DIRECTORS' REPORT

TO THE MEMBERS

The Directors of the Company are pleased to present their Report together with the Audited Accounts  of the Company for the year ended December 31, 2004.

BUSINESS  ACTIVITIES

Turnover during 2004 was Taka 1,351.80 million registering a growth of 21.8%. Cost of  goods sold improved by 1.7% over last year. Profit after tax was Taka 145.49 million – a growth of 37.8%.  Earnings per Share (EPS) stood at Taka 260.79  against Taka 227.07  of  2003.

The following formulations were introduced during the year 2004:

PHARMACEUTICAL PRODUCTS:

 *Trade Mark

ANIMAL HEALTH PRODUCTS

1.      Haemobit

2.      Catophos

3.      Viaphos

FINANCIAL  RESULTS

The Directors take pleasure in reporting the following financial results of the Company for the year 2004:

APPROPRIATION RECOMMENDED:

DIVIDEND

There has been considerable increase in the profits available for distribution. However, as we reported last year, the Company is in the process of making substantial investments for expanding and diversifying its manufacturing capacity, and thus the Directors deem it necessary to retain adequate funds to finance the capital expenditures that are expected to enhance shareholder value in the future.

The Board of Directors is pleased to recommend a cash dividend  of Taka 50.00 per ordinary share of Tk. 100. This dividend will entail a payment of Taka 27,893,200. The Board of Directors also recommend for declaration of  Stock  Dividend (Bonus Shares) in the ratio of one Bonus Share for every five shares held (1:5) for which an amount of  Taka 11,157280 will have to be transferred to Share Capital Account. The appropriation, if approved by the shareholders at the Annual General Meeting of the Company will absorb Taka 41,839,800  including 10%  dividend  distribution  tax  amounting to  Taka 2,789,320.

DIRECTORS

The Directors retiring by rotation under Articles 109, 115 and 116 of the Articles of Association of  the Company are Mr. A. Hasanat Khan  and  Mrs. Sajida Humayun Kabir who, being eligible, offer themselves for re-election.

AUDITORS

The Company’s Auditors Messrs Rahman Rahman Huq Chartered Accountants retire at the thirty first Annual  General  Meeting  and  being eligible offer themselves for reappointment as Auditors for the year 2005 with re-fixation of their remuneration.

SUBSIDIARY OPERATION

For the diversification of business in Consumer products a subsidiary Company in the name of “Purnava Limited” was formed in August 2004. Renata Limited subscribed 24,999 shares of Taka 100 each representing 99.99% shares with a paid up value of Taka 2,499,900. As per law, since a Company must have more than one shareholder, Mr. Syed S. Kaiser Kabir subscribed 1 (One) share of Taka 100/-. The Company’s current status is reflected in the Director’s Report of Purnava Limited.

CAPITAL EXPENDITURE

The following capital expenditure made by the Company during the year amounted to Tk.78.68 million.

The entire investment was made from internally generated funds.

CONSOLIDATION OF  ACCOUNT

The Company  is  consistently  following  the  code  of International Accounting Standard as adopted by the Institute of Chartered Accountants of Bangladesh. According to Bangladesh Accounting Standard-27, (BAS-27) the Company has presented all the relevant consolidated financial statements with those of  its subsidiary for reflecting the Group’s position.

PERSONNEL

The Directors record their appreciation for the  contribution made by the employees to the operation of the Company.

ACKNOWLEDGEMENT:

The Board wishes to thank the Shareholders, Officials of the Drug Administration and other Government officials Doctors, Chemists and other Customers, Bankers, the Securities and Exchange Commission, the Dhaka Stock Exchange  Limited and all  well-wishers for their continued support. By the grace of the Almighty, the Directors look forward to a bright future for the Company.

On behalf of the Board of Directors

Syed S. Kaiser Kabir

Managing Director

April 30, 2005

DIRECTORS' REPORT

The Drug Control Ordinance does not permit the manufacture of non-pharmaceutical products in plants approved for pharmaceutical products. Thus, to provide the Company an option to enter into Fast Moving Consumer Goods (FMCG), we created a new Company named Purnava in August 2004.

Purnava has very modest manufacturing facilities located at our Mirpur Site.

We hope to introduce two products from this plant in 2005, viz., (1) Vitamin-C chewing gum, and (2) Isotonic Power Drink.

Shareholders should note that the above are merely experimental products that would hopefully help us to understand the FMCG business. Beyond the goal of studying the FMCG we do not have any major ambitions for Purnava in the next 12 months.

On behalf of the Board of Directors

Syed S. Kaiser Kabir

Chairman & Managing Director

April 30, 2005