I am very pleased to report that Shriro has survived the Millennium and is entering 2001 in excellent shape.

2000 was a very profitable year for our Group and was a year in which we completed the consolidation of the new businesses that we acquired in 1999 and also completed the rationalisation programme that we initiated in previous years.

In today's global economy there are forces operating which although largely beyond our control have critical effects upon the health of our Group.

In particular, I am thinking of foreign exchange rates, interest rates and the prevailing economic conditions in our various markets.

Shriro, with the major exception of our Neil Pryde subsidiary, is primarily an importer and distributor of consumer and capital goods in the Pacific Rim.

On balance, key exchange rates have been favourable for us, particularly in Japan and Greater China.

But they have had a negative effect on our margins in Australasia and in Europe for our Neil Pryde subsidiaries there.

Our strong balance sheet and positive cash flow have ameliorated the effect of continuing high interest rates.

Generally, our various economies have further recovered from the shocks of 1997 with the exceptions of Japan and New Zealand.

In 2000 we decided to exit the PhotoLab business and sold our two activities in Seattle and Tokyo. I would like to thank our staff in those businesses, particularly David Hoffman in Seattle, for all their efforts on our behalf and wish them well in the future.

We also closed Shriro Canada following the decision by Aiwa to go it alone and here I wish to thank Dr Jagtiani and Rose Campanella for their invaluable support.

During the year we took the decision to build our own facility in Sydney, Australia and our people are working hard to get this completed by mid year.

Thus we have finished 2000 with much-improved sales and profits, a healthy balance sheet and a more focussed business.

Turning to 2001, however, we can expect more turbulent operating conditions.

Already key foreign exchange rates such as the Euro/Yen have moved against us and are bound to have a negative effect for our important Japanese business.

The American economy will significantly slow down, particularly in the new technology area and this will have a direct effect on our Asian economies.

Hopefully, this decline will not extend to Europe and our Neil Pryde business there will enjoy some relief.

We must continue to work hard and smart to maintain and increase our market positions.

We must continue to press our suppliers for competitive prices and new winning products and we must develop new business to offset those activities, which have gone or will go.