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Corporate Information

BOARD OF DIRECTORS Dato’ Seri DiRaja Mohamad Tajol Rosli bin Mohd Ghazali Independent Non-Executive Chairman

En Amin bin Halim Rasip Non-Independent Non-Executive Deputy Chairman

En Azman Shah bin Mohd Yusof Executive Director

En. Mohamed Rafique Merican bin Mohd Wahiduddin Merican Non-Independent Non-Executive Director

Puan Shireen Ann Zaharah bt Muhiudeen Independent Non-Executive Director

Mr. Chan Wan Siew Independent Non-Executive Director

Mr. Loong Foo Ching Independent Non-Executive Director

Ir. Abdul Manap bin Ali Hasan Independent Non-Executive Director

Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din Non-Independent Non-Executive Director

Dato’ Abd Manaf bin Hashim Non-Independent Non-Executive Director

SENIOR INDEPENDENT DIRECTORMr. Chan Wan Siew

AUDIT COMMITTEEMr. Chan Wan Siew (Chairman)Mr. Loong Foo ChingIr. Abdul Manap bin Ali Hasan

GOVERNANCE COMMITTEEPuan Shireen Ann Zaharah bt Muhiudeen (Chairman)Mr. Chan Wan SiewMr. Loong Foo Ching

REMUNERATION COMMITTEE Mr. Loong Foo Ching (Chairman)Dato’ Abd Manaf bin HashimIr. Abdul Manap bin Ali Hasan

RISK COMMITTEELaksamana Tan Sri Dato’ Seri Ilyas bin Hj Din (Chairman)Dato’ Abd Manaf bin HashimMr. Chan Wan Siew Ir. Abdul Manap bin Ali Hasan

TENDER COMMITTEEEn. Mohamed Rafique Merican bin Mohd Wahiduddin Merican (Chairman)Puan Shireen Ann Zaharah bt Muhiudeen Mr. Chan Wan Siew

COMPANY SECRETARYLim Hooi Mooi (MAICSA 0799764) Chin Su Yee (MAICSA 7029893)

STOCK EXCHANGE LISTINGMain Board, Bursa Malaysia Securities BerhadStock Short Name : INTEGRAStock Code : 9555

PRINCIPAL BANKERSCIMB Bank BerhadHSBC Bank Malaysia BerhadPublic Bank Malaysia Berhad

REGISTERED OFFICE / DOMICILE17th Floor – Tower BlockKompleks Antarabangsa, Jalan Sultan Ismail50250 Kuala Lumpur, Malaysia Tel No. : 603-2141 7728 Fax No. : 603-2141 2995Website: www.integrax.com.my E-mail: [email protected]

SHARE REGISTRARSymphony Share Registrars Sdn BhdLevel 6, Symphony House, Pusat Dagangan Dana 1Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, MalaysiaTel No. : 603-7841 8000Fax No. : 603-7841 8008Website : www.symphony.com.my

AUDITORSDeloitte & Touche (AF 0834)Chartered AccountantsLevel 19, Uptown 1, Damansara Uptown1, Jalan SS21/58, 47400 Petaling Jaya, Selangor Darul Ehsan, MalaysiaTel No. : 603-7723 6500Fax No. : 603-7726 3986Website: www.deloitte.com

SOLICITORSMessrs. Jeff Leong Poon & WongMessrs. Dorairaj Low & Teh

Contents

Financials Statementssection one:

section two:

Chairman’s Statement 15

Integrax Group

26th Annual General Meeting Venue : Prince Room 1, Level 3

Prince Hotel & Residence Kuala Lumpur

No 4 Jalan Conlay 50450 Kuala Lumpur

Date : Wednesday, 27 June 2012

Time : 10.00 a.m.

Notice of Annual General Meeting 104

section four:

Proxy Form 109

section five:

section six:

section three:

GovernanceStatement on Corporate Social Responsibility 22

Statement on Corporate Governance 24

Statement on Internal Control 34

Audit Committee Report 36

Directors’ Report 42

Statement By Directors 47

Statutory Declaration 47

Independent Auditors’ Report 48

Statements of Comprehensive Income 50

Statements of Financial Position 51

Statements of Changes in Equity 53

Statements of Cash Flow 54

Notes to the Financial Statements 56

Properties Owned by the Group 100

Analysis of Shareholdings 101

Corporate Information 1

5-year Financial Summary 2

Financial Indicators 2

Corporate Structure 3

Lumut Port 4 - Lekir Bulk Terminal - Lumut Maritime Terminal

Profile of Directors 9

2

FINANCIAL INDICATORS 2007 2008 2009 2010 2011

Total assets (RM million) 778.7 755.7 773.0 802.9 746.8

Total borrowings (RM million) 199.2 168.5 135.4 99.9 62.9

Shareholders’ equity (RM million) 479.9 474.3 512.8 554.6 559.7

Return on equity (%) 7.6 (0.7) 7.2 9.1 7.8

Return on total assets (%) 5.4 0.3 5.5 6.9 6.6

Interest cover (times) 4.2 2.2 6.1 9.0 12.8

Net earnings per share (sen) 12.1 (1.0) 12.3 16.7 14.6

Gross dividend per share (sen) 2.0 2.7 - 3.0 16.0

Gross dividend yield (%) 1.5 5.7 - 1.8 12.0

Price earning (PE) ratio (times) 11.2 (47.0) 7.3 9.9 9.1

Gearing ratio (times) 0.4 0.4 0.3 0.2 0.1

Net assets per share (RM) 1.60 1.58 1.70 1.84 1.86

5-YeAR FINANCIAL SummARY

2007 2008 2009 2010 2011

Revenue 82.6 85.3 85.3 88.1 87.9 EBITDA 67.6 30.2 68.5 76.1 71.9Operating profit 47.1 41.6 47.2 36.0 44.1 Profit before tax 48.3 11.9 52.0 60.7 60.2 Profit after tax 42.1 2.6 42.9 55.8 49.5 Profit attributable to shareholders 36.5 (3.1) 37.1 50.3 43.8

100.0

90.0

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

-

(10.0)

Year 2011Year 2010Year 2009Year 2008Year 2007

RM million

87.9

71.9

49.5

43.844.1

60.2

88.1

76.1

55.8

50.3

36.0

60.7

85.3

68.5

42.9

37.1

47.2

52.0

85.3

30.2

2.6(3.1)

41.6

11.9

82.6

67.6

42.1

36.5

47.1 48.3

3

GROuP CORPORATe STRuCTuRe

Integrax Resources Pte. Ltd.

100%

Pelabuhan Lumut Sdn. Bhd.

100%

*Integrax Philipines,Inc.

100%

Lekir Bulk TerminalSdn. Bhd.

80%

Lumut MaritimeTerminal Sdn. Bhd.

50% less 1 share

LMT CapitalSdn. Bhd.

100%

P.T. IntegraJasa Energi

95%

* Dormant company, in the process of winding-up.

3 Dormant Malaysian Companies

100%

P.T. Integrax Indonesia

100%

BOARDOF DIRECTORS

RiskCommittee

Remuneration Committee

Governance Committee

ExecutiveDirector

Statutory AuditorsInternal Auditors

Lumut PortOperations

Finance BusinessDevelopment

CorporateServices

Tender Committee

AuditCommittee

Integrax Resources Pte. Ltd.

100%

Pelabuhan Lumut Sdn. Bhd.

100%

*Integrax Philipines,Inc.

100%

Lekir Bulk TerminalSdn. Bhd.

80%

Lumut MaritimeTerminal Sdn. Bhd.

50% less 1 share

LMT CapitalSdn. Bhd.

100%

P.T. IntegraJasa Energi

95%

* Dormant company, in the process of winding-up.

3 Dormant Malaysian Companies

100%

P.T. Integrax Indonesia

100%

BOARDOF DIRECTORS

RiskCommittee

Remuneration Committee

Governance Committee

ExecutiveDirector

Statutory AuditorsInternal Auditors

Lumut PortOperations

Finance BusinessDevelopment

CorporateServices

Tender Committee

AuditCommittee

GROuP ORGANISATIONAL STRuCTuRe

4

FACILITIeS AND SeRVICeS

Lumut Port is located on the west coast of Peninsular Malaysia in the State of Perak directly off the Straits of Malacca. Lumut Port comprises two (2) terminals, Lekir Bulk Terminal (LBT) and Lumut Maritime Terminal (LMT). Strategically located to serve nearer trades within South-East Asia, Myanmar, Bangladesh, India, Sri Lanka, Pakistan, and farther trades with the Far East region, Australia / Pacific region, Africa/Mid East region and EU region.

TeRmINAL LOCATION COORDINATeS

Terminal Location Coordinates are as follows:

Terminal Location Coodinates Latitude Longitude

LMT 04° 15.3’ N 100° 39.6’ ELBT 04° 08.7’ N 100° 37.3’ E

LumuT PORT

Pilot Station

Located at latitude 4° 10.5 minutes north and longitude 100° 35 minutes east (south of Pulau Pangkor). The Pilot Station is within 10.5 nautical miles of Lumut Maritime Terminal and within 3 nautical miles of Lekir Bulk Terminal.

5

LeKIR BuLK TeRmINAL (LBT)

LBT DeVeLOPmeNT HISTORY

Consequent to the in-principle indicative approval of the State Government of Perak of the Lekir Coastal Development Project (“Lekir Coastal Project”) in 1996, two companies were formed by three partners to promote, develop and implement the Lekir Coastal Project, which comprised two related developments:

Desa Kilat Sdn. Bhd. (DKSB)

The promotion and development of the Lekir Coastal Project comprising the reclamation of land from the sea in the form of islands and the sale of these islands. Total area available for reclamation was 20,000 acres.

Lekir Bulk Terminal Sdn. Bhd. (LBT)

The promotion and development of a very deep water bulk terminal, complementary in nature to LMT and the Lekir Coastal Project.

The founding promoters of DKSB and LBT were:

Perbadanan Kemajuan Negeri PerakHalim Rasip Holdings Sdn. Bhd.Malakoff Berhad

The current shareholders of DKSB and LBT are:

DKSBThe founding promoters

LBTIntegrax Berhad & Malakoff Berhad

DKSB commenced reclamation of the First Island (of 325 hectares) in July 1997 in waters of depth 0.5m to 2.0m ACD. The scope of works included reclamation of land, slope protection and the construction of a bunded enclosed body of water.

The First Island was completed on 31 August 1999, and was handed over to its purchasers, TNB Janamanjung Sdn. Bhd. for the purposes of construction and operation of a coal-fired 2,100 MW Power Station, and LBT, for the purposes of its very deep water bulk terminal, pursuant to Site Acquisition Agreements executed in January 1999.

LBT executed a Jetty Terminal Usage Agreement with TNB Janamanjung Sdn. Bhd. in August 1999 for the provision of coal unloading and delivery services to the Power Station, thus securing an anchor customer. LBT commenced the construction of Phase I of the dry bulk terminal in May 2000, comprising berths able to accommodate Capemax and Panamax vessels with water depths alongside of 20m ACD, a 2,000m trestle, 2 grab discharge cranes, mechanised handling equipment and controls and appropriate onshore support facilities.

In 30 June 2000, LBT achieved financial close with the issue of an RM445 million Serial Bond rated AA3 by Rating Agency Malaysia Bhd on a non-recourse project finance basis.

6

Nature of Terminal Common User Port designed to handle dry bulk and liquid bulk. Gazzetted Customs Port.

Port Operation Working Hours 3 Shifts, 24 Hours Per Day, 365 Days Per Year.

Administrative Working Hours Mondays to Fridays 08:30 am - 17:00 pm Saturdays 08:30 am - 12:00 noon Closed Sundays and Public Holidays

Navigable Channel Directly off the Straits of Malacca Minimum Depth – 20m at all times

Berths South Berths Length 530m Draft 20m ACD North Berths Length 250m Draft 18m ACD

Vessel / Size / Parameters Vessels / Maximum 180,000 DWT Barges / Minimum 7,000 DWT

Services To Vessels Tuggage required, Pilotage compulsory Port Agency available

Dry Bulk Facilities Unloading Equipment2 Grab ship unloaders with 1,500 mt/hour rated capacities feeding 2 import conveyors, with each conveyor having 3,800 MT / hour rated capacity (inclusive of provision for extra grab unloader in future), integrated with a transfer station system with alternative routing capability.

Direct Transhipment Capability - Under DevelopmentDirect transhipment at berth possible using existing unloaders for direct ship / barge to ship / barge transfer between north and south berths, tied in with open and covered storage area of total 200,000 sq. metres to be equipped with appropriate stock piling and reclaiming equipment for integration into existing transfer station system. Estimated storage capacity up to 1.5 million MT.

Ship Loading Capability - Under DevelopmentPlans for future export berth for vessels / barges with 15m ACD water alongside, with export conveyors integrated with existing transfer station system. Loading rate of 2,500 MT / hour contemplated.

Mobile EquipmentWheel loaders, dozers, mobile feed / stacker, etc. to suit requirements.

Liquid Bulk Facilities Pipeline wayleaves and tank areas available for direct vessel-to-plant / tank transfer by negotiation.

LeKIR BuLK TeRmINAL (LBT) (Continued)

7

LumuT mARITIme TeRmINAL (LmT)

LmT DeVeLOPmeNT HISTORY

Subsequent to execution of the Privatisation Agreement with the State Government of Perak in February 1993, construction of LMT commenced in November 1993 on a turnkey design-build basis.

The scope of works included the filling of some 70 acres, a 200m marginal wharf, a 58m marginal barge berth, open and covered storage facilities, appropriate infrastructure and an administrative building for a value for RM60 million.

It was completed in July 1995 and was officially opened on 24 July 1995 by the Prime Minister of Malaysia, Dato Seri Dr. Mahathir Mohamad in the presence of the Chief Minister of Perak, Tan Sri Ramli Ngah Talib, many dignitaries, over 12,000 citizens, 4 helicopters, 1 float plane, a 100 foot yacht and the 12,000 DWT MV KOTA MAWAR being the first vessel alongside.

Since 1995 the LMT Terminal has improved and extended its facilities with additional open and covered storage, handling equipment and, in 2001, an extension to the Main Berth of 280m, with depth alongside of 12m ACD, resulting in a total overall straight-line berth length of 500m.

8

LumuT mARITIme TeRmINAL (LmT) (Continued)

Nature of Terminal Common User Port designed and equipped to handle dry bulk, liquid bulk, containers, all conventional cargo and project cargoes. Gazzetted Customs Port.

Port Operation Working Hours 3 Shifts, 24 Hours Per Day, 365 Days Per Year.

Administrative Working Hours Mondays to Fridays, 08:30 am - 17:00 pm Saturdays, 08:30 am - 12:00 noon Closed Sundays and Public Holidays

Navigable Channel Within Dindings River off the Straits of Malacca Minimum depth – 9m Maximum depth – 12m at high tide

Berths South Berths Length 200m Draft 10m ACD North Berths Length 280m Draft 12m ACD Barge Berths Two barges longitudinally moored Draft 3.5m ACD

Vessel / Size / Parameters Vessels / maximum 35,000 DWT alongside > 35,000 DWT with lighterage Barges / maximum 8,000 DWT LOA / maximum 230m

Services to Vessels Tuggage required Pilotage compulsory Port Agency available

Container Facilities Storage Container Yard storage of 6,000 sq. metres Reefer Points (by nego.) Equipment High Stacker 1 Prime Movers 4 Trailers: 6 x 40 ft / 14 x 20 ft Mobile Crane 1

Dry Bulk Facilities Storage Covered Storage 8,000 sq. metres. Open Storage 100,000 sq. metres.

Leased areas for specialised cargo owner / operated facilities and conveyor way leaves by negotiation. Mobile Equipment Wheel Loaders / Excavators 11 Tipper Trucks 15 Hoppers 38 cbm 4 Mobile Conveyors 150 mt/hr 3 300 mt/hr 2 Grabs: - 5 cbm 4 - 8 cbm 4

Liquid Bulk Facilities Pipeline way leaves and tank areas available for direct vessel-to-plant / tank transfer by negotiation.

Conventional Cargo Facilities Storage Covered storage 6,200 sq. metres. Dedicated Storage Leased areas available for specialised cargo storage / re-packing owner operated facilities by negotiation. Equipment Mobile Cranes Capacities on request Forklifts To suit Gear To suit

9

Malaysian, aged 56, was appointed to the Board on 29 May 2001 and was re-designated as the Non-Independent Non-Executive Deputy Chairman of the Company on 14 February 2012.

He graduated from the University of Newcastle, Australia in 1978 with a Bachelor of Engineering Degree in Naval Architecture. He also holds a Master of Science Degree from the Massachusetts Institute of Technology (MIT) in United States of America where he specialised in Finance and Risk Analysis.

His commercial, financial and business creation strengths have been involved in various business sectors for more than 20 years including ship owning, ship management, steel fabrication, plant maintenance, manufacturing services, oil and gas industry services, marine, logistics and port terminals.

His core strengths include extensive engineering knowledge and ‘hands on’ practical operational experience in several engineering disciplines, acquired from over 20 years involvement in various sectors including ship design, ship building, ship management, steel fabrication, maintenance systems, control systems, quality assurance, manufacturing, integrated logistics systems, system reliability, subsea engineering, offshore oil and gas industry, bulk material systems, industrial plants and consultancy.

He also has a thorough understanding and capability in respect of detailed financial analysis and risk assessment of projects, contract law, construction contracts, marine charter parties and legal documentation in industry.

He is deemed a connected party to Golden Initiative Sdn Bhd, a major shareholder of Integrax. He does not hold directorships in any other public company. His interest in the shares of Integrax is disclosed in the Director’s Report shown on page 103 of this Annual Report.

Save as disclosed, he does not have any conflict of interest with the Company.

Non-Independent Non-Executive Deputy ChairmanAmIN HALIm RASIP

Malaysian, aged 67, was appointed as an Independent Non-Executive Director to the Board on 24 May 2011 and subsequently as the Chairman of the Company on 21 June 2011.

Dato’ Seri holds a Bachelor of Commerce Degree from the University of Melbourne.

Dato’ Seri was formerly the Chief Minister of the State of Perak and had held various portfolios in the Government namely as Parliamentary Secretary of Rural Development in 1983, Deputy Minister of National and Rural Development in 1986, Deputy Minister of Energy, Telecommunications and Post in 1990, Deputy Minister of Housing and Local Government in 1995, Deputy Minister of Home Affairs in 1997 and Minister in the Prime Minister’s Department in January 1999. Dato’ Seri has been an assemblymen since he was first elected in 1977 and a member of Parliament from 1978 to 1999. Apart from his extensive contribution to the public administration, Dato’ Seri has also played a very active role in the development and activities of youth within Malaysia and the Asian region.

He was the President of the Malaysian Youth Council and the Secretary General of the Working Committee for ASEAN Youth Council from 1982 to 1986. From 1988 to 1991, he was the President of the Asian Youth Council. Besides his career in the public sector, Dato’ Seri had also served in the private sector in various capacities for 15 years. Amongst the position he had held are Director of Applied Management Consultant Sdn Bhd, an IT consultancy company and Managing Director of Rosli, Gan & Co., which specialized in outsourcing of accounting and company secretarial services.

Doto’ Seri is currently the Chairman of Pengurusan Aset Air Berhad. He has no family relationship with any Director and/or major shareholders and he does not have any conflict of interest with the Company.

Dato’ Seri has no interest in the shares of the Company.

DATO’ SeRI DIRAJA mOHAmAD TAJOL ROSLI BIN mOHD GHAZALIIndependent Non-Executive Chairman

PROFILe OF DIReCTORS

10

PROFILe OF DIReCTORS (Continued)

Malaysian, aged 42, Executive Director, was appointed to the Board on 6 May 2011 as Independent Non-Executive Director and re-designated as Executive Director on 2 April 2012.

En. Azman Shah graduated with a Bachelor’s Degree in Economics from London School of Economics, UK in 1992 and completed an Executive Programme in Macroeconomic Policy and Management at Harvard University, USA in 1996.

He has more than 10 years of experience serving the Government, holding various senior positions at Bank Negara Malaysia and Pengurusan Danaharta Nasional Berhad.

Subsequently in 2002, En. Azman Shah became a corporate advisor and company director for companies involved in property development, REIT management, hotel management, media, radio broadcasting, information technology and agriculture.

Prior to taking the helm of the Company as Executive Director, En Azman was the Head of Marketing and Corporate Services at Bolton Berhad, a property development company, overseeing the marketing and corporate services including corporate planning and strategy, communications, branding, marketing and customer relations.

He has firm family roots in Ipoh, Perak and is active in social work, including alumni associations, Parent-Teachers’ Associations and residents association.

He has no family relationship with any Director and/or major shareholder and he does not have any conflict of interest with the Company.

He does not hold directorships in any other public company incorporated in Malaysia. His interests in the shares of Integrax is as disclosed in the Directors’ Report shown on page 103 of this Annual Report.

Executive DirectorAZmAN SHAH BIN mOHD YuSOF

LAKSAmANA TAN SRI DATO’ SeRI ILYAS BIN HJ. DINNon-Independent Non-Executive Director

Malaysian, aged 61, was appointed as Non-Independent Non-Executive Director to the Board on 25 July 2011 and is the Chairman of the Risk Committee.

YBhg Laksamana Tan Sri Dato’ Seri Ilyas received his early education at Sultan Abdul Hamid College, Alor Setar. He then continued his studies at the Royal Military College, Sungai Besi. He joined Angkatan Tentera Laut DiRaja Malaysia (“TLDM”) in 1970 and was sent for training at Britannia Royal Naval College, Darmouth. He completed his training in January 1972. His highest academic qualification is Post Graduate Diploma in Engineering Business Management.

YBhg Laksamana Tan Sri Dato’ Seri Ilyas is the 13th Chief of TLDM. He retired as a Four-Star Admiral, where his last position in TLDM was Chief of Navy, the highest ranking officer in TLDM.

During his service with TLDM since 1970, YBhg Laksamana Tan Sri Dato’ Seri Ilyas has had an extensive track record. He was the commanding officer of KD Sri Selangor, KD Ganas, KD Gempita and frigate KD Hang Tuah. He was also the commanding officer of Markas Pendidikan dan Latihan TLDM. YBhg Tan Sri Dato’ Seri Ilyas was appointed as Chief of Navy Region I in Kuantan before being promoted to Rear Admiral. In August 2003, he was appointed as Deputy Chief of Navy and then promoted to Chief of Navy in April 2005.

YBhg Laksamana Tan Sri Dato’ Seri Ilyas is currently the Chairman of Perbadanan Hal Ehwal Bekas Tentera (PERHEBAT). He represents Perbadanan Kemajuan Negeri Perak, a major shareholder of the Company. Save as disclosed he has no family relationship with any Director and/or other major shareholder nor does he have any conflict of interest with the Company.

YBhg Laksamana Tan Sri Dato’ Seri Ilyas does not sit on the board of any public listed companies and he has no interest in the shares of the Company.

11


Malaysian, aged 48, was appointed as Independent Non-Executive Director to the Board on 6 May 2011. She is the Chairman of the Governance Committee and a member of the Tender Committee.

Puan Shireen Muhiudeen holds a Master of Business Adminisration from Loyola Marymount University, California, and a Bachelor of Science (Marshall School of Business) from University of Southern California.

She is the founder, managing director, and principal fund manager of Corston-Smith Asset Management, which is today the only Malaysian asset manager admitted as a signatory to the United Nations Principles of Responsible Investing (UNPRI) and the only Malaysian asset management firm admitted as a member of the well-renowned Asian Corporate Governance Association (ACGA).

Puan Shireen set up Corston-Smith in 2004, after 12 years as chief executive officer of the Malaysian arm of global insurance giant AIG Investment Corporation. In all, she has more than 24 years of focused fund management expertise, including her current ASEAN portfolio.

Puan Shireen was named one of the 25 most influential women in the Asia-Pacific region for asset management, by regional publication AsianInvestor in 2011. She has long been a much sought-after speaker at national and international forums, including that of the International Financial Corporation (IFC), which is a member of the World Bank group and Pacific Pension Institute. She is currently also a member of IFC’s working group for the establishment of the Philippine Stock Exchange’s Maharlika Board, which is a separate trading board for companies with world-class corporate governance practices.

Puan Shireen’s involvement in finalising the rules for the Maharlika Board is just one of her many unstinting commitments to good corporate governance, transparency, accountability, and greater representation of women in boardrooms. Besides nurturing and nudging companies that Corston-Smith invests in towards best practices, she has also successfully drawn many international investors to Malaysia by launching the ASEAN Corporate Governance Fund in 2008 and the ASEAN Shariah Corporate Governance Fund in 2009.

She accepts speaking engagements whenever she can to reinforce her commitments, such as the Pacific Pension Institute 2011 Summer Roundtable and 2011 Asian Pension Fund Roundtable, Institute of Chartered Accountants in England & Wales Policy Summit 2011, Khazanah Megatrends Forum 2011, International Corporate Governance Network (ICGN)(2011) and Deloitte’s Global Council for the Retention and Advancement of Women (2011). She builds on these consistently, notably with her monthly column, Governance Matters, in Malaysia’s best-selling English daily - The Star. On top of that, she and her team at Corston-Smith have published a handbook on personal finance for young working adults titled ‘Learn To Make Sense Of Your Money - What They Don’t Tell You When You First Start Work’, it is available in English and Bahasa Malaysia.

This equally avid sportswoman is no stranger to international representation, having been Malaysia’s hope at the Junior Wimbledon tennis championships in 1981. In recent years, she has served on the Sports Advisory Council, the Board of Tourism Malaysia, and a member of the EU-Malaysia Chamber of Commerce & Industry’s Financial Services Committee.

She does not sit on the board of any public listed companies and has no family relationship with any Director and/or major shareholder nor does she have any conflict of interest with the Company.

She is deemed interested in the shares of the Company is by virtue of her being the Managing Director of Corston-Smith Asset Management Sdn Bhd as disclosed in the Director’s Shareholding Report shown on page 103 of this Annual Report.

Independent Non-Executive DirectorSHIReeN ANN ZAHARAH BINTI muHIuDeeN

Malaysian, aged 62, was appointed as Independent Non-Executive Director to the Board on 6 May 2011. He is the Chairman of the Remuneration Committee and a member of the Audit Committee and Governance Committee.

Mr. Loong is an advocate and solicitor and holds a Bachelor of Laws (LLB) - honours degree from University of London and a Master of Laws (LLM) degree from University of Malaya. He is also an associate member of the Chartered Institute of Bankers, London (now under the official brand name of Institute of Financial Services) and a member of Institut Bank-Bank Malaysia.

Prior to legal practice, Mr Loong has served a total of 25 years in the banking and finance industry initially with HSBC Bank Group and later with Sabah Development Bank Group.

Mr. Loong is also an Independent Non-Executive Director of Bertam Alliance Berhad.

He has no family relationship with any Director and/or major shareholder and he does not have any conflict of interest with the Company and he has no interest in the shares of the Company.

Independent Non-Executive DirectorLOONG FOO CHING

12


Malaysian, aged 61, was appointed as Senior Independent Non-Executive Director to the Board on 6 May 2011. He is the Chairman of the Audit Committee of the Board and a member of the Governance Committee, Risk Committee and Tender Committee.

Professionally, Mr. Chan is a Chartered Accountant, a Fellow Member of the Association of Chartered Certified Accountants (UK), the Institute of Chartered Secretaries and Administrators (UK), and the CPA Australia. He is also a Certified Financial Planner and Chartered Financial Consultant (USA).

Currently, he serves as an Independent Non-Executive Director in various capacities on the Audit, Risk Management, Nomination, and Remuneration Committees in several Public Company Boards namely Mycron Steel Berhad, Luxchem Corporation Berhad and Prestariang Berhad.

Mr. Chan’s professional and business experience spans over 35 years across areas of accounting, corporate, financial and business advisory services, as well in assisting clients to manage their corporate and personal financial resources. He is the President of Business Transitions Asia Sdn Bhd, a company which provides business advisory services to businesses in transition, serving the business-owners as an independent advisor in managing the value of their business.

He is also active in serving various professional entities and Non-Governmental Organizations [NGO]. He is the Founding Deputy President of the Malaysian Alliance of Corporate Directors (MACD), an Exco Member of Federation of Public Listed Companies (FPLC), Member of FMM (Federation of Malaysian Manufacturers) Governance & Ethics Committee and a Council Member of MIA (Malaysian Institute of Accountants).

He had served as the President of ACCA Malaysia (Association of Chartered Certified Accountants), President of MAICSA (Malaysian Institute of Chartered Secretaries & Administrators), Founding Board Member/Vice President of FPAM (Financial Planning Association of Malaysia) and Secretary General of Malaysian Institute of Corporate Governance (MICG).

He has no family relationship with any Director and/or major shareholder and he does not have any conflict of interest with the Company. Mr Chan has no interest in the shares of the Company.

Malaysian, aged 55, was appointed as Non-Independent Non-Executive Director to the Board on 25 July 2011. He is a member of the Company’s Risk Committee and Remuneration Committee.

Dato’ Abd Manaf bin Hashim holds a Higher National Diploma in Engineering from Thames Valley University (Slough Campus).

Dato’ Abd Manaf has been a member of the Suruhanjaya Perkhidmatan Awam Negeri Perak since 2009 and serves as Chairman in several private companies involved in the construction, telecommunications and solar hybrid sectors since 1993. Prior to that, Dato’ Abd Manaf held various positions in Shapadu Decloedt Dredging Sdn Bhd (1990-1992), Industrial Boilers and Allied Equipment (IBAE) (1984-1986), Hakasa Sdn Bhd (1983-1984) and Asie Sdn Bhd (1982-1983).

Dato’ Manaf also sits on the Board of Tenaga Nasional Berhad and several other private companies.

Dato’ Manaf represents Tenaga Nasional Berhad, a major shareholder of the Company. Save as disclosed Dato’ Manaf has no family relationship with any Director and/or other major shareholders and he does not have any conflict of interest with the Company.

Dato’ Manaf has no interest in the shares of the company.

Non-Independent Non-Executive DirectorDATO’ ABD mANAF BIN HASHIm

Independent Non-Executive DirectorCHAN WAN SIeW

13


Malaysian, aged 47, was appointed as Non-Independent Non-Executive Director to the Board on 8 April 2011. He is the Chairman of the Tender Committee.

He is a Chartered Accountant, registered with the Malaysian Institute of Accountants, and a fellow member of the Association of Chartered Certified Accountants, UK.

En. Rafique has an extensive service track record, where he started his career with Land and General Berhad and later he served with Bumiputra Merchant Bankers Bhd, Landmarks Bhd and Taiping Consolidated Berhad. Prior to joining Malakoff Corporation Berhad, an Independent Power Producer (IPP) as Chief Financial Officer (CFO) in 2002, he was with Amanah Capital Partners Berhad. He later served as Chief Executive Officer of Radicare (M) Berhad. He served as the Chief Financial Officer / Vice President (Group Finance) of Tenaga Nasional Berhad, a major shareholder of the Company prior to his appointment as the Group Chief Financial Officer of Maybank Berhad on 1 June 2012.

En Rafique does not sit on the board of any public listed companies and represents Tenaga Nasional Berhad, a major shareholder of the Company. Save as disclosed En Rafique has no family relationship with any Director and/or other major shareholders and he does not have any conflict of interest with the Company.

En Rafique has no interest in the shares of the Company.

mOHAmeD RAFIQue meRICAN BIN mOHD. WAHIDuDDIN meRICAN Non-Independent Non-Executive Director

Malaysian, aged 64, was appointed as Independent Non-Executive Director to the Board on 6 May 2011. He is a member of the Company’s Audit Committee, Risk Committee and Remuneration Committee.

Ir. Abdul Manap holds a Bachelor of Science (Hons) from the University of Glasgow majoring in Ocean Engineering. He is also a Professional Engineer of Malaysia, a Fellow of Institute of Marine Engineering, Science and Technology (UK) and a member of the Royal Institution of Naval Architects (UK) and Chartered Engineer (UK).

He has held professional positions as chairman of the Joint Branch for Royal Institution of Naval Architects and The Institute of Marine Engineering Science and Technology (UK).

He has more than 25 years’ experience in shipbuilding, ship repair, oil and gas production platform fabrication, crane fabrication and pressure vessel fabrication.

Ir. Abdul Manap has also been involved in tug operations. In 1993-1995 he was responsible for the privatization of Naval Dockyard Sdn Bhd. As Vice President Special Projects at Penang Shipbuilding & Construction Sdn Bhd (“PSC”), he was responsible for the development of new business, joint ventures, acquisitions of companies related to the shipbuilding and marine engineering sector of the group.

He also sat on the boards of companies such as Wave Master International Pty Ltd, Australia, Trencless Technology Sdn Bhd, VE Metal Building System Sdn Bhd, TC Gallaghan (M) Sdn Bhd, Naval Dockyard Sdn Bhd, Malaysia Maritime Academy and PSC Defense Technologies Sdn Bhd.

In 1997 he left the PSC group of companies to pursue his own consultancy business. He has 5 years’ experience in consultancy work providing services related to the shipping, ports, leisure, fisheries and oil and gas sectors.

In 2003-2004 he took up a position of Vice President – Fleet Management Division at KIC Oil & Gas Ltd a company which operates a VLCC as a Floating Fuel Oil Processing Terminal and a 30,000 dwt product tanker which trades internationally. In 2006 he joined MRR Consult as Senior Consultant and Chief Operating Officer.

He does not sit on the board of any public listed companies and has no family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company.

Ir. Abdul Manap has no interest in the shares of the Company.

Independent Non-Executive DirectorIR. ABDuL mANAP BIN ALI HASAN

** None of the Directors have been convicted of any offences within the past ten (10) years other than traffic offences, if any.

14

CHAIRmAN’S STATemeNT

15

CHAIRmAN’S STATemeNT

DeAR SHAReHOLDeRS,

For and on behalf of the Board of Directors, I am pleased to present to you our Annual Report for the financial year ended 31 December 2011.

FINANCIAL PeRFORmANCe

Integrax continues to be a strong, profitable company with a consistent revenue stream and a strong balance sheet. Integrax’s revenue showed a marginal decrease to RM87.9 million due to a decline in throughput at Lekir Bulk Terminal. Profit from operations increased by 22.5% to RM44.1 million due to lower operating expenses and the recognition of profits on disposal of our investments in the Philippines and Indonesia. Profit for the year declined to RM49.5 million compared with the RM55.8 million recorded the previous year. This was due to the inclusion of the profit from discontinued operations of RM6.0 million in the previous year’s profit figure.

Our shareholders’ funds remain strong at RM559.7 million. Our gearing ratio remains low at 0.1 times, and we have a comfortable cash position of RM147.0 million. We will be making the last payment of RM40 million of the 12 ½ years zero coupon Serial Bonds in July 2012 and we will be relatively debt-free thereafter. The Net Tangible Assets of the Company is RM1.86 per share.

OPeRATIONAL PeRFORmANCe

In 2011, Lekir Bulk Terminal (“LBT”), our deepwater terminal located in the Malacca Straits, recorded cargo throughput of 6.1 million MT in 2011. LBT handles coal for the Tenaga Nasional Berhad coal-fired power station on Lekir Island. Only a few ports in the region have the capability and natural depth of LBT. LBT recorded profit after tax of RM28.2 million on the back of RM87.9 million revenue in 2011.

16

CHAIRmAN’S STATemeNT (Continued)

Lumut Maritime Terminal (“LMT”) achieved a cargo throughput of 3.18 million MT. Throughput at LMT consisted of dry bulk (coal, limestone, clinker, pet coke and animal feed among others) which made up 63% of throughput, and liquid bulk (palm oil, biodiesel and petroleum products) which made up 31% of throughput. LMT achieved a profit after tax of RM35.3 million on the back of RM97.2 million revenue in 2011.

By Cargo Type 2011 2010

Conventional / Break Bulk 188,068 163,224

Liquid Bulk 983,142 1,005,996

LMT Dry Bulk 2,004,403 2,127,660

LMT Sub-Total 3,175,613 3,296,880

LBT Dry Bulk 6,073,865 6,316,797

Total 9,249,478 9,613,677

By Industry Sector 2011 2010

Chemicals 598,332 553,146

Mining 714,654 606,681

Agriculture 760,190 877,731

Construction Materials 1,046,916 1,224,976

Others 55,521 34,346

LMT Sub-Total 3,175,613 3,296,880

Energy (LBT) 6,073,865 6,316,797

Total 9,249,478 9,613,677

Percentage of Exports and Imports 2011 2010

Imports 80.6% 78.7%

Exports 19.4% 21.3%

LBT and LMT Cargo Throughput

10.00

9.00

8.00

7.00

6.00

5.00

4.00

3.00

2.00

1.00

Year 2008 Year 2009 Year 2010 Year 2011

Million MT

4.53

2.45

5.50

3.03

5.31

3.27

6.32

3.30

6.07

3.18

Year 2007

Year 2007 2008 2009 2010 2011

LBT Throughput 4.53 5.50 5.31 6.32 6.07

LMT Throughput 2.45 3.03 3.27 3.30 3.18

6.98

8.53 8.58

9.629.25

LMT recorded RM28.1 million revenue from the sale of 65.8 acres of land located in Lumut Port Industrial Park (“LPIP”), which is a 1,000 acre industrial estate located next to the LMT facitlities. LPIP now has a thriving business community comprising of companies in the palm oil, chemicals, oil and gas, steel fabrication, shipbuilding and animal feed industries.

17


A YeAR OF TRANSITION

My first impression of the company when I was appointed to the Board in May 2011 was that Integrax is a financially-strong company with an impressive track record and tremendous potential, but it was being overshadowed by certain legacy issues.

Integrax is a good example of public-private smart partnership with the full support and participation of the Perak State Government. The Company has a proud history, having contributed to the economic growth of Manjung District, one of the fastest growing districts in Perak, through the operations of LMT since 1995, LBT since 2002 and the development of LPIP. The economic multiplier effect over the last 15 years has been estimated at over RM25 billion, with more than 16,000 jobs created in the greater Lumut area.

2011 saw the entry of Tenaga Nasional Berhad as the single largest shareholder of Integrax and the reconstitution of the Board of Directors following the resignation of five directors and the appointment of nine new directors. The new directors comprised of outstanding individuals with a wealth of experience and diverse background, and they had set about their work in an expedient and earnest manner.

18


My fellow Board members and the team at Integrax spent the last 12 months resolving various legacy issues, strengthening the governance structure of the company, healing strained business relationships and engaging with all our stakeholders. The signing of the new Shareholders’ Agreement on 5 October 2011 with Taipan Merit Sdn Bhd (“TMSB”) a wholly-owned subsidiary of Perak Corporation Berhad (“PCB”), a Perak State Government-Linked Company, to govern the business and management of Lumut Maritime Terminal Sdn. Bhd. (“LMTSB”), our 50% less 1 share associate company, was an important step towards resolving the uncertainty which had adversely affected the strategic partnership between the two parties.

We have put in place a solid governance structure, with a Board Charter, and we have established Committees for Governance, Audit, Remuneration, Tender, Risk Management and Investment, with specific Terms of Reference. We have also greatly enhanced the Communications Policy and the Risk Management Framework of the Company.

Recently, we held our first ever Board and Management Offsite Meeting to chart our growth and development plans moving forward, using the tools of “Blue Ocean Strategy”. We have charted a roadmap not only for the future growth of Integrax, but will also contribute to the development of Lumut as the “New Economic Capital of Perak”.

INTeGRAx – THe VALue CHAIN INTeGRATION PARTNeR

The Blue Ocean Strategy that we have charted for Integrax consists of plans to expand our port facilities and integrate our operations along the value chains of the many raw materials which flow through our ports. We plan to reposition and strengthen Lumut Port’s position as a “Value Chain Integration Partner” and provide value-added services to our customers. Our ability to move along the value chain of various types of raw materials and provide integration solutions is made possible by our approach of “Smart Partnership”.

FuTuRe VISION eCO INDuSTRIAL ZONe - mANJuNG LeKIR

19


LBT is a terminal with a design configuration that can accommodate several users. Plans are in place to equip LBT with new material handling equipment in a configuration that can cater for the needs of multiple users including all the current and future needs of our customers. The usage of stockyard space in LBT which is currently underutilized will generate additional revenue for LBT.

We also recognise the needs of our limestone exporters who require export berths which accommodate bigger ships. Plans to optimise and expand the capacity of Lumut Port are being drawn up and we are in talks with strategic partners and current and potential customers.

Our idea of creating a Lumut “Eco-Industrial Zone” has received good response from the industrial players in the Lumut area. The reality is that Lumut is strategically located on an artery of global trade and Lumut Port is located within a cluster of industrial plants and very soon, Vale and all the other iron and steel companies that are envisaged to set up in the greater Lumut area. These companies have common infrastructure needs which Integrax can help to fulfil. Vast opportunities await us in the creation of new products and services including biomass pellets, syngas, and green fuels which can lead to CO2 emission reduction in a bigger scale.

Our team is hard at work making these ambitious plans a reality. We hope to give you positive news in the not too distant future…..

LumuT - THe NeW eCONOmIC CAPITAL OF PeRAK

RAWmATeRIAL

CONVeRSIONPROCeSS

TRADeRS,DISTRIBuTION

PRODuCTmARKeTSLOGISTICS

20


ACKNOWLeDGemeNT

I would like to put on record our immense gratitude to the directors, management and staff who have worked tirelessly and diligently throughout the year, in spite of the challenges and uncertainties that they faced in 2011. I sincerely hope that you will continue to perform beyond expectations and make Integrax’s vision a reality.

I would like to welcome the new directors who joined the Company in May 2011. I would like to thank my fellow Board members who went beyond the call of duty in providing guidance and insight to the management team in helping to resolve the legacy issues, and in creating a strong governance structure which will prove invaluable as the Company continues to grow from strength to strength.

The re-designation of Encik Amin Halim Rasip as Deputy Chairman is testimony to his vision and foresight as one of the founders of this Company. With the re-designation and appointment of Encik Azman Shah Mohd Yusof as the Executive Director effective 2nd April 2012, the management team of Integrax has been further strengthened, and ready and able to steer the Company forward to greater success.

Overall, the achievements of the Company would not have been possible without the strong relationship which we continue to enjoy with the Perak State Government, especially Perbadanan Kemajuan Negeri Perak (“PKNP”) and its subsidiaries, as well as the assistance from Majlis Perbandaran Manjung, Jabatan Kastam, Jabatan Laut, Unit Perancang Ekonomi and Pejabat Tanah dan Galian.

To the shareholders of Integrax, I thank you for your unwavering support and I believe that the growth path which we have charted will reap huge rewards for you in the not too distant future. We are at the tip of a Blue Ocean, ready to set sail into a vast sea of “Value Innovation”, and we hope that you will continue to sail with us through thick and thin…..

Mohamad Tajol Rosli Bin Mohd Ghazali Chairman 28 May 2012

21

“ We are at the tip of a Blue Ocean, ready to set sail into a vast sea of Value Innovation...”

22

STATemeNT OF CORPORATe SOCIAL ReSPONSIBILITY

As a responsible corporate citizen, we recognise that we have a duty to make life better for all our stakeholders in ways that truly matter. We are also cognisant of the fact that in order to achieve sustainable growth over the long term, we need to build trust, develop mutual respect and make a real difference to our stakeholders by addressing issues that they care most about. The Group has always been mindful of its corporate and social obligations, in particular towards the State of Perak and has contributed significantly towards the growth and development of the District of Manjung.

During the financial year, the Group’s Corporate Social Responsibility initiatives were centred on four key areas – Community Service, Work Place, Communication and Engagement and Education.

Safety Signages

ISPS Code Compliant

1. COmmuNITY SeRVICe

The Group has always endeavoured to contribute to the community through corporate sponsorships, donations to charitable causes, participation in community events such as sports and the preservation of the environment. During the year, the Group through Lumut Port contributed RM80,000 in the Manjung District for community programmes such as “Hari Maritim Sedunia 2011”, “Majlis Korban Perdana Aidiladha Tahun 2011” and “Larian Ozon dan Karnival Alam Sekitar 2011”, and sports events such as “Karnival Futsal Amal 1Malaysia”, “Kejohanan Sepaktakraw Tertutup Perak” and “Kejohanan Badminton PKNP 2011”. At the corporate level, the Group was the Platinum Sponsor for the Federation of Public-Listed Companies 1st Inter-Media Bowling Cup 2011.

2. WORKPLACe

Lumut Port is committed to complying with workplace health and safety laws and regulations pertaining to Occupational Safety and Health, particularly in meeting with the Fire Department and The Department of Environment’s requirements and standards. Every employee, be it of Lumut Port or of its contractors, is compelled to attend a Safety Induction Course. On-the-job training as well as refresher courses are held regularly to inculcate safety awareness among all port workers in carrying out their duties.

Lumut Port is also a member of the District Security Committee which deals with issues such as fires, marine disasters, and oil spills. All of our security officers and many of our operation and support services personnel are trained in basic First Aid procedures. All cargo handling equipment are inspected regularly in compliance with the guidelines of the Department of Health and Safety.

23

STATemeNT OF CORPORATe SOCIAL ReSPONSIBILITY (Continued)

Safety Campaign

Safety Campaigns are organised on a monthly basis to create awareness amongst our employees, contractors and Port users, in line with the requirements of the Jabatan Keselamatan dan Kesihatan Pekerjaan (“JKKP”).

Operations and Port Management procedures are also subject to constant evaluation and mitigation based on our internal Risk Management Framework to minimise any negative impact to safety, security and the workplace environment. Lumut Port is also International Ship Port Security (“ISPS”) Code – compliant.

3. COmmuNICATION AND eNGAGemeNT

Lumut Port endeavours to nurture and cultivate a culture of compliance

with all the requirements of the laws, rules, regulations and corporate

governance best practices towards realising and enhancing shareholders’

interests at all times.

We also regularly engage and communicate with all the regulatory

authorities, port users and service providers to ensure and maintain a

harmonious working relationship.

4. eDuCATION

In terms of education, Lumut Port conducts an internship programme

by taking in students from various universities and colleges to undergo

practical training in the various divisions including port operations, finance,

administration and engineering. These students are paid a monthly

allowance of RM400. During the year, Lumut Port had granted internship

to a student specialising in Electronic Engineering for six months.

Fire Fighting Training

24

CORPORATe GOVeRNANCe STATemeNTA. INTRODuCTION

The Board of Directors is committed to ensuring that the highest standard of corporate governance is practiced throughout the Group. This is fundamental in discharging its fiduciary responsibilities to enhance the shareholders’ value and the Group’s financial performance. To this end the Board of Directors fully subscribes to and supports the recommendations of the Malaysian Code on Corporate Governance (“Code”).

The Directors are pleased to set out below how the Company has applied the principles set out in the Code. Except for matters specifically identified, the Board of Directors has complied with the best practices set out in the Code.

B. BOARD OF DIReCTORS

1. COmPOSITION AND BOARD BALANCe

An effective Board leads and controls the Group. As at 31 December 2011, the Board has a total of ten (10) members, comprising four (4) Non-Independent Non-Executive Directors and six (6) Independent Non-Executive Directors.

In the financial year under review, the Directors appointed to the Board of the Company, the date of appointment and status of the appointment are as follows –

Name of Director Position Date of Appointment

1 En. Mohamed Rafique Merican bin Mohd Wahiduddin Merican

Non-Independent Non-Executive Director 8 April 2011

2 Mdm. Shireen Ann Zaharah bt Muhiudeen Independent Non-Executive Director 6 May 2011

3 Mr. Chan Wan Siew Independent Non-Executive Director 6 May 2011

4 Mr. Loong Foo Ching Independent Non-Executive Director 6 May 2011

5 En Azman Shah bin Mohd Yusof * Independent Non-Executive Director 6 May 2011

6 Ir. Abdul Manap bin Ali Hasan Independent Non-Executive Director 6 May 2011

7 Dato’ Seri DiRaja Mohamad Tajol Rosli bin Mohd Ghazali

Independent Non-Executive Director 24 May 2011

8 Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din

Non-Independent Non-Executive Director 25 July 2011

9 Dato’ Abd Manaf bin Hashim Non-Independent Non-Executive Director 27 April 2011 and 25 July 2011#

* En Azman Shah bin Mohd Yusof was re-designated as the Executive Director on 2 April 2012.

# Dato’ Abd Manaf was first appointed on 27 April 2011 as a Non-Independent Non-Executive Director until 6 May 2011. He was re-appointed to the same position on 25 July 2011.

In the financial year under review, Datuk Syed Tamim Ansari bin Syed Mohamed, who was the Independent Non-Executive Chairman of the Company, resigned as Director and Chairman of the Company on 3 January 2011.

En Harun Halim Rasip who was the Co-Chief Executive Officer (“Co-CEO”) of the Company was re-designated as the sole Chief Executive Officer of the Company on 8 April 2011, but resigned from that position and as Director of the Company on 20 April 2011.

Independent Non-Executive Director, Dato’ Ir Onn bin Hamzah, resigned as Director of the Company on 4 May 2011 and on 5 May 2011 Mr. Wong Joon Hian and Mr. Chan Kok Keong resigned as Directors of the Company.

Dato’ Seri DiRaja Mohamad Tajol Rosli Mohd Ghazali who was appointed as the Independent Non-Executive Director of the Company on 24 May 2011 was appointed the Independent Non-Executive Chairman of the Company with effect from 21 June 2011.

25

CORPORATe GOVeRNANCe STATemeNT (Continued)

En Amin bin Halim Rasip, the Co-CEO of the Company was re-designated as a Non-Independent Non-Executive Director of the Company on 8 April 2011. He was re-designated as the Executive Director of the Company on 6 May 2011. On 6 October 2011, he was again re-designated as a Non-Independent Non-Executive Director of the Company. He was appointed as the Non-Independent Non-Executive Deputy Chairman of the Company on 14 February 2012.

Mr. Chan Wan Siew was appointed the Senior Independent Non-Executive Director of the Company on 29 June 2011.

En Azman Shah bin Mohd Yusof, who was appointed as an Independent Non-Executive Director of the Company on 6 May 2011, was re-designated as the Executive Director of the Company on 2 April 2012.

As at the time of this report the following Directors are Independent Non-Executive Directors of the Company –

1. Dato’ Seri DiRaja Mohamad Tajol Rosli Mohd Ghazali;2. Puan Shireen Ann Zaharah bt Muhiudeen;3. Mr. Chan Wan Siew;4. Mr. Loong Foo Ching; and5. Ir. Abdul Manap bin Ali Hasan.

With the above-mentioned Independent Directors, the Board complies with paragraph 15.02 of the Listing Requirements which requires that at least two (2) directors or one-third (1/3) of the Board, whichever is the higher, are independent Directors. No individual or group of individuals dominates the Board’s decision making. The Board always has non-executive directors constituting a majority.

A brief profile of each Director is set out on pages 9 to 13 of this report.

2. meeTINGS

During the financial year 2011, the Board held fourteen (14) meetings. The attendance records of Directors at Board Meetings held during the financial year ended 31 December 2011 were as follows –

DirectorNo. of Meetings

Attended / Held during office

Dato’ Seri DiRaja Mohamad Tajol Rosli Mohd Ghazali (appointed on 24 May 2011) 6/6

En Amin bin Halim Rasip 14/14

En Mohamed Rafique Merican bin Mohd Wahiduddin Merican (appointed on 8 April 2011)

10/11

Puan Shireen Ann Zaharah bt Muhiudeen (Appointed on 6 May 2011) 7/9

Mr. Chan Wan Siew (appointed on 6 May 2011) 8/9

Mr. Loong Foo Ching (appointed on 6 May 2011) 9/9

En. Azman Shah bin Mohd Yusof (appointed on 6 May 2011) 8/9

Ir. Abdul Manap bin Ali Hasan (appointed on 6 May 2011) 9/9

Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din (appointed on 25 July 2011) 3/3

Dato’ Abd Manaf bin Hashim # 3/3

Datuk Syed Tamim Ansari bin Syed Mohamed resigned on 3 January 2011

Harun bin Halim Rasip (resigned on 20 April 2011) 3/3

Dato’ Ir Onn bin Hamzah (resigned on 4 May 2011) 5/5

Wong Joon Hian (resigned on 5 May 2011) 5/5

Chan Kok Keong (resigned on 5 May 2011) 5/5

# Dato’ Abd Manaf bin Hashim was first appointed on 27 April 2011 as a Non-Independent Non-Executive Director until 6 May 2011. No board meetings were held from 27 April - 6 May 2011. He was re-appointed to the same position on 25 July 2011.

B. BOARD OF DIReCTORS (Continued)

26

3. SuPPLY OF INFORmATION TO THe BOARD memBeRS

All Directors are provided with an Agenda and Board papers on a timely basis prior to the meeting to enable them to deliberate on an informed basis on the issues to be raised. The Board papers include, among others, the following details:-

• ConfirmedminutesofmeetingsofallCommitteesoftheBoard• OperationalandfinancialreportingoftheGroup• BusinessdevelopmentoftheGroup• AuditCommitteereporting• Regulatoryandotheradministrativematters

All proceedings of Board Meetings are minuted and signed by the Chairman of the Meeting in accordance with the provision of Section 156 of the Companies Act, 1965. The Directors have unrestricted access to all information within the Group whether as a full board or in their individual capacity, in furtherance of their duties.

The Directors also have access to the advice and services of the Company Secretary and independent professional advice should the need arises. The newly appointed Directors are encouraged to visit the Group’s operating sites to familiarize themselves with the operations of the Group.

4. DIReCTORS’ TRAINING

Directors are encouraged to attend continuous education programmes to keep them abreast of changes in legislations and regulations that affect the business operations. All the Directors on the Board of the Company as at 31 December 2011, had attended and completed the Mandatory Accreditation Programme (MAP).

Following the repeal of Practice Note No. 15/2003 on Continuing Education Programme (“CEP”) prescribed by Bursa Malaysia Securities Berhad (“BMSB”), the Board of Directors of each listed issuer has a duty to evaluate and determine the training needs of its Directors on a continuous basis. The training must be one that aids the Director in the discharge of his/her duties as a Director.

For the year under review as at 31 December 2011, the Directors attended the following conferences, dialogues and seminars:

Directors Conference attended

Dato’ Seri DiRaja mohamad Tajol Rosli mohd Ghazali

Seminar on Director’s Duties and Corporate Governance by MICG

en Amin bin Halim Rasip • BiomassPartneringConference• Oil&GasIndustriesConference

en Azman Shah bin mohd Yusof • LatestDevelopmentsinLandandPropertyLawsand Land Dealings in Malaysia

• GreaterKL:SmartCityoftheFutureConference• TheBrutalTruthaboutAsianBranding• CurrentLegalandPracticalIssuesAffectingHousing

Developers• DynamicWorkplaceCoachingCulture• GoverningBusinessandRelationships• UnderstandingGenerationX,YandZ• PersonalBrandingWorkshop• CEOForum2011–TransformingMalaysia:Challenges

to Becoming a High Income Nation• MalaysianPropertyOutlook• MandatoryAccreditationProgramme• AsiaPacific:theSkyistheLimit-SettingtheTempoforGrowth

en. mohamed Rafique merican bin mohd Wahiduddin merican

• CEOWorkshop:LeadingLeadersProgramme• MandatoryAccreditationProgramme



27

Puan Shireen Ann Zaharah bt muhiudeen •PanelistoftheInternationalCorporateGovernanceNetwork(ICGN) 2011 Mid-Year Conference

•Speakerofthe2011InternationalWomen’sDaywebcast•SpeakeroftheIFCWomen&BoardDiversity•PanelistoftheIFCGlobalCorporateGovernanceForum•Speakerof2011CorporateDirectorsConference–

The Resurgence of Corporate Malaysia•SpeakeroftheMalaysianInstituteofAccountants&Audit

Oversight Board, Securities Commission’s conference on Driving Audit Quality : Enhancing the Role of Stakeholders

•PresentedthekeynotespeechatAsianInvestor’sThe25MostInfluential Women in Asset Management

•ModeratoratMalaysianInternationalChamberofCommerceand Industry’s The CEO Debate 2011

•Facilitatorof2011PacificPensionInstitute’sSummerRoundtable on Asia’s Southern Rim : Perspectives on India, Southeast Asia and Oceania

•LeadDiscussantoftheInstituteofCharteredAccountantsinEngland & Wales (ICAEW) Policy Summit – Crisis without a Legacy

•PanelistofKhazanahNasionalBerhad’sKhazanahMegatrendsForum (KFM) 2011 – Uncertainty as Normality : Navigating through Complex Interconnection

•FacilitatorforPacificPensionInstitute’s2011AsianPensionFund Roundtable – Investing When Change is Fundamental

•ModeratorforSecuritiesCommissionMalaysia’sconferenceonSustainability : Taking Corporate Governance A Step Further

•MandatoryAccreditationProgramme

mr. Chan Wan Siew •SustainabilityProgramforCorporateMalaysiabyBursaMalaysia

•FPLC-TI(M)-MACCTalkonCorruptioninMalaysia•CorporateIntegritybyBursaMalaysia•StrategicIR&EffectiveCorporateCommunicationbyMICG•AIFInternationalSymposium2011:TalentDevelopment–

The New Paradigm•CorporateDirectorsConference2011•Competition&DataProtectionAct•GlobalCorporateGovernanceForum(CGCF)•CEOForum2011:TransformingMalaysia•MAICSAAnnualConference2011•SingaporeInstituteofDirectorsAnnualConference•NACDBoardLeadershipConference2011•MalaysianInstituteofAccountants-ASEANFederationof

Accountants Conference 2011•SC-BursaCorporateGovernanceWeek•FacilitatorforProfessionalisminDirectorshipProgramme

mr. Loong Foo Ching •UnderstandingRelatedParty&ConflictofInterestTransactionsReporting Compliance

•7th Tricor Tax & Corporate Seminar

Ir. Abdul manap bin Ali Hasan •MandatoryAccreditationProgramme

Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din •MandatoryAccreditationProgramme

Dato’ Abd manaf bin Hashim •BoardRolesandResponsibilities•CorporateCulturebyICLIFLeadership&GovernanceCulture.



28

5. Re-eLeCTION OF DIReCTORS

In accordance with Article 87 of the Company’s Articles of Association, all newly appointed Directors are subject to re-election by shareholders at the first Annual General Meeting (“AGM”) after their appointments. At every AGM one third (1/3) but not exceeding one third (1/3) of the existing Directors retire from office in accordance with Article 80 of the Company’s Article of Association and all Directors retire from office at least once every three (3) years but shall be eligible for re-elections. Directors who attain an age of over seventy (70) years retire at every AGM pursuant to Section 129(6) of the Companies Act, 1965.

The following Directors who were appointed in 2011 were re-elected to the Board, under Article 87 of the Company’s Articles of Association, at the Company’s 25th Annual General Meeting held on 29 June 2011 –

1. Dato’ Seri DiRaja Mohamad Tajol Rosli Mohd Ghazali2. En. Mohamed Rafique Merican bin Mohd Wahiduddin Merican3. Puan Shireen Ann Zaharah bt Muhiudeen4. Mr. Chan Wan Siew5. Mr. Loong Foo Ching6. En Azman Shah bin Mohd Yusof7. Ir. Abdul Manap bin Ali Hasan

The following Directors will be standing for re-election at the forthcoming Twenty-Sixth Annual General Meeting of the Company –

Directors retiring in accordance with Article 80 of the Company’s Articles of Association

1. En. Amin bin Halim Rasip; and2. En. Mohamed Rafique Merican bin Mohd Wahiduddin Merican.

Directors retiring in accordance with Article 87 of the Company’s Articles of Association

1. Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din; and2. Dato’ Abd Manaf bin Hashim.

The names of the Directors who retire and are eligible for re-election at the forthcoming Twenty-Sixth Annual General Meeting of the Company are shown on page 104 of this report. The relevant information of the retiring Directors can be found in the Profiles of Directors.

6. BOARD COmmITTeeS

6.1 Audit Committee

The composition and terms of reference of the Audit Committee together with its report are presented on pages 36 to 40 of this report.

6.2 Governance Committee

The Board formed the Governance Committee on 24 May 2011 to assist the Board to review the Company’s corporate governance system, process and guidelines. The Governance Committee is also tasked with reviewing the Charters of other Board Sub-Committees and to recommend to the Board any necessary changes to the Sub-Committee’s assignments.

The Board with the input and recommendation from the Governance Committee made the following changes to the Board Sub-Committees –

6.2.1 The dual role of the Nomination and Remuneration Committee was discontinued. The nomination functions are now an integral role of the Governance Committee.

6.2.2 The Remuneration Committee was formed to ensure remuneration packages for Senior Executives and Directors are appropriately structured in alignment with the Shareholders’ interests.

6.2.3 The Investment Committee was also discontinued and its functions are undertaken by the newly reconstituted Risk Committee.



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6.2.4 The Tender Committee was formed to establish the framework for tender policies and procedures.

As at the date of this report, the Governance Committee oversaw and mediated towards the resolution and conclusion of all the legal issues the Company was embroiled in, the appointment of the Chairman of the Company, appointment of two (2) additional Directors representing two (2) of the Company’s substantial shareholders and on 14 February 2012 finalised the appointment of the Executive Director for the Company which took effect on 2 April 2012.

The Governance Committee was also tasked with evaluation of the performance of the Board to ensure that the board governance system of the Company performs well.

The Governance Committee held a total of seven (7) meetings in the financial year under review. The members of the Governance Committee comprises the following Independent Non-Executive Directors and their respective meeting attendance record are as follows –



1. Puan Shireen Ann Zaharah bt Muhiudeen as Chairman 7/7

2. Mr. Chan Wan Siew 7/7

3. Mr. Loong Foo Ching 7/7

4. En Azman Shah bin Mohd Yusof - vacated the position on 14 February 2012

7/7

6.3 Remuneration Committee

The Remuneration Committee was formed on 7 June 2011. The primary objective of the Remuneration Committee (“RC”) is to recommend the necessary remuneration packages to attract, retain and motivate Senior Executives and Executive Directors with the required expertise to manage the Company’s business in alignment with the shareholders’ interests. The RC also assists the Board in assessing the Non-Executive Directors’ remuneration packages to reflect the responsibility and commitment undertaken by the Board members.

The Remuneration Committee held one (1) meeting in the financial year under review. The members of the Remuneration Committee comprises the following Directors and their respective meeting attendance record are as follows -



1. Mr. Loong Foo Ching as Chairman 1/1

2. Ir. Abdul Manap bin Ali Hasan 1/1

3. Mr. Chan Wan Siew – vacated the position on 2 April 2012 1/1

4. Dato’ Abd Manaf bin Hashim Appointed on 2 April 2012

6.4 Risk Committee

The Board is responsible for ensuring that business risks are properly managed and will require evidence that risks are being identified, assessed, measured and duly mitigated. For this purpose, the Risk Management Committee was established on 7 June 2011 with its primary objective to review the existing controls, evaluating the risk management strategies, policies and measures, and assessing the risk tolerance of the Group. On 10 January 2012, the roles of the reconstituted Risk Committee were expanded to include rendering assistance to the Board in the evaluation of project papers, business plans and budgets for the Group, assuming the role of the previous Investment Committee which was discontinued.



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The Risk Management Committee held one (1) meeting in the financial year under review. The members of the re-constituted Risk Committee comprises the following Directors and their respective meeting attendance record are as follows –

Director No. of Meetings Attended / Held during office

1. Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din as Chairman Appointed on 2 April 2012

2. Dato’ Abd Manaf bin Hashim Appointed on 2 April 2012

3. Mr. Chan Wan Siew 1/1

4. Ir. Abdul Manap bin Ali Hasan 1/1

5. Puan Shireen Ann Zaharah bt Muhiudeen (appointed on 7 June 2011 and vacated the position on 2 April 2012)

1/1

6. En Azman Shah bin Mohd Yusof - (appointed on 7 June 2011 as Chairman and vacated the position as Chairman and member on 14 February 2012)

1/1

6.5 Tender Committee

The Tender Committee was formed by the Board on 10 January 2012 to assist the Board in establishing a framework and procedure for tender and procurement for the Group’s projects.

Members of the Tender Committee comprises of the following Directors –

1. En Mohamed Rafique Merican bin Mohd Wahiduddin as Chairman;2. Puan Shireen Ann Zaharah bt Muhiudeen; and3. Mr. Chan Wan Siew

7. DIReCTORS’ RemuNeRATION

The Board as a whole determines the remuneration of Directors with individual Directors abstained from discussing their own remuneration.

The Executive Director’s remuneration is linked to commitment, experience, service seniority, scope of responsibilities, individual performance and corporate performance.

Non-Executive Directors do not receive any performance related remuneration. Non-Executive Directors are remunerated by way of fees based on the roles and level of responsibilities undertaken by the particular Non-Executive Director concerned. Directors are reimbursed reasonable expenses incurred by them in the course of carrying out their duties on behalf of the Company.

Fees payable to Directors are subject to shareholders’ approval at the Annual General Meeting.Remuneration of all Directors, who were on Board in 2011 (including Directors who resigned in 2011), falling within the following bands are –

Band (RM) Executive Directors Non-Executive Directors Total

less than 50,000 - 11 11

50,001 – 100,000 - 2 2

250,001 – 300,000 1 - 1

650,001 – 700,000 1 - 1



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The aggregate remuneration paid or payable to all Directors is further categorized into the following components: -

Salaries (RM) Fees (RM) Benefits in kind (RM)

Total (RM)

Executive Directors 581,730 335,343 22,117 939,190

Non-Executive Directors - 505,397 - 505,397

Total 581,730 840,740 22,117 1,444,587

C. SHAReHOLDeRS

1. DIALOGue BeTWeeN THe COmPANY AND INVeSTORS

The Board and Management convey information about the Company performance, and other matters affecting shareholders’ interests through corporate announcements released to BMSB and via the Company’s website at www.integrax.com.my. A copy of the Annual Report is sent to all our shareholders.

Information on the development of Lumut Port can be accessed from the website at www.lumutport.com.my

Shareholders may contact the Executive Director for any enquiries at (email) [email protected], (tel) 603-21417728 or (fax) 603-21412995. Shareholders may also contact the Senior Independent Director at (email) [email protected] for any enquiries, or the Company Secretary at (email) [email protected] for information on the Company.

2. ANNuAL GeNeRAL meeTING

In accordance with the Company’s Articles of Association, Notice of Annual General Meeting for each financial year end together with the related papers were sent out to shareholders at least 21 days before the date of the meeting.

At the Annual General Meeting, shareholders are encouraged to ask questions both about the resolutions being proposed or about the Group’s operations, plans and prospects in general. The Executive Director and, where appropriate, the Chairman, will respond to shareholders’ questions during the meeting. Where appropriate, the Chairman will undertake to provide a written response to any significant question that cannot be readily answered at the meeting.

Each item of special business included in the Notice of Annual General Meeting will be accompanied by a full explanation of the effects of a proposed resolution. Separate resolutions are proposed for substantially separate issues at each meeting and the Chairman shall declare the number of proxy votes received both for and against each separate resolution.

The Company will provide shareholders, upon written request, with a summary of the discussions held at the Annual General Meeting.



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D. ACCOuNTABILITY AND AuDIT

1. FINANCIAL RePORTING

The Board takes due care and responsibility for presenting a balanced and understandable assessment of the Group’s position and prospects each time it releases its quarterly and annual financial statements to shareholders. The Audit Committee will assist the Board to oversee the Group’s financial reporting processes and the quality of its financial reporting.

2. INTeRNAL CONTROL

The Group’s Internal Control Statement is set out on page 34 to 35.

3. ReLATIONSHIP WITH THe AuDITORS

The role of the Audit Committee in relation to the external auditors is stated on page 36 to 40.

4. DIReCTORS’ ReSPONSIBILITY STATemeNT FOR PRePARING THe ANNuAL FINANCIAL STATemeNTS

The Directors are required by Part VI Division 1 of the Companies Act, 1965 to prepare financial statements for each financial year which are to be made out in accordance with the applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board and to give a true and fair view of the state of affairs of the Group and the Company at the end of the financial year and of the results and cash flows of the Group and Company for the financial year.

In preparing the financial statements for the financial year ended 31 December 2011, the Directors have:

• usedappropriateaccountingpoliciesandappliedthemconsistently;• madejudgmentsandestimatesthatarereasonableandprudent;• statedwhetherapplicableaccountingstandardshavebeenfollowed,subjecttoanymaterialdeparturesdisclosed

and explained in the financial statements;• preparedfinancialstatementsonthegoingconcernbasisastheDirectorshaveareasonableexpectation,having

made enquiries, that the Group and Company have adequate resources to continue in operational existence for the foreseeable future.

The Directors have responsibility for ensuring that the Company keeps proper accounting records which disclose with reasonable accuracy the financial position of the Group and Company and which enable them to ensure that the financial statements comply with Part VI Division 1 of the Companies Act, 1965.

The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group, and to detect and prevent fraud and other irregularities.

e. OTHeR INFORmATION

1. OPTIONS, WARRANTS OR CONVeRTIBLe SeCuRITIeS

The Company did not issue/exercise any options or warrants and convertible securities during the financial year.

2. ImPOSITION OF SANCTIONS AND/OR PeNALTIeS

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by any relevant regulatory bodies during the financial year.

3. NON-AuDIT FeeS

During the financial year, non-audit fees paid to the external auditors amounted to RM7,500 (2010: RM11,000) as disclosed in Note (7) to the financial statements. These fees were in respect of the services rendered in connection with the review of financial statements for compliance with Financial Reporting Standards of the Company and the certification of net operating cash flows of a subsidiary company.


33

4. mATeRIAL CONTRACTS

Other than those mentioned herein and disclosed in the Note (16) to the Financial Statement, there were no material contracts entered into by the Company and its subsidiaries involving Directors’ and major shareholders’ interests during the financial year.

a. Sale of PT Indoexchange Tbk (“INDx”)

TheCompanyhadon10February2011,acceptedanoffermadebyEquatorexSdnBhd(“ETX”),acompanyowned and managed by Harun bin Halim Rasip, a former director of the company who had resigned as Director on20April2012,toacquiretheentireinterestoftheCompanyinINDXtobeeffectedbythecrossingofINDXsharesthroughtheIndonesianStockExchange.ThefullproceedsfromthesaleofINDXshareswerereceivedbythe Company on 17 February 2011.

b. Shareholders Agreement between Pelabuhan Lumut Sdn Bhd and Taipan merit Sdn Bhd dated 5 October 2011 to govern the business and management of Lumut maritime Terminal Sdn. Bhd (“LmTSB”) (“the SHA”)

The Company’s wholly owned subsidiary Pelabuhan Lumut Sdn Bhd (“PLSB”) had on 5 October 2011 entered into the SHA with Taipan Merit Sdn Bhd (“TMSB”) who is a substantial shareholder of the Company and the wholly-owned subsidiary of Perak Corporation Berhad (“PCB) who in turn is the subsidiary of Perbadanan Kemajuan Negeri Perak.

The SHA replaces the old shareholders’ agreement which was the subject matter of the Arbitration and which was terminated by mutual consent of the parties on 6 October 2011. The SHA sets out the terms and conditions to govern the business and management of LMTSB, the Company’s 50% less one (1) share associate. The balance 50% plus one (1) share of LMTSB is held by TMSB.

5. DISCONTINueD LITIGATION

a. Civil Suit against Amin Halim Rasip

The Company has on 21 January 2011 filed an action against En Amin bin Halim Rasip (“En Amin”) for alleged breach of fiduciary duty (“the Suit”).

The Board based on subsequent legal opinion unanimously agreed to withdraw the Suit and the Suit was struck off on 14 October 2011,

b. Kuala Lumpur High Court Suit No. 22NCC-762-2011 between Tenaga Nasional Berhad (“TNB”) and the Company and 6 others

The Company was served with a Writ of Summons and Statement of Claim by TNB on 10 May 2011. The Company was only a nominal defendant in this suit with no allegation of wrongdoings in TNB’s Statement of Claim against the Company. TNB withdrew the Writ of Summons on 1 March 2012 with no liberty to file afresh.

6. SHARe BuY-BACKS

There were no share buy-backs during the financial year in review.

7. DePOSITORY ReCeIPT PROGRAmme

There were no Depository Receipt Programmes sponsored by the Company during the financial year in review.

8. VARIATION IN ReSuLTS

There was no material variances between the result for the financial year and unaudited result previously announced.

9. PROFIT GuARANTee

There were no profit guarantees given by the Company during the financial year in review.

10. ReCuRReNT ReLATeD PARTY TRANSACTIONS

Other than those mentioned in the Financial Statements (Note 16), there were no material recurrent related party transactions of a revenue in nature during the financial year in review.


e. OTHeR INFORmATION (Continued)

34

STATemeNT ON INTeRNAL CONTROLBOARD ReSPONSIBILITY

The Board of Directors acknowledges its responsibility for the Group’s system of internal control and for reviewing its adequacy and integrity in order to safeguard shareholders’ interests and the assets of the Group as prescribed by the Malaysian Code of Corporate Governance.

The Board has established on-going processes for identifying, evaluating and managing the significant risks encountered by the Group and periodically reviews these processes. The Board has also established procedures to implement the recommendations of the “Statement on Internal Controls” Guidance for Directors of Public Listed Companies”.

The Board has adopted the Board Charter which provides a concise overview of:-

• theroles,functions,responsibilitiesandpowersoftheBoardandtheseniormanagementoftheGroup:• thepowersdelegatedtovariousboardcommitteesoftheGroup;and• thepoliciesandpracticesoftheBoardinrespectofmatterssuchascorporategovernance,codeofconduct,conflictsand

declaration of interest, board meeting procedures and the appointment of directors.

The Board places great importance on governance and intends that the Group complies and adopts the best practice principles and all applicable laws, including but not limited to the requirements of the Securities Commission Malaysia, the Bursa Malaysia Listing Guidelines and the Companies Act 1965. The Board is of the opinion that the implementation of best practice corporate governance is a performance enhancement opportunity rather than just an act of compliance.

While acknowledging its responsibility to maintain a sound system of internal control to safeguard the Group’s interests, the Board is aware that such a system is designed to manage rather than eliminate risks and therefore cannot provide absolute assurance against material misstatement fraud or loss.

THe AuDIT meCHANISm

The Board has assigned the Audit Committee (AC) with the duty of reviewing and monitoring the effectiveness of the Group’s system of internal control. The AC reviews the Internal Audit Department’s work which is currently outsourced to a firm of professional service providers, which adopts a risk-based business life cycle approach, in accordance with an agreed frequency. During the year 2011, two internal audit reviews were conducted, namely the “Management Review of Head Office Functions” and “Review of Stocktake Procedures at Operating Companies”. Apart from the internal auditors of the group, the operations of the Company’s associate, Lumut Maritime Terminal Sdn Bhd are also audited by the other shareholders’ internal auditors.

The External Auditors form an opinion on the financial statements of the Group based on their annual statutory audit. Any significant errors and misstatements identified during the course of the statutory audit by External Auditors are brought to the attention of the AC through management letters or are articulated at the AC meetings. The AC also holds two (2) meetings with the External Auditors without the presence of Executive Directors or management. Minutes and/or matters arising from the AC meetings are brought to the attention of the Board.

The Report of the AC is set out on pages 36 to 40 of the Annual Report.

35

The other key elements of the Group’s internal control systems are as follows:

Organisational Structure

• Thereisinplaceanorganisationstructure,whichclearlydefinesthelinesofresponsibilityanddelegationofauthority.

Limits of Authority

• TheGrouphasclearlydefineddelegatedlimitsofauthoritywhichdeterminestheapprovingauthoritiesandauthoritylimitsfor various transactions. Major capital expenditure, acquisition and disposal of investment interests are approved by the Board before being carried out.

Planning and Monitoring

• Thereisastrategicplanning,annualbudgetingandtargetsettingprocess,whichincludesforecastsforeachareaofbusinesswith detailed reviews at operating levels of the Group.

• There isamanagementreportingsystemwherebycomprehensivemanagementreportsarepreparedandreviewedonaregular basis. Performance and results are monitored on a regular basis ensuring all major variances and critical operational issues are being followed up with actions taken thereon.

Policies and Procedures

• DocumentedinternalpoliciesandproceduresaresetoutinseveralmanualsandareimplementedthroughouttheGroup,forexample the Corporate Communications Guidelines and Policies. These documents are subject to review and improvement.

CONCLuSION

The Board believes that the existing level of system of internal control is reasonable to enable the group to achieve its business objectives. Nevertheless, the Board recognises that the system of internal control should be continuously improved in line with the evolving business environment.

ReVIeW OF THe STATemeNT BY exTeRNAL AuDITORS

The External Auditors have reviewed this Statement on Internal Control for inclusion in the Annual Report of the Group for the financial year ended 31 December 2011 and reported to the Board that nothing has come to their attention that causes them to believe that the Statement is inconsistent with their understanding of the process that the Board has adopted in the review of the adequacy and integrity of the system of internal control within the Group.

STATemeNT ON INTeRNAL CONTROL (Continued)

OTHeR KeY eLemeNTS OF INTeRNAL CONTROLS

36

AuDIT COmmITTee RePORT1. eSTABLISHmeNT AND memBeRSHIP

The Audit Committee is appointed by the Board of Directors (Board) from amongst its members and comprises non-executive directors, all of whom are independent directors.

The members of the Audit Committee during the financial year ended 31 December 2011 were as follows: 1. Mr Chan Wan Siew, Chairman (Independent Non-Executive Director)

appointed on 6 May 2011

2. Mr Loong Foo Ching (Independent Non-Executive Director) appointed on 6 May 2011

3. Ir. Abdul Manap bin Ali Hasan (Independent Non-Executive Director) appointed on 14 February 2012

4. En Azman Shah bin Mohd Yusof (Independent Non-Executive Director until re-designated as Executive Director on 2 April 2012) appointed on 6 May 2011 and vacated the position on 14 February 2012

5. Mr Wong Joon Hian resigned as Director and Chairman of the Audit Committee on 5 May 2011

6. Mr Chan Kok Keong resigned as Director and member of the Audit Committee on 5 May 2011

7. Dato’ Ir Onn Hamzah resigned as Director and member of the Audit Committee on 4 May 2011

8. Datuk Syed Tamim Ansari bin Syed Mohamed resigned as Director and member of the Audit Committee on 3 January 2011

At the time of this report, the Audit Committee comprises the following three (3) independent non-executive directors –

1. Mr Chan Wan Siew, Chairman;

2. Mr Loong Foo Ching; and

3. Ir. Abdul Manap bin Ali Hasan

2. TeRmS OF ReFeReNCe

The Audit Committee is governed by its written terms of reference, which spells out its authorities and duties in accordance with Paragraph 15.11 of the Listing Requirements of Bursa Malaysia Securities Berhad.

The function of the Audit Committee is to ensure that internal and external audit functions are properly conducted and that audit recommendations are being carried out effectively by the Group. The Audit Committee’s functions include –

a. to assist the Board to fulfill its fiduciary responsibilities relating to internal controls, financial and accounting records and policies, as well as financial reporting practices of the Group, and will report to the Board on the nature and extent of the functions performed by it. All findings by the Audit Committee will be reported to the Board.

b. to assure the shareholders of the Company that the Directors of the Company have complied with Malaysian financial standards and required disclosure policies developed and administered by Bursa Malaysia Securities Berhad (“Bursa Securities”).

37

c. to ensure consistency with Bursa Securities’ commitment to encourage high standards of corporate disclosure and to adopt best practices aimed at maintaining appropriate standards of corporate responsibility, integrity and accountability to all the Company’s shareholders.

d. to relieve the full Board from detailed involvement in the review of the results of internal and external audit activities and yet ensure that audit findings are brought to the highest level for consideration.

2.1 membership

The Audit Committee shall be appointed by the Board from amongst the Directors of the Company except Alternate Directors. The Audit Committee shall comprise of at least three (3) non-executive directors the majority of whom, including the Chairman, shall be independent directors. All members of the Audit Committee shall be financially literate with at least one member being a member of the Malaysian Institute of Accountants or fulfills such other requirements as prescribed or approved by Bursa Securities. Any vacancies in the Audit Committee which will result in a breach of Listing Requirements of Bursa Securities, the Board will fill the vacancy within three (3) months.

The Board shall review the term of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference.

2.2 meetings

2.2.1 The Committee shall meet at least four (4) times a year and such additional meetings as the Chairman shall decide. The Chairman may call a meeting of the Audit Committee if a request is made by any Audit Committee member or the internal auditors if they consider it necessary. In addition, the Chairman shall convene a meeting with the External Auditors to consider any matter which the External Auditors believe should be brought to the attention of the Directors or Shareholders.

2.2.2 Meetings will be attended by the members of the Audit Committee and the Company Secretary who shall act

as the Secretary of the Audit Committee and record the proceedings of the meeting thereat.

2.2.3 Participants may be invited from time to time to attend the meeting depending on the nature of the subject under review. These participants may include other Directors, General Managers, Division Heads, representatives from the Finance Department, Internal Audit Departments and/or the External Auditors.

2.2.4 The Audit Committee shall meet with the External Auditors at least twice a year, without the presence of Executive Directors or Management.

2.2.5 The quorum for each meeting shall consist of at least two (2) members, both of whom shall be Independent Directors.

2.2.6 Recommendations of the Audit Committee are submitted to the Board for adoption.

2.3 Rights And Authority

2.3.1 In carrying out its duties and responsibilities, the Audit Committee will have the following rights:

a. explicit authority to investigate any matter within its terms of reference;b. the resources which are required to perform its duties;c. full, free and unrestricted access to any information, records, properties and personnel of the Company and

of any other company within its Group;d. direct communication channels with the External Auditors and person(s) carrying out the internal audit

function or activity;e. be able to obtain independent professional or other advice and to invite outsiders with relevant experience

to attend the Audit Committee’s meetings (if required) and to brief the Audit Committee;f. be able to convene meetings with the External Auditors, the internal auditors or both, excluding the

attendance of other Directors and employees of the Company, whenever deemed necessary; andg. regulate the manner of proceedings of its meetings, having regard to normal conventions on such matter.

AuDIT COmmITTee RePORT (Continued)

38

2.3.2 The attendance at any particular Audit Committee meeting by other Directors and employees of the Company shall be at the Audit Committee’s invitation and discretion, and must be for the specific agenda to the relevant meeting.

2.3.3 Where the Audit Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Securities, the Audit Committee has the responsibility to promptly report such matter to Bursa Securities.

2.4 Duties And Responsibilities

The main duties and responsibilities of the Audit Committee include –

a. To discuss and liaise with External Auditors before the audit commences, the nature and scope of their audit plan to ensure smooth implementation of the audit of the Group, to discuss problems and reservations arising from the audits and any matter the auditors may wish to discuss and to review and evaluate their findings on the internal control system and the audit reports on the financial statements of the Company and the Group;

b. To review the quarterly and year-end financial statements prior to the approval by the Board of Directors. The review will include an assessment on changes in or implementation of major accounting policies and practices, significant and unusual events, significant audit adjustments arising from an audit, the going concern assumption and compliance with accounting standards and other legal requirements;

c. To review the External Auditors’ management letter and Management’s response and to discuss problems and reservations arising from the interim and final audits and any matter the auditors may wish to raise, in the absence of management where necessary;

d. To review with the External Auditors the draft statement to be made by the Board with regard to the state of internal control of the Company and its Group, and report the results thereof to the Board;

e. To review any related party transactions and conflict of interest situation that may arise within the Company and the Group including any transaction, procedure or course of conduct that raises questions of management integrity;

f. To review the assistance given by the employees of the Company and the Group to the External Auditors;

g. To review and assess the appropriateness of the Group’s accounting policies and the adequacy of management reporting requirements;

h. To establish an internal audit function which is independent of the activities it audits. Where the internal audit function is undertaken by external consultants: -

• reviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunctionsandthat it has the necessary authority to carry out its work;

• reviewtheinternalauditprogramme,processes,theresultsoftheinternalauditprogramme,processesorinvestigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

• reviewanyappraisalorassessmentoftheperformanceoftheinternalauditfunction;and• approveanyappointmentorterminationoftheinternalauditors.

i. To review the Group’s business ethics and compliance with the law;

j. To consider the major findings of internal investigations and management’s response;

k. To consider the resignation, appointment and annual reappointment of the External Auditors, audit fees and any questions of resignation or dismissal;

l. To recommend the nomination of a person or persons as External Auditors;

m. To review the Audit Committee’s terms of reference as conditions dictate; and

n. To perform any other such functions as may be agreed by the Audit Committee and the Board.


2. TeRmS OF ReFeReNCe (Continued)

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2.5 Procedures Of The Audit Committee

2.5.1 Calling of meetings

The members may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit, provided that they shall have a minimum of four (4) meetings in a financial year. The Secretary shall on the requisition of a member summon a meeting of the Audit Committee.

2.5.2 Notice of Meeting

Notice of a meeting of the Audit Committee shall be given to all the members in writing. Unless otherwise determined by the Board of Directors from time to time, seven (7) days’ notice shall be given, except in the case of an emergency, shorter notice may be given.

2.5.3 Voting and proceeding of meeting

The decision of the Audit Committee shall be by a majority of votes and the determination by a majority of the members shall for all purposes be deemed a determination of the Audit Committee. In case of an equality of votes, the Chairman of the meeting shall have a second or casting vote.

Circular Resolutions signed by all the members shall be valid and effective as if it had been passed at a meeting of the Audit Committee.

2.5.4 Keeping of minutes

The Secretary shall maintain minutes of the proceedings of the meetings and circulate such minutes to all members of the Audit Committee. Such minutes shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting.

The minutes of proceedings of the Audit Committee shall be kept by the Secretary at the registered office of the Company, and shall be circulated with the papers of the next Board meeting and the Audit Committee chairman will provide an update to the Board on their contents.

3. SummARY OF ACTIVITIeS OF THe AuDIT COmmITTee DuRING THe FINANCIAL YeAR

3.1 During the financial year ended 31 December 2011, Nine (9) Audit Committee meetings were held. A record of the attendance to these meetings are as follows:

Name of Audit Committee Member No. of Meetings Attended / Held during his office

Mr Chan Wan Siew, Chairman 4/4

Mr Loong Foo Ching 4/4

Ir. Abdul Manap bin Ali Hasan Appointed on 14 February 2012

En Azman Shah bin Mohd Yusof (vacated the position on 14 February 2012) 4/4

Mr Wong Joon Hian (resigned on 5 May 2011) 5/5

Mr Chan Kok Keong (resigned on 5 May 2011) 5/5

Dato’ Ir Onn bin Hamzah (resigned on 4 May 2011) 5/5

Datuk Syed Tamim Ansari bin Syed Mohamed (resigned on 3 January 2011) -

The Executive Directors, senior management staff, External and Internal Auditors were in attendance at the meetings, where appropriate.


2. TeRmS OF ReFeReNCe (Continued)

40

3.2 The activities undertaken by the Audit Committee for the financial year were as follows:-

(a) Reviewed the group’s financial management, assessment measures and made recommendations to the Board in relation thereto;

(b) Reviewed the adequacy and relevance of the scope, functions, resources, risk based internal audit plan and results of the internal audit processes with the external consultant for internal audit services;

(c) Considered the reappointment of the External Auditors and audit fees;

(d) Reviewed with the External Auditors, the audit plan of the Company and of the Group for the year (inclusive of risk and audit approach, system evaluation, issues raised and management responses) prior to the commencement of the annual audit and the External Auditor’s audit report;

(e) Discussed and reviewed with External Auditors their evaluation of internal control systems of the Group;

(f) Reviewed the extent of assistance rendered by management and issues and reservations arising from audits with the External Auditors without the presence of management staff and the Executive Directors;

(g) Reviewed the results of each quarter with management and reviewed the financial statements for the financial year ended 31 December 2011 with management and the External Auditors before recommending them to the Board of Directors for approval and release to Bursa Securities;

(h) Reviewed the related party transactions and conflict of interest situation that may arise within the Company and the Group including any transaction, procedure or course of conduct that raises questions of management integrity;

(i) Reported to the Board on significant issues and concerns discussed during the Audit Committee’s meetings together with applicable recommendations for substantive action to be taken. Minutes of meetings were also tabled to the Board;

(j) Reviewed and approved the Audit Committee Report for inclusion in the Company’s 2011 Annual Report;

4. TRAINING

Training courses attended by Audit Committee members during the financial year are reported in the Corporate Governance Statement on page 26 to 27.

5. INTeRNAL AuDIT FuNCTION

The Company outsourced its internal audit function to an external consultancy firm which has adequate resources and appropriate standing to undertake its activities independently and objectively to assist the Audit Committee in discharging its duties and responsibilities more effectively. The external consultant responsible for the internal audit function reports directly to the Audit Committee. As at 31 December 2011, the fees for the internal audit function is RM34,000 (2010: RM40,000).

The internal audit approach, scope of work and plans of the external consultant are submitted to the Audit Committee for approval before the commencement of any reviews. The reports of the external consultant are presented to the Audit Committee together with presentations at the appropriate meetings. Further details of the activities of the internal audit function are set out in the Statement on Internal Control on pages 34 to 35.


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CONTeNTS PAGe(S)

DIRECTORS’ REPORT 42 - 46

STATEMENT BY DIRECTORS 47

DECLARATION BY THE OFFICER PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE GROUP AND OF THE COMPANY

47

INDEPENDENT AUDITORS’ REPORT 48 - 49

STATEMENTS OF COMPREHENSIVE INCOME 50

STATEMENTS OF FINANCIAL POSITION 51 - 52

STATEMENTS OF CHANGES IN EQUITY 53

STATEMENTS OF CASH FLOWS 54 - 55

NOTES TO THE FINANCIAL STATEMENTS 56 - 99

FINANCIAL STATemeNTS

42

The directors of INTEGRAX BERHAD have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended December 31, 2011.

PRINCIPAL ACTIVITIES

The Company is an investment holding company and the principal activities of the subsidiary companies are as stated in Note 16 to the financial statements.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiary companies during the financial year.

RESULTS OF OPERATIONS

The results of operations of the Group and of the Company for the financial year are as follows:

The Group

The Company

RM RM

Profit for the year 49,481,884 45,311,417

Profit attributable to: Equity holders of the Company 43,813,938 45,311,417Non-controlling interests 5,667,946 -

49,481,884 45,311,417

In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

RESERVES AND PROVISIONS

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

DIVIDENDS

Since the end of the previous financial year, a special interim dividend of 16% less 25% income tax, amounting to RM36,096,710 in respect of the financial year ended December 31, 2011 was paid on May 18, 2011.

No further dividends have been recommended by the directors for the financial year ended December 31, 2011.

ISSUE OF SHARES AND DEBENTURES

There were no changes in the authorised, issued and paid-up capital of the Company during the financial year. The Company did not issue any debentures during the financial year.

SHARE OPTIONS

No options were granted to any person to take up unissued shares of the Company during the year.

DIRECTORS’ REPORT

43

DIRECTORS’ REPORT (Continued)

OTHER STATUTORY INFORMATION

Before the statements of comprehensive income and the statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and have satisfied themselves that all known bad debts have been written off and that adequate allowance for doubtful debts has been made; and

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business have been written down to their estimated realisable values.

At the date of this report, the directors are not aware of any circumstances:

(a) which would render the amount of bad debts written off or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) 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; or

(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.

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

(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or

(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

No contingent or other liability 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 and of the Company to meet their obligations as and when they fall due.

In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made.

44

DIRECTORS

The following directors served on the Board of the Company since the date of the last report:

Amin bin Halim Rasip

Mohamed Rafique Merican bin Mohd Wahiduddin Merican

Shireen Ann Zaharah binti Muhiudeen (appointed on May 6, 2011)

Chan Wan Siew (appointed on May 6, 2011)

Loong Foo Ching (appointed on May 6, 2011)

Azman Shah bin Mohd Yusof (appointed on May 6, 2011)

Ir. Abd Manap bin Ali Hasan (appointed on May 6, 2011)

Dato’ Seri DiRaja Mohamad Tajol Rosli bin Mohd Ghazali (appointed on May 24, 2011)

Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din (appointed on July 25, 2011)

Dato’ Abdul Manaf bin Hashim (appointed on July 25, 2011) #

Dato’ Che On @ Onn bin Hamzah (resigned on May 4, 2011)

Wong Joon Hian (resigned on May 5, 2011)

Chan Kok Keong (resigned on May 5, 2011)

# Dato’ Abdul Manaf bin Hashim was first appointed on April 27, 2011 as a Non-Independent Non-Executive Director until May 6, 2011. He was re-appointed to the same position on July 25, 2011.

In accordance with Article 80 of the Company’s Articles of Association, Amin bin Halim Rasip and Mohamed Rafique Merican bin Mohd Wahiduddin Merican retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din and Dato’ Abd Manaf bin Hashim who were appointed to the board since the last Annual General Meeting retire in accordance with Article 87 of the Company’s Articles of Association and, being eligible, offer themselves for re-election at the forthcoming Annual General Meeting.


45


DIRECTORS’ INTERESTS

The shareholdings in the Company and its related companies of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:

Number of ordinary shares of RM1.00 eachBalance at1.1.2011/

date of appointment Bought Sold

Balance at31.12.2011

Direct interest

CompanyAzman Shah bin Mohd Yusof 1,000 - - 1,000

Indirect/Deemed interest

CompanyAmin bin Halim Rasip

- Own (i) 113,721,446 40,868,942 (103,081,446) 51,508,942- Others (ii) 4,347,826 - - 4,347,826

Shireen Ann Zaharah bt Muhiudeen (iii) 11,181,700 1,913,300 - 13,095,000

Number of LBT RCCPS1 of RM0.01 eachBalance at1.1.2011 Bought Sold

Balance at31.12.2011

Deemed interest

Lekir Bulk Terminal Sdn Bhd (“LBTSB”)

Amin bin Halim Rasip (i) 16,000,000 - - 16,000,000

(i) Indirect interest by virtue of his shareholdings in Jurukapal Marine Services Sdn Bhd (“JMS”) and Golden Initiative Sdn Bhd (“GISB”), who are all shareholders of Integrax Berhad. The shares transacted during the financial year under review were previously held under Halim Rasip Holdings Sdn Bhd (“HRH”) and Lekir Group 1 Sdn Bhd (“LG1”) of which he was a director and shareholder. He is no longer a director nor shareholder of HRH or LG1.

(ii) Refers to shareholding held by spouse of Amin bin Halim Rasip. In accordance with Section 134(12)(c) of the Companies Act, 1965, the direct interests of the spouse in the shares of Integrax Berhad shall be treated as the deemed interests of Amin bin Halim Rasip.

(iii) Deemed interest in the shares of the Company by virtue of Shireen Ann Zaharah bt Muhiudeen, being the Managing Director of Corston-Smith Asset Management Sdn Bhd, the fund manager for the ordinary shares of the Company held on behalf of British Columbia Investment Management Corporation (bcIMC) and Corston-Smith ASEAN Corporate Governance Fund.

Redeemable cumulative convertible preference share(s) of RM0.01 each in LBTSB issued at a premium of RM0.99 each.

By virtue of the above directors’ interest in the shares of the Company, they are deemed to have an interest in the shares of subsidiary companies to the extent that the Company has interest.

46

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive any benefits (other than the benefits included in the aggregate of emoluments received or due and receivable by directors as shown in the financial statements of the Group and of the Company) 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 other than any benefits which may be deemed to have arisen by virtue of the transactions as disclosed in Note 16 to the financial statements.

During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby the directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

SIGNIFICANT EVENTS

The significant events during the financial year is as disclosed in Note 36 to the financial statements.

SUBSEQUENT EVENT

The significant event subsequent to the date of financial position is as disclosed in Note 37 to the financial statements.

AUDITORS

The auditors, Messrs. Deloitte & Touche, have indicated their willingness to continue in office.

Signed on behalf of the Boardin accordance with a resolution of the Directors,

(Signed)

DATO’ SERI DIRAJA MOHAMADTAJOL ROSLI BIN MOHD GHAZALI

(Signed)

AMIN BIN HALIM RASIP

Kuala Lumpur,April 16, 2012


47

DECLARATION BY THE OFFICER PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE GROUP AND OF THE COMPANY

The directors of INTEGRAX BERHAD, state that, in their opinion, the accompanying financial statements are drawn up in accordance with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of December 31, 2011 and of the financial performance and the cash flows of the Group and of the Company for the year ended on that date.

The information set out in Note 39 to the financial statements has been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysia Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Signed on behalf of the Boardin accordance with resolution of the Directors,

(Signed)

DATO’ SERI DIRAJA MOHAMADTAJOL ROSLI BIN MOHD GHAZALI

(Signed)

AMIN BIN HALIM RASIP

Kuala Lumpur,April 16, 2012

I, THERESA KONG LYE FUN, the officer primarily responsible for the financial management of INTEGRAX BERHAD, do solemnly and sincerely declare that the accompanying financial statements are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declaration Act, 1960.

(Signed)

THERESA KONG LYE FUN

Subscribed and solemnly declared by the abovenamed THERESA KONG LYE FUN at KUALA LUMPUR this 16th day of April, 2012.

Before me,

(Signed)

COMMISIONER FOR OATHS

STATEMENT BY DIRECTORS

48

Report on the Financial Statements

We have audited the financial statements of INTEGRAX BERHAD, which comprise the statements of financial position of the Group and of the Company as at December 31, 2011 and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 50 to 98.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia and for such internal control as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of December 31, 2011 and their financial performance and cash flows for the year then ended.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiary companies of which we have acted as auditors, have been properly kept in accordance with the provisions of the Act;

(b) We have considered the accounts and auditors’ report of the subsidiary companies, of which we have not acted as auditors, as mentioned in Note 16 to the financial statements, being accounts that have been included in the financial statements of the Group;

(c) We are satisfied that the accounts of the subsidiary companies that have been consolidated with the financial statements of the Company 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 as required by us for these purposes; and

(d) The auditors’ report on the accounts of the subsidiary companies were not subject to any qualification and did not include any adverse comment made under Section 174(3) of the Act.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF INTEGRAX BERHAD (incorporated in Malaysia)

49

Other Reporting Responsibilities

The supplementary information set out in Note 39 to the financial statements has been compiled by the Company as required by Bursa Malaysia Securities Berhad Listing Requirements and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with guidance on Special Matter No.1 “Determination of Realised and Unrealised Profit or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility towards any other person for the contents of this report.

(Signed)

DELOITTE & TOUCHEAF 0834Chartered Accountants

(Signed)

LOO CHEE CHOUPartner - 2783/09/12 (J)Chartered Accountant

April 16, 2012

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF INTEGRAX BERHAD (incorporated in Malaysia) (Continued)

50

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2011

The Group The Company2011 2010 2011 2010

Note RM RM RM RM(Restated)

Continuing operationsRevenue 6 87,930,499 88,096,269 44,100,000 1,600,000Cost of services

- Contracted services (29,326,113) (28,538,862) - -- Depreciation of property, plant and equipment (9,850,545) (10,027,909) - -

Gross profit 48,753,841 49,529,498 44,100,000 1,600,000Administrative expenses (8,090,054) (7,738,761) (5,398,538) (7,462,021)Other operating expenses (2,441,483) (6,742,537) (33,602) (4,656,140)Other operating income 5,865,130 953,350 4,639,330 1,176,997

Profit from operations 7 44,087,434 36,001,550 43,307,190 (9,341,164)Interest income 4,055,727 3,327,981 1,596,676 339,544Finance costs 9 (5,613,960) (8,455,600) (32,541) (18,403)Share of profit after tax of equity accounted associates 17,662,210 14,386,120 - -Allowances for doubtful debts written back - 21,079,479 817,259 26,316,535Impairment on investment in subsidiary company - - - (7,000,000)Impairment of goodwill on consolidation - (5,601,680) - -

Profit before tax 60,191,411 60,737,850 45,688,584 10,296,512Income tax expense 10 (10,709,527) (10,938,722) (377,167) (56,280)

Profit for the year from continuing operations 49,481,884 49,799,128 45,311,417 10,240,232

Discontinued operationsProfit for the year from discontinued operations 11 - 5,965,527 - -

PROFIT FOR THE YEAR 49,481,884 55,764,655 45,311,417 10,240,232Other comprehensive income Exchange differences on translating foreign operations (2,583,911) (130,508) - -

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 46,897,973 55,634,147 45,311,417 10,240,232

Profit attributable to:Equity holders of the Company 43,813,938 50,268,406Non-controlling interests 5,667,946 5,496,249

Profit for the year 49,481,884 55,764,655

Total comprehensive income attributable to:Equity holders of the Company 41,229,281 50,219,070Non-controlling interests 5,668,692 5,415,077

46,897,973 55,634,147

Basic Earnings per share (sen): From continuing operations 12 14.6 14.8

From continuing and discontinued operations 12 14.6 16.7

The accompanying Notes form an integral part of the Financial Statements.

51


Note RM RM RM RM

ASSETSNon-current AssetsProperty, plant and equipment 14 331,901,799 343,016,451 713,892 896,782Goodwill on consolidation 15 128,029,993 128,658,222 - -Investment in subsidiary companies 16 - - 274,555,540 303,732,367Investment in associates 17 106,147,850 98,485,640 - -Other investments 18 10,029,999 10,029,999 16,000,000 16,000,000

Total Non-current Assets 576,109,641 580,190,312 291,269,432 320,629,149

Current AssetsTrade receivables 19 8,565,738 9,710,389 - -Other receivables and prepaid expenses 19 15,157,445 11,406,052 454,918 266,062Amount owing by subsidiary companies 16 - - 1,600,000 3,131,907Amount owing by associate 17 - 150,590 - 150,590Tax recoverable - - - 165,867Cash and bank balances 20 146,990,883 160,882,569 69,386,251 31,789,416

170,714,066 182,149,600 71,441,169 35,503,842Assets classified as held for sale 21 - 40,557,687 - -

Total Current Assets 170,714,066 222,707,287 71,441,169 35,503,842

Total Assets 746,823,707 802,897,599 362,710,601 356,132,991

EQUITY AND LIABILITIESCapital and reservesShare capital 22 300,805,917 300,805,917 300,805,917 300,805,917Reserves 23 47,850,352 50,435,009 46,705,593 46,705,593Retained earnings 24 211,057,343 203,340,115 11,958,290 2,743,583

Equity attributable to equity holders of the Company 559,713,612 554,581,041 359,469,800 350,255,093

Non-controlling interests 25 56,765,549 61,945,395 - -

Total Equity 616,479,161 616,526,436 359,469,800 350,255,093

Non-current LiabilitiesDeferred tax liabilities 26 52,210,000 53,684,000 - -Serial bonds 27 - 53,279,643 - -Preference share capital 28 40,000 40,000 - -Preference share premium 29 3,960,000 3,960,000 - -Hire-purchase payables 32 364,382 497,966 364,382 497,966Total Non-current Liabilities 56,574,382 111,461,609 364,382 497,966

STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2011


52

STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2011 (Continued)

Current LiabilitiesTrade payables 30 8,681,612 8,346,064 - -Other payables and accrued expenses 31 5,155,898 24,330,442 1,220,917 2,239,784Serial bonds 27 58,461,063 42,000,000 - -Amount owing to subsidiary companies - - 1,436,649 3,014,673Current tax liabilities 1,338,007 107,573 85,269 -Hire-purchase payables 32 133,584 125,475 133,584 125,475

Total Current Liabilities 73,770,164 74,909,554 2,876,419 5,379,932

Total Liabilities 130,344,546 186,371,163 3,240,801 5,877,898

Total Equity and Liabilities 746,823,707 802,897,599 362,710,601 356,132,991


Note RM RM RM RM


53

Non-distributable

NoteSharecapital

Share premiumCapital

redemption reserve

Translation reserve

Distributableretained earnings Total

Non-controlling interests Total

equityThe Group RM RM RM RM RM RM RM RM

Balance as of January 1, 2010 300,805,917 46,705,593 185,450 3,593,302 159,870,090 511,160,352 56,588,179 567,748,531Effect of quasi restructuring - - - - (30,248) (30,248) (59,918) (90,166)Profit for the year - - - - 50,268,406 50,268,406 5,496,249 55,764,655Other comprehensive income - - - (49,336) - (49,336) (81,172) (130,508)Total comprehensive income

for the year - - - (49,336) 50,268,406 50,219,070 5,415,077 55,634,147Incorporation of subsidiary company - - - - - - 2,057 2,057Dividend to owners of the Company 13 - - - - (6,768,133) (6,768,133) - (6,768,133)

Balance as of December 31, 2010 300,805,917 46,705,593 185,450 3,543,966 203,340,115 554,581,041 61,945,395 616,526,436

Balance as of January 1, 2011 300,805,917 46,705,593 185,450 3,543,966 203,340,115 554,581,041 61,945,395 616,526,436

Profit for the year - - - - 43,813,938 43,813,938 5,667,946 49,481,884Other comprehensive income - - - (2,584,657) - (2,584,657) 746 (2,583,911)Total comprehensive income

for the year - - - (2,584,657) 43,813,938 41,229,281 5,668,692 46,897,973Disposal of subsidiary company - - - - - - (2,723,538) (2,723,538)Dividend to owners of the Company 13 - - - - (36,096,710) (36,096,710) - (36,096,710)Dividend to non-controlling interests - - - - - - (8,125,000) (8,125,000)

Balance as of December 31, 2011 300,805,917 46,705,593 185,450 959,309 211,057,343 559,713,612 56,765,549 616,479,161

Non-distributable Distributable

Note Share capital Share premium

retained earnings /

(Accumulated losses) Total

The Company RM RM RM RM

Balance as of January 1, 2010 300,805,917 46,705,593 (728,516) 346,782,994Total comprehensive income - - 10,240,232 10,240,232Dividend paid 13 - - (6,768,133) (6,768,133)

Balance as of December 31, 2010 300,805,917 46,705,593 2,743,583 350,255,093

Balance as of January 1, 2011 300,805,917 46,705,593 2,743,583 350,255,093Total comprehensive income - - 45,311,417 45,311,417Dividend paid 13 - - (36,096,710) (36,096,710)

Balance as of December 31, 2011 300,805,917 46,705,593 11,958,290 359,469,800

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2011


54


Note RM RM RM RMContinuing operations (Restated)

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIESProfit before tax from continuing operations 60,191,411 60,737,850 45,688,584 10,296,512Profit from discontinued operations - 5,965,527 - -Adjustments for:

Depreciation of property, plant and equipment 10,069,637 10,202,213 204,729 145,578Dividend income - - (44,100,000) (1,600,000)Finance costs 5,613,960 8,455,600 32,541 18,403Gain on disposal of subsidiary company (1,925,673) - (2,152,942) -Gain on disposal of associate (722,489) - - -Interest income (4,055,727) (3,327,981) (1,596,676) (339,544)Impairment on investment in subsidiary companies - - - 7,000,000Impairment of goodwill on consolidation - 5,601,680 - -Reversal of impairment in associate - (21,079,479) - -Allowance for doubtful debts written back - - (817,259) (26,316,535)Waiver of inter company balances - - (1,586,889) -Project expenses - 6,371,405 - 4,285,008Property, plant and equipment written off 2,408,896 - 1,015 -Share of profit after tax of equity accounted associates (17,662,210) (14,386,120) - -Unrealised (gain)/loss on foreign exchange (1,453) 8,126 82 2,016,863

53,916,352 58,548,821 (4,326,815) (4,493,715)Movement in working capital:Decrease/(Increase) in:

Trade receivables, other receivables and prepaid expenses (4,371,016) (2,229,479) (187,887) (4,078,729)Increase/(Decrease) in:

Trade payables, other payables and accrued expenses (16,758,322) 108,274 (1,018,867) 1,161,720

Cash From/(Used In) Operations 32,787,014 56,427,616 (5,533,569) (7,410,724)Tax paid (11,000,580) (13,604,705) (126,031) (269,399)Tax refunded 50,527 - - -

Net Cash From/(Used In) Operating Activities 21,836,961 42,822,911 (5,659,600) (7,680,123)

Cash Flows From/(Used In) Investing ActivitiesAcquisition of property, plant and equipment (3,873,110) (123,395) (22,854) (123,395)Proceeds from disposal of associate 41,280,176 - - -Proceeds from disposal of subsidiary companies 11 2,172,197 - 9,602,519 -Interest received 4,055,727 3,327,981 1,596,676 339,544Decrease in advances to subsidiary companies - - 25,684,230 24,861,081Increase in trade payables,

other payables and accrued expenses - 21,561,553 - -Dividend received 10,000,000 - 42,500,000 4,800,000

Net Cash From Investing Activities 53,634,990 24,766,139 79,360,571 29,877,230


STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2011

55


Note RM RM RM RM(Restated)

Cash Flows From/(Used In) Financing Activities(Increase)/Decrease in debt service reserve account 1,595,077 (4,562,502) - -(Increase)/Decrease in amount owing by associates - (5,605,197) 150,590 (50,590)Dividend paid to shareholders (36,096,710) (6,768,133) (36,096,710) (6,768,133)Dividend paid to non-controlling interests (8,125,000) - - -Redemption of serial bonds (42,000,000) (44,000,000) - -Redeemable cumulative convertible preference share

dividends paid (400,000) (1,200,000) - -Repayment of hire-purchase (125,475) (58,957) (125,475) (58,957)Hire-purchase interest paid (32,541) (18,403) (32,541) (18,403)

Net Cash Used In Financing Activities (85,184,649) (62,213,192) (36,104,136) (6,896,083)

Net cash (used in)/from continuing operations (9,712,698) 5,375,858 37,596,835 15,301,024

Net cash used in discontinued operations 11 - (2,557,063) - -

Effect of foreign currency translation in consolidation (2,583,911) (110,877) - -

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 131,967,373 129,259,455 31,789,416 16,488,392

CASH AND CASH EQUIVALENTS AT END OF YEAR (i) 119,670,764 131,967,373 69,386,251 31,789,416

(i) Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following amounts as disclosed in Note 20:The Group The Company

2011 2010 2011 2010RM RM RM RM

(Restated)

Cash and bank balances 9,852,633 6,733,821 336,251 726,997Deposits with licensed banks 137,138,250 154,148,748 69,050,000 31,062,419

146,990,883 160,882,569 69,386,251 31,789,416Less:

Amounts held in a Bond Redemption account:- Cash and bank balances (7,295,119) (10,196) - -- Deposits with licensed banks (20,020,000) (28,900,000) - -

Deposits pledged (5,000) (5,000) - -

119,670,764 131,967,373 69,386,251 31,789,416

(ii) Acquisition of property, plant and equipment

During the year, the Group and the Company acquired property, plant and equipment with an aggregate cost of RM3,873,110 (2010: RM649,395) and RM22,854 (2010: RM649,395) respectively of which RMNil (2010: RM526,000), were acquired by the Group and the Company by means of hire-purchase plans.

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2011 (Continued)


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1. GENERAL INFORMATION

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

The principal activity of the Company is investment holding. The principal activities of the subsidiary companies are stated in Note 16.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiary companies during the financial year.

The principal place of business and the registered office of the Company is located at 17th Floor, Tower Block, Kompleks Antarabangsa, Jalan Sultan Ismail, 50250 Kuala Lumpur.

The financial statements of the Group and the Company were authorised for issuance by the Board of Directors in accordance with a resolution of the directors on April 16, 2012.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements of the Group and the Company have been prepared in accordance with Financial Reporting Standards (“FRSs”) and the provisions of the Companies Act, 1965 in Malaysia.

Adoption of New and Revised Financial Reporting Standards

On January 1, 2011, the Group and the Company have adopted the following new and revised FRS and IC Interpretations (“IC Ints”) mandatory for annual financial periods beginning on or after January 1, 2011:

FRS 1 First-time Adoption of Financial Reporting Standards (Revised)FRS 1 First-time Adoption of Financial Reporting Standards (Amendments relating to limited exemption from Comparative

FRS 7 Disclosures for First-time Adopters)FRS 1 First-time Adoption of Financial Reporting Standards (Amendments relating to additional exemptions for first-time

adopters)FRS 2 Share-based Payment (Amendments relating to group-cash settled share-based payment transactions)FRS 2 Share-based Payment (Amendments relating to scope of FRS 2 and revised FRS 3)FRS 3 Business Combinations (Revised)FRS 5 Non-current Assets Held for Sale and Discontinued Operations (Amendments relating to plan to sell the controlling

interest in a subsidiary)FRS 7 Financial Instruments: Disclosures (Amendments relating to improving disclosures about financial instruments)FRS 124 Related Party Disclosures (Revised)FRS 127 Consolidated and Separate Financial Statements (Revised)FRS 128 Investment in Associates (Revised)FRS 132 Financial Instruments: Disclosures (Amendments relating to classification of rights issue)FRS 138 Intangible Assets (Amendments relating to additional consequential amendments arising from FRS 3)FRS 139 Financial Instruments: Recognition and Measurement (Amendments relating to additional consequetional

amendments arising from revised FRS 3 and revised FRS 127)

Improvements to FRSs issued in 2010IC Int. 4 Determining Whether an Arrangement Contains a LeaseIC Int. 9 Reassessment of Embedded Derivatives (Amendments relating to additional consequential amendments arising

from revised FRS 3)IC Int. 12 Service Concession ArrangementsIC Int. 16 Hedges of a Net Investment in a Foreign OperationIC Int. 17 Distributions of Non-cash Assets to Owners

The adoption of these new and revised FRSs and IC Ints did not result in significant changes in the accounting policies of the Group and of the Company and had no significant effect on the financial performance or position of the Group and of the Company.

NOTES TO THE FINANCIAL STATEMENTS

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2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (Continued)

Malaysian Financial Reporting Standards (“MFRSs Framework”)

On November 19, 2011, the Malaysian Accounting Standards Board (“MASB”) issued a MASB approved accounting framework, the Malaysian Financial Reporting Standards (“MFRS Framework”). The MFRS Framework is a fully International Financial Standards (“IFRSs”) compliant framework, equivalent to IFRSs which are mandatory for adoption by all Entities Other than Private Entities for annual periods beginning on or after January 1, 2012, with the exception for Transitioning Entities. Transitioning Entities, being entities which are subject to the application of MFRS 141 Agriculture and/or IC Int 15 Agreements for the Construction of Real Estate are given an option to defer adoption of the MFRS Framework by an additional year.

Accordingly, the Group and the Company which are not a Transitioning Entities will be required to apply MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards (MFRS 1) in their financial statements for the financial year ending December 31, 2012, being the first set of financial statements to be prepared in accordance with the new MFRS Framework. Further, an explicit and unreserved statement of compliance with IFRSs will need to be made in these financial statements.

The Group and the Company are currently assessing the impact of adoption of MFRS 1, including identification of the differences in existing accounting policies as compared to the new MFRSs. As at the date of authorisation of issue of the financial statements, accounting policy decisions or elections have not been finalised. Thus, the impact of adopting the new MFRS Framework on the Group’s and the Company’s first set of financial statements to be prepared in accordance with the MFRS Framework cannot be determined and estimated reliably until the process is complete.

3. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention unless otherwise indicated in the accounting policies below.

Basis of Consolidation

Subsidiary companies are those entities controlled by the Group and the Company. Control exists when the Group and the Company have the power to govern the financial and operational policies of an enterprise so as to obtain benefits from its activities. Control is presumed to exist when the Group owns, directly or indirectly through subsidiary companies, more than half of the voting power of the entity.

The consolidated financial statements include the financial statements of the Company and entities controlled by the Company (its subsidiary companies) as mentioned in Note 16 made up to December 31, 2011. The financial statements of the subsidiary companies are prepared for the same reporting date as the Company.

All subsidiary companies are consolidated using the acquisition method of accounting. On acquisition, the assets, liabilities and contingent liabilities of the relevant subsidiary companies are measured at their fair values at the date of acquisition. The results of the subsidiary companies acquired or disposed during the year are included in the consolidated statement of comprehensive income from the date of their acquisitions or up to the effective date of their disposals.

All significant inter-company transactions and balances are eliminated on consolidation. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances.

Non-controlling interests in the net assets of consolidated subsidiary companies are identified separately from the Group’s equity therein. Non-controlling interests consist of the amount of these interests at the date of the original business combination and the non-controlling share of subsequent changes in equity since the date of acquisition.

The interest of non-controlling interests in the acquired subsidiary company is initially measured at the non-controlling proportion of fair value of the net assets acquired.

Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Company.

NOTES TO THE FINANCIAL STATEMENTS (Continued)

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3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of Consolidation (Continued)

Increases or decreases in ownership interests in subsidiary companies that do not result in the Group losing control over the subsidiary companies are dealt with in equity and attributed to the owners of the parent, with no impact on goodwill or profit or loss. When control of a subsidiary company is lost as a result of a transaction, event or other circumstance, the Group derecognises all assets, liabilities and non-controlling interests at their carrying amounts. Any retained interest in the former subsidiary company is recognised at its fair value at the date when control is lost, with the resulting gain or loss being recognised in profit or loss.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in Ringgit Malaysia using exchange rates prevailing at the end of the reporting period. Income and expense items (including comparatives) are translated at the average exchange rates for the financial year, unless exchange rates fluctuated significantly during that financial year, in which case the exchange rates at the dates of the transactions are used.

The results of foreign associates are translated at the average rate of exchange for the financial year.

Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised in the consolidated statement of comprehensive income in the period in which the foreign operation or foreign associate is disposed of.

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(i) Port services

Income from port services is recognised in profit or loss once the service is rendered. Revenue arising from the fixed portion of the port service revenue is recognised on an accrual basis.

(ii) Dividend income

Dividend income is recognised when the right to receive payment is established.

(iii) Office facility fees

Office facility fees are recognised in profit or loss upon the provision of the facility. Office facility fees are recognised on an accrual basis.

(iv) Rental income

Rental income is recognised in profit or loss as it accrues.

Foreign Currency

(i) Functional and Presentation Currencies

The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates (“the functional currency”). For the purposes of the consolidated financial statements, the results and the financial position of each group entity are expressed in Ringgit Malaysia (“RM”) which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

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Foreign Currency (Continued)

(ii) Foreign Currency Transactions

In preparing the financial statements of the individual entities, transactions in foreign currencies other than the entity’s functional currency (i.e. foreign currencies) are recorded at the rates prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing on that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

The closing rates used in the translation of foreign currency monetary assets and liabilities are as follows:

2011 2010RM RM

1 United States Dollar 3.1725 3.0905100 Indonesian Rupiah 0.0350 0.0343100 Philippines Peso 7.2350 7.0300

Employee Benefits

(i) Short-Term Employee Benefits

Wages, salaries, bonuses and non-monetary benefits are accrued for in the period in which the associated services are rendered by the employees of the Group.

(ii) Defined Contribution Plan

The Group makes contributions to the Employees’ Provident Fund (“EPF”) and the contributions to the EPF are charged to the income statements in the period in which they relate. Once the obligations have been paid, the Group has no further payment obligations. The Group’s contributions to EPF are included under personnel expenses as disclosed in Note 7.

Income Taxes

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amounts of assets and liabilities in the financial statements and their corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are generally recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises 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 the accounting profit nor taxable profit.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on the tax rates that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.


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Income Taxes (Continued)

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is included in the accounting for the business combination.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Discontinued operations

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statements of comprehensive income is restated as if the operation had been discontinued from the start of the comparative period.

Property, Plant and Equipment and Depreciation

(i) Recognition and measurement

Items of property, plant and equipment are stated at cost less any accumulated depreciation and any accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset and any other costs directly to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour and, for qualifying assets, borrowing costs are capitalised in accordance with the Group’s accounting policy. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within other income or other operating expenses respectively in profit and loss.

(ii) Subsequent cost

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Buildings and renovation are depreciated over a period of 50 years and 3 years respectively.

The estimated useful lives and depreciation methods of other items of property, plant and equipment for current and comparative periods are as follows:

Industrial building, civil works and infrastructure

Gross Post Construction dry bulk cargo and infrastructure throughput expressed in metric tonnes to-date allocated over a prudent estimate of the total gross post construction throughput capacity expressed in metric tonnes over 50 years.

Plant and machinery, tools, office equipment and furniture

Gross Post Construction dry bulk cargo and infrastructure throughput expressed in metric tonnes to-date allocated over a prudent estimate of the total gross post construction throughput capacity expressed in metric tonnes over 10 to 30 years.


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Property, Plant and Equipment and Depreciation (Continued)

(iii) Depreciation (Continued)

The estimation of the total gross post construction throughput capacity is based on the historical actual throughput and the estimated throughput over the estimated useful lives. As such, this involves estimation uncertainty and critical judgement as the actual throughput in the future might differ from the estimated future throughput capacity.

Other property, plant and equipment are depreciated on a straight-line basis to write off the costs of each asset to their residual value over their estimated useful life, at the following annual rates:

Furniture and fittings 10%Motor vehicles 20%Office equipment 20%

Depreciation methods, useful lives and residual values are reassessed at each reporting date.

Goodwill on Consolidation

Goodwill on consolidation represents the excess of the cost of acquisition of subsidiaries over 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 initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary company, the attributable amount of goodwill is included in the determination of profit or loss on disposal.

Investment in Subsidiary Companies

A subsidiary company is an entity over which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from its activities.

Subsidiary companies are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

Investment in subsidiary companies, which is eliminated on consolidation, is stated at cost less impairment losses, if any, in the Company’s separate financial statements. Investment in Associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with FRS 5: Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in associates are carried in the consolidated statements of financial position at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate) are recognised only to the extent that the Group has incurred legal or constructive obligation or made payments on behalf of that associate.


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Investment in Associates (Continued)

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.

Investment in associates is stated at cost less impairment losses, if any, in the Company’s separate financial statements.

Other Investment

Other investment in unquoted shares is stated at cost less any impairment loss.

Assets Classified As Held For Sale

Assets are classified as held for sale if their carrying amount is expected to be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary.

Immediately before classification as held for sale, the measurement of the assets is brought up-to-date in accordance with applicable FRSs. Then, upon initial classification as held for sale, (other than deferred tax assets, employee benefit assets, financial assets and inventories) these assets are measured in accordance with FRS 5 and that is the lower of carrying amount and fair value less cost to sell. Any differences are included in profit or loss.

Compound Financial Instruments

A compound financial instrument is a non-derivative financial instrument that contains both a liability and an equity component.

The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequent to initial recognition.

Contingent Liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

Impairment of Assets

(i) Financial assets

All financial assets (except for investment in subsidiary companies) are assessed at each reporting date for any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment.

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.


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Impairment of Assets (Continued)

(i) Financial assets (Continued)

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity and recognised to profit or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit and loss for an investment in an equity instrument classified as available for sale is not reversed through profit or loss.

If in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

(ii) Non-financial assets

The carrying amount of non-financial assets (except for inventories and non- current assets (or disposal groups) classified as held for sale) are reviewed at the end of each reporting period to determine whether there is any indication of impairment.

If any such indication exists, then the asset’s recoverable amount is estimated. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or group of assets (“cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the losses have decreased or no longer exist. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Payments made under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread evenly over the lease term.


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Financial Instruments

Financial instruments are recognised in the statements of financial position when, and only when the Group and the Company become a party to the contractual provisions of the financial instruments.

(a) Financial Assets

Financial assets are classified into the following specified categories: financial assets at fair value through profit or loss (FVTPL), held-to-maturity investments, available-for-sale (AFS) financial assets and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

(i) Effective Interest Method

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

(ii) Financial Assets at FVTPL

Financial assets are classified as FVTPL when the financial asset is either held for trading or it is specially designated into this category upon initial recognition.

A financial asset is classified as held for trading if:

• ithasbeenacquiredprincipallyforthepurposeofsellingitinthenearterm;or• oninitialrecognitionitispartofaportfolioofidentifiedfinancialinstrumentsthattheGroupandtheCompanymanage

together and has a recent actual pattern of short-term profit-taking; or• itisaderivativethatisnotdesignatedandeffectiveasahedginginstrument.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 33.

(iii) AFS Financial Assets

AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL. All AFS assets that have a quoted market price in an active market are measured at fair value at the end of the reporting period. Fair value is determined in the manner disclosed in Note 33. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses and interest calculated using the effective interest method. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss.

AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less any identified impairment losses at the end of the reporting period.

(iv) Receivables

Receivables that have fixed or determinable payments that are not quoted in an active market are categorised as loan and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.


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Financial Instruments (Continued)

(a) Financial Assets (Continued)

(v) Impairment of Financial Assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial asset have been affected.

Receivables assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in the national or global economic conditions that correlate with default on receivables.

In respect of receivables carried at amortised cost, the amount of impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period. When an impairment loss subsequently reverses, impairment loss previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income.

(vi) Derecognition of Financial Assets

The Group and the Company derecognise a financial asset only when the contractual rights to the cash flows from the asset expire, or when they transfer the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group and the Company neither transfer nor retain substantially all the risks and rewards of ownership and continue to control the transferred asset, the Group and the Company recognise its retained interest in the asset and an associated liability for amounts they may have to pay. If the Group and the Company retain substantially all the risks and rewards of ownership of a transferred financial asset, the Group and the Company continues to recognise the financial asset and also recognise a collateralised borrowing for the proceeds received.

(b) Financial Liabilities and Equity Instruments

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

(i) Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all of its liabilities. Equity instruments issued by the Group and the Company are recognised at the proceeds received, net of direct issue costs.

(ii) Financial Liabilities

Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities.

(iii) Financial Liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is specially designated into this category upon initial recognition.


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Financial Instruments (Continued)

(b) Financial Liabilities and Equity Instruments (Continued)

(iii) Financial Liabilities at FVTPL (Continued)

A financial liability is classified as held for trading if:

• ithasbeenacquiredprincipallyforthepurposeofrepurchasingitinthenearterm;or• oninitialrecognitionitispartofaportfolioofidentifiedfinancialinstrumentsthattheGroupandtheCompanymanage

together and has a recent actual pattern of short-term profit-taking; or• itisaderivativethatisnotdesignatedandeffectiveasahedginginstrument.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability. Fair value is determined in the manner described in Note 33.

(iv) Other Financial Liabilities

Other financial liabilities, including payables and borrowings, are initially measured at fair value, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

(v) Derecognition of Financial Liabilities

The Group and the Company derecognise financial liabilities when, and only when, the Group’s and the Company’s obligations are discharged, cancelled or they expire.

Cash and cash equivalents

The Group and the Company have adopted the indirect method in the preparation of the statements of cash flows.

Cash equivalents are short-term, highly liquid investments with maturities of six months or less from the date of acquisition and are readily convertible to cash without significant risks of changes in value.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

(i) Critical judgements in applying accounting policies

In the process of applying the Group’s and the Company’s accounting policies, management is of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements except as discussed below.


67

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Continued)

(ii) Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

Depreciation of property, plant and equipment

The depreciation of property, plant and equipment is based on the estimation of the total gross post construction throughput capacity. This is based on the historical actual throughput and the estimated throughput over the estimated remaining useful lives. As such, this involves estimation uncertainty and critical judgement as the actual throughput in the future might differ from the estimated future throughput capacity.

Valuation of the recoverable amount for cash-generating unit

The value in use of the cash generating units is based on management’s cash flow projections covering periods of 5 to 17 years. A discount rate of 7% per annum was applied over the period of the cash flow projections. Management believes that a period of 17 years used for the cash flow projections is justified as income derived from the extended period can be supported by a Jetty Terminal Usage Agreement (“JTUA”) which expires in the year 2028.

5. SEGMENTAL REPORTING

Segment information is presented in respect of the Group’s business and geographical segments. No segment information on the basis of geographic segments is presented as all of the external customers and segment assets are located in Malaysia. The primary format using business segments is based on the Group’s management and internal reporting structure. Inter-segment pricing is determined based on negotiated terms.

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 interest-earning assets and revenue and interest-bearing loans, borrowings, financial instruments and expenses.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.

The Group comprises the following main business segments:

Port operations Ownership and operation of 2 port facilities, Lekir Bulk Terminal (“LBT”) (port facility for dry and liquid bulk) and Lumut Maritime Terminal (“LMT”) (port facility for dry and liquid bulk, break bulk and containers) comprising Lumut Port

Marine services Provision of tuggage services. This was discontinued during the current year upon the disposal of the Group’s investment in P.T. Indoexchange Tbk. (“INDX”)

Investment holding Investment in ordinary shares of subsidiary companies, LBTSB Redeemable Cumulative Convertible Preference Shares (“RCCPS”), LMT Redeemable Preference Share (“RPS”) and other unquoted shares

Industrial property Sale of industrial property

Metal business Mining and smelting of nickle ore via investment in Platinum Group Metal Corporation (“PGMC”). This was discontinued in the year 2010 upon the disposal of the Group’s investment in PGMC


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5. SEGMENTAL REPORTING (Continued)

The Group Port Investment Industrial Continuing2011 operations holding property Elimination Consolidated operations

RM RM RM RM RM RM

Business segmentsRevenue from external customers 87,930,499 - - - 87,930,499 87,930,499Inter-segment revenue - 44,100,000 - (44,100,000) - -Share of revenue of associate 34,564,151 - 14,034,800 - 48,598,951 48,598,951

Gross segment revenue 122,494,650 44,100,000 14,034,800 (44,100,000) 136,529,450 136,529,450Share of revenue of associate (34,564,151) - (14,034,800) - (48,598,951) (48,598,951)

Total segment revenue 87,930,499 44,100,000 - (44,100,000) 87,930,499 87,930,499

Segment results 43,871,347 44,316,087 - (44,100,000) 44,087,434 44,087,434

Results from operations 43,871,347 44,316,087 - (44,100,000) 44,087,434 44,087,434Interest income 2,307,126 1,748,601 - - 4,055,727 4,055,727Finance costs (7,181,419) (32,541) - 1,600,000 (5,613,960) (5,613,960)

Operating profit 38,997,054 46,032,147 - (42,500,000) 42,529,201 42,529,201Share of profit after tax of equity accounted

associate 11,958,076 - 5,704,134 - 17,662,210 17,662,210

Profit before tax 50,955,130 46,032,147 5,704,134 (42,500,000) 60,191,411 60,191,411Tax expense (10,613,473) (96,054) - - (10,709,527) (10,709,527)

Net profit for the year 40,341,657 45,936,093 5,704,134 (42,500,000) 49,481,884 49,481,884

Business segmentsSegment assets 429,542,905 211,132,952 - - 640,675,857 640,675,857Investment in associate 68,199,994 - 37,947,856 - 106,147,850 106,147,850

Total assets 497,742,899 211,132,952 37,947,856 - 746,823,707 746,823,707

Total liabilities 128,485,134 1,859,412 - - 130,344,546 130,344,546

Depreciation of property, plant and equipment 9,850,545 219,092 - - 10,069,637 10,069,637


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5. SEGMENTAL REPORTING (Continued)

The Group Port Marine Investment Industrial Discontinued Continuing2010 operations services holding property Metal Elimination Consolidated operations operations(Restated) RM RM RM RM RM RM RM RM RM

Business segmentsRevenue from external

customers 88,096,269 6,097,469 - - - - 94,193,738 (6,097,469) 88,096,269Inter-segment revenue - - 1,600,000 - - (1,600,000) - - -Share of revenue of

associates 33,612,461 - - 6,355,950 38,181,380 - 78,149,791 (38,181,380) 39,968,411

Gross segment revenue 121,708,730 6,097,469 1,600,000 6,355,950 38,181,380 (1,600,000) 172,343,529 (44,278,849) 128,064,680Share of revenue of

associates (33,612,461) - - (6,355,950) (38,181,380) - (78,149,791) 38,181,380 (39,968,411)

Total segment revenue 88,096,269 6,097,469 1,600,000 - - (1,600,000) 94,193,738 (6,097,469) 88,096,269

Segment results 45,215,832 196,784 (7,614,282) - - (1,600,000) 36,198,334 (196,784) 36,001,550

Results from operations 45,215,832 196,784 (7,614,282) - - (1,600,000) 36,198,334 (196,784) 36,001,550Interest income 2,771,629 470,598 556,352 - - - 3,798,579 (470,598) 3,327,981Finance costs (10,037,197) - (18,403) - - 1,600,000 (8,455,600) - (8,455,600)

Operating profit 37,950,264 667,382 (7,076,333) - - - 31,541,313 (667,382) 30,873,931Share of profit after tax

of equity accounted associates 11,699,877 - - 2,686,243 5,554,607 - 19,940,727 (5,554,607) 14,386,120

Impairment loss on subsidiary company - - (7,000,000) - - 1,398,320 (5,601,680) - (5,601,680)

Reversal of impairment loss in an associate - - 26,316,535 - - (5,237,056) 21,079,479 - 21,079,479

Profit before tax 49,650,141 667,382 12,240,202 2,686,243 5,554,607 (3,838,736) 66,959,839 (6,221,989) 60,737,850Tax expense (10,803,862) (256,462) (99,656) - - (35,204) (11,195,184) 256,462 (10,938,722)

Net profit for the year 38,846,279 410,920 12,140,546 2,686,243 5,554,607 (3,873,940) 55,764,655 (5,965,527) 49,799,128

Business segmentsSegment assets 475,262,463 11,788,212 176,803,597 - - - 663,854,272 - 663,854,272Investment in associates 67,383,875 - - 31,101,765 - - 98,485,640 - 98,485,640Asset classified as held

for sale - - - - 40,557,687 - 40,557,687 - 40,557,687

Total assets 542,646,338 11,788,212 176,803,597 31,101,765 40,557,687 - 802,897,599 - 802,897,599

Total liabilities 161,735,513 525,542 24,110,108 - - - 186,371,163 - 186,371,163

Depreciation of property, plant and equipment 10,027,909 38,319 174,304 - - - 10,240,532 (38,319) 10,202,213


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6. REVENUE

Revenue of the Group and the Company consist of the following:

The Group The Company2011 2010 2011 2010RM RM RM RM

Port operations income 87,930,499 88,096,269 - -Gross dividend income from subsidiary companies - - 44,100,000 1,600,000

87,930,499 88,096,269 44,100,000 1,600,000

7. PROFIT FROM OPERATIONS

Profit from operations is stated after charging/(crediting):

The Group The Company2011 2010 2011 2010RM RM

(Restated)RM RM

Audit fee:Current year 110,735 121,633 63,000 60,000Underprovision in prior years 937 5,000 - -Other services 7,500 11,000 5,000 -

Depreciation of property, plant, and equipment (Note 14) 10,069,637 10,202,213 204,729 145,578Project expenses - 6,371,405 - 4,285,008Personnel expenses:

Salaries and allowances 650,480 1,591,137 650,480 1,591,137Contribution to Employees Provident Fund 75,709 189,981 75,709 189,981

Management fees 150,000 (600,000) 150,000 (600,000)Gain on disposal of associate (PGMC) (722,489) - - -Gain on disposal of subsidiary company (INDX) (1,925,673) - (2,152,942) -Office facilities fees (41,400) (165,600) (41,400) (165,600)Plant and equipment written off 2,408,896 - 1,015 -(Gain)/ Loss on foreign exchange:

Realised (2,403,578) (96,397) (105,624) (96,397)Unrealised (1,453) 8,126 82 2,016,863

Allowance for doubtful debts written back - - (817,259) (26,316,535)Waiver of inter company balances - - (1,586,889) -


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7. PROFIT FROM OPERATIONS (Continued)

The remuneration of members of key management, other than the directors of the Company as disclosed in Note 8, are as follows:


Salaries and allowances 931,730 528,846 931,730 528,846Contribution to Employees Provident Fund 76,906 31,732 76,906 31,732

1,008,636 560,578 1,008,636 560,578

8. DIRECTORS’ REMUNERATION


(Restated)RM RM

Directors’ fees 855,517 848,132 840,740 840,000Directors’ allowances 386,000 432,000 386,000 432,000

1,241,517 1,280,132 1,226,740 1,272,000

9. FINANCE COSTS


Interest:LBT Serial Bonds interest expense 5,181,419 8,037,197 - -Finance lease 32,541 18,403 32,541 18,403Share of LBT RCCPS dividend to non-controlling interests 400,000 400,000 - -

5,613,960 8,455,600 32,541 18,403


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10. INCOME TAX EXPENSE


(Restated)RM RM RM RM

Income tax payable:Malaysian 12,463,921 12,061,636 360,756 55,218Foreign 34,117 78,618 16,411 53(Over)/Underprovision in prior years (314,511) 4,468 - 1,009

12,183,527 12,144,722 377,167 56,280Deferred tax (Note 26):Recognised in profit or loss (1,474,000) (1,206,000) - -

Income tax expense 10,709,527 10,938,722 377,167 56,280

A reconciliation of income tax expense applicable to profit before tax at the applicable statutory income tax rates to income tax expense at the effective income tax rates of the Group and of the Company is as follows:


(Restated)RM RM

Profit before tax:Continuing operations 60,191,411 60,737,850 45,688,584 10,296,512Discontinued operations - 5,965,527 - -

60,191,411 66,703,377 45,688,584 10,296,512

Taxation at applicable rate of 25% 15,047,853 16,675,844 11,422,146 2,574,128Tax effect of:

Effect of tax rates in foreign jurisdictions 34,117 78,618 16,411 53Tax of equity accounted associates (4,415,589) (4,924,334) - -Non-deductible expenses 1,398,484 5,762,648 1,083,334 5,298,890Non-taxable income (856,061) (5,269,870) (934,958) (6,579,134)Tax exempt income (184,766) (1,388,652) (11,209,766) (1,238,666)(Over)/Under provision in prior years (314,511) 4,468 - 1,009

10,709,527 10,938,722 377,167 56,280


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11. DISCONTINUED OPERATIONS On February 10, 2011, the Company accepted an offer from Equatorex Sdn Bhd to acquire the entire 70.31% interest of the Company in INDX. Accordingly, this disposal had resulted in the classification of INDX’s operations as discontinued operations during the current year.

On October 19, 2010, the Company’s wholly owned subsidiary, Integrax Philippines Inc. entered into a Conditional Share Purchase Agreement for the disposal of its 20.01% shareholding in PGMC for a total gross consideration of PHP600,375,047 (equivalent to USD13,962,210 or RM43,150,211) and classified as discontinued operations in 2010. This disposal was completed on January 17, 2011.

The combined results of the discontinued operations of marine services and metal business are as set out below. The comparative profit and cash flows from discontinued operations of the Group have been re-presented to include these operations classified as discontinued in the current period.

Profit attributable to the discontinued operations were as follows:

The Group2011 2010RM RM

Results of discontinued operationsRevenue - 6,097,469Cost of services-contracted services - (4,884,054)

Gross profit - 1,213,415Administrative expenses - (1,016,631)

Profit from operations - 196,784Interest income - 470,598

Profit before tax - 667,382Income tax expense - (256,462)

Profit from discontinued operations-INDX - 410,920

Profit from discontinued operations-PGMC - 5,554,607

Profit from discontinued operations - 5,965,527

Cash flow used in discontinued operations were as follows:


Net cash used in operating activities - 383,632Net cash used in investing activities - 2,173,431

Net cash used in discontinued operations - 2,557,063


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11. DISCONTINUED OPERATIONS (Continued)

The effects of the disposal of INDX on the financial position of the Group were as follows:

The Group2011RM

Property, plant and equipment 2,509,410Goodwill on acquisition 628,229Current assets 9,347,082Current liabilities (2,084,337)Non-controlling interests (2,723,538)

Net assets 7,676,846Gain on disposal 1,925,673Consideration received 9,602,519Cash and cash equivalents disposed of (7,430,322)

Net cash inflow 2,172,197

12. EARNINGS PER ORDINARY SHARE

The calculation of basic earnings per share is based on the consolidated profit attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the year as follows:

The Group2011 2010Sen Sen

(Restated)Basic earnings per ordinary share:

From continuing operations 14.6 14.8From discontinued operations - 1.9

14.6 16.7


(Restated)

Profit attributable to equity holders of the Company 43,813,938 50,268,406Profit for the year from discontinued operations used in the calculation of

basic earnings per share from discontinued operations - (5,855,236)

Earnings used in the calculation of basic earnings per share from continued operations 43,813,938 44,413,170

The Group2011 2010Units Units

Number of ordinary shares in issue 300,805,917 300,805,917


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13. DIVIDENDS

The Group and The Company2011 2010RM RM

Special interim dividend of 16% less 25% tax 36,096,710 -Final dividend of 3% less 25% tax - 6,768,133

Since the end of the previous financial year, a special interim dividend of 16% less 25% income tax, amounting to RM 36,096,710 in respect of the financial year ended December 31, 2011 was paid on May 18, 2011.

No further dividends have been recommended by the directors for the financial year ended December 31, 2011.


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14. PROPERTY, PLANT AND EQUIPMENT

The GroupLeasehold

landBuildings andrenovations

Industrialbuildings, civil

works andinfrastructure

Motorvehicles

Plant andequipment,furniture

and fittings Vessel TotalCost RM RM RM RM RM RM RM

Balance at January 1, 2010 18,758,729 556,954 155,057,605 178,895 221,072,556 - 395,624,739Additions - 47,156 - 609,823 44,083 2,592,362 3,293,424Effect of movement in

exchange rate - (6,662) - - (5,445) (115,457) (127,564)

Balance at December 31, 2010 18,758,729 597,448 155,057,605 788,718 221,111,194 2,476,905 398,790,599

Balance at January 1, 2011 18,758,729 597,448 155,057,605 788,718 221,111,194 2,476,905 398,790,599Additions - - 366,500 - 3,506,610 - 3,873,110Written off - - - - (3,005,455) - (3,005,455)Disposals of subsidiary

company - (46,766) - - (37,489) (2,476,905) (2,561,160)

Balance at December 31, 2011 18,758,729 550,682 155,424,105 788,718 221,574,860 - 397,097,094

Accumulated DepreciationBalance at January 1, 2010 1,484,471 476,019 12,504,423 8,945 31,069,261 - 45,543,119Depreciation for the year 189,480 22,841 2,811,582 96,760 7,093,763 26,106 10,240,532Effect of movement in

exchange rate - (4,467) - - (4,731) (305) (9,503)

Balance at December 31, 2010 1,673,951 494,393 15,316,005 105,705 38,158,293 25,801 55,774,148

Balance at January 1, 2011 1,673,951 494,393 15,316,005 105,705 38,158,293 25,801 55,774,148Depreciation for the year 189,480 10,296 2,734,800 157,746 6,977,315 - 10,069,637Written off - - - - (596,559) - (596,559)Disposals of subsidiary

company - (3,897) - - (22,052) (25,801) (51,750)Effect of movement in

exchange rate - (111) - - (70) - (181)


Net Book ValueBalance at December 31, 2010 17,084,778 103,055 139,741,600 683,013 182,952,901 2,451,104 343,016,451


A private caveat over LBTSB’s leasehold land had been lodged by the Bank providing the Bank Guarantee to the LBT Serial Bondholders as disclosed in Note 27.

As at December 31, 2011, the leasehold land had an unexpired lease period of 89 years (2010: 90 years).


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14. PROPERTY, PLANT AND EQUIPMENT (Continued)

Buildings RenovationMotor

vehiclesFurniture

and fittingsOffice

equipment TotalThe CompanyCost RM RM RM RM RM RMBalance at January 1, 2010 75,000 408,458 178,895 131,366 191,969 985,688Additions - - 609,823 23,060 16,512 649,395

Balance at December 31, 2010 75,000 408,458 788,718 154,426 208,481 1,635,083

Balance at January 1, 2011 75,000 408,458 788,718 154,426 208,481 1,635,083Additions - - - 7,769 15,085 22,854Written off - - - - (2,909) (2,909)

Balance at December 31, 2011 75,000 408,458 788,718 162,195 220,657 1,655,028

Accumulated DepreciationBalance at January 1, 2010 21,999 408,458 8,945 58,432 94,889 592,723Depreciation for the year 1,500 - 96,760 14,151 33,167 145,578

Balance at December 31, 2010 23,499 408,458 105,705 72,583 128,056 738,301

Balance at January 1, 2011 23,499 408,458 105,705 72,583 128,056 738,301Depreciation for the year 1,500 - 157,746 15,958 29,525 204,729Written off - - - - (1,894) (1,894)

Balance at December 31, 2011 24,999 408,458 263,451 88,541 155,687 941,136

Net Book Value Balance at December 31, 2010 51,501 - 683,013 81,843 80,425 896,782

Balance at December 31, 2011 50,001 - 525,267 73,654 64,970 713,892


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15. GOODWILL ON CONSOLIDATION


Cost 128,029,993 134,259,902Accumulated impairment losses - (5,601,680)

128,029,993 128,658,222

The carrying amount of goodwill is attributable to cash-generating units as follows:


Lekir Bulk Terminal Sdn Bhd (“LBTSB”) 90,208,779 90,208,779Lumut Maritime Terminal Sdn Bhd (“LMTSB”) 37,821,214 37,821,214PT Indoexchange Tbk (“INDX”) - 628,229

128,029,993 128,658,222

Key assumptions used in value in use calculations

The value in use of the cash generating units is based on management’s cash flow projections covering periods of 5 to 17 years. A discount rate of 7% per annum was applied over the period of the cash flow projections. Management believes that a period of 17 years used for the cash flow projections is justified as income derived from the extended period can be supported by a Jetty Terminal Usage Agreement which expires in the year 2028.

16. INVESTMENT IN SUBSIDIARY COMPANIES

The Company2011 2010RM RM

At cost:Unquoted shares 139,351,469 139,351,469Quoted shares outside Malaysia - 14,449,577

139,351,469 153,801,046Less: Impairment loss - (7,000,000)

139,351,469 146,801,046Advances to subsidiary companies 135,204,071 159,549,321Less: Allowance for doubtful debts - (2,618,000)

274,555,540 303,732,367

Market value:Quoted shares outside Malaysia (based on last traded value on December 30, 2010) - 7,288,984


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16. INVESTMENT IN SUBSIDIARY COMPANIES (Continued)

Details of the Company’s subsidiary companies at December 31, 2011 are as follows:

Name of subsidiary companyCountry of

incorporationProportion of

ownership interest Principal activity2011 2010

% %

Pelabuhan Lumut Sdn Bhd (“PLSB”) Malaysia 100 100 Investment holdingIntegrax Resources Pte Ltd (“IRPL”)# Singapore 100 100 Investment holdingSegmen Kembara Sdn Bhd (“SKSB”) Malaysia 100 100 DormantTrek Kembara Sdn Bhd (“TKSB”) Malaysia 100 100 DormantLBT Two Sdn Bhd (“LBT2”) Malaysia 100 100 DormantPT Integra Jasa Energi (“PTIJE”)# Indonesia 95 95 DormantPT Integrax Indonesia (“PTITB”)# Indonesia 100 100 DormantIntegrax Philippines, Inc (“ITP”)* Philippines 100 100 Investment holdingPT Indoexchange Tbk (“INDX”)* Indonesia - 70.31 Investment holding

Subsidiary of PLSBLekir Bulk Terminal Sdn Bhd (“LBTSB”) Malaysia 80 80 Development, ownership and

management of a dry bulk terminal

Subsidiaries of INDXRadikal Rancak Sdn Bhd (“RRSB”)* Malaysia - 70 Provision of tuggage servicesPT Nexia Sourcing Indonesia* Indonesia - 64 Textile portal servicesPT Icorp Asia* Indonesia - 70 Mining portal servicesPT Pelayaran Indx Lines* Indonesia - 99 Provision of marine services

* The financial statements of these companies were not audited by Deloitte & Touche. # The financial statements of these companies have been consolidated based on management accounts as they are in the process

of liquidation. The amount owing by/(to) subsidiary companies, which are non-trade in nature, are unsecured, interest free and repayable on demand.

For the purposes of these financial statements, parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Controlling related party relationships are in respect of:

(i) The Company’s subsidiary companies as disclosed above.

(ii) A Director of the Company, Amin bin Halim Rasip, who is deemed to be interested by virtue of his shareholdings in Jurukapal Marine Services Sdn Bhd (“JMS”) and Golden Initiative Sdn Bhd (“GISB”).


80


Significant inter-company transactions of the Company are as follows:


Ordinary dividend received from PLSB 44,100,000 -Preference dividend receivable from LBTSB 1,600,000 1,600,000Administrative fee receivable from LBTSB 227,760 219,000Telephone charges received from RRSB (former subsidiary company) 2,786 24,000Sundry expenses received from RRSB (former subsidiary company) 3,482 30,000Office rental received from RRSB (former subsidiary company) 4,179 36,000Electricity received from RRSB (former subsidiary company) 696 6,000Web maintenance charge paid to INDX (former subsidiary company) 6,919 63,450Interest income received from INDX (former subsidiary company) 46,847 -

Set out below are the significant related party transactions in the normal course of business for the financial year (in addition to related party disclosures mentioned elsewhere in the financial statements). The related party transactions described below were carried out on terms and conditions not more materially different from those obtainable in transactions with unrelated parties.

Significant related party transactions of the Company are as follows:

The Group and The Company

2011 2010RM RM

Office facilities fees receivable from Petrokapal Sdn Bhd (“PKS”), a company in which a director (Amin bin Halim Rasip) previously has interest 41,400 165,600

Significant transactions with an associate, LMTSB are as follows:

The Group and The Company

2011 2010RM RM

Management fee receivable - 600,000Operations and maintenance fees payable 29,326,113 28,538,862Tuggage services received 704,500 6,096,269


81


The operations and maintenance fees payable is in respect of the operations of the port belonging to LBTSB which is managed by LMTSB.

The terms and conditions for the above transactions are based on contracted terms. All the amounts outstanding are unsecured and are expected to be settled with cash.

17. INVESTMENT IN ASSOCIATES


At cost:Unquoted shares - LMTSB 70,590,502 70,590,502Group’s share of post-acquisition reserves 92,807,186 75,144,976

163,397,688 145,735,478

Less: Dividends (57,249,838) (47,249,838)

106,147,850 98,485,640

Details of the Group’s associates as at December 31, 2011 are as follows:

Name of associateCountry of

incorporationProportion of

ownership interest Principal activity2011 2010

% %

LMTSB (held through PLSB) Malaysia 50% less one (1) share

50% less one (1) share

Development of an integrated privatised project encompassing ownership and operations of multi-purpose port facilities, operation and maintenance of a bulk terminal, sales and rental of port related land and other ancillary activities

LMTC (held through LMTSB) Malaysia 50% less one (1) share

50% less one (1) share

Dormant

PGMC Philippines - 20.01 Extraction and smelting of nickle ore


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17. INVESTMENT IN ASSOCIATES (Continued)

Summary of financial information of the Group’s associates as at the end of the reporting period are as below:

Revenues Profit Total assets Total liabilities(100%) (100%) (100%) (100%)

2011 RM RM RM RM

LMTSB 97,217,346 35,331,486 220,217,113 83,158,259LMTC # # # #

97,217,346 35,331,486 220,217,113 83,158,259

2010

LMTSB 79,952,813 28,777,996 207,204,727 85,837,359*LMTC # # # #

79,952,813 28,777,996 207,204,727 85,837,359*

# LMTC is held as an associate through LMTSB. Its financial information is consolidated with LMTSB.* Included in total liabilities is preference share premium of RM19,800,000

On January 17, 2011 the Company’s wholly owned subsidiary company, Integrax Philippines Inc. completed the disposal of its 20.01% shareholding in PGMC.

18. OTHER INVESTMENTS


Non-current LMT Redeemable Preference Shares (“RPS”) 10,029,999 10,029,999


Non-current LBT Redeemable Cumulative Convertible Preference Shares (“RCCPS”) 16,000,000 16,000,000


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19. TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES


Trade receivables 8,565,738 9,710,389

Trade receivables are measured at amortised cost, less impairment losses.

No interest is charged on trade receivables for the first 60 days from the date of invoices. Thereafter, interest is charged at 2% per annum (2010: 2% per annum) above the prevailing base lending rate as quoted by a local bank on the outstanding balance. They are recognised at their original invoiced amounts which represent their fair values on initial recognition.

Receivables that are neither past due nor impaired

The Group’s trade receivables are owed by TNB Janamanjung Sdn Bhd (“TNBJ”) and LMTSB with good payment records with the Group. The Group’s trade receivables that are neither past due nor impaired have not been renegotiated during the financial year.

The Group does not hold any collateral or other credit enhancements over these balances nor do they have a legal right to offset against any amounts owed by the Group to the counterparty.

An analysis of trade receivables is as follows:


Neither past due nor impaired 8,565,738 9,710,389Past due but not impaired - -

Total trade receivables, net 8,565,738 9,710,389

Other receivables and prepaid expenses consist of the following:


Prepaid expenses 349,743 1,380,543 19,823 64,428Interest receivable 583,343 484,453 298,574 35,371Refundable deposits 113,229 137,585 93,229 91,729Deposits for property, plant and equipment 4,380,000 - - -Other receivables 9,731,130 9,403,471 43,292 74,534

15,157,445 11,406,052 454,918 266,062


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19. TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES (Continued)

The currency exposure profile of other receivables and prepaid expenses are as follows:


Malaysian Ringgit 15,157,377 10,810,268 413,749 225,716Indonesian Rupiah - 541,097 41,169 40,346Philippines Peso 68 48,753 - -United States Dollar - 5,934 - -

15,157,445 11,406,052 454,918 266,062

20. CASH AND BANK BALANCES


Cash and bank balances 9,852,633 6,733,821 336,251 726,997Deposits with licensed banks 137,138,250 154,148,748 69,050,000 31,062,419

146,990,883 160,882,569 69,386,251 31,789,416

The currency exposure profile of cash and bank balances are as follows:


Malaysian Ringgit 144,559,975 148,501,573 69,386,251 31,789,416Indonesian Rupiah 1,936,902 11,940,626 - -Philippines Peso 494,006 440,370 - -

146,990,883 160,882,569 69,386,251 31,789,416

Included in fixed deposits of the Group is an amount of RM5,000 (2010: RM5,000) which has been pledged by LBTSB with a bank for guarantee facilities for the purpose of a bond required by Kastam Diraja Malaysia in respect of its dry bulk terminal’s customs legal landing point status.

Included in deposits with licensed banks and cash and bank balances are amounts of RM20,020,000 (2010: RM28,9000,000) and RM7,295,119 (2010: RM10,196) respectively held in a Bond Redemption Account maintained by LBTSB for the settlement of its Serial Bonds.


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21. ASSETS CLASSIFIED AS HELD FOR SALE

On October 19, 2010, the Company’s wholly owned subsidiary company, Integrax Philippines Inc entered into a conditional Share Purchase Agreement for the disposal of its 20.01% shareholding in PGMC for a total gross consideration of USD13,962,210 (equivalent to RM43,150,211).

The sale consideration was payable in two instalments denominated in USD, the first payment of USD6,976,720 (equivalent to RM21,561,553) was received on December 21, 2010 upon the fulfilment of all the conditions precedent stated in the Share Purchase Agreement.

The balance sums of USD6,520,350 (equivalent to RM20,151,142) and Peso 20,000,000 were received on January 17, 2011. The legal title and ownership of these PGMC shares were transferred to the buyer upon the receipt of these balance sums.

22. SHARE CAPITAL

The Group andThe Company

2011 2010RM RM

Authorised:470,000,000 ordinary shares of RM1.00 each 470,000,000 470,000,000300,000,000 Irredeemable Convertible Preference Shares (“ICPS”) of RM0.10 each 30,000,000 30,000,000

Issued and fully paid:300,805,917 ordinary shares of RM1.00 each 300,805,917 300,805,917

23. RESERVES


Non-distributable: Share premium 46,705,593 46,705,593 46,705,593 46,705,593Capital redemption reserve 185,450 185,450 - -Translation reserve 959,309 3,543,966 - -

47,850,352 50,435,009 46,705,593 46,705,593

Capital redemption reserve

The capital redemption reserve was created as a consequence of the redemption of the LBT Redeemable Non-Cumulative Preference Shares (“RNCPS”) by transferring the required nominal amount redeemed from retained earnings.

Translation reserve

Exchange differences relating to the translation of the net assets of the Group’s foreign operations from their functional currencies to the Group’s presentation currency are recognised directly in other comprehensive income and accumulated in the translation reserve. Exchange differences previously accumulated in the translation reserve are reclassified to profit or loss on the disposal or partial disposal of the foreign operation.


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23. RESERVES (Continued)


Balance at January 1 3,543,966 3,593,302Exchange differences arising on translating the net assets of foreign operations (2,584,657) (49,336)

Balance at December 31 959,309 3,543,966

24. RETAINED EARNINGS

Distributable reserves are those available for distribution by way of cash dividends.

In accordance with the Finance Act 2007, the single tier income tax system became effective from year of assessment 2008. Under this new system, tax on a company’s profit is a final tax, and dividends paid are exempted from tax in the hands of the shareholders. Unlike the previous imputation system, the recipient of the dividend would no longer be able to claim any tax credit.

Companies with Section 108 tax credit balance will automatically move to the single tier tax system on January 1, 2008. However, companies with such tax credits are given irrevocable options to elect for the single tier tax system and disregard the tax credit or to continue to use the tax credits under Section 108 account to frank the payment of cash dividends on ordinary shares for a period of 6 years ending December 31, 2013 or until the tax credits are fully utilised, whichever comes first. During the transitional period, any tax paid will not be added to the Section 108 account and any tax credits utilised will reduce the tax credit balance. All companies will automatically move to the new system on January 1, 2014.

As of December 31, 2011, the Company has not elected for the irrevocable option to disregard Section 108 tax credits. Accordingly, subject to agreement of the Inland Revenue Board and based on the prevailing tax rate applicable to dividend and estimated tax credits, the Company has sufficient Section 108 tax credits to frank dividends amounting to approximately RM9,315,197 out of its retained earnings as of December 31, 2011 without additional tax liability being incurred. The Company may distribute the balance of retained earnings of approximately of RM2,643,093 as dividend under single tier system.

25. NON-CONTROLLING INTERESTS

The Group 2011 2010RM RM

At January 1 61,945,395 56,588,179Share of profit for the year 5,667,946 5,496,249Non-controlling interest arising from acquisition - 2,057Disposal of subsidiary company (2,723,538) -Effects of Quasi restructuring - (59,918)Share of other comprehensive income for the year 746 (81,172)Dividend paid (8,125,000) -

At December 31 56,765,549 61,945,395


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26. DEFERRED TAX LIABILITIESThe Group

Deferred tax liabilities2011 2010RM RM

At January 1 53,684,000 54,890,000Total recognised in profit or loss (Note 10): (1,474,000) (1,206,000)

At December 31 52,210,000 53,684,000

Deferred tax liabilities are attributable to the following:

2011 2010RM RM

Property, plant and equipment 52,210,000 53,684,000

27. SERIAL BONDS

On July 7, 2000, LBTSB issued zero coupon Serial Bonds with a nominal value of RM445,000,000 to finance the construction of its jetty terminal. These Serial Bonds are repayable over a period of 12½ years. The Serial Bond’s average effective interest rate determined by reference to the yield to maturity is 8% (2010: 8%) per annum.

2011 2010RM RM

Serial bonds 60,000,000 102,000,000Less: Unamortised discount on issuance (1,538,937) (6,720,357)

58,461,063 95,279,643

The serial bonds are payable as follows:

2011 2010RM RM

Less than one year 58,461,063 42,000,000Within two to five years - 53,279,643

58,461,063 95,279,643

In September 2011, RAM Rating Services Berhad (“RAM”) reaffirmed their enhanced rating of AAA(bg) for these Serial Bonds with a stable outlook. These Serial Bonds are secured by a guarantee issued by a Bank rated AAA (bg) by RAM. The serial bondholders and the guarantee provider share a charge over the Jetty Terminal Usage Agreement (“JTUA”) signed by LBTSB and TNB Janamanjung Sdn Bhd, and a designated bank account of LBTSB, with the serial bondholders ranking after the guarantee provider. LBTSB is obligated to ensure that there shall, on a progressive basis over a period of six months, be an amount accumulated in the designated bank account which is equivalent to the serial bond due at the end of each six-month period.


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27. SERIAL BONDS (Continued)

The Bank Guarantee facility is secured by the following:

(i) A private caveat over land owned by LBTSB;

(ii) Assignment of the Jetty Terminal Usage Agreement; and

(iii) Assignment of the Bond Redemption Account

The main covenants of the Bank Guarantee facility are as follows:

(i) LBTSB to maintain a Debt to Equity ratio of not more than 2:1 at all times;

(ii) LBTSB to open and maintain a Bond Redemption Account which is to be operated solely by the Bank Guarantor or such party appointed by the Bank Guarantor. This Bond Redemption Account is for the purpose of capturing all periodic payments due to LBTSB under the JTUA; and

(iii) LBTSB is to ensure that at all times the balance standing to the credit of the Bond Redemption Account is of an amount equivalent to the Minimum Balance required under the Facility Agreement plus any outstanding Bank Guarantee fee which is due and payable to the Bank Guarantor.

28. PREFERENCE SHARE CAPITAL


Authorised: Redeemable Non-cumulative Convertible

Preference Shares of RM0.01 each (LBT RNCPS) 1,000,000 1,000,000Redeemable Cumulative Convertible

Preference Shares of RM0.01 each (LBT RCCPS) 1,000,000 1,000,000

2,000,000 2,000,000

Issued and fully paid: LBT RCCPS 40,000 40,000

The LBT RCCPS have the following rights:

(i) As to income

LBTSB shall pay to the holders of the RCCPS out of profits of the LBTSB resolved under the Articles of Association of the company to be distributed in respect of each financial year in priority to all dividends declared on Ordinary Shares in issue, a fixed cumulative preferential dividend at the rate of ten percent (10%) per annum on the RCCPS then in issue.

(ii) As to redemption

(a) LBTSB shall have the right, at any time after the allotment of any RCCPS (provided it is fully paid) to redeem such shares and in the case of a partial redemption proportionately in respect of each holding of RCCPS but in any event, LBTSB shall be obliged to redeem all of the RCCPS which are then in issue not later than fourteen (14) days prior to a proposed listing of, merger or amalgamation of or reconstruction exercise undertaken by LBTSB unless otherwise agreed by the holders of the Preference Shares then in issue in the case of a merger, amalgamation or other reconstruction exercise; and redeem all of the RCCPS which are then in issue on the date expiring fifteen (15) years from May 21, 2002 (“Redemption Date”).

Any such redemption shall include the nominal amount and a premium of Sen Ninety-Nine (RM0.99) per share payable to the holder.


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28. PREFERENCE SHARE CAPITAL (Continued)

Issued and fully paid: (Continued)

(iii) As to conversion

(a) If LBTSB fails to redeem the RCCPS in accordance with its Articles of Association; or

(b) Fails to redeem all of the RCCPS on the Redemption Date;

Whichever is the earlier, then on the date of such failure, the holders of the RCCPS may convert any of the RCCPS into Ordinary Shares on the basis of one (1) RCCPS for one (1) Ordinary Share provided that if the Ordinary Shares are consolidated or sub-divided at any time prior to the Conversion Date, the number of Ordinary Shares into which the RCCPS are converted shall be adjusted accordingly.

29. PREFERENCE SHARE PREMIUM

The preference share premium account arose from the following:


4,000,000 LBT RCCPS at a premium of RM0.99 each 3,960,000 3,960,000

30. TRADE PAYABLES

The credit period granted from a single creditor is 60 days. No interest is charged by the trade creditor for the first 60 days from the date of invoices. Thereafter, interest is charged at 2% per annum (2010: 2% per annum) above the prevailing base lending rate as quoted by a local bank on the outstanding balance. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

31. OTHER PAYABLES AND ACCRUED EXPENSES

Other payables and accrued expenses comprise the following:


RM RM RM RM

Other payables - 21,111,967 - -Accrued expenses 4,755,898 2,818,475 1,220,917 2,239,784Dividend payable 400,000 400,000 - -

5,155,898 24,330,442 1,220,917 2,239,784


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31. OTHER PAYABLES AND ACCRUED EXPENSES (Continued)

The currency exposure profile of other payables and accrued expenses are as follows:


RM RM RM RM

Malaysian Ringgit 5,124,049 3,101,673 1,220,917 2,239,784Indonesian Rupiah 7,032 101,053 - -Philippines Peso 24,817 21,120,654 - -United States Dollar - 7,062 - -

5,155,898 24,330,442 1,220,917 2,239,784

32. HIRE-PURCHASE PAYABLES


2011 2010RM RM

Total outstanding 548,502 706,518Less:

Interest-in-suspense (50,536) (83,077)

Principal outstanding 497,966 623,441

Less:Portion due within the next 12 months (shown under current liabilities) (133,584) (125,475)

Non-current portion 364,382 497,966

The non-current portion is repayable as follows:


2011 2010RM RM

Financial year ending December 31:2012 - 133,5842013 141,693 141,6932014 143,606 143,6062015 79,083 79,083

364,382 497,966

The interest rates are fixed at the inception of the hire-purchase arrangement. It is the Group’s policy to acquire certain of its property, plant and equipment under hire-purchase agreement. The average basis term is 5 years. For the year ended December 31, 2011, the average effective borrowing rate was 3% per annum (2010: 3% per annum).


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33. FINANCIAL INSTRUMENTS

Capital Risk Management

The objective of the Group’s capital management is to safeguard the Group’s ability to continue as a going concern while maximising the return to shareholders through the optimisation of debt and equity balance. The Group’s overall strategy remains unchanged since 2010.

The capital structure of the Group consists of serial bonds (as disclosed in Note 27) and equity of the Group (comprising share capital, reserves, retained earnings and non-controlling interest as detailed in Notes 22 to 25). The Group is not subject to any externally imposed capital requirements.

Gearing Ratio

The gearing ratio at end of the reporting period is as follows:


RM RM RM RM

Debt 58,461,063 95,279,643 - -

Equity 616,479,161 616,526,436 359,469,800 350,255,093

Debt to equity ratio (%) 9.48 15.45 - -

(i) Debt consists of the LBTSB Serial Bonds as disclosed in Note 27.

(ii) Equity includes all capital and reserves of the Group and of the Company that are managed as capital.

Significant Accounting Policies

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement, and the bases for recognition of income and expenses), for each class of financial asset, financial liability and equity instrument are disclosed in Note 3.

Categories of financial instruments The table below provides an analysis of financial instruments categorised as follows:

(i) Available-for-sale financial assets

(ii) Loans and receivables

(iii) Held to maturity

(iv) Other financial liabilities measured at amortised cost


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33. FINANCIAL INSTRUMENTS (Continued)


Financial assets Available-for-sale financial assets:

Other investment 10,029,999 10,029,999 16,000,000 16,000,000

Loan and receivables:Trade receivables 8,565,738 9,710,389 - -Other receivables 15,157,445 11,406,052 454,918 266,062Amount owing by subsidiary companies - - 136,804,071 160,063,228Amount owing by associate - 150,590 - 150,590

23,723,183 21,267,031 137,258,989 160,479,880

Cash and bank balances 146,990,883 160,882,569 69,386,251 31,789,416

Financial liabilities At amortised cost: Trade payables 8,681,612 8,346,064 - -Other payables and accrued expenses 5,155,898 24,330,442 1,200,917 2,239,784Serial bonds 58,461,063 95,279,643 - -Hire-purchase payables 497,966 623,441 - -Amount owing to subsidiary companies - - 1,436,649 3,014,673

Financial Risk Management Objectives

The Group’s corporate treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group. These risks include market risk, credit risk and liquidity risk.

The Group seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and the investment of excess liquidity. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Credit risk

The Group’s primary exposure to credit risk arises through its trade receivables. Appropriate informal credit evaluations were performed on customers prior to entering into contractual agreements with them or with customers requiring credit over a certain amount. The exposure to credit risk is monitored by management on an on-going basis.

At the end of the reporting period, 100% (2010: 86%) of the trade receivables are owed by TNBJ which is the current sole customer of LBTSB. The maximum exposure to credit risk is represented by the carrying amount of each financial asset presented on the statement of financial position.

Market Risk

The Group’s and the Company’s activities expose it primarily to the financial risks of changes in foreign exchange rates and interest rates.

Foreign exchange and interest rate exposure is measured using sensitivity analysis as disclosed below. There has been no change to the Group’s and the Company’s exposure to market risk or the manner in which this risk is managed and measured.


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Foreign Currency Risk Management

The Group and the Company undertake transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Group’s and of the Company’s foreign currency denominated monetary assets and liabilities at the end of the reporting period are disclosed in the respective notes.

Foreign Currency Sensitivity Analysis

The Group and the Company are mainly exposed to the currencies of Indonesian Rupiah, Philippines Peso and United States Dollar.

The following tables detail the Group’s and the Company’s sensitivity to a 5% increase and decrease in the relevant foreign currency against the RM. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at year end for a 5% change in foreign currency rates.

A positive number below indicates an increase in profit and other equity where the relevant currency strengthens 5% against the RM. For a 5% weakening of the relevant currency against the RM, there would be a comparable impact on the profit and other equity, and the balances below would be negative.

The changes to the Group’s other components of equity is mainly attributable to the Group’s exposure outstanding on net assets of foreign operations denominated in Indonesian Rupiah and Philippines Peso at the end of the reporting period.

The GroupProfit or Loss Other Equity

2011 2010 2011 2010 RM RM RM RM

Indonesian Rupiah - - 64,803 546,671Philippines Peso - - - 55,012United States Dollar - - - 78,444

The CompanyProfit or Loss Other Equity

2011 2010 2011 2010 RM RM RM RM

Indonesian Rupiah 33,749 170,274 - -Philippines Peso - 1,080,707 - -United States Dollar - 999,729 - -

Interest rate risk

The Group and the Company place cash balances with reputable licensed banks to generate interest income for the Group and the Company. The Group and the Company manage their interest rate risk by placing such balances in deposits with maturities ranging from 1 week to 6 months at interest rates ranging from 0.16% to 6.50% per annum.


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Effective interest rate analysis

In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their average effective interest rates at the end of the reporting period and the periods in which they mature:

The GroupEffective

interest rate TotalLess than

1 yearMore than

5 years% RM RM RM

2011Fixed rate instruments Fixed deposits and REPO with licensed banks 3.07 137,138,250 137,138,250 -Preference share capital 10.00 (40,000) - (40,000)Preference share premium 10.00 (3,960,000) - (3,960,000)

133,138,250 137,138,250 (4,000,000)

2010Fixed rate instruments Fixed deposits and REPO with licensed banks 2.48 154,148,748 154,148,748 -Preference share capital 10.00 (40,000) - (40,000)Preference share premium 10.00 (3,960,000) - (3,960,000)

150,148,748 154,148,748 (4,000,000)

The Company

2011Fixed rate instruments Fixed deposits and REPO with licensed banks 3.19 69,050,000 69,050,000 -

2010Fixed rate instruments Fixed deposits and REPO with licensed banks 2.31 31,062,419 31,062,419 -

Fair values of financial instruments

The carrying amounts of cash and bank balances, trade and other current receivables and payables, provisions and other liabilities and amounts payable approximate their respective fair values due to the relatively short-term maturity of these financial instruments.


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The fair values of other classes of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:

2011 2010

CarryingAmount

Fair value

Carryingamount

Fair value

RM RM RM RMThe GroupFinancial assets Available-for-sale financial assets:

Other investment 10,029,999 See (i) below 10,029,999 See (i) below

Loan and receivables:Trade receivables 8,565,738 8,565,738 9,710,389 9,710,389Other receivables 14,807,702 14,807,702 10,025,509 10,025,509Amount owing by associate - - 150,590 150,590

23,373,440 23,373,440 19,886,488 19,886,488

Cash and cash equivalents 146,990,883 146,990,883 160,882,569 160,882,569

Financial liabilities At amortised cost: Trade payables 8,681,612 8,681,612 8,346,064 8,346,064Other payables and accrued expenses 5,155,898 5,155,898 24,330,442 24,330,442Serial bonds 58,461,063 58,461,063 95,279,643 96,738,000Hire purchase payables 497,966 464,937 623,441 604,808Preference share capital 40,000 See (ii) below 40,000 See (ii) belowPreference share premium 3,960,000 See (ii) below 3,960,000 See (ii) below


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2011 2010CarryingAmount

Fair value

Carryingamount

Fair value

RM RM RM RMThe CompanyFinancial assets Available-for-sale financial assets:

Other investment 16,000,000 See (iii) below 16,000,000 See (iii) below

Loan and receivables:Other receivables 435,095 435,095 201,634 201,634Amount owing by subsidiary companies 136,804,071 136,804,071 160,063,228 160,063,228Amount owing by associate - - 150,590 150,590

137,239,166 137,239,166 160,415,452 160,415,452

Cash and cash equivalents 69,386,251 69,386,251 31,789,416 31,789,416

The CompanyFinancial liabilities At amortised cost: Other payables and accrued expenses 1,220,917 1,220,917 2,239,784 2,239,784Amount owing to subsidiary companies 1,436,649 1,436,649 3,014,673 3,014,673Hire purchase payables 497,966 464,937 623,441 604,808

The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices.

Significant assumptions used in determining the fair value of other financial assets and liabilities are as follows:

(i) LMT RPS

It is not practicable to estimate the fair value of this investment representing 50% less one (1) share of the issued and paid-up LMT RPS capital of this unquoted company. This investment is carried at its original cost of RM10,029,999 (2010: RM10,029,999) in the statement of financial position.

The LMTSB RPS are non-cumulative and may be redeemed out of the retained earnings of LMTSB at LMTSB’s shareholders’ option.

(ii) Preference share capital and share premium held by minority shareholders

It is not practicable to estimate the fair value of this financial liability representing 20% of the issued and paid-up LBTSB RCCPS capital. This financial liability is carried at its original cost in the statement of financial position.

The principal terms of the LBT RCCPS are disclosed in Note 28 and 29 to these financial statements.

(iii) LBT RCCPS

It is not practicable to estimate the fair value of this investment representing 80% of the issued and paid-up LBT RCCPS capital. This investment is carried at its original cost of RM16,000,000 (2010: RM16,000,000) in the statement of financial position.

As at December 31, 2011, the net tangible assets reported by LBTSB was RM283,457,771 (2010: RM295,926,950).

The principal terms of the LBT RCCPS are disclosed in Notes 28 and 29 to these financial statements.

As at the end of the reporting period, there were no unrecognised financial instruments.


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34. CAPITAL COMMITMENT

As at the end of the reporting period, the Group has the following capital commitment in respect of the acquisition of property, plant and equipment:

2011 2010RM RM

Approved and contracted for 14,600,000 -

35. COMPARATIVE FIGURES

Certain comparative figures have been reclassified as a consequence of the disposal of INDX and PGMC.

The items were reclassified as follows:

As previously stated Reclassifications As reclassified

RM RM RMConsolidated statement of comprehensive income 2010

Revenue 94,193,738 (6,097,469) 88,096,269Cost of services - Contracted services (33,422,916) 4,884,054 (28,538,862)Administrative expenses (8,755,392) 1,016,631 (7,738,761)Interest income 3,798,579 (470,598) 3,327,981Income tax expense (11,195,184) 256,462 (10,938,722)Profit from continuing operations 50,210,048 (410,920) 49,799,128Profit from discontinued operations 5,554,607 410,920 5,965,527

Consolidated statement of cash flows 2010

Net cash from operating activities 42,439,279 383,632 42,822,911Net cash from investing activities 22,592,708 2,173,431 24,766,139Net cash from continuing operations 2,818,795 2,557,063 5,375,858Net cash used in discontinued operations - (2,557,063) (2,557,063)

36. SIGNIFICANT EVENTS

(i) Originating Summons by the Company and PLSB against Taipan Merit Sdn Bhd (“TMSB”) And Arbitration between the Company & PLSB with TMSB (“The Arbitration”)

On January 13, 2011, the Company and PLSB obtained a Consent Order, issued by the High Court pursuant to the Originating Summons by the Company and PLSB (collectively referred to as “the Plaintiff”) against Taipan Merit Sdn Bhd (“TMSB”) and 7 others, that pending the final disposal or determination of the Arbitration between the Plaintiff and TMSB, the Company’s rights in a shareholders’ agreement between the parties were to be preserved and that En Amin bin Halim Rasip shall not be involved in the affairs of LMTSB (hereinafter referred to as “the Consent Order”).

The Arbitration proceedings was filed at the Kuala Lumpur Regional Centre for Arbitration (“KLRCA”) but was subsequently terminated on October 6, 2011 with an Order for Termination of the Arbitration proceedings issued by the KLRCA (“Termination Order”). With the Termination Order, the Arbitration was deemed to be finally disposed and determined and the orders contained in the Consent Order were removed.


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36. SIGNIFICANT EVENTS (Continued)

(ii) Disposal of the Company’s 70.31% Shareholding in INDX

On February 10, 2011, the Company accepted an offer from Equatorex Sdn Bhd to acquire the entire interest of the Company in INDX through a market deal. The gross sale proceeds amounted to IDR28,014,741,513 (equivalent to RM9,609,519). The sale proceeds were received on 22 February 2011.

(iii) Writ of Summons No 22NCC6-762-2011 and Statement of Claim from Tenaga Nasional Berhad (“TNB”) against the Company and 7 others

The Company was only a nominal defendant in this suit with no allegations of wrongdoings in TNB’s Statement of Claim. The Company was advised, by its legal counsel, to take a neutral stand and to leave it for the other 7 defendants to reply to the substantive part of TNB’s statement of claim.

Subsequent to the year end, TNB withdrew the suit against all the defendants, including the Company, on 1 March 2012 with no liberty to file afresh.

(iv) New Shareholders’ Agreement

On October 5, 2011, PLSB entered into a new Shareholders’ Agreement with TMSB a wholly-owned subsidiary of Perak Corporation Berhad (“PCB”) to govern the business and management of LMTSB.

The salient terms of the New Shareholders’ Agreement are as follows:

• Thereshallbeonlytwo(2)shareholdersinLMTSB,namelyPLSBandTMSB,andunlessotherwiseagreedinwriting,theshareholding of the parties shall be maintained for all ordinary shares and redeemable preference shares or any other class of shares to be created in LMTSB. TMSB shall hold two (2) ordinary shares and two (2) redeemable preference shares more than PLSB.

• TheBoardofDirectorsofLMTSBshallconsistofseven(7)directorswherePLSBisentitledtonominatethree(3)nomineedirectors and TMSB four (4) nominee directors, one of whom shall be the Chairman of LMTSB.

• TheChiefExecutiveOfficer(“CEO”)ofLMTSBshallbenominatedbyPLSBbuttheappointmentofthenominatedCEOissubject to the discretion of the Board of Directors of LMTSB.

(v) Suit No. D-22NCC-155-2011 against Amin Bin Halim Rasip

This suit was struck-off on October 14, 2011 with cost to be taxed unless otherwise agreed by the parties.

37. SUBSEQUENT EVENT

Dissolution of a wholly owned subsidiary of the Company, Integrax Philippines Inc. (ITP)

On April 3, 2012, the board of directors of ITP has approved the dissolution of ITP.

38. PUT OPTION

A right has been granted to the single minority shareholder of LBTSB to sell (put) to the Company its 20% stake of 13,600,000 ordinary shares of RM1.00 each in LBTSB at fair value upon the redemption of all classes of preference shares issued by LBTSB after 15 years from May 21, 2002 provided it remains the sole beneficial owner of the 20% stake. The Directors are of the opinion that the value of this put option cannot be reliably measured.


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39. SUPPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS OR LOSSES

On March 25, 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements. This directive requires all listed issuers to disclose the breakdown of the unappropriated profits or accumulated losses as at the end of the reporting period, into realised and unrealised profits or losses.

On December 20, 2010, Bursa Malaysia further issued another directive on the disclosure and the prescribed format of presentation.

The breakdown of the retained earnings of the Group and of the Company as at December 31, 2011, into realised and unrealised profits, pursuant to the directive, is as follows:

2011 2010The

GroupThe

CompanyThe

GroupThe Company

RM RM RM RM

Total retained earnings of the Company and its subsidiary companies:Realised 267,740,619 11,958,290 219,537,183 3,542,800Unrealised (41,768,000) - (47,467,080) (799,217)

225,972,619 11,958,290 172,070,103 2,743,583Total share of retained earnings from associates:

Realised 95,551,637 - 84,085,991 -Unrealised (2,744,451) - (2,619,476) -

92,807,186 - 81,466,515 -

Less: Consolidation adjustments (107,722,462) - (50,196,503) -

Total retained earnings as per statement of financial position 211,057,343 11,958,290 203,340,115 2,743,583

The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities Listing Requirements” as issued by the Malaysian Institute of Accountants on December 20, 2010. A charge or credit to the profit or loss of a legal entity is deemed realised when it resulted from the consumption of resource of all types and form, regardless of whether is the recovery consumed in the ordinary course of business or otherwise. Resources may be consumed through sale or use. Where a credit or a charge to the profit or loss upon initial recognition or subsequent measurement of an asset or a liability is not attributed to the consumption of resources, such credit or charge should not be deemed as realised until the consumption of resources could be demonstrated.

This supplementary information have been made solely for complying with the disclosure requirements as stipulated in the directive of Bursa Malaysia Securities Berhad and is not made for any other purposes.


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PROPERTIES OWNED BY THE GROUP AS AT 31 DECEMBER 2011

No. Lot No./Location Description Date of Acquisition

Land area/(built-up area)

(sq. metres)Tenure/(Age of

building)Net book value

RM

1. H.S. (D) 17396P.T. 24776Mukim of SitiawanDistrict of ManjungPerak Darul Ridzuan

Bulk terminal, berths, trestle and mechanical handling equipment and structures, office and maintenancebuildings, land and waterbody

25 February 2002 1,088,866.727(4,662)

99 yearsLeaseholdExpiring

24/2/2101(9 years)

154,268,598

2. H.S. (D) 75362P.T. 2193Mukim of SetulDistrict of Seremban

3 units low cost flats 19 May 1995 190(190)

Freehold(16 years)

50,001

Notes:

(1) No revaluation was done on the abovementioned properties.

(2) Property No. 2 is currently not being utilised for any purpose and property no. 1 is being utilised for bulk terminal activities.

(3) List excludes industrial properties on which are located the port facilities of the Lumut Maritime Terminal owned by Lumut Maritime Terminal Sdn Bhd, an associate company set out below:

No. Description of Title/Mukim Description

Approximate Land Area

(acres)Tenure/

(Age of building)

1 H.S(D)Dgs 7105, PT6973Mukim Lumut

Wharfs, Open Storage Areas, Warehouses & Office building

72.54 Leasehold – 99 yearsExpiring on 21 December 2094

(17 years)

2 H.S(D)Dgs 6247, PT2273Mukim Lumut

Waterbody 27.46 Leasehold – 99 yearsExpiring on 18 December 2093

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ANALYSIS OF SHAREHOLDINGS AS AT 10 MAY 2012

Authorized share capital : RM470,000,000 Issued and paid-up share capital : RM300,805,917Class of share : Ordinary Shares of RM1.00 eachVoting rights : One vote per ordinary share on a poll One vote per shareholder on a show of hands

BREAKDOWN OF SHAREHOLDINGS

1. Analysis by size of shareholdings

Size of Holdings No of Holders % No of Holdings %

1 - 99 74 2.17 2,661 0.00

100 - 1,000 905 26.60 857,364 0.28

1,001 - 10,000 1,704 50.09 8,149,375 2.71

10,001 - 100,000 583 17.14 18,940,637 6.30

100,001 - less than 5% of issued shares 132 3.88 124,225,799 41.30

5% and above of issued shares 4 0.12 148,630,081 49.41

Total 3,402 100 300,805,917 100

2. List of top 30 holders as at 10 May 2012

No. Name Holdings %

1. Tenaga Nasional Berhad 66,538,269 22.12

2. Golden Initiative Sdn Bhd 37,146,595 12.35

3. CIMB Group Nominees (Tempatan) Sdn BhdCIMB Bank Bhd For Perak Equity Sdn Bhd (CBD-NR-Perak CB) 24,945,217 8.29

4. KAF Nominees (Tempatan) Sdn BhdPledged Securities Account For Taipan Merit Sdn Bhd (TA3432) 20,000,000 6.65

5. Cartaban Nominees (Tempatan) Sdn BhdCorston-Smith Asset Management Sdn Bhd For Corston-Smith Asean Corporate Governance Fund 11,222,100 3.73

6. Jurukapal Marine Services Sdn Bhd 10,640,000 3.54

7. Amanahraya Trustees BerhadPublic Smallcap Fund 9,001,100 2.99

8. Amsec Nominees (Tempatan) Sdn BhdPledged Securities Account – Ambank (M) Berhad For Tzel Capital Sdn Bhd 8,000,000 2.66

9. TSM Global Berhad 6,150,000 2.04

10. HSBC Nominees (Asing) Sdn BhdShafston Group Limited 5,980,065 1.99

11. HSBC Nominees (Asing) Sdn BhdRakewood Enterprises Ltd 5,907,302 1.96

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No. Name Holdings %

12. DB (Malaysia) Nominee (Tempatan) Sendirian BerhadiCapital.Biz Berhad 4,884,500 1.62

13. Nor’aini Binti Hashim 4,347,826 1.45

14. Golden Initiative Sdn Bhd 3,722,347 1.24

15. Cartaban Nominees (Asing) Sdn BhdExempt An For RBC Dexia Investor Services Trust (Clients Account) 2,492,900 0.83

16. Kenanga Nominees (Asing) Sdn BhdCantal Capital Inc. 2,100,000 0.70

17. HSBC Nominees (Asing) Sdn Bhd Exempt An For Coutts & Co Ltd (HK Branch) 1,750,000 0.58

18. HDM Nomines (Tempatan) Sdn BhdPledged Securities Account For Ng Wymin (M09) 1,732,100 0.58

19. Ng Chee Hua 1,524,000 0.51

20. Citigroup Nominees (Asing) Sdn BhdExempt An For Merrill Lynch Pierce Fenner & Smith Incorporated (Foreign) 1,500,000 0.50

21. Renfield Investment Limited 1,300,000 0.43

22. Taipan Merit Sdn Bhd 1,242,600 0.41

23. HSBC Nominees (Asing) Sdn BhdExempt An For Credit Suisse (SG BR-TST-Asing) 1,100,000 0.37

24. Beh Eng Par 1,079,600 0.36

25. Maybank Nominees (Tempatan) Sdn BhdYeoh Ah Tu 1,011,700 0.34

26. Kuala-Vest Sdn Bhd 1,011,660 0.34

27. HDM Nominees (Tempatan) Sdn BhdPledged Securities Account For Mohamad Razman Bin Rahim (M09) 1,000,000 0.33

28. Kenanga Nominees (Asing) Sdn BhdEmmel Inc. 1,000,000 0.33

29. HSBC Nominees (Tempatan) Sdn BhdHSBC (M) Trustee Bhd For OSK-UOB Smart Treasure Fund (4694-002) 956,000 0.32

30. Citigroup Nominees (Asing) Sdn BhdCBNY For Dimensional Emerging Markets Value Fund 910,200 0.30

ANALYSIS OF SHAREHOLDINGS AS AT 10 MAY 2012 (Continued)

BREAKDOWN OF SHAREHOLDINGS (Continued)

2. List of top 30 holders as at 10 May 2012 (Continued)

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ANALYSIS OF SHAREHOLDINGS AS AT 10 MAY 2012 (Continued)

BREAKDOWN OF SHAREHOLDINGS (Continued)

3. List of Substantial Shareholders

Name of Substantial Shareholder

Direct Indirect

No of Shares % No of Shares %

Tenaga Nasional Berhad 66,538,269 22.12 - -

Khazanah Nasional Berhad - - 66,538,269 1 22.12

Amin bin Halim Rasip - - 63,396,309 2 21.08

Golden Initiative Sdn Bhd 40,868,942 13.59 - -

Nor’aini binti Hashim 4,347,826 1.45 51,508,942 3 17.12

Perak Equity Sdn Bhd 25,300,543 8.41 - *

Taipan Merit Sdn Bhd 21,244,600 7.06 - -

Perak Corporation Berhad - - 21,244,600 4 7.06

Perbadanan Kemajuan Negeri Perak - - 46,545,143 5 15.47

Notes:

1. Deemed interested by virtue of its shareholding in Tenaga Nasional Berhad.

2. Deemed interested by virtue of his shareholding in Golden Initiative Sdn Bhd, Jurukapal Marine Services Sdn Bhd, Shafston Group Limited and Rakewood Enterprises Ltd.

3. Deemed interested by virtue of her shareholding in Golden Initiative Sdn Bhd and Jurukapal Marine Services Sdn Bhd.

4. Deemed interested by virtue of its shareholding in Taipan Merit Sdn Bhd

5. Deemed interested by virtue of its shareholding in Perak Equity Sdn Bhd and indirect shareholding in Taipan Merit Sdn Bhd via Perak Corporation Berhad.

4. Directors’ shareholdings

Name of Director

Direct Indirect

No of Shares % No of Shares %

Dato’ Seri DiRaja Mohamad Tajol Rosli bin Mohd Ghazali - - - -

En Amin bin Halim Rasip - - 67,744,135 1 22.52

En Azman Shah bin Mohd Yusof 1,000 0.0 - -

En Mohamed Rafique Merican bin Mohd Wahiduddin Merican - - - -

Puan Shireen Ann Zaharah bt Muhiudeen - - 13,715,000 2 4.56

Mr. Chan Wan Siew - - - -

Mr. Loong Foo Ching - - - -

Ir. Abd Manap bin Ali Hasan - - - -

Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din - - - -

Dato’ Abd Manaf bin Hashim - - - - Notes:

1. Deemed interested by virtue of his shareholding in Golden Initiative Sdn Bhd, Jurukapal Marine Services Sdn Bhd, Shafston Group Limited, Rakewood Enterprises Ltd and shares held by his spouse.

2. Deemed interested by virtue of her being the Managing Director of Corston-Smith Asset Management Sdn Bhd, the fund manager for the ordinary shares of the Company held on behalf of British Columbia Investment Management Corporation (bcIMC) and Corston-Smith ASEAN Corporate Governance Fund.

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NOTICE IS HEREBY GIVEN that the Twenty-Sixth Annual General Meeting of the Company will be held at Prince Room 1, Level 3, Prince Hotel & Residence Kuala Lumpur, No 4 Jalan Conlay 50450 Kuala Lumpur, Malaysia on Wednesday, 27 June 2012 at 10.00 a.m. for the following purposes:-

1) To receive and consider the Audited Financial Statements for the financial year ended 31 December 2011 together with the Reports of the Directors and Auditors thereon. (Please refer to Note [1])

2) To re-elect the following Directors retiring in accordance with Article 80 of the Company’s Articles of Association –

2.1 En Amin bin Halim Rasip

2.2 En Mohamed Rafique Merican bin Mohd Wahiduddin Merican

Ordinary Resolution 1


3) To re-elect the following Directors retiring in accordance with Article 87 of the Company’s Articles of Association –

3.1 Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din

3.2 Dato’ Abd Manaf bin Hashim



4) To approve the Directors’ fees of RM840,740 for the financial year ended 31 December 2011 (2010:RM840,000).


5) To re-appoint Messrs Deloitte & Touche as Auditors of the Company and to authorise the Directors to fix their remuneration.


6) As special business, to consider and if thought fit, to pass, with or without any modifications, the following resolutions:-

6.1 PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR SHARE BUY-BACK BY THE COMPANY (Please refer to Resolution note A).


6.2 PROPOSED AMENDMENT TO THE COMPANY’S ARTICLES OF ASSOCIATION (Please refer to Resolution note B).

Special Resolution 1

7) To transact any other business of which due notice shall have been given.

By Order of the Board

Lim Hooi Mooi (MAICSA 0799764)Chin Su Yee (MAICSA 7029893)Joint SecretariesKuala Lumpur5 June 2012

NOTICE OF ANNUAL GENERAL MEETING

105

NOTICE OF ANNUAL GENERAL MEETING (Continued)

Ordinary Resolution 7 – Resolution Note A

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR SHARE BUY-BACK BY THE COMPANY OF AN AMOUNT NOT EXCEEDING 10% OF THE TOTAL ISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY

“THAT subject to the Company’s compliance with all applicable rules, regulations, orders and guidelines made pursuant to the Companies Act, 1965, the provisions of the Company’s Memorandum and Articles of Association and the requirements of the Main Market Listing requirement of Bursa Malaysia Securities Berhad (“BMSB”) and other applicable laws, rules, regulations and approvals of all relevant regulatory authorities, authority be given to the Directors for the Company to buy back such amount of ordinary share of RM1.00 each in the Company (“Authority to Buy-Back Shares”) as may be determined by the Directors of the Company from time to time through the BMSB upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company provided that:

(a) the maximum number of shares which may be purchased and/or held by the Company at any point of time pursuant to this resolution shall not exceed ten percent (10%) of the total issued and paid-up share capital of the Company for the time being quoted on BMSB;

(b) the maximum amount of funds to be allocated for the Authority to Buy-Back Shares shall not exceed the sum of retained profits and the share premium account of the Company based on its latest audited financial statements available up to the date of a transaction pursuant to the Authority to Buy-Back Shares;

THAT at the discretion of the Directors of the Company, the shares purchased by the Company pursuant to the Authority to Buy-Back Shares may be dealt with in all or any of the following manner:

(i) the shares so purchased maybe cancelled; and/or(ii) the shares so purchased may be retained as treasury shares in accordance with the relevant rules of BMSB for distribution as

dividend to the shareholders and/or resell through BMSB and/or subsequently cancelled; and/or(iii) part of the shares so purchased may be retained as treasury shares with the remainder being cancelled;

THAT such authority shall commence upon the passing of this resolution, until the conclusion of the next Annual General Meeting of the Company or the expiry of the period within which the next Annual General Meeting is required by law to be held unless revoked or varied by ordinary resolution of the shareholders of the Company in general meeting but so as not to prejudice the completion of a purchase made before such expiry date;

AND THAT the Directors of the Company be and are hereby authorized to take all steps as are necessary or expedient to implement or to give effect the Authority to Buy-Back Shares with full powers to amend and/or 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 thereafter in accordance with the Companies Act, 1965, the provisions of the Company’s Memorandum and Articles of Association and the requirements of the BMSB and all other relevant governmental/regulatory authorities.”

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Special Resolution 1 – Resolution Note B

PROPOSED AMENDMENT TO THE COMPANY’S ARTICLES OF ASSOCIATION

“THAT the proposed amendment to the Articles of Association of the Company as set out below be and are hereby approved and adopted AND THAT the Directors of the Company be and are hereby authorized to assent to any modifications, variations and/or amendments as may be required by the relevant authorities and to do all acts and things and take all such steps as may be considered necessary to give full effect to the proposed amendment to the Company’s Articles of Association.”

Article No. Existing Provision Amended Provision

68A – voting rights of members

“Subject to Article 57, a member of the Company shall be entitled to be present and to vote at any general meeting, in respect of any share or shares upon which all calls due to the Company have been paid.”

“Subject to Article 57, a member of the Company shall be entitled to be present and to vote at any general meeting in respect of any share or shares upon which all calls due to the Company have been paid and shall be entitled to appoint any person or persons as proxy to attend and vote instead of the member at the meeting, a proxy or proxies duly appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting.”

70 – Appointment of more than one proxy

“Where a member of the Company is an authorized nominee as defined under the Central Depositories Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.”

a) Where a member of the Company is an authorized nominee as defined under the Central Depositories Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

b) Where a member of the Company is an exempt authorized nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) - there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds.

c) Where an authorized nominee appoints two (2) proxies, or where an exempt authorized nominee appoints two (2) or more proxies, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.”

Notes:

1. The proposed Agenda 1 above is meant for discussion only. The provisions of Section 169 of the Companies Act, 1965 (“the Act”) and the Articles of Association of the Company require that the Audited Financial Statements and the Reports of the Directors and Auditors thereon be laid before the Company at its Annual General Meeting. As such, this Agenda item is not a business which requires a resolution to be put to vote by shareholders.

2. With respect to deposited securities, only members whose names appear in the Record of Depositors on 20 June 2012 (General Meeting Record of Depositors) shall be eligible to attend the meeting or to appoint proxy(ies) to attend and/or vote on his behalf.

3. A proxy may but does not need to be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 (“the Act”) shall not apply.


107


4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 17th Floor – Tower Block, Kompleks Antarabangsa, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting.

5. A member shall be entitled to appoint more than one proxy to attend and vote at the same meeting. Where a member of the Company is an authorized nominee, as defined under the Central Depositories Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. Where a member of the Company is an exempt authorized nominee which holds the ordinary shares of the Company for multiple beneficial owners in one securities account (“omnibus account”) there is no limit to the number of proxies it may appoint in respect to the omnibus account.

6. Where a member, or an authorized nominee or an exempt authorized nominee appoints more than one proxy the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

7. If the appointor is a corporation, the proxy form must be executed under its common seal or under the hand of its attorney.

8. Profiles of the Directors standing for re-election as Directors of the Company for Ordinary Resolutions 1, 2, 3 and 4 are shown on pages 9, 10, 12 and 13 of the 2011 Annual Report.

9. Explanatory Notes on Special Business –

9.1. Ordinary Resolution 7 – Proposed Renewal of Shareholders’ Mandate for Share Buy-Back Authority

The Ordinary Resolution proposed in Agenda 6.1 above, if passed, will empower the Directors of the Company to purchase the Company’s shares up to ten percent (10%) of the issued and paid-up share capital of the Company by utilising the funds allocated which shall not exceed the total retained profits and share premium of the Company. This authority will, unless revoked or varied at a General Meeting, expire at the conclusion of the next AGM of the Company.

Further information on the Proposed Renewal of Shareholders’ Mandate for Share Buy-Back Authority are set out in the Circular to Shareholders of the Company which is despatched together with the Company’s 2011 Annual Report.

9.2. Special Resolution 1 – Proposed Amendment to the Company’s Articles of Association

The Special Resolution proposed in Agenda 6.2 above, if passed, will bring the Company’s Articles of Association in line with the amendments to the Main Market Listing Requirements of Bursa Maaysia Securities Berhad.

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I/We, ofbeing a *member/members of Integrax Berhad hereby appoint Mr/Ms/Madam/Missofor failing him/herofor failing him/her the Chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the Twenty-Sixth Annual General Meeting of the Company to be held at Prince Room 1, Level 3, Prince Hotel & Residence Kuala Lumpur, No 4 Jalan Conlay 50450 Kuala Lumpur, Malaysia on Wednesday, 27 June 2012 at 10.00 a.m. and at any adjournment thereof.

My/Our proxy(ies) is/are to vote as indicated below:-

No. Relating to:- For Against

1. Receiving of the Audited Financial Statements and Reports

2. Re-election of En Amin bin Halim Rasip (Ordinary Resolution 1)

3. Re-election of En Mohamed Rafique Merican bin Mohd Wahiduddin Merican (Ordinary Resolution 2)

4. Re-election of Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din (Ordinary Resolution 3)

5. Re-election of Dato’ Abd Manaf bin Hashim (Ordinary Resolution 4)

6. To approve payment of Directors’ fees (Ordinary Resolution 5)

7. Re-appointment of Messrs Deloitte & Touche as Auditors (Ordinary Resolution 6)

8. Proposed Renewal of Shareholders’ Mandate for Share Buy-Back Authority (Ordinary Resolution 7)

9. Proposed Amendment to the Company’s Articles of Association (Special Resolution 1)

(Please indicate with an “X” in the space provided, how you wish your vote to be cast. In the absence of specific directions, the proxy may vote or abstain at his/her discretion.)

Dated ………….day of ………………….2012

………………………………..........……………Signature/Common Seal of Shareholder(s)

Notes1. A proxy may but does not need to be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 (“the Act”) shall not apply.2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 17th Floor – Tower Block, Kompleks Antarabangsa, Jalan

Sultan Ismail, 50250 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting.3. With respect to deposited securities, only members whose names appear in the Record of Depositors on 20 June 2012 (General Meeting Record of

Depositors) shall be eligible to attend the meeting or to appoint proxy(ies) to attend and/or vote on his behalf.4. A member shall be entitled to appoint more than one proxy to attend and vote at the same meeting. The provisions of Section 149(1)(c) of the Act shall not

apply to the Company.5. Where a member appoints more than one proxy the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by

each proxy. 6. If the appointor is a corporation, this form must be executed under its common seal or under the hand of its attorney.

FORM OF PROXY

No. of Shares : ________________________________

CDS Account No : ________________________________

The Company Secretary

Integrax Berhad (49317 – W)

17th Floor – Tower BlockKompleks AntarabangsaJalan Sultan Ismail50250 Kuala LumpurMalaysia

Stamp

Please Fold Here

IMPORTANT NOTICE

With regard to the Twenty-Sixth Annual General Meeting of Integrax Berhad

Registration will start from 9.00 a.m. onwards

The meeting will start punctually at 10.00 a.m.

Late comers will not be entertained

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