My fellow shareholders, On behalf of the Board of Directors of Ingress Corporation Berhad, it is my pleasure to present our Annual Report for the financial year ended 31 January 2011.

INDUSTRY OVERVIEW

The financial year under review, which is approximately equivalent to the calendar year 2010, saw the economy in the region bounced back stronger after emerging from the aftermath of the global economic crisis in 2008/2009. The Government's swift action of economic stimuli put in place in 2009 by our Honourable Prime Minister, successfully set the footing for the country's economic recovery. With the improving economy, the automotive industry in Malaysia continued with its upward momentum into the calendar year 2010. Total vehicle sales ("TIV") in the country grew by 12.7% from 2009 to hit an all time high of 605,156 units, thus surpassing the previous record of 552,316 units achieved in 2005.

In Thailand, TIV increased by 45.8%, registering 800,357 units of vehicles for the calendar year 2010 from 548,871 units in 2009. At the same time, total automotive production for Thailand in 2010 surged 64.6% to 1,645,304 units of vehicles from 999,378 units last year. Vehicle sales in Indonesia, meanwhile, had an even more robust growth with vehicle sales expanding 57.3% in 2010 to a total of 764,710 units compared with 486,088 units in the previous year.

The economic transformation program initiated by the Government had also spurred the growth of the construction industry. This augurs well for the railway construction sector, power industry as well as the oil and gas industry, giving new opportunities for our Power Engineering and Projects Division ("PEP Division").

FINANCIAL OVERVIEW

On the back of strong figures shown by the automotive industry in the region, the Group successfully recorded another year of extremely strong performance. The Group registered a 17.0% improvement in revenue to RM761.2 million from RM650.6 million a year earlier. Our stronger performance was mainly due to the better overall contributions from our Automotive Division, particularly the Automotive Components Manufacturing Divisions in Malaysia and Thailand.

In line with the increasing revenue, the Group posted a remarkable increase of 61.1% in net profit to RM29.8 million for the financial year ended 31 January 2011 from RM18.5 million achieved previously. The better profits recorded have resulted in a healthier financial position for the Group. The Debt-Equity ratio for the Group has now been reduced to 1.54 times compared to 2.21 last financial year, stemming from both the repayment of borrowings / financing and the strengthening of reserves. Net tangible assets per share also improved to RM1.96 per share from RM1.83 per share last financial year.

OPERATIONS REVIEW

For the financial year under review, virtually all of our operations showed encouraging improvements, led by our Automotive Division, garnering 89.4% of the Group's total revenue, especially our Malaysian and Thailand operations. For Malaysia, the improvement was virtually across our product lines but most notably from this being the first full financial year of supplies for door related parts and sash for Perodua Alza and Proton Exora. In Thailand, the revenue increase stemmed from volume improvements in virtually all of our supplies to our customers, namely Mitsubishi, Honda, Isuzu, Ford / Mazda. Notably amongst these, was the marked volume increase in our supplies to Mitsubishi's one-tonne pick-up truck models and Honda models. Our Indonesian operation also posted encouraging performance although its overall contribution to the Group remained marginal at this point.

In December 2010, another milestone was achieved by the Group with the formation of our joint venture company in India, Ingress Mayur Auto Ventures Private Limited, in which the Group subscribed 40% of the equity whilst the remaining 60% being owned by our joint venture partner. I'm happy to inform that even in infancy, the JV company has already secured a contract to supply Suzuki Maruti India of mouldings for its new model slated to commence in the second half of the current financial year.

Our Premium Automotive Dealership ("PAD") for BMW vehicles continued to post respectable number of vehicles sales. As part of our strategy to improve our range of services and increase margins, during the financial year our PAD operations commenced a body and paint shop for repairing BMW vehicles.

For the Power Engineering and Projects Division, revenues declined about a tenth compared to a financial year earlier which mostly due to delays in commencing the already secured projects. Within the division, Multi Discovery Sdn Bhd remained the main revenue contributor derived from the transmission line and substation projects undertaken during the financial year. However, the division was actively involved in bidding for new projects in the power, railway, as well as oil and gas sectors. These efforts are expected to lay the foundation for future growth for the division.

PROSPECTS

The economic prospect for Malaysia remains good. In its bulletin in April 2011, the Malaysian Institute of Economic Research ("MIER") contended that the economic recovery, which started in mid-2009, will continue in 2011. Developing Asia with better economic fundamentals and stronger domestic demand is set to lead global growth. MIER also projected the domestic economy will grow 5.2% year-on-year and domestic demand will continue to remain strong from supportive government policy measures.

Although our local economy has been resilient and consumer sentiments remained positive, we have to remain cautious as the uncertainties over the global economies remain unresolved, especially the Euro Zone debt crisis. This, together with resultant shortage of components and spare parts due to the earthquake that hit Japan in March 2011, have dampened somewhat the automotive industry in Asean in first half of 2011. However, all the Japanese automakers in Asean have taken steps to mitigate these downside, with full recovery targeted by the third quarter of this financial year.

In Malaysia, the Malaysian Automotive Association ("MAA") remains positive for the local automotive industry in 2011 to embark on recovery due to the unexpected event in Japan. For 2011, MAA is projecting sales to marginally rise to 618,000 units. The Government initiative to accelerate the liberalisation of the automotive industry is not expected to impair sales volume but may cause reorganization within the industry players. In terms of operations, our ACM Malaysia is currently gearing for the commencement for the supply of parts for both Perodua and Proton new models. In the case of Thailand, TIV for the calendar year 2011 is forecast at 800,000 units of vehicles, whilst total production is targeted to increase by 9.4%, year-on year, to 1.8 million units of vehicles. However, some corrections may be expected depending on the speed of recovery for parts supply from Japan. Currently, our ACM Thailand Division is making preparations for the commencement of supply of new parts for General Motors as well as Suzuki in the fourth quarter of the current financial year.

A much better performance is forecast for Indonesia, with TIV for the calendar year 2011 is expected to increase by 11.2% to 850,000 units. In line, we expect our Indonesian operations to continue improving in the current year.

We expect PEP Division to bounce back this financial year with stronger numbers from the expected contributions from its current projects in hand as well as the commencement of new projects especially in the Power and Railway sectors.

CORPORATE ACTIVITIES

In the corporate front, I would like to take this opportunity of sharing with our beloved shareholders on the successful settlement of our Sukuk Al-Ijarah on 30th June 2010. The then RM120.3 million outstanding Sukuk was completely refinanced by internal funds and proceeds from the new RM110 million Syndicated Commodity Murabahah Term Islamic Facility.

During the financial year, we undertook several divestments for marketing and strategic reasons. First, we successfully divested to our joint venture partner 19% equity in our associate company, Balfour Beatty Rail Sdn Bhd, which raised RM11.4 million cash. Subsequently, we completed the sales of 11.2% equity in our Thailand subsidiary, Ingress Autoventures Co., Ltd to our Japanese partner for RM6.9 million cash. Part of these proceeds were utilised to redeem the Sukuk, as mentioned earlier. During the financial year, we have also increased our effective equity interest in our Indonesian subsidiary PT Ingress Malindo Ventures from 72% to 81% as well as completed the subscription of 40% stake in Ingress Mayur Autoventures Private Limited.

Furthermore, we are also continuously evaluating our whole operations, to make it more lean and streamline as well as to concentrate our resources on our more profitable core activities. This has led us to divest 100% of two of our operating units namely, Matrix Power Services Sdn Bhd and our associate, Maju Nusa Sdn Bhd, subsequent to the financial year under review.

DIVIDENDS

Due to certain financial covenants restrictions imposed on the Group by our financiers, we are still unable to recommend any dividends to be paid for the financial year ended 31 January 2011. The Board recognise your continued support and patience and we will do everything to further improve our financials for this coming financial year.

ACKNOWLEDGMENTS

We would like to express our deepest appreciation to all our stakeholders, especially our esteemed shareholders, for your continued support and faith in us throughout the financial year.

We would also like to extend our appreciation to our customers, principals bankers, Government authorities and agencies as well as our growing list of business associates in Malaysia, Thailand, Indonesia, Japan, Korea and India for your support and confidence in us.

A special thank goes to the management and staff for their continued support, contributions, dedication and tireless efforts for the Group's remarkable performance for the financial year 2011.

Finally, I would like to personally thank my esteemed colleagues on the Board for their leadership, counsel, direction, expert guidance and commitment towards the Group's success throughout the financial year.



Thank you.

Shamsudin @ Samad bin Kassim
Chairman