We are glad to report that during the period under review, your Company was able to succeed on two fronts: first, in achieving an improved sales mix through high prescription growth in our specialty products, and second, in aggressively controlling inventory and production costs.

Overall Net Sales grew by 17.99% from Rs. 297.619 Million last year to Rs. 351.149 Million during the year under review. Embedded in this figure is a substantially greater growth achieved from our most profitable prescription brands, which now increasingly account for the bulk of the company's sales.

The benefits from an improved product portfolio and better inventory management are evident in the cost of sales, which increased by only 4.66% against a nearly 18% increase in sales. As a consequence, our Gross Profit improved by 41.88%, from Rs. 106.553 Million during the period ended June 30, 2000 to Rs. 151.179 Million during the year under review.

Administrative expenses during the same period increased by 5.79%, while selling expenses grew by 19.6% to Rs. 65.714 Million (2000: Rs. 54.970 Million). The increase in selling expenses is reflective of our continued emphasis on brand building as a means to achieving sustained growth in sales and profitability in the future.

We are glad to report that owing to an improved cash flow position, financial expenses during the year fell by 45.97%, from Rs. 4.380 Million last year to Rs. 2.367 Million during the year under review.
After a provision for taxation and other government levies of of Rs. 22.158 Million (2000: Rs. 10.609 Million), the Net Profit of the company stands at Rs. 40.047 Million for the period, an improvement of 115.85% over the figure of Rs. 18.552 Million achieved during 2000. The Earnings per share for the period stand at Rs. 11.34 (2000: Rs. 5.25).

In the aftermath of the tragic events of September 11, Pakistan finds itself a frontline state in an increasingly volatile global situation. The immediate economic impact of this crisis has been extremely negative: the cost of goods being brought in and out of the country has gone up significantly, both by the inappropriate application of war risk insurance to a country not at war, and in the case of air freight - a major portion of pharmaceutical material logistics cost - significantly higher rates being charged by PIA, which finds itself in a virtual monopoly for air traffic in and out of the country. However, we have managed, with the help of our international suppliers, to ensure that the impact of this cost rise on the Company is minimal, and that raw material supplies remain uninterrupted.

It is nevertheless important, at a time of heightened uncertainty, to recognize the Government's efforts in retaining calm in the country as well as in fighting Pakistan's case on the economic and foreign policy fronts. The Government has also rightly put pressure on international relief agencies to purchase relief supplies from the domestic market to help the ailing local economy. It is our sincere hope that a humane solution can be found to the crisis that engulfs our borders, so that we can work as a nation towards building a stable and unified Pakistan along the line of our founder's vision.

We feel privileged, once again, to thank the company staff and workers at all levels for their dedication and professionalism, without which these results would not have been possible.