Integrated Logistics Berhad

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Contents

2 CorporateInformation

3 Corporatestructure

4 GroupFinancialHighlights

6 Chairman’sstatement

13 Directors’ Profile

17 CorporateGovernancestatement

22 otherDisclosures

25 AuditCommitteeReport

28 statementonInternalControl

30 statementofDirectors’Responsibilities

31 ReportsAndFinancialstatements

110 PropertiesofILBGroup

112 shareholdingsstatistics

115 noticeofAnnualGeneralMeeting

118 statementAccompanyingnoticeofAGM

119 ProxyForm

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CorporateInformation

BoARDoFDIReCtoRs

Dato’LeeHwaBengChairman

Independent Non-Executive Director

teetuansemChief Executive Officer

Executive Director

GohtheowHiangChief Financial Officer

Executive Director

ChinthenYoonExecutive Director

MakototakahashiExecutive Director

WanAzfarbinDato’WanAnnuarNon-Executive Non-Independent Director

eliasbinAbdullahngIndependent Non-Executive Director

Dato’HajiWazirbinHajiMuazIndependent Non-Executive Director

seCRetARY

KeethuanKin

ReGIsteReDoFFICe

Lot 4, Lebuh Sultan Muhammed 2Kawasan 2�, Bandar Sultan Suleiman42000 Port KlangSelangor Darul EhsanTel No. 03-3�76�004, Fax No. 03-3�765�0�Website : www.ilb.com.my

sHAReReGIstRAR

symphonyshareRegistrarssdnBhdLevel 26, Menara Multi-PurposeCapital SquareNo. 8, Jalan Munshi Abdullah50�00 Kuala LumpurTel No. 03-272�2222, Fax No. 272�2530

soLICItoR

MessrsKadir,Andri&Partners8th Floor, Menara Safuan80, Jalan Ampang50450 Kuala Lumpur

AUDItoRs

MessrsMoorestephens(AF.0282)Chartered AccountantsNo. 8A, Jalan Sri Semantan SatuDamansara Heights50490 Kuala Lumpur

stoCKeXCHAnGeLIstInG

BursaMalaysiasecuritiesBerhad, Main Board

PRInCIPALBAnKeRs

RHBInvestmentBankBerhadLevel ��, Tower Three, RHB Centre426, Jalan Tun Razak50400 Kuala Lumpur

CIMBBankBerhad44, Jalan ChungahOff Jalan Sekolah42000 Port KlangSelangor Darul Ehsan

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3

Corporatestructure

Malaysia

Hong Kong

China

Philippines

British Virgin Islands

Cayman Islands

United Arab Emirates

100%

Integrated Shun Hing Logistics (Lingang) Co. Limited Dormant

100%

Integrated Logistics (China) Co. LimitedWarehousing & related value added services and transportation

Integrated Logistics BerhadInvestment holding

Integrated Warehouse Sdn BhdWarehousing & related value added services

100%

Integrated Forwarding & Shipping BerhadFreight Forwarding, transportation and distribution

100%

100%

Integrated HaulageSdn Bhd Container haulage

Integrated Freight Services Sdn BhdFreight Forwarding, transportation and distribution

100%

M. I. Logistics Sdn Bhd Warehousing & related value added services10

0%

Integrated Leasing Corporation Sdn BhdFinanciers under leasing & hire purchase agreements

100%

South Pacific Steamship Agency (Properties) Sdn BhdProperty Investment

100%

Wayson Construction & Engineering Sdn BhdDormant10

0%

100%

Integrated Logistics Solutions Sdn BhdDormant

100%

Integrated Logistics Services Sdn BhdDormant

Integrated Cargo Services Sdn BhdShipping solutions services

50%

100%

Warisan MegahSdn BhdDormant

50% Integrated Mits Sdn Bhd

Warehousing & related value added services

100%

ILB International (BVI) LimitedInvestment holding

70% ISH Logistics Group

LimitedInvestment holding 10

0%

ISH Group (BVI) Limited Investment holding

Integrated Logistics (H.K.) LimitedInvestment holding, warehous-ing & related value added services & transportation

100%

57.5

% Integrated National Logistics LimitedDormant

KPI WarehouseHoldings Inc.Providing warehousing facilities and equipment

90%

50% KP Integrated Sdn Bhd

Investment holding

100%

ISH Logistics (Shenzhen) Limited Investment holding

ISH Logistics Yantian (Shenzhen) Limited Dormant

100%

Integrated Shun Hing Logistics (Shenzhen) Co. LimitedWarehousing & related value added services and transportation

100%

Integrated Etern Logistics (Suzhou) LimitedWarehousing & related value added services and transportation

65%Integrated

Shun Hing Logistics (Shanghai) Limited Warehousing & related value added services and transportation

100%

100%

ISH Logistics (Shanghai) LimitedInvestment holding

ILB (Hangzhou) Co. LimitedDormant

100%

Shenzhen ISH Logistics Co. LimitedWarehousing & related value added services and transportation

100%

100%

ISH Logistics (Shenzhen II) Limited Investment holding

100%

Integrated Logistics (Hangzhou) LimitedDormant

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GroupFinancialHighlights

2003 2004 2005 2006 2007

RM’000 RM’000 RM’000 RM’000 RM’000

Revenue �65,334 �78,255 �90,502 �97,787 �90,8�4

Profit Before Taxation ��,373 20,489 30,598 3�,654 �4,865

Profit Attributable to Equity HoldersoftheCompany

4,276 �3,96� �8,335 24,477 8,2�8

netearningsPershare-Basic(sen) 3.3 9.9 ��.4 �4.8 4.5

InCoMestAteMent(RM’000)

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GroupFinancialHighlights

Note :* TheBoardproposedafirstandfinaldividendof3%pershareless26%Malaysianincometaxforthefinancialyearended31December2007subjecttoShareholders’

approvalattheAnnualGeneralMeetingtobeconvened.

2003 2004 2005 2006 2007

RM’000 RM’000 RM’000 RM’000 RM’000

Paid-upCapital �30,675 �55,807 �60,75� �69,�0� �97,026

totalAssets 530,�46 583,094 620,529 592,900 638,625

Total Equity Attributable toshareholdersoftheCompany

2�6,528 26�,0�8 284,436 300,395 333,489

netAssetsPershare(RM) 2.02 �.95 2.09 �.95 �.89

GrossDividendRate(%) - 2% 4% 6% 3%*

BALAnCesHeet(RM’000)

PeRsHARestAtIstICs

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Chairman’sstatement

our operations on the local front were severely affected, as reflected in the Group’s bottom line. In China, the Group had to grapple with rising operational costs. Although this too had hurt our bottom line, the Group’s operations in China managed to record a satisfactory profit.

Despite these adversities, the Group was able to record a pre-tax profit of RM14.9 million for the financial year ended 31 December 2007 compared to RM3�.7 million in the previous year. Revenue for the year under review was RM�90.8 million compared to RM�97.8 million for the year before. The lower revenue was mainly attributed to lower sales recorded by our Malaysian operations. The management of ILB is fully aware of business risks and market saturation in the logistics industry, especially in Malaysia. Hence, the Group had planned a lean organization and created a cost-conscious awareness program to mitigate the escalating costs of running a logistics business and to ward off strong local and international competitors. In order to edge its competitors, the Group has improved and streamlined its operations to be more effective and efficient, whilst maintaining its consistent quality of services to valued customers with the existing businesses.

Moving forward, ILB will diversify its business by venturing into other regions

Dear Shareholders,

On behalf of the Board of Directors of Integrated Logistics Berhad (“ILB”), I am pleased to present the Annual Report 2007, incorporating the Financial Statements of the Group and the Company for the financial year ended 31 December 2007.

PeRFoRMAnCeReVIeW

2007 was a challenging year as the Group had to operate in a difficult business environment due to escalating crude oil prices which severely affected the global logistics industry. During the year under review, price of crude oil peaked at almost USD�00 per barrel compared to USD75 per barrel in 2006. The impact of the rising crude oil prices and other indirect costs had caused most manufacturers, exporters, traders, logistics providers and other businesses to rationalise their increasing operating costs.

The rationalization had affected supply chain management in transportation, storage and distribution to consumers and had made logistics business more vulnerable and created more intense competition among local and global logistics providers. This had resulted in weaker demand for warehousing, forwarding and haulage businesses, particularly in Malaysia, as more logistics players entered the market. As such,

Warehousing facilities in Shah Alam, Malaysia Shenzhen warehouses in Futian Free Trade Zone, Shenzhen, China

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such as the Middle East (Dubai), which will provide additional profits and a better yield for the Group, in addition to also expanding its business operations in strategic locations in China.

DIVIDenDs

The Board is recommending the payment of a first and final dividend of 3.0 sen per share less Malaysian tax of 26% for the financial year ended 31 December 2007. The dividend is subject to the shareholders’ approval in the forthcoming Annual General Meeting.

ReVIeWoFoPeRAtIons

MALAYsIA

It was a challenging and competitive year for the logistics industry due to higher operating costs as a result of rising crude oil prices. Amidst this situation, the logistics industry experienced weaker demand for warehousing, forwarding and haulage businesses in Malaysia. The Malaysian operations therefore saw its contribution to the Group’s revenue fall, by making up approximately 50% of the Group’s revenue compared to approximately 55% in FY 2006, due to lower sales.

ILB however maintained its position as a leading total logistics services provider and the largest bonded warehouse operator in Malaysia in 2007. The Group

has a total warehouse space of 4.5 million square feet, of which 2.6 million square feet are located in Malaysia, �.8 million square feet in China, with the balance in the Philippines.

The fall in occupancy rate experienced during the year under review had substantially affected our rental and handling incomes. Warehousing business revenue decreased due to weaker demand for the Port Klang warehouses and the cost rationalization programmes undertaken by some anchor tenants in Shah Alam and Johor Bahru resulting in reductions in occupied warehousing space.

ILB’s haulage division maintains its transport fleet of 129 prime movers and 9�0 trailers during the year. The haulage business remained very competitive. However, the Group is committed towards a marketing strategy of providing “package-deals” to customers, quality services and a better fleet turnaround. The haulage division emerged as an important component, growing parallel with the other logistics services that we offer.

specialtaxIncentivePackage

Malaysia’s logistics services companies which have developed in tandem with the growth in the country’s manufacturing sector especially the export-oriented industry, have been urged to become

Warehousing facilities in Port Klang, Malaysia Keyboard Assembly Line in Shenzhen, China Container loading in China warehouse

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integrated logistics services providers. In a move to encourage investments in integrated logistics, the Malaysian government is offering tax incentives in the form of Pioneer Status or Investment Tax Allowance.

In 2006, Integrated Logistics Solutions Sdn Bhd (“ILS”), a wholly-owned subsidiary of ILB, was awarded the Special Incentive Package for �00% Tax Exemption for �0 years under the Income Tax Act, �967 for Regional 4PL Integrated Services. ILS has since commenced operations in January 2008, and is now the Group’s main operating company in Malaysia after the migration of the business operations of ILB’s five wholly-owned subsidiary companies to ILS. The five companies are Integrated Warehouse Sdn Bhd, Integrated Forwarding & Shipping Bhd, Integrated Haulage Sdn Bhd, Integrated Freight Services Sdn Bhd and M.I. Logistics Sdn Bhd. The incentive awarded will help the Group to invest in more sophisticated infrastructure and technology to compete with established multinational companies, and will further enhance its ability to provide a comprehensive supply chain management, not only within the country but also on a global basis.

CHInA

The robust growth in the China’s economy has resulted in higher costs of operations especially in term of rising

labour wages in China during the year under review. With its largest operations in Shenzhen, ILB was therefore adversely affected by rising operational costs. This, coupled with increases in expenditures and fees incurred pursuant to the new projects undertaken in China had affected the Group’s bottom line for the year under review. Hence, the Group’s China operations recorded a lower pre-tax profit for 2007 compared to 2006. Notwithstanding this, the China operations made up approximately 50% of the Group’s revenue for the FY 2007, up from 45% in the FY 2006.

ILB maintained its position as one of the leading foreign total logistics services providers in China, having established itself as a provider of high value-added logistics services. ILB currently operates five warehouses in Shenzhen and Shanghai, with a total warehouse space of about �.8 million square feet. Due to rapid local industrial growth, the Group rented additional warehouse space of about 480,000 square feet in Shenzhen to cater for strong demand for its services. The warehouses in Shenzhen are dedicated to Vendor Managed Inventories (VMI) operations of Lenovo/IBM together with some other 220 suppliers.

As part of this strategy to grow and expand its business in China, ILB purchased substantial stakes in Shanghai Puhwa Logistics Co. Ltd. (“Shanghai Puhwa”)

Warehousing facilities in Futian Free Trade Zone, Shenzhen, China

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and Jiangyin Foreversun Chemical Logistics Co. Ltd. (“Foreversun”) to further strengthen its operations in China. Strategic Acquisitions

The acquisition of 60% equity interest in Shanghai Puhwa by ILB’s 70%-owned Integrated Logistics (HK) Limited (“ILHK”) is expected to be completed soon and bodes well for the Group’s strategy to grow its transportation business, which is vital for the growth of our logistics business in China. This acquisition will automatically enable ILB to reach the second and third tier cities in China.

ILB had in October 2007, through ILHK, entered into an investment agreement to acquire a 30% equity interest in Foreversun to expand the scope of its logistics businesses into the high-growth and high-profit margin petrol chemical logistics industry in China. Foreversun is a leading liquid chemical storage and logistics player located in Jiangyin City, 2-hour drive away from Shanghai. Foreversun’s facilities include 37 chemical storage tanks with a total storage capacity of 97,600 cubic metres. Major clients of Foreversun include large multinational and local petrol chemical companies.

During the year, ILB also purchased a piece of land measuring about 260,000 square feet near Yantian Port in Shenzhen

to develop a four-storey warehouse for related logistics services targeted for completion before mid-2009. As the largest port in Shenzhen strategically located in the Pearl River Delta with close proximity to Hong Kong, Yantian Port caters for the huge manufacturing base in the Pearl Delta Area and is one of China’s fastest-developing ports as it handles almost half of the total annual container throughput of Shenzhen. This investment forms part of ILB’s plan to further expand its logistics businesses in China.

JointVenture

Also, ILHK and a Chinese-listed entity Jiangsu Etern Logistics Development Ltd formed a joint-venture namely Integrated Etern Logistics (Suzhou) Ltd in Wujiang which acts as the regional distribution agent and provides warehousing and value-added services and transportation. The construction of a warehouse with approximately 240,000 square feet built-up area is expected to be completed by mid-2008.

saleandLeaseback

In order to unlock the value of the assets in China, Integrated Shun Hing Logistics (Shanghai) Ltd, a 70%-owned subsidiary of ILB, entered into a Reservation Agreement in November 2007 for the sale and leaseback of its warehouse in Waigaoqiao Free Trade Zone, Shanghai.

Proposed new warehouse in Wujiang, China Ground-breaking ceremony in December 2007 for the proposed new warehouse in Wujiang, China

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Proceeds from the sale will be used towards expansion into other higher yield and synergistic investments.

The China operation will continue to strive to improve yields and operating efficiencies through organic growth of its �.4 million square feet warehouse facilities in Futian Free Trade Zone, Shenzhen and 0.4 million square feet of warehouses facilities in Waigaoqiao Free Trade Zone, Shanghai.

The acquisitions and business alliances undertaken by the Group in China during the year under review will enhance ILB’s financial performance in the medium to long term. ILB will continue to explore investment opportunities that will generate positive impact on the Group’s financial performance.

DUBAI

ILB strengthened its position as an international logistics services provider when it ventured into the logistics business in Dubai. During the year, ILB formed a joint-venture with National Trading & Development Establishment, a Dubai-based trading company which has been in the trading and distribution business for the past 30 years in Dubai. The joint-venture, Integrated National Logistics Limited (“INL”), will be building a state-of-the-art warehouse with an approximate capacity of 750,000 square feet of warehouse cum office

space. INL’s warehouse is located in Dubai Logistics City (“DLC”), which is strategically sandwiched between the world-class Jebel Ali Port and the new airport runways of DLC, at the crossroads between West Asia, Europe, North Africa and the Middle East. With this connectivity, the time-to-market is significantly faster. This enables flexible supply chain arrangements that can deliver products on time and at reasonable costs.

The warehouse, targeted for completion by end of 2009, will be one of the largest fully-automated warehouse with cold room, ambient, air-conditioned environment to cater for all types of customers in Dubai that a third party logistics (3PL) warehouse provider has ever built. We expect good response and high demand for the warehouse space as a result of competitive pricing and efficient operations with less human intervention and the warehouse is expected to be a significant contributor to the Group’s earnings in the near future.

PRosPeCts

The global logistics industry continues to be competitive in the current year due to the rising cost of crude oil prices and wages, particularly in China. The year 2007 was a good turning point for ILB as it achieved notable milestones by venturing into several strategic investments in China and Dubai, some

Proposed State-of-the-Art Warehouse in Dubai (front view) Proposed State-of-the-Art Warehouse in Dubai (back view)

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of which will provide positive impact on its financial performance in 2008. With these encouraging developments, ILB expects to stage a better performance for the current year 2008. The Group’s China operations will continue to be the major contributor to ILB’s performance. The Group’s strategic investments in several projects in China are expected to contribute to its bottom line when implemented and become operational within the next three years.

MALAYsIA

The Malaysian economy is expected to remain resilient in 2008 on the back of robust domestic demand and private consumption spending and investment activities. In line with this, ILB has formulated strategies to strengthen and sustain the profitability of the Group. These strategies see the Group targeting customers with high growth rates in the domestic market. In addition, ILB is streamlining its operational processes and efficiency levels by consolidating its logistics supply chain. The Group is now diversifying its customers which are not export-orientated and ILB will continue to provide value chains to its customers through consistent and quality services.

ILB foresees the domestic logistics market to consolidate further while stiff competition is anticipated amongst the logistic players especially in the haulage

business, in 2008. The uncertainty in the rising price of crude oil will be the main driver that determines the demand for the logistics supply chain and the mode of storage and transportation. Hence, this will affect the demand for our services in warehousing and transportation.

However, the Group is confident that it can weather the situation and strengthen its operations in anticipation of better performance from Group’s logistics businesses. The haulage division is expected to boost its performance with plans to increase its fleet size. ILB is therefore confident of better performance from its Malaysian operations and hopes to register a reasonable profit for the current year in line with the expected improvement in the occupancy rates for our warehousing business, as well as the haulage and forwarding businesses.

CHInA

China’s economy is expected to maintain its high growth, seemingly able to resist the negative impact of the weakening global economy. China ��th Five Year Plan (2006 to 20�0) forecasts the country’s logistics industry to maintain an annual growth of 20%. 3PL logistics will contribute up to 23% of the logistics industry. China logistics industry value is projected to reach RMB�.2 trillion in 20�0. China’s ports are projected to achieve 8 billion metric tonnes annually, by 20�0.

Signing ceremony in October 2007 for the 30% acquisition of Foreversun, China Site visit to the chemical storage facilities of Foreversun, China

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To take advantage of the escalating growth in logistics demand at the major ports, ILB is planning to develop the land acquired near Yantian Port in 2008. Another growth area is in the Yangshan Port wherein ILB has proposed to acquire a piece of strategic land for the development of warehouses. Yangshan Port, the biggest deep water port located 55 kilometres from Shanghai, offers liberal and favourable investment policies in China. Yangshan Port is targeted to be one of the world’s busiest ports with estimated annual throughput of 22 million TEUs. The proposed development of these two warehouses augurs well with ILB’s expansion into growth areas outside the Futian Free Trade Zone.

The investment in the chemical logistics industry through the strategic investment in Foreversun will further enhance the yield of ILB’s China investment as the profit margin in chemical logistics is one of the highest in the logistics industry.

With the portfolio of warehouses in Free Trade Zones, two planned warehouses in the strategic ports in China, an established 3PL company with a well-connected distribution network throughout China and investment in chemical logistics industry, ILB is poised to steer itself as an emerging leading integrated logistics player in China.

The Group is also confident of steady growth in Shenzhen with regard to its plan for growth in the area where it operates, as it is located near to the airport in Hong Kong and the Shenzhen Port, the second largest container port in China. Apart from Shenzhen, ILB is looking at new growth areas near Shanghai and Suzhou which offer good prospects for the Group.

DUBAI

Our presence in Dubai will be a good platform for the Group to tap into new

clientele and leverage our warehouse expertise in 3PL environment as well as maximizing our partners’ expertise in their distribution network. This will see the Group expanding its organic growth within the Group and other regions. Indirectly, it will allow the Group to reach other multinational companies as its customers. The state-of-the-art warehouse project located in Dubai will generate a significant annual contribution to the Group when completed in 2009. ILB will continue to explore opportunities to expand and grow its businesses both locally and regionally to enhance its future performance.

ACKnoWLeDGeMents

On behalf of the Board, I express my condolences on the demise of Haji Yusof @ Yaakop bin Haji Salleh who passed away on �2 August 2007. He was an Independent Non-Executive Director and had been sitting on the board for �4 years. I would like to record the Board’s appreciation for his loyalty, dedication and commitment to serving the Company.

I would like to extend my warmest welcome to Dato’ Haji Wazir bin Haji Muaz for his appointment as an Independent Non-Executive Director of ILB on 5 November 2007.

Lastly, I would like to express my appreciation to the management and staff for their dedication and contribution to the Group during the year. I would also like to thank our customers, business associates and investors for their support throughout the year, and we look forward to better performance in the coming years.

Dato’ Lee Hwa BengChairman

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Directors’Profiles

Dato’ Lee Hwa Beng, aged 54, a practising public accountant, was appointed to the Board on �7th January �997. On 27th February 2007, he was appointed the Chairman of the Company. He is a Member of the Malaysian Institute of Accountants, Fellow Member of the Chartered Association of Certified Accountants, Fellow Member of the Malaysian Institute of Taxation and an Associate Member of the Institute of Chartered Secretaries and Administrators.

Dato’ Lee Hwa Beng is also the Chairman of the Audit Committee, Nomination Committee and Remuneration Committee of the Company and does not hold any other directorships of public companies.

Dato’ Lee Hwa Beng has a direct interest in �02,900 fully paid ordinary shares of RM�-00 each in the Company. He has no family relationship with any other Director and/or major shareholder of the Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interest with the Company. He has not been convicted of any offences within the past �0 years.

Tee Tuan Sem, aged 56, the Chief Executive Officer, was appointed to the Board on 9th June �992. He is a member of the Malaysian Institute of Accountants and a Fellow Member of the Chartered Association of Certified Accountants. He joined Tet. O Chong & Co., an established firm of public accountants, in 1976 and joined Integrated Forwarding & Shipping Berhad as Chief Accountant in �98�. He was promoted to the position of Finance Director in �998 and subsequently promoted as the Chief Executive Officer in 2001.

Tee Tuan Sem is a member of the Remuneration Committee of the Company and does not hold any other directorships of public companies.

Tee Tuan Sem has a direct interest in 8,957,924 fully paid ordinary shares of RM�-00 each in the Company. He also has an indirect interest in �36,800 fully paid ordinary shares of RM�-00 each in the Company held through his wife, Yang Chiew Bi. He has no family relationship with any other Director and/or major shareholder of the Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interest with the Company. He has not been convicted of any offences within the past �0 years.

Dato’LeeHwaBeng

ChairmanIndependent Non-Executive Director (Malaysian)

teetuansem

Chief Executive OfficerExecutive Director(Malaysian)

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Goh Theow Hiang, aged 57, was appointed to the Board on 27th March 2002 as an Independent Non-Executive Director. On 2nd September 2002, he was appointed as an Executive Director assuming the position as Chief Financial Officer of ILB. He holds a Bachelor of Economics (Hons) degree, Post Graduate Diploma in Accounting from University of Malaya. He is also a member of Malaysian Institute of Accountants. He has 20 years experience in the merchant banking industry. He began his career as a financial analyst with Malaysian Industrial Development Authority (MIDA). In �980, he joined RHB Sakura Merchant Bankers Berhad as a Corporate Banking Officer and was subsequently promoted to General Manager. In �993 he was promoted to Senior General Manager, Head of Corporate Banking Division in the Bank. Prior to his current appointment, he was an Executive Director of Multi Vest Resources Berhad for a period of two years.

Goh Theow Hiang has a direct interest in �,326,999 fully paid ordinary shares of RM�-00 each in the Company and he does not hold any other directorships of public companies. He has no family relationship with any other Director and/or major shareholder of the Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interest with the Company. He has not been convicted of any offences within the past �0 years.

ChinthenYoon

Executive Director(Malaysian)

Chin Then Yoon, aged 56, the Executive Director, was appointed to the Board on �2th July �993. He completed his School Certificate / Malaysian Certificate of Education in �969. He is also the Group Operations Director responsible for the operational functions of the Group. He has more than 30 years of experience in the forwarding, transportation, air cargo and bonded warehousing industry. He is one of the pioneer staff of the Group, having joined Integrated Forwarding & Shipping Berhad in �974.

Chin Then Yoon has a direct interest in 759,800 fully paid ordinary shares of RM�-00 each in the Company and he does not hold any other directorships of public companies. He has no family relationship with any other Director and/or major shareholder of the Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interest with the Company. He has not been convicted of any offences within the past �0 years.

GohtheowHiang

Chief Financial OfficerExecutive Director

(Malaysian)

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Wan Azfar bin Dato’ Wan Annuar, aged 57, was appointed to the Board as an Executive Director on �7th September 200�. He resigned as the Executive Director of ILB on 26th March 2003 but remained as a Non-Executive Non-Independent Director. A Naval Officer by training, having been through Britannia Royal College, Dartmouth, United Kingdom and HMS Mercury, Royal Navy’s School of Maritime Operations, Petersfield, United Kingdom, he has some �6 years service at sea and ashore. His military appointments included 2 warships commands, staff duties at Ministry of Defence, Kuala Lumpur, Naval Headquarters in Singapore and as Naval Attache/Advisor at the Malaysian High Commission, London. After leaving the Royal Malaysian Navy, he joined the Malayan United Industries Berhad group of companies and pioneered the hotel division.

Wan Azfar bin Dato’ Wan Annuar has an indirect interest in �6,�48,�76 fully paid ordinary shares of RM�-00 each in the Company and he does not hold any other directorships of public companies. He has no family relationship with any other Director and/or major shareholder of the Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interest with the Company. He has not been convicted of any offences within the past �0 years.

WanAzfarbinDato’WanAnnuar

Non-Independent Non-Executive Director(Malaysian)

Makototakahashi

Executive Director(Japanese)

Makoto Takahashi, aged 40, the Executive Director was appointed to the Board on �7th September 200�. He holds a Bachelor of Science degree from the University of San Francisco. He has 2 years experience working with a Japanese logistics company in Kobe, Japan and 5 years experience working with a trading company in Hong Kong. He joined ILB in �998 as General Manager of Sales & Marketing Department. Subsequently he was appointed as Executive Director of ILB on �7th September 200�. He also sits on the Boards of other private limited companies.

Makoto Takahashi has a direct interest of 3,0�7,85� fully paid ordinary shares of RM�-00 each in the Company and he does not hold any other directorships of public companies. He has no family relationships with any other Director and/or major shareholder of the Company except that he is the son of Dato’ Yasua Takahashi, the Group Corporate Advisor of the Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interest with the Company. He has not been convicted of any offences within the past �0 years.

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eliasbinAbdullahng

Independent Non-Executive Director(Malaysian)

Dato’HajiWazirbinHajiMuaz

Independent Non-Executive Director(Malaysian)

Elias bin Abdullah Ng, aged 52, was appointed to the Board on �6th August 2002. He holds a Master in Business Administration from Ohio University, United States. He was a Manager with Amanah Chase Merchant Bank from �983 to �987. From �987 to �997, he was an Executive Director of Kimara Securities Sdn Bhd. He is presently a Remisier with Rashid Hussain Securities Sdn Bhd.

Elias bin Abdullah Ng is also a member of the Audit Committee, Nomination Committee and Remuneration Committee of the Company and does not hold any other directorships of public companies.

Elias bin Abdullah Ng does not have interest in the securities of the Company and its subsidiaries. He has no family relationship with any other Director and/or major shareholder of the Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interest with the Company. He has not been convicted of any offences within the past �0 years.

Dato’ Haji Wazir bin Haji Muaz, aged 56, was appointed to the Board on 5 November 2007 as an Independent Non-Executive Director. He holds a Masters in Public Administration (M.P.A.) from American University Washington D.C. USA, Ijazah Sarjana Muda Sastera (Kepujian), University Malaya and a Diploma in Textile Technology, Salford College of Technology, England. He was formerly the Deputy Director General of Royal Customs and Excise, Malaysia, and retired on May 2007, after having served in the Department for 34 years. During his tenure, he had introduced several changes in the Customs working procedures namely Golden Counter, Pre-clearance and others. He had held various important and prominent positions dealing in all aspects of Customs enforcement.

Dato’ Haji Wazir bin Haji Muaz is also a member of the Audit Committee and Nominations Committee and does not hold any other directorships of public companies.

Dato’ Haji Wazir bin Haji Muaz does not have interest in the securities of the Company and its subsidiaries. He has no family relationships with any other Director and/or major shareholder of the Company. He has not entered into any transaction, whether directly or indirectly, which has a conflict of interest with the Company. He has not been convicted of any offences within the past �0 years.

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CorporateGovernancestatement

theMalaysianCodeonCorporateGovernance(“theCode”) The Board of Directors remains committed to subscribe to the principles of good corporate governance that is central to the effective operation of the Company and to ensure the highest standards of accountability and transparency.

The Board is pleased to report on the extent to which the principles and best practices of the Code were applied throughout the financial year ended 3�st December 2007.

BoARDoFDIReCtoRs

Boardsize,BalanceandComposition

The Company is led by an experienced Board, comprising four (4) Executive Directors, one (�) Non-independent Non-Executive Director and three (3) Independent Non-Executive Directors. The Board’s composition represents a mix of knowledge, skill, and expertise to effectively discharge its stewardship and responsibilities in charting the strategic direction of the Group. The profiles of the members of the Board are set out on pages 13 to 16 of this Annual Report.

DutiesandResponsibilities

The Board is responsible for the Company’s overall business strategy, overseeing the conduct of the Company’s investment and corporate proposals undertaken and ensures that the Company’s business is being properly managed.

The Board reviews the adequacy and integrity of the Company’s internal control system and management information systems and ensure that the systems comply with applicable laws and regulations. The Board also implements appropriate systems to identify and manage principal risks.

The Independent Non-Executive Directors exercise independent view, advice and judgement in Board deliberations. They do not participate in the day to day management of the Company but provide sufficient check and balance. They do not engage in any business dealing or other relationship with the Company but act in the best interest of the shareholders and other stakeholders of the Company.

BoardMeeting

The Board meets on a quarterly basis with additional meetings being convened to address urgent issues. The Board met on four (4) occasions during the financial year ended 31st December 2007. The details of attendance of each Director at the Board Meetings held during the financial year are set out below.

DetAILsoFBoARDMeetInGs

DateofMeeting time

27th February 2007 �0:30 a.m. 22nd May 2007 �0:30 a.m. 06th August 2007 �0:30 a.m. 27th November 2007 �0:00 a.m.

All the above meetings were held at Lot �B, Persiaran Klang, Seksyen 27, 40400 Shah Alam, Selangor Darul Ehsan.

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AttenDAnCetotalnumberof

MeetingsnumberofMeetings

Attended

eXeCUtIVeDIReCtoRs

TEE TUAN SEM 4 4

GOH THEOW HIANG 4 4

CHIN THEN YOON 4 4

MAKOTO TAKAHASHI 4 3

non-InDePenDentnon-eXeCUtIVeDIReCtoR

WAN AZFAR BIN DATO’ WAN ANNUAR 4 4

InDePenDentnon-eXeCUtIVeDIReCtoR

HAJI YUSOF @ YAAKOP BIN HAJI SALLEH * 3 2

DATO’ LEE HWA BENG 4 3

ELIAS BIN ABDULLAH NG 4 4

DATO’ HAJI WAZIR BIN HAJI MUAZ # � �

* Haji Yusof @ Yaakop bin Haji Salleh demised on 12-08-2007.# Dato’ Haji Wazir bin Haji Muaz was appointed as an Independent Non-Executive Director on 05-11-2007.

All the Directors have complied with the minimum attendance at Board meetings as stipulated by the Listing Requirements of Bursa Malaysia Securities Berhad during the financial year.

supplyofInformation

The Board has timely access to relevant information pertaining to the Group. Prior to each Board meeting, the Agenda for every Board meeting, together with comprehensive management reports, proposal papers and supporting documents, are furnished to all Directors for their perusal well in advance of the Board meeting date, so that the Directors have ample time to review matters to be deliberated. Directors can obtain further clarification where necessary in order to be better informed properly before the Board meeting. The proceedings and resolutions reached at each Board meeting are recorded in the minutes of the Board meeting.

The members of the Board also evaluate business propositions and corporate proposals that require to be approved by the Board. The Board is regularly updated and advised on new statutory as well as regulatory requirements relating to the duties and responsibilities of Directors. Directors also have the advice and services of the Company Secretary. Directors can also seek independent professional advice if necessary in furtherance of their duties.

Directorstraining

All Directors have to attend training programmes that can further enhance their knowledge in the latest developments relevant to the Group. Members of the Board attended the National Accountants Conference 2007 conducted on �2th and �3th November 2007 at Kuala Lumpur Convention Centre. They have also attended various accredited programs on areas pertinent to the enhancement of their roles and responsibilities as Directors and are committed to continue with training on an annual basis to keep abreast with new regulatory developments and listing requirements.

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CorporatesocialResponsibility

The Group strongly recognises its commitment to contribute positively to the community and society.

The Group together with its subsidiaries had supported various charitable causes during the year and donated RM25,000 to Pertubuhan Rumah Amal Cahaya Tengku Ampuan Rahimah. The Group has also contributed to victims and staffs of the Group during the recent floods affecting Johore.

AppointmenttotheBoard

The appointment of any additional Director is made as and when it is deemed necessary by the existing Board with the recommendations of the Nomination Committee. In the process of nominating and appointing new Directors, due consideration is given to industry’s experience skill and mixed expertise required for an effective Board.

DirectorsRe-election

In accordance with the Company’s Articles of Association, one-third (l/3) of the Board, are subject to retirement by rotation at each Annual General Meeting. Directors retiring in each year are the directors who have been longest in office since their appointment or re-appointment. A retiring director is eligible for re-appointments. Re-appointments provide an opportunity for the shareholders to renew their mandates. The election of each director is voted separately. To assist shareholders in their decision, sufficient information such as personal profile, meetings’ attendance and the shareholdings interest in the Company of each director standing for election are furnished in the Statement Accompanying Notice of Annual General Meeting.

DirectorsRemuneration

The Remuneration Committee annually reviews the performance of the Executive Directors before furnishiing recommendations to the Board on specific adjustments in remuneration, in order to reflect their respective contributions for the year as well as to ensure remunerations which are competitive and consistent with the Company’s corporate objectives and strategy.

All Non-Executive Directors receive fees which are endorsed by the Board for approval by shareholders of the Company at the Annual General Meeting. The level of remuneration reflects the level of responsibilities undertaken by the Non-Executive Director. In addition, Non-Executive Directors are paid an allowance for each Board meeting they attend.

Details of Director’s remuneration for the financial year ended 3�st December, 2007 are as follows:-

ParticularsexecutiveDirectors

non-executiveDirectors total(RM)

Salaries & other emoluments 2,�22,082 - 2,�22,082

Fees 64,290 54,000 ��8,290

Other emoluments - �8�,935 �8�,935

Total (RM) 2,�86,372 235,935 2,422,307

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The number of Directors whose remuneration are analysed into bands of RM50,000 are as follows:-

‹-------------------------------numberofDirectors----------------------------›

RangeofRemunerationexecutive

non-executivenon-Independent

non-executiveIndependent

Below RM50,000 - - 3

RM 50,00� to RM�00,000 - � �

RM400,00� to RM450,000 � - -

RM500,00� to RM550,000 � - -

RM550,00� to RM600,000 � - -

RM600,00� to RM650,000 � - -

Note :-The above mentioned Directors’ remuneration is the total sum of the remuneration received by the Directors from the Company and its subsidiaries.

BoardCommittees

The Board delegates specific functions and responsibilities to the Board Committees to facilitate it in the execution of its responsibilities, namely the Nomination Committee, Remuneration Committee and Audit Committee. All Committees are provided with written terms of reference which state clearly the extent and limits of their responsibility and authority.

nominationCommittee

The Board established the Nomination Committee on 23rd November 200�. The Committee is responsible for assessing existing Directors and identifying, nominating and orientating new Directors to enhance corporate governance. The Committee met on two (2) occasions in the financial year 2007

The composition of the Nomination Committee is as follows

� Dato’ Lee Hwa Beng (Chairman) Chairman, Independent Non-Executive Director

2 Elias bin Abdullah Ng Independent Non-Executive Director

3 Haji Yusof @ Yaakop bin Haji Salleh Independent Non-Executive Director (demisedon12-08-2007)

4 Dato’ Haji Wazir bin Haji Muaz Independent Non-Executive Director (appointedon5-11-2007)

RemunerationCommittee

The Remuneration Committee was formed on 23rd November, 200�. The Remuneration Committee assists in the evaluation of the performance of the Directors and Senior Management. The Committee recommends to the Board rewards and the benefits for all Directors of the Group commensurate with their contributions to the Group’s overall performance. The Committee met on three (3) occasions in the financial year 2007.

The composition of the Remuneration Committee is as follows:-

� Dato’ Lee Hwa Beng (Chairman) Chairman, Independent Non-Executive Director

2 Tee Tuan Sem Executive Director

3 Elias bin Abdullah Ng Independent Non-Executive Director

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AuditCommittee

The Audit Committee assists in the monitoring of the adequancy and effectiveness of the internal control systems in place and also in the reviewing and reporting of financial information.

The Audit Committee Report is set out separately on pages 25 to 27 of the Annual Report.

RelationswithshareholdersandInvestors

The Annual General Meeting is the principal forum for dialogue and interaction with shareholders. Shareholders can ask questions on resolutions being proposed during the meeting and also on the progress, performance and future developments of the Company. The Chairman, Board members and the external auditors are available to respond and provide explanations to this question and answer session.

Information on the Group’s activities is provided in the Annual Report and Financial Statements which are despatched to shareholders. Dialogues are also held by the Group with investment analysts and fund managers to keep them abreast with corporate and financial developments within the Group.

Shareholders can also obtain up-to-date information on the Group’s various activities, news events and press releases by accessing its web site at www.ilb.com.my. Investors and the public who wish to contact the Group on any enquiry, comment or proposal can channel them through e-mail or contact the following persons :-

name Contactno. e-mailaddress

Kee Thuan Kin 03-3�76�004 [email protected]

ACCoUntABILItYAnDAUDIt

FinancialReporting

In presenting the annual financial statements and quarterly announcement to shareholders, the Board takes responsibility to present a balanced and understandable assessment of the Group’s position and prospects. The Board is assisted by the Audit Committee to oversee the Group’s financial reporting process and the quality of its financial reporting. The Statement explaining the Director’s responsibility for preparing the financial statements is set out in page 30 of the Annual Report.

InternalControl

The Board acknowledges its overall responsibility for maintaining a sound system of internal controls which encompasses financial, operational and compliance controls and risk management necessary for the Group to achieve its corporate objectives within an acceptable risk profile. These controls can only provide reasonable but not absolute assurance against material misstatement, loss or fraud. Ongoing reviews are continuously carried out to ensure the effectiveness, adequency and integrity of the system of internal controls in safeguarding the company’s assets.

The Statement on Internal Control set out on pages 28 & 29 of this Annual Report provides an overview of the State of Internal Control within the Group and the Company.

The Board has collectively approved this statement.

RelationshipwiththeAuditors

The Board has established a formal and transparent relationship with the auditors. The Audit Committee recommends the appointment of the external auditors and their remuneration. The appointment of the external auditors is subject to the approval of shareholders in general meetings whilst their remuneration is determined by the Board. The role of the Audit Committee is further described in the Audit Committee Report.

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otherDisclosures

Material Contracts, significant and subsequent events

�. On 29th May 2007, the Company paid a final dividend of 3% per share less 27% for the financial year ended 31st December 2006, to the shareholders whose names appeared in the Records of Depositors on 8th May 2007.

2. On �2th March 2007, the Company announced the following proposals :-

(i) Proposed Renewal of Share Buy-Back Authority by the Company of up to �8,04�,�77 ordinary shares of RM�.00 each, representing up to �0% of its issued and paid-up share capital as at 9th March 2007; and

(ii) Proposed Amendment to the Articles of Association.

3. On ��th April 2007, the Company entered into a Shares Sale & Purchase Agreement with Matsushita Logistics Co., Ltd., a company incorporated in Japan, for the acquisition of �,800,000 ordinary shares of RM�/- each, representing �2.5% equity interest in M.I. Logistics Sdn. Bhd. (“MIL”), a subsidiary company of the Company, for a total consideration of RM�,7�0,000-00. As a result, MIL became a wholly-owned subsidiary of the Company.

4. On 25th April 2007, Integrated Logistics (H.K.) Limited (“ILHK”), a subsidiary company of the Company, entered into a joint venture agreement with Jiangsu Etern Logistics Development Ltd. (“JELD”). ILHK and JELD have agreed to jointly participate in Integrated Etern Logistics (Suzhou) Ltd (“IEL”), a newly company incorporated in Wujiang, The People’s Republic of China, as the joint venture vehicle, with its principal activities as the regional distribution agent, and in the provision of warehousing and value-added services. Pursuant thereto, ILHK and JELD will invest RMB32.5 million and RMB�7.5 million respectively in IEL.

5. On 20th June 2007, ISH Logistics (Shenzhen) Ltd, a 70%-owned subsidiary company of the Company, had incorporated a wholly-owned subsidiary, with the registered capital of HK$40 million, namely ISH Logistics Yantian (Shenzhen) Ltd (“ISH Yantian”) in Shenzhen, The People’s Republic of China.

6. On 28th June 2007, ISH Yantianentered into a Contract for “Land Use Right Transfer” with Shenzhen Municipal Bureau of Land Resources and Housing Management, to invest in a project in “Yantian Port Bonded Logistics Park” in Shenzhen to conduct warehousing and related logistics services.

7. On 4th July 2007, the Company announced that Integrated National Logistics Limited (“INL”), a 57.5%-owned subsidiary company of the Company in Dubai Logistics City, Emirates of Dubai, United Arab Emirates, had been issued a licence to operate from the Dubai Aviation Corporation Authority on �9th June 2007 to conduct logistics, freight forwarding, warehousing and other related value added services, and that the shareholder, Argan Ventures Pte. Ltd. has withdrawn its shareholdings from INL. Pursuant thereto, ILB shareholdings in INL has increased from 55% to 57.5% based on the enlarged paid-up share capital of INL of United Arab Emirates Dirham (“AED”) 400,000 comprising 40 ordinary shares of AED�0,000.00 each.

8. On 6th August 2007, the Company announced the proposal to implement a private placement of up to �7,9��,400 ordinary shares of RM�/- each representing �0% of the issued and paid up share capital of the Company (“Proposed Private Placement”). The Proposed Private Placement was completed on �9th October 2007 pursuant to the listing and quotation of �7,9��,000 new ordinary shares of RM�/- each on Bursa Malaysia Securities Berhad (“Bursa Malaysia”) on the same date.

9. On 4th October 2007, the Company entered into a Shares Sale Agreement with William Chiew Soon Ming and Ling Nai Yieng, to dispose the Company’s entire �00% interest in Focusmax Services Sdn. Bhd. comprising 3,000,000 ordinary shares of RM�/- each for a total cash consideration of RM6,�75,000 (“Proposed Disposal”). The Proposed Disposal was completed on 5th December 2007.

�0. On �6th October 2007, ILHK entered into an investment agreement with Jiangyin Foreversun Chemical Logistics Co. Ltd. (“Foreversun”) and Ku Wing Hing, the �00% shareholders of Foreversun, to invest RMB80 million for an equity stake of 30% in a new company which is to be incorporated in British Virgin Islands to wholly-own Foreversun.

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otherDisclosures

��. On 3�st October 2007, the Company announced that Integrated Logistics (China) Co. Limited, a wholly-owned subsidiary of ILHK, which in turn is a 70%-owned subsidiary of the Company, had on 29th October 2007, incorporated a wholly-owned subsidiary, namely Integrated Shun Hing Logistics (Lingang) Co. Ltd (“ISH Lingang”) in Shanghai, The People’s Republic of China, with the authorised capital of RMB�0,000,000. ISH Lingang has not commenced business as at 3�st December 2007.

�2. On �2th November 2007, Integrated Shun Hing Logistics (Shanghai) Ltd, a subsidiary Company in which the Company has a 70% effective equity interest, had entered into a Reservation Agreement with MapletreeLog Integrated (Shanghai) (Cayman) Ltd., for the sale and leaseback of a property (the land together with buildings are hereinafter collectively referred to as “the Property”) in Shanghai, The People’s Republic of China. The sale price of the Property is RMB�58,300,000 in cash. The Purchaser is a wholly-owned subsidiary of Mapletree Logistics Trust, a real estate investment trust listed on the Singapore Exchange.

�3. On 30th November 2007, Integrated Warehouse Sdn Bhd, a wholly-owned subsidiary of the Company, had entered into a Sale and Purchase Agreement with Perceptive Logistics Properties Sdn Bhd for the disposal of a leasehold industrial land with a two-storey building and a workshop erected thereon for a total cash consideration of RM��,�07,800.

�4. On 3�st December 2007, the Company announced that further to the announcement made on 24th November 2006 that Integrated Logistics Solutions Sdn Bhd (“ILS”), a wholly-owned subsidiary company of the Company, was awarded the Special Incentive Package for �00% Tax Exemption for �0 years under the Income Tax Act, �967 for Regional 4PL Integrated Services (reclassified as “International Integrated Logistics”) by the Malaysian Industrial Development Authority (“MIDA”), vide its letter dated 22th November 2006. Pursuant thereto, the Company’s Malaysian operations is undertaking an internal restructuring exercise to meet the pre-requisite conditions set by MIDA for ILS to qualify for the tax incentives. ILS will become the group’s main operating company in Malaysia after the migration of the business operations of ILB’s five (5) wholly-owned subsidiary companies to ILS. ILS has commenced its operations on �st January 2008.

�5. On �0th February 2008, the Company had reduced its investment shares in Integrated National Logistics Limited from 57.5% to 42.5%.

�6. On �9th February 2008, the Company announced that a first and final dividend of 3% per ordinary shares less 26% tax, in respect of the financial year ended 31st December 2007, is subject to the shareholders’ approval at the forthcoming Annual General Meeting to be convened.

�7. As at 3�st March 2008, the Company had increased its paid-up share capital from RM�69,�0�,32�/- (as at �st January 2007) to RM�97,025,503/- by allotment of 27,924,�82 ordinary shares of RM�/- each, pursuant to exercise of Warrants 2002/2007 and Private Placement exercise. All allotted shares rank pari passu with the existing shares of the Company and were granted listing by Bursa Malaysia.

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otherDisclosures

UtilisationofProceeds

Warrants Conversion

Proceeds arising from allotment of �0,0�3,�82 new ordinary shares of RM�/- each arising from conversion of Warrant B (2002-2007) into new ordinary shares of RM�/- each, at an exercise price of RM�.05 each totalling RM�0,5�3,84� were utilised for working capital of the Company.

Private Placement exercise

Proceeds arising from allotment of �7,9��,000 new ordinary shares of RM�/- each arising from the Private Placement exercise at RM1.25 per share, which represents approximately 3.85% discount from the five (5)-day weighted average price of the Company’s shares up to September 2007 of RM�.30 totalling RM22,388,750 were utilised for repayment of bank borrowings, for financing the Group’s expansion plans and working capital of the Company.

shareBuy-Back

The shareholders of the Company, by an ordinary resolution passed at the �5th Annual General Meeting held on 3rd May 2007 approved the Company’s proposal to repurchase shares up to ten per cent (�0%) of the issued and paid-up share capital of the Company. During the financial year, the Company has not purchased any of its issued shares from the open market and no shares are currently being kept as treasury shares. There has been no resale or cancellation of treasury shares during the same period.

sanctionandPenalties

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies.

non-AuditFees

The amount of non-audit fees paid to external auditors for the financial year ended 31st December 2007 was RM4,050.00.

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AuditCommitteeReport

teRMsoFReFeRenCe

1.0 oBJeCtIVes

The primary objective of the Audit Committee is to assist the Board of Directors in fulfilling its fiduciary responsibilities relating to the corporate accounting and reporting practices of the Company and its subsidiary companies. In addition, the Audit Committee shall:-

a) Oversee and appraise the quality of the audit conducted by the Company’s external Auditors. b) Maintain through regularly scheduled meetings, a direct line of communication between the Board of

Directors and the external Auditors as well as internal Auditors.

c) Determine the adequacy of the Group’s administrative, operating and accounting controls.

2.0 CoMPosItIon

The Audit Committee shall be appointed by the Board of Directors from amongst their members and shall be composed of at least three (3) and not more than five (5) members of whom a majority shall not :-

a) be Executive Directors of the Company or any related corporations.

b) comprise persons having a relationship which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the functions of the Committee.

One member of the committee members shall be appointed Chairman by the Board of Directors. In the absence of such an appointment, one of the members shall be elected as Chairman by the committee members.

3.0 AUtHoRItY

The Audit Committee is authorised by the Board of Directors to investigate any activity within its terms of reference. It has free access to all information and documents it requires for the purpose of discharging its function and responsibilities.

The Audit Committee is also authorised to obtain outside legal or other independent professional advice, as it considers necessary.

4.0 DUtIesAnDResPonsIBILItIes

The duties and responsibilities of the Audit Committee shall be:-

a) To review:-

• the financial statement and annual reports prior to submission to the Board of Directors.

• the Group’s quarterly result prior to submission to the Board of Directors.

• the compliance with and adequacy of the guidelines and procedures established to monitor recurrent related party transactions.

• the planning, scope and area of internal audit and external audit and their respective audit findings.

• the adequacy and effectiveness of the systems of internal control.

b) to consider the appointment of the external Auditors, their remuneration and any question of resignation or dismissal.

c) to report to the Board of Directors its activities, significant result and findings.

d) to undertake such other responsibilities as may be agreed to by the Board of Directors.

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5.0 MeetInGs

The Audit Committee shall meet at least four (4) times a year.

In addition, the chairperson shall convene a meeting of the Committee if requested to do so by any member, the management or the internal or external Auditors to consider any matter within the scope and responsibilities of the Committee.

6.0 AttenDAnCe

a) Meetings shall be attended by the Chief Executive Officer, the Head of Internal Audit, and a representative of the external Auditors.

b) participants may be invited from time to time to attend the meetings.

7.0 QUoRUM

A quorum shall consist of a majority of committee members who are Non-Executive Directors.

8.0 seCRetARY

The Company Secretary shall be the secretary to the Audit Committee and shall be responsible for keeping the minutes of meetings and circulating them to Committee members.

CoMPosItIonAnDAtenDAnCeoFMeetInGs

The Audit Committee comprises the following members and details of attendance of each member at Committee meetings held during the financial year ended 31st December 2007 are as follow :-

CompositionoftheCommittee note AttendanceattheCommitteemeetings

Dato’ Lee Hwa Beng (Chairman)(Chairman / Independent Non-Executive Director)

3 out of 4 meetings

Tee Tuan Sem(Member / Non-independent Executive Director)

� 3 out of 3 meetings

En. Elias bin Abdullah Ng(Member / Independent Non-Executive Director)

4 out of 4 meetings

Haji Yusof @ Yaakop bin Haji Salleh(Member / Independent Non-Executive Director)

2 2 out of 3 meetings

Dato’ Haji Wazir bin Haji Muaz(Member / Independent Non-Executive Director

3 � out of � meeting

Note�. Tee Tuan Sem resigned with effect from 5th November 20072. Haji Yusof @ Yaakop bin Haji Salleh demised on �2th August 20073. Dato’ Haji Wazir bin Haji Muaz appointed with effect from 5th November 2007

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27


ACtIVItIes

During the financial year, the Audit Committee met to review the quarterly and annual financial statements of the Company. The Audit Committee concurrently reviewed and endorsed the annual audit plan to ensure adequate scope and comprehensive coverage on the audit activities of Integrated Group of Companies. Also deliberated was the internal audit reports, audit recommendations made and management response to these recommendations and actions taken to improve the system of internal control and procedures. The scope of internal audit covers the audits of financial and operations, including subsidiaries. A risk-based approach is adopted in respect of such audits.

The Audit Committee discharged its duties and responsibilities in accordance with its Terms of Reference.

InteRnALAUDIt

The Group Internal Audit Department whose principal responsibilities are to undertake regular and systematic reviews of the internal control system so as to provide reasonable assurance that such system continues to operate satisfactorily and effectively in the Group.

The Internal Audit Department within its terms of reference carried out the following activities for the period :-

a) reviewed and appraised the soundness, adequacy and application of financial and operational controls for the

Group.

b) reviewed current system and key risk areas covering business processes to ensure proper internal controls are

embedded in these processes.

c) monitored the implementation of the audit recommendations to ensure all key risks and controls have been

addressed.

d) reviewed the implementation of ISO Quality Management System on subsidiaries which are ISO 900�:2000

certified to ensure operations controls procedures are in place and rectified any non-conformance findings.

e) assisting the organisation management by identifying and evaluating significant exposures to risk and contributing

to the improvement of risk management and control systems.

f) conducted Health, Safety and Environmental audits.

g) performed ad hoc audits on the operations of the Companys’ subsidiaries including security and proper utilisation

of the Company’s assets.

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28

statementonInternalControl

BoARDResPonsIBILItY

The Board of Directors recognises the importance of good corporate governance and is committed to maintaining a sound system of internal control and risk management. This includes the establishment of an appropriate control environment and risk management framework, and reviewing the adequacy and integrity of the said systems, to safeguard shareholders’ investment and the Group’s assets. The Board is pleased to provide the following statement, which outlines the nature and scope of internal control of the Group during the year.

Whilst acknowledging its responsibilities, the Board is aware that due to the limitations that are inherent in any systems of internal control and risk management, such systems are designed to manage, rather than eliminate, the risk that may impede the achievement of the Group’s business objectives. Accordingly, it can only provide reasonable but not absolute assurance against material misstatement or losses, fraud or breaches or laws or regulations.

The Group’s system of internal control has been in place for the entire year under review. The key features of the internal control systems which are operated throughout the period covered by the financial statements are described under the following headings:

RiskManagement

The Group has an embedded process for the identification, evaluation and reporting of the major business risks within the Group. Policies and procedures have been laid down for the regular review and management of these risks. Reviews of the most significant areas of risk are undertaken to ensure that key control objectives remain in place. Reports on such reviews are presented to the Board and the Audit Committee.

InternalControlstructure

The Group has in place a sound internal control structure with sufficient assurance mechanism to safeguard the Group’s assets. There is a clearly defined operating structure with lines of responsibilities and delegated authority. The control structure and environment are supported by the following activities:

• MainControlProcedures

The Group has defined procedures and control, including information systems controls, to ensure the reporting of complete and accurate financial information. These procedures and controls include obtaining authority for major transactions and ensuring compliance with laws and regulations that have significant financial implications. Procedures are also in place to ensure that assets are subject to proper physical controls and that the organisations remains structured to ensure appropriate segregation of duties.

• Reporting

There is a comprehensive budgeting system with an annual budget approved by the Board each year. Management accounts containing actual and budget results and revised forecasts for the year are prepared and reported to the Board. These Management reports analyse and explain variances against plan and report on key indicators.

• AuditCommittee

The Audit Committee comprises independent non-executive members of the Board and provides direction and oversight over the internal audit function to enhance its independence from management. The Audit Committee meets regularly to review internal audit findings, discuss risk management issues and ensures that weaknesses in controls highlighted are appropriately addressed by the management.

• InternalAudit

An annual risk based internal audit plan is reviewed and approved by the Audit Committee at the beginning of the year. The objectives of the said audit plan are to ensure, through regular internal audit reviews, that the Group’s policies and procedures are being complied with in order to provide assurance on the adequacy and effectiveness of the Group’s system of internal controls. Follow-up reviews on previous audit reports are carried out to ensure that appropriate actions are taken to address internal control weaknesses highlighted.

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29

statementonInternalControl

• Monitoring

The monitoring of control procedures is achieved through management review by the responsible Executive Director reporting to the Board. These are supplemented by comprehensive reviews undertaken by the internal audit function on the controls in operation in each individual business. Regular reports are produced for senior management to assess the impact of control issues and recommend appropriate actions.

• Controlenvironment

The Group has in place a proper control environment, which emphasizes on quality and performance of the group’s employees through the development and implementation of human resource policies and programmes which are designed to enhance the effectiveness and efficiency of the individual and the organisation.

During the year, the Internal Audit Department has performed its duties in accordance with its annual audit plan covering management, operational and financial audit of various subsidiaries to ensure proper internal controls system are in place. In addition, the Internal Audit Department has conducted a compliance audit on the Groups’ Recurrent Related Party Transactions.

The system of internal control is satisfactory and has not resulted in material losses, contingencies or uncertainties that would require disclosure in the Group’s Annual Report.

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30

statementofDirectors’ResponsibilitiesInRespectoftheAuditedFinancialstatements

The Directors are required by the Companies Act, 1965 (“the Act”) to prepare financial statements for each financial year which gives a true and fair view of the state of affairs of the Group and the Company at the end of the financial year and the results and cash flow of the Group and of the Company for the financial year. As required by the Act and the Listing Requirements of the Bursa Malaysia Securities Berhad, the financial statements have been prepared in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Act.

In preparing those financial statements, the Company’s Directors have:

• adopted suitable accounting policies and applied them consistently;

• made judgements and estimates that are prudent and reasonable;

• ensured applicable approved accounting standards have been followed.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act, �965. The Directors are also responsible for the assets of the Company and hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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3�

Contents

32 Directors’Report

37 statementbyDirectors

37 statutoryDeclaration

38 ReportoftheAuditorstotheMembers

39 ConsolidatedBalancesheet

41 ConsolidatedIncomestatement

42 Consolidated Statement of Changes in Equity

46 ConsolidatedCashFlowstatement

49 Balancesheet

51 Incomestatement

52 Statement of Changes in Equity

53 CashFlowstatement

55 notestotheFinancialstatements

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32

Directors’Report

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 3� December 2007.

PRInCIPALACtIVItIes

The Company is principally engaged in the business of investment holding, receiving rental revenue, operating a warehouse and providing related value added services. The principal activities of the subsidiary companies are disclosed in note 7 to the financial statements. There have been no significant changes in the nature of these activities during the year.

ResULts

Group Company

RM RM

Profit after taxation �3,��5,373 6,555,578

Profit attributable to shareholders:-

Equity holders of the Company 8,2�7,77�

Minority interest 4,897,602

�3,��5,373

DIVIDenDs

Since the end of the previous financial year, the Company paid a final dividend of 3% per ordinary share of RM1/- each less 27% tax amounting to RM3,922,607/- in respect of the previous financial year, as reported in the Directors’ Report of that year; and

The Directors recommended a first and final dividend of 3% per ordinary share of RM1/- each less 26% tax in respect of the current financial year, subject to the approval of the shareholders at the forthcoming Annual General Meeting.

ReseRVesAnDPRoVIsIons

There were no material transfers to or from reserves or provisions during the year other than those disclosed in the financial statements.

BADAnDDoUBtFULDeBts

Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of provisions for doubtful debts, and have satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts.

At the date of this report, the Directors are not aware of any circumstances which would render the amount written off for bad debts, or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent.

CURRentAssets

Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps to ensure that any current assets which were unlikely to realise in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise.

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33

Directors’Report

At the date of this report, the Directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

VALUAtIonMetHoDs

At the date of this report, the Directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

ContInGentAnDotHeRLIABILItIes

At the date of this report there does not exist:-

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person, or

(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.

No contingent liability or other liability of the Group or of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group or of the Company to meet their obligations as and when they fall due.

CHAnGeoFCIRCUMstAnCes

At the date of this report, the Directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the Group and of the Company, which would render any amount stated in the financial statements misleading.

IteMsoFAnUnUsUALnAtURe

In the opinion of the Directors:-

(i) the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than those disclosed in note 25(a)(i) to the financial statements.

(ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

IssUeoFsHARes

During the year, the following issues of shares were made by the Company:-

Class number termsofIssue PurposeofIssue

Ordinary shares of RM�/- each �0,0�3,�82 Cash Exercise of Warrants 2002/2007

Ordinary shares of RM�/- each �7,9��,000 Cash Private Placement

tReAsURYsHARes

During the financial year, the Company did not repurchase any of its issued and fully paid ordinary shares.

The Company did not hold any treasury shares as at 3� December 2007

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34

Directors’Report

WARRAnts

Warrants 2002/2007

Pursuant to a supplemental deed poll dated 22 March 2002, Warrants 2001/2006 were redefined as Warrants 2002/2007.

Warrants 2002/2007 are constituted by a deed poll dated 29 January 200� and a supplemental deed poll dated 22 March 2002. Each Warrant 2002/2007 entitles the holder to subscribe for one new ordinary share of RM�/- each at an exercise price which at 3� December 2007 was RM�.05 per share. The exercise period for Warrants 2002/2007 expired on 9 March 2007.

DIReCtoRsoFtHeCoMPAnY

The Directors in office since the date of the last report are:-

DATO’ LEE HWA BENGTEE TUAN SEMCHIN THEN YOONGOH THEOW HIANGMAKOTO TAKAHASHIWAN AZFAR BIN DATO’ WAN ANNUARYUSOF @ YAAKOP BIN HAJI SALLEH (Demised on �2.8.07)ELIAS BIN ABDULLAH NGDATO’ HAJI WAZIR BIN HAJI MUAZ (Appointed on 5.��.07)

In accordance with Article 80 of the Company’s Articles of Association, Tee Tuan Sem and Goh Theow Hiang retire from the board at the forthcoming annual general meeting and being eligible offer themselves for re-election.

In accordance with Article 87 of the Company’s Article of Association, Dato’ Haji Wazir Bin Haji Muaz retires from the board at the forthcoming annual general meeting and being eligible offers himself for re-election.

DIReCtoRs’InteRests

The Directors who are in office at the end of the financial year have the following interests in the ordinary shares and warrants during the financial year:-

(a) shareholdingsintheCompany

numberofordinarysharesofRM1/-each

At At

1.1.07 Bought sold 31.12.07

DirectInterest

Chin Then Yoon 553,000 �74,000 (250,000) 477,000

Dato’ Lee Hwa Beng �02,900 - - �02,900

Makoto Takahashi 2,��7,85� �,000,000 (�00,000) 3,0�7,85�

Goh Theow Hiang �,298,666 28,333 - �,326,999

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Directors’Report

numberofordinarysharesofRM1/-each

At At

1.1.07 Bought sold 31.12.07

IndirectInterest

Beingsharesheldthroughnominees,

personsconnectedtodirectorsand

corporationsinwhichtheDirectors

areinterested

Tee Tuan Sem �4,59�,867 �0,000 (5,5�2,�43) 9,089,724

Chin Then Yoon 282,800 - - 282,800

Wan Azfar Bin Dato’ Wan Annuar �6,928,755 �,3�9,42� (�,700,000) �6,548,�76

(b) WarrantsintheCompany

numberofWarrants2002/2007

At expired

1.1.07 Bought sold 9.3.07

DirectInterest

Chin Then Yoon �74,250 - (�74,250) -

Makoto Takahashi �,000,000 - (�,000,000) -

Goh Theow Hiang 28,333 - (28,333) -

IndirectInterest

Beingwarrantsheldthroughnominees,

personsconnectedtodirectorsand

corporationsinwhichtheDirectorsare

interested

Wan Azfar Bin Dato’ Wan Annuar �,3�9,42� - (�,3�9,42�) -

By virtue of their interest in the shares of the Company, the Directors as disclosed above are also deemed to have an interest in the shares of the subsidiary companies to the extent of the shareholdings of the Company.

DIReCtoRs’BeneFIts

Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than those disclosed as directors fees, other emoluments and benefits-in-kind in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

Neither during nor as at the end of the financial year, was the Company a party to any arrangements whose object is to enable the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

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36

Directors’Report

sIGnIFICAnteVentsDURInGtHeYeAR

Significant events during the year are disclosed in note 43 to the financial statements.

sUBseQUenteVents

Significant events arising subsequent to the financial year are disclosed in note 44 to the financial statements.

AUDItoRs

The auditors, Messrs. Moore Stephens, retire and do not seek reappointment. A resolution to appoint Moore Stephens AC will be proposed at the forthcoming Annual General Meeting.

On Behalf of the Board

TEE TUAN SEM

GOH THEOW HIANG

Kuala Lumpur28th March 2008

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37

statementByDirectorsPursuant To Section �69(�5) Of The Companies Act, �965

We, the undersigned, being two of the Directors of the Company, state that in the opinion of the Directors, the financial statements as set out on pages 39 to �09, are drawn up in accordance with the provisions of the Companies Act, �965 and applicable MASB Approved Accounting Standards for Entities Other Than Private Entities in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as at 3� December 2007 and of the results of the operations, changes in equity and cash flows of the Group and of the Company for the year ended on that date.

On Behalf of the Board

TEE TUAN SEM

GOH THEOW HIANG


stAtUtoRYDeCLARAtIonPursuant to Section �69(�6) of the Companies Act, �965

I, Goh Theow Hiang, NRIC No.: 510127-08-5663, being the Director primarily responsible for the financial management of the Company, do solemnly and sincerely declare that the financial statements as set out on pages 39 to 109 are to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, �960.

Subscribed and solemnly declared at

Kuala Lumpur in the Federal Territorythis 28th day of March 2008

Before meS. MASOHOOD OMAR PKT,PJK,PJMCommissioner of Oaths (W.354)Kuala Lumpur

GOH THEOW HIANG

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38

ReportoftheAuditorstotheMembers

We have audited the financial statements set out on pages 39 to 109.

The preparation of the financial statements are the responsibility of the Company’s directors.

It is our responsibility to form an independent opinion, based on our audit, on those financial statements and to report our opinion to you, as a body, in accordance with Section �74 of the Companies Act, �965 and for no other purpose. We do not assume responsibility towards any other person for the content of this report.

We conducted our audit in accordance with the approved standards on auditing in Malaysia. These standards require that we plan and perform the audit to obtain all the information and explanations, which we considered necessary to provide us with sufficient evidence to give reasonable assurance that the financial statements are free of material misstatement. Our audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. Our audit includes an assessment of the accounting principles used and significant estimates made by the Directors as well as evaluating the overall adequacy of the presentation of information in the financial statements. We believe our audit provides a reasonable basis for our opinion.

In our opinion:-

(a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable MASB Approved Accounting Standards for Entities Other Than Private Entities in Malaysia so as to give a true and fair view of:-

(i) the matters required by Section 169 of the Companies Act, 1965, to be dealt with in the financial statements of the Group and of the Company; and

(ii) the state of affairs of the Group and of the Company as at 3� December 2007 and of the results of the operations, changes in equity and cash flows of the Group and of the Company for the year ended on that date;

and

(b) the accounting and other records and the registers required by the Companies Act, �965, to be kept by the Company and its subsidiary companies of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act.

The names of the subsidiary companies of which we have not acted as auditors are disclosed in note 7 to the financial statements. We have considered the financial statements of these subsidiary companies and the auditors’ reports thereon.

We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for these purposes.

The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and in respect of subsidiary companies incorporated in Malaysia, did not include any comment made under Section �74(3) of the Companies Act, �965.

MOORE STEPHENS CHONG TET ONChartered Accountants 370/04/08 (J/PH)(AF.0282) Partner


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39

ConsolidatedBalancesheetAs At 3� December 2007

2007 2006

note RM RM

(Restated)

Assets

non-currentassets

Property, plant and equipment 4 306,373,673 360,43�,24�

Prepaid land lease payments 5 130,853,733 ��6,845,40�

Capital work-in-progress 6 2,500,230 -

Interest in associated companies 9 19,814,778 �7,645,668

Amount owing by associated company �0 - 774,998

Other investments �� 852,743 855,3�7

Goodwill �2 114,607 97,804

460,509,764 496,650,429

Currentassets

Receivables �4 73,282,279 43,934,58�

Amount owing by associated company �0 168,999 -

Tax assets �5 2,614,929 3,209,893

Cash deposits with licensed banks and other corporation �6 13,621,406 29,809,809

Cash and bank balances 35,695,644 �9,295,0�8

125,383,257 96,249,30�

Non-current assets classified as held for sale �7 52,731,549 -

178,114,806 96,249,30�

totALAssets 638,624,570 592,899,730

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40

ConsolidatedBalancesheetAs At 3� December 2007

2007 2006

note RM RM

(Restated)

eQUItYAnDLIABILItIes

Equity

Share capital �8 197,025,503 �69,�0�,32�

Reserves 136,463,162 �3�,293,706

Total equity attributable to shareholders of the Company 333,488,665 300,395,027

Minority interest 39,053,156 29,553,�84

Total Equity 372,541,821 329,948,2��

Liabilities

non-currentliabilities

Long term borrowings �9 156,394,292 �57,886,605

Deferred tax liabilities �3 37,477,682 40,�87,055

193,871,974 �98,073,660

Currentliabilities

Payables 20 34,871,126 22,492,�26

Short term borrowings 2� 35,544,276 4�,486,055

Bank overdrafts - unsecured 22 933,029 -

Taxation 862,344 899,678

72,210,775 64,877,859

totalLiabilities 266,082,749 262,95�,5�9

totALeQUItYAnDLIABILItIes 638,624,570 592,899,730

netassetsperordinaryshare 23 189sen �95 SEN

The annexed notes form an integral part of, and should be read in conjunction with, these financial statements.

(cont’d)

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4�

ConsolidatedIncomestatementFor The Year Ended 3� December 2007

2007 2006

note RM RM

Operating revenue 24 190,814,095 �97,786,609

Direct operating costs (134,369,659) (�29,234,946)

Gross profit 56,444,436 68,55�,663

Other operating revenue 4,532,183 9,539,223

Administrative costs (32,951,713) (35,043,976)

Other operating costs (5,998,814) (3,0�5,754)

(38,950,527) (38,059,730)

Profit from operations 22,026,092 40,03�,�56

Finance costs (9,080,735) (9,4�5,28�)

Share of results of associated companies 1,919,910 �,037,903

Profit before taxation 25 14,865,267 3�,653,778

Taxation 26 (1,749,894) (200,�82)

Profit after taxation 13,115,373 3�,453,596

Attributableto:-

Equity holders of the Company 8,217,771 24,476,848

Minority interest 4,897,602 6,976,748

Profit attributable to shareholders 13,115,373 3�,453,596

Basic earnings per ordinary share 23 4.5sen �4.8 SEN

Diluted earnings per ordinary share 23 - �4.4 SEN

Dividend per share (gross)

- interim dividend (declared and paid) - 3.0 SEN

- proposed final dividend 3.0sen 3.0 SEN


Integrated Logistics Berhad (229690K) l Annual Report 2007 42

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07

46

ConsolidatedCashFlowstatementFor The Year Ended 3� December 2007

2007 2006

note RM RM

(Restated)

CashFlowsfromoperatingActivities

Profit before taxation 14,865,267 3�,653,778

Adjustments for:-

Allowance for doubtful debts 406,858 626,�62

Allowance for diminution in value of other investments - 68,979

Amortisation and depreciation of property, plant and equipment 16,372,680 �8,800,726

Amortisation of prepaid land lease payments 2,911,487 2,607,537

Bad debts written off 507,127 �0,2��

Deposits written off 18,575 -

Gain on disposal of property, plant and equipment (93,732) (282,4�3)

Impairment loss on property, plant and equipment 12,122 -

Impairment loss on non-current assets held for sale 231,815 -

Loss on disposal of investment in subsidiary company 3,140,487 -

Property, plant and equipment written off 6,870 652,�90

Provision for employee benefits 388,253 352,689

Reversal of allowance for doubtful debts (198,072) (295,564)

Share of profits of associated companies (1,919,910) (�,037,903)

Unrealised loss on foreign exchange 5,726 ��,945

Interest revenue (1,180,762) (545,564)

Interest and financing charges 8,502,406 8,895,620

Operating profit before working capital changes 43,977,197 6�,5�8,393

(Increase)/Decrease in trade and other receivables (30,893,510) 3,202,096

Increase/(Decrease) in trade and other payables 12,960,935 (7,634,�47)

Cash generated from operations 26,044,622 57,086,342

Tax refund 351,694 -

Interest paid (5,814,753) (6,695,495)

Tax paid (3,002,151) (2,8�9,304)

Net cash generated from operating activities carried down 17,579,412 47,57�,543

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69

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nu

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20

07

47


2007 2006

note RM RM

(Restated)

Net cash generated from operating activities brought down 17,579,412 47,57�,543

CashFlowsfromInvestingActivities

Acquisition of additional shares in subsidiary

companies from minority interest (1,710,000) (�3,�55,9�5)

Proceeds from allotment of shares by subsidiary company to minority interest 4,632,829 -

Effect of disposal of a subsidiary company, net of cash disposed 28 6,174,964 -

Additional investment in associated company - (62,500)

Capital work-in-progress incurred (2,500,230) -

Withdrawals of fixed deposits - 2�8,859

Purchase of property, plant and equipment (5,089,302) (3,72�,397)

Purchase of leasehold land (39,394,801) (643,823)

Repayments from associated company 605,999 795,000

Acquisition of associated company - (250,000)

Interest received 1,180,762 545,564

Acquisition of other investment - (�26,979)

Proceeds from disposal of property, plant and equipment 477,082 �,042,463

Net cash used in investing activities (35,622,697) (�5,358,728)

CashFlowsfromFinancingActivities

Dividend paid (3,922,607) (6,0�2,479)

Proceeds from/(Repayments of) unsecured loan 8,073,000 (4,�36,466)

Interest paid (2,687,653) (2,200,�25)

Payments to hire purchase payables and lease payables (496,849) (832,880)

Proceeds from revolving credit 6,500,000 -

Repayments of commercial papers (50,000,000) (5,000,000)

Proceeds from allotment of shares 32,902,591 9,09�,078

Proceeds from term loans 56,000,000 3�,256,700

Repayments of term loans (24,991,639) (36,788,435)

Net cash generated from/(used in) financing activities 21,376,843 (�4,622,607)

3,333,558 �7,590,208

Exchange differences (1,429,833) (7,429,�09)

Net increase in cash and cash equivalents 1,903,725 �0,�6�,099

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nu

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07

48


2007 2006

note RM RM

(Restated)

Net increase in cash and cash equivalents 1,903,725 �0,�6�,099

Cash and cash equivalents at beginning of the year

As previously reported 49,093,784 4�,04�,�50

Effects of exchange rate changes on cash and cash equivalents (2,613,488) (2,�08,465)

46,480,296 38,932,685

Cash and cash equivalents at end of the year 29 48,384,021 49,093,784


(cont’d)

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nu

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20

07

49

BalancesheetAs At 3� December 2007

2007 2006

note RM RM

Assets

non-currentassets

Property, plant and equipment 4 43,663 69,293

Investments in subsidiary companies 7 100,365,155 �0�,606,�95

Amounts owing by subsidiary companies 8 - �5�,862,636

Interest in associated companies 9 15,257,500 �5,257,500

Amount owing by an associated company �0 - 774,998

Other investments �� 58,000 58,000

Deferred tax assets �3 2,287,400 -

118,011,718 269,628,622

Currentassets

Receivables �4 18,230,821 2,�2�,��0

Amounts owing by subsidiary companies 8 172,588,498 -

Amount owing by an associated company �0 168,999 -

Tax assets �5 2,625,488 2,�75,872

Cash deposits with licensed banks and other corporation �6 13,368,918 2,997,799

Cash and bank balances 887,521 8�4,0�7

207,870,245

8,�08,798

totALAssets 325,881,963 277,737,420

Inte

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nu

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07

50

BalancesheetAs At 3� December 2007

2007 2006

Note RM RM

eQUItYAnDLIABILItIes

Equity

Share capital �8 197,025,503 �69,�0�,32�

Reserves 58,793,395 5�,�82,0�5

Total Equity 255,818,898 220,283,336

Liabilities


Amounts owing to subsidiary companies 8 - �,754,7�8

Long term borrowings �9 57,000,000 44,200,000

57,000,000 45,954,7�8

Currentliabilities

Payables 20 409,418 299,366

Amounts owing to subsidiary companies 8 2,953,647 -

Short term borrowings 2� 9,700,000 ��,200,000

13,063,065 ��,499,366

totalLiabilities 70,063,065 57,454,084

totALeQUItYAnDLIABILItIes 325,881,963 277,737,420


(cont’d)

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07

5�

IncomestatementFor The Year Ended 3� December 2007

2007 2006

note RM RM

Operating revenue 24 17,336,620 4,570,756

Direct operating costs - (354,842)

Gross profit 17,336,620 4,2�5,9�4

Other operating revenue 5,983,876 9,226,734

Administrative costs (2,303,642) (�,752,942)

Other operating costs (12,972,181) (�,4�8,467)

(15,275,823) (3,�7�,409)

Profit from operations 8,044,673 �0,27�,239

Finance costs (3,163,441) (2,73�,�09)

Profit before taxation 25 4,881,232 7,540,�30

Taxation 26 1,674,346 305,880

Profit after taxation 6,555,578 7,846,0�0


Inte

gra

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Be

rha

d (2

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nu

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07

52

Statement Of Changes In EquityFor The Year Ended 3� December 2007

shareCapital

non-Distributable

sharePremium

DistributableRetained

Profits Total Equity

RM RM RM RM

At1.1.06 �60,75�,004 46,042,�06 2,524,376 209,3�7,486

Allotment of shares pursuant to

- ESOS 2,060,500 426,270 - 2,486,770

- Exercise of Warrants 6,289,8�7 3�4,49� - 6,604,308

8,350,3�7 740,76� - 9,09�,078

Net profit for the year - - 7,846,0�0 7,846,0�0

Final dividend of 2% per share less 28% in respect for the year ended 3�.�2.05 - - (2,36�,066) (2,36�,066)

Interim dividend of 3% per share less 28% in respect for the financial year ended 3�.�2.06 - - (3,6�0,�72) (3,6�0,�72)

At31.12.06 �69,�0�,32� 46,782,867 4,399,�48 220,283,336

Allotment of shares pursuant to

- Exercise of Warrants �0,0�3,�82 500,659 - �0,5�3,84�

- Private placement �7,9��,000 4,477,750 - 22,388,750

27,924,�82 4,978,409 - 32,902,59�

Net profit for the year - - 6,555,578 6,555,578

Final dividend of 3% per share less 27% in respect for the financial year ended 3�.�2.06 - - (3,922,607) (3,922,607)

At31.12.07 �97,025,503 5�,76�,276 7,032,��9 255,8�8,898


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CashFlowstatementFor The Year Ended 3� December 2007

2007 2006

note RM RM

CashFlowsfromoperatingActivities

Profit before taxation 4,881,232 7,540,�30

Adjustments for:-

Allowance for diminution in value of other investments - 68,979

Depreciation of property, plant and equipment 34,767 36,9�0

Deposits written off 2,000 -

Property, plant and equipment written off 6,167 2,49�

Bad debts written off 5,092,812 5,827

Gain on disposal of investment in subsidiary company (3,005,000) (6,642,333)

Provision for employee benefits 1,748 5,727

Unrealised loss on foreign exchange 7,794,587 �,303,�33

Dividend revenue (17,336,620) (4,20�,403)

Interest revenue (2,932,931) (2,572,40�)

Interest and financing charges 2,687,653 2,402,64�

Operating loss before working capital changes (2,773,585) (2,050,299)

(Increase)/Decrease in trade and other receivables (21,199,666) 3,567,444

Increase/(Decrease) in trade and other payables 108,304 (679,463)

Cash (used in)/generated from operations (23,864,947) 837,682

Interest paid (1,487,606) (�79,7�6)

Tax paid (1,062,670) (�,204,285)

Net cash used in operating activities carried down (26,415,223) (546,3�9)

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CashFlowstatementFor The Year Ended 3� December 2007

2007 2006

note RM RM

Net cash used in operating activities brought down (26,415,223) (546,3�9)

CashFlowsfromInvestingActivities

Additional investments in subsidiary company (1,710,000) (800,000)

Additional investments in associated company - (62,500)

Advances to subsidiary companies (28,520,449) (3�,460,838)

Purchase of property, plant and equipment (15,304) (�7,��)

Repayments from associated company 605,999 795,000

Repayments from subsidiary companies - �2,877,207

Acquisition of subsidiary company (218,960) (20,8�6,�95)

Acquisition of associated company - (250,000)

Proceeds from disposal of subsidiary company 6,175,000 23,309,000

Acquisition of other investment - (�26,979)

Dividend received 17,336,620 4,20�,403

Interest received 2,932,931 2,572,40�

Net cash used in investing activities (3,414,163) (9,778,6�2)

CashFlowsfromFinancingActivities

Advances from subsidiary companies 1,194,072 250,000

Repayments to subsidiary companies - (672,427)

Dividend paid (3,922,607) (6,0�2,479)

Interest paid (1,200,047) (2,200,�25)

Repayments of commercial papers (50,000,000) (5,000,000)

Proceeds from term loans 56,000,000 6,000,000

Repayments of term loans (1,200,000) (600,000)

Proceeds from revolving credit 6,500,000 -

Proceeds from allotment of shares 32,902,591 9,09�,078

Net cash generated from financing activities 40,274,009 856,047

Net increase/(decrease) in cash and cash equivalents 10,444,623 (9,468,884)

Cash and cash equivalents at beginning of the year 3,811,816 �3,280,700

Cash and cash equivalents at end of the year 29 14,256,439 3,8��,8�6


(cont’d)

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notestotheFinancialstatements3� December 2007

1. CoRPoRAteInFoRMAtIon

The Company is a public limited company, incorporated and domiciled in Malaysia, and listed on the Main Board of the Bursa Malaysia.

The principal activities of the Company are investment holding, receiving rental revenue, operating a warehouse and providing related value added services. The principal activities of the subsidiary companies are disclosed in note 7 to the financial statements. There have been no significant changes in the nature of these activities during the year.

The registered office and the principal place of business is located at Lot 4, Lebuh Sultan Muhamed 2, Kawasan 2�, Bandar Sultan Suleiman, 42000 Port Klang, Selangor Darul Ehsan.

The financial statements were authorised for issue in accordance with a directors’ resolution dated 28 March 2008.

2. BAsIsoFPRePARAtIon

The financial statements of the Group and of the Company comply with the provisions of the Companies Act, �965 and applicable MASB Approved Accounting Standards for Entities Other Than Private Entities issued by the Malaysian Accounting Standards Board (“MASB”).

The measurement bases applied in the presentation of the financial statement of the Group and of the Company included cost, recoverable amount, realisable value and revalued amount. Estimates are used in measuring these values.

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency. All financial information presented in RM has been rendered to nearest RM, unless otherwise stated.

The preparation of financial statements of the Group and of the Company requires management to make assumptions, estimates and judgements that effect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Assumptions and estimates are reviewed on an ongoing basis and are recognized in the period in which the assumption or estimate is revised.

Significant areas of estimation, uncertainty and critical judgements used in applying accounting principles that have significant effect on the amount recognised in the financial statements are as follows :-

(i) depreciation of property, plant and equipment (note 4) – The cost of property, plant and equipment is depreciated on a straight line method over the assets useful lives. Management estimates the useful live of these property, plant and equipment to be within 5 to 50 years. These are common life expectancies applied generally. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore future depreciation changes could be revised.

(ii) annual testing for impairment of property, plant and equipment (note 4) – The measurement of the recoverable amount of cash generating units are determine based on the value-in-use method.

(iii) annual testing for impairment of goodwill (note �2) - the measurement of the recoverable amount of cash-generating units are determined based on the value-in-use method, which requires the use of cash flow projections based on financial budgets approved by management.

(iv) deferred tax assets (note �3) - deferred tax assets are recognised for unabsorbed capital and special allowances claimed on warehouse buildings, deductible temporary differences in respect of expenses and unrelieved tax losses to the extent that it is probable that taxable profit will be available against which the temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the future financial performance of the subsidiary companies and of the Company.

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3. sIGnIFICAntACCoUntInGPoLICIes

On � January 2007, the Company adopted the following Financial Reporting Standards (“FRS”) issued by the MASB mandatory for accounting periods beginning on or after � October 2006 or � January 2007.

FRS 6 Exploration for and Evaluation of Mineral Resource

FRS ��7 Leases

FRS �24 Related Party Disclosures

FRS 6 is not relevant to the Group’s and to the Company’s operations.

The adoption of these FRSs does not have any material financial impact on the Group and on the Company, or any significant changes in accounting policies of the Group and of the Company except as disclosed in note 46 to the financial statements.

newandrevisedFRss,AmendmentstoFRssandIssuesCommittee(“IC”)Interpretationsnotadopted

For financial periods

beginningonorafter

Amendment toFRS �2�

The effects of Changes in Foreign Exchange Rates – net investment in foreign operation

� July 2007

FRS �07 Cash Flow Statements � July 2007

FRS �� Construction Contracts � July 2007

FRS ��2 Income Taxes � July 2007

FRS ��8 Revenue � July 2007

FRS ��9 Employee Benefits � July 2007

FRS �20 Accounting for Government Grants and Disclosure of Government Assistance

� July 2007

FRS �26 Accounting and Reporting by Retirement Benefit Plans � July 2007

FRS �29 Financial Reporting in Hyperinflationary Economies � July 2007

FRS �34 Interim Financial Reporting � July 2007

FRS �37 Provision, Contingent Liabilities and Contingent Assets � July 2007

IC Interpretation � Changes in Existing Decommissioning, Restoration and Similar Liabilities

� July 2007

IC Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments � July 2007

IC Interpretation 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

� July 2007

IC Interpretation 6 Liabilities arising from Participating in a Specific Market-Waste Electrical and Electronic Equipment

� July 2007

IC Interpretation 7 Applying the Restatement Approach under FRS �292004

Financial Reporting in Hyperinflationary Economies

� July 2007

IC Interpretation 8 Scope of FRS 2 � July 2007

FRS �39 Financial Instruments : Recognition and Measurement Yet to be determined

The adoption of FRS 107, 112, 118, 119, 134, 137 and amendment to FRS 121 does not have any significant financial impact on the results and the financial position of the Company when these standards become effective to the Group and to the Company.

IC Interpretation �, 2, 5, 6, 7, 8 and FRS ��, �20, �26 and �29 are not relevant to the Group’s operations.

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3. sIGnIFICAntACCoUntInGPoLICIes(cont’d)

The Group and the Company have not early adopted FRS �39 - Financial Instruments : Recognition and Measurement, for which MASB has yet to announce the effective date. The impact of applying this standard on these financial statement upon first adoption of this standard as required by paragraph 30(b) of FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors is not required to be disclosed by virtue of exemption provided under paragraph �03AB of FRS�39.

(a) BasisofConsolidation

The consolidated financial statements incorporate the financial statements of the Company and all its subsidiary companies disclosed in note 7 to the financial statements made up to the end of the financial year.

Intra-group balances, transactions and resulting unrealised profits are eliminated on consolidation. Unrealised losses are eliminated on consolidation unless cost cannot be recovered. Consolidated financial statements reflect external transactions only.

The results of the subsidiary companies acquired or disposed during the financial year are included in the consolidated financial statements based on the purchase method from the effective date of acquisition or up to the effective date of disposal respectively. The assets, liabilities and contingent liabilities of a subsidiary company are measured at their fair values at the date of acquisition and these values are reflected in the consolidated balance sheet.

Any excess of the cost of the acquisition over the Group’s interest in fair value of the identifiable assets, liabilities and contingent liabilities assumed represents goodwill. Any excess of the Group’s interest in the fair value of identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised in the income statement.

Minority interests represent the portion of profit or loss and net assets in subsidiary companies not held by the Group. It is measured at the minority interests’ share of the fair value of net assets at the acquisition date and the (minorities’ share of) changes in the equity since then.

The consolidated financial statements are prepared on the basis that exceeds of losses attributable to minority shareholders over their equity interest will be absorbed by the Group. All profits subsequently reported by the subsidiary companies will be allocated to the Group until the minority shareholders’ share of losses previously absorbed by the Group has been recovered.

(b) Goodwill

Goodwill acquired in a business combination represents the difference between purchase consideration and the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary companies at the date of acquisition.

Goodwill is allocated to cash generating units and is stated at cost less accumulated impairment losses, if any. Impairment test is performed annually. Goodwill is also tested for impairment when indication of impairment exists. Impairment losses recognised are not reversed in subsequent periods.

Upon the disposal of interest in the subsidiary company, the related goodwill will be included in the computation of gain or loss on disposal of interest in the subsidiary company in the consolidated income statement.

(c) subsidiaryCompany

A subsidiary company is a company in which the Group has the power, directly or indirectly, to exercise control over its financial and operating policies so as to obtain benefits from its activities.

Investments in subsidiary companies, which are eliminated on consolidation, are stated at cost less accumulated impairment losses, if any, in the Company’s financial statements. An impairment loss is recognised when there is an impairment in the value of the investments determined on an individual basis and is charged to the income statement as an expense.

The difference between net disposal proceeds and its carrying amount is charged or credited to income statement upon disposal of the investment.

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3. sIGnIFICAntACCoUntInGPoLICIes(cont’d) (d) AssociatedCompany

An associated company is defined as a company, not being a subsidiary company, in which the Group has a long term equity interest and where it exercises significant influence over the financial and operating policies.

Investments in associated companies are stated at cost less accumulated impairment losses, if any, in the Company’s financial statements.

The Group’s interest in associated companies is stated at cost plus adjustments for post-acquisition changes in the Group’s share of net assets of the associated companies. The Group’s share of post-acquisition results of the associated companies is accounted for using the equity method of accounting in the income statement.

The Group’s share of post-acquisition losses is restricted to the carrying value of the investment in that associated company. Should the associated company subsequently reports profits, the Group will only resume to recognise its share of profits after its share of profits equals to its share of losses previously not recognised.

Where audited financial statements of the associated companies are not co-terminous with those of the Group, the share of results is based on a limited review on the financial statements performed by auditors of the associated company made up to the financial year end of the Group.

(e) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost or at valuation less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that are directly attributable to the acquisition of the asset. Subsequent costs are included in the assets’ carrying amount or recognised as separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

Freehold land and buildings are stated at valuation less accumulated depreciation and accumulated impairment losses, if any, except for freehold land which is not depreciated. Additions subsequent to the date of the last valuation are stated at cost less accumulated depreciation and accumulated impairment losses, if any.

The policy on revaluation of freehold land and buildings is disclosed in note 3(g) to the financial statements.

Depreciation on other property, plant and equipment is calculated on the straight line method to write off the cost or revalued amount of the property, plant and equipment over their estimated useful lives.

The principal annual rates used for this purpose are:-

Warehouse buildings 2% - 5%

Office and residential buildings 2%

Machinery, equipment, pallets, furniture and fittings �0% - 331/3%

Motor vehicles 20%

Lorries and trailers �0% - 20%

The residual values, useful lives and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying amount is recognised in the income statement.

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3. sIGnIFICAntACCoUntInGPoLICIes(cont’d)

(e) Property, Plant and Equipment and Depreciation (cont’d)

Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use and no further charge for depreciation is made in respect of these property, plant and equipment.

(f) ImpairmentofAssets

The carrying amounts of assets other than deferred tax assets, arising from employee benefits and financial assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If such an indication exists, the asset’s recoverable amount is estimated. The recoverable is the higher of net selling price and the value in use, which is measured by reference to discounted future cash flows is determined on individual asset basis, unless the asset does not generate cash flow that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit to which the asset belongs to. An impairment loss is recognised whenever the carrying amount of an item of assets exceeds its recoverable amount.

An impairment loss is recognised as an expense in the income statement. However, an impairment loss on a revalued asset will be treated as a revaluation deficit to the extent that the loss does not exceed the amount held in revaluation reserve in respect of the same asset.

Any subsequent increase in recoverable amount of an asset, other than goodwill due to a reversal of impairment loss is restricted to the carrying amount that would have been determined (net of accumulated depreciation, where applicable) had no impairment loss been recognised in prior years. The reversal of impairment loss is recognised as revenue in the income statement. However, the reversal of impairment loss on a revalued asset will be treated as revaluation surplus to the extent that the reversal does not exceed the amount previously held in revaluation reserve in respect of the same asset.

(g) RevaluationofFreeholdLandandBuildings

Freehold land and buildings are revalued at least once in every 5 years based on valuations carried out by independent professional valuers on the open market value basis.

A surplus arising therefrom is credited to revaluation reserve. However, a surplus will be recognised as revenue to the extent that it reverses a revaluation deficit of the same property previously recognised as an expense. A deficit arising therefrom is recognised as an expense. However, a deficit will be set-off against any related revaluation surplus to the extent that the deficit does not exceed the amount held in revaluation reserve in respect of the same property.

Upon disposal of these properties, any surplus in revaluation reserve relating to these properties will be transferred to retained earnings.

(h) CapitalWork-In-Progress

Capital work-in-progress consists of expenditure incurred on construction of property, plant and equipment which take a substantial period of time to be ready for their intended use.

Capital work-in-progress is stated at cost during the period of construction. No depreciation is provided on capital work-in-progress and upon completion of the construction, the cost will be transferred to property, plant and equipment.

(i) Provisions

Provisions are recognised when there is a present obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

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3. sIGnIFICAntACCoUntInGPoLICIes(cont’d)(j) Leases

i. FinanceLeaseAssets acquired by way of hire purchase or finance lease where the Group assumes substantially all the benefits and risks of ownership are classified as property, plant and equipment.

Finance leases are capitalised at the inception of the lease at the lower of the fair value of the assets and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a periodic constant rate of interest on the remaining balance. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

ii. operatingLeaseOperating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expenses over the lease term on the straight-line basis.

In the case of a lease of land, the minimum lease payments or the up-front payments made represents prepaid land lease payments and are recognised on a straight-line basis over the lease term.

(k) RevenueRecognition

Commissions and revenue from services are recognised when services are rendered.

Rental revenue is recognised on an accrual basis.

Interest revenue is recognised on a time proportion basis that reflects the effective yield of the asset.

Dividends from subsidiary, associated companies and other investments are recognised when the right to receive payment is established.

Revenue from leasing is recognised following the financing method of accounting. Under this method, the excess of aggregate rentals over the cost (reduced by estimated residual value at the end of the lease) of the lease property is taken as revenue over the term of the lease in decreasing amounts proportionate to the declining balance of the unrecovered investment.

Interest revenue from hire purchase financing is similarly taken into the income statement using the sum of digits method. Interest charged on lease and hire purchase overdue instalments is recognised on cash basis.

However, recognition of interest revenue is suspended when the leasing accounts and/or hire purchase financing are in arrears for more than 6 months. Interest in suspense is to be taken up as revenue only when the accounts are no longer in arrears.

(l) Employee Benefits

i. Short Term Employee BenefitsWages, salaries, bonuses and social security contributions are recognised as expenses in the year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

ii. Defined Contribution PlansAs required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund. Some of the Group’s foreign subsidiary companies make contributions to their respective countries’ statutory Pension Schemes. Such contributions are recognised as an expense in the income statement as incurred.

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3. sIGnIFICAntACCoUntInGPoLICIes(cont’d)(m) taxation

Taxation in the income statement represents the aggregate amount of current and deferred tax. Current tax is the expected amount payable in respect of taxable income for the year and any adjustments recognised in the year for current tax of prior years.

Deferred tax is provided using the liability method, on all temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction, which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax is measured at the tax rates that are expected to apply in the period in which the assets are realised or the liabilities are settled.

Deferred tax is recognised in equity when it relates to items recognised directly in equity. When deferred tax arises from business combination that is an acquisition, the deferred tax is included in the resulting goodwill or negative goodwill.

Deferred tax assets are recognised only to the extent that there are sufficient taxable temporary differences relating to the same taxation authority to offset or when it is probable that future taxable income will be available against which the assets can be utilised.

(n) ForeignCurrencies

i. transactionsinforeigncurrenciesTransactions in foreign currencies are translated into Ringgit Malaysia at rates of exchange ruling at transaction dates and where settlement had not taken place at the financial year end at the approximate rates ruling as at that date. All gains and losses on foreign exchange are included in the income statement.

ii. Translation of foreign currency financial statementsAssets, liabilities and reserves of foreign subsidiary companies are translated in Ringgit Malaysia at the rates of exchange as at the financial year end. Income statement items are translated at the average rate of exchange for the year which approximate the exchange rate at the date of transactions. The translation differences arising therefrom are recorded as movement in translation reserve. Upon disposal of a foreign subsidiary company, the cumulative amount of translation differences at the date of disposal of the subsidiary company is taken to the income statement.

(o) non-currentAssetsHeldforsale

Non-current assets that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale.

Immediately before reclassification as held for sale, the assets are remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets are measured at the lower of their carrying amount and fair value less cost to sell.

Impairment losses on initial classification as held for sale and subsequent gains and losses on remeasurement are recognised in the income statement. Gains are not recognised in excess of any cumulative impairment loss.

(p) FinancialInstruments

Financial instruments are classified as assets, liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as assets or liabilities, are reported as expense or revenue. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

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3. sIGnIFICAntACCoUntInGPoLICIes(cont’d)(p) FinancialInstruments(cont’d)

The recognised financial instruments comprise cash and cash equivalents, trade and other receivables, trade and other payables, other non-current investments, bank borrowings and ordinary shares. These instruments are recognised in the financial statements when a contract or contractual arrangement has been entered into with the counter-parties.

The unrecognised financial instruments comprise financial guarantees given to financial institutions for banking and credit facilities granted to the subsidiary companies. The financial guarantees would be recognised as liabilities when obligations to pay the counter-parties are assessed as being probable.

i. Cash and Cash EquivalentsCash and cash equivalents comprise cash and bank balances, demand deposits, bank overdrafts and short term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

ii. othernon-CurrentInvestmentsNon-current investments other than investments in subsidiary and associated companies are stated at cost less allowance for diminution in value, if any.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the income statement.

iii. ReceivablesReceivables are stated at cost less allowance for doubtful debts, if any, which is the anticipated realisable values. Known bad debts are written off and specific allowance is made for those debts considered to be doubtful of collection.

iv. PayablesPayables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.

v. BorrowingsInterest bearing borrowings and other borrowings are stated at the amount of proceeds received.

vi. Equity InstrumentsEquity instruments include ordinary shares and warrants. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

The transaction costs of an equity transaction, other than in the context of a business combination, are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those external costs directly attributable to the equity transaction which would otherwise have been avoided. Cost of issuing equity securities in connection with a business combination are included in the cost of acquisition.

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4. PRoPeRtY,PLAntAnDeQUIPMent

Group FreeholdLand Buildings

Machinery,Equipment,

Pallets,Furniture&

Fittings

MotorVehicles,Lorries&trailers total

RM RM RM RM RM

Cost/Valuation

At �.�.07 2�,500,000 329,503,932 5�,088,9�9 54,950,754 457,043,605

Translation differences - (63�,986) (74,645) (23,026) (729,657)

Additions - 844,903 3,999,600 244,799 5,089,302

Classified as non-current assets held for sale (note �7) - (37,732,7�7) - - (37,732,7�7)

In respect of subsidiary company disposed - (6,835,000) (398,5�8) - (7,233,5�8)

Disposals - - (2,�82,�66) (2,275,85�) (4,458,0�7)

Written off - - (�,598,322) (20,000) (�,6�8,322)

At 3�.�2.07 2�,500,000 285,�49,�32 50,834,868 52,876,676 4�0,360,676

AccumulatedDepreciation

At �.�.07 - 20,232,5�3 39,648,459 36,73�,392 96,6�2,364

Translation differences - �2,309 (3�,423) (�8,589) (37,703)

Charge for the year - 7,067,2�9 4,57�,273 4,734,�88 �6,372,680

Classified as non-current assets held for sale (note �7) - (2,47�,262) - - (2,47�,262)

In respect of subsidiary company disposed - (5�2,625) (290,332) - (802,957)

Disposals - - (�,9�2,0�8) (2,�62,649) (4,074,667)

Written off - - (�,59�,453) (�9,999) (�,6��,452)

At 3�.�2.07 - 24,328,�54 40,394,506 39,264,343 �03,987,003

AccumulatedImpairmentLoss

Recognise for the year - �2,�22 - - �2,�22

Classified as non-current assets held for sale (note �7) - (�2,�22) - - (�2,�22)

At 3�.�2.07 - - - - -

netBookValue

At 3�.�2.07 2�,500,000 260,820,978 �0,440,362 �3,6�2,333 306,373,673

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Pallets,Furniture&

Fittings


RM RM RM RM RM

Cost/Valuation

At �.�.06 2�,500,000 338,429,8�0 52,258,40� 59,07�,428 47�,259,639

Translation differences - (�0,249,83�) (762,30�) (�0�,075) (��,��3,207)

Additions - �,323,953 2,�76,942 220,502 3,72�,397

Disposals - - (2,545,7��) (2,738,744) (5,284,455)

Written off - - (38,4�2) (�,50�,357) (�,539,769)

At 3�.�2.06 2�,500,000 329,503,932 5�,088,9�9 54,950,754 457,043,605


At �.�.06 - �3,244,623 37,08�,269 33,796,497 84,�22,389

Translation differences - (43�,777) (408,��4) (58,876) (898,767)

Charge for the year - 7,4�9,667 5,309,204 6,07�,855 �8,800,726

Disposals - - (2,297,979) (2,226,426) (4,524,405)

Written off - - (35,92�) (85�,658) (887,579)

At 3�.�2.06 - 20,232,5�3 39,648,459 36,73�,392 96,6�2,364

netBookValue

At 3�.�2.06 2�,500,000 309,27�,4�9 ��,440,460 �8,2�9,362 360,43�,24�

In 2003, the freehold land and buildings were revalued by the Directors based on independent professional valuations on the open market value basis.

Analysisofcostandvaluation:-



Pallets,Furniture&

Fittings


RM RM RM RM RM

2007

Cost/Valuation

At cost - 63,246,�74 50,834,868 52,876,676 �66,957,7�8

At valuation - 2003 2�,500,000 22�,902,958 - - 243,402,958

2�,500,000 285,�49,�32 50,834,868 52,876,676 4�0,360,676

4. PRoPeRtY,PLAntAnDeQUIPMent(cont’d)

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Pallets,Furniture&

Fittings


RM RM RM RM RM

2007

netBookValue

At cost - 59,587,873 �0,440,362 �3,6�2,333 83,640,568

At valuation - 2003 2�,500,000 20�,233,�05 - - 222,733,�05

2�,500,000 260,820,978 �0,440,362 �3,6�2,333 306,373,673

2006

Cost/Valuation

At cost - 77,907,433 5�,088,9�9 54,950,754 �83,947,�06

At valuation - 2003 2�,500,000 25�,596,499 - - 273,096,499

2�,500,000 329,503,932 5�,088,9�9 54,950,754 457,043,605

netBookValue

At cost - 84,340,264 ��,440,460 �8,2�9,362 ��4,000,086

At valuation - 2003 2�,500,000 224,93�,�55 - - 246,43�,�55

2�,500,000 309,27�,4�9 ��,440,460 �8,2�9,362 360,43�,24�

The net book value of these property, plant and equipment as if no revaluation had been made are as follows:-

Group

2007 2006

RM RM

Freehold land �7,097,809 �7,097,809

Buildings 292,8��,8�2 299,953,296

4. PRoPeRtY,PLAntAnDeQUIPMent(cont’d)Analysisofcostandvaluation:-(cont’d)

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Included in property, plant and equipment of the Group are:-

(i) property, plant and equipment pledged for banking facilities granted to the Group and to the Company as disclosed in note 35 to the financial statements are as follows:-

Group

2007 2006

RM RM

netBookValue

Freehold land 21,500,000 2�,500,000

Buildings 176,621,573 �80,456,022

Prime movers, trailers and side loaders 2,095,216 8,283,635

200,216,789 2�0,239,657

(ii) buildings with net book value of RM 67,237,239/- (2006 : RM68,638,527/-) charged as securities for the commercial papers issued by the Company as disclosed in note 36 to the financial statements.

(iii) Property, plant and equipment acquired under finance lease and hire purchase financing as follows:-

Group

2007 2006

RM RM

FInAnCeLeAse

Computer Equipment

Cost 590,000 �,200,000

Net book value 299,917 684,250

HIRePURCHAse

Motor Vehicles

Cost 1,746,958 �,746,957

Net book value 907,807 �,257,977

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Equipment, Furniture&

Fittings

Company RM

Cost

At �.�.07 47�,765

Additions �5,304

Written off (55,446)

At 3�.�2.07 43�,623


At �.�.07 402,472

Charge for the year 34,767

Written off (49,279)

At 3�.�2.07 387,960

netBookValue

At 3�.�2.07 43,663

Cost

At �.�.06 46�,724

Additions �7,��

Written off (7,070)

At 3�.�2.06 47�,765


At �.�.06 370,�4�

Charge for the year 36,9�0

Written off (4,579)

At 3�.�2.06 402,472

netBookValue

At 3�.�2.06 69,293


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5. PRePAIDLAnDLeAsePAYMents

Group

2007 2006

RM RM

At beginning of the year 116,845,401 �23,466,�90

Additions during the year 39,394,801 643,823

Amortisation for the year (2,911,487) (2,607,537)

In respect of subsidiary company disposed (3,623,196) -

Translation differences (1,137,755) (4,657,075)

148,567,764 ��6,845,40�

Less: Classified as non-current assets held for sale (note 17) (17,714,031) -

At end of the year 130,853,733 ��6,845,40�

Analysed as follows:-

Group

2007 2006

RM RM

Short term leasehold land 105,906,658 77,205,758

Long term leasehold land 24,947,075 39,639,643

130,853,733

��6,845,40�

The short term leasehold land of the Group has an unexpired lease period of less than 50 years whereas the long term leasehold land of the Group has an expired lease period of more than 50 years.

Included in prepaid land lease payments of the Group are:-

(i) leasehold land with carrying values of RM62,9�5,479/- (2006 : RM60,�58,585/-) charged as securities for bank borrowing facilities disclosed in notes 35 to the financial statements;

(ii) leasehold land rights with carrying values of RM�00,787,�55/- (2006 : RM7�,722,426/-) in The People’s Republic of China; and

(iii) leasehold land with carrying values of RM24,052,376/- (2006 : RM24,355,865/-) charged as securities for the commercial papers issued by the Company disclosed in note 36 to the financial statements.

The leasehold land of the Group were revalued in 2003 by Directors based on independent professional valuers to reflect the market value on existing use basis. As allowed by the transitional provisions of FRS 117, where the leasehold land had been previously revalued, the unamortised revalued amount of leasehold land is retained as the surrogate cost of prepaid land lease payments and is amortised over the remaining lease term of the leasehold land.

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6. CAPItALWoRK-In-PRoGRess

Group

2007 2006

RM RM

At cost,

Additions 2,500,230 -

At end of the year 2,500,230 -

This is in respect of renovation and construction of warehouse buildings

7. InVestMentsInsUBsIDIARYCoMPAnIes

Company

2007 2006

RM RM

Unquoted shares, at cost

At beginning of the year 126,606,195 �2�,656,667

Additions 1,928,960 2�,6�6,�95

Disposals (3,170,000) (�6,666,667)

At end of the year 125,365,155 �26,606,�95

Less: Impairment loss (25,000,000) (25,000,000)

100,365,155 �0�,606,�95

The subsidiary companies are as follows:-

nameofCompanyCountryof

Incorporation PrincipalActivitiesEffective Equity

Interest

2007 2006

Integrated Warehouse Sdn. Bhd. Malaysia Warehousing & related value added services

100% �00%

Integrated Forwarding & Shipping Berhad

Malaysia Freight forwarding, transportation and distribution

100% �00%

Integrated Freight Services Sdn. Bhd.

Malaysia Freight forwarding, transportation and distribution

100% �00%

Integrated Leasing Corporation Sdn. Bhd.

Malaysia Financiers under leasing and hire purchase agreements

100% �00%

Integrated Logistics Services Sdn. Bhd.

Malaysia Dormant 100% �00%

Integrated Logistics Solutions Sdn. Bhd.


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Interest

2007 2006

M.I. Logistics Sdn. Bhd. Malaysia Warehousing & related value added services

100% 87.5%

Warisan Megah Sdn. Bhd. Malaysia Dormant 100% �00%

Integrated Haulage Sdn. Bhd. Malaysia Container haulage 100% �00%

# Focusmax Services Sdn. Bhd. Malaysia Warehousing & related value added services

- �00%

ILB International (BVI) Limited British Virgin Islands

Investment holding 100% �00%

^ Integrated National Logistics Limited

United Arab Emirates

Dormant 57.5% -

subsidiarycompanyofIntegratedWarehousesdn.Bhd.

* South Pacific Steamship Agency (Properties) Sdn. Bhd.

Malaysia Property investment 100% �00%

subsidiarycompanyofIntegratedForwarding&shippingBerhad

* Way Son Construction And Engineering Sdn. Bhd.


subsidiarycompanyofILBInternational(BVI)Limited

** ISH Logistics Group Limited Grand Cayman Island

Investment holding 70% 70%

subsidiarycompanyofIsHLogisticsGroupLimited

** ISH Group (BVI) Limited British Virgin Islands

Investment holding 70% 70%

7. InVestMentsInsUBsIDIARYCoMPAnIes(cont’d)

The subsidiary companies are as follows:- (cont’d)

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Interest

2007 2006

subsidiarycompanyofIsHGroup(BVI)Limited

** Integrated Logistics (H.K.) Limited Hong Kong Investment holding, warehousing and related value added services and transportation

70% 70%

subsidiarycompaniesofIntegratedLogistics(H.K.)Ltd.

** ISH Logistics (Shenzhen) Ltd. Hong Kong Investment holding 70% 70%

** ISH Logistics (Shanghai) Ltd. Hong Kong Investment holding 70% 70%

** ISH Logistics (Shenzhen II) Ltd. Hong Kong Investment holding 70% 70%

** Integrated Logistics (Hangzhou) Ltd.

Hong Kong Dormant 70% 70%

@ Integrated Logistics (China) Co. Ltd.

The People’s Republic of

China

Warehousing and transportation 70% 70%

** ILB (Hangzhou) Company Ltd. The People’s Republic of

China

Dormant 70% 70%

** Integrated Etern Logistics (Suzhou) Ltd.


China

Warehousing & related value added services and transportation

45.5% -

subsidiarycompanyofIsHLogistics(shenzhen)Ltd.

@ Integrated Shun Hing Logistics (Shenzhen) Co. Ltd.


China


70% 70%

@ ISH Logistics Yantian (Shenzhen) Ltd


China

Dormant 70% -



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Interest

2007 2006

subsidiarycompanyofIsHLogistics(shanghai)Ltd.

@ Integrated Shun Hing Logistics (Shanghai) Ltd.


China


70% 70%

subsidiarycompanyofIsHLogistics(shenzhenII)Ltd.

@ Shenzhen ISH Logistics Company Ltd.


China


70% 70%

subsidiarycompanyofIntegratedLogistics(China)Co.Ltd

^ Integrated Shun Hing Logistics (Lingang) Co. Ltd.


China

Dormant 70% -

* Audited by an associated firm of the auditors of the Company** Audited by a member firm of Moore Stephens International Limited@ Audited by another professional firm of accountants^ The financial statements of this subsidiary company is based on the unaudited management financial

statements made up to the date of the financial year end of the Group# Disposed on 4 October 2007 to external parties as disclosed in note 43(viii) to the financial statement.

8. AMoUntoWInGBY/tosUBsIDIARYCoMPAnIes

Amounts owing by/to subsidiary companies are non-trade in nature, unsecured, interest free and repayable on demand by cash except for amounts of RM53,973,04�/- (2006 : RM52,865,0�8/-) which bear interest at a rate of 4.9% (2006 : rates ranging from 4.5% to 8.3%) per annum.



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9. InteRestInAssoCIAteDCoMPAnIes

Group Company

2007 2006 2007 2006

RM RM RM RM

Unquoted shares, at cost

At beginning of the year 15,257,500 �4,945,000 15,257,500 �4,945,000

Additions - 3�2,500 - 3�2,500

At end of the year 15,257,500 �5,257,500 15,257,500 �5,257,500

Share of post-acquisition reserves 4,557,278 2,388,�68 - -

19,814,778 �7,645,668 15,257,500 �5,257,500

The Group’s investments in associated companies are represented by:-

Group’s share of net assets 19,814,778 �7,645,668

The associated companies are as follows:-



Interest

2007 2006

KP Integrated Sdn. Bhd. Malaysia Investment holding and providing transportation & related value added services

50% 50%

* Integrated Mits Sdn. Bhd. Malaysia Warehousing & related value added services

50% 50%

Integrated Cargo Services Sdn. Bhd.

Malaysia Shipping solution services 50% 50%

InterestHeldthroughKPIntegratedsdn.Bhd.

** KPI Warehouse Holdings Inc. Philippines Providing warehousing facilities and equipment

45% 45%

* Audited by an associated firm of the auditors of the Company.** Audited by another professional firm of accountants.

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9. InteRestInAssoCIAteDCoMPAnIes(cont’d)

The summarised financial information of the associated companies are as follows:-

2007 2006

RM RM

Total assets 61,597,700 6�,343,632

Total liabilities 21,302,145 25,496,985

Operating revenue 15,038,093 ��,270,855

Net profits 3,888,872 2,055,888

The details of negative goodwill included within the Group’s carrying amount of investment in associated companies are as follows:-

2007 2006

RM RM

At � January - �,224,482

Effect of adopting FRS 3 - (�,224,482)

At 3� December - -

10. AMoUntoWInGBYAssoCIAteDCoMPAnY

The amount owing by an associated company, KP Integrated Sdn. Bhd., is non-trade in nature, unsecured, interest free, repayable on demand by cash.

11. otHeRInVestMents

Group Company

2007 2006 2007 2006

RM RM RM RM

Golf club memberships, at cost

At beginning of the year 959,296 874,344 126,979 -

Addition - �26,979 - �26,979

Translation differences (2,574) (42,027) - -

At end of the year 956,722 959,296 126,979 �26,979

Less: Allowance for diminution in value (103,979) (�03,979) (68,979) (68,979)

852,743 855,3�7 58,000 58,000

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12. GooDWILL

Group

2007 2006

RM RM

At cost,

At � January 97,804 -

In respect of additional investment in subsidiary company 16,803 97,804

At 3� December 114,607 97,804

Impairmenttestingofgoodwill

Goodwill acquired in business combinations have been allocated to the Group’s cash-generating units (“CGU”) identified according to business segments as follows:

2007 2006

RM RM

Haulage services 97,804 97,804

Warehousing and related value added services 16,803 -

114,607 97,804

The recoverable amounts of the CGU of above business segments are determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management covering a five year period. Cash flows beyond the five year period are extrapolated using the growth rate stated below.

The key assumptions used in the value-in-use calculations are as follows:-

Growth rate �0% - �2%

Discount rate �0%

The following describes each key assumption on which the management has based its cash flow projections to undertake impairment testing for goodwill:-

(i) Growth rateThe weighted average growth rates used are based on the long-term average growth rate for respective industries

(ii) Discount rateThe discount rates applied exclude impact on taxation. Different discount rates are used to reflect specific risks relating to the relevant sectors.

Sensitivity to changes in assumptions

In assessing the value-in-use, the management is of the view that no foreseeable CGUs to materially exceed their recoverable amounts.

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13. DeFeRReDtAXAssets/(LIABILItIes)

Group Company

2007 2006 2007 2006

RM RM RM RM

At beginning of the year (40,187,055) (42,647,527) - -

Translation differences 362,673 548,372 - -

Recognised in income statement (note 26) 1,573,100 �,8�4,200 2,287,400 -

In respect of disposal of a subsidiary company (note 28(ii)) 773,600 - - -

Recognised in equity - 97,900 - -

At end of the year(37,477,682) (40,�87,055) 2,287,400 -

Presented after appropriate offsetting as follows:-

Group Company

2007 2006 2007 2006

RM RM RM RM

Deferred tax assets 5,259,100 7,037,809 2,300,800 (�9,500)

Deferred tax liabilities (42,736,782) (47,224,864) (13,400) �9,500

(37,477,682) (40,�87,055) 2,287,400 -

This is in respect of estimated deferred tax assets/liabilities arising from temporary differences as follows:-

Group Company

2007 2006 2007 2006

RM RM RM RM

Deferredtaxassets

Unrelieved tax losses 138,800 �54,200 - -

Unabsorbed capital and special allowances claimed on warehouse buildings 4,502,000 5,95�,200 - -

Deductible temporary differences in respect of expenses 618,300 932,409 2,300,800 �9,500

5,259,100 7,037,809 2,300,800 �9,500

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Deferredtaxliabilities

Differences between the carrying amounts of property, plant and equipment and their tax base 32,388,400 36,206,809 13,400 �9,500

Differences between the carrying amounts of property, plant and equipment under finance lease and their tax base 191,800 290,700 - -

Surplus arising from revaluation of freehold and leasehold land and buildings 10,156,582 �0,727,355 - -

42,736,782 47,224,864 13,400 �9,500

The estimated temporary differences for which no deferred tax assets have been recognised in the financial statements are as follows:-

Group Company

2007 2006 2007 2006

RM RM RM RM

Unrelieved tax losses 7,901,160 �0,873,200 - -

Deductible temporary differences in respect of expenses 42,408 �,392,400 - �,334,200

Unabsorbed capital allowances claimed on property, plant and equipment 1,417,500 �,376,�00 1,378,000 �,376,�00

9,361,068 �3,64�,700 1,378,000 2,7�0,300

The estimated unrelieved tax losses and unabsorbed capital and special allowances claimed on warehouse buildings are subject to agreement by the Inland Revenue Board or the tax authority of the foreign subsidiary companies and are not available for set-off between subsidiary companies.

13. DeFeRReDtAXAssets/(LIABILItIes)(cont’d)

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14. ReCeIVABLes

Group Company

2007 2006 2007 2006

RM RM RM RM

Trade receivables less allowance for doubtful debts of RM�,394,439/- (2006 : RM�,325,856/-) 39,233,732 37,2�3,334 - -

Other receivables, deposits and prepayments (note 30) 34,048,547 6,72�,247 1,906,701 2,�2�,��0

Dividend receivables - - 16,324,120 -

73,282,279 43,934,58� 18,230,821 2,�2�,��0

The Group’s normal trade credit term ranges from 30 to 90 days.

Dividend receivables are in respect of dividends declared by subsidiary companies.

The foreign currency exposure profile of trade receivables for the Group is as follows:-

HongKongDollar

UnitedstatesDollar

singaporeDollar thaiBaht total

RM RM RM RM RM

Functional currency of Group of companies

2007

Ringgit Malaysia - 263,29� 260,990 �4,657 538,938

Chinese Renminbi 4,�30,694 �,576,�00 - - 5,706,794

4,�30,694 �,839,39� 260,990 �4,657 6,245,732

2006

Ringgit Malaysia - 659,287 307,342 �4,658 98�,287

Chinese Renminbi 4,595,33� �,450,505 - - 6,045,836

4,595,33� 2,�09,792 307,342 �4,658 7,027,�23

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15. tAXAssets

Group Company

2007 2006 2007 2006

RM RM RM RM

Tax paid in advance 979,141 �,0��,22� - -

Tax recoverable 1,635,788 2,�98,672 2,625,488 2,�75,872

2,614,929 3,209,893 2,625,488 2,�75,872

16. CAsHDePosItsWItHLICenseDBAnKsAnDotHeRCoRPoRAtIon

Included in cash deposits are:-

(i) deposits of the Group amounting to nil (2006 : RM��,043/-) which are pledged for bank guarantees facilities; and

(ii) deposits of the Group and of the Company amounting to RM�3,368,9�8/- (2006 : RM2,997,799/-) which are deposited in a selected cash fund of a corporation.

The cash deposits bear effective interest at rates ranging from 3.0% to 4.32% (2006 : 2.3% to 3.7%) per annum.

17. non-CURRentAssetsCLAssIFIeDAsHeLDFoRsALe

Property, plant and equipment and prepaid land lease payments that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale.

During the year, Integrated Warehouse Sdn Bhd and Integrated Shun Hing Logistics (Shanghai) Ltd, the subsidiaries of the Company, have entered into a Sale and Purchase Agreement and a Sale and Leaseback Agreement respectively to dispose off the following properties:-

Group

2007 2006

RM RM

Transfer from property, plant and equipment (note 4) 35,249,333 -

Transfer from prepaid land lease payments (note 5) 17,714,031 -

Less: Impairment loss (231,815) -

17,482,216 -

At end of the year 52,731,549 -

Included in the prepaid land lease payments are leasehold land rights with carrying values of RM7,�3�,590/- in The People’s Republic of China.

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18. sHAReCAPItAL

Group/Company

2007 2006

RM RM

Ordinary shares of RM�/- each

Authorised:

250,000,000 ordinary shares 250,000,000 250,000,000

Issued and fully paid:

At beginning of the year 169,101,321 �60,75�,004

Allotted pursuant to:-

- ESOS - 2,060,500

- Exercise of Warrants 10,013,182 6,289,8�7

- Private Placement 17,911,000 -

At end of the year 197,025,503 �69,�0�,32�

Warrants

Warrants 2002/2007

Pursuant to a supplemental deed poll dated 22 March 2002, Warrants 2001/2006 were redefined as Warrants 2002/2007.

Warrants 2002/2007 are constituted by a deed poll dated 29 January 200� and a supplemental deed poll dated 22 March 2002. Each Warrant 2002/2007 entitles the holder to subscribe for one new ordinary share of RM�/- each at an exercise price which at 3� December 2006 was RM�.05 per share. The exercise period for Warrants 2002/2007 expired on 9 March 2007.

19. LonGteRMBoRRoWInGs

Group Company

2007 2006 2007 2006

RM RM RM RM

Term loans (note 35) 116,969,280 83,86�,397 57,000,000 4,200,000

Commercial papers (note 36) - 40,000,000 - 40,000,000

Unsecured loan (note 38) 39,412,569 33,542,423 - -

Finance lease and hire purchase payable (note 34) 12,443 482,785 - -

156,394,292 �57,886,605 57,000,000 44,200,000

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20 PAYABLes

Group Company

2007 2006 2007 2006

RM RM RM RM

Trade payables 9,925,478 7,755,087 - -

Other payables, deposits and accruals (note 32)

24,544,249 �4,328,�7� 407,670 293,639

Provisions (note 33) 401,399 408,868 1,748 5,727

34,871,126 22,492,�26 409,418 299,366

The normal trade credit term granted to the Group and the Company ranges from 45 to 60 days.

The foreign currency exposure profile of trade payables for the Group is as follows:-

HongKongDollar

UnitedstatesDollar

singaporeDollar

thaiBaht JapaneseYen

total

RM RM RM RM RM RM

Functional currency of

Group of companies

2007

Ringgit Malaysia - 2,824 2�,890 ��6,747 4,903 �46,364

Chinese Renminbi �,445,445 - 6 - - �,445,45�

�,445,445 2,824 2�,896 ��6,747 4,903 �,59�,8�5

2006

Ringgit Malaysia - �2,929 47,477 87,�7� - �47,577

Chinese Renminbi �,097,073 - - - - �,097,073

�,097,073 �2,929 47,477 87,�7� - �,244,650

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21. sHoRtteRMBoRRoWInGs

Group Company

2007 2006 2007 2006

RM RM RM RM

Term loans (note 35) 28,573,760 30,989,032 3,200,000 �,200,000

Commercial papers (note 36) - �0,000,000 - �0,000,000

Revolving credit (note 37) 6,500,000 - 6,500,000 -

Finance lease and hire purchase payable (note 34) 470,516 497,023 - -

35,544,276 4�,486,055 9,700,000 ��,200,000

22. BAnKoVeRDRAFts-UnseCUReD

The unsecured bank overdraft facilities of the subsidiary companies bear effective interest at a rate of 7.5% per annum.

23. eARnInGsAnDnetAssetsPeRoRDInARYsHARe

The basic earnings per share is calculated by dividing the Group earnings attributable to shareholders of RM8,2�7,77�/- (2006 : RM24,476,848/-) by the weighted average number of shares of �8�,9�7,�80 (2006: �64,924,063) ordinary shares of RM�/- each in issue during the year.

DilutedearningsPershare

The diluted earning per share is not applicable for the current financial year as the Group does not have dilutive potential ordinary shares at Balance Sheet date.

The diluted earnings per share in previous financial year was calculated by dividing the Group earnings attributable to shareholders of RM24,476,848/- by the adjusted weighted average number of shares of �70,060,833.

netAssetsPershare

The net assets per ordinary share is calculated by dividing the total equity with the number of ordinary shares in issue as at the balance sheet date.

24. oPeRAtInGReVenUe

Group Company

2007 2006 2007 2006

RM RM RM RM

Warehousing and related value added services 115,300,711 �2�,796,5�2 - 369,353

Transportation, distribution, freight forwarding and haulage services 75,512,125 75,944,932 - -

Leasing and hire purchase interest 1,259 �2,922 - -

Dividend revenue - 32,243 17,336,620 4,20�,403

190,814,095 �97,786,609 17,336,620 4,570,756

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24. oPeRAtInGReVenUe(cont’d)

Operating revenue of the Group represents and invoiced value of rental and related services rendered less discounts.

Operating revenue of the Company represents dividend revenue and invoiced value of rental and services rendered less discounts.

25. PRoFItBeFoRetAXAtIon

(a) Profit before taxation is arrived at after charging/(crediting):-

(i) Exceptional items

Group Company

2007 2006 2007 2006

RM RM RM RM

Loss/(Gain) on disposal of investment in subsidiary company 3,140,487 - (3,005,000) (6,642,333)

(ii) Others

Group Company

2007 2006 2007 2006

RM RM RM RM

Allowance for doubtful debts 406,858 626,�62 - -

Allowance for diminution in

value of other investments - 68,979 - 68,979

Amortisation and depreciation of property, plant and equipment 16,372,680 �8,800,726 34,767 36,9�0

Amortisation of prepaid land lease payments 2,911,487 2,607,537 - -

Auditors’ remuneration 246,874 200,976 12,000 �0,000

Bad debts recovered (160,360) (20,786) - -

Bad debts written off 507,127 �0,2�� 5,092,812 5,827

Deposits written off 18,575 - 2,000 -

Directors’ remuneration

- Directors of the Company

- fees 118,290 399,569 54,000 54,000

- other emoluments 2,304,017 �,985,373 633,075 549,883

- Directors of subsidiary companies

- fees 107,105 239,527 - -

- other emoluments 1,866,080 �,752,429 - -

Interest and financing charges 8,502,406 8,895,620 2,687,653 2,402,64�

Impairment loss on property, plant and equipment 12,122 - - -

Impairment loss on non-current assets held for sale 231,815 - - -

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Group Company

2007 2006 2007 2006

RM RM RM RM

Gain on disposal of property, plant and equipment (93,732) (282,4�3) - -

Property, plant and equipment written off 6,870 652,�90 6,167 2,49�

Provision for employee benefits 388,253 352,689 1,748 5,727

Rental of premises, land and buildings 694,300 ��,9�9,254 84,853 290,�95

Rental of vehicles and equipment 1,602,380 �,7�5,297 - -

Reversal of allowance for

doubtful debts (198,072) (295,564) - -

(Gain)/Loss on foreign exchange

- unrealised 5,726 ��,945 7,794,587 �,303,�33

- realised (835,736) (7,344,366) 49,614 �3,037

Interest revenue (1,180,762) (545,564) (2,932,931) (2,572,40�)

Rental revenue (138,728) (�38,447) - -

During the year, certain directors of the Group have acquired the benefit of using the property, plant and equipment, the estimatd value of which amounted to RM72,966/-(2006: RM65,600/-)

Group Company

2007 2006 2007 2006

RM RM RM RM

(iii) Staff costs 44,786,143 46,847,993 878,088 770,040

Included in staff costs are:-

Remuneration of full time directors 4,170,097 3,622,386 633,075 549,883

Employees’ Provident Fund and SOCSO contribution 2,172,449 2,240,562 15,385 23,224

25. PRoFItBeFoRetAXAtIon(cont’d)

(a) Profit before taxation is arrived at after charging/(crediting):- (cont’d)

(ii) Others (cont’d)

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25. PRoFItBeFoRetAXAtIon(cont’d)

(b) Directors’ remuneration

Group Company

2007 2006 2007 2006

RM RM RM RM

DirectorsoftheCompany

Executive Directors

- fees 64,290 345,569 - -

- other emoluments 2,122,082 �,845,736 451,140 405,�63

2,186,372 2,�9�,305 451,140 405,�63

Non-Executive Directors

- fees 54,000 54,000 54,000 54,000

- other emoluments 181,935 �39,637 181,935 �44,720

235,935 �93,637 235,935 �98,720

The Executive Directors of the Company are as follows:-

2007

- Tee Tuan Sem- Chin Then Yoon- Goh Theow Hiang- Makoto Takahashi

2006

- Tee Tuan Sem- Chin Then Yoon- Goh Theow Hiang- Makoto Takahashi

The Non-Executive Directors of the Company are as follows:-

2007

- Dato’ Lee Hwa Beng- Haji Yusof @ Yaakop bin Haji Salleh (Demised on �2.8.07)- Elias bin Abdullah Ng- Wan Azfar bin Dato’ Wan Annuar- Dato’ Haji Wazir bin Haji Muaz (Appointed on 5.��.07)

2006

- Dato’ Lee Hwa Beng- Haji Yusof @ Yaakop bin Haji Salleh- Elias bin Abdullah Ng- Wan Azfar bin Dato’ Wan Annuar

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26. tAXAtIon

Group Company

2007 2006 2007 2006

RM RM RM RM

Based on results for the year 3,379,304 2,757,973 648,000 5�6,500

Origination and reversal of temporary differences (note �3) (1,573,100) (�,8�4,200) (2,287,400) -

1,806,204 943,773 (1,639,400) 5�6,500

Overprovision in prior years (56,310) (743,59�) (34,946) (822,380)

Tax expense/(credit) 1,749,894 200,�82 (1,674,346) (305,880)

The reconciliation from the tax amount at statutory tax rate to the Group’s and the Company’s tax expense are as follows:-

Group Company

2007 2006 2007 2006

RM RM RM RM

Profit before taxation 14,865,267 3�,653,778 4,881,232 7,540,�30

Tax at the Malaysian statutory income tax rate of 27% (2006 : 28%) 4,013,600 8,863,�00 1,317,900 2,��,300

Effect of lower tax rate for Malaysian subsidiary companies with issued and paid-up share capital of RM2.5 million and below (31,800) (94,700) - -

Effect of different tax rates in other countries (3,910,500) (4,7�3,000) - -

Effect on difference in lease income recognition method between accounting and tax 37,000 - - -

Share of results of associated companies (518,300) (288,000) - -

Tax effect of non-taxable revenue (680,400) (2,003,000) (4,539,000) (2,068,�00)

Adjustment on deferred tax resulting from reduction in tax rates (1,589,500) (2,365,�00) - -

Tax effect of non-deductible expenses 2,310,994 2,256,073 1,914,900 �,208,700

Utilisation of deferred tax assets not recognised in prior years - (536,300) - (735,400)

Recognition of deferred tax assets previously not recognised - - (333,700) -

Deferred tax assets not recongised during the year 2,166,600 - 500 -

Under/(Over) provision in prior year

- income taxation (56,000) (743,59�) (34,946) (822,380)

- deferred taxation 8,200 (�75,300) - -

Tax expense/(credit) 1,749,894 200,�82 (1,674,346) (305,880)

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26. tAXAtIon(cont’d)

The Company has:-

(i) unabsorbed capital allowances of RM�,378,000/- (2006 : RM�,376,�00/-) available for set-off against future taxable profits;

(ii) tax exempt income available for distribution by way of tax exempt dividend of approximately RM3,�53,200/- (2006 : RM3,�53,200/-). The tax exempt income is in respect of chargeable income of which income tax had been waived; and

(iii) sufficient tax credit under Section 108 of the Income Tax Act, 1967, to frank future payment of dividends out of its entire retained profits as at 31 December 2007, without incurring additional tax liability.

The Group has unrelieved tax losses and unabsorbed capital and special allowances on warehouse buildings of RM7,653,000/- (2006 : RM7,690,500/-) and RM�9,422,400/- (2006: RM24,265,000/-) respectively available for set-off against future taxable profits.

27. ACQUIsItIonoFsUBsIDIARYCoMPAnY

On 4 July 2007, the Company acquired 23 ordinary shares of Arab Emirates Dirham (“AED”) �0,000/- each representing 57.5% of the issued and fully paid up share capital of Integrated National Logistics Limited, a company incorporated in United Arab Emirates for a total consideration of RM2�8,960/-.

During the year, the Group incorporated new subsidiary companies in The People’s Republic of China are as follows:-

(a) Integrated Shun Hing Logistics (Lingang) Co. Limited;

(b) ISH Logistics Yantian (Shenzhen) Ltd; and

(c) Integrated Etern Logistics (Suzhou) Ltd

(i) Effect of acquisition of a subsidiary company, net cash acquired

There is no fair values of the assets acquired and the liabilities assumed at the effective date of acquisition.

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27. ACQUIsItIonoFsUBsIDIARYCoMPAnY(cont’d)

(ii) Effect on Consolidated Income Statement

The effect of consolidated results of the Group from their effective date of acquisition to the financial year end are as follows:-

2007

RM

Operating revenue -

Direct operating costs (440,193)

Gross loss (440,193)

Other revenue 493,484

Administrative costs (493,063)

Finance costs (1,303)

(494,366)

(441,075)

Minority interest 181,234

Loss for the year (259,841)

(iii) Effect on Consolidated Financial Position

The effect on the consolidated balance sheet as at financial year end are as follows:-

2007

RM

Property, plant and equipment 4,615

Prepaid land lease payments 37,899,695

Capital work-in-progress 1,500,230

Other receivables, deposits and prepayments 22,992,933

Cash and bank balances 6,372,307

Other payables and accruals (19,506,932)

Minority interest (15,434,316)

33,828,532

28. DIsPosALoFAsUBsIDIARYCoMPAnY

On 4 October 2007, the Company disposed off 3,000,000 ordinary shares of RM�/- each representing the entire issued and paid-up share capital of its wholly-owned subsidiary company, Focusmax Services Sdn. Bhd., for a total cash consideration of RM6,�75,000/-.

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28. DIsPosALoFAsUBsIDIARYCoMPAnY(cont’d) (i) Effect on Consolidated Income Statement

The effect on the consolidated results of the Group up to the effective date of disposal and the comparatives for the previous year are as follows:-

Periodfrom1.1.07to30.9.07

Yearended31.12.06

RM

RM

Operating revenue 380,250 233,795

Direct operating costs (256,543) (290,774)

Gross profit/(loss) 123,707 (56,979)

Other operating revenue 379,103 25�

Administrative costs (24,696) (�55,623)

Other operating costs (41,063) -

(65,759) (�55,623)

Profit/(loss) from operation 437,051 (2�2,35�)

Finance costs (388) (54,368)

436,663 (266,7�9)

Taxation (13,900) �02,400

Net profit/(loss) for the year 422,763 (�64,3�9)

(ii) Effect on Consolidated Financial Position

The effect on the consolidated financial position of the Group as at the effective date of disposal and the comparatives for the previous financial year are as follows:-

Asat30.9.07 Asat31.12.06

RM RM

Property, plant and equipment 6,430,561 6,560,�82

Prepaid land lease payments 3,623,196 3,674,�83

Deposits and prepayments 28,314 �3,850

Fixed deposits with a licensed bank 11,605 ��,043

Cash and bank balances 36 5,575

Trade payables - (6,�44)

Other payables and accruals (4,625) (378,667)

Deferred taxation (773,600) (759,700)

9,315,487 9,�20,322

Loss on disposal of subsidiary company (3,140,487)

Sales proceeds 6,175,000

Less: Cash and bank balances (36)

6,174,964

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29. CAsHAnDCAsHeQUIVALents

Group Company

2007 2006 2007 2006

RM RM RM RM

Cash deposits with licensed

banks and other corporation 13,621,406 29,809,809 13,368,918 2,997,799

Less: Pledged cash deposits

Less: (note �6) - (��,043) - -

13,621,406 29,798,766 13,368,918 2,997,799

Cash and bank balances 35,695,644 �9,295,0�8 887,521 8�4,0�7

Bank overdrafts (note 22) (933,029) - - -

48,384,021 49,093,784 14,256,439 3,8��,8�6

The foreign currency exposure profile for the Group is as follows:-

Group

2007 2006

FunctionalcurrencyofGroup

ChineseRenminbi

Chinese Renminbi

RM RM

Hong Kong Dollar 3,793,613 5,�23,935

Japanese Yen 1,592 �,597

United States Dollar 11,511,237 2,666,652

15,306,442 7,792,�84

Hong Kong Dollar is the functional currency of ILB International (BVI) Limited, a wholly-owned subsidiary company of Integrated Logistics Berhad.

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30. otHeRReCeIVABLes,DePosItsAnDPRePAYMents

Group Company

2007 2006 2007 2006

RM RM RM RM

Receivables from:-

- external parties 22,971,000 2,737,575 254,127 963,699

- subsidiary companies - - 1,474,300 554,�04

22,971,000 2,737,575 1,728,427 �,5�7,803

Deposits 8,241,731 2,299,085 64,236 68,732

Prepayments 2,835,816 �,684,587 114,038 534,575

34,048,547 6,72�,247 1,906,701 2,�2�,��0

Receivables from subsidiary companies are unsecured, interest-free and repayable on demand by cash.

Included in the receivables from external parties of the Group is an amount of RM�8,202,096/- (2006: Nil) being advances to the contractors for the constructions works of a subsidiary company.

Included in deposits of the Group is an amount of RM5,984,923/-(2006:Nil) being deposit paid for the purchase of leasehold land in The People’s Republic of China.

In prior year, prepayments:-

(i) of the Group and of the Company included prepaid bank guarantee fees and interest for commercial papers of RM�68,929/- and RM335,703/- respectively; and

(ii) of the Group included RM350,000/- being partial payment for acquisition and implementation of a financial accounting software of the Group.


Group

2007 2006


ChineseRenminbi

Chinese Renminbi

RM RM

Hong Kong Dollar 401,024 566,079

United States Dollar 57,773 64,203

458,797 630,282


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31. LeAseAnDHIRePURCHAseReCeIVABLes

Group

LeaseHire

Purchase 2007 2006

RM RM RM RM

Receivable within � year

Total instalments �24,888 - 124,888 �63,788

Present value of total receivables �24,888 - 124,888 �63,788

Less: Allowance for doubtful debts (�24,888) - (124,888) (�63,788)

Current assets - - - -

32. otHeRPAYABLes,DePosItsAnDACCRUALs

Group Company

2007 2006 2007 2006

RM RM RM RM

Payable to:-

- external parties 6,340,556 3,4�3,68� 5,510 76,548

- corporate shareholders of a subsidiary company

6,443,279 - - -

- subsidiary companies - - 27,080 2,5�4

- associated company 4,529 - - -

Rental and utilities deposits 997,362 �,530,763 - 5,�00

Accruals 10,758,523 9,383,727 375,080 209,477

24,544,249 �4,328,�7� 407,670 293,639

Included in payables are:-

(i) payables to subsidiary companies are unsecured, interest-free, repayable on demand by cash;

(ii) amount owing to an associated company, Integrated Cargo Services Sdn. Bhd., is unsecured, interest-free, repayable on demand by cash; and

(iii) the payables to a corporate shareholder of a subsidiary company, Integrated National Logistics Limited, is non-trade in nature, interest-free and repayable on demand by cash.

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32. otHeRPAYABLes,DePosItsAnDACCRUALs(cont’d)


Group

2007 2006


ChineseRenminbi

ChineseRenminbi

RM RM

Hong Kong Dollar �2�,932 2,��2,�08

United States Dollar �,499,550 -

�,62�,482 2,��2,�08


33. PRoVIsIons

employeeBenefits

RetrenchmentCompensation total

RM RM RM

Group

2007

At beginning of the year 373,575 35,295 408,870

Additions 388,253 - 388,253

Incurred (395,724) - (395,724)

(7,47�) - (7,47�)

At end of the year 366,�04 35,295 40�,399

2006

At beginning of the year 392,557 35,293 427,850

Additions 352,689 - 352,689

Incurred (37�,67�) - (37�,67�)

(�8,982) - (�8,982)

At end of the year 373,575 35,293 408,868

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employeeBenefits

RetrenchmentCompensation total

RM RM RM

Company

2007

At beginning of the year 5,727 - 5,727

Additions �,748 - �,748

Incurred (5,727) - (5,727)

At end of the year �,748 - �,748

2006

At beginning of the year 5,047 - 5,047

Additions 5,727 - 5,727

Incurred (5,047) - (5,047)

At end of the year 5,727 - 5,727

Employee benefits and retrenchment compensation are in respect of short term accumulating compensated absences and claims for loss of employment respectively.

34. FInAnCeLeAseAnDHIRePURCHAsePAYABLes

Hire Group

Purchase Lease 2007 2006

RM RM RM RM

Total instalment payable 498,053 - 498,053 �,042,372

Less: Future finance charges (15,094) - (15,094) (62,564)

Present value of hire purchase and lease payables 482,959 - 482,959 979,808

Total instalment payable within � year 485,373 - 485,373 544,309

Less: Future finance charges (14,857) - (14,857) (47,286)

Current liabilities (note 2�) 470,516 - 470,516 497,023

Total instalment payable after � year but not later than 2 years 12,680 - 12,680 498,063

Less: Future finance charges (237) - (237) (�5,278)

Non-current liabilities (note �9) 12,443 - 12,443 482,785

Present value of hire purchase and lease payables 482,959 - 482,959 979,808

The finance lease and hire purchase bear an effective interest rate of 4.60% (2006 : rates ranging from 4.00% to 6.34%) per annum.

33. PRoVIsIons(cont’d)

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35. teRMLoAns

DenominatedIn Group Company

RinggitMalaysia

ChineseRenminbi 2007 2006 2007 2006

RM RM RM RM RM RM

short-termloans

Secured 3,70�,897 �4,2�9,520 17,921,417 �9,994,382 2,000,000 -

Unsecured 4,469,943 6,�82,400 10,652,343 �0,994,650 1,200,000 �,200,000

Current liabilities (note 2�) 8,�7�,840 20,40�,920 28,573,760 30,989,032 3,200,000 �,200,000

Long-termloans

Secured

More than � year but less than 2 years 4,000,000 �7,840,640 21,840,640 �8,8�8,769 4,000,000 -

More than 2 years but less than 5 years

50,000,000 29,675,520 79,675,520 4�,296,920 50,000,000 -

More than 5 years - 6,270,720 6,270,720 �2,672,660 - -

54,000,000 53,786,880 107,786,880 72,788,349 54,000,000 -

Unsecured

More than � year but less than 2 years 3,000,000 6,�82,400 9,182,400 4,97�,348 3,000,000 �,200,000

More than 2 years but less than 5 years - - - 6,�0�,700 - 3,000,000

3,000,000 6,�82,400 9,182,400 ��,073,048 3,000,000 4,200,000

Non-current liabilities (note �9)

57,000,000 59,969,280 116,969,280 83,86�,397 57,000,000 4,200,000

65,�7�,840 80,37�,200 145,543,040 ��4,850,429 60,200,000 5,400,000

termLoansDenominatedinRinggitMalaysia

The secured term loan of a subsidiary company bears an effective interest rate of 6.5% (2006 : rates ranging from 5.05% to 7.00%) per annum and is secured and supported as follows:-

(a) specific debentures creating legal charges over the prime movers, trailers and side loaders financed by the term loan; and

(b) corporate guarantee of the Company.

The secured term loans of the Company bear effective interest rate of 4.55% (2006 : Nil) per annum and are secured and supported as follows:-

(a) legal charges over a subsidiary company’s freehold land and buildings; and(b) corporate guarantee of a subsidiary company.

The unsecured term loans of the subsidiary companies bear effective interest rates ranging from 5.40% to 5.75% (2006 : 5.75%) per annum and are supported by a corporate guarantee of the Company.

The unsecured term loan of the Company bears an effective interest rate of 4.80% (2006 : 4.95%) per annum and is supported by a corporate guarantee of a subsidiary company.

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35. teRMLoAns(cont’d)

termLoansDenominatedinChineseRenminbi

The secured term loans bear effective interest at rates ranging from 5.5�% to 7.�8% (2006 :5.�8% to 6.�6%) per annum and are secured and supported as follows:-

(a) legal charges over respective subsidiary companies’ leasehold land and buildings; and(b) corporate guarantees by a foreign subsidiary company.

The unsecured term loan bears effective interest at rates ranging from 4.86% to 5.8�% (2006 : 4.39% to 4.86%) per annum.

36. CoMMeRCIALPAPeRs

Group/Company

2007 2006

RM RM

Currentliabilites

Repayable within � year (note 2�) - �0,000,000


Repayable after � year but not later than 2 years - �0,000,000

Repayable after 2 years but not later than 5 years - 30,000,000

Total non-current liabilites (note �9) - 40,000,000

- 50,000,000

In prior year, the commercial papers bear effective interest at rates ranging from 3.98% to 4.70% per annum and are secured by legal charges over the subsidiary companies’ leasehold land and buildings.

Subsequent to the financial year end, the legal charges over the subsidiary companies’ leasehold land and buildings were discharged.

37. ReVoLVInGCReDIt-UnseCUReD

The unsecured revolving credit of the Group and of the Company bears an effective interest at a rate of 4.55% and supported by a corporate guarantee of a subsidiary company.

38. UnseCUReDLoAn

The unsecured loan from Shun Hing China Investments Limited, a corporate shareholder of a subsidiary company, is non-trade in nature, interest-free and is not expected to be settled within one year.

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39. seGMentAnALYsIs

Segment information is presented in respect of the Group’s business and geographical segments. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise corporate assets, liabilities and expenses.

Segment assets and liabilities do not include income tax assets and tax liabilities respectively. Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one accounting period.

Inter-segment transactions are entered in the ordinary course of business based on terms mutually agreed upon by the parties concerned.

Businesssegments

The Group comprises the following major business segments:-

(i) Warehousing and related value added services - rental of warehouses, handling and providing logistics solution services

(ii) Freight forwarding, transportation and distribution

- business of sea and air freight forwarding, shipping agent, trucking and container haulage

(iii) Others - investment holding, leasing and other services

The business segments of investment holding, property rental, management services and lease and hire purchase have been combined to form a reportable segment.

Geographicalsegments

The Group operates in four principal geographical areas of the world:-

(i) Malaysia(ii) Hong Kong(iii) The People’s Republic of China(iv) United Arab Emirates

(a) MAJoRseGMentBYACtIVItY

Warehousing&Related

ValueAddedservices

FreightForwarding,

transportation&Distribution others eliminations Consolidated

RM RM RM RM RM

2007

Revenue

External revenue ��5,300,7�0 75,5�2,�26 �,259 - �90,8�4,095

Inter-segment revenue 607,328 470,064 �7,377,�35 (�8,454,527) -

Total revenue ��5,908,038 75,982,�90 �7,378,394 (�8,454,527) �90,8�4,095

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Warehousing&Related

ValueAddedservices

FreightForwarding,


RM RM RM RM RM

2007

Result

Segment result 27,8�9,247 4,899,�36 (�2,450,820) - 20,267,563

Interest and financing charges (5,470,264) (344,489) (2,687,653) - (8,502,406)

Interest revenue 886,528 45,7�� 247,96� - �,�80,200

Share of results of associated companies - - �,9�9,9�0 - �,9�9,9�0

Taxation (464,980) (6�7,876) (667,038) - (�,749,894)


Profit attributable to shareholders 8,2�7,77�

Assets

Segment assets 535,0�0,96� 45,6��,703 34,435,850 - 6�5,058,5�4

Interest in associated companies - - �9,8�4,778 - �9,8�4,778

Amount owing by associated company - - �68,999 - �68,999

Goodwill - - ��4,607 - ��4,607

Tax assets 207,402 626,882 �,780,645 - 2,6�4,929

Other investments 772,993 2�,750 58,000 - 852,743

Consolidated total assets 535,99�,356 46,260,335 56,372,879 - 638,624,570

Liabilities

Segment liabilities 35,633,994 8,258,33� (9,02�,�99) - 34,87�,�26

Taxation 73�,909 �30,435 - - 862,344

Deferred tax liabilites 36,947,382 5�6,900 �3,400 - 37,477,682

Interest bearing liabilities �22,932,390 3,239,207 66,700,000 - �92,87�,597

Consolidated total liabilities �96,245,675 �2,�44,873 57,692,20� - 266,082,749

39. seGMentAnALYsIs(cont’d)

(a) MAJoRseGMentBYACtIVItY(cont’d)

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Warehousing&Related

ValueAddedservices

FreightForwarding,


RM RM RM RM RM

2007

othersegmentInformation

Capital expenditure 43,574,8�6 893,983 �5,304 - 44,484,�03

Amortisation and depreciation of property, plant and equipment 9,890,972 6,446,055 35,653 - �6,372,680

Amortisation of prepaid land lease payments 2,5�8,005 393,482 - - 2,9��,487

Significant non-cash expenses other than depreciation:

Allowance for doubtful debts 2,009 404,849 - - 406,858

Bad debts written off - 48,439 458,688 - 507,�27

Property, plant and equipment written off 4�7 284 6,�69 - 6,870

Provision for employee benefits �90,�37 �95,53� 2,585 - 388,253

2006

Revenue

External revenue �2�,796,5�2 75,944,932 45,�65 - �97,786,609

Inter-segment revenue 88�,687 544,323 4,234,052 (5,660,062) -

Total revenue �22,678,�99 76,489,255 4,279,2�7 (5,660,062) �97,786,609



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Warehousing&Related

ValueAddedservices

FreightForwarding,


RM RM RM RM RM

2006

Result

Segment result 32,4�9,9�7 3,��5,044 3,398,727 - 38,933,688

Interest and financing charges (5,64�,0�8) (849,536) (2,405,066) - (8,895,620)

Interest revenue 328,990 28,875 �87,699 - 545,564

Dividend revenue - - 32,243 - 32,243

Share of results of associated companies - - �,037,903 - �,037,903

Taxation (862,673) (539,650) �,202,�4� - (200,�82)


Profit attributable to shareholders 24,476,848

Assets

Segment assets 5�5,364,728 48,653,02� 6,298,30� - 570,3�6,050

Interest in associated

companies - - �7,645,668 - �7,645,668

Amount owing by

associated company - - 774,998 - 774,998

Goodwill - - 97,804 - 97,804

Tax assets 294,358 �79,728 2,735,807 - 3,209,893

Other investments 775,567 2�,750 58,000 - 855,3�7

Consolidated total assets 5�6,434,653 48,854,499 27,6�0,578 - 592,899,730

Liabilities

Segment liabilities 26,424,009 29,209,334 378,406 - 56,0��,749

Taxation 857,234 42,444 - - 899,678

Deferred tax liabilites 39,906,055 28�,000 - - 40,�87,055

Interest bearing liabilities �02,498,583 7,93�,654 55,422,800 - �65,853,037

Consolidated total liabilities �69,685,88� 37,464,432 55,80�,206 - 262,95�,5�9



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Warehousing&Related

ValueAddedservices

FreightForwarding,


RM RM RM RM RM

2006

othersegmentInformation

Capital expenditure 3,725,798 622,3�� 7,�� - 4,365,220

Amortisation and depreciation of property, plant and equipment ��,�76,534 7,586,�42 38,050 - �8,800,726

Amortisation of prepaid land lease payments 2,338,766 268,77� - - 2,607,537

Significant non-cash expenses other than depreciation:

Allowance for doubtful debts - 626,�62 - - 626,�62

Allowance for diminution in value of other investment - - 68,979 - 68,979

Bad debts written off - 4,384 5,827 - �0,2��

Property, plant and equipment written off - 649,699 2,49� - 652,�90

Provision for employee benefits �79,33� �66,5�� 6,847 - 352,689

(b) MAJoRseGMentBYGeoGRAPHICALLoCAtIon

Malaysia HongKong

thePeople’sRepublicof

ChinaUnitedArab

emirates Consolidated

RM RM RM RM RM

2007

Total revenue from

external customers 95,422,��9 2,7�2,�72 92,679,804 - �90,8�4,095

Segment assets 266,738,7�� ,437,095 350,9�7,709 �9,53�,055 638,624,570

Capital expenditure �,938,625 - 4�,508,826 - 43,447,45�



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(b) MAJoRseGMentBYGeoGRAPHICALLoCAtIon(cont’d)

Malaysia HongKong

thePeople’sRepublicof

ChinaUnitedArab

emirates Consolidated

RM RM RM RM RM

2006

Total revenue from

external customers �08,335,380 3,24�,228 86,2�0,00� - �97,786,609

Segment assets 277,852,343 4,483,�87 3�0,564,200 - 592,899,730

Capital expenditure �,730,375 37,494 2,597,35� - 4,365,220

40. ContInGentLIABILItIes-UnseCUReD

Company

2007 2006

RM RM

Corporate guarantees given by the Company to financial institutions for banking facilities granted to the subsidiary companies

- outstanding at financial year end 18,495,078 29,438,778

41 CAPItALAnDotHeRCoMMItMents

Group

2007 2006

RM RM

Approved and contracted for:

(i) acquisition and implementation of financial accounting software - 350,000

(ii) non-cancellable operating lease

- within � year 2,137,482 8,380,350

- more than � year but less than 5 years 215,694 �,852,�58

(iii) acquisition of investment as mentioned in Note 43(ix) 39,501,120 4,�87,295

(iv) construction of warehouse buildings 50,807,904 -

92,662,200 �4,769,803

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42. sIGnIFICAntInteR-CoMPAnYAnDReLAteDPARtYtRAnsACtIons

(i) Significant inter-company transactions with subsidiary companies are as follows:-

Company

2007 2006

RM RM

Paid or payable to subsidiary company

Trade

- Handling services - 47,396

- Rental of premises - �86,399

Company

2007 2006

RM RM

(Received or receivable from)/Paid or payable to subsidiary companies

Non-Trade

- Interest (2,684,970) (2,405,0�7)

- Rental of premises 50,400 26,400

- Gross dividend (17,336,620) (4,�69,�60)

- Sale consideration for disposal of a subsidiary company - (23,309,000)

(ii) Compensation of the key management are as follows:-

Key management personnel includes personnel having authority and responsibility for planning, directing and controlling the activities of the entity, including any Director of the Company.

The remuneration of the key management are as follows:-

Group

2007 2006

RM RM

Short term employees benefits 2,996,734 2,740,�79

Post-employment benefits 325,205 �79,688

3,321,939 2,9�9,867

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43. sIGnIFICAnteVents

(i) On �2 March 2007, the Company announced the following proposals:-

(a) Proposed Renewal of Share Buy-Back Authority by the Company of up to �8,04�,�77 ordinary shares of RM�/- each, representing up to �0% of its issued and paid-up share capital as at 9 March 2007; and

(b) Proposed Amendment to the Articles of Association.

(ii) On �� April 2007, the Company entered into a Shares Sale & Purchase Agreement with Matsushita Logistics Co., Ltd., a company incorporated in Japan, for the acquisition of �,800,000 ordinary shares of RM�/- each, representing �2.5% equity interest, in M.I. Logistics Sdn. Bhd. (“MIL”), a subsidiary company of the Company for a total consideration of RM�,7�0,000. As a result, MIL became a wholly-owned subsidiary of the Company.

(iii) On 25 April 2007, Integrated Logistics (H.K.) Limited (“ILHK”), a subsidiary company of the Company, entered into a joint venture agreement with Jiangsu Etern Logistics Development Ltd. (“JELD”). ILHK and JELD have agreed to jointly participate in Integrated Etern Logistics (Suzhou) Ltd (“IEL”), a newly incorporated in Wujiang, The People’s Republic of China, as the joint venture vehicle, with its principal activities as the regional distribution agent, and in the provision of warehousing and value-added services. Pursuant thereto, ILHK and JELD will invest RMB32.5 million and RMB�7.5 million respectively in IEL.

(iv) On 20 June 2007, ISH Logistics (Shenzhen) Ltd (“ISH Shenzhen”), a 70%-owned subsidiary company of the Company, had incorporated a wholly-owned subsidiary, with the registered capital of HK$40 million, namely ISH Logistics Yantian (Shenzhen) Ltd (“ISH Yantian”) in Shenzhen, The People’s Republic of China.

(v) On 28 June 2007, ISH Yantian entered into a Contract for “Land Use Right Transfer” with Shenzhen Municipal Bureau of Land Resources and Housing Management, to invest in a project in “Yantian Port Bonded Logistics Park” in Shenzhen to conduct warehousing and related logistics services.

(vi) On 4 July 2007, the Company announced that Integrated National Logistics Limited (“INL”), a 57.5%- owned subsidiary company of the Company in Dubai Logistics City, Emirates of Dubai, United Arab Emirates, had been issued a licence to operate from the Dubai Aviation Corporation Authority on �9 June 2007 to conduct logistics, freight forwarding, warehousing and other related value added services and that the shareholder, Argan Ventures Pte. Ltd. has withdrawn its shareholdings from INL. Pursuant thereto, the Company’s shareholdings in INL has increased from 55% to 57.5% based on the enlarged paid-up capital of INL of United Arab Emirates Dirham (“AED”) 400,000 comprising 40 ordinary shares of AED�0,000 each.

(vii) On 6 August 2007, the Company announced the proposal to implement a private placement of up to �7,9��,400 ordinary shares of RM�/- each representing �0% of the issued and paid up share capital of the Company (“The Proposed Private Placement”). The Proposed Private Placement was completed on �9 October 2007 pursuant to the listing and quotation of �7,9��,000 new ordinary shares of RM�/- each on Bursa Malaysia Securities Berhad (“Bursa Malaysia”) on the same date.

(viii) On 4 October 2007, the Company entered into a Shares Sale Agreement with William Chiew Soon Ming and Ling Nai Yieng to dispose the Company’s entire �00% equity interest in Focusmax Services Sdn. Bhd. comprising 3,000,000 ordinary shares of RM�/- each for a total cash consideration of RM6,�75,000 (“Proposed Disposal”). The Proposed Disposal was completed on 5 December 2007.

(ix) On �6 October 2007, ILHK entered into an investment agreement with Jiangyin Foreversun Chemical Logistics Co. Ltd. (“Foreversun”) and Ku Wing Hing, the �00% shareholders of Foreversun, to invest RMB 80 million for an equity stake of 30% in a new company which is to be incorporated in British Virgin Islands to wholly-own Foreversun.

(x) On 3� October 2007, the Company announced that Integrated Logistics (China) Co. Limited , a wholly- owned subsidiary of ILHK, which in turn is a 70%-owned subsidiary company of the Company, had on 29

October 2007, incorporated a wholly-owned subsidiary company, namely Integrated Shun Hing Logistics (Lingang) Co. Ltd (“ISH Lingang”) in Shanghai, The People’s Republic of China, with the authorized share capital of RMB�0,000,000/-. ISH Lingang has not commenced business as at balance sheet date.

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43. sIGnIFICAnteVents(cont’d)

(xi) On �2 November 2007, Integrated Shun Hing Logistics (Shanghai) Ltd, a subsidiary company in which the Company has a 70% effective equity interest, had entered into a Reservation Agreement with MapletreeLog Integrated (Shanghai) (Cayman) Ltd., for the sale and leaseback of a property (the land together with buildings are hereinafter collectively referred to as “the Property”) in Shanghai, The People’s Republic of China. The sale price of the Property is RMB�58,300,000 in cash. The Purchaser is a wholly-owned subsidiary of Mapletree Logistics Trust, a real estate investment trust listed on the Singapore Exchange.

(xii) On 30 November 2007, Integrated Warehouse Sdn. Bhd., a wholly-owned subsidiary company of the Company, had entered into a Sale and Purchase Agreement with Perceptive Logistics Properties Sdn. Bhd. for the disposal of a leasehold industrial land with a two-storey building and a workshop erected thereon for a total cash consideration of RM��,�07,800/-.

(xiii) On 3� December 2007, the Company announced that further to announcement made on 24 November 2006 that Integrated Logistics Solutions Sdn. Bhd. (“ILS”), a wholly-owned subsidiary company of the Company, was awarded the Special Incentive Package for �00% Tax Exemption for �0 years under the Income Tax Act, 1967 for Regional 4PL Integrated Services (reclassified as “International Integrated Logistics”) by the Malaysian Industrial Development Authority (“MIDA”), vide its letter dated 22 November 2006. Pursuant thereto, the Company’s Malaysian operations is undertaking an internal restructuring exercise to meet the pre-requisite conditions set by MIDA for ILS to qualify for the tax incentives. ILS will become the group’s main operating company in Malaysia after the migration of the business operations of ILB’s five (5) wholly-owned subsidiary companies to ILS. ILS has commenced its operations on 1 January 2008.

(xiv) As at the financial year end, the Company had increased its paid-up share capital from RM169,101,321/- to RM�97,025,503/- by allotment of 27,924,�82 ordinary shares of RM�/- each, pursuant to exercise of Warrants 2002/2007 and Private Placement. All allotted shares rank pari passu with the existing shares of the Company and were granted listing by Bursa Malaysia.

44. sUBseQUenteVents

On �0 February 2008, the Company had reduced its equity interest in Integrated National Logistics Limited from 57.5% to 42.5%.

45. FInAnCIALInstRUMents

(a) FinancialRiskManagementPolicies

The Group’s financial risk management policy seeks to ensure optimal allocation of financial resources for the development of the Group’s business whilst managing its risks.

The main risks and corresponding management policies arising from the Group’s normal course of business are as follow:-

i. ForeignexchangeRiskThe Group is exposed to foreign currency risk as a result of its normal trade activities when the currency denomination differs from its functional currency. Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

ii. InterestRateRiskThe Group’s exposure to interest rate risk relates to interest bearing financial assets and liabilities. Interest bearing financial assets include fixed deposits with licensed banks, placed for better yield returns than cash at banks and to satisfy conditions for bank guarantee and borrowing facilities granted to the Group.

The Group’s interest bearing financial liabilities comprise bank overdrafts, term loans, hire purchase, leasing, revolving credit, bonds and commercial papers.

The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets.

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45. FInAnCIALInstRUMents(cont’d)

iii. CreditRiskThe Group’s exposure to credit risk arises from its receivables and the maximum risk associated with recognised financial assets is the carrying amounts as presented in the balance sheet.

The Group has a credit policy in place and the exposure to credit risk is managed through the application of credit approvals, credit limits and monitoring procedures.

The Group does not have any significant exposure to any individual customer.

iv. Liquidity and Cash Flow RisksThe Group actively manages its operating cash flows and the availability of funding so as to ensure that all repayment and funding needs are met. The Group strives to maintain available banking facilities of a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions so as to achieve overall cost effectiveness.

(b) FairValues

The methods and assumptions used to estimate the fair value of each class of financial assets and liabilities are as follows:-

i. CashandBankBalances,CashDeposits,tradeandotherReceivablesandPayablesThe carrying amounts approximate fair values due to the relatively short term maturities of these financial assets and liabilities.

ii. otherInvestmentsThe fair values of transferable golf club memberships are estimated based on the current market price of the memberships determined on an individual basis.

iii. BorrowingsThe carrying amounts of bank overdrafts and short term loan approximate fair values due to the relatively short term maturities of these financial liabilities.

The carrying amounts of floating rate term loans and commercial papers approximate their fair values.

The fair values of lease and hire purchase payables, fixed rate term loans are estimated using discounted cash flow analysis, based on current lending rates for similar types of borrowing arrangements.

The carrying amounts of financial assets and liabilities recognised in the balance sheets approximate their fair values except for the following:-

Group Company

CarryingAmount FairValue


RM RM RM RM

2007

FinancialAssets

Other investments

- Golf club memberships 852,743 �,965,692 58,000 �88,784

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(b) FairValues(cont’d)

Group Company



RM RM RM RM

FinancialLiabilities

Finance lease and hire purchase payables 482,959 488,757 - -

Term loans �45,543,040 �43,839,838 60,200,000 58,402,638

Unsecured loan 39,4�2,569 * - - -

The carrying amounts of financial assets and liabilities recognised in the balance sheets approximate their fair values except for the following:-

Group Company



RM RM RM RM

2006

FinancialAssets

Amount owing by subsidiary companies - - �5�,862,636 *-

Amount owing by associated companies 774,998 *- 774,998 *-

Other investments

- Golf club memberships 855,3�7 �,257,427 58,000 58,046

FinancialLiabilities

Amount owing to subsidiary companies - - �,754,7�8 *-

Finance lease and hire purchase payables 979,808 �,003,486 - -

Term loans ��4,850,429 ��4,634,697 5,400,000 4,8�4,3��

Unsecured loan 35,542,423 *- - -

* It is not practical to estimate the fair values of intragroup balances, amount owing by associated companies and loan from a corporate shareholder of subsidiary company due principally to a lack of fixed repayment terms entered into by the parties involved. However, the Group and the Company do not anticipate the carrying amounts recorded at the balance sheet to be significantly different from the values that would eventually be received or settled.

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(b) FairValues(cont’d)

The nominal/notional amounts and fair values of financial instruments not recognised in the balance sheets are as follows:-

Company

nominalAmount FairValue

RM RM

2007

Contingent liabilities �8,495,078 *-

2006

Contingent liabilities 29,439,778 *-

* It is not practical to estimate the fair value of the contingent liabilities reliably due to uncertainties in timing, costs and eventual outcomes.

46. CHAnGesInACCoUntInGPoLICIes

The adoption of the FRS as set out in Note 3 of the financial statements does not have any material financial impact on the Group and on the Company or any significant changes in accounting policies of the Group and of the Company except as follows:-

FRs117:Leases

Prior to 1 January 2007, leasehold land held for own use was classified as property, plant and equipment and was stated at cost less accumulated depreciation and impairment losses. The adoption of the revised FRS ��7 has resulted in a change in the accounting policy relating to the classification of leases of land and buildings. Leases of land and buildings are classified as operating or finance leases in the same way as leases or other assets and the land and building elements of a lease of land and buildings are considered separately for the purposes of lease classification. Leasehold land held for own use is now classified as operating lease and where necessary, the minimum lease payments or the upfront payments made are allocated between the land and the buildings elements in proportion to the relative fair values for leasehold interest in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid land lease payments and are amortised on a straight-line basis over the lease term. The Group has applied the change in accounting policy in respect of leasehold land in accordance with the transitional provisions of FRS ��7. At � January 2007, the unamortised amount of leasehold land is retained as the surrogate carrying amount of prepaid land lease payments as allowed by the transitional provisions.

The reclassification of leasehold land as prepaid land lease payments has been accounted for retrospectively and as disclosed in note 47 to the financial statements, certain comparatives have been restated.

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47. CoMPARAtIVeFIGURes

Certain comparative figures have been reclassified where necessary to conform with the current year’s presentation and as a result of change in accounting policies as stated in note 3 to the financial statements.

AsPreviouslyReported

Decrease/(Increase)FRs117 AsRestated

RM RM RM

Group

Balancesheet

Property, plant and equipment 477,276,642 (��6,845,40�) 360,43�,24�

Prepaid land lease payments - ��6,845,40� ��6,845,40�

Incomestatement

Amortisation and depreciation of property, plant and equipment 2�,408,263 (2,607,537) �8,800,726

Amortisation of prepaid land lease payments - 2,607,537 2,607,537

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PropertiesofILBGroupAs At 3�st December 2007

Location Description AgeofBuilding(Years)

Area(sq. ft.)

tenure nBV@31/12/2007

(RM)

YearofAcquisition

orRevaluation*

Lot 4, Lebuh SultanMuhammed 2, Kawasan 2�,Bandar Sultan Suleiman,42000 Port Klang,Selangor Darul Ehsan.

Land withwarehouses and office building

(IWS 7, 9)

�4-�6 Land - 649,567 Build-up - 555,898

Leaseholdexpiring in

2088

�4,063,�2043,3�7,239

2003 *

Lot �5, Lengkungan SultanHishamuddin,Kawasan 20,Bandar Sultan Suleiman,42000 Port Klang,Selangor Darul Ehsan.

Land with warehouses and office building (IWS �)

24 Land - �39,544Build-up - �0�,�55


2086

2,500,0006,520,000

2003 *

Lot 6 & 8, Lingkaran SultanHishamuddin, Kawasan 20,Bandar Sultan Suleiman,42000 Port Klang,Selangor Darul Ehsan.

Land with warehouses and office building

(IWS 3, 4, 5)

�8-20 Land - 435,600Build-up - 358,000


2086

7,609,738�8,400,000

2003 *

No. �B, Persiaran Klang,Seksyen 2740400 Shah Alam,Selangor Darul Ehsan.

Land with warehouse and office building (IWS �0)

�2 Land - 697,662Build-up - 494,577

Freehold 2�,500,00038,249,�88

2003 *

Lot �7, Lengkungan SultanHishamuddin, Kawasan 20,Bandar Sultan Suleiman,42000 Port Klang,Selangor Darul Ehsan.

Land with warehouse(IWS �-D)

�� Land - 42,808Build-up - 27,920


2086

940,000�,600,000

2003 *

No. �-�, �-2, �-3 & �-4,First Floor, Block �9,PKNS Housing Projects,North Klang Straits,42000 Port Klang,Selangor Darul Ehsan.

4 units apartment

used as staff quarters

�8 Build-up - 3,�04 Leaseholdexpiring in

2086

2�4,40� 2003 *

PLO 78, Jalan Keluli,Kawasan PerindustrianPasir Gudang,8�700 Pasir Gudang,Johor Darul Takzim.

Land with warehousesand office building

Land - 557,572 Leaseholdexpiring in

202�

5,��9,368 2003 *

Warehouse I 8 to �2 Build-up - �60,005 �2,064,540 2003 *

Warehouse II 4 Build-up - 53,982 3,096,863 2004

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PropertiesofILBGroupAs At 3�st December 2007

Location Description AgeofBuilding(Years)

Area(sq. ft.)

tenure nBV@31/12/2007

(RM)

YearofAcquisition

orRevaluation*

Plot 5, Lot �06�,Jalan Pengkalan, MK 6, Bukit Tengah,�4000 Bukit Mertajam,Penang.

Storage Yard 7 �/2 2,000 3rd party’sland

��4,362 2003 *

No.�, Hai Hong RoadFutian Free Trade ZoneShenzhenThe People’s Republicof China

Land with warehouse and office building

�� Land - 208,7�4Build-up - 30�,000

Land UseRights

expiring in2044

54,�82,367 2003 *

No. 3, Guang Lan RoadFutian Free Trade ZoneShenzhenThe People’s Republicof China

Land with warehouse and office building

4 Land - �77,530Build-up 400,000

Land UseRights

expiring in2052

65,642,�06 2003 *

No. 30, Tao Huo RoadFutian Free Trade ZoneShenzhen The People’s Republicof China

Land with warehouseand office building

2.5 Land - 266,570Build-up 668,622

Land UseRights

expiring in2054

68,583,985 2005

No. 80, Fu Te RoadWai Gao Qiao Free TradeZone,ShanghaiThe People’s Republicof China

Land with 2 warehousesand officebuilding

Land - 2�0,670 Land UseRights

expiring in2044

Warehouse I 4 Build-up �90,�72 25,035,847 2003 *

Warehouse II 2.5 Build-up 207,388 �6,67�,529 2005

No.J306-00�9Yantian Free TradeZone,Shenzhen,The People's Republicof China

Land - Land - 256,599 Land UseRights

expiring in2057

32,446,630 2007

Wuyong2007No.07049200.& No.0704920�.Fenhu Economic Centre,East Fenhu Road, Fenhu, Wujiang, JiangsuThe People's Republicof China

Land - Land -7�8,240 Land UseRights

expiring in2057

6,477,622 2007

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shareholdingsstatisticsAs at �4th March 2008

shareCapital

Authorised Capital : RM250,000,000

Issued and Fully Paid-up Share Capital : RM�97,025,503

Class of Share : Ordinary Shares of RM�-00 each

Voting Rights of Shareholders in General Meetings : Every member present in person or proxy or represented by attorney shall have one vote and upon a poll, every such member shall have one vote for every share held by him.

DIstRIBUtIonoFsHAReHoLDInGsAsAt14thMARCH2008

sizeofshareholdings no.ofshareholders

%ofshareholders

no.ofsharesheld

%ofissuedcapital

Less than �00 504 8.59 9,785 0.0�

�00 -�,000 �,337 22.77 �,�90,4�6 0.60

�,00� –�0,000 3,�48 53.62 �2,452,405 6.32

�0,00�-�00,000 704 ��.99 22,��4,72� ��.22

�00,00� to less than 5% �76 3.00 �28,309,304 65.�2

5% and above 2 0.03 32,948,872 �6.73

Total 5,87� �00.00 �97,025,503 �00.00

LIstoFtHIRtYLARGestsHAReHoLDeRsAsAt14thMARCH2008

no. nameofshareholder no.ofsharesheld

%ofissuedcapital

�. Lembaga Tabung Haji �8,�52,367 9.2�

2. Syahdu Jaya Sdn Bhd �4,796,505 7.5�

3. RHB Merchant Nominees (Asing) Sdn Bhd(Dato’ Yasuo Takahashi)

9,593,778 4.87

4. Berjaya Sompo Insurance Berhad 7,696,000 3.9�

5. Alliancegroup Nominees (Tempatan) Sdn Bhd(Pheim Asset Management Sdn Bhd for Employees Provident Fund)

5,370,�00 2.73

6. Hassan Mohammad Kazem Ahmadi 5,000,000 2.54

7. Tee Tuan Sem 4,330,067 2.20

8. Cartaban Nominees (Tempatan) Sdn Bhd[Exempt AN for MIDF Amanah Asset Nominees (Tempatan) Sdn Bhd (Account �)]

4,280,700 2.�7

9. Amsec Nominees (Tempatan) Sdn BhdAmbank (M) Berhad for Tee Tuan Sem

4,262,857 2.�6

�0. Beh Eng Par 3,682,800 �.87

��. Makoto Takahashi 3,0�7,85� �.53

�2. HDM Nominees (Asing) Sdn Bhd[UOB Kay Hian Pte Ltd for Shun Hing Electronic Trading Company Limited (Gainwell Securities Co. Ltd.)]

3,000,000 �.52

�3. TM Asia Life Malaysia Bhd[As Beneficial Owner (PF)]

2,8�3,000 �.43

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no. nameofshareholder no.ofsharesheld

%ofissuedcapital

�4. RHB Nominees (Tempatan) Sdn Bhd(Pledged Securities account for Raja Abdullah bin Raja Baharuddin)

2,750,000 �.40

�5. RHB Merchant Nominees (Asing) Sdn Bhd(Pledged Securities account for Dato’ Yasuo Takahashi)

2,700,000 �.37

�6. Syed Zainol Anwar Ibni Syed Putra Jamalullail 2,500,000 �.27

�7. Amanah Raya Nominees (Tempatan) Sdn Bhd(Kumpulan Wang Bersama)

2,337,800 �.�9

�8. Citigroup Nominees (Asing) Sdn Bhd(CBHK PBGSG for Gan Boon Hwee

2,�69,600 �.�0

�9. Berjaya Sompo Insurance Berhad 2,08�,�00 �.06

20. Ang Lam Poah �,860,000 0.94

2�. TA Nominees (Tempatan) Sdn Bhd(Pledged Securities account for Lim Peng Koon)

�,803,933 0.92

22. Amanah Raya Nominees (Tempatan) Sdn Bhd(AUTB Progress Fund)

�,6�8,700 0.82

23. Yasuo Takahashi �,520,349 0.77

24. TA Nominees (Tempatan) Sdn Bhd(Pledged Securities account for Oh Kim Sun)

�,456,700 0.74

25. Tan Bee Kong �,430,000 0.73

26. Syahdu Jaya Sdn Bhd �,35�,67� 0.69

27. HSBC Nominees (Tempatan) Sdn Bhd[HSBC (M) Trustee Bhd for HwangDBS Select Opportunity Fund (3969)]

�,326,300 0.67

28. Citigroup Nominees (Asing) Sdn Bhd(CBNY for DFA Emerging Markets Fund)

�,222,800 0.62

29 Chan Han Siong �,200,000 0.6�

30. HSBC Nominees (Asing) Sdn Bhd(TNTC for DBS Malaysia Equity Fund)

�,�72,300 0.59

theDirectorsshareholdingsintheCompanyasat14thMarch2008areasfollows:-

nameofDirectors Directno.ofshares

note %ofissuedcapital

Indirectno.ofshares

note %ofissuedcapital

Dato’ Lee Hwa Beng �02,900 � 0.05 - - -

Tee Tuan Sem 8,957,924 2 4.55 �36,800 3 0.07

Goh Theow Hiang �,326,999 � 0.67 - - -

Chin Then Yoon 759,800 4 0.39 - - -

Makoto Takahashi 3,0�7,85� � �.53 - - -

Wan Azfar bin Dato’ Wan Annuar - - - �6,�48,�76 5 8.20

Elias bin Abdullah Ng - - - - - -

Dato’ Haji Wazir bin Haji Muaz - - - - - -

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�. Held directly.2. Held directly, through Amsec Nominees (Tempatan) Sdn Bhd and Southern Investment Bank Berhad.3. Deemed interested by virtue of the shareholdings of his wife, Yang Chiew Bi, which are held directly and through

RC Nominees (Tempatan) Sdn Bhd.4. Held directly and through RHB Capital Nominees (Tempatan) Sdn Bhd.5. Deemed interested by virtue of Section 6A(4) of the Act, through his shareholdings in Syahdu Jaya Sdn Bhd.

substantialshareholders

The substantial shareholders of the Company as at �4th March 2008 are as follows :-

nameofshareholder Directno.ofshares note

%ofissuedcapital

Indirectno.ofshares note

%ofissuedCapital

Lembaga Tabung Haji �8,553,567 � 9.42 - - -

Syahdu Jaya Sdn Bhd �6,�48,�76 2 8.20 - - -

Wan Azfar bin Dato’ Wan Annuar - - - �6,�48,�76 3 8.20

Zainal bin Khalidi 3�3,000 2 0.�5 �6,�48,�76 3 8.20

Dato’ Yasuo Takahashi �3,8�4,�27 4 7.0� 3,0�7,85� 5 �.53

Notes

�. Held directly and through Amanah SSCM Nominees (Tempatan) Sdn Bhd.2. Held directly.3. Deemed interested by virtue of Section 6A(4) of the Act, through their shareholdings in Syahdu Jaya Sdn Bhd.4. Held directly and through RHB Merchant Nominees (Asing) Sdn Bhd.5. Deemed interested by virtue of the shareholdings of his son, Makoto Takahashi, which are held directly.

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noticeofAnnualGeneralMeeting

NOTICE IS HEREBY GIVEN THAT the �6th Annual General Meeting (“AGM”) of Integrated Logistics Berhad (“ILB or “Company”) will be held at Melati 6 & 7, Sheraton Subang Hotel & Towers , Jalan SS �2/�, 47500 Subang Jaya, Selangor Darul Ehsan on 29th April 2008 at �0:00 a.m. for the following purposes:-

AGenDA

AsoRDInARYBUsIness

� To receive and adopt the Directors’ Report and Audited Financial Statements for the financial year ended 3�st December, 2007 and Auditors Report thereon.

(Resolution �)

2 To approve the payment of a first and final dividend of 3% (3 sen per RM1.00 share) less 26% Malaysian income tax.

(Resolution 2)

3 To approve the payment of Directors’ fees of RM36,000 for the year ended 3�st December 2007.

(Resolution 3)

4 To re-elect Dato’ Haji Wazir bin Haji Muaz, a Director who is retiring in accordance with Article 87 of the Company’s Articles of Association.

(Resolution 4)

5 To re-elect the following Directors retiring by rotation in accordance with Article 80 of the Company’s Articles of Association:-

- Tee Tuan Sem- Goh Theow Hiang

(Resolution 5)(Resolution 6)

6 To accept the retirement of Messrs Moore Stephens as Auditors of the Company and in place thereof, Messrs Moore Stephens AC having consented to act, be and are hereby appointed Auditors of the Company for the year ended 3�st December 2008 until the conclusion of the next AGM and to authorise the Directors to fix their renumeration.

(Resolution 7)

7 To transact any other ordinary business of the Company of which due notice has been received.

AssPeCIALBUsIness

To consider if thought fit, pass the following as Ordinary Resolution:-

oRDInARYResoLUtIons

8 PRoPoseDReneWALoFsHAReBUY-BACKAUtHoRItY tHAt, subject to the Company’s compliance with all applicable rules, regulations, orders and guidelines made pursuant to the Companies Act, �965, the provisions of the Company’s Memorandum and Articles of Association and the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the approvals of all relevant authorities, the Company be and is hereby authorised, to the fullest extent permitted by law, to buy back and/or hold from time to time and at any time such amount of ordinary shares of RM�-00 each in the Company as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interests of the Company (the Proposed Share Buy-Back”) provided that :-

(Resolution 8)

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i) The maximum number of shares which may be purchased and/or held by the Company at any point of time pursuant to the Proposed Share Buy-Back shall not exceed ten (�0) per cent of the total issued and paid-up share capital of the Company from time to time being quoted on Bursa Securities.

ii) The maximum amount of funds to be allocated for the purchase of the shares pursuant to the Proposed Share Buy-Back shall not exceed the aggregate of retained profits and/or share premium account of the Company based on its latest audited accounts available up to the date of a transaction pursuant to the Proposed Share-Buy Back. As at 3�st December 2007, the audited Retained Profits and Share Premium Account of the Company were RM7,032,��9 and RM5�,76�,276 respectively.

iii) The Proposed Share Buy-Back to be undertaken will be in compliance with Section 67A of the Companies Act, �965. The Directors will deal with the shares purchased in the following manner:-

(a) to cancel the Shares so purchased; or

(b) to retain the Shares so purchased as treasury shares for distribution as dividends to the shareholders of the Company and/or re-sell on Bursa Securities in accordance with the Listing Requirements of Bursa Securities and/or cancellation subsequently; or

(c) to retain part of the Shares so purchased as treasury shares and cancel the remainder.

AnD tHAt such authority to purchase the Company’s own shares will be effective immediately from the passing of this resolution until the conclusion of the next AGM at which such resolution was passed at which time the authority would lapse unless renewed by ordinary resolution, either unconditionally or conditionally or the passing of the date on which the next AGM is required by law to be held or the authority is revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting but so as not to prejudice the completion of a purchase made before such expiry date;

AnDtHAt the Directors of the Company be and are hereby authorised to take all steps as are necessary or expedient to implement or to give effect to the Proposed Share Buy-Back with full powers to amend and/assent to any conditions, modifications, variations or amendments (if any) as may be imposed by the relevant governmental/regulatory authorities from time to time and with full power to do all such acts and things in accordance with the Companies Act, �965, the provisions of the Company’s Memorandum and Articles of association and the Listing Requirements of Bursa Securities and all other relevant governmental/regulatory authorities.

9 AUtHoRItYtoIssUesHAResPURsUAnttoseCtIon132DoFtHeCoMPAnIesACt,1965

tHAt subject to Section �32D of the Companies Act, �965 and the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue shares in the Company, at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this Resolution in any one financial year does no exceed ten per cent (�0%) of the issued and paid-up share capital of the Company for the time being.

AnDtHAt such authority shall commence immediately upon passing of this Resolution and continue to be in force until the conclusion of the next AGM of the Company.

(Resolution 9)

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DAteoFentItLeMentAnDPAYMentoFFIRst&FInALDIVIDenD

NOTICE HAS BEEN GIVEN ON 20th FEBRUARY 2008 THAT subject to the approval of Members at the Company’s �6th Annual General Meeting to be held on 29th April 2008, a first and final dividend of 3% less 26% Malaysia income tax for the financial year ended 31st December 2007 will be paid on �6th May 2008 to Depositors whose names appear in the Records of Depositors on 7th May 2008.

A Depositor shall qualify for entitlement to the dividend only in respect of :

a) Securities transferred into the Depositor’s Securities Account before 5.00 p.m. on 7th May 2008 in respect of transfers;

b) Securities bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

By Order of the BoardKee Thuan KinCompany SecretarySelangor Darul EhsanDate: 7th April 2008

NOTES

�. Any member of the Company entitled to attend and vote is entitled to appoint one (�) or more proxies to attend and vote instead of him, and that a proxy need not be a member of the Company and where a member appoints more than one (�) proxy, the member must specify the proportion of his shareholdings to be represented by each proxy respectively, failing which the appointment shall be invalid.

2. If you wish to appoint as your proxy any person other than “the Chairman of the Meeting”, please insert the full name of the proxy (in block letters) in the space provided and delete the words “the Chairman of the Meeting”.

3. A corporation may complete the proxy form under its common seal or under the hand of an officer or attorney duly authorized.

4. Please indicate with an “X” either “For” or “Against”. If neither “For” or “Against” is indicated, the proxy will vote as he thinks fit or abstain from voting.

5. The instrument appointing a proxy must reach the Registered Office of the Company at Lot 4, Lebuh Sultan Muhammed 2, Kawasan 21, Bandar Sultan Suleiman, 42000 Port Klang, Selangor Darul Ehsan, Malaysia not less than 48 hours before the AGM. The lodging of the proxy form will not preclude shareholders from attending and voting in person at the AGM should they subsequently wish to do so.

explanatorynoteonitem(8)oftheAgenda

The proposed ordinary resolution, if passed, will empower the Directors of the Company to buy back and/or hold from time to time shares of the Company not exceeding ten (�0) per cent of the issued and paid-up share capital of the Company from time to time being quoted on Bursa Securities as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interests of the Company.

explanatorynoteonitem(9)oftheAgenda

The proposed ordinary resolution, if passed, will empower the Directors of the Company to issue shares in the Company up to an amount not exceeding �0% of the total issued capital of the Company for the time being and for such purposes as the Directors would consider be in the best interest of the Company, This authority, unless revoked or varied by the shareholders of the Company in general meeting will expire at the conclusion of the next AGM of the Company.

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statementAccompanyingnoticeofAnnualGeneralMeeting

�. tore-electDato’HajiWazirbinHajiMuaz,aDirectorwhoisretiringinaccordancewithArticle87oftheCompany’sArticlesofAssociation.

Details of Dato’ Haji Wazir bin Haji Muaz, who is seeking for re-election are set out in the Directors’ profiles’ section

of this annual report.

2. theDirectorswhoarestandingforre-electionattheAnnualGeneralMeetingoftheCompanyinaccordancewithArticle80oftheCompany’sArticlesofAssociationare:-

a) Tee Tuan Sem b) Goh Theow Hiang

Details of the Directors seeking for re-election are set out in the Directors’ profiles’ section of this annual report. Their shareholdings in the Company are set out on page ��3 this Annual Report.

3. DetailsofattendanceofDirectorsatBoardMeetings

Four (4) Board Meetings were held during the financial year ended 31 December 2007. Details of attendance of the Directors at Board Meetings are set out on page �8 of this Annual Report.

4. Date,timeandPlaceofthe16thAnnualGeneralMeeting

Date and Time : 29th April 2008 at �0:00 a.m.

Place : Melati 6 & 7, Sheraton Subang Hotel & Towers Jalan SS �2/�, 47500 Subang Jaya, Selangor Darul Ehsan.

“I/We,”__________________________________________________________________________________________of ______________________________________________________________________________________________being a member/members of INTEGRATED LOGISTICS BERHAD, hereby appoint (“the Chairman of the Meeting”) or _______________________________________________________________________________________________NRIC No. _________________________________ of____________________________________________________________________________________________________________________________________________________as my/our proxy to vote for me/us on my/our behalf, at the �6th Annual General Meeting (“AGM”) of the Company to be held at Melati 6 & 7, Sheraton Subang Hotel & Towers, Jalan SS �2/�, 47500 Subang Jaya, Selangor Darul Ehsan on Tuesday, 29th April 2008 at �0.00 a.m. or any adjournment thereof and to vote as indicated below:-

AsoRDInARYBUsIness

FoR AGAInst

RESOLUTION � To receive and adopt the Audited Financial Statements.

RESOLUTION 2 To declare a first and final dividend of 3% per share less 26% Malaysian income tax.

RESOLUTION 3 To approve payment of Directors’ Fees.

RESOLUTION 4 To re-elect Dato’ Haji Wazir bin Haji Muaz in accordance with Article 87 of the Company’s Articles of Association.

RESOLUTION 5 To re-elect Tee Tuan Sem as Director in accordance with Article 80 of the Company’s Articles of Association.

RESOLUTION 6 To re-elect Goh Theow Hiang as Director in accordance with Article 80 of the Company’s Articles of Association.

RESOLUTION 7 To accept the retirement of Messrs Moore Stephens as Auditors of the Company and in place thereof, Messrs Moore Stephens AC having consented to act, be and hereby appointed Auditors of the Company.

AssPeCIALBUsIness

RESOLUTION 8 Proposed Renewal of Share Buy-Back Authority.

RESOLUTION 9 To authorize the Directors to allot and issue shares in the Company pursuant to Section �32D of the Companies Act, �965.

No. of shares held______________________________________________

Signed this ____________________ day of _______________________ 2008 _______________________ Signature of Shareholder(s)

NOTE :�. Any member of the Company entitled to attend and vote is entitled to appoint one (�) or more proxies to attend and vote instead of him, and that

a proxy need not be a member of the Company and where a member appoints more than one (�) proxy, the member must specify the proportion of his shareholdings to be represented by each proxy respectively, failing which the appointment shall be invalid.

2. If you wish to appoint as your proxy any person other than “the Chairman of the Meeting”, please insert the full name of the proxy (in block letters) in the space provided and delete the words “the Chairman of the Meeting”.

3. A corporation may complete the proxy form under its common seal or under the hand of an officer or attorney duly authorized.4. Please indicate with and “X” either “For” or “Against”. If neither “For” or “Against” is indicated, the proxy will vote as he thinks fit or abstain from

voting.5. The instrument appointing a proxy must reach the Registered Office of the Company at Lot 4, Lebuh Sultan Muhammed 2, Kawasan 21, Bandar

Sultan Suleiman, 42000 Port Klang, Selangor Darul Ehsan, Malaysia not less than 48 hours before the AGM. The lodging of the proxy form will not preclude shareholders from attending and voting in person at the AGM should they subsequently wish to do so.

ProxyForm

InteGRAteDLoGIstICsBeRHAD(229690 K)

Lot 4, Lebuh Sultan Muhammed 2,

Kawasan 2�, Bandar Sultan Suleiman,

42000 Port Klang, Selangor Darul Ehsan, Malaysia

Tel: (603) 3�76�004 Fax: (603) 3�765�0�

Website: www.ilb.com.my

Integrated Logistics Berhad

Documents

Transcript of Integrated Logistics Berhad