Foreword We have been engaged to oversee the management reporting of the financial statements of the company for the

year ended 30 June 2007. Our specific mission is to develop a model for the future management reporting of the financial [and non-financial] information. This report features carefully crafted information contents, intended for internal users, whose information needs are different from external users; hence our reluctance in adopting formats used for external financial reporting in ditto. The result is a user-friendly tone granting a diligent user to draw proper understanding and conclusions about the company. In achieving our mission, we were able to review critical operational and related accounting processes and highlight core improvements required. For example, the company records its billing as a single amount to the client, whereas typically a major portion of any bill consists of itemised direct reimbursable expenses [the receipted expenses]. Unless direct expenses are recorded on individual case basis, assuring that all items have been billed would rely on memorandum records. As we know memorandum records are not a part of formal accounting system and therefore the risk of error is higher. The limitations that exist in the present accounting processes, such as one noted here, found us commissioning financial and non-financial information from accounting and memorandum records. In doing so, we were not able to achieve all our benchmark [such as setting off each item of direct expenses with the items billed to clients]. However, we were able to do so for haulage [transportation-in = billed to client, and transportation-out = billed to the company by vendors]. As a matter of record, we need to disclose that we have not subjected the enclosed information to vigorous audit procedures. Admittedly, the information misses the high mark of scrupulous accuracy. However, we believe it is reliable for the intended purpose of gathering an overall view. Some of the information provided here may require minor but time consuming adjustments to achieve accuracy, which was not attempted. Furthermore, at times, comparable financial and operational information of the previous year is not cited given the time and information access constraints on the staff. This may impair quality of user understanding. For example, you will find that receipted expenditure is disclosed as imports and exports for 2007 but not for 2006. On a positive note, we are satisfied that this report can serve as a model for future management reporting.

The staff of the company fully supported us in providing the basic data in line with our direction and guidance, for which we remain grateful with special thanks to Malik Khan, Chief Executive Officer and Mr. Malik, Manager Accounts of the company. Finally, we have concluded this report with an independent frame of mind and reasonable care, having no undisclosed interest other than our fee. We will be pleased to allow our client to rely upon any specific areas of this report in light of our expressed confirmation. Altaf Noor Ali, Chartered Accountants Executive Summary: Model Transport (Pvt) Ltd was incorporated in Pakistan on 18 March 1996 under Companies Ordinance 1984. Its principal activity is shifting [moving] bonded cargo arriving at Karachi ports to dry ports in other parts of the country, at the instruction of the consignee, for its eventual clearance from the dry port and delivery. The company maintains a license from the Government of Pakistan to carry out this activity. Our core findings as detailed further in this report are: 1. Profitability. The operating surplus was down by 57.7% because of lower billings and committed management expenses. We expect tax provision for the current year to be around a million, which will be made after consulting tax advisor. Cases in process details as on 30-6-07 are not a part of accounting system. Accounts for the first quarter ending 30 Sep 2007 are not available.

2. Cash inflows continued to shrink for three consecutive quarters before recovering marginally in the last quarter confirming a significant business downturn. The cash loss per share for the year works out to be Rs. 905. The company rightly maintains a zero borrowing policy from banks, which saved it from additional cash outflows. 3. Cash transaction. A number of transactions happen in cash. Tax on cash withdrawals for the year was around Rs. 136k. Given its vulnerability and risks the processes involved requires review and revision. 4. Unrecorded deposit. A security deposit provided to customs on behalf of the company as security deposit by the ceo in the form of defence saving certificate is not recorded in the books. 5. Deposits with shipping lines. Recoveries from shipping lines are being made on regular basis. However, there are deposits of Rs. 4 m retained by shipping lines, for over two years and may require write-offs. Financial Position [Balance Sheet] at 30-06-07:

Financial Performance for the year ended 30-06-07.

Financial Performance by Quarter for the year 30-06-07