ASL Marine Holdings Ltd.aslmarine.listedcompany.com/misc/ar2011.pdfASL Marine Holdings Ltd. │...

ASL Marine Holdings Ltd.Company Registration No. 200008542N

19 Pandan Road Singapore 609271

Telephone: (65) 6264 3833 Facsmile: (65) 6268 0274

Website: www.aslmarine.com

ASL M

arine H

old

ings Ltd

. An

nu

al Rep

ort 2011

2011Annual Report

ASL Marine Holdings Ltd.

01 Corporate Profi le

02 Business Overview

04 Financial Highlights

06 Five Year Financial Summary

07 Founder’s Message

08 Chairman’s Statement

11 Operations and Financial Review

14 Board of Directors

17 Senior Management

18 Group Structure

19 Corporate Governance Report

32 Risk Management Strategies

33 Financial Statements

126 Analysis of Shareholdings

128 Notice of Annual General Meeting

Proxy Form

Corporate Information

Contents


BOARD OF DIRECTORS

Executive

Ang Kok Tian (Chairman and Managing Director)

Ang Ah Nui (Deputy Managing Director)

Ang Kok Eng

Ang Kok Leong

Independent, Non-Executive

Damian Hong Chin Fock (Lead Independent Director)

Andre Yeap Poh Leong

Christopher Chong Meng Tak

AUDIT COMMITTEE

Damian Hong Chin Fock (Chairman)



NOMINATING COMMITTEE

Andre Yeap Poh Leong (Chairman)


Damian Hong Chin Fock

REMUNERATION COMMITTEE




COMPANY SECRETARIES

Lilian Tan Yin Yen

S. Thillainathan

INVESTOR RELATIONS CONTACTS


[email protected]

Financial PR Pte Ltd

romil@fi nancialpr.com.sg

REGISTERED OFFICE

19 Pandan Road

Singapore 609271

Telephone : (65) 6264 3833

Facsimile : (65) 6268 0274

Email : [email protected]

Website : www.aslmarine.com

INCORPORATION DATA

Place of Incorporation : Singapore

Date of Incorporation : 4 October 2000

Co. Reg. No. 200008542N

SHARE LISTING

ASL Marine Holdings Ltd.’s shares are listed and

traded on the Main Board of the Singapore Exchange

Securities Trading Limited since March 2003.

SHARE REGISTRAR & SHARE TRANSFER OFFICE

M & C Services Private Limited

138 Robinson Road #17-00

The Corporate Offi ce

Singapore 068906

Telephone : (65) 6227 6660

Facsimile : (65) 6225 1452

AUDITORS

Ernst & Young LLP

Certifi ed Public Accountants

One Raffl es Quay

North Tower, Level 18

Singapore 048583

Partner-In-Charge: Terry Wee Hiang Bing

(appointed since the fi nancial year ended 30 June

2010)

PRINCIPAL BANKERS

United Overseas Bank Limited

DBS Bank Ltd

The Royal Bank of Scotland N.V.

Standard Chartered Bank

Oversea-Chinese Banking Corporation Limited

ASL Marine Holdings Ltd. │ Annual Report 2011 │ 1

The Group started operations as

a trader of scrapped steel material

in 1974, and subsequently rode

on the 1980s construction sector

boom by undertaking building

construction works.

Guided by its vision to be a leading

player in the marine sector, the

Group undertook ship-breaking

activities in 1986 before venturing

into shipbuilding and shiprepair. It

successfully constructed its first

barge and tug in 1988 and 1990

respectively. In 1989, the Group

extended its vertically integrated

capabilities by providing charter

of tugs and barges and other

marine logistics services.

Headquartered and listed in

Singapore on 17 March 2003,

the Group currently owns and

operates three shipyards in

Singapore, Indonesia (Batam)

and China (Guangdong) providing

a comprehensive range of

shipbuilding and shiprepair and

conversion services spanning

myriad sectors and industries.

ASL Marine specialises in building

Offshore Support Vessels,

construction vessels, dredgers,

tugs, barges and tankers. The

Group also undertakes repairs

and conversions of all types of

vessels.

The Group operates three graving

dry docks of 300,000 dwt, 60,000

dwt and 20,000 dwt each at its

Batam shipyard. The 300,000 dwt

graving dry dock is currently one

of the largest dry docks in Batam

capable of accommodating larger

vessels such as Capesize Bulk

Carriers, Long Range Product

Tankers, Container Vessels,

Heavy-lift Ships, Floating Storage

and Offloading (“FSO”) and

Floating Production, Storage and

Offloading (“FPSO”) vessel. The

two medium-sized dry docks of

60,000 dwt and 20,000 dwt each

are to cater mainly for repair of

medium-sized vessels such as

Panamax and Handymax Bulk

Carriers and Medium Range

Products Tankers.

Equipped with a young fleet of

194 vessels consisting of barges,

towing tugs, Anchor Handling

Tugs, Anchor Handling Towing/

ASL Marine Holdings Ltd. is a vertically-

integrated marine services group

principally engaged in shipbuilding,

shiprepair and conversion, shipchartering

and other marine related services,

catering to customers mainly from Asia

Pacifi c, South Asia, Europe, Australia and

the Middle East.

Corporate Profi le

“

”

Supply vessels and other vessels,

the Group has carved a niche in

providing shipchartering services to

various industries including offshore

oil and gas, marine infrastructure,

dredging, land reclamation, marine

construction works and cargoes

transportation.

Business Overview

2

SHIPBUILDING

SHIPREPAIR AND CONVERSION

The Group provides a comprehensive range of repair and conversion

services including retro-fittings, life-extensions and repair of various

types of vessels such as:

• Tanker, Container Vessel, Bulk Carrier

• Offshore Support Vessel, Dredging Vessel, Pipe Laying

Vessel

• Jack-up Rig, Semi-submersible Rig

• FSO and FPSO

The Group’s Batam yard is equipped with the following dry docking

facilities:

• A graving dry dock measuring 340 x 60 metres to

accommodate larger vessels up to 300,000 dwt such as

Capesize bulker, FSO and FPSO

• Two medium-sized dry docks of 230 metres and 180 metres

length each to accommodate medium-sized vessels up to

60,000 dwt and 20,000 dwt respectively such as Panamax,

Handymax and medium range tankers

The Group operates three shipyards in Singapore, Batam, Indonesia

and Guangdong, China.

The Group has established a track record of building specialised

niche vessels for customers from Asia, Europe, Middle East,

America, India and Australia such as:

• Offshore Support Vessels including Heavy-Lift cum Pipelay

Vessel, Subsea Operation Vessel, Anchor Handling Towing

Supply Vessel, Platform Supply Vessel, Offshore Maintenance/

Accommodation Vessel, Rescue and Standby Vessel

• Cutter Suction Dredger and Water Injection Dredger

• Accommodation Barge, Pipe Laying Barge and Work Barge

• Commercial Vessels including Chemical Tanker (IMO II/III), Bunkering

Tanker, Product Tanker


SHIPCHARTERING

YARD FACILITIES

The Group owns a young fleet of 194 vessels consisting mainly

barges, towing tugs, Anchor Handling Tugs, Anchor Handling

Towing/Supply vessels and other vessels.

The Group charters its fleet to customers from diverse industries

including:

• Offshore oil & gas

• Marine infrastructure

• Dredging, land reclamation & marine construction works

• Marine transportation of cargoes such as coal, aggregates

and heavy equipment

The Group’s vessels are mainly deployed by customers in Singapore,

Indonesia, Australia and other South East Asia countries.

SINGAPORE

Capitalising on Singapore’s strengths in infrastructure,

telecommunications and distribution channels, the Group’s

Singapore yard also acts as a headquarter to provide technical,

engineering, logistics and procurement supports to the Batam yard

with respect to the sourcing of raw material, equipment and parts

for its operations.

BATAM, INDONESIA

The Group’s Batam yard, with a naturally sheltered deep waterfront,

has a land size of over thirty hectares. The yard is located in

a free trade zone at Batam with industrial areas designated

specifically for shipyards and developed infrastructure such as

roads, telecommunications, utilities and supporting services.

Equipped with a 300,000 dwt graving dry dock and two medium-

sized graving dry docks of 60,000 dwt and 20,000 dwt the Batam

yard is capable of repairing up to Capesize vessels.

GUANGDONG, CHINA

The shipyard in Guangdong is owned by the Group’s 60% held

subsidiary Jiang Men Hongda Shipyard Ltd. The shipyard at

Guangdong has a land size of eight hectares and it has been

engaged in mainly shipbuilding activities for smaller vessels.

Financial Highlights

4

Net Profi t ($ million)

Basic Earnings Per Share (cents)

Number of Vessels

Revenue ($ million)

Net Assets ($ million)

Net Assets Per Share (cents)

2007

2008

2009

2010

2011

318.4

400.4

435.4

363.2

468.4

2007

2008

2009

2010

2011

40.2

60.3

71.1

31.9

37.3

2007

2008

2009

2010

2011

152.9

236.5

288.6

335.8

315.3

2007

2008

2009

2010

2011

11.46

15.09

16.93

7.61

8.89

2007

2008

2009

2010

2011

59.68

78.60

96.32

105.25

80.05

2007

2008

2009

2010

2011

Tugs and Other Vessels Barges

AHT / AHTS

115

97

118

125

111

60

61

67

62

64

1

4

4

4

5


Revenue by Operations ($ million)

Gross Profi t by Operations ($ million)

2010 2011

Shipbuilding 306.3 65.4% 215.7 59.4%

Shiprepair and conversion 89.1 19.0% 81.9 22.5%

Shipchartering and rental 73.0 15.6% 65.6 18.1%

Revenue by Operations ($ million) 468.4 100.0% 363.2 100.0%

2010 2011

Shipbuilding 25.6 42.1% 17.8 35.9%

Shiprepair and conversion 18.1 29.8% 16.2 32.7%

Shipchartering and rental 17.1 28.1% 15.6 31.4%

Gross Profi t by Operations ($ million) 60.8 100.0% 49.6 100.0%

2010

2010

2011

2011

Five Year Financial Summary

6

FY2011 FY2010 FY2009 FY2008 FY2007

Profit and Loss Accounts ($’000)

Revenue 363,151 468,372 435,442 400,440 318,402

Earnings before interests, tax, depreciation

and amortisation 83,477 87,307 115,622 93,525 63,712

Profit before tax 37,802 48,070 83,949 69,857 45,133

Profit attributable to owners of the Company 31,916 37,286 71,070 60,296 40,248

Balance Sheet ($’000)

Total assets 778,920 738,612 702,689 608,805 444,172

Total liabilities 433,732 414,495 407,646 368,609 287,427

Total equity 345,188 324,117 295,043 240,196 156,745

Property, plant & equipment 493,278 437,660 397,305 255,458 216,391

Bank balances, deposits and cash 49,536 90,090 96,012 102,995 47,668

Borrowings (Net of cash) 209,279 119,173 97,300 33,636 77,820

Per Share (cents)

Basic earnings per share 7.61 8.89 16.93 15.09 11.46

Diluted earnings per share 7.61 8.89 16.93 14.60 10.72

Net assets per share 80.05 105.25 96.32 78.60 59.68

Dividend per share 1.50 3.00 4.00 4.00 2.80

Financial Ratios

Net profit margin (%) 8.8 8.0 16.3 15.1 12.6

Return on shareholders’ fund (%) 9.5 11.8 24.6 25.5 26.3

Return on total assets (%) 4.1 5.0 10.1 9.9 9.1

Debt equity ratio (times) 0.75 0.65 0.66 0.57 0.80

Net debt equity ratio (times) 0.61 0.37 0.33 0.14 0.50

Founder’s Message


Dear Shareholders,

With slowing global economy and the sovereign debt

crisis in Europe, the marine industry continued to

remain muted with an uncertain economic outlook.

The Group registered 22.5% decline in revenue

to $363.2 million in FY2011 as each of its three

business segments of shipbuilding, shiprepair and

shipchartering recorded lower revenue as compared

to last financial year. Consequently, the Group’s

earnings declined by 14.4% to $31.9 million in

FY2011.

For the shipbuilding and shiprepair segments, the

Group would continue to capitalise on the capability

and capacity of its existing yards to diversify its

customer base. For the shipchartering segment,

the Group would continue to upgrade and renew

its fleet to better meet clients’ needs.

I would like to sincerely and humbly thank all of

you for your continuous support to ASL Marine. I

would also like to take this opportunity to thank

all our business partners, customers, bankers and

employees for your continued support and belief in

ASL Marine.

Ang Sin Liu

Founder and Advisor

Chairman’s Statement

8

Dear Shareholders,

The financial year in review witnessed the industry

fundamentals remaining more on the weaker side as

the global economies continued to be engulfed by the

financial turmoil dissipating from the US and Europe.

The operating environment that the Group operates in

remained highly competitive and challenging during the

financial year FY2011. The Group however continued to

be profitable in FY2011.

The Group registered a decline of 22.5% in total revenue

to $363.2 million in FY2011 as the maritime business

environment remained tough during the financial year

and impacted the three business segments of the

Group, namely shipbuilding, shiprepair and conversion

and shipchartering operations. The three segments

recorded relatively lower revenue for FY2011. In line with

lower revenue, the gross profit for the Group declined

18.4% to $49.6 million in FY2011 whilst gross profit

margin increased marginally from 13.0% in FY2010 to

13.7% in FY2011. The other operating income increased

12.8% to $10.5 million mainly due to higher gain on

vessel sales of $10.2 million in FY2011. The Group’s net

profit attributable to equity holders declined from $37.3

million in FY2010 to $31.9 million in FY2011.

The Group recorded a 9.2% return on equity for FY2011.

The Group’s net gearing ratio increased from 0.38 as at

30 June 2010 to 0.62 as at 30 June 2011 mainly due to

borrowing arising from $50 million bonds issued during

the financial year.

Based on the respective weighted average number

of shares, the Group’s fully diluted earnings per share

reduced from 8.89 cents in FY2010 to 7.61 cents in

FY2011. The net assets per share decreased from

105.25 cents as at 30 June 2010 for 299,604,002

shares in issue to 80.05 cents as at 30 June 2011 for

419,511,294 shares in issue. There were 120,577,892

bonus shares issued in December 2010 on the basis of

4 bonus shares for every 10 existing shares.


Shipbuilding operations remained as the Group’s highest

revenue contributor with 59.4% of the total revenue

contributions. Due to lower order book in the financial

year, revenue from shipbuilding operations declined

29.6% in FY2011 to $215.7 million. New shipbuilding

orders remain subdued in the industry, the Group

however managed to secure some new orders. Since the

fourth quarter of FY2011, the Group has secured new

shipbuilding orders worth approximately $159 million for

13 vessels comprising 2 units of Emergency Response

and Rescue vessels, 9 units of Anchor Handling Towing/

Supply vessels, 1 unit of Offtake Support and Supply

vessel and 1 unit of work

barge.

The Group’s shiprepair

and conversion operations

registered 8.0% decline in

revenue to $81.9 million

in FY2011 mainly due to

the absence of larger ship

conversion jobs during the

financial year. The Group

entered FY2011 with enhanced facilities at the Batam

yard with the graving dry dock lengthened from 260 to

340 metres and the addition of two new medium-sized

dry docks of 60,000 dwt and 20,000 dwt each. With

the enlarged capacity of 300,000 dwt for the graving

dock, the Group was able to accommodate and work

on larger vessels such as tankers, FSO and capesize

bulk carriers, during FY2011.

The Group’s shipchartering operations witnessed the

increase in fleet size from 177 vessels as at 30 June

2010 to 194 vessels as at 30 June 2011, comprising

barges, towing tugs, Anchor Handling Tugs, Anchor

Handling Towing/ Supply vessels and other vessels.

Revenue from the shipchartering segment declined

10.2% to $65.6 million in FY2011 mainly due to weaker

demand for towing jobs during the financial year which

affected the vessel utilisation rate and charter pricing.

The Group incurred a total capital expenditure of $122.2

million in FY2011 which included $58.7 million for

acquisition of vessels, $8.2 million for leasehold property

and building, $4.4 million for plant and machinery and

$50.4 million for assets under construction including

yard infrastructure development and vessels under

construction.

Outlook

Demand for new shipbuilding orders is expected to be

negatively impacted by the growing concerns about

slower global economic growth.

As at August 2011, the Group’s

total outstanding shipbuilding

order book from external

customers stood at approximately

$310 million for 29 vessels,

comprising 14 units of offshore

support vessels (including Diving

Support vessel, Anchor Handling

Towing/ Supply vessels, Offtake

Support and Supply vessel and

Emergency Response and Rescue vessels), 8 units

of tugs (Rotor tugs and Azimuth Stern Drive tugs), 2

units of self-propelled cutter suction dredgers and 5

units of barges and other vessels. These 29 vessels

are scheduled for progressive deliveries up to the third

quarter of 2013. Barring any unforeseen circumstances,

approximately 58% of the order book is expected to be

recognised within FY2012.

The market conditions for the shiprepair segment are

expected to remain competitive. The Group however

remains positive on the longer term outlook of the

segment with its enhanced docking facilities at the

Batam yard. The Group is currently establishing an

offshore services division to target on higher value

offshore oil and gas related conversion and repair

contracts such as FSO and FPSO.

Th e Group is well positioned

to leverage on its expanded

docking facilities at Batam

yard to enlarge its customer

base for future growth.

“

”

10

Chairman’s Statement

The Group’s shipchartering operations have an order

book of approximately $45 million as at 30 June 2011

with respect to long term shipchartering contracts. The

Group continuously aims to enhance and renew its

shipchartering fleet in order to better meet customers’

needs. As part of the fleet enhancement initiative,

the Group’s shipchartering operations have a total

outstanding delivery order of 14 new vessels worth

approximately $78 million of which long term charter

contract has been secured for 1 vessel. These new

vessels comprising towing tugs, pipe-lay barge, ROV

support vessel, Anchor Handling Tugs and barges and

they are being built internally by the Group. Demand

for this segment is underpinned by domestic marine

infrastructure, construction and land reclamation projects

such as the port expansion and construction of new

international cruise terminal, transportation needs

for natural resources in the South East Asia region

particularly in Indonesia, as well as offshore oil and gas

activities in South East Asia and Australia and the marine

infrastructure, harbour and terminal services sectors in

Australia.

Appreciation

I would like to take this opportunity to thank all our

shareholders for the support and confidence in the

Group. In appreciation of the support and to reward the

shareholders, the Board has proposed a final one-tier

tax-exempt dividend of 1.5 cents per ordinary share for

FY2011, representing a payout of approximately 20%

of the Group’s FY2011 earnings. The final dividend, if

approved at our upcoming Annual General Meeting, will

be paid on 16 November 2011.

On behalf of the Board, I would also like to express my

deep appreciation to all our management and staff for

their unceasing commitment and hard work towards

ASL Marine. Also, I would like to mention my sincerest

thanks and gratitude for my fellow directors for their

advice and guidance, and to our customers, partners,

business associates and suppliers for their strong and

loyal support.

Ang Kok Tian

Chairman and Managing Director

Operations and Financial Review


Revenue and Profitability

The Group’s revenue declined 22.5% to $363.2

million for the 12 months ended 30 June 2011

(“FY2011”). This was due to declines in all the three

business segments, namely shipbuilding, shiprepair

and conversion and shipchartering, due to the

continued tough maritime business environment.

In line with lower revenue, the Group’s gross profit

fell 18.4% to $49.6 million for FY2011. Gross profit

margin however, increased marginally from 13.0%

in FY2010 to 13.7% in FY2011.

In FY2011, other operating income for the Group

increased 12.8% to $10.5 million essentially because

it included higher gain on the disposal of plant and

equipment worth $6.2 million from the sale of 13

vessels (FY2010: $4.2 million for 20 vessels) and

gain from disposal of vessels held for sale of $4.0

million (FY2010: $2.5 million).

The Group’s administrative expenses decreased

5.1% to $9.3 million in FY2011. Other operating

expenses reduce 3.1% to $3.3 million primarily

due to the absence of impairment loss on vessels

(FY2010: $2.3 million) and lower net allowance for

doubtful trade receivables partially offset by higher

foreign exchange loss.

Finance costs of $8.9 million were 10.7% higher in

FY2011 as a result of absence of capitalisation of

$0.8 million borrowing costs recorded in FY2010.

The Group enters into “plain vanilla” interest rate

swaps to hedge against interest rate fluctuations on

its long-term borrowings.

Shipbuilding

The Group’s shipbuilding revenue declined by 29.6%

to $215.7 million in FY2011 due to lower order

book. Shipbuilding operations registered 30.6%

decline in gross profit to $17.8 million, while gross

profit margin remained relatively stable at 8.2%

(FY2010: 8.4%).

Including new shipbuilding orders secured since

the fourth quarter of FY2011 totaling approximately

$159 million for 13 vessels, the Group’s total

outstanding shipbuilding order book from external

customers stood at $310 million for 29 vessels as

at August 2011. These 29 vessels are scheduled

for progressive deliveries up to the third quarter

of 2013 and include offshore support vessels,

diving support vessels, Anchor Handling Towing/

Supply vessels, tugs, self-propelled cutter suction

dredgers and other vessels. Barring any unforeseen

circumstances, approximately 58% of the order

book is expected to be recognised within FY2012.

Shiprepair and Conversion

Revenue from the Group’s shiprepair and conversion

operations declined 8.0% to $81.9 million in FY2011

due to absence of larger ship conversion jobs during

the financial year. As a result of pricing pressures,

the segment’s gross profit declined 10.6% to $16.2

million while gross profit margin fell marginally from

20.3% in FY2010 to 19.7% in FY2011.

The Group’s docking facilities at Batam consists of a

graving dry dock of 340 metres length (300,000 dwt)

and two medium-sized dry docks of 230 metres

12

Operations and Financial Review

length (60,000 dwt) and 180 metres length (20,000

dwt) respectively. During the financial year, the

Group undertook shiprepair works on larger vessels

such as tankers, FSO and capesize bulk carriers.

Shipchartering

The Group’s shipchartering segment recorded

10.2% decline in revenue to $65.6 million in FY2011

mainly attributed to weaker market demand for

towing jobs during the year. Gross profit fell 8.2%

to $15.7 million in tandem with lower revenue, while

gross profit margin increased marginally to 23.9% in

FY2011 (FY2010: 23.4%). As at 30 June 2011, the

Group had 194 vessels in its fleet (177 vessels as

at 30 June 2010) comprising barges, towing tugs,

Anchor Handling Tugs and Anchor Handling Towing/

Supply vessels and other vessels.

The bulk of the Group’s shipchartering revenue

in FY2011 was driven by short-term and ad

hoc contracts. In FY2011, long-term contracts

with duration of more than a year contributed

approximately 11% of the shipchartering revenue.

As at 30 June 2011, the Group’s outstanding order

book for long-term shipchartering contracts stood

at approximately $45 million.

In order to better meet customers’ needs, the Group

remains strategically committed towards maximising

deployment, enhancing and renewing its fleet of

vessels. As at the end of FY2011, the shipchartering

operations had a total outstanding delivery order

of 14 new vessels worth approximately $78 million

which are being built internally by the Group. These

14 vessels under construction comprised towing

tugs, pipe-lay barge, ROV support vessel, Anchor

Handling Tugs and barges, of which a long-term

charter contract has been secured for 1 vessel.

Share of Results of Jointly-Controlled Entity and Associate

The Group’s share of losses incurred by HKR-

ASL Joint Venture Limited and the Group’s

associated company, Fastcoat Industries Pte.

Ltd. and its subsidiary amounted to $0.1 million

(FY2010: $0.2 million) and $0.6 million (FY2010:

$0.5 million) respectively. HKR-ASL Joint Venture

Limited has been dormant since the completion of

a shipchartering project in FY2009.

Operating Cash Flows

In FY2011, the Group’s net cash inflow of $34.4

million from operating activities was $29.5 million

lower as compared to $63.9 million in FY2010.

This decline was primarily due to comparatively

lower earnings, higher work-in-progress incurred

for shipbuilding projects and lower receipts on trade

receivables partially offset by lower payments on

trade payables.

The Group funded its working capital, capital

expenditure and repayment of borrowings through its

operating cash flows, external borrowings including

bonds issuance, bank loans and trust receipts as

well as proceeds from sale of vessels.


Interest-bearing Loans and Borrowings

The Group’s interest-bearing loans and borrowings are set out as follows:

30 June 2011$’000

30 June 2010$’000

Due within one year:

Trust receipts (Unsecured) 34,865 25,033

Obligations under finance leases (Secured) 6,210 2,954

Short term bank loans (Secured) – 1,030

Short term bank loans (Unsecured) 9,000 1,000

Long term bank loans (Secured) 31,101 35,086

Notes issued under Multicurrency Debt Issuance Programme (Unsecured) 22,100 11,000

103,276 76,103

Due after one year:

Obligations under finance leases (Secured) 15,872 5,781

Long term bank loans (Secured) 46,767 62,379

Notes issued under Multicurrency Debt Issuance Programme (Unsecured) 92,900 65,000

155,539 133,160

Interest-bearing loans and borrowings 258,815 209,263

Gearing ratio 0.77 0.66

Gearing ratio (Net of cash) 0.62 0.38

The Group’s total interest-bearing loans and borrowings increased by $49.6

million to $258.8 million. The increase was mainly due to borrowing under

the $50 million bonds issued in March 2011 and other borrowings of $82.0

million partially offset by redemptions and repayments made of $82.4 million

during the year.

The $50 million bonds issued in FY2011 under the Company’s $300 million

Multicurrency Debt Issuance Programme comprised of fixed rate notes with a

3-year tenor maturing in March 2014. The Group’s total borrowings pursuant

to bonds issuance amounted to $115 million as at 30 June 2011 (30 June

2010: $76 million).

14

Ang Kok Tian, age 50Chairman and Managing Director

Mr K T Ang was appointed an

Executive Director of the Company

in October 2000, and Chairman of

the Board and Managing Director

in January 2003.

Mr K T Ang has been with the

Group for more than 20 years

and has extensive knowledge

and experience in the industry

and is instrumental in developing

the shipbuilding, shiprepair and

conversion and shipchartering

business of the Group. Mr K T

Ang is in charge of the Group’s

business strategies and direction,

corporate plans and policies as

well as the general management

of the Group. In particular, he

is in charge of the shipbuilding

and shiprepair divisions and is

responsible for all aspects of the

shipyard’s operations, including

estimations, negotiations and

contract finalisation. Mr K T Ang

began his career at Ang Sin Liu

Hardware, handling administration,

purchasing and marketing for the

company. He graduated from the

National University of Singapore

in 1986 where he received his

Bachelor’s Degree in Science.

Ang Ah Nui, age 47

Deputy Managing Director

Mr A N Ang was appointed

an Executive Director of the

Company in October 2000 and

Deputy Managing Director in

January 2003.

Mr A N Ang, having been with

the Group for more than 20

years, has extensive industry

knowledge and experience

and is instrumental in seeking

new markets for the business.

Mr A N Ang is jointly responsible

for the Group’s business

strategies and direction, corporate

plans and policies, and for the

general management of the

Group’s shiprepair and conversion

and shipchartering operations,

including business development

and operations.

Board of

Directors


Ang Kok Eng, age 44 Executive Director

Mr K E Ang was appointed an


in October 2002.

Mr K E Ang is responsible for

developing marketing strategies,

identifying new businesses and

markets and customers for Asia.

Mr K E Ang joined the Group

on 1 December 1994 and was

responsible for the operations of

the shipyards in Batam, Indonesia

and Guangdong, China. He is

also in charge of the Group’s

management information systems.

Prior to joining the Group, Mr K E

Ang was the Product Manager

of Navystar Industrial Co. Ltd,

a toy manufacturing company

based in Hong Kong and China.

He graduated from the University

of Michigan, USA in 1992 with a

Bachelor of Science Degree in

Electrical Engineering.

Ang Kok Leong, age 42

Executive Director

Mr K L Ang was appointed an


in October 2002.

Mr K L Ang is responsible for

developing marketing strategies,

identifying new businesses and

markets and customers for

Europe, Middle East, Australia,

South America and East Malaysia.

Mr K L Ang joined the Group on

1 January 1995 as a Marketing

Executive in the shipbuilding

division. He graduated from

Carnegie Mellon University in 1994

with a Bachelor of Science Degree

in Industrial Management.

Andre Yeap Poh Leong, age 50

Independent Director

Mr Yeap joined the Board in

January 2003.

Mr Yeap is currently a Senior

Counsel at Rajah & Tann LLP.

Prior to joining Rajah & Tann LLP

in 2004, he ran his own practice

under the name “Andre Yeap

& Co”. Mr Yeap had worked in

various law firms in Singapore.

He was a Senior Litigation Partner

at Allen & Gledhill (now known as

Allen and Gledhill LLP) where he

had worked from 1987 to 2000,

before joining the partnership of

Lee & Lee in 2001. His practice

focuses on banking, commercial

and corporate litigation with

special emphasis on securities

and stockbroking-related litigation

as well as construction litigation,

including ship and oil-rig matters,

both in Court and in arbitration.

He was appointed Senior Counsel

on 4 January 2003. He graduated

from the National University of

Singapore with a Bachelor’s

Degree in Law and is a member

of the Singapore International

Arbitration Centre.

16

Damian Hong Chin Fock, age 63

Independent Director

Mr Hong joined the Board in May

2003.

Mr Hong is also the independent

director of listed company,

Riverstone Holdings Limited,

the executive director of Shared

Services for Charities Limited

and director of several private

companies. He was a part

time lecturer at the Singapore

Management University and was

an Examiner of the Taxation Paper

for the Association of Chartered

Certified Accountants.

Mr Hong was employed by the

Inland Revenue Authority of

Singapore before joining KPMG

in 1979. He retired from KPMG

as Tax Principal in 1997 and

acted as Tax Consultant in KPMG

until 2004. Mr Hong was also

formerly a Tax Consultant in Allen

& Gledhill between 1994 to 2008.

He graduated from University of

Singapore with a Bachelor of

Social Science Degree (Upper

Class II Honours in Economics).

Christopher Chong Meng Tak, age 52Independent Director

Mr Chong joined the Board in

January 2006.

Mr Chong is a partner and co-

founder of ACH Investments Pte

Ltd, a specialist corporate advisory

firm in Singapore. He is currently

an independent director of several

listed companies including Koda

Ltd, Lorenzo International Limited,

Xpress Holdings Ltd and Ying Li

International Real Estate Limited

on the SGX-ST, Koon Holdings

Limited and GLG Corp Ltd on

the Australian Stock Exchange

and Imagi International Holdings

Ltd on the Hong Kong Stock

Exchange. Mr Chong is also a

director/trustee of several private

companies, trusts and funds.

Mr Chong has signif icant

exper ience in corporate

governance and corporate affairs.

He was a multi-award winning

analyst and the managing director

of HSBC Securities (Singapore)

Pte Ltd, formerly known as

HSBC James Capel Securities

(Singapore) Pte Ltd, and prior to

this was an executive director

of UOB Kay Hian Holdings Ltd,

formerly known as Kay Hian

James Capel Ltd.

Mr Chong holds a Bachelor of

Science degree in Economics

(1st Honours) from the University

College of Wales and a Master of

Business Administration degree

from the London Business

School. He is a member of the

Institute of Chartered Accountants

of Scotland, a Fellow of the

Australian CPAs, a Fellow of the

Hong Kong Institute of Certified

Public Accountants, a Fellow of the

Singapore Institute of Directors, a

Fellow of the Australian Institute of

Company Directors and a Master

Stockbroker of the Securities and

Derivatives Industry Association

of Australia.

Board of

Directors

Senior Management


Tay Kes SiongGeneral Manager (Shipchartering)

Capt. Tay joined the Group in October 2002 and is

responsible for managing the shipping operations

of the Group, including marketing, overall fleet

scheduling, maintenance, crew management,

shipping agencies, freight forwarding and freight

documentation.

Capt. Tay has more than 30 years of experience in

the shipping and marine industry. Prior to joining

the Group, Capt. Tay was a Marine Surveyor and

a Director of Marine Management Surveyors and

Services Pte Ltd which engaged in marine and

cargo surveys, consultancy, sea trials, compass

adjustments, pre-purchase inspections, shipping

agencies, forwarding and crew management.

S. Thillainathan Group Legal Manager and Company Secretary

Thillainathan joined the Group in July 2004 and is

responsible for the legal, secretarial and insurance

matters of the Group.

Thillainathan has more than 30 years experience

practicing and handling legal and insurance matters

in the marine industry. Before joining the Group, he

was employed as Senior Manager, Legal, by Labroy

Marine Limited for more than 7 years. Prior to that

he worked as Vice President, Legal and Secretariat

of Sembawang group of companies for more than

16 years.

Thillainathan holds a Bachelor of Laws Degree from

University of Singapore and was admitted as an

Advocate & Solicitor of the High Court of Singapore

in 1975.

Lilian Tan Yin YenGroup Financial Controller and Company Secretary

Lilian joined the Group in July 2006 and is

responsible for the Group’s accounting, finance,

treasury, secretarial, human resource and

administrative functions.

Lilian has more than 26 years experience in the

finance related fields. Her work experience includes

construction, manufacturing and trading industries.

Prior to joining the Group, she was the Group

Financial Controller of SP Corporation Ltd which

she held various managerial positions from 1992

to 2006 responsible for finance, treasury, human

resource and administrative functions. Her earlier

work experience included commercial and CPA

firms. Lilian holds a Bachelor of Accountancy

Degree from the National University of Singapore

in 1984. She is a fellow member of the Institute of

Certified Public Accountants of Singapore.

18


Shipbuilding and Shiprepair

ASL Shipyard Pte Ltd100%

Shipchartering

100% ASL Offshore & Marine Pte. Ltd.

100% Capitol Marine Pte Ltd

100% Capitol Offshore Pte Ltd

100% Capitol Shipping Pte Ltd

100% Capitol Tug & Barge Pte Ltd

100% Lightmode Pte Ltd

100% Capitol Logistics Pte. Ltd.

100% Capitol Navigation Pte. Ltd.

100% Capitol Aquaria Pte. Ltd.

100% Intan Synergy Pte. Ltd.

100% Intan Offshore Pte. Ltd.

100% Intan Oceans Pte. Ltd.

100% Intan Scorpio Pte. Ltd.

60% ASL Triaksa Offshore Pte. Ltd.

100% Capitol Oceans Pte. Ltd.

100% ASL Maritime Services Pte. Ltd.

100% Intan Maritime Investments Pte. Ltd.

Jointly Controlled Entity/Associate

PT. ASL Shipyard Indonesia10%

Hongda Investment Pte. Ltd.

60%

Jiang Men Hongda Shipyard Ltd.

Intan Overseas Investments Pte. Ltd.100%

75% PT. Cipta Nusantara Abadi

PT. Capitol Nusantara Indonesia

100% PT. Bina Kontinental Lestari

PT. Awak SamuderaTransportasi

90%

100%

100%

100% 100%

80%

50% HKR-ASL Joint Venture Limited

44.5%Fastcoat Industries Pte. Ltd.

PT. Fastcoat Industries

PT. Cemara Intan Shipyard

Group Structureas at 30 June 2011

18

Corporate Governance Report


The board of directors (the “Board”) of ASL Marine Holdings Ltd. (the “Company”) is committed to maintaining a high

standard of corporate governance by complying with the principles and guidelines of the Code of Corporate Governance

2005 (the “Code”) issued by the Ministry of Finance.

This report outlines the Company’s corporate governance practices with specific reference made to the Code. The

Board is pleased to confirm that the Company has complied with the Code, save for deviation with reference to

Guideline 3.1 (Chairman and CEO should be separate persons) which is explained in this report.

BOARD MATTERS

The Board’s Conduct of Affairs

Principle 1: Every company should be headed by an effective Board to lead and control the company.

The Board is collectively responsible for the success of the company. The Board works with

management to achieve this and the management remains accountable to the Board.

The primary function of the Board is to protect the assets and to enhance the long-term value of the Company for

its shareholders. Besides carrying out its statutory responsibilities, the Board oversees the businesses and affairs of

the Group. It reviews and advises on overall strategies, policies and objectives, sets goals, supervises management,

monitors business performance and goals achievement. The Board also oversees the processes for evaluating the

adequacy of internal controls, risk management, financial reporting and compliance and assumes responsibility for

overall corporate governance of the Group. Each director is expected, in the course of carrying out his duties, to

exercise independent judgment and act in good faith in the best interests of the Company.

The Board’s approval is required for matters such as the Group’s financial plans and annual budget, key operational

initiatives, acceptances of bank facilities, major investments and divestments proposals, material acquisitions and

disposals of assets, interested person transactions of a material nature and release of the Group’s quarterly and full year

financial results to the Singapore Exchange Securities Trading Limited (“SGX-ST”). Apart from matters that specifically

require the Board’s approval, the Board approves transactions exceeding certain threshold limits and delegates authority

for transactions below those limits to management so as to optimise operational efficiency.

To assist the Board in the execution of its responsibilities and to provide independent oversight of management,

various Board Committees, namely the Audit Committee (“AC”), Nominating Committee (“NC”) and Remuneration

Committee (“RC”), have been constituted with clear written terms of reference. These Committees are made up solely of

independent non-executive directors and the effectiveness of each Committee is constantly monitored by the Board.

No new director was appointed by the Company during the financial year ended 30 June 2011. For new appointment

to the Board, the newly-appointed director will be given a formal letter setting out his duties and obligations and he

will undergo an orientation program to be familiar with the Group’s businesses and governance practices. Directors

are also invited to yards visit and meet with management to gain a better understanding of the Group’s business

operations. To keep pace with regulatory changes, the director’s own initiatives are supplemented from time to time

with information, updates and sponsored seminars conducted by external professionals, including any changes in

legislation and financial reporting standards, government policies and regulations and guidelines from SGX-ST that

affect the Company and/or the directors in discharging their duties.

During the year, an independent non-executive director reviewed our Indonesian operations including visiting both

Batam and Jakarta and speaking to our Indonesian subsidiary’s auditors and legal advisors without the presence of

management. During the year, the independent non-executive directors attended relevant professional conferences,

seminars, workshops and courses including those conducted by SGX-ST on updates concerning guidance to the best

practice of director and the regulatory environment in Singapore. One of our independent non-executive directors has

attended, passed and obtained the Company Director Course Diploma issued by the Australian Institute of Company

Directors.

The Board conducts regular scheduled meetings and ad hoc Board meetings are convened when warranted by

circumstances relating to matters that are material to the Group. The Board meets at least six times a year. Telephonic

attendance and video conferencing at Board meetings are allowed under the Company’s articles of association. The

number of meetings held and the attendance of each director at every Board and Board Committee meetings during

the financial year ended 30 June 2011 are as follows:

20


Attendance at Board and

Board Committee meetings Board

Audit

Committee

Nominating

Committee

Remuneration

Committee

Number of meetings held 6 6 2 3

Number of meetings attended:

Executive directors

Ang Kok Tian 6 6* 2* 3*

Ang Ah Nui 6 6* 2* 3*

Ang Kok Eng 5 – – –

Ang Kok Leong 4 – – –

Independent non-executive

directors


(Chairman of NC) 5 5 2 3

Christopher Chong Meng Tak 6 6 2 3


(Chairman of AC and RC) 6 6 2 3

* Attendance by invitation of the Committee

Board Composition and Guidance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise

objective judgment on corporate affairs independently, in particular, from management. No

individual or small group of individuals should be allowed to dominate the Board’s decision

making.

The Board comprises seven directors, three of whom are independent non-executive directors. The independent non-

executive directors make up more than one-third of the Board thus providing an independent element on the Board

capable of exercising independent judgment on corporate affairs of the Group and provide management with a diverse

and objective perspective to enable balanced and well-considered decisions to be made. The NC determines, on an

annual basis, the independence of each independent non-executive director based on the guidelines provided in the

Code as one who has no relationship with any of the substantial shareholders of the Company, the Company, its

related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the

director’s independent business judgment in the conduct of the Company’s affairs.

The Board considers the current Board size and composition appropriate for the nature and scope of the Group’s

operations. The Board however intends to further review its Board size and composition taking into considerations the

key recommendations of the Singapore Corporate Governance Council announced in June 2011.

Among the directors are business leaders, financial, tax and legal professionals who possess the relevant expertise and

skill sets for effective decision-making. One of our independent non-executive directors whilst never having held an

executive position with a ship builder and ship repairer, has over 20 years experience analyzing, reviewing and advising

companies in such businesses. The profiles of the directors are set out on pages 14 to 16 of this Annual Report. The

combined business, management, finance, strategic planning and professional experience, knowledge and expertise

of the directors provide the necessary core competencies for the Board to effectively lead and manage the Group’s

businesses and operations.

The independent non-executive directors participate actively during Board meetings. In addition to providing

constructive advice to management on pertinent issues affecting the affairs and business of the Group, they also review

management’s performance in meeting goals and objectives of the Group’s business segments. The Company has


benefited from management’s access to its directors for guidance and exchange of views both within and outside of

the meetings of the Board and Board Committees. The independent non-executive directors communicate amongst

themselves and with the Company’s auditors and senior managers. Where necessary, the Company co-ordinates

informal meetings for independent non-executive directors to meet without the presence of the executive directors

and/or management.

Chairman and Chief Executive Officer

Principle 3: There should be a clear division of responsibilities at the top of the company – the working

of the Board and the executive responsibility of the company’s business – which will ensure

a balance of power and authority, such that no one individual represents a considerable

concentration of power.

Mr Ang Kok Tian is both the Chairman of the Board and the Managing Director of the Company. Mr Ang Kok Tian is

involved in the day-to-day running of the Group; he leads management in setting marketing strategies and objectives

and ensures accurate, adequate and timely flow of information between the Board, management and shareholders

of the Company. He facilitates constructive discussions between the Board and management and encourages their

effective contributions. Whilst the independent non-executive directors of the Company possess the relevant expertise

and experience in their respective professional fields, none have had significant hands-on experience in the marine

industry. Consequently, and given the current volatility and challenges of the marine industry, they are of the view that it

is in the best interests of the Group to continue to have an Executive Chairman so that the Board can have the benefit

of a Chairman who is knowledgeable about the marine industry and the businesses of the Group and is thereby better

able to guide discussions and ensures that the Board is properly briefed in a timely manner on pertinent issues and

developments. The Executive Chairman takes a leading role in ensuring the Company’s compliance with corporate

governance guidelines with the full support of the directors, Company Secretaries and management.

Mr Ang Kok Tian is supported by Mr Ang Ah Nui, the Deputy Managing Director on the setting of business strategies

and managing the day to day operations of the Group. In the absence of Mr Ang Kok Tian, Mr Ang Ah Nui would stand

in as the acting Managing Director to ensure continuity of the business operations of the Company.

To enhance the independence of the Board, an independent non-executive director, Mr Damian Hong Chin Fock has

been appointed as lead independent director to coordinate the activities of the independent non-executive directors and

act as principal liaison between the independent non-executive directors and Chairman on sensitive issues. The lead

independent director is also available to shareholders where they have concerns, for which contact through the normal

channels of the Chairman and Managing Director has failed to resolve or for which such contact is inappropriate.

All major decisions made by the Board are subject to majority approval of the Board and are reviewed by the AC,

whose members comprise only independent non-executive directors of the Company. Mr Ang Kok Tian’s performance

and remuneration are reviewed annually by the NC and RC respectively, whose members comprise only independent

non-executive directors of the Company. The Board believes that there are adequate safeguards in place to ensure

an appropriate balance of power and authority within the spirit of good corporate governance.

Board Membership

Principle 4: There should be a formal and transparent process for the appointment of new directors to

the Board.

The Board established the NC in March 2003 which currently consists of three independent non-executive directors,

namely, Mr Andre Yeap Poh Leong, Mr Damian Hong Chin Fock and Mr Christopher Chong Meng Tak. Mr Andre Yeap

is the Chairman of the NC and he is not associated in any way with the substantial shareholders of the Company.

22


The operations of the NC are regulated by its terms of reference, which were approved and are subject to periodic

review by the Board. The functions of the NC include making recommendations to the Board on all appointments

and re-appointments/re-elections of directors taking into consideration the mix of expertise, skills and attributes of

the directors for meeting the business and governance needs of the Group. The NC is also tasked to assess the

independence of the directors annually.

For appointment of new directors to the Board if a vacancy arises, the NC will, in consultation with the Board, evaluate

and determine the selection criteria with due consideration to the mix of skills, knowledge and experience of the existing

Board. The selection criterion includes integrity, diversity of competencies, expertise and financial literacy. The NC’s

selection process involves the evaluation of the existing strength and capabilities of the Board, assessment as to

whether the likely future needs of the Board can be fulfilled by the appointment of one person and if not, consult the

Board in respect to the appointment of two persons, seek suitably qualified candidates widely, review and undertake

background checks on the resumes received, short-list and interview candidates including a briefing of the duties

required to ensure that there are no expectations gap. The NC will seek candidates widely and beyond persons directly

known to the directors and is empowered to engage professional search firms and also give due consideration to

candidates identified by any person. The NC will interview all potential candidates in frank and detailed meetings and

make recommendations to the Board for approval.

Every year, the NC reviewed and affirmed the independence of the Company’s independent non-executive directors.

Each director is required to complete a Director’s Independence Checklist on an annual basis to confirm his

independence. The checklist is drawn up based on the guidelines provided in the Code and requires each director

to assess whether he considers himself independent despite not being involved in any of the relationships identified

in the Code. The checklist requires each director to disclose any relationship which would interfere or be reasonably

perceived to interfere with the exercise of independent judgment in carrying out the functions as an independent

non-executive director of the Company. Amongst the items included in the checklist are disclosure pertaining to any

employment including compensation received from the Company or any of its related corporations, relationship to an

executive director of the Company or its related corporations, immediate family member employed by the Company or

any of its related corporations as senior executive officer whose remuneration is determined by the RC, shareholding

or partnership or directorship (including those held by immediate family members) in an organization to which the

Company or any of its subsidiaries made, or from which the Company or its subsidiaries received, significant payments

in the current or immediate past financial year. The NC will then review the checklist completed by each director to

determine whether the director is independent. For the year under review, the NC has ascertained and is satisfied that

all non-executive directors are independent.

The NC has also reviewed directors with multiple directorships. With the exception of Mr Christopher Chong Meng Tak

who holds four concurrent directorships in other companies that have a primary listing on SGX-ST (making five such

directorships including the directorship of the Company), the remaining six directors hold fewer than two concurrent

directorships in other listed companies in SGX-ST. The NC has been informed by Mr Christopher Chong Meng Tak

that he will able to meet his obligations to the Company and in the event that any extraordinary duties are being

required by other companies he has or will be inviting an alternative director to share the responsibilities. For the year

under review, the NC is satisfied that the majority of the directors held not more than two concurrent directorships

in companies listed in SGX-ST and the directors with multiple directorships have given adequate time and attention

to the affairs of the Group through attendance at meetings of the Board and Board Committees, including electronic

and telephone communications.

Pursuant to Article 91 of the Company’s articles of association, every director (other than the Managing or Joint

Managing Director) shall retire from office once every three years and for this purpose, one-third of the Board are

to retire from office by rotation and be subject to re-election at the Company’s annual general meeting (“AGM”). In

addition, Article 97 of the Company’s articles of association provides that a newly appointed director must retire and

submit himself for re-election at the next AGM following his appointment. Thereafter, he is subject to re-election at

least once in every three years.

At the forthcoming AGM, Mr Ang Ah Nui and Mr Damian Hong Chin Fock will be retiring by rotation pursuant to Article

91 of the Company’s articles of association. Both of them, being eligible for re-election, have offered themselves for

re-election.


The dates of first appointment and last re-election of each director, together with their existing directorships in listed

companies as well as past directorships in other listed companies in the last three years are set out below:

Name of director

Date of first

appointment/

last re-election

Current directorships

in listed companies

Past directorships

in other listed

companies

(from 1 July 2008 to

30 June 2011)

Ang Kok Tian

(Chairman and Managing

Director)

4 October 2000/

12 November 2002

ASL Marine Holdings Ltd. Nil

Ang Ah Nui

(Deputy Managing Director)

4 October 2000/

17 October 2008


Ang Kok Eng

(Executive Director)

18 October 2002/

21 October 2009


Ang Kok Leong

(Executive Director)

18 October 2002/

25 October 2010



(Independent Non-executive

Director)

17 January 2003/

25 October 2010




Director)

16 May 2003/

17 October 2008


Riverstone Holdings Limited

Eng Wah Organisation

Limited.

Financial One Corp.



Director)

3 January 2006/

21 October 2009


Koda Ltd

Lorenzo International

Limited

Xpress Holdings Ltd

Ying Li International Real

Estate Limited

GLG Corp Ltd1

Koon Holdings Limited1

Imagi International Holdings

Ltd2

SKY China Petroleum

Services Ltd

Win Fund3

1 Listed on the Australian Stock Exchange2 Listed on the Hong Kong Stock Exchange3 Listed on the Luxembourg Stock Exchange

Board Performance

Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the

contribution by each director to the effectiveness of the Board.

The NC assesses the performance and effectiveness of the Board as a whole as well as the contribution of individual

directors to the effectiveness of the entire Board. The assessment process involves both a qualitative and quantitative

assessment. The qualitative assessment is undertaken by the independent non-executive directors in the form of a

discussion between themselves only. The quantitative assessment involves scoring a pre-agreed weighted score card

against various criteria including key performance indicators. The design of the quantitative assessment included input

and advice from third party professionals. This process ensure that the overall evaluation is undertaken against a set

of objective, quantitative and qualitative performance criteria that had been proposed by the NC and approved by the

Board.

24


The performance criteria includes the evaluation of the size and composition of the Board, the Board’s access

to information, the Board’s accountability and performance in relation to discharging its principal functions and

responsibilities, the directors’ standards of conduct and financial targets such as return on assets, return on equity

and the Company’s share price performance vis-a-vis the Singapore Straits Times Index and a benchmark index of

its industry peers. The Board, however, notes that the financial indicators provide only a snapshot of the Company’s

performance, and do not fully reflect on-going risk or measure the sustainable long-term wealth and value creation of

the Company.

In assessing the individual director’s performance and the effectiveness of the Board, the NC takes into consideration

the individual director’s industry knowledge and/or functional expertise, contribution, attendance at meetings of the

Board or Board Committees and workload requirements.

Access to Information

Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete,

adequate and timely information prior to Board meetings and on an on-going basis.

All directors have unrestricted access to the Company’s records and information. The Board members receive

quarterly management reports and budget variance reports to enable them to oversee the Group’s financial and

operational performance. The Board members also receive relevant information and comprehensive analysis furnished

by management pertaining to matters to be brought before the Board for discussion and decision. The independent

non-executive directors also, on an ad hoc basis, speak directly and privately to the CFO of the Company concerning

financial matters of the Group.

The Board and the Board Committees are furnished with complete and adequate information in a timely manner to enable

full deliberation on the issues to be considered at the respective meetings. Board papers with sufficient background

and explanatory information are circulated at least three days before each meeting. From time to time, managerial staff,

lawyers, the Company’s auditors or external consultants engaged on specific projects are invited to attend the Board

and Board Committee’ meetings so as to provide additional insight into the matters for discussions.

The Board has offsite meetings at least once in two years. These meetings are designed to focus on strategy, risk

and medium & longer term growth issues. At these meetings, the independent non-executive directors are provided

undertaking to industry trends and developments, government and international policies and opportunities and threats

that face the Company. The Board then weights up options and sets or revises growth targets and risk levels.

The Board has separate and independent access to the management and Company Secretaries at all times in carrying

out their duties. The directors, in furtherance of their duties, are entitled to take independent professional advice at the

expense of the Company when necessary. The Company Secretary assists the Chairman to ensure good information

flows within the Board and its Committees as well as the information flows between management and the independent

non-executive directors. The Company secretary also assists the Board on compliance with regulatory requirements

as well as professional development as required.

The Company Secretary attends all Board and Board Committee meetings of the Company and ensures that Board

procedures are followed and that applicable statutory and regulatory rules and regulations are complied with. Directors

are also invited from time to time to attend seminars pertaining to corporate governance and strategic business

affairs.

REMUNERATION MATTERS

Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for developing policy on executive

remuneration and for fixing the remuneration packages of individual directors. No director

should be involved in deciding his own remuneration.

The Board established the RC in March 2003 which currently consists of three independent non-executive directors,

namely, Mr Damian Hong Chin Fock, Mr Andre Yeap Poh Leong and Mr Christopher Chong Meng Tak. Mr Damian


Hong is the Chairman of the RC. In discharging their duties, the members have access to advice from the internal

human resources personnel, and if required, advice from external experts. The operations of the RC are regulated by

its terms of reference, which were approved and are subject to periodic review by the Board.

The RC recommends, in consultation with the Chairman of the Board, a framework of remuneration policies for key

executives and directors serving on the Board and Board Committees, and determines specifically the remuneration

package for each executive director of the Company. The RC covers all aspects of remuneration including but not

limited to directors’ fees, salaries, allowances, bonuses, share options, performance shares and benefits in kind. In

addition, the RC also reviews the remuneration of senior management. The RC’s recommendations are submitted for

endorsement by the entire Board. No director is involved in deciding his own remuneration.

The RC administers both the ASL Employee Share Option Scheme (“ESOS”) approved on 23 January 2003 and the

ASL Marine Performance Shares Scheme (“PSS”) adopted at the Extraordinary General Meeting held on 20 July 2007,

in accordance with the rules of the ESOS and PSS.

The RC determines and approves the allocation of the share options, the date of grant and the price thereof under the

ESOS. There were no share options granted during the financial year under ESOS and the executive directors did not

participate in the ESOS. Details of the ESOS are set out on pages 36 and 37 of this Annual Report.

As at the end of the financial year, there were no shares issued under the PSS. Details of the PSS are set out on page

37 of this Annual Report.

Level and Mix of Remuneration

Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors

needed to run the company successfully but companies should avoid paying more than is

necessary for this purpose. A significant proportion of executive directors’ remuneration

should be structured so as to link rewards to corporate and individual performance.

The Group’s remuneration policy is to provide remuneration packages which will reward performance and attract, retain

and motivate directors and key executives to run the Group successfully. In setting the remuneration packages, the

RC takes into consideration the remuneration and employment conditions within the same industry and in comparable

companies, and takes into account the Group’s and the individual’s performance.

The executive directors do not receive directors’ fees. The remuneration for the executive directors and the key

executives comprises primarily a basic salary component and a variable component which is the bonuses, based on

the performance of the Group as a whole and their individual performance. The service agreements entered into with

the four executive directors, namely, Mr Ang Kok Tian, Mr Ang Ah Nui, Mr Ang Kok Eng and Mr Ang Kok Leong, are

automatically renewable on a yearly basis unless terminated by either party giving written notice of not less than three

months.

The non-executive directors receive directors’ fees, in accordance with their contributions, taking into account factors

such as responsibilities, effort and time spent for serving on the Board and Board Committees. The non-executive

directors’ fees were derived using the fee structure as follows:

Audit

Committee

Nominating

Committee

Remuneration

Committee

Chairman $30,000 per annum $21,000 per annum $21,000 per annum

Member $20,000 per annum $16,000 per annum $16,000 per annum

The Company does not have service contracts with non-executive directors. Directors’ fees are recommended by the

Board and are subject to the approval of shareholders at the Company’s AGM.

The Company encourages independent non-executive directors to invest in the Company and has taken steps in the

past to ensure that this happened. The shareholdings of the individual directors of the Company are set out on page

34 of this Annual Report. None of the directors hold shares in the subsidiaries of the Company.

26


Disclosure on Remuneration

Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of

remuneration, and the procedure for setting remuneration in the company’s annual report.

It should provide disclosure in relation to its remuneration policies to enable investors

to understand the link between remuneration paid to directors and key executives, and

performance.

The remuneration of the directors of the Company for the financial year ended 30 June 2011 is summarised below:

Number of directors

Remuneration bands 2011 2010

$500,000 to below $600,000 2 2

$400,000 to below $500,000 2 2

Below $100,000 3 3

Total 7 7

Remuneration of executive directors and key executives

The following table shows the breakdown of the remuneration (in percentage terms) of the executive directors of

the Company and the top five executives of the Group (who are not directors) for the financial year ended 30 June

2011:

Salary1 Bonus1

Other

Benefits2 Total

% % % %

Executive directors

$500,000 to below $600,000

Ang Kok Tian 67 21 12 100

Ang Ah Nui 68 19 13 100

$400,000 to below $500,000

Ang Kok Eng 70 20 10 100

Ang Kok Leong 67 21 12 100

Key executives

$200,000 to below $300,000

Tay Kes Siong 76 24 – 100

Lilian Tan Yin Yen 76 24 – 100

$100,000 to below $200,000

Lim Soon Teck 80 20 – 100

S. Thillainathan 92 8 – 100

You Bom Lee 75 25 – 100

1 Salary and bonus includes Central Provident Fund Contributions2 Other benefits refer to car benefits

The following table shows the remuneration payable to the independent non-executive directors for the financial year

ended 30 June 2011:

Directors’ Fees

$

Independent non-executive directors

Andre Yeap Poh Leong 57,000

Damian Hong Chin Fock 67,000

Christopher Chong Meng Tak 52,000

Total 176,000


Remuneration of employees who are immediate family members of a director or the chief executive

officer

For the financial year ended 30 June 2011, saved as disclosed in the following table which shows the breakdown of

the remuneration (in percentage terms) of the Group Advisor who is the father of the executive directors, Mr Ang Kok

Tian, Mr Ang Ah Nui, Mr Ang Kok Eng and Mr Ang Kok Leong, the Company and its subsidiary companies do not have

any other employee who is an immediate family member of a director and whose remuneration exceeds $150,000.

Salary1 Bonus1

Other

Benefits2 Total

% % % %

Group Advisor

$400,000 to below $500,000

Ang Sin Liu 61 20 19 100

1 Salary and bonus includes Central Provident Fund Contributions2 Other benefits refer to car benefits

ACCOUNTABILITY AND AUDIT

Accountability

Principle 10: The Board should present a balanced and understandable assessment of the company’s

performance, position and prospects.

The Board endeavors to provide shareholders with a balanced and understandable assessment of the Group’s

performance, position and prospects on a regular basis. In presenting the quarterly financial statements announcements

and annual report to shareholders, the Board aims to provide shareholders with detailed analysis, explanation and

assessment of the financial performance, position and prospects of the Group. The analysis is further supported by

powerpoint presentation on the Group’s quarterly results and briefings of the same by the management.

In line with the requirements of SGX-ST, negative assurance confirmations on interim financial results were issued by

the Board confirming that to the best of its knowledge, nothing had come to the attention of the Board which may

render the Company’s quarterly results to be false or misleading in any material aspect.

Audit Committee

Principle 11: The Board should establish an AC with written terms of reference which clearly set out its

authority and duties.

The Board established the AC in March 2003 which currently consists of three independent non-executive directors,

namely, Mr Damian Hong Chin Fock, Mr Christopher Chong Meng Tak and Mr Andre Yeap Poh Leong. Mr Damian Hong

is the Chairman of the AC. The Board is of the opinion that the members of the AC have considerable legal, tax and

financial management expertise and also business experience with which to discharge their duties. The operations of

the AC are regulated by its terms of reference, which were approved and are subject to periodic review by the Board.

The AC meets at least six times a year.

The duties of the AC include reviewing with the internal auditor, external auditors and management, the Group’s policies

and control procedures, interested person transactions, as well as any financial information presented to shareholders.

Specifically, the AC:

• reviews the scope and results of external audit, the cost effectiveness of the audit, the independence and

objectivity of the external auditors and the nature and extent of non-audit services provided by the external

auditors;

• reviews the quarterly results announcements before submission to the Board for adoption;

• reviews the financial statements of the Group, accounting principles and policies thereto and management of

financial matters before endorsement by the Board;

28


• reviews the scope and results of the internal audit procedures, the adequacy of the internal control procedures

and effectiveness of the internal audit function;

• reviews the audit plans and reports of the internal and external auditors and evaluation of the internal control

systems of the Group and management’s responses and actions to correct any deficiencies;

• reviews the co-operation given by the Company’s officers to the internal and external auditors;

• recommends to the Board on the appointment or re-appointment of external auditors and their fees for

shareholders’ approval; and

• reviews interested person transactions in accordance with the requirements of the SGX-ST Listing Manual.

The AC has explicit authority to investigate any matter within the scope of its duties and is authorised to obtain

independent professional advice. It has full access to and co-operation of the management and reasonable resources

to enable it to discharge its duties properly. It also has full discretion to invite any executive director or executive officer

or any other person to attend its meetings. The AC meets with the external and internal auditors separately, at least

once a year, without the presence of management to review any areas of audit concern. Individual members of the AC

also engage the external and internal auditors separately in ad hoc meetings.

At the request of the AC, the Group undertook two audits for its financial results, one for the first half of the financial

year and the other for the full financial year.

For the financial year under review, the AC has reviewed the non-audit services provided by the Company’s external

auditors, which comprised attestation services required under the Approved International Shipping Enterprise Scheme.

The AC is satisfied that their independence and objectivity have not been impaired by the provision of those services.

The fees that are charged to the Group by the external auditors for non-audit services were $21,000 for the financial

year ended 30 June 2011 ($21,000 for the financial year ended 30 June 2010).

The AC has recommended to the Board the re-appointment of Ernst & Young LLP as the Company’s external auditors

at the forthcoming AGM.

WHISTLE-BLOWING POLICY

The Company has put in place a whistle-blowing policy and procedures duly endorsed by the AC, where employees

of the Group may, anonymously and in confidence, raise concerns about possible corporate improprieties in financial

reporting or other matters such as suspected fraud, corruption, dishonest practices etc. All reports including unsigned

reports, reports weak in details and verbal reports are considered. To ensure independent investigation into such

matters and for appropriate follow up action, all whistle-blowing reports are reviewed by the AC and the Board. In the

event that the report is about a director, that director shall not be involved in the review and any decisions with respect

to that report. The policy aims to encourage the reporting of such matters in good faith, with the confidence that any

employees making such reports will be treated fairly and be protected from reprisals. Details of the whistle-blowing

policy have been made available to all employees.

INTERNAL CONTROLS AND AUDIT

Internal Controls

Principle 12: The Board should ensure that the management maintains a sound system of internal controls

to safeguard the shareholders’ investments and the company’s assets.

The Group has a system of internal control designed to provide reasonable assurance with respect to the safeguarding

of assets and maintaining proper accounting records to ensure that financial information used for financial reporting

are reliable. The system of internal control is based within a wider framework that attempts to optimize the balance

between growth/return and related risks. More specifically, the Board attempts to:

a. Align risk with its medium and longer term business strategy. The Board thus sets the overall risk appetite which

the internal auditor and internal controls monitor.


b. Preselect risk response. For each major risk or risk category, the Board decides whether to avoid, reduce,

share or accept the risk. The internal auditor and internal controls are there to ensure that the system does not

deliberately or inadvertently circumvent or override this decision.

c. Reducing operational surprises and losses.

d. Identifying cross border and cross business risk and such are risks which are not normally within the scope or

control of day-to-day management.

e. Improving the use of capital and resources.

However, the Board recognises that no internal control system could provide absolute assurance against the occurrence

of material errors, poor judgment in decision-making, human errors, losses, fraud or other irregularities. The internal

control system is designed to manage rather than eliminate the risk of failure to achieve the business objectives.

Internal and external audit reports on any material non-compliance or internal control weaknesses, including financial,

operational and compliance controls and recommendations for improvements are submitted to the AC for review semi-

annually. The AC reviews the effectiveness of the actions taken by management based on the recommendations made

by the internal and external auditors to the AC. The AC is satisfied that there are adequate internal controls within the

Group taking into account the nature and size of the Group’s business and operations.

The Group’s approach to risk management with a brief description of the nature and extent of its risk exposures are

set out on page 32 of this Annual Report.

Internal Audit

Principle 13: The company should establish an internal audit function that is independent of the activities

it audits.

The role of the internal auditor is to assist the AC to ensure that the Group maintains a sound system of controls

by regular monitoring of key controls and procedures and ensuring their effectiveness, undertaking investigations as

directed by the AC. The Company’s internal audit function is housed within the corporate services office. The AC

has also engage an independent external professional accounting firm to periodically review the Company’s internal

audit function so as to ensure that the internal audit function conforms substantially to established internal audit

standards.

The AC is responsible for the adequacy of the internal audit function, its resources and its standing and is satisfied that

the internal audit function is independent of the activities which it audits and has appropriate standing within the Group

to perform its role effectively. The internal auditor reports functionally to the Chairman of the AC and administratively

to the Group Financial Controller.

The internal auditor has unrestricted access to all records, properties, functions and co-operation from management

and staff necessary to effectively discharge his responsibilities. The internal auditor has adopted the standards for

the Professional Practice of Internal Auditing developed by The Institute of Internal Auditors to carry out internal audit

review in accordance with the annual audit plan which is formulated through the risk assessment in consultation with

and approved by the AC. The internal auditor performs checks and compliance tests on the systems of internal control

including financial and operational controls and risk management.

The AC reviews the internal audit reports and management controls in place on a semi-annual basis and is satisfied

with the adequacy of the internal controls in the Group.

COMMUNICATION WITH SHAREHOLDERS

Communication with Shareholders

Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

The Board is mindful of its obligations to provide timely disclosure of material information presented in a fair and

objective manner to shareholders and investors. The communications with shareholders and investors are carried

out through various channels including the annual report, quarterly financial statements announcements including

30


powerpoint presentations, press releases, online management Q & A at Shareinvestor.com, announcements on

important developments and material information released through SGX-ST website which are also accessible at the

Company’s website, www.aslmarine.com.

The Company discloses the date of the release of its quarterly results at least one week prior to the date of

announcement through SGX-ST website. On the day of results announcement, the accompanying press release and/

or presentation slides are released onto the SGX-ST website. In addition, results briefing by management is also held

for analysts and media in conjunction with the release of the half-year and full year results announcements. From time

to time, the management participates in roadshows and holds meetings with investors and analysts to explain the

financial results and provide insight to the development and outlook of the industry.

The Company also engages external investor relation consultant firm to support the Group in promoting communication

with shareholders and investment community.

All shareholders will receive the annual report of the Company with notice of AGM by post and published in the

newspapers within the mandatory period. The shareholders can also access information on the Group at the Company’s

website at www.aslmarine.com. The website provides, inter alia, all publicly disclosed financial information, corporate

announcements, press releases, annual reports and profile of the Group.

Greater Shareholder Participation

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders

the opportunity to communicate their views on various matters affecting the company.

All registered shareholders are invited to participate and given the right to vote on resolutions at general meetings. Every

matter requiring shareholders’ approval is proposed as a separate resolution. Each item of special business included

in the notice of the meeting is accompanied, where appropriate, by an explanation for the proposed resolution. Proxy

form is sent with notice of general meeting to all shareholders. If any shareholder is unable to attend the general meeting

in person, he is allowed to appoint up to two proxies to attend and vote on his behalf. The Company also allows CPF

investors to attend general meetings as observers. Voting in absentia by mail, facsimile or e-mail is currently not allowed

as such voting methods would need to be cautiously evaluated for feasibility to ensure that there is no compromise to

the integrity of the information and the authentication of the shareholders’ identity.

The results of all AGMs and EGMs are disclosed by way of a Company Announcement.

In consideration of the dilution impact to shareholders, the Company has voluntarily reduced the limit for non-pro rata

shares issue from 20% to 15% of the total number of issued shares in the capital of the Company with effect from

the last AGM.

The Board, Chairman of the AC, NC, RC and management are present at general meetings to address questions

that shareholders may have concerning the Group. The Company’s external auditors are also present to address any

relevant queries relating to the conduct of audit and the preparation and content of the auditors’ report.

VOLUNTARY LIMITS

The Company voluntarily limits the percentage of the enlarged share capital to be offered by way of a private placement

or such other way except on a pro-rata basis to all shareholders to between 10-15%.


INTERESTED PERSON TRANSACTIONS

The Company has adopted an internal policy in respect of any transactions with interested persons and has set out

the procedures for quarterly review and approval of the interested person transactions to be entered into by the Group.

In accordance with Chapter 9 of the Listing Manual of SGX-ST, there were no material interested person transactions

entered into by the Group for the financial year ended 30 June 2011.

MATERIAL CONTRACTS

During the financial year, the Company and its subsidiary companies did not enter into any material contracts involving

the interests of any directors or any controlling shareholders of the Company or its associates except for the Company’s

announcement made on 28 September 2010 via SGX-ST in connection with the acquisition of property and vessels

by the Group’s subsidiaries from companies held by Koon Holdings Limited (“KHL”) in which disclosures were made

concerning the interests held by the controlling shareholders of the Company in KHL and the interest of an independent

non-executive director of the Company who is also an independent director of KHL.

DEALINGS IN SECURITIES

The Company has complied with the best practices on dealings in the Company’s securities. The Company has adopted

an internal compliance code which provides guidance to its officers and employees with regard to dealings in the

Company’s securities. The Group’s officers and employees are prohibited from dealing in the Company’s securities while

in possession of unpublished price-sensitive information of the Group, as well as during the periods commencing two

weeks before the announcement of the Company’s quarterly results and one month before the announcement of the

Company’s full year results and ending on the date of the announcement of the relevant results. The Group’s officers

and employees are also discouraged from dealing in the Company’s securities on short-term considerations.

SGX CHECKLISTS

The Company submits the following compliance checklists to SGX-ST when required:

• Acquisitions and Realisations

• Announcement of Financial Statements of SGX-ST Listed Companies

• Annual Report

• Bonus Issue of Shares and Warrants

• Circular Disclosure in relation to Employee Share Option Scheme

• Circular Disclosure in relation to Share Buy-Back Mandate

• Placement of Shares or Convertibles For Cash

• Rights Issue

• Share Split

Risk Management Strategies

32

The Group has established a framework for risk management to identify, assess and manage potential risks and

opportunities and to assist management in making informed decisions. The Group adopts a proactive approach to

managing risk of financial losses, breaches in legal and regulatory requirements, negative impact to customers and

loss of business opportunities.

The Group regularly reviews the level of risk exposure in the following key risk areas which the Group operates in:

• Legal and Country Risk

The Group has established subsidiaries operating in different countries. These overseas subsidiaries are exposed

to changes in governmental regulations and unfavourable political developments, which may limit the realisation

of business opportunities and investments in those countries.

Risks arising from non-compliance with applicable laws and regulations are managed with the assistance of the

Group’s in-house legal counsel as well as external legal advisers when necessary. Where the Group is active or

has an operating presence in a foreign jurisdiction, legal counsel from that foreign jurisdiction is sought where

appropriate. The operating head of the business unit is responsible for compliance with the applicable laws in

the country of operations.

The Group’s business operations are also exposed to uncertainties of the global economy and international

capital markets. To prepare for the fluctuations in external environment, the Board and the management

consistently keep themselves up-to-date on the changes in political and industry regulations so as to implement

appropriate measures against any adverse changes in market conditions in an efficient and timely manner.

• Operational Risk

Operational risk is the potential loss caused by a breakdown in internal process, deficiencies in people and

management, or operational failure arising from external events. The Group’s operational risk is managed at

each operating unit and monitored at the Group level. Whilst operational risk cannot be eliminated completely,

the Group evaluates the options available by weighing the cost and effectiveness of each measure taken to

minimise risk exposure. Where appropriate, the Group maintains sufficient insurance coverage for those areas

exposed to risks, taking into account the risk profile of the business in which it operates.

• Financial Risk

The Group’s financial risk management objectives and policies are set out on pages 105 to 116 of this Annual

Report. Financial risk includes market risk such as interest rate risk and foreign exchange rate risk, as well as

credit risk and liquidity risk.

• Investment Risk

The Group evaluates any investment proposals for potential ventures and business acquisitions by conducting

due diligence exercises and comparing to benchmarked rate of return taking into consideration the Group’s

level of risk exposure. All investment proposals are subject to the Board’s approval with post-investment reviews

being conducted to monitor and mitigate the risk of non-performing investments.


34 Directors’ Report

40 Statement by Directors

41 Independent Auditors’ Report

42 Statements of Financial Position

44 Consolidated Income Statement

45 Consolidated Statement of Comprehensive Income

46 Statements of Changes in Equity

50 Consolidated Statement of Cash Flows

52 Notes to the Financial Statements

Financial Statements

Contents

Directors’ Report

34

The Directors are pleased to present their report to the members together with the audited consolidated financial

statements of ASL Marine Holdings Ltd. (the “Company”) and its subsidiaries (collectively, the “Group”) and the

statement of financial position and statement of changes in equity of the Company for the financial year ended 30

June 2011.

Directors

The Directors of the Company in office at the date of this report are:

Ang Kok Tian

Ang Ah Nui

Ang Kok Eng

Ang Kok Leong


Hong Chin Fock


Arrangements to enable Directors to acquire Shares and Debentures

Except as disclosed in this report, neither at the end of nor at any time during the financial year was the Company a

party to any arrangement whose objects are, or one of whose object is, to enable the Directors of the Company to

acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate.

Directors’ Interests in Shares and Debentures

The following Directors, who held office at the end of the financial year, had, according to the Register of Directors’

Shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in shares

and share options of the Company and related corporations (other than wholly-owned subsidiaries) as stated below:

Direct interest Deemed interest

Name of Directors

At the

beginning of

financial year

At the

end of

financial year

At the

beginning of

financial year

At the

end of

financial year

The Company


(Ordinary shares)

Ang Kok Tian 41,427,000 57,997,800 154,172,000* 215,840,800*

Ang Ah Nui 39,600,000 55,440,000 155,999,000* 218,398,600*

Ang Kok Eng 34,750,000 48,650,000 160,849,000* 225,188,600*

Ang Kok Leong 34,650,000 48,510,000 160,949,000* 225,328,600*

Andre Yeap Poh Leong 250,000 350,000 – –

Hong Chin Fock 250,000 350,000 – –

* Ang Kok Tian, Ang Ah Nui, Ang Kok Eng and Ang Kok Leong are brothers. Each of the brothers is deemed to

be interested in the shares held by the other brothers and their father and sister.


Directors’ Interests in Shares and Debentures (cont’d)

Direct interest Deemed interest

Name of Directors

At the

beginning of

financial year

At the

end of

financial year

At the

beginning of

financial year

At the

end of

financial year

Subsidiaries

ASL Triaksa Offshore Pte. Ltd.

(Ordinary shares)

Ang Kok Tian – – 60,000 60,000

Ang Ah Nui – – 60,000 60,000

Ang Kok Eng – – 60,000 60,000

Ang Kok Leong – – 60,000 60,000

PT. Cipta Nusantara Abadi

(Ordinary shares of Rp. 50,000 each)

Ang Kok Tian – – 30,300 30,300

Ang Ah Nui – – 30,300 30,300

Ang Kok Eng – – 30,300 30,300

Ang Kok Leong – – 30,300 30,300

PT. Capitol Nusantara Indonesia

(Ordinary shares of Rp. 1,000,000 each)

Ang Kok Tian – – 2,000 2,000

Ang Ah Nui – – 2,000 2,000

Ang Kok Eng – – 2,000 2,000

Ang Kok Leong – – 2,000 2,000

Hongda Investment Pte. Ltd.

(Ordinary shares)

Ang Kok Tian – – 2,280,000 2,280,000

Ang Ah Nui – – 2,280,000 2,280,000

Ang Kok Eng – – 2,280,000 2,280,000

Ang Kok Leong – – 2,280,000 2,280,000

There was no change in any of the above-mentioned interests between the end of the financial year and 21 July

2011.

By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Ang Kok Tian, Ang Ah Nui, Ang Kok Eng and Ang

Kok Leong are deemed to have interests in the shares of the subsidiaries of the Company.

Except as disclosed in this report, no Director who held office at the end of the financial year had interests in shares,

share options, warrants or debentures of the Company, or of related corporations, either at the beginning or at the

end of the financial year.

36

Directors’ Report

Directors’ Contractual Benefits

Except as disclosed in the financial statements, since the end of the previous financial year, no Director of the

Company has received or become entitled to receive a benefit by reason of a contract made by the Company or a

related corporation with the Director, or with a firm of which the Director is a member, or with a company in which the

Director has a substantial financial interest.

Share Options

The ASL Employee Share Option Scheme (the “Scheme”) was approved and adopted by the shareholders of the

Company at an Extraordinary General Meeting held on 23 January 2003. The Scheme is administered by the

Remuneration Committee (the “RC”) of the Company comprising three independent Directors, Hong Chin Fock

(Chairman), Christopher Chong Meng Tak and Andre Yeap Poh Leong.

Details of the Scheme were set out in the Directors’ Report for the year ended 30 June 2003.

Other statutory information regarding the Scheme is set out below:

(i) Exercise Price

The exercise price to be paid upon the exercise of the options are as follows:

• the options were granted at the exercise price of $0.55 per share and no options were granted at a

discount to the then prevailing Market Price; and

• the “Market Price”, defined as the average of the last dealt price for a share, is determined by reference

to the daily Official List published by Singapore Exchange Securities Trading Limited (“SGX-ST”) for five

consecutive market days immediately prior to the date an offer to grant an option is made (“Offer Date”),

rounded up to the nearest whole cent.

(ii) Option Exercise Period

The options which were granted shall be exercisable during the option exercise period commencing after the

first anniversary of the Offer Date and expiring on, in the case of options granted to non-executive Directors

and/or associated company employees, the day preceding the fifth anniversary of the Offer Date and, in the

case of options granted to other than non-executive Directors and/or associated company employees, the day

preceding the tenth anniversary of the Offer Date.

At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary

shares of the Company are as follows:

Date of grant

of options

Exercise

price per

share

Options

outstanding

at 1/7/2010

Options

exercised

Options

outstanding

at 30/6/2011

Number

of option

holders at

30/6/2011

Exercise

period

18/12/2003 $0.55 47,000* (47,000) – –

18/12/2004

to

17/12/2013

* These were granted to the employees of the Company and were exercisable on or after 18 December

2006.

Except as disclosed in this report, there were no unissued shares of the Company or its subsidiaries under

options granted by the Company or its subsidiaries at the end of the financial year.


Share Options (cont’d)

Details of options granted to non-executive Directors of the Company under the Scheme are as follows:

Name of directors

Options

granted

for financial

year ended

30/6/2011

Aggregate

options

granted since

commencement

of Scheme to

30/6/2011

Aggregate

options

lapsed since

commencement

of Scheme to

30/6/2011

Aggregate

options

exercised since

commencement

of Scheme to

30/6/2011

Aggregate

options

outstanding as

at 30/6/2011

Andre Yeap Poh Leong – 250,000 – (250,000) –

Hong Chin Fock – 250,000 – (250,000) –

Since the commencement of the Scheme until the end of the financial year:

• No options have been granted to the controlling shareholders of the Company and their associates;

• No participant has been granted 5% or more of the total options available under the Scheme;

• No options entitle the holders of the options to participate, by virtue of such holding, in any share issue of any

other company; and

• No options have been granted at a discount.

ASL Marine Performance Shares Scheme

The ASL Marine Performance Shares Scheme (the “PSS”) was approved and adopted by the shareholders of the

Company at an Extraordinary General Meeting held on 20 July 2007. The PSS is administered by the RC of the

Company.

Details of the Scheme were set out in the circular dated 4 July 2007 which is available for inspection at the registered

office of the Company.

As at the end of financial year, no award of shares have been granted by the Company under the PSS.

38

Directors’ Report

Audit Committee

The Audit Committee (“AC”) carried out its functions in accordance with Section 201B(5) of the Singapore Companies

Act, Cap. 50, including the following:

• Reviews the audit plans of the external auditors and ensures the adequacy of the Group’s system of accounting

controls and the co-operation given by the management to the external auditors;

• Reviews the quarterly and annual financial statements and the auditors’ report on the annual financial statements

of the Group before their submission to the Board of Directors;

• Reviews effectiveness of the Group’s material internal controls, including financial, operational and compliance

controls and risk management via reviews carried out by the internal auditors;

• Meets with the external auditors, other committees, and management in separate executive sessions to discuss

any matters that these groups believe should be discussed privately with the AC;

• Reviews legal and regulatory matters that may have a material impact on the financial statements, related

compliance policies and programmes and any reports received from regulators;

• Reviews the cost effectiveness and the independence and objectivity of the external auditors;

• Reviews the nature and extent of non-audit services provided by the external auditors;

• Recommends to the Board of Directors the external auditors to be nominated, approves the compensation of

the external auditors and reviews the scope and results of the audit;

• Reports actions and minutes of the AC to the Board of Directors with such recommendations as the AC considers

appropriate; and

• Reviews interested person transactions in accordance with the requirements of the SGX-ST’s Listing Manual.

The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfied that the nature

and extent of such services would not affect the independence of the external auditors. The AC has also conducted

a review of interested person transactions.

The AC convened six meetings during the year with full attendance from all members. The AC has also met with internal

and external auditors, without the presence of the Company’s management, at least once a year.

Further details regarding the AC are disclosed in the Report on Corporate Governance.


Auditors

Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.

On behalf of the Board of Directors:

Ang Kok Tian

Director

Ang Ah Nui

Director

Singapore

8 September 2011

Statement by Directors

40

We, Ang Kok Tian and Ang Ah Nui, being two of the Directors of ASL Marine Holdings Ltd., do hereby state that, in

the opinion of the Directors,

(i) the accompanying statements of financial position, consolidated income statement, consolidated statement of

comprehensive income, statements of changes in equity, and consolidated statement of cash flows together

with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the

Company as at 30 June 2011 and the results of the business, changes in equity and cash flows of the Group

and the changes in equity of the Company for the year ended on that date; and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its

debts as and when they fall due.

On behalf of the Board of Directors:

Ang Kok Tian

Director

Ang Ah Nui

Director

Singapore

8 September 2011

Independent Auditors’ Report


To the members of ASL Marine Holdings Ltd.

Report on the Financial Statements

We have audited the accompanying financial statements of ASL Marine Holdings Ltd. (the “Company”) and its subsidiaries (collectively, “the Group”) set out on pages 42 to 125, which comprise the statements of financial position of the Group and the Company as at 30 June 2011, the statements of changes in equity of the Group and the Company and the consolidated income statement, consolidated statement of comprehensive income and consolidated statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2011 and the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Ernst & Young LLP

Public Accountants andCertified Public AccountantsSingapore

8 September 2011

Statements of Financial Positionas at 30 June 2011

42

The Group The Company

Note 2011 2010 2011 2010

$’000 $’000 $’000 $’000

Non-Current Assets

Property, plant and equipment 4 493,278 437,660 – 100

Lease prepayments 5 3,844 3,892 – –

Subsidiaries 6 – – 69,505 33,573

Interest in jointly-controlled entity and associate 7 953 1,825 – 1,558

Other receivable – – – 2,203

498,075 443,377 69,505 37,434

Current Assets

Inventories 8 12,591 13,151 – –

Construction work-in-progress 9 80,453 67,734 – –

Trade and other receivables 10 109,574 108,593 178,153 165,437

Deposits and prepayments 11 9,702 7,048 3,344 3,133

Derivative financial instruments 12 3,225 1,350 – –

Bank balances, deposits and cash 13 49,536 90,090 177 510

Assets held for sale 14 15,764 7,269 – –

280,845 295,235 181,674 169,080

Current Liabilities

Trade and other payables 15 131,665 134,552 36,513 30,009

Other liabilities 16 3,259 3,345 – –

Progress billings in excess

of construction work-in-progress 9 19,507 40,548 – –

Trust receipts 17 34,865 25,033 – –

Interest-bearing loans and borrowings 18 68,411 51,070 22,100 11,025

Derivative financial instruments 12 1,842 3,564 505 368

Current tax payable 8,266 12,007 – –

267,815 270,119 59,118 41,402

Net Current Assets 13,030 25,116 122,556 127,678



Note 2011 2010 2011 2010

$’000 $’000 $’000 $’000

Non-Current Liabilities

Interest-bearing loans and borrowings 18 155,539 133,160 92,900 65,020

Amount due to non-controlling interests

of subsidiaries 15 – 1,469 – –

Deferred tax liabilities 19 10,378 9,747 – –

165,917 144,376 92,900 65,020

Net Assets 345,188 324,117 99,161 100,092

Equity attributable to owners of the Company

Share capital 20 83,092 83,061 83,092 83,061

Treasury shares 20 (923) (923) (923) (923)

Reserves 21 253,667 233,195 16,992 17,954

335,836 315,333 99,161 100,092

Non-Controlling Interests 9,352 8,784 – –

Total Equity 345,188 324,117 99,161 100,092

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

Consolidated Income Statementfor the year ended 30 June 2011

44

Note 2011 2010

$’000 $’000

Revenue 23 363,151 468,372

Cost of sales (313,552) (407,622)

Gross profit 49,599 60,750

Other operating income 24 10,514 9,320

Administrative expenses (9,334) (9,840)

Other operating expenses (3,311) (3,418)

Finance costs 25 (8,935) (8,072)

Share of results of jointly-controlled entity and associate (731) (670)

Profit before tax 26 37,802 48,070

Tax expense 27 (4,603) (8,806)

Profit for the year 33,199 39,264

Attributable to:

Owners of the Company 28 31,916 37,286

Non-controlling interests 1,283 1,978

33,199 39,264

2011 2010

cents cents

(Restated)

Earnings per share

Basic 28 7.61 8.89

Diluted 28 7.61 8.89


Consolidated Statement of Comprehensive Incomefor the year ended 30 June 2011


Note 2011 2010

$’000 $’000

Profit for the year 33,199 39,264

Other comprehensive income:

Translation differences relating to financial statements

of foreign subsidiaries, net of tax (5,384) 329

Share of other comprehensive income of jointly-controlled entity (141) (74)

Net fair value changes to cash flow hedges 2,359 1,531

Other comprehensive income for the year, net of tax 22 (3,166) 1,786

Total comprehensive income for the year 30,033 41,050

Attributable to:

Owners of the Company 29,465 38,753

Non-controlling interests 568 2,297

30,033 41,050


Statements of Changes in Equityfor the year ended 30 June 2011

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Consolidated Statement of Cash Flowsfor the year ended 30 June 2011

50

2011 2010

$’000 $’000

Cash flows from operating activities

Profit before tax 37,802 48,070

Adjustments for:

Amortisation of lease prepayments 202 199

Allowance for impairment of doubtful receivables (net) 200 577

Bad debts written off (non-trade) – 2

Depreciation of property, plant and equipment 35,942 30,475

(Gain)/ Loss on ineffective portion of cash flow hedges on

forward currency contracts and interest rate swaps (840) 1,126

Gain on disposal of property, plant and equipment (6,169) (4,216)

Property, plant and equipment written off 15 3

Impairment loss on property, plant and equipment – 2,297

Interest expense 8,935 8,072

Interest income (135) (179)

Share of results of jointly-controlled entity and associate 731 670

Gain on disposal of assets held for sale (3,994) (2,495)

Operating profit before working capital changes 72,689 84,601

Changes in working capital:

Inventories 560 (742)

Construction work-in-progress and progress billings in excess

of construction work-in-progress (33,643) 21,459

Trade and other receivables (3,622) (38,107)

Trade and other payables 4,797 8,635

Balances with related parties (trade) (460) (924)

Bank balances, deposits and cash (restricted use) 2,003 (5,551)

Cash generated from operations 42,324 69,371

Tax paid (7,933) (5,468)

Net cash generated from operating activities 34,391 63,903

Cash flows from investing activities

Interest received 135 175

Purchase of property, plant and equipment (Note A) (104,529) (83,192)

Proceeds from disposal of property, plant and equipment 10,234 10,104

Purchase of assets held for sale – (3,231)

Proceeds from disposal of assets held for sale 9,260 8,985

Lease prepayments (243) –

Balances with related parties (non-trade) 170 1

Net cash used in investing activities (84,973) (67,158)


Note 2011 2010

$’000 $’000

Cash flows from financing activities

Interest paid (8,915) (8,029)

Dividend paid (8,988) (11,984)

Repayment of interest-bearing loans and borrowings (64,828) (89,999)

Proceeds from interest-bearing loans and borrowings 86,866 107,803

Proceeds from finance lease receivables – 1,721

Proceeds from issue of shares 26 8

Repayment of trust receipts (17,563) (83,312)

Proceeds from trust receipts 27,395 75,401

(Repayment of)/ Proceeds from loan from non-controlling interests

of subsidiaries (1,071) 289

Net cash generated from/ (used in) financing activities 12,922 (8,102)

Net decrease in cash and cash equivalents (37,660) (11,357)

Cash and cash equivalents at beginning of year 83,302 94,775

Effects of exchange rate changes on opening

cash and cash equivalents (891) (116)

Cash and cash equivalents at end of year 13 44,751 83,302

Note A:

The Group acquired property, plant and equipment with an aggregate cost of $122,211,000 (2010: $89,250,000), of

which $17,682,000 (2010: $6,058,000) was acquired by means of finance lease. The cash outflow on acquisition of

property, plant and equipment amounted to $104,529,000 (2010: $83,192,000).


Notes to the Financial Statements30 June 2011

52

1. Corporate information

ASL Marine Holdings Ltd. (the “Company”), incorporated in the Republic of Singapore, is a public limited

company listed on the Singapore Exchange Securities Trading Limited.

The registered office and principal place of business of the Company is located at No. 19 Pandan Road,

Singapore 609271.

The principal activities of the Company are those relating to an investment holding company. The principal

activities of the subsidiaries are set out in Note 6.

2. Summary of significant accounting policies

2.1 Basis of preparation

The consolidated financial statements of the Group and the statement of financial position and statement of

changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting

Standards (“FRS”).

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting

policies below.

The financial statements are presented in Singapore Dollar (“SGD” or “$”) and all values in the tables are rounded

to the nearest thousand ($’000) unless otherwise indicated.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except in the current

financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (“INT

FRS”) that are effective for annual periods beginning on or after 1 July 2010. The adoption of these standards

and interpretations did not have any effect on the financial performance or position of the Group and the

Company.

2.3 Standards issued but not yet effective

The Group has not adopted the following standards and interpretations that have been issued but not yet

effective:

Effective for annual

periods beginning

Description on or after

Revised FRS 24 Related Party Disclosures 1 January 2011

Amendments to INT FRS 114 Prepayments of a Minimum Funding Requirement 1 January 2011

INT FRS 115 Agreements for the Construction of Real Estate 1 January 2011

Amendments to FRS 107 Disclosures Transfers of Financial Assets 1 July 2011

Amendments to FRS 12 Deferred Tax – Recovery of Underlying Assets 1 January 2012

Amendments to FRS 101 Severe Hyperinflation and Removal of

Fixed Dates for First- time Adopters 1 January 2012

Improvements to FRSs 2010:

– Amendments to FRS 101 First-time Adoption of Financial Reporting Standards 1 July 2011

– Amendments to FRS 107 Financial Instruments: Disclosures 1 January 2011

– Amendments to FRS 1 Presentation of Financial Statements 1 January 2011

– Amendments to FRS 34 Interim Financial Reporting 1 January 2011

– Amendments to INT FRS 113 Customer Loyalty Programmes 1 January 2011


2. Summary of significant accounting policies (cont’d)

2.3 Standards issued but not yet effective (cont’d)

Management expects that the adoption of the standards and interpretations above will have no material impact

on the financial statements in the period of initial application, except for the following:

Revised FRS 24 Related Party Disclosures

The revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships

and to eliminate inconsistencies in its application. The revised FRS 24 expands the definition of a related party

and would treat two entities as related to each other whenever a person (or a close member of that person’s

family) or a third party entity has control or joint control over the entity, or has significant influence over the entity.

The revised standard also introduces a partial exemption of disclosure requirements for government-related

entities. The Group is currently determining the impact of the expanded definition has on the disclosure of related

party transactions. As this is a disclosure standard, it will have no impact on the financial position or financial

performance of the Group when implemented in year ending 30 June 2012.

2.4 Foreign currency

(a) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currency of

the primary economic environment in which the entity operates (its functional currency). The consolidated

financial statements are presented in Singapore Dollar, which is also the Company’s functional and

presentation currency.

(b) Foreign currency transactions and balances

Transactions in foreign currencies are measured in the respective functional currencies of the Company

and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates

approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign

currencies are translated at the exchange rate ruling at the end of the reporting period. Non-monetary

items that are measured in terms of historical cost in a foreign currency are translated using the exchange

rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign

currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the

end of the reporting period are recognised in profit or loss except for exchange differences arising on

monetary items that form part of the Group’s net investment in foreign operations, which are recognised

initially in other comprehensive income and accumulated under foreign currency translation reserve in

equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group

on disposal of the foreign operations.

(c) Foreign operations

For consolidation purpose, the assets and liabilities of foreign operations are translated into SGD at

the exchange rates ruling at the end of the reporting period and their profit or loss are translated at the

average exchange rates for the year. The exchange differences arising on the translation are taken directly

to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in

other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation,

the proportionate share of the cumulative amount of the exchange differences are re-attributed to

non-controlling interest and are not recognised in profit or loss. For partial disposals of associates or

jointly controlled entities that are foreign operations, the proportionate share of the accumulated exchange

differences is reclassified to profit or loss.

54



2.5 Basis of consolidation and business combinations

(a) Basis of consolidation

Basis of consolidation from 1 July 2010

The consolidated financial statements comprise the financial statements of the Company and its

subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used

in the preparation of the consolidated financial statements are prepared for the same reporting date

as the Company. Consistent accounting policies are applied to like transactions and events in similar

circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group

transactions and dividends are eliminated in full.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains

control, and continue to be consolidated until the date that such control ceases.

Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit

balance.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity

transaction. If the Group loses control over a subsidiary, it:

• Derecognises the assets (including goodwill) and liabilities of the subsidiary at their carrying

amounts at the date when controls is lost;

• Derecognises the carrying amount of any non-controlling interest;

• Derecognises the cumulative translation differences recorded in equity;

• Recognises the fair value of the consideration received;

• Recognises the fair value of any investment retained;

• Recognises any surplus or deficit in profit or loss;

• Reclassifies the Group’s share of components previously recognised in other comprehensive

income to profit or loss or retained earnings, as appropriate.

Basis of consolidation prior to 1 July 2010

Certain of the above-mentioned requirements were applied on a prospective basis. The following

differences, however, are carried forward in certain instances from the previous basis of consolidation:

• Acquisition of non-controlling interests, prior to 1 July 2010, were accounted for using the parent

entity extension method, whereby, the difference between the consideration and the book value

of the share of the net assets acquired were recognised in goodwill.

• Losses incurred by the Group were attributed to the non-controlling interest until the balance was

reduced to nil. Any further losses were attributed to the Group, unless the non-controlling interest

had a binding obligation to cover these. Losses prior to 1 July 2010 were not reallocated between

non-controlling interest and the owners of the Company.

• Upon loss of control, the Group accounted for the investment retained at its proportionate share

of net asset value at the date control was lost. The carrying value of such investments as at 1

July 2010 have not been restated.



2.5 Basis of consolidation and business combinations (cont’d)

(b) Business combinations

Business combinations from 1 July 2010

Business combinations are accounted for using the acquisition method. Identifiable assets acquired and

liabilities assumed in a business combination are measured initially at their fair values at the acquisition

date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred

and the services are received.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate

classification and designation in accordance with the contractual terms, economic circumstances and

pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in

host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the

acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed

to be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as a

change to other comprehensive income. If the contingent consideration is classified as equity, it is not

be remeasured until it is finally settled within equity.

In business combinations achieved in stages, previously held equity interests in the acquiree are

remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in

profit or loss.

The Group elects for each individual business combination, whether non-controlling interest in the

acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s

proportionate share of the acquiree’s identifiable net assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the

amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously

held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and

liabilities is recorded as goodwill. In instances where the latter amount exceeds the former, the excess

is recognised as gain on bargain purchase in profit or loss on the acquisition date.

Business combinations prior to 1 July 2010

In comparison to the above mentioned requirements, the following differences applied:

Business combinations are accounted for using the acquisition method. Transaction costs directly

attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly

known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net

assets.

Business combinations achieved in stages were accounted for as separate steps. Adjustments to those

fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any

additional acquired share of interest did not affect previously recognised goodwill.

When the Group acquired a business, embedded derivatives separated from the host contract by the

acquiree were not reassessed on acquisition unless the business combination resulted in a change in the

terms of the contract that significantly modified the cash flows that otherwise would have been required

under the contract.

Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic

outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to

the contingent consideration were recognised as part of goodwill.

56



2.6 Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners

of the Company, and are presented separately in the consolidated statement of comprehensive income and

within equity in the consolidated statement of financial position, separately from equity attributable to owners

of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control

are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling

and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary.

Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the

consideration paid or received is recognised directly in equity and attributed to owners of the Company.

2.7 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies

so as to obtain benefits from its activities. The Group generally has such power when it directly or indirectly,

holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls

the composition of the Board of Directors.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any

impairment losses.

2.8 Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence.

This generally coincides with the Group having between 20% and 50% of the voting power, or has representation

on the board of directors. An associate is equity accounted for from the date the Group obtains significant

influence until the date the Group ceases to have significant influence over the associate.

The Group’s investment in associate is accounted for using the equity method. Under the equity method, the

investment in associate is carried in the consolidated statement of financial position at cost plus post-acquisition

changes in the Group’s share of net assets of the associate. Goodwill relating to an associate is included in

the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s

identifiable assets, liabilities and contingent liabilities over the cost of the investment is included as income

in the determination of the Group’s share of results of the associate in the period in which the investment is

acquired.

The profit or loss reflects the share of the results of operations of the associates. Where there has been a

change recognised in other comprehensive income by the associates, the Group recognises its share of such

changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the

Group and the associate are eliminated to the extent of the interest in the associates.

The Group’s share of results of its associates is shown on the face of profit or loss after tax and non-controlling

interests in the subsidiaries of associates.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does

not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate to

satisfy obligations that the Group has guaranteed or otherwise committed on behalf of.

After application of the equity method, the Group determines whether it is necessary to recognise an additional

impairment loss on the Group’s investment in its associates. The Group determines at the end of each reporting

period whether there is any objective evidence that the investment in the associate is impaired. If this is the

case, the Group calculates the amount of impairment as the difference between the recoverable amount of the

associate and its carrying value and recognises the amount in profit or loss.



2.8 Associates (cont’d)

The financial statements of the associate are prepared as of the same reporting date as the Company. Where

necessary, adjustments are made to bring the accounting policies in line with those of the Group.

Upon loss of significant influence over the associate, the Group measures and recognises any retained investment

at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence

and the fair value of the aggregate of the retained investment and proceeds from disposal is recognised in

profit or loss.

2.9 Jointly-controlled entities

A jointly-controlled entity is a contractual arrangement whereby two or more parties undertake an economic

activity that is subject to joint control, where the strategic financial and operating decisions relating to the activity

require the unanimous consent of the parties sharing control.

Interests in jointly-controlled entities are accounted for at cost less any impairment losses.

The Group’s interest in jointly-controlled entities are accounted for in the consolidated financial statements using

the equity method, whereby the Group’s share of results in jointly-controlled entities is included in the consolidated

profit or loss. In the consolidated statement of financial position, the carrying value of jointly-controlled entities

reflects the Group’s share of the underlying net assets of the jointly-controlled entities.

The most recent available audited financial statements of the jointly-controlled entities are used by the Group

in applying the equity method. Where the dates of the audited financial statements used are not co-terminous

with those of the Group, the share of results is arrived at from the last audited financial statements available

and unaudited management financial statements to the end of the accounting period.

2.10 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to initial recognition, property,

plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

The cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are

directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment.

The accounting policy for borrowing costs is set out in Note 2.20. The cost of an item of property, plant and

equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with

the item will flow to the Group and the cost of the item can be measured reliably.

When significant parts of property, plant and equipment are required to be replaced in intervals, the Group

recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise,

when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment

as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised

in profit or loss as incurred.

Depreciation of an asset begins when it is available for use and is computed on a straight-line basis over the

estimated useful lives of the assets on the following basis:

Leasehold property and buildings – 20 to 30 years

Plant and machinery – 3 to 30 years

Office equipment, furniture and fittings – 3 to 10 years

Tugs and other vessels – 1 to 25 years

Barges – 1 to 15 years

Motor vehicles – 5 to 8 years

Dry docks, quays and ancillary – 8 to 20 years

58



2.10 Property, plant and equipment (cont’d)

Assets under construction included in property, plant and equipment are not depreciated until such time as the

relevant assets are completed and put into operational use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in

circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at the end of each reporting period, and

adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits

are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss

in the year the asset is derecognised.

Fully depreciated assets are retained in the financial statements until they are no longer in use and no further

charge for depreciation is made in respect of these assets.

2.11 Lease prepayment

Leases of land under which the lessor has not transferred all the risks and rewards incidental to ownership are

classified as operating leases and the payments made on acquiring the land use right represent prepaid lease

payments.

Lease prepayment for land use rights is stated at cost less accumulated amortisation. Amortisation is computed

on a straight-line basis over the term of the respective leases.

2.12 Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is an indication that an asset may be

impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group makes

an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell

and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows

that are largely independent of those from other assets or groups of assets. Where the carrying amount of an

asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable

amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a

pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific

to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if

available. If no such transactions can be identified, an appropriate valuation model is used. These calculations

are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available

fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared

separately for each of the Group’s cash-generating units to which the individual assets are allocated. These

budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term

growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses are recognised in profit or loss in those categories consistent with the function of the impaired

asset. After the recognition of an impairment loss, the depreciation (amortisation) charge for the asset shall be

adjusted in future periods to allocate the asset’s revised carrying amount, less its residual value (if any), on a

systematic basis over its remaining useful life.



2.12 Impairment of non-financial assets (cont’d)

For assets excluding goodwill, an assessment is made at the end of each reporting period as to whether there

is any indication that previously recognised impairment losses recognised for an asset may no longer exist or

may have decreased. If such indication exists, the recoverable amount of the asset or cash generating unit is

estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates

used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the

case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot

exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss

been recognised previously. Such reversal is recognised in profit or loss. After such a reversal, the depreciation

charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on

a systematic basis over its remaining useful life.

2.13 Financial assets

Initial recognition and measurement

Financial assets are recognised in the statement of financial position when, and only when, the Group becomes

a party to the contractual provisions of the financial instrument. The Group determines the classification of its

financial assets at initial recognition.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets

not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial

assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified

as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This

category includes derivative financial instruments entered into by the Group that are not designated

as hedging instruments in hedge relationships as defined by FRS 39. Derivative, including separated

embedded derivatives also classified as held for trading unless they are designated as effective hedging

instruments.

The Group has not designated any financial assets upon initial recognition at fair value through profit or

loss.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair

value and any changes therein are recognised in profit or loss. Net gains or net losses on financial assets

at fair value through profit or loss include exchange differences, interest and dividend income.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair

value if their economic characteristics and risks are not closely related to those of the host contracts

and the host contracts are not held for trading or designated at fair value through profit or loss. These

embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss.

Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the

cash flows that would otherwise be required.

60



2.13 Financial assets (cont’d)

Subsequent measurement (cont’d)

(b) Loans and receivables

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active

market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables

are measured at amortised cost using the effective interest method, less impairment. Gains and losses

are recognised in profit or loss when the loans and receivables are derecognised or impaired and through

the amortisation process.

The Group classifies the following financial assets as loans and receivables:

• Bank balances, deposits and cash

• Trade and other receivables, including amounts due from subsidiaries, jointly-controlled entity and

related parties

(c) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as

held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the

effective interest method, less impairment. Gains and losses are recognised in profit or loss when the

held-to-maturity investments are derecognised or impaired, and through the amortisation process.

(d) Available-for-sale financial assets

Available-for-sale financial assets include equity and debt securities. Equity investments classified as

available-for sale are those, which are neither classified as held for trading nor designated at fair value

through profit or loss. Debt securities in this category are those which are intended to be held for an

indefinite period of time and which may be sold in response to needs for liquidity or in response to

changes in the market conditions.

After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any

changes in fair value of the financial assets are recognised in other comprehensive income, except for

impairment loss, foreign exchange gains and losses on monetary instruments and interest calculated

using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously

recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification

adjustment when the financial asset is derecognised.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost

less impairment loss.

Derecognition

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On

derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the

consideration received and any cumulative gain or loss that has been recognised directly in other comprehensive

income is recognised in profit or loss.

All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e.

the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases

or sales of financial assets that require delivery of assets within the period generally established by regulation

or convention in the marketplace concerned.



2.14 Bank balances, deposits and cash

Bank balances, deposits and cash comprise cash at bank and on hand and demand deposits that are readily

convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

Bank balances, deposits and cash carried in the statements of financial position are classified and accounted for

as loans and receivables. The accounting policy for this category of financial assets is stated in Note 2.13(b).

2.15 Trade and other receivables

Trade and other receivables, including amounts due from subsidiaries, jointly-controlled entity and related parties

are classified and accounted for as loans and receivables. The accounting policy for this category of financial

assets is stated in Note 2.13(b).

An allowance for impairment is made for uncollectible amount when there is objective evidence that the Group

will not be able to collect the debt. Bad debts are written off when identified. Further details on the accounting

policy for impairment of financial assets are stated in Note 2.16(a) below.

2.16 Impairment of financial assets

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial

asset is impaired.

(a) Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses whether objective evidence

of impairment exists individually for financial assets that are individually significant, or collectively for

financial assets that are not individually significant. If the Group determines that no objective evidence of

impairment exists for an individually assessed financial asset, whether significant or not, it includes the

asset in a group of financial assets with similar credit risk characteristics and collectively assesses them

for impairment. Assets that are individually assessed for impairment and for which an impairment loss is,

or continues to be recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss on financial assets carried at amortised cost has

been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount

and the present value of estimated future cash flows discounted at the financial asset’s original effective

interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The

impairment loss is recognised in profit or loss.

When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly

or if an amount was charged to the allowance account, the amounts charged to the allowance account

are written off against the carrying value of the financial asset.

To determine whether there is objective evidence that an impairment loss on financial assets has been

incurred, the Group considers factors such as the probability of insolvency or significant financial

difficulties of the debtor and default or significant delay in payments.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be

related objectively to an event occurring after the impairment was recognised, the previously recognised

impairment loss is reversed to the extent that the carrying value of the asset does not exceed its amortised

cost at the reversal date. The amount of reversal is recognised in profit or loss.

62



2.16 Impairment of financial assets (cont’d)

(b) Financial assets carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the

issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment

loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the

difference between the asset’s carrying amount and the present value of estimated future cash flows

discounted at the current market rate of return for a similar financial asset. Such impairment losses are

not reversed in subsequent periods.

(c) Available-for-sale financial assets

In the case of equity investments classified as available-for-sale, objective evidence of impairment include

(i) significant financial difficulty of the issuer or obligor, (ii) information about significant changes with

an adverse effect that have taken place in the technological, market, economic or legal environment in

which the issuer operates, and indicates that the cost of the investment in equity instrument may not be

recovered; and (iii) a significant or prolonged decline in the fair value of the investment below its costs.

Significant’ is to be evaluated against the original cost of the investment and ‘prolonged’ against the

period in which the fair value has been below its original cost.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its

acquisition cost (net of any principal repayment and amortisation) and its current fair value, less any

impairment loss previously recognised in profit or loss, is transferred from other comprehensive income

and recognised in profit or loss. Reversals of impairment losses in respect of equity instruments are not

recognised in profit or loss; any subsequent increase in their fair value after impairment are recognised

directly in other comprehensive income.

In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same

criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the

cumulative loss measured as the difference between the amortised cost and the current fair value, less

any impairment loss on that investment previously recognised in profit or loss. Future interest income

continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest

used to discount the future cash flows for the purpose of measuring the impairment loss. The interest

income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument

increases and the increases can be objectively related to an event occurring after the impairment loss

was recognised in profit or loss, the impairment loss is reversed in profit or loss.

2.17 Inventories

Inventories comprise raw materials and fuel on board for consumption purposes and are stated at the lower of

cost (determined on first-in-first-out basis) and net realisable value. Raw materials consist mainly of steel and

other materials used for shipbuilding and shiprepair operations.

Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying

value of inventories to the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs

necessary to make the sale.



2.18 Construction contracts

The outcome of a construction contract can be estimated reliably when: (i) total contract revenue can be

measured reliably; (ii) it is probable that the economic benefits associated with the contract will flow to the

entity; (iii) the costs to complete the contract and the stage of completion can be measured reliably; and (iv)

the contract costs attributable to the contract can be clearly identified and measured reliably so that actual

contract costs incurred can be compared with prior estimates. The stage of completion is measured by reference

to the percentage of direct costs incurred for work performed to date to estimated total direct costs for the

contract.

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs

are recognised as revenue and expenses respectively, by reference to the stage of completion of the contract

activity at the end of each reporting period. When the outcome of a construction contract cannot be estimated

reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable

and contract costs are recognised as expense in the period in which they are incurred. When it is probable

that total contract costs will exceed total contract revenue, the expected loss on the construction contract is

recognised as an expense immediately.

In applying the percentage of completion method, revenue recognised corresponds to the total contract revenue

(as defined below) multiplied by the actual completion rate based on the proportion of total contract costs (as

defined below) incurred to date and the estimated costs to complete.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in the contract

work and claims that can be measured reliably. A variation or a claim is recognised as contract revenue when it

is probable that the customer will approve the variation or negotiations have reached an advanced stage such

that it is probable that the customer will accept the claim.

Contract costs include costs that relate directly to the specific contract and costs that are attributable to contract

activity in general and can be allocated to the contract. Costs that relate directly to a specific contract comprise:

site labour costs (including site supervision); costs of materials used in construction; depreciation of equipment

used on the contract; costs of design, and technical assistance that is directly related to the contract.

At the end of each reporting period, the aggregated costs incurred plus recognised profit (less recognised loss)

on each contract is compared against the progress billings. Where costs incurred plus the recognised profits

(less recognised losses) exceed progress billings, the balance is presented as construction work-in-progress

within “Current Assets”. Where progress billings exceed costs incurred plus recognised profits (less recognised

losses), the balance is presented as progress billings in excess of construction in work-in-progress within

“Current Liabilities”.

2.19 Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual

provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial

recognition.

All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value

through profit or loss, directly attributable transaction costs.

Subsequent measurement

The measurement of financial liabilities depends on their classification as follows:

64



2.19 Financial liabilities (cont’d)

Subsequent measurement (cont’d)

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial liabilities are recognised in profit or loss.

The Group has not designated any financial liabilities upon initial recognition at fair value through profit or loss.

Other liabilities

After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.20 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

2.21 Provisions

General

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.

Provision for liquidated damages

Provision for liquidated damages is made in respect of anticipated claims from customers on contracts of which deadlines are overdue or not expected to be completed on time in accordance with contractual obligations. The utilisation of provisions is dependent on the timing of claims.



2.21 Provisions (cont’d)

Provision for warranties

Provision for warranties represents the best estimate of the Group’s liability to repair vessels or replace affected parts during the warranty period. The provision is calculated based on past experience of the level of repairs and returns.

2.22 Government grants

Cash grants received from the government in relation to the Jobs Credit Scheme are recognised upon receipts. Such grants are recorded by the Group as other income in profit or loss.

2.23 Employee benefits

(a) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group make contributions to Central Provident Fund Scheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

(b) Employee leave entitlements

Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated liability for leave is recognised for services rendered by employees up to the end of the reporting period.

(c) Employee share option plans

Employees (including non-executive Directors) of the Group and of the Company receive remuneration in the form of share options as consideration for services rendered. The cost of these equity-settled share based payment transactions with employees is measured by reference to the fair value at the date on which the share options are granted. This cost is recognised in profit or loss, with a corresponding increase in the employee share option reserve, over the vesting period. The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.

No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

In the case where the option does not vest as the result of a failure to meet a non-vesting condition that is within the control of the Group or the employee, it is accounted for as a cancellation. In such case, the amount of the compensation cost that otherwise would be recognised over the remainder of the vesting period is recognised immediately in profit or loss upon cancellation.

The employee share option reserve is transferred to retained earnings upon expiry of the share options. When the options are exercised, the employee share option reserve is transferred to share capital if new shares are issued.

The Group has taken advantage of the transitional provisions of FRS 102 in respect of equity-settled awards and has applied FRS 102 only to equity-settled awards granted after 22 November 2002 that had not vested on or before 1 July 2005.

66



2.24 Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the

arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific

asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified

in an arrangement.

For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005

in accordance with the transitional requirements of INT FRS 104.

(a) As lessee

Finance leases which transfer to the Group substantially all the risks and rewards incidental to ownership

of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or,

if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to

the amount capitalised. Lease payments are apportioned between the finance charges and reduction

of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the

periods in which they are incurred.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and

the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the

lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over

the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction

of rental expense over the lease term on a straight-line basis.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of the ownership of the asset are

classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to

the carrying amount of the leased assets and are recognised over the lease term on the same basis as

rental income. The accounting policy for rental income is set out in Note 2.26(c). Contingent rents are

recognised as revenue in the period in which they are earned.

2.25 Assets held for sale

An asset is classified as held for sale if its carrying amount will be recovered principally through a sale transaction

rather than through continuing use. Upon classification as held for sale, the asset is not depreciated and is

measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in

profit or loss.

Property, plant and equipment once classified as held for sale are not depreciated or amortised.



2.26 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and

the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the

fair value of consideration received or receivable, taking into account contractually defined terms of payment

and excluding taxes or duty. Group turnover excludes intercompany transactions.

(a) Shipbuilding

Revenue from shipbuilding contracts is recognised using the percentage of completion method, provided

the work is at least 10% completed and the outcome of the contract can be reliably estimated. The

percentage of completion is measured by reference to the percentage of direct costs incurred for work

performed to date to estimated total direct costs for the contract. When the outcome of a contract cannot

be estimated reliably, revenue is recognised only to the extent of contract costs incurred that are likely

to be recoverable.

(b) Shiprepair and conversion

Revenue from fabrication and outfitting works and conversion jobs is recognised using the percentage

of completion method, provided the work is at least 10% completed and the outcome of the contract

can be reliably estimated. The percentage of completion is measured by reference to the percentage of

direct costs incurred for work performed to date to estimated total direct costs for the contract. When the

outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract

costs incurred that are likely to be recoverable.

Revenue from other shiprepair and conversion are recognised upon completion of work.

(c) Shipchartering and rental

Shipchartering revenue and rental income are recognised on a time proportion basis.

(d) Interest income

Interest income is recognised using the effective interest method.

(e) Dividend income

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

2.27 Taxes

(a) Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount

expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to

compute the amount are those that are enacted or substantively enacted at the end of the reporting

period, in the countries where the Group operates and generates taxable income.

Current income taxes are recognised in profit or loss except to the extent that the tax relates to items

recognised outside profit or loss, either in other comprehensive income or directly in equity. Management

periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax

regulations are subject to interpretation and establishes provisions where appropriate.

68



2.27 Taxes (cont’d)

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the end of the reporting

period between the tax bases of assets and liabilities and their carrying amounts for financial reporting

purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

• where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability

in a transaction that is not a business combination and, at the time of the transaction, affects

neither the accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences associated with investments in subsidiaries, associates

and interests in joint ventures, where the timing of the reversal of the temporary differences can

be controlled and it is probable that the temporary differences will not reverse in the foreseeable

future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax

credits and unused tax losses, to the extent that it is probable that taxable profit will be available against

which the deductible temporary differences, and the carry forward of unused tax credits and unused tax

losses can be utilised except:

• where the deferred tax asset relating to the deductible temporary difference arises from the initial

recognition of an asset or liability in a transaction that is not a business combination and, at the

time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• in respect of deductible temporary differences associated with investments in subsidiaries,

associates and interests in joint ventures, deferred tax assets are recognised only to the extent

that it is probable that the temporary differences will reverse in the foreseeable future and taxable

profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced

to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part

of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of

each reporting period and are recognised to the extent that it has become probable that future taxable

profit will allow the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year

when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been

enacted or substantively enacted at the end of each reporting period.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred

tax items are recognised in correlation to the underlying transaction either in other comprehensive income

or directly in equity and deferred tax arising from a business combination is adjusted against goodwill

on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off

current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable

entity and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate

recognition at that date, would be recognised subsequently if new information about facts and

circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as

it does not exceed goodwill) if it incurred during the measurement period or in profit or loss.



2.27 Taxes (cont’d)

(c) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

• where the sales tax incurred on a purchase of assets or services is not recoverable from the

taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of

the asset or as part of the expense item as applicable; and

• receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of

receivables or payables in the statements of financial position.

2.28 Derivative financial instruments and hedging activities

The Group uses derivative financial instruments such as forward currency contracts and interest rate swaps

to hedge its risks associated with foreign currency and interest rate fluctuations. Such derivative financial

instruments are initially recognised at fair value on the date on which a derivative contract is entered into and

are subsequently remeasured at fair value. Derivative financial instruments are carried as assets when the fair

value is positive and as liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivative financial instruments that do not qualify

for hedge accounting are recognised in profit or loss for the year.

The fair value of forward currency contracts is calculated by reference to current forward exchange rates for

contracts with similar maturity profiles. The fair value of interest rate swap contracts is determined by reference

to market values for similar instruments.

For the purpose of hedge accounting, hedges are classified as:

• fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability

or an unrecognised firm commitment, that is attributable to a particular risk and could affect profit or

loss; or

• cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a

particular risk associated with a recognised asset or liability or a highly probable forecast transaction

and could affect profit or loss.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship

to which the Group wishes to apply hedge accounting and the risk management objective and strategy for

undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item

or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s

effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to

the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value

or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective

throughout the financial reporting periods for which they were designated.

(a) Fair value hedges

For fair value hedges, the carrying amount of the hedged item is adjusted for gains and losses attributable

to the risk being hedged, the derivative is remeasured at fair value and gains and losses from both are

recognised in profit or loss.

70



2.28 Derivative financial instruments and hedging activities (cont’d)

(a) Fair value hedges (cont’d)

For fair value hedges relating to items carried at amortised cost, the adjustment to carrying value is amortised through the profit or loss over the remaining term to maturity. Any adjustment to the carrying amount of a hedged financial instrument for which the effective interest method is used is amortised to profit or loss.

Amortisation begins as soon as an adjustment exists but no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.

When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.

The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, the hedge no longer meets the criteria for hedge accounting or the Group revokes the designation. Any adjustment to the carrying amount of a hedged financial instrument for which the effective interest method is used is amortised to profit or loss. Amortisation begins as soon as an adjustment exists but no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.

(b) Cash flow hedges

For cash flow hedges, the effective portion of the gain or loss on the hedging instrument is recognised directly in the hedging reserve, while the ineffective portion is recognised in profit or loss.

Amounts taken to hedging reserve are transferred to profit or loss when the hedged transaction affects profit or loss, such as when hedged financial income or financial expense is recognised or when a forecast sale or purchase occurs. Where the hedged item is the cost of a non-financial asset or liability, the amounts taken to hedging reserve are transferred to the initial carrying amount of the non-financial asset or liability.

If the forecast transaction is no longer expected to occur, amounts previously recognised in hedging reserve are transferred to profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognised in hedging reserve remain in equity until the forecast transaction occurs. If the related transaction is not expected to occur, the amount is recognised in profit or loss.

2.29 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services. The segment results are regularly reviewed by management in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 34, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.30 Share capital and share issue expenses

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of ordinary shares are deducted against share capital.

2.31 Treasury shares

The Group’s own equity instruments, which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount of treasury shares and the consideration received, if reissued, is recognised directly in equity. Voting rights related to treasury shares are nullified for the Group and no dividends are allocated to them respectively.



2.32 Contingencies

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or

(b) a present obligation that arises from past events but is not recognised because:

(i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) The amount of the obligation cannot be measured with sufficient reliability.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.

Contingent liabilities and assets are not recognised in the statement of financial position of the Group, except for contingent liabilities assumed in a business combination that are present obligations and which the fair values can be reliably determined.

2.33 Related parties

A related party is defined as follows:

(a) A person or a close member of that person’s family is related to the Group and Company if that person:

(i) Has control or joint control over the Company;

(ii) Has significant influence over the Company; or

(iii) Is a member of the key management personnel of the Group or Company or of a parent of the Company.

(b) An entity is related to the Group and the Company if any of the following conditions applies:

(i) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

(iii) Both entities are joint ventures of the same third party;

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(v) The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company;

(vi) The entity is controlled or jointly controlled by a person identified in (a); or

(vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

72


3. Significant accounting judgments and estimates

The preparation of the Group’s financial statements requires management to make judgments, estimates and

assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure

of contingent liabilities at the end of each reporting period. These are assessed on an on-going basis and

are based on experience and relevant factors, including expectations of future events that are believed to be

reasonable under the circumstances. However, uncertainty about these assumptions and estimates could result

in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in

the future periods.

3.1 Judgments made in applying accounting policies

The following are the judgments made by management in the process of applying the Group’s accounting policies

that have the most significant effect on the amounts recognised in the consolidated financial statements.

(a) Revenue recognition

Total contract revenue includes an estimation of the value of variation works that is recoverable from

the customers.

The Group has recognised estimated recoverable variation works of $1,813,000 (2010: $1,215,000) as

contract revenue for which customer acceptance is pending. In making the judgment, the Group evaluates

its past experience and the history of settlements with the customers. Any shortfall in recovery of this

recoverable amount will impact the results of the Group by the same quantum.

(b) Determination of functional currency

The Group measures foreign currency transactions in the respective functional currencies of the Company

and its subsidiaries. In determining the functional currencies, judgment is required to determine the

currency that mainly influences sales prices for goods and services and of the country whose competitive

forces and regulations mainly determines the sales prices of its goods and services. The functional

currencies of the entities in the Group are determined based on management’s assessment of the

economic environment in which the entities operate and its process of determining sales prices.

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each

reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets

and liabilities within the next financial year are discussed below.

(a) Useful lives of property, plant and equipment

The cost of property, plant and equipment is depreciated on a straight-line basis over their estimated

economic useful lives. Management estimates the useful lives of these property, plant and equipment to

be within 1 to 30 years. These are common life expectancies applied in the shipping industry. Changes in

the expected level of usage and technological developments could impact the economic useful lives and

the residual values of these assets, therefore future depreciation charges could be revised. The carrying

amount of the Group’s property, plant and equipment is disclosed in Note 4.


3. Significant accounting judgments and estimates (cont’d)

3.2 Key sources of estimation uncertainty (cont’d)

(b) Impairment of non-financial assets

The Group determines an asset’s recoverable amount based on the higher of an asset’s or cash-generating

unit’s fair value less costs to sell and its value in use. When value in use calculation is undertaken,

management estimates the expected future cash flows from the asset or cash-generating unit by applying

a suitable discount rate to calculate the present value of those cash flows. When fair value less costs

to sell is used, management engages the services of professional valuers to determine the fair values

using valuation techniques which involve the use of estimates and assumptions which are reflective of

current market conditions.

The carrying amount of the Group’s property, plant and equipment is disclosed in Note 4.

(c) Impairment of loans and receivables

The Group assesses at the end of each reporting period whether there is any objective evidence that a

financial asset is impaired. To determine whether there is objective evidence of impairment, the Group

considers factors such as the probability of insolvency or significant financial difficulties of the debtor

and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated

based on historical loss experience for assets with similar credit risk characteristics. The carrying amount

of the Group’s loans and receivables is disclosed in Notes 10 and 13.

(d) Construction contracts

The Group recognises contract revenue by reference to the stage of completion of the contract activity at

the end of each reporting period, when the outcome of a construction contract can be estimated reliably.

The stage of completion is measured by reference to the proportion that contract costs incurred for work

performed to date bear to the estimated total contract costs. Significant assumptions are required to

estimate the total contract costs that will affect the stage of completion. The estimates are made based

on past experience and knowledge of the management. The carrying amounts of assets and liabilities

arising from construction contracts are disclosed in Note 9.

(e) Income taxes

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing

of future taxable income. Given the wide range of international business relationships and the long-term

nature and complexity of existing contractual agreements, differences arising between the actual results

and the assumptions made, or future changes to such assumptions, could necessitate future adjustments

to tax provisions already recorded. The Group establishes provisions, based on reasonable estimates, for

possible consequences of audits by the tax authorities of the respective countries in which it operates.

The amount of such provisions is based on various factors, such as experience of previous tax audits

and differing interpretations of tax regulations by the taxable entity and the relevant tax authority. Such

differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing

in the respective Group company’s domicile.

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable

profit will be available against which the losses can be utilised. Significant management judgment is

required to determine the amount of deferred tax assets that can be recognised, based upon the likely

timing and level of future taxable profits together with future tax planning strategies.

The carrying amount of the Group’s current tax payable and deferred tax liabilities at 30 June 2011 was

$8,266,000 (2010: $12,007,000) and $10,378,000 (2010: $9,747,000) respectively.

74


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76


4. Property, plant and equipment (cont’d)

The Company

Motor

vehicles

$’000

Cost

At 1 July 2009, 30 June 2010 and 1 July 2010 227

Disposal (227)

At 30 June 2011 –

Accumulated depreciation

At 1 July 2009 103

Depreciation charge for the year 24

At 30 June 2010 and 1 July 2010 127

Depreciation charge for the year 6

Disposal (133)

At 30 June 2011 –

Net carrying amount

At 30 June 2010 100

At 30 June 2011 –

The depreciation charge for the year as shown in profit or loss is arrived at as follows:

The Group

2011 2010

$’000 $’000

Depreciation charge for the year 36,059 30,765

Depreciation included in work-in-progress carried forward (Note 9) (2,792) (2,675)

Depreciation previously included in work-in-progress now

charged to profit or loss 2,675 2,385

Depreciation charge as disclosed in Note 26 35,942 30,475


4. Property, plant and equipment (cont’d)

Included in net carrying amount of property, plant and equipment of the Group and the Company are the

following:


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Assets held under finance leases:

Motor vehicles 531 654 – 100

Plant and machinery 16,484 12,234 – –

Asset under construction 14,953 – – –

31,968 12,888 – 100

Assets pledged as security for interest-bearing

loans and borrowings:

Leasehold property and buildings 11,845 5,060 – –

Plant and machinery 8,595 10,265 – –

Tugs and other vessels 118,357 129,930 – –

Barges 34,254 39,700 – –

Dry docks, quays and ancillary 12,963 18,716 – –

186,014 203,671 – –

Borrowing costs of $817,000 at interest rates ranging from 4.75% to 5.5% per annum was capitalised as cost

of property, plant and equipment in 2010.

The Group recorded an impairment loss of $2,297,000 in 2010 which represented the write-down of assets to

their recoverable amounts, determined at the cash-generating unit level (individual vessel) and was based on

fair value less costs to sell determined with respect to valuations obtained. The impairment loss was recognised

in profit or loss under “other operating expenses” (Note 26).

78


5. Lease prepayments

The Group

Leasehold

land

$’000

Cost

At 1 July 2009 6,600

Net exchange differences (36)

At 30 June 2010 and 1 July 2010 6,564

Additions 243


At 30 June 2011 6,709

Accumulated amortisation

At 1 July 2009 2,476

Amortisation charge for the year 199


At 30 June 2010 and 1 July 2010 2,672

Amortisation charge for the year 202


At 30 June 2011 2,865

Net carrying amount

At 30 June 2010 3,892

At 30 June 2011 3,844

Included in lease prepayments of the Group are the following:

The Group

2011 2010

$’000 $’000

Leasehold land mortgaged to banks as security for interest-bearing

loans and borrowings granted to a subsidiary 1,281 1,414

The Group has land use rights over 8 (2010: 7) plots of land in the People’s Republic of China, Indonesia and

Singapore where the shipyards of the Group operate. The land use rights have remaining tenures ranging from

10 to 44 years (2010: 11 to 45 years).


6. Subsidiaries

The Company

2011 2010

$’000 $’000

Unquoted equity shares, at cost 69,505 33,573

The details of the subsidiaries are as follows:

Name of subsidiaries Principal activities

Country of

incorporation

Equity

interest held

by the Company

2011 2010

% %

Held by the Company

* ASL Shipyard Pte Ltd Shipbuilding, shiprepair

and conversion and general

engineering

Singapore 100 100

** PT. ASL Shipyard Indonesia 1 Shipbuilding, shiprepair


engineering

Indonesia 10 10

* ASL Offshore & Marine Pte. Ltd. Chartering of vessels and

ship management

Singapore 100 100

* Capitol Marine Pte Ltd Chartering of vessels Singapore 100 100

* Capitol Offshore Pte Ltd Chartering of vessels Singapore 100 100

* Capitol Tug & Barge Pte Ltd Chartering of vessels Singapore 100 100

* Capitol Shipping Pte Ltd Chartering of vessels Singapore 100 100

* Lightmode Pte Ltd Chartering of vessels Singapore 100 100

* Capitol Logistics Pte. Ltd. Chartering of vessels Singapore 100 100

* Capitol Navigation Pte. Ltd. Chartering of vessels Singapore 100 100

* Capitol Aquaria Pte. Ltd. Chartering of vessels Singapore 100 100

* Capitol Oceans Pte. Ltd. Chartering of vessels Singapore 100 100

* ASL Maritime Services Pte. Ltd. # Chartering of vessels Singapore 100 100

* Intan Maritime Investments Pte. Ltd. Chartering of vessels Singapore 100 100

* Intan Synergy Pte. Ltd. Chartering of vessels Singapore 100 100

* Intan Offshore Pte. Ltd. # Chartering of vessels Singapore 100 100

1 90% owned by ASL Shipyard Pte Ltd, a wholly-owned subsidiary of the Company

80


6. Subsidiaries (cont’d)

Name of subsidiaries Principal activities

Country of

incorporation

Equity

interest held

by the Company

2011 2010

% %

Held by the Company (cont’d)

* Intan Oceans Pte. Ltd. Chartering of vessels Singapore 100 –

* Intan Scorpio Pte. Ltd. Chartering of vessels Singapore 100 –

* ASL Triaksa Offshore Pte. Ltd. # Chartering of vessels Singapore 60 60

* Hongda Investment Pte. Ltd. Investment holding Singapore 60 60

* Intan Overseas Investments

Pte. Ltd.

Investment holding Singapore 100 100

Held through subsidiaries

** PT. ASL Shipyard Indonesia Shipbuilding, shiprepair


engineering

Indonesia 90 90

** PT. Cipta Nusantara Abadi Investment holding and

provision of agency, handling

and consultancy services

Indonesia 75 75

** PT. Capitol Nusantara Indonesia Chartering of vessels and

ship management

Indonesia 60 60

** PT. Bina Kontinental Lestari Investment holding and

provision of agency, handling

and consultancy services

Indonesia 100 100

** PT. Awak Samudera Transportasi Chartering of vessels Indonesia 100 100

** PT. Cemara Intan Shipyard Shipbuilding, shiprepair and

general engineering

Indonesia 100 100

*** Jiang Men Hongda Shipyard Ltd. Shipbuilding and general

engineering

People’s

Republic of

China

60 60

* Audited by Ernst & Young LLP, Singapore

** Audited by Drs Bernardi & Co, Indonesia

*** Audited by Zhishang Certified Public Accountants Co., Ltd., People’s Republic of China# The company is dormant during the financial year

In accordance with Rule 716 of the SGX-ST Listing Manual, the Audit Committee and Board of Directors of the

Company confirmed that they are satisfied that the appointment of different auditors for its subsidiaries would

not compromise the standard and effectiveness of the audit of the Company and the Group.


7. Interest in jointly-controlled entity and associate


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Interest in jointly-controlled entity

Unquoted equity shares, at cost 87 87 – –

Share of post-acquisition reserves 866 1,137 – –

953 1,224 – –

Interest in associate

Unquoted equity shares, at cost 1,558 1,558 1,558 1,558

Share of post-acquisition reserves (1,558) (957) – –

Impairment loss – – (1,558) –

– 601 – 1,558

Total interest in jointly-controlled entity

and associate 953 1,825 – 1,558

Interest in jointly-controlled entity

Details of the jointly-controlled entity are as follows:

Name of jointly-controlled entity Principal activities

Place of

incorporation

and business

Effective equity

interest held

by the Group

2011 2010

% %

Held through a subsidiary

* HKR-ASL Joint Venture Limited # Chartering of vessels Hong Kong 50 50

* Audited by Alan Chan & Company, Hong Kong# The company is dormant during the financial year

The following amounts represent the Group’s proportionate share of the results, assets and liabilities of the jointly-controlled entity, which have been equity accounted in the consolidated statement of financial position and profit or loss:

The Group

2011 2010

$’000 $’000

Turnover – –

Profit after tax (130) (179)

Current assets 166 190

Non-current assets 788 1,034

Total assets 954 1,224

Current liabilities (1) (1)

Total liabilities (1) (1)

82


7. Interest in jointly-controlled entity and associate (cont’d)

Interest in associate

Details of the associate are as follows:

Name of associate Principal activities

Place of

incorporation

and business

Effective equity

interest held

by the Group

2011 2010

% %

Held by the Company

* Fastcoat Industries Pte. Ltd. Investment holding and

metal galvanising, coating

and protecting operations

Singapore 44.5 44.5

Held through an associate

** PT. Fastcoat Industries Metal galvanising, coating

and protecting operations

Indonesia 44.5 44.5

* Audited by Ernst & Young LLP, Singapore

** Audited by Drs Bernardi & Co, Indonesia

The summarised financial information of the associate, not adjusted for the proportion of ownership interest

held by the Group, is as follows:

The Group

2011 2010

$’000 $’000

Turnover 2,849 3,950

Loss after tax (1,443) (1,103)

Current assets 2,326 3,359

Non-current assets 1,803 2,248

Total assets 4,129 5,607

Current liabilities (4,220) (4,256)

Total liabilities (4,220) (4,256)

8. Inventories

The Group

2011 2010

$’000 $’000

Raw materials 12,272 12,841

Bunker fuel 319 310

12,591 13,151


9. Construction work-in-progress/Progress billings in excess of construction work-in-progress

The Group

2011 2010

$’000 $’000

Construction work-in-progress and attributable profits 290,231 235,386

Progress billings (229,285) (208,200)

60,946 27,186

Represented by:

Construction work-in-progress 80,453 67,734

Progress billings in excess of construction work-in-progress (19,507) (40,548)

60,946 27,186

The construction work-in-progress included depreciation capitalised amounting to $2,792,000 (2010:

$2,675,000).

10. Trade and other receivables


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Trade and other receivables (current):

Trade receivables 98,057 100,586 – –

Less: Allowance for impairment (2,471) (5,011) – –

Net trade receivables 95,586 95,575 – –

Other receivables 8,638 9,067 – –

Insurance receivables 3,649 2,486 – –

Amount due from subsidiaries

– non-trade – – 178,153 165,437

Amount due from jointly-controlled entity and

associate

– trade 1,881 1,499 – –

– non-trade – 181 – –

14,168 13,233 178,153 165,437

Less: Allowance for impairment (180) (215) – –

Net other receivables 13,988 13,018 178,153 165,437

Total 109,574 108,593 178,153 165,437

Other receivable (non-current):

Amount due from subsidiary

– non-trade – – – 2,203

Total trade and other receivables 109,574 108,593 178,153 167,640

84


10. Trade and other receivables (cont’d)

Movements in allowance for impairment of doubtful trade and other receivables during the financial year is as

follows:

The Group

2011 2010

$’000 $’000

At 1 July 5,226 4,635

Charge for the year 666 610

Written-back (466) (33)

Written-off (2,763) –

Net exchange differences (12) 14

At 30 June 2,651 5,226

The ageing of trade receivables and allowance for impairment of doubtful trade receivables of the Group is as

follows:

2011 2010

Gross Impairment Gross Impairment

$’000 $’000 $’000 $’000

Not past due 42,187 – 15,797 –

Past due 0 to 3 months 19,302 – 35,272 –



More than 1 year 17,053 2,471 15,160 5,011

98,057 2,471 100,586 5,011

Trade receivables

Trade receivables are non-interest bearing and are generally on 30 to 90 days’ credit terms. They are recognised

at their original invoice amounts which represent their fair values on initial recognition.

Amount due from subsidiaries, jointly-controlled entity and associate

The non-trade balances with subsidiaries are unsecured, interest-free and are repayable on demand except

for balances with certain wholly-owned subsidiaries which bear interest ranging from 4.82% to 5.23% (2010:

3.93% to 5.05%) per annum.

The trade and non-trade balances with jointly-controlled entity and associate are unsecured, interest-free and

are repayable on demand.

Amount due from subsidiary (non-current)

The non-trade balance with subsidiary was unsecured, interest-free and was not expected to be repayable

within the next twelve months.


10. Trade and other receivables (cont’d)

Trade and other receivables are denominated in the following currencies:


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Singapore Dollar 80,883 71,883 174,615 162,177

United States Dollar 19,227 30,943 3,538 5,463

Euro 7,025 3,569 – –

Indonesia Rupiah 2,199 1,295 – –

Chinese Renminbi 218 860 – –

Others 22 43 – –

109,574 108,593 178,153 167,640

11. Deposits and prepayments


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Deposits 166 293 – –

Downpayment for purchase of land,

machinery and yard development 2,455 2,734 2,454 2,454

Prepayments 7,081 4,021 890 679

9,702 7,048 3,344 3,133

12. Derivative financial instruments

Derivative financial instruments as at 30 June are as follows:

The Group

2011 2010

Assets Liabilities Assets Liabilities

$’000 $’000 $’000 $’000

Forward currency contracts 3,225 (11) 1,350 (443)

Interest rate swaps – (1,831) – (3,121)

3,225 (1,842) 1,350 (3,564)

86


12. Derivative financial instruments (cont’d)

The Company

2011 2010

Assets Liabilities Assets Liabilities

$’000 $’000 $’000 $’000

Interest rate swaps – (505) – (368)

(i) Forward currency contracts

The Group entered into various foreign exchange forward contracts to sell and purchase foreign currencies

on its future anticipated income and expenditure respectively. As at 30 June 2011, the terms of these

contracts and the fair value adjustments on these derivative financial instruments are as follows:

The Group

Contract or

notional

Fair value

adjustments

Forward currency contracts Maturity dates amount Assets Liabilities

$’000 $’000 $’000

2011

Sell

– fixed forward contracts 15 July 2011 –

28 February 2012

47,440 3,111 –

Buy

– fixed forward contracts 15 July 2011 –

30 December 2011

7,452 114 (11)

3,225 (11)

The terms of the forward currency contracts have been negotiated to match the terms of the

commitments.

For the cash flow hedges of the expected future sales which were assessed to be effective, a net fair

value gain of $3,090,000 (2010: $993,000) was included in the hedging reserve. Fair value loss of $59,000

(2010: gain of $72,000) was recognised in profit or loss during the year on the ineffective portion of the

cash flow hedges.

For the cash flow hedges of the expected future purchases which were assessed to be effective, a net

fair value gain of $104,000 (2010: loss of $140,000) was included in the hedging reserve. Fair values

gain of $26,000 (2010: loss of $27,000) was recognised in profit or loss during the year on the ineffective

portion of the cash flow hedges.


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88


13. Bank balances, deposits and cash


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Cash on hand 24 42 – –

Cash at banks 35,844 32,425 177 510

Fixed deposits with banks 13,668 57,623 – –

49,536 90,090 177 510

Cash at banks of the Group amounting to $9,844,000 as at 30 June 2011 (2010: $14,815,000) earn interest

based on daily bank deposit rates.

The maturity period of fixed deposits with banks ranges from 2 days to 1 year (2010: 1 week to 1 year) for the

Group. The weighted average effective interest rate at 30 June for fixed deposits of the Group is 0.34% (2010:

0.20%) per annum.

Bank balances, deposits and cash of the Group and the Company are denominated in the following

currencies:


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Singapore Dollar 25,400 73,246 177 510

United States Dollar 18,954 8,367 – –

Euro 4,413 7,924 – –


Indonesia Rupiah 670 273 – –

Others 1 1 – –

49,536 90,090 177 510

The Group’s restricted cash as at 30 June 2011 included cash at banks and fixed deposits amounted to

$2,116,000 (2010: $1,861,000) and $2,669,000 (2010: $4,927,000) respectively, and are set aside for specific

use with respect to certain financing facilities obtained by certain subsidiaries (Note 18).

For the purpose of statement of cash flows, cash and cash equivalents comprise the following:


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Cash on hand 24 42 – –

Cash at banks 35,844 32,425 177 510

Fixed deposits with banks 13,668 57,623 – –

49,536 90,090 177 510

Less: Restricted cash

– Cash at banks (2,116) (1,861) – –

– Fixed deposits with banks (2,669) (4,927) – –

Cash and cash equivalents 44,751 83,302 177 510


14. Assets held for sale

The Group

2011 2010

$’000 $’000

Vessels

At 1 July 7,269 845

Additions – 3,231

Disposals (5,266) (6,490)

Transfer from property, plant and equipment 13,761 9,683

At 30 June 15,764 7,269

15. Trade and other payables


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Trade and other payables (current):

Trade payables 71,302 85,554 19 64

Accrued operating expenses 44,765 34,255 1,851 1,102

Payables for yard development 12,811 9,132 – –

Other payables 515 3,295 – –

Amount due to subsidiaries

– non-trade – – 34,643 28,843

Amount due to jointly-controlled entity and associate

– trade 68 146 – –

– non-trade 79 90 – –

Amount due to non-controlling interests of subsidiaries

– non-trade 2,125 2,080 – –

131,665 134,552 36,513 30,009

Other payables (non-current):

Amount due to non-controlling interests of subsidiaries

– non-trade – 1,469 – –

Total trade and other payables 131,665 136,021 36,513 30,009

90


15. Trade and other payables (cont’d)

Trade payables are non-interest bearing and are normally on 30 to 120 days’ credit terms.

Amount due to subsidiaries, jointly-controlled entity and associate

The trade and non-trade balances with subsidiaries, jointly-controlled entity and associate are unsecured,

interest-free and are repayable on demand.

Amount due to non-controlling interests of subsidiaries (current)

The balance with non-controlling interests of subsidiaries is unsecured, interest-free and is repayable on

demand.

Amount due to non-controlling interests of subsidiaries (non-current)

This balance relates to non-controlling interests’ loan to subsidiaries of the Company which is unsecured,

interest-free and is not expected to be repaid within the next twelve months.

Trade and other payables are denominated in the following currencies:


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Singapore Dollar 108,656 112,144 36,513 30,009

United States Dollar 6,901 8,527 – –

Euro 4,189 1,612 – –

Indonesia Rupiah 10,935 11,764 – –


Hong Kong Dollar 80 91 – –

Swedish Krona 145 135 – –

Japanese Yen 207 172 – –

Sterling Pound 4 30 – –

Norwegian Kroner 9 1,040 – –

Australian Dollar 94 – – –

Others 27 31 – –

131,665 136,021 36,513 30,009

16. Other liabilities

The Group

2011 2010

$’000 $’000

Deferred income 246 93

Deposits received from customers 3,013 3,252

3,259 3,345


17. Trust receipts

Trust receipts are unsecured and denominated in the following currencies:

The Group

2011 2010

$’000 $’000

Singapore Dollar 27,738 23,467

United States Dollar – 1,566

Euro Dollar 7,127 –

34,865 25,033

The effective interest rate at 30 June is 2.23% (2010: 2.12%) per annum. Interest rates are repriced within a

year.

18. Interest-bearing loans and borrowings


Effective

interest

rates

Maturity

dates 2011 2010 2011 2010

$’000 $’000 $’000 $’000

Current

SGD Finance lease liabilities – secured 3.96 2012 6,210 2,953 – 25

RMB Finance lease liabilities – secured 2012 – 1 – –

SGD Floating rate – secured 2.75 1 2012 7,676 5,325 – –

USD Floating rate – secured 2.51 1 2012 1,991 – – –

SGD Fixed rate – secured 2.89 2 2012 7,008 13,454 – –

SGD Fixed rate – unsecured 4.30 2,3 2012 33,645 15,687 22,100 11,000

USD Fixed rate – secured 6.03 2 2012 9,779 10,589 – –

Euro Fixed rate – secured 5.17 2 2012 2,102 2,031 – –

RMB Fixed rate – secured 2012 – 1,030 – –

68,411 51,070 22,100 11,025

92


18. Interest-bearing loans and borrowings (cont’d)


Effective

interest

rates

Maturity

dates 2011 2010 2011 2010

$’000 $’000 $’000 $’000

Non-current

SGD Finance lease liabilities – secured 3.96 2013 – 2017 15,872 5,781 – 20

SGD Floating rate – secured 2.75 1 2013 – 2016 13,853 10,248 – –

USD Floating rate – secured 2.51 1 2016 8,762 – – –

SGD Fixed rate – secured 2.89 2 2013 – 2014 5,693 18,267 – –

SGD Fixed rate – unsecured 4.30 2,3 2014 94,893 69,537 92,900 65,000

USD Fixed rate – secured 6.03 2 2013 – 2016 15,415 26,281 – –

Euro Fixed rate – secured 5.17 2 2013 1,051 3,046 – –

155,539 133,160 92,900 65,020

Total 223,950 184,230 115,000 76,045

1 The interest rates of these floating rate loans are repriced at intervals of 1 month for SGD loans and 3

months for USD loan.

2 Includes interest-bearing loans and borrowings with interest rate swaps.

3 Includes notes issued under the S$300 million Multicurrency Debt Issuance Programme established by the

Company in May 2008. These notes are unsecured and are issued in series or tranches and comprised

floating rate notes of $21,000,000 and fixed rate notes of $94,000,000 due in March 2014.

The net carrying amount of the Group’s assets pledged as security for interest-bearing loans and borrowings

are disclosed in Notes 4 and 5. The Group also secured borrowings by way of corporate guarantees from

the Company and certain subsidiaries and assignment of charter income and insurance of certain vessels of

subsidiaries.


19. Deferred tax liabilities

The Group

2011 2010

$’000 $’000

Deferred tax assets

Unabsorbed wear and tear allowances and unutilised tax losses (344) (177)

Allowance for unutilised leave (54) (48)

Others (34) (25)

(432) (250)

Deferred tax liabilities

Differences in depreciation 10,267 9,852

Revaluation of forward contract to fair value 543 145

10,810 9,997

10,378 9,747

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets

against current income tax liabilities and when the deferred taxes relate to the same taxable entity and the same

taxation authority. The deferred tax amounts determined after appropriate offsetting are as follows:

The Group

2011 2010

$’000 $’000

Deferred tax liabilities 10,378 9,747

At the end of the reporting period, the Group has undistributed earnings of subsidiaries for which deferred tax

liabilities have not been recognised. No liability has been recognised in respect of these differences because

the Group is in a position to control the timing of the reversal of the temporary differences and it is probable

that the temporary differences will not reverse in the foreseeable future.

94


20. Share capital

The Group and the Company

Number of shares Amount

Issued

share

capital

Treasury

shares

Issued

share

capital

Treasury

shares

’000 ’000 $’000 $’000

Fully paid ordinary shares, with no par value

2011

Balance at beginning of year 301,398 1,794 83,061 (923)

Issued under ASL Employee

Share Option Scheme (Note 30) 47 – 31 –

Bonus shares issued 120,578 718 – –

Balance at end of year 422,023 2,512 83,092 (923)

2010

Balance at beginning of year 301,383 1,794 83,051 (923)

Issued under ASL Employee

Share Option Scheme (Note 30) 15 – 10 –

Balance at end of year 301,398 1,794 83,061 (923)

The holders of ordinary shares (except for treasury shares) are entitled to receive dividends as and when declared

by the Company. All ordinary shares (except for treasury shares) carry one vote per share without restriction.

On 29 December 2010, the Company’s share capital has increased by 120,577,892 ordinary shares as a result

of bonus issue of four shares for every ten existing ordinary shares.

Treasury shares

During the year, the Company did not buy back any shares.

The Company holds the shares bought back as treasury shares.


21. Reserves


2011 2010 2011 2010

$’000 $’000 $’000 $’000

Accumulated profits 257,140 234,212 17,497 18,317

Employee share option reserve – 5 – 5

Foreign currency translation reserve (4,865) (55) – –

Hedging reserve 1,392 (967) (505) (368)

253,667 233,195 16,992 17,954

Employee share option reserve

Employee share option reserve represents the equity-settled share options granted to employees (Note 30). The

reserve is made up of the cumulative value of services received from employees recorded on grant of equity-

settled share options.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of

the financial statements of foreign operations whose functional currencies are different from that of the Group’s

presentation currency.

Hedging reserve

Hedging reserve records the portion of the fair value changes of derivative financial instruments designated as

hedging instruments in cash flow hedges that is determined to be effective.

22. Other comprehensive income

Tax effects relating to each component of other comprehensive income are set out below:

2011 2010

The Group

Before

tax

Tax

expense

Net

of tax

Before

tax

Tax

expense

Net

of tax

$’000 $’000 $’000 $’000 $’000 $’000

Translation differences relating

to financial statements

of foreign subsidiaries (5,384) – (5,384) 329 – 329

Share of other comprehensive

income of jointly-controlled

entity (141) – (141) (74) – (74)

Fair value changes to cash flow

hedges 2,757 (398) 2,359 1,676 (145) 1,531

(2,768) (398) (3,166) 1,931 (145) 1,786

96


23. Revenue

The Group

2011 2010

$’000 $’000

Shipbuilding 215,683 306,316

Shiprepair and conversion 81,900 89,061

Shipchartering and rental 65,568 72,995

363,151 468,372

24. Other operating income

The Group

2011 2010

$’000 $’000

Interest income from:

– fixed deposits and bank balances 135 155

– finance lease receivables – 24

Insurance claims 65 356

Gain on disposal of property, plant and equipment 6,169 4,216

Gain on disposal of assets held for sale 3,994 2,495

Grant income from Jobs Credit Scheme – 351

Miscellaneous income 151 1,723

10,514 9,320

The Group received cash grant of $351,000 in 2010 with respect to the Singapore government’s Job Credit

Scheme.

25. Finance costs

The Group

2011 2010

$’000 $’000

Interest expense on:

– bank loans and bonds 8,239 8,386

– finance lease 676 456

– trust receipts 430 755

– others 20 43

9,365 9,640

Less:

Interest expense capitalised in property, plant and equipment – (817)

Interest expense on trust receipts charged to cost of sales (430) (751)

8,935 8,072


26. Profit before tax

The Group

2011 2010

$’000 $’000

Profit before tax is stated after charging/(crediting):

Amortisation of lease prepayments (Note 5) 202 199

Depreciation of property, plant and equipment (Note 4) 35,942 30,475

Employee benefits expense (Note 30) 23,711 25,577

(Gain)/ Loss on ineffective portion of cash flow hedges

on forward currency contracts and interest rate swaps (840) 1,126

Impairment loss on property, plant and equipment (Note 4) – 2,297

Loss on foreign exchange (net) 3,095 539

Non-audit fees payable to auditors of the Company 21 21

Operating lease expenses (Note 29(c)) 1,007 998

Property, plant and equipment written off 15 3

Allowance for impairment of doubtful trade and other receivables (net) 200 577

27. Tax expense

Major components of tax expense for the years ended 30 June are:

The Group

2011 2010

$’000 $’000

Current income tax:

Current income tax 5,928 8,673

(Overprovision)/ Underprovision in respect of prior years (788) 683

5,140 9,356

Deferred tax:

Movements in temporary differences (827) 47

Underprovision/ (Overprovision) in respect of prior years 290 (597)

(537) (550)

4,603 8,806

98


27. Tax expense (cont’d)

The Group

2011 2010

$’000 $’000

Reconciliation of effective tax rate

Profit before tax 37,802 48,070

Income tax using Singapore tax rate of 17% 6,426 8,172

Tax effects of:

Expenses not deductible for tax purposes 989 458

Income not subject to tax (1) (257)

Partial tax exemption (144) (180)

Effect of different tax rates in foreign countries 863 642

Tax exempt income (915) (187)

Group relief (771) (844)

Deferred tax assets not recognised 90 1,584

Tax incentives/ concessions under foreign jurisdiction (884) (1,342)

Losses not available for carried-forward 73 520

Others (625) 154

(Overprovision)/ Underprovision in respect of prior years (498) 86

4,603 8,806

The Company and certain subsidiaries are granted the “Approved International Shipping Enterprise” incentive

by the Maritime Port Authority, under which the income from qualifying shipping operations of its Singapore

incorporated subsidiaries are exempt from tax for a period of 10 years commencing 1 January 2004 under the

Singapore Income Tax Act.

The Group has adopted a loss transfer system of group relief (group relief system) under the Singapore Income

Tax Act. Under the group relief system, a Singapore incorporated company belonging to a group may transfer

its current year unabsorbed capital allowances, trade losses and donations (loss items) to another Singapore

incorporated company belonging to the same group, to be deducted against the assessable income of the

latter company.

At the end of the reporting period, the Group has tax losses of approximately $1,375,000 (2010: $850,000)

that are available for offset against future taxable profits of the relevant subsidiary in which the losses arose, for

which no deferred tax asset is recognised due to the uncertainty of its recoverability. The use of these tax losses

is subject to the agreement of the tax authority and compliance with certain provisions of the tax legislation of

the respective country in which the subsidiary operates.


28. Earnings per share

The Group

2011 2010

$’000 $’000

(a) Basic earnings per share

Basic earnings per share is based on:

(i) Profit for the year attributable to owners of the Company 31,916 37,286

No. of shares No. of shares

(Restated)

(ii) Weighted average number of ordinary shares:

Issued ordinary shares at beginning of the year 419,445,494 419,424,494

Weighted average number of ordinary shares issued

during the year 37,136 17,030

Weighted average number of ordinary shares (basic)

at end of the year 419,482,630 419,441,524

(b) Diluted earnings per share

The weighted average number of ordinary shares adjusted for the effects of all dilutive potential ordinary

shares is determined as follows:

The Group

2011 2010

No. of shares No. of shares

(Restated)

Weighted average number of ordinary shares used in

the calculation of basic earnings per share 419,482,630 419,441,524

Weighted average number of unissued ordinary shares

under share options 20,474 50,970

Weighted average number of ordinary shares that

would have been issued at fair value (14,706) (30,032)

5,768 20,938

Weighted average number of ordinary shares used in

the calculation of diluted earnings per share 419,488,398 419,462,462

The earnings per ordinary share (basic and fully diluted basis) for the financial year ended 30 June 2010

have been restated taking into consideration the bonus share issuance on 29 December 2010.

100


29. Commitments and contingencies

The Group

2011 2010

$’000 $’000

(a) Capital commitments

Purchase of:

Tugs and other vessels 4,361 15,210

Barges 1,655 –

Plant and machinery 81 3,003

Construction of dry docks, quays and ancillary – 10,856

6,097 29,069

(b) Operating lease commitments – As lessor

The Group entered into operating leases on its fleet of vessels. As at 30 June 2011, these non-cancellable

leases have remaining lease terms ranging from 9 months to 15 years.

Future minimum lease payments receivable under non-cancellable operating leases as at 30 June are

as follows:

The Group

2011 2010

$’000 $’000

Not later than one year 7,562 5,004

Later than one year but not later than five years 14,341 1,057

Later than five years 23,239 –

45,142 6,061

(c) Operating lease commitments – As lessee

In addition to the land use rights disclosed in Note 5, the Group has entered into commercial property

leases. There are no restrictions placed upon the Group by entering into these leases. Operating lease

payments recognised in the Group’s profit or loss during the year amounted to $1,007,000 (2010:

$998,000).

Future minimum lease payments payable under non-cancellable operating leases (excluding land use

rights) as at 30 June are as follows:

The Group

2011 2010

$’000 $’000

Not later than one year 993 619

Later than one year but not later than five years 3,973 2,476

Later than five years 9,026 6,138

13,992 9,233


29. Commitments and contingencies (cont’d)

(d) Finance lease commitments – As lessee

The Group has entered into leases for certain assets under construction, motor vehicles and plant and

machinery. These leases are classified as finance leases with expiration over the next 6 years (2010: 7

years). Under the terms of the finance lease arrangements, no contingent rents are payable. The average

effective interest rates implicit in the leases are 3.96% (2010: 2.63%) per annum for the Group and nil%

(2010: 2.5%) per annum for the Company.

Future minimum lease payments under finance leases (Note 18) together with the present value of the

net minimum lease payments for the Group are as follows:

The Group

2011 2010

Minimum

lease

payments

Present

value of

payments

Minimum

lease

payments

Present

value of

payments

$’000 $’000 $’000 $’000

Not later than one year 7,171 6,210 3,320 2,954

Later than one year but not

later than five years 17,107 15,867 6,065 5,761

More than five years 5 5 20 20

Total minimum lease payments 24,283 22,082 9,405 8,735

Less: Amounts representing finance charges (2,201) – (670) –

Present value of minimum lease payments 22,082 22,082 8,735 8,735

The Company

2011 2010

Minimum

lease

payments

Present

value of

payments

Minimum

lease

payments

Present

value of

payments

$’000 $’000 $’000 $’000

Not later than one year – – 27 25

Later than one year but not

later than five years – – 20 20

Total minimum lease payments – – 47 45

Less: Amounts representing finance charges – – (2) –

Present value of minimum lease payments – – 45 45

102


29. Commitments and contingencies (cont’d)

(e) Contingent liabilities

(i) Corporate guarantees (unsecured)

The Company has given the following corporate guarantees in respect of banking facilities utilised as at 30 June:

The Company2011 2010

$’000 $’000

Subsidiaries 403,870 495,693

The financial effects of FRS 39 relating to financial guarantee contracts issued by the Company are not material to the financial statements of the Company and therefore are not recognised.

(ii) Legal claim

In respect of the arbitration proceedings served in May 2009 on two wholly-owned subsidiaries of the Company by a customer in connection with an incident in November 2005 involving a tug chartered from one of the subsidiaries, the arbitration proceedings have been discontinued by the customer subsequent to the financial year end.

30. Employee benefits

The Group

2011 2010

$’000 $’000

Employee benefits expense

(including executive directors)

Salaries and bonuses 22,133 23,742

Central Provident Fund contributions 872 853

Provision for short-term accumulating

compensated absences 29 35

Other staff benefits 677 947

23,711 25,577

ASL Employee Share Option Scheme (the “Scheme”)

The Scheme was approved and adopted by the shareholders of the Company at an Extraordinary General Meeting held on 23 January 2003. Details of the Scheme were set out in the Directors’ Report for the year ended 30 June 2003. The Scheme is administered by the Remuneration Committee of the Company comprising three independent directors, Hong Chin Fock (Chairman), Christopher Chong Meng Tak and Andre Yeap Poh Leong.

Other statutory information regarding the Scheme is set out below:

(i) Exercise price

The exercise price to be paid upon the exercise of the options are as follows:

• the options were granted at the exercise price of $0.55 per share and no options were granted at a discount to the then prevailing Market Price; and

• the “Market Price”, defined as the average of the last dealt price for a share, is determined by reference to the daily Official List published by SGX-ST for five consecutive market days immediately prior to the date an offer to grant an option is made (“Offer Date”), rounded up to the nearest whole cent.


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104


30. Employee benefits (cont’d)

ASL Employee Share Option Scheme (the “Scheme”) (cont’d)

The fair value of equity-settled share options as at the date of grant, is estimated by an external valuer using a

binomial model, taking into account the terms and conditions upon which the options were granted. The inputs

to the model used as at the date of grant are shown below.

The Group

Independent

Directors Employees

Dividend yield (%) 3.35 4.93

Expected volatility (%) 42 42

Historical volatility (%) 42 42

Risk-free interest rate (%) 1.81 3.62

Expected life of options (years) 5 10

Weighted average share price ($) 0.55 0.55

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns

that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future

trends, which may also not necessarily be the actual outcome. No other features of the option grant were

incorporated into the measurement of fair value.

31. Related party disclosures

(a) Sale and purchase of goods and services

In addition to the related party information disclosed elsewhere in the financial statements, the following

significant transactions were entered by the Group and its related parties on terms agreed between the

parties during the financial year:

The Group

2011 2010

$’000 $’000

Jointly-controlled entity and associate

Rental income 480 720

Purchase of galvanising services (246) (222)

Miscellaneous income 9 27


31. Related party disclosures (cont’d)

(b) Compensation of key management personnel

The Group

2011 2010

$’000 $’000

Short-term employee benefits 2,171 2,103

Central Provident Fund contributions 50 27

Other long-term benefits 238 284

Total compensation paid to key management personnel 2,459 2,414

Comprise amounts paid to:

• Directors of the Company 2,459 2,414

The remuneration of key management personnel is determined by the Remuneration Committee of the

Company having regard to the performance of individuals and market trends.

32. Financial risk management objectives and policies

The Group and the Company are exposed to a variety of financial risks, including market risk (interest rate

risk and foreign currency risk), credit risk, liquidity risk and capital management risk arising from its business

activities. The Group’s overall risk management strategy seeks to minimise the potential material adverse effects

from these exposures. The Group uses financial instruments such as interest rate swaps and forward currency

contracts to hedge certain financial risk exposures. It is the Group’s policy that no trading in derivative financial

instruments shall be undertaken. Exposure to foreign currency risks is also hedged naturally where possible.

The Group’s policy on financial authority limit seeks to mitigate risks by setting out the threshold of approvals

required for entry into contractual obligations and investments.

The Board has overall responsibility for the establishment and oversight of the Group’s risk management

framework. Risk management is carried out under policies approved by the Board. The Board reviews and

approves policies for managing each of these risks and they are summarised below.

There has been no change to the Group’s exposure to these financial risks or the manner in which it manages

and measures the risks.

(a) Market risk

Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates

will affect the Group’s income or the value of its holdings of financial instruments. The objective of market

risk management is to manage and reduce market risk exposures within acceptable parameters.

(i) Interest rate risk

The Group’s exposures to interest rates relates primarily to interest-earning financial assets and

interest-bearing financial liabilities. The Group’s interest rate risk mainly arises from its bank

balances, deposits and cash and borrowings with financial institutions. The Group’s policy is

to maintain an efficient and optimal interest cost structure using a mix of fixed and variable rate

borrowings as well as long-term and short-term borrowings.

The Group seeks to minimise its exposure to interest rate fluctuations through interest rate swaps,

where appropriate, over the duration of its borrowings. The Group classifies these interest rate

swaps as cash flow hedges.

106


32

. F

ina

nc

ial

ris

k m

an

ag

em

en

t o

bje

cti

ve

s a

nd

po

lic

ies

(c

on

t’d

)

(a)

Ma

rke

t ri

sk

(c

on

t’d

)

(i)

Inte

res

t ra

te r

isk

(c

on

t’d

)

Eff

ec

tive

in

tere

st

rate

s a

nd

re

pri

cin

g a

na

lys

is

In r

esp

ect

of

inte

rest-

earn

ing

fin

an

cia

l assets

an

d i

nte

rest-

bearin

g f

inan

cia

l lia

bili

ties t

hat

are

exp

osed

to

in

tere

st

rate

ris

k,

the f

ollo

win

g

tab

le s

ets

ou

t th

e c

arr

yin

g a

mo

un

t b

y m

atu

rity

of

the f

inan

cia

l in

str

um

en

ts t

hat

are

exp

osed

to

in

tere

st

rate

ris

k.

20

11

20

10

Th

e G

rou

p

Le

ss

tha

n

1 y

ea

r

Be

twe

en

1 t

o 5

ye

ars

Ove

r

5 y

ea

rsT

ota

l

Le

ss

tha

n

1 y

ea

r

Be

twe

en

1 t

o 5

ye

ars

Ove

r

5 y

ea

rsT

ota

l

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

Fix

ed

ra

te

Ban

k b

ala

nces,

dep

osits a

nd

cash

23

,51

2–

–2

3,5

12

72

,43

8–

–7

2,4

38

Derivative f

inan

cia

l in

str

um

en

ts

– in

tere

st

rate

sw

ap

(1,8

31

)–

–(1

,83

1)

(3,1

21

)–

–(3

,12

1)

Fin

an

ce lease lia

bili

ties

(6,2

10

)(1

5,8

67

)(5

)(2

2,0

82

)(2

,95

4)

(5,7

61

)(2

0)

(8,7

35

)

Inte

rest-

bearin

g lo

an

s a

nd

b

orr

ow

ing

s*

(52

,53

4)

(11

7,0

52

)–

(16

9,5

86

)(4

2,7

91

)(1

17

,13

1)

–(1

59

,92

2)

Flo

ati

ng

ra

te

Tru

st

receip

ts(3

4,8

65

)–

–(3

4,8

65

)(2

5,0

33

)–

–(2

5,0

33

)

Inte

rest-

bearin

g lo

an

s a

nd

b

orr

ow

ing

s**

(9,6

67

)(2

2,6

15

)–

(32

,28

2)

(5,3

25

)(1

0,2

48

)–

(15

,57

3)


32

. F

ina

nc

ial

ris

k m

an

ag

em

en

t o

bje

cti

ve

s a

nd

po

lic

ies

(c

on

t’d

)

(a)

Ma

rke

t ri

sk

(c

on

t’d

)

(i)

Inte

res

t ra

te r

isk

(c

on

t’d

)

Eff

ec

tive

in

tere

st

rate

s a

nd

re

pri

cin

g a

na

lys

is (

co

nt’

d) 20

11

20

10

Th

e C

om

pa

ny

Le

ss

tha

n

1 y

ea

r

Be

twe

en

1 t

o 5

ye

ars

Ove

r

5 y

ea

rsT

ota

l

Le

ss

tha

n

1 y

ea

r

Be

twe

en

1 t

o 5

ye

ars

Ove

r

5 y

ea

rsT

ota

l

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

Fix

ed

ra

te

Am

ou

nts

du

e f

rom

su

bsid

iaries

11

3,4

65

––

11

3,4

65

73

,95

5–

–7

3,9

55

Derivative f

inan

cia

l in

str

um

en

ts

– in

tere

st

rate

sw

ap

(50

5)

––

(50

5)

(36

8)

––

(36

8)

Fin

an

ce lease lia

bili

ties

––

––

(25

)(2

0)

–(4

5)

Inte

rest-

bearin

g lo

an

s a

nd

b

orr

ow

ing

s*

(22

,10

0)

(92

,90

0)

–(1

15

,00

0)

(11

,00

0)

(65

,00

0)

–(7

6,0

00

)

* In

clu

des f

loatin

g r

ate

s lo

an

s h

ed

ged

by in

tere

st

rate

sw

ap

s

**

Exclu

des f

loatin

g r

ate

s lo

an

s h

ed

ged

by in

tere

st

rate

sw

ap

s

108


32. Financial risk management objectives and policies (cont’d)

(a) Market risk (cont’d)

(i) Interest rate risk (cont’d)

Effective interest rates and repricing analysis (cont’d)

Interest on financial instruments subject to floating interest rates is contractually repriced at

intervals ranging from 1 to 11 months (2010: 1 to 6 months). Interest on financial instruments at

fixed rates is fixed until the maturity of the instrument. The other financial instruments of the Group

and the Company that are not included in the above tables are not subject to interest rate risk.

Sensitivity analysis

For the Group’s and Company’s borrowings at variable rates on which effective hedges have

not been entered into, an increase of 0.5% (2010: 0.5%) in interest rate at 30 June would have

decreased profit before tax by the amounts shown below. A decrease of 0.5% (2010: 0.5%) in

interest rate at 30 June would have an equal but opposite effect. The analysis assumes that all

other variables, in particular foreign currency exchange rates, remain constant.


2011 2010 2011 2010

Profit

before tax

Profit

before tax

Profit

before tax

Profit

before tax

$’000 $’000 $’000 $’000

Floating rate instruments 336 203 – –


32

. F

ina

nc

ial

ris

k m

an

ag

em

en

t o

bje

cti

ve

s a

nd

po

lic

ies

(c

on

t’d

)

(a)

Ma

rke

t ri

sk

(c

on

t’d

)

(ii)

F

ore

ign

cu

rre

nc

y r

isk

Th

e G

rou

p is

exp

osed

to

fo

reig

n cu

rren

cy exch

an

ge ra

te m

ovem

en

ts p

rim

arily

fo

r th

e U

nited

S

tate

s D

olla

r (“

US

D”)

, E

uro

(“

EU

R”)

,

Ind

on

esia

Ru

pia

h (

“ID

R”)

an

d C

hin

ese R

en

min

bi

(“R

MB

”) o

n c

ash

flo

ws f

rom

an

ticip

ate

d s

ale

an

d p

urc

hase t

ran

sactio

ns a

nd

fin

an

cin

g

arr

an

gem

en

ts.

Su

ch

ris

ks a

re h

ed

ged

eith

er

by f

orw

ard

fo

reig

n e

xch

an

ge c

on

tracts

in

resp

ect

of

actu

al o

r fo

recaste

d c

urr

en

cy e

xp

osu

res

wh

ich

are

reaso

nab

ly c

ert

ain

or

hed

ged

natu

rally

by a

matc

hin

g s

ale

or

pu

rch

ase o

f a m

atc

hin

g a

sset

or

liab

ility

of

the s

am

e c

urr

en

cy

an

d a

mo

un

t.

Th

e G

rou

p’s

exp

osu

re t

o f

ore

ign

cu

rren

cy is a

s f

ollo

ws:

SG

DU

SD

EU

RID

RR

MB

Oth

ers

To

tal

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

Th

e G

rou

p

20

11

Fin

an

cia

l a

ss

ets

Tra

de a

nd

oth

er

receiv

ab

les

80

,88

31

9,2

27

7,0

25

2,1

99

21

82

21

09

,57

4

Dep

osits

69

34

–5

8–

–1

61

Ban

k b

ala

nces,

dep

osits a

nd

cash

25

,40

01

8,9

55

4,4

13

67

09

71

49

,53

6

10

6,3

52

38

,21

61

1,4

38

2,9

27

31

52

31

59

,27

1

Fin

an

cia

l li

ab

ilit

ies

Tra

de a

nd

oth

er

payab

les

10

8,6

56

6,9

01

4,1

89

10

,93

54

18

56

61

31

,66

5

Dep

osits r

eceiv

ed

fro

m c

usto

mers

2,1

30

17

1–

––

–2

,30

1

Inte

rest-

bearin

g lo

an

s a

nd

bo

rro

win

gs

18

4,8

50

35

,94

73

,15

3–

––

22

3,9

50

Tru

st

receip

ts2

7,7

38

–7

,12

7–

––

34

,86

5

32

3,3

74

43

,01

91

4,4

69

10

,93

54

18

56

63

92

,78

1

Ne

t fi

na

nc

ial

lia

bil

itie

s(2

17

,02

2)

(4,8

03

)(3

,03

1)

(8,0

08

)(1

03

)(5

43

)(2

33

,51

0)

Net

fin

an

cia

l lia

bili

ties d

en

om

inate

d

in

th

e r

esp

ective e

ntities’

fun

ctio

nal

cu

rren

cie

s2

17

,05

42

7,4

59

–3

42

10

3–

24

4,9

58

Cu

rren

cy e

xp

osu

re3

22

2,6

56

(3,0

31

)(7

,66

6)

–(5

43

)1

1,4

48

110


32

. F

ina

nc

ial

ris

k m

an

ag

em

en

t o

bje

cti

ve

s a

nd

po

lic

ies

(c

on

t’d

)

(a)

Ma

rke

t ri

sk

(c

on

t’d

)

(ii)

F

ore

ign

cu

rre

nc

y r

isk

(c

on

t’d

)

SG

DU

SD

EU

RID

RR

MB

Oth

ers

To

tal

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

Th

e G

rou

p

20

10

Fin

an

cia

l a

ss

ets

Tra

de a

nd

oth

er

receiv

ab

les

71

,88

33

0,9

43

3,5

69

1,2

95

86

04

31

08

,59

3

Dep

osits

17

91

83

16

2–

–2

90

Ban

k b

ala

nces,

dep

osits a

nd

cash

73

,24

68

,36

77

,92

42

73

27

91

90

,09

0

14

5,3

08

39

,32

81

1,5

24

1,6

30

1,1

39

44

19

8,9

73

Fin

an

cia

l li

ab

ilit

ies

Tra

de a

nd

oth

er

payab

les

11

2,1

44

8,5

27

1,6

12

11

,76

44

75

1,4

99

13

6,0

21

Dep

osits r

eceiv

ed

fro

m c

usto

mers

1,4

46

1,4

02

––

––

2,8

48

Inte

rest-

bearin

g lo

an

s a

nd

bo

rro

win

gs

14

1,2

52

36

,87

05

,07

7–

1,0

31

–1

84

,23

0

Tru

st

receip

ts2

3,4

67

1,5

66

––

––

25

,03

3

27

8,3

09

48

,36

56

,68

91

1,7

64

1,5

06

1,4

99

34

8,1

32

Ne

t fi

na

nc

ial

(lia

bil

itie

s)/

as

se

ts(1

33

,00

1)

(9,0

37

)4

,83

5(1

0,1

34

)(3

67

)(1

,45

5)

(14

9,1

59

)

Net

fin

an

cia

l lia

bili

ties d

en

om

inate

d

in

th

e r

esp

ective e

ntities’

fun

ctio

nal

cu

rren

cie

s1

32

,94

02

5,7

60

–2

57

36

7–

15

9,3

24

Cu

rren

cy e

xp

osu

re(6

1)

16

,72

34

,83

5(9

,87

7)

–(1

,45

5)

10

,16

5




(ii) Foreign currency risk (cont’d)

The Company is exposed to foreign currency exchange rate movements primarily for United States

Dollar (“USD”) on its balances with related parties.

SGD USD Total

$’000 $’000 $’000

The Company

2011

Financial assets

Trade and other receivables 174,615 3,538 178,153

Bank balances, deposits and cash 177 – 177

174,792 3,538 178,330

Financial liabilities

Trade and other payables 36,513 – 36,513

Interest-bearing loans and borrowings 115,000 – 115,000

151,513 – 151,513

Net financial assets 23,279 3,538 26,817

Net financial assets denominated

in the functional currency of the

Company (23,279) – (23,279)

Currency exposure – 3,538 3,538

2010

Financial assets

Trade and other receivables 162,177 5,463 167,640

Bank balances, deposits and cash 510 – 510

162,687 5,463 168,150

Financial liabilities

Trade and other payables 30,009 – 30,009

Interest-bearing loans and borrowings 76,045 – 76,045

106,054 – 106,054

Net financial assets 56,633 5,463 62,096

Net financial assets denominated

in the functional currency of the

Company (56,633) – (56,633)

Currency exposure – 5,463 5,463

112




(ii) Foreign currency risk (cont’d)

Sensitivity analysis

A 5% strengthening of the following foreign currencies against Singapore Dollar at 30 June would

increase/ (decrease) profit before tax by the amounts shown below.

A 5% weakening of the following foreign currencies against Singapore Dollar at 30 June would

have the equal but opposite effect. The analysis assumes that all other variables, in particular

interest rates, remain constant.


2011 2010 2011 2010

Profit

before tax

Profit

before tax

Profit

before tax

Profit

before tax

$’000 $’000 $’000 $’000

USD 1,133 836 177 273

EUR (152) 242 – –

IDR (383) (494) – –

(b) Credit risk

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in

financial loss to the Group. The Group manages its exposure to credit risk arising from sales to trade

customers through credit evaluation, credit limits and debt monitoring procedures on an on-going basis.

Where appropriate, the Group obtains guarantees from the customers or arrange netting agreements.

Cash terms, advance payments or letters of credit are required for customers of lower credit standing.

The Group’s major classes of financial assets are bank balances, deposits and cash and trade receivables.

Cash at banks and fixed deposits are placed in banks and financial institutions with good credit rating.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in

respect of trade receivables. The main components of this allowance are a specific loss component

that relates to individually significant exposures. Where the Group is certain that no recovery of the

amount owing is possible, the financial asset is considered irrecoverable and the amount charged to the

impairment account is written off against the carrying amount of the impaired financial asset.

The ageing analysis of trade receivables and allowance for impairment of doubtful trade receivables is

disclosed in Note 10.



(b) Credit risk (cont’d)

The concentration of credit risk relating to trade receivables is limited as the Group provides services

spanning a myriad of sectors and industries. The Group’s historical experience in the collection of trade

and other receivables falls within the recorded allowances.

At 30 June, the Group’s and the Company’s maximum exposure to credit risk is the carrying amount

of each financial asset, including derivative financial instruments. Guarantees granted by the Company

and certain subsidiaries to banks in respect of banking facilities are only given for companies within the

Group. The maximum exposure to credit risk in respect of financial guarantees at the end of the reporting

period is disclosed in Note 29.

Credit risk concentration profile

The Group determines concentration of credit risk by monitoring the business activities and geographical

areas profile of its trade receivables on an on-going basis. The credit risk concentration profile of the

Group’s net trade receivables is as follows:

The Group

2011 2010

$’000 $’000

By business activities

Shipbuilding 25,463 28,144

Shiprepair 44,202 40,131

Shipchartering 25,921 27,300

95,586 95,575

By geographical areas

Singapore 57,967 38,529

Indonesia 11,878 16,221

Rest of Asia 5,447 15,786

Europe and other countries 20,294 25,039

95,586 95,575

114



(c) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The

Group manages its liquidity risk by maintaining a level of cash and cash equivalents deemed adequate to

finance the Group’s operations to meet its liabilities when due. The Group maintains flexibility in funding

by keeping committed credit facilities available.

The table below summarises the maturity profile of the Group’s and the Company’s financial assets and

financial liabilities based on undiscounted repayment obligations.

Contractual Cash Flows

Carrying

amounts Total

Within

1 year

Between

1 and 5

years

After 5

years

$’000 $’000 $’000 $’000 $’000

The Group

2011

Derivative Financial

Instruments

Derivative financial liabilities 1,842

– inflow – – – –

– outflow (5,232) (4,572) (660) –

Derivative financial assets (3,225)

– inflow 50,555 50,555 – –

– outflow (7,412) (7,412) – –

Non-derivative Financial

Instruments

Trade and other payables 131,665 (131,665) (131,665) – –

Deposits received from customers 2,301 (2,301) (2,301) – –

Trust receipts 34,865 (34,961) (34,961) – –

Interest-bearing loans and

borrowings 223,950 (241,065) (76,291) (164,769) (5)

391,398 (372,081) (206,647) (165,429) (5)



(c) Liquidity risk (cont’d)


Carrying

amounts Total

Within

1 year

Between

1 and 5

years

After 5

years

$’000 $’000 $’000 $’000 $’000

The Group

2010


Instruments

Derivative financial liabilities 3,564

– inflow 16,378 16,378 – –

– outflow (13,642) (11,940) (1,702) –

Derivative financial assets (1,350)

– inflow 72,029 48,867 23,162 –

– outflow (59,560) (59,560) – –


Instruments

Trade and other payables 136,021 (136,021) (134,552) (1,469) –

Deposits received from customers 2,848 (2,848) (2,848) – –

Trust receipts 25,033 (25,112) (25,112) – –


borrowings 184,230 (197,648) (57,067) (140,561) (20)

350,346 (346,424) (225,834) (120,570) (20)

The Company

2011


Instruments

Derivative financial liabilities 505

– outflow (552) (293) (259) –


Instruments



borrowings 115,000 (126,336) (27,155) (99,181) –

152,018 (163,401) (63,961) (99,440) –

116



(c) Liquidity risk (cont’d)


Carrying

amounts Total

Within

1 year

Between

1 and 5

years

After 5

years

$’000 $’000 $’000 $’000 $’000

The Company

2010


Instruments

Derivative financial liabilities 368

– outflow (835) (291) (544) –


Instruments



borrowings 76,045 (83,938) (14,109) (69,829) –

106,422 (114,782) (44,409) (70,373) –

(d) Capital management risk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going

concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to

maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment,

return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell

assets to reduce borrowings. No changes were made in objectives, policies or processes during the

years ended 30 June 2011 and 2010.

Management monitors capital based on the Group’s return on shareholders’ funds and net gearing (times)

ratio. The return on shareholders’ funds for the financial year was 9.5% (2010: 11.8%). Net gearing was

0.62 as at 30 June 2011 (2010: 0.38).

The return on shareholders’ funds is calculated based on net profit attributable to owners of the Company

divided by shareholders’ funds as at the end of the reporting period.

The net gearing (times) ratio is calculated based on net borrowings divided by shareholders’ funds. Net

borrowings is the sum of total interest-bearing loans and borrowings (Note 18), trust receipts (Note 17),

less bank balances, deposits and cash (Note 13).

The Group and the Company are in compliance with all externally imposed financial covenant requirements

for the financial years ended 30 June 2011 and 2010.


33. Fair value of financial instruments

(a) Fair value of financial instruments that are carried at fair value

The financial instruments of the Group and the Company that are carried at fair value comprised derivative

financial instruments (Note 12) which fall under Level 2 of the fair value hierarchy.

The Group and the Company classifies fair value measurement using a fair value hierarchy that reflects

the significance of the inputs used in making the measurements. The fair value hierarchy has the following

levels:

Level 1: quoted prices (unadjusted) in active markets of identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or

liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3: inputs for the assets or liabilities that are not based on observable market data (unobservable

inputs).

The fair value has been determined by reference to banker quotes at the end of the reporting period

without factoring in transaction costs.

(b) Fair value of financial instruments by classes that are not carried at fair value and whose

carrying amounts are a reasonable approximation of fair value

The Group’s financial assets and liabilities include bank balances, deposits and cash, trade and other

receivables, balances with related parties and non-controlling interests of subsidiaries, trade and other

payables, trust receipts and floating rate loans.

The carrying amount of these financial assets and liabilities are a reasonable approximation of fair values,

either due to their short-term nature or they are floating rate instruments that are repriced to market

interest rates on or near to the end of the reporting period.

118


33

. F

air

va

lue

of

fin

an

cia

l in

str

um

en

ts (

co

nt’

d)

(c)

Fa

ir v

alu

e o

f fi

na

nc

ial

ins

tru

me

nts

by c

las

se

s t

ha

t a

re n

ot

ca

rrie

d a

t fa

ir v

alu

e a

nd

wh

os

e c

arr

yin

g a

mo

un

ts a

re n

ot

a r

ea

so

na

ble

ap

pro

xim

ati

on

of

fair

va

lue

Set

ou

t b

elo

w is t

he n

et

fair v

alu

es o

f fin

an

cia

l assets

an

d lia

bili

ties w

hic

h a

re n

ot

carr

ied

at

fair v

alu

e in

th

e s

tate

men

ts o

f fin

an

cia

l p

ositio

n a

s

at

30

Ju

ne.

Th

e G

rou

pT

he

Co

mp

an

y

Ca

rryin

g a

mo

un

tF

air

va

lue

Ca

rryin

g a

mo

un

tF

air

va

lue

20

11

20

10

20

11

20

10

20

11

20

10

20

11

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10

$’0

00

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an

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ets

Oth

er

receiv

ab

le (

no

n-c

urr

en

t) (

i)–

––

––

2,2

03

–2

,03

0

Fin

an

cia

l li

ab

ilit

ies

Fin

an

ce lease lia

bili

ties (

ii)2

2,0

82

8,7

35

21

,55

38

,53

0–

45

–4

4

Inte

rest-

bearin

g lo

an

s a

nd

bo

rro

win

gs

(fix

ed

rate

)* (

ii)1

03

,79

05

8,6

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10

1,5

94

57

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4,0

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44

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09

1,9

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43

,13

6

Am

ou

nt

du

e t

o n

on

-co

ntr

olli

ng

in

tere

sts

o

f su

bsid

iaries (

no

n-c

urr

en

t)1

,31

01

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91

,19

01

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3–

––

–

* E

xclu

des f

loatin

g r

ate

s lo

an

s h

ed

ged

by in

tere

st

rate

sw

ap

s

(i)

The C

om

pany’

s n

on-c

urr

ent

receiv

ab

le f

rom

a s

ub

sid

iary

of

$2

,20

3,0

00

as a

t 3

0 J

une 2

01

0 h

as n

o r

ep

aym

ent

term

s a

nd

was n

ot

exp

ecte

d

to b

e r

ep

ayab

le w

ith

in t

he n

ext

twelv

e m

on

ths f

rom

rep

ort

ing

date

. A

cco

rdin

gly

, its f

air v

alu

e w

as b

ased

on

estim

atio

n a

s t

he t

imin

g o

f

the f

utu

re c

ash

flo

ws c

ou

ld n

ot

be d

ete

rmin

ed

relia

bly

.

(ii)

The f

air v

alu

e o

f finance lease lia

bili

ties a

nd

inte

rest-

bearing

lo

ans a

nd

bo

rro

win

gs w

ith f

ixed

inte

rest

rate

s a

re d

ete

rmin

ed

usin

g d

isco

unte

d

futu

re p

rin

cip

al

an

d i

nte

rest

at

the m

ark

et

inte

rest

rate

at

the e

nd

of

the r

ep

ort

ing

perio

d.

Th

e b

ala

nce w

ith

no

n-c

on

tro

llin

g i

nte

rests

of

su

bsid

iaries a

re d

ete

rmin

ed

by d

isco

un

tin

g e

stim

ate

d f

utu

re c

ash

flo

ws a

t th

e m

ark

et

inte

rest

rate

at

the e

nd

of

the r

ep

ort

ing

perio

d.

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e

estim

ate

d f

utu

re c

ash

flo

ws a

re p

roje

cte

d b

ased

on

man

ag

em

en

t’s b

est

estim

ate

s.


34. Segment reporting

Reporting format

The primary segment reporting format is determined to be business segments as the Group’s risks and rates of

return are affected predominantly by differences in the products and services produced. Secondary information

is reported geographically. The operating businesses are organised and managed separately according to the

nature of the products and services provided, with each segment representing a strategic business unit that

offers different products and serves different markets.

Business segments

The Group has the following four main business segments:

Shipbuilding : Construction of vessels

Shiprepair and conversion : Provision of shiprepair and related services

Shipchartering and rental : Provision for chartering of vessels, transportation services and

rental of plant and machinery

Investment holding : Investment holding

Geographical segments

The Group operates in Singapore, Indonesia, Rest of Asia, Europe and other countries. In presenting information

on the basis of geographical segments, segment revenue is based on the countries in which customers are

invoiced.

Allocation basis and transfer pricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that

can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities and

expenses.

Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions

with third parties. Segment revenue, expenses and results include transfers between business segments. These

transfers are eliminated on consolidation.

120


34

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eg

me

nt

rep

ort

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(c

on

t’d

)

(i)

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sin

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s s

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me

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ipb

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din

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pa

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co

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ip-

ch

art

eri

ng

an

d r

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stm

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ldin

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ina

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ns

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nu

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20

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21

5,6

83

81

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06

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36

3,1

51

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10

0,3

87

41

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–

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31

6,0

70

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98

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63

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1

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men

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su

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16

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22

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(17

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4)

49

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allo

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(1,8

43

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an

ce c

osts

(8,9

35

)

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are

of

pro

fit

of

join

tly-c

on

tro

lled

en

tity

an

d a

sso

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te(7

31

)

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xp

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se

(4,6

03

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Pro

fit

for

the y

ear

33

,19

9


34

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(c

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(i)

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s s

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(c

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d

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20

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30

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70

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(16

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37

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men

t re

su

lts

20

,87

21

6,5

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41

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(16

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2)

58

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7

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allo

cate

d e

xp

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ses

(1,7

45

)

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an

ce c

osts

(8,0

72

)

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are

of

pro

fit

of

join

tly-c

on

tro

lled

en

tity

an

d a

sso

cia

te(6

70

)

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xp

en

se

(8,8

06

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fit

for

the y

ear

39

,26

4

122


34

. S

eg

me

nt

rep

ort

ing

(c

on

t’d

)

(i)

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sin

es

s s

eg

me

nts

(c

on

t’d

)

Sh

ipb

uil

din

g

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ipre

pa

ir

an

d

co

nve

rsio

n

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ip-

ch

art

eri

ng

an

d r

en

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stm

en

t

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ldin

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ina

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ns

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oli

da

ted

$’0

00

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00

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00

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00

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00

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00

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se

ts a

nd

lia

bil

itie

s

20

11

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men

t assets

26

6,0

62

10

5,0

20

40

3,3

64

3,5

21

–7

77

,96

7

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allo

cate

d a

ssets

95

3

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tal assets

77

8,9

20

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men

t lia

bili

ties

94

,90

84

2,0

75

16

,91

92

,37

1–

15

6,2

73

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allo

cate

d lia

bili

ties

27

7,4

59

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tal lia

bili

ties

43

3,7

32

20

10

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men

t assets

26

6,6

20

10

0,9

16

36

5,5

08

3,7

43

–7

36

,78

7

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allo

cate

d a

ssets

1,8

25

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tal assets

73

8,6

12

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men

t lia

bili

ties

11

8,6

21

39

,34

92

3,9

78

1,5

30

–1

83

,47

8

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d lia

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ties

23

1,0

17

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tal lia

bili

ties

41

4,4

95


34

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eg

me

nt

rep

ort

ing

(c

on

t’d

)

(i)

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sin

es

s s

eg

me

nts

(c

on

t’d

)

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ipb

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ip-

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d r

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er

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gm

en

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20

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ital exp

en

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re1

8,7

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14

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12

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recia

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nd

am

ort

isatio

n9

,76

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36

,14

4

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er

no

n-c

ash

exp

en

ses

(15

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(45

4)

(14

)–

–(6

25

)

20

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Cap

ital exp

en

ditu

re2

1,7

13

17

,67

54

9,8

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89

,25

0

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recia

tio

n a

nd

am

ort

isatio

n7

,88

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,20

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er

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57

08

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2,5

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124


34

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eg

me

nt

rep

ort

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(c

on

t’d

)

(ii)

G

eo

gra

ph

ica

l s

eg

me

nts

Sin

ga

po

reIn

do

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st

of

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iaE

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pe

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ite

d S

tate

s

an

d

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ers

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ns

oli

da

ted

$’0

00

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00

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00

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00

$’0

00

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20

11

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ue f

rom

exte

rnal cu

sto

mers

69

,20

84

4,7

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81

68

,49

52

0,0

16

36

3,1

51

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ital exp

en

ditu

re1

02

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08

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1

20

10

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ue f

rom

exte

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sto

mers

10

7,0

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ital exp

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ditu

re6

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67

25

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41

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89

,25

0

Manag

em

ent

belie

ves it

wo

uld

be inaccura

te t

o a

naly

se s

eg

ment

assets

by g

eo

gra

phic

al seg

ment

because c

ert

ain

vessels

canno

t b

e m

eanin

gfu

lly

allo

cate

d t

o d

iffe

ren

t g

eo

gra

ph

ical

are

as.

Fo

r ch

art

er

serv

ices,

ch

art

ere

rs o

f th

e G

rou

p’s

vessels

have t

he d

iscre

tio

n t

o o

pera

te w

ith

in a

wid

e

are

a a

nd

are

no

t co

nstr

ain

ed

by a

sp

ecific

sea r

ou

te.


35. Dividends

The Group and

the Company

2011 2010

$’000 $’000

Declared and paid during the year:

Dividends on ordinary shares:

• First and final one-tier tax-exempt dividend for 2010: 3.0 cents

(2009: 3.0 cents) per share 8,988 8,988

• Special one-tier tax-exempt dividend for 2009: 1.0 cents per share – 2,996

8,988 11,984

Proposed but not recognised as a liability as at 30 June:

Dividends on ordinary shares, subject to shareholders’ approval

at the Annual General Meeting

• Final one-tier tax-exempt dividend for 2011: 1.5 cents

(2010: 3.0 cents) per share 6,293 8,988

6,293 8,988

36. Authorisation of financial statements

The financial statements for the year ended 30 June 2011 were authorised for issue in accordance with a

resolution of the Directors on 8 September 2011.

Analysis of Shareholdingsas at 8 September 2011

126

Class of Equity Security : Ordinary shares

Voting Rights : On a show of hands: one vote for each member

On a poll: one vote for each ordinary share

Treasury shares held by the Company will have no voting rights

DISTRIBUTION OF SHAREHOLDINGS

Size of Shareholdings

No. of

Shareholders %

No. of

Shares %

1 – 999 153 3.83 27,756 0.01

1,000 – 10,000 1,822 45.61 9,815,698 2.32

10,001 – 1,000,000 1,997 49.99 75,713,121 17.94

1,000,001 and above 23 0.57 336,466,319 79.73

Total 3,995 100.00 422,022,894 100.00

TOP 20 SHAREHOLDERS

S/No. Name of Shareholders No. of Shares %*

1 Ang Kok Tian 57,997,800 13.82

2 Ang Ah Nui 55,440,000 13.22

3 Ang Kok Eng 48,650,000 11.60

4 Ang Kok Leong 48,510,000 11.56

5 Ang Sin Liu 33,086,200 7.89

6 Raffles Nominees (Pte) Ltd 19,757,000 4.71

7 Ang Swee Kuan 18,130,000 4.32

8 HSBC (Singapore) Nominees Pte Ltd 10,438,800 2.49

9 Kim Eng Securities Pte. Ltd. 8,450,614 2.01

10 United Overseas Bank Nominees Pte Ltd 8,446,222 2.01

11 Citibank Nominees S’pore Pte Ltd 5,869,400 1.40

12 DBS Nominees Pte Ltd 3,494,800 0.83

13 ASL Marine Holdings Ltd – Account Share Buy-Share 2,511,600 0.60

14 Toh Kim Bock C-E Contractor Pte Ltd 2,493,400 0.59

15 Eastern Navigation Pte Ltd 2,097,200 0.50

16 Toyogo (Singapore) Pte Ltd 1,890,000 0.45

17 Hong Leong Finance Nominees Pte Ltd 1,776,200 0.42

18 DBSN Services Pte Ltd 1,454,400 0.35

19 DBS Vickers Securities (S) Pte Ltd 1,417,600 0.34

20 Lee Tian Geok 1,330,000 0.32

Total 333,241,236 79.43

* The percentage is computed based on 419,511,294 issued ordinary shares of the Company as of 8 September

2011, being 422,022,894 total shares in issue less 2,511,600 treasury shares as at that date.


SHAREHOLDINGS HELD IN THE HANDS OF PUBLIC

Based on information available to the Company and to the best knowledge of the Company as at 8 September 2011,

approximately 35% of the issued ordinary shares of the Company is held by the public and therefore, Rule 723 of the

SGX-ST Listing Manual is complied with.

SUBSTANTIAL SHAREHOLDERS AS AT 8 SEPTEMBER 2011

Direct Interest Deemed Interest

Substantial Shareholders No. of Shares % No. of Shares %

Ang Kok Tian(1) (2) (3) 57,997,800 13.82 215,840,800 51.46

Ang Ah Nui(1) (2) (3) 55,440,000 13.22 218,398,600(4) 52.06

Ang Kok Eng(1) (2) (3) 48,650,000 11.60 225,188,600 53.68

Ang Kok Leong(1) (2) (3) 48,510,000 11.56 225,328,600 53.72

Ang Sin Liu(2) (3) 33,086,200 7.89 240,752,400(5) 57.39

Ang Swee Kuan(2) (3) 18,130,000 4.32 255,708,600 60.96

Notes

(1) Ang Kok Tian, Ang Ah Nui, Ang Kok Eng and Ang Kok Leong are brothers. Each of the brothers is deemed to

have an interest in the shares held by the other.

(2) Ang Sin Liu is the father of Ang Kok Tian, Ang Ah Nui, Ang Kok Eng, Ang Kok Leong and Ang Swee Kuan. Each

of them is deemed to have an interest in the shares held by the other.

(3) Ang Swee Kuan is the sister of Ang Kok Tian, Ang Ah Nui, Ang Kok Eng and Ang Kok Leong and the daughter

of Ang Sin Liu. Each of them is deemed to have an interest in the shares held by the other.

(4) 5,845,000 shares are registered in the name of a nominee.

(5) 6,179,600 shares are registered in the name of a nominee.

Notice of Annual General Meeting

128

NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting of the Company will be held at Jurong Country Club, 9 Science Centre Road, Singapore 609078 on Tuesday, 25 October 2011 at 2.00 p.m. for the following purposes:-

Ordinary Business

1. To receive and adopt the audited financial statements and the reports of the directors and auditors of the Company for the year ended 30 June 2011.

Resolution 1

2. To declare a final one-tier tax-exempt dividend of 1.5 Singapore cents per ordinary share for the year ended 30 June 2011.

Resolution 2

3. To approve directors’ fees of S$176,000 for the year ended 30 June 2011. (2010: S$176,000) Resolution 3

4. To re-elect Mr Ang Ah Nui, a director who will retire by rotation in accordance with Article 91 of the Company’s Articles of Association and who, being eligible, will offer himself for re-election.

Resolution 4

5. To re-elect Mr Hong Chin Fock, a director who will retire by rotation in accordance with Article 91 of the Company’s Articles of Association and who, being eligible, will offer himself for re-election.

Note: Mr Hong Chin Fock, if re-elected as a director of the Company, will remain the chairman of the audit committee, a member of the nominating committee and the chairman of the remuneration committee. Mr Hong is an independent director.

Resolution 5

6. To re-appoint Ernst & Young LLP as auditors of the Company and to authorise the directors to fix their remuneration.

Resolution 6

Special Business

To consider and, if thought fit, to pass with or without any modifications, the following resolutions as ordinary resolutions:-

7. That pursuant to Section 161 of the Companies Act, Cap. 50 (the “Companies Act”) and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), authority be and is hereby given to the directors of the Company to:-

(a) allot and issue shares in the Company; and

(b) issue convertible securities and any shares in the Company arising from the conversion of such convertible securities,

(whether by way of rights, bonus or otherwise) at any time to such persons and upon such terms and conditions and for such purposes as the directors may in their absolute discretion deem fit, provided that the aggregate number of shares and convertible securities to be issued pursuant to such authority shall not exceed 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which the aggregate number of shares and convertible securities to be issued other than on a pro rata basis to shareholders of the Company shall not exceed 15% of the total number of issued shares (excluding treasury shares) in the capital of the Company, and for the purposes of this resolution and Rule 806(3) of the Listing Manual, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this resolution is passed (after adjusting for new shares arising from the conversion or exercise of any convertible securities or exercise of share options or vesting of share awards which are outstanding or subsisting at the time of the passing of this resolution approving the mandate, provided the options or awards were granted in compliance with the Listing Manual and any subsequent bonus issue, consolidation or subdivision of the Company’s shares), and unless revoked or varied by the Company


in general meeting, such authority conferred by this resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. Resolution 7

8. That:–

(a) for the purposes of Sections 76C and 76E of the Companies Act, the exercise by the directors of the Company of all the powers of the Company to purchase or otherwise acquire issued ordinary shares each fully paid in the capital of the Company (“Shares”) not exceeding in aggregate the Maximum Percentage (as hereafter defined), at such price or prices as may be determined by the directors from time to time up to the Maximum Price (as hereafter defined), whether by way of:-

(i) market purchase(s) on the SGX-ST; and/or

(ii) off-market purchase(s) (if effected otherwise than on the SGX-ST) in accordance with any equal access scheme(s) as may be determined or formulated by the directors as they consider fit, which scheme(s) shall satisfy all the conditions prescribed by the Companies Act,

and otherwise in accordance with all other laws and regulations and rules of the SGX-ST, be and is hereby authorised and approved generally and unconditionally (the “Share Purchase Mandate”);

(b) unless varied or revoked by the Company in general meeting, the authority conferred on the directors of the Company pursuant to the Share Purchase Mandate may be exercised by the directors at any time and from time to time during the period commencing from the date of the passing of this resolution and expiring on the earlier of:-

(i) the date on which the next Annual General Meeting of the Company is held or required by law to be held;

(ii) the date on which the authority conferred by the Share Purchase Mandate is revoked or varied by shareholders in general meeting; or

(iii) the date on which the Company has purchased the maximum number of Shares mandated under the Share Purchase Mandate;

(c) in this resolution:-

“Average Closing Price” means the average of the closing market prices of a Share over the five consecutive Market Days on which the Shares are transacted on the SGX-ST, immediately preceding the date of the market purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the off-market purchase, and deemed to be adjusted, in accordance with the listing rules of the SGX-ST, for any corporate action that occurs after the relevant five Market Days period;

“date of the making of the offer” means the date on which the Company makes an offer for the purchase or acquisition of Shares from holders of Shares, stating therein the relevant terms of the equal access scheme for effecting the off-market purchase;

“Market Day” means a day on which the SGX-ST is open for trading in securities;

“Maximum Percentage” means that number of issued Shares representing 10% of the total number of issued ordinary shares (excluding treasury shares) in the capital of the Company as at the date of the passing of this resolution; and

“Maximum Price” in relation to a Share to be purchased, means an amount (excluding brokerage, stamp duties, applicable goods and services tax and other related expenses) not exceeding:-

(i) in the case of a market purchase, 105% of the Average Closing Price; and

(ii) in the case of an off-market purchase pursuant to an equal access scheme, 110% of the Average Closing Price, and

130

Notice of Annual General Meeting

(d) the directors of the Company and/or any of them be and are hereby authorised to complete and do all

such acts and things (including executing such documents as may be required) as they and/or he may

consider expedient or necessary to give effect to the transactions contemplated and/or authorised by

this resolution.

Resolution 8

9. That pursuant to Section 161 of the Companies Act, authority be and is hereby given to the directors of the

Company to offer and grant options in accordance with the provisions of the ASL Employee Share Option

Scheme (the “Share Option Scheme”) and to allot and issue from time to time such number of ordinary shares

in the capital of the Company as may be required to be issued pursuant to the exercise of the options under

the Share Option Scheme, provided that the aggregate number of ordinary shares in respect of which such

options may be granted and which may be issued pursuant to the Share Option Scheme and any other share

based schemes of the Company shall not exceed 10% of the total number of issued shares (excluding treasury

shares) in the capital of the Company from time to time.

Resolution 9

10. That pursuant to Section 161 of the Companies Act, authority be and is hereby given to the directors of the

Company to grant awards in accordance with the rules of the ASL Marine Performance Shares Scheme (the

“Shares Scheme”) and to allot and issue from time to time such number of fully paid-up shares in the capital

of the Company as may be required to be issued pursuant to the vesting of the awards under the Shares

Scheme, provided that the aggregate number of shares in respect of which such awards may be granted and

which may be issued pursuant to the Shares Scheme and any other share based schemes of the Company

shall not exceed 10% of the total number of issued shares (excluding treasury shares) in the capital of the

Company from time to time.

Resolution 10

11. To transact such other business as can be transacted at an Annual General Meeting of the Company.

Notice of Books Closure and Dividend Payment Dates

NOTICE IS HEREBY GIVEN that the share transfer books and register of members of the Company will be closed on

4 November 2011, for the purpose of determining members’ entitlements to a final one-tier tax-exempt dividend of

1.5 Singapore cents per ordinary share for the year ended 30 June 2011.

Duly completed transfers received by the Company’s Share Registrar, M & C Services Private Limited at 138 Robinson

Road #17-00, The Corporate Office, Singapore 068906 up to 5.00 p.m. on 3 November 2011 will be registered to

determine members’ entitlements to the proposed dividend.

Members whose securities accounts with The Central Depository (Pte) Limited are credited with ordinary shares at

5.00 p.m. on 3 November 2011 will be entitled to the proposed dividend.

The proposed dividend, if approved by members at the Company’s Eleventh Annual General Meeting to be held on

25 October 2011, will be paid on 16 November 2011.

By Order of the Board

Lilian Tan Yin Yen and S.Thillainathan

Company Secretaries

Singapore

7 October 2011


Notes

1. A member entitled to attend and vote at the Annual General Meeting may appoint not more than two proxies to

attend and vote on his behalf. Where a member appoints more than one proxy, he shall specify the proportion of

his shareholding to be represented by each proxy.

2. A proxy need not be a member of the Company.

3. The instrument appointing a proxy shall, in the case of an individual, be signed by the appointor or his attorney,

and in the case of a corporation shall be either under its common seal or signed by its attorney or a duly authorised

officer on behalf of the corporation.

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 19

Pandan Road, Singapore 609271 not less than 48 hours before the time appointed for holding the Annual General

Meeting.

Explanatory notes on the Special Business to be transacted:-

1. The ordinary resolution proposed in resolution 7 above is to authorise the directors from the date of the above

meeting until the date of the next Annual General Meeting to allot and issue shares and convertible securities in the

Company. The aggregate number of shares and convertible securities which the directors may allot and issue under

this resolution shall not exceed 50% of the total number of issued shares (excluding treasury shares) in the capital

of the Company at the time this resolution is passed. For allotments and issues of shares and convertible securities

other than on a pro rata basis to all shareholders, the aggregate number of shares and convertible securities to be

issued shall not exceed 15% of the total number of issued shares (excluding treasury shares) in the capital of the

Company, at the time this resolution is passed.

2. The ordinary resolution proposed in resolution 8 above is to authorise the directors from the date of the above

meeting until the earliest of (i) the date on which the next Annual General Meeting of the Company is held or

required by law to be held, (ii) the date on which the authority conferred by this mandate is revoked or varied by

shareholders in general meeting, or (iii) the date on which the Company has purchased the maximum number of

shares mandated under this mandate, to purchase or otherwise acquire issued ordinary shares in the capital of the

Company by way of market purchases or off-market purchases of up to 10% of the total number of issued ordinary

shares (excluding treasury shares) in the capital of the Company. For more information on this resolution, please

refer to the letter to shareholders dated 7 October 2011.

3. The ordinary resolution proposed in resolution 9 above is to authorise the directors to offer and grant options and

to allot and issue shares in the capital of the Company pursuant to the Share Option Scheme, provided that the

aggregate number of shares in respect of which such options may be granted and which may be issued pursuant

to the Share Option Scheme and any other share based schemes of the Company shall not exceed 10% of the

total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.

4. The ordinary resolution proposed in resolution 10 above is to authorise the directors to grant awards and to allot and

issue shares in the capital of the Company pursuant to the Shares Scheme, provided that the aggregate number of

shares in respect of which such awards may be granted and which may be issued pursuant to the Shares Scheme

and any other share based schemes of the Company shall not exceed 10% of the total number of issued shares

(excluding treasury shares) in the capital of the Company from time to time.

This page has been intentionally left blank

ASL MARINE HOLDINGS LTD.(Incorporated in the Republic of Singapore)

Company Registration No. 200008542N

PROXY FORM

IMPORTANT:

1 For investors who have used their CPF monies to buy

ASL Marine Holdings Ltd.’s shares, this annual report is

forwarded to them at the request of their CPF approved

nominees and is sent solely FOR INFORMATION ONLY.

2 This proxy form is not valid for use by CPF investors and

shall be ineffective for all intents and purposes if used or

purported to be used by them.

I/We , NRIC/Passport No.

of

being a member/members of ASL Marine Holdings Ltd. hereby appoint

Name Address NRIC/

Passport No.

Proportion of

Shareholdings (%)

and/or (delete as appropriate)

Name Address NRIC/

Passport No.

Proportion of

Shareholdings (%)

as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the Eleventh Annual General Meeting of the Company to be held at Jurong Country Club, 9 Science Centre Road, Singapore 609078 on Tuesday, 25 October 2011 at 2.00 p.m. and at any adjournment thereof.

(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions as set out in the notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.)

No. Resolutions For Against

Ordinary Business

1 Adoption of audited financial statements and reports

2 Declaration of final one-tier tax-exempt dividend

3 Approval of directors’ fees

4 Re-election of Mr Ang Ah Nui as director

5 Re-election of Mr Hong Chin Fock as director

6 Re-appointment of Ernst & Young LLP as auditors

Special Business

7 Authority for directors to allot and issue shares and convertible securities

8 Renewal of Share Purchase Mandate

9 Authority for directors to offer and grant options and to allot and issue shares

pursuant to the ASL Employee Share Option Scheme

10 Authority for directors to grant awards and to allot and issue shares pursuant

to the ASL Marine Performance Shares Scheme

Dated this day of 2011

Total Number of Shares Held

Signature(s) of Member(s) or Common Seal

IMPORTANTPLEASE READ NOTES OVERLEAF

Notes

1 Please insert the total number of shares in the Company held by you either in the Depository Register (as defined

in Section 130A of the Companies Act, Cap. 50) or in the Register of Members, or both. If no number is inserted,

this proxy form will be deemed to relate to all the shares held by you.

2 A member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies

to attend and vote on his behalf. A proxy need not be a member of the Company.

3 Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be represented

by each proxy.

4 The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 19 Pandan

Road, Singapore 609271 not less than 48 hours before the time appointed for the meeting.

5 The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly

authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be

executed under its common seal or under the hand of its attorney or a duly authorised officer of the corporation.

6 Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or

power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged

with the instrument of proxy, failing which the instrument may be treated as invalid.

7 A corporation which is a member may authorise by resolution of its directors or other governing body such person

as it thinks fit to act as its representative at the meeting, in accordance with Section 179 of the Companies Act,

Cap. 50.

8 The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible

or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified

in the instrument of proxy. In addition, in the case of shares entered in the Depository Register, the Company may

reject an instrument of proxy if the member, being the appointor, is not shown to have shares entered against his

name in the Depository Register as at 48 hours before the time appointed for holding the meeting, as certified by

The Central Depository (Pte) Limited to the Company.

01 Corporate Profi le

02 Business Overview

04 Financial Highlights

06 Five Year Financial Summary

07 Founder’s Message

08 Chairman’s Statement

11 Operations and Financial Review

14 Board of Directors

17 Senior Management

18 Group Structure

19 Corporate Governance Report

32 Risk Management Strategies

33 Financial Statements

126 Analysis of Shareholdings

128 Notice of Annual General Meeting

Proxy Form


Contents


BOARD OF DIRECTORS

Executive

Ang Kok Tian (Chairman and Managing Director)

Ang Ah Nui (Deputy Managing Director)

Ang Kok Eng

Ang Kok Leong

Independent, Non-Executive

Damian Hong Chin Fock (Lead Independent Director)



AUDIT COMMITTEE




NOMINATING COMMITTEE

Andre Yeap Poh Leong (Chairman)



REMUNERATION COMMITTEE




COMPANY SECRETARIES

Lilian Tan Yin Yen

S. Thillainathan

INVESTOR RELATIONS CONTACTS


[email protected]

Financial PR Pte Ltd

romil@fi nancialpr.com.sg

REGISTERED OFFICE

19 Pandan Road

Singapore 609271

Telephone : (65) 6264 3833

Facsimile : (65) 6268 0274

Email : [email protected]

Website : www.aslmarine.com

INCORPORATION DATA

Place of Incorporation : Singapore

Date of Incorporation : 4 October 2000

Co. Reg. No. 200008542N

SHARE LISTING

ASL Marine Holdings Ltd.’s shares are listed and

traded on the Main Board of the Singapore Exchange

Securities Trading Limited since March 2003.

SHARE REGISTRAR & SHARE TRANSFER OFFICE

M & C Services Private Limited

138 Robinson Road #17-00

The Corporate Offi ce

Singapore 068906

Telephone : (65) 6227 6660

Facsimile : (65) 6225 1452

AUDITORS

Ernst & Young LLP

Certifi ed Public Accountants

One Raffl es Quay

North Tower, Level 18

Singapore 048583

Partner-In-Charge: Terry Wee Hiang Bing

(appointed since the fi nancial year ended 30 June

2010)

PRINCIPAL BANKERS

United Overseas Bank Limited

DBS Bank Ltd

The Royal Bank of Scotland N.V.

Standard Chartered Bank

Oversea-Chinese Banking Corporation Limited

ASL Marine Holdings Ltd.Company Registration No. 200008542N

19 Pandan Road Singapore 609271

Telephone: (65) 6264 3833 Facsmile: (65) 6268 0274

Website: www.aslmarine.com

ASL M

arine H

old

ings Ltd

. An

nu

al Rep

ort 2011

2011Annual Report


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