DIRECTORS' REVIEW OF ACCOUNTS FOR
THE QUARTER ENDED March 31, 2005

We are pleased to present your company’s consolidated un-audited accounts for the Quarter as well as the 9 months ended March 31, 2005.

Net Sales of your Company’s pharmaceutical operations registered an increase of 32.54%, for the Quarter, increasing from Rs. 132.335 Million in Q III, 2004 to Rs. 175.394 Million during the Quarter under Review. For the nine-month period, Net Sales increased from Rs. 362.343 Million for the first three quarters of last year to Rs. 473.570 Million for the Corresponding period of the current year, an improvement of 30.70%.

Consolidated Net Sales including the Farmacia Venture of your company stood at Rs. 192.635 Million for the Quarter ended March 31, an improvement of 15.59% over Rs. 166.648 Million achieved in the corresponding quarter of last year. Consolidated Net Sales for the nine-month period grew by 10.52% to Rs. 527.626 Million, compared to Rs. 477.400 Million achieved during the corresponding period of last year. The dilution in sales growth reflects the closure towards the end of last year of Farmacia’s loss-making branch at Jinnah Hospital, Lahore. Since the closure, Farmacia has returned to a healthy profitability. In its first nine months of the current financial year, Farmacia earned a net profit of Rs. 4.217 Million, against a loss of Rs. 7.787 Million during the corresponding period of last year. We would like to express Our appreciation of the excellent efforts by the management team and staff at Farmacia for achieving this turnaround.

Your Company’s Gross Profit (GP) for the Quarter under review rose to Rs. 97.234 Million from Rs. 79.638 Million, an improvement of 22.10%. For the nine months under review, the GP stood at Rs. 268.560 Million, an increase of 20.26% over the GP of Rs. 223.318 Million achieved during the same period of last year.

Operating expenses increased by 27.06%, from Rs. 37.827 Million during Quarter III 2004, to Rs. 48.063 Million during the Quarter under review. Operating Expenses for the 9 Months were Rs. 134.973 Million, an increase of 10.57% over the figure of Rs. 122.073 Million incurred during the same period of the previous year.

Profit from Operations for the Quarter increased by 21.66 % to Rs. 54.394 Million, from Rs. 44.712 Million achieved during the same Quarter of last year. For the 9-month period, the Profit from Operations increased by 33.25 % to Rs. 142.361 Million (2004: Rs. 106.837 Million).

After adjusting for a loss of Rs. 4.446 Million on remeasurement of your Company’s equity investment portfolio, and a provision for taxation and other levies of Rs. 44 Million (2004: Rs 32.700 Million), the Net Profit of your company for the 9-month period under review stands at Rs. 96.811 Million, an improvement of 40.19% over the Net Profit of Rs. 69.055 Million achieved during the same period of the previous year. Net Profit for the Quarter under review stood at Rs. 34.565 Million, an improvement of 33.62% over the figure of Rs. 25.868 Million achieved during Quarter III of last year.

Your Company plans to increase its focus on growth through its portfolio of value-added brands in the key niche areas of hepatology, oncology, cardiology and dermatology. Our collaboration with our principals in these areas continues to flourish, and our planned investment in our new facilities at Lahore is so far continuing on schedule. Barring any severe and unforeseen economic down-turn, your Company should Inshallah be able to build on the momentum it has achieved so far, and to continue on the path to becoming one of the nation’s leading providers of global quality healthcare.

For and on Behalf of the Board of Directors
(Mrs. Akhter Khalid Waheed)
Chairperson & Chief Executive

April 28, 2005

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