During the period 1 January 2007 - 31 December 2007, the Company implemented some but not all of the principles issued by the Capital Markets Board (CMB). Detailed information is given below.

EİS Eczacıbaşı İlaç Sanayi manages its shareholder relations through the Finance Department's Capital Market and Shareholder Relations Unit, which was established in 1993. During the year, the Company received questions from shareholders and responded immediately to them within the boundaries allowed by the Capital Markets Board (CMB) and Istanbul Stock Exchange (ISE). Shareholders requesting information by phone or through meetings with the Company were responded to in the same way.

Shareholder Relations Contact Person and Details:

Name Surname : Gülnur Günbey Kartal
Phone: +(90 212) 350 85 36
Fax: +(90 212) 350 85 33
e-mail : gulnur.gunbey@eczacibasi.com.tr

The Shareholder Relations Unit communicates verbally and in written format with shareholders, the ISE, the CMB, the Settlement and Custody Bank and the Central Registry Agency (CRA).

The Department's main activities during the period included:

• Providing written or verbal responses to all requests for information except those requesting information not made public, confidential information or trade secrets, and responding to all annual report requests in writing or verbally.

• Ensuring that the general meeting adhered to current regulations, the Company's related articles of association and other internal regulations.

• Preparing useful documentation for shareholders to refer to at the general meeting.

• Keeping record of voting results. No shareholder requested to see these records.

• Responding to requests for minutes of the general meeting.

• Monitoring and following up on all matters related to public disclosure, as required by regulations.

• Performing the requirements of CRA concerning the dematerialization of shares in the Dematerialized System.

The Company is very careful to comply with all CMB regulations and related items in its articles of association regarding shareholders’ prerogative to exercise their rights. In 2007, the Company did not receive any written or verbal complaint from a shareholder, nor, to the best of our knowledge, was any administrative or legal proceeding initiated in this regard.

All shareholders are treated equally when they exercise their right to request and evaluate information.

During the year, the Company responded on the same day to written and verbal inquiries about capital increase and dividend transactions; it also mailed annual reports to three people who requested them in writing or by telephone on the same day that it received the requests. Developments that may affect shareholders' rights are announced by the ISE. The Company's articles of association do not contain any clause about appointing a special auditor, nor did it receive any demand for one during the period.

The ordinary general shareholders' meeting was held on 27 April 2007. The invitation to the meeting was made in accordance with the Turkish Commercial Code, the related items of the Company’s articles of association and CMB regulations. Well before the general shareholders’ meeting, the Company provided a sample power of attorney form on its website for shareholders who wanted to authorize someone else to represent them at the meeting. The attendance rate at the meeting was 69 percent. Seven shareholders from the publicly owned part of the Company were registered in the List of Attendants. Members of the press attended the meeting as well. Shareholders were invited to the meeting through announcements in the press and the ISE bulletin.

The Company made its annual report, financial statements, articles of association and profit distribution recommendation available to shareholders at its headquarters at least 15 days before the meeting. Shareholders used their right to question at the general meeting and received responses from the Board members and general manager.

There is no requirement in the Company's articles of association that decisions regarding the division of assets, large purchases and sales and hiring be taken up at the general meeting, but such important issues are put on the general assembly agenda anyway.

To facilitate attendance, the general meeting is held in the city center and is announced in a popular newspaper. The minutes of the general meeting are sent to the ISE and CMB. Additionally, shareholders may freely view the minutes of the meeting at the Company's headquarters.

There are no privileged voting rights: every share has one vote. The Company has no procedure that foresees voting rights being exercised within a determined period after the acquisition date. There is no item in the Company’s articles of association that prevents a shareholder’s proxy from voting on the shareholder’s behalf. Eczacıbaşı Holding A.Ş., which has a reciprocal stake and controlling interest in the Company greater than 50 percent, exercises its vote at the general meeting. The Company attended all subsidiaries' general meetings and exercised its vote. To date, no shareholder has claimed minority shareholder status. The Company does not use the cumulative voting procedure.

At a meeting on 15 March 2006, the Board of Directors established the following “Corporate Governance Principles” with regard to the Company’s profit distribution policy:

• The articles of association do not contain any clause about privileged shares, founder benefit shares and the distribution of profit to members of the Board of Directors and employees as well as the distribution of profit advance payments.

• The Company's articles of association accept the principle of distribution of the first based on the ratio and amount decided by the CMB.

• In preparing its recommendations on profit distribution for the general assembly, the Board of Directors takes into consideration the sensitive balance between the Company’s existing profitability, the expectations of shareholders and prescribed growth strategies.

• Dividend payments (cash and/or bonus shares) are made as soon as possible after the shareholders’ meeting and within the legal time limit set by CMB regulations.

There is no article of association that limits share transfers.

The Company's principle is to present all non-confidential information whenever demanded and as soon as possible. Company authorities provide written or verbal responses to all requests from shareholders, media or potential investors.

The Company’s information disclosure policy is as set out in its Corporate Governance Principles. In line with this policy, the Company prepares and discloses within the time frames established by the CMB: six-month, limited review consolidated financial statements; 12-month, audited consolidated financial statements; and unaudited three-month and nine-month consolidated financial statements with footnotes in accordance with International Financial Reporting Standards (IFRS) guidelines.

Gülnur Günbey Kartal is responsible for executing the Company’s information disclosure policy.

During the year, the Company made 39 special event disclosures to the CMB. The CMB and ISE each requested further information only once. The Company's stocks are not traded in international markets. Since the disclosures were timely, the CMB did not issue warnings.

The Company’s web sites (www.eis.com.tr and www.eczacibasiilac.com.tr) became active in April 2005, giving the public access to relevant information about policies, investor relations, certificates and awards, business partners, audits, contracts, visitors, details of products and the Company’s policies regarding the environment and quality. As a result of its reorganization in 2007, the Company has begun to update its websites. Local community relations have been strengthened by the “Human Resources” web pages, which include employee/internship recruitment policies and a “Contact Form” for visitors who want to communicate their thoughts or questions.

The Company is a member of the Eczacıbaşı Group and no study has been done on this subject.

Company executives having access to potential insider trading information are members of the Board of Directors and top management. The names of these executives are disclosed in the annual report.

Within the boundaries of CMB regulations, stakeholders are informed through general meetings, supplier and customer meetings; and employees are informed through strategic planning meetings, general manager meetings and departmental meetings. (Targets, changes in wages, employee rights, travel allowance, and satisfaction surveys are reviewed in these meetings.) The Company shares information with customers and suppliers in every area and undertakes joint efforts to improve processes. Strategic meetings with employees are held twice a year; meetings with suppliers are held once a year and meetings with the Division's marketing company, Eczacıbaşı İlaç Pazarlama, are held 12 times a year. The Company has a corporate portal for employees providing all kinds of information and documents of interest to them.

Stakeholders contribute to management through general meetings for shareholders, strategic planning meetings for employees, supplier meetings, customer meetings and customer visits.

Following the Company’s reorganization in 2007, the Company’s financial affairs department took charge of human resources management. The Company does not have any unionized personnel.

Human Resources Policy

Recognizing that people underpin the Eczacıbaşı Group’s values and represent the main source of its competitive edge, the Company’s human resources policies aim to:

• Establish an organizational structure that is flexible and open to change and in line with Company’s Strategic Business Plan and Targets,

• Ensure that human resources are used effectively and productively to achieve the Company’s strategic goals,

• Continually review and improve the Company’s human resources processes and systems,

• Encourage employees to learn so that they might improve their knowledge, competencies and behavior, thus enhancing their individual performance as well as the performances of their teams and the Company,

• Create opportunities for personal and career development that respond to the needs of the Company and reflect performance evaluation results,

• Continuously raise the level of employee satisfaction by making improvements in areas noted by employee satisfaction surveys and other related performance indicators,

• Attract employees who have the right competencies for their jobs: who are creative, innovative, participative, open to change, entrepreneurial, energetic, transparent, and strong communicators; who want to develop personally and professionally and who are able to train others; who share our values.

To date, there have been no complaints of discrimination from Company employees.

Every six months, the Company evaluates customer satisfaction through surveys of wholesaler and retail channels. The Company has a written “Supplier Policy” that it has distributed to all of its suppliers. Every year, the Company organizes a “Suppliers' Day”, where it presents awards to successful suppliers in various categories. Additionally, the Company provides training to suppliers on various subjects, in line with a plan, and supports their efforts to obtain quality certificates. It also organizes group trips for suppliers to its facilities. Due to the Company’s reorganization in 2007, it will no longer carry out these activities from 2008 onward.

The Company supports many social, cultural and sports activities, in accordance with the principles of the Eczacıbaşı Group. There are no legal claims on the Company related to environmental pollution. With the understanding that protecting the environment is its most important social responsibility, the Company has written down its environmental policy and communicated it to all of its employees.

Relations with Society and Other Companies

Eczacıbaşı İlaç Sanayi, as a corporation, has a social responsibility to:

• Ensure, before all else, compliance with legal and ethical rules in its relations with society and other companies, just as it has in all relationships it has established with its stakeholders,

• Cooperate with the local community and wider parts of the society to take advantage of opportunities that provide mutual benefit,

• Take advantage of cooperation opportunities with other companies within the framework of continuous and mutual development principles.

Environment Policy

In line with its goal of business excellence, Eczacıbaşı İlaç Sanayi seeks to preserve the environment and contribute systematically to increased understanding of environmental protection through the following objectives and principles:

• To inform employees, business partners and the local community about environmental issues in order to generate and continually develop environmental awareness,

• To increase the efficiency of raw materials, intermediate inputs and energy, and thus improve continually all related processes,

• To reduce all forms of pollution, recycle non-hazardous waste and eliminate non-recyclable waste using appropriate techniques, so as to minimize the impact of our activities on the environment,

• To take special care to protect the natural environment,

• To support the environmental initiatives of government and public organizations,

• To monitor continually and strengthen measures aimed at ensuring employee heath and safety in the workplace.

In line with these goals and principles, we pledge, in the name of Eczacıbaşı İlaç Sanayi employees, to fulfill our social responsibilities; improve all those activities that may have a negative impact on the environment; comply with all legislation, regulations and standards aimed at ensuring a sustainable future and protecting natural resources; and set an example with our efforts in these areas.

Environmental Matters

The Company undertakes all investments required to protect the environment and has invested more than USD 3 million in this area in its plants since they were established. Hazardous wastes mentioned in the list of Regulations on the Control of Hazardous Wastes are collected and stored separately in the plants. They are then sent to the IZAYDAS waste treatment plant for disposal using a licensed transporter.

The Lüleburgaz waste water treatment facility has been in operation since the complex was opened in 1992. Industrial and household water waste is treated and then sent to a fish pond. The sludge from this treatment process is passed through a filter press to eliminate water and then sent to IZAYDAS for disposal. IZAYDAS has analyzed the sludge and reported that it has the characteristics of household waste.

All waste oils from the Company's production processes are sent to IZAYDAS for disposal.

At the Lüleburgaz plant, where the Company has its pharmaceuticals manufactured on a contract basis, the production process is carried out in a closed environment, so it does not produce external noise pollution.

Relations with Related Authorities

Eczacıbaşı İlaç Sanayi has direct relationships with the Ministry of Health, Ministry of Finance, Ministry of Labor and Social Security, Ministry of Agriculture and Rural Affairs, Ministry of the Environment, TSE (Turkish Standards Institution), TUBITAK (the Scientific and Technological Research Council of Turkey), city and county institutions, municipalities, the Turkish Doctors' Association, Turkish Pharmacists' Association, Turkish Dental Association and university faculties of medicine and pharmacology. In the constitution of standards for the pharmaceutical sector, the authorities always take into consideration the Company's ideas and recommendations.

Participation in Educational and Training Activities

The Company assists and provides resources to university students who request help with their school projects and research. Eczacıbaşı İlaç Sanayi provides some ingredients and intermediates to university and academic hospitals for their scientific research. The Company makes donations of computers and hardware to various educational and training institutions. Eczacıbaşı İlaç Sanayi provides internship opportunities to students of technical high schools and universities.

Support of Health and Welfare Initiatives

In 1959, to contribute to the development of the medical and pharmacology fields in Turkey, Eczacıbaşı İlaç Sanayi established and sponsored the Eczacıbaşı Medical Awards and Scientific Research Support Fund, one of the first initiatives promoting cooperation between universities and industry in our country. To date, with the approval of the scientific juries comprising university faculty, Eczacıbaşı İlaç Sanayi has provided grants to 171 scientific research projects and distributed 31 Medical Science Awards and 34 Medical Incentive Awards.

The Company, on behalf of its employees and shareholders, provides assistance and renovation funds to nearby health centers. It also provides blood donations during the Red Crescent Blood Donation Week. In local emergency situations, the Company provides the use of its ambulance.

Support of Sports and Recreational Activities

With the contributions of Eczacıbaşı İlaç Sanayi, the Eczacıbaşı Sports Club has won numerous championships in Turkey and abroad and contributed to the development and promotion of sports in Turkey. Since 1999, Eczacıbaşı İlaç Sanayi has provided financial assistance to local sports clubs. Eczacıbaşı İlaç Sanayi established a volleyball school for girls in the 7-14 age group to help them appreciate sports and the culture and ethics of sports under the direction of the Eczacıbaşı Sports Club. Eczacıbaşı İlaç Sanayi also has sponsorship agreements with various sports clubs that involve contributions in kind.

Bülent Eczacıbaşı	Non-executive
Faruk Eczacıbaşı	Non-executive
Dr. Erdal Karamercan	Non-executive
Sacit Basmacı	Non-executive
Sedat Birol	General Manager

The Board does not have any independent members, because there has been no demand or need for independent members, as the Board carefully observes the views of shareholders and outsources consultancy services when an external view is required.

In principle, Board members may have positions in other Eczacıbaşı Group companies but not in companies outside the Group.

The structure of the Board of Directors is in accordance with Articles 3.1.1, 3.1.2 and 3.1.5 of Part IV of CMB's Corporate Governance Principles. There are no articles related to this in the Company's articles of association.

The Company has established the scope and subject of its articles of association in detail and conducts its activities accordingly. The Company's vision is defined and its strategic targets, policies, and strategies are determined and reviewed every year. The Company's Board of Directors and management continually monitor the Company's activities and results to ensure that they are in line with its strategic targets.

In this area, the Board receives the support of the Audit Committee, which comprises two members of the Board of Directors, the Financial Coordination Unit of Eczacıbaşı Holding, and the Certified Public Accountant. Professional risk analysts evaluate the Company's fixed assets, while the Company analyzes its security, extraordinary events and risky asset position at the Board of Directors' meetings.

The duties and responsibilities of the Board of Directors and management are clearly defined in the Company's articles of association.

The chairman assigns the general manager the duty of preparing the agenda of the Board of Director meetings. During the period, the Board held 26 meetings that were attended by 96 percent of the members on average. Invitations were made by phone and/or e-mail. The general manager is responsible for informing and communicating with the members of the Board of Directors.

The Board's decisions at these meetings were made unanimously; no member opposed any decision. All Board members have attended meetings on the subjects listed in Part IV, Article 2.17.4 of the CMB's Corporate Governance Principles.

None of the members have special voting or veto rights.

While Board members are authorized to undertake transactions with the Company on behalf of the Board within the boundaries of the law, the general principles of the Eczacıbaşı Group do not allow any member of the Board of Directors to make a transaction on their own behalf with the Company.

The Company abides by the ethical rules of the Eczacıbaşı Group. These are distributed to all employees in written format but are not disclosed to the public.

The Company has an Audit Committee and has begun to establish its Corporate Governance Committee in line with the requirements of Article 8 of the CMB's Communiqué No. 41, Series IV, on "Communiqué on Principles Corresponding to the Corporations Subject to Capital Market Law" that was published in the Official Gazette No. 26821 on 19 March 2008.

In accordance with the decisions of the general meeting, members of the Board of Directors do not receive wages. Board members have no financial transactions with the Company nor receive any performance awards. In 2007, none of the members of the Board of Directors or executives received guarantees, credit or loans from the Company.