================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 20-F

                                   (Mark One)

[ ]        REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                                       OR

[X]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

[ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from     to

                          COMMISSION FILE NUMBER 0-2918

                          ARAMEX INTERNATIONAL LIMITED
             (Exact name of registrant as specified in its charter)

                          ARAMEX INTERNATIONAL LIMITED
                 (Translation of Registrant's name into English)

                                     BERMUDA
                 (Jurisdiction of incorporation or organization)
                                  P.O. Box 3371
                              Amman, 11181, Jordan
                                (Mailing Address)

                          2 BADR SHAKER ALSAYYAB STREET
                            UM UTHAYNA, AMMAN, JORDAN
                    (Address of principal executive offices)

                               -------------------

 Securities registered or to be registered pursuant to Section 12(b) of the Act.

                                                   Name of each exchange on
      Title of each class                              which registered
      -------------------                          ------------------------

COMMON STOCK, U.S. $0.01 PAR VALUE                             NASDAQ

 Securities registered or to be registered pursuant to Section 12(g) of the Act.
                                (Title of Class)

                               -------------------

          Securities for which there is a reporting obligation pursuant
                          to Section 15(d) of the Act.
                                (Title of Class)
                       COMMON STOCK, U.S. $0.01 PAR VALUE

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report.

COMMON STOCK, U.S. $0.01 PAR VALUE..............................4,900,903 SHARES

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate by check mark which financial statement item the registrant has elected
to follow.

           Item 17 [ ] Item 18 [X]
================================================================================

<PAGE>

                                TABLE OF CONTENTS


                                     PART I

           Section                                                        Page #
           -------                                                        ------

ITEM 1.    DESCRIPTION OF BUSINESS.............................................1

           THE COMPANY.........................................................1

           PRODUCTS AND SERVICES...............................................3

           CUSTOMERS...........................................................5

           SEASONALITY.........................................................5

           COMPETITION.........................................................5

           EMPLOYEES...........................................................6

           GOVERNMENT REGULATION...............................................6

ITEM 2.    DESCRIPTION OF PROPERTY.............................................6

ITEM 3.    LEGAL PROCEEDINGS...................................................7

ITEM 4.    CONTROL OF REGISTRANT...............................................7

ITEM 5.    NATURE OF TRADING MARKET............................................7

ITEM 6.    EXCHANGE CONTROLS AND OTHER LIMITATIONS
           AFFECTING SECURITY HOLDERS..........................................8

ITEM 7.    TAXATION............................................................8

ITEM 8.    SELECTED FINANCIAL DATA.............................................9

ITEM 9.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS......................10

           OVERVIEW...........................................................10

           RECENT EVENTS......................................................12

           RESULTS OF OPERATIONS..............................................12

           GEOGRAPHIC BREAKDOWN OF REVENUES...................................15

           UNAUDITED SELECTED QUARTERLY RESULTS OF OPERATIONS.................16

           LIQUIDITY AND CAPITAL RESOURCES....................................17

           EFFECTIVE CORPORATE TAX RATES......................................18


                                       i

<PAGE>


           IMPACT OF INFLATION AND CURRENCY FLUCTUATIONS......................19

           IMPACT OF YEAR 2000................................................19

           FACTORS THAT COULD AFFECT OPERATING RESULTS........................19

ITEM 9A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.........22

ITEM 10.   DIRECTORS, OFFICERS AND KEY EMPLOYEES OF
           REGISTRANT.........................................................23

ITEM 11.   COMPENSATION OF DIRECTORS, OFFICERS
           AND KEY EMPLOYEES..................................................24

ITEM 12.   OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES.....24

ITEM 13.   INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS.....................25

                                     PART II

ITEM 14.   DESCRIPTION OF SECURITIES TO BE REGISTERED.........................26


                                    PART III

ITEM 15.   DEFAULTS UPON SENIOR SECURITIES....................................26

ITEM 16.   CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR
           REGISTERED SECURITIES..............................................26

                                     PART IV

ITEM 17.   FINANCIAL STATEMENTS...............................................27

ITEM 18.   FINANCIAL STATEMENTS...............................................27

ITEM 19.   FINANCIAL STATEMENTS AND EXHIBITS..................................27

           SIGNATURES.........................................................28

Index To Financial Statements................................................F-1

                                       ii


<PAGE>

      In addition to historical information, this Annual Report on Form 20-F
contains forward-looking statements. The forward-looking statements contained
herein are subject to certain risks and uncertainties that could cause actual
results to differ materially from those reflected in the forward-looking
statements. Factors that might cause such difference include but are not limited
to, those discussed in "Item 1: Description of Business" and "Item 9:
Management's Discussion and Analysis of Financial Condition and Results of
Operations" readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's analysis as of the date
hereof. The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that arise after
the date hereof. In addition to the disclosure contained herein, readers should
carefully review any disclosure of risks and uncertainties contained in other
documents that the Company files from time to time with the Securities and
Exchange Commission.

ITEM 1. DESCRIPTION OF BUSINESS

         THE COMPANY

         Aramex International Limited ("Aramex" or the "Company") is a leading
provider of express package delivery, freight forwarding and other
transportation services primarily to, from and within the Middle East and the
Indian Sub-Continent. Since its founding in 1982, the Company has expanded its
station/office network to include 95 locations in 32 countries with
approximately 1,800 employees as of April 1, 1999. The Company also holds a
majority interest in a direct marketing and mail order business, Middle East
Direct Marketing ("MED"). From 1995 to 1998, the Company's total revenues
increased from $43.6 million to $83.6 million and net income grew from $1.5
million to $3.9 million, respectively.

         The Company provides its services from its main hubs in Dubai (UAE),
London, New York and Amman (Jordan). The Company believes that it has
established itself as one of the leading transportation service companies in the
Middle East because of its ability to provide a wide array of transportation
solutions to its clients, its local market knowledge, reputation for quality
service, and its expansive station network. In addition, the Company made the
strategic decision not to own nor operate aircraft, permitting it to place no
restrictions on delivery schedules or shipment size or weight, thereby adding to
its ability to serve its clients.

         Historically, the majority of the Company's business has been derived
from its express package delivery operations. These express operations, combined
with its station network, has provided the Company with a solid foundation for
the development of additional revenue sources. Each Aramex station is divided
into teams specialized in cross marketing multiple services to industry-specific
segments in their local market. Since each team targets one or more industry
segments in its local market, it can develop and offer customized solutions for
their clients where appropriate. The Company is a founding member of the
Overseas Express Carriers Network (the "OEC") along with Airborne Freight
Corporation ("Airborne"), the parent of Airborne Express, the third largest
domestic air express delivery carrier in the United States and a 6.2%
shareholder in the Company. The OEC is a global alliance among certain leading
independent express companies that functions as a worldwide delivery network for
its members. For tracking and tracing of its express shipments worldwide, the
Company utilizes the FOCUS tracking system which is owned and operated by
Airborne. The Company also intends to continue to make investments in technology
systems to provide a strong platform for enhanced service and future growth.

         The Company's growth strategy includes the following key elements:

Expand Market Geographic Presence - The Company continues to implement a
strategy focused on expanding its geographic presence and market in the Middle
East, the Indian Sub-Continent, and other contiguous emerging markets. Most of
these emerging markets are characterized by large populations and growing
economies which are liberalizing and opening their markets to local and foreign
investment. By expanding its distribution network in these regions, the
Company's management believes it can (i) enhance its regional market and
presence; (ii) expand its customer base; and (iii) reduce its geographic revenue
concentration.

Provide Total Transportation Solutions - The Company plans to continue to
capitalize on its reputation as a quality service provider of total
transportation solutions in its markets. A large part of this strategy involves
the continued development by the Company of customized solutions for its clients
in the areas of (i) logistics

                                       1
<PAGE>



management; (ii) multi-modal regional transportation and distribution
(offering the options of express air freight, air freight forwarding, and ground
distribution); (iii) inventory management; and (iv) local warehousing. The
Company's "One Stop Shop" approach is designed to provide its customers within a
total solution for their everyday transportation needs.

Continue Emphasis on Technology - The Company continues to invest in technology
as a vehicle to enhance service, increase sales and foster growth. The Company
believes that continuing improvements in its communications network and
information systems, such as linking all of the Company's offices via a on-line,
real time communications network and the ability of customers to have direct
connectivity to the Aramex network, will yield continued improvements in
operations and customer service and improve the Company's results of operations.

Market its Services through Aramex Teams - The Company plans to continue to
market its services through cross functional personalized customer teams which
possess the marketing skills, local market knowledge, service expertise and
industry experience necessary to identify and effectively address individual
client's transportation needs at each of its stations. This strategy provides
each station with the flexibility and independence necessary to customize
operations and solutions for the needs of local customers.

Grow Through Strategic Alliances and Acquisitions - The Company has established
strategic relationships with a variety of industry participants through its
participation in the OEC and through its agency, sponsorship and joint venture
partners. The Company plans to continue to pursue strategic alliances and may
acquire complimentary businesses in order to expand the distribution of its
services, maximize penetration in new and existing geographic markets, expand
the range of commercial services based upon its technology and infrastructure
and increase name recognition.

The Company's mailing address is P.O. Box 960913, Amman, 11196 Jordan and its
principal executive office is located at 2 Badr Shaker Alsayyab Street, Um
Uthayna, Amman, Jordan and the Company's telephone number is 962-6-5522192.


                  Aramex Stations and Service Providers/Agents
<TABLE>
<CAPTION>

Country                    Principal Station                  Other Significant Offices
-------                    -----------------                  -------------------------
<S>                        <C>                                <C>

Bahrain                    Manama

Bangladesh                 Dhaka

Bulgaria                   Sofia

Canada                     Montreal

Cyprus                     Nicosia                            Larnaca, Limassol

Egypt                      Cairo Main Office                  Cairo Down Town, 10th of Ramadan,
                                                              Alexandria, Heliopolis

Ethiopia                   Addis Ababa
France                     Paris
Greece                     Athens                             Thessaloniki
Hong Kong                  Hong Kong
India(1)                   Bombay                             Bangalore, Calcutta, Delhi,
                                                              Hyderbad, Madras
Israel                     Jerusalem
Jordan                     Amman                              Aqaba, Irbid, Sahab
Kuwait                     Kuwait
</TABLE>


                                       2
<PAGE>

<TABLE>
<S>                        <C>                                <C>
Lebanon                    Beirut                             Ain Mreisseh, Jounieh
Libya                      Tripoli
Oman                       Muscat
Pakistan                   Karachi                            Islamabad, Lahore
Palestinian
National Authority         Nabulus                            Ramallah, Gaza, East Jerusalem
Qatar                      Doha
Saudi Arabia               Jeddah                             Riyadh, Dhahran
Sri Lanka                  Colombo
Sudan                      Khartoum
Switzerland                Geneva
Syria                      Damascus                           Latakia, Homs, Aleppo, Hama,
                                                              Tartous
Turkey                     Istanbul                           Ankara, Izmir
United Arab Emirates       Dubai
                           Abu Dhabi                          Fujeirah, Al Ain, Jebel Ali
United Kingdom             London
United States              New York,
                           Washington D.C.
Uzbekistan                 Tashkent
Yemen                      Sana'a                             Aden
</TABLE>

----------------------------

(1)  Excludes 23 other stations.


         PRODUCTS AND SERVICES

         International Express Delivery Service. Express shipments consist of
small packages, typically ranging in weight up to 110 pounds with time-sensitive
delivery requirements. The Company offers its express delivery services on an
international basis to both retail and wholesale express accounts and offers its
customers the ability to track their shipments on the world wide web through the
Company's web site (www.aramex.com). At December 31, 1998, the Company had
approximately 24,000 retail express accounts and 650 wholesale express accounts.

         In order to satisfy the customer's need for rapid tracing of express
shipments, the Company provides, through the FOCUS system, an instantaneous
worldwide on-line system linking all the Company's offices. Express customers
pay a premium for the level of service provided for deliveries, especially on
international shipments.

         The Company believes that the express business will experience its most
significant growth through its retail customers as a result of the Company's
aggressive marketing of this business in an effort to generate additional
revenue and improved margins. Retail express customers include trading
companies, pharmaceutical companies, banks, service and information companies
and manufacturing and regional distribution companies, and are not concentrated
in any one industry. Revenues from retail accounts were $26.9 million (or 32.2%
of total revenues), 20.6 million (or 31.1% of total revenues) and $16.1 million
(or 30.9% of total revenues) for 1998, 1997 and 1996, respectively.

Wholesale customers consist primarily of express delivery companies (such as
Airborne Express and Emery), which originate express packages that have a Middle
Eastern destination and require Aramex's network in the region to deliver their
shipments. The end-user remains a customer of Aramex's wholesale client. Based
upon its knowledge of the Middle East market, management believes that the
Company is the leading independent wholesaler to the Middle East. Revenues from
wholesale accounts were $14.8 million (or 17.7% of total revenues), $15 million
(or 22.6% of total revenues) and $14.7 million (or 28% of total revenues) for
1998, 1997 and 1996, respectively.


                                       3
<PAGE>

         The Company is a founding member of the OEC, which is a global alliance
among certain leading or independent express companies that functions as a
worldwide delivery network for its members. The OEC sets rates for deliveries by
members in each of the member markets and establishes standards for service and
performance. OEC members, who each have valuable knowledge of their respective
markets, conduct joint marketing efforts and participate in committees that meet
periodically to address the operations of the network as a whole. The OEC in
aggregate employs more than 30,000 people in 230 countries.

         The Aramex express business, especially with the increasing strength of
the retail portion, serves as a foundation for the development of additional
revenue sources. The retail express customer often becomes a freight forwarding
or customized special services customer. The Company can also market services
such as its Shop the World Direct catalog centers to its express customer base.

         Freight Forwarding. The Company offers a wide range of freight
forwarding services, including air and ocean freight forwarding consolidation,
warehousing, customs clearance and breakbulk services. Aramex provides full
"door to door" service from, to and within the Middle East and the Indian
Sub-Continent. A significant portion of the Company's freight forwarding
business involves consignee sales (imports) and, to a lesser extent exports.
Freight forwarding shipments typically have gross weights in excess of 50
kilograms, often require more handling and are normally less time-sensitive than
express shipments.

         Aramex launched its freight forwarding business in 1987 at selected
stations and in 1993 at every Aramex station. Revenues from the Company's
freight forwarding operations were $28.8 million (or 34.5% of total revenues),
$21.7 million (or 32.7% of total revenues) and $15.2 million (or 29.1% of total
revenues) for 1998, 1997 and 1996, respectively. Whereas express shipments in
the Aramex network virtually always pass through one of its four international
hubs (Dubai, London, New York, Amman), cargo shipments are routed direct from
sender to destination by way of the commercial carrier routing that is best
suited to the size, weight and time sensitivity of the shipment.

         The Company continues to expand its ground transportation network for
small parcels and fast-moving consumer goods in the region, servicing what the
Company perceives to be a highly underdeveloped market. Demand for this mode of
transportation is continuously increasing to include different kinds of
shipments from moving small parcel shipments to shipments of computers, heavy
machinery and personal effects. In response to this need, the Company has
launched a trucking route linking Dubai in the UAE, on the one hand, and Muscat
in Oman, Riyadh in Saudi Arabia and Amman in Jordan, on the other hand. The
Company has also started a trucking route linking Dhahran in Saudi Arabia and
Bahrain in addition to a regular trucking route between Amman in Jordan and
Palestinian Territories. The Company plans to add additional trucking routes
linking together major cities in the Middle East. The Company does not own the
trucks used in connection with its freight forwarding transportation services,
but rather wet leases them on an as needed basis. In developing a parcel shuttle
service linking the main cities in the Middle East, Aramex expects to lower the
cost of linehauling by reducing air freight movement and thereby offering
customers the option of deferred service at lower prices. This service is an
extension of Aramex's logistics management service. Management believes the
addition of such complementary businesses should help strengthen the core
business of Aramex.

         Domestic Express Delivery Services. The Company has developed an
extensive network for the delivery of small parcels and has the capability to
pick-up and deliver shipments from city to city in every country in which it
operates, thereby satisfying customers' local distribution and information
needs. Customers for these services typically include local distributors,
pharmaceutical companies, banks and a TV home shopping network. Domestic express
revenues accounted for $6.5 million (or 7.7% of total revenues), $4.0 million
(or 6.0% of total revenues), and $2.9 million (or 5.5% of total revenues) 1998,
1997 and 1996, respectively.

         Shop the World Direct Catalog Centers (MED). In January 1996, the
Company formally introduced MED, a direct marketing and mail order catalog
service, at certain stations in the Middle East. MED assists customers in
selecting, ordering and delivering a broad variety of merchandise from the
catalogs of retail and mail order companies based principally in the United
States and Europe. Customers may place orders directly at MED locations or over
the telephone by calling the Company's customer service representatives. The
Company takes

                                       4
<PAGE>

delivery of all orders at airport locations in New York City and London (UK)
and then delivers the product to the customer. The Company offers a limited
guarantee on each purchase.

         The Company developed MED in response to Middle Eastern client requests
to receive goods marketed through foreign catalogs. MED generates shipments of
parcels throughout the Company's network in the Middle East, provides the
Company with a platform by which it can cross-market its services and increase
name recognition to an expanded customer base, and provides the Company with an
additional source of revenue. The Company receives a commission on each MED
product sale and generates shipping revenue on the delivery of the product to
the customer. Revenue generated from such sales by MED accounted for $2.2
million (or 2.6% of total revenue) and $1.8 million or (2.8% of total revenue)
for 1998 and 1997, respectively.

         The Company operates Catalogue shopping centers in Jordan, Kuwait,
Egypt, Lebanon, Qatar, Bahrain, United Arab Emirates, Palestinian Authority, and
Saudi Arabia.

         At December 31, 1998, MED had exclusive Middle East rights to sell and
distribute products offered by several American and European major catalogues
including J.C. Penney, Littlewoods (UK) & Sundance. (With the exception of Saudi
Arabia, Kuwait, the Gulf States and the Palestinian Authority in the case of
J.C. Penney). Starting August 1999, more catalogues will be added to the
collection offered by MED centers to include Kays (UK), Freemans (UK), Spiegel,
Newport News & Personal Creations.

         CUSTOMERS

         Aramex has a diverse customer base, totaling over 24,500 accounts
during 1998, which spans a broad geographic area mainly in the Middle East,
Europe and North America and includes companies in a wide range of industries.
Its customers, both retail and wholesale, are also diverse in terms of their
service needs. The Company's customers are not concentrated in any one
particular industry but typical customers include trading companies,
pharmaceutical companies, banks, service and information companies,
manufacturing and regional distribution companies and express companies. The
broad range of services which the Company offers has developed in response to
the growing diversity of its customers. Aramex customers make increasing use of
the high value-added services provided by Aramex, from reliable express services
to cost effective door-to-door air freight forwarding to customized special
services.

         Aramex has both retail and wholesale customers. Retail customers, i.e.,
those who are serviced and billed directly by Aramex, include both express and
freight forwarding accounts. Wholesale customers consist primarily of express
accounts. The Company is dependent upon its relationships with Airborne Express,
which is a wholesale customer of the Company and whose parent is a shareholder
of the Company. None of the Company's retail customers accounted for more than
5% of express revenues, and none of its freight customers accounted for more
than 5% of freight revenues for the years ended 1997 and 1998, respectively.

         SEASONALITY

         The Company's business is seasonal in nature. Historically, the Company
experiences a decrease in demand for its services during the first and third
quarter, the post-winter holiday and summer vacation seasons. The Company
traditionally experiences its highest volume in the fourth quarter due to the
holiday season. The seasonality of the Company's sales may cause a variation in
its quarterly operating results and a significant decrease in second or fourth
quarter revenues may have an adverse effect on the Company's results of
operations for that fiscal year. However, local Middle East holidays vary on a
year to year basis and, as a result, the Company's seasonality may shift over
time.

         COMPETITION

         The express and freight forwarding industry is highly competitive. The
principal competitive factors within the express and freight forwarding industry
include price, frequency and capacity of scheduled service, extent of geographic
coverage and reliability. Many of the Company's competitors have well
established reputations and possess substantially greater financial, marketing,
personnel and other resources than the Company. The Company's principal express
competitors are DHL Worldwide Express, Federal Express Corporation and TNT
Express, Inc. The Company's principal freight forwarding competitors are Air
Express International Corporation,


                                       5
<PAGE>

Expeditors International of Washington, Inc. and MSAS Cargo International Ltd.
In addition, the Company competes against other express and freight forwarding
companies, such as United Parcel Service of America, Inc., which are
establishing or broadening their presence in the Middle Eastern express and
freight forwarding markets. The Company competes primarily by seeking to offer
customers a wide range of distinct delivery and transportation services,
competitive pricing, a high level of service and on-time delivery. The Company
believes its competitive position is enhanced by (i) its strategy of becoming a
"One Stop" solution provider for its clients transportation needs; (ii) its
knowledge of the Middle East based upon its 17 year presence in the region;
(iii) its decentralized operation and team approach which allows local
management to maximize its resources and customize operations to the needs of
local customers; (iv) its strong management team; and (v) its emphasis on
operating cost controls.

         EMPLOYEES

         As of April 1, 1999, the Company had 1,800 employees with 343 in
administration, 875 in operations and 582 in service and sales. The Company also
uses temporary employees as necessary. The Company's future success will depend,
in part, on its ability to attract, retain and motivate qualified personnel. The
Company believes that relations with its employees are good. None of the
Company's employees are covered by labor contracts or other collective
bargaining agreements. However, certain of the Company's subsidiaries are
required by the labor law of each related country to provide indemnity payment
upon termination of relationships with their employees. The benefit accrues to
employees on a pro rata basis during their employment period and is based on
each employee's current salary.

         GOVERNMENT REGULATION

         The Company's operations require and will require various licenses,
permits and approvals in each jurisdiction where it operates. The loss or
revocation of any existing licenses, permits or approvals or the failure to
obtain any necessary licenses, permits or approvals in new jurisdictions where
the Company intends to do business would have an adverse effect on the ability
of the Company to conduct its business and/or on its ability to expand into such
jurisdictions. Authorization to commence operations will be required in each
country in which the Company intends to operate. No assurance can be given that
the Company will obtain such authorization, licenses or necessary approvals. In
addition, countries in which the Company wishes to operate may have regulatory
systems that impose other impediments on the Company's operations. There can be
no assurance that such restrictions will not have a material adverse affect on
the Company's expansion plans or results of operations.

ITEM 2. DESCRIPTION OF PROPERTY

         The Company's principal executive offices are located in Amman, Jordan.
Such offices are leased by the Company under a one year lease, renewable
annually, commencing January 1996, for approximately 11,406 square feet of
office space. Annual rent payments, for each of 1998 & 1999 years, under the
lease are approximately $106,000. The Company leases this space from ARAM, an
investment Company  controlled by the Ghandour family.

         The Company also leases 49 other facilities aggregating approximately
239,485 square feet of office space in 21 countries. The terms of such leases
range from one to six years with the last lease to expire in December 2003. The
aggregate annual rental under such leases is approximately $1.7 million for
1998.

         The Company believes its existing facilities are adequate to meet
current needs and it does not anticipate any difficulty in negotiating renewals
as leases expire or in finding other satisfactory space if existing facilities
become unavailable. However, to effectuate the Company's expansion plans, the
Company will have to service additional facilities. The company has no
agreements for future facilities at this time and there can be no assurance that
the Company will be able to secure such facilities on acceptable terms, if at
all.

                                       6
<PAGE>

ITEM 3. LEGAL PROCEEDINGS


In September 1995, an action was brought by a station manager against the
Company, claiming $1 million in damages for certain breaches of contracts and
other matters. The Company's legal counsel has filed a motion for summary
judgment. On February 3, 1997, the motion for partial summary judgment was
granted, and the only remaining claim is the claim for an accounting. The
Company's legal counsel filed a motion for partial summary judgment on the claim
for an accounting. The motion was denied and the plaintiff was granted an
accounting. The only claims remaining are the counterclaims of the Company. No
trial date is set on the Company's counterclaims, and the parties are engaged in
settlement discussions. Management believes that this action should not have a
material adverse effect on the financial position or results of operations of
the Company.

         In addition, the Company may be involved in various legal proceedings
arising in the ordinary course of its business. In the opinion of management,
the outcome of such proceedings will not have a material adverse effect on the
Company's financial position, statement of operations or cash flows.

ITEM 4. CONTROL OF REGISTRANT

         The Company is not controlled or owned by another corporation or
foreign government. The following table sets forth information as of April 1,
1999 with respect: (i) to each person known to the Company to own more than 10%
of the Company's Common Stock, and (ii) the total amount of voting stock of the
Company beneficially owned by officers and directors as a group.

<TABLE>
<CAPTION>

       Identity of Person                  Number of Shares of Common        Percentage of Shares of
           Or Group                             Beneficially Owned          Stock Beneficially Owned
           --------                             ------------------          ------------------------
<S>                                              <C>                                <C>

William S. Kingson/1/                            1,321,600                            26.6%
Fadi Ghandour/2/                                 1,321,600                            26.6%
Rula Ghandour/3/                                 1,321,600                            26.6%
All directors, officers and key employees
as a group (13 persons)/12/                      2,710,124                            53.3%
</TABLE>

(1)      Includes 100,000 shares of Common Stock issuable upon exercise of
         incentive stock options held by Mr. Kingson having an initial exercise
         price of $7.70, which expire 50% in January 2002 and 50% in July 2002.

(2)      Includes (a) 618,750 shares of Common Stock owned by Mr. Fadi
         Ghandour's spouse, Ms. Rula Ghandour and (b) 100,000 shares of Common
         Stock issuable upon exercise of non-qualified options held by Mr.
         Ghandour having an exercise price of $7.00, which expire 50% in January
         2007 and 50% in July 2007.

(3)      Includes (a) 100,000 shares of Common stock issuable upon exercise of
         non-qualified options held by Mr. Ghandour having an exercise price of
         7.00, which expire 50% in January 2007 and 50% in July 2007 and (b)
         602,850 shares of Common Stock held of record by Ms. Ghandour's spouse,
         Mr. Fadi Ghandour.

ITEM 5. NATURE OF TRADING MARKET

         The Company's Common Stock has been listed for trading on the Nasdaq
National Market since January 13, 1997. The symbol for the Company's Common
Stock on the Nasdaq National Market is "ARMX". The Company changed its symbol
from "ARMXF" to "ARMX" on April 15, 1999. The Common Stock is not listed for
trading on an exchange or other market outside the United States. The Company
has been advised, however, that a market for the shares has been developed on
the Stuttgart Stock Exchange in Germany.

         As of the date of this Annual Report, of the 4,900,903 shares of the
Company's Common Stock outstanding, 2,123,467 shares are freely tradable without
further restriction or further registration under the Securities Act of 1933
(the "Securities Act"), unless purchased by affiliates of the Company as that
term is defined under the Securities Act. The remaining 2,777,436 shares of
Common Stock outstanding are "restricted securities," as that term is defined by
Rule 144 of the


                                       7
<PAGE>

Securities Act and may only be sold in the public market if the shares are
registered under the Securities Act or if the shares qualify for an exemption
from registration under Rule 144.

         The following table sets forth, for the period beginning January 13,
1997 (the date that the Company's Common Stock first traded) and ending March
31, 1999, the high and low closing prices as traded on the Nasdaq National
Market System.

Year Ending December 31, 1997
                                       High               Low
                                       ----               ---
    First Quarter                     $ 9.44            $ 7.88
    Second Quarter                    $ 9.75            $ 8.88
    Third Quarter                     $17.13            $ 9.25
    Fourth Quarter                    $15.88            $13.50

Year Ending December 31, 1998
    First Quarter                     $14.88            $12.25
    Second Quarter                    $14.13            $10.38
    Third Quarter                     $10.75            $ 5.87
    Fourth Quarter                    $11.50            $ 7.50

Year Ending December 31,1999
    First Quarter                     $11.44             $ 9.50

         As of March 25, 1998, there were 117 record holders of the Company's
Common Stock.

ITEM 6. EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

         The Company does not believe there are any decrees or regulations under
the laws of Bermuda applicable to it restricting the import or export of capital
or affecting the remittance of dividends or other payments to nonresident
holders of the Company's Common Stock.

         There are no restrictions under the Company's Bye-Laws or Memorandum of
Association or under Bermuda law as currently in effect that limit the right of
nonresident owners to hold or vote the Company's Common Stock or to receive
dividends thereon. The permission of the Bermuda Monetary Authority is required
before shares of the Company's Common Stock can be transferred or issued to
persons who are resident in Bermuda for exchange control purposes.

         The Company is organized under the laws of Bermuda and is headquartered
in Jordan. There is uncertainty as to whether the Courts of Bermuda or Jordan
would (i) enforce judgments of United States Courts obtained against the Company
or its directors and officers predicated upon the civil liability provisions of
the federal securities laws of the United States or (ii) entertain original
actions brought in Bermuda Courts against the Company or such persons predicated
upon the federal securities laws of the United States. There is no treaty in
effect between the United States and Bermuda providing for such enforcement.


ITEM 7. TAXATION

         The Company is organized under the laws of Bermuda. At the present
time, there is no Bermuda income on profits tax, withholding tax, capital gains
tax, capital transfer tax, estate duty or inheritance tax payable by United
States shareholders of the Company, other than shareholders ordinarily resident
in Bermuda. There is currently no reciprocal tax treaty between Bermuda and the
United States regarding withholding.

                                       8
<PAGE>

ITEM 8. SELECTED FINANCIAL DATA

         The following table summarizes selected consolidated financial data and
operating information of the Company drawn from the Company's audited financial
statements.

         The following selected consolidated financial data as of December 31,
1997 and 1998 and for the years ended December 31, 1996, 1997 and 1998 have been
derived from the Company's audited Consolidated Financial Statements included
elsewhere herein. The selected consolidated financial data as of December 31,
1994 and 1995 and for the years ended December 31, 1994 and 1995 have been
derived from audited historical consolidated financial statements of the Company
covering those periods. The information should be read in conjunction with the
Consolidated Financial Statements and Notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" appearing elsewhere
in this Report.

         The Company's Consolidated Financial Statements have been prepared in
accordance with international accounting standards, which, for purposes of the
Company's financial statements, are substantially consistent with U.S. GAAP
except as set forth in note 22 to the consolidated financial statements included
elsewhere herein.

<TABLE>
<CAPTION>

           (In Thousands of U.S. Dollars Except for Shares and Per Share Data) (Year Ended December 31)

                                          1994            1995          1996            1997            1998
---------------------------------------------------------------------------------------------------------------
<S>                                   <C>            <C>            <C>            <C>              <C>

STATEMENT OF INCOME DATA:
Revenues:
International Express .............   $    22,349    $    25,491    $     30,798   $    36,556      $    43,629
Freight Forwarding ................        13,104         14,306          15,186        21,697           28,804
Domestic Express(1) ...............         1,291          2,007           2,880         3,967            6,456
MED ...............................            --             --           1,078         1,833            2,153
Other (2) .........................         1,385          1,798           2,333         2,277            2,569

Total revenues ....................        38,129         43,602          52,275        66,330           83,611

Shipping costs ....................        19,992         23,045          28,080        35,471           44,795

Gross profit ......................        18,137         20,557          24,195        30,859           38,816
Operating expenses ................         6,877          7,986           9,796        10,682           12,616
Selling, general and
     administrative expenses ......        10,232         10,664          12,003        17,278           22,462

Operative income ..................         1,028          1,907           2,396         2,899            3,738
Interest income ...................            --             --              --           365              571
Interest expense ..................           (46)           (61)           (102)          (65)            (130)
Gain (loss) on sale of fixed
     assets .......................            (4)            (1)             14           (44)              (5)
Exchange gain (loss) ..............           (55)            31             (13)          (37)             (40)
Other income (loss) ...............          (123)            69              71           142               14
Income before income taxes ........           800          1,945           2,366         3,260            4,148
Provision for income taxes ........          (227)          (266)           (157)         (170)            (292)
Minority interests ................          (278)          (157)           (162)           31               (1)
Net income ........................   $       295    $     1,522    $      2,047   $     3,121            3,855


Earnings per common share
     Basic ........................   $      0.09    $      0.49    $      0.64    $      0.71      $      0.81

     Diluted ......................   $      0.09    $      0.49    $      0.64    $      0.69      $      0.79
Weighted average common shares
outstanding
     Basic ........................     3,125,000      3,125,000       3,184,939     4,396,811        4,746,066

     Diluted ......................     3,125,000      3,125,000       3,184,939     4,523,047        4,867,945
Cash Dividends Per Share Declared..           --              --              --            --               --
                                      -----------    -----------    ------------   -----------      -----------
</TABLE>

                                       9
<PAGE>


<TABLE>
<S>                                   <C>            <C>            <C>            <C>              <C>
BALANCE SHEET DATA:
Working capital ...................   $     1,915    $     2,867     $     6,650    $   13,596      $    21,108
Total assets ......................        13,178         14,344          19,372        30,704           41,320
Total liabilities .................         9,715          9,649          10,463        12,960           13,945
Total Shareholders equity .........   $     2,889    $     4,404     $     8,653    $   16,759      $    25,975
                                      -----------    -----------    ------------   -----------      -----------
US GAAP
Operative income ..................         1,028          1,907           2,396         2,899            2,884
Net income ........................   $       295    $     1,522     $     2,047    $    3,121      $     3,001
Earnings per common share
  Basic ...........................   $      0.09    $      0.49     $      0.64    $     0.71      $      0.63
  Diluted .........................   $      0.09    $      0.49     $      0.64    $     0.69      $      0.62
</TABLE>

-------------------
(1) Domestic express revenues are derived from the intracountry delivery of
    packages, primarily by ground transportation.

(2) Other revenue derived from the Company's remail and special services.



ITEM 9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Overview

         General. Aramex is a leading provider of express package delivery,
freight forwarding and other transportation services primarily to, from and
within the Middle East and the Indian Sub-Continent. Since its founding in 1982,
the Company has expanded its station/office network to include 95 locations in
32 countries. From 1995 to 1998, the Company's total revenues increased from
$43.6 million to $83.6 million and net income increased from $1.5 million to
$3.9 million, respectively. The Company provides its services from its main hubs
in Dubai (UAE), London, New York and Amman (Jordan). The Company also holds a
majority interest in a direct marketing and mail order business, Middle East
Direct Marketing ("MED").

         International express revenues are derived from the Company's
international express parcel delivery service. Freight forwarding revenues are
derived from the Company's freight forwarding services, including air and ocean
freight forwarding consolidation, warehousing, customs clearance and breakbulk
services. Domestic express revenues are derived from the Company's intra-country
delivery services. MED revenues are derived from the Company's direct marketing
and mail order catalog service. Other revenues are derived from the Company's
other special services, including airline ticketing, remail, travel and other
corporate services. The Company recognizes revenues when shipments are
completed. For "door to door" shipments revenues are recognized upon delivery of
freight at the destination. For other shipments, revenues are recognized upon
delivery of freight to the air carrier, at which time the revenue process is
completed.

         As a non-asset based provider of transportation services, the Company's
"cost of services" consists of purchased transportation on the most
cost-effective and reliable mode of transportation available. Therefore,
shipping costs include linehaul expenses, distribution expenses, inbound costs
and freight forwarding and related expenses, the latter constituting the largest
component of direct costs. The Company's operating expenses are primarily the
expenses of the Company's stations and include salaries and fringe benefits,
communication, travel expenses, vehicle expenses, operating material,
depreciation expense, office rent and utilities, printing and stationery,
maintenance expenses, governmental fees and uniform expenses. Selling, general
and administrative expenses include executive salaries, corporate overhead at
the GSO and selling and marketing expenses for the Company as a whole.

         In accordance with its growth strategy, the Company has strengthened
its presence in the Indian Sub-Continent region by converting local agency
agreements to Company-controlled joint ventures in India, Sri Lanka and
Bangladesh as of April 1, July 1 and June 1, 1998 respectively. By doing so, the
Company now consolidates the results of the 29 existing Aramex locations in
India into its operations since April 1998. The Company


                                       10
<PAGE>

increased its marketing efforts in this region and introduced the Company's
customer team concept to these locations during the 1998 year.

         Being ideally positioned to take full advantage of the opportunities
that the market in Turkey offers, the Company started a Company-controlled joint
venture in Turkey that has been included in the Company's consolidation since
November 1998.

         The Company has expanded its investment in some stations to increase
its marketing efforts in these stations. The Company experienced major
expansions in Cyprus, Hong Kong, Paris, Saudi Arabia and Amman during 1998. In
addition, the Company acquired full ownership share in its joint venture
operation in Egypt that went into effect as of October 1, 1998.

         In addition to the existing trucking routes that links between
different cities in the Gulf and the Middle East, the Company plans to launch
additional trucking routes in order to maximize customer satisfaction and
achieve high efficiency levels. The Company does not own the trucks used in
connection with its freight forwarding transportation services, but rather wet
leases them on an as needed basis. In developing a parcel shuttle service
linking the main cities in the Middle East, the Company expects to lower the
cost of linehauling by reducing air freight movement and thereby offering
customers the option of deferred service at lower prices. This service
complements an extension of the Company's logistics management service.
Management believes the addition of such complementary businesses should help
strengthen the core business of the Company.

         Historically, the majority of the Company's business has been derived
from its express package delivery operations. These express operations, combined
with its station network, have provided the Company with a solid foundation for
the development of additional revenue sources. The Company has made significant
investments over the past few years in training its personnel to sell and market
its freight forwarding services at most of its stations. This has resulted in an
increase in freight forwarding revenues of 32.7% from $21.7 million in 1997 to
$28.8 million in 1998. The Company's strategy is to continue to identify
additional revenue sources to add to its menu of products and services and
diversify its revenue base.

         As an example of this strategy, the Company continues to expand its
ground transportation network for small parcels and fast moving consumer goods
in the region. As part of the Company's overall strategy to increase its
logistics services, the Company plans to continue developing an intra-Gulf
region ground transportation network to address the growing electronics and
computer needs of the region. Consistent with the Company's plan to expand its
logistics and related transportation services, the Company plans to continue to
expand its warehousing facilities in Amman and Dubai as well as focus on
increasing market and client penetration with its existing clients by offering
additional transportation and logistics services.

         In addition, the Company opened three additional MED locations in Saudi
Arabia in 1998. Although the Company formally inaugurated MED in 1996, the
Company had limited financial and human resources to develop MED during its
first year and it was not until 1997, following the Company's initial public
offering, that the Company commenced expending marketing and other resources to
develop the MED business. The Company believes that while the expenditures made
in 1997 to develop this business negatively impacted the Company's margins and
profitability for 1997, the appropriate infrastructure has been put in place to
develop MED into a viable, complementary business to the Company's other
businesses while creating an additional source of revenue for the Company's
express business.

In December 1997, the Company was awarded the Corporate International Standard
Organization (ISO) quality certification, a move that supports the company's
drive towards certifying all of its branches throughout the globe with the
covered stamp of quality.

         The Company generally operates through subsidiaries, sponsorship
agreements, joint ventures, or agency arrangements. The consolidated financial
statements include the accounts of the Company, its subsidiaries and other
entities that are controlled directly and indirectly through agreements that
provide the Company with authority to govern the financial and operating affairs
of the subsidiaries. Payments to the Company's joint


                                     11

<PAGE>
venture partners, minority owners, and sponsors are reflected in the Company's
financial statements as minority interests. Whenever possible under local law,
the Company considers increasing its ownership or participation interest in its
joint ventures as well as converting its agency arrangements with certain of its
service providers into joint ventures in order to permit the consolidation of
these operations' results with the Company's results of operations.

         As an offshore company incorporated in Bermuda, profits from operations
of foreign subsidiaries are not subject to Bermudian taxes. Additionally, for
certain of its operations in the Middle East, the Company is exempt from income
taxes. As a result, the Company's consolidated effective tax rate for 1998 was
7.0%. As long as the Company continues to generate a similar portion of its
operating profits from tax-free jurisdictions similar to many countries in the
Middle East, the Company believes its effective tax rate will remain in the
range of historical levels.

         The Company's business is seasonal in nature. Historically, the Company
experiences a decrease in demand for its services during the first and third
quarters, the post-winter (and local Middle East) holiday and summer vacation
seasons. The Company traditionally experiences its highest volume in the fourth
quarter due to the holiday season. The seasonality of the Company's sales may
cause a variation in its quarterly operating results and a significant decrease
in second or fourth quarter revenue may have an adverse effect on the results of
operations for that fiscal year. However, local Middle East holidays vary on a
year to year basis and, as a result, the Company's seasonality may shift over
time.

         The consolidated financial statements of the Company have been prepared
in accordance with International Accounting Standards (IAS). For purposes of
these financial statements there is only one significant difference between the
Company's accounting principles utilized and United States Generally Accepted
Accounting Principles (US GAAP).

    Following is a description of this difference:

         During 1998 Mr. William Kingson (Chairman) and Mr. Fadi Ghandour (CEO)
transferred 65,000 shares of common stock of the Company as a gift to certain
employees. Under US GAAP where a company's principal stockholder transfers a
portion of his shares to one or more of its employees, then the Company is
required to account for such transfer as a compensation expense with an
offsetting contribution to capital at the fair value of the shares transferred.

         Under IAS, there is no requirement to record such transfers as
compensation expense, and accordingly the company did not record the transfer of
shares as an expense.

Recent Events

         In May, 1999 the Company obtained an official license to start its
operations in Morocco. The Company plans to launch its Morocco operations during
the fourth quarter of 1999 year.

Results Of Operations

         The following table sets forth for the periods indicated the
percentages of total revenues represented by certain items reflected in the
Company's consolidated statements of income:


<TABLE>
<CAPTION>
                                                         Years Ended December 31,
                                                         ------------------------
                                                      1996         1997          1998
                                                      ----         ----          ----
<S>                                                   <C>          <C>          <C>
Revenues:
   International express .......................      58.9%        55.1%         52.2%
   Freight forwarding ..........................      29.1         32.7          34.4
   Domestic express ............................       5.5          6.0           7.7
   MED .........................................       2.1          2.8           2.6
   Other .......................................       4.5          3.4           3.1
      Total Revenues ...........................       100%         100%          100%

Shipping costs..................................      53.7         53.5          53.6
Gross profit ...................................      46.3         46.5          46.4
Operating expenses .............................      18.7         16.1          15.1
Selling, general and administrative expenses....      23.0         26.0          26.9

Operating income ...............................       4.6          4.4           4.5
Income before income taxes .....................       4.5          4.9           5.0
Provision for income taxes .....................       0.3          0.3           0.3
Minority interests .............................       0.3         (0.1)           (-)
Net income .....................................       3.9          4.7           4.6
</TABLE>


                                       12
<PAGE>


Comparison Of Year Ended December 31, 1998 To Year Ended December 3l, 1997

         Revenues.

          Consolidated revenues of the Company increased by $17.3 million, or
26.1%, to $83.6 million for the year ended December 31, 1998 ("1998") from $66.3
million for the year ended December 31, 1997 ("1997").

         International express revenues increased by $7.1 million, or 19.3%, to
$43.6 million for 1998 from $36.6 million in 1997, primarily as a result of
launching new joint venture operations in India, Sri Lanka, Bangladesh, Turkey
and increased activity in Saudi Arabia and the United Arab Emirates.

         Freight forwarding revenues increased by $7.1 million, or 32.8%, to
$28.8 million for 1998 from $21.7 million for 1997, primarily as a result of
increased growth in the Company's freight business in most of it's core markets
the Middle East.

         Domestic express revenues increased by $ 2.5 million, or 62.8%, to $6.5
million for 1998 from $4.0 million for 1997, primarily as a result of the
Company's new joint venture in India and the continued market share growth, in
the Company's activities in the United Arab Emirates, and Saudi Arabia.

         MED revenues increased by $0.3 million, or 17.4%, to $2.2 million for
1998 from $1.8 million for 1997, primarily as a result of growth in MED's core
markets especially in Egypt, and newly opened operations in Saudi Arabia.

         Other revenues increased by $0.3 million, or 12.8%, to $2.6 million for
1998.

         Shipping Costs increased by $9.3 million, or 26.3%, to $44.8 million
for 1998 from $35.5 million for 1997.

         Gross Profit. As a result of the above factors, gross profit increased
by $8.0 million, or 25.8%, to $38.8 million in 1998 from $30.9 million in 1997.

         Operating Expenses.

         Operating expenses increased by $1.9 million, or 18.1%, to $12.6
million for 1998 from $10.7 million for 1997. As a percentage of total revenues,
however, operating expenses decreased to 15.1% of 1998 total revenues from 16.1%
of 1997 total revenue.

         Selling, General and Administrative Expenses.

         Selling, and administrative expenses increased by $5.2 million, or 30%
to $22.5 million for 1998 from $17.3 million for 1997.

         Operating Income.

         As a result of the above factors, operating income increased by $0.8
million, or 28.9%, to $3.7 million in 1998 from $2.9 million in 1997.

         Other Income.

         Other income remained at $0.4 million for 1998.

         Net Income.

         Net income increased by $0.7 million, or 23.5% to $3.9 million for 1998
from $3.1 million for 1997.


                                       13
<PAGE>


Comparison Of Year Ended December 31, 1997 To Year Ended December 3l, 1996

         Revenues.

         Consolidated revenues of the Company increased by $14.1 million, or
26.8%, to $66.3 million for the year ended December 31, 1997 ("1997") from $52.3
million for the year ended December 31, 1996 ("1996").

         International express revenues increased by $5.8 million, or 18.8%, to
$36.6 million for 1997 from $30.8 million in 1996, primarily as a result of
additional revenues generated by the Company's expansion of its operations in
Saudi Arabia and the Arabian Gulf. Specifically, express revenue growth was
driven largely by increased growth in the Company's retail express business of
approximately 25%, primarily attributable to a 225% and 35% increase in retail
express business generated by the Company's stations in Saudi Arabia and Dubai,
respectively.

         Freight forwarding revenues increased by $6.5 million, or 42.9%, to
$21.7 million for 1997 from $15.2 million for 1996, primarily as a result of
increased revenue growth in the Company's operations in Saudi Arabia, the UAE,
Jordan and Lebanon. Management believes this growth is the direct result of the
Company's focus on, and investment in, training its employees to sell freight
forwarding service at most of its stations.

         Domestic express revenues increased by $ 1.1 million, or 37.7%, to $4.0
million for 1997 from $2.9 million for 1996, primarily as a result of the
continued growth in the Company's activities in the UAE and Saudi Arabia and the
addition of domestic express services in most of the Company's stations in the
Middle East.

         MED revenues increased by $0.8 million, or 70.0%, to $1.8 million for
1997 from $1.1 million for 1996, primarily as a result of growth in MED's core
markets of Jordan, Kuwait and Lebanon and the opening of a MED office in Dubai
(UAE).

         Other revenues decreased by $0.05 million, or 2.4%, to $2.3 million
for 1997.

         Shipping Costs.

         Shipping costs increased by $7.4 million, or 26.3%, to $35.5 million
for 1997 from $28.1 million for 1996, primarily as a result of the increased
volume in the number of 1997 shipments. As a percentage of total revenues,
however, shipping costs remained stable at approximately 53.5%. During 1997, the
Company experienced lower shipping costs as a percentage of international
express and freight forwarding revenues, respectively, offset by increased
shipping costs as a percentage of MED and domestic express revenues,
respectively.

         Gross Profit. As a result of the above factors, gross profit increased
by $6.7 million, or 27.5%, to $30.9 million in 1997 from $24.2 million in 1996.
Gross margin remained stable at approximately 46.5% of total revenues for each
of 1997 and 1996.

         Operating Expenses. Operating expenses increased by $0.9 million, or
9.0%, to $10.7 million for 1997 from $9.8 million for 1996, primarily as a
result of the addition of employees involved in the Company's Saudi Arabian
operations. As a percentage of total revenues, however, operating expenses
decreased to 16.1% of 1997 total revenues from 18.7% of 1996 total revenues.

         Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $5.3 million, or 44.0% to $17.3 million for
1997 from $12.0 million for 1996. As percentage of total revenues, selling,
general and administrative expenses increased to 26.0% of 1997 total revenues
from 23.0% of 1996 revenues. This increase resulted primarily from additional
expenditures during 1997 related to addition of executive, marketing and sales
employees associated with the Company's expansion in Saudi Arabia, the
Palestinian Territories, Jordan and Dubai.


                                       14
<PAGE>

         Operating Income. As a result of the above factors, operating income
increased by $0.5 million, or 21.0%, to $2.9 million in 1997 from $2.4 million
in 1996. As a percentage of total revenues, operating income decreased slightly
to 4.4% of total 1997 revenues from 4.6% of total 1996 revenues.

         Other Income. Other income increased to $0.4 million in 1997 from
$(0.03) million in other expense in 1996, primarily as a result of interest
income from the proceeds of the Company's 1997 initial public offering.

         Net Income. Net income increased by $1.1 million, or 52.5% to $3.1
million for 1997 from $2.0 million for 1996.

Geographic Breakdown of Revenues

         The Company sells its services primarily to customers in the Middle
East, Europe and North America. Revenues are generally recognized at the source,
i.e., by the station which invoices the ultimate customer. The table below shows
the breakdown of revenues (dollars in millions) by geographic region for 1998,
1997 and 1996.
<TABLE>
<CAPTION>

                                       International            Freight           Domestic Express,
                                         Express               Forwarding               MED &              Total
1998                                      (53%)                  (34%)               Other(13%)       Company (100%)
-------                                -------------           ----------         -----------------   ---------------
REGION                                  $       %             $       %            $          %        $          %
------                                -----    ---           -----   ---         -----       ---     -----       ---
<S>                                    <C>     <C>            <C>     <C>          <C>       <C>      <C>         <C>

Middle East.................           48.8     75            22.9    80           9.7        88      81.5        78
Europe......................            9.5     15             3.1    10           0.3         1      12.7        12
North America...............            3.2      5             2.3     8           0.3         3       5.8         6
Asia........................            3.4      5             0.5     2           0.8         8       4.8         4
Eliminations(1).............          (21.2)     -               -                   -         -     (21.2)        -
                                      -----    ---           -----   ---         -----       ---     -----       ---
Total 1998 Revenues.........          $43.7    100%          $28.8   100%        $11.1       100%    $83.6       100%
                                      =====    ===           =====   ===         =====       ===     =====       ===

</TABLE>

<TABLE>
<CAPTION>

                                       International            Freight           Domestic Express,
                                         Express               Forwarding              MED &              Total
1997                                      (55%)                  (33%)               Other(12%)       Company (100%)
-------                                -------------           ----------         -----------------   ---------------
REGION                                  $       %             $       %            $          %        $          %
------                                -----    ---           -----   ---         -----       ---     -----       ---
<S>                                    <C>     <C>            <C>     <C>          <C>       <C>      <C>         <C>

Middle East.................           42.3     77            16.5    76           8.0        94      66.8        79
Europe......................            9.5     17             2.7    12           0.1         1      12.3        14
North America...............            3.1      6             2.5    12           0.4         5       6.0         7
Eliminations(1).............          (18.3)     -               -     -          (0.5)        -     (18.8)        -
                                      -----    ---           -----   ---         -----       ---     -----       ---
Total 1997 Revenues........           $36.6    100%          $21.7   100%         $8.0       100%    $66.3       100%
                                      =====    ===           =====   ===         =====       ===     =====       ===
</TABLE>

<TABLE>
<CAPTION>

                                       International            Freight           Domestic Express,
                                         Express               Forwarding               MED &              Total
1996                                      (60%)                   (29%)               Other(11%)       Company (100%)
-------                                -------------           ----------         -----------------   ---------------
REGION                                  $       %              $      %            $          %        $          %
------                                -----    ---           -----   ---         -----       ---     -----       ---
<S>                                    <C>     <C>            <C>     <C>          <C>       <C>      <C>         <C>

Middle East................            34.2     74            10.9    72           6.1        92      51.2        75
Europe......................            8.9     19             2.0    13           0.1         2        11        16
North America...............            3.1      7             2.3    15           0.4         6       5.8         9
Eliminations(1).............          (15.4)     -               -     -          (0.3)        -     (15.7)        -
                                      -----    ---           -----   ---         -----       ---     -----       ---

Total 1996 Revenues...                $30.8    100%          $15.2   100%         $6.3       100%    $52.3       100%
                                      =====    ===           =====   ===         =====       ===     =====       ===
</TABLE>

                                       15
<PAGE>


-------------
1. Revenues between stations that are wholly-owned subsidiaries are priced at
cost. Transactions with other affiliated stations are priced at cost plus 10%.
All intercompany transactions have been eliminated in consolidation.

Unaudited Selected Quarterly Results of Operations

         The following tables set forth certain unaudited quarterly operating
information for each of the eight quarters ending with the quarter ended
December 31, 1998, both in U.S. dollars and as a percentage of total revenues.
This data has been prepared on the same basis as the audited financial
statements contained elsewhere in this Report and management believes that it
includes all adjustments, consisting only of normal recurring adjustments,
necessary for the fair presentation of the information for the periods presented
when read in conjunction with the Company's Financial Statements and related
Notes thereto. Results for any previous fiscal quarter are not necessarily
indicative of results for the full year or for any future quarter. The Company's
quarterly operating results have varied significantly in the past and may vary
significantly in the future.


<TABLE>
<CAPTION>
                                                         Quarter Ended
                              ----------------------------------------------------------------------
                                                             1997
                              ----------------------------------------------------------------------
                                  Mar. 31            June 30           Sept. 30           Dec. 31
                              ---------------    ---------------   ---------------   ---------------
Statement of Income Data:
                                $         %        $         %        $         %      $          %
                              -----     -----    -----     ----     -----     ----   -----      ----
<S>                           <C>        <C>     <C>        <C>     <C>       <C>    <C>         <C>
Revenues
International
     express .............    8,118      55.6    8,864      56.7    8,968     54.0   10,606      54.4
   Freight forward .......    4,576      31.3    5,295      33.9    5,516     33.2    6,310      32.4
   Domestic ..............      794       5.4      844       5.4    1,027      6.2    1,302       6.7
   MED ...................      342       2.3      352       2.3      440      2.6      699       3.6
   Other .................      767       5.3      275       1.8      658      4.0      577       3.0

 Total revenues ..........   14,597       100   15,630       100   16,609      100   19,494       100

Shipping costs ...........    8,000      54.8    8,230      52.7    9,060     54.5   10,181      52.2
     Gross profit ........    6,597      45.2    7,400      47.3    7,549     45.5    9,313      47.8
Operating exp. ...........    2,681      18.4    2,509      16.1    2,769     16.7    2,723      14.0
Selling, general
and admin exp. ...........    3,273      22.4    4,172      26.7    4,187     25.2    5,646      29.0

Operating income .........      643       4.4      719       4.6      593      3.6      944       4.8
Net income ...............      636       4.4      722       4.6      757      4.6    1,006       5.2

</TABLE>



                                       16

<PAGE>



<TABLE>
<CAPTION>
                                                         Quarter Ended
                              ----------------------------------------------------------------------
                                                             1998
                              ----------------------------------------------------------------------
                                  Mar. 31            June 30           Sept. 30           Dec. 31
                              ---------------    ---------------   ---------------   ---------------
Statement of Income Data:
                                $         %        $         %        $         %      $          %
                              -----     -----    -----     ----     -----     ----   -----      ----
<S>                           <C>        <C>     <C>        <C>     <C>       <C>    <C>         <C>
Revenues
International
     express ............    9,901      53.8     10,473    52.5     10,246    52.3    13,009     50.7
   Freight forwarding ...    6,358      34.5      6,938    34.9      6,903    35.3     8,606     33.6
   Domestic express .....    1,144       6.2      1,337     6.7      1,491     7.6     2,484      9.7
   MED ..................      468       2.5        494     2.4        347     1.9       842      3.3
   Other ................      552       3.0        697     3.5        618     3.1       702      2.7

Total revenues ..........   18,423       100     19,939     100     19,605     100    25,643      100

Shipping costs ..........   10,026      54.4     10,784    54.1     10,260    52.3    13,725     53.5
     Gross profit .......    8,397      45.6      9,155    45.9      9,345    47.6    11,918     46.5
Operating expenses.......    2,905      15.8      3,013    15.1      3,212    16.4     3,485     13.6
Selling, general
   and administrative
   expenses .............    4,748      25.8      5,165    25.9      5,257    26.8     7,292     28.4

Operating income ........      744       4.0        977     4.9        876     4.5     1,141      4.4
Net income ..............      781       4.2        903     4.5        951     4.9     1,220      4.8

US GAAP
Operating income ........      744       4.0        977     4.9         22     0.1     1,141      4.4
Net income ..............      781       4.2        903     4.5         97     0.5     1,220      4.8
</TABLE>

Liquidity and Capital Resources

         The Company's primary capital requirements to date have been funding
its accounts receivable and expansion of its station network. The requirements
have been met primarily by internally generated funds, banks financing and
proceeds from the Company's 1996 private sale of shares of Common Stock to
Airborne, the Company's 1997 initial public offering and the Company's 1998
secondary public offering.

         The Company's working capital was $21.1 million at December 31, 1998,
as compared to $13.6 million at December 31, 1997. The increase in working
capital was primarily the result of the proceeds from the Company's secondary
public offering.

         The Company's cash balances were $10.3 million at December 31, 1998 as
compared to $6.6 million at December 31, 1997, and $2.3 million at December 31,
1996. Net cash from operating activities was $2.7 million at December 31, 1998
as compared to $2.1 million at December 31, 1997, and $0.5 million at December
31, 1996. The increase in net cash from operating activities in 1998 compared to
1997 was due primarily to the increase in earnings before depreciation expenses.

         Net cash used in investing activities was $4.6 million at December 31,
1998 as compared to $4.1 million at December 31, 1997, and $1.1 million at
December 31, 1996. Purchases of property, plant and equipment remained at a high
level of 3.6 million during 1998 year primarily due to the Company's continued
investment in technology, expansion in Saudi Arabia and the addition of new
joint ventures . Net cash from financing activities was $5.6 million at December
31, 1998 as compared to $6.2 million at December 31, 1997, and $1.7 million at
December 31, 1996. The increase in 1998 of cash flows from financing activities
was primarily the result of the issuance of shares in the Company's secondary
public offering.

          The Company leases office space and office and transportation
equipment under various operating leases, some of which are renewable annually.
Rent expense related to these leases amounted to $1.7 million, $1.2 million, and
$1.1 million for 1998, 1997, and 1996, respectively.

         The Company has from time to time experienced a need for cash to fund
its receivables and sourced such needs with bank overdrafts and/or available
credit under its lines of credit. The Company maintains several lines of credit
with various banks aggregating $0.2 million, $0.5 million and $0.3 million at
December 31, 1998, 1997, and 1996, respectively. The Company had $0.2 million,
$0.3 million and $0.3 million outstanding under these


                                       17

<PAGE>



lines of credit at December 31, 1998, 1997, and 1996, respectively. The
remaining amounts due to banks of $0.2 million, $0.3 million, and $0.4 million
due at December 31, 1998, 1997, and 1996, respectively, represent bank
overdrafts. The weighted average interest rates on the Company's lines of credit
were 8.5%, 12.8%, and 11.9% at December 31, 1998, 1997, and 1996, respectively.

         In June 1996, the Company entered into a three-year term loan from
NatWest Bank in the principal amount of $0.2 million bearing interest at 9.875%
per annum. The loan was fully settled before the end of 1998 year.

         For 1998, 1997, and 1996, payments to minority interests aggregated
$(0.1) million, $(0.1) million, and $(0.2) million, respectively.

         In January 1997, the Company completed the initial public offering of
1,000,000 shares of Common Stock. The net proceeds of this issue received by the
Company (after deducting underwriting discounts, commissions and other costs
associated with the offering) were approximately $5.0 million. The Company has
also completed a secondary public offering on May 6,1998 of 1,000,000 shares of
common stock on the Nasdaq National Market at a price of $13.125 per share, of
which 500,000 shares were offered by the Company and 500,000 shares were offered
by certain selling shareholders. The net proceeds of this issue received by the
Company (after deducting underwriting discounts, commissions and other costs
associated with the offering) were approximately $5.70 million. The Company used
a portion of the net proceeds from its initial & secondary public offerings (i)
to expand into existing and emerging markets by acquiring ownership interests or
increasing existing participation interests in certain local service providers,
(ii) to open additional Shop the World Direct catalog centers, (iii) to invest
in technology and systems infrastructure in order to introduce logistics
management services, (iv) to acquire additional vehicles for operation of
domestic and cross border ground transportation, (v) working capital and general
corporate purposes and (vi) to finance the company's share repurchase plan.

         In October 1996, the Company received $2.0 million of proceeds from the
Airborne Stock Purchase and utilized the proceeds for working capital purposes.

         On September 18,1998 the company announced a share repurchase program
to acquire up to 200,000 shares of it's common stock. According to the program
the shares will be purchased in open market or private transactions and the
purchased shares will be cancelled. During 1998 the Company purchased 31,000
shares at an aggregate cost of $274,000 and an additional 30,000 shares were
purchased during 1999 at an aggregate cost of $337,000 .

         The Company's capital commitments for 1999 are anticipated to relate to
the expansion of the Company's facilities in the Indian Subcontinent and Dubai
and additional investments in technology and information systems to support the
Company's growth.

         Management believes that the proceeds from its two public offerings
coupled with cash flows from operations and borrowing capacity should be
sufficient to fund the Company's operations for the foreseeable future.

Effective Corporate Tax Rates

         The Company's consolidated effective tax rate was 7.0%, 5.2%, and 6.7%
for 1998, 1997, 1996, respectively. The principal differences between the
effective tax rates and the statutory tax rate applicable in the United States
of 35% are exemptions from income taxes of many of the Company's subsidiaries
operating in the Middle East and lower statutory rates at certain other
locations. As long as the Company continues to generate a similar portion of its
operating profits from tax-free jurisdictions similar to many countries in the
Middle East, the Company believes its effective tax rate will remain in the
range of historical levels.

         The Company is subject to taxation in a number of jurisdictions, and
the final determination of its tax liabilities involves the interpretation of
the statutes and requirements of various domestic and foreign taxing
authorities. Foreign income tax returns of foreign subsidiaries, unconsolidated
affiliates and related entities are


                                       18

<PAGE>



routinely examined by foreign tax authorities. In certain countries, the tax
returns have not yet been reviewed by the tax authorities. However, the Company
is satisfied that adequate provisions have been provided for potential tax
contingencies.

Impact of Inflation and Currency Fluctuations

         The Company does not believe that inflation or currency fluctuations
has had a material adverse effect on revenues and results of operations.
However, demand for the Company's services is influenced by general economic
conditions, including inflation and currency fluctuations. Periods of economic
recession, high inflation or the devaluation of currencies in countries in which
the Company operates could have a material adverse effect on the express and
freight forwarding industry and the Company's results of operations.

Impact of Year 2000

         Many computer systems and software products will not function properly
in the years starting 2000 due to a once-common programming standard that
represents years using only the last two-digits. This is known as the Year 2000
problem.

         In 1998, the Company began converting its internal computer systems to
be Year 2000 compliant. As of March 31, 1999, approximately 80% of the Company's
hardware and 70% of the Company's software were compliant. All of the Company's
internal IT and non-IT systems are expected to be compliant by September 30,
1999. Completion of the Company's compliance program has been a part of the
Company's on-going investment in technology The Company plans for expenses and
liabilities related to Year 2000 complications out of revenues from operations
and capital resources.

         The applications used in the Company's internal IT and non-IT systems
are commercially available and certified by the vendors of the systems for full
Year 2000 compliance. Additionally, the Company has verified the functional
behavior of these applications as being Year 2000 compliant.

         The Company does not believe, after contacting appropriate parties,
that the failure of its vendors' or other third-party providers' systems to be
Year 2000 compliant will materially adversely affect the Company's financial
performance.

         If the Company does not attain compliance for its prior generation
products and complications arise, customers will be advised to reset the
computer clock to a date in the 1990's. The Company has verified that resetting
the internal clock will enable the Company's products to function in accordance
with their specifications.

         While the Company believes that it is adequately addressing the Year
2000 problem, there can be no assurance that the costs and liabilities of the
Year 2000 problem will not have material adverse effects on its business,
financial condition and results of operations.


FACTORS THAT COULD AFFECT OPERATING RESULTS

         This Annual Report on Form 20-F contains forward-looking statements.
Additional written and oral forward-looking statements may be made by the
Company from time to time in Securities and Exchange Commission ("SEC") filings
and otherwise. The Company cautions readers that results predicted by
forward-looking statements, including, without limitation, those relating to the
Company's future business prospects, revenues, working capital, liquidity,
capital needs, interest costs, and income are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
indicated in the forward-looking statements, due to the following factors, among
other risks and factors identified from time to time in the Company's filings
with the SEC.


                                       19

<PAGE>


         Risks Inherent in International Operations. A majority of the Company's
business is conducted outside of the United States. As a result, the Company's
operations are subject to various risks such as the possibility of the loss of
revenue, property or equipment due to expropriation, nationalization, war,
insurrection, terrorism or civil disturbance, the instability of foreign
economies, currency fluctuations, and devaluations, adverse tax policies and
governmental activities that may limit or disrupt markets, restrict payments or
the movement of funds or result in the deprivation of contract rights.
Additionally, the ability of the Company to compete may be adversely affected by
foreign governmental regulations that encourage or mandate the hiring of local
contractors, or by regulations that require foreign contractors to employ
citizens of, or purchase supplies from vendors in, a particular jurisdiction.
The Company is subject to taxation in a number of jurisdictions, and the final
determination of its tax liabilities involves the interpretation of the statutes
and requirements of various domestic and foreign taxing authorities. Foreign
income tax returns of foreign subsidiaries, unconsolidated affiliates and
related entities are routinely examined by foreign tax authorities. There can be
no assurance that any of these risks will not have an adverse effect on the
Company.

         Risks Relating to Operations in the Middle East. The Company operates
in 18 countries located in the Middle East. The Company derived 75% of 1998
revenue and substantially all of its operating profit from operations in the
Middle East, and the risks of doing business in that region could adversely
affect the Company. Such risks include the following:

         Political and Economic Factors. The Middle East's economies have been
subject to many destabilizing factors, including military conflicts and
tensions, including, but not limited to, the on-going dispute between the United
Nations and Iraq, civil unrest, large government deficits, low foreign exchange
revenues and fluctuations in world commodity prices. In attempting to respond to
these problems, many Middle Eastern governments have intervened in their
economies, employing among other things, fiscal, monetary and trade policies,
import duties, foreign currency restrictions and controls of wages, prices and
exchange rates. Some Middle Eastern governments have frequently changed their
policies in all these areas. Certain Middle Eastern economies have received
military and economic aid from the United States and many Middle Eastern
companies have been financed by United States venture capital and investment
concerns. There is no assurance that such aid and investments will continue to
be available in the future.

         Risks of Foreign Legal Systems. Many of the countries where the Company
operates and plans to operate have legal systems that differ from the United
States legal system and may provide substantially less protection for foreign
investors.

         Effect of Postal Taxes and Other Payments. In several Middle Eastern
countries where the Company operates, it is required to pay taxes and/or
royalties to the local postal authority. To the extent these taxes and/or
royalties are increased, the Company's results of operations may adversely be
affected.

         Risks Associated with Geographic Expansion and New Lines of Business.
The Company intends to actively pursue a strategy of continued growth, and will
seek to expand the range of its services and penetrate new geographic markets.
The Company's ability to expand into new geographic markets will be dependent
upon its ability to secure and maintain the requisite local licenses, permits
and approvals necessary to conduct business, including those which may be
required by the local postal authority. Several countries targeted by the
Company for expansion have restricted express and freight forwarding companies
from operating in their jurisdiction. The loss or revocation of any existing
licenses, permits or approvals or the failure to obtain any necessary licenses,
permits or approvals in new jurisdictions where the Company intends to do
business would have an adverse effect on the ability of the Company to conduct
its business and/or on its ability to expand into such jurisdictions. No
assurance can be given that the Company will obtain such authorizations,
licenses, permits or necessary approvals. The Company also plans to open
additional catalog centers and expand its logistics management services along
with regional trucking and ground transportation. This will require additional
capital expenditures, including leasing additional facilities and purchasing
and/or leasing and operating a small trucking fleet. The Company has only
limited experience in operating a trucking operation and a logistics management
service. The availability of qualified and licensed drivers will become an
important factor in the Company's expansion of a


                                       20


<PAGE>



regional trucking and ground transportation business. In addition, the Company
will be required to identify suitable new geographic markets with sufficient
demand for the Company's services, to hire and retain skilled management,
marketing, customer services and other personnel, and to successfully manage
growth, including monitoring operations, controlling costs and maintaining
effective quality and service controls. There can be no assurance that the
Company will be able to do so effectively or that allocation of capital or human
resources will not adversely impact the Company as a whole. In addition,
countries in which the Company wishes to operate may have regulatory systems
that impose other impediments on the Company's operations. There can be no
assurance that the Company will be able to profitably operate in light of these
restrictions.

         Restrictions and Controls on Foreign Investments and Acquisitions of
Majority Interests. Foreign investment by the Company in local joint ventures or
business acquisitions has been and will continue to be restricted or controlled
to varying degrees. These restrictions or controls have and may continue to
limit or preclude foreign investment in certain proposed joint ventures or
business acquisitions or increase the costs and expenses of the Company in
seeking to effectuate such a transaction. Various governments require
governmental approval prior to investments by foreign persons and limit the
extent of any such investment. In certain countries, the Company is required to
conduct operations pursuant to an agency or sponsorship agreement. The loss of
an agent or sponsor could result in the temporary or permanent cessation of
operations in a particular country. There can be no assurance that the Company
will be able to replace such agent or sponsor on favorable terms, if at all.
Furthermore, various governments restrict investment opportunities by foreign
persons in certain industries. Various governments may also require governmental
approval for the repatriation of capital and income by foreign investors.
Various governments have laws protecting local postal authorities. Although such
approvals are usually given, there can be no assurance that such approvals will
be forthcoming in the future. There can be no assurance that additional or
different restrictions or adverse policies applicable to the Company will not be
imposed in the future or, if imposed, as to the duration or impact of any such
restrictions or policies.

         Reliance on Joint Ventures. The Company relies upon joint ventures to
conduct and expand its operations in certain countries. The loss of any joint
venture partner or the Company's inability to attract and maintain additional
joint venture partners may result in delays and difficulties in effectuating the
Company's business plan. There can be no assurance that the Company will be able
to attract joint venture partners on acceptable terms, if at all.

         Competition. The Company faces strong competition in the Middle East
and other regions in which it operates. The Company's ability to compete
effectively depends principally upon price, frequency and capacity of scheduled
service, extent of geographic coverage and reliability. Some of the Company's
competitors have well established reputations and significantly greater
financial and other resources available for expansion than the Company. The
Company's principal express competitors are DHL Worldwide Express, Federal
Express Corporation, TNT Express Worldwide and United Parcel Service of America,
Inc. The Company's principal freight forwarding competitors are Air Express
International Corporation, Inc., Expeditors International of Washington, Inc.
and MSAS Cargo International Ltd. There can be no assurance that the Company
will be able to expand as rapidly as, or compete effectively against, its
competitors.

         Dependence on Key Employees. The Company's growth and profitability are
dependent upon, among other things, the abilities and experience of the
Company's management team including Mr. William Kingson and Mr. Fadi Ghandour,
the Company's Chairman and the Company's President, Deputy Chairman and Chief
Executive Officer, respectively. If the services of Messrs. Kingson and Ghandour
or a number of the Company's executive officers were no longer available to the
Company, the Company's business, financial condition and results of operations
could be adversely affected.

         Dependence on International Trade. International trade is essential to
the Company's results of operations and has played an important role in the
economic development of the Middle East and other regions where the Company
currently operates or plans to operate. International trade is influenced by
many factors, including economic and political conditions, major work stoppages,
currency fluctuations, and laws relating to tariffs, trade restrictions, foreign
investments, and taxation. A reduction in the volume of international trade due
to one or more of these factors, any material restrictions on trade, or a
downturn in the economies where the Company currently


                                       21


<PAGE>



operates or plans to operate could have a material adverse effect on the
Company. Political differences may lead to the imposition of trade barriers
and/or economic sanctions. The occurrence of such barriers or sanctions could
have a material adverse effect on the Company's operations.

         Rights of Shareholders Under Bermuda and Jordanian Law. The Company is
incorporated under the laws of Bermuda and is headquartered in Jordan.
Principles of law relating to such matters as the validity of corporate
procedures, the fiduciary duties of the Company's management and directors and
the rights of its shareholders, are governed by Bermuda law and the Company's
Memorandum of Association and Bye-laws. Such principles of law may differ from
those that would apply if the Company were incorporated in a jurisdiction in the
United States. In addition, the Company has been advised by Conyers Dill &
Pearman, its Bermuda counsel, that there is uncertainty as to whether the courts
of Bermuda would enforce (i) judgments of United States courts obtained against
the Company or its officers and directors predicated upon the civil liability
provisions of the securities laws of the United States or any state or (ii) in
original actions brought in Bermuda, liabilities against the Company or such
persons predicated upon the securities laws of the United States or any state.
The Company has been further advised by the Ali Sharif Zu'bi & Sharif Ali Zu'bi
Law Firm, Jordanian counsel to the Company, that the enforcement of foreign
judgements in Jordan is governed by Law No. 8 of 1952. Basically, a foreign
judgement may be enforced in Jordan by means of an application to the competent
court without retrial and re-examination of the merits or issues of the case.
Jordanian courts may, however, decline to enforce a foreign judgement (i) if the
court which passed the judgement was without competent jurisdiction, (ii) if the
defendant has not carried on any business within the jurisdiction of the court
which passed the judgement or was not resident within its jurisdiction and did
not willfully appear before the court or did not recognize its jurisdiction,
(iii) if the defendant was not notified to appear before the court which issued
the judgement or was not duly or properly served with notice, (iv) if the
judgement has been passed in a fraudulent manner, (v) if the defendant is able
to persuade the court that the judgement is not final, (vi) if the judgement
contravenes Jordanian public policy, and (vii) if the laws of the country of the
court which passed the judgement do not recognize and enforce judgements of
Jordanian courts.

         We may be adversely affected by the Year 2000. Many computer systems
and software products will not function properly commencing in the year 2000 due
to a once-common programming standard that represents years using only the last
two-digits. This is known as the Year 2000 problem. The Company is in the
process of upgrading its computers to avoid any material complications due to
the Year 2000 problem. As part of this program, the Company will identify those
systems and applications that require modification, redevelopment or
replacement. The Company expects to be Year 2000 compliant by September 30, 1999
with respect to its internal systems and products. The Company does not believe
that the failure of its vendors or other third-party providers' systems to be
Year 2000 compliant will have a materially negative impact on its business.

ITEM 9A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company faces primary market risk exposures in two categories;
exchange rate risk and interest rate risk. The Company does not enter into
derivative contracts related to managing fluctuations in foreign exchange rates
or interest rates.

Foreign Currency Exchange Rate Risks:

         The Company faces foreign currency exposure as a result of operating in
various countries around the world. It is estimated that a 10% appreciation at
December 31, 1998 in the United States Dollar against the currencies of the
respective countries in which the Company operates would result in a reduction
in the operating income of approximately US$251,000 for the year ending December
31, 1998. This calculation, however, does not take into account the possible
changes in sales volume or local pricing as a result of the depreciation of
local currencies against the US Dollar. 16.2% of the Company's total revenues
are derived in U.S. Dollars and the remainder in local currencies. All
remittances from subsidiaries to the Company are being denominated in U.S.
Dollars.

Interest Rate Risks:

         The Company's long term debt consists of $32,000 in the form of notes
payable and US$720,000 in the form of capital leases. The long term notes are
payable in monthly installments with original maturities of two to three years
at interest rates ranging from 6.75% to 16%. The capital lease obligations are
in respect of vehicles and telephone equipment, of which 87% are denominated in
Saudi Riyals, with an average interest rate of 7.5%. The remainder of the
capital leases are denominated in US Dollars, Sterling Pounds and French Franks.
The Company does not have interest rate exposure since interest rates on both
notes payable and leases are fixed.

                                       22
<PAGE>

ITEM 10. DIRECTORS, OFFICERS AND KEY EMPLOYEES OF REGISTRANT

         The following sets forth the directors, executive officers and key
employees of the Company, positions and offices held by each such person, and
the period each such person has held such position.

<TABLE>
<CAPTION>
Name                                        Position Held and Term
----                                        ----------------------

<S>                                         <C>
William S. Kingson(1)                       Chairman of the Board and Class 2 Director since
                                            1996 and Chairman Of the Board and Director of
                                            predecessor entities since 1982

Fadi Ghandour                               President, Deputy Chairman, Chief Executive Officer,
                                            Assistant Secretary and a Class 3 Director since
                                            1996 and of predecessor Entities since 1982

Rula Ghandour                               Class 1 Director since 1996 and Director of
                                            predecessor entities since 1982

Roy Liljebeck(2)                            Class 1 Director since April 1997

Ayed Al-Jeaid(3)                            Class 2 Director since April 1997

Hazem Malhas(4)                             Chief Operating Officer since December 1996

Safwan Tannir(5)                            Senior Vice President-Freight Forwarding since December 1996

Camille Tam Nasrallah(6)                    Senior Vice President-Gulf and Indian Subcontinent
                                            since December 1996

Emad Shishtawi(7)                           Vice President-Finance since December 1996

Yousef Ghandour                             Managing Director of MED since 1994

Basem Malhas(8)                             Vice President-Information Technology since December 1997.

Iyad Kamal(9)                               Express and Quality Manager since 1995.

Bashar Obeid(10)                            Group Financial Controller since January 1998.
</TABLE>

-----------------

(1)    Mr. Kingson is also President of New York based SR-71 Corporation and
       Co-chairman and President of the Pointe Group.

(2)    Mr. Roy Liljebeck has been Executive Vice President and Chief Financial
       Officer of Airborne Freight Corporation since 1985, having held various
       positions with Airborne since 1967.

(3)    Mr. Ayed Al-Jeaid is Chief Executive Officer of Makshaff Services, Ltd.,
       a holding company for various aviation and media interests in Saudi
       Arabia and worldwide.

(4)    Mr. Malhas joined the Company in 1986 as Freight Forwarding Sales Manager
       the Company's Amman, Jordan office. During 1987, he was Country Manager
       for Jordan. From 1987 to 1993, he served as Vice President-Operations and
       Planning. From 1993 to 1996, he served as Vice President and Chief
       Operating Officer-Express Division.

(5)    Mr. Tannir joined the Company in 1986 as General Manager of Air Cargo
       Jordan, the predecessor to the Company's freight forwarding network. From
       1986 to 1990 he served as Vice President-Marketing and Sales and Vice
       President Middle East. From 1990 to 1996, he served as Vice President and
       Chief Operating Officer-Freight Division.

(6)    Mr. Nasrallah joined the Company in 1988 as general manager UAE and
       served as Vice President-Gulf and Indian Sub-Continent until 1993. From
       1993 to 1996, he served as Vice President-Corporate Affairs.

(7)    Mr. Shishtawi joined the Company in 1984 as Accountant in the Amman
       headquarters and was later promoted to Financial Manager. From 1988 to
       1992 he served as Controller. From 1992 to 1996 he served as Accounting
       and Finance Manager.

(8)    Mr. Malhas joined the Company in 1989 when he held the position of IT
       Manager. In 1992 he became the General Manager of Information Technology.

                                       23
<PAGE>


(9)    From 1992 to 1995 Mr. Kamal was the Company's OEC Coordinator stationed
       in Jordan.

(10)   Mr. Obeid joined the Company in 1993 as an accountant and was then
       promoted to Financial Controller.

         Directors were elected at the 1997 annual general meeting of
Shareholders. The current terms of office for directors expires as follows:
Class 1, at the 2000 annual general meeting of shareholders; Class 2, at the
1998 annual general meeting of shareholders and Class 3, at the 1999 annual
general meeting of shareholders. Thereafter, the term of office of each director
will expire at the third annual meeting of shareholders following his or her
election. Officers of the Company are appointed by the Board of Directors and
serve until their successors are duly appointed and qualified.

         Except for Mr. Fadi Ghandour and Ms. Rula Ghandour, who are husband and
wife, and Mr. Yousef Ghandour, who is Mr. Ghandour's uncle, there are no family
relationships, among directors and executive officers of the Company.

ITEM 11. COMPENSATION OF DIRECTORS, OFFICERS AND KEY EMPLOYEES

         Directors of the Company currently do not receive any additional
remuneration for serving on the Board of Directors. The aggregate amount of
compensation paid or accrued by the Company and its subsidiaries to all officers
and key employees of the Company who held office at any time during the fiscal
year ended December 31, 1998 (13 persons), was $619,200. None of such persons is
entitled to any pension, retirement or similar benefits of the Company.

         In addition, certain directors and executive officers earn compensation
through entities which provide services to the Company (see Item 13 of this
Report).

ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES

         Other than warrants issued in connection with the Company's initial
public offering and options granted under the Company's Stock Option Plan, there
are no other rights, warrants or options presently outstanding pursuant to which
additional Common Stock could be issued.

         In connection with the Company's initial public offering, the Company
sold to the underwriters of the initial public offering for an aggregate
purchase price of $100.00 warrants to purchase up to 100,000 shares of the
Company's Common Stock at an exercise price per share equal to $8.40 (the
"Warrants"). The Warrants are not redeemable and are exercisable during the
four-year period commencing January 13, 1998. The Warrants provide, subject to
certain conditions, for a period of four years commencing on January 13, 1998,
one "demand" registration right and for a period of four years commencing on
January 13, 1998 certain "piggy back" registration rights.

         On December 19, 1996 the Board of Directors of the Company established
the Aramex International Limited Stock Option Plan (the "Plan") for employees
and consultants of the Company and its subsidiaries and for nonemployee members
of the Board of Directors of the Company. The Plan permits the granting of both
incentive stock options and nonqualified stock options. A total of 400,000
shares of Common Stock were authorized for issuance under the Plan.

         The Plan is administered by a committee of nonemployee members of the
Board of Directors (the "Committee"). Subject to the terms of the Plan, the
Committee has the sole discretion to determine the persons to whom options will
be granted and the terms and conditions of such options. However, the option
price can not be less than 100% of the fair market value of the Company's Common
Stock on the date of the grant. In the case of an incentive stock option
recipient possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any of its subsidiaries, the option price
shall not be less than 110% of the fair market value of the Company's Common
Stock on the date of the grant.


                                       24

<PAGE>



         On January 13, 1997, Mr. Kingson was granted incentive stock options to
purchase 100,000 shares of Common Stock at an option price of $7.70 per share.
Each of Mr. Kingson's options are exercisable for a period of five years from
the date of vesting. Fifty percent of these options vested on January 13, 1997
and the other fifty percent vested on July 13, 1997.

         On January 13, 1997, Mr. Ghandour was granted non-qualified stock
options to purchase 100,000 shares of Common Stock at an option price of $7.00
per share. Mr. Ghandour's options are exercisable for a period of ten years from
the date of vesting. Fifty percent of these options vested on January 13, 1997
and the other fifty percent vested on July 13, 1997.

         On January 13, 1997, stock options to purchase an aggregate of 100,000
shares of Common Stock at an option price of $7.00 per share were granted to 139
persons, including the Company's executive officers (other than Messrs. Kingson
and Ghandour), employees and consultants. These options will vest over a
five-year period on the basis of one-quarter each year following the first year
anniversary of the grant of such option. (Of these options, options to purchase
28,750 shares of Common Stock were granted to executive officers of the Company,
excluding Messrs. Kingson and Ghandour.)

No options were granted in 1998.

ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

         As part of the Reorganization that resulted in the Company becoming the
successor to Aramex Hong Kong, on December 13, 1996 the Company subscribed for
100 Ordinary Shares of Aramex Hong Kong and each share of Aramex Hong Kong
outstanding prior to such subscription was converted by a special resolution of
the shareholders of Aramex Hong Kong into non-voting deferred shares (the
"Deferred Shares"). The Deferred Shares do not carry voting rights (other than
with respect to resolutions affecting their class rights) and are effectively
subordinated to the Ordinary Shares (all of which are held by the Company) in
respect of all dividends, distributions and liquidation rights until such time
as the holders of Ordinary Shares have received $100 billion. Messrs. Kingson
and Ghandour, Ms. Ghandour and Airborne Freight Corporation ("Airborne"), in
their capacity as shareholders of Aramex Hong Kong, retain a nominal interest in
Aramex Hong Kong through their ownership of the Deferred Shares. Aramex Hong
Kong acts as an intermediate holding company of the Company's subsidiaries.

         On October 21, 1996, Aramex Hong Kong sold 195 shares of its Common
Stock to Airborne for an aggregate purchase price of $2,000,000 (the "Airborne
Stock Purchase"). After the Reorganization became effective, such shares were
converted into 304,688 shares of Common Stock of the Company. In connection with
the Airborne Stock Purchase, Mr. William S. Kingson, Mr. Fadi Ghandour, Ms. Rula
Ghandour and Airborne entered into a Shareholders Agreement, as amended on
December 11, 1996 and December 12, 1996, which, among other things, provides
that in the event the Company transfers any shares of Common Stock to certain
listed competitors to Airborne or any other company primarily engaged in air,
freight or in express shipments. In the event that Messrs. Kingson and Ghandour
and/or Ms. Rula Ghandour transfer any shares of Common Stock to certain listed
competitors of to Airborne or any other company primarily engaged in the
transportation of air freight or air express shipments, it shall be a condition
of such transfer that Airborne shall be offered the right to sell to such
competitor all of its shares of Common Stock on the same terms and conditions as
the sale by Messrs. Kingson and Ghandour and/or Ms. Rula Ghandour. "Transfer" is
defined to mean the direct or indirect, through intermediaries or otherwise,
sale, transfer, distribution, assignment, bequest, pledge, hypothecation,
encumbrance, grant of security interest in, or grant, issuance, sale or
conveyance of any option, warrant or right to acquire, grant of a proxy to vote,
or other disposition of shares of Common Stock of the Company and is defined to
exclude a sale on the open market or the Transfer of shares by the Company in
connection with a strategic acquisition or similar transaction where the Company
(directly or through one or more subsidiaries) is the acquiring party. In
connection with the Airborne Stock Purchase, Airborne was granted certain
"piggyback" registration rights relating to their shares of Common Stock. In
addition, under the terms of the Airborne Stock Purchase, Airborne


                                       25

<PAGE>



was granted the right to appoint one Director to the Company's Board of
Directors. On April 23, 1997, Mr. Roy Liljebeck was designated by Airborne to be
its Board designee.

         MED was organized under the laws of the Isle of Jersey in 1996. Of the
100 shares of MED currently outstanding, the Company owns 80 shares (5 of which
shares were acquired in connection with the Company's initial public offering
from Mr. Hazem Malhas, the Chief Operating Officer, for nominal consideration)
and Mr. Yousef Ghandour owns 20 shares. Mr. Yousef Ghandour is Mr. Fadi
Ghandour's uncle.

         The Company leases the premises currently occupied by the Company's
London operations from Mr. Ali Ghandour, the father of Fadi Ghandour, at an
annual rental of $83,000. The lease renews annually. The Company believes that
the terms of the lease are at least as favorable to the Company as those
available from unaffiliated third parties.

         The Company leases the premises currently occupied by the Company's
corporate offices in Amman, Jordan, from ARAM, an investment company controlled
by the Ghandour family at a 1998 annual rental of $106,000. The lease renews
annually. The Company believes that the terms of the lease are at least as
favorable to the Company as those available from unaffiliated third parties.

         Ms. Asmahan Abboud, the sister of Fadi Ghandour, is a 50% shareholder
in two of the Company's Lebanese subsidiaries. In addition, Ms. Abboud and her
husband own 25% of the outstanding capital stock of the Company's Lebanese MED
subsidiary. Ms. Abboud's interest in the capital and retained earnings of the
Company's Lebanese subsidiaries was $169,866 for 1998 and $170,364 for 1997. Ms.
Abboud and her husband's aggregate salary from these operations was $96,512 for
1998 and $96,512 for 1997. Ms. Abboud and her husband received withdrawals from
these operations of $67,091 in 1998 and $90,400 in 1997.

         The Company has entered into nominee shareholder agreements with Fadi
Ghandour and Ms. Raghida Ghandour, the sister of Fadi Ghandour, the owners of
78% and 22% of the share capital of Arab American International Express Company
(Aramex) Limited, the entity through which the Company conducts its Jordanian
operations. Mr. Ghandour and Ms. Ghandour have held their shares in Arab
American International Express Company (Aramex) Limited as nominees for the
Company since inception of its operations on April 3, 1982. However, in January
1995, the Company formalized the arrangement with Mr. Ghandour and Ms. Ghandour
pursuant to nominee shareholder agreements which have been subsequently amended
in connection with the Reorganization. Pursuant to such agreements, Mr. and Ms.
Ghandour confirmed that they are holding their respective shares in the name of
the Company and that they will abide by any written instructions given by the
Company concerning the shares. The Company agreed that they will reimburse and
indemnify Mr. and Ms. Ghandour for all expenses incurred in acquiring and
holding the shares. Arab American International Express Company (Aramex) Limited
has been included in the consolidated financial statements of the Company as a
wholly-owned subsidiary for all periods presented herein.

                                     PART II

ITEM 14: DESCRIPTION OF SECURITIES TO BE REGISTERED.

Not Applicable.

                                    PART III

ITEM 15: DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.

ITEM 16: CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED
         SECURITIES.

Not Applicable.


                                       26

<PAGE>



                                     PART IV

ITEM 17: FINANCIAL STATEMENTS.

The Company has elected to furnish the financial statements specified by
Item 18.

ITEM 18. FINANCIAL STATEMENTS


         a)       Financial statements which appear herein at the page
                  indicated:

                  Report of Independent Public Accountants................ F-1

                  Consolidated Balance Sheets at December 31, 1998
                  and 1997.................................................F-2

                  Consolidated Statement of Income For the Years Ended
                  December 31, 1998, 1997 and 1996.........................F-3

                  Statement of Changes in Shareholders' Equity For the
                  Years Ended December 31, 1998, 1997 and 1996.............F-4

                  Consolidated Statement of Cash Flows for the Years
                  Ended December 31, 1998, 1997 and 1996...................F-5

                  Notes to the Consolidated Financial Statements...........F-6

                  Other Auditor's Reports on certain Consolidated Financial
                  Statements (separate financial statements not included herein
                  but are incorporated by reference to the Company's Annual
                  Report on Form 20-F for the year ended December 31, 1998,
                  (Commission File Number 000-29018).

ITEM 19.       FINANCIAL STATEMENTS AND EXHIBITS

                  The financial statements listed in Item 18 are incorporated by
                  reference to this Item.

         EXHIBIT NUMBER   DESCRIPTION
-------------------------------------------------------------------------------

         b)
         3.1   Memorandum of Association of Aramex International Limited**
         3.2   Bye-laws of Aramex International Limited**
         4.1   Specimen of Common Stock Certificate**
         4.2   Form of Underwriter's Warrant Agreement including form of
               Redeemable Warrant  Certificate for the Company's initial
               public offering.**
        10.1   Stock Option Plan**
        10.2   Form of Agreement granting a license to use the "Aramex" name**
        10.3   Form of Management Agreement**
        10.4   Form of Agreement with each of the Company's Middle East (MED)
               Mail Order Catalog Companies**
        10.5   Employment Agreement dated as of January 13, 1997 between Aramex
               International Limited and William Kingson**
        10.6   Employment Agreement dated as of January 13, 1997 between Aramex
               International Limited and Fadi Ghandour**
        10.7   Form of Indemnification Agreement, between Aramex International
               Limited and members of the Board of Directors**
        10.8   Stock Purchase Agreement dated as of October 22, 1996 between
               Aramex International Limited and Airborne Freight Corporation**
        10.9   Shareholders Agreement dated October 22, 1996 between William
               Kingson, Fadi Ghandour, Rula Ghandour and Airborne Freight
               Corporation**
       10.10   Amendment No. 1 to Shareholders Agreement dated as of
               December 11, 1996 between William Kingson, Fadi Ghandour,
               Rula Ghandour and Airborne Freight Corporation as
               amended by Agreement dated as of December 12, 1996**
       10.11   Nominee Shareholder Agreement dated January 1, 1995 by and
               between Raghida Ali Ghandour and Aramex International Limited**
       10.12   Nominee Shareholder Agreement dated January 1, 1995 by and
               between Raghida Ali Ghandour and Aramex International Limited**
       10.13   Amendment No. 1 to each of the Nominee Shareholder Agreements
               dated as of December 23, 1996.**
       21.1    List of subsidiaries of Aramex International Limited
               27.1 Financial Data Schedule for the year ending
               December 31, 1998.

         **    Previously filed in the Company's Registration Statement on Form
               F-1 (Registration Statement No.333-15639) and incorporated herein
               by reference.

                                       27
<PAGE>




                                   SIGNATURES

         Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this Annual Report to be signed on its
behalf by the undersigned, thereto duly authorized.

                                         ARAMEX INTERNATIONAL LIMITED


Dated: June 30, 1999                     By:  /s/ William S. Kingson
                                              ----------------------------------
                                              William S. Kingson
                                              Chairman of the Board of Directors
















                                       28



<PAGE>




                          ARAMEX INTERNATIONAL LIMITED


       CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997

                                  TOGETHER WITH

                                AUDITORS' REPORT






<PAGE>






                          Index To Financial Statements



                                                                           Page
                                                                           ----

Report of Independent Public Accountants                                    F-1


Consolidated Balance Sheets at December 31, 1998 and 1997                   F-2


Consolidated Statements of Income For the Years Ended
   December 31, 1998, 1997 and 1996                                         F-3


Statement of Changes in Shareholders' Equity For the
   Years Ended December 31, 1998, 1997 and 1996                             F-4


Consolidated Statements of Cash Flows For the Years Ended
   December 31, 1998, 1997 and 1996                                         F-5


Notes to Consolidated Financial Statements                                  F-6


<PAGE>



                REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To The Shareholders and Board of Directors of
ARAMEX International Limited


We have audited the accompanying consolidated balance sheets of ARAMEX
International Limited (a Bermuda Corporation as defined in Note 1 to
consolidated financial statements) and subsidiaries as of December 31, 1998 and
1997 and the related consolidated statements of income, changes in shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We did not audit the
financial statements as of December 31, 1996 of certain subsidiaries operating
in United Kingdom, United States and France, which reflect revenue of 28 percent
of the consolidated totals. Those statements were audited by other auditors
whose reports have been furnished to us, and our opinion, insofar as it relates
to the amounts included for those entities is based solely on the reports of the
other auditors.

We conducted our audits in accordance with International Auditing Standards
which are substantially consistent with those in the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of ARAMEX International Limited and subsidiaries as of
December 31, 1998 and 1997 and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1998 in
conformity with International Accounting Standards.

The accounting practices of the Company used in preparing the accompanying
financial statements vary in one significant respect from accounting principles
generally accepted in the United States. A description of the significant
difference and the approximate effect on consolidated net income are set forth
in Note 22 to the accompanying financial statements.



Manama - Bahrain                                Arthur Andersen
February 14, 1999                               Certified Public Accountants





                                      F-1



<PAGE>



                  ARAMEX INTERNATIONAL LIMITED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 1998 AND 1997
                         (IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>

ASSETS                                                     Notes                  1998              1997
------                                                     -----                  ----              ----
<S>                                                        <C>                   <C>              <C>

Current Assets

     Cash on hand and at banks                                  3                10,252             6,627
     Receivables, net                                           4                19,338            15,592
     Deferred income taxes                                     14                    60                54
     Other current assets                                       5                 3,457             2,438
                                                                                 ------            ------

              Total current assets                                               33,107            24,711

Property, plant and equipment, net                              6                 6,055             5,012
Goodwill, net                                                                     1,166                 -
Other assets                                                                        992               981
                                                                                 ------            ------

              Total Assets                                                       41,320            30,704
                                                                                 ======            ======

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

Current Liabilities

     Due to banks                                               8                   404               587
     Current portion of long term debt                          9                   458               352
     Trade payables                                                               7,065             6,305
     Other current liabilities                                  7                 4,072             3,871
                                                                                 ------            ------

              Total current liabilities                                          11,999            11,115
                                                                                 ------            ------

Long term debt                                                  9                   294               456
Deferred income taxes                                          14                    61                52
Other liabilities                                               2                 1,591             1,337
                                                                                 ------            ------
                                                                                  1,946             1,845
                                                                                 ------            ------

Minority interests in subsidiaries                                                1,400               985
                                                                                 ------            ------

Shareholders' Equity

     Share capital                                           1,10                    49                44
     Additional paid in capital                              1,10                12,684             7,263
     Accumulated other comprehensive loss                                           (70)               (5)
     Retained earnings                                                           13,312             9,457
                                                                                 ------            ------

              Total shareholders' equity                                         25,975            16,759
                                                                                 ------            ------

              Total Liabilities and shareholders' equity                         41,320            30,704
                                                                                 ======            ======
</TABLE>





   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-2



<PAGE>



                  ARAMEX INTERNATIONAL LIMITED AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
       (IN THOUSANDS OF U.S. DOLLARS EXCEPT FOR SHARES AND PER SHARE DATA)


<TABLE>
<CAPTION>
                                                              Notes          1998             1997           1996
                                                              -----          ----             ----           ----
<S>                                                          <C>            <C>             <C>              <C>

Revenues                                                          11        83,611           66,330           52,275

Shipping costs                                                    12       (44,795)         (35,471)         (28,080)
                                                                           -------          --------         -------

         Gross profit                                                       38,816           30,859           24,195

Operating expenses                                                         (12,616)         (10,682)          (9,796)

Selling, general and administrative expenses                               (22,462)         (17,278)         (12,003)
                                                                           -------           -------         -------

         Operating income                                                    3,738            2,899            2,396
                                                                           -------          -------          -------

Other income (expenses) -

     Interest income                                                           571              365               -
     Interest expenses                                                        (130)             (65)            (102)
     (Loss) gain on sale of assets                                              (5)             (44)              14
     Exchange loss                                                             (40)             (37)             (13)
     Other income                                                               14              142               71
                                                                           -------          -------          -------

                                                                               410              361              (30)
                                                                           -------          -------          -------

         Income before income taxes                                          4,148            3,260            2,366

Provision for income taxes                                        14          (292)            (170)            (157)
Minority interests                                                              (1)              31             (162)
                                                                           -------          -------          -------

         Net income                                                          3,855            3,121            2,047
                                                                           =======          =======          =======

Basic earnings per share                                          15          0.81             0.71             0.64
                                                                              ====             ====             ====

Diluted earnings per share                                        15          0.79             0.69             0.64
                                                                              ====             ====             ====

Weighted average number of shares outstanding - basic                    4,746,066        4,396,811        3,184,939
                                                                         =========        =========        =========

Weighted average number of shares outstanding - diluted                  4,867,945        4,523,047        3,184,939
                                                                         =========        =========        =========
</TABLE>

   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-3



<PAGE>



                  ARAMEX INTERNATIONAL LIMITED AND SUBSIDIARIES
                  STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
              (IN THOUSANDS OF U.S. DOLLARS, EXCEPT FOR SHARE DATA)




<TABLE>
<CAPTION>
                                                      Accumulated         Retained Earnings
                     Share    Capital    Additional      Other        ------------------------                        Total
                     -----    -------     Paid in    Comprehensive    Legal     Unappropriated     Comprehensive   Shareholders'
                     Shares    Amount     Capital    (Loss) Income    Reserve      Earnings            Income         Equity
                     ------    ------     -------    -------------    -------      --------            ------         ------
<S>                  <C>      <C>         <C>         <C>             <C>          <C>                   <C>            <C>

Balance at
January 1, 1996     3,125,000     31          228        (144)             50        4,239                             4,404
Issuance of
 shares               304,688      3        1,997           -               -            -                             2,000
Comprehensive
Income:
- Net income                -      -            -           -              25        2,022               2,047             -
- Translation
    adjustment              -      -            -         202               -            -                 202             -
                                                                                                       -------
Comprehensive
Income                      -      -            -           -               -            -               2,249         2,249
                     --------     --        -----        ----              --        -----             =======         =====
Balance at
December 31, 1996   3,429,688     34        2,225          58              75        6,261                   -         8,653

Issuance
 of shares          1,000,000     10        5,038           -               -            -                   -         5,048
Comprehensive
Income:
- Net income                -      -            -           -               -        3,121               3,121             -
- Translation
   adjustment               -      -            -         (63)              -            -                 (63)            -
                                                                                                         -----
Comprehensive
Income                      -      -            -           -               -            -               3,058         3,058
                    ---------     --        -----        ----              --        -----               =====         =====

Balance at
December 31, 1997   4,429,688     44        7,263          (5)             75        9,382                  -         16,759
Issuance
 of shares            502,215      5        5,695           -               -            -                             5,700
Repurchase
of shares             (31,000)     -         (274)          -               -            -                              (274)
Comprehensive
Income:
- Net income                -      -            -           -              20        3,835               3,855             -
- Translation
   adjustment               -      -            -         (65)              -            -                 (65)            -
                                                                                                         -----
Comprehensive
Income                      -      -            -           -               -            -               3,790         3,790
                     --------     --        -----          --              --       ------               =====         =====

Balance at
December 31, 1998   4,900,903     49       12,684         (70)             95       13,217                            25,975
                    =========     ==       ======          ==           =====       ======                            ======
</TABLE>




   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-4



<PAGE>



                  ARAMEX INTERNATIONAL LIMITED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
                         (IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>

CASH FLOWS FROM OPERATING ACTIVITIES                              1998             1997            1996
------------------------------------                              ----             ----            ----
<S>                                                               <C>               <C>           <C>


Income before income taxes                                        4,148            3,260           2,366
Adjustments to reconcile income before tax
 to net cash from operating activities -
     Depreciation                                                 2,009            1,319             868
     Amortization                                                    41                -               -
     Loss (gain) on sale of assets                                    5               44             (14)
                                                                 ------           ------          ------
                                                                  6,203            4,623           3,220

Increase in receivables                                          (3,412)          (3,898)         (2,625)
Increase in other current assets                                 (1,019)            (470)         (1,144)
Increase in payables                                                760            1,066             578
Increase in other liabilities                                       254              422             173
Increase in other current liabilities                                78              553             477
Other                                                               (31)              34             (10)
                                                                 ------           ------          ------
       Cash generated from operations                             2,833            2,330             669
Income taxes paid                                                  (169)            (217)           (198)
                                                                 ------           ------          ------
       Net cash from operating activities                         2,664            2,113             471
                                                                 ------           ------          ------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment                        (3,592)          (3,841)         (1,029)
Proceeds from sale of assets                                        508              234              48
Acquisitions (Note 16)                                           (1,541)               -               -
Increase in other assets                                            (11)            (454)           (159)
                                                                 ------           ------          ------
       Net cash used in investing activities                     (4,636)          (4,061)         (1,140)
                                                                 ------           ------          ------

CASH FLOWS FROM FINANCING ACTIVITIES
Due to banks, net                                                  (183)            (128)            (62)
Proceeds from long term debt                                         44              678             238
Repayment of long term debt                                        (100)            (112)           (141)
Issuance of shares                                                5,700            5,048           2,000
Repurchase of shares                                               (274)               -               -
Proceeds from issue of common stock
 to minority interests                                              526              894             214
Payments to minority interests                                     (113)            (134)           (197)
Due to shareholders, net                                              -                -            (396)
                                                                 ------           ------          ------
       Net cash from financing activities                         5,600            6,246           1,656
                                                                 ------           ------          ------
Effect of exchange rate changes on cash                              (3)              (6)              7
                                                                 ------           ------          ------

Net increase in cash on hand and at banks                         3,625            4,292             994

Cash on hand and at banks, beginning of year                      6,627            2,335           1,341
                                                                 ------           ------          ------

Cash on hand and at banks, end of year                           10,252            6,627           2,335
                                                                 ======           ======          ======
</TABLE>



   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-5



<PAGE>






                  ARAMEX INTERNATIONAL LIMITED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       DECEMBER 31, 1998 AND 1997 AND 1996
      (IN THOUSANDS OF U.S. DOLLARS, EXCEPT FOR SHARES AND PER SHARE DATA)



(1)      BUSINESS AND ORGANIZATION
----------------------------------
ARAMEX International Limited, ("ARAMEX" or the "Company") was incorporated under
the laws of Bermuda on October 31, 1996 to be the successor to ARAMEX
International, Limited, a Hong Kong company which was incorporated in February
1986 ("ARAMEX Hong Kong").

On December 13,1996, ARAMEX subscribed for 100 shares of ARAMEX Hong Kong (the
"Ordinary Shares") and each share of ARAMEX Hong Kong outstanding prior to such
subscription was converted by a special resolution of the Shareholders of ARAMEX
Hong Kong into non-voting deferred shares (the "Deferred Shares") (collectively,
the "Reorganization"). The Deferred Shares do not carry voting rights (other
than in respect of resolutions affecting their class rights) and are effectively
subordinated to the Ordinary Shares (all of which are held by ARAMEX) in respect
of all dividends, distributions and liquidation rights until such time as the
holders of Ordinary Shares have received $ 100 billion. Accordingly, no value
has been assigned to the Deferred Shares. Pursuant to the Reorganization, ARAMEX
became the parent holding company of ARAMEX Hong Kong. The existing shareholders
of ARAMEX Hong Kong will retain a nominal interest in ARAMEX Hong Kong through
their ownership of the Deferred Shares. ARAMEX Hong Kong transferred its
properties, assets and other claims, rights and interests which were directly or
indirectly, owned, licensed or used by it to ARAMEX.

ARAMEX has an authorized share capital of 15,000,000 shares of common stock with
a par value of $0.01 per share. The Company is also authorized to issue
5,000,000 shares of preferred stock with a par value of $ 0.01 per share, none
of which has been issued or is outstanding.

PRINCIPAL ACTIVITIES
--------------------
ARAMEX provides express delivery and freight forwarding services from its main
stations (hubs) in Dubai, London, New York and Amman primarily to, from and
within destinations in the Middle East. ARAMEX's operations are controlled
through a regional office which was registered in Jordan on March 15, 1988 under
the name of ARAMEX International Limited (the "Regional Office") pursuant to the
foreign companies law No. (58) of 1985. The operations of the Regional Office
are facilitated by the hubs of the ARAMEX network.

Effective January 1, 1996, the Company formally inaugurated its direct marketing
and mail order catalog service at certain stations in the Middle East. The
service, called Middle East Direct ("MED"), provides assistance to customers in
selecting, ordering and delivering merchandise through catalogs of retail
companies based principally in the United States and Western Europe.



   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-6



<PAGE>



(2)      SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------
a)       Basis of presentation
         ---------------------
         The consolidated financial statements of the Company have been prepared
         in accordance with International Accounting Standards (IAS). For
         purposes of these financial statements, there are no significant
         differences between the Company's accounting principles utilized and
         the accounting principles generally accepted in the United States
         except as set forth in Note 22 to the consolidated financial
         statements.

b)       Principles of consolidation
         ---------------------------
         The consolidated financial statements include the accounts of the
         Company and all of its subsidiaries that are controlled directly and
         indirectly through agreements that provide the Company with authority
         to govern the financial and operating affairs of the subsidiaries. All
         significant intercompany accounts and transactions have been
         eliminated.

         Following is a listing of the subsidiaries, comprising the consolidated
         financial statements together with the respective percentage and
         investment amounts owned by ARAMEX International Limited:

<TABLE>
<CAPTION>
         SUBSIDIARIES                          INVESTMENT                          OWNERSHIP
         ------------                        --------------             --------------------------------
                                              1998       1997           1998         1997           1996
                                              ----       ----           ----         ----           ----
                                                                          %            %              %
                                                                        ----         ----           ----
         <S>                                <C>         <C>            <C>          <C>             <C>

         Amman                              1,546        474            100           100            100
         Damascus                               6          6             60            60             60
         Beirut *                               0          0             50            50             50
         Beirut CGO *                           1          1             50            50             50
         Cairo                                732          8            100            49             49
         Dubai                                245        245            100           100            100
         Abu Dhabi                             75         75            100           100            100
         Doha                                  20         20            100           100            100
         Bahrain                                3          3            100           100            100
         Jeddah *                             747         80             50            50             50
         Nicosia                               72          -            100           100            100
         Paris                                445         36            100           100            100
         London                               804        804            100           100            100
         Washington, D.C.                      15         15            100           100            100
         New York                           1,000      1,000            100           100            100
         Montreal *                             7          7           19.5          19.5           19.5
         Kuwait                               127        127            100           100            100
         Athens                               200        200            100           100            100
         Jerusalem                            337        337            100           100            100
         Palestine                            141        100            100           100              -
         Ramallah                              54         54             51            51              -
         MED                                  308        218             80            80             80
         Turkey                               242          -             50             -              -
         Bangladesh                            50          -             50             -              -
         Sri-Lanka                            250          -             50             -              -
         India                                100          -             50             -              -
         Hong Kong                             57          -            100             -              -
</TABLE>

*        Controlled through shareholder agreements.


   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-7



<PAGE>



c)       Use of estimates
         ----------------
         The preparation of financial statements in accordance with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosures of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual amounts could differ
         from those estimates.

d)       Concentration of risk in geographic area
         ----------------------------------------
         The Company derived approximately 75%, 75% and 71%, respectively, of
         1998, 1997 and 1996 revenues from operations in the Middle East. The
         risk of doing business in this region could adversely affect the
         Company, as the region has been subject to many destabilizing political
         and economic factors over the years.

e)       Revenue recognition
         -------------------
         Revenues are recognized when shipments are completed. For
         "door-to-door" shipments, revenues are recognized upon delivery of
         freight at the destination. For other shipments, revenues are
         recognized upon delivery of freight to the air carrier, at which time,
         the revenue process is completed.

         Certain customers pay in advance, giving rise to deferred revenue.

f)       Translation of the financial statements of foreign stations
         -----------------------------------------------------------
         The Company's functional currency is the United States Dollar. The
         financial statements of foreign subsidiaries where the local currency
         is the functional currency (substantially all stations) are translated
         into U.S Dollars using exchange rates in effect at period end for
         assets and liabilities and average exchange rates during each reporting
         period for results of operations. Adjustments resulting from
         translation of financial statements are reflected as a separate
         component of shareholders' equity.

         Exchange gains and losses resulting from transactions of the Company
         and its subsidiaries which are made in currencies different from their
         own are included in income as they occur.

g)       Property, plant and equipment
         -----------------------------
         Property, plant and equipment are recorded at cost and are depreciated
         over their estimated useful lives using primarily the straight-line
         method.

         The estimated useful lives of these assets are:

         Furniture and fixtures                           7 years
         Office equipment                                 7 years
         Computers                                        5 years
         Vehicles                                         5 years

         Assets held under capital leases are depreciated over the shorter of
         the lease terms or the useful lives of the assets.



   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-8



<PAGE>




h)       Income taxes
         ------------
         The Company provides income taxes in accordance with IAS 12. As an
         offshore company incorporated in Bermuda, profits from operations of
         foreign subsidiaries are not subject to Bermudan taxes. For certain
         operations in the Middle East, the Company is exempt from income taxes.
         For other operations, deferred income taxes have been provided, using
         the liability method under IAS 12, for the difference between the book
         and tax bases of assets and liabilities.

         Deferred income taxes have not been provided on the undistributed
         earnings of subsidiaries operating outside of Bermuda, as such earnings
         are expected to be indefinitely reinvested or, if distributed, are
         expected to be distributed tax free.

i)       Employee termination indemnities
         --------------------------------
         Certain of the Company's subsidiaries are required, by the labor law of
         each related country, to provide indemnity payments upon termination of
         relationship with their employees. The benefit accrues to employees on
         a pro-rata basis during their employment period and is based on each
         employee's current salary. Other liabilities in the accompanying
         Consolidated Financial Statements reflects the maximum amounts of the
         indemnities as of the balance sheet dates of $1,586, and $1,212,
         respectively, at December 31, 1998 and 1997.

j)       Goodwill
         --------
         Goodwill represents the excess of purchase price and related costs over
         the value assigned to the net tangible assets of businesses acquired.
         Goodwill is amortized on a straight line basis over 10 years.
         Periodically, the Company reviews the recoverability of goodwill. The
         measurement of possible impairment is based primarily on the ability to
         recover the balance of the goodwill from expected future operating cash
         flows on an undiscounted basis. It is management's opinion that no
         material impairment exists at December 31, 1998.


(3)      CASH ON HAND AND AT BANKS
----------------------------------
Cash on hand and at banks as of December 31, 1998 includes compensating balances
of $100 maintained by the Company to support the Company's lines of credit.


(4)      RECEIVABLES
--------------------
This item consists of the following:
<TABLE>
<CAPTION>
                                                                 1998                 1997
                                                                 ----                 ----
<S>                                                              <C>                 <C>

Trade receivables                                              20,154                  15,902
Employee advances                                                 636                     556
                                                               ------                  ------

                                                               20,790                  16,458
Less: Allowance for doubtful accounts                          (1,452)                   (866)
                                                               ------                   -----

                                                               19,338                  15,592
                                                               ======                  ======
</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-9



<PAGE>




All employee advances bear no interest and are due within one year.

Geographic concentrations of accounts receivables as of December 31, 1998 and
1997 are the following:
<TABLE>
<CAPTION>
                                                                       1998               1997
                                                                       ----               ----
                                                                         %                  %
                                                                       ----               ----
<S>                                                                    <C>                <C>

Middle East                                                            76.6               77.4
Europe                                                                 13.8               17.5
North America                                                           4.5                5.1
Asia                                                                    5.1                -
</TABLE>

Management believes that all receivables, net of related allowances, will be
collected in due course.

Movements in the allowance for doubtful accounts are as follows:

<TABLE>
<CAPTION>
                                                       1998              1997             1996
                                                       ----              ----             ----
<S>                                                    <C>              <C>             <C>

Balance - Beginning of the year                        866               739               960
Provision                                              655               433               125
Write-offs                                             (69)             (306)             (346)
                                                     -----               ---               ---

Balance - End of the year                            1,452               866               739
                                                     =====               ===               ===


(5)      Other Current Assets
-----------------------------
This item consists of the following:
                                                      1998              1997
                                                      ----              ----

Prepaid expenses                                     1,084               793
Refundable deposits                                    610               398
Advances                                               431               314
Tax withholdings                                       373               242
Supplies and stationary                                562               448
Accrued interest receivable                            219               157
Other                                                  178                86
                                                     -----             -----

                                                     3,457             2,438
                                                     =====             =====
</TABLE>






   The accompanying notes are an integral part of these consolidated financial
                                   statements


                                      F-10
<PAGE>



(6)      PROPERTY, PLANT AND EQUIPMENT
--------------------------------------
This item consists of the following:
Costs:

<TABLE>
<CAPTION>
                           At the Beginning                                      Exchange      At the End
                             of the Year          Purchases      Disposals     Differences     of the Year
                           ----------------      -----------     ---------     -----------     -----------

<S>                              <C>                <C>            <C>               <C>            <C>
Land                               249                  -          (249)               -                 -
Furniture and fixtures           2,365              1,141          (130)             (16)            3,360
Office equipment                 1,278                785           (88)              10             1,985
Computers                        2,493                638           (82)              (2)            3,047
Vehicles                         2,471              1,028          (310)              (7)            3,182
                                 -----              -----          ----              ---            ------

                                 8,856              3,592          (859)             (15)           11,574
                                 =====              =====          ====              ===            ======
</TABLE>

Accumulated depreciation:

<TABLE>
<CAPTION>
                           At the Beginning      Depreciation                    Exchange      At the End
                             of the Year            Expense      Disposals     Differences     of the Year
                           ----------------      ------------    ---------     -----------     -----------

<S>                              <C>                 <C>            <C>            <C>            <C>
Furniture and fixtures           1,073                 603           (76)           2             1,602
Office equipment                   590                 344           (51)           7               890
Computers                        1,168                 418           (43)           -             1,543
Vehicles                         1,013                 644          (176)           3             1,484
                                 -----               -----          ----           --             -----

                                 3,844               2,009          (346)          12             5,519
                                 =====               =====          =====          ==             =====

Net book value                   5,012                                                            6,055
                                 =====                                                            =====
</TABLE>

The net book value of assets included above which are held under capital leases
is $720, as of December 31, 1998.


(7)      OTHER CURRENT LIABILITIES
----------------------------------
This item consists of the following:

                                                              1998          1997
                                                              ----          ----

Accrued expenses                                             2,068         2,149
Deferred revenue                                               543           600
Income taxes payable                                           451           328
Social securities and taxes payable                            380           436
Sales taxes and other                                          442           217
Other                                                          188           141
                                                             -----         -----

                                                             4,072         3,871
                                                             =====         =====


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-11
<PAGE>


(8)      DUE TO BANKS
---------------------
ARAMEX and its subsidiaries maintain lines of credit with various banks in the
aggregate of $208, and $538, respectively, at December 31, 1998 and 1997. At
December 31, 1998 and 1997, the Company had $198 and $328 outstanding under
these lines of credit. Some of the lines of credit were personally guaranteed by
Mr. Fadi Ghandour and secured by a mortgage debenture over the assets of Aramex
(UK) International Courier Limited. The weighted average interest rates on the
Company's lines of credit were 8.46% and 12.8% at December 31, 1998 and 1997,
respectively. The remaining balances of $206 and $259 in Due to Banks as of
December 31, 1998 and 1997, respectively, represent bank overdrafts.


(9)      LONG TERM DEBT
-----------------------
This item consists of the following:

                                                            1998            1997
                                                            ----            ----

Long term loan (a)                                             -             88
Long term notes payable (b)                                   32             44
Capital lease obligations (c)                                720            676
                                                            ----           ----

                                                             752            808
Less: current maturities                                    (458)          (352)
                                                            ----           ----

Long term portion                                            294            456
                                                            ====           ====

(a)      Long term loan

         This represents a bank loan at a fixed interest rate of 9.875%. The
         loan is denominated in Great Britain pounds and is secured by a
         mortgage debenture over the assets of Aramex (UK) International Courier
         Limited.

(b)      Long term notes payable

         This represents various vehicle and equipment's notes payable in
         monthly installments with original average maturities of two to three
         years, at interest rates ranging from 6.75% to 16%. Long term notes
         payable including current maturities are payable in various currencies
         including the U.S. Dollars.

         The aggregate amounts of annual principal maturities of long-term loan
         and notes payable are as follows:

                                                             December 31
                                                             -----------

         1999                                                     26
         2000                                                      6
         2001                                                      -


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-12
<PAGE>


(c)      Capital lease obligations

                                                             1998         1997
                                                             ----         ----
         Capital lease obligations in respect of
          vehicles and telephone equipment                   720           676
         Less: current maturities                           (432)         (258)
                                                            ----          ----

         Long term portion                                   288           418
                                                            ====          ====

         Future minimum annual payments under all noncancellable capital leases
         are as follows:

                                                                December 31
                                                                -----------

         1999                                                       486
         2000                                                       258
         2001                                                        35
         2002                                                         8
                                                                    ---

         Total minimum lease payments                               787
         Less: interest component                                   (67)
                                                                    ---

         Present value of minimum lease payments                    720
                                                                    ===


(10)     SHARE CAPITAL
----------------------
(a)      Common Stock -

         ARAMEX has an authorized share capital of 15,000,000 shares of common
         stock with a par value of $0.01 per share. The Company is also
         authorized to issue 5,000,000 shares of preferred stock with a par
         value of $0.01 per share, none of which has been issued or is
         outstanding.

         On September 18, 1998 the Company announced a share repurchase program
         to acquire up to 200,000 shares of its common stock. According to the
         program the shares will be purchased in open market or private
         transactions and the purchased shares will be cancelled. During 1998
         the Company purchased 31,000 shares at an aggregate cost of $274.

         On May 6, 1998, the Company completed a secondary public offering of
         1,000,000 shares of common stock on the Nasdaq National Market at a
         price of $13.125 per share, of which 500,000 shares were offered by
         the Company and 500,000 shares were offered by certain selling
         shareholders. The net proceeds of the issue received by the Company
         (after deducting underwriting discounts, commissions and after costs
         associated with the offering) were $5,700.

   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-13
<PAGE>


         On January 13, 1997, the Company completed an initial public offering
         of 1,000,000 shares of common stock on the Nasdaq National Market at a
         price of $7 per share. The net proceeds of the issue received by the
         Company, (after deducting underwriting discounts, commissions and other
         costs associated with the offering), were approximately $5,048. On
         January 29, 1997, the underwriters exercised their over-allotment
         option, (which was granted by the Selling Shareholders), on 150,000
         shares of the Company's common stock.

(b)      Warrants -

         In connection with the initial public offering, the Company has also
         agreed to sell to the Underwriters, warrants to purchase up to 100,000
         shares of its common stock at an exercise price of $8.40 per share. The
         warrants are not redeemable, and are exercisable during a four-year
         period commencing January 13, 1998. The warrants provide, subject to
         certain conditions, for a period of four years commencing on January
         13, 1998, one "demand" registration right and will provide, subject to
         certain conditions, for a period of four years commencing January 13,
         1998, certain "piggyback" registration rights.

         During 1998, a total of 10,900 warrants were exercised on a cashless
         basis resulting in an issue of 2,215 shares of common stock.

(c)      Stock Option Plan -

         The following options have been granted under the Company's Stock
         Option Plan:

<TABLE>
<CAPTION>
                               Balance at the     Granted           Exercised       Balance at the   Exercise price
                               beginning of the   during the        during the      end of the
                               year               year              year            year
                               ------------------------------------------------------------------------------------

<S>                                 <C>               <C>                <C>       <C>              <C>
        Mr. F. Ghandour             100,000            -                 -         100,000          $7.00
        Mr. W. Kingson              100,000            -                 -         100,000          $7.70
        Officers & managers         100,000            -                 -         100,000          $7.00
                               ------------------------------------------------------------------------------------

                                    300,000            -                 -         300,000
                               ------------------------------------------------------------------------------------
</TABLE>

         The Plan provides for the granting of incentive stock options and
         nonqualified stock options. The total number of shares available for
         grant under the Plan shall not exceed 400,000. The option price shall
         not be less than 100% of the fair market value of the Company's share
         on the date of the grant. In the case of an incentive stock option
         recipient possessing more than 10% of the total combined voting power
         of all classes of stock of the Company or any of its subsidiaries, the
         option price shall not be less than 110% of the fair market value of
         the Company's share on the date of the grant.

   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-14
<PAGE>


         On January 13, 1997, Mr. Fadi Ghandour (CEO), was granted nonqualified
         options to purchase 100,000 shares of common stock at an option price
         of $7 per share. The options are exercisable for a period of ten years
         from the date of vesting. Fifty percent of these options vested on
         January 13, 1997 and the other fifty percent vested six months from
         said date. On January 13,1997, Mr. William Kingson (Chairman), was
         granted incentive stock options to purchase 100,000 shares of common
         stock at an option price of $7.7 per share. The options are exercisable
         for a period of five years from the date of vesting. Fifty percent of
         these options have vested on January 13, 1997 and the other fifty
         percent vested six months from said date.

         Stock options to purchase an additional aggregate 100,000 shares of
         common stock at an exercise price equal to $7 per share have been
         granted on January 13, 1997 to certain of the Company's executive
         officers and managers. These options will vest over a five-year period
         on the basis of one-quarter each year following the first anniversary
         of the grant of such options.

         International Accounting Standards do not require compensation expense
         to be recognized for stock options. Under United States generally
         accepted accounting principles, stock options are accounted for in
         accordance with the provisions of Statement of Financial Accounting
         Standard No. 123, "Accounting for Stock-Based Compensation" (SFAS 123).
         As permitted by SFAS 123, the Company has elected to account for
         stock-based compensation using the intrinsic value method under
         Accounting Principles Board Opinion No. 25. Accordingly no compensation
         expense has been recognized for stock options. If compensation expense
         for the Company's stock options issued in 1997 had been determined
         based on the fair value method of accounting, as defined in SFAS 123,
         the Company's net income and earnings per share would have been reduced
         to the pro forma amounts indicated below:

                                                        1998             1997
                                                        ----             ----
         Net income:
            As reported                                 3,855            3,121
            Pro forma                                   3,762            2,338
         Basic earnings per share:
            As reported                                 0.81             0.71
            Pro forma                                   0.79             0.53
         Diluted earnings per share
            As reported                                 0.79             0.69
            Pro forma                                   0.77             0.52

         The fair value of granted stock options is estimated on the date of the
         grant using a variant of the Black-Scholes option pricing model
         incorporating the following assumptions:

         Expected share price volatility                    34.4%
         Risk free interest rate                             6.4% - 6.8%
         Expected life of options                            5 to 10 years

         The weighted average fair value of stock options granted during 1997
         was $3.27 per option share. No options were granted during 1998 and
         1996.


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-15
<PAGE>


(11)     REVENUES
-----------------
This item consists of the following:
                                              1998           1997        1996
                                              ----           ----        ----

International express                         43,629        36,556      30,798
Freight forwarding                            28,804        21,697      15,186
Domestic express                               6,456         3,967       2,880
MED                                            2,153         1,833       1,078
Other *                                        2,569         2,277       2,333
                                              ------        ------      ------

                                              83,611        66,330      52,275
                                              ======        ======      ======

*        Amounts represent revenues from other special services which the
         Company renders, including airline ticketing and travel, remail and
         visa services. All related costs are reflected in shipping costs.


(12)     SHIPPING COSTS
-----------------------
This item consists of the following:
                                               1998         1997        1996
                                               ----         ----        ----

Linehaul expenses - Express                   9,528        7,392       7,281
Distribution expenses - Express               6,447        6,607       4,879
Inbound costs - Express                       2,614        1,555       1,441
Freight forwarding and related expenses      22,076       16,843      11,904
MED cost of sales                             1,500        1,246         697
Other                                         2,630        1,828       1,878
                                             ------       ------      ------

                                             44,795       35,471      28,080
                                             ======       ======      ======


(13)     COMMITMENTS
--------------------
The Company leases office space and office and transportation equipment under
various operating leases, some of which are renewable annually. Rent expense
related to these leases amounted to $1,671, $1,159 and $1,072 for the years
ended December 31, 1998, 1997 and 1996, respectively. The Company believes that
most operating leases should be renewable at comparable rates to the expiring
leases.

The approximate minimum annual rental commitments of the Company under the
existing lease agreements, are as follows:

                                                      December 31
                                                      -----------

1999                                                     1,222
2000                                                       514
2001                                                       353
2002                                                       257
2003                                                       113


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-16
<PAGE>


(14)     INCOME TAXES
---------------------
The provision for income taxes on results of operations of foreign subsidiaries
is comprised of the following:

                                                  1998        1997        1996
                                                  ----        ----        ----

Current                                           289          169         167
Deferred                                            3            1         (10)
                                                  ---          ---         ---

                                                  292          170         157
                                                  ===          ===         ===

Deferred income taxes are provided in accordance with the liability method under
IAS 12, for the temporary differences between the financial reporting basis and
the tax basis of the Company's assets and liabilities. The composition of
deferred taxes reflected on the balance sheet is as follows:

                                                       Assets    (Liabilities)
                                                        1998          1997
                                                       ------    -------------
Current -
Provision for doubtful accounts                           45             30
Termination indemnities                                    9             19
Donation carryover                                         6              5
                                                        ----           ----

                                                          60             54
                                                        ----           ----
Non-current -
Depreciation                                             (15)             6
Net operating losses carryforward                        602            871
Other                                                     26              7
Valuation allowance                                     (674)          (936)
                                                        ----           ----
                                                         (61)           (52)
                                                        ----           ----

                                                          (1)             2
                                                        ====           ====

At December 31, 1998, the Company and its subsidiaries had net operating losses
carryforward of approximately $1,766 which expire between 1999 and 2012.

The Company's consolidated effective tax rate was 7.0%, 5.2% and 6.7% for 1998,
1997 and 1996, respectively. The principal differences between these effective
tax rates and the statutory tax rate applicable in the United States of 35% are
as follows:

<TABLE>
<CAPTION>
                                                                 1998             1997           1996
                                                                 ----             ----           ----

<S>                                                             <C>              <C>              <C>
Computed tax at U.S. rate of 35%                                1,452            1,141            828
Effects of tax exemptions                                        (827)            (633)          (320)
Effect of lower rates in certain countries                       (872)            (650)          (430)
Losses not benefited                                              469              400            107
Other                                                              70              (88)           (28)
                                                                -----            -----            ---

                                                                  292              170            157
                                                                =====            =====            ===
</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                    statement

                                      F-17
<PAGE>



In certain countries the tax returns have not yet been reviewed by the tax
authorities. However, the Company is satisfied that adequate provisions have
been provided for potential tax contingencies.

As of December 31, 1998, the retained earnings of the Company represent the
retained earnings of ARAMEX and its share of the retained earnings of its other
subsidiaries. Such earnings are expected to be indefinitely reinvested or if
distributed, are expected to be distributed tax-free.


(15)     EARNINGS PER SHARE
---------------------------
<TABLE>
<CAPTION>
            Net income      Weighted average     Effect of      Weighted average      Basic           Diluted
                            No. of  shares -     dilution       No. of shares -       earnings per    earnings per
                            basic                               diluted               share           share
            ---------------------------------------------------------------------------------------------------------

<S>         <C>             <C>                  <C>            <C>                   <C>             <C>
1998        3,855           4,746,066            121,879        4,867,945             0.81            0.79

1997        3,121           4,396,811            126,236        4,523,047             0.71            0.69

1996        2,047           3,184,939            -              3,184,939             0.64            0.64
</TABLE>


(16)     ACQUISITIONS
---------------------
During the year acquisitions were made for a total consideration of $1,541.
This included increasing the company's ownership in the Cairo and Turkey
subsidiaries from 49% and 30% to 100% and 50% respectively in addition to
acquiring controlling interests in companies in India, Sri-Lanka, Bangladesh,
Turkey and Hong Kong. Goodwill arising from the acquisitions was $1,207
calculated as follows:

Fair value of net assets acquired                                        334
Less:    Consideration                                                 1,541
                                                                       -----
Goodwill arising                                                       1,207
----------------                                                       =====

Following is the movement on the goodwill account:

Balance at January 1, 1998                                                 -
Acquisitions                                                           1,207
Amortization for the year                                                (41)
                                                                       -----

Balance at December 31, 1998                                           1,166
                                                                       =====

Acquisitions made during the year contributed $4,808 to revenue and a net loss
of $294. The above acquisitions were accounted for using the purchase method of
accounting and accordingly, the purchase price has been allocated to the assets
acquired and liabilities assumed based upon the fair value at the date of
acquisition.


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-18
<PAGE>



The following unaudited pro forma information presents the results of operations
of the Company as if the acquisitions had taken place on January 1. This
information is not necessarily indicative of the results the Company would have
obtained had these events actually then occurred of the Company's future
results:

<TABLE>
<CAPTION>
                                         Pro Forma Year Ended    Pro Forma Year Ended
                                         December 31, 1998       December 31, 1997
-------------------------------------------------------------------------------------

<S>                                           <C>                       <C>
Revenues                                      87,173                    72,607
Income before income taxes                     3,947                     2,787
Net income                                     3,676                     2,744
Earnings per share - basic                      0.77                      0.63
Earnings per share - diluted                    0.76                      0.61
</TABLE>


(17)     LITIGATION
-------------------
In September 1995, an action was brought by a station manager against the
Company, claiming $1,000 in damages for certain breaches of contracts and other
matters. The Company's legal counsel has filed a motion for summary judgment. On
February 3, 1997, the motion for partial summary judgement was granted, and the
only remaining claim is the claim for an accounting. The Company's legal counsel
filed a motion for partial summary judgement on the claim for an accounting. The
motion was denied and the plaintiff was granted an accounting. The only claims
remaining are the counterclaims of the Company. No trial date is set on the
Company's counterclaims, and the parties are engaged in settlement discussions.
Management believes that this action should not have a material adverse effect
on the financial position or results of operations or cash flows of the Company.


(18)     RELATED PARTY TRANSACTIONS
-----------------------------------
On October 21, 1996, ARAMEX Hong Kong, sold 195 shares of common stock (304,688
shares after the reorganization effected on December 13,1996 as discussed in
Note 1), to Airborne Freight Corporation ("Airborne") for an aggregate
consideration of $2,000 ("the Airborne stock purchase"). In connection with such
purchase, the stockholders of ARAMEX Hong Kong entered into a Shareholders
Agreement (the Shareholders Agreement), as amended on December 11, 1996 which
provides, among other things, that in the event the Company transfer (as defined
in the Shareholders Agreement) any shares of common stock to certain listed
competitors of Airborne or any other company primarily engaged in the
transportation of air freight or air express shipments, Airborne has the right
to sell all of its shares of common stock to the Company on the same terms and
conditions as the sale to such other company. In the event that Messrs. Kingson
and Ghandour and/or Ms. Rula Ghandour transfer any shares of common stock to
certain listed competitors to Airborne or any other company primarily engaged in
the transportation of air freight or air express shipments, it shall be a
condition of such transfer that Airborne shall be offered the right to sell to
such competitor all of its shares of common stock on the same terms and
conditions as the sale by Messrs. Kingson and Ghandour and/or Ms. Rula Ghandour.
In addition, under the terms of the Airborne stock purchase, Airborne was
granted certain "piggyback" registration rights relating to its shares of common
stock and is entitled to appoint one director to the Company's Board of
Directors for as long as Airborne continues to own at least half of the shares
it acquired in the Airborne stock purchase.


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-19
<PAGE>


The Company leases the premises currently occupied by the Company's London
operations from Mr. Ali Ghandour, the father of Mr. Fadi Ghandour (CEO), at an
annual rental of $83 (GBP 50). The lease is open-ended and is renewed annually.
The Company believes that the terms of the lease are at least as favorable to
the Company as those available from unaffiliated third parties. During 1996, the
Company leased the premises currently occupied by the Company's corporate
offices in Amman, Jordan, from ARAM, an investment company controlled by the
CEO's family at an annual rental of $106 (JD 75). The lease is open-ended and is
renewed annually. The Company believes that the terms of the lease are at least
as favorable to the Company as those available from unaffiliated third parties.

During 1998 the Company sold at cost for $249 (JD 177) which approximates market
value the land that was owned by the Company's corporate offices in Amman,
Jordan to ARAM, an investment company controlled by the CEO's family.

The Company and Airborne are founding members of the Overseas Express Courier
Network (OEC). The OEC is a global alliance among certain leading independent
express companies that functions as a worldwide delivery network for its
members. Airborne handles and delivers the Company's express and freight
shipments that are sent mainly to North America and the Far East. The Company
and Airborne maintain normal business relations whereby they share profits on
handling of freight shipments and they bill each other for charges incurred on
handling and delivery of express shipments. Revenue from inbound shipments
amounted to less than 5% of total revenues.


(19)     INFORMATION ABOUT BUSINESS SEGMENTS
--------------------------------------------
The company operates predominantly in a single industry as a courier and cargo
freight forwarder. The following is a summary of financial data by business
segment consistent with the way senior management organizes operations within
the Company for decision making purposes and performance assessment.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                    International     Freight          Domestic
                    Express           Forwarding       Express          Other             Consolidated
----------------------------------------------------------------------------------------------------------
1998
  Revenue/(1)
----------------------------------------------------------------------------------------------------------
<S>                 <C>               <C>              <C>              <C>               <C>
External sales      43,629            28,804           6,456            4,722             83,611
----------------------------------------------------------------------------------------------------------
Inter-segment       21,095                 -               -              674                  -
sales
----------------------------------------------------------------------------------------------------------
Segment sales       64,724            28,804           6,456            5,396             83,611
----------------------------------------------------------------------------------------------------------
Gross profit        24,878             6,728           5,104            2,106             38,816
----------------------------------------------------------------------------------------------------------
1997
  Revenue/(1)
----------------------------------------------------------------------------------------------------------
External sales      36,556            21,697           3,967            4,110             66,330
----------------------------------------------------------------------------------------------------------
Inter-segment       18,382                 -               -              441                  -
sales
----------------------------------------------------------------------------------------------------------
Segment sales       54,938            21,697           3,967            4,551             66,330
----------------------------------------------------------------------------------------------------------
Gross profit        21,002             4,854           3,254            1,749             30,859
----------------------------------------------------------------------------------------------------------
1996
  Revenue/(1)
----------------------------------------------------------------------------------------------------------
External sales      30,798            15,186           2,880            3,411             52,275
----------------------------------------------------------------------------------------------------------
Inter-segment       15,424                 -               -              315                  -
sales
----------------------------------------------------------------------------------------------------------
Segment sales       46,222            15,186           2,880            3,726             52,275
----------------------------------------------------------------------------------------------------------
Gross profit        17,196             3,283           2,422            1,294             24,195
----------------------------------------------------------------------------------------------------------
</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-20
<PAGE>


(1)      Revenues between stations that are wholly owned subsidiaries are priced
         at cost. Transactions with other affiliated stations are priced at cost
         plus 10%. All intercompany transactions have been eliminated in
         consolidation

International express revenues are derived from the Company's international
express package delivery system. Freight forwarding revenues are derived from
the Company's freight forwarding services, including air and ocean freight
forwarding consolidation, warehousing and customs clearance services. Domestic
express revenues are derived from the Company's intra-country express delivery
services. Other revenues are derived from MED, the Company's direct marketing
and mail order catalog service, airline ticketing, remail, travel and other
corporate services.

The Company does not segregate assets and liabilities by business segment and
accordingly such information is not available. The following table shows the
Company's consolidated revenues, assets and liabilities by geographical area:

<TABLE>
<CAPTION>
                                          1998         1997             1996
                                          ----         ----             ----
Revenue

<S>                                      <C>          <C>              <C>
Middle East                              62,371       50,005           37,209
Europe                                   11,153       10,584            9,556
North America                             5,561        5,741            5,510
Asia                                      4,526            -                -
                                         ------       ------           ------

                                         83,611       66,330           52,275
                                         ======       ======           ======

                                                        1998             1997
                                                        ----             ----
Assets -
Middle East                                           34,307           26,020
Europe                                                 3,761            3,485
North America                                          1,308            1,199
Asia                                                   1,944                -
                                                      ------           ------

                                                      41,320           30,704
                                                      ======           ======

Liabilities -
Middle East                                           10,190            9,427
Europe                                                 2,141            2,842
North America                                            856              691
Asia                                                     758                -
                                                      ------           ------

                                                      13,945           12,960
                                                      ======           ======
</TABLE>


(20)     RESTRICTIONS ON UNAPPROPRIATED EARNINGS
------------------------------------------------
The legal reserve of the Company represents earnings restricted from payment of
dividends in accordance with the local laws of the domiciles of certain
subsidiaries. The law dictates that a fixed percentage, which is 10% of the net
income of the applicable subsidiaries, must be annually appropriated.


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-21
<PAGE>


(21)     SUPPLEMENTAL FINANCIAL STATEMENT DISCLOSURES
-----------------------------------------------------
Disclosures about fair values of financial instruments:

         The carrying amounts of cash, current receivables, trade payables, due
         to banks and long term debt approximate their fair market values.


(22)     SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES
         FOLLOWED BY THE COMPANY AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
         PRINCIPLES
--------------------------------------------------------------------------------
o    The consolidated financial statements of the Company have been prepared in
     accordance with International Accounting Standards (IAS). For purposes of
     these financial statements there is only one significant difference between
     the Company's accounting principles utilized and United States Generally
     Accepted Accounting Principles (US GAAP).

     Following is a description of this difference:

         During 1998 Mr. William Kingson (Chairman) and Mr. Fadi Ghandour (CEO)
         transferred 65,000 shares of common stock of the Company as a gift to
         certain employees. Under US GAAP where a company's principal
         stockholder transfers a portion of his shares to one or more of its
         employees, then the Company is required to account for such transfer as
         a compensation expense with an offsetting contribution to capital at
         the fair value of the shares transferred.

         Under IAS, there is no requirement to record such transfers as
         compensation expense, and accordingly the company did not record the
         transfer of shares as an expense.

         Following is a reconciliation of net income to US GAAP:

<TABLE>
<CAPTION>
                                                                                                1998
                                                                                                ----

<S>                                                                                            <C>
         Net income according to the financial statements
                  IAS                                                                          3,855
         US GAPP adjustment
                  Decrease due to compensation expense                                          (854)
                                                                                               -----

         Net income under US GAAP                                                              3,001
                                                                                               =====

         Earnings per share

         Basic earnings per share per accompanying financial statements                         0.81
                                                                                                ====

         Basic earnings per share under US GAAP                                                 0.63
                                                                                                ====

         Diluted earnings per share per accompanying financial statements                       0.79
                                                                                                ====

         Diluted earnings per share under US GAAP                                               0.62
                                                                                                ====
</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-22
<PAGE>


o    Effective January 1, 1998, the Company adopted Statement of Financial
     Accounting Standards (SFAS) No. 130 "Reporting Comprehensive Income". This
     standard increased financial reporting disclosures and had no impact on the
     Company's financial position or results of operations. Certain
     reclassifications have been made to the December 31, 1997 and 1996
     Consolidated Financial Statements to conform with the financial reporting
     requirements of SFAS No. 130 (see Consolidated Statement of Changes and
     Shareholders' Equity).


   The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-23
<PAGE>


                                            Exhibit Index




Exhibit Number                                   Description
--------------                                   -----------

21.1                                  List of subsidiaries of
                                      Aramex International Limited
27.1                                  Financial Data Schedule for the
                                      year ending December 31, 1999