LETTER FROM CEO

Dear Valued Customers,

The year 2002 was a 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 one-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 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 many different industries like 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 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 and medium businesses and large enterprises across the globe. The customers are spread across North America, South America, Europe, Africa, Middle East, East Asia and Australia.

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, 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 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 2002?

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:

· Acquired iristaDistribute (formerly FourGen® Accounting, Endura® Enterprise) from Irista, an HK systems division, and renamed the product iDistribute™

· Renamed the CASE Tools product, FourGen® CASE Tools - as it was known for two decades, since 1983. Also updated the windows-based GUI front-end.

· Created and hosted the Endura/FourGen Community Web Site as a knowledge exchange portal for the user community

· Developed an Archive and Purge module for iDistribute™ V8.1, and made it available to clients who wanted to retrofit it into older versions.

· Renewed maintenance for many companies who had foregone support in the past

· Added several new clients

· Worked with several existing clients on upgrades to 8.1 of iDistribute™ from various earlier versions

· Started selling and supporting the FourGen® CASE Tools as a standalone product as FourGen and Endura did in the past two decades.

· Started several brand recognition and lead generation initiatives via AMR Research, Gartner Group, key industry publications and trade shows.

· Received Awards for Inc 500 and FAST 500 for exceptional growth of 1125% from our inception in 1996 through 2001.

· Ported the FourGen® CASE Tools and iDistribute™ to Linux platform

· Maintained Premier Status in IBM Business Partner Program

What are the plans for 2003?

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.

· Continue to consolidate all clients onto the latest version of software by offering V8.1 upgrade path and incentives

· Port the solutions to Support Informix Dynamic Server V9.3 and newer versions IBM/Informix will release, by Q2

· Add Support for Informix-4GL V7.31 and newer versions by Q2

· Port the solutions to IBM AIX V5L, SUN Solaris V2.9, HP-UX 11i and SCO OpenServer R5.0.7 by Q3

· Re-Certify a port to Oracle 9i database server by Q2

· Provide a DB2 database port by Q3 to capture additional market via the DB2 install base

· Port the eSCM V8.1 (Web Order Entry) solution to IBM WebSphere platform for scalability

· Offer Portal and Collaboration capabilities and functionality via IBM WebSphere technology

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

· Expand the existing Windows-based GUI front-end to offer a browser-based front-end user interface by Q4

· 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

· 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

We understand that you rely on iDistribute™, 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.

Yours sincerely,

Syed M. Kamal
President and Chief Executive Officer

Gillani, Inc.