Natover Lease & Refinance Limited.

Annual Reports 2003

"NATOVER, as a Non-Banking Finance Company (NBFC) engaged

in the business of Supply of Money principally through Leasing,

Shall continue on its path of creative innovation.

Its transition from True' Lessor to 'Range' Lessor,

addition of ancillary financial services,

geographically expanding net work,

and accumulated skill and experience

will ensure achievement of its goal to become

a Wholesome and versatile finance house.

Company Information

Notice of Meeting

Statement of Compliance

Review of Compliance

Auditors' Report

Balance Sheet

Profit and Loss Account

Cash Flow Statement

Statement of Changes in Equity

Notes to the Accounts

Pattern of Shareholding

Branch Network.

Board of Directors:

Syed Zahid Hasan

Chairman

Mr. Khalid Latif

Director

Syed Dilawar Abbas

Director

Brig. (Retd.) M. Zareef Malik

Director

Mr. Hassan All Fadoo

Director

Mr. Shahid Anwar

N.I.T. Nominee

Mr. Nadeem H. Shaikh

Chief Executive / Director

Company Secretary:

Shahzad Ali ACA

Registered Office:

140, 17th East Street,

Off Main Korangi Road,

Phase-1, Defence Housing

Authority, Karachi.

Tel: (021)5893881-3

E.mail.nlrlho@brain.net.com

Head Office:

2nd Floor, 75-West,

Eagle Plaza, Fazal-e-Haq Road,

Blue Area, Islamabad.

Tel: (051) 2201532, 2206729

Fax: (051) 2206238,

E.mail.natover@isb.paknet.net.pk

Auditors:

M/s Hyder Bhimji & Company

Chartered Accountants

Legal Advisors:

Mr. Muhammad Aslam Arain

Mr. M.S. Qureshi

Registrar & Shares

M/s. Technology Trade (Pvt) Ltd

Transfer Officer

1st Floor, Westland Trade Centre,

Opp. Flyover, Shaheed-e-Millat Road,

Karachi - 75350

Tel: (021) 4313205, 4313206

Fax: (021) 4313207

NOTICE is hereby given that the 18th Annual General Meeting of NATOVER LEASE & REFINANCE LIMITED will be held

on Thursday October 09, 2003 at 10:00 a.m. at the Registered Office of the Company at 140,17th East Street, Off Main

Korangi Road, Phase I, Defence Housing Authority, Karachi, to transact the following business:

ORDINARY BUSINESS:

1.     To confirm the minutes of the Annual General Meeting held on 25* October 2002.

2.     To receive, consider and adopt the Audited Accounts together with the Directors'and Auditors'Report thereon

for the year ended 30th June 2003.

3.     To Confirm cash dividend @ Rupees 1.50 per share of 15,000,000 15% Preference Shares under the terms

thereof   forthe year ended on 30th June 2003.

4.     To appoint Auditors for the year 2003  2004 and to fix their remuneration. The present Auditors, M/s. Hyder

Bhimji & Co. Chartered Accountants, retire and being eligible, offer themselves for reappointment.

SPECIAL BUSINESS:

5.     SPECIAL RESOLUTION

To increase the Authorized capital form Rs.400 million to Rs.700 million and if approved, to pass, with or without

modification, the following Special Resolution:

"RESOLVED AS A SPECIAL RESOLUTION THAT the Authorized Share capital of the Company be enhanced

from Rs. 400,000,0007- (Rupees Four Hundred Million) to Rs. 700,000,000 (Rupees Seven Hundred Million)

and the following resolution for amendments in the relevant clauses of Capital in the Memorandum and Articles

of Association be and are hereby approved:

RESOLVED THAT the words and figures "Rs. 400,000,000/- (Rupees Four Hundred Million) divided into

10,000,000 ordinary shares of Rs.10/- each and 30,000,000 preference shares of Rs. 10/- each" as appearing

in Clause V of the Memorandum of Association be substituted by the words and figures "Rs. 700,000,000/-

(Rupees Seven Hundred Million) divided into 10,000,000 (Ten Million) ordinary shares of Rs.10/- each and

60,000,000 (Sixty Million) preference shares of Rs. 10/- each.

RESOLVED THAT the words and figures "Rs. 400,000,000/= (Rupees Four Hundred Million) divided into

10,000,000 ordinary shares of Rs.10/- each and 30,000,000/- Preference shares of Rs. 10/- each" as appearing

in Article - 5 of the Articles of Association be substituted by the words and figures "Rs. 700,000,0007- (Rupees

Seven Hundred Million) divided into 10,000,000 (Ten Million) ordinary shares of Rs.10/- each and 60,000,000

(Sixty Million) Preference Shares of Rs. 10/- each.

FURTHER RESOLVED THAT the Chief Executive Officer and Company Secretary be and are hereby

authorized to take all necessary steps for compliance of all the legal requirements in above behalf."

6.     To transact any other business with the permission of the chair.

By Order of the Board

KARACHI: 18th September 2003

(SHAHZADALI)

Company Secretary

NOTES:

1.     The Shares Transfer Books of the Company will remain closed from 02"" October 2003 to 09th October 2003

(both days inclusive).

2.     A member entitled to attend and vote at the meeting may appoint another member as his / her proxy to attend

and vote on his / her behalf.    The instrument appointing a proxy must be received at the Company's

Registered Office not less than 48 hours before the time of holding of the meeting.

3.    Any individual Beneficial Owner of the Central Depository Company's accounts, entitled to vote at this

meeting must bring his / her National Identity Card with him / her to prove his / her identity and in case of

proxy, must enclose an attested copy of his / her National Identity Card. Representative of corporate

members should bring the usual documents required for such purpose.

Dear shareholders,

The Directors of the Company are pleased to present before you the Annual Report together with

the Company's audited financial statements with notes thereon and Auditors' Report for the year

ended 30th June 2003:

Rupees

Profit before taxation for the year ended June 30, 2003

25,632,811

Less: Provision for taxation     - Current

350,000

- Prior Year

-317,655

- Deferred

800,000

832,345

Profit after taxation

24,800,466

Dividend on 15% preference shares

22,500,000

Profit available for appropriation

2,300,466

Transferred to statutory reserve

460,093

Profit after appropriation

1,840,373

Accumulated loss brought forward

-17,092,976

Accumulated loss carried forward

-15,252,603

Earning per ordinary share

0.44

REVIEW OF OPERATIONS

AI-Hamdo-lillah, despite challenges like placid economy, unfair competition and the absence of

entrepreneurial vitality in business at large, the performance of the company has been satisfactory.

The operations of the company expanded for the year under review, the investment in hire

purchase/morahaba financing showed growth of 15 % from Rs. 94.33 million to Rs. 108.32 million.

Although substantial decrease of 68 % was recorded in financial charges being the effect of

preference shares, the administrative expenses however, registered an inevitable but reasonable

rise of 13.9%.

The gross income posted an increase of 23 % from Rs.50.60 million to Rs.62.03 million, profit after

tax-depicted increase of 411 % that is from Rs.4.85 million to Rs. 24.80 million, once again due to

preference stock. After payment of preferred dividend @ of 15 % and transfer the profit to statutory

stood at Rs. 1,84 million which brought down the accumulated loss to Rs.15.25 million from

Rs.17.09 million. The basic earning per ordinary share stood at Rs. 0.44.

DIVIDEND

Preference Dividend; Under the terms thereof, the Directors have confirmed cash dividend @

Rs.1.50 per share to the preference share holders for the year ending June 30, 2003.

Ordinary Dividend; The Directors have decided to pass over the dividend to ordinary share for the

current year.

FUTURE OUT LOOK

Despite considerable improvement in major economic indicators like GDP growth, current account

surplus, foreign exchange reserves and reduction in foreign and domestic debt, the economy has

yet to show perceptible improvement in investment activity. Generation of employment

opportunities is essential for prosperous economy, as production requires consumption, which in

turn invigorates demand for credit. The measures for tight fiscal discipline and other reforms

launched more than three years ago by the Authorities, perhaps too much too soon for a country

such as ours, have only resulted in scant public sector investment, which has adversely impacted

down stream private sector investment. The Banking and Finance sector, instead of directing its

energies towards encouraging corporate sector enterprise, appears to have presently opted for

rather an easier course, and focused on consumer finance business.

In keeping with its tradition of survival, Natover as a full range lessor, has taken initiatives to create

new avenues by seeking business opportunities in un-conventional and innovative areas of

business. By aggressively pursuing its specialty, the operating lease wherein by adding risk and

service to supply of money, it has always managed to compete the Company expects to broaden

nationally its relationship base in the area of small and medium indigenous enterprise.

EQUITY ENHANCEMENT

In response to the opportunity presented by the NBFC Rules 2003 to expand its range of financial

activities, the Company has initiated the process to increase its authorized as well as paid up

capital. The company plans to expand its existing pool of issued capital from existing Rs. 202.50

million to Rs. 400 million and authorized capital from present Rs.400 million to Rs. 700 million during

next financial year.

CODE OF CORPORATE GOVERNANCE

To the best of our knowledge and belief, we confirm correctness of the following information in

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