2003 LETTER FROM CEO

Dear Valued Customers,

The year 2003 was the second key year in the history of Gillani, Inc. In January 2002, Gillani acquired the FourGen/Endura business from Irista, Inc., the software division of HK Systems. At our two-year anniversary of the acquisition, we would like to share our progress with you – our most important asset in this acquisition.

Who is Gillani?

By way of the FourGen/Endura acquisition, Gillani provides an Enterprise Distribution Management™ (EDM) software solution, iDistribute™, focused on the Supply Chain Management processes that particularly help distribution business win and keep customers. These solutions also work for many businesses across the globe in different industries including Manufacturing, Retail, Healthcare, Hospitality, Services, Government and 3PL. The Distribution Management solution features an integrated Financials solution that also functions as a freestanding ERP package for many of our customers who do not distribute product.

What is our Value Proposition?

Successful experience – since 1983, has shown that companies which value a flexible, scalable and modifiable software solution built on a solid functional foundation, become Gillani customers. These customers are today the users of FourGen® Accounting, Endura® Enterprise and iDistribute™ - as the latest V8.1 is now known, and FourGen® CASE Tools. Off course, all of these customers have utilized the FourGen® CASE Tools to modify the base system or have developed new custom application utilizing these Rapid Application Development tools.

Who are the Customers?

After two decades of providing software solutions, Gillani solutions are today utilized by more than one million end-users and over 1500 small & medium size businesses and large enterprises across the globe. The customers are spread across North America, South America, Europe, Africa, Middle East, East Asia and Australia. Most of these customers are companies like Verizon, Misys, Sikorsky, Hughes Supply, Wesco International, Kaman, Motorola, AT&T, GE Supply, Advance PCS, ChevronTexaco, Full Service Supply, Avaya, Lucent, Whole Foods, Kenya Roads Board, Bank of Nigeria, Coles Myer, Motorola China and many others.

The Gillani Advantage

A company’s success is determined by the decisions it makes and how it conducts business. Instead of forcing clients to run their business the way the software forces them to operate, Modifiability By Design (MDB) allows a client to implement business practices necessary to win and keep customers. Gillani offers several specific advantages over its competition in providing applications for Enterprise Distribution Management and Enterprise Resource Planning (ERP) or Financials, to its clients in several key industries:

Modifiability By Design
Understanding of the Distribution, Retail, Healthcare, Manufacturing, Hospitality, Services & 3PL Industries
Distribution and Financials functionality
Application Integration
Key Reference Customers
Shorter and More Certain Time to Value
Proven and Streamlined Implementation Methodology
Measurable Return on Investment (ROI)

Benefits To Gillani Customers

The Gillani iDistribute™ solution offers the following benefits to its clients and their customers:

Dramatic improvements in accuracy of product availability, customer order handling, product delivery, customer billing, accurate accounting and product replenishment, resulting in improved customer service.
Improved order fill rates in the retention of customers through the ability to offer substitutions and upgrades, increasing the speed and reducing the error in picking, packing and shipping processes.
Support of our clients’ unique customer value proposition, enabling better selection, higher volumes, smaller shipments, buying convenience, lower prices, better availability and improved customer service.
The ability of clients to tailor their systems to meet their customers’ special needs, versus forcing customers to adjust to them because of system limitations, resulting in improved customer service.
Open systems and open architectures that facilitate integration of their internal systems and with those of their customers.
Integrated analytics or business intelligence tools that enable the analyst and management to understand customer, product, cost, and market sales and profitability.
Products, processes and systems that support and facilitate transitions to new technologies that can create new value for customers, resulting in reduction in cost for IT and increase in profitability for the company.

What has Gillani Accomplished in 2003?

Since we completed the acquisition of the FourGen/Endura business, Gillani has added tremendous value to the software and our clients, which can be summed-up as follows:

Grew 2003 Revenues by almost 300% compared to 2002 sales revenue
Added new clients to the Gillani family as well as upgraded existing customers to latest V8.1
Renewed maintenance for many companies who had foregone support in the past within the Americas as well as Europe and Asia
Updated the windows-based GUI front-end and browser-enabled the application
Launched iCare – a self-service website for customer support providing the capabilities to customers to report software related issues to Gillani, lookup history of all reported issues and their resolution and many other useful resources
Enhanced and added new features to the Endura/FourGen Community Web Site as a knowledge exchange portal for the user community
Launched Scholars Program to donate iDistribute software to Universities for teaching & research purposes and Joined University of Texas at Dallas School of Management as a Strategic Partner
Enhanced the Archive and Purge module for iDistribute™ V8.1, and made it available to clients who wanted to retrofit it into older versions
Continued to launch several brand recognition and lead generation initiatives via AMR Research, Gartner Group, key industry publications and trade shows
Ported the FourGen® CASE Tools and iDistribute™ to latest IDS V9.4 and Informix-4GL V7.32
Ported to Red Hat Linux V8 & 9 as well as Red Hat Enterprise 3 version
Added better Business Intelligence as well as Reporting solutions via Cognos Impromptu (ReportNET), PowerPlay and Visualizer
Maintained Premier Status in IBM Business Partner Program
Became a contributing member of the Distribution Software Council

What are the plans for 2004?

Gillani plans to continue on the growth path it has been on for the past six years. We project to become a key player in both the Distribution Management and ERP solutions market in the next 3-5 years:

Continue to consolidate all clients onto the latest version of software by offering V8.1 upgrade path and incentives
Offer FourGen Passport Program to all customers with lapsed support, to come under maintenance
· Complete a DB2 database port to capture additional market via the DB2 install base

· Port the eSCM V8.1 (Web Order Entry) solution to IBM WebSphere platform for scalability, and offer Portal and Collaboration capabilities and functionality

· Port the Payroll and HR modules to latest V8.1 and add new self servicing functionality

· Expand sourcing modules functionality into eProcurement capabilities

· Expand the Marketing Campaigns module to offer more CRM capabilities

· Strengthen the Financials and Distribution Management modules by adding new features and functionality

· Start an annual FourGen/Gillani user group meeting in summer/fall 2004

· Establish key relationships in key markets with partners to establish representation in all geographical markets across the globe

· Better position the company to capture bigger market share in key industries, such as Wholesale Distribution, Manufacturing, Retail, Healthcare, Hospitality, Services, Government and 3PL

We understand that you rely on Gillani iDistribute™, Gillani Financials, FourGen® CASE Tools and their future to solve your business problems. Your loyalty and commitment to these solutions is highly valued by Gillani and we are dedicated to delivering value to you – our most valuable asset, long into the future. In this regard, Gillani will be putting together an annual user group meeting during summer/fall 2004. Your feedback for this user group event and participation will be highly valuable.

Yours sincerely,

Syed M. Kamal
President and Chief Executive Officer

Gillani, Inc.