Your Company's Net Sales for the year increased by 15.23% to Rs. 404.636 Million, from Rs. 351.149 Million achieved during the Financial Year ended June 30,2001. We are glad to report that the performance of your Company's newly launched products, particularly in its cardiology (Xavor and Xavor-DIU) and dermatology (Icon and Lormax) franchises, has been extremely encouraging. These segments are set to account for a significant share in your Company's
turnover during the years to come, and will help in broadening our key strength areas, which currently center around the Gastroenterology and Anti-infectives markets.

We are also happy to report that your Company was successful in containing the Cost of Sales during the year under review. Against an increase in Sales of 15%, Cost of Sales appreciated by 9.49%. As a consequence, Gross Profit improved by 22.82%, from Rs. 151.179 Million during the year ended June 30,2001 to Rs. 185.683 Million during the year under review. Administrative expenses during the same period increased by 25.91 %, owing to increased depreciation,
primarily on vehicles acquired for the field force, improved salaries and higher contribution towards Worker Welfare Fund.

Selling expenses grew by 24.05% to Rs. 81.518 Million during the year (2001:Rs. 65.715 Million). Your company continued to increase its investment in its corporate and product branding in this period, as a means to achieving sustained growth in sales and profitability in the future. We are glad to report that your company's cash flows continued to improve during the year, with
financial expenses during the year falling by 34.35%, from Rs. 2.367 Million last year to Rs. 1.554 Million during the year under review.

After a provision for taxation, Workers' Participation Fund and Central Research Fund of Rs. 31.771 Million (2001: Rs. 26.043 Million), the Net Profit of the company stands at Rs. 52.193 Million for the year, an improvement of 30.33% over the figure of Rs. 40.047__Million achieved during 2001. The Earning per share (after tax) for the Year stands at Rs. 14.77 (2001: Rs. 11.34).

In view of the year's financial performance, the Board of Directors is pleased to recommend a final cash dividend of 25% (i.e. Rs. 2.50 per 10-rupee share), as well as a stock dividend (bonus issue) of 25%, i.e., one Bonus Share for every four Shares held. Added to the interim dividend of 40% already declared during the year, this would amount to a total payout of 90% for the Year ended June 30, 2002.

The coming year promises to be an exciting one for your company. We have made strenuous efforts and met with considerable success in our efforts to seek out significant growth opportunities and ensure a solid pipeline for the company's future operations within the pharmaceutical sector.

In addition to new launches in the areas of cardiology and dermatology, we are glad to report that the
management of your company has entered into strategic partnerships with two major foreign principals -- Curatis Pharma GmbH, Germany and the Bago Group SA, Argentina -- for the import, repackaging and marketing of a range of sophisticated biotechnology-based products in the areas of Gastroenterology and Oncology. Through these products, we will not only be able to capitalize on our existing presence in the gastroenterology segment, but will also have immediate access to the untapped Oncology segment, which is a niche market with great potential and a limited number of competitors. These launches will also have a positive drag effect on our existing business, and should, Inshallah, take your company to higher levels of competitiveness and brand differentiation.

The pharmaceutical industry has benefited greatly from the stability enjoyed by the Rupee Vs. the Dollar during the year under review. Current economic indicators seem to point towards this trend continuing in the future, a fact that augurs well for your company and the industry at large.

Appreciation is also due to the Government for promptly withdrawing GST on pharmaceutical products once it became clear that the burden on the country's poor far outweighed the revenue benefits gained by the Government. The mechanism employed for GST withdrawal and refund to manufacturers was also well thought-out and effective in its implementation.

If the coming government continues with these salutary trends, and is able to provide a reasonable degree of economic stability and consistency of policy, there is no reason why the pharmaceutical industry , your company included, should not continue to expand, grow and invest in the years to come.

The Company's Auditors, Messrs. Taseer, Hadi, Khalid and Co., Chartered Accountants stand retired and have offered themselves for reappointment.
Pattern of Shareholding
The statement indicating the number of shareholders and their categories forming the pattern of
shareholding is annexed.

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.