##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549


Form 10-K

|                                               |  |                                                                                             
|---------------------------------------------- |  | --------------------------------------------------------------------------------------------
|þ                                              |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|                                              
|For the fiscal year ended January 31,
    2004
|                                              
|or                                            
|                                              
|o                                              |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                              
|                                               |  | For the transition period
    from           to                                             

000-31869

(Commission File Number)


UTi Worldwide Inc.

(Exact name of Registrant as Specified in its
Charter)


|                                                                                         |  |                                                                                                 
|---------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------
|British Virgin Islands(State or Other Jurisdiction of
    Incorporation or Organization) |  | N/A(IRS Employer Identification
    Number)                                                     
|                                                                                        
|9 Columbus Centre, Pelican Drive
    Road Town, Tortola
    British Virgin Islands       |  | c/o UTi, Services, Inc.
    19443 Laurel Park Road, Suite 111
    Rancho Dominguez, CA 90220 USA
|(Addresses of Principal Executive Offices and
    Zip Code)                             

310.604.3311

(Registrants Telephone
Number, Including Area Code)


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

None


Securities registered or to be registered
pursuant to Section 12(g) of the Act:

Ordinary shares, no par value


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

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any
amendment to this
Form 10-K.     o

Indicate by check mark whether the Registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Exchange
Act).     Yes þ          No o

The aggregate market value of the voting common
stock held by non-affiliates of the Registrant as of
July 31, 2003 was $487 million computed by reference
to the closing price as quoted on the Nasdaq National Stock
Market.

At March 31, 2004, the number of shares
outstanding of the issuers ordinary shares was 30,943,854.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrants
definitive Proxy Statement for the 2004 Annual Meeting of
Shareholders (members), which is expected to be filed on or
before May 30, 2004 are incorporated by reference in
Items 10, 11, 12, 13 and 14 of Part III of this
Form 10-K.



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UTi WORLDWIDE INC.

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED JANUARY 31,
2004


TABLE OF CONTENTS

|                               |  |                                                                                                                      |    |      |    | 
|------------------------------ |  | -------------------------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                               |  |                                                                                                                      |    | Page
|                               |  |                                                                                                                      |    |     
|Forward-Looking
    Statements |  |                                                                                                                      | 1  |     
|PART I                        
|Item 1.                        |  | Business                                                                                                             |    |      | 1  | 
|Item 2.                        |  | Properties                                                                                                           |    |      | 9  | 
|Item 3.                        |  | Legal Proceedings                                                                                                    |    |      | 9  | 
|Item 4.                        |  | Submission of Matters to a
    Vote of Security Holders                                                              |    |      | 10 | 
|PART II                       
|Item 5.                        |  | Market for Registrants
    Common Equity, Related Stockholder Matters and Issuer Purchases
    of Equity Securities |    |      | 11 | 
|Item 6.                        |  | Selected Financial Data                                                                                              |    |      | 16 | 
|Item 7.                        |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operations                            |    |      | 17 | 
|Item 7A.                       |  | Quantitative and Qualitative
    Disclosures about Market Risk                                                       |    |      | 41 | 
|Item 8.                        |  | Financial Statements and
    Supplementary Data                                                                      |    |      | 42 | 
|Item 9.                        |  | Changes in and Disagreements
    with Accountants on Accounting and Financial Disclosure                             |    |      | 42 | 
|Item 9A.                       |  | Controls and Procedures                                                                                              |    |      | 42 | 
|PART III                      
|Item 10.                       |  | Directors and Executive
    Officers of the Registrant                                                               |    |      | 42 | 
|Item 11.                       |  | Executive Compensation                                                                                               |    |      | 43 | 
|Item 12.                       |  | Security Ownership of
    Certain Beneficial Owners and Management and Related Stockholder
    Matters               |    |      | 43 | 
|Item 13.                       |  | Certain Relationships and
    Related Transactions                                                                   |    |      | 43 | 
|Item 14.                       |  | Principal Accounting Fees
    and Services                                                                           |    |      | 43 | 
|PART IV                       
|Item 15.                       |  | Exhibits, Financial
    Statement Schedules, and Reports on Form 8-K                                                 |    |      | 43 | 
|Signatures                     |  |                                                                                                                      | 46 |     
|Certifications                 |  |                                                                                                                      |    |     
|EXHIBIT 10.12                 
|EXHIBIT 10.13                 
|EXHIBIT 21                    
|EXHIBIT 23                    
|EXHIBIT 31.1                  
|EXHIBIT 31.2                  
|EXHIBIT 32.1                  
|EXHIBIT 32.2                  





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As used in this annual report on Form 10-K,
the terms we, us, our and
the company refer to UTi Worldwide Inc. and its
subsidiaries as a combined entity, except where it is noted or
the context makes clear the reference is only to UTi Worldwide
Inc.




Forward-Looking Statements

Except for historical information contained
herein, this annual report on Form 10-K contains
forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as
amended, which involve certain risks and uncertainties.
Forward-looking statements are included with respect to, among
other things, the companys current business plan and
strategy and strategic operating plan. These forward-looking
statements are identified by the use of such terms and phrases
as intends, intend,
intended, goal, estimate,
estimates, expects, expect,
expected, project,
projected, projections,
plans, anticipates,
anticipated, should, designed
to, foreseeable future, believe,
believes and scheduled and similar
expressions which generally identify forward-looking statements.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified.
Future events and actual results could differ materially from
those set forth in, contemplated by, or underlying our
forward-looking statements. The companys actual results or
outcomes may differ materially from those anticipated. Readers
are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date the
statement was made. The company undertakes no obligation to
publicly update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.

In assessing forward-looking statements contained
herein, readers are urged to read carefully all cautionary
statements contained in this Form 10-K, including, without
limitation, those contained under the heading, Factors
That May Affect Future Results and Other Cautionary
Statements, contained in Item 7 of this
Form 10-K. For these forward-looking statements, we claim
the protection of the safe harbor for forward-looking statements
in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.




PART I






|        |         
|------- | --------
|Item 1. | Business

History and Development of the
Company

We are an international, non-asset-based global
integrated logistics company that provides services to our
customers through a network of branch offices, including agents
and contract logistics centers. We were incorporated in the
British Virgin Islands on January 30, 1995 under the
International Business Companies Act as an international
business company and operate under the British Virgin Islands
legislation governing corporations. The address and telephone
number of our registered office are 9 Columbus Centre, Pelican
Drive, Road Town, Tortola, British Virgin Islands and (284)
494-4567, respectively. Our registered agent is Midocean
Management and Trust Services (BVI) Limited, 9 Columbus
Centre, Pelican Drive, Road Town, Tortola, British Virgin
Islands. Our registered agent for service of process in the
United States is CT Corporation System, 111 Eighth Avenue,
New York, New York, 10011.

We formed our current business from a base of
three freight forwarders which we acquired between 1993 and
1995. Currently, we operate a global network of branch offices
in 263 cities, along with 93 logistics centers, in 49
countries. In addition, we service our customers through another
180 independent agent-owned offices, of which 162 offices are
exclusive agents and 18 are non-exclusive agents, that are
located in 85 additional countries. Our business is managed from
seven principal support offices in Dusseldorf, Hong Kong,
Johannesburg, London and Sydney and in the United States in Los
Angeles, California and Columbia, South Carolina.

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Organizational Structure

UTi Worldwide Inc. is a holding company and all
of our operations are conducted through subsidiaries. Our
subsidiaries, along with their countries of incorporation and
our ownership interests, are included in Exhibit 21,
included with this report. The proportion of voting power that
we hold for each subsidiary is equivalent to our percentage
ownership.

Business Overview

As an international, global integrated logistics
company, we provide air and ocean freight forwarding, contract
logistics, distribution, customs brokerage and other supply
chain management services, including consulting, the
coordination of purchase orders and customized management
services.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Air and Ocean Freight
    Forwarding.As a freight forwarder, we
    conduct business as an indirect carrier for our customers or
    occasionally as an authorized agent for an airline or ocean
    carrier. We typically act as an indirect carrier with respect to
    shipments of freight unless the volume of freight to be shipped
    over a particular route is not large enough to warrant
    consolidating such freight with other shipments. In such
    situations, we usually forward the freight as an agent of the
    direct carrier. Except for a domestic delivery service which
    includes forwarding shipments by air or expedited ground
    transportation within South Africa, we primarily handle
    international shipments and do not provide for domestic
    shipments unless they occur as part of an international
    shipment. We consider our domestic delivery service within South
    Africa part of our airfreight services.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We do not own or operate aircraft or vessels and,
    consequently, contract with commercial carriers to arrange for
    the shipment of cargo. We arrange for, and in many cases
    provide, pick-up and delivery service between the carrier and
    the location of the shipper or recipient. Our domestic delivery
    service in South Africa uses predominantly outsourced resources
    to provide pick-up and delivery services between the location of
    the shipper or recipient and the local distribution center.
|
| | When we act as an authorized agent for an airline
    or ocean carrier, we arrange for the transportation of
    individual shipments to the airline or ocean carrier. As
    compensation for arranging for the shipments, the airline or
    ocean carrier pays us a commission. If we provide the customer
    with ancillary services, such as the preparation of export
    documentation, we receive an additional fee.                                                                                                   



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Contract Logistics.Our contract logistics services primarily relate to the
    value-added warehousing and distribution of goods and materials
    in order to meet customers inventory needs and production
    or distribution schedules. Our distribution services include
    receiving, deconsolidation and decontainerization, sorting, put
    away, consolidation, assembly, cargo loading and unloading,
    assembly of freight and protective packaging, storage and
    distribution. Our outsourced services include inspection
    services, quality centers and manufacturing support.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In January 2002, we acquired Grupo SLi and Union,
    S.L., which we refer to as SLi, a contract logistics and freight
    forwarding operation headquartered in Madrid, Spain. At the time
    of the acquisition, SLi operated warehousing and distribution
    facilities in Spain and Portugal. In October 2002, we acquired
    Standard Corporation, which we refer to as Standard, which
    operates logistics centers located primarily in the southeastern
    United States. Because of these acquisitions, our contract
    logistics service business increased in fiscal 2004 over our
    historical levels in fiscal 2003 and prior.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Customs Brokerage.As part of our integrated logistics services, we provide customs
    brokerage services in the United States and most of the
    countries in which we operate. Within each country, the rules
    and regulations vary, along with the level of expertise that is
    required to perform the customs brokerage services. We provide
    customs brokerage services in connection with a majority of the
    shipments which we handle as both an airfreight and ocean
    freight forwarder. We also provide customs brokerage services in
    connection with shipments forwarded by our competitors. In
    addition, other companies may provide customs brokerage services
    in connection with the shipments which we forward.

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As part of our customs brokerage services, we
    prepare and file formal documentation required for clearance
    through customs agencies, obtain customs bonds, facilitate the
    payment of import duties on behalf of the importer, arrange for
    payment of collect freight charges, assist with determining and
    obtaining the best commodity classifications for shipments and
    perform other related services. We determine our fees for our
    customs brokerage services based on the volume of business
    transactions for a particular customer, and the type, number and
    complexity of services provided.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Other Supply Chain Management
    Services.We also provide a range of
    other supply chain management services, such as road
    transportation, warehousing services, consulting, order
    management, planning and optimization services, outsourced
    management services, developing specialized customer-specific
    supply chain solutions, and customized distribution and
    inventory management services. We receive fees for other supply
    chain management services that we perform.

Financial Information about Segments

Additional information regarding our operations
by geographic segment and gross revenue and net revenue
attributable to our principle services is set forth in
Note 16. Segment Reporting in our notes to our
consolidated financial statements included in this annual
report, which note is incorporated herein by reference.

Seasonality

Historically, our operating results have been
subject to seasonal trends when measured on a quarterly basis.
Our first quarter is traditionally weaker compared with the
other fiscal quarters, which we believe is in keeping with the
trends of the operating results of other supply chain service
providers. This trend is dependent on numerous factors,
including the markets in which we operate, holiday seasons,
consumer demand and economic conditions. We cannot accurately
predict the timing of these factors, nor can we accurately
estimate the impact of any particular factor, and thus we can
give no assurance that these historical seasonal patterns will
continue in future periods.

Sales and Marketing

To market our services, we produce customized
supply chain solutions that provide the logistics services our
clients require. We use our planning and optimization systems to
identify the needs of our customers and to develop supply chain
solutions tailored to our customers industry-specific
requirements. In this way, we attempt to become our
customers primary provider of supply chain services,
thereby increasing the range and volume of transactions and
services provided to our customers. For fiscal 2004, no single
customer accounted for more than 4% of our gross revenue and our
top five customers accounted for less than 10% of our gross
revenue.

We market our services through an organization
consisting of approximately 510 full-time salespersons who
receive assistance from our senior management and regional and
local managers. Our four principal geographic regions are
Europe, Americas, Asia Pacific and Africa, and each regional
manager is responsible for the financial performance of his or
her region. We have implemented a sales process by which we use
our supply chain consulting services, which primarily relate to
planning and optimizing the movement of freight, to market our
core services of freight forwarding, contract logistics and
customs brokerage services.

In connection with our sales process and in order
to serve the needs of our customers, some of which desire only
our freight forwarding and contract logistics services and for
others who desire a wider variety of our supply chain solutions
services, our sales force is divided into two specialized sales
groups. One of these sales groups focuses primarily on marketing
individually our air and ocean freight forwarding, contract
logistics and customs brokerage services and the other group
focuses on marketing all of our supply chain solutions services.

Our sales and marketing efforts are directed at
both global and local customers. Our global solutions sales and
marketing teams focus their efforts on obtaining and developing
large volume global accounts with

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multiple shipping locations who require
comprehensive solutions. These accounts typically impose
numerous requirements on their providers, such as electronic
data interchange, Internet-based tracking and monitoring
systems, proof of delivery capabilities, customized shipping
reports and a global network of offices.


The requirements imposed by our large volume
global accounts often limit the competition for these accounts
to large freight forwarders, third-party logistics providers and
integrated carriers with global operations. Our global solutions
sales and marketing teams also target companies operating in
specific industries with unique supply chain requirements, such
as the pharmaceutical, fashion and apparel, chemical, automotive
and technology industries.

Our local sales and marketing teams focus on
selling to and servicing smaller-and medium-sized customers who
primarily are interested in selected services, such as freight
forwarding, contract logistics and customs brokerage. These two
sales and marketing teams may work together on larger accounts.

During our initial review of a customers
requirements, we determine the current status of the
customers supply chain process. We analyze the supply
chain requirements of our customer and determine improvements
through modification or re-engineering. After discussing with
the customer the various supply chain solutions which could be
implemented for them, we implement the desired solutions.

Competition

Competition within the freight forwarding,
logistics and supply chain management industries is intense. We
compete primarily with a relatively small number of
international firms that have the worldwide capabilities to
provide the breadth of services that we offer. We also encounter
competition from regional and local third-party logistics
providers, integrated transportation companies that operate
their own aircraft, cargo sales agents and brokers, surface
freight forwarders and carriers, airlines, associations of
shippers organized to consolidate their members shipments
to obtain lower freight rates, and Internet-based freight
exchanges. In addition, computer information and consulting
firms which traditionally operated outside of the supply chain
management industry have been expanding the scope of their
services to include supply chain related activities so that they
may service the supply chain needs of their existing customers
and offer their information systems services to new customers.

To compete successfully, we believe that
companies in our industry must be able to provide their
customers with integrated, global supply chain solutions. Among
the factors that we believe are impacting our industry are the
outsourcing of supply chain activities, increased global trade
and sourcing, increased demand for time definite delivery of
goods, the need for data processing and monitoring, customized
reporting and transaction analysis facilitated by sophisticated
technology systems. Furthermore, as supply chain management
becomes more complicated, we believe companies are increasingly
seeking full service solutions from a single or limited number
of partners that are familiar with their requirements, processes
and procedures and that can provide services globally. We seek
to use our global network, proprietary information technology
systems, relationships with transportation providers and
expertise in outsourced logistics services to improve our
customers visibility into their supply chains while
reducing their logistics costs.

Information Technology Systems

We developed our eMpower suite of proprietary
supply chain technology systems based on open architecture
design. eMpower facilitates the online operations of our supply
chain activities, allows our agents and offices to link to our
transportation system and offers our customers real-time,
web-based access to detailed levels of inventory product and
shipment data, customized reporting and analysis and easy
integration with their technology systems. eMpower5,
which is the next generation of our systems to be released in
fiscal 2005, provides customers with a customizable web portal,
along with powerful supply chain visibility tools for managing
their integrated end-to-end supply chains at the SKU level.
Within eMpower are various supply chain information systems,
including the following:

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| |   |                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | uOp 2000, which is used by our agents and offices
    as the local operating system for customs brokerage, air and
    ocean import and export documentation and accounting functions
    that feed shipment and other customer data into our global
    information systems,
|
| |  | uOrder, which assists our customers with order
    management,                                                                                                                                                                                                               
|
| |  | uTrac, which provides our customers with supply
    chain visibility, enabling them to track shipments of goods and
    materials,                                                                                                                                           
|
| |  | uWarehouse, which enables our customers to track
    the location and status of goods and materials,                                                                                                                                                                         
|
| |  | uClear, which assists our customers with customs
    clearance,                                                                                                                                                                                                              
|
| |  | uAnalyze, which assists us and our customers with
    isolating the factors causing variability in transit times,                                                                                                                                                            
|
| |  | uReport, which provides customers with customized
    reports,                                                                                                                                                                                                               
|
| |  | uConnect, which enables the electronic transfer
    of data between our systems and those of our customers, and                                                                                                                                                              
|
| |  | uPlan, which is a suite of selected planning and
    optimization software developed by i2 Technologies.                                                                                                                                                                     

Intellectual Property

We have applied for federal trademark or service
mark registration of the names UTi, UTi eMpower and Inzalo and
the logos for UTi. In addition, we have received federal
trademark or service mark registration of the name and logo for
Union-Transport. All of these names and logos have also been or
are currently being registered in countries around the world. We
have no patents nor have we filed any patent applications. While
we may seek further trademarks or service marks and perhaps
patents on inventions or processes in the future, we believe our
success depends primarily on factors such as the technological
skills and innovative abilities of our personnel rather than on
any patents or other registrations we may obtain.

Government Regulation

Our airfreight forwarding business in the United
States is subject to regulation, as an indirect air carrier,
under the Federal Aviation Act by the Department of
Transportation, although airfreight forwarders are exempted from
most of this Acts requirements by the applicable
regulations. Our airfreight forwarding business in the United
States is subject to regulation by the Transportation Security
Administration. Our indirect air carrier status is registered
and in compliance with the Indirect Air Carrier Standard
Security Program Change 3 administered by the
Transportation Security Administration. To facilitate compliance
with known shipper requirements, we are part of a
national database which helps delineate shipper status for
security purposes. Our foreign airfreight forwarding operations
are subject to similar regulation by the regulatory authorities
of the respective foreign jurisdictions. The airfreight
forwarding industry is subject to regulatory and legislative
changes that can affect the economics of the industry by
requiring changes in operating practices or influencing the
demand for, and the costs of providing, services to customers.

The Federal Maritime Commission regulates our
ocean freight forwarding and non-vessel operating common carrier
operations to and from the United States. The Federal Maritime
Commission licenses intermediaries (combined ocean freight
forwarders and non-vessel operating common carrier operators).
Indirect ocean carriers are subject to Federal Maritime
Commission regulation, under this Commissions tariff
publication and surety bond requirements, and under the Shipping
Act of 1984 and the Ocean Reform Shipping Act of 1998,
particularly those terms proscribing rebating practices. For
ocean shipments not originating or terminating in the United
States, the applicable regulations and licensing requirements
typically are less stringent than those that originate or
terminate in the United States.

We are licensed as a customs broker by the United
States Customs Service of the Department of the Treasury in
United States customs districts in which we do business.
All United States Customs brokers are required to maintain
prescribed records and are subject to periodic audits by the
United States Customs

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Service. As a certified party under the
self-policing Customs-Trade Partnership Against Terrorism, we
are also subject to compliance with security regulations within
the trade environment that are enforced by the United States
Customs Service. We are also subject to regulations under the
Container Security Initiative, which is administered by the
United States Customs Service. Since February 1, 2003, we
have been submitting manifests automatically to
U.S. Customs from foreign ports 24 hours in advance of
vessel departure. Our foreign customs brokerage operations are
licensed in and subject to the regulations of their respective
countries.


We must comply with export regulations of the
United States Department of State, including the International
Traffic in Arms Regulations, the United States Department of
Commerce and the United States Bureau of Customs and Immigration
Service regarding what commodities are shipped to what
destination, to what end-user and for what end-use.

Some portions of our warehouse operations require
authorizations and bonds by the United States Department of the
Treasury and approvals by the United States Customs Service. We
are subject to various federal and state environmental, work
safety and hazardous materials regulations at our owned and
leased warehouse facilities. Our foreign warehouse operations
are subject to the regulations of their respective countries.

We are subject to a broad range of foreign and
domestic environmental and workplace health and safety
requirements, including those governing discharges to air and
water and the handling and disposal of solid and hazardous
wastes. In the course of our operations, we may be asked to
arrange transport of substances defined as hazardous under
applicable laws. If a release of hazardous substances occurs on
or from our facilities or from the transporter, we may be
required to participate in, or have liability for, the remedy of
such release. In such case, we also may be subject to claims for
personal injury and natural resource damages.

Although our current operations have not been
significantly affected by compliance with, or liability arising
under, these environmental, health and safety laws, we cannot
predict what impact future environmental, health and safety
regulations might have on our business.

We believe that we are in substantial compliance
with applicable material regulations and that the costs of
regulatory compliance have not had a material adverse impact on
our operations to date. However, our failure to comply with the
applicable regulations or to maintain required permits or
licenses could result in substantial fines or revocation of our
operating permits or licenses. We cannot predict the degree or
cost of future regulations on our business.

If we fail to comply with applicable governmental
regulations, we could be subject to substantial fines or
revocation of our permits and licenses.

Employees

At January 31, 2004, 2003 and 2002, we
employed a total of 11,155, 10,079 and 6,948 persons,
respectively. A breakdown of our employees by region for the
last three fiscal years is as follows:

|             |       |                   |       |        |  |      |       |        |  |  |       |       | 
|------------ | ----- | ----------------- | ----- | ------ |  | ---- | ----- | ------ |  |  | ----- | ----- | 
|             |       |                  
|             |       | As of January 31,
|             |       |                  
|             |       | 2004              |       | 2003   |  | 2002
|             |       |                   |       |        |  |     
|Europe       |       |                   | 1,786 |        |  |      | 1,567 |        |  |  | 1,333 |      
|Americas     |       |                   | 4,202 |        |  |      | 3,876 |        |  |  | 1,252 |      
|Asia Pacific |       |                   | 1,807 |        |  |      | 1,515 |        |  |  | 1,364 |      
|Africa       |       |                   | 3,299 |        |  |      | 3,070 |        |  |  | 2,948 |      
|Corporate    |       |                   | 61    |        |  |      | 51    |        |  |  | 51    |      
|             |       |                   |       |        |  |      |       |        |  |  |       |      
|             | Total |                   |       | 11,155 |  |      |       | 10,079 |  |  |       | 6,948 | 
|             |       |                   |       |        |  |      |       |        |  |  |       |      

The large increase in our number of employees
between January 31, 2002 and January 31, 2003 was
primarily due to our acquisition of Standard, which was
effective October 1, 2002 and which added approximately
2,600 employees to our Americas region.

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Approximately 944 of our employees are subject to
collective bargaining arrangements in several countries,
including South Africa and the Netherlands. We believe our
employee relations to be generally good.

Executive Officers and Other Senior Managers
of Registrant

Our executive officers are as follows:

|                    |  |     |    |          |  |                                                                                              
|------------------- |  | --- | -- | -------- |  | ---------------------------------------------------------------------------------------------
|Name                |  | Age |    | Position
|                    |  |     |    |         
|Roger I. MacFarlane |  |     | 59 |          |  | Chief Executive Officer and Director                                                         
|Peter Thorrington   |  |     | 58 |          |  | President, Chief Operating Officer and Director                                              
|Matthys J. Wessels  |  |     | 59 |          |  | Chairman of the Board of Directors, Chief
    Executive Officer - African Region and Director
|Alan C. Draper      |  |     | 51 |          |  | Executive Vice President and President -
    Asia Pacific Region and Director                
|Lawrence R. Samuels |  |     | 47 |          |  | Senior Vice President - Finance, Chief
    Financial Officer and Secretary                   
|Gene Ochi           |  |     | 54 |          |  | Senior Vice President - Marketing and Global
    Growth                                      
|Linda C. Bennett    |  |     | 53 |          |  | Senior Vice President and Chief Information
    Officer                                      
|John S. Hextall     |  |     | 47 |          |  | President - Europe, Middle East and North
    Africa Region                                  

Roger I. MacFarlanehas served as our Chief Executive
Officer since May 2000 and has been a director since our
formation in 1995. From 1995 to April 2000, Mr. MacFarlane
served as our Chief Executive Officer of the Americas Region and
was responsible for overseeing our operations in North and South
America. From 1993 to 1995, Mr. MacFarlane served as the
Chief Executive Officer of the Americas Division of one of our
predecessor corporations, and was responsible for overseeing its
operations in North and South America. From 1987 to 1993,
Mr. MacFarlane served in various executive capacities,
including Joint Chief Executive, for BAX Global, an
international freight forwarder and a subsidiary of The Pittston
Company, a New York Stock Exchange traded company. From
1983 to 1987, Mr. MacFarlane served as a director and held
various executive positions, including Chief Executive Officer,
for WTC International N.V., an international freight forwarder
and an American Stock Exchange traded company.
Mr. MacFarlane received a Bachelor of Arts degree and an
L.L.B. degree from the University of Cape Town.

Peter Thorringtonhas served as our President and
Chief Operating Officer since May 2000 and has been a director
since our formation in 1995. From 1995 to April 2000,
Mr. Thorrington served as our Chief Executive Officer of
the European Region and was responsible for overseeing our
operations in Europe. From 1993 to 1995, Mr. Thorrington
served as the Chief Executive of the European Division of one of
our predecessor corporations, and was responsible for overseeing
its operations in Europe. From 1987 to 1993,
Mr. Thorrington served in various executive capacities,
including Joint Chief Executive of BAX Global. From 1983 to
1987, Mr. Thorrington served as a director and held various
executive positions, including President, for WTC International
N.V. Mr. Thorrington received a Bachelor of Science degree
from the University of Natal and an M.B.A. from the University
of Cape Town. On December 10, 2003, Mr. Thorrington
announced his plans to retire from his executive positions with
the company during fiscal 2005.

Matthys J. Wesselshas served as our Chairman of the
Board of Directors since January 1999 and has been our Chief
Executive Officer - African Region and a director
since our formation in 1995. Mr. Wessels served as our
Chief Executive Officer from 1998 to April 2000. Since 1987,
Mr. Wessels has served as the chairman for United Service
Technologies Limited, a publicly listed company in South Africa
and a substantial holder of our ordinary shares. From 1984 to
1987, Mr. Wessels served in various executive capacities
for WTC International N.V. When the South African interests of
WTC International N.V. were separated from its other operations
in 1987, Mr. Wessels continued as the Chief Executive
Officer of the South African operations until these operations
were combined with United Service Technologies Limited later
that year. Mr. Wessels received a Bachelor of Science
degree from the University of Natal and an M.B.A. from the
University of Cape Town.

7



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##### Table of Contents



Alan C. Draperhas served as our President-Asia
Pacific Region since January 1996, an Executive Vice President
since May 2000 and a director since our formation in 1995. From
1993 to 1996, Mr. Draper served as the Senior Vice
President Finance of one of our predecessor corporations. From
1990 to 1994, Mr. Draper served as the President of
Transtec Ocean Express Company, an international ocean freight
forwarding company, which was also one of our predecessors. From
1987 to 1990, Mr. Draper served as the Managing Director of
BAX Global (UK) and was responsible for its activities in
Europe. From 1983 to 1987, Mr. Draper served in various
executive capacities for WTC International N.V. Mr. Draper,
as a Rhodes Scholar, graduated with a Masters of Philosophy from
Oxford University and an Alpha Beta pass. Mr. Draper
received a Bachelor of Commerce degree from the University of
Natal and is a qualified chartered accountant in South Africa.

Lawrence R. Samuelshas served as our Senior Vice
President-Finance and Secretary since 1996 and Chief Financial
Officer since May 2000. Since 1989, Mr. Samuels has served
as the Secretary of United Service Technologies Limited, a
publicly listed company in South Africa and a substantial holder
of our ordinary shares. From 1993 to 1995, Mr. Samuels
served as the Financial Director of, and from 1987 to 1993 as
the Financial Manager of, Pyramid Freight (Proprietary) Ltd.,
one of our subsidiaries. From 1984 to 1987, Mr. Samuels
served as the Financial Manager of Sun Couriers, an express
courier operation in South Africa. From 1982 to 1984,
Mr. Samuels served as the Financial Manager for Adfreight
(Pty) Ltd., an express courier operation in South Africa, which
was merged into Sun Couriers in 1984. Mr. Samuels received
a Bachelor of Commerce degree from the University of the
Witwatersrand and is a qualified chartered accountant in South
Africa.

Gene Ochihas
served as our Senior Vice President-Marketing and Global Growth
since 1998. From 1993 to 1998, Mr. Ochi served as the
Regional Vice President, Western U.S.A., of UTi, United States,
Inc., one of our subsidiaries. From 1989 to 1992, Mr. Ochi
served as the Senior Vice President of Marketing of BAX Global.
From 1982 to 1989, Mr. Ochi served in various executive
capacities for Flying Tigers, a cargo airline. From 1979 to
1982, Mr. Ochi served as the Vice President of Marketing
for WTC Air Freight. Mr. Ochi received a Bachelor of
Science degree from the University of Utah and an M.B.A. from
the University of Southern California.

Linda C. Bennetthas served as our Senior Vice
President and Chief Information Officer since April 2000. From
August 1995 to February 2000, Ms. Bennett served as the
Director, Information Technology and later as the Vice
President, Information Technology for
Pinkertons, Inc., a security guard, consulting,
investigation and security system integration company.
Ms. Bennett received a Bachelor of Arts degree from
Pepperdine University and an M.B.A. from the Andersen School of
Management at the University of California, Los Angeles.

John S. Hextallhas served as our President for
the Europe Region since May 2001. From March 2000 to May 2001,
Mr. Hextall served as Managing Director Atlantic Region.
From 1997 to 2000, Mr. Hextall served as the Managing
Director of UTi Worldwide (U.K.) Ltd., one of our subsidiaries.
From 1993 to 1997, Mr. Hextall served as the Managing
Director of UTi Belgium N.V., one of our subsidiaries.
Mr. Hextall received a Bachelor of Science Combined Honours
degree in Transport Planning & Operations from the
University of Aston, Birmingham, UK.

Our other senior managers are as follows:

|                        |  |     |    |          |  |                                                                        
|----------------------- |  | --- | -- | -------- |  | -----------------------------------------------------------------------
|Name                    |  | Age |    | Position
|                        |  |     |    |         
|Gordon C. Abbey         |  |     | 51 |          |  | Managing Director UTi Africa Region                                    
|David Cheng             |  |     | 59 |          |  | Chairman of UTi Hong Kong & China                                      
|Brian R. J. Dangerfield |  |     | 45 |          |  | Executive Vice President Northeast Asia and the
    Indian Subcontinent
|Carlos Escario Pascual  |  |     | 42 |          |  | Managing Director, Grupo SLi                                           
|William T. Gates        |  |     | 56 |          |  | Chief Executive Officer-Standard Corporation                           
|Walter R. Mapham        |  |     | 56 |          |  | Director Strategic Services                                            
|Glenn Mills             |  |     | 51 |          |  | Vice President - Sales & Marketing,
    Asia Pacific                   
|Michael K. OToole      |  |     | 59 |          |  | Vice President - Predictable Performance                               
|Graham Somerville       |  |     | 49 |          |  | Managing Director Sun Couriers Division                                

8



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Available Information

Our annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports are available without charge on our
website, http://www.go2uti.com, as soon as reasonably
practicable after they are filed or furnished electronically
with the SEC. We are providing the address to our Internet site
solely for the information of investors. We do not intend the
address to be an active link or to otherwise incorporate the
contents of the website into this report.






|        |           
|------- | ----------
|Item 2. | Properties

We lease or, in a few cases, own 421 facilities
in 49 countries. These facilities are comprised of office and
warehouse space. In most countries, these facilities typically
are located close to an airport, ocean port, or an important
border crossing and range in size from approximately
35 square feet to approximately 508,000 square feet.
Leases for our principal properties generally have terms of five
years or more and often include options to renew. While some of
our leases are month-to-month and others expire in the near
term, we believe that our facilities are adequate for our
current needs and for the foreseeable future.

Included in our leased facilities we have
approximately 4.3 million square feet of single-tenant
warehouses and distribution facilities and approximately
3.8 million square feet of shared warehouses, excluding our
contract logistics operations located in the customers
facilities. As of January 31, 2004, we leased 93 medium- to
large-sized warehouse facilities ranging in size from
approximately 10,000 square feet to approximately
508,000 square feet and we own five medium-sized warehouse
facilities ranging in size from approximately 18,000 square
feet to approximately 55,000 square feet. These warehouse
facilities are located in Australia (four locations), Bangladesh
(one location), Belgium (one location), Canada (one location),
Colombia (four locations), the Czech Republic (one location),
Hong Kong (two locations), Italy (three locations), Malawi
(one location), the Netherlands (four locations), New Zealand
(two locations), Philippines (two locations), Portugal (one
location), South Africa (28 locations), Spain (seven locations),
Sweden (one location), the United Kingdom (six locations) and
the United States (29 locations). Approximately
51,000 square feet of our leased facilities represents
single-tenant warehouses and distribution facilities under
leases with a term longer than the logistics services contracts
we have with our customers.

We also own five facilities in South Africa
ranging in size from approximately 23,500 square feet to
approximately 406,600 square feet which we use in our
domestic delivery service in that country.






|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

From time to time, we are a defendant or
plaintiff in various legal proceedings, including litigation
arising in the ordinary course of our business. To date, none of
these types of litigation has had a material effect on us and,
as of the date of this annual report, we are not a party to any
material litigation except as described below.

We are involved in litigation in Italy (in cases
filed in 2000 in the Court of Milan) and England (in a case
filed on April 13, 2000 in the High Court of Justice,
London) with Enrico Furgada the former ultimate owner of Per
Transport SpA and related entities in connection with our April
1998 acquisition of Per Transport SpA and our subsequent
termination of the employment of the former ultimate owner as a
consultant. The suits seek monetary damages, including
compensation for termination of the owners consulting
agreement. We have brought counter-claims for monetary damages
in relation to warranty claims under the purchase agreement. We
have been advised that proceedings to recover amounts owing by
the former ultimate owner and other entities owned by him, to
third parties may be instituted against us. It is alleged that
Per Transport SpA guaranteed certain obligations of these other
entities owned by the former ultimate owner. We believe that
these guarantees are the responsibility of the former ultimate
owner. These guarantees were made prior to our acquisition, were
not disclosed to us during our acquisition negotiations nor were
they disclosed in the audited statutory financial statements of
Per Transport SpA. Civil and criminal proceedings have also been
instituted against the former ultimate owner in relation to
these guarantees. The total of all such actual and potential
claims is approximately $16.2 million, based on exchange
rates as of January 31, 2004.

9



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We are one of seven defendants named in a lawsuit
filed on July 30, 2001 in the United States Bankruptcy
Court for the Southern District of New York. The plaintiff,
the committee of unsecured creditors of FMI Forwarding (formerly
known as Intermaritime Forwarding), alleges under a theory of
fraudulent conveyance that we paid inadequate consideration for
certain assets of Intermaritime Forwarding and also alleges that
we are liable for debts of FMI Forwarding on a successor
liability theory. The plaintiff seeks recovery in an amount up
to $4.6 million.

A former customer, De La Rue International,
filed a complaint against us in the Superior Court of Gwinnett
County, Georgia on April 21, 2003 alleging that we were
negligent, that we breached our contractual obligations and that
we fraudulently concealed the fact that three shipments in
August and September 1999 were not properly and timely reported
to U.S. Customs for clearance. The plaintiff is asking for
damages in excess of $2.0 million.

We are one of approximately 83 defendants named
in two class action lawsuits which were originally filed on
September 19, 1995 and subsequently consolidated in the
District Court of Brazaria County, Texas (23rd Judicial
District) where it is alleged that various defendants sold
chemicals that were utilized in the 1991 Gulf War by the Iraqi
army which caused personal injuries to U.S. armed services
personnel and their families, including birth defects. The
lawsuits were brought on behalf of the military personnel who
served in the 1991 Gulf War and their families and the
plaintiffs are seeking in excess of $1.0 billion in
damages. To date, the plaintiffs have not obtained class
certification. We believe we are a defendant in the suit because
an entity that sold us assets in 1993 is a defendant. We believe
we will prevail in this matter because the alleged actions
giving rise to the claims occurred prior to our purchase of the
assets. We further believe that we will ultimately prevail in
this matter since we never manufactured chemicals and the
plaintiffs have been unable to thus far produce evidence that we
acted as a freight forwarder for cargo that included chemicals
used by the Iraqi army.

On August 19, 2003 in the District Court of
Dallas County, Texas we were named as one of the defendants in a
wrongful death suit filed by the survivors of an automobile
accident caused by the toppling of an ocean container from the
chassis of a truck (Sim et. al. versus Sharpless et. al.). The
truck was under the control of the steamship line at the time of
the accident. The case is being defended by outside counsel
appointed by our general liability insurance carrier. The
plaintiffs are claiming non-specific but exemplary damages in
excess of $4.0 million.






|        |                                                        
|------- | -------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders

No matters were submitted to a vote of our
shareholders (members) during the fourth quarter of fiscal
2004.

10



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PART II






|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities

Price Range of our Ordinary Shares

Our ordinary shares trade on the Nasdaq National
Market System under the symbol UTIW. The high and low market
prices for our ordinary shares for each fiscal quarter during
the last two fiscal years are as follows:

|                                    |             |      |   |       |  |  |   |       | 
|----------------------------------- | ----------- | ---- | - | ----- |  |  | - | ----- | 
|                                    |             | High |   | Low  
|                                    |             |      |   |      
|Fiscal Year Ended January 31, 2004: |             |      |   |       |  |  |   |      
|                                    | 4th Quarter |      | $ | 43.25 |  |  | $ | 33.14 | 
|                                    | 3rd Quarter |      |   | 38.40 |  |  |   | 29.85 | 
|                                    | 2nd Quarter |      |   | 36.63 |  |  |   | 26.00 | 
|                                    | 1st Quarter |      |   | 31.34 |  |  |   | 23.11 | 
|Fiscal Year Ended January 31, 2003: |             |      |   |       |  |  |   |      
|                                    | 4th Quarter |      |   | 27.14 |  |  |   | 19.55 | 
|                                    | 3rd Quarter |      |   | 23.89 |  |  |   | 15.70 | 
|                                    | 2nd Quarter |      |   | 21.70 |  |  |   | 16.06 | 
|                                    | 1st Quarter |      |   | 20.60 |  |  |   | 16.31 | 

As of March 31, 2004, the number of holders
of record of our ordinary shares was 265.

Dividend Policy

During fiscal 2004 and fiscal 2003, we paid an
annual regular cash dividend of $0.095 and $0.075 per
ordinary share, respectively. In April 2004, the board of
directors declared an annual regular cash dividend of
$0.115 per ordinary share, payable on May 21, 2004 to
shareholders of record as of April 30, 2004. Historically,
our board of directors has considered the declaration of
dividends on an annual basis. Any future determination to pay
cash dividends to our shareholders will be at the discretion of
our board of directors and will depend upon our financial
condition, operating results, capital requirements, restrictions
contained in our agreements, legal requirements and other
factors which our board of directors deems relevant. We intend
to reinvest a substantial portion of our earnings in the
development of our business and no assurance can be given that
dividends will be paid to our shareholders in the future.

Exchange Controls

There are currently no British Virgin Islands
laws or regulations restricting the import or export of capital
or affecting the payment of dividends or other distributions to
holders of our ordinary shares who are non-residents of the
British Virgin Islands.

Some of our subsidiaries may be subject from time
to time to exchange control laws and regulations that may limit
or restrict the payment of dividends or distributions or other
transfers of funds by those subsidiaries to our holding company.

Taxation



| |                                                  
| | -------------------------------------------------
| | United States Federal Income Tax
    Consequences



| |        
| | -------
| | General

This section summarizes certain material United
States federal income tax consequences to holders of our
ordinary shares as of the date of this report. The summary
applies to you only if you hold our ordinary shares as a capital
asset for tax purposes (that is, for investment purposes). The
summary does not cover state,

11



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##### Table of Contents



local or foreign law. In addition, this summary
does not apply to you if you are a member of a class of holders
subject to special rules, such as:




| |   |                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a dealer in securities or currencies;                                                                                                                        
|
| |  | a trader in securities that elects to use a
    mark-to-market method of accounting for your securities holdings;                                            
|
| |  | a bank;                                                                                                                                                      
|
| |  | a life insurance company;                                                                                                                                    
|
| |  | a tax-exempt organization;                                                                                                                                   
|
| |  | a person that holds our ordinary shares as part
    of a straddle or a hedging, integrated, constructive sale or
    conversion transaction for tax purposes;
|
| |  | a person whose functional currency for tax
    purposes is not the U.S. dollar;                                                                              
|
| |  | a person liable for alternative minimum
    tax; or                                                                                                          
|
| |  | a person that owns, or is treated as owning, 10%
    or more of any class of our shares.                                                                     

The discussion is based on current law as of the
filing of this annual report. Changes in the law may alter the
tax treatment of our ordinary shares, possibly on a retroactive
basis. The discussion also assumes that we will not be
classified as a controlled foreign corporation under
U.S. law.

The discussion does not cover tax consequences
that depend upon your particular tax circumstances. We recommend
that you consult your tax advisor about the consequences of
holding our ordinary shares in your particular situation.

For purposes of the discussion below, you are a
U.S. holder if you are a beneficial owner of our ordinary
shares who or which is:



| |   |                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an individual U.S. citizen or resident alien;                                                                                                                                                             
|
| |  | a corporation, or entity taxable as a
    corporation, that was created, or treated as created, under
    U.S. law (federal or state);                                                                    
|
| |  | an estate whose worldwide income is subject to
    U.S. federal income tax; or                                                                                                                            
|
| |  | a trust if (1) a U.S. court is able to
    exercise primary supervision over its administration and
    (2) one or more U.S. persons have authority to control
    all substantial decisions of the trust.

If you are not a U.S. holder, you are a
non-U.S. holder and the discussion below titled Tax
Consequences to Non-U.S. Holders will apply to you.

If a partnership holds our ordinary shares, the
tax treatment of a partner will generally depend upon the status
of the partner and upon the activities of the partnership. If
you are a partner of a partnership holding ordinary shares, you
should consult your tax advisor.



| |                                     
| | ------------------------------------
| | Tax Consequences to
    U.S. Holders



| |              
| | -------------
| | Distributions

If we make any distributions on our ordinary
shares, the gross amount of any such distribution (other than in
liquidation) that you receive with respect to our ordinary
shares generally will be taxed to you as a dividend (i.e.,
ordinary income) to the extent such distribution does not exceed
our current or accumulated earnings and profits, as calculated
for U.S. federal income tax purposes. To the extent any
distribution exceeds our earnings and profits, as calculated for
U.S. federal income tax purposes, the distribution will
first be treated as a tax-free return of capital to the extent
of your adjusted tax basis in our ordinary shares and will be
applied against and reduce such basis on a dollar-for-dollar
basis (thereby increasing the amount of gain and decreasing the
amount of loss recognized on a subsequent disposition of such
common stock). To the extent

12



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##### Table of Contents



that such distribution exceeds your adjusted tax
basis, the distribution will be taxed as gain recognized on a
sale or exchange of our ordinary shares. See Sale or Other
Disposition of our Ordinary Shares, below. Because we are
not a U.S. corporation, dividends paid by us to
corporations are not eligible for the dividends-received
deduction. A U.S. holder will not be eligible to claim a
foreign tax credit against its U.S. federal income tax
liability for foreign taxes paid by us unless it is a
U.S. corporation owning 10 percent or more of our
voting stock. Dividends paid with respect to our ordinary shares
will generally be treated as foreign source passive
income or, in the case of some types of U.S. holders,
financial services income, for purposes of computing
allowable foreign tax credits for U.S. foreign tax credit
purposes.


Sale or Other
Disposition of our Ordinary Shares

In connection with the sale or other taxable
disposition of our ordinary shares:



| |   |                                                                                                                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | you will recognize a gain or loss equal to the
    difference (if any) between the U.S. dollar value of the
    amount realized on such sale or other taxable disposition, and
    your adjusted tax basis in such ordinary shares.                                                                                                                                             
|
| |  | any gain or loss will be capital gain or loss and
    will be long-term capital gain or loss if your holding period
    for our ordinary shares is more than one year at the time of
    such sale or other disposition.                                                                                                                                                        
|
| |  | any gain or loss will be treated as having a
    United States source for United States foreign tax credit
    purposes and as a result of the foreign tax credit provisions of
    the Internal Revenue Code of 1986 you may be unable to claim a
    foreign tax credit for British Virgin Islands taxes, if any,
    imposed upon the sale or disposition of ordinary shares.
|
| |  | your ability to deduct capital losses is subject
    to limitations.                                                                                                                                                                                                                                                                                                            



| |                                   
| | ----------------------------------
| | Passive Foreign Investment Company

We will be classified as a passive foreign
investment company for U.S. federal income tax purposes if:



| |   |                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 75% or more of our gross income for the taxable
    year is passive income; or                                                                                                          
|
| |  | on average for the taxable year, 50% or more of
    our assets by value or under certain circumstances, by adjusted
    basis, produce or are held for the production of passive income.

We do not believe that we currently satisfy
either of the requirements for classification as a passive
foreign investment company. Because the determination of whether
our ordinary shares constitute shares of a passive foreign
investment company will be based upon the composition of our
income and assets from time to time, there can be no assurance
that we will not be considered a passive foreign investment
company for any future fiscal year.

If we are classified as a passive foreign
investment company for any taxable year, unless a qualified
electing fund election is made:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | any excess distributions (generally defined as
    the excess of the amount received with respect to the shares in
    any taxable year over 125% of the average received in the
    shorter of either the three previous years or your holding
    period before the taxable year) made by us during a taxable year
    must be allocated ratably to each day of your holding period.
    The amounts allocated to the current taxable year and to taxable
    years prior to the first year in which we were classified as a
    passive foreign investment company will be included as ordinary
    income in gross income for that year. The amount allocated to
    each prior taxable year will be taxed as ordinary income at the
    highest rate in effect for the U.S. holder in that prior
    year and the tax is subject to an interest charge at the rate
    applicable to deficiencies in income taxes; and
|
| |  | the entire amount of any gain realized upon the
    sale or other disposition of ordinary shares will be treated as
    an excess distribution made in the year of sale or other
    disposition and as a consequence will be treated as ordinary
    income and to the extent allocated to years prior to the year of
    sale or other disposition, will be subject to the interest
    charge described above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

13



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The passive foreign investment company rules will
not apply if the U.S. holder elects to treat us as a
qualified electing fund and we provide specific information
required to make the election. If we were classified as a
passive foreign investment company, we intend to notify
U.S. holders and provide them with that information as may
be required to make the qualified electing fund election
effective. If the qualified election fund election is made, a
U.S. holder is taxable on its pro-rata share of our
ordinary earnings and net capital gain for each taxable year of
the company, regardless of whether the distributions were
received. The U.S. holders basis in the ordinary
shares will be increased to reflect taxed but undistributed
income. Distributions of income that had previously been taxed
will result in a corresponding reduction in basis in the
ordinary shares and will not be taxed again as a distribution.

U.S. holders that own ordinary shares during
any year in which we are classified as a passive foreign
investment company, must file Form 8621. We urge you to
consult your own U.S. tax advisor regarding the
U.S. federal income tax consequences of holding our shares
while classified as a passive foreign investment company.



| |                                              
| | ---------------------------------------------
| | Information Return and Backup
    Withholding

Distributions made by us with respect to our
ordinary shares and gross proceeds from the disposition of the
shares may be subject to information reporting requirements to
the Internal Revenue Service and a 30% backup withholding tax.
However, the backup withholding tax will generally not apply to
a U.S. holder who furnishes a correct taxpayer
identification number and provides other required information.
If backup withholding applies, the amount withheld is not an
additional tax, but is credited against the shareholders
United States federal income tax liability. Accordingly, we urge
you to contact your own tax advisor to ascertain whether it is
necessary for you to furnish any such information to us or the
Internal Revenue Service.



| |                                         
| | ----------------------------------------
| | Tax Consequences to
    Non-U.S. Holders

Distributions

If you are a non-U.S. holder, you generally
will not be subject to U.S. federal income tax on
distributions made on our ordinary shares unless:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | you conduct a trade or business in the United
    States and,                                                                                                                                                                                                                                                                                                                                             
|
| |  | the dividends are effectively connected with the
    conduct of that trade or business (and, if an applicable income
    tax treaty so requires as a condition for you to be subject to
    U.S. federal income tax on a net income basis in respect of
    income from our ordinary shares, such dividends are attributable
    to a permanent establishment that you maintain in the United
    States).

If you satisfy the two above-described
requirements, you generally will be subject to tax in respect of
such dividends in the same manner as a U.S. holder, as
described above. In addition, any effectively connected
dividends received by a non-U.S. corporation may also,
under some circumstances, be subject to an additional
branch profits tax at a 30% rate or such lower rate
as may be specified by an applicable income tax treaty.



| |                                                     
| | ----------------------------------------------------
| | Sale or Other Disposition of our Ordinary
    Shares

If you are a non-U.S. holder, you will not
be subject to U.S. federal income tax, including
withholding tax, in respect of gain recognized on a sale or
other taxable disposition of our ordinary shares unless:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | your gain is effectively connected with a trade
    or business that you conduct in the United States (and, if an
    applicable income tax treaty so requires as a condition for you
    to be subject to U.S. federal income tax on a net income
    basis in respect of gain from the sale or other disposition of
    our ordinary shares, such gain is attributable to a permanent
    establishment maintained by you in the United States), or

14



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##### Table of Contents





| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | you are an individual and are present in the
    United States for at least 183 days in the taxable year of
    the sale or other disposition, and either:



| |   |                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------
| |  | your gain is attributable to an office or other
    fixed place of business that you maintain in the United
    States, or
|
| |  | you have a tax home in the United States.                                                                                 

Effectively connected gains realized by a
non-U.S. corporation may also, under some circumstances, be
subject to an additional branch profits tax at a
rate of 30% or such lower rate as may be specified by an
applicable income tax treaty.



| |                                                 
| | ------------------------------------------------
| | Backup Withholding and Information
    Reporting

Payments (or other taxable distributions) in
respect of our ordinary shares that are made in the United
States or by a U.S. related financial intermediary will be
subject to U.S. information reporting rules. You will not
be subject to backup withholding of U.S. federal income tax
provided that:



| |   |                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | you are a corporation or other exempt
    recipient, or                                                                                                                                                              
|
| |  | you provide a taxpayer identification number
    (which, in the case of an individual, that is his or her social
    security number) and certify that no loss of exemption from
    backup withholding has occurred.

If you are not a United States person, you
generally are not subject to information reporting and backup
withholding, but you may be required to provide a certification
of your non-U.S. status in order to establish that you are
exempt.

Amounts withheld under the backup withholding
rules may be credited against your U.S. federal income tax
liability, and you may obtain a refund of any excess amounts
withheld under the backup withholding rules by filing the
appropriate claim for refund with the Internal Revenue Service.



| |                                    
| | -----------------------------------
| | British Virgin Islands
    Taxation

Under the International Business Companies Act of
the British Virgin Islands as currently in effect, a holder of
ordinary shares who is not a resident of the British Virgin
Islands is exempt from British Virgin Islands income tax on
dividends paid with respect to the ordinary shares and all
holders of ordinary shares are not liable to the British Virgin
Islands for income tax on gains realized during that year on
sale or disposal of such shares; the British Virgin Islands does
not impose a withholding tax on dividends paid by a company
incorporated under the International Business Companies Act.

There are no capital gains, gift or inheritance
taxes levied by the British Virgin Islands on companies
incorporated under the International Business Companies Act. In
addition, shares of companies incorporated under the
International Business Companies Act are not subject to transfer
taxes, stamp duties or similar charges.

There is no income tax treaty or convention
currently in effect between the United States and the British
Virgin Islands.

Recent Sales of Unregistered
Securities

At the time of our acquisition of Standard in
October 2002, we established a contingent incentive earn-out
arrangement for selected key employees of Standard. Pursuant to
this arrangement, we issued 16,762 ordinary shares during the
fourth quarter of fiscal 2004. These shares were not registered
under the Securities Act of 1933 in reliance on the exemption
from registration contained in Section 4(2) of the Act as
transactions not involving a public offering.

In addition, 67,373 ordinary shares were released
during fiscal 2004 from the Guernsey Island Trusts established
for the companys Executive Share Plan and the
Union-Transport Share Incentive Plan to a limited number of
participants upon the exercise of options granted before the
company became a reporting company pursuant to Rule 701
under the Securities Act of 1933.

15



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##### Table of Contents








|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

Selected Financial Data

The following selected consolidated financial
data should be read in conjunction with the consolidated
financial statements and related notes thereto and
Managements Discussion and Analysis of Financial
Condition and Results of Operations and other financial
data included elsewhere in this report.

The selected consolidated financial data as of
January 31, 2004 and 2003, and for each of the years in the
three-year period ended January 31, 2004 have been derived
from our audited consolidated financial statements which appear
elsewhere in this report. The selected consolidated financial
data as of January 31, 2002, 2001 and 2000 and for each of
the years in the two-year period ended January 31, 2001
have been derived from our audited consolidated financial
statements which are not included in this report. The historical
results are not necessarily indicative of the operating results
to be expected in the future. All financial information
presented has been prepared in United States dollars and in
accordance with accounting principles generally accepted in the
United States of America (U.S. GAAP).

|                                                                       |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |         |         | 
|---------------------------------------------------------------------- | ------------------------ | ---------------------------------------- | --------- | ------- | ------- | ---- | --------- | ------- | ------- | ---- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                                                       |                          |                                         
|                                                                       |                          | Year Ended January 31,                  
|                                                                       |                          |                                         
|                                                                       |                          | 2004                                     |           | 2003    |         | 2002 |           | 2001    |         | 2000
|                                                                       |                          |                                          |           |         |         |      |           |         |         |     
|                                                                       |                          |                                         
|                                                                       |                          | (In thousands, except per share amounts)
|INCOME STATEMENT DATA:                                                 |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|Gross revenue(1)                                                       |                          | $                                        | 1,502,875 |         |         | $    | 1,170,060 |         |         | $    | 889,786 |         |         | $ | 863,259 |         |         | $ | 706,955 |        
|Freight consolidation costs(1)(2)                                      |                          |                                          | 906,734   |         |         |      | 765,270   |         |         |      | 585,227 |         |         |   | 561,413 |         |         |   | 461,338 |        
|                                                                       |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|Net revenues(2):                                                       |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|                                                                       | Airfreight forwarding    |                                          |           | 198,822 |         |      |           | 157,493 |         |      |         | 142,312 |         |   |         | 145,594 |         |   |         | 124,177 |        
|                                                                       | Ocean freight forwarding |                                          |           | 75,131  |         |      |           | 66,554  |         |      |         | 58,633  |         |   |         | 54,461  |         |   |         | 44,078  |        
|                                                                       | Customs brokerage        |                                          |           | 65,532  |         |      |           | 61,105  |         |      |         | 54,034  |         |   |         | 55,295  |         |   |         | 40,156  |        
|                                                                       | Contract logistics       |                                          |           | 192,969 |         |      |           | 79,517  |         |      |         | 14,957  |         |   |         | 8,478   |         |   |         | 7,921   |        
|                                                                       | Other                    |                                          |           | 63,687  |         |      |           | 40,121  |         |      |         | 34,623  |         |   |         | 38,018  |         |   |         | 29,285  |        
|                                                                       |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|                                                                       |                          | Total net revenues                       |           |         | 596,141 |      |           |         | 404,790 |      |         |         | 304,559 |   |         |         | 301,846 |   |         |         | 245,617 | 
|Staff costs                                                            |                          |                                          | 318,727   |         |         |      | 204,971   |         |         |      | 156,005 |         |         |   | 154,426 |         |         |   | 124,330 |        
|Depreciation and amortization                                          |                          |                                          | 14,806    |         |         |      | 11,174    |         |         |      | 9,411   |         |         |   | 9,060   |         |         |   | 7,798   |        
|Amortization of intangible assets(3)                                   |                          |                                          | 663       |         |         |      | 198       |         |         |      | 5,339   |         |         |   | 4,306   |         |         |   | 2,935   |        
|Other operating expenses                                               |                          |                                          | 202,874   |         |         |      | 142,942   |         |         |      | 104,134 |         |         |   | 109,846 |         |         |   | 90,032  |        
|                                                                       |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|Operating income(3)                                                    |                          |                                          | 59,071    |         |         |      | 45,505    |         |         |      | 29,670  |         |         |   | 24,208  |         |         |   | 20,522  |        
|Pretax income(3)                                                       |                          |                                          | 59,771    |         |         |      | 43,294    |         |         |      | 28,477  |         |         |   | 25,623  |         |         |   | 18,750  |        
|Income before minority interests(3)                                    |                          |                                          | 46,368    |         |         |      | 30,802    |         |         |      | 20,507  |         |         |   | 19,415  |         |         |   | 17,098  |        
|Net income(3)                                                          |                          | $                                        | 44,771    |         |         | $    | 29,294    |         |         | $    | 19,158  |         |         | $ | 18,453  |         |         | $ | 16,693  |        
|                                                                       |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|Basic earnings per ordinary share(3)(4)                                |                          | $                                        | 1.48      |         |         | $    | 1.13      |         |         | $    | 0.76    |         |         | $ | 0.95    |         |         | $ | 1.12    |        
|                                                                       |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|Diluted earnings per ordinary share(3)(4)                              |                          | $                                        | 1.42      |         |         | $    | 1.11      |         |         | $    | 0.75    |         |         | $ | 0.88    |         |         | $ | 0.86    |        
|                                                                       |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|Cash dividends declared per ordinary share                             |                          | $                                        | 0.095     |         |         | $    | 0.075     |         |         | $    | 0.075   |         |         | $ | 0.15    |         |         | $ | 0.14    |        
|                                                                       |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|Number of weighted average shares used for per
    share calculations: |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|                                                                       |                          | Basic shares(4)                          |           |         | 30,292  |      |           |         | 25,932  |      |         |         | 25,233  |   |         |         | 19,345  |   |         |         | 14,263  | 
|                                                                       |                          | Diluted shares(4)                        |           |         | 31,480  |      |           |         | 26,504  |      |         |         | 25,502  |   |         |         | 21,053  |   |         |         | 19,356  | 
|CASH FLOW DATA:                                                        |                          |                                          |           |         |         |      |           |         |         |      |         |         |         |   |         |         |         |   |         |        
|Purchases of property, plant and equipment                             |                          | $                                        | 18,720    |         |         | $    | 13,572    |         |         | $    | 8,711   |         |         | $ | 10,121  |         |         | $ | 8,990   |        
|Net cash provided by operating activities                              |                          |                                          | 65,858    |         |         |      | 49,602    |         |         |      | 43,086  |         |         |   | 32,654  |         |         |   | 10,240  |        
|Net cash used in investing activities                                  |                          |                                          | (50,380   | )       |         |      | (76,685   | )       |         |      | (29,687 | )       |         |   | (40,274 | )       |         |   | (29,530 | )      
|Net cash (used in)/provided by financing
    activities(4)             |                          |                                          | (24,860   | )       |         |      | 103,276   |         |         |      | (18,239 | )       |         |   | 92,323  |         |         |   | 2,712   |        

16



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##### Table of Contents



|                      |                                      |                                          |         |         |         |      |         |         |         |      |         |         |         |   |         |         |         |   |         |         |         | 
|--------------------- | ------------------------------------ | ---------------------------------------- | ------- | ------- | ------- | ---- | ------- | ------- | ------- | ---- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                      |                                      |                                         
|                      |                                      | Year Ended January 31,                  
|                      |                                      |                                         
|                      |                                      | 2004                                     |         | 2003    |         | 2002 |         | 2001    |         | 2000
|                      |                                      |                                          |         |         |         |      |         |         |         |     
|                      |                                      |                                         
|                      |                                      | (In thousands, except per share amounts)
|BALANCE SHEET DATA:   |                                      |                                          |         |         |         |      |         |         |         |      |         |         |         |   |         |         |         |   |         |        
|Working capital       |                                      | $                                        | 174,593 |         |         | $    | 157,864 |         |         | $    | 78,920  |         |         | $ | 95,435  |         |         | $ | 39,057  |        
|Total assets          |                                      |                                          | 703,341 |         |         |      | 627,075 |         |         |      | 404,611 |         |         |   | 443,753 |         |         |   | 288,098 |        
|Long-term liabilities |                                      |                                          | 12,530  |         |         |      | 9,969   |         |         |      | 9,177   |         |         |   | 14,890  |         |         |   | 14,339  |        
|Shareholders equity: |                                      |                                          |         |         |         |      |         |         |         |      |         |         |         |   |         |         |         |   |         |        
|                      | Preference shares                    |                                          |         |        |         |      |         |        |         |      |         |        |         |   |         |        |         |   |         | 36,535  |        
|                      | Common stock(4)                      |                                          |         | 318,409 |         |      |         | 311,161 |         |      |         | 207,143 |         |   |         | 206,626 |         |   |         | 90,952  |        
|                      | Retained earnings                    |                                          |         | 105,855 |         |      |         | 63,973  |         |      |         | 36,608  |         |   |         | 19,376  |         |   |         | 3,311   |        
|                      | Accumulated other comprehensive loss |                                          |         | (38,418 | )       |      |         | (50,965 | )       |      |         | (63,897 | )       |   |         | (38,514 | )       |   |         | (23,396 | )      
|                      |                                      |                                          |         |         |         |      |         |         |         |      |         |         |         |   |         |         |         |   |         |        
|                      |                                      | Total shareholders equity(4)            |         | $       | 385,846 |      |         | $       | 324,169 |      |         | $       | 179,854 |   |         | $       | 187,488 |   |         | $       | 107,402 | 
|                      |                                      |                                          |         |         |         |      |         |         |         |      |         |         |         |   |         |         |         |   |         |        



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Gross revenue represents billings on exports to
    customers, plus net revenue on imports, net of any billings for
    value added taxes, custom duties and freight insurance premiums
    whereby we also act as an agent. Gross revenue and freight
    consolidation costs for airfreight and ocean freight forwarding
    services, including commissions earned from our services as an
    authorized agent for airline and ocean carriers and third-party
    freight insurers, are recognized at the time the freight departs
    the terminal of origin, which is when the customer is billed.
    Gross customs brokerage revenue and contract logistics and other
    revenue are recognized when we bill the customer, which for
    customs brokerage revenue is when the necessary documentation
    for customs clearance has been completed, and for contract
    logistics and other revenue is when the service has been
    provided to third parties in the ordinary course of business.
|   
|(2) | Net revenue is determined by deducting freight
    consolidation costs from gross revenue. Freight consolidation
    costs are recognized at the time the freight departs the
    terminal of origin.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(3) | Effective with fiscal year 2003, operating
    income, pretax income, income before minority interests and net
    income, as well as basic and diluted earnings per ordinary
    share, exclude the effect of amortization of goodwill in
    accordance with the adoption of Statement of Financial
    Accounting Standards No. 142.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(4) | In December 2002, we completed a public offering
    of 4,600,000 ordinary shares. Net proceeds totaled approximately
    $100.0 million (after underwriting discounts and
    commissions and related transaction expenses). In November 2000,
    we completed a public offering of 5,405,000 ordinary shares. Net
    proceeds totaled approximately $71.8 million (after
    underwriting discounts and commissions and related transaction
    expenses).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Introduction

This managements discussion and analysis of
financial condition and results of operations is intended to
provide investors with an understanding of our past performance,
our financial condition and our prospects.

We will discuss and provide our analysis in the
following order:



| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | Overview                                                                  
|
| |  | Discussion of Operating Results                                           
|
| |  | Liquidity and Capital Resources                                           
|
| |  | Off-Balance Sheet Arrangements                                            
|
| |  | Impact of Inflation                                                       
|
| |  | Critical Accounting Policies and Use of Estimates                         
|
| |  | Factors That May Affect Future Results and Other
    Cautionary Statements

17



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##### Table of Contents



Overview

Our business operates in four geographic segments
comprised of Europe, the Americas, Asia Pacific and Africa and
in each of these geographic segments our principal sources of
income include airfreight forwarding, ocean freight forwarding,
customs brokerage, contract logistics and other supply chain
management services.

Our recent growth in gross revenue and net
revenue for the years ended January 31, 2004 (which we
refer to as fiscal 2004) and January 31, 2003 (which we
refer to as fiscal 2003), compared to the respective prior year
period, resulted from growth which we attribute to our
acquisitions, favorable exchange rates as compared to the
U.S. dollar and the growth of our existing operations.

A significant portion of our expenses is variable
and adjusts to reflect the level of our business activities.
Other than transportation costs, staff costs are our single
largest variable expense and are less flexible in the near term
as we must staff to meet uncertain future demand.



| |                                                  
| | -------------------------------------------------
| | Description of Services & Revenue
    Recognition



| |                      
| | ---------------------
| | Airfreight Forwarding

When we act as an airfreight forwarder, we
conduct business as an indirect carrier or occasionally as an
authorized agent for the airline which carries the shipment. In
both cases, gross revenue and applicable costs are recognized at
the time the freight departs the terminal of origin.

When we act as an indirect air carrier, we
procure shipments from a large number of customers, consolidate
shipments bound for a particular destination from a common place
of origin, determine the routing over which the consolidated
shipment will move, and purchase cargo space from airlines on a
volume basis. As an indirect air carrier, our gross revenue
includes the rate charged to the client for the movement of the
shipment on the airline, plus the fees we charge for our other
ancillary services such as preparing shipment-related
documentation and materials handling related services.
Airfreight forwarding gross revenue includes expedited movement
by ground transportation and our domestic delivery service in
South Africa.

When we act as an indirect air carrier, our net
revenue is the differential between the rates charged to us by
the airlines and, where applicable, expedited ground transport
operators, and the rates we charge our customers plus the fees
we receive for our other services. Therefore, our net revenue is
influenced by our ability to charge our customers a rate which
is higher than the rate we obtain from the airlines, but which
is also lower than the rate the customers could otherwise obtain
directly from the airlines.

When we act as an authorized agent for the
airline which carries the actual shipment, our gross revenue is
primarily derived from commissions received from the airline
plus fees for the ancillary services we provide, such as
preparing shipment-related documentation and materials handling
related services. Our gross revenue does not include airline
transportation costs when we act as an authorized agent.
Accordingly, our gross revenue and net revenue are not
materially different in this situation.



| |                         
| | ------------------------
| | Ocean Freight Forwarding

When we act as an ocean freight forwarder, we
conduct business as an indirect ocean carrier or occasionally as
an authorized agent for the ocean carrier which carries the
shipment. Our gross revenue and net revenue from ocean freight
forwarding and related costs are recognized the same way that
our gross revenue and net revenue from airfreight forwarding and
related costs are recognized.

When we act as an indirect ocean carrier or
non-vessel operating common carrier, we contract with ocean
shipping lines to obtain transportation for a fixed number of
containers between various points in a specified time period at
an agreed upon rate. We then solicit freight from customers to
fill the containers and consolidate the freight bound for a
particular destination from a common shipping point. As in the
case when we act as an indirect airfreight forwarder, our gross
revenue in this situation includes the rate charged to the
customer for the movement of the shipment on the ocean carrier
plus our fees for the other services we provide which are
related to the movement of goods such as preparing
shipment-related documentation. Our net

18



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##### Table of Contents



revenue is determined by the differential between
the rates charged to us by the carriers and the rates we charge
our customers along with the fees we receive for our other
ancillary services.


When we act as an authorized agent for an ocean
carrier, our gross revenue is generated from the commission we
receive from the carrier plus the fees we charge for the
ancillary services we provide. Our gross revenue does not
include transportation costs when we act as an authorized agent
for an ocean carrier. Under these circumstances, our gross
revenue and net revenue are not materially different.



| |                  
| | -----------------
| | Customs Brokerage

We provide customs clearance and brokerage
services with respect to the majority of the shipments we handle
as a freight forwarder. We also provide customs brokerage
services for shipments handled by our competitors. These
services include assisting with and performing regulatory
compliance functions in international trade.

Customs brokerage gross revenue is recognized
when the necessary documentation for customs clearance has been
completed. This gross revenue is generated by the fees we charge
for providing customs brokerage services, as well as the fees we
charge for the disbursements made on behalf of a customer. These
disbursements, which typically include customs duties and taxes,
are excluded from our calculations of gross revenue since they
represent disbursements made on behalf of customers. Typically,
disbursements are included in our accounts receivable and are
several times larger than the amount of customs brokerage gross
revenue generated.



| |                   
| | ------------------
| | Contract Logistics

Our contract logistics services primarily relate
to our value-added warehousing services and distribution of
goods and materials in order to meet customers inventory
needs and production or distribution schedules. Our distribution
services include receiving, deconsolidation and
decontainerization, sorting, put away, consolidation, assembly,
cargo loading and unloading, assembly of freight and protective
packaging, storage and distribution. Our outsourced services
include inspection services, quality centers and manufacturing
support.

Contract logistics gross revenue is recognized
when the service has been provided to third parties in the
ordinary course of business. We have expanded our contract
logistics services with our acquisitions of Standard in fiscal
2003 and SLi in fiscal 2002.



| |               
| | --------------
| | Other Services

We also provide a range of other supply chain
management services, such as road transportation, warehousing
services, consulting, order management, planning and
optimization services, outsourced distribution services,
developing specialized customer-specific supply chain solutions,
and customized distribution and inventory management services.
Our gross revenue in these capacities includes commissions and
fees earned by us and are recognized upon performance.

Acquisitions

Acquisitions affect the comparison of our results
between years prior to when acquisitions are made and to
subsequent years, depending on the date of acquisition (i.e.,
acquisitions made on February 1, the first day of our
fiscal year will only affect a comparison with the prior
years results). The results of acquired businesses are
included in our consolidated financial statements from the dates
of their respective acquisitions. We consider the operating
results of an acquired company during the first twelve months
following the date of its acquisition to be an acquisition
impact or a benefit from acquisitions.
Thereafter, we consider the growth in an acquired companys
results to be organic growth.

During the last two fiscal years, we completed
two significant acquisitions which have had a material effect on
the comparison of our operating results, increasing gross
revenues, net revenues and expenses in fiscal 2004 and fiscal
2003 over the respective prior year.

19



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##### Table of Contents



In fiscal 2003, the operating results of Standard
are included in our financial statements since the effective
date of the acquisition, October 1, 2002. We acquired the
entire issued share capital of Standard for an initial purchase
price of approximately $48.8 million, of which
approximately $31.3 million represented goodwill and other
intangible assets. The final total consideration for this
acquisition could be up to approximately $12.5 million
higher, but is dependent on certain performance criteria being
achieved over the two-year period following the date of
acquisition. Of the $12.5 million potential additional
consideration, approximately $8.2 million was paid in the
fourth quarter of fiscal 2004 related to the first year
performance.

In fiscal 2002, the operating results of the
acquired operations for SLi are included in our financial
statements since the date of acquisition, January 25, 2002.
UTi acquired the entire issued share capital of SLi,
incorporated in Spain, for two initial cash payments totaling
approximately $13.1 million, of which approximately
$12.8 million represented goodwill. The remainder of the
purchase price is contingent on future performance and is based
on a multiple of the annual net income of the purchased
operations over the period February 1, 2002 through
January 31, 2006. The four contingent earn-out payments are
calculated on each years results and are paid annually,
using a deemed UTi share price of approximately $15.82 per
ordinary share and are payable in ordinary shares or cash at the
sellers option if the share price is below $15.82. Through
January 31, 2004, one earn-out payment, in cash, has been
made totaling approximately $5.8 million.

In December 2003, we announced the signing of
definitive agreements to acquire South African-based
International Healthcare Distributors (Pty.) Limited (which we
refer to as IHD). In March 2004, we announced that we had
received the approval of the South African Competition
Authorities as well as signed distribution agreements from all
11 selling shareholders of IHD. However, certain
wholesalers are challenging aspects of the ruling of the
Competition Authorities, which includes a settlement agreement
between the selling shareholders and the Competition
Authorities. The implementation of the settlement agreement is a
pre-condition to closing the proposed IHD transaction. The
appeals process is scheduled to begin in April 2004. In
addition, since the execution of the acquisition agreements
announced by the company on December 2, 2003, the South
African Government has announced its intention to introduce
legislation that may impact the pharmaceutical industry in that
country. Consequently, the sellers and UTi are awaiting further
developments concerning the proposed legislation in order to
assess its potential impact, if any, on the currently proposed
structure of the transaction. There can be no assurances that
the proposed transaction involving IHD will not be restructured
or may not close for a variety of reasons, including the failure
to satisfy closing or other conditions. If the proposed
transaction of IHD does occur, we would anticipate that our
gross and net revenues for contract logistics would increase
along with our operating expenses and applicable income taxes.



| |                                                                    
| | -------------------------------------------------------------------
| | Effect of Foreign Currency Translation on
    Comparison of Results

Our reporting currency is the United States
(U.S.) dollar. However, due to our global operations, we
conduct and will continue to conduct business in currencies
other than our reporting currency. The conversion of these
currencies into our reporting currency for reporting purposes
will be affected by movements in these currencies against the
U.S. dollar. A depreciation of these currencies against the
U.S. dollar would result in lower gross and net revenues
reported, however as applicable costs are also converted from
these currencies, costs would also be lower. The net impact on
our net income is therefore somewhat mitigated. Similarly, the
opposite effect will occur if these currencies appreciate
against the U.S. dollar.

Discussion of Operating Results

The following discussion of our operating results
explains material changes in our consolidated results of
operations for fiscal 2004 and fiscal 2003 compared to the
respective prior year. The discussion should be read in
conjunction with the consolidated financial statements and
related notes included elsewhere in this report. This discussion
contains forward-looking statements, the accuracy of which
involves risks and uncertainties, and our actual results could
differ materially from those anticipated in the forward-looking
statements for many reasons, including, but not limited to,
those factors described in this Item under, Factors That
May Affect Future Results and Other Cautionary Statements,
and elsewhere in this report. We disclaim any

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obligation to update information contained in any
forward-looking statement. Our consolidated financial statements
attached to this report, have been prepared in U.S. dollars
and in accordance with U.S. GAAP.




| |              
| | -------------
| | Gross Revenue

Gross revenue for our freight forwarding services
is recognized in the region in which the shipment originates.
Gross revenue for all other services is recognized in the region
where the service is performed. Our gross revenue by operating
segment is set forth in the following table (in thousands):

|              |  |                        |           |         |  |        |     |         |  |        |           |         |  |  |     |   |  |   |         |  |  |  |     |  
|------------- |  | ---------------------- | --------- | ------- |  | ------ | --- | ------- |  | ------ | --------- | ------- |  |  | --- | - |  | - | ------- |  |  |  | --- | -
|              |  |                       
|              |  | Year Ended January 31,
|              |  |                       
|              |  |                        |           |         |  |       
|              |  | 2004                   |           | 2003    |  | 2002  
|              |  |                        |           |         |  |       
|              |  |                        |           | % of    |  |        |     | % of    |  |        |           | % of   
|              |  |                        |           | Gross   |  |        |     | Gross   |  |        |           | Gross  
|              |  | Amount                 |           | Revenue |  | Amount |     | Revenue |  | Amount |           | Revenue
|              |  |                        |           |         |  |        |     |         |  |        |           |        
|Europe        |  | $                      | 424,457   |         |  |        | 28  | %       |  | $      | 372,515   |         |  |  | 32  | % |  | $ | 264,280 |  |  |  | 30  | %
|Americas      |  |                        | 449,381   |         |  |        | 30  |         |  |        | 317,314   |         |  |  | 27  |   |  |   | 258,008 |  |  |  | 29  |  
|Asia Pacific  |  |                        | 430,376   |         |  |        | 29  |         |  |        | 337,430   |         |  |  | 29  |   |  |   | 242,950 |  |  |  | 27  |  
|Africa        |  |                        | 198,661   |         |  |        | 13  |         |  |        | 142,801   |         |  |  | 12  |   |  |   | 124,548 |  |  |  | 14  |  
|              |  |                        |           |         |  |        |     |         |  |        |           |         |  |  |     |   |  |   |         |  |  |  |     |  
|Gross revenue |  | $                      | 1,502,875 |         |  |        | 100 | %       |  | $      | 1,170,060 |         |  |  | 100 | % |  | $ | 889,786 |  |  |  | 100 | %
|              |  |                        |           |         |  |        |     |         |  |        |           |         |  |  |     |   |  |   |         |  |  |  |     |  

Gross revenue increased $332.8 million, or
28%, to $1.5 billion for fiscal 2004 compared to
$1.2 billion for fiscal 2003. Of the total increase for
fiscal 2004, $100.5 million was due to the impact of the
acquisition of Standard and $119.6 million was due to the
impact of favorable exchange rates as compared to the
U.S. dollar. The remaining increase in gross revenue was
due to organic growth and the impact of certain less significant
acquisitions. By service line, our total increase in gross
revenue was due to increases in fiscal 2004 over fiscal 2003 in
contract logistics (127%), airfreight forwarding (16%), ocean
freight forwarding (27%), other revenue (26%) and customs
brokerage (6%).

Gross revenue increased 31% to $1.2 billion
for fiscal 2003 compared to $889.8 million for fiscal 2002
due to increases in gross revenue for contract logistics (325%),
airfreight forwarding (26%), ocean freight forwarding (11%),
other revenue (57%) and customs brokerage (15%). We estimate
that acquisitions completed during fiscal 2003 accounted for
$102.3 million of our gross revenue for fiscal 2003.

We believe that net revenue is a better measure
than gross revenue of the importance to us of our various
services since our gross revenue for our services as an indirect
air and ocean carrier includes the carriers charges to us
for carriage of the shipment. When we act as an indirect air and
ocean carrier, our net revenue is determined by the differential
between the rates charged to us by the carrier and the rates we
charge our customers plus the fees we receive for our ancillary
services. Net revenue derived from freight forwarding generally
is shared between the points of origin and destination. Our
gross revenue in our other capacities includes only commissions
and fees earned by us and is substantially the same as our net
revenue.

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The following table shows our net revenues and
our operating expenses for the periods presented, expressed as a
percentage of total net revenues.

|                                   |                                   |                        |     |      |   |      |     |    |   |  |     |    |  
|---------------------------------- | --------------------------------- | ---------------------- | --- | ---- | - | ---- | --- | -- | - |  | --- | -- | -
|                                   |                                   |                       
|                                   |                                   | Year Ended January 31,
|                                   |                                   |                       
|                                   |                                   | 2004                   |     | 2003 |   | 2002
|                                   |                                   |                        |     |      |   |     
|Net revenues:                      |                                   |                        |     |      |   |      |     |    |   |  |     |   
|                                   | Airfreight forwarding             |                        |     | 33   | % |      |     | 39 | % |  |     | 47 | %
|                                   | Ocean freight forwarding          |                        |     | 13   |   |      |     | 16 |   |  |     | 19 |  
|                                   | Customs brokerage                 |                        |     | 11   |   |      |     | 15 |   |  |     | 18 |  
|                                   | Contract logistics                |                        |     | 32   |   |      |     | 20 |   |  |     | 5  |  
|                                   | Other                             |                        |     | 11   |   |      |     | 10 |   |  |     | 11 |  
|                                   |                                   |                        |     |      |   |      |     |    |   |  |     |   
|Total net revenues                 |                                   |                        | 100 |      |   |      | 100 |    |   |  | 100 |   
|Operating expenses:                |                                   |                        |     |      |   |      |     |    |   |  |     |   
|                                   | Staff costs                       |                        |     | 53   |   |      |     | 51 |   |  |     | 51 |  
|                                   | Depreciation and amortization     |                        |     | 2    |   |      |     | 3  |   |  |     | 3  |  
|                                   | Amortization of intangible assets |                        |     | *    |   |      |     | *  |   |  |     | 2  |  
|                                   | Other operating expenses          |                        |     | 34   |   |      |     | 35 |   |  |     | 34 |  
|                                   |                                   |                        |     |      |   |      |     |    |   |  |     |   
|Operating income                   |                                   |                        | 10  |      |   |      | 11  |    |   |  | 10  |   
|Interest income                    |                                   |                        | 1   |      |   |      | 1   |    |   |  | 1   |   
|Interest expense                   |                                   |                        | (1  | )    |   |      | (1  | )  |   |  | (2  | ) 
|Gains/(losses) on foreign exchange |                                   |                        | *   |      |   |      | *   |    |   |  | *   |   
|                                   |                                   |                        |     |      |   |      |     |    |   |  |     |   
|Pretax income                      |                                   |                        | 10  |      |   |      | 11  |    |   |  | 9   |   
|Provision for income taxes         |                                   |                        | 2   |      |   |      | 3   |    |   |  | 3   |   
|Minority interests                 |                                   |                        | *   |      |   |      | *   |    |   |  | *   |   
|                                   |                                   |                        |     |      |   |      |     |    |   |  |     |   
|Net income                         |                                   |                        | 8   | %    |   |      | 7   | %  |   |  | 6   | % 
|                                   |                                   |                        |     |      |   |      |     |    |   |  |     |   



---



|  |                       
|- | ----------------------
|* | Less than one percent.



| |                                                                        
| | -----------------------------------------------------------------------
| | Year Ended January 31, 2004 Compared
    to Year Ended January 31, 2003

Net revenue increased $191.3 million, or
47%, to $596.1 million for fiscal 2004 compared to
$404.8 million for fiscal 2003. Overall, our net revenue
benefited from the full year effect of acquisitions made in
fiscal 2003 (primarily Standard) and from the impact of
acquisitions made during fiscal 2004 as well as from favorable
exchange rates as compared to the U.S. dollar and organic
growth from our operations. On a constant currency basis, when
we translate our fiscal 2004 results using currency exchange
rates in effect for fiscal 2003, we estimate that acquisitions
and favorable exchange rates accounted for approximately
$107.7 million and $49.6 million, respectively, of the
net revenue increase for fiscal 2004 versus the prior fiscal
year. The total increase due to acquisitions of
$107.7 million in fiscal 2004 as compared to fiscal 2003
reflects the acquisition benefit of Standard on net revenues of
$100.5 million.

Airfreight forwarding net revenue increased
$41.3 million, or 26%, to $198.8 million for fiscal
2004 compared to $157.5 million for the prior year. This
increase primarily resulted from favorable exchange rates as
compared to the U.S. dollar in fiscal 2004 when compared to
fiscal 2003, mostly in our Africa and Europe regions, due to
changes in the South African rand and the euro, respectively,
and to organic growth in all regions. Increased volumes in
Africa led to growth in that region. The Europe region improved
their yields to help offset lower export volumes, resulting in
an overall increase in the Europe regions net revenues,
excluding the currency translation impact. Asia Pacifics
volumes grew in fiscal 2004 over the prior year, even
considering the higher volumes reported in fiscal 2003 as a
result of increased demand in airfreight

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created by last years West Coast port
lock-out. We also experienced some growth in airfreight
forwarding net revenues in the Americas region as slightly
higher export volumes offset a slight decline in yields.


Ocean freight forwarding net revenue increased
$8.5 million, or 13%, to $75.1 million for fiscal 2004
compared to $66.6 million for fiscal 2003. This increase
was due primarily to increased volumes in fiscal 2004 versus
fiscal 2003, especially in the Africa and Asia Pacific regions,
which offset our decline in yields caused by price increases
from ocean carriers which were typically passed through to
customers at lower margins than we have historically experienced.

Customs brokerage net revenue increased
$4.4 million, or 7%, to $65.5 million for fiscal 2004
compared to $61.1 million for fiscal 2003. Customs
brokerage net revenue increased primarily as a result of the
higher shipping volumes resulting from increased demand for our
services.

Contract logistics net revenue increased
$113.5 million, or 143%, to $193.0 million for fiscal
2004 compared to $79.5 million for the prior year. This
increase was primarily due to the full year contribution from
the Standard acquisition in fiscal 2004.

Other net revenue, which includes revenue from
our other supply chain management services including outsourced
distribution services, increased $23.6 million, or 59%, to
$63.7 million for fiscal 2004 compared to
$40.1 million for fiscal 2003. This increase was also
primarily due to the full year contribution from the Standard
acquisition in fiscal 2004.

Staff costs increased $113.7 million, or
55%, to $318.7 million for fiscal 2004 from
$205.0 million for the prior year, primarily as a result of
the addition of personnel in connection with our acquisition of
Standard, which accounted for approximately $57.4 million
of the total increase. Staff costs were also generally higher in
fiscal 2004 as compared to fiscal 2003 because of an increase in
reported costs in the Europe and Africa regions over the prior
year as a result of the stronger euro and South African rand,
respectively, as compared to the U.S. dollar during the
year. The increase in total staff costs expressed as a
percentage of net revenues from 51% in fiscal 2003 to 53% in
fiscal 2004 was primarily related to Standards contract
logistics business which has historically experienced higher
staff costs as a percentage of net revenues than our freight
forwarding operations and we expect staff costs to generally be
higher when expressed as a percentage of net revenues as
compared to our historic trends. Staff costs are the largest
component of operating expenses and we strive to manage these
costs in relation to net revenue growth.

Depreciation and amortization expense increased
by $3.6 million, or 33%, for fiscal 2004 over fiscal 2003
to $14.8 million primarily due to increases in capital
spending for computer equipment and fixtures and fittings during
the period, along with the impact of fiscal 2004 acquisitions
and the full year impact of fiscal 2003 acquisitions.
Depreciation and amortization expense declined slightly to 2% of
net revenue in fiscal 2004 as compared to 3% in the prior year.

Other operating expenses increased by
$60.0 million, or 42%, to $202.9 million in fiscal
2004 compared to $142.9 million for fiscal 2003. Generally
these expenses increased because of the full year impact of our
acquisition of Standard (estimated to be $35.8 million) and
also because of an increase in reported costs in the Europe and
Africa regions over the prior year as a result of the stronger
euro and South African rand, respectively, as compared to the
U.S. dollar during the year. Included in other operating
expenses for fiscal 2004 are facilities and communications costs
of $67.7 million compared to $45.9 million of such
costs for the prior fiscal year. Facilities and communications
costs increased primarily as a result of the addition of new
locations in fiscal 2004 as compared to the prior fiscal year,
including those acquired with Standard. The balance of the other
operating expenses is comprised of selling, general and
administrative costs. For fiscal 2004, selling, general and
administrative costs were $135.2 million compared to
$97.0 million for the same prior year period. The increase
in selling, general and administrative costs was primarily a
result of the acquisition of Standard (estimated to be
$25.8 million) and secondarily to the stronger euro and
South African rand when compared to the U.S. dollar. When
expressed as a percentage of net revenue, other operating
expenses decreased to 34% for fiscal 2004 from 35% for fiscal
2003.

Our interest income relates primarily to interest
earned on our cash deposits, while our interest expense consists
primarily of interest on our credit facilities and capital lease
obligations. Both interest income and

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interest expense increased in fiscal 2004 as
compared to fiscal 2003 by $2.2 million, or 48%, and
$0.7 million, or 14%, respectively. The increase in
interest income was primarily due to the higher levels of cash
balances in fiscal 2004 due to the cash received in December
2003 from our follow-on stock offering, while the increase in
interest expense was due primarily to the acquisition impact of
Standard.


The effective income tax rate decreased to 22% in
fiscal 2004 compared to 29% in the prior year. The effective
income tax rate decreased in fiscal 2004 as compared to fiscal
2003, primarily due to the prior year effective income tax rate
including the establishment of certain valuation allowances and
changes in local tax rates, which were not repeated in fiscal
2004. Our overall tax rate is impacted by the geographic
composition of our worldwide taxable income, with some of our
operations in countries with low effective income tax rates. For
fiscal 2005, we currently anticipate that our effective tax rate
will be approximately 25%, although such rate may fluctuate due
to the geographic mix of our taxable income.

Net income increased by $15.5 million, or
53%, to $44.8 million in fiscal 2004 as compared to the
prior year for the reasons listed above.



| |                                                                        
| | -----------------------------------------------------------------------
| | Year Ended January 31, 2003 Compared
    to Year Ended January 31, 2002

Net revenue increased $100.2 million, or
33%, to $404.8 million for fiscal 2003 compared to
$304.6 million for fiscal 2002. Overall, our net revenue
benefited from acquisitions made during fiscal 2003 (primarily
Standard) as well as from the full year effect of acquisitions
made in fiscal 2002 (primarily SLi). We estimate that
acquisitions accounted for approximately $74.4 million of
the net revenue increase for fiscal 2003 versus the prior fiscal
year.

Airfreight forwarding net revenue increased
$15.2 million, or 11%, to $157.5 million for fiscal
2003 compared to $142.3 million for the prior year. This
increase primarily resulted from higher volumes in all regions,
but particularly in the Asia Pacific region, partially offset by
negative pricing pressures and a lower overall airfreight yield.
Fiscal 2003 airfreight forwarding net revenue for Asia Pacific,
where there was increased demand in airfreight created by the
West Coast port lock-out, increased 20% over the prior year.
Airfreight forwarding net revenue in Europe also benefited from
acquisitions in addition to increased volumes, resulting in
growth of 23% in fiscal 2003 when compared to fiscal 2002. We
experienced pricing pressures in all regions as a result of
carrier capacity restraints and, in the Asia Pacific region, as
a result of our air charter program that we employed to secure
airfreight capacity for our customers. The overall airfreight
yield also declined because of a shift in our geographic mix of
gross revenues with an increasing share from the Asia Pacific
region where our yields are at lower levels than the
companys historic average yield, thereby depressing the
overall yield.

Ocean freight forwarding net revenue increased
$8.0 million, or 14%, to $66.6 million for fiscal 2003
compared to $58.6 million for the prior year. This increase
was due primarily to increased volumes in fiscal 2003 versus
fiscal 2002 and secondarily to acquisitions. Volume increases
were tempered somewhat by negative pricing pressures. Africa and
Europe experienced growth in ocean freight forwarding net
revenue, with increases of 33% and 30%, respectively, in fiscal
2003 compared to fiscal 2002, benefiting primarily from the SLi
acquisition and, to a lesser degree, increased volumes from our
operations in existence prior to fiscal 2002.

Customs brokerage net revenue increased
$7.1 million, or 13%, to $61.1 million for fiscal 2003
compared to $54.0 million for fiscal 2002. Customs
brokerage net revenue increased primarily as a result of the
higher shipping volumes resulting from increased demand for our
services.

Contract logistics net revenue increased
$64.5 million, or 432%, to $79.5 million for fiscal
2003 compared to $15.0 million for the prior year. This
increase was primarily due to contributions from the Standard
and SLi acquisitions, which contributed four and twelve months
of operating results, respectively, and, to a lesser degree, new
business.

Other net revenue, which includes revenue from
our other supply chain management services such as road
transportation, consulting, order management, planning and
optimization services, increased $5.5 million,

24



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##### Table of Contents



or 16%, to $40.1 million for fiscal 2003
compared to $34.6 million for fiscal 2002. This increase
was primarily due to contributions from the Standard and SLi
acquisitions, and, to a lesser degree, new business.


Staff costs increased $49.0 million, or 31%,
to $205.0 million for fiscal 2003 from $156.0 million
for the prior year, primarily as a result of the addition of
personnel in connection with our acquisitions of Standard and
SLi. Staff costs, however, remained constant when expressed as a
percentage of net revenue, at 51% in both fiscal 2003 and fiscal
2002. Staff costs are the largest component of operating
expenses and we strive to manage these costs in relation to net
revenue growth.

Depreciation and amortization expense increased
by $1.8 million, or 19%, for fiscal 2003 over fiscal 2002
to $11.2 million primarily due to increases in capital
spending for computer equipment and fixtures and fittings during
the period, along with the impact of fiscal 2003 acquisitions
and the full year impact of fiscal 2002 acquisitions.
Depreciation expense remained constant at 3% of net revenue in
fiscal 2003 as compared to the prior year.

Amortization of intangible assets decreased by
$5.1 million, or 96%, to $0.2 million in fiscal 2003
as compared to $5.3 million in the prior year. We ceased
amortizing goodwill effective February 1, 2002 when we
adopted SFAS No. 142, however, we recorded
amortization expense of $0.2 million related to the
amortization of other intangible assets acquired with Standard.

Other operating expenses increased by
$38.8 million, or 37%, to $142.9 million in fiscal
2003 compared to $104.1 million for fiscal 2002. Included
in other operating expenses for fiscal 2003 are facilities and
communications costs of $45.9 million compared to
$37.3 million of such costs for the prior year. Facilities
and communications costs increased primarily as a result of the
addition of new locations in fiscal 2003 as compared to the
prior fiscal year, including the acquisitions of Standard and
SLi. The balance of the other operating expenses is comprised of
selling, general and administrative costs. For fiscal 2003,
selling, general and administrative costs were
$97.0 million compared to $66.8 million for fiscal
2002. The increase in selling, general and administrative costs
was primarily a result of the acquisitions of Standard and SLi.
When expressed as a percentage of net revenue, other operating
expenses increased from 34% for fiscal 2002 to 35% for fiscal
2003.

Net interest expense, consisting primarily of
interest on our credit facilities and capital lease obligations
offset by interest income on our cash deposits, decreased
$0.7 million to $0.5 million in fiscal 2003 from
$1.2 million for the prior year. This decrease was due
primarily to decreased borrowings during fiscal 2003 as compared
to fiscal 2002, along with increased interest income for the
cash on deposit received in December 2002 from our follow-on
stock offering.

There was a net loss on foreign exchange of
$1.7 million in fiscal 2003 compared to a gain of $17,000
for the prior fiscal year. This decrease was primarily due to
exchange losses recorded upon the settlement of intercompany
loans in the fourth quarter of fiscal 2003.

The effective income tax rate increased to 29% in
fiscal 2003 compared to 28% in the prior fiscal year. Our
overall tax rate is impacted by the geographic composition of
our worldwide taxable income, with some of our operations in
countries with low effective income tax rates.

Net income increased by $10.1 million, or
53%, to $29.3 million in fiscal 2003 as compared to the
prior year for the reasons listed above.

Liquidity and Capital Resources

As of January 31, 2004, our cash and cash
equivalents totaled $156.7 million, representing a decrease
of $11.4 million from January 31, 2003, as a result of
using a net amount of $9.4 million of cash in our
operating, investing and financing activities and a negative
impact of $2.0 million related to the effect of foreign
exchange rate changes on our cash balances. Historically, we
have used our internally generated net cash flow from operating
activities along with the net proceeds from the issuance of
ordinary shares to fund our working capital requirements,
capital expenditures, acquisitions and debt service.

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In fiscal 2004, we generated approximately
$65.9 million in net cash from operating activities. This
resulted from net income of $44.8 million plus depreciation
and amortization of intangible assets totaling
$15.5 million and other items totaling $4.0 million,
plus a net decrease in working capital of approximately
$1.6 million.

During fiscal 2004, we used approximately
$30.3 million of cash for acquisitions and contingent
earn-out payments, of which approximately $6.1 million was
used to acquire IndAir Carriers (Pvt) Ltd. and Kite Logistics
(Pty) Limited and the balance was used for contingent earn-out
payments for acquisitions made in prior fiscal years. Our
earn-out payments made in fiscal 2004 included the final
earn-out payment related to our acquisition of Continental of
approximately $7.6 million, the first of four contingent
earn-out payments for our acquisition of SLi of approximately
$5.8 million and the first of two contingent earn-out
payments for Standard of approximately $8.2 million. Future
earn-out payment calculations, which may result in a significant
use of cash, include the second and final earn-out payment for
Standard, which is limited by the purchase agreement to be no
more than $4.3 million and is scheduled for the fourth
quarter of fiscal 2005, and the three remaining earn-out payment
calculations related to our acquisition of SLi each of which
scheduled for the second quarter of fiscal 2005, fiscal 2006 and
fiscal 2007, respectively. During fiscal 2004, cash used for
capital expenditures was $18.7 million, consisting
primarily of computer hardware and software and furniture,
fixtures and fittings. Based on our current operations, we do
not expect our capital expenditures to be significantly higher
in fiscal 2005 when compared to fiscal 2004.

Our financing activities during fiscal 2004 used
$24.9 million of cash, primarily due to reductions on bank
lines of credit and short-term borrowings totaling approximately
$22.7 million. Additionally, we paid dividends of
$2.9 million during fiscal 2004. We expect to use
approximately $3.6 million of cash in the second quarter of
fiscal 2005 for the payment of dividends on our ordinary shares
as declared by our board of directors on April 6, 2004.



| |                  
| | -----------------
| | Credit Facilities

We have various bank credit facilities
established in countries where such facilities are required for
our business. At January 31, 2004 these facilities provided
for lines of credit from approximately $0.1 million to
$45.0 million, and provided for guarantees, which are a
necessary part of our business, totaling $54.0 million, and
a total borrowing capacity of $138.9 million. Due to the
global nature of our business, we utilize a number of different
financial institutions to provide these various facilities.
Consequently, the use of a particular credit facility is
normally restricted to the country in which it originated and a
particular credit facility may restrict distributions by the
subsidiary operating in the country. Our borrowings under these
facilities totaled $18.2 million at January 31, 2004
and we had approximately $66.8 million of available, unused
borrowing capacity under our various bank credit facilities.
Most of our borrowings are secured by grants of security
interests in accounts receivable and other assets, including
pledges of stock of our subsidiaries. The interest rates on
these facilities vary and ranged from 0.5% to 16.8% at
January 31, 2004. These rates are generally linked to the
prime lending rate in each country where we have facilities. We
use our credit facilities to primarily fund our working capital
needs as well as to provide for customs bonds and guarantees and
forward exchange transactions. While the majority of our
borrowings are due and payable within one year, we believe we
will be able to renew such facilities on commercially reasonable
terms.

Our current largest credit facility is with
Nedcor Bank Limited (Nedcor Bank), totaling 28.3 million
British pounds sterling (equivalent to approximately
$51.5 million as of January 31, 2004). Of this
facility, approximately $45.0 million is primarily used for
guarantees and standby letters of credit to secure banking
facilities and $6.5 million is primarily used for
guaranteeing performance undertakings of our subsidiary
companies. The facility is available on an ongoing basis until
further notice, subject to Nedcor Banks credit review
procedures and may be terminated by the bank at any time. The
facility is secured by cross guarantees and indemnities of
selected subsidiary companies.

As of the date of this filing, UTi,
(U.S.) Holdings, Inc., the U.S. parent company of
our operating subsidiary companies in the United States, is in
the process of negotiating a proposed senior revolving credit
facility primarily for use in our operations in the United
States. If completed, it is currently anticipated that

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the proposed facility would provide for
borrowings based upon a borrowing base formula. In the event the
proposed credit facility is not finalized, we believe we have
sufficient working capital in order to fund our operations in
the United States as currently conducted without disruption or
adverse consequences.




| |                        
| | -----------------------
| | Contractual Obligations

At January 31, 2004, we had the following
contractual obligations (in thousands):

|                                          |       |                        |         |           |  |       |        |        |  |         |        |        |  |   |        |        |  |   |        |        | 
|----------------------------------------- | ----- | ---------------------- | ------- | --------- |  | ----- | ------ | ------ |  | ------- | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                          |       |                       
|                                          |       | Payments Due By Period
|                                          |       |                       
|                                          |       |                        |         | Less Than |  | 1-3   |        | 4-5    |  | After 5
|                                          |       | Total                  |         | 1 Year    |  | Years |        | Years  |  | Years  
|                                          |       |                        |         |           |  |       |        |        |  |        
|Bank and other long-term debt obligations |       | $                      | 19,585  |           |  | $     | 19,492 |        |  | $       | 65     |        |  | $ | 28     |        |  | $ |       |       
|Capital lease obligations (1)             |       |                        | 12,569  |           |  |       | 2,680  |        |  |         | 2,472  |        |  |   | 7,331  |        |  |   | 86     |       
|Operating lease obligations               |       |                        | 125,076 |           |  |       | 31,007 |        |  |         | 51,347 |        |  |   | 28,022 |        |  |   | 14,700 |       
|Unconditional purchase obligations        |       |                        | 463     |           |  |       | 463    |        |  |         |       |        |  |   |       |        |  |   |       |       
|                                          |       |                        |         |           |  |       |        |        |  |         |        |        |  |   |        |        |  |   |        |       
|                                          | Total |                        | $       | 157,693   |  |       | $      | 53,642 |  |         | $      | 53,884 |  |   | $      | 35,381 |  |   | $      | 14,786 | 
|                                          |       |                        |         |           |  |       |        |        |  |         |        |        |  |   |        |        |  |   |        |       



---



|    |                   
|--- | ------------------
|(1) | Includes interest.

We believe that with our current cash position,
various bank credit facilities and operating cash flows, we have
sufficient means to meet our working capital and liquidity
requirements for the next twelve months as our operations are
currently conducted.

The nature of our operations necessitates dealing
in many foreign currencies and our results are subject to
fluctuations due to changes in exchange rates. See
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk.

Off-Balance Sheet Arrangements

Other than operating leases, we have no material
off-balance sheet arrangements.

Impact of Inflation

To date, our business has not been significantly
or adversely affected by inflation. Historically, we have been
generally successful in passing carrier rate increases and
surcharges on to our customers by means of price increases and
surcharges. Direct carrier rate increases could occur over the
short- to medium-term. Due to the high degree of competition in
the marketplace, these rate increases might lead to an erosion
of our profit margins.

Critical Accounting Policies and
Estimates

Our discussion of our operating and financial
review and prospects is based on our consolidated financial
statements, prepared in accordance with U.S. GAAP and
contained within this report. Certain amounts included in, or
affecting, our financial statements and related disclosure must
be estimated, requiring us to make certain assumptions with
respect to values or conditions which cannot be known with
certainty at the time the financial statements are prepared.
Therefore, the reported amounts of our assets and liabilities,
revenues and expenses and associated disclosures with respect to
contingent obligations are necessarily affected by these
estimates. In preparing our financial statements and related
disclosures, we must use estimates in determining the economic
useful lives of our assets, obligations under our employee
benefit plans, provisions for uncollectible accounts receivable
and various other recorded and disclosed amounts. We evaluate
these estimates on an ongoing basis.

Our significant accounting polices are included
in Note 1 to the consolidated financial statements included
in this report; however, we believe that certain accounting
policies are more critical to our financial

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statement preparation process than others. These
include our policies on revenue recognition, income taxes,
allowance for doubtful receivables, goodwill, contingencies and
currency translation.




| |                    
| | -------------------
| | Revenue Recognition

Gross revenue represents billings on exports to
customers, plus net revenue on imports, net of any billings for
value added taxes, custom duties and freight insurance premiums
whereby we act as an agent. Gross revenue and freight
consolidation costs for airfreight and ocean freight forwarding
services, including commissions earned from our services as an
authorized agent for airline and ocean carriers and third-party
freight insurers, are recognized at the time the freight departs
the terminal of origin which is when the customer is billed.
Gross customs brokerage revenue, contract logistics revenue and
other revenue are recognized when we bill the customer, which
for customs brokerage revenue is when the necessary
documentation for customs clearance has been completed, and for
contract logistics and other revenue is when the service has
been provided to third parties in the ordinary course of
business. Net revenue is determined by deducting freight
consolidation costs from gross revenue. Freight consolidation
costs are recognized at the time the freight departs the
terminal of origin. Certain costs, related primarily to
ancillary services, are estimated and accrued at the time the
services are provided, and adjusted upon receipt of the final
suppliers invoice.



| |             
| | ------------
| | Income Taxes

Our overall effective income tax rate is
determined by the geographic composition of our worldwide
taxable income, with some of our operations in countries with
low effective income tax rates. Consequently our accrual of tax
expense on an interim basis is based on an estimate of our
overall effective tax rate for the related annual period.

Deferred income taxes are accounted for using the
liability method in respect of temporary differences arising
from differences between the carrying amount of assets and
liabilities in the financial statements and the corresponding
tax basis used in the computation of taxable income. Deferred
income tax assets and liabilities are recognized for all taxable
temporary differences. Deferred income taxes are calculated at
the tax rates that are expected to apply to the period when the
asset is realized or the liability is settled. Deferred income
taxes are charged or credited to the income statement.

Deferred income tax assets are offset by
valuation allowances so that the assets are recognized only to
the extent that it is more likely than not that taxable income
will be available against which deductible temporary differences
can be utilized. We consider our historical performance,
forecast taxable income and other factors when we determine the
sufficiency of our valuation allowances. We believe the
estimates and assumptions used to determine future taxable
income to be reasonable, although they are inherently
unpredictable and uncertain and actual results may differ from
these estimates.



| |                                       
| | --------------------------------------
| | Allowance for Doubtful
    Receivables

We maintain an allowance for doubtful receivables
based on a variety of factors and estimates. These factors
include historical customer trends, general and specific
economic conditions and local market conditions. We believe our
estimate for doubtful receivables is based on reasonable
assumptions and estimates, although they are inherently
unpredictable and uncertain and actual results may differ from
these estimates



| |         
| | --------
| | Goodwill

The company accounts for goodwill and intangible
assets in accordance with SFAS No. 142, Goodwill
and Other Intangible Assets, (SFAS No. 142). In
accordance with SFAS No. 142, no amortization was
recorded for goodwill for acquisitions completed after
June 30, 2001. Further, effective February 1, 2002, in
accordance with SFAS No. 142, the company discontinued
the amortization relating to all existing goodwill. Intangible
assets that have finite useful lives continue to be amortized
over their useful lives. SFAS No. 142 requires that
goodwill and non-amortizable intangible assets be assessed
annually for impairment. This assessment requires the
determination of the fair value of each reporting unit as
compared to its carrying

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value. We determine the fair value of our
reporting units on the income approach, which requires the use
of estimates in determining future revenues, cash flows and
capital expenditures, as well as market trends and growth. We
believe these estimates and assumptions to be reasonable,
although they are inherently unpredictable and uncertain and
actual results may differ from these estimates. The company
completes the required impairment test annually in the second
quarter, or when certain events occur or circumstances change.




| |              
| | -------------
| | Contingencies

We are subject to a range of claims, lawsuits and
administrative proceedings that arise in the ordinary course of
business. Estimating liabilities and costs associated with these
matters requires judgment and assessment based upon professional
knowledge and experience of management and its legal counsel.
Where the company is self-insured in relation to freight related
exposures, adequate liabilities are estimated and recorded for
the portion the company is self-insured. When estimates of our
exposure from claims or pending or threatened litigation matters
meet the recognition criteria of SFAS No. 5,
Accounting for Contingencies, amounts are recorded as
charges to earnings. The ultimate resolution of any exposure to
us may change as further facts and circumstances become known.



| |                     
| | --------------------
| | Currency Translation

For consolidation purposes, balance sheets of
subsidiaries expressed in currencies other than
U.S. dollars are translated at the rates of exchange ruling
at the balance sheet date. Operating results for the year are
translated using average rates of exchange for the year. Gains
and losses on translation are recorded as a separate component
of equity and are included in other comprehensive income or
loss. Transactions in foreign currencies during the year are
remeasured at rates of exchange ruling on the dates of the
transactions. These gains and losses arising on remeasurement
are accounted for in the income statement. Exchange differences
arising on the translation of long-term structural loans to
subsidiary companies are recorded as other comprehensive income
or loss.

Assets and liabilities at the balance sheet date
of the companys subsidiaries expressed in currencies
different to their functional currencies, are remeasured at
rates of exchange ruling at the balance sheet date. The
financial statements of foreign entities that report in the
currency of a hyper-inflationary economy are restated in terms
of the measuring unit currency at the balance sheet date before
they are translated into U.S. dollars.

Recent Accounting Pronouncements

In April 2002, the Financial Accounting Standards
Board (FASB) issued SFAS No. 145, Rescission of
FASB Statements No. 4, 44 and 64, Amendment of FASB
No. 13 and Technical Corrections
(SFAS No. 145). SFAS No. 145 rescinds FASB
Statement No. 4, Reporting Gains and Losses from
Extinguishment of Debt, and an amendment of that Statement,
FASB Statement No. 64, Extinguishments of Debt Made to
Satisfy Sinking-Fund Requirements. This statement also
rescinds FASB Statement No. 44, Accounting for
Intangible Assets of Motor Carriers. This statement amends
FASB Statement No. 13, Accounting for Leases, to
eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for
certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. This statement also
amends other existing authoritative pronouncements to make
various technical corrections, clarify meanings, or describe
their applicability under changed conditions. The company
adopted the provisions of SFAS No. 145 as of
February 1, 2003 and such adoption had no impact on its
consolidated financial position or results of operations.

In June 2002, the FASB issued
SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities (SFAS No. 146).
SFAS No. 146 addresses financial accounting and
reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force Issue No. 94-3,
Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring). This statement is
effective for exit or disposal activities that are initiated
after

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December 31, 2002. The company adopted the
provisions of SFAS No. 146 as of February 1, 2003
and such adoption did not have a material impact on its
consolidated financial position or results of operations.


In December 2002, the FASB issued
SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure 
an amendment of FASB Statement No. 123
(SFAS No. 148). SFAS No. 148 amends
SFAS No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition
for a voluntary change to the fair value based method of
accounting for stock-based employee compensation and to amend
the disclosure requirements regarding the method of accounting
for stock-based employee compensation and the effect of the
method used on reported results. This statement is effective for
fiscal years ending after December 15, 2003, while certain
disclosure provisions are effective for financial statements for
fiscal years ending after December 15, 2002. The company
adopted the annual disclosure provisions of
SFAS No. 148 in its financial reports for its year
ended January 31, 2003 and the interim disclosure
provisions in its financial reports for its year beginning
February 1, 2003. The adoption of this statement did not
have a material impact on its consolidated financial position or
results of operations.

In January 2003, the FASB issued FASB
Interpretation No. 46, Consolidation of Variable
Interest Entities (FIN No. 46). FIN No. 46
clarifies the application of Accounting Research Bulletin
No. 51, Consolidated Financial Statement, to certain
entities in which equity investors do not have the
characteristics of a controlling financial interest or do not
have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support
from other parties. In December 2003, the FASB revised FASB
Interpretation No. 46 (revised December 2003),
Consolidation of Variable Interest Entities [FIN
No. 46 (R)]. FIN No. 46 (R) replaces FIN
No. 46 in its entirety. FIN No. 46 (R) exempts
certain entities from its requirements and clarifies certain
complexities arising during the initial implementation of FIN
No. 46. This revised interpretation is effective for
reporting periods that end after March 15, 2004. The
company expects that the adoption of this interpretation will
have no material impact on its consolidated financial position
or results of operations.

In December 2003, the FASB issued
SFAS No. 132 (revised 2003), Employers
Disclosures about Pensions and Other Postretirement Benefits
(SFAS No. 132). SFAS No. 132 retains the
existing disclosure requirements for pensions and other
postretirement benefits and requires additional disclosures for
pension and other postretirement benefit plan assets,
obligations and net cost in financial statements. In addition,
SFAS No. 132 requires disclosures of certain plan
information on a quarterly basis in interim financial
statements. This statement did not change the methodologies
underlying the measurement of obligations or recognition of
expenses. This statement is effective for fiscal years ending
after December 15, 2003 for all domestic (United States)
plans. As permitted by the statement, we will adopt the
additional disclosure provisions for our foreign plans for
fiscal year ending January 31, 2005. The company expects
that the adoption of this statement will have no material impact
on its consolidated financial position or results of operations.

In May 2003, the FASB issued
SFAS No. 150 (SFAS No. 150), Accounting
for Certain Financial Instruments with Characteristics of both
Liabilities and Equity. SFAS No. 150 establishes
standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities
and equity. This statement requires that an issuer classify a
financial instrument that is within its scope as a liability (or
an asset in some circumstances). The provisions of this
statement are effective for financial instruments entered into
or modified after May 31, 2003, and otherwise are effective
at the beginning of the first interim period beginning after
June 15, 2003. The company adopted the provisions of
SFAS No. 150 as of August 1, 2003 and such
adoption had no material impact on its consolidated financial
position or results of operations.

Factors That May Affect Future Results and
Other Cautionary Statements

In addition to the other information contained in
this annual report on Form 10-K, you should consider
carefully the following factors and uncertainties in evaluating
our business. Our business and operations are subject to a
number of risks and uncertainties, and the following list should
not be considered to be a definitive list of all factors that
may affect our business, financial condition and future results
of operations and should be read in conjunction with the
factors, risks and uncertainties contained in our other filings
with the Securities

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and Exchange Commission. We caution readers that
any forward-looking statements made by us are made with the
intention of obtaining the benefits of the safe
harbor provisions of the Private Securities Litigation
Reform Act and that a number of factors, including but not
limited to those discussed below, could cause our actual results
and experiences to differ materially from the anticipated
results or expectations expressed in any forward-looking
statements.




| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We conduct business throughout the world
    and we expect that our results of operations may be impacted by
    international trade volumes and by global and regional economic
    conditions.

Our business is related to and dependent on
general world economic conditions, and the local, regional,
national and international conditions that affect international
trade and the specific regions or countries that we serve. We
are affected by recessionary economic cycles and downturns in
our customers business cycles, particularly in market
segments and industries such as chemicals, pharmaceuticals and
apparel, where we have a significant concentration of customers.

Economic conditions, including those resulting
from wars, civil unrest, acts of terrorism and other conflicts,
may adversely affect the global economy, our customers and their
ability to pay for our services. The consequences of any armed
conflict are unpredictable, and we may not be able to foresee
events that could have an adverse effect on our business. We
expect that our revenue and results of operations will continue
to be sensitive to global and regional economic conditions.



| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our international presence exposes us to
    potential difficulties associated with managing distant
    operations and to regulatory, tariff, licensing and other
    risks.

We conduct a majority of our business outside of
the United States and we anticipate that revenue from foreign
operations will continue to account for a significant amount of
our future revenue. Our international operations are directly
related to and dependent on the volume of international trade
and local market conditions. Our international operations and
international commerce are influenced by many factors, including:



| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changes in economic and political conditions and
    in governmental policies,                                                                            
|
| |  | changes in international and domestic customs
    regulations,                                                                                            
|
| |  | wars, civil unrest, acts of terrorism and other
    conflicts,                                                                                            
|
| |  | natural disasters,                                                                                                                                        
|
| |  | changes in tariffs, trade restrictions, trade
    agreements and taxation,                                                                                
|
| |  | difficulties in managing or overseeing foreign
    operations,                                                                                            
|
| |  | limitations on the repatriation of funds because
    of foreign exchange controls,                                                                        
|
| |  | different liability standards, and                                                                                                                        
|
| |  | intellectual property laws of countries which do
    not protect our intellectual property rights to the same extent
    as the laws of the United States.

The occurrence or consequences of any of these
factors may restrict our ability to operate in the affected
region and/or decrease the profitability of our operations in
that region.



| |                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Restrictions and controls on investments
    and acquisitions outside of the United States and our ability to
    conduct business with local agents in particular countries may
    restrict our ability to operate in those
    countries.

Investments in joint ventures or businesses
outside of the United States have been and will continue to be
restricted or controlled to varying degrees. These restrictions
or controls have and may continue to limit or preclude
investments in proposed joint ventures or business acquisitions
outside of the United States or increase our costs and expenses
in seeking to effect such transactions. Various governments
require

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governmental approval prior to investments by
foreign persons and limit the extent of any such investments. In
some countries, we may be required by local regulations to
conduct operations pursuant to an agency or sponsorship
agreement. Even if not required by regulations, we may conduct
business in a country with a local agent who can provide
knowledge of the local market conditions and facilitate the
acquisition of necessary licenses and permits. The loss of an
agent or sponsor could result in the temporary or permanent
cessation of operations in a particular country. There can be no
assurance that we will be able to replace such agent or sponsor
on favorable terms, if at all. Furthermore, various governments
restrict investment opportunities by foreign persons in some
industries or may require governmental approval for the
repatriation of capital and income by foreign investors. There
can be no assurance that such approvals will be forthcoming in
the future. There also can be no assurance that additional or
different restrictions or adverse policies applicable to us will
not be imposed in the future or, if imposed, as to the duration
or impact of any such restrictions or policies.




| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Foreign currency fluctuations could result
    in currency translation exchange gains or losses or could
    increase or decrease the book value of our assets.

Our reporting currency is the United States
dollar. In fiscal year 2004, we derived a substantial portion of
our gross revenue in currencies other than the United States
dollar and, due to the global nature of our operations, we
expect in the foreseeable future to continue to conduct a
significant amount of our business in currencies other than our
reporting currency. Appreciation or depreciation in the value of
other currencies as compared to our reporting currency will
result in currency translation exchange gains or losses which,
if the appreciation or depreciation is significant, could be
material. In those areas where our revenue is denominated in a
local currency rather than our reporting currency, a
depreciation of the local currency against the United States
dollar could adversely affect our reported United States dollar
earnings. Additionally, the assets and liabilities of our
international operations are denominated in each countrys
local currency. As such, when the value of those assets is
translated into United States dollars, foreign currency exchange
rates may adversely affect the book value of our assets. We
cannot predict the effects of exchange rate fluctuations on our
future operating results. We will experience the effects of
changes in foreign currency exchange rates on our consolidated
net income in the future.

We have significant operations located in
South Africa which are subject to various economic, regulatory,
political and other uncertainties and factors which could
adversely impact our operations located in that
country.

For the fiscal year ended January 31, 2004,
approximately 20% of our net revenues were generated in South
Africa and our South African assets represented approximately
20% of our total assets as of January 31, 2004. South
Africa faces a number of social, political and economic issues
which may affect our South African operations.

The government of South Africa and the South
African business community have recently undertaken a number of
significant steps designed to involve historically disadvantaged
South Africans in the ownership and management of South African
businesses and to achieve broad-based black empowerment in the
South African economy. In January 2004, the South African
government enacted legislation requiring business enterprises to
develop empowerment plans and to report on their compliance with
those plans. The purpose of the legislation is to empower
historically disadvantaged South Africans through diverse but
integrated social economic strategies including direct
empowerment, the object of which is the promotion of ownership
and control of the South African economy, the promotion of human
resource development, and indirect empowerment incorporating
criteria such as the level of procurement sourced from
businesses which are owned or empowered by historically
disadvantaged South Africans and investments in, and joint
ventures with, businesses empowered or owned by historically
disadvantaged South Africans.

Our operations in South Africa are currently not
certified as being black empowered for purposes of
the legislation and we are actively considering the steps which
will be necessary for us to become certified as black
empowered. To achieve such certification, it may be
necessary for us to restructure a portion of our South African
operations or to dispose of a portion of our South African
assets. Unless our operations become certified as black
empowered, our existing customers may curtail or
discontinue doing business with us or

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we may be unable to acquire additional business
from new customers to the extent those customers seek to do
business with black empowered enterprises. In this event, our
investments in South Africa and our South African revenue and
operating profits may be adversely affected.




| |                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because our business is dependent on
    commercial airfreight carriers and air charter operators, ocean
    freight carriers and other transportation companies, changes in
    available cargo capacity and other changes affecting such
    carriers as well as interruptions in service or work stoppages
    by such carriers may negatively impact our
    business.

We rely on commercial airfreight carriers and air
charter operators, ocean freight carriers, trucking companies
and other transportation companies for the movement of our
customers cargo. Consequently, our ability to provide
these services for our clients could be adversely impacted by
shortages in available cargo capacity; changes by carriers and
transportation companies in policies and practices such as
scheduling, pricing, payment terms and frequency of service or
increases in the cost of fuel, taxes and labor; and other
factors not within our control. Reductions in airfreight or
ocean freight capacity could negatively impact our yields.
Material interruptions in service or stoppages in
transportation, whether caused by strike, work stoppage,
lock-out, slowdown or otherwise, could adversely impact our
business, results of operations and financial condition.



| |                                                
| | -----------------------------------------------
| | Our business is subject to seasonal
    trends.

Historically, our operating results have been
subject to seasonal trends when measured on a quarterly basis.
Our first fiscal quarter is traditionally weaker compared with
our other fiscal quarters. This trend is dependent on numerous
factors, including the markets in which we operate, holiday
seasons, consumer demand, climate, economic conditions and
numerous other factors beyond our control. There can be no
assurance that our historic operating patterns will continue in
future periods as we cannot influence or forecast many of these
factors.



| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Comparisons of our operating results from
    period to period are not necessarily meaningful and should not
    be relied upon as an indicator of future
    performance.

Our operating results have fluctuated in the past
and it is likely that they will continue to fluctuate in the
future because of a variety of factors, many of which are beyond
our control. Changes in our pricing policies and those of our
competitors and changes in the shipping patterns of our
customers may adversely impact our operating results. In
addition, the following factors could also cause fluctuations in
our operating results:



| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | personnel costs,                                                                                                
|
| |  | timing and magnitude of capital expenditures,                                                                   
|
| |  | costs relating to the expansion of operations,                                                                  
|
| |  | costs and revenue fluctuations due to
    acquisitions,                                                         
|
| |  | pricing and availability of cargo space on
    airlines, ships and trucks which we utilize to transport freight,
|
| |  | adjustments in inventory levels,                                                                                
|
| |  | customer discounts and credits, and                                                                             
|
| |  | changes in our customers requirements for
    contract logistics and outsourcing services.                     

Because our quarterly revenues and operating
results vary significantly, comparisons of our results from
period to period are not necessarily meaningful and should not
be relied upon as an indicator of future performance.

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We have grown and plan to grow, in part,
through acquisitions of other freight forwarders, contract
logistics providers, customs brokers, and other supply chain
management providers. Growth by acquisitions involves risks and
we may not be able to identify or acquire companies consistent
with our growth strategy or successfully integrate any acquired
business into our operations.

We have grown through acquisitions and we may
pursue opportunities to expand our business by acquiring other
companies in the future. Acquisitions involve risks including
those relating to:



| |   |                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |  | identification of appropriate acquisition
    candidates or negotiation of acquisitions on favorable terms and
    valuations,
|
| |  | integration of acquired businesses and personnel,                                                                             
|
| |  | implementation of proper business and accounting
    controls,                                                                
|
| |  | ability to obtain financing, on favorable terms
    or at all,                                                                
|
| |  | diversion of management attention,                                                                                            
|
| |  | retention of employees and customers, and                                                                                     
|
| |  | unexpected liabilities.                                                                                                       

Our growth strategy may affect short-term cash
flow and net income as we expend funds, increase indebtedness
and incur additional expenses in connection with pursuing
acquisitions. If we are not able to identify or acquire
companies consistent with our growth strategy or if we fail to
successfully integrate any acquired companies into our
operations, we may not achieve anticipated increases in revenue,
cost savings and economies of scale, and our operating results
may be adversely affected.

Our growth and profitability may not
continue, which may result in a decrease in our stock
price.

We experienced significant growth in revenue and
operating income over the past several years. There can be no
assurance that our growth rate will continue or that we will be
able to effectively adapt our management, administrative and
operational systems to respond to any future growth. We can
provide no assurance that our operating margins will not be
adversely affected by future changes in and expansion of our
business or by changes in economic or political conditions.
Slower or less profitable growth or losses could adversely
affect our results of operations.

We may not succeed with our NextLeap
strategic operating plan, and as a result our revenue and
profitability may not increase.

We recently completed the second year of
NextLeap, our five-year strategic operating plan.
Under NextLeap, we are undertaking various efforts
to attempt to increase our customers and revenue, improve our
operating margins, and train and develop our employees. This
strategic operating plan requires that we successfully manage
our operations and growth. Our business is subject to numerous
factors beyond our control and there can be no guarantee that we
will be able to successfully implement NextLeap or
that our efforts will result in increased revenues or improved
margins or profitability. If we are not able to increase our
revenue or improve our operating margins in the future, our
results of operations could be adversely affected.

Our effective income tax rate will impact
our results of operations, our cash flow and our
profitability.

We have international operations and generate
taxable income in different countries throughout the world, with
different effective income tax rates. Our future effective
income tax rate will be impacted by a number of factors,
including the geographical composition of our worldwide taxable
income. If the tax laws of the countries in which we operate are
rescinded or changed or the United States or other foreign tax
authorities were to change applicable tax laws or successfully
challenge the manner or jurisdiction in which our profits
currently are recognized, our effective income tax rate could
increase, which would adversely impact our cash flow and
profitability.

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We face intense competition in the freight
forwarding, contract logistics and supply chain management
industry.

The freight forwarding, contract logistics and
supply chain management industry is intensely competitive and we
expect it to remain so for the foreseeable future. We face
competition from a number of companies, including many that have
significantly greater financial, technical and marketing
resources. There are a large number of companies competing in
one or more segments of the industry. We also encounter
competition from regional and local third-party logistics
providers, freight forwarders and integrated transportation
companies. Depending on the location of the customer and the
scope of services requested, we must compete against both the
niche players and larger competitors. In addition, customers
increasingly are turning to competitive bidding situations
involving bids from a number of competitors, including
competitors that are larger than us. We also face competition
from air and ocean carriers, computer information and consulting
firms and contract manufacturers, all of which traditionally
operated outside of the supply chain management industry, but
are now beginning to expand the scope of their operations to
include supply chain related services. Increased competition
could result in reduced revenues, reduced margins or loss of
market share, any of which could damage the long-term or
short-term prospects of our business.

Our industry is consolidating and if we
cannot gain sufficient market presence in our industry, we may
not be able to compete successfully against larger, global
companies in our industry.

There currently is a marked trend within our
industry toward consolidation of niche players into larger
companies which are attempting to increase their global
operations through the acquisition of freight forwarders and
contract logistics providers. If we cannot gain sufficient
market presence in our industry through internal expansion and
additional acquisitions, we may not be able to compete
successfully against larger, global companies in our industry.

We are dependent on key management
personnel and the loss of any such personnel could materially
and adversely affect our business.

Our future performance depends, in significant
part, upon the continued service of our key management
personnel, including Roger MacFarlane (Chief Executive Officer),
Matthys Wessels (Chairman of the Board and Chief Executive
Officer - African Region), Alan Draper (Executive Vice
President and President - Asia Pacific Region) and Lawrence
Samuels (Senior Vice President - Finance, Chief Financial
Officer and Secretary). There can be no assurance that we can
retain such key managerial employees. The unplanned loss of the
services of one or more of these or other key personnel could
have a material adverse effect on our business, operating
results and financial condition. In addition, Peter Thorrington,
our President and Chief Operating Officer, announced his
intention in December 2003 to retire during fiscal 2005. No
assurances can be given that we will be able to find a
replacement with the operating experience and skills of
Mr. Thorrington. We must continue to develop and retain a
core group of management personnel and address issues of
succession planning if we are to realize our goal of growing our
business. We cannot assure you that we will be successful in our
efforts.

Because we are a holding company, we are
financially dependent on receiving distributions from our
subsidiaries and we could be harmed if such distributions could
not be made in the future.

We are a holding company and all of our
operations are conducted through subsidiaries. Consequently, we
rely on dividends or advances from our subsidiaries (including
those that are wholly owned) to meet our financial obligations
and to pay dividends on our ordinary shares. The ability of our
subsidiaries to pay dividends to us and our ability to receive
distributions on our investments in other entities is subject to
applicable local law and other restrictions including, but not
limited to, applicable tax laws and limitations contained in
some of our bank credit facilities. Such laws and restrictions
could limit the payment of dividends and distributions to us
which would restrict our ability to continue operations.

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Because we manage our business on a
decentralized basis, our operations may be materially adversely
affected by inconsistent management practices.

We manage our business on a decentralized basis,
with local and regional management retaining responsibility for
day-to-day operations, profitability and the growth of the
business. Our decentralized operating strategy can make it
difficult for us to implement strategic decisions and
coordinated procedures throughout our global operations. In
addition, many of our subsidiaries operate with management,
sales and support personnel that may be insufficient to support
growth in their respective businesses without significant
central oversight and coordination. Our decentralized operating
strategy could result in inconsistent management practices and
materially adversely affect our overall profitability, and
ultimately our business, results of operations, financial
condition and prospects.

We may need additional financing to fund
our operations and finance our growth, and we may not be able to
obtain financing on terms acceptable to us or at
all.

We may require additional financing to fund our
operations and our current plans for expansion. Because our
credit facilities often are limited to the country in which the
facility is originated, we may require additional financing to
fund our operations in countries in which we do not have
existing credit facilities. In addition, when our existing
credit facilities expire, we may need to obtain replacement
financing. Additional or replacement financing may involve
incurring debt or selling equity securities. There can be no
assurance that additional or replacement financing will be
available to us on commercially reasonable terms or at all. If
we incur debt, the risks associated with our business could
increase. If we raise capital through the sale of equity
securities, the percentage ownership of our shareholders will be
diluted. In addition, any new equity securities may have rights,
preferences or privileges senior to those of our ordinary
shares. If we are unable to obtain additional or replacement
financing, our ability to fund our operations and meet our
current plans for expansion will be materially adversely
affected.

If we fail to develop and integrate
information technology systems or we fail to upgrade or replace
our information technology systems to handle increased volumes
and levels of complexity, meet the demands of our customers and
protect against disruptions of our operations, we may lose
inventory items, orders or customers, which could seriously harm
our business.

Increasingly, we compete for customers based upon
the flexibility and sophistication of the information technology
systems supporting our services. The failure of the hardware or
software that supports our information technology systems, the
loss of data contained in the systems, or the inability to
access or interact with our web site or connect electronically,
could significantly disrupt our operations, prevent customers
from making orders, or cause us to lose inventory items, orders
or customers. If our information technology systems are unable
to handle additional volume for our operations as our business
and scope of services grow, our service levels, operating
efficiency and future transaction volumes will decline. In
addition, we expect customers to continue to demand more
sophisticated, fully integrated information technology systems
from their supply chain services providers. If we fail to hire
qualified persons to implement, maintain and protect our
information technology systems or we fail to upgrade or replace
our information technology systems to handle increased volumes
and levels of complexity, meet the demands of our customers and
protect against disruptions of our operations, we may lose
inventory items, orders or customers, which could seriously harm
our business.

Our information technology systems are
subject to risks which we cannot control.

Our information technology systems are dependent
upon global communications providers, web browsers, telephone
systems and other aspects of the Internet infrastructure which
have experienced significant system failures and electrical
outages in the past. Our systems are susceptible to outages due
to fire, floods, power loss, telecommunications failures,
break-ins and similar events. Despite our implementation of
network security measures, our servers are vulnerable to
computer viruses, break-ins and similar disruptions from
unauthorized tampering with our computer systems. The occurrence
of any of these events could disrupt or damage our

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information technology systems and inhibit our
internal operations, our ability to provide services to our
customers and the ability of our customers to access our
information technology systems.


We may be adversely affected if we are
unable to license the software necessary for our information
technology system.

We license a variety of software which is used in
our proprietary information technology system which we call
eMpower5. As a result, the success and functionality
of our information technology system is dependent upon our
ability to continue our licenses for this software. There can be
no assurance that we will be able to maintain these licenses or
replace the functionality provided by this software on
commercially reasonable terms or at all. The failure to maintain
these licenses or a significant delay in the replacement of this
software could have a material adverse effect on our business,
financial condition and results of operations.

If we fail to adequately protect our
intellectual property rights, the value of such rights may
diminish and our results of operations and financial condition
may be materially adversely affected.

We rely on a combination of copyright, trademark
and trade secret laws and confidentiality procedures to protect
our intellectual property rights. These protections may not be
sufficient, and they do not prevent independent third-party
development of competitive products or services. Further, the
laws of many foreign countries do not protect our intellectual
property rights to the same extent as the laws of the United
States. A failure to protect our intellectual property rights
could result in the loss or diminution in value of such rights.

If we are not able to limit our liability
for customers claims through contract terms and the
purchase of insurance, we could be required to pay large amounts
to our customers as compensation for their claims and our
results of operations could be materially adversely
affected.

In general, we limit by contract our liability to
our customers for loss or damage to their goods to $20 per
kilogram (approximately $9.07 per pound) for airfreight
shipments and $500 per carton or customary unit, including
an ocean container, for ocean freight shipments, with the actual
insured amount determined based on the value of the freight.
However, because a freight forwarders relationship to an
airline or ocean carrier is that of a shipper to a carrier, the
airline or ocean carrier generally assumes the same
responsibility to us as we assume to our customers. When we act
in the capacity of an authorized agent for an air or ocean
carrier, the carrier, rather than we, assumes liability for the
safe delivery of the customers cargo to its ultimate
destination. We have, from time to time, made payments to our
customers for claims related to our services. Should we
experience an increase in the number of such claims or an
increase in liability pursuant to claims or unfavorable
resolutions of claims, our results could be adversely affected.
There can be no assurance that our insurance coverage will
provide us with adequate coverage for such claims or that the
maximum amounts for which we are liable in connection with our
services will not change in the future. In addition, significant
increases in insurance costs could reduce our profitability.

The failure of our policies and procedures
which are designed to prevent the unlawful transportation or
storage of hazardous, explosive or illegal materials could
subject us to large fines, penalties or lawsuits.

We are subject to a broad range of foreign and
domestic (including state and local) environmental, health and
safety and criminal laws and regulations, including those
governing discharges into the air and water, the storage,
handling and disposal of solid and hazardous waste and the
shipment of explosive or illegal substances. In the course of
our operations, we may be asked to arrange for the storage or
transportation of substances defined as hazardous under
applicable laws. As is the case with any such operation, if a
release of hazardous substances occurs on or from our facilities
or from the transporter, we may be required to participate in
the remedy of, or otherwise bear liability for, such release or
be subject to claims from third parties whose property or person
is injured by the release. In addition, if our employees arrange
for the storage or transportation of hazardous, explosive or
illegal materials in violation of applicable laws or
regulations, we may face civil or criminal fines or penalties,
including bans on making future shipments in particular
geographic areas. In the event we are found to not be in
compliance with applicable environmental, health and safety laws
and regulations or there is a future finding that our policies
and procedures fail to satisfy requisite

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minimum safeguards or otherwise do not comply
with applicable laws or regulations, we could be subject to
large fines, penalties or lawsuits.


If we fail to comply with applicable
governmental regulations, we could be subject to substantial
fines or revocation of our permits and licenses.

Our air transportation activities in the United
States are subject to regulation by the Department of
Transportation as an indirect air carrier and by the Federal
Aviation Administration (FAA). We are also subject to security
measures and strict shipper and customer classifications by the
new Transportation Security Administration (TSA) and the
FAA. We anticipate new security requirements regarding the
handling of airfreight in the near term. Our overseas offices
and agents are licensed as airfreight forwarders in their
respective countries of operation, as necessary. We are
accredited in each of our offices by the International Air
Transport Association (IATA) or the Cargo Network Services
Corporation, a subsidiary of the IATA, as a registered agent.
Our indirect air carrier status is also subject to the Indirect
Air Carrier Standard Security Program administered by the TSA.
We are licensed as a customs broker by the United States Customs
Service of the Department of the Treasury in each United States
customs district in which we do business. All United States
customs brokers are required to maintain prescribed records and
are subject to periodic audits by the United States Customs
Service. As a certified party under the self-policing
Customs-Trade Partnership Against Terrorism, we are also subject
to compliance with security regulations within the trade
environment that are enforced by the United States Customs
Service. We are also subject to regulations under the Container
Security Initiative, which is administered by the United States
Customs Service. Our foreign customs brokerage operations are
licensed in and subject to the regulations of their respective
countries.

We are licensed as an ocean freight forwarder by
and registered as an ocean transportation intermediary with the
Federal Maritime Commission. The Federal Maritime Commission has
established qualifications for shipping agents, including surety
bonding requirements. The Federal Maritime Commission also is
responsible for the economic regulation of non-vessel operating
common carriers that contract for space and sell that space to
commercial shippers and other non-vessel operating common
carriers for freight originating or terminating in the United
States. To comply with these economic regulations, vessel
operators and non-vessel operating common carriers are required
to publish tariffs that establish the rates to be charged for
the movement of specified commodities into and out of the United
States. The Federal Maritime Commission has the power to enforce
these regulations by assessing penalties. For ocean shipments
not originating or terminating in the United States, the
applicable regulations and licensing requirements typically are
less stringent than those that do originate or terminate in the
United States.

As part of our contract logistics services, we
operate owned and leased warehouse facilities. Our operations at
these facilities include both warehousing and distribution
services, and we are subject to various federal and state
environmental, work safety and hazardous materials regulations.

We may experience an increase in operating costs,
such as costs for security, as a result of governmental
regulations that have been and will be adopted in response to
terrorist activities and potential terrorist activities. No
assurances can be given that we will be able to pass these
increased costs on to our customers in the form of rate
increases or surcharges. We cannot predict what impact future
regulations may have on our business. Our failure to maintain
required permits or licenses, or to comply with applicable
regulations, could result in substantial fines or revocation of
our operating permits and licenses.

If we are not able to sell container space
that we purchase from ocean shipping lines and capacity that we
charter from our carriers, we will not be able to recover our
out-of-pocket costs and our profitability may
suffer.

As an indirect ocean carrier or non-vessel
operating common carrier, we contract with ocean shipping lines
to obtain transportation for a fixed number of containers
between various points during a specified time period at
variable rates. As an airfreight forwarder, we occasionally
charter aircraft capacity to meet peak season volume increases
for our customers, particularly in Hong Kong and other locations
in Asia. We then solicit freight from our customers to fill the
ocean containers and air charter capacity. When we contract with

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ocean shipping lines to obtain containers and
with air carriers to obtain charter aircraft capacity, we become
obligated to pay for the container space or charter aircraft
capacity that we purchase. If we are not able to sell all of our
purchased container space or charter aircraft capacity, we will
not be able to recover our out-of-pocket costs for such purchase
of container space or charter aircraft capacity.


If we lose certain of our contract
logistics customers or we cannot maintain adequate levels of
utilization in our shared warehouses, then we may experience
revenue losses and decreased profitability.

We anticipate that revenues from our contract
logistics services will account for an increasing portion of our
consolidated revenues and may continue to increase as we further
develop and expand our contract logistics, distribution and
outsourcing services. In some cases, we have entered into
long-term commitments for facilities. We lease single-tenant
warehouses and distribution facilities, which represent in the
aggregate approximately 51,000 square feet, under leases
with terms longer than the logistics services contracts we have
with our customers. We are required to pay rent under these real
property leases even if such customers decide not to renew or
otherwise terminate their agreements with us and we are not able
to obtain new customers for these facilities. As a result, our
revenues and earnings may be adversely affected. In addition, if
we experience a decline in demand for space in our shared
warehouses, then our revenues and earnings may decline as we
would continue to be obligated to pay the full amount of the
underlying leases.

If we are not reimbursed for amounts which
we advance for our customers, our net revenue and profitability
may decrease.

We make significant disbursements on behalf of
our customers for transportation costs concerning collect
freight and customs duties and taxes and in connection with our
performance of other contract logistics services. The billings
to our customers for these disbursements may be several times
larger than the amount of revenue and fees derived from these
transactions. If we are unable to recover a significant portion
of these disbursements or if our customers do not reimburse us
for a substantial amount of these disbursements in a timely
manner, we may experience net revenue losses and decreased
profitability.

Our executive officers, directors and
principal shareholders control a significant portion of our
shares and their interests may be different than or conflict
with yours.

Our current executive officers, directors and
principal shareholders and their respective affiliates control a
significant portion of our ordinary shares. As a result, these
shareholders may be able to influence us and our affairs,
including the election of directors and approval of significant
corporate transactions. This concentration of ownership also may
delay, defer or prevent a change in control of our company, and
make some transactions more difficult or impossible without the
support of these shareholders. These transactions might include
proxy contests, mergers, tender offers, open market purchase
programs or other purchases of our ordinary shares that could
give our shareholders the opportunity to realize a premium over
the then-prevailing market price of our ordinary shares.

It may be difficult for our shareholders to
effect service of process and enforce judgments obtained in
United States courts against us or our directors and executive
officers who reside outside of the United States.

We are incorporated in the British Virgin
Islands. Several of our directors and executive officers reside
outside the United States, and a majority of our assets are
located outside the United States. As a result, we have been
advised by legal counsel in the British Virgin Islands that it
may be difficult or impossible for our shareholders to effect
service of process upon, or to enforce judgments obtained in
United States courts against, us or our directors and executive
officers, including judgments predicated upon the civil
liability provisions of the federal securities laws of the
United States.

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Because we are incorporated under the laws
of the British Virgin Islands, it may be more difficult for our
shareholders to protect their rights than it would be for a
shareholder of a corporation incorporated in another
jurisdiction.

Our corporate affairs are governed by our
Memorandum and Articles of Association and by the International
Business Companies Act of the British Virgin Islands. Principles
of law relating to such matters as the validity of corporate
procedures, the fiduciary duties of management and the rights of
our shareholders may differ from those that would apply if we
were incorporated in the United States or another jurisdiction.
The rights of shareholders under British Virgin Islands law are
not as clearly established as are the rights of shareholders in
many other jurisdictions. Thus, you may have more difficulty
protecting your interests in the face of actions by our board of
directors or our principal shareholders than you would have as
shareholders of a corporation incorporated in another
jurisdiction.

Future issuances of preference shares could
adversely affect the holders of our ordinary
shares.

We are authorized to issue up to 100,000,000
preference shares, of which 50,000,000 have been designated as
Class A preference shares and 50,000,000 have been
designated as Class B preference shares. Our board of
directors may determine the rights and preferences of the
Class A and Class B preference shares within the
limits set forth in our Memorandum and Articles of Association
and applicable law. Among other rights, our board of directors
may determine, without further vote or action by our
shareholders, the dividend, voting, conversion, redemption and
liquidation rights of our preference shares. Our board of
directors may also amend our Memorandum and Articles of
Association to create from time to time one or more classes of
preference shares. The issuance of any preference shares could
adversely affect the rights of the holders of ordinary shares,
and therefore reduce the value of the ordinary shares. While
currently no preference shares are outstanding, no assurances
can be made that we will not issue preference shares in the
future.

Our Memorandum and Articles of Association
contain anti-takeover provisions which may discourage attempts
by others to acquire or merge with us and which could reduce the
market value of our ordinary shares.

Provisions of our Memorandum and Articles of
Association may discourage attempts by other companies to
acquire or merge with us, which could reduce the market value of
our ordinary shares. Provisions in our Memorandum and Articles
of Association may delay, deter or prevent other persons from
attempting to acquire control of us. These provisions include:



| |   |                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the authorization of our board of directors to
    issue preference shares with such rights and preferences
    determined by the board, without the specific approval of the
    holders of ordinary shares,                                                                                                                                           
|
| |  | our board of directors is divided into three
    classes each of which is elected in a different year,                                                                                                                                                                                                                                                  
|
| |  | the prohibition of action by the written consent
    of the shareholders,                                                                                                                                                                                                                                                                               
|
| |  | the establishment of advance notice requirements
    for director nominations and actions to be taken at shareholder
    meetings, and                                                                                                                                                                                                                  
|
| |  | the requirement that the holders of two-thirds of
    the outstanding shares entitled to vote at a meeting are
    required to approve changes to specific provisions of our
    Memorandum and Articles of Association including those
    provisions described above and others which are designed to
    discourage non-negotiated takeover attempts.

In addition, our Memorandum and Articles of
Association permits special meetings of the shareholders to be
called only by our chief executive officer or our board of
directors upon request by a majority of our directors or the
written request of holders of more than 50 percent of our
outstanding voting securities. Provisions of British Virgin
Islands law to which we are subject could impede a merger,
takeover or other business combination involving us or
discourage a potential acquiror from making a tender offer or
otherwise attempting to obtain control of us.

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|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures
    about Market Risk

Quantitative Information about Market
Risk



| |                                               
| | ----------------------------------------------
| | Foreign Currency Exchange Rate
    Sensitivity

Our use of derivative financial instruments is
limited to forward foreign exchange contracts. At
January 31, 2004, the notional value of all of our open
forward foreign exchange contracts was $8.9 million related
to transactions denominated in various currencies, but
predominantly in United States dollars, euros and pounds
sterling. These contracts are entered into at the time the
foreign currency exposure is incurred and do not exceed
60 days.

The following tables provide comparable
information about our non-functional currency components of
balance sheet items by currency, and present such information in
United States dollar equivalents at January 31, 2004 and
2003. These tables summarize information on transactions that
are sensitive to foreign currency exchange rates, including
non-functional currency denominated receivables and payables.
The net amount that is exposed in foreign currency is then
subjected to a 10% change in the value of the functional
currency versus the non-functional currency.

Non-functional currency exposure in United States
dollar equivalents is as follows (in thousands):

|                        |       |        |        |             |  |              |       |                        |  |             |        |       |  |   |      |     |  |   |      |      |  
|----------------------- | ----- | ------ | ------ | ----------- |  | ------------ | ----- | ---------------------- |  | ----------- | ------ | ----- |  | - | ---- | --- |  | - | ---- | ---- | -
|                        |       |        |        |             |  |              |       |                       
|                        |       |        |        |             |  |              |       | Foreign Exchange      
|                        |       |        |        |             |  |              |       | Gain/(Loss)           
|                        |       |        |        |             |  |              |       | if Functional Currency
|                        |       |        |        |             |  | Net          |       |                       
|                        |       |        |        |             |  | Exposure     |       | Appreciates            |  | Depreciates
|Non-Functional Currency |       | Assets |        | Liabilities |  | Long/(Short) |       | by 10%                 |  | by 10%     
|                        |       |        |        |             |  |              |       |                        |  |            
|At January 31, 2004:    |       |        |        |             |  |              |       |                        |  |             |        |       |  |   |      |     |  |   |      |     
|United States dollars   |       | $      | 10,970 |             |  | $            | 6,646 |                        |  | $           | 4,324  |       |  | $ | 432  |     |  | $ | (432 | )   
|Euro                    |       |        | 833    |             |  |              | 3,151 |                        |  |             | (2,318 | )     |  |   | (232 | )   |  |   | 232  |     
|Japanese yen            |       |        | 37     |             |  |              | 447   |                        |  |             | (410   | )     |  |   | (41  | )   |  |   | 41   |     
|Other                   |       |        | 5,339  |             |  |              | 5,810 |                        |  |             | (471   | )     |  |   | (47  | )   |  |   | 47   |     
|                        |       |        |        |             |  |              |       |                        |  |             |        |       |  |   |      |     |  |   |      |     
|                        | Total |        | $      | 17,179      |  |              | $     | 16,054                 |  |             | $      | 1,125 |  |   | $    | 112 |  |   | $    | (112 | )
|                        |       |        |        |             |  |              |       |                        |  |             |        |       |  |   |      |     |  |   |      |     
|At January 31, 2003:    |       |        |        |             |  |              |       |                        |  |             |        |       |  |   |      |     |  |   |      |     
|United States dollars   |       | $      | 8,830  |             |  | $            | 3,889 |                        |  | $           | 4,941  |       |  | $ | 494  |     |  | $ | (494 | )   
|Euro                    |       |        | 631    |             |  |              | 217   |                        |  |             | 414    |       |  |   | 41   |     |  |   | (41  | )   
|Japanese yen            |       |        | 105    |             |  |              | 251   |                        |  |             | (146   | )     |  |   | (15  | )   |  |   | 15   |     
|Other                   |       |        | 1,179  |             |  |              | 1,220 |                        |  |             | (41    | )     |  |   | (4   | )   |  |   | 4    |     
|                        |       |        |        |             |  |              |       |                        |  |             |        |       |  |   |      |     |  |   |      |     
|                        | Total |        | $      | 10,745      |  |              | $     | 5,577                  |  |             | $      | 5,168 |  |   | $    | 516 |  |   | $    | (516 | )
|                        |       |        |        |             |  |              |       |                        |  |             |        |       |  |   |      |     |  |   |      |     

Qualitative Information about Market
Risk

The nature of our operations necessitates dealing
in many foreign currencies. Our results are subject to
fluctuations due to changes in exchange rates. We attempt to
limit our exposure to changing foreign exchange rates through
both operational and financial market actions. We provide
services to customers in locations throughout the world and, as
a result, operate with many currencies including the key
currencies of North America, Latin America, Africa, Asia Pacific
and Europe.

Our short-term exposures to fluctuating foreign
currency exchange rates are related primarily to intercompany
transactions. The duration of these exposures is minimized
through our use of an intercompany netting and settlement system
that settles all of our intercompany trading obligations once
per month. In addition, selected exposures are managed by
financial market transactions in the form of forward foreign
exchange contracts (typically with maturities at the end of the
month following the purchase of the contract). Forward foreign
exchange contracts are primarily denominated in the currencies
of our principal markets. We

41



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##### Table of Contents



will normally generate foreign exchange gains and
losses through normal trading operations. We do not enter into
derivative contracts for speculative purposes.


We do not hedge our foreign currency exposure in
a manner that would entirely eliminate the effects of changes in
foreign exchange rates on our consolidated net income.

We are subject to changing interest rates because
our debt consists primarily of short-term working capital lines.
We do not undertake any specific actions to cover our exposure
to interest rate risk and we are not a party to any interest
rate risk management transactions. We do not purchase or hold
any derivative financial instruments for trading or speculative
purposes.

The fair value of our long-term bank loans
approximates the carrying value at January 31, 2004 and
January 31, 2003. Market risk was estimated as the
potential decrease in fair value resulting from a hypothetical
10% increase in interest rates and was not considered material
at either year-end.






|        |                                                
|------- | -----------------------------------------------
|Item 8. | Financial Statements and Supplementary
    Data

Consolidated Statements and Other Financial
Information

Our consolidated financial statements, along with
the independent auditors report thereon, are attached to
this report beginning on page F-1.






|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure

During the fiscal years ended January 31,
2004 and 2003, there were no disagreements between the company
and its accountants on any matter of accounting principle or
financial statement disclosure.






|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

As of January 31, 2004, the end of the
period covered by this report, an evaluation was performed under
the supervision and with the participation of the companys
management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and
operation of the companys disclosure controls and
procedures, as such term is defined under Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934, as
amended (the Exchange Act). Based on that evaluation, the
companys management, including the Chief Executive Officer
and Chief Financial Officer, concluded that the companys
disclosure controls and procedures were effective as of
January 31, 2004 at insuring that required information will
be disclosed on a timely basis in the companys reports
filed under the Exchange Act. No change in the companys
internal control over financial reporting has occurred during
the last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the companys
internal control over financial reporting.




PART III






|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

The information required by this Item with
respect to directors, Section 16(a) compliance and the
companys code of ethics is incorporated by reference under
the captions, Election of Directors,
Section 16(a) Beneficial Ownership Reporting
Compliance and Code of Ethics, respectively,
from the companys definitive Proxy Statement for its 2004
Annual Meeting of Shareholders (members), which we refer to as
the 2004 Proxy Statement, which will be filed within
120 days of January 31, 2004 pursuant to
Regulation 14A.

Information regarding executive officers of the
company is included in Part I, Item 1 of this report
appearing under the caption, Executive Officers of
Registrant.

42



---



##### Table of Contents








|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

The information required by this Item is
incorporated by reference under the captions Compensation
of Directors and Compensation of Executive
Officers from the companys 2004 Proxy Statement.






|         |                                                                                                       
|-------- | ------------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder
    Matters

The information required by this Item is
incorporated by reference under the captions Security
Ownership of Certain Beneficial Owners and Management and
Equity Compensation Plan Information from the
companys 2004 Proxy Statement.






|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

The information required by this Item is
incorporated by reference under the caption Transactions
with Management and Others from the companys 2004
Proxy Statement.






|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal Accounting Fees and
    Services

The information required by this Item is
incorporated by reference under the caption Independent
Auditors from the companys 2004 Proxy Statement.




PART IV






|         |                                                                     
|-------- | --------------------------------------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules,
    and Reports on Form 8-K

(a)Financial Statements, Financial
Statement Schedules and Exhibits.

1. Financial Statements and Financial
Statement Schedules.

Our consolidated financial statements are
attached to this report and begin on page F-1.

2. Exhibits

The following documents are filed herewith or
incorporated herein by reference to the location indicated.

|        |   |     |  |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | - | --- |  | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |     |  | Description
|        |   |     |  |            
|        | 2 | .1+ |  |             |  | Asset Purchase Agreement between Continental Air
    Express (HK) Limited, Continental Container Lines Limited,
    Union-Transport (HK) Limited, Cheng Kwan Kok David, Lai Kwok
    Fai, Lewis Billy Barnhill, Francis Raymond Bello, Albert Patrick
    Cataldo, Chan Ka Ming, Chan Kwan Hang, Chau Hak Cheong, Cheng
    Kwan Lung, Ng Chun Ka, Ng Sai Kuen and Registrant dated
    August 25, 2000 (incorporated by reference to the
    Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                  
|       
|        | 2 | .2+ |  |             |  | Asset Purchase Agreement between Continental
    Container Line, Inc., Continental Cargo Logistics Inc.
    (New York corporation), Continental Cargo Logistics Inc.
    (California corporation), Union-Transport Corporation, Lai Kwok
    Fai, Ng Chun Ka, Cheng Kwan Kok David, Albert Patrick Cataldo,
    Lewis Billy Barnhill, Francis Raymond Bello, Chan Ka Ming, Chan
    Kwan Hang, Chau Hak Cheong, Cheng Kwan Lung and Ng Sai Kuen
    dated August 25, 2000 (incorporated by reference to the
    Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)
|       
|        | 2 | .3  |  |             |  | Amendment to Asset Purchase Agreement between
    Continental Air Express (HK) Limited, Continental Container
    Lines Limited, Union-Transport (HK) Limited, Cheng Kwan Kok
    David, Lai Kwok Fai, Lewis Billy Barnhill, Francis Raymond
    Bello, Albert Patrick Cataldo, Chan Ka Ming, Chan Kwan Hang,
    Chau Hak Cheong, Cheng Kwan Lung, Ng Chun Ka, Ng Sai Kuen and
    Registrant, dated October 3, 2000 (incorporated by
    reference to Amendment No. 1 to the Companys
    Registration Statement on Form F-1, No. 333-47616,
    dated October 30, 2000)                             

43



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##### Table of Contents



|        |    |      |  |             |  |                                                                                                                                                                                                                                                                                                                                         
|------- | -- | ---- |  | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |      |  | Description
|        |    |      |  |            
|       
|        | 2  | .4+  |  |             |  | Stock Purchase Agreement among Samuel
    Clarke, Jr., Claude M. Walker, Jr., James H. Walker,
    Standard Corporation and Union Transport (U.S.)
    Holdings, Inc., dated as of October 11, 2002
    (incorporated by reference to the Companys Registration
    Statement on Form F-3, No. 333-101309, dated
    November 19, 2002)
|       
|        | 3  | .1   |  |             |  | Memorandum of Association of the Company
    (incorporated by reference to Amendment No. 1 to the
    Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 30, 2000)                                                                                                                                          
|       
|        | 3  | .2   |  |             |  | Articles of Association of the Company, as
    amended (incorporated by reference to Exhibit 99.2 to the
    Companys Report on Form 6-K dated June 6, 2002)                                                                                                                                                                           
|       
|        | 10 | .1*  |  |             |  | Form of Employment Agreement between
    Mr. Wessels and the Company (incorporated by reference to
    the Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                                     
|       
|        | 10 | .2*  |  |             |  | Form of Employment Agreement between
    Mr. MacFarlane and the Company (incorporated by reference
    to the Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                                  
|       
|        | 10 | .3*  |  |             |  | Form of Employment Agreement between
    Mr. Thorrington and the Company (incorporated by reference
    to the Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                                 
|       
|        | 10 | .4*  |  |             |  | Form of Employment Agreement between
    Mr. Draper and the Company (incorporated by reference to
    the Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                                      
|       
|        | 10 | .5*  |  |             |  | 2000 Employee Share Purchase Plan, as amended
    (incorporated by reference to the Companys Registration
    Statement on Form S-8, No. 333-58832, dated
    April 12, 2001)                                                                                                                                                          
|       
|        | 10 | .6*  |  |             |  | Non-Employee Directors Stock Option Plan
    (incorporated by reference to the Companys Registration
    Statement on Form F-1, No. 333-47616, dated
    October 10, 2000)                                                                                                                                                             
|       
|        | 10 | .7*  |  |             |  | Form of Severance Agreement between the Company
    and its executive officers (incorporated by reference to the
    Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                           
|       
|        | 10 | .8*  |  |             |  | Union-Transport Inc. Share Incentive Plan, as
    amended (incorporated by reference to the Companys Annual
    Report on Form 20-F, No. 000-31869, dated May 8,
    2002)                                                                                                                                                             
|       
|        | 10 | .9*  |  |             |  | Union-Transport Executive Share Plan, as amended
    (incorporated by reference to the Companys Annual Report
    on Form 20-F, No. 000-31869, dated May 8, 2002)                                                                                                                                                                      
|       
|        | 10 | .10  |  |             |  | Credit Agreement between the Company and Nedcor
    Bank Limited, dated August 1, 2002 (incorporated by
    reference to Exhibit 99.2 to the Companys Report on
    Form 6-K dated December 5, 2002)                                                                                                                                   
|       
|        | 10 | .11  |  |             |  | Amended and Restated Registration Rights
    Agreement between PTR Holdings, Inc., Union-Transport
    Holdings Inc. and the Company (incorporated by reference to
    Amendment No. 2 to the Companys Registration
    Statement on Form F-3, No. 333-101309, dated
    December 10, 2002)                                            
|       
|        | 10 | .12* |  |             |  | 2000 Stock Option Plan, as amended                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .13* |  |             |  | 2004 Long-Term Incentive Plan                                                                                                                                                                                                                                                                                                           
|       
|        | 21 |      |  |             |  | Subsidiaries of the Company                                                                                                                                                                                                                                                                                                             
|       
|        | 23 |      |  |             |  | Independent Auditors Consent                                                                                                                                                                                                                                                                                                           
|       
|        | 31 | .1   |  |             |  | Certification of Chief Executive Officer pursuant
    to Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002                                                                                                                                             
|       
|        | 31 | .2   |  |             |  | Certification of Chief Financial Officer pursuant
    to Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002                                                                                                                                             
|       
|        | 32 | .1   |  |             |  | Certification of Chief Executive Officer pursuant
    to Section 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                       
|        | 32 | .2   |  |             |  | Certification of Chief Financial Officer pursuant
    to Section 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                       

44



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---



| |   |                                                 
| | - | ------------------------------------------------
| | * | Management contract or compensatory arrangement.



|  |                                                                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|+ | Certain portions of the identified exhibit were
    omitted and filed separately with the Commission and have been
    granted confidential treatment by the Commission.

(b) Reports on Form 8-K

|     |        |             |  |                   |  |                                                                                                                    
|---- | ------ | ----------- |  | ----------------- |  | -------------------------------------------------------------------------------------------------------------------
|Item |        | Filing Date |  | Description      
|     |        |             |  |                  
|     | 7,  12 |             |  | December 10, 2003 |  | News release dated December 10, 2003
    regarding the companys financial results for its third
    fiscal quarter

45



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



| |                   
| | ------------------
| | UTI WORLDWIDE INC.



| |     |                        
| | --- | -----------------------
| | By: | /s/ ROGER I. MACFARLANE

| |                                     
| | ------------------------------------
| |                                     
| | Roger I. MacFarlane                 
| | Chief Executive Officer and Director

Date: April 15, 2004

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated.



| |                   
| | ------------------
| | UTI WORLDWIDE INC.

|                     |  |                                                                                                                                                                                                  
|-------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date: April 15, 2004 |  | By: /s/ ROGER I. MACFARLANERoger I. MacFarlaneChief Executive Officer and Director                                                                                                               
|                    
|Date: April 15, 2004 |  | By: /s/ LAWRENCE R. SAMUELSLawrence R. SamuelsSenior Vice President - Finance,
    Chief Financial Officer
    and Secretary
    Principal Financial Officer and
    Principal Accounting Officer
|                    
|Date: April 15, 2004 |  | By: /s/ PETER THORRINGTONPeter ThorringtonPresident, Chief Operating Officer and Director                                                                                                        
|                    
|Date: April 15, 2004 |  | By: /s/ MATTHYS J. WESSELSMatthys J. WesselsChairman of the Board of Directors and
    Chief Executive Officer - African Region                                                                  
|                    
|Date: April 15, 2004 |  | By: /s/ ALAN C. DRAPERAlan C. DraperExecutive Vice President and
    President - Asia Pacific Region and Director                                                                                

46



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##### Table of Contents



|                     |  |                                                         
|-------------------- |  | --------------------------------------------------------
|                    
|Date: April 15, 2004 |  | By: /s/ WILLIAM H. DAVIDSONWilliam H. DavidsonDirector  
|                    
|Date: April 15, 2004 |  | By: /s/ C. JOHN LANGLEY, JR.C. John Langley, Jr.Director
|                    
|Date: April 15, 2004 |  | By: /s/ LEON J. LEVELLeon J. LevelDirector              
|                    
|Date: April 15, 2004 |  | By: /s/ ALLAN M. ROSENZWEIGAllan M. RosenzweigDirector  
|                    
|Date: April 15, 2004 |  | By: /s/ J. SIMON STUBBINGSJ. Simon StubbingsDirector    

47



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##### Table of Contents



UTi WORLDWIDE INC.

INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS

|                                                                                                                       |  |      |      | 
|---------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                                       |  | Page
|                                                                                                                       |  |     
|Independent Auditors
    Report                                                                                       |  |      | F-2  | 
|Consolidated Income
    Statements for the years ended January 31, 2004, 2003 and
    2002                             |  |      | F-3  | 
|Consolidated Balance Sheets
    as of January 31, 2004 and 2003                                                        |  |      | F-4  | 
|Consolidated Statements of
    Changes in Shareholders Equity for the years ended
    January 31, 2004, 2003 and 2002 |  |      | F-5  | 
|Consolidated Statements of
    Cash Flows for the years ended January 31, 2004, 2003 and
    2002                      |  |      | F-6  | 
|Notes to the Consolidated
    Financial Statements                                                                     |  |      | F-7  | 
|Financial Statement
    Schedule                                                                                       |  |      | F-37 | 

F-1



---



##### Table of Contents






INDEPENDENT AUDITORS REPORT

To the Board of Directors and Shareholders of UTi
Worldwide Inc.

We have audited the accompanying consolidated
balance sheets of UTi Worldwide Inc. and its subsidiaries as of
January 31, 2004 and 2003, and the related consolidated
statements of income, changes in shareholders equity, and
cash flows for each of the three years in the period ended
January 31, 2004. Our audits also included the financial
statement schedule listed in the index on page F-1. These
financial statements and financial statement schedule are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.

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

In our opinion, such consolidated financial
statements present fairly, in all material respects, the
financial position of UTi Worldwide Inc. and its subsidiaries as
of January 31, 2004 and 2003, and the results of their
operations and their cash flows for each of the three years in
the period ended January 31, 2004 in conformity with
accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

As described in Note 1 to the financial
statements, the Company adopted Statement of Financial
Accounting Standards No. 142, Goodwill and Other
Intangible Assets, effective February 1, 2002.

/s/ DELOITTE & TOUCHE LLP

Los Angeles, California

April 14, 2004

F-2



---



##### Table of Contents



UTi WORLDWIDE INC.



CONSOLIDATED INCOME STATEMENTS


For the years ended January 31, 2004,
2003 and 2002


|                                                                       |                |                                           |           |            |  |      |           |            |  |   |         |            | 
|---------------------------------------------------------------------- | -------------- | ----------------------------------------- | --------- | ---------- |  | ---- | --------- | ---------- |  | - | ------- | ---------- | 
|                                                                       |                |                                          
|                                                                       |                | Year Ended January 31,                   
|                                                                       |                |                                          
|                                                                       |                | 2004                                      |           | 2003       |  | 2002
|                                                                       |                |                                           |           |            |  |     
|                                                                       |                |                                          
|                                                                       |                | (In thousands, except share and per share
|                                                                       |                | amounts)                                 
|Gross revenue                                                          |                | $                                         | 1,502,875 |            |  | $    | 1,170,060 |            |  | $ | 889,786 |           
|Freight consolidation costs                                            |                |                                           | 906,734   |            |  |      | 765,270   |            |  |   | 585,227 |           
|                                                                       |                |                                           |           |            |  |      |           |            |  |   |         |           
|Net revenue                                                            |                |                                           | 596,141   |            |  |      | 404,790   |            |  |   | 304,559 |           
|Staff costs                                                            |                |                                           | 318,727   |            |  |      | 204,971   |            |  |   | 156,005 |           
|Depreciation and amortization                                          |                |                                           | 14,806    |            |  |      | 11,174    |            |  |   | 9,411   |           
|Amortization of intangible assets                                      |                |                                           | 663       |            |  |      | 198       |            |  |   | 5,339   |           
|Other operating expenses                                               |                |                                           | 202,874   |            |  |      | 142,942   |            |  |   | 104,134 |           
|                                                                       |                |                                           |           |            |  |      |           |            |  |   |         |           
|Operating income                                                       |                |                                           | 59,071    |            |  |      | 45,505    |            |  |   | 29,670  |           
|Interest income                                                        |                |                                           | 6,881     |            |  |      | 4,641     |            |  |   | 4,102   |           
|Interest expense                                                       |                |                                           | (5,840    | )          |  |      | (5,127    | )          |  |   | (5,312  | )         
|(Losses)/gains on foreign exchange                                     |                |                                           | (341      | )          |  |      | (1,725    | )          |  |   | 17      |           
|                                                                       |                |                                           |           |            |  |      |           |            |  |   |         |           
|Pretax income                                                          |                |                                           | 59,771    |            |  |      | 43,294    |            |  |   | 28,477  |           
|Provision for income taxes                                             |                |                                           | 13,403    |            |  |      | 12,492    |            |  |   | 7,970   |           
|                                                                       |                |                                           |           |            |  |      |           |            |  |   |         |           
|Income before minority interests                                       |                |                                           | 46,368    |            |  |      | 30,802    |            |  |   | 20,507  |           
|Minority interests                                                     |                |                                           | (1,597    | )          |  |      | (1,508    | )          |  |   | (1,349  | )         
|                                                                       |                |                                           |           |            |  |      |           |            |  |   |         |           
|Net income                                                             |                | $                                         | 44,771    |            |  | $    | 29,294    |            |  | $ | 19,158  |           
|                                                                       |                |                                           |           |            |  |      |           |            |  |   |         |           
|Basic earnings per share                                               |                | $                                         | 1.48      |            |  | $    | 1.13      |            |  | $ | 0.76    |           
|Diluted earnings per share                                             |                |                                           | 1.42      |            |  |      | 1.11      |            |  |   | 0.75    |           
|Number of weighted average shares used for per
    share calculations: |                |                                           |           |            |  |      |           |            |  |   |         |           
|                                                                       | Basic shares   |                                           |           | 30,291,543 |  |      |           | 25,932,164 |  |   |         | 25,233,394 | 
|                                                                       | Diluted shares |                                           |           | 31,479,887 |  |      |           | 26,504,401 |  |   |         | 25,501,864 | 

See accompanying notes to the consolidated
financial statements.

F-3



---



##### Table of Contents



UTi WORLDWIDE INC.



CONSOLIDATED BALANCE SHEETS


As of January 31, 2004 and 2003


|                                                                                                                                           |                                                                                                                                                                                          |                                                  |         |         |   |   |         |         |   | 
|------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | ------- | ------- | - | - | ------- | ------- | - | 
|                                                                                                                                           |                                                                                                                                                                                          |                                                 
|                                                                                                                                           |                                                                                                                                                                                          | January 31,                                     
|                                                                                                                                           |                                                                                                                                                                                          |                                                 
|                                                                                                                                           |                                                                                                                                                                                          | 2004                                             |         | 2003   
|                                                                                                                                           |                                                                                                                                                                                          |                                                  |         |        
|                                                                                                                                           |                                                                                                                                                                                          |                                                 
|                                                                                                                                           |                                                                                                                                                                                          | (In thousands, except                           
|                                                                                                                                           |                                                                                                                                                                                          | share amounts)                                  
|ASSETS                                                                                                                                    
|Cash and cash equivalents                                                                                                                  |                                                                                                                                                                                          | $                                                | 156,687 |         |   | $ | 168,125 |        
|Trade receivables (net of allowance for doubtful
    receivables of $14,300 and $11,943 as of January 31, 2004
    and 2003, respectively) |                                                                                                                                                                                          |                                                  | 280,044 |         |   |   | 247,893 |        
|Deferred income tax assets                                                                                                                 |                                                                                                                                                                                          |                                                  | 6,534   |         |   |   | 1,592   |        
|Other current assets                                                                                                                       |                                                                                                                                                                                          |                                                  | 33,420  |         |   |   | 30,492  |        
|                                                                                                                                           |                                                                                                                                                                                          |                                                  |         |         |   |   |         |        
|Total current assets                                                                                                                       |                                                                                                                                                                                          |                                                  | 476,685 |         |   |   | 448,102 |        
|Property, plant and equipment, net                                                                                                         |                                                                                                                                                                                          |                                                  | 54,421  |         |   |   | 44,566  |        
|Goodwill                                                                                                                                   |                                                                                                                                                                                          |                                                  | 148,372 |         |   |   | 116,644 |        
|Other intangible assets, net                                                                                                               |                                                                                                                                                                                          |                                                  | 10,195  |         |   |   | 8,997   |        
|Investments                                                                                                                                |                                                                                                                                                                                          |                                                  | 1,117   |         |   |   | 847     |        
|Deferred income tax assets                                                                                                                 |                                                                                                                                                                                          |                                                  | 2,384   |         |   |   | 1,227   |        
|Other non-current assets                                                                                                                   |                                                                                                                                                                                          |                                                  | 10,167  |         |   |   | 6,692   |        
|                                                                                                                                           |                                                                                                                                                                                          |                                                  |         |         |   |   |         |        
|Total assets                                                                                                                               |                                                                                                                                                                                          | $                                                | 703,341 |         |   | $ | 627,075 |        
|                                                                                                                                           |                                                                                                                                                                                          |                                                  |         |         |   |   |         |        
|LIABILITIES & SHAREHOLDERS
    EQUITY                                                                                                    
|Bank lines of credit                                                                                                                       |                                                                                                                                                                                          | $                                                | 18,180  |         |   | $ | 33,458  |        
|Short-term borrowings                                                                                                                      |                                                                                                                                                                                          |                                                  | 1,312   |         |   |   | 9,121   |        
|Current portion of capital lease obligations                                                                                               |                                                                                                                                                                                          |                                                  | 2,408   |         |   |   | 2,539   |        
|Trade payables and other accrued liabilities                                                                                               |                                                                                                                                                                                          |                                                  | 269,072 |         |   |   | 236,548 |        
|Income taxes payable                                                                                                                       |                                                                                                                                                                                          |                                                  | 10,864  |         |   |   | 8,083   |        
|Deferred income tax liabilities                                                                                                            |                                                                                                                                                                                          |                                                  | 256     |         |   |   | 489     |        
|                                                                                                                                           |                                                                                                                                                                                          |                                                  |         |         |   |   |         |        
|Total current liabilities                                                                                                                  |                                                                                                                                                                                          |                                                  | 302,092 |         |   |   | 290,238 |        
|Long-term borrowings                                                                                                                       |                                                                                                                                                                                          |                                                  | 93      |         |   |   | 199     |        
|Capital lease obligations                                                                                                                  |                                                                                                                                                                                          |                                                  | 7,326   |         |   |   | 7,111   |        
|Deferred income tax liabilities                                                                                                            |                                                                                                                                                                                          |                                                  | 3,860   |         |   |   | 1,643   |        
|Retirement fund obligations                                                                                                                |                                                                                                                                                                                          |                                                  | 1,251   |         |   |   | 1,016   |        
|Minority interests                                                                                                                         |                                                                                                                                                                                          |                                                  | 2,873   |         |   |   | 2,699   |        
|Commitments and contingencies                                                                                                              |                                                                                                                                                                                          |                                                  |         |         |   |   |         |        
|Shareholders equity:                                                                                                                      |                                                                                                                                                                                          |                                                  |         |         |   |   |         |        
|                                                                                                                                           | Non-voting variable rate participating cumulative
    convertible preference shares of no par value:                                                                                     |                                                  |         |         |   |   |         |         |  
|                                                                                                                                           |                                                                                                                                                                                          | Class A  authorized 50,000,000;
    none issued |         |         |  |   |         |         |  | 
|                                                                                                                                           |                                                                                                                                                                                          | Class B  authorized 50,000,000;
    none issued |         |         |  |   |         |         |  | 
|                                                                                                                                           | Common stock  authorized 500,000,000
    ordinary shares of no par value; issued and outstanding
    30,929,814 and 30,551,124 shares as of January 31, 2004 and
    2003, respectively |                                                  |         | 318,409 |   |   |         | 311,161 |  
|                                                                                                                                           | Retained earnings                                                                                                                                                                        |                                                  |         | 105,855 |   |   |         | 63,973  |  
|                                                                                                                                           | Accumulated other comprehensive loss                                                                                                                                                     |                                                  |         | (38,418 | ) |   |         | (50,965 | )
|                                                                                                                                           |                                                                                                                                                                                          |                                                  |         |         |   |   |         |        
|Total shareholders equity                                                                                                                 |                                                                                                                                                                                          |                                                  | 385,846 |         |   |   | 324,169 |        
|                                                                                                                                           |                                                                                                                                                                                          |                                                  |         |         |   |   |         |        
|Total liabilities and shareholders equity                                                                                                 |                                                                                                                                                                                          | $                                                | 703,341 |         |   | $ | 627,075 |        
|                                                                                                                                           |                                                                                                                                                                                          |                                                  |         |         |   |   |         |        

See accompanying notes to the consolidated
financial statements.

F-4



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##### Table of Contents



UTi WORLDWIDE INC.



CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS EQUITY


For the years ended January 31, 2004,
2003 and 2002


|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |         |        |  
|------------------------------------------------ | --------------------------------------- | --------------------------------- | ---------- | -------- |  | ------------- | ------- | ---- |  | ----- | ------- | ------ |  | - | ------- | ------- | - | - | ------- | ------- | ------ | -
|                                                 |                                         |                                   |            |          |  | Accumulated   |         |     
|                                                 |                                         | Common Stock                      |            |          |  | Other         |         |     
|                                                 |                                         |                                   |            | Retained |  | Comprehensive |         |     
|                                                 |                                         | Shares                            |            | Amount   |  | Earnings      |         | Loss |  | Total
|                                                 |                                         |                                   |            |          |  |               |         |      |  |      
|                                                 |                                         |                                  
|                                                 |                                         | (In thousands, except share data)
|Balance at January 31, 2001                      |                                         |                                   | 25,685,950 |          |  | $             | 206,626 |      |  | $     | 19,376  |        |  | $ | (38,514 | )       |   | $ | 187,488 |        
|Comprehensive loss:                              |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|                                                 | Net income                              |                                   |            |         |  |               |         |     |  |       |         | 19,158 |  |   |         |        |   |   |         | 19,158  |       
|                                                 | Foreign currency translation adjustment |                                   |            |         |  |               |         |     |  |       |         |       |  |   |         | (25,383 | ) |   |         | (25,383 | )     
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|                                                 |                                         | Total comprehensive loss          |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |         | (6,225 | )
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|Shares issued                                    |                                         |                                   | 5,310      |          |  |               | 72      |      |  |       |        |        |  |   |        |         |   |   | 72      |        
|Stock options exercised                          |                                         |                                   | 11,141     |          |  |               | 145     |      |  |       |        |        |  |   |        |         |   |   | 145     |        
|Stock compensation costs                         |                                         |                                   |           |          |  |               | 300     |      |  |       |        |        |  |   |        |         |   |   | 300     |        
|Dividends                                        |                                         |                                   |           |          |  |               |        |      |  |       | (1,926  | )      |  |   |        |         |   |   | (1,926  | )      
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|Balance at January 31, 2002                      |                                         |                                   | 25,702,401 |          |  |               | 207,143 |      |  |       | 36,608  |        |  |   | (63,897 | )       |   |   | 179,854 |        
|Comprehensive income:                            |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|                                                 | Net income                              |                                   |            |         |  |               |         |     |  |       |         | 29,294 |  |   |         |        |   |   |         | 29,294  |       
|                                                 | Foreign currency translation adjustment |                                   |            |         |  |               |         |     |  |       |         |       |  |   |         | 12,932  |   |   |         | 12,932  |       
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|                                                 |                                         | Total comprehensive income        |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |         | 42,226 |  
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|Shares issued                                    |                                         |                                   | 4,799,416  |          |  |               | 103,175 |      |  |       |        |        |  |   |        |         |   |   | 103,175 |        
|Stock options exercised                          |                                         |                                   | 49,307     |          |  |               | 661     |      |  |       |        |        |  |   |        |         |   |   | 661     |        
|Stock compensation costs                         |                                         |                                   |           |          |  |               | 182     |      |  |       |        |        |  |   |        |         |   |   | 182     |        
|Dividends                                        |                                         |                                   |           |          |  |               |        |      |  |       | (1,929  | )      |  |   |        |         |   |   | (1,929  | )      
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|Balance at January 31, 2003                      |                                         |                                   | 30,551,124 |          |  |               | 311,161 |      |  |       | 63,973  |        |  |   | (50,965 | )       |   |   | 324,169 |        
|Comprehensive income:                            |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|                                                 | Net income                              |                                   |            |         |  |               |         |     |  |       |         | 44,771 |  |   |         |        |   |   |         | 44,771  |       
|                                                 | Foreign currency translation adjustment |                                   |            |         |  |               |         |     |  |       |         |       |  |   |         | 12,547  |   |   |         | 12,547  |       
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|                                                 |                                         | Total comprehensive income        |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |         | 57,318 |  
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|Shares issued                                    |                                         |                                   | 24,623     |          |  |               | 694     |      |  |       |        |        |  |   |        |         |   |   | 694     |        
|Stock options exercised                          |                                         |                                   | 337,305    |          |  |               | 4,920   |      |  |       |        |        |  |   |        |         |   |   | 4,920   |        
|Stock compensation costs                         |                                         |                                   | 16,762     |          |  |               | 798     |      |  |       |        |        |  |   |        |         |   |   | 798     |        
|Tax benefit related to exercise of stock options |                                         |                                   |           |          |  |               | 836     |      |  |       |        |        |  |   |        |         |   |   | 836     |        
|Dividends                                        |                                         |                                   |           |          |  |               |        |      |  |       | (2,889  | )      |  |   |        |         |   |   | (2,889  | )      
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        
|Balance at January 31, 2004                      |                                         |                                   | 30,929,814 |          |  | $             | 318,409 |      |  | $     | 105,855 |        |  | $ | (38,418 | )       |   | $ | 385,846 |        
|                                                 |                                         |                                   |            |          |  |               |         |      |  |       |         |        |  |   |         |         |   |   |         |        

See accompanying notes to the consolidated
financial statements.

F-5



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##### Table of Contents



UTi WORLDWIDE INC.



CONSOLIDATED STATEMENTS OF CASH
FLOWS


For the years ended January 31, 2004,
2003 and 2002


|                                                                            |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |       |         |         |  
|--------------------------------------------------------------------------- | ------------------------------------------------------------ | ---------------------------------------- | ------------------------------------------------------- | ------ | ------ | ------- | ------- | ------ | ------- | ------- | ------- | ----- | ------- | ------- | -
|                                                                            |                                                              |                                         
|                                                                            |                                                              | Year Ended January 31,                  
|                                                                            |                                                              |                                         
|                                                                            |                                                              | 2004                                     |                                                         | 2003   |        | 2002   
|                                                                            |                                                              |                                          |                                                         |        |        |        
|                                                                            |                                                              |                                         
|                                                                            |                                                              | (In thousands)                          
|OPERATING ACTIVITIES:                                                       |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      
|Net income                                                                  |                                                              | $                                        | 44,771                                                  |        |        | $       | 29,294  |        |         | $       | 19,158  |      
|Adjustments to reconcile net income to net cash
    provided by operations: |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      
|                                                                            | Stock compensation costs                                     |                                          |                                                         | 798    |        |         |         | 182    |         |         |         | 300   |        
|                                                                            | Depreciation and amortization                                |                                          |                                                         | 14,806 |        |         |         | 11,174 |         |         |         | 9,411 |        
|                                                                            | Amortization of intangible assets                            |                                          |                                                         | 663    |        |         |         | 198    |         |         |         | 5,339 |        
|                                                                            | Deferred income taxes                                        |                                          |                                                         | 847    |        |         |         | 423    |         |         |         | 161   |        
|                                                                            | Tax benefit relating to exercise of stock options            |                                          |                                                         | 836    |        |         |         |       |         |         |         |      |        
|                                                                            | Loss/(gain) on disposal of property, plant and
    equipment |                                          |                                                         | 171    |        |         |         | 110    |         |         |         | (187  | )      
|                                                                            | Other                                                        |                                          |                                                         | 1,395  |        |         |         | 1,329  |         |         |         | 1,326 |        
|                                                                            | Changes in operating assets and liabilities:                 |                                          |                                                         |        |        |         |         |        |         |         |         |       |        
|                                                                            |                                                              | (Increase)/decrease in trade receivables |                                                         |        | (7,582 | )       |         |        | (18,367 | )       |         |       | 24,055  |        
|                                                                            |                                                              | Increase in other current assets         |                                                         |        | (2,590 | )       |         |        | (5,197  | )       |         |       | (782    | )      
|                                                                            |                                                              | Increase/(decrease) in trade payables    |                                                         |        | 10,713 |         |         |        | 23,029  |         |         |       | (20,564 | )      
|                                                                            |                                                              | Increase in other current liabilities    |                                                         |        | 1,030  |         |         |        | 7,427   |         |         |       | 4,869   |        
|                                                                            |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      
|                                                                            |                                                              |                                          | Net cash provided by operating activities               |        |        | 65,858  |         |        |         | 49,602  |         |       |         | 43,086  |  
|INVESTING ACTIVITIES:                                                       |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      
|Purchases of property, plant and equipment                                  |                                                              |                                          | (18,720                                                 | )      |        |         | (13,572 | )      |         |         | (8,711  | )    
|Proceeds from disposal of property, plant and
    equipment                 |                                                              |                                          | 889                                                     |        |        |         | 430     |        |         |         | 912     |      
|Increase in other non-current assets                                        |                                                              |                                          | (1,674                                                  | )      |        |         |        |        |         |         |        |      
|Acquisitions and contingent earn-out payments                               |                                                              |                                          | (30,288                                                 | )      |        |         | (62,944 | )      |         |         | (21,868 | )    
|Other                                                                       |                                                              |                                          | (587                                                    | )      |        |         | (599    | )      |         |         | (20     | )    
|                                                                            |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      
|                                                                            |                                                              |                                          | Net cash used in investing activities                   |        |        | (50,380 | )       |        |         | (76,685 | )       |       |         | (29,687 | )
|FINANCING ACTIVITIES:                                                       |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      
|(Decrease)/increase in bank lines of credit                                 |                                                              |                                          | (15,278                                                 | )      |        |         | 12,396  |        |         |         | (14,225 | )    
|(Decrease)/increase in short-term borrowings                                |                                                              |                                          | (7,421                                                  | )      |        |         | (3,727  | )      |         |         | 168     |      
|Long-term borrowings  advanced                                             |                                                              |                                          |                                                        |        |        |         |        |        |         |         | 116     |      
|Long-term borrowings  repaid                                               |                                                              |                                          | (146                                                    | )      |        |         | (204    | )      |         |         | (72     | )    
|Repayments of capital lease obligations                                     |                                                              |                                          | (3,444                                                  | )      |        |         | (3,068  | )      |         |         | (1,985  | )    
|Decrease in minority interests                                              |                                                              |                                          | (1,296                                                  | )      |        |         | (1,028  | )      |         |         | (532    | )    
|Net proceeds from the issuance of ordinary shares                           |                                                              |                                          | 5,614                                                   |        |        |         | 100,836 |        |         |         | 217     |      
|Dividends paid                                                              |                                                              |                                          | (2,889                                                  | )      |        |         | (1,929  | )      |         |         | (1,926  | )    
|                                                                            |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      
|                                                                            |                                                              |                                          | Net cash (used in)/provided by financing
    activities |        |        | (24,860 | )       |        |         | 103,276 |         |       |         | (18,239 | )
|                                                                            |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      
|Net (decrease)/increase in cash and cash
    equivalents                    |                                                              |                                          | (9,382                                                  | )      |        |         | 76,193  |        |         |         | (4,840  | )    
|Cash and cash equivalents at beginning of year                              |                                                              |                                          | 168,125                                                 |        |        |         | 87,594  |        |         |         | 98,372  |      
|Effect of foreign exchange rate changes on cash                             |                                                              |                                          | (2,056                                                  | )      |        |         | 4,338   |        |         |         | (5,938  | )    
|                                                                            |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      
|                                                                            |                                                              |                                          | Cash and cash equivalents at end of the year            |        | $      | 156,687 |         |        | $       | 168,125 |         |       | $       | 87,594  |  
|                                                                            |                                                              |                                          |                                                         |        |        |         |         |        |         |         |         |      

See accompanying notes to the consolidated
financial statements.

F-6



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##### Table of Contents



UTi WORLDWIDE INC.

NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS

For the years ended January 31, 2004,
2003 and 2002




|   |                                               
|-- | ----------------------------------------------
|1. | Summary of Significant Accounting
    Policies



| |                      
| | ---------------------
| | Basis of Presentation

UTi Worldwide Inc. (the Company or UTi) is an
international, non-asset-based global integrated logistics
company that provides air and ocean freight forwarding, contract
logistics, distribution, customs clearances and other supply
chain management services. The Company serves its clients
through a worldwide network of branch offices in 134 countries,
including exclusive agents, and 93 contract logistics centers.

The consolidated financial statements incorporate
the financial statements of UTi and all subsidiaries controlled
by the Company (generally more than 50% shareholding). Control
is achieved where the Company has the power to govern the
financial and operating policies of a subsidiary company so as
to obtain benefits from its activities. The results of
subsidiaries acquired during the year are included in the
consolidated financial statements from the effective dates of
acquisition. All significant intercompany transactions and
balances are eliminated.

The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States (U.S. GAAP) requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities
at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

All dollar amounts in the notes are presented in
thousands except for share data.



| |                     
| | --------------------
| | Currency Translation

For consolidation purposes, balance sheets of
subsidiaries expressed in currencies other than United States
dollars are translated at the rates of exchange ruling at the
balance sheet date. Operating results for the year are
translated using average rates of exchange for the year. Gains
and losses on translation are recorded as a separate component
of equity and are included in other comprehensive income or
loss. Transactions in foreign currencies during the year are
remeasured at rates of exchange ruling on the dates of the
transactions. These gains and losses arising on remeasurement
are accounted for in the income statement. Exchange differences
arising on the translation of long-term structural loans to
subsidiary companies are recorded as a separate component of
equity and are included in other comprehensive income or loss.
The financial statements of foreign entities that report in the
currency of a hyper-inflationary economy are remeasured as if
the functional currency were the reporting currency before they
are translated into United States dollars.



| |                    
| | -------------------
| | Revenue Recognition

Gross revenue represents billings on exports to
customers, plus net revenue on imports, net of any billings for
value added taxes, custom duties and freight insurance premiums
whereby the Company acts as an agent. Gross revenue and freight
consolidation costs for airfreight and ocean freight forwarding
services, including commissions earned from the Companys
services as an authorized agent for airline and ocean carriers
and third-party freight insurers, are recognized at the time the
freight departs the terminal of origin which is when the
customer is billed. Gross customs brokerage revenue, contract
logistics revenue and other revenues are recognized when the
customer is billed, which for customs brokerage revenue, is when
the necessary documentation for customs clearance has been
completed, and for contract logistics and other revenues, is
when the service has been provided to third parties in the
ordinary course of business.

F-7



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002




| |             
| | ------------
| | Income Taxes

Federal, state and foreign income taxes are
computed at current tax rates, less tax credits. Tax provisions
include amounts that are currently payable, plus changes in
deferred income tax assets and liabilities that arise because of
temporary differences between the time when items of income and
expense are recognized for financial reporting and income tax
purposes.

Deferred income taxes are accounted for using the
liability method for temporary differences arising from
differences between the carrying amount of assets and
liabilities in the financial statements and the corresponding
tax basis used in the computation of taxable income. Deferred
income tax assets and liabilities are recognized for all taxable
temporary differences. Deferred income tax assets are offset by
valuation allowances so that the assets are recognized only to
the extent that it is more likely than not that taxable income
will be available against which deductible temporary differences
can be utilized. Deferred income taxes are calculated at the tax
rates that are expected to apply to the period when the asset is
realized or the liability is settled. Deferred income taxes are
charged or credited to the income statement.

No provision is made for additional taxes, which
would arise if the retained earnings of subsidiaries were
distributed, on the basis that it is not envisaged that such
distribution will be made.



| |              
| | -------------
| | Stock Options

As of January 31, 2004, the Company had five
stock-based employee and non-employee compensation plans which
are accounted for using the intrinsic value method under the
recognition and measurement principles of Accounting Principle
Board Opinion No. 25, Accounting for Stock Issued to
Employees, and its related Interpretations (APB
No. 25). Compensation cost is recorded in net income only
for stock options that have an exercise price below the market
value of the underlying common stock on the date of grant. As
required by Statement of Financial Accounting Standards
No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure 
an amendment of FASB Statement No. 123, the following table
shows the estimated effect on net income and earnings per share
as if the Company had applied the fair value recognition
provision of Statement of Financial Accounting Standards
(SFAS) No. 123, Accounting for Stock-Based
Compensation, to all stock options.

|                                 |                                                                                                                    |                        |        |       |  |      |        |       |  |   |        |       | 
|-------------------------------- | ------------------------------------------------------------------------------------------------------------------ | ---------------------- | ------ | ----- |  | ---- | ------ | ----- |  | - | ------ | ----- | 
|                                 |                                                                                                                    |                       
|                                 |                                                                                                                    | Year Ended January 31,
|                                 |                                                                                                                    |                       
|                                 |                                                                                                                    | 2004                   |        | 2003  |  | 2002
|                                 |                                                                                                                    |                        |        |       |  |     
|Net income as reported           |                                                                                                                    | $                      | 44,771 |       |  | $    | 29,294 |       |  | $ | 19,158 |      
|                                 | Add: Stock-based employee compensation expense
    included in reported net income, net of income taxes            |                        |        | 173   |  |      |        | 182   |  |   |        | 300   | 
|                                 | Less: Total stock-based compensation expense
    determined under the fair value based method, net of income taxes |                        |        | 3,385 |  |      |        | 2,886 |  |   |        | 2,490 | 
|                                 |                                                                                                                    |                        |        |       |  |      |        |       |  |   |        |      
|Pro forma net income             |                                                                                                                    | $                      | 41,559 |       |  | $    | 26,590 |       |  | $ | 16,968 |      
|                                 |                                                                                                                    |                        |        |       |  |      |        |       |  |   |        |      
|Earnings per share, as reported: |                                                                                                                    |                        |        |       |  |      |        |       |  |   |        |      
|                                 | Basic earnings per share                                                                                           |                        | $      | 1.48  |  |      | $      | 1.13  |  |   | $      | 0.76  | 
|                                 | Diluted earnings per share                                                                                         |                        |        | 1.42  |  |      |        | 1.11  |  |   |        | 0.75  | 
|Earnings per share, pro forma:   |                                                                                                                    |                        |        |       |  |      |        |       |  |   |        |      
|                                 | Basic earnings per share                                                                                           |                        |        | 1.37  |  |      |        | 1.03  |  |   |        | 0.67  | 
|                                 | Diluted earnings per share                                                                                         |                        |        | 1.32  |  |      |        | 1.00  |  |   |        | 0.67  | 

F-8



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


The foregoing impact of compensation costs, was
determined under the Black-Scholes option-pricing model using
the following weighted average assumptions:

|                                 |  |                        |         |      |  |      |         |  |  |  |         | 
|-------------------------------- |  | ---------------------- | ------- | ---- |  | ---- | ------- |  |  |  | ------- | 
|                                 |  |                       
|                                 |  | Year Ended January 31,
|                                 |  |                       
|                                 |  | 2004                   |         | 2003 |  | 2002
|                                 |  |                        |         |      |  |     
|Risk free rate of return, annual |  |                        | 3%      |      |  |      | 4%      |  |  |  | 4%      | 
|Expected life                    |  |                        | 5 years |      |  |      | 5 years |  |  |  | 5 years | 
|Expected volatility              |  |                        | 46%     |      |  |      | 45%     |  |  |  | 39%     | 
|Dividend yield                   |  |                        | 1%      |      |  |      | 1%      |  |  |  | 1%      | 

Cash and Cash
Equivalents

Cash and cash equivalents include demand deposits
and investments with original maturities of three months or less.

Trade
Receivables

In addition to billings related to transportation
costs, trade receivables include disbursements made on behalf of
customers for value added taxes, customs duties and freight
insurance. The billings to customers for these disbursements are
not recorded as gross revenue and freight consolidation costs in
the income statement. Management establishes reserves based on
the expected ultimate collectibility of these receivables.

Significant portions of the Companys trade
receivables are from large companies. None of the Companys
other financial instruments represent a concentration of credit
risk because the Company has dealings with a variety of major
banks and customers worldwide.

Property,
Plant and Equipment

Property, plant and equipment are stated at cost
less accumulated depreciation and amortization. Depreciation is
provided on the straight-line and reducing balance methods over
the estimated useful lives of the assets at the following annual
rates:

|                                 |  |           
|-------------------------------- |  | ----------
|Computer equipment/software      |  | 20% - 33% 
|Fixtures, fittings and equipment |  | 10% - 33% 
|Motor vehicles                   |  | 10% - 33% 
|Buildings                        |  | 2.5% - 10%

The Company capitalizes software costs in
accordance with American Institute of Certified Public
Accountants Statement of Position 98-1, Accounting
for the Costs of Computer Software Developed or Obtained for
Internal Use.

Assets held under capital leases are amortized
over their expected useful lives on the same basis as owned
assets, or if there is not reasonable certainty that the Company
will obtain ownership by the end of the lease term, the asset is
amortized over the shorter of the lease term or its useful life.
Leasehold improvements are amortized over the estimated useful
life of the related asset, or over the remaining term of the
lease, whichever is shorter.

Goodwill and
Other Intangible Assets

The Company accounts for goodwill and intangible
assets in accordance with SFAS No. 142, Goodwill
and Other Intangible Assets, (SFAS No. 142). In
accordance with SFAS No. 142, no amortization was
recorded for goodwill for acquisitions completed after
June 30, 2001. Further, effective February 1, 2002, in

F-9



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


accordance with SFAS No. 142, the
Company discontinued the amortization relating to all existing
goodwill. Intangible assets that have finite useful lives
continue to be amortized over their useful lives.
SFAS No. 142 requires that goodwill and
non-amortizable intangible assets be assessed annually for
impairment. The Company completes the required impairment test
annually in the second quarter, or when certain events occur or
circumstances change. Prior to February 1, 2002, goodwill
was amortized using the straight-line method following an
assessment of the estimated useful life, subject to a maximum
period of 20 years.

The changes in the carrying amount of goodwill by
reportable segment for the years ended January 31, 2004 and
2003, are as follows:

|                                                                       |  |        |        |          |  |         |        |        |  |       |        |  |  |   |        |  |  |   |         |  
|---------------------------------------------------------------------- |  | ------ | ------ | -------- |  | ------- | ------ | ------ |  | ----- | ------ |  |  | - | ------ |  |  | - | ------- | -
|                                                                       |  |        |        |          |  | Asia    |        |        |  |      
|                                                                       |  | Europe |        | Americas |  | Pacific |        | Africa |  | Total
|                                                                       |  |        |        |          |  |         |        |        |  |      
|Balance as of February 1, 2002                                         |  | $      | 19,314 |          |  | $       | 10,357 |        |  | $     | 35,448 |  |  | $ | 11,492 |  |  | $ | 76,611  |  
|Contingent earn-out payments made                                      |  |        | 2,872  |          |  |         | 1,540  |        |  |       | 5,272  |  |  |   | 1,709  |  |  |   | 11,393  |  
|Acquisitions                                                           |  |        | 511    |          |  |         | 22,405 |        |  |       | 937    |  |  |   | 304    |  |  |   | 24,157  |  
|Foreign currency translation and other Adjustments                     |  |        | 1,130  |          |  |         | 606    |        |  |       | 2,075  |  |  |   | 672    |  |  |   | 4,483   |  
|                                                                       |  |        |        |          |  |         |        |        |  |       |        |  |  |   |        |  |  |   |         |  
|Balance as of February 1, 2003                                         |  |        | 23,827 |          |  |         | 34,908 |        |  |       | 43,732 |  |  |   | 14,177 |  |  |   | 116,644 |  
|Contingent earn-out payments made                                      |  |        | 5,998  |          |  |         | 3,216  |        |  |       | 11,010 |  |  |   | 3,569  |  |  |   | 23,793  |  
|Acquisitions                                                           |  |        | 263    |          |  |         | 271    |        |  |       | 482    |  |  |   | 3,148  |  |  |   | 4,164   |  
|Reduction due to reversal of valuation allowance
    on deferred taxes |  |        |       |          |  |         | (4,711 | )      |  |       |       |  |  |   |       |  |  |   | (4,711  | )
|Foreign currency translation and other adjustments                     |  |        | 2,138  |          |  |         | 1,147  |        |  |       | 3,925  |  |  |   | 1,272  |  |  |   | 8,482   |  
|                                                                       |  |        |        |          |  |         |        |        |  |       |        |  |  |   |        |  |  |   |         |  
|Balance as of January 31, 2004                                         |  | $      | 32,226 |          |  | $       | 34,831 |        |  | $     | 59,149 |  |  | $ | 22,166 |  |  | $ | 148,372 |  
|                                                                       |  |        |        |          |  |         |        |        |  |       |        |  |  |   |        |  |  |   |         |  

The amortized intangible assets as of
January 31, 2004 relate to the estimated fair value of the
customer contracts and customer relationships acquired with
Standard Corporation (Standard) and non-compete agreements with
the former owners of Standard and Kite Logistics (Pty) Limited
(Kite). The changes in the carrying value of intangible assets
for the years ended January 31, 2004 and 2003, are as
follows:

|                       |                                  |                    |        |      |   |   |       |      |  
|---------------------- | -------------------------------- | ------------------ | ------ | ---- | - | - | ----- | ---- | -
|                       |                                  |                   
|                       |                                  | For the Year Ended
|                       |                                  | January 31,       
|                       |                                  |                   
|                       |                                  | 2004               |        | 2003
|                       |                                  |                    |        |     
|Gross carrying balance |                                  | $                  | 11,059 |      |   | $ | 9,195 |     
|                       | Accumulated amortization expense |                    |        | (861 | ) |   |       | (198 | )
|                       | Foreign currency translation     |                    |        | (3   | ) |   |       |     |  
|                       |                                  |                    |        |      |   |   |       |     
|Net carrying balance   |                                  | $                  | 10,195 |      |   | $ | 8,997 |     
|                       |                                  |                    |        |      |   |   |       |     

The weighted average life of these assets is
15.5 years. Amortization expense totaled $663 and $198 for
the years ended January 31, 2004 and 2003, respectively,
and we expect it to be approximately $720 per year for each of
the next five years. There were no amortized intangible assets
as of February 1, 2002.

F-10



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


As required by SFAS No. 142, the
results for the prior years have not been restated. A
reconciliation of net income as if SFAS No. 142 had
been adopted for the year ended January 31, 2002, along
with reported results for the years ended January 31, 2004
and 2003 is as follows:

|                            |                                               |                                     |   |        |        |      |   |        |        |  |   |        |        | 
|--------------------------- | --------------------------------------------- | ----------------------------------- | - | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|                            |                                               |                                    
|                            |                                               | For the Year Ended January 31,     
|                            |                                               |                                    
|                            |                                               | 2004                                |   | 2003   |        | 2002
|                            |                                               |                                     |   |        |        |     
|Operating income:           |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|                            | As reported                                   |                                     | $ | 59,071 |        |      | $ | 45,505 |        |  | $ | 29,670 |       
|                            | Add back amortization of goodwill             |                                     |   |       |        |      |   |       |        |  |   | 5,339  |       
|                            |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|                            |                                               | Adjusted operating income           |   | $      | 59,071 |      |   | $      | 45,505 |  |   | $      | 35,009 | 
|                            |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|Net income:                 |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|                            | As reported                                   |                                     | $ | 44,771 |        |      | $ | 29,294 |        |  | $ | 19,158 |       
|                            | Add back amortization of goodwill, net of tax |                                     |   |       |        |      |   |       |        |  |   | 5,100  |       
|                            |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|                            |                                               | Adjusted net income                 |   | $      | 44,771 |      |   | $      | 29,294 |  |   | $      | 24,258 | 
|                            |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|Basic earnings per share:   |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|                            | As reported                                   |                                     | $ | 1.48   |        |      | $ | 1.13   |        |  | $ | 0.76   |       
|                            | Add back amortization of goodwill, net of tax |                                     |   |       |        |      |   |       |        |  |   | 0.20   |       
|                            |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|                            |                                               | Adjusted basic earnings per share   |   | $      | 1.48   |      |   | $      | 1.13   |  |   | $      | 0.96   | 
|                            |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|Diluted earnings per share: |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|                            | As reported                                   |                                     | $ | 1.42   |        |      | $ | 1.11   |        |  | $ | 0.75   |       
|                            | Add back amortization of goodwill, net of tax |                                     |   |       |        |      |   |       |        |  |   | 0.20   |       
|                            |                                               |                                     |   |        |        |      |   |        |        |  |   |       
|                            |                                               | Adjusted diluted earnings per share |   | $      | 1.42   |      |   | $      | 1.11   |  |   | $      | 0.95   | 
|                            |                                               |                                     |   |        |        |      |   |        |        |  |   |       

Investments

Investments in unconsolidated subsidiaries are
accounted for using the equity method when the Company has
significant influence over the operating and financial policies
(generally an investment of 2050%). The goodwill arising
on the acquisition of an associate is included within the
carrying amount of the associate.

Retirement
Benefit Costs

Payments to defined contribution retirement plans
are expensed as they are incurred. Payments made to
state-managed retirement plans are dealt with as defined
contribution plans where the Companys obligations under
the plans are equivalent to those arising in a defined
contribution retirement plan.

For defined benefit retirement plans, the cost of
providing retirement benefits is determined using the projected
unit credit method, with the actuarial valuations being carried
out at each balance sheet date. Unrecognized actuarial gains and
losses which exceed 10% of the greater of the present value of
the Companys pension obligations or the fair value of the
plans assets are amortized over the expected average
remaining working lives of the employees participating in the
plans. Actuarial gains and losses which are within 10% of the
present value of the Companys pension obligations or the
fair value of the plans assets are carried forward. Past
service costs are recognized immediately to the extent that the
benefits are already vested, and otherwise are amortized on a
straight-line basis over the average period until the amended
benefits become vested.

F-11



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


The amount recognized as retirement fund
obligations in the accompanying consolidated balance sheets
represents the present value of the defined benefit obligations
as adjusted for unrecognized actuarial gains and losses and
unrecognized past service costs, and reduced by the fair value
of the plans assets.

Fair Values
of Financial Instruments

The Companys principal financial assets are
cash and cash equivalents and trade and other receivables. The
carrying amounts of cash and cash equivalents and trade and
other receivables approximate fair value because of the short
maturities of these instruments.

Financial liabilities and equity instruments are
classified according to the substance of the contractual
agreements entered into. Significant financial liabilities
include trade and other payables, interest-bearing bank lines of
credit and bank loans, and capital lease obligations. The
carrying amounts of bank lines of credit and the majority of
other long-term borrowings approximate fair values because the
interest rates are based upon variable reference rates.
Interest-bearing bank loans and bank lines of credit are
recorded at the proceeds received. Interest expense, including
premiums payable on settlement or redemption, is accounted for
on an accrual basis.

Equity instruments are recorded at the proceeds
received, net of direct issue costs.



| |                
| | ---------------
| | Risk Management

The Companys credit risk is primarily
attributable to its trade receivables. The amounts presented in
the accompanying consolidated balance sheets are net of
allowances for doubtful receivables, estimated by the
Companys management based on prior experience and the
current economic environment. The Company has no significant
concentration of credit risk, with exposure spread over a large
number of customers.

The credit risk on liquid funds and derivative
financial instruments is limited because the counter parties are
banks with high credit ratings assigned by international credit
rating agencies.

In order to manage its exposure to foreign
exchange risks, the Company enters into forward exchange
contracts. At the end of each accounting period, the forward
exchange contracts are marked to fair value and the resulting
gains and losses are recorded in the income statement as part of
freight consolidation costs.



| |                                     
| | ------------------------------------
| | Recent Accounting
    Pronouncements

In April 2002, the Financial Accounting Standards
Board (FASB) issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB No. 13
and Technical Corrections (SFAS No. 145). SFAS
No. 145 rescinds FASB Statement No. 4, Reporting
Gains and Losses from Extinguishment of Debt, and an
amendment of that Statement, FASB Statement No. 64,
Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements. This statement also rescinds FASB Statement
No. 44, Accounting for Intangible Assets of Motor
Carriers. This statement amends FASB Statement No. 13,
Accounting for Leases, to eliminate an inconsistency
between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback
transactions. This statement also amends other existing
authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability
under changed conditions. The Company adopted the provisions of
SFAS No. 145 as of February 1, 2003 and such adoption
had no impact on its consolidated financial position or results
of operations.

In June 2002, the FASB issued SFAS
No. 146, Accounting for Costs Associated with Exit or
Disposal Activities (SFAS No. 146). SFAS No. 146
addresses financial accounting and reporting for costs
associated with exit or disposal activities and nullifies
Emerging Issues Task Force Issue No. 94-3, Liability
Recognition

F-12



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs
Incurred in a Restructuring). This
statement is effective for exit or disposal activities that are
initiated after December 31, 2002. The Company adopted the
provisions of SFAS No. 146 as of February 1, 2003 and
such adoption did not have a material impact on its consolidated
financial position or results of operations.

In December 2002, the FASB issued SFAS
No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure 
an amendment of FASB Statement No. 123 (SFAS
No. 148). SFAS No. 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation (SFAS
No. 123), to provide alternative methods of transition for
a voluntary change to the fair value based method of accounting
for stock-based employee compensation and to amend the
disclosure requirements regarding the method of accounting for
stock-based employee compensation and the effect of the method
used on reported results. This statement is effective for fiscal
years ending after December 15, 2003, while certain
disclosure provisions are effective for financial statements for
fiscal years ending after December 15, 2002. The Company
adopted the annual disclosure provisions of SFAS No. 148 in
its financial reports for its year ended January 31, 2003
and the interim disclosure provisions in its financial reports
for its year beginning February 1, 2003. The adoption of
this statement did not have a material impact on its
consolidated financial position or results of operations.

In January 2003, the FASB issued FASB
Interpretation No. 46, Consolidation of Variable
Interest Entities (FIN No. 46). FIN No. 46
clarifies the application of Accounting Research Bulletin
No. 51, Consolidated Financial Statement, to certain
entities in which equity investors do not have the
characteristics of a controlling financial interest or do not
have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support
from other parties. In December 2003, the FASB revised FASB
Interpretation No. 46 (revised December 2003),
Consolidation of Variable Interest Entities [FIN
No. 46(R)]. FIN No. 46(R) replaces FIN No. 46 in
its entirety. FIN No. 46(R) exempts certain entities from
its requirements and clarifies certain complexities arising
during the initial implementation of FIN No. 46. This
revised interpretation is effective for reporting periods that
end after March 15, 2004. The Company expects that the
adoption of this interpretation will have no material impact on
its consolidated financial position or results of operations.

In December 2003, the FASB issued SFAS
No. 132 (revised 2003), Employers Disclosures
about Pensions and Other Postretirement Benefits (SFAS
No. 132). SFAS No. 132 retains the existing disclosure
requirements for pensions and other postretirement benefits and
requires additional disclosures for pension and other
postretirement benefit plan assets, obligations and net cost in
financial statements. In addition, SFAS No. 132 requires
disclosures of certain plan information on a quarterly basis in
interim financial statements. This statement did not change the
methodologies underlying the measurement of obligations or
recognition of expenses. This statement is effective for fiscal
years ending after December 15, 2003 for all domestic
(United States) plans. As permitted by the statement, the
Company will adopt the additional disclosure provisions for its
foreign plans for the year ending January 31, 2005. The
Company expects that the adoption of this statement will have no
material impact on its consolidated financial position or
results of operations.

In May 2003, the FASB issued SFAS
No. 150 (SFAS No. 150), Accounting for Certain
Financial Instruments with Characteristics of both Liabilities
and Equity. SFAS No. 150 establishes standards for how
an issuer classifies and measures certain financial instruments
with characteristics of both liabilities and equity. This
statement requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset
in some circumstances). The provisions of this statement are
effective for financial instruments entered into or modified
after May 31, 2003, and otherwise are effective at the
beginning of the first interim period beginning after
June 15, 2003. The Company adopted the provisions of SFAS
No. 150 as of August 1, 2003 and such adoption had no
impact on its consolidated financial position or results of
operations.

F-13



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002




| |                  
| | -----------------
| | Reclassifications

Certain reclassifications have been made in the
2003 and 2002 financial statements to conform to the 2004
presentation.

2.     Acquisitions

The following acquisitions have all been
accounted for using the purchase method of accounting. On the
acquisition of a business, where the cost of the acquisition
exceeds the fair value attributable to the purchased net assets,
the difference is treated as goodwill. All acquisitions are
primarily engaged in providing cargo transportation logistics
management, including international air and ocean freight
forwarding, customs brokerage and contract logistics services.
The results of acquired businesses have been included in the
Companys consolidated financial statements from the dates
of acquisition.



| |                                        
| | ---------------------------------------
| | For the Year Ended January 31,
    2004

Effective May 1, 2003, the Company acquired
100% of the issued and outstanding share capital of IndAir
Carriers (Pvt) Ltd, incorporated in India, for an initial
purchase price of approximately $1.7 million.

Effective July 1, 2003, the Company acquired
50% of the issued and outstanding share capital of Kite,
incorporated in South Africa, for an initial purchase price of
approximately $5.3 million.



| |                                        
| | ---------------------------------------
| | For the Year Ended January 31,
    2003

Effective October 1, 2002, the Company
acquired 100% of the issued and outstanding share capital of
Standard, incorporated in South Carolina, as part of its plan to
expand its contract logistics services, for an initial purchase
price of approximately $48,830, consisting of approximately
$45,830 in cash and the issuance by the Company of $3,000 worth
of restricted ordinary shares (164,384 shares). In addition to
the initial payment, the terms of the acquisition agreement
provide for additional consideration of up to approximately
$12,500 contingent upon the future performance of Standard over
the two-year period ending September 30, 2004, of which
$4,000 was placed in escrow at the time of the acquisition. For
the twelve-month period ended September 30, 2003, an
additional $8,197, which includes the release of $4,000 which
was placed in escrow, was paid to the sellers of Standard and
was recorded as an addition to goodwill. All such additional
consideration will be recorded as additions to goodwill. We
expect that the amortization of goodwill for tax purposes will
be fully deductible. The following table summarizes the
estimated fair value of the assets acquired and liabilities
assumed at the date of acquisition, including the subsequent
contingent earn-out payment of $8,197.

|                              |                       |   |        |        | 
|----------------------------- | --------------------- | - | ------ | ------ | 
|Current assets                |                       | $ | 23,316 |       
|Deferred taxes                |                       |   | 4,711  |       
|Property, plant and equipment |                       |   | 4,068  |       
|Intangible assets             |                       |   | 9,195  |       
|Goodwill                      |                       |   | 25,617 |       
|                              |                       |   |        |       
|                              | Total assets acquired |   |        | 66,907 | 
|Liabilities assumed           |                       |   | (9,880 | )     
|                              |                       |   |        |       
|                              | Net assets acquired   |   | $      | 57,027 | 
|                              |                       |   |        |       

On November 1, 2002, the Company acquired
the entire issued share capital of Zeracon Limited, incorporated
in the United Kingdom, for an initial purchase price of
approximately $2,533. The final total

F-14



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


consideration for this acquisition is dependent
on certain performance criteria being achieved over the
three-year period following the date of acquisition.



| |                                        
| | ---------------------------------------
| | For the Year Ended January 31,
    2002

On February 1, 2001 the Company acquired 51%
of Pership Logistics (Private) Limited, incorporated in Sri
Lanka, for consideration of approximately $1,300.

On May 1, 2001, the Company acquired 51% of
Eilat Overseas Limited, incorporated in Israel for consideration
of approximately $700.

On January 25, 2002 the Company acquired
100% of the issued and outstanding share capital of Grupo SLi
& Union S.L. (SLi), incorporated in Spain, for initial cash
payments totaling approximately $13,100, with the final purchase
price being dependent on certain performance criteria being
achieved over the four-year period subsequent to the
acquisition. The first earn-out payment was made in cash in
fiscal 2004 and totaled approximately $5,817.

The following table shows the supplemental pro
forma information of these acquisitions as though each of these
had occurred at the beginning of the fiscal year, and for the
immediately preceding year as if these had occurred at the
beginning of that fiscal year.

|      |              |                               |   |           |           |            |   |        |        |  |   |      |      | 
|----- | ------------ | ----------------------------- | - | --------- | --------- | ---------- | - | ------ | ------ |  | - | ---- | ---- | 
|      |              |                              
|      |              | Fiscal year ended January 31,
|      |              |                              
|      |              |                               |   | Diluted  
|      |              | Gross                         |   | Net       |           | earnings  
|      |              | revenue                       |   | income    |           | per share*
|      |              |                               |   |           |           |           
|2004: |              |                               |   |           |           |            |   |        |        |  |   |     
|      | As reported  |                               | $ | 1,502,875 |           |            | $ | 44,771 |        |  | $ | 1.42 |     
|      | Acquisitions |                               |   | 11,885    |           |            |   | 5      |        |  |   | 0.00 |     
|      |              |                               |   |           |           |            |   |        |        |  |   |     
|      |              | Total                         |   | $         | 1,514,760 |            |   | $      | 44,776 |  |   |      | 1.42 | 
|      |              |                               |   |           |           |            |   |        |        |  |   |     
|2003: |              |                               |   |           |           |            |   |        |        |  |   |     
|      | As reported  |                               | $ | 1,170,060 |           |            | $ | 29,294 |        |  | $ | 1.11 |     
|      | Acquisitions |                               |   | 134,256   |           |            |   | 1,218  |        |  |   | 0.05 |     
|      |              |                               |   |           |           |            |   |        |        |  |   |     
|      |              | Total                         |   | $         | 1,304,316 |            |   | $      | 30,512 |  |   |      | 1.15 | 
|      |              |                               |   |           |           |            |   |        |        |  |   |     



---



|  |                                                                                                                                                                                                                                                                                                                                                             
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Earnings per share calculated based on 31,479,887
    and 26,613,990 diluted ordinary shares for the years ended
    January 31, 2004 and 2003, respectively. The diluted
    earnings per share amounts as reported plus acquisitions for the
    year ended January 31, 2003 do not add to the total pro
    forma amounts due to the effects of rounding.

An analysis of the net outflow of cash and cash
equivalents in respect of acquisitions and contingent earn-out
payments is as follows:

|                                                                                                             |  |                               |        |      |  |      |        |   |  |   |        |  
|------------------------------------------------------------------------------------------------------------ |  | ----------------------------- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                                                                             |  |                              
|                                                                                                             |  | Fiscal Year Ended January 31,
|                                                                                                             |  |                              
|                                                                                                             |  | 2004                          |        | 2003 |  | 2002
|                                                                                                             |  |                               |        |      |  |     
|Cash consideration                                                                                           |  | $                             | 30,856 |      |  | $    | 61,754 |   |  | $ | 20,158 |  
|Cash at bank acquired                                                                                        |  |                               | (568   | )    |  |      | (10    | ) |  |   | (556   | )
|Bank overdrafts acquired                                                                                     |  |                               |       |      |  |      | 1,200  |   |  |   | 2,266  |  
|                                                                                                             |  |                               |        |      |  |      |        |   |  |   |        |  
|Net outflow of cash and cash equivalents in
    respect of the acquisitions and contingent earn-out payments |  | $                             | 30,288 |      |  | $    | 62,944 |   |  | $ | 21,868 |  
|                                                                                                             |  |                               |        |      |  |      |        |   |  |   |        |  

F-15



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


3.     Income
Taxes

Provision for income taxes is comprised of the
following:

|                             |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |        | 
|---------------------------- | -------- | ------- | ----- | ----- |  | ------- | --- | ----- |  | - | ------ | ------ | - | - | ------ | ------ | 
|                             |          | Federal |       | State |  | Foreign |     | Total
|                             |          |         |       |       |  |         |     |      
|Year ended January 31, 2004: |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |       
|                             | Current  |         | $     | 849   |  |         | $   | 471   |  |   | $      | 10,786 |   |   | $      | 12,106 | 
|                             | Deferred |         |       | 1,205 |  |         |     | 417   |  |   |        | (325   | ) |   |        | 1,297  | 
|                             |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |       
|                             |          | $       | 2,054 |       |  | $       | 888 |       |  | $ | 10,461 |        |   | $ | 13,403 |       
|                             |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |       
|Year ended January 31, 2003: |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |       
|                             | Current  |         | $     | 12    |  |         | $   | 278   |  |   | $      | 11,929 |   |   | $      | 12,219 | 
|                             | Deferred |         |       |      |  |         |     |      |  |   |        | 273    |   |   |        | 273    | 
|                             |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |       
|                             |          | $       | 12    |       |  | $       | 278 |       |  | $ | 12,202 |        |   | $ | 12,492 |       
|                             |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |       
|Year ended January 31, 2002: |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |       
|                             | Current  |         | $     |      |  |         | $   | 128   |  |   | $      | 7,633  |   |   | $      | 7,761  | 
|                             | Deferred |         |       | 517   |  |         |     | 89    |  |   |        | (397   | ) |   |        | 209    | 
|                             |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |       
|                             |          | $       | 517   |       |  | $       | 217 |       |  | $ | 7,236  |        |   | $ | 7,970  |       
|                             |          |         |       |       |  |         |     |       |  |   |        |        |   |   |        |       

A reconciliation of the Companys statutory
tax rate to the effective tax rate is as follows:

|                                             |                                           |             |      |      |   |      |      |      |  |  |      |      |  
|-------------------------------------------- | ----------------------------------------- | ----------- | ---- | ---- | - | ---- | ---- | ---- |  |  | ---- | ---- | -
|                                             |                                           |            
|                                             |                                           | Year Ended 
|                                             |                                           | January 31,
|                                             |                                           |            
|                                             |                                           | 2004        |      | 2003 |   | 2002
|                                             |                                           |             |      |      |   |     
|Statutory income tax rate for the Company(1) |                                           |             |     | %    |   |      |     | %    |  |  |     | %   
|Increase/(decrease) in rate resulting from:  |                                           |             |      |      |   |      |      |      |  |  |      |     
|                                             | Foreign income tax differential           |             |      | 20.8 |   |      |      | 21.0 |  |  |      | 17.1 |  
|                                             | Non-deductible expenses                   |             |      | 2.4  |   |      |      | 2.5  |  |  |      | 8.9  |  
|                                             | (Decrease)/increase in income tax rates   |             |      | (0.2 | ) |      |      | 2.1  |  |  |      | (0.2 | )
|                                             | Deferred income tax assets not recognized |             |      |     |   |      |      |     |  |  |      | (0.8 | )
|                                             | Change in valuation allowance             |             |      | (0.7 | ) |      |      | 1.9  |  |  |      | 1.8  |  
|                                             | Other                                     |             |      | 0.1  |   |      |      | 1.4  |  |  |      | 1.2  |  
|                                             |                                           |             |      |      |   |      |      |      |  |  |      |     
|Effective income tax rate                    |                                           |             | 22.4 | %    |   |      | 28.9 | %    |  |  | 28.0 | %   
|                                             |                                           |             |      |      |   |      |      |      |  |  |      |     



---



|    |                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------
|(1) | The statutory income tax rate in the British
    Virgin Islands, where the Company is incorporated, is nil.

F-16



---



##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


The deferred income tax assets and deferred
income tax liabilities resulted from temporary differences
associated with the following:

|                                            |                                   |                   |        |        |   |   |        |        |  
|------------------------------------------- | --------------------------------- | ----------------- | ------ | ------ | - | - | ------ | ------ | -
|                                            |                                   |                  
|                                            |                                   | As of January 31,
|                                            |                                   |                  
|                                            |                                   | 2004              |        | 2003  
|                                            |                                   |                   |        |       
|Gross deferred income tax assets:           |                                   |                   |        |        |   |   |        |       
|                                            | Allowance for doubtful accounts   |                   | $      | 2,828  |   |   | $      | 1,559  |  
|                                            | Accruals not currently deductible |                   |        | 4,025  |   |   |        | 3,622  |  
|                                            | Property, plant and equipment     |                   |        | 266    |   |   |        | 403    |  
|                                            | Goodwill                          |                   |        | 513    |   |   |        | 548    |  
|                                            | Net operating loss carryforwards  |                   |        | 2,905  |   |   |        | 3,266  |  
|                                            | Other                             |                   |        | 368    |   |   |        | 133    |  
|                                            |                                   |                   |        |        |   |   |        |       
|Total gross deferred income tax assets      |                                   |                   | 10,905 |        |   |   | 9,531  |       
|Gross deferred income tax liabilities:      |                                   |                   |        |        |   |   |        |       
|                                            | Property, plant and equipment     |                   |        | (267   | ) |   |        | (839   | )
|                                            | Retirement benefit obligations    |                   |        | (1,538 | ) |   |        | (1,367 | )
|                                            | Goodwill and intangible assets    |                   |        | (1,944 | ) |   |        |       |  
|                                            | Other                             |                   |        | (1,555 | ) |   |        | (732   | )
|                                            |                                   |                   |        |        |   |   |        |       
|Total gross deferred income tax liabilities |                                   |                   | (5,304 | )      |   |   | (2,938 | )     
|Valuation allowance                         |                                   |                   | (799   | )      |   |   | (5,906 | )     
|                                            |                                   |                   |        |        |   |   |        |       
|Net deferred income tax asset               |                                   | $                 | 4,802  |        |   | $ | 687    |       
|                                            |                                   |                   |        |        |   |   |        |       

As of January 31, 2004, the Company has U.S.
federal net operating loss carryforwards of approximately
$2,727. These net operating loss carryforwards will begin to
expire in the year ending January 31, 2022. The Company has
operating loss carryforwards relating to state taxes in the U.S.
of approximately $5,519, which expire at various dates from the
year ending January 31, 2011 through January 31, 2022.
The Company also has approximately $10,800 of net operating loss
carryforwards in various countries excluding the United States.
These expire at various dates with certain locations having
indefinite time periods in which to use their net operating loss
carryforwards. During the year ended January 31, 2004, the
Company utilized approximately $5,599 of net operating loss
carryforwards.

The Company has established a valuation allowance
in accordance with the provisions of SFAS No. 109,
Accounting for Income Taxes. The valuation allowance
primarily relates to the net operating losses of subsidiaries.
The Company continually reviews the adequacy of valuation
allowances and establishes the allowances when it is determined
that it is more likely than not that the benefits will not be
realized. During the years ended January 31, 2004 and 2003,
the valuation allowance decreased by $5,107 and increased by
$826, respectively. Of the $5,107 decrease in the year ended
January 31, 2004, $4,711 represents the reduction of
goodwill due to the reversal of the valuation allowance on
deferred taxes as discussed in Note 1.

F-17



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


4.     Earnings per
Share

Earnings per share are calculated as follows:

|                                                                                                 |  |                        |            |      |  |      |            |  |  |   |            | 
|------------------------------------------------------------------------------------------------ |  | ---------------------- | ---------- | ---- |  | ---- | ---------- |  |  | - | ---------- | 
|                                                                                                 |  |                       
|                                                                                                 |  | Year Ended January 31,
|                                                                                                 |  |                       
|                                                                                                 |  | 2004                   |            | 2003 |  | 2002
|                                                                                                 |  |                        |            |      |  |     
|Basic earnings per share:                                                                        |  |                        |            |      |  |      |            |  |  |   |            | 
|Net income                                                                                       |  | $                      | 44,771     |      |  | $    | 29,294     |  |  | $ | 19,158     | 
|Weighted average number of ordinary shares                                                       |  |                        | 30,291,543 |      |  |      | 25,932,164 |  |  |   | 25,233,394 | 
|                                                                                                 |  |                        |            |      |  |      |            |  |  |   |            | 
|Basic earnings per share                                                                         |  | $                      | 1.48       |      |  | $    | 1.13       |  |  | $ | 0.76       | 
|                                                                                                 |  |                        |            |      |  |      |            |  |  |   |            | 
|Diluted earnings per share:                                                                      |  |                        |            |      |  |      |            |  |  |   |            | 
|Net income                                                                                       |  | $                      | 44,771     |      |  | $    | 29,294     |  |  | $ | 19,158     | 
|Weighted average number of ordinary shares                                                       |  |                        | 30,291,543 |      |  |      | 25,932,164 |  |  |   | 25,233,394 | 
|Incremental shares required for diluted earnings
    per share related to employee stock options |  |                        | 1,188,344  |      |  |      | 572,237    |  |  |   | 268,470    | 
|                                                                                                 |  |                        |            |      |  |      |            |  |  |   |            | 
|Diluted weighted average number of shares                                                        |  |                        | 31,479,887 |      |  |      | 26,504,401 |  |  |   | 25,501,864 | 
|                                                                                                 |  |                        |            |      |  |      |            |  |  |   |            | 
|Diluted earnings per share                                                                       |  | $                      | 1.42       |      |  | $    | 1.11       |  |  | $ | 0.75       | 
|                                                                                                 |  |                        |            |      |  |      |            |  |  |   |            | 
|Cash dividends paid per share                                                                    |  | $                      | 0.095      |      |  | $    | 0.075      |  |  | $ | 0.075      | 
|                                                                                                 |  |                        |            |      |  |      |            |  |  |   |            | 

This calculation excludes the 344,666, 412,039
and 457,412 ordinary shares held in the incentive trusts for the
Union-Transport Share Incentive Plan and for the Executive Share
Plan as of January 31, 2004, 2003 and 2002, respectively.

The above number of shares excludes any
contingently issuable ordinary shares. There were 152,500,
124,500 and 223,114 options outstanding, respectively, and for
the years ended January 31, 2004, 2003 and 2002,
respectively, which were excluded from the computation of
diluted earnings per share because the options exercise
prices were greater than the average market price of the
ordinary shares and were therefore anti-dilutive.

5.     Property,
Plant and Equipment

At January 31, 2004 and 2003, property,
plant and equipment at cost and accumulated depreciation were:

|                                          |  |             |         |      |  |   |         |  
|----------------------------------------- |  | ----------- | ------- | ---- |  | - | ------- | -
|                                          |  |            
|                                          |  | January 31,
|                                          |  |            
|                                          |  | 2004        |         | 2003
|                                          |  |             |         |     
|Land                                      |  | $           | 2,992   |      |  | $ | 2,541   |  
|Buildings and leasehold improvements      |  |             | 22,164  |      |  |   | 18,894  |  
|Furniture, fixtures and equipment         |  |             | 77,916  |      |  |   | 60,735  |  
|Vehicles                                  |  |             | 12,840  |      |  |   | 9,138   |  
|                                          |  |             |         |      |  |   |         |  
|Property, plant and equipment, gross      |  |             | 115,912 |      |  |   | 91,308  |  
|Accumulated depreciation and amortization |  |             | (61,491 | )    |  |   | (46,742 | )
|                                          |  |             |         |      |  |   |         |  
|Property, plant and equipment, net        |  | $           | 54,421  |      |  | $ | 44,566  |  
|                                          |  |             |         |      |  |   |         |  

F-18



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


6.     Trade Payables
and Other Accrued Liabilities

At January 31, 2004 and 2003, trade payables
and other accrued liabilities were comprised of the following:

|                                                   |                      |             |         |         |  |   |         |         | 
|-------------------------------------------------- | -------------------- | ----------- | ------- | ------- |  | - | ------- | ------- | 
|                                                   |                      |            
|                                                   |                      | January 31,
|                                                   |                      |            
|                                                   |                      | 2004        |         | 2003   
|                                                   |                      |             |         |        
|Trade payables:                                    |                      |             |         |         |  |   |         |        
|                                                   | Due to agents        |             | $       | 3,331   |  |   | $       | 2,803   | 
|                                                   | Other trade payables |             |         | 206,369 |  |   |         | 176,166 | 
|                                                   |                      |             |         |         |  |   |         |        
|Trade payables                                     |                      |             | 209,700 |         |  |   | 178,969 |        
|Interest payable                                   |                      |             | 23      |         |  |   | 110     |        
|Other payables and accruals                        |                      |             | 59,349  |         |  |   | 57,469  |        
|                                                   |                      |             |         |         |  |   |         |        
|Total trade payables and other accrued liabilities |                      | $           | 269,072 |         |  | $ | 236,548 |        
|                                                   |                      |             |         |         |  |   |         |        

7.     Borrowings

At January 31, 2004 and 2003, borrowings
were comprised of the following:

|                          |  |                   |        |      |  |   |        | 
|------------------------- |  | ----------------- | ------ | ---- |  | - | ------ | 
|                          |  |                  
|                          |  | As of January 31,
|                          |  |                  
|                          |  | 2004              |        | 2003
|                          |  |                   |        |     
|Bank lines of credit      |  | $                 | 18,180 |      |  | $ | 33,458 | 
|Short-term borrowings     |  |                   | 1,312  |      |  |   | 9,121  | 
|Long-term bank borrowings |  |                   | 93     |      |  |   | 199    | 
|                          |  |                   |        |      |  |   |        | 
|                          |  | $                 | 19,585 |      |  | $ | 42,778 | 
|                          |  |                   |        |      |  |   |        | 

The amounts due as of January 31, 2004 are
repayable in the following fiscal years:

|                    |  |   |        | 
|------------------- |  | - | ------ | 
|2005                |  | $ | 19,492 | 
|2006                |  |   | 31     | 
|2007                |  |   | 34     | 
|2008                |  |   | 28     | 
|2009                |  |   |       | 
|2010 and thereafter |  |   |       | 
|                    |  |   |        | 
|                    |  | $ | 19,585 | 
|                    |  |   |        | 

F-19



---



##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


Borrowings are denominated primarily in U.S.
dollars, British pounds sterling, euros and other currencies, as
follows (presented in United States dollar equivalents):

|                        |  |     |        |     |  |      |       |       |  |       |       |  |  |   |        |  |  |   |        | 
|----------------------- |  | --- | ------ | --- |  | ---- | ----- | ----- |  | ----- | ----- |  |  | - | ------ |  |  | - | ------ | 
|                        |  | US$ |        | GBP |  | Euro |       | Other |  | Total
|                        |  |     |        |     |  |      |       |       |  |      
|As of January 31, 2004: |  |     |        |     |  |      |       |       |  |       |       |  |  |   |        |  |  |   |        | 
|Bank lines of credit    |  | $   |       |     |  | $    | 57    |       |  | $     | 4,194 |  |  | $ | 13,929 |  |  | $ | 18,180 | 
|Short-term borrowings   |  |     |       |     |  |      |      |       |  |       | 345   |  |  |   | 967    |  |  |   | 1,312  | 
|Long-term bank loans    |  |     |       |     |  |      |      |       |  |       |      |  |  |   | 93     |  |  |   | 93     | 
|As of January 31, 2003: |  |     |        |     |  |      |       |       |  |       |       |  |  |   |        |  |  |   |        | 
|Bank lines of credit    |  | $   | 17,491 |     |  | $    | 1,143 |       |  | $     | 4,736 |  |  | $ | 10,088 |  |  | $ | 33,458 | 
|Short-term borrowings   |  |     |       |     |  |      |      |       |  |       | 464   |  |  |   | 8,657  |  |  |   | 9,121  | 
|Long-term bank loans    |  |     |       |     |  |      |      |       |  |       |      |  |  |   | 199    |  |  |   | 199    | 

As of January 31, 2004 and 2003, the
weighted average interest rate on the Companys outstanding
debt was 5.4% and 5.7%, respectively. An analysis of interest
rates by currency is as follows (presented in United States
dollar equivalents):

|                        |  |     |     |     |  |      |     |       |  |  |          |  |  |  |          | 
|----------------------- |  | --- | --- | --- |  | ---- | --- | ----- |  |  | -------- |  |  |  | -------- | 
|                        |  | US$ |     | GBP |  | Euro |     | Other
|                        |  | %   |     | %   |  | %    |     | %    
|                        |  |     |     |     |  |      |     |      
|As of January 31, 2004: |  |     |     |     |  |      |     |       |  |  |          |  |  |  |          | 
|Bank lines of credit    |  |     |    |     |  |      | 5.3 |       |  |  | 2.4-10.1 |  |  |  | 0.5-16.8 | 
|Short-term borrowings   |  |     |    |     |  |      |    |       |  |  | 3.3-3.5  |  |  |  | 0.6-5.0  | 
|Long-term bank loans    |  |     |    |     |  |      |    |       |  |  |         |  |  |  | 6.3-17.8 | 
|As of January 31, 2003: |  |     |     |     |  |      |     |       |  |  |          |  |  |  |          | 
|Bank lines of credit    |  |     | 4.0 |     |  |      | 5.5 |       |  |  | 4.0-9.3  |  |  |  | 5.0-17.8 | 
|Short-term borrowings   |  |     |    |     |  |      |    |       |  |  | 6.0-7.1  |  |  |  | 2.0-15.5 | 
|Long-term bank loans    |  |     |    |     |  |      |    |       |  |  |         |  |  |  | 9.8-17.8 | 

Borrowings on bank lines of credit at
January 31, 2004 and 2003 of $15,101 and $24,066,
respectively, are collateralized by trade receivables, other
assets, pledged cash deposits, pledges placed over shares of
certain subsidiaries or a combination of these, and are
repayable on demand. Trade receivables of $45,243 are pledged as
security against certain of the Companys borrowings, which
amount to $6,566 at January 31, 2004.

The Company has credit facilities with Nedcor
Bank Limited. As of January 31, 2004, the outstanding
balances under these credit facilities was approximately
$13,448. The weighted average interest rate on the outstanding
balances under these facilities was 6.4% at January 31,
2004. The facilities are available on an ongoing basis until
further notice, subject to Nedcor Banks credit review
procedures and may be terminated by the bank at any time. The
facilities are secured by cross guarantees and indemnities of
selected subsidiary companies. The Company believes that such
loans were made in the ordinary course of business on
substantially the same terms, including interest rate and
collateral, as those prevailing at the time for comparable
transactions.

The Companys credit facilities at
January 31, 2004 allow for borrowings and guarantees of up
to $84,933 and $53,989, respectively, depending on available
receivables and other restrictions. Borrowings under these
facilities totaled approximately $18,180 as of January 31,
2004. The purpose of these facilities is to provide the Company
with working capital, customs bonds and guarantees. Due to the
global nature of the Company, a number of financial institutions
are utilized to provide the abovementioned facilities.
Consequently, the uses of these facilities are normally
restricted to the country in which they are offered.

F-20



---



##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


8.     Supplemental
Financial Information



| |                         
| | ------------------------
| | Other Operating Expenses

Included in other operating expenses are
facilities and communication costs for the years ended
January 31, 2004, 2003 and 2002 of $67,711, $45,948 and
$37,300, respectively. The balance of other operating expenses
is comprised of selling, general and administrative costs.



| |                                       
| | --------------------------------------
| | Supplemental Cash Flow
    Information

|                                                         |              |                        |       |        |   |      |       |       |  |  |     |       | 
|-------------------------------------------------------- | ------------ | ---------------------- | ----- | ------ | - | ---- | ----- | ----- |  |  | --- | ----- | 
|                                                         |              |                       
|                                                         |              | Year Ended January 31,
|                                                         |              |                       
|                                                         |              | 2004                   |       | 2003   |   | 2002
|                                                         |              |                        |       |        |   |     
|Net cash (received)/paid for:                            |              |                        |       |        |   |      |       |       |  |  |     |      
|                                                         | Interest     |                        | $     | (950   | ) |      | $     | 432   |  |  | $   | 1,264 | 
|                                                         | Income taxes |                        |       | 10,090 |   |      |       | 9,152 |  |  |     | 6,674 | 
|Capital lease obligations incurred to acquire
    assets |              |                        | 2,049 |        |   |      | 2,472 |       |  |  | 927 |      

9.     Retirement
Benefit Plans

Defined
Contribution Plans

In certain countries, the Company operates
defined contribution retirement plans for all qualifying
employees. The assets of the plans are held separately from
those of the Company, in funds under the control of trustees. In
other countries, the qualifying employees are members of
state-managed retirement benefit plans. The Company is required
to contribute a specified percentage of the payroll costs to the
retirement benefit plan to fund the benefits. The only
obligation of the Company with respect to the retirement benefit
plans is to make the required contribution. For the years ended
January 31, 2004, 2003 and 2002, the Companys
contributions to the above plans were $6,298, $3,053 and $2,457,
respectively.



| |                      
| | ---------------------
| | Defined Benefit Plans

The Company operates defined benefit plans for
qualifying employees in certain countries. Under these plans
employees are entitled to retirement benefits as a certain
percentage of the employees final salary on attainment of
the qualifying retirement age. No other post-retirement benefits
are provided.

F-21



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


The following tables, based on the latest
valuations, summarize the funded status and amounts recognized
in the Companys financial statements for defined benefit
plans, which relate primarily to South Africa.

|                                                                                                                   |                              |                                              |                                      |        |        |       |        |        |        |       |        |       |       |       | 
|------------------------------------------------------------------------------------------------------------------ | ---------------------------- | -------------------------------------------- | ------------------------------------ | ------ | ------ | ----- | ------ | ------ | ------ | ----- | ------ | ----- | ----- | ----- | 
|                                                                                                                   |                              |                                             
|                                                                                                                   |                              | Year Ended January 31,                      
|                                                                                                                   |                              |                                             
|                                                                                                                   |                              | 2004                                         |                                      | 2003   |        | 2002 
|                                                                                                                   |                              |                                              |                                      |        |        |      
|Change in projected benefit
    obligations:                                                                       |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|Projected benefit obligation at beginning of year                                                                  |                              | $                                            | 14,942                               |        |        | $     | 9,945  |        |        | $     | 11,380 |      
|Service cost                                                                                                       |                              |                                              | 1,049                                |        |        |       | 641    |        |        |       | 660    |      
|Plan participants contributions                                                                                   |                              |                                              | 328                                  |        |        |       | 179    |        |        |       | 156    |      
|Interest cost                                                                                                      |                              |                                              | 1,697                                |        |        |       | 1,168  |        |        |       | 1,120  |      
|Amendments                                                                                                         |                              |                                              |                                     |        |        |       |       |        |        |       | 31     |      
|Actuarial (gain)/loss                                                                                              |                              |                                              | (36                                  | )      |        |       | (159   | )      |        |       | 1,348  |      
|Transfer to liability due to settlement                                                                            |                              |                                              |                                     |        |        |       |       |        |        |       | (209   | )    
|Benefits paid                                                                                                      |                              |                                              | (548                                 | )      |        |       | (401   | )      |        |       | (658   | )    
|Foreign exchange translation adjustment                                                                            |                              |                                              | 3,155                                |        |        |       | 3,569  |        |        |       | (3,883 | )    
|                                                                                                                   |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|                                                                                                                   |                              | Projected benefit obligations at end of year |                                      | $      | 20,587 |       |        | $      | 14,942 |       |        | $     | 9,945 |      
|                                                                                                                   |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|Change in plan assets:                                                                                             |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|Fair value of plan assets at beginning of year                                                                     |                              | $                                            | 13,584                               |        |        | $     | 10,598 |        |        | $     | 12,984 |      
|Actual returns/(losses) on assets                                                                                  |                              |                                              | 1,816                                |        |        |       | (688   | )      |        |       | 2,233  |      
|Employer contributions                                                                                             |                              |                                              | 762                                  |        |        |       | 417    |        |        |       | 544    |      
|Benefits paid                                                                                                      |                              |                                              | (548                                 | )      |        |       | (401   | )      |        |       | (658   | )    
|Transfer to liability due to settlement                                                                            |                              |                                              |                                     |        |        |       |       |        |        |       | (209   | )    
|Plan participants contribution                                                                                    |                              |                                              | 328                                  |        |        |       | 179    |        |        |       | 156    |      
|Foreign exchange translation adjustment                                                                            |                              |                                              | 2,922                                |        |        |       | 3,479  |        |        |       | (4,452 | )    
|                                                                                                                   |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|Fair value of plan assets at end of year                                                                           |                              | $                                            | 18,864                               |        |        | $     | 13,584 |        |        | $     | 10,598 |      
|                                                                                                                   |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|Reconciliation of funded status and net amount
    recognized in the accompanying consolidated balance
    sheets: |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|                                                                                                                   | Funded status at end of year |                                              | $                                    | (1,723 | )      |       | $      | (1,358 | )      |       | $      | 653   |      
|                                                                                                                   | Unrecognized net loss        |                                              |                                      | 5,571  |        |       |        | 4,967  |        |       |        | 1,845 |      
|                                                                                                                   |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|                                                                                                                   |                              |                                              | Net amount recognized at end of year |        | $      | 3,848 |        |        | $      | 3,609 |        |       | $     | 2,498 | 
|                                                                                                                   |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|Weighted average assumptions used to determine
    benefit obligations at end of year:                             |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|Discount rate                                                                                                      |                              |                                              | 611                                 | %      |        |       | 611   | %      |        |       | 611   | %    
|Rate of increase in future compensation levels                                                                     |                              |                                              | 9                                    | %      |        |       | 9      | %      |        |       | 9      | %    
|Expected long-term rate of return on assets                                                                        |                              |                                              | 14                                   | %      |        |       | 14     | %      |        |       | 14     | %    
|Weighted average assumptions used to determine
    net periodic benefit expense at end of year:                    |                              |                                              |                                      |        |        |       |        |        |        |       |        |      
|Discount rate                                                                                                      |                              |                                              | 611                                 | %      |        |       | 611   | %      |        |       | 611   | %    
|Rate of increase in future compensation levels                                                                     |                              |                                              | 9                                    | %      |        |       | 9      | %      |        |       | 9      | %    
|Expected long-term rate of return on assets                                                                        |                              |                                              | 14                                   | %      |        |       | 14     | %      |        |       | 14     | %    

F-22



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


Net periodic pension expense consists of:

|                                      |                              |                        |        |       |  |      |        |     |  |   |        |     | 
|------------------------------------- | ---------------------------- | ---------------------- | ------ | ----- |  | ---- | ------ | --- |  | - | ------ | --- | 
|                                      |                              |                       
|                                      |                              | Year Ended January 31,
|                                      |                              |                       
|                                      |                              | 2004                   |        | 2003  |  | 2002
|                                      |                              |                        |        |       |  |     
|Service cost component                |                              | $                      | 1,049  |       |  | $    | 641    |     |  | $ | 660    |    
|Plan participants contributions      |                              |                        | 328    |       |  |      | 179    |     |  |   | 156    |    
|Interest cost component               |                              |                        | 1,697  |       |  |      | 1,168  |     |  |   | 1,120  |    
|Expected return on assets             |                              |                        | (2,235 | )     |  |      | (1,671 | )   |  |   | (1,489 | )  
|Amortization of unrecognized net loss |                              |                        | 352    |       |  |      | 49     |     |  |   | 52     |    
|                                      |                              |                        |        |       |  |      |        |     |  |   |        |    
|                                      | Net periodic pension expense |                        | $      | 1,191 |  |      | $      | 366 |  |   | $      | 499 | 
|                                      |                              |                        |        |       |  |      |        |     |  |   |        |    

Amounts recognized in the balance sheet consist
of:

|                             |  |                   |        |      |  |      |        |   |  |   |       |  
|---------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  | - | ----- | -
|                             |  |                  
|                             |  | As of January 31,
|                             |  |                  
|                             |  | 2004              |        | 2003 |  | 2002
|                             |  |                   |        |      |  |     
|Prepaid benefit expenses     |  | $                 | 5,099  |      |  | $    | 4,625  |   |  | $ | 3,191 |  
|Accrued benefit expenses     |  |                   | (1,251 | )    |  |      | (1,016 | ) |  |   | (693  | )
|                             |  |                   |        |      |  |      |        |   |  |   |       |  
|Net prepaid benefit expenses |  | $                 | 3,848  |      |  | $    | 3,609  |   |  | $ | 2,498 |  
|                             |  |                   |        |      |  |      |        |   |  |   |       |  



|    |                     
|--- | --------------------
|10. | Shareholders Equity

During the years ended January 31, 2004,
2003 and 2002, the Companys Board of Directors declared a
dividend on the ordinary share capital of the Company of $0.095,
$0.075 and $0.075 per share, respectively, totaling $2,889,
$1,929 and $1,926, respectively.

On April 6, 2004, the Companys Board
of Directors declared an annual regular cash dividend on the
ordinary share capital of the Company of $0.115 per share
payable on May 21, 2004 to shareholders of record as of
April 30, 2004.



|    |                  
|--- | -----------------
|11. | Share-Based Plans

As of January 31, 2004, the Company had the
following share option plans, which are described in greater
detail later in this Note: Union-Transport Share Incentive Plan;
Executive Share Plan; 2000 Stock Option Plan; and Non-Executive
Directors Stock Option Plan.

In addition, on February 27, 2004, the
Companys shareholders (members) approved the UTi Worldwide
Inc. 2004 Long Term Incentive Plan (LTIP) which provides greater
flexibility with respect to the types of awards that may be
granted under the current plans. The LTIP is also described in
greater detail later in this Note.

Following the approval of the LTIP by
shareholders, the Company reduced the maximum number of ordinary
shares which may be issued pursuant to options granted under the
2000 Stock Option Plan by 1,300,000 shares. In addition, the
ordinary shares remaining available for future option grants in
the Union-Transport Share Incentive Plan and the Executive Share
Plan will be returned to, and cancelled by, the Company.

The number of shares available for grants under
the Non-Executive Directors Stock Option Plan was not affected
by the LTIP.

F-23



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002




| |                                                        
| | -------------------------------------------------------
| | Summary of the Union-Transport Share
    Incentive Plan

In September 1997, the Companys Board of
Directors (the Board) approved the Union-Transport Share
Incentive Plan (the Plan). For the purpose of the Plan, the
Board established the Union-Transport Share Incentive Trust (the
Trust). Officers, employees and non-executive directors
(Participants) selected by the Board are offered the opportunity
to enter into an agreement with the Trust to acquire ordinary
shares (Plan Shares).

Under the Plan, ordinary shares are sold by the
Trust to Participants upon the Participants execution of a
contract of sale, but the purchase price for the shares is not
payable immediately. Under the terms of the Plan, the purchase
price is payable by a Participant for Plan Shares and shall not
be less than $9.69 per share or the middle market price at which
the ordinary shares traded on the day immediately preceding the
day of acceptance of the offer by the Participant. Once a
Participant has accepted the offer to purchase shares, the
trustee pays for the shares at the offer price and establishes a
Participant loan (share debt) for the total purchase price,
which is repayable by the Participant to the Trust.

A Participants share debt bears interest at
such rate (if any) as may from time to time be determined by the
Board. Dividends on Plan Shares are paid to the Trust and are
applied in the following manner: in payment of interest on the
share debt; in payment to the Trust for reduction of share debt
(to such extent as the Board may determine); and, as to any
balance, to the relevant Participant.

Unless the Board determines otherwise, Plan
Shares may not be released to a Participant from the Plan or
from pledge to the Trust unless the share debt in respect of
such Plan Shares has been fully discharged. Provided that the
related share debt is discharged, Plan Shares are released at
the rate of 25% per year beginning on December 31, on the
fourth anniversary of the date of acceptance of the offer to
acquire Plan Shares. Except in the case of death or retirement,
the termination of a Participants employment with the
Company results in forfeiture of any Plan Shares not capable of
being released at the date of termination.

The Company applies the intrinsic value-based
methodology in accordance with APB No. 25 as permitted by
SFAS No. 123 in accounting for the Plan. In accordance with
APB No. 25, total compensation cost related to the Plan was
$131 for each of the three years ended January 31, 2004,
2003 and 2002, with corresponding increases to
shareholders equity.

No compensation expense has been recognized under
the fair value method; however, the Company has adopted the
disclosure-only provisions of SFAS No. 123. Had
compensation cost for Plan Shares awarded under the Plan been
determined based on their fair values at the grant dates
together with the other plans described herein, the
Companys net income, basic earnings per share and the
diluted earnings per share would have been as reflected in Note
1.

F-24



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


A summary of Plan activity is as follows:

|                                                  |                                           |                        |         |         |  |      |         |         |  |  |         |         | 
|------------------------------------------------- | ----------------------------------------- | ---------------------- | ------- | ------- |  | ---- | ------- | ------- |  |  | ------- | ------- | 
|                                                  |                                           |                       
|                                                  |                                           | Year Ended January 31,
|                                                  |                                           |                       
|                                                  |                                           | 2004                   |         | 2003    |  | 2002
|                                                  |                                           |                        |         |         |  |     
|Unvested shares at beginning of year              |                                           |                        | 108,978 |         |  |      | 116,848 |         |  |  | 127,457 |        
|Shares granted                                    |                                           |                        |        |         |  |      |        |         |  |  |        |        
|Shares exercised                                  |                                           |                        | (16,483 | )       |  |      | (5,904  | )       |  |  | (2,129  | )      
|Shares returned                                   |                                           |                        | (3,095  | )       |  |      | (1,966  | )       |  |  | (8,480  | )      
|                                                  |                                           |                        |         |         |  |      |         |         |  |  |         |        
|Unvested shares at end of year                    |                                           |                        | 89,400  |         |  |      | 108,978 |         |  |  | 116,848 |        
|Shares available for future grants at end of year |                                           |                        | 17,145  |         |  |      | 14,050  |         |  |  | 12,084  |        
|                                                  |                                           |                        |         |         |  |      |         |         |  |  |         |        
|                                                  | Total shares held in Trust at end of year |                        |         | 106,545 |  |      |         | 123,028 |  |  |         | 128,932 | 
|                                                  |                                           |                        |         |         |  |      |         |         |  |  |         |        

Summary of
the Executive Share Plan

The Companys Executive Share Plan was
established in 1994 in the form of a Guernsey Island trust for
the benefit of the Companys directors and executive
managers. A liaison committee consisting of the Companys
Chief Executive Officer and two other individuals makes
recommendations to the trustee of the trust as to how options
should be granted under this plan. With the consent of the
liaison committee, the trustee has the right to amend or
terminate this plan.

Options granted by the trust generally vest in
four annual increments of 25% each starting on either the third
or fourth anniversaries of the grant date. Options vest only as
long as participants remain employees. Until such time as the
options have vested, all bonuses earned by a participant are
paid directly to the trust to pay the option exercise price,
unless the trustee decides to exempt such bonus after
consultation with the Company.

The exercise price is set by the trustee with the
Companys consent and cannot be less than 40% of the fair
market value of the granted shares on the grant date. Options
expire if not exercised by the seventh anniversary of the grant
date. Options may not be assigned by participants to any person
without the consent of the trustee.

The Company applies the intrinsic value-based
methodology in accordance with APB No. 25 permitted by SFAS
No. 123 in accounting for the share options granted under
the Executive Share Plan. In accordance with APB No. 25,
total compensation cost related to the Executive Share Plan was
$43, $51 and $60, respectively, for the years ended
January 31, 2004, 2003 and 2002, with corresponding
increases to shareholders equity.

No compensation expense has been recognized under
the fair value method; however, the Company has adopted the
disclosure-only provisions of SFAS No. 123. Had
compensation cost for the shares awarded under the Executive
Share Plan been determined based on their fair value at the
grant date together with the other plans described herein, the
Companys net income, basic earnings per share and the
diluted earnings per share would have been as reflected in
Note 1.

F-25



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


A summary of the Executive Share Plan option
activity is as follows:

|                                                                  |                             |                                                    |         |          |         |   |      |      |  | 
|----------------------------------------------------------------- | --------------------------- | -------------------------------------------------- | ------- | -------- | ------- | - | ---- | ---- |  | 
|                                                                  |                             |                                                   
|                                                                  |                             | Executive Share Plan                              
|                                                                  |                             |                                                   
|                                                                  |                             |                                                    |         | Weighted
|                                                                  |                             |                                                    |         | Average 
|                                                                  |                             | Options                                            |         | Exercise
|                                                                  |                             | Outstanding                                        |         | Price   
|                                                                  |                             |                                                    |         |         
|Balance at January 31, 2001                                       |                             |                                                    | 363,598 |          |         | $ | 2.30 |     
|                                                                  | Options granted             |                                                    |         |         |         |   |      |      | 
|                                                                  | Options exercised           |                                                    |         | (269,363 | )       |   |      | 2.03 | 
|                                                                  | Options cancelled/forfeited |                                                    |         |         |         |   |      |      | 
|                                                                  |                             |                                                    |         |          |         |   |      |     
|Balance at January 31, 2002                                       |                             |                                                    | 94,235  |          |         |   | 3.05 |     
|                                                                  | Options granted             |                                                    |         |         |         |   |      |      | 
|                                                                  | Options exercised           |                                                    |         | (39,469  | )       |   |      | 2.53 | 
|                                                                  | Options cancelled/forfeited |                                                    |         |         |         |   |      |      | 
|                                                                  |                             |                                                    |         |          |         |   |      |     
|Balance at January 31, 2003                                       |                             |                                                    | 54,766  |          |         |   | 3.42 |     
|                                                                  | Options granted             |                                                    |         |         |         |   |      |      | 
|                                                                  | Options exercised           |                                                    |         | (50,890  | )       |   |      | 3.54 | 
|                                                                  | Options cancelled/forfeited |                                                    |         |         |         |   |      |      | 
|                                                                  |                             |                                                    |         |          |         |   |      |     
|Balance at January 31, 2004                                       |                             |                                                    | 3,876   |          |         |   | 3.87 |     
|Shares available for future option grants at
    January 31, 2004 |                             |                                                    | 234,245 |          |         |   |      |     
|                                                                  |                             |                                                    |         |          |         |   |      |     
|                                                                  |                             | Total shares held in trust at January 31,
    2004 |         |          | 238,121 |   |      |      |  | 
|                                                                  |                             |                                                    |         |          |         |   |      |     

A summary of stock options outstanding and
exercisable pursuant to the Executive Share Plan as of
January 31, 2004 is as follows:

|                         |  |                     |       |                     |  |          |       |             |  |          |      |  |  |  |       |  |  |   |      | 
|------------------------ |  | ------------------- | ----- | ------------------- |  | -------- | ----- | ----------- |  | -------- | ---- |  |  |  | ----- |  |  | - | ---- | 
|                         |  |                     |       |                    
|                         |  | Options Outstanding |       | Options Exercisable
|                         |  |                     |       |                    
|                         |  |                     |       | Weighted            |  | Weighted |       |             |  | Weighted
|                         |  |                     |       | Average             |  | Average  |       |             |  | Average 
|                         |  | Number              |       | Remaining           |  | Exercise |       | Number      |  | Exercise
|Range of Exercise Prices |  | Outstanding         |       | Life (Years)        |  | Price    |       | Exercisable |  | Price   
|                         |  |                     |       |                     |  |          |       |             |  |         
|$3.87                    |  |                     | 3,876 |                     |  |          | 0.001 |             |  | $        | 3.87 |  |  |  | 3,876 |  |  | $ | 3.87 | 

Summary of
the 2000 Stock Option Plan

The Companys 2000 Stock Option Plan,
created in the year ended January 31, 2001, provides for
the issuance of options to purchase ordinary shares to the
Companys directors, executives, employees and consultants.
This plan allows for the grant of incentive and non-qualified
stock options. At January 31, 2004, 3,859,109 shares were
reserved for issuance under this plan, subject to adjustments.

Options granted under this plan generally vest in
four annual increments of 25% each starting on the first
anniversary of the grant date. Incentive options vest only as
long as participants remain employees of the Company. At January
31, 2004, 2003, and 2002, there were 841,289, 648,669 and
349,641, options, respectively, which were exercisable at a
weighted average exercise price of $14.68, $13.84 and $13.80 per
share, respectively.

The exercise price of an incentive stock option
cannot be less than 100% of the fair market value of an ordinary
share on the grant date, and the exercise price in case of any
non-statutory stock option shall not be less than 85% of the
fair market value on the grant date. No person who owns more
than 10% of the total

F-26



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


combined voting power of the Companys
ordinary shares may receive incentive stock options unless the
exercise price is at least 110% of the fair market value of a
share on the grant date. All options issued under the plan have
terms of ten years or less. The 2000 Stock Option Plan
terminates on March 7, 2010.

A summary of the 2000 Stock Option Plan option
activity is as follows:

|                            |                             |                        |           |          |   |   |       |       | 
|--------------------------- | --------------------------- | ---------------------- | --------- | -------- | - | - | ----- | ----- | 
|                            |                             |                       
|                            |                             | 2000 Stock Option Plan
|                            |                             |                       
|                            |                             |                        |           | Weighted
|                            |                             |                        |           | Average 
|                            |                             | Options                |           | Exercise
|                            |                             | Outstanding            |           | Price   
|                            |                             |                        |           |         
|Balance at January 31, 2001 |                             |                        | 1,439,117 |          |   | $ | 13.76 |      
|                            | Options granted             |                        |           | 65,172   |   |   |       | 14.00 | 
|                            | Options exercised           |                        |           | (11,141  | ) |   |       | 12.97 | 
|                            | Options cancelled/forfeited |                        |           | (35,387  | ) |   |       | 12.97 | 
|                            |                             |                        |           |          |   |   |       |      
|Balance at January 31, 2002 |                             |                        | 1,457,761 |          |   |   | 13.80 |      
|                            | Options granted             |                        |           | 734,500  |   |   |       | 19.13 | 
|                            | Options exercised           |                        |           | (49,307  | ) |   |       | 13.37 | 
|                            | Options cancelled/forfeited |                        |           | (55,946  | ) |   |       | 13.81 | 
|                            |                             |                        |           |          |   |   |       |      
|Balance at January 31, 2003 |                             |                        | 2,087,008 |          |   |   | 15.68 |      
|                            | Options granted             |                        |           | 426,000  |   |   |       | 28.51 | 
|                            | Options exercised           |                        |           | (319,305 | ) |   |       | 14.48 | 
|                            | Options cancelled/forfeited |                        |           | (27,734  | ) |   |       | 13.90 | 
|                            |                             |                        |           |          |   |   |       |      
|Balance at January 31, 2004 |                             |                        | 2,165,969 |          |   |   | 18.39 |      
|                            |                             |                        |           |          |   |   |       |      

A summary of stock options outstanding and
exercisable pursuant to the 2000 Stock Option Plan as of
January 31, 2004 is as follows:

|                         |  |                     |         |                     |  |          |     |             |  |          |       |  |  |  |         |  |  |   |       | 
|------------------------ |  | ------------------- | ------- | ------------------- |  | -------- | --- | ----------- |  | -------- | ----- |  |  |  | ------- |  |  | - | ----- | 
|                         |  |                     |         |                    
|                         |  | Options Outstanding |         | Options Exercisable
|                         |  |                     |         |                    
|                         |  |                     |         | Weighted            |  | Weighted |     |             |  | Weighted
|                         |  |                     |         | Average             |  | Average  |     |             |  | Average 
|                         |  | Number              |         | Remaining           |  | Exercise |     | Number      |  | Exercise
|Range of Exercise Prices |  | Outstanding         |         | Life (Years)        |  | Price    |     | Exercisable |  | Price   
|                         |  |                     |         |                     |  |          |     |             |  |         
|$12.49 - $15.00          |  |                     | 902,520 |                     |  |          | 6.3 |             |  | $        | 13.42 |  |  |  | 606,077 |  |  | $ | 13.44 | 
|$16.00 - $18.53          |  |                     | 271,074 |                     |  |          | 7.4 |             |  | $        | 16.83 |  |  |  | 127,837 |  |  | $ | 16.54 | 
|$19.00 - $24.78          |  |                     | 792,175 |                     |  |          | 8.6 |             |  | $        | 20.95 |  |  |  | 107,375 |  |  | $ | 19.43 | 
|$30.53 - $33.71          |  |                     | 200,200 |                     |  |          | 9.6 |             |  | $        | 32.71 |  |  |  |        |  |  | $ |      | 

The Company applies the intrinsic value-based
methodology in accordance with APB No. 25 as permitted
by SFAS No. 123 in accounting for the 2000 Stock
Option Plan. In accordance with APB No. 25, no
compensation has been recognized for the years ended
January 31, 2004, 2003 and 2002. No compensation expense
has been recognized under the fair value method. Had
compensation cost for plan shares awarded under the plan been
determined based on their fair value at the grant date together
with the other plans described herein, the Companys net
income, basic earnings per share and the diluted earnings per
share would have been as reflected in Note 1. The weighted
average fair value of the options issued under this plan during
fiscal 2004 was $11.33.

F-27



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002




| |                                                            
| | -----------------------------------------------------------
| | Summary of the Non-Employee Directors Stock
    Option Plan

The Companys Non-Employee Directors Stock
Option Plan provides for the issuance of options to purchase
ordinary shares to each of the Companys non-employee
directors. Under this plan, non-executive directors receive an
initial grant to purchase 15,000 ordinary shares on the day they
join our Board. The plan also provides that each non-employee
director is to receive options to purchase 3,000 ordinary
shares on the date of each of the Companys annual
meetings, excluding the annual meeting in the year the director
joins the Board. The option exercise price is equal to the fair
market value of the underlying ordinary shares as of the grant
date. As of January 31, 2004 options to acquire
93,000 ordinary shares have been granted, with exercise
prices ranging from $12.97 to $35.78 per share. A total of
400,000 shares have been reserved for the issuance of options
under this plan, subject to adjustment in the event of specific
types of changes in our capitalization.

Options granted under this plan vest in three
annual increments, beginning one year from the grant date. As of
January 31, 2004, 2003 and 2002, there were 33,000, 29,000
and 11,000 options, respectively, which were exercisable under
this plan at a weighted average exercise price of $16.91, $16.58
and $16.79, respectively. Options granted under this plan expire
ten years from the grant date unless terminated earlier as
provided for in this plan. A summary of activity under this plan
is as follows:

|                            |  |                       |         |          |  |   |       | 
|--------------------------- |  | --------------------- | ------- | -------- |  | - | ----- | 
|                            |  |                      
|                            |  | Non-Employee Director
|                            |  | Stock Option Plan    
|                            |  |                      
|                            |  |                       |         | Weighted
|                            |  |                       |         | Average 
|                            |  | Options               |         | Exercise
|                            |  | Outstanding           |         | Price   
|                            |  |                       |         |         
|Balance at January 31, 2001 |  |                       | 33,000  |          |  | $ | 16.79 | 
|Options granted             |  |                       | 21,000  |          |  |   | 15.92 | 
|Options exercised           |  |                       |        |          |  |   |       | 
|Options cancelled/forfeited |  |                       |        |          |  |   |       | 
|                            |  |                       |         |          |  |   |       | 
|Balance at January 31, 2002 |  |                       | 54,000  |          |  |   | 16.45 | 
|Options granted             |  |                       | 12,000  |          |  |   | 19.70 | 
|Options exercised           |  |                       |        |          |  |   |       | 
|Options cancelled/forfeited |  |                       |        |          |  |   |       | 
|                            |  |                       |         |          |  |   |       | 
|Balance at January 31, 2003 |  |                       | 66,000  |          |  |   | 17.04 | 
|Options granted             |  |                       | 27,000  |          |  |   | 33.59 | 
|Options exercised           |  |                       | (18,000 | )        |  |   | 16.53 | 
|Options cancelled/forfeited |  |                       |        |          |  |   |       | 
|                            |  |                       |         |          |  |   |       | 
|Balance at January 31, 2004 |  |                       | 75,000  |          |  |   | 23.12 | 
|                            |  |                       |         |          |  |   |       | 

A summary of stock options outstanding and
exercisable under this plan as of January 31, 2004 is as
follows:

|                         |  |                     |        |                     |  |          |     |             |  |          |       |  |  |  |        |  |  |   |       | 
|------------------------ |  | ------------------- | ------ | ------------------- |  | -------- | --- | ----------- |  | -------- | ----- |  |  |  | ------ |  |  | - | ----- | 
|                         |  |                     |        |                    
|                         |  | Options Outstanding |        | Options Exercisable
|                         |  |                     |        |                    
|                         |  |                     |        | Weighted            |  | Weighted |     |             |  | Weighted
|                         |  |                     |        | Average             |  | Average  |     |             |  | Average 
|                         |  | Number              |        | Remaining           |  | Exercise |     | Number      |  | Exercise
|Range of Exercise Prices |  | Outstanding         |        | Life (Years)        |  | Price    |     | Exercisable |  | Price   
|                         |  |                     |        |                     |  |          |     |             |  |         
|$15.92 - $19.70          |  |                     | 48,000 |                     |  |          | 7.5 |             |  | $        | 17.23 |  |  |  | 33,000 |  |  | $ | 16.91 | 
|$30.85 - $35.78          |  |                     | 27,000 |                     |  |          | 9.7 |             |  | $        | 33.59 |  |  |  |       |  |  | $ |      | 

F-28



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


The Company applies the intrinsic value-based
methodology in accordance with APB No. 25 as permitted
by SFAS No. 123 in accounting for the Non-Employee
Directors Stock Option Plan. In accordance with
APB No. 25, no compensation has been recognized for
the years ended January 31, 2004, 2003 and 2002. No
compensation expense has been recognized under the fair value
method. Had compensation cost for plan shares awarded under the
plan been determined based on their fair value at the grant date
together with the other plans described herein, the
Companys net income, basic earnings per share and the
diluted earnings per share would have been as reflected in
Note 1. The weighted average fair value of the options
issued under this plan during fiscal 2004 was $12.65.



| |                                                 
| | ------------------------------------------------
| | Shares Held in Employer Stock Benefit
    Trusts

The ordinary shares held by the Plan and
Executive Share Plan trusts which had not been awarded to
participants, or where the Company had not committed to release
the shares because the related share debt had not been
discharged by the participant, have been excluded from the
denominator in computing basic earnings per share. Dilutive
potential ordinary shares have been included in the denominator
in computing diluted earnings per share.



| |                                                     
| | ----------------------------------------------------
| | Summary of the 2000 Employee Share Purchase
    Plan

The Companys 2000 Employee Share Purchase
Plan provides the Companys employees (including employees
of selected subsidiaries where permitted under local law) with
an opportunity to purchase ordinary shares through accumulated
payroll deductions. A total of 400,000 ordinary shares are
reserved for issuance under this plan, subject to adjustments as
provided for in the plan.

Employees in selected subsidiaries who have
worked for the Company for a year or more are eligible to
participate in the plan. Eligible employees become plan
participants by completing subscription agreements authorizing
payroll deductions which are used to purchase the ordinary
shares. The plan is administered in quarterly offering periods
and the first offering period commenced May 1, 2001. The
purchase price is the lower of 85% of the fair market value of
the Companys ordinary shares on either the first or last
day of each offering period. Employee payroll deductions cannot
exceed 10% of a participants current compensation and are
subject to an annual maximum of $25.



| |                              
| | -----------------------------
| | 2004 Long-Term Incentive Plan

The Companys 2004 Long Term Incentive Plan
(LTIP), was approved by the shareholders (members) on
February 27, 2004, and provides for the issuance of a
variety of awards, including options, share appreciation rights
(sometimes referred to as SARs), restricted shares, restricted
share units, deferred share units, and performance based awards.
This plan allows for the grant of incentive and non-qualified
stock options. 2,000,000 shares are reserved for issuance under
this plan, subject to adjustments. As a result of the adoption
of the LTIP, the Company reduced the maximum number of ordinary
shares which may be issued pursuant to options granted under the
2000 Stock Option Plan by 1,300,000 shares. In addition, the
ordinary shares remaining available for future option grants in
the Plan and the Executive Share Plan of 16,507 and 234,245
respectively will be returned to and cancelled by the company.
In addition, if any awards which are currently outstanding under
the Plan or the Executive Share Plan are cancelled or terminated
or otherwise forfeited by the participants or optionees, then
the trusts administering those plans are also expected to return
the shares underlying such awards back to the Company for
cancellation.

No awards have been made to date under the LTIP
and 2,000,000 shares remain available for issuance.

F-29



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


12.     Derivative
Financial Instruments

The Company utilizes forward exchange contracts
to reduce its exposure to foreign currency denominated
liabilities. Foreign exchange contracts purchased are primarily
denominated in the currencies of the Companys principal
markets. The Company does not enter into derivative contracts
for speculative purposes.

As of January 31, 2004, the Company had
contracted to sell the following amounts under forward exchange
contracts which all mature within 30 days of
January 31, 2004: $3,376 in euros; $3,417 in U.S. dollars;
$1,130 in British pounds sterling; and, $935 in other
currencies. The fair values of forward exchange contracts were
$61 and $18 for the years ended January 31, 2004 and 2003,
respectively.

13.     Commitments

At January 31, 2004, the Company had
outstanding commitments under capital and non-cancelable
operating leases, which fall due in the years ended
January 31, as follows:

|                                                   |  |         |        |           |  |   |         | 
|-------------------------------------------------- |  | ------- | ------ | --------- |  | - | ------- | 
|                                                   |  | Capital |        | Operating
|                                                   |  | Leases  |        | Leases   
|                                                   |  |         |        |          
|2005                                               |  | $       | 2,680  |           |  | $ | 31,007  | 
|2006                                               |  |         | 1,614  |           |  |   | 27,822  | 
|2007                                               |  |         | 858    |           |  |   | 23,525  | 
|2008                                               |  |         | 7,190  |           |  |   | 17,133  | 
|2009                                               |  |         | 141    |           |  |   | 10,889  | 
|2010 and thereafter                                |  |         | 86     |           |  |   | 14,700  | 
|                                                   |  |         |        |           |  |   |         | 
|Total payments                                     |  |         | 12,569 |           |  | $ | 125,076 | 
|                                                   |  |         |        |           |  |   |         | 
|Less amounts representing interest                 |  |         | (2,835 | )         |  |   |         | 
|                                                   |  |         |        |           |  |   |         | 
|Present value of minimum capital lease obligations |  | $       | 9,734  |           |  |   |         | 
|                                                   |  |         |        |           |  |   |         | 

The Company has obligations under various
operating lease agreements ranging from one to ten years. The
leases are for property, plant and equipment. These leases
require minimum annual payments, which are expensed as incurred.
Total rent expense for the years ended January 31, 2004,
2003 and 2002 was $36,202, $22,975 and $20,779, respectively.

It is the Companys policy to lease certain
of its property, plant and equipment under capital leases. The
normal lease term for plant and equipment is two to five years
and the normal lease term for property varies between three and
ten years. For the year ended January 31, 2004, the average
effective borrowing rate for property, plant and equipment under
capital leases was 8.9%. Interest rates usually vary during the
contract period. The net book value of assets under capital
leases as of January 31, 2004 and 2003 was $12,274 and
$11,253, respectively.

Capital commitments contracted for, but not
provided in the accompanying consolidated balance sheet as of
January 31, 2004 totaled $463.

14.     Contingencies

The Company is subject to legal proceedings and
claims, which arise in the ordinary course of its business.

As of January 31, 2004, the Company has
outstanding claims of $481. The Company carries commercial
insurance, which is sufficient to cover the majority of these
claims.

F-30



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


The Company is involved in litigation in Italy
and England related to cases filed in 2000 with Enrico Furgada
the former ultimate owner of Per Transport SpA and related
entities in connection with its April 1998 acquisition of Per
Transport SpA and its subsequent termination of the employment
of the former ultimate owner as a consultant. The suits seek
monetary damages, including compensation for termination of the
owners consulting agreement. The Company has brought
counter-claims for monetary damages in relation to warranty
claims under the purchase agreement. The Company has been
advised that proceedings to recover amounts owing by the former
ultimate owner and other entities owned by him, to third parties
may be instituted against the Company. It is alleged that Per
Transport SpA guaranteed certain obligations of these other
entities owned by the former ultimate owner. The Company
believes that these guarantees are the responsibility of the
former ultimate owner. These guarantees were made prior to its
acquisition, were not disclosed to the Company during its
acquisition negotiations nor were they disclosed in the audited
statutory financial statements of Per Transport SpA. Civil and
criminal proceedings have also been instituted against the
former ultimate owner in relation to these guarantees. The total
of all such actual and potential claims is approximately
$16.2 million, based on exchange rates as of
January 31, 2004. The Company believes that it has adequate
defenses in relation to these claims if these proceedings are
brought against it.

We are one of seven defendants named in a lawsuit
filed on July 30, 2001 in the United States Bankruptcy
Court for the Southern District of New York. The plaintiff, the
committee of unsecured creditors of FMI Forwarding (formerly
known as Intermaritime Forwarding), alleges under a theory of
fraudulent conveyance that we paid inadequate consideration for
certain assets of Intermaritime Forwarding and also alleges that
we are liable for debts of FMI Forwarding on a successor
liability theory. The plaintiff seeks recovery in an amount up
to $4.6 million.

A former customer, De La Rue International, filed
a complaint against us in the Superior Court of Gwinnett County,
Georgia on April 21, 2003 alleging that we were negligent,
that we breached our contractual obligations and that we
fraudulently concealed the fact that three shipments in August
and September 1999 were not properly and timely reported to U.S.
Customs for clearance. The plaintiff is asking for damages in
excess of $2.0 million.

The Company is one of approximately 83 defendants
named in two class action lawsuits which were originally filed
on September 19, 1995 and subsequently consolidated in the
District Court of Brazaria County, Texas (23rd Judicial
District) where it is alleged that various defendants sold
chemicals that were utilized in the Gulf War by the Iraqi army
which caused personal injuries to U.S. armed services personnel
and their families, including birth defects. The lawsuits were
brought on behalf of the military personnel who served in the
Gulf War and their families and the plaintiffs are seeking in
excess of $1 billion in damages. To date, the plaintiffs have
not obtained class certification. The Company believes they are
a defendant in the suit because an entity that sold the Company
assets in 1993 is a defendant. The Company believes it will
prevail in this matter because the alleged actions giving rise
to the claims occurred prior to our purchase of the assets. The
Company further believes that it will ultimately prevail in this
matter since it never manufactured chemicals and the plaintiffs
have been unable to thus far produce evidence that the Company
acted as a freight forwarder for cargo that included chemicals
used by the Iraqi army.

On August 19, 2003 in the District Court of
Dallas County, Texas, UTi was named as one of the defendants in
a wrongful death suit filed by the survivors of an automobile
accident caused by the toppling of an ocean container from the
chassis of a truck (Sim et. al. versus Sharpless et. al.). The
truck was under the control of the steamship line at the time of
the accident. The case is being defended by outside counsel
appointed by our general liability insurance carrier. The
plaintiffs are claiming non-specific but exemplary damages in
excess of $4 million.

F-31



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


In the opinion of management, the amount of
ultimate liability with respect to these actions will not
materially affect the results of operations or financial
position of the Company.

15.     Related Party
Transactions

Pursuant to an amended and restated registration
rights agreement, PTR Holdings and UT Holdings, two of the
Companys shareholders, are entitled to rights with respect
to the registration of their shares under the Securities Act of
1933. Pursuant to this agreement, PTR Holdings sold 1,150,000
ordinary shares in the Companys public offering that
closed in December 2002.

One of the Companys Hong Kong operating
subsidiaries is party to a service agreement pursuant to which a
company owned by one of the Companys employees (a previous
owner of Continental) and members of his family, provides
management consulting and sales solicitation services. During
the years ended January 31, 2004, 2003 and 2002, the
Companys Hong Kong subsidiary paid the company
approximately $206, $212 and $186, respectively, under this
service agreement.

One of the Companys Spanish subsidiaries is
party to a service agreement, effective January 25, 2002,
pursuant to which the Companys subsidiary provides
commercial and administrative services to a company owned by the
Managing Director of SLi and his three brothers, two of whom are
current employees of the Company, all of whom were previous
owners of SLi. During the years ended January 31, 2004 and
2003, approximately $864 and $802, respectively, was billed by
the Companys Spanish subsidiary for fees pursuant to this
agreement. As of January 31, 2004 and 2003, the total net
amount due from these three employees, their immediate family
members and companies owned by them was $412 and $1,436,
respectively.

The Companys Israeli operating subsidiary
is party to various agreements, effective for the year ended
January 31, 2004, pursuant to which a company partially
owned by the Managing Director of UTi Eliat Overseas Ltd.,
provides facility and vehicle leases. During the year ended
January 31, 2004, the Companys Israeli subsidiary
paid the company approximately $273 under these agreements.

16.     Segment
Reporting

The Company operates in four geographic segments
comprised of Europe, the Americas, Asia Pacific and Africa,
which offer similar products and services. They are managed
separately because each segment requires close customer contact
by senior management, individual requirements of customers
differ between regions and each region is affected by similar
economic conditions.

For segment reporting purposes by geographic
region, gross airfreight and ocean freight forwarding revenues
for the movement of goods is attributed to the country where the
shipment originates. Gross revenues, as well as net revenues,
for all other services are attributed to the country where the
services are performed. Net revenues for airfreight and ocean
freight forwarding related to the movement of the goods are
prorated between the country of origin and the destination
country, based on a standard formula.

F-32



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


Certain information regarding the Companys
operations by segment is summarized as follows:

|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   |           |  
|------------------------------------- |  | --------------------------- | ------- | -------- |  | ------------ | ------- | ------ |  | --------- | ------- | ----- |  | - | ------- |  |  | - | ------- | - |  | - | --------- | -
|                                      |  |                            
|                                      |  | Year Ended January 31, 2004
|                                      |  |                            
|                                      |  | Europe                      |         | Americas |  | Asia Pacific |         | Africa |  | Corporate |         | Total
|                                      |  |                             |         |          |  |              |         |        |  |           |         |      
|Gross revenue from external customers |  | $                           | 424,457 |          |  | $            | 449,381 |        |  | $         | 430,376 |       |  | $ | 198,661 |  |  | $ |        |   |  | $ | 1,502,875 |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   |           |  
|Net revenue                           |  | $                           | 129,404 |          |  | $            | 252,378 |        |  | $         | 86,489  |       |  | $ | 127,870 |  |  | $ |        |   |  | $ | 596,141   |  
|Staff costs                           |  |                             | 73,814  |          |  |              | 147,201 |        |  |           | 36,708  |       |  |   | 55,667  |  |  |   | 5,337   |   |  |   | 318,727   |  
|Depreciation and amortization         |  |                             | 4,415   |          |  |              | 3,976   |        |  |           | 2,140   |       |  |   | 3,088   |  |  |   | 1,187   |   |  |   | 14,806    |  
|Amortization of intangible assets     |  |                             |        |          |  |              | 594     |        |  |           |        |       |  |   | 69      |  |  |   |        |   |  |   | 663       |  
|Other operating expenses              |  |                             | 40,125  |          |  |              | 84,760  |        |  |           | 21,755  |       |  |   | 51,264  |  |  |   | 4,970   |   |  |   | 202,874   |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   |           |  
|Operating income/(loss)               |  | $                           | 11,050  |          |  | $            | 15,847  |        |  | $         | 25,886  |       |  | $ | 17,782  |  |  | $ | (11,494 | ) |  |   | 59,071    |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   |           |  
|Interest income                       |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   | 6,881     |  
|Interest expense                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   | (5,840    | )
|Losses on foreign exchange            |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   | (341      | )
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   |           |  
|Pretax income                         |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   | 59,771    |  
|Provision for income taxes            |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   | 13,403    |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   |           |  
|Income before minority interests      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  | $ | 46,368    |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   |           |  
|Capital expenditures                  |  | $                           | 5,339   |          |  | $            | 6,710   |        |  | $         | 3,238   |       |  | $ | 4,959   |  |  | $ | 552     |   |  | $ | 20,768    |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   |           |  
|Segment assets at year-end            |  | $                           | 162,890 |          |  | $            | 170,609 |        |  | $         | 155,834 |       |  | $ | 158,302 |  |  | $ | 55,706  |   |  | $ | 703,341   |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |         |   |  |   |           |  

F-33



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |           |  
|------------------------------------- |  | --------------------------- | ------- | -------- |  | ------------ | ------- | ------ |  | --------- | ------- | ----- |  | - | ------- |  |  | - | ------ | - |  | - | --------- | -
|                                      |  |                            
|                                      |  | Year Ended January 31, 2003
|                                      |  |                            
|                                      |  | Europe                      |         | Americas |  | Asia Pacific |         | Africa |  | Corporate |         | Total
|                                      |  |                             |         |          |  |              |         |        |  |           |         |      
|Gross revenue from external customers |  | $                           | 372,515 |          |  | $            | 317,314 |        |  | $         | 337,430 |       |  | $ | 142,801 |  |  | $ |       |   |  | $ | 1,170,060 |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |           |  
|Net revenue                           |  | $                           | 99,571  |          |  | $            | 143,484 |        |  | $         | 70,626  |       |  | $ | 91,109  |  |  | $ |       |   |  | $ | 404,790   |  
|Staff costs                           |  |                             | 54,864  |          |  |              | 81,603  |        |  |           | 29,237  |       |  |   | 35,263  |  |  |   | 4,004  |   |  |   | 204,971   |  
|Depreciation and amortization         |  |                             | 3,526   |          |  |              | 2,848   |        |  |           | 1,962   |       |  |   | 1,982   |  |  |   | 856    |   |  |   | 11,174    |  
|Amortization of intangible assets     |  |                             |        |          |  |              | 198     |        |  |           |        |       |  |   |        |  |  |   |       |   |  |   | 198       |  
|Other operating expenses              |  |                             | 30,608  |          |  |              | 50,382  |        |  |           | 19,981  |       |  |   | 37,695  |  |  |   | 4,276  |   |  |   | 142,942   |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |           |  
|Operating income/(loss)               |  | $                           | 10,573  |          |  | $            | 8,453   |        |  | $         | 19,446  |       |  | $ | 16,169  |  |  | $ | (9,136 | ) |  |   | 45,505    |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |           |  
|Interest income                       |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | 4,641     |  
|Interest expense                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | (5,127    | )
|Losses on foreign exchange            |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | (1,725    | )
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |           |  
|Pretax income                         |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | 43,294    |  
|Provision for income taxes            |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | 12,492    |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |           |  
|Income before minority interests      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  | $ | 30,802    |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |           |  
|Capital expenditures                  |  | $                           | 5,974   |          |  | $            | 2,129   |        |  | $         | 2,223   |       |  | $ | 4,806   |  |  | $ | 912    |   |  | $ | 16,044    |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |           |  
|Segment assets at year-end            |  | $                           | 146,052 |          |  | $            | 155,574 |        |  | $         | 112,815 |       |  | $ | 122,152 |  |  | $ | 90,482 |   |  | $ | 627,075   |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |           |  

|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |         |  
|------------------------------------- |  | --------------------------- | ------- | -------- |  | ------------ | ------- | ------ |  | --------- | ------- | ----- |  | - | ------- |  |  | - | ------ | - |  | - | ------- | -
|                                      |  |                            
|                                      |  | Year Ended January 31, 2002
|                                      |  |                            
|                                      |  | Europe                      |         | Americas |  | Asia Pacific |         | Africa |  | Corporate |         | Total
|                                      |  |                             |         |          |  |              |         |        |  |           |         |      
|Gross revenue from external customers |  | $                           | 264,280 |          |  | $            | 258,008 |        |  | $         | 242,950 |       |  | $ | 124,548 |  |  | $ |       |   |  | $ | 889,786 |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |         |  
|Net revenue                           |  | $                           | 62,457  |          |  | $            | 94,045  |        |  | $         | 60,075  |       |  | $ | 87,982  |  |  | $ |       |   |  | $ | 304,559 |  
|Staff costs                           |  |                             | 35,632  |          |  |              | 56,614  |        |  |           | 26,238  |       |  |   | 33,373  |  |  |   | 4,148  |   |  |   | 156,005 |  
|Depreciation and amortization         |  |                             | 2,571   |          |  |              | 2,462   |        |  |           | 1,775   |       |  |   | 2,264   |  |  |   | 339    |   |  |   | 9,411   |  
|Amortization of intangible assets     |  |                             | 531     |          |  |              | 3,096   |        |  |           | 1,432   |       |  |   | 280     |  |  |   |       |   |  |   | 5,339   |  
|Other operating expenses              |  |                             | 16,262  |          |  |              | 29,859  |        |  |           | 18,098  |       |  |   | 38,860  |  |  |   | 1,055  |   |  |   | 104,134 |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |         |  
|Operating income/(loss)               |  | $                           | 7,461   |          |  | $            | 2,014   |        |  | $         | 12,532  |       |  | $ | 13,205  |  |  | $ | (5,542 | ) |  |   | 29,670  |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |         |  
|Interest income                       |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | 4,102   |  
|Interest expense                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | (5,312  | )
|Gains on foreign exchange             |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | 17      |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |         |  
|Pretax income                         |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | 28,477  |  
|Provision for income taxes            |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   | 7,970   |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |         |  
|Income before minority interests      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  | $ | 20,507  |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |         |  
|Capital expenditures                  |  | $                           | 2,779   |          |  | $            | 2,071   |        |  | $         | 2,091   |       |  | $ | 2,683   |  |  | $ | 14     |   |  | $ | 9,638   |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |         |  
|Segment assets at year-end            |  | $                           | 107,998 |          |  | $            | 105,294 |        |  | $         | 80,574  |       |  | $ | 69,268  |  |  | $ | 41,477 |   |  | $ | 404,611 |  
|                                      |  |                             |         |          |  |              |         |        |  |           |         |       |  |   |         |  |  |   |        |   |  |   |         |  

F-34



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


Intercompany transactions are priced at cost.
Where two or more subsidiaries are involved in the handling of a
consignment, the net revenue is shared based upon a standard
formula, which is adopted across the Company.

The following table shows the gross revenue and
net revenue attributable to the Companys principal
services.

|                |                          |                        |           |         |  |      |           |         |  |   |         |         | 
|--------------- | ------------------------ | ---------------------- | --------- | ------- |  | ---- | --------- | ------- |  | - | ------- | ------- | 
|                |                          |                       
|                |                          | Year Ended January 31,
|                |                          |                       
|                |                          | 2004                   |           | 2003    |  | 2002
|                |                          |                        |           |         |  |     
|Gross revenues: |                          |                        |           |         |  |      |           |         |  |   |         |        
|                | Airfreight forwarding    |                        | $         | 720,689 |  |      | $         | 621,905 |  |   | $       | 491,946 | 
|                | Ocean freight forwarding |                        |           | 360,253 |  |      |           | 283,869 |  |   |         | 255,272 | 
|                | Customs brokerage        |                        |           | 67,859  |  |      |           | 64,221  |  |   |         | 55,875  | 
|                | Contract logistics       |                        |           | 229,709 |  |      |           | 101,294 |  |   |         | 23,856  | 
|                | Other                    |                        |           | 124,365 |  |      |           | 98,771  |  |   |         | 62,837  | 
|                |                          |                        |           |         |  |      |           |         |  |   |         |        
|                |                          | $                      | 1,502,875 |         |  | $    | 1,170,060 |         |  | $ | 889,786 |        
|                |                          |                        |           |         |  |      |           |         |  |   |         |        
|Net revenues:   |                          |                        |           |         |  |      |           |         |  |   |         |        
|                | Airfreight forwarding    |                        | $         | 198,822 |  |      | $         | 157,493 |  |   | $       | 142,312 | 
|                | Ocean freight forwarding |                        |           | 75,131  |  |      |           | 66,554  |  |   |         | 58,633  | 
|                | Customs brokerage        |                        |           | 65,532  |  |      |           | 61,105  |  |   |         | 54,034  | 
|                | Contract logistics       |                        |           | 192,969 |  |      |           | 79,517  |  |   |         | 14,957  | 
|                | Other                    |                        |           | 63,687  |  |      |           | 40,121  |  |   |         | 34,623  | 
|                |                          |                        |           |         |  |      |           |         |  |   |         |        
|                |                          | $                      | 596,141   |         |  | $    | 404,790   |         |  | $ | 304,559 |        
|                |                          |                        |           |         |  |      |           |         |  |   |         |        

F-35



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##### Table of Contents



UTi WORLDWIDE INC.


NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

For the years ended January 31, 2004,
2003 and 2002


17.     Selected
Quarterly Financial Data (Unaudited)

|                               |         |       |   |         |  |       |   |         |  |       |   |         |  |  |   |         |   |  |   |           | 
|------------------------------ | ------- | ----- | - | ------- |  | ----- | - | ------- |  | ----- | - | ------- |  |  | - | ------- | - |  | - | --------- | 
|For the Year Ended January 31, |         | First |   | Second  |  | Third |   | Fourth  |  | Total
|                               |         |       |   |         |  |       |   |         |  |      
|Gross revenue:                 |         |       |   |         |  |       |   |         |  |       |   |         |  |  |   |         |   |  |   |          
|                               | 2004    |       | $ | 326,788 |  |       | $ | 362,025 |  |       | $ | 398,726 |  |  | $ | 415,336 |   |  | $ | 1,502,875 | 
|                               | 2003    |       |   | 235,658 |  |       |   | 274,819 |  |       |   | 321,521 |  |  |   | 338,062 |   |  |   | 1,170,060 | 
|Net revenue:                   |         |       |   |         |  |       |   |         |  |       |   |         |  |  |   |         |   |  |   |          
|                               | 2004    |       |   | 131,419 |  |       |   | 144,859 |  |       |   | 156,545 |  |  |   | 163,318 |   |  |   | 596,141   | 
|                               | 2003    |       |   | 76,929  |  |       |   | 87,533  |  |       |   | 107,529 |  |  |   | 132,799 |   |  |   | 404,790   | 
|Operating income:              |         |       |   |         |  |       |   |         |  |       |   |         |  |  |   |         |   |  |   |          
|                               | 2004    |       |   | 11,093  |  |       |   | 15,038  |  |       |   | 17,973  |  |  |   | 14,967  |   |  |   | 59,071    | 
|                               | 2003    |       |   | 7,912   |  |       |   | 11,446  |  |       |   | 14,238  |  |  |   | 11,909  |   |  |   | 45,505    | 
|Net income:                    |         |       |   |         |  |       |   |         |  |       |   |         |  |  |   |         |   |  |   |          
|                               | 2004    |       |   | 7,974   |  |       |   | 11,416  |  |       |   | 13,178  |  |  |   | 12,203  | * |  |   | 44,771    | 
|                               | 2003    |       |   | 4,757   |  |       |   | 7,739   |  |       |   | 9,470   |  |  |   | 7,328   |   |  |   | 29,294    | 
|Basic earnings per share:      |         |       |   |         |  |       |   |         |  |       |   |         |  |  |   |         |   |  |   |          
|                               | 2004(1) |       |   | 0.26    |  |       |   | 0.38    |  |       |   | 0.43    |  |  |   | 0.40    | * |  |   | 1.48      | 
|                               | 2003    |       |   | 0.19    |  |       |   | 0.31    |  |       |   | 0.37    |  |  |   | 0.26    |   |  |   | 1.13      | 
|Diluted earnings per share:    |         |       |   |         |  |       |   |         |  |       |   |         |  |  |   |         |   |  |   |          
|                               | 2004    |       |   | 0.26    |  |       |   | 0.36    |  |       |   | 0.42    |  |  |   | 0.38    | * |  |   | 1.42      | 
|                               | 2003    |       |   | 0.18    |  |       |   | 0.30    |  |       |   | 0.37    |  |  |   | 0.26    |   |  |   | 1.11      | 



---

|  |                                                                                                                                                                                                                 
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | The fiscal 2004 fourth quarter benefited by a
    change in the estimated effective tax rate for the fiscal year
    which resulted in an increase in net income of approximately
    3 cents per diluted share.



|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The basic earnings per share amounts for the
    fiscal 2004 quarters do not add to the total for the year ended
    January 31, 2004 due to the effects of rounding.

F-36



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##### Table of Contents



UTi Worldwide Inc.

Schedule II

Valuation and Qualifying Accounts

(in thousands)


Allowance for Doubtful Accounts

|                       |  |            |        |                 |  |                 |       |       |  |             |        |             |  |   |     |  |  |   |        |   |  |   |        | 
|---------------------- |  | ---------- | ------ | --------------- |  | --------------- | ----- | ----- |  | ----------- | ------ | ----------- |  | - | --- |  |  | - | ------ | - |  | - | ------ | 
|                       |  | Balance at |        |                 |  |                 |       |       |  | Foreign     |        |            
|                       |  | Beginning  |        | Amounts Charged |  | Charges Against |       |       |  | Currency    |        | Balance at 
|Year Ended January 31, |  | of Year    |        | to Expense      |  | the Allowance   |       | Other |  | Translation |        | End of Year
|                       |  |            |        |                 |  |                 |       |       |  |             |        |            
|2004                   |  | $          | 11,943 |                 |  | $               | 4,792 |       |  | $           | (3,876 | )           |  | $ | 159 |  |  | $ | 1,282  |   |  | $ | 14,300 | 
|2003                   |  |            | 9,638  |                 |  |                 | 6,471 |       |  |             | (6,198 | )           |  |   | 268 |  |  |   | 1,764  |   |  |   | 11,943 | 
|2002                   |  |            | 11,156 |                 |  |                 | 3,680 |       |  |             | (4,436 | )           |  |   | 473 |  |  |   | (1,235 | ) |  |   | 9,638  | 

Schedules not listed above have been omitted
because the information required to be described in the
schedules is not applicable or is shown in our financial
statements.

F-37



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##### Table of Contents



INDEX TO EXHIBITS

|        |    |     |  |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | -- | --- |  | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |  | Description
|        |    |     |  |            
|        | 2  | .1+ |  |             |  | Asset Purchase Agreement between Continental Air
    Express (HK) Limited, Continental Container Lines Limited,
    Union-Transport (HK) Limited, Cheng Kwan Kok David, Lai Kwok
    Fai, Lewis Billy Barnhill, Francis Raymond Bello, Albert Patrick
    Cataldo, Chan Ka Ming, Chan Kwan Hang, Chau Hak Cheong, Cheng
    Kwan Lung, Ng Chun Ka, Ng Sai Kuen and Registrant dated
    August 25, 2000 (incorporated by reference to the
    Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                  
|       
|        | 2  | .2+ |  |             |  | Asset Purchase Agreement between Continental
    Container Line, Inc., Continental Cargo Logistics Inc.
    (New York corporation), Continental Cargo Logistics Inc.
    (California corporation), Union-Transport Corporation, Lai Kwok
    Fai, Ng Chun Ka, Cheng Kwan Kok David, Albert Patrick Cataldo,
    Lewis Billy Barnhill, Francis Raymond Bello, Chan Ka Ming, Chan
    Kwan Hang, Chau Hak Cheong, Cheng Kwan Lung and Ng Sai Kuen
    dated August 25, 2000 (incorporated by reference to the
    Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)
|       
|        | 2  | .3  |  |             |  | Amendment to Asset Purchase Agreement between
    Continental Air Express (HK) Limited, Continental Container
    Lines Limited, Union-Transport (HK) Limited, Cheng Kwan Kok
    David, Lai Kwok Fai, Lewis Billy Barnhill, Francis Raymond
    Bello, Albert Patrick Cataldo, Chan Ka Ming, Chan Kwan Hang,
    Chau Hak Cheong, Cheng Kwan Lung, Ng Chun Ka, Ng Sai Kuen and
    Registrant, dated October 3, 2000 (incorporated by
    reference to Amendment No. 1 to the Companys
    Registration Statement on Form F-1, No. 333-47616,
    dated October 30, 2000)                             
|       
|        | 2  | .4+ |  |             |  | Stock Purchase Agreement among Samuel
    Clarke, Jr., Claude M. Walker, Jr., James H. Walker,
    Standard Corporation and Union Transport (U.S.)
    Holdings, Inc., dated as of October 11, 2002
    (incorporated by reference to the Companys Registration
    Statement on Form F-3, No. 333-101309, dated
    November 19, 2002)                                                                                                                                                                                                                                                                
|       
|        | 3  | .1  |  |             |  | Memorandum of Association of the Company
    (incorporated by reference to Amendment No. 1 to the
    Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 30, 2000)                                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 3  | .2  |  |             |  | Articles of Association of the Company, as
    amended (incorporated by reference to Exhibit 99.2 to the
    Companys Report on Form 6-K dated June 6, 2002)                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       
|        | 10 | .1* |  |             |  | Form of Employment Agreement between
    Mr. Wessels and the Company (incorporated by reference to
    the Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|        | 10 | .2* |  |             |  | Form of Employment Agreement between
    Mr. MacFarlane and the Company (incorporated by reference
    to the Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | 10 | .3* |  |             |  | Form of Employment Agreement between
    Mr. Thorrington and the Company (incorporated by reference
    to the Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 10 | .4* |  |             |  | Form of Employment Agreement between
    Mr. Draper and the Company (incorporated by reference to
    the Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                                                                                                                                                                                                                                                                                                      
|       
|        | 10 | .5* |  |             |  | 2000 Employee Share Purchase Plan, as amended
    (incorporated by reference to the Companys Registration
    Statement on Form S-8, No. 333-58832, dated
    April 12, 2001)                                                                                                                                                                                                                                                                                                                                                                                                                          
|       
|        | 10 | .6* |  |             |  | Non-Employee Directors Stock Option Plan
    (incorporated by reference to the Companys Registration
    Statement on Form F-1, No. 333-47616, dated
    October 10, 2000)                                                                                                                                                                                                                                                                                                                                                                                                                             
|       
|        | 10 | .7* |  |             |  | Form of Severance Agreement between the Company
    and its executive officers (incorporated by reference to the
    Companys Registration Statement on Form F-1,
    No. 333-47616, dated October 10, 2000)                                                                                                                                                                                                                                                                                                                                                                                           
|       
|        | 10 | .8* |  |             |  | Union-Transport Inc. Share Incentive Plan, as
    amended (incorporated by reference to the Companys Annual
    Report on Form 20-F, No. 000-31869, dated May 8,
    2002)                                                                                                                                                                                                                                                                                                                                                                                                                             
|       
|        | 10 | .9* |  |             |  | Union-Transport Executive Share Plan, as amended
    (incorporated by reference to the Companys Annual Report
    on Form 20-F, No. 000-31869, dated May 8, 2002)                                                                                                                                                                                                                                                                                                                                                                                                                                      



---



##### Table of Contents



|        |    |      |  |             |  |                                                                                                                                                                                                                                                                                             
|------- | -- | ---- |  | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |      |  | Description
|        |    |      |  |            
|       
|        | 10 | .10  |  |             |  | Credit Agreement between the Company and Nedcor
    Bank Limited, dated August 1, 2002 (incorporated by
    reference to Exhibit 99.2 to the Companys Report on
    Form 6-K dated December 5, 2002)                                                                                       
|       
|        | 10 | .11  |  |             |  | Amended and Restated Registration Rights
    Agreement between PTR Holdings, Inc., Union-Transport
    Holdings Inc. and the Company (incorporated by reference to
    Amendment No. 2 to the Companys Registration
    Statement on Form F-3, No. 333-101309, dated
    December 10, 2002)
|       
|        | 10 | .12* |  |             |  | 2000 Stock Option Plan, as amended                                                                                                                                                                                                                                                          
|       
|        | 10 | .13* |  |             |  | 2004 Long-Term Incentive Plan                                                                                                                                                                                                                                                               
|       
|        | 21 |      |  |             |  | Subsidiaries of the Company                                                                                                                                                                                                                                                                 
|       
|        | 23 |      |  |             |  | Independent Auditors Consent                                                                                                                                                                                                                                                               
|       
|        | 31 | .1   |  |             |  | Certification of Chief Executive Officer pursuant
    to Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002                                                                                                 
|       
|        | 31 | .2   |  |             |  | Certification of Chief Financial Officer pursuant
    to Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002                                                                                                 
|       
|        | 32 | .1   |  |             |  | Certification of Chief Executive Officer pursuant
    to Section 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                           
|        | 32 | .2   |  |             |  | Certification of Chief Financial Officer pursuant
    to Section 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                           



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| |   |                                                 
| | - | ------------------------------------------------
| | * | Management contract or compensatory arrangement.



|  |                                                                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|+ | Certain portions of the identified exhibit were
    omitted and filed separately with the Commission and have been
    granted confidential treatment by the Commission.