DIRECTORS' REVIEW FOR
THE QUARTER/NINE MONTHS  ENDED MARCH 31, 2006

We are pleased to present your company’s individual and consolidated un-audited accounts for the Quarter as well as the 9 months ended March 31, 2006.

Net Sales of your Company’s pharmaceutical operations registered a modest increase of         3% for the Quarter, from Rs. 175.394 Million in Q III, 2005 to Rs. 180.649 Million during the Quarter under Review. For the nine-month period, Net Sales increased from Rs. 473.570 Million for the first three quarters of last year to Rs. 559.622 Million for the corresponding period of the current year, an improvement of 18.17%.

Similarly, Consolidated Net Sales including the Farmacia Venture of your company stood at Rs.201.604 Million for the Quarter ended March 31, a growth of 4.66% over Rs. 192.635 Million achieved in the corresponding quarter of last year. Consolidated Net Sales for the nine-month period grew by 18.59% to Rs. 625.724 Million, compared to Rs. 527.626 Million achieved during the corresponding period of last year. The sluggish growth in sales during the Quarter partially reflect some delays in purchase by key customer institutions, and also the fact that we had an exceptionally strong corresponding quarter during the last financial year.

Your Company’s Gross Profit (GP) for the Quarter under review rose to Rs. 105.322 Million from Rs. 97.234 Million, an improvement of 8.32%.  For the nine months under review, the GP stood at Rs. 325.836 Million, an increase of 21.33% over the GP of Rs. 268.560 Million achieved during the same period of last year.

Operating expenses increased by 20.45%, from Rs. 45.408 Million during Quarter III 2005, to Rs. 54.694 Million during the Quarter under review. Operating Expenses for the 9 Months were Rs. 153.099 Million, an increase of 19.75% over the figure of Rs. 127.851 Million incurred during the same period of the previous year.

After adjusting for Other Income of Rs. 9.709 Million, loss of Rs. 2.387 Million on remeasurement of your Company’s equity investment portfolio, and share of profit in Farmacia of Rs. 1.701 Million (2005: Rs. 1.122 Million), Profit Before Tax of your company, net of Workers’ Profit Participation and Central Research Funds, stood at Rs. 56.644 Million for the Quarter, an improvement of 13.37% over the figure of Rs. 49.965 Million achieved during Quarter III of last year. For the Nine Months under review, the Net Profit before Tax stands at Rs. 183.579 Million, an improvement of 30.37% over the figure of Rs. 140.811 Million achieved during the same period of the previous year.

Net Profit after Tax (NPAT) of your Company stood at Rs. 44.444 Million for the Quarter, an increase of 28.58% over the NPAT of Rs. 34.565 Million achieved during the third Quarter of last year. For the Nine Month period under review, NPAT of your Company grew by 42.42% to Rs. 137.879 Million (2005: Rs. 96.811 Million).

The Basic Earnings per Share (EPS) of your Company for the Quarter ended March 31, 2006 stand at Rs. 4.42 per share (2005: Rs. 3.44 per share). The 9-monthly EPS stands at Rs. 13.72 per share, compared to Rs. 9.64 achieved during the same period last year.

 Future Scenario

Your Company has important launches planned for the coming months in the areas of gastroenterology, oncology and transplantation. These launches should add substantially to company revenues and profitability. Our collaboration with the Bagó Group has also been further strengthened through a joint venture agreement and the subsequent creation of our JV subsidiary, BF Biosciences Limited. Construction work on the JV Company’s new facilities at Lahore has commenced and is so far continuing on schedule. It is hoped, as your Company nears the completion of its first 50 years of service to humanity, that we will Inshallah be able to achieve a strong closing for the current year, and lay the foundations of a successful future as a leading provider of Global Quality healthcare at home and abroad.

                              For and on behalf of the Board of Directors

(Mrs. Akhter Khalid Waheed)
Chairperson & Chief Executive

RAWALPINDI
APRIL  27, 2006

To view the Financial Statements for the Quarter/Nine Months  Ended March 31, 2006, click here. You will need Adobe Acrobate to view the document.