The present invention provides a process of preparing the solid oral pharmaceutical compositions comprising combination of metformin and sitagliptin or salts thereof. In particular, the present invention relates to a process of preparing multilayered coated pharmaceutical composition comprising at least two compartments of metformin or salts thereof exhibiting immediate and extended release and at least one compartment of sitagliptin and metformin or salts thereof exhibiting immediate release. The invention also includes method of use of such compositions for treating type II diabetes.