LEVERAGING ON OUR STRENGTHS

A N N U A L R E P O R T 2 0 1 1

LEVERAGING ON OUR STRENGTHS

SAMUDERA SHIPPING LINE LTD

CONTENTS01 Milestones04 Board of Directors06 Chairman’s Message08 CEO Statement on Operational Review11 Financial Highlights14 Regional Container Shipping16 Indonesia Domestic Container Shipping18 Bulk Carrier & Tanker22 Service Network23 Group Structure24 Corporate Information25 Financial Contents

The competitive sport of rowing demands the best of its athletes, for it requires discipline, leadership, determination and teamwork in order to succeed.

Inspired by the sport’s aquatic nature and various qualities similar to the development of our business, the 2011 Samudera Shipping Line Ltd Annual Report features the creative concept of rowing to reflect our strengths and strategies for the year ahead.

Just as each boat is helmed by a captain responsible for piloting his team to victory, Samudera is likewise guided by strong leadership and a competent management team capable of steering the Company forward to overcome the turbulent seas of today’s global economy.

The captain’s success is dependent on his rowers, which is a testament of Samudera’s effective business model and dedicated staff. Each rower represents a different aspect of our business service – Regional Container Shipping, Bulk Carrier & Tanker and Indonesia Domestic Container Shipping – working closely together to create a complementing dynamic that supports one another in time of need.

These synergies will go the distance to propel Samudera towards a path of greater stability and create greater value for our customers and shareholders alike.

LEVERAGING ON OUR STRENGTHS

1ANNUAL REPORT 2011

MILESTONES

1ANNUAL REPORT 2011

1993Incorporated in Singapore for its container shipping business.

1994Began its feeder routes to Jakarta, Indonesia and Bangkok, Thailand.

Samudera was granted the Approved International Shipping (“AIS”) status by the Trade Development Board.

1995Extension of network to India, Sri Lanka, Philippines, Malaysia and other Indonesian ports.

1996Entered into bulk carrier & tanker business through its S’pore subsidiary, Foremost MaritimePte Ltd.

1997Listed in Singapore Stock Exchange, Sesdaq, and expansion of network to China, Hong Kong and South Korea.

1998Expansion of network to the United Arab Emirate (“UAE”) such as Dubai, Iran, Saudi Arabia, Bahrain and Kuwait.

Commended by PSA for being part of the list of top ten achievers of throughput, amongst all vessel operators that call at its Singapore terminals, which continues for the next decade.

1999Achieved geographical diversification by covering more than 80 ports in the Southeast Asia region (“SEA”), Indian Sub-continent region (“ISC”), Far East area (“FA”) and UAE.

Additional capital of S$32.9 million raised through share placement.

2000Samudera officially migrated to Main Board Listing, SGX-ST.

Began bulk carrier & tanker business in Indonesia through its subsidiary, PT Samudera Shipping Service.

2001Delivery of MT Sinar Jogya, our biggest oil tanker with 17,766 DWT capacity.

2003Established presence in India through a subsidiary, Samudera Shipping Line (India) Pvt Ltd to manage its extensive network and anticipate business opportunities in ISC region.

2004Established presence in Thailand, through a subsidiary, Samudera Traffic Co Ltd.

2006Anchored presence in Singapore by acquiring office property at 6 Raffles Quay.

Entered into LNG shipping by investing in a joint venture LNG East-West Shipping Company (Singapore) Pte Limited.

Expanded into the Indonesian domestic container shipping business through its Indonesian subsidiary.

2008Took delivery of 5 newbuild container vessels to serve both regional and Indonesian domestic container shipping market.

2010Remained among the top 10 vessel operators in terms of container throughput calling at the terminals of PSA.

2011Converted from chartered-in to owned capacity by acquiring 3 container vessels, to manage operating costs and capacity.

Acquired 3 container vessels to strengthen the Indonesian domestic market presence.

Took delivery of 2 Supramax bulk carriers, our biggest bulk carrier each with 57,700 DWT capacity.

2 SAMUDERA SHIPPING LINE LTD

NavIgaTINg ChaLLENgES

ThrOugh rESILIENCEEven as we move toward uncertain times in today’s

changing global economy, we are just as much certain of

a driving force – to stay united and resilient with our efforts

– that will propel us to ride out turbulent waters

and emerge stronger in time.

3ANNUAL REPORT 2011


BOarD OFDIrECTOrS

Masli Mulia 1

Chairman

Masli Mulia was appointed as Chairman in June 2010. As Chairman, Masli Mulia leads the Board in its overall direction of the Group. He is also the President Director of PT. Samudera Indonesia Tbk (Samudera Indonesia Group), a majority shareholder of the Company. He joined Samudera Indonesia Group in 1971 and was the Corporate Managing Director – Forwarding & Warehousing Group prior to becoming the President Director of the Samudera Indonesia Group in 2010. Amongst several other directorships, Masli Mulia served as Chairman of Asean Federation of Forwarders Associations (AFFA) till 2010.

DaviD BatuBara 2

Executive Director and CEO

David Batubara, joined the Company as an Executive Director and Chief Executive Officer (CEO) in June 2010, is responsible for the overall management, strategic planning, growth and business development of the Company and its subsidiaries. David is a member of the Nomination Committee of the Company. He is also appointed as the Deputy President Director of Samudera Indonesia Group since May 2010. Prior to assuming responsibilities in office, David was a member of Board of Commissioner of Samudera Indonesia Group and was the country Director of Western Union for Indonesia, Singapore and Brunei. He started his career with PricewaterhouseCoopers and with CIGNA International where he held various Directorship roles. David holds a Bachelor of Economics degree (majoring in Accountancy) from the University of Padjadjaran, Indonesia.

anwarsyah 3

Executive Director and CFO

Anwarsyah, became the Chief Financial Officer (CFO) in June 2010, is responsible for the overall finance, information technology and administrative functions of the Company and its subsidiaries. He has been with the Samudera Indonesia

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5ANNUAL REPORT 2011

Group since 1985 and has held various positions in internal audit, finance, information technology, marketing, forwarding and agency services. In 2010, Anwarsyah was appointed as the Executive Director (Finance) of Samudera Indonesia Group. He holds a Bachelor of Economics degree (majoring in Accountancy) from the Gadjah Mada University, Indonesia and a Master in Management degree from the Institut Pendidikan Dan Pembinaan Manajemen in Indonesia.

asMari hErry PrayitnO 4

Executive Director and COO

Asmari Herry, became the Chief Operating Officer (COO) in June 2010, is responsible for the overall operations of the Company and its subsidiaries. He served as officer on board the ships of Samudera Indonesia Group for seven years prior to assuming responsibilities in the office. Asmari Herry joined Samudera Indonesia Group in 1979 and was appointed as a General Manager of Agency division in 1991, as General Manager of Feeder division in 1993 and as Executive Director of the Company since 1997. In 2010, he was appointed as the Executive Director (Operations) of Samudera Indonesia Group. He holds a Bachelor degree from the Merchant Marine College in Indonesia.

liM KEE hEE 5

Executive Director

Lim Kee Hee, appointed as Executive Director in June 2010, is responsible for the overall commercial activities of the Company. Prior to becoming the Executive Director, Lim Kee Hee is the Senior General Manager of the Company who is responsible for the trade and marketing functions. He has over 20 years of experience in the shipping industry where he had served in various senior management positions prior to joining the Company. He holds a Bachelor of Science from the National University of Singapore and a Graduate Diploma in Financial Management from the Singapore Institute of Management.

hErMawan FriDiana hErMan 6

Executive Director

Hermawan, appointed as Executive Director in June 2010, is responsible for the finance and administrative functions of the Company and its subsidiaries. In addition, he also serves as Director on the board of Foremost Maritime Pte Ltd, Samudera Traffic Co., Ltd, SILkargo Logistics (Singapore) Pte Ltd and LNG East-West Pte Ltd. Hermawan joined PT Samudera Indonesia Tbk in 1992 as Group Accountant and was subsequently posted to Singapore as General Manager for Finance and Administration for the Company. Hermawan started his career with a business consultant in Indonesia before joining KPMG Indonesia as an Auditor. He holds a Bachelor of Economics degree (majoring in Accountancy) from the University of Indonesia.

Chng hEE KOK 7

independent and non-Executive Director

Chng Hee Kok is the Chairman of the Audit Committee. He is Managing Director of Liang Huat Aluminium Ltd. He graduated with a BEng (First Class Honours) degree from the University of Singapore in 1972 and a MBA degree from the National University of Singapore in 1984. He was a Member of Parliament from 1984 to 2001. He was CEO of Yeo Hiap Seng Ltd, CEO of Scotts Holdings Ltd, CEO of Hartawan Holdings Ltd and CEO of HG Metal Manufacturing Ltd. Chng Hee Kok served on the board of Sentosa Development Corporation from March 2001 to February 2005. He is a Director of a number of public listed companies including People’s Food Holdings, Pacific Century Regional Developments Ltd and Full Apex Holdings Ltd.

DaviD liM tECK lEOng 8


David Lim is the Chairman of the Remuneration Committee of the Company. He is also a member of the Audit Committee and the Nominating Committee of the Company. David Lim has been in the legal practice since 1982 and is the managing partner of a law firm in Singapore. He obtained his degree in law from King’s College London, University of London and qualified as a Barrister-at-Law at Gray’s Inn, London, UK. David Lim is a Fellow of the Singapore Institute of Directors.

niChOlas PEtEr Ballas 9


Nicholas Ballas joined the Company as an Independent and Non-Executive Director in June 2010. He is also a member of the Audit Committee and Remuneration Committee of the Company. Nicholas is Executive Vice President, Asia Pacific and a member of the executive committee of Nexans SA, the worldwide leader in the cable industry based in Paris, France. He has 20 years of experience working in the Asia Pacific region and has held various positions in finance, strategy and general management in the USA, Japan, Malaysia and Indonesia. Nicholas was educated in the USA and holds an MBA degree from Thunderbird School of Global Management.

lEE ChEE yEng 10


Lee Chee Yeng joined the Company as an Independent and Non-Executive Director in 2006. He is the Chairman of the Nomination Committee as well as a member of the Audit and Remuneration Committee of the Company. He holds a Degree in Business Administration, First Class Honours from the University of Singapore. Lee Chee Yeng has many years of experience in container terminals, multi-purpose terminals, cargo logistics and airport services and was awarded the Public Administration Medal (Gold). He is presently the CEO of St Luke’s Hospital.


We have a strong team in Samudera and our strategies have been effective in terms of revenue growth and cash generation. Over the last 3 years, we have been growing from strength to strength.

ChaIrMaN’SMESSagE

I am pleased to report a better year for Samudera Shipping Line for the financial year ended 31 December 2011. Group revenue rose 23.0% to US$454.2 million from US$369.1 million for the corresponding period in 2010. This was due to firm performance for our Indonesia domestic container shipping and bulk carrier & tanker businesses, both of which were boosted by new capacity and service routes introduced by the Group during the year.

Net profit after tax rose 33.8% to US$12.6 million, compared to US$9.4 million in 2010, mainly due to improved revenue, good cost control, foreign exchange gains and other operating income.

Our improved performance comes on the back of some of the toughest macroeconomic and industry conditions we have ever faced. In the course of 2011, global shipping demand suffered from the continued lacklustre US economy, a full-blown debt crisis in Europe, multiple governments overthrown in the ‘Arab Spring’, severe industry supply chain disruptions due to the Fukushima earthquake and floods in Thailand, sharply higher bunker prices, and volatile charter, freight and currency exchange rates.

We were mentally prepared for a difficult year and in fact capitalised on the adversity to strengthen the Group. We kept a tight rein on costs, protected ourselves with judicious hedging of currencies and bunker, streamlined and expanded our service offerings, and continued our strategy of increasing the proportion of owned vessels in our fleet.

In this light, the Board of Directors is satisfied with our performance in 2011, which demonstrates the resilience of our business model, particularly our focus on the Indonesia domestic container shipping business. We continued to benefit from aligning ourselves with our parent company, Samudera Indonesia, which is a leading cargo transportation and logistics group in Indonesia and the region.

The Board has recommended a final one-tier tax exempt cash dividend of 0.3 Singapore cents per ordinary share. This is lower than the dividend for the 2010 financial year, but given the current anticipated challenges in 2012, the Board is of the view that the Group should take necessary precaution of increasing our holding of cash and cash equivalents to ensure uninterrupted operations and that all future funding requirements are met.

7ANNUAL REPORT 2011

ChallEngEs ahEaD

The consensus view is for a global economic slowdown in 2012, and we see no reason to differ from this. Although the US economy is reportedly showing some improvement recently, this may not be sustainable given the continued debt crisis in Europe as well as the likely slowdown in China. This alone would pose a substantial challenge to the Group due to lower end-demand which in turn would put pressure on freight rates and vessel utilisation. Add to this the likelihood of continued sharp swings in all our operating parameters like bunker prices and currency exchange rates.

Also on the horizon is the ever-present danger of a larger-than-expected influx of newbuilds of container ships, bulk carriers and tankers. In particular, regional and international charter rates for chemical tankers are expected to soften, as newbuilding deliveries in 2012 will likely lead to a lag in demand over vessel supply.In anticipation of this, we recently reflagged one of our chemical tankers to Indonesian registry to take advantage of changes to cabotage laws.

We expect the Indonesia domestic container shipping business to continue to be healthy, and we are well-positioned to take advantage of opportunities here by leveraging the strengths of our parent company, Samudera Indonesia. We are working to take full advantage of being part of a much larger group, and shareholders can expect to see some changes in our business model going forward. In the meantime, we are

starting to explore opportunities to expand our service offerings, for example by providing harbor tug services in Indonesia waters.

We have a strong team in Samudera and our strategies have been effective in terms of revenue growth and cash generation. Over the last 3 years, we have been growing from strength to strength. From the net loss in 2009, we achieved a turnaround in 2010 and now in 2011 we have been able to improve our bottom line despite difficult operating conditions. That said, we are mindful that the operating dynamics for 2012 could be even more challenging than that of 2009.

aCKnOwlEDgEMEnts

We are very grateful to all our customers, agents, partners, business associates and shareholders for their support and encouragement. The Board also wants to thank all our employees for their hard work, dedication and talent, without which the Group, part of the leading regional shipping line, Samudera Indonesia Group, would not be in its strong position today.

We look forward to your continued support in 2012.

MASLI MULIAChairman


For the year ended 31 December 2011, overall Group revenue grew 23.0% to US$454.2 million, with total container volume handled increasing 7.5% to 1.42 million TEUs, from 1.32 million TEUs registered in 2010.

In addition, we also expanded our fleet for the bulk carrier & tanker business with the delivery of two new 57,700 DWT bulk carriers.

CEO STaTEMENT ONOpEraTIONaL rEvIEw

Dear shareholders,

2011 was a challenging year marked by economic crises, natural disasters and political upheavals. For shipping players like Samudera, we had to grapple with industry-wide issues such as higher bunker prices, volatile foreign exchange rates, vessel oversupply and weak global demand.

Despite such adverse operating conditions, we managed to achieve higher overall profitability in 2011. This was largely due to the Group’s strategy to capitalise on our Indonesia business in both the container, and bulk carrier & tanker business segments.

CaPitalising On COllECtivE strEngths

For the year ended 31 December 2011, overall Group revenue grew 23.0% to US$454.2 million, with total container volume handled increasing 7.5% to 1.42 million TEUs, from 1.32 million TEUs registered in 2010. In addition, we also expanded our fleet for the bulk carrier & tanker business with the delivery of two new 57,700 DWT bulk carriers.

Revenue for regional container shipping, our largest contributor, grew 16.8% to US$318.3 million contributed by a 5.5% improvement in volume handled despite continued low freight rates. The Group’s throughput at PSA International’s terminal in Singapore rose 3% compared to 2010, enabling us to retain our Top-10 position for more than 10 years running.

Revenue from Indonesia domestic container shipping, our fastest-growing segment, surged 59.6% to US$59.2 million, driven by higher liftings, new services expansion as well as an increase in the number of vessels operated during the year.

The bulk carrier & tanker segment registered a 27.2% rise in revenue to US$74.3 million, mainly due to the delivery of two new 57,700 DWT bulk carriers and higher vessel employment rates.

Although our Group revenue recorded respectable growth, this was outpaced by the increase in cost of services which rose 25.1% to US$426.4 million, mainly driven by higher bunker prices, and vessel operating and stevedoring costs. Consequently, gross profit was largely sustained at US$27.8 million, versus US$28.3 million in 2010.

ANNUAL REPORT 2011 9

The regional container shipping segment faced severe margin pressure as a result of higher stevedoring and vessel charter hire rates and, most of all, sharply higher bunker prices. Gross profit in this segment fell by 72.8% to US$4.4 million.

However, due to our diversified business model, this significant decline was almost completely offset by improvements from our other business segments.

Our Indonesia domestic container shipping segment saw gross profit rising more than threefold to US$12.6 million, compared with US$3.6 million in the previous year. This was driven by a 27.8% increase in volume handled, improved freight rates, higher load factors, and the introduction of new capacity and services during the year.

The bulk carrier & tanker segment also performed well, with gross profit increasing 50.4% to US$6.8 million. This segment benefited from the two new bulk carriers delivered in FY11 and better vessel employment.

Overall, Group net profit after tax grew 33.8% to US$12.6 million for FY11, compared to US$9.4 million in FY10, helped by good cost control in administrative and other expenses, a US$0.7 million foreign exchange gain and US$4.6 million in other income from the sale of containers. Earnings per share increased by 29.7% to 2.23 US cents compared to 1.72 US cents in 2010.

Our cash earnings improved with operating profit before working capital changes up by 8.7% to US$34.0 million. Net asset value per share improved to 43.24 US cents, up from 42.12 US cents in 2010.

Capital expenditure was US$82.2 million, much higher than the US$4.6 million in 2010, due to our strategy to maintain an optimal composition of owned vessels to chartered-in vessels for the regional container shipping business, and to increase our owned Indonesia-flagged vessels for the domestic container shipping business to capitalise on the Indonesian cabotage law. Our vessel acquisitions are funded by our strong cash flow from

operations, reserves, as well as bank borrowings, and we believe the strategy will pay off over time.

Due to increased capital expenditure, cash and cash equivalents as at the end of 2011 was US$22.6 million, lower than the US$40.1 million as at the end of 2010. Gearing ratio was 0.90 as at the end of 2011, compared to 0.73 at the end of 2010.

navigating ChallEngEs thrOugh rEsiliEnCE

Throughout the year, we endeavoured to fully utilise our vessels and capitalise on new economic “hotspots” in the region which required cargo transportation. We changed some of our routes and introduced new ones, and in doing so, strengthened our existing relationship with our customers.

We also continued to build on our long-term strategy of balancing our portfolio of owned, long-term charter-in and short-term charter-in vessels. This increased our flexibility in terms of fleet deployment and stabilised our operating costs, and in turn enabled us to adapt quickly to a very dynamic market condition.

In our domestic market, we rode the robust growth of the local economy and utilised the Indonesian network of our parent company, Samudera Indonesia. We also sought to work synergistically with the other non-shipping segments of our parent company, which helped to strengthen our positioning in the region.

Having strong presence in Indonesia, we understand what makes Indonesia unique and thus made full use of that knowledge. For example, we deployed smaller vessels to serve the outlying ports with shallow drafts. Leveraging our fleet of Indonesia-flagged container vessels, bulk carriers & tankers, we were also able to take advantage of the unique opportunity presented by the new Indonesia cabotage rules, which restrict the transportation of cargo within the country to Indonesian-flagged vessels.



We added three container vessels for the Indonesia domestic container shipping business and took delivery of two new Supramax bulk carriers in the bulk carrier & tanker business. This increased the capacity in these higher-growth segments which helped to mitigate the weaker performance in the regional container shipping business. In October 2011, the Group reflagged one of its chemical tankers, the Sinar Busan, from Singaporean to Indonesian registry. Reflagging widens our customer reach in Indonesia while retaining the flexibility to deploy the tankers on international routes, depending on market needs.

We also made long-term investments in information technology, through hardware and software upgrades and new systems, and managed our human resources more carefully taking into account our tighter operating parameters.

POisED FOr grEatEr OPPOrtunitiEs

Despite the improved financial performance in 2011, the macroeconomic situation ahead does not paint a rosy picture for the Group.

The ailing Eurozone and expectations of a slowdown in China’s GDP growth may put a cap on any increase in global trade volumes, while the present vessel oversupply situation is likely to be exacerbated with an additional 6.7% in global capacity to be delivered to the market in 2012. This is likely to have a cascading effect on our regional container shipping business, and result in continued pressure on freight rates.

Separately, we foresee some challenges in our Indonesia domestic container shipping business due to port congestion, higher bunker and other operating costs and the integration of new vessels to be delivered in 2012. In the bulk carrier & tanker segment, we are of the view that charter rates may continue to soften as newbuilding deliveries in 2012 outpace growth in demand.

In view of the above challenges, our first priority is to maximise our current fleet utilisation in terms of its employment base, load factors and vessel turnaround time. We are also going to be continuously reviewing our existing service routes and assets deployed and make the necessary changes at the most opportune times. Given the tough industry conditions, we will also prioritise cost control and cash flow management. Capital expenditure will be minimal, except for selective investments made to capitalise on emerging profitable trends or to enhance our information technology infrastructure.

We expect to increase our focus on the Indonesian market as we expect the strength of the local economy to sustain demand. We believe that this segment will continue to present opportunities for growth as we generate synergy with our parent company’s longstanding business relationships and extensive network in this market.

No matter the headwinds in 2012, in the long-run, we intend to persevere in our efforts to take Samudera Shipping Line up to the next level in terms of earnings growth. We intend to be our customers’ best partner to be entrusted with more and better paying routes, which will in turn benefit our shareholders.

Our strategies will continue and refinements will be made where necessary. As we have shown in 2011, adversity can be opportunity. Our industry, like all industries, is cyclical and highly dynamic. The strongest companies will reap the biggest rewards when the up-cycle comes. During down-cycles, we retool and sharpen our competitive edge.

In summary our key strategies will be to maximise our current fleet utilisation and leverage Group-wide strengths through synergising our regional and domestic container shipping businesses, utilising our extensive network in Indonesia and exploring our existing customer base for new opportunities. We also seek to re-balance our business portfolio such that we focus less on capital intensive investments and more on investments with shorter payback periods. Along with this, we will increase our investment in and use of technology to improve our operational efficiency. The successful implementation of these strategies would ultimately serve as the key component in increasing shareholders’ value.

aCKnOwlEDgEMEnts

To my fellow Board members, I am grateful for your counsel and guidance which have been invaluable to the Group. To our employees, who are my colleagues, I thank you for your hard work, loyalty and dedication. To our customers, bankers, and business partners, I want to express my deepest gratitude for your support.

To our shareholders, thank you for your patience and belief in Samudera. Without a doubt, 2012 will be another challenging year for us. Over the longer haul however, I am confident Samudera Shipping Line can ride through it with the resilience built over the years, and emerge all the stronger for it. Stay with us for a fruitful journey.

DAVID BATUBARACEO

11ANNUAL REPORT 201110 SAMUDERA SHIPPING LINE LTD


We added three container vessels for the Indonesia domestic container shipping business and took delivery of two new Supramax bulk carriers in the bulk carrier & tanker business. This increased the capacity in these higher-growth segments which helped to mitigate the weaker performance in the regional container shipping business. In October 2011, the Group reflagged one of its chemical tankers, the Sinar Busan, from Singaporean to Indonesian registry. Reflagging widens our customer reach in Indonesia while retaining the flexibility to deploy the tankers on international routes, depending on market needs.

We also made long-term investments in information technology, through hardware and software upgrades and new systems, and managed our human resources more carefully taking into account our tighter operating parameters.

POisED FOr grEatEr OPPOrtunitiEs

Despite the improved financial performance in 2011, the macroeconomic situation ahead does not paint a rosy picture for the Group.

The ailing Eurozone and expectations of a slowdown in China’s GDP growth may put a cap on any increase in global trade volumes, while the present vessel oversupply situation is likely to be exacerbated with an additional 6.7% in global capacity to be delivered to the market in 2012. This is likely to have a cascading effect on our regional container shipping business, and result in continued pressure on freight rates.

Separately, we foresee some challenges in our Indonesia domestic container shipping business due to port congestion, higher bunker and other operating costs and the integration of new vessels to be delivered in 2012. In the bulk carrier & tanker segment, we are of the view that charter rates may continue to soften as newbuilding deliveries in 2012 outpace growth in demand.

In view of the above challenges, our first priority is to maximise our current fleet utilisation in terms of its employment base, load factors and vessel turnaround time. We are also going to be continuously reviewing our existing service routes and assets deployed and make the necessary changes at the most opportune times. Given the tough industry conditions, we will also prioritise cost control and cash flow management. Capital expenditure will be minimal, except for selective investments made to capitalise on emerging profitable trends or to enhance our information technology infrastructure.

We expect to increase our focus on the Indonesian market as we expect the strength of the local economy to sustain demand. We believe that this segment will continue to present opportunities for growth as we generate synergy with our parent company’s longstanding business relationships and extensive network in this market.

No matter the headwinds in 2012, in the long-run, we intend to persevere in our efforts to take Samudera Shipping Line up to the next level in terms of earnings growth. We intend to be our customers’ best partner to be entrusted with more and better paying routes, which will in turn benefit our shareholders.

Our strategies will continue and refinements will be made where necessary. As we have shown in 2011, adversity can be opportunity. Our industry, like all industries, is cyclical and highly dynamic. The strongest companies will reap the biggest rewards when the up-cycle comes. During down-cycles, we retool and sharpen our competitive edge.

In summary our key strategies will be to maximise our current fleet utilisation and leverage Group-wide strengths through synergising our regional and domestic container shipping businesses, utilising our extensive network in Indonesia and exploring our existing customer base for new opportunities. We also seek to re-balance our business portfolio such that we focus less on capital intensive investments and more on investments with shorter payback periods. Along with this, we will increase our investment in and use of technology to improve our operational efficiency. The successful implementation of these strategies would ultimately serve as the key component in increasing shareholders’ value.

aCKnOwlEDgEMEnts

To my fellow Board members, I am grateful for your counsel and guidance which have been invaluable to the Group. To our employees, who are my colleagues, I thank you for your hard work, loyalty and dedication. To our customers, bankers, and business partners, I want to express my deepest gratitude for your support.

To our shareholders, thank you for your patience and belief in Samudera. Without a doubt, 2012 will be another challenging year for us. Over the longer haul however, I am confident Samudera Shipping Line can ride through it with the resilience built over the years, and emerge all the stronger for it. Stay with us for a fruitful journey.

DAVID BATUBARACEO


CapITaLISINg ON COLLECTIvE

STrENgThSOur experience and expertise in Regional Container

and Indonesia Domestic Container Shipping as well as

Bulk Carrier & Tanker has been the cornerstones of our

success. We will continue to refine our capabilities and

leverage on these complementing pillars of strengths to

deliver greater value to our customers.

13ANNUAL REPORT 2011


rEgIONaL CONTaINEr ShIppINg

sinar sabang

Samudera provides feeder services for the transportation of containerised cargo between Singapore as a “hub” port and other outlying “spoke” ports in Asia. Our service routes connect South East Asia, the Indian Sub-Continent, and the Far East. Through our vast network of service routes as well as our reliable and timely services, we are able to cater to the needs of various global container shipping companies. Samudera also provides inter-region and intra-region container shipping services to end users, such as manufacturers, buyers, exporters and importers of various goods and products.

We serve our regional container shipping customers via representative offices and third-party agency offices overseas, as well as from our headquarters in Singapore. Our main representative and agency offices are located in Jakarta, Surabaya, Semarang, Belawan, Palembang, Hong Kong, Shanghai, Bushan, Bangkok, Ho Chi Minh, Port Klang, Penang, Yangon, Mumbai, Kolkata, Chennai, Chittagong and Karachi.

Our regional container shipping operations are supported by a highly efficient Booking & Documentation System that integrates vessel scheduling, freight booking, documentation and invoicing into a seamless solution. Along with this, our Container Management System also enables us to track our equipment and inventory, as well as monitor fleet maintenance and repair schedules across our network.

Samudera currently operates a total of 21 container vessels weighing some 376,000 deadweight tonnes (DWT), and with a carrying capacity of more than 27,000 twenty-foot equivalent units (TEU) containers. These vessels, with capacities ranging from 562 TEU to 2,741 TEU, are either owned or time-chartered in. Collectively, the Group, through a combination of owned vessels, chartered vessels, slot exchanges and non-vessel operating common carrier (NVOCC) arrangements, offer 21 different service routes and serve a total of 52 ports in the region.


sinar sumba

FLEET LIST AS AT 1 MARcH 2012

name Of vessel Flag Capacity year Built Control1 Cape Manuel Cyprus 2,741 TEUs 2007 Chartered

2 Lindavia Liberia 2,078 TEUs 1996 Chartered

3 Sinar Sabang Singapore 1,740 TEUs 2008 Owned

4 Sinar Sumba Singapore 1,740 TEUs 2008 Owned

5 Sinar Sangir Panama 1,708 TEUs 2008 Chartered

6 Sinar Subang Panama 1,708 TEUs 2008 Chartered

7 Silver Bay Liberia 1,504 TEUs 1998 Chartered

8 Sinar Biak Panama 1,441 TEUs 1995 Chartered

9 Sinar Bitung Panama 1,150 TEUs 2007 Chartered

10 Sinar Bima Singapore 1,118 TEUs 2008 Owned

11 CTP Fortune Indonesia 1,064 TEUs 1998 Chartered

12 Sinar Solo Singapore 1,060 TEUs 1999 Owned

13 Sinar Buton Panama 1,060 TEUs 2008 Chartered

14 Sinar Bromo Panama 1,060 TEUs 2009 Chartered

15 Sinar Brani Panama 1,060 TEUs 2010 Chartered

16 Sinar Bandung Singapore 1,054 TEUs 2004 Owned

17 Sinar Banten Panama 1,054 TEUs 2008 Chartered

18 Sinar Bintan Singapore 1,054 TEUs 2002 Owned

19 MCP Graz Cyprus 618 TEUs 2010 Chartered

20 MCP Amsterdam Malta 618 TEUs 2007 Chartered

21 Bei Jiang Hong Kong 562 TEUs 2005 Chartered

total 27,192 tEus

INDONESIa DOMESTIC CONTaINEr ShIppINg

Our Indonesia domestic container shipping business spearheads the aspirations of the late Samudera Indonesia’s founder, Mr. Soedarpo Sastrosatomo, to connect Indonesian archipelago through a network of shipping services. Over time, we have grown steadily in this business, with customers ranging from individuals to logistics providers, distribution companies and manufacturers.

Leveraging these marine and land transportation support capabilities of our parent company Samudera Indonesia, we are able to provide for our customers the following value-added services, that are not easily matched by other service providers:– port operation services with high-quality berthing

and stevedoring services, as well as– a seamless end-to-end solution in logistic services

such as container depot, warehousing, agency, trucking and forwarding in Indonesia.

We currently operate 14 vessels with capacities ranging from 115 TEUs to 511 TEUs, and aggregating more than 3,500 TEUs. These vessels are either owned or chartered-in, and are currently deployed on a total of nine service routes from our hubs in Jakarta and Surabaya to some seven outlying ports on the islands of Sumatra, Kalimantan, and Sulawesi.

All our vessels plying the Indonesia domestic container shipping routes are Indonesia-flagged as the recently introduced cabotage laws in Indonesia bars the deployment of foreign-flagged vessels for domestic shipping activities.


sinar Jambi


name Of vessel Flag Capacity year Built Control1 Sinar Jombang Indonesia 511 TEUs 1998 Owned

2 Sinar Jepara Indonesia 378 TEUs 2005 Owned

3 Sinar Jimbaran Indonesia 378 TEUs 2005 Owned

4 Sinar Ambon Indonesia 287 TEUs 2004 Owned

5 Sinar Jambi Indonesia 265 TEUs 2005 Owned

6 Sinar Demak Indonesia 265 TEUs 2005 Owned

7 Sinar Padang Indonesia 241 TEUs 2005 Owned

8 Sinar Panjang Indonesia 241 TEUs 2005 Owned

9 Semarang CJN III – 35 Indonesia 208 TEUs 1997 Chartered

10 Isa Clarity Indonesia 204 TEUs 1986 Chartered

11 Multi Alfa Indonesia 198 TEUs 2008 Chartered

12 Caraka Jaya Niaga III – 7 Indonesia 115 TEUs 1992 Chartered



total 3,521 tEus


sinar Padang

BuLk CarrIEr & TaNkEr


Samudera’s bulk carrier & tanker shipping business serves both the international, as well as Indonesian domestic market in the transportation of special dry bulk, liquid and gas cargo. Our vessels are deployed on time-charter basis, contracts of affreightment, and on single voyage basis.

Our fleet of tankers are managed according to the standards set by the international maritime organisation and approved for service by our customers. These vessels carry petroleum and petrochemical products ranging from methanol to caustic soda, benzene and other easy chemical products, gasoline and other fuel

sinar Jogya

sinar Kapuas

oils from refineries to industrial and consumer centres in South East Asia.

Our fleet of environmentally friendly and efficient dry bulk carriers is typically engaged for the transportation of coal and other dry bulk cargo from the mines to their respective distribution or transhipment sites.

Samudera’s bulk carrier & tanker fleet comprises nine chemical tankers with capacities ranging from 2,800 DWT to 11,200 DWT, two oil tankers of approximately 17,700 DWT each, two gas tankers, three offshore support vessels, two dry bulk carriers of 57,700 DWT each, and four coal carriers of between 4,700 DWT and 5,000 DWT each. More than 75% of the fleet is registered in Indonesia, to facilitate our tapping of opportunities there under the new cabotage rules. These rules restrict the transportation of chemical cargo within the country to Indonesian-flagged tankers. Vessels bearing the Indonesia flag are thus able to serve more customers in Indonesia while having the flexibility to ply international routes, depending on market needs.

Our participation in the LNG sector is mainly through our 25%-owned 145,700 CBM LNG vessel, Tangguh Towuti. The vessel has been chartered out on a 20-year period and is engaged in the transportation of LNG from Indonesia to North Asia and North America.

In addition, the Group also provides high-quality marine offshore support services to the oil and gas industry in Indonesia.

* LNG Tangguh Towuti is owned through an associated company, in which the Group has a 25% stake.


name Of vessel Flag Capacity year Built Control

Oil Tanker1 Sinar Emas Indonesia 17,726 DWT 2000 Owned

2 Sinar Jogya Indonesia 17,766 DWT 2001 Owned

chemical Tanker3 Sinar Busan Indonesia 10,600 DWT 2006 Owned

4 Sinar Agra Indonesia 11,244 DWT 2006 Owned

5 Sinar Bontang Indonesia 3,785 DWT 1992 Owned

6 Sinar Labuan Indonesia 3,519 DWT 1994 Owned

7 Sinar Bunyu Singapore 3,426 DWT 2001 Owned

8 Sinar Johor Indonesia 3,098 DWT 1991 Owned

9 Sinar Bukom Indonesia 3,097 DWT 1990 Owned

10 Sinar Tokyo Singapore 2,949 DWT 2004 Owned

11 Sinar Anyer Indonesia 2,781 DWT 1996 Owned

Gas Tanker12 LNG Tangguh Towuti* Singapore 145,700 CBM 2007 Owned

13 Amanah Indonesia 1,560 CBM 1981 Owned

Marine Off Shore Support Unit14 Aquatic Conserver Indonesia 400 DWT 1995 Owned

15 Cumawis 110 Indonesia 350 DWT 1995 Owned

16 Nurhidayah Indonesia 102 DWT 1996 Chartered

Dry Bulk17 Sinar Kutai Singapore 57,700 DWT 2011 Owned

18 Sinar Kapuas Singapore 57,700 DWT 2011 Owned

19 Sinar Tuban Indonesia 5,500 DWT 2005 Owned

20 Sinar Barito Indonesia 4,700 DWT 2003 Owned

21 Sinar Borneo Indonesia 4,700 DWT 2003 Owned

22 Sinar Banjar Indonesia 4,700 DWT 2003 Owned

total 215,843 Dwt

147,260 CBM



pOISED FOr grEaTEr

OppOrTuNITIESEmpowered by a united spirit and diverse portfolio, we are

assured in our abilities to chart a steady course that will

enable us to overcome new challenges and seize potential

opportunities that lay ahead.



SErvICE NETwOrkBY rEgIONas at 1st March 2012

sOuth East asia

We have 7 services covering main ports at Jakarta, Surabaya, Semarang, Belawan, Palembang and Panjang with sailing frequency ranging from 1 to 2 sailings per week. There are 8 services serving Singapore, Malaysia, Thailand, Vietnam and Yangon with sailing frequency of 4 sailings per week.

inDian suB-COntinEnt

We operate 4 services with up to 2 weekly sailings covering India, Bangladesh, Sri Lanka and Pakistan.

Far East

There are 2 services with a weekly sailing frequency serving Hong Kong, Korea, South & North China ports; with direct calls from Hong Kong, Shanghai, Ningbo, Qingdao, Busan and Inchon to Malaysia and Singapore.

intEr-islanD inDOnEsia

We have 9 services covering main ports of Jakarta and Surabaya to Pontianak, Banjarmasin, Balikpapan, Samarinda, Padang, Batam and Makassar with sailing frequency ranging from 1 to 2 sailings per week.

nvOCC

In addition to the ports served by these services, where we deploy vessels, we also serve other ports on Non-Vessel Operating Common Carrier (NVOCC) basis.



LNG East-West*

25%

grOupSTruCTurEas at 1st March 2012

1. Samudera Shipping Line Ltd owns 16% of the issued capital and Foremost Maritime Pte Ltd owns 17% of the issued capital. However, the Group has control over the management of Samudera Emirates Shipping LLC.

2. Samudera Shipping Line Ltd owns 49% of the issued capital. However the Group has control over the management of Samudera Traffic Co., Ltd.

* LNG East-West Shipping refers to LNG East-West Shipping Company (Singapore) Pte Ltd.

23ANNUAL REPORT 2011ANNUAL REPORT 2011

Samudera Shipping Line(India) Pvt Ltd 100%

Foremost Maritime Pte Ltd 100%

Samudera EmiratesShipping LLc1 33%

Galaxy Shipping ServicesSdn Bhd 60%

SILkargo Logistics(Singapore) Pte Ltd 100%

Samudera Traffic co., Ltd2 49%

Samudera Shipping Line(Vietnam) co., Ltd 51%

PT Samudera Shipping Services 95%



BOarD OF DirECtOrsMasli Mulia (Chairman)

ExecutiveDavid BatubaraAsmari Herry PrayitnoAnwarsyahHermawan F. HermanLim Kee Hee

non-Executive Chng Hee KokDavid Lim Teck Leong Lee Chee Yeng Nicholas Peter Ballas

auDit COMMittEEChng Hee Kok (Chairman)David Lim Teck LeongLee Chee YengNicholas Peter Ballas

nOMinatiOn COMMittEELee Chee Yeng (Chairman)Chng Hee KokDavid Lim Teck LeongDavid Batubara

rEMunEratiOn COMMittEEDavid Lim Teck Leong (Chairman) Chng Hee Kok Lee Chee YengNicholas Peter Ballas

sECrEtaryYeo Poh Noi Caroline

rEgistErED OFFiCE6 Raffles Quay #25-01Singapore 048580Tel: (65) 6403 1687Fax: (65) 6403 1889

sharE rEgistrarM&C Service Private Limited138 Robinson Road #17-00The Corporate OfficeSingapore 068906

auDitOrsDeloitte & Touche LLPCertified Public Accountants6 Shenton Way #32-00DBS Building Tower TwoSingapore 068809

Partner-in-chargeMichael Kee Cheng Kong(Appointed with effect fromFinancial Year 2010)

PrinCiPal BanKErsCitibank N.A. Singapore8 Marina View #21-01Asia Square Tower 1Singapore 018960

United Overseas Bank Limited1 Raffles Place #10-00OUB CentreSingapore 048616

Sumitomo Mitsui Banking Corporation3 Temasek Avenue #06-01Centennial TowerSingapore 039190

NATIXIS50 Raffles Place #41-01Singapore Land TowerSingapore 048623

BNP Paribas10 Collyer Quay #33-01Ocean Financial CentreSingapore 049315

OCBC Bank65 Chulia Street#09-00 OCBC CentreSingapore 049513

Maybank2 Battery RoadMaybank Tower 2Singapore 049907


COrpOraTE INFOrMaTION

CORPORATE GOVERNANCE


FINANCIALCONTENTS26 Corporate Governance34 Interested Person Transactions35 Risk Management Policies and Processes37 Key Executives38 Report of the Directors41 Statements of Directors42 Independent Auditors’ Report44 Balance Sheets46 Consolidated Profit and Loss Account47 Consolidated Statement of Comprehensive Income48 Statement of Changes in Equity50 Consolidated Statement of Cash Flows52 Notes to Financial Statements120 Statistics of Shareholdings122 Notice of Annual General Meeting Proxy Form



Samudera Shipping Line Ltd (the “Company”) is committed to raising the standard of corporate governance to protect the interest of its shareholders and to promote investors’ confidence. This report describes the Company’s corporate governance processes and activities with specific reference to the Code of Corporate Governance 2005 (the “Code 2005”).

Board of directors (PrinciPles 1, 2, 3 and 6)

The Company has an effective Board of Directors (the “Board”) to lead and control the operations and affairs of the Company and its subsidiaries (collectively the “Group”). The Board consists of ten Directors, four of whom are Independent and Non-Executive Directors, making up more than one-third of the Board:

Masli Mulia (Chairman)Torkis David Parlaungan Batubara (Executive Director and CEO)Asmari Herry Prayitno (Executive Director and COO)Anwarsyah (Executive Director and CFO)Hermawan Fridiana Herman (Executive Director)Lim Kee Hee (Executive Director)Chng Hee Kok (Independent and Non-Executive Director)David Lim Teck Leong (Independent and Non-Executive Director)Lee Chee Yeng (Independent and Non-Executive Director)Nicholas Peter Ballas (Independent and Non-Executive Director)

The Board, as a whole, combines people with industry knowledge, general commercial experience, accounting, financial, legal and capital market background, all of whom as a group, provides the Board with a good mix of the necessary experience and expertise to direct and lead the Group. The objective judgment of the Independent and Non-Executive Directors on corporate affairs and their collective experience and contributions are valued by the Company. The Board is of the view that the current board size is appropriate, taking into account the nature and scope of the Group’s operations.

During the financial year ended 31 December 2011 (“FY2011”), the Board met five times to review and approve the annual budget, and the Company’s quarterly and full-year results. Ad-hoc meetings are convened when circumstances require. The Company’s Articles of Association (the “Articles”) allow a board meeting to be conducted by way of a tele-conference. Frequency of Board meetings and Committee meetings held during FY2011 are set out in Table “A”.

The principal functions of the Board are:

• Tosetupandtoreviewthebroadpolicies,strategiesandfinancialobjectivesoftheGroup;• TosupervisethemanagementofthebusinessandaffairsoftheGroupandtheperformanceofManagement;• ToreviewthefinancialperformanceoftheGroup;• Tooverseetheprocessesforevaluatingtheadequacyofinternalcontrols,riskmanagement,financialreporting

andcompliance;• Toapprovethenominationofboarddirectorsandappointmentofkeyexecutives;• Toreviewandapproveannualbudgets,majorfundingproposals,potentialinvestmentanddivestmentproposals,

includingmaterialcapitalinvestment;and• Toassumeresponsibilityforcorporategovernance.



Board of directors (PrinciPles 1, 2, 3 and 6) (cont'd)

To enable the Board to fulfill its responsibilities, Management provides the Board with complete, adequate and timely information prior to Board meetings and on an on-going basis. In addition, all relevant information on the Group’s annual budgets, financial statements, material events and transactions complete with background and explanations are circulated to Directors as and when they arise.

As Chairman, Masli Mulia is responsible for:

(a) the workings of the Board, ensures that board meetings are held when necessary and sets the agenda of the BoardMeetingsinconsultationwiththeotherDirectorsandManagement;and

(b) reviewing the Board papers before they are presented to the Board and ensures that the Board members are provided with complete, adequate and timely information.

The CEO, David Batubara, is responsible for:

(a) the day-to-day operations of the Group’s business which are carried out with the assistance of the other ExecutiveDirectors;and

(b) steering the strategic direction and growth of the Group’s business. Strategic decisions are made in consultation with the Board.

Objectivity and independence of the Board decisions are maintained through the professionalism of each member of the Board, including the Independent and Non-Executive Directors, who have demonstrated a high level of commitment in their roles as Directors of the Company.

The Directors have separate and independent access to the Company’s senior management and the advice and services of the Company Secretary. The Directors may, in appropriate circumstances, seek independent professional advice concerning the Company’s affairs. Should the Directors, whether as a group or individually, need independent professional advice, the Company will, upon direction by the Board, appoint a professional advisor selected by the group or the individual to render the advice.

The Company encourages all Directors to attend seminars, conferences or any courses in connection to new laws, regulations and risk management (including management of commercial, financial, operational and compliance risks) conducted by professional bodies, including active participation in the Singapore Institute of Directors. Newly appointed Directors are given orientation briefings by Management on the business activities of the Group and its strategic directions, so as to familiarise them with the Group’s operations and encourage effective participation in Board discussions. All Directors are updated on major milestones of the Group.

The Company Secretary attends all meetings of the Board and Committees and ensures that Board procedures are followed. The Company Secretary also ensures that requirements of the Companies Act and all other rules and regulations of the Singapore Exchange Securities Trading Limited (“SGX-ST”) are complied with.



nominatinG committee (“nc”) (PrinciPles 4 and 5)

A majority of the members of the NC are independent and non-executive Directors. The NC is chaired by Lee Chee Yeng, an Independent and Non-Executive Director, whilst the other members of the NC are Chng Hee Kok, David Lim Teck Leong, who are also Independent and Non-Executive Directors, and David Batubara, the CEO.

The NC is regulated by a set of written Terms of Reference and is responsible for making recommendations to the Board on all Board appointments and re-appointments through a formal and transparent process, which includes internal guidelines to address the conflict of competing time commitments that are faced by Directors with multiple board representations. In respect of re-nominations, the NC will consider the individual Director’s contribution and performance and whether the Director has adequate time and attention to devote to the Company, in the case of Directors with multiple board representations.

The key functions of the NC include:

• ToconductaformalassessmentontheeffectivenessoftheBoardasawholeandtoassessthecontributionby each individual Director to the effectiveness of the Board, particularly when a Director serves on multiple Boards;

• ToestablishproceduresforandmakerecommendationstotheBoardontheappointmentsofnewDirectors,including making recommendations on the composition of the Board generally and the balance between executiveandnon-executiveDirectorsappointedtotheBoardandre-appointments;

• ToregularlyreviewtheBoardstructure,sizeandcompositionhavingregardtothescopeandnatureoftheoperationsandthecorecompetenciesoftheDirectorsasagroup;

• ToestablishproceduresforevaluationoftheBoard’sperformanceandproposeobjectiveperformancecriteriawhichshallbeapprovedbytheBoard;

• TodeterminetheindependenceofeachDirector,namelytheindependentDirectors;and

• ToensurethatallBoardappointeesundergoanappropriateinductionprogramme.

The NC recommends all appointments of Directors to the Board, after taking into account the following factors:

(a) theGroup’sstrategicandbusinessplansandoperationalrequirements;and(b) the suitability of candidates for Board appointment, based on their skills, expertise and experience.

Under the Company’s Articles of Association (the “Articles”), each Director is required to retire at least once in every three years by rotation and all newly appointed Directors will have to retire at the next Annual General Meeting (“AGM”) following their appointment. The retiring Directors are eligible to offer themselves for re-election.

During FY2011, the NC had met once to:-

(a) AssessandevaluateeffectivenessoftheBoardandtheBoard’sperformanceasawhole;(b) ReviewtheBoardcompositionandassesstheindependenceofeachIndependentDirector;and(c) Recommend the re-election of Directors retiring pursuant to the Articles.



nominatinG committee (“nc”) (PrinciPles 4 and 5) (cont'd)

The NC has recommended the re-election of four Directors, Anwarsyah, Asmari Herry Prayitno, David Lim Teck Leong and Lee Chee Yeng, who are retiring by rotation under Article 91 at the forthcoming AGM. The Board has accepted the NC’s recommendation of the four Directors retiring under the Articles and who will be offering themselves for re-election.

The NC has established evaluation procedures and performance criteria for the assessment of the Board’s performance as a whole. The evaluation of the Board’s performance is carried out on an annual basis. Each Director assesses the Board’s performance as a whole by providing feedback to the NC.

The Board is of the view that the financial indicators set out in the Code as guides for the evaluation of the Board are more a measure of the Management’s performance and are less applicable to the Independent and Non-Executive Directors.

remuneration committee (PrinciPle 7)

The Remuneration Committee (“RC”) comprises four members, all of whom are Independent and Non-Executive Directors. The RC is chaired by David Lim Teck Leong and the other members of the RC are Chng Hee Kok, Lee Chee Yeng and Nicholas Peter Ballas.

The RC is regulated by a set of written Terms of Reference. Its key functions include:

• ToreviewandrecommendtotheBoardaframeworkofremunerationforExecutiveDirectorsandkeyexecutivesthat are competitive and sufficient to attract, retain and motivate key executives of the required quality to run theCompanysuccessfully;and

• ToreviewanddeterminethespecificremunerationpackagesandtermsofemploymentforeachExecutiveDirector and senior executives.

During FY2011, the RC met once to review and determine the remuneration packages of the Executive Directors and key executives, to ensure that Directors are adequately but not excessively remunerated, and to review and recommend the Independent and Non-Executive Directors’ fees, which are subject to the shareholders’ approval at the AGM. The RC also considered, in consultation with the CEO, amongst other things, their responsibilities, skills, expertise and contributions to the Group’s performance and whether the remuneration packages are competitive and sufficient to ensure that the Group is able to attract and retain the best available executive talent.

No individual Director is involved in fixing his own remuneration. Independent and Non-Executive Directors are paid directors’ fees annually on a standard fee basis.



disclosure on remuneration (PrinciPles 8 and 9)

remuneration of directors and key executives who are not directors

The fees and remuneration paid to each of the Directors of the Company and top six key executives who are not directors (“key executives”) for FY2011 are set out below. A breakdown of the level and mix of the remuneration payable to each individual Director and top 6 key executives for FY2011 are as follows:

range of remuneration name of Personnel salary Bonus Benefits fees

Below US$250,000 Key ExecutivesChan Cheow Chan Chan Ngok Chuin Choo Eng Chye RoyceOh Kian BengOng Yaw TehTan Meng Toon

Independent Non-Executive DirectorsChng Hee KokDavid Lim Teck LeongLee Chee YengNicholas Peter Ballas

Executive DirectorsDhrubajyoti Das (resigned on 30 June 2011)Hermawan Fridiana HermanLim Kee Hee

76.5%75.6%71.7%70.3%48.2%74.2%

0%0%0%0%

75.6%

46.6%69.9%

12.3%12.4%11.9%11.5%4.2%13.0%

0%0%0%0%

0.0%

19.2%24.8%

11.2%12.0%16.4%18.2%47.6%12.8%

0%0%0%0%

24.4%

34.2%5.3%

0%0%0%0%0%0%

100%100%100%100%

0%

0%0%

US$250,001 to US$500,000

Executive DirectorsAnwarsyahAsmari Herry Prayitno

32.8%38.8%

62.4%61.2%

4.8%0.0%

0%0%

US$500,001 to US$750,000

ChairmanMasli Mulia

Executive DirectorDavid Batubara

38.4%

37.6%

61.2%

62.4%

0.4%

0.0%

0%

0%

There are no employees who are immediate family members of the Directors and the CEO who earn in excess of S$150,000 per year.



audit committee (PrinciPle 11)

The Audit Committee (“AC”) comprises four members, all of whom are Independent and Non-Executive Directors. The Chairman of the AC is Chng Hee Kok and the other members of the AC are David Lim Teck Leong, Lee Chee Yeng and Nicholas Peter Ballas.

The Board is of the opinion that the AC members are appropriately qualified to discharge their responsibilities. Two of the members, Chng Hee Kok and Nicholas Peter Ballas, have accounting or related financial management background, while David Lim has a legal background and Lee Chee Yeng’s expertise is in container terminals and cargo logistics. All members are familiar with financial statements.

The AC met seven times during FY2011 to review the budget for the year, the audit plan/report, the audit findings, the report on interested person transactions, the announcements of the quarterly and full-year results before being approved by the Board for release to the SGX-ST, and to appoint an independent audit firm as the Group’s internal auditor.

The AC is authorised by the Board to investigate any matters within its terms of reference. It has unrestricted access to information pertaining to the Group, to both internal and external auditors, and to all employees of the Group. Reasonable resources have been made available to the AC to enable it to discharge its duties properly.

The key responsibilities of the AC include the following:

• Toreview,theexternaland internalauditplans/auditreports, includingthenatureandscopeoftheauditbefore the audit commences, the management letter issued by the external auditors (if any) and Management’s responsetotheletterandtoensureManagement’scooperationwithauditors;

• Toreviewtheinternalauditors’evaluationoftheCompany’ssystemofinternalcontrols;

• ToreviewtheannouncementsofthequarterlyandannualresultspriortotheirsubmissiontotheBoardforapprovalforreleasetotheSGX-ST;

• ToreviewinterestedpersontransactionsinaccordancewiththerequirementsoftheListingRulesoftheSGX-ST;

• Toreviewallnon-auditservicesprovidedbytheexternalauditorstodetermineiftheprovisionofsuchserviceswouldaffecttheindependenceoftheexternalauditors;and

• Toreviewandrecommendthere-appointmentoftheexternalauditors.

The AC has examined any other aspects of the Company’s affairs, as it deems necessary where such matters relate to exposures or risks of regulatory or legal nature, and monitor the Company’s compliance with its legal, regulatory and contractual obligations.

The AC has met with the external auditors, without the presence of the Company’s Management. The AC has also reviewed the non-audit services provided by the external auditors and is of the opinion that the provision of such services does not affect their independence. The AC is satisfied that the appointment of external auditors is in compliance with the requirements of Rule 712 of the SGX-ST Listing Manual. Accordingly, the AC has recommended the re-appointment of Deloitte & Touche LLP as external auditors at the forthcoming Annual General Meeting.

In accordance with the requirements of Rule 716 of the SGX-ST Listing Manual, the AC and the Board, having reviewed the appointment of different auditors for the Company’s subsidiaries, are satisfied that these appointments would not compromise the standard and effectiveness of the audit of the Group.



internal controls and internal audit (PrinciPles 12 and 13)

The Board believes in the importance of maintaining a sound system of internal controls, including financial, operational and compliance controls, and risk management systems to safeguard the interests of the shareholders and the Group’s assets. To achieve this, internal reviews are constantly being undertaken to ensure that the system of internal controls maintained by the Group is sufficient to provide reasonable assurance that the Group’s assets are safeguarded against loss from unauthorised use or disposition, transactions are properly authorised and proper financial records are being maintained.

During FY2011, the Group’s internal audit function was outsourced to an independent audit firm. The internal auditor reports to the AC on audit matters. The internal auditor has adopted the Standards for Professional Practice of Internal Auditing set by The Institute of Internal Auditors.

To ensure the adequacy of the internal audit function and that it is adequately resourced, the AC will review the internal audit activities on a regular basis.

The AC has reviewed the Group’s financial controls and risk management policies and processes, based on the AC’s own assessment and the reports of the external auditors and internal auditors, the AC is assured that adequate internal controls are in place.

As for the operational and compliance controls, the Group has periodically reviewed these control areas through the various heads of department, and has continuously made improvements with the assistance of the internal auditor. The Board and the AC are satisfied that the current internal controls in place are adequate in addressing financial, operational and compliance risks.

communication with shareholders (PrinciPles 10, 14 and 15)

The Board is mindful of the obligation to provide timely and fair disclosure of material information. The Board is accountable to the shareholders while the Management is accountable to the Board.

Results and other material information are released through the SGXNet system on a timely basis for the dissemination to shareholders and the public in accordance with the requirements of the SGX-ST. A copy of the Annual Report and Notice of the Annual General Meeting (“AGM”) are sent to every shareholder of the Company. The Notice is also advertised in the newspapers, released via SGXNet and made available on the Company’s website. During AGMs, shareholders are given opportunities to speak and seek clarifications concerning the Company.

The Chairmen of the various sub-committees and the external auditors are or would be present at every AGM to address any relevant questions that may be raised by the shareholders.



dealinGs in the comPany’s securities

The Company has adopted an internal Code of Conduct (the “Code”) to provide guidance to the officers, including Directors, of both the Company and its subsidiaries with regard to dealings in the Company’s securities.

The Code prohibits the officers of the Group from dealing in the Company’s securities during the period commencing one month before the announcement of the Company’s full year financial results and two weeks before the announcements of each of the Company’s quarterly financial results, and ending on one day after the announcement. In addition, the Directors and key officers of the Group are discouraged from dealing in the Company’s securities on short-term considerations.

taBle “a”

directors’ attendance at Board and committee meetinGs

meetings of Boardaudit

committeenominating committee

remuneration committee

total held in fy2011 5 7 1 1

Masli Mulia 5

David Batubara 5 1

Anwarsyah 5

Asmari Herry Prayitno 5

Hermawan Fridiana Herman 5

Lim Kee Hee 5

Chng Hee Kok 5 7 1 1

David Lim Teck Leong 5 7 1 1

Lee Chee Yeng 5 7 1 1

Nicholas Peter Ballas 5 7 1

Dhrubajyoti Das(resigned on 30 June 2011) 2


Interested person transactions conducted during the financial year pursuant to the Shareholders’ mandate obtained under Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”) by the Group are as follows:

interested person

aggregate value of all transactions excluding transactions conducted

under shareholders’ mandate pursuant to rule 920 of the

sGX-st listing manual

aggregate value of all transactions conducted under a shareholders’

mandate pursuant to rule 920 of the sGX-st listing

manual2011 2010 2011 2010

u$’000 u$’000 us$’000 us$’000expensesimmediate holding companyPT Samudera Indonesia TbkAgency Commissions – – 3,162 2,896Office rental – – 108 104

related companyPT Samudera Indonesia Ship ManagementShip management fees – – 1,113 877

PT PanurjwanBuilding rental – – 28 27Vessel charter hire – – 1,600 1,344

PT Masaji Tatanan ContainerContainer depot storage / repair – – 340 286Land lease 289 – – –

PT Prima Nur PanurjwanStevedorage – – 5,386 3,712

PT Tankindo PerdanaVessel charter hire – – 305 160

salesrelated companyPT Samudera Mbiantu SesamiVessel charter hire 4,870 – – –

PT Silkargo IndonesiaSale of subsidiary – Silkargo LLC – 380 – –

PT Tankindo PerdanaSale of vessel - Nurhidayah – 350 – –

5,159 730 12,042 9,406

There were no other interested person transactions during the financial year under review in relation to Rule 920 of the SGX-ST Listing Manual except those stated above.

The Group had subsisting service agreements with the holding company and related companies relating to shipping agency services, ship management services, vessel charter hire, stevedorage and container depot storage and repair at the end of the financial year.

No other material contracts to which the Company or any subsidiary is a party and which involve directors’ interests subsisted at the end of the financial year, or have been entered into since the end of the previous financial year.

interested person transactions


risK ManaGeMent poLicies and processes

The risk management policies and processes are set by the Board. These are regularly reviewed and updated as necessary.

In 2011, the Group identifies, analyses and evaluates risks that affect the operations of Samudera’s business and realisation of projects. This includes considering factors that trigger and give rise to such risks as well as its potential impact to the organisation. Achieving these objectives will allow the Group to increase shareholder value by focusing on the key risks, finding an appropriate balance between cost and risk control as well as a more effective capital allocation.

The risks are identified in the following areas:

• Strategic• Investment• Operation• Financial

strategic

1. A periodic strategy evaluation exercise is conducted with the view to build and enhance its long-term strategic direction and plans. The plan will be aligned with the broader Vision, Mission and Values of the Samudera Indonesia Group, the major shareholder of the Group. The main elements of the strategy will be to expand and enhance our network and connectivity, and to provide high quality transportation services and logistics to our valued customers.

2. The Group is committed on providing the best quality service for its customers. Therefore, strong emphasis in organisational structure is geared toward continuous improvement in customer satisfaction as well as customer retention.

3. The Group adopts a portfolio approach in terms of its business lines. Within the shipping industry, it participates in three different business segments: regional container shipping, Indonesia domestic container shipping as well as bulk carrier & tanker, each having its own unique business cycles, characteristics, risk profiles and profitability patterns.

investment

1. Written approval from Board is necessary prior to implementation of any new investment. The approval process involves a rigorous review of various aspects, including but not limited to:a) competition and marketb) demand – supplyc) pre-operating project management risks, including risks of delay and cost overrun d) operational risks and expertise necessary e) valuation risksf) currency risksg) level of borrowing h) interest rate riski) cash flow and returnsj) country riskk) legal issues

2. As good corporate governance practices, the Group adopts a prudent approach in managing the investments and, at the same time, maximizing available resources. In particular, special attention is paid in managing the level of gearing on a consolidated basis. Although it covenants a gearing ratio of not higher than 2:1 (being the ratio of interest bearing debt over net worth) to its lenders, it consistently maintains a gearing level, which is lower than its covenants.


risK ManaGeMent poLicies and processes

3. For external borrowings, it ensures that it works with a bank or a financial institution that is financially sound and understands the Group’s business and its risk characteristics. The Group believes that by choosing its lenders properly, it can expect a continuing support from the financing community at attractive terms to support the Group’s strategic plan.

operation

1. The Group relies on proper organisational structures and internal controls to ensure a smooth running of operations in relation to Group’s goals and the industry environments and various geographical areas that it operates in. Periodical review is conducted by the Board to review and evaluate the effectiveness of the controls and appropriateness of the structure.

2. Being in the service industry, it places high emphasis on its quality of human resources through placement of the right people at the right place and appropriate management control tools.

3. The Group opines that information technology is one of the crucial factors in achieving business growth. Investment within this area mainly focuses on technology that will improve quality of services and productivity.

financial

Please refer to Notes to financial statements of the Annual Report.


Key executives

caPtain tan menG toon is the Deputy Director of the Company and is in charge of the trade function in controlling and managing the service routes within the Company’s network. Captain Tan had served onboard the vessel as a deck officer in various ranking in several local and foreign-owned shipping companies. He also served as a technical superintendent and operations manager of a foreign-owned ship management company. Captain Tan holds a Foreign Ocean Going Master (Class I) Certificate.

caPtain choo enG chye, royce held various senior positions in the shipping industry for the past 12 years prior to joining the Company in 1999. At present, he holds the position as an Operations General Manager and is responsible for the fleet management of the Company. Captain Royce obtained a Certificate of Competency in Master of Foreign-Going Ship from Auckland Nautical Institute, New Zealand in 1986.

mr chan nGok chuin joined the Company in 2002 as MIS General Manager to oversee the management information systems of the Group. He holds a Bachelor of Science major in Computer Science and Mathematics from Brandon University, Canada and a Master of Business Administration major in Strategic Management from the Nanyang Technological University, Singapore. Mr Chan has more than 20 years of experience in the IT field such as system implementation, Portnet interfaces, designing and developing real time applications system, providing management and leadership in all computerization projects in the South East Asia region, Hong Kong, Taiwan, China, Europe and America.

caPtain chan cheow chan joined the Company in 1996. He holds a position of General Manager who is responsible for the Liner Business. Prior to his current appointment, he was a Deputy General Manager responsible for the Business Development of the Company. Before joining Samudera, Captain Chan had many years of experience in various aspects of shipping business. He obtained a Certificate of Competency in Master of Foreign-Going Ship from the Singapore Marine Department in 1988.

mr oh kian BenG joined the Company in 1992. He holds the position of General Manager who is responsible for the Sales & Marketing as well as Customer Service functions. Prior to joining the Company, Mr Oh had many years of marketing experience in the shipping industry.

mr Patrick onG yaw teh is our Country Representative in China. He joined the Company in March 2000 and is responsible for promoting Samudera’s brand name in the region as well as managing the day-to-day operational matter. Besides, he is also involved in marketing, exploring business opportunity and customers’ networking in China. He holds a Bachelor of Arts & Social Sciences from the National University of Singapore in 1991.

mr amursjah aGustiar is our Country Representative for Thailand since April 2008. He is responsible for the day-to-day operational matters as well as to promote trade and marketing activities. Prior to the existing assignment, Mr Amursjah Agustiar was the Country Representative in Malaysia for 6 years, to promote SSL’s presence and gain local support for the Group. Mr Amursjah Agustiar is experienced on the operations of shipping agency as he had been with PT Samudera Indonesia Tbk since 1982, as General Manager of the General Agency Division and acting as shipping agent for various main line operators of container and tramper business. He studied at Universitas Indonesia in Jakarta, majoring in economics and he is also graduated from the Indonesia Merchant Marine Academy in Jakarta and PPM Institute of Management, Jakarta.

mr muhammad willy is our Country Representative in Malaysia who is responsible for day-to-day marketing, operation and finance matters as well as exploring business opportunity and customers’ networking in Malaysia. Prior to his current position, he was a General Manager in Samudera Indonesia, SSL Division, Jakarta office. He holds a Bachelor of Science from Gunadarma University in 1997 and a Master in Management from PPM Graduate School of Management, Jakarta, Indonesia in 2000.

mr teGuh Basuseto is our Country Representative in Vietnam. He oversees and manages the business in the country in all aspects of marketing, trade, operations, and finance. Mr Teguh has been with Samudera Indonesia Group since 1998 and has held various senior executive positions within the Group in shipping, stevedoring, logistics, and agency. He holds a Master of Business Administration degree from the City University, Washington, USA, in 1997.

mr rakesh Vijay is our Country Representative for Indian Sub-Continent and is stationed in Mumbai. He joined the Company in 2001 as a Finance Manager. Mr Rakesh has more than fifteen years of experience in various aspects of shipping business. He holds a Bachelor of Commerce degree from the University of Mumbai and is also a Certified Chartered Accountant as well as Cost and Works Accountant.


report oF tHe directors

The directors present their report together with the audited consolidated financial statements of the Group and balance sheet and statement of changes in equity of the Company for the financial year ended December 31, 2011.

1 directors

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

Masli Mulia Torkis David Parlaungan Batubara Anwarsyah Asmari Herry Prayitno Hermawan Fridiana Herman Lim Kee Hee Chng Hee Kok David Lim Teck Leong Lee Chee Yeng Nicholas Peter Ballas

2 arranGements to enaBle directors to acQuire Benefits By means of the acQuisition of shares and deBentures

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate.

3 directors’ interests in shares and deBentures

The directors of the Company holding office at the end of the financial year had no interests in the share capital and debentures of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act, except as follows:

shareholdings registered in name of directors or their

nomineesshareholdings in which directors are deemed to have an interest

name of directors and companies in which interests are held

at beginningof year

at endof year

at beginningof year

at endof year

immediate holding companyPT Samudera Indonesia TbkOrdinary shares of IDR 500 each

Masli Mulia 658,500 658,500 – –Asmari Herry Prayitno 500 500 – –

the companySamudera Shipping Line LtdOrdinary shares

Anwarsyah 12,000 12,000 – –Asmari Herry Prayitno 60,000 60,000 – –David Lim Teck Leong – – 60,000 60,000

The directors’ interest in the shares of the Company and related corporations at January 21, 2012 were the same at December 31, 2011.



4 directors’ receiPt and entitlement to contractual Benefits

Since the beginning of the financial year, no director of the Company has received or become entitled to receive a benefit which is required to be disclosed under Section 201(8) of the Singapore Companies Act, by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which he has a substantial financial interest except for salaries, bonuses and other benefits as disclosed in the financial statements. Certain directors have employment relationships with related corporations of the immediate holding company and received remuneration in those capacities.

5 audit committee

The Audit Committee (“AC”) comprises four members, all of whom are independent and non-executive. The Chairman of the AC is Chng Hee Kok and the other members of the AC are David Lim Teck Leong, Lee Chee Yeng and Nicholas Peter Ballas.

The AC is authorised by the Board of Directors to investigate any matters within its terms of reference. It has unrestricted access to information pertaining to the Group, to both internal and external auditors, and to all employees of the Group. Reasonable resources have been made available to the AC to enable it to discharge its duties properly.

The key responsibilities of the AC include the following:

• Toreviewtheexternalandinternalauditplans/auditreports, includingthenatureandscopeoftheaudit before the audit commences, the management letter issued by the external auditors (if any) and management’sresponsetotheletterandtoensuremanagement’scooperationwithauditors;

• Toreviewtheinternalauditors’evaluationoftheCompany’ssystemofinternalcontrols;

• ToreviewtheannouncementsofthequarterlyandannualresultspriortotheirsubmissiontotheBoardforapprovalforreleasetotheSingaporeExchangeSecuritiesTradingLimited(“SGX-ST”);

• ToreviewinterestedpersontransactionsinaccordancewiththerequirementsoftheListingRulesoftheSGX-ST;

• Toreviewallnon-auditservicesprovidedbytheexternalauditorstodetermineiftheprovisionofsuchserviceswouldaffecttheindependenceoftheexternalauditors;and

• Toreviewandrecommendthere-appointmentoftheexternalauditors.

The AC has examined any other aspects of the Company’s affairs, as it deems necessary where such matters relate to exposures or risks of regulatory or legal nature, and monitor the Company’s compliance with its legal, regulatory and contractual obligations.

The AC has met with the external auditors, without the presence of the Company’s management. The AC has also reviewed the non-audit services provided by the external auditors and is of the opinion that the provision of such services does not affect their independence.


6 share oPtions

(a) options to take up unissued shares

During the financial year, no options to take up unissued shares of the Company or any corporation in the Group were granted.

(b) options exercised

During the financial year, there were no shares of the Company or any corporation in the Group issued by virtue of the exercise of an option to take up unissued shares.

(c) unissued shares under options

At the end of the financial year, there were no unissued shares of the Company or any corporation in the Group under options.

7 auditors

The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.

ON BEHALF OF THE DIRECTORS

Anwarsyah

Hermawan Fridiana Herman

March 26, 2012



stateMent oF directors

In the opinion of the directors, the consolidated financial statements of the Group and balance sheet and statement of changes in equity of the Company as set out on pages 44 to 119 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 December 31, 2011 and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts when they fall due.

ON BEHALF OF THE DIRECTORS

Anwarsyah

Hermawan Fridiana Herman

March 26, 2012


independent auditors’ reportTO THE MEMBERS OF SAMUDERA SHIPPING LINE LTD

rePort on the financial statements

We have audited the accompanying financial statements of Samudera Shipping Line Ltd (the “Company”) and its subsidiaries (collectively, “the Group”), which comprise the balance sheets of the Group and the Company as at December 31, 2011, the profit and loss account, statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group and the statement of changes in equity of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 44 to 119.

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 assetsaresafeguardedagainstlossfromunauthoriseduseordisposition;andtransactionsareproperlyauthorisedand 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 judgement, 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.


independent auditors’ reportTO THE MEMBERS OF SAMUDERA SHIPPING LINE LTD

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 December 31, 2011 and of the results, changes in equity and cash flows of the Group and 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 provision of the Act.

Deloitte & Touche LLPPublic Accountants andCertified Public Accountants

SingaporeMarch 26, 2012


BaLance sHeetsDecember 31, 2011

Group companynote 2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

assets

current assetsCash and bank balances 5 30,646 47,002 15,949 35,942Trade receivables 6 60,955 46,297 43,024 33,149Prepaid operating expenses 14,632 13,229 6,982 4,786Other receivables and deposits 7 4,724 4,437 695 589Due from immediate holding company

(non-trade) 8 2,091 2,054 – – Due from immediate holding company (trade) 8 459 – 459 – Due from subsidiaries (trade) 9 – – 5,361 4,723Due from subsidiaries (non-trade) 10 – – 9,298 24,738Due from related companies (trade) 11 687 369 411 109Due from non-controlling

shareholder of a subsidiary (non-trade) 12 48 48 48 48Investment securities 13 2,052 – – – Inventories 4,718 2,894 1,506 411Total current assets 121,012 116,330 83,733 104,495

non-current assetsCash and bank balances 5 245 696 – – Property, plant and equipment 14 374,694 315,204 155,961 122,917Subsidiaries 15 – – 72,354 54,496Associates 16 3,097 6,909 12,117 12,117Deferred tax assets 23 36 15 – – Total non-current assets 378,072 322,824 240,432 189,530

total assets 499,084 439,154 324,165 294,025

See accompanying notes to financial statements.


BaLance sHeetsDecember 31, 2011

Group companynote 2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

liaBilities and eQuity

current liabilitiesBank term loans (secured) 17 28,959 13,779 20,377 8,089Trade payables 18 27,876 20,782 19,126 14,383Other payables and liabilities 19 21,312 18,883 7,144 5,917Due to subsidiary (trade) 20 – – – 25Due to subsidiary (non-trade) 20 – – – 1,081Due to immediate holding company (trade) 21 115 722 – 470Due to related companies (trade) 11 215 1,324 157 –Finance leases 22 319 324 49 78Income tax payable 2,004 2,212 437 392Total current liabilities 80,800 58,026 47,290 30,435

non-current liabilitiesBank term loans (secured) 17 180,425 149,619 87,004 73,573Finance leases 22 709 1,070 186 277Deferred tax liabilities 23 2 – – –Total non-current liabilities 181,136 150,689 87,190 73,850

capital, reserves and non-controlling interestsShare capital 24 68,761 68,761 68,761 68,761Treasury shares 25 (174) (174) (174) (174)Retained earnings 184,266 174,482 121,098 121,153Other reserves 26 (8,369) (5,086) – –Foreign currency translation reserve 27 (11,837) (11,379) – –Equity attributable to owners of the Company 232,647 226,604 189,685 189,740Non-controlling interests 4,501 3,835 – –Total equity 237,148 230,439 189,685 189,740

total liabilities and equity 499,084 439,154 324,165 294,025



consoLidated proFit and Loss accountYear ended December 31, 2011

Groupnote 2011 2010

us$’000 us$’000

revenue 28 454,213 369,141Cost of sales (426,436) (340,792)Gross profit 27,777 28,349Other operating income 29 6,055 1,076Marketing expenses (8,453) (6,785)Administrative expenses (8,469) (9,230)Other operating expenses 30 (252) (1,206)Profit from operations 16,658 12,204Finance income 31 412 194Finance costs 32 (3,247) (2,531)operating profit 13,823 9,867Share of results of associates 547 1,174Profit before tax 14,370 11,041Income tax expense 33 (1,798) (1,648)Profit for the year 34 12,572 9,393

attributable to:Owners of the Company 11,989 9,263Non-controlling interests 583 130

12,572 9,393

earnings per share (us cents)Basic and diluted 35 2.23 1.72



consoLidated stateMent oF coMpreHensive incoMeYear ended December 31, 2011

Group2011 2010

us$’000 us$’000

Profit for the year 12,572 9,393

other comprehensive income (loss):Net unrealised gain on revaluation of cash flow hedge – 59Share of other comprehensive loss of associates (3,284) (1,413)Foreign currency translation (loss) gain (165) 203other comprehensive loss for the year (3,449) (1,151)

total comprehensive income for the year 9,123 8,242

total comprehensive income attributable to:Owners of the Company 8,248 7,947Non-controlling interests 875 295

9,123 8,242



stateMents oF cHanGes in eQuityYear ended December 31, 2011

foreign attributablecurrency to owners non-

share treasury retained other translation of the controllingGroup capital shares earnings reserves reserve company interests total

us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000

Balance at January 1, 2010 68,761 (174) 165,226 (3,700) (11,488) 218,625 2,834 221,459

Total comprehensive income (loss) for the year – – 9,263 (1,372) 56 7,947 295 8,242

Disposal of subsidiary – – – (21) 53 32 (193) (161)Additional investment

in subsidiary by non-controlling shareholder – – – – – – 1,412 1,412

Dividends paid to non-controlling shareholders – – – – – – (513) (513)

Transfer to other reserves – – (7) 7 – – – –

Balance at December 31, 2010 68,761 (174) 174,482 (5,086) (11,379) 226,604 3,835 230,439

Total comprehensive income (loss) for the year – – 11,989 (3,283) (458) 8,248 875 9,123

Dividends (Note 36) – – (2,205) – – (2,205) (209) (2,414)Balance at

December 31, 2011 68,761 (174) 184,266 (8,369) (11,837) 232,647 4,501 237,148



share treasury retainedcompany capital shares earnings total

us$’000 us$’000 us$’000 us$’000

Balance at January 1, 2010 68,761 (174) 114,469 183,056

Total comprehensive income for the year – – 6,684 6,684

Balance at December 31, 2010 68,761 (174) 121,153 189,740

Total comprehensive income for the year – – 2,150 2,150

Dividends (Note 36) – – (2,205) (2,205)

Balance at December 31, 2011 68,761 (174) 121,098 189,685

stateMents oF cHanGes in eQuityYear ended December 31, 2011



Group2011 2010

us$’000 us$’000

operating activitiesProfit before tax 14,370 11,041Adjustments for:

Depreciation of property, plant and equipment 21,850 17,991Gain on disposal of property, plant and equipment (4,688) (219)Loss on disposal of investment securities – 17Gain on disposal of subsidiary (Note 42) – (161)Loss on disposal of associate (Note 16) 241 –Finance cost 3,247 2,531Finance income (412) (194)Allowance for doubtful trade debts 354 313Write-back of doubtful trade debts (22) (142)Share of results of associates (547) (1,174)Property, plant and equipment written off 6 12Net foreign exchange (gain) loss (384) 1,284

Operating cash flows before movements in working capital 34,015 31,299

Trade receivables (14,990) (9,094)Other receivables and deposits (287) 1,644Prepaid operating expenses (1,809) 50Due from immediate holding company (496) (1,384)Due from related companies (318) (369)Due from an associate – 1,714Inventories (1,824) (558)Trade payables 7,094 (3,572)Other payables and liabilities 2,429 5,124Due to related companies (1,109) (580)Due to immediate holding company (607) 140

Cash generated from operations 22,098 24,414Interest paid (3,247) (2,531)Income tax paid (1,518) (1,413)

net cash from operating activities 17,333 20,470

consoLidated stateMent oF casH FLoWsYear ended December 31, 2011



Group2011 2010

us$’000 us$’000

investing activitiesInterest income received 412 194Proceeds from disposal of property, plant and equipment 5,213 421Proceeds from disposal of investment securities – 478Proceeds from disposal of subsidiary (Note 42) – 155Proceeds from disposal of associate (Note 16) 132 –Purchase of property, plant and equipment (Note 14(d)) (82,029) (4,635)Purchase of investment securities (2,052) –Dividends received from an associate 875 174

net cash used in investing activities (77,449) (3,213)

financing activitiesRepayment of finance leases (365) (262)Proceeds from bank term loans 81,218 – Repayment of bank term loans (34,998) (16,898)Dividends paid (2,205) – Increase in pledged deposits (709) (611)Dividends paid to non-controlling shareholder (209) (513)Additional investment in subsidiary by a non-controlling shareholder – 1,412

net cash from (used in) financing activities 42,732 (16,872)

Net (decrease) increase in cash and cash equivalents (17,384) 385Cash and cash equivalents at beginning of the year 40,126 39,610Effects of exchange rate changes on the balance of cash held in foreign currencies (132) 131

cash and cash equivalents at end of the year (note 5) 22,610 40,126

consoLidated stateMent oF casH FLoWsYear ended December 31, 2011



NOTES TO FINANCIAL STATEMENTSDecember 31, 2011

1 corPorate information

The Company (Registration Number:199308462C) is incorporated in Singapore with its principal place of business and registered office at 6 Raffles Quay, #25-01, Singapore 048580. The Company is listed on the Singapore Exchange Securities Trading Limited. The financial statements are expressed in United States dollars.

The principal activities of the Company are the owning and operating of ocean-going ships and the provision of containerised feeder shipping services. The principal activities of its subsidiaries are disclosed in Note 15.

The Group operates in South East Asia, Far East, Indian Sub-continent and the Middle East.

The consolidated financial statements of the Group and balance sheet and statement of changes in equity of the Company for the year ended December 31, 2011 were authorised for issue by the Board of Directors on March 26, 2012.

2 summary of siGnificant accountinG Policies

2.1 Basis of accounting

The financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”).

2.2 adoption of new and revised standards

In the current financial year, the Company has adopted all the new and revised FRSs and Interpretations of FRS (“INT FRS”) that are relevant to its operations and effective for annual periods beginning on or after January 1, 2011. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Group’s and Company’s accounting policies and has no material effect on the amounts reported for the current or prior years except as disclosed below.

FRS 24 (Revised) Related Party Disclosures

FRS 24 (Revised) Related Party Disclosures has been adopted beginning January 1, 2011 and has been applied retrospectively. The revised Standard clarifies the definition of a related party.

At the date of authorisation of these financial statements, the following FRSs, INT FRSs and amendments to FRS that are relevant to the Group and the Company were issued but not effective:

• AmendmentstoFRS1Presentation of Financial Statements - Amendments relating to Presentation of

Items of Other Comprehensive Income • FRS27(Revised)Separate Financial Statements • FRS28(Revised)Investments in Associates and Joint Ventures • FRS110Consolidated Financial Statements • FRS111Joint Arrangements • FRS112Disclosure of Interests in Other Entities • FRS113Fair Value Measurement

notes to FinanciaL stateMentsDecember 31, 2011



2 summary of siGnificant accountinG Policies (cont'd)

2.2 adoption of new and revised standards (cont'd)

Consequential amendments were also made to various standards as a result of these new/revised standards.

The adoption of the above FRSs, INT FRSs and amendments to FRS in future periods will not have a material impact on the financial statements of the Group and of the Company in the period of their initial adoption except for the following:

Amendments to FRS 1 Presentation of Financial Statements - Amendments relating to Presentation of Items of Other Comprehensive Income (“OCI”)

The amendment on Other Comprehensive Income (“OCI”) presentation will require the Group to present in separate groupings, OCI items that might be recycled i.e., reclassified to profit or loss and those items that would not be recycled. The tax effects recognised for the OCI items would also be captured in the respective grouping, although there is a choice to present OCI items before tax or net of tax.

Changes arising from these amendments to FRS 1 will take effect from financial years beginning on or after July 1, 2012, with full retrospective application.

FRS 110 Consolidated Financial Statements and FRS 27 Consolidated and Separate Financial Statements

FRS 110 replaces the control assessment criteria and consolidation requirements currently in FRS 27 and INT FRS 12 Consolidation - Special Purpose Entities.

FRS 110 defines the principle of control and establishes control as the basis for determining which entities are consolidated in the consolidated financial statements. It also provides more extensive application guidance on assessing control based on voting rights or other contractual rights. Under FRS 110, control assessment will bebasedonwhetheraninvestorhas(i)powerovertheinvestee;(ii)exposure,orrights,tovariablereturnsfromitsinvolvementwiththeinvestee;and(iii)theabilitytouseitspowerovertheinvesteetoaffecttheamountofthe returns. FRS 27 remains as a Standard applicable only to separate financial statements.

FRS 110 will take effect from financial years beginning on or after January 1, 2013, with full retrospective application. When the Group adopts FRS 110, entities it currently consolidates may not qualify for consolidation, and entities it currently does not consolidate may qualify for consolidation. The Group is currently assessing the effects of FRS 110 on its investments in the period of initial adoption.




2.2 adoption of new and revised standards (cont'd)

FRS 111 Joint Arrangements and FRS 28 Investments in Associates and Joint Ventures

FRS 111 supersedes FRS 31 Interests in Joint Ventures and INT FRS 13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers.

FRS 111 classifies a joint arrangement as either a joint operation or a joint venture based on the parties’ rights and obligations under the arrangement. The existence of a separate legal vehicle is no longer the key factor. A joint operation is a joint arrangement whereby the parties that have joint control have rights to the assets and obligations for the liabilities. A joint venture is a joint arrangement whereby the parties that have joint control have rights to the net assets. The joint venturer should use the equity method under the revised FRS 28 to account for a joint venture. The option to use proportionate consolidation method has been removed.

FRS 111 will take effect from financial years beginning on or after January 1, 2013, with full retrospective application. The Group has assessed and determined that its current investments in associates have already been appropriately accounted for in the consolidated financial statements using the equity method of accounting.

FRS 112 Disclosure of Interests in Other Entities

FRS 112 requires an entity to provide more extensive disclosures regarding the nature of and risks associated with its interest in subsidiaries, associates, joint arrangements and unconsolidated structured entities.

FRS 112 will take effect from financial years beginning on or after January 1, 2013. The Group is currently assessing the extent of additional disclosures needed.

FRS 113 Fair Value Measurement

FRS 113 is a single new Standard that applies to both financial and non-financial items. It replaces the guidance on fair value measurement and related disclosures in other Standards, with the exception of measurement dealt with under FRS 102 Share-based Payment, FRS 17 Leases, net realisable value in FRS 2 Inventories and value-in-use in FRS 36 Impairment of Assets.

FRS 113 provides a common fair value definition and hierarchy applicable to the fair value measurement of assets, liabilities, and an entity’s own equity instruments within its scope, but does not change the requirements in other Standards regarding which items should be measured or disclosed at fair value.

FRS 113 will be effective prospectively from annual periods beginning on or after January 1, 2013. Comparative information is not required for periods before initial application. The Group is currently assessing the effects of FRS 113 in the period of initial adoption.




2.3 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the financial year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-Group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interest of non-controlling shareholders that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured (at date of original business combination) either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Other types of non-contolling interests are measured at fair value or, when applicable, on the basis specified in another FRS. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group’s interests and the 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 interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

In the Company’s financial statements, investments in subsidiaries are carried at cost less any impairment in net recoverable value that has been recognised in profit or loss.




2.4 Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the acquisition date fair values of assets given, liabilities incurred by the Group to the former owners of the acquiree, and equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with FRS 39 Financial Instruments: Recognition and Measurement, or FRS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.

Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under the FRS are recognised at their fair value at the acquisition date, except that:

• deferredtaxassetsorliabilitiesandliabilitiesorassetsrelatedtoemployeebenefitarrangementsarerecognised and measured in accordance with FRS 12 Income Taxes and FRS 19 Employee Benefits respectively;

• liabilitiesorequity instrumentsrelatedtoshare-basedpaymenttransactionsoftheacquireeorthereplacement of an acquiree's shared-based payment awards transactions with share-based payment awards transactions of the acquirer in accordance with the method in FRS 102 Share-based Payment attheacquisitiondate;and

• assets(ordisposalgroups)thatareclassifiedasheldforsaleinaccordancewithFRS105Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.

The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date and is subject to a maximum of one year from acquisition date.

The accounting policy for initial measurement of non-controlling interests is described in Note 2.3 - Basis of Consolidation.




2.5 financial instruments

Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest basis for debt instruments other than those financial instruments “at fair value through profit or loss”.

financial assets

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.

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.

Financial assets are classified into the following specified categories: financial assets “at fair value through profit or loss” and “loans and receivables”. The classification depends on the nature and purpose of financial assets and is determined at the time of initial recognition.

Financial assets at fair value through profit or loss

Financial assets held for trading are classified as financial assets at fair value through profit or loss. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets 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 assets are recognized in the 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.

Loans and receivables

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




2.5 financial instruments (cont'd)

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

Derecognition of financial assets

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. 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 in other comprehensive income is recognised in the profit or loss.

financial liabilities and equity instruments

Classification as debt or equity

Equity instruments and financial liabilities issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

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




2.5 financial instruments (cont'd)

Financial liabilities

Financial liabilities include trade and other payables, and interest-bearing bank borrowings. Financial liabilities are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the financial instrument.

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method.

Interest-bearing bank loans are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs.

Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risk, including interest rate swaps and forward currency contracts.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless it is designated and effective as a hedging instrument.

A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or liabilities.

Derecognition of financial liabilities

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

2.6 financial Guarantee

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantees are recognised initially at fair value. Subsequent to initial recognition, financial guarantees are recognised as income in the profit or loss over the period of the guarantee. If it is probable that the liability will be higher than the amount initially recognised less amortisation, the liability is recorded at the higher amount with the difference charged to profit or loss.




2.7 leases

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

The Group as lessor

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which the used benefit derived from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income.

The Group as lessee

Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Sale and leaseback transactions

For sale and leaseback transactions which result in a finance lease, the excess of sales proceeds over the carrying amount of property, plant and equipment is deferred and amortised over the lease term to profit or loss. If the fair value at the time of a sale and leaseback transaction is less than the carrying amount of the asset, a loss equal to the amount of the difference between the carrying amount and fair value shall be recognised immediately.

For sale and leaseback transactions which result in an operating lease, the excess of sales proceeds above fair value of the plant and equipment is deferred and amortised over the period for which the asset is expected to be used.

Gains and losses on sale and leaseback transactions established at fair value which resulted in operating leases are recognised immediately in the profit or loss.




2.8 inventories

Inventories, comprising oil and spare parts on board of vessels for consumption purposes are stated at lower of cost and net realizable value (determined on a first-in, first out basis). Allowance is made of deteriorated, damaged, obsolete and slow-moving inventories.

2.9 Prepaid operating expenses

Prepaid operating expenses, comprising of prepaid charter-hire and other expenses, are initially recognised as prepayments when payments are made. Prepaid charter hire expenses are subsequently charged to profit or loss on a straight-line basis over the charter-hire period.

2.10 Property, Plant and equipment

All items of property, plant and equipment are initially recorded at cost. 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. Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

The initial cost of the property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use, any trade discounts and rebates are deducted in arriving at the purchase price. Expenditure incurred after the property, plant and equipment has been put into operation, such as repairs and maintenance and overhaul costs, is normally charged to the profit or loss in the period in which the costs are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an item of property, plant and equipment beyond its originally assessed standard of performance, the expenditure is capitalised as an additional cost of property, plant and equipment.

Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Vessels – 15 to 25 years Vessel improvements – 4 to 10 years Deferred charges – 20 to 30 months Motor vehicles – 5 years Equipment – 3 to 7 years Furniture and fittings – 5 years Renovation – 3 years Freehold properties – 15 to 50 years

Upon acquisition of a vessel, the components of the vessel which are required to be replaced at the next drydocking are identified and the estimate of the cost to be incurred is determined. The cost of these components is to be depreciated over a period to the next estimated drydocking date.

Deferred charges represent drydocking expenditure incurred for major overhauls of vessels, which is deferred when incurred and depreciated over a period from the current drydocking date to the next estimate drydocking date (normally 2 ½ years). When significant drydocking expenditures recur prior to the expiry of the depreciation period, the remaining carrying value of the previous drydocking is expensed in the month of the subsequent drydocking.




2.10 Property, Plant and equipment (cont'd)

Vessels and property under construction are stated at cost less any recognised impairment loss, which includes the progress billings paid in accordance with the construction contracts and interest charges arising from borrowings used to finance the construction or installation during the construction periods. Assets under construction are not depreciated as these assets are not available for use. Depreciation will commence when these assets are available for their intended 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 each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

During the financial year, the Group changed the estimated residual values of its vessels as further described in the Note 3 (b)(iii).

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, if there is no certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life.

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 the profit or loss in the year the asset is derecognised.

2.11 Goodwill

Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity over net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

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

On disposal of a subsidiary or the relevant cash generating unit, the attributable amount of goodwill is included in the determination of profit or loss on disposal.




2.12 impairment of non-financial assets excluding Goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

2.13 associates

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

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for under FRS 105 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate) are not recognised, unless the Group has incurred legal or constructive obligations or made payments on behalf of the associate.




2.13 associates (cont'd)

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

Where a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

In the Company’s financial statements, investments in associates are carried at cost less any impairment in net recoverable value that has been recognised in profit or loss.

2.14 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

2.15 revenue recognition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at fair value of the consideration received or receivable.

Rendering of services

Revenue and operating costs on freight operations are recognised as income and expenses respectively, by reference to the percentage of completion of the voyage as at end of the reporting period. Unearned revenue received is recognised as deferred income.

Revenue from rendering sea freight forwarding services is recognised based on the completion of shipment.

Time charter revenue is recognised evenly over the lives of the time charter agreements and is stated net of withholding taxes and commission paid. Voyage freight is recognised evenly over the duration of each voyage.




2.15 revenue recognition (cont'd)

Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Dividend income

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.

Rental income

Rental income arising on properties is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

2.16 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

2.17 retirement Benefit costs

Payments to defined contribution retirement benefit plans are charged as an expense when employees have rendered the services entitling them to the contributions. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

2.18 employee leave entitlement

Employees’ entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the financial period.




2.19 income tax

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted in countries where the Company and its subsidiaries operate by the end of the reporting period.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised on taxable temporary differences arising on investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

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 profits will be available to allow all or part of the asset to be recovered.

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

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

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited outside profit or loss (either in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss (either in other comprehensive income or directly in equity, respectively), or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.



2 summary of siGnificant accountinG Policies (cont’d)

2.20 sales tax

Revenue, expenses and assets are recognised net of the amount of sales tax except:

• Wherethesalestaxincurredinapurchaseofassetsorservicesisnotrecoverablefromthetaxationauthority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as partoftheexpenseitemasapplicable;and

• Receivablesandpayablesthatarestatedwiththeamountofsalestaxincluded.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

2.21 foreign currency transactions and translation

The individual financial statements of each group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are presented in United States dollars, which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

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

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

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in United States dollars using exchange rates prevailing at the end of the reporting period. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in a separate component of equity under the header of foreign currency translation reserve.

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, or loss of significant influence over an associate that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are derecognised, but they are not reclassified to profit or loss.




2.21 foreign currency transactions and translation (cont’d)

In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign operation, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. of associates not involving a change of accounting basis), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities), and of borrowings and other currency instruments designated as hedges of such investments, are recognised in other comprehensive income and accumulated in a separate component of equity under the header of foreign currency translation reserve.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

2.22 cash and cash equivalents in the statement of cash flows

Cash and cash equivalents in the statement of cash flows comprise cash on hand, bank balances and fixed deposits that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

2.23 share Buyback

Shares purchased in connection with the share buyback programme approved by the Company’s shareholders may be only funded out of surplus available for dividend or distribution. When share capital recognized as equity is reacquired, the amount of consideration paid or received is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, or cancellation of the Group’s own equity instruments.

2.24 hedge accounting

The Group applies hedge accounting for certain hedging relationships which qualify for hedge accounting.

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 oranunrecognisedfirmcommitment;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 or the foreign currencyriskinanunrecognisedfirmcommitment;or

– Hedges of a net investment in a foreign operation.




2.24 hedge accounting (cont’d)

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. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows of the hedged item 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.

Hedges which meet the strict criteria for hedge accounting are accounted for as follows:

Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognised directly as other comprehensive income in hedging reserve, while any ineffective portion is recognised immediately in profit or loss.

Amounts recognised as other comprehensive income are transferred to profit or loss when the hedged transaction affects profit or loss, such as when the hedged finance income or finance expense is recognised or when a forecast sale occurs. Where the hedged item is the cost of a non-financial asset or non-financial liability, the amounts recognised as other comprehensive income are transferred to the initial carrying amount of the non-financial asset or liability.

If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain or loss previously recognised in equity 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, any cumulative gain or loss previously recognised in other comprehensive income remain in other comprehensive income until the forecast transaction or firm commitment affects profit or loss.

2.25 segment reporting

For management purposes, the Group is organised into operating segments based on their services and geographical regions which are managed by respective segment managers responsible for the performance of the respective segment under their charge. The segment or department managers report directly to the management of the Group who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance.

3 critical accountinG judGements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are described in Note 2, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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



3 critical accountinG judGements and key sources of estimation uncertainty (cont’d)

(a) Critical judgements in applying the entity’s accounting policies

The following are the critical judgements, apart from those involving estimations (see below), that management has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

(i) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determining the Group-wide provision for income taxes. There are certain transactions and computation for which the ultimate tax determination is uncertain during the course of business. The Group recognises liabilities for expected tax issues based on assessment of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amounts of the Group’s income tax payable, deferred tax assets and deferred tax liabilities at the end of the reporting period were US$2,004,000 (2010 : US$2,212,000) and US$36,000 (2010 : US$15,000) and US$ 2,000 (2010 : US$ Nil) respectively.

(ii) 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 of the entities in the Group, judgement is required to determine the currency that mainly influences sales prices for goods and services and of the country whose economic environment 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 the entities’ processes of determining sales prices.

(iii) Operating lease commitments – as lessor

The Group has entered into charter hire leases on its owned vessels. The Group has determined that it retains all the significant risks and rewards of ownership of these vessels which are leased out on operating leases. The Group has recognised these vessels and their vessel improvements as its property, plant and equipment. The carrying amounts of these vessels and their vessel improvements under property, plant and equipment are disclosed in Note 14.

(b) Key sources of estimation uncertainty

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



3 critical accountinG judGements and key sources of estimation uncertainty (cont’d)

(b) Key sources of estimation uncertainty (Cont’d)

(i) Investments in subsidiaries and associates

The Company reviews for indication on whether investments in subsidiaries and associates are impaired at least on an annual basis and measures the recoverable amount of the investments whenever the investments may be impaired. This requires an estimation of the value in use of the investments. Estimating the value in use requires the Company to make an estimate of the expected future cash flows from the subsidiaries and associates and also to choose a suitable discount rate in order to calculate the present value of those cash flows. As at December 31, 2011, except for SILkargo Logistics (Singapore) Pte Ltd, Samudera Shipping Line (Vietnam) Co., Ltd and Samudera Emirates Shipping (LLC), for which allowance for impairment loss on the investments have been made, there is no evidence of any indication of impairment on investments in other subsidiaries and associated companies. The carrying amounts of investments in subsidiaries and associates at the end of the reporting period are disclosed in Notes 15 and 16 respectively.

(ii) Depreciation of vessels and vessel improvements

The cost of vessels and vessel improvements of the Group and the Company is depreciated on a straight-line basis over the useful life of the vessels. The management estimates the useful life of these vessels and vessel improvements to be within 4 to 25 years. The carrying amounts of the Group’s vessels and vessel improvements at the end of the reporting period are disclosed in Note 14. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore, future depreciation charges could be revised.

(iii) Residual values of vessels (Note 14)

The Group reviews the residual values of vessels periodically to ensure that the amount is consistent with the future economic benefits embodied in these vessels at the point of disposal. Significant judgment is required in determining the residual values of its vessels. In determining the residual values of its vessels, the Group considers the net proceeds that would be obtained from the disposal of the assets in the resale or scrap markets, fluctuations in scrap steel prices and industry practice.

During the financial year, management determined that the residual values of vessels should be brought

in line with the expected scrap value of the vessels which in turn is dependent on the market scrap rates of metals. The financial effects of this reassessment resulted in a decrease in consolidated depreciation expense for the current financial year and for the next 3 years by the following amounts:

financial year ended/ decrease of depreciationending december 31: expense (us$’000):

2011 1,1352012 1,2702013 1,2702014 1,270

(iv) 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. The carrying amounts of loans and receivables at the end of the reporting period are disclosed in Notes 6 to 12.



4 financial instruments, financial risks and caPital risks manaGement

(a) categories of financial instruments

The following table sets out the financial instruments as at the end of the reporting period:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

financial assetsFair value through profit or loss 2,052 – – –

Loan and receivables (including cash and cash equivalents) 99,855 100,903 75,245 99,298

financial liabilitiesAt amortised cost 258,019 204,882 132,397 102,439

(b) financial risk management policies and objectives

The Group and the Company are exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include foreign currency risk, interest rate risk, credit risk, bunker price risk and liquidity risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks. The Audit Committee provides independent oversight to the effectiveness of the risk management process. It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient.

The Group uses a variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including:

• forwardcurrencycontractstohedgetheexchangeraterisksarisingfromtradereceivablesandtradepayables;and

• interestrateswapstomitigatetheriskofrisinginterestrates.

The Group does not hold or issue derivative financial instruments for speculative purposes.

There has been no change to the Group's exposure to these financial risks or the manner in which it manages and measures the risk. Market risk exposures are measured using sensitivity analysis indicated below.

(i) Foreign exchange risk

The Group has transactional currency exposures arising from sales or cost of services that are denominated in a currency other than the respective functional currencies of Group entities, primarily Singapore dollar (SGD), Indonesian rupiah (IDR), Indian rupee (INR) and Thai baht (THB). The foreign currencies in which these transactions are denominated are mainly SGD.



4 financial instruments, financial risks and caPital risks manaGement (cont’d)

(b) financial risk management policies and objectives (cont’d)

(i) Foreign exchange risk (Cont'd)

The Group and the Company also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. At the end of the reporting period, such foreign currency balances approximately amount to US$9,180,000 (2010 : US$18,173,000) and US$3,415,000 (2010 : US$10,737,000) for the Group and the Company respectively.

The Group is also exposed to currency translation risk arising from its net investments in foreign operations, including Malaysia, Thailand, Indonesia, India, Vietnam and United Arab Emirates.

The Group manages its foreign exchange exposure by a policy of matching, as far as possible, receipts and payments in each individual currency. Surpluses of foreign currencies are converted, as soon as possible, to SGD or USD.

At the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities denominated in currencies other than the respective Group entities’ functional currencies are as follows:

Group companyliabilities assets liabilities assets

2011 2010 2011 2010 2011 2010 2011 2010us$’000 US$’000 us$’000 US$’000 us$’000 US$’000 us$’000 US$’000

SGD 32,005 24,513 14,056 18,580 31,013 24,152 13,441 18,046IDR 14,517 8,625 10,317 11,257 12 1 23 9INR – – 3,906 3,363 – – 3,906 3,363Others 483 187 2,175 3,113 110 61 1,346 2,671

Foreign currency sensitivity

The following table details the sensitivity to a 5% increase and decrease in the exchange rate of SGD and IDR against USD with all other variables held constant. It is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding monetary items denominated in SGD and IDR and adjusts their translation at the period end for a 5% change in foreign currency rates. The sensitivity analysis of monetary items denominated in currencies other than SGD and IDR is not significant.

Group companystrengthen effect on strengthen effect on(weaken) in net profit (weaken) in net profit

exchange after tax exchange after tax us$’000 us$’000

2011– Singapore dollar 5.00% (745) 5.00% (729)

(5.00%) 745 (5.00%) 729– Indonesian rupiah 5.00% (174) 5.00% –

(5.00%) 174 (5.00%) –

2010– Singapore dollar 5.00% (246) 5.00% (253)

(5.00%) 246 (5.00%) 253– Indonesian rupiah 5.00% 109 5.00% –

(5.00%) (109) (5.00%) –





(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and borrowings and fixed deposits.

The Group obtains additional financing through bank borrowings. The Group’s policy is to obtain the most favourable interest rates available without increasing its foreign currency exposure.

The Group enters into various interest rate swap contracts to hedge its interest rate risk, where appropriate, over the duration of its borrowings. The contracts limit the Group’s exposure to both favourable and unfavourable interest rate fluctuations. It is the Group’s policy not to trade in derivative contracts.

Surplus funds are placed with reputable banks and financial institutions which generate interest income for the Group.

Information relating to the Group’s interest rate exposure is disclosed in Notes 5, 17 and 22.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the SGD and USD interest rates, with all other variables held constant, of the Group’s and the Company’s profit or loss (through the net impact of interest expense on floating loans and borrowings and interest income on fixed deposits and investment securities).

Group companyincrease effect increase effect

(decrease) in on profit (decrease) in on profitbasis points or loss basis points or loss

us$’000 us$’000

2011– Singapore dollar 25 (41) 25 (41)

(25) 41 (25) 41– United States dollar 25 (347) 25 (165)

(25) 347 (25) 165

2010– Singapore dollar 25 (13) 25 (13)

(25) 13 (25) 13– United States dollar 25 (144) 25 (97)

(25) 144 (25) 97





(iii) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities and cash and cash equivalents), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. The Group and the Company may request bankers’ guarantee from its customers if it is necessary. In addition, debtors balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Credit risk concentration profile

The Group determines concentration of credit risk by monitoring the country and customer profile of its trade receivables on an on-going basis. The credit risk concentration profile of the Group’s and the Company's trade receivables at the end of the reporting period is as follows:

Group company2011 2010 2011 2010

us$’000 % of total us$’000 % of total us$’000 % of total us$’000 % of total

By country:

Singapore 38,172 62.6 30,130 65.1 36,828 85.6 28,849 87.0Indonesia 14,388 23.6 9,798 21.2 1,759 4.1 1,026 3.1Thailand 2,363 3.9 2,112 4.6 159 0.4 389 1.2China 1,780 2.9 1,160 2.5 1,780 4.1 1,160 3.5Myanmar 1,501 2.5 963 2.1 1,501 3.5 963 2.9Other countries 2,751 4.5 2,134 4.5 997 2.3 762 2.3

60,955 100.0 46,297 100.0 43,024 100.0 33,149 100.0

Group company2011 2010 2011 2010

us$’000 % of total us$’000 % of total us$’000 % of total us$’000 % of total

By customers:

Main line operators 39,308 64.5 32,113 69.4 31,818 74.0 25,760 77.7

Agents 3,525 5.8 2,563 5.5 3,446 8.0 2,479 7.5Others 18,122 29.7 11,621 25.1 7,760 18.0 4,910 14.8

60,955 100.0 46,297 100.0 43,024 100.0 33,149 100.0

At the end of the reporting period, approximately 18% (2010 : 30%) of the Group’s and Company’s trade receivables were due from 4 (2010: 5) major customers who are main line operators located in Singapore.





(iii) Credit risk (Cont’d)

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash and cash equivalents and investment securities that are not impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 6.

(iv) Bunker price risk

The Group’s earnings are affected by changes in bunker prices. The Group manages this risk by monitoring the bunker prices and entering into forward contracts to hedge against fluctuations in bunker price if considered appropriate.

As at December 31, 2011 and 2010, the Group has no outstanding bunker price hedging contracts.

(v) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

The Group and the Company monitor and maintain a level of cash and cash equivalents deemed adequate by the management to finance the Group’s operation and mitigate the effects of fluctuation of cash flows.

liquidity and interest risk analyses

Non-derivative financial instruments

The following tables detail the remaining contractual maturity for non-derivative financial instruments. The tables have been drawn up based on the discounted cash flows of financial liabilities that include both interest and principal cash flows based on the earliest date on which the Group and Company can be required to pay and on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Group and the Company anticipate that the cash flow will occur in a different period. The adjustment column represents the possible future cash flows attributable to the instrument included in the maturity analysis which is not included in the carrying amount of the financial assets and liabilities on the balance sheet.





(v) Liquidity risk (Cont’d)

liquidity and interest risk analyses (cont’d)

Non-derivative financial instruments (Cont’d)

effectiveon

demand withininterest or within 2 to 5 after

Group rate 1 year years 5 years adjustment total2011 % p.a. us$’000 us$’000 us$’000 us$’000 us$’000

Financial assetsnon-interest bearing:Trade and other receivables and deposits – 65,679 – – – 65,679Due from related

companies – 3,237 – – – 3,237Due from non-controlling shareholder – 48 – – – 48

Variable interest rate instruments:Investment securities – 2,052 – – – 2,052Cash and bank balances 0.00 to 9.10 30,681 256 – (46) 30,891

total financial assets 101,697 256 – (46) 101,907

Financial liabilitiesnon-interest bearing:Trade payables – 27,876 – – – 27,876Other payables and liabilities – 19,401 – – – 19,401Due to related companies – 330 – – – 330

Variable interest rate instruments:Finance leases 2.88 to 5.94 386 752 29 (139) 1,028Bank term loans 0.55 to 2.30

above LIBOR 21,565 88,781 80,960 (14,194) 177,112Bank term loans 2.25 to 2.50

above SIBOR 1,570 3,570 – (510) 4,630Bank term loans 0.95 to 1.00

above SOR 8,547 4,455 8,553 (1,163) 20,392Bank term loans 10.00 fixed 925 5,552 1,469 (696) 7,250

total financial liabilities 80,600 103,110 91,011 (16,702) 258,019

net financial assets (liabilities) 21,097 (102,854) (91,011) 16,656 (156,112)








effectiveon


Group rate 1 year years 5 years adjustment total2010 % p.a. us$’000 us$’000 us$’000 us$’000 us$’000

Financial assetsnon-interest bearing:Trade and other receivables and deposits – 50,734 – – – 50,734Due from related companies – 2,423 – – – 2,423Due from non-controlling shareholder – 48 – – – 48

Variable interest rate instruments:Cash and bank balances 0.00 to 8.80 47,046 696 – (44) 47,698

total financial assets 100,251 696 – (44) 100,903

Financial liabilitiesnon-interest bearing:Trade payables – 20,782 – – – 20,782Other payables and liabilities – 17,262 – – – 17,262Due to related companies – 2,046 – – – 2,046

Variable interest rate instruments:Finance leases 2.90 to 5.90 421 1,140 73 (240) 1,394Bank term loans 0.55 to 1.35


above SIBOR 2,724 4,889 251 (834) 7,030Bank term loans 0.95

above SOR 1,168 4,548 9,729 (1,332) 14,113


net financial assets (liabilities) 44,175 (75,222) (84,353) 11,421 103,979








effectiveon


company rate 1 year years 5 years adjustment total2011 % p.a. us$’000 us$’000 us$’000 us$’000 us$’000


Variable interest rate instruments:Cash and bank balances 0.00 to 0.78 15,953 – – (4) 15,949

total financial assets 75,249 – – (4) 75,245

Financial liabilitiesnon-interest bearing:Trade payables – 19,126 – – – 19,126Other payables and liabilities – 5,498 – – – 5,498Due to related companies – 157 – – – 157

Variable interest rate instruments:Finance leases 2.88 to 3.87 57 183 29 (34) 235Bank term loans 1.22 to 2.20


above SOR 8,547 4,455 8,553 (1,163) 20,392










effectiveon


company rate 1 year years 5 years adjustment total2010 % p.a. us$’000 us$’000 us$’000 us$’000 us$’000


Variable interest rate instruments:Cash and bank balances 0.00 to 0.78 35,963 – – (21) 35,942

total financial assets 99,319 – – (21) 99,298

Financial liabilitiesnon-interest bearing:Trade payables – 14,383 – – – 14,383Other payables and liabilities – 4,463 – – – 4,463Due to related companies – 1,576 – – – 1,576

Variable interest rate instruments:Finance leases 2.88 to 4.52 89 243 73 (50) 355Bank term loans 1.22 to 1.35

above LIBOR 8,163 31,157 33,694 (5,465) 67,549Bank term loans 0.95

above SOR 1,168 4,548 9,729 (1,332) 14,113









Derivative financial instruments

The table in Note 4(b)(vi)(c) details the liquidity analysis for derivative financial instruments. The table has been drawn up based on the undiscounted net cash inflows (outflows) on the derivative instrument that settle on a net basis and the undiscounted gross inflows (outflows) on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates at the end of the reporting period.

(vi) Fair value of financial assets and financial liabilities

The fair values of financial assets and financial liabilities are determined as follows:

• thefairvalueoffinancialassetsandfinancialliabilitieswithstandardtermsandconditionsandtradedonactiveliquidmarketsaredeterminedwithreferencetoquotedmarketprices;

• thefairvalueofotherfinancialassetsandfinancialliabilities(excludingderivativeinstruments)are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similarinstruments;and

• thefairvalueofderivativeinstrumentsarecalculatedusingquotedprices.Wheresuchpricesarenot available, discounted cash flow analysis is used, based on the applicable yield curve of the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives.

(a) Fair value of financial instruments that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

The fair value of financial liabilities that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value are as follows:

Group companycarrying amount fair value carrying amount fair value

2011 2010 2011 2010 2011 2010 2011 2010us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000

Finance leases 1,028 1,394 1,070 1,453 235 355 243 347

The fair values as disclosed in the table above are estimated by discounting expected future cash flows using the current interest rate of similar type of instruments at the end of the reporting period.





(vi) Fair value of financial assets and financial liabilities (Cont’d)

(b) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

Due from (to) immediate holding company/ subsidiaries/related companies

The fair value of these financial assets and liabilities is based on the current rates available for debt with the same maturity profile.

Current trade receivables, other receivables and deposits, trade payables, other payables and liabilities, cash and cash equivalents, and bank term loans at floating rate

The carrying amount of these financial assets and liabilities are reasonable approximation of fair values, either due to their relatively short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.

(c) Fair value of financial instruments that are carried at fair value

The Group 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 – Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

Investment securities

Fair value is determined directly by reference to the market bid price obtained from the bank/ portfolio manager at the end of the reporting period.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived fromprices);and

Interest rate swap contracts

The fair value is based upon valuations provided by the swap counter-party banks.






(c) Fair value of financial instruments that are carried at fair value (Cont’d)

Derivative financial instruments and hedging activities

Derivative financial instruments included in the balance sheet at the end of the reporting period are as follows:

Group2011 2010

assets liabilities assets liabilitiesus$’000 us$’000 us$’000 us$’000

Forward currency contracts 45 – 4 –

The Company has no derivative financial instruments in the balance sheets at the end of the reporting period in 2011 and 2010.

During the year, a gain of US$45,000 (2010 : US$4,000) has been recognised in profit or loss in relation to the change in fair value of various forward contracts that the Group has entered into, based on valuations provided by banks.

The terms of these contracts and the fair value adjustments of these derivative financial instruments are as follows:

contract or forwardnotional fair value

maturity dates amount adjustmentsus$’000 us$’000

Group

2011

Forward currency contracts 28/02/2012 to 05/04/2012 1,774 45

2010

Forward currency contracts 23/02/2011 to 10/6/2011 606 4






(c) Fair value of financial instruments that are carried at fair value (Cont’d)

Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Group and Company has no financial instrument under Level 3.

During the current financial year, there were no transfers of financial instruments between the levels of the fair value hierarchy.

(c) capital risk management policies and objectives

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholders’ value.

The capital structure of the Group consists of borrowings and equity attributable to owners of the Company, comprising issued capital, reserves and retained earnings.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended December 31, 2011 and 2010.

The Group is required to maintain certain financial ratios within a set of range to comply with loan covenants imposed by its lenders. The Group monitors the financial covenants on bank borrowings to ensure there is no breach of covenants.



5 cash and Bank Balances

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

current

Call and fixed deposits 18,120 34,655 8,885 28,711Cash at bank and on hand 12,526 12,347 7,064 7,231

30,646 47,002 15,949 35,942

non-current

Call and fixed deposits 245 696 – –

Total cash and bank balances 30,891 47,698 15,949 35,942

Fixed deposits are made for varying periods between 7 days to 3 years (2010 : 7 days to 1 year) depending on the immediate cash requirements of the Group. These current portion of fixed deposits can be withdrawn anytime at the discretion of the management. Non-current portion of cash and bank balances represents a deposit with maturity date of more than a year. Interest rates on fixed deposits range from 0.02% to 9.10% (2010 : 0.03% to 8.80%) per annum.

Cash at bank earns interest at floating rates based on daily bank deposit rates ranging from 0.00% to 3.00% (2010 : 0.00% to 2.00%) per annum.

Cash and cash equivalents in the consolidated statement of cash flows comprise of:

Group2011 2010

us$’000 us$’000

Cash and bank balances (as above) 30,891 47,698Less: Pledged deposits (Note A) (8,281) (7,572) Cash and cash equivalents 22,610 40,126



5 cash and Bank Balances (cont’d)

Note A:

The Company’s fixed deposits totalling US$601,000 (2010 : US$1,099,000) have been pledged to a bank to secure bankers’ guarantee facilities of US$1,830,000 (2010 : US$1,734,000) given to suppliers of goods and services in the ordinary course of business.

Fixed deposits of subsidiaries totalling US$579,000 (2010 : US$1,854,000) have been pledged to certain banks to secure bankers’ guarantee facilities of US$1,235,000 (2010 : US$2,536,000) given to suppliers of goods and services in the ordinary course of business.

Included in the cash and bank balances of the Group is an amount of US$7,101,000 (2010 : US$4,619,000) pledged to certain bank to secure loans of the Group amounting to US$141,014,000 (2010 : US$67,173,000).

Cash and bank balances are denominated in the following currencies:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

United States dollar 21,711 29,525 12,534 25,205Thai baht 2,380 2,467 444 398Indonesian rupiah 2,312 2,172 27 9Singapore dollar 1,942 9,258 1,803 9,055Indian rupee 1,652 3,080 440 428Others 894 1,196 701 847

30,891 47,698 15,949 35,942



6 trade receiVaBles

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Trade receivables 61,888 46,898 43,655 33,517Less: Allowance for doubtful debts (933) (601) (631) (368)

60,955 46,297 43,024 33,149

Movements in allowance for doubtful debts:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Balance at beginning of the year (601) (1,515) (368) (1,332)Allowance for the year (354) (313) (270) (122)Write-back of allowance 22 142 7 1Written off against allowance – 1,085 – 1,085Balance at end of the year (933) (601) (631) (368)

Trade receivables are non-interest bearing and are generally on 30 to 60 days (2010 : 30 to 60 days) terms. They are recognised at their original invoiced amounts which represent their fair values on initial recognition.

Before accepting any new customer, the Group and the Company will assess the customer’s credit quality and define credit terms for each of the customers. Credit terms attributed to customers are reviewed periodically.

Trade receivables that are past due but not impaired

The Group and the Company respectively has trade receivables amounting to US$8,176,000 (2010 : US$4,648,000) and US$3,212,000 (2010 : US$1,571,000) that are past due at the end of the reporting period but not impaired. These trade receivables are unsecured and the analysis of their aging at the end of the reporting period are as follows:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Trade receivables past due:Lesser than 31 days 5,489 3,170 2,365 1,47331 to 60 days 1,272 895 541 9561 to 90 days 512 115 153 3More than 90 days 903 468 153 –

8,176 4,648 3,212 1,571



6 trade receiVaBles (cont’d)

Trade receivables that are impaired

The Group’s and the Company's trade receivables that are impaired at the end of the reporting period are as follows:

individually impairedGroup company

2011 2010 2011 2010us$’000 us$’000 us$’000 us$’000

Trade receivables 933 601 631 368Less: Allowance for impairment (933) (601) (631) (368)

– – – –

Trade receivables that are individually determined to be impaired at the end of the reporting period relates to debts that have delayed in payments or has indication of default in payments. These trade receivables are not secured by any collaterals or credit enhancements.

Trade receivables are denominated in the following currencies:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

United States dollar 39,831 29,516 31,609 23,915Singapore dollar 11,402 8,991 11,285 8,942Indonesian rupiah 6,409 4,660 – – Others 3,313 3,130 130 292

60,955 46,297 43,024 33,149



7 other receiVaBles and dePosits

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Other receivables 1,050 685 555 432Deposits 595 1,654 30 30Loans to employees 19 25 2 19Insurance claims receivable 3,060 2,073 108 108

4,724 4,437 695 589

The insurance claim receivable represents the best estimate of losses or damages incurred on various accidents which are recoverable from insurance companies.

Other receivables and deposits are denominated in the following currencies:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

United States dollar 4,036 1,975 659 535Singapore dollar 33 122 32 50Indian rupee 398 1,439 – – Others 257 901 4 4

4,724 4,437 695 589

8 due from immediate holdinG comPany (non-trade and trade)

The balances are unsecured, interest-free and expected to be settled within 12 months from the end of the reporting period.



9 due from suBsidiaries (trade)

company2011 2010

us$’000 us$’000

Due from subsidiaries 5,361 5,492

Less: Allowance for doubtful debts – (769)5,361 4,723

Movement in allowance for doubtful debts:

company2011 2010

us$’000 us$’000

Balance at beginning of the year (769) (704)Allowance for the year – (65)Write back of allowance 769 – Balance at end of the year – (769)

These balances are unsecured, interest-free and expected to be settled within 12 months from the end of the reporting period. These balances are mainly denominated in United States dollar.



10 due from suBsidiaries (non-trade)

These balances are unsecured, interest-free and expected to be settled within 12 months from the end of the reporting period, except for an amount of US$3,957,000 (2010: US$5,079.000) which is interest-bearing at 0.5% above LIBOR per annum.

11 due from (to) related comPanies (trade)

These balances are unsecured, interest-free and expected to be settled within 12 months from the end of the reporting period.

12 due from non-controllinG shareholder of a suBsidiary (non-trade)

These balances are unsecured, interest-free and expected to be settled within 12 months from the end of the reporting period.

13 inVestment securities

Group2011 2010

us$’000 us$’000

Quoted fund investments, at fair value 2,052 –

The fair value of the quoted fund investment is based on the market quoted price at the end of the reporting period.



14 ProPerty, Plant and eQuiPment

Property furnitureVessel deferred Vessels under under motor and freehold freehold

Group Vessels improvements charges construction construction vehicles equipment fittings renovation land properties totalus$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000

cost

At January 1, 2010 269,107 2,610 22,662 – 1,428 1,028 7,780 508 1,209 14,807 5,694 326,833Additions – – 2,742 913 324 342 582 – – 738 – 5,641Transfer to vessels – – – 78,403 – – – – – – – 78,403Disposals (151) (88) (409) – – (182) (211) (55) (32) – – (1,128)Written off – – – – – – (17) (26) – – – (43)Translation difference – – – – 83 15 37 14 7 – – 156At December 31, 2010 268,956 2,522 24,995 79,316 1,835 1,203 8,171 441 1,184 15,545 5,694 409,862Additions 71,587 – 10,067 – 234 57 229 – – – – 82,174Transfer to vessels 79,316 – – (79,316) – – – – – – – –Disposals (378) – (1,210) – – (150) (10) – – – – (1,748)Written off – – – – – (18) (103) (1) (43) – – (165)Reclassification – 88 – – – (8) (63) (17) – – – –Translation difference – – – – (291) (19) (31) (9) (2) – – (352)At December 31, 2011 419,481 2,610 33,852 – 1,778 1,065 8,193 414 1,139 15,545 5,694 489,771

accumulated depreciation

At January 1, 2010 51,657 2,286 16,080 – – 584 4,926 406 1,156 – 425 77,520Depreciation for the year 11,490 90 4,888 – – 169 1,149 42 13 – 150 17,991Disposals (126) (88) (274) – – (181) (158) (44) (11) – – (882)Written off – – – – – – (15) (16) – – – (31)Translation difference – – – – – 8 37 12 3 – – 60At December 31, 2010 63,021 2,288 20,694 – – 580 5,939 400 1,161 – 575 94,658Depreciation for the year 15,326 65 5,075 – – 184 1,008 34 8 – 150 21,850Disposals (378) – (737) – – (98) (10) – – – – (1,223)Written off – – – – – (18) (95) (3) (43) – – (159)Reclassification – 88 – – – (8) (63) (17) – – – –Translation difference – – – – – (12) (27) (8) (2) – – (49)At December 31, 2011 77,969 2,441 25,032 – – 628 6,752 406 1,124 – 725 115,077

carrying amount

At December 31, 2011 341,512 169 8,820 – 1,778 437 1,441 8 15 15,545 4,969 374,694

At December 31, 2010 205,935 234 4,301 79,316 1,835 623 2,232 41 23 15,545 5,119 315,204


14 ProPerty, Plant and eQuiPment

Property furnitureVessel deferred Vessels under under motor and freehold freehold

Group Vessels improvements charges construction construction vehicles equipment fittings renovation land properties totalus$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000

cost

At January 1, 2010 269,107 2,610 22,662 – 1,428 1,028 7,780 508 1,209 14,807 5,694 326,833Additions – – 2,742 913 324 342 582 – – 738 – 5,641Transfer to vessels – – – 78,403 – – – – – – – 78,403Disposals (151) (88) (409) – – (182) (211) (55) (32) – – (1,128)Written off – – – – – – (17) (26) – – – (43)Translation difference – – – – 83 15 37 14 7 – – 156At December 31, 2010 268,956 2,522 24,995 79,316 1,835 1,203 8,171 441 1,184 15,545 5,694 409,862Additions 71,587 – 10,067 – 234 57 229 – – – – 82,174Transfer to vessels 79,316 – – (79,316) – – – – – – – –Disposals (378) – (1,210) – – (150) (10) – – – – (1,748)Written off – – – – – (18) (103) (1) (43) – – (165)Reclassification – 88 – – – (8) (63) (17) – – – –Translation difference – – – – (291) (19) (31) (9) (2) – – (352)At December 31, 2011 419,481 2,610 33,852 – 1,778 1,065 8,193 414 1,139 15,545 5,694 489,771


At January 1, 2010 51,657 2,286 16,080 – – 584 4,926 406 1,156 – 425 77,520Depreciation for the year 11,490 90 4,888 – – 169 1,149 42 13 – 150 17,991Disposals (126) (88) (274) – – (181) (158) (44) (11) – – (882)Written off – – – – – – (15) (16) – – – (31)Translation difference – – – – – 8 37 12 3 – – 60At December 31, 2010 63,021 2,288 20,694 – – 580 5,939 400 1,161 – 575 94,658Depreciation for the year 15,326 65 5,075 – – 184 1,008 34 8 – 150 21,850Disposals (378) – (737) – – (98) (10) – – – – (1,223)Written off – – – – – (18) (95) (3) (43) – – (159)Reclassification – 88 – – – (8) (63) (17) – – – –Translation difference – – – – – (12) (27) (8) (2) – – (49)At December 31, 2011 77,969 2,441 25,032 – – 628 6,752 406 1,124 – 725 115,077

carrying amount

At December 31, 2011 341,512 169 8,820 – 1,778 437 1,441 8 15 15,545 4,969 374,694

At December 31, 2010 205,935 234 4,301 79,316 1,835 623 2,232 41 23 15,545 5,119 315,204



14 ProPerty, Plant and eQuiPment (cont’d)

furnituredeferred motor and freehold freehold

company Vessels charges vehicles equipment fittings renovation land properties totalus$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000 us$’000

cost

At January 1, 2010 113,316 – 544 4,569 204 1,079 14,807 5,694 140,213Additions – – 306 187 – – – – 493Disposals – – (119) – – – – – (119)At December 31,

2010 113,316 – 731 4,756 204 1,079 14,807 5,694 140,587Additions 39,534 450 – 157 – – – – 40,141Disposals – – (133) – – – – – (133)Written off – – – (3) – – – – (3)At December 31,

2011 152,850 450 598 4,910 204 1,079 14,807 5,694 180,592


At January 1, 2010 7,003 – 274 3,363 146 1,078 – 425 12,289Depreciation for the

year 4,533 – 101 685 30 1 – 150 5,500Disposals – – (119) – – – – – (119)At December 31,

2010 11,536 – 256 4,048 176 1,079 – 575 17,670Depreciation for the

year 5,933 283 113 540 27 – – 150 7,046Disposals – – (82) – – – – – (82)Written off – – – (3) – – – – (3)At December 31,

2011 17,469 283 287 4,585 203 1,079 – 725 24,631

carrying amount

At December 31, 2011 135,381 167 311 325 1 – 14,807 4,969 155,961

At December 31, 2010 101,780 – 475 708 28 – 14,807 5,119 122,917



14 ProPerty, Plant and eQuiPment (cont’d)

(a) The carrying amount of motor vehicles of the Group and Company as at December 31, 2011 under finance leases amounted to US$239,000 and US$225,000 (2010 : US$387,000 and US$358,000) respectively.

(b) The Group’s and the Company’s vessels, freehold land and freehold properties with carrying amount of US$346,947,000 and US$155,157,000 (2010 : US$188,686,000 and US$121,707,000) respectively have also been placed under legal mortgage to secure the Company’s and subsidiaries’ bank term loans (Note 17).

(c) The following shows the carrying amount of the vessels of the Group that are chartered out to third parties (Time charter) under operating leases:

Group2011 2010

us$’000 us$’000

Cost 198,942 73,275Accumulated depreciation (34,297) (23,413)Carrying amount 164,645 49,862

The depreciation charge for vessels chartered out under operating leases in the year is US$5,930,000 (2010 : US$2,183,000).

The charter hire income for the year amounted to US$20,752,000 (2010 : US$13,464,000).

(d) During the financial year, the Group acquired property, plant and equipment with aggregate cost of US$82,174,000 (2010 : US$5,641,000) of which US$145,000 (2010 : US$485,000) was relating to capitalised interest during construction and US$Nil (2010 : US$521,000) was acquired by means of finance leases. Cash payment of US$82,029,000 (2010 : US$4,635,000) was made to purchase property, plant and equipment of the Group.

15 suBsidiaries

company2011 2010

us$’000 us$’000

Unquoted equity share at cost 54,910 55,255Additions during the year 17,858 –Strike-off during the year – (345)Less: Allowance for impairment loss (414) (414)

72,354 54,496

Movements in allowance for impairment loss:

Balance at beginning of the year (414) (706)Impairment loss for the year – (53)Impairment written off – 345Balance at end of the year (414) (414)



15 suBsidiaries (cont’d)

Details of the subsidiaries are as follows:

name Principal activitiescountry of

incorporation

cost ofProportion of investment held

ownership interest by the company2011 2010 2011 2010

% % us$’000 us$’000

held by the company

Foremost Maritime Owning and chartering Singapore 100 100 72,021 54,163Pte Ltd of vessels(“Foremost”) (1) (10)

SILkargo Sea freight forwarding, Singapore 100 100 345 345Logistics (Singapore) shipping agency andPte Ltd (“SILkargo”) (1) container freight station

services

Samudera Emirates Shipping agency United Arab 16 16 16 16Shipping (LLC)(“SES”) (3) (8)

(In the process of voluntary liquidation)

Emirates

Galaxy Shipping Shipping agency Malaysia 60 60 191 191Services Sdn Bhd (4)

Samudera Shipping Line (India) Pvt Ltd (7)

Shipping agency India 100 100 28 28

Samudera Traffic Co. Shipping agency Thailand 49 49 114 114Ltd (“STC”) (5) (9)

Samudera Shipping Line Shipping agency Vietnam 51 51 53 53 (Vietnam) Co., Ltd (6) 72,768 54,910



15 suBsidiaries (cont’d)


incorporation



% % us$’000 us$’000

held through subsidiaries

PT Samudera Shipping Owning and chartering Indonesia 95 95 – – Services (“PT SSS”) (2) of vessels

Samudera Emirates Shipping agency United Arab 17 17 – – Shipping (LLC) (“SES) (3) (8)

(In the process of voluntary liquidation)

Emirates– –

(1) Audited by Deloitte & Touche LLP, Singapore.

(2) Audited by overseas practice of Deloitte Touche Tohmatsu Limited.

(3) Audited by UHY Saxena, Dubai.

(4) Audited by Ernst & Young, Malaysia.

(5) Audited by Grant Thornton Limited, Thailand.

(6) Audited by Vietnam Accounting Auditing Consulting Company.

(7) Audited by Ghalla & Bhansali Chartered Accountants, India.

(8) The Company and a subsidiary, Foremost, contributed 16% and 17% of the issued share capital of SES respectively. Hence, the Group’s total effective interest in SES is 33%. As the Group has control over the financial and operating policies via majority representation on the board of directors of SES, the latter is deemed to be a subsidiary of the Group. SES is in the process of voluntary liquidation as at December 31, 2011.

(9) As the Group has control over the financial and operating policies via majority representation on the board of directors of STC, the latter is deemed to be a subsidiary of the Group. The Company entered into an agreement where it is entitled to a 60% share of the net profits of the subsidiary. The voting power held by the Company is 65.8% (2010 : 65.8%). The shares held by the Company carry two votes per share.

(10) During the financial year, the Company subscribed for an additional 23,036,820 ordinary shares in its subsidiary, Foremost, for a consideration of US$17,858,000.



16 associates

Group2011 2010

us$’000 us$’000

Unquoted equity shares, at cost 12,312 12,312Dividend received (875) (174)Share of post acquisition profits 821 820Share of hedging reserve (8,402) (5,118)Translation difference (759) (931)

3,097 6,909

Details of the associates are as follows:


incorporation



% % us$’000 us$’000

held by the company

LNG East-West Owning, managing Singapore 25 25 12,117 12,117Shipping Company and chartering of(Singapore) vessels and ship

Pte. Limited (1) brokering

held through subsidiary

PT Jardine Tangguh Shipping agency Indonesia – 38 – – Transport Services

(“JTTS”) (2) (3)

12,117 12,117

(1) Audited by Ernst & Young LLP, Singapore.

(2) Audited by PriceWaterhouseCoopers, Indonesia.

(3) In 2010, the Company disposed of its entire interests in JTTS to a subsidiary, PT SSS, for a consideration of US$344,000. Consequently, the proportion of ownership interest by the Group was reduced from 40% to 38% because PT SSS is not wholly-owned by the Group. The financial effects of the dilution of interests in JTTS to the Group is not significant and thus not disclosed in the financial statements.

In 2011, the Group disposed of its entire interests in JTTS to a non-related party for a consideration of US$132,000. The Group incurred a loss on disposal of associate of US$241,000.



16 associates (cont’d)

Summarised financial information in respect of the Group’s associates, not adjusted for the proportion of interest held by the Group is set out below:

2011 2010us$’000 us$’000

Total assets 181,845 190,228Total liabilities (180,440) (173,957)Net assets 1,405 16,271

Revenue 25,686 26,611

Profit for the year 2,406 4,473

17 Bank term loans (secured)

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

current

Amounts due not later than one year 28,959 13,779 20,377 8,089

non-current

Amounts due:Later than one year but not later than five years 92,767 68,525 49,636 32,026Later than five years 87,658 81,094 37,368 41,547

180,425 149,619 87,004 73,573

Total 209,384 163,398 107,381 81,662



17 Bank term loans (secured) (cont’d)

The details of bank term loans are as follows:

loans outstandingat december 312011 2010

us$’000 us$’000

a) the company

(i) SGD21,590,000 repayable in 120 monthly instalments commencing September 2006 with a certain remaining amount to be paid at the end of the term with an option to extend for a further 10 years. Interest is payable at 0.95% above Swap Offer Rate per annum. 12,107 13,039

(ii) SGD2,053,000 repayable in 120 monthly instalments commencing October 2007. Interest is payable at 0.95% above Swap Offer Rate per annum. 908 1,074

(iii) SGD10,000,000 repayable in 11 equal monthly instalments commencing April 2011 with a certain remaining amount to be paid at the end of the term. Interest is payable at 1.00% above Swap Offer Rate per annum. 7,377 –

(iv) USD23,120,000 repayable in 40 quarterly instalments commencing May 2008 with a certain remaining amount to be paid at the end of the term. Interest is payable at 1.22% above LIBOR per annum. 16,299 18,205

(v) USD33,600,000 repayable in 48 quarterly instalments commencing June 2008. Interest is payable at 1.35% above LIBOR per annum. 23,672 26,440

(vi) USD28,400,000 repayable in 48 quarterly instalments commencing October 2008. Interest is payable at 1.35% above LIBOR per annum. 20,571 22,904

(vii) USD9,703,000 repayable in 83 equal monthly instalments commencing April 2011 and a final instalment for the remaining amount at the end of the term. Interest is payable at 2.20% above LIBOR per annum. 8,577 –

(viii) USD12,160,000 repayable in 27 equal quarterly instalments commencing September 2011 and a final instalment for the remaining amount at the end of the term. Interest is payable at 1.90% above LIBOR per annum. 11,222 –

(ix) USD7,735,000 repayable in 59 equal monthly instalments commencing May 2011 and a final instalment for the remaining amount at the end of the term. Interest is payable at 2.20% above LIBOR per annum. 6,648 –

107,381 81,662




loans outstandingat december 312011 2010

us$’000 us$’000

b) subsidiaries

(i) USD8,120,000 repayable in 14 equal quarterly instalments with interest payable at 1.625% above SIBOR. On March 13, 2008, partial payment amounting to USD2,320,000 was made. On June 6, 2008, the loan agreement was amended to 15 equal quarterly instalments of USD348,000, commencing July 2008. Interest is payable at 2.25% above SIBOR. 348 1,740

(ii) USD16,450,000 repayable in 40 equal quarterly instalments commencing October 2006. Interest is payable at 1.05% above LIBOR per annum. – 9,459

The loan was fully paid during the current financial year.

(iii) USD16,450,000 repayable in 40 equal quarterly instalments commencing January 2007. Interest is payable at 2.00% above LIBOR per annum. – 8,370

The loan was fully paid during the current financial year.

(iv) USD8,150,000 repayable in 24 equal quarterly instalments commencing April 2008 with interest payable at 1.625% above SIBOR. On June 6, 2008, the loan agreement was amended to 30 equal quarterly instalments of USD252,000 each commencing July 2008, and a final instalment of USD250,000. Interest is payable at 2.5% above SIBOR. 4,282 5,290

(v) USD78,012,000 (2010 : USD56,877,000) repayable in 48 equal quarterly instalments commencing July 2011. Interest is payable at 0.55% above LIBOR per annum. 74,762 56,877

(vi) USD7,136,000 non-revolving credit facility with interest payable at 2.30% above LIBOR. 7,136 –

(vii) USD8,225,000 non-revolving credit facility with interest payable at 2.30% above LIBOR. 8,225 –

(viii) IDR41,884,125,000 repayable in 24 consecutive quarterly instalments commencing January 2012. Repayment term comprises of quarterly instalment of IDR1,047,103,000 for the first year, IDR1,570,655,000 for second and third year, and IDR2,094,206,000 for fourth to sixth year. Interest is payable at 10.00% fixed per annum. 4,620 –

(ix) IDR23,854,163,000 repayable in 23 consecutive quarterly instalments commencing January 2012. Repayment term comprises of quarterly instalment of IDR795,139,000 for first year, IDR894,531,000 for second and third year, and IDR1,192,708,000 for fourth to sixth year. Interest is payable at 10.00% fixed per annum. 2,630 –

102,003 81,736

total 209,384 163,398




The bank term loans are secured as follows:

1. Bank term loans (a)(i) to (a)(iii)

- legalmortgageoverfreeholdlandandfreeholdpropertiesoftheCompany(Note14); - assignmentofinsurance;and - assignment of income or proceeds of sale if any.

2. Bank term loans (a)(iv) to (a)(vi)

- corporate guarantee(1)fromtheCompany; - legalmortgagesovercertainvesselsoftheGroup(Note14); - assignmentofincomefromcharterhirecontracts;and - assignment of insurance of the vessels.

3. Bank term loans (a)(vii) to (a)(viii)

- legalmortgagesovercertainvesselsoftheCompany(Note14); - assignmentofincomefromcharterhirecontracts;and - assignment of insurance of the vessels.

4. Bank term loans (a)(ix)

- legalmortgageoveravesseloftheCompany(Note14); - legalchargeovercertainfixeddepositsoftheCompany; - assignmentofincomefromcharterhirecontracts;and - assignment of insurance of the vessel.

5. Bank term loans (b)(i)

- corporate guarantee(1)fromtheCompanyandasubsidiary; - legalmortgagesovercertainvesselsofthesubsidiary(Note14); - assignmentofincomefromcharterhirecontracts;and - assignment of insurance of the vessels.

6. Bank term loans (b)(ii) to (b)(iv)

- corporate guarantee(1)fromtheCompany; - legalmortgagesovercertainvesselsofthesubsidiaries(Note14); - assignmentofincomefromcharterhirecontracts;and - assignment of insurance of the vessels.

7. Bank term loans (b)(v) to (b)(vii)

- corporate guarantee(1)fromtheCompany; - legalmortgagesovercertainvesselsofthesubsidiaries(Note14); - legalchargesovercertainbankaccountsoftheCompanyandthesubsidiaries; - assignmentofincomefromcharterhirecontracts;and - assignment of insurance of the vessels.




8. Bank term loans (b)(viii) to (b)(ix)

- legalmortgagesovercertainvesselsofasubsidiary(Note14);and - assignment of insurance of the vessels.

(1) The fair value of the corporate guarantee is assessed by the management to be insignificant.

The carrying amounts of bank loans are denominated in the following currencies:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

United States dollar 181,742 149,285 86,989 67,549Singapore dollar 20,392 14,113 20,392 14,113Indonesian rupiah 7,250 – – –

209,384 163,398 107,381 81,662

18 trade PayaBles Trade payables are non-interest bearing and are normally settled on 30 to 60 days (2010 : 30 to 60 days) terms.

Trade payables are denominated in the following currencies:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

United States dollar 14,258 10,648 10,401 6,658Singapore dollar 9,495 7,789 8,603 7,663Others 4,123 2,345 122 62

27,876 20,782 19,126 14,383

19 other PayaBles and liaBilities

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Accrued operating expenses 18,544 16,215 5,216 4,081Other payables 857 1,047 282 382Deferred income 1,911 1,621 1,646 1,454

21,312 18,883 7,144 5,917



19 other PayaBles and liaBilities (cont’d)

Other payables and liabilities are denominated in the following currencies:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

United States dollar 11,832 14,155 5,802 4,287Indonesian rupiah 4,902 – – –Thai baht 2,473 2,262 – – Singapore dollar 1,543 1,649 1,342 1,629Indian rupee 514 681 – – Others 48 136 – 1

21,312 18,883 7,144 5,917

20 due to suBsidiary (trade/non-trade)


21 due to immediate holdinG comPany (trade)


22 finance leases

Group

minimumlease payments

Present valueof minimum

lease payments2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Amounts payable under finance leases:

Within one year 386 421 319 324In the second to fifth years inclusive 751 1,140 684 1,006More than five years 29 73 25 64

1,166 1,634 1,028 1,394Less: Future finance charges (138) (240) – – Present value of lease obligations 1,028 1,394 1,028 1,394

Less: Amount due for settlement within 12 months (shown under current liabilities) 319 324

Amount due for settlement after 12 months 709 1,070



22 finance leases (cont’d)

company

minimumlease payments

Present valueof minimum

lease payments2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Amounts payable under finance leases:

Within one year 57 89 49 78In the second to fifth years inclusive 183 243 161 213More than five years 29 73 25 64

269 405 235 355Less: Future finance charges (34) (50) – – Present value of lease obligations 235 355 235 355

Less: Amount due for settlement within 12 months (shown under current liabilities) 49 78Amount due for settlement after 12 months 186 277

Finance leases bear interest ranging from 2.9% to 5.9% (2010 : 2.9% to 5.9%) per annum. All assets acquired under finance leases are secured against the assets under lease. The carrying amount of assets under finance leases is disclosed in Note 14.

The finance leases do not contain any escalation clauses and do not provide for contingent rents. Lease terms do not contain restrictions concerning dividend, additional debts or further leasing.

23 deferred taX

Deferred tax assets and liabilities as at the end of the reporting period relate to the following:

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Deferred tax assetsAn excess of tax written down value over net book value of fixed assets (2) – – – Provisions 37 14 – – Others 1 1 – –

36 15 – –

Deferred tax liabilitesAn excess of tax written down value over net book value of fixed assets 2 – – –

2 – – –

As the movements are not significant, no additional information is provided.



24 share caPital

Group and company2011 2010

no. of shares us$’000 no. of shares us$’000

Issued and fully paid:Balance at beginning and end of year 539,131,199 68,761 539,131,199 68,761

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions. The ordinary shares have no par value.

25 treasury sharesGroup and company

2011 2010no. of shares us$’000 no. of shares us$’000

Issued and fully paid:Balance at beginning and end of the year (1,093,000) (174) (1,093,000) (174)

Treasury shares relate to ordinary shares of the Company that is held by the Company.

26 other reserVes

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Statutory reserve (a) 33 32 – – Hedging reserve (b) (8,402) (5,118) – –

(8,369) (5,086) – –

(a) Statutory reserve

For subsidiary in the United Arab Emirates (“UAE”), 10% of the profits for the year is required to be transferred to a statutory reserve account according to the Articles of Association and UAE Commercial Companies Law. The subsidiary may resolve to discontinue such annual transfer when the reserves reach 50% of its issued share capital. The statutory reserves are not available for distribution except in circumstances permitted by the law.

The subsidiary in Thailand is also required to set aside a statutory reserve equal to the least 5% of its net profit each time the subsidiary pays out a dividend, until such reserve reaches 10% of the subsidiary’s registered share capital. The statutory reserve cannot be used to offset any deficit and dividend payment.

(b) Hedging reserve

The hedging reserve records the portion of the fair value changes on derivative financial instruments designated as hedging instruments in cash flow hedges that is determined to be an effective hedge.



26 other reserVes (cont’d)

Group company2011 2010 2011 2010

us$’000 us$’000 us$’000 us$’000

Balance at beginning of the year (5,118) (3,764) – – Net change in the hedging reserve – 59 – – Share of net change in associate’s hedging

reserve (3,284) (1,413) – – Balance at end of the year (8,402) (5,118) – –

27 foreiGn currency translation reserVe

The foreign currency translation reserve represents 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.

28 reVenue

Revenue of the Group represents revenue from freight operations, charter hire income and other services income. Intra-group transactions and revenue from associates have been excluded from the Group’s revenue.

Group2011 2010

us$’000 us$’000

Freight operations 375,638 308,100Charter hire 74,294 57,755Other services 4,281 3,286

454,213 369,141

29 other oPeratinG income

Group2011 2010

us$’000 us$’000

Gain on disposal of property, plant and equipment 4,688 219Net foreign exchange gain 713 – Rental income 251 232Others 403 625

6,055 1,076

Included in the gain on disposal of property, plant and equipment is a gain of US$4,570,000 on disposal of containers in a sale and leaseback arrangement with a non-related party (Note 40).



30 other oPeratinG eXPenses

Group2011 2010

us$’000 us$’000

Claim expenses 11 281Net foreign exchange loss – 864Loss on disposal of investment securities – 17Loss on disposal of associate 241 –Others – 44

252 1,206

31 finance income

Group2011 2010

us$’000 us$’000

Interest income– call deposits and bank balances 314 194– quoted fund investment 98 –

412 194

32 finance costs

Group2011 2010

us$’000 us$’000

Interest expense– bank term loans 3,147 2,440– finance leases 100 91

3,247 2,531

During the financial year, borrowing costs of approximately US$145,000 (2010 : US$485,000) at an interest rate of 0.55% above LIBOR (2010 : 0.55% above LIBOR) per annum, arising from borrowings obtained specifically for the vessels purchase, were capitalised in vessels in property, plant and equipment (2010 : capitalised in vessels under construction in property, plant and equipment).

33 income taX eXPense

Income tax recognised in profit or loss:

Group2011 2010

us$’000 us$’000

Current income tax:– current year 1,856 1,633– over provision in respect of prior years (39) – Deferred tax:– current year (21) 15– under provision in respect of prior years 2 –

1,798 1,648



33 income taX eXPense (cont’d)

Domestic income tax of Singapore is calculated at 17% (2010 : 17%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

The Company has been granted an extension of the status of the Approved International Shipping Enterprise (“AIS”) with effect from September 15, 2004 for a period of 10 years. The AIS incentive exempts certain income derived by the Company from Singapore Income Tax, subject to compliance with the relevant conditions under the scheme and those income not qualifying for incentive will be taxable at the existing corporate income tax rate.

The income of Foremost Maritime Pte Ltd, a subsidiary, which arises from shipping activities, is exempted from income tax in accordance with section 13A of the Singapore Income Tax Act, Cap. 134.

Income arising from other activities do not enjoy the above-mentioned income tax incentives and exemption. The income of the other companies in the Group are subject to the relevant income tax laws and regulations in the respective countries in which they operate.

The tax charge for the year can be reconciled to the accounting profit as follows:

Group2011 2010

us$’000 us$’000

Profit before tax 14,370 11,041

Income tax expense calculated at 17% (2010 : 17%) 2,443 1,877Effects of:Non-deductible expenses 209 117Income not subject to tax (259) (801)Effect of different applicable tax rates for foreign subsidiaries and associates (526) 592Over provision in respect of prior years (37) – Others (32) (137)

1,798 1,648

As at the end of the reporting period, the Group and the Company have tax losses of approximately US$230,000 (2010 : US$315,000) and US$Nil (2010 : US$Nil) respectively that are available for offset against future taxable profits of the companies in the Group and the Company in which the losses arose for which no deferred tax asset is recognised due to uncertainty of recoverability. The use of these tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operate.



34 Profit for the year

Profit for the year has been arrived at after charging (crediting):

Group2011 2010

us$’000 us$’000

Stevedoring and port charges (included in cost of sales) 150,914 132,365Bunker fuel (included in cost of sales) 101,836 73,994Charter hire (included in cost of sales) 69,722 61,194Operating lease expenses (included in cost of sales) 8,563 6,803Directors’ fees 130 116Employee benefits 12,288 12,667Audit fee paid/payable to auditors of the Company 188 178Audit fee paid/payable to other auditors 24 34Non-audit fee paid/payable to auditors of the Company 15 14Non-audit fee paid/payable to other auditors 12 2Depreciation of property, plant and equipment 21,850 17,991Property, plant and equipment written off 6 12Allowance for doubtful trade debts 354 313Write-back of doubtful trade debts (22) (142)Gain on disposal of subsidiary (Note 42) – 161

Group2011 2010

us$’000 us$’000

employee benefits:Wages, salaries and benefits 11,663 11,656Central Provident Fund and other pension costs 625 1,011

12,288 12,667

35 earninGs Per share

The earnings per share is calculated by dividing the profit attributable to owners of the Company of US$11,989,000 (2010 : US$9,263,000) by the weighted average number of shares in issue during the financial year of 538,038,199 (2010 : 538,038,199). The basic and diluted earnings per share are the same as there are no potential dilutive shares.



36 diVidendscompany

2011 2010us$’000 us$’000

declared and paid during the year:

Dividends on ordinary shares: Final dividend paid – 0.50 Singapore cents per ordinary share (tax exempt) in respect of previous financial year (2010 : Nil Singapore cents per ordinary share (tax exempt) in respect of previous financial year) 2,205 –

Proposed and not recognised as a liability as at the end of the reporting period:

Dividends on ordinary shares subject to shareholders’ approval at the Annual General Meeting:

Final one-tier tax exempt dividend for financial year ended December 31, 2011 of 0.30 Singapore cents per share, total dividend payable amounting to SGD 1,614,000 (2010 : Final one-tier tax exempt dividend for financial year ended December

31, 2010 of 0.50 Singapore cents per share, total dividend payable amounting to SGD 2,690,000) 1,242 2,085



37 holdinG comPany and related comPany transactions

The Company is a subsidiary of PT Samudera Indonesia Tbk, incorporated in Indonesia, which is a public limited company listed on the Jakarta Stock Exchange. The ultimate holding company is PT Samudera Indonesia Tangguh, also incorporated in Indonesia. Related companies in these financial statements refer to members of the ultimate holding company’s group of companies.

Some of the Company’s transactions and arrangements are between members of the Group and the effect of these on the basis determined between the parties is reflected in these financial statements. The balances are unsecured, interest-free and expected to be settled within 12 months from the end of the reporting period.

During the year, Group entities entered into the following transactions with related companies that are not members of the Group:

Group2011 2010

us$’000 us$’000

expenses

Immediate holding company:Agency commissions 3,162 2,896Office rental 108 104

Related companies:Ship management fees 1,113 877Building rental 28 27Vessel charter hire 1,905 1,504Container depot storage/repair 340 286Land lease 289 –Stevedorage charges 6,060 4,204

income

Related companies:Vessel charter hire 4,870 –Sale of a subsidiary – 380Sale of a vessel – 350



38 other related Party transactions

Some of the Company’s transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these financial statements.

During the year, Group entities entered into the following transactions with related parties:

Group2011 2010

us$’000 us$’000

expenses

Fees paid to a firm of which a director of the Company is a member 9 14

Compensation of directors and key management personnel

Short-term employee benefits 3,545 3,452Pension contributions 64 74Total compensation paid to key management personnel 3,609 3,526

Comprise amounts paid to:Directors of the Company 2,478 2,220Key executives 1,131 1,306

3,609 3,526

39 caPital commitments

Capital expenditure contracted for as at the end of the reporting period but not recognised in the financial statements are as follows:

Group2011 2010

us$’000 us$’000

Acquisition of property, plant and equipment – 19,743



40 oPeratinG lease arranGements

(a) Non-cancellable operating lease commitments - Group as lessee

The Group has various operating lease agreements for rental of office, containers, residential premises and charter hire of vessels. Most leases contain renewable options. Lease terms do not contain escalation clauses or contingent rentals and do not contain restrictions on the Group’s activities concerning dividends, additional debt or further leasing.

Group2011 2010

us$’000 us$’000

Minimum lease payments under operating leases recognised as an expense in the year 78,285 67,997

At the end of the reporting period, the Group has outstanding commitments under operating leases which fall due as follows:

Group2011 2010

us$’000 us$’000

Within one year 45,134 49,362In the second to fifth years inclusive 42,365 56,788Later than 5 years 6,417 –

93,916 106,150

Operating lease commitments in respect of the Group’s charter hire of vessels are calculated based on the charter hire rates applicable as at the end of the financial year. These lease contracts contain provisions for renegotiation of the charter hire rates on a 3 monthly, 6 monthly or annual basis.

During the year, the Group entered into an arrangement to dispose of containers to a non-related party for US$4,570,000 and then lease back the containers from the purchaser. The subsequent lease was accounted as an operating lease because the lease payments and the sale price are at fair value. Consequently, the gain on disposal of the containers was recognised in the profit or loss.

(b) Operating lease commitments - Group as lessor

The Group has various operating lease agreements with third parties relating to the rental of office, residential premises and charter hire of vessels. These non-cancellable leases have remaining non cancellable lease terms of between one and three years. Some leases include a clause to enable the charterer to extend the charter hire contract at the charterer’s option for a specified period.

At the end of the reporting period, the Group has contracted with lessees for the following future minimum lease payments:

Group2011 2010

us$’000 us$’000

Within one year 5,023 15,779In the second to third years inclusive 1,373 3,819

6,396 19,598



41 seGment information

For management purposes, the Group is organised on a world-wide basis into three main operating divisions, namely:

– Regional Container Shipping providing feeder services for the transportaion of containerised cargo between Singapore as a “hub”

port and other outgoing “spoke” ports in Asia, as well as inter-region and intra-region container shipping services to end users.

– Indonesia Domestic Container Shipping providing container shipping services to connect Indonesian archipelago.

– Bulk Carrier & Tanker providing transportation of special dry bulk, liquid and gas cargo in the international as well as Indonesian

domestic market.

– Others include forwarding, agency and other services.

The Group’s risks and rates of return are affected predominantly by differences in the services rendered.

Management monitors the operating results of its operating divisions separately for the purpose of making decisions about resource allocation and performance assessment.

indonesiaregional domestic Bulk

container container carriershipping shipping & tanker others eliminations Group

us$’000 us$’000 us$’000 us$’000 us$’000 us$’000

2011

revenue– External customers 318,041 57,597 74,293 4,282 – 454,213– Inter-segment 304 1,614 18 2,244 (4,180) –

318,345 59,211 74,311 6,526 (4,180) 454,213

Segment results 4,054 9,504 4,347 453 (1,700) 16,658Finance income 121 97 108 212 (126) 412Finance costs (1,939) (508) (918) (1) 119 (3,247)Share of results of

associates – – 781 (234) – 547Profit before tax 2,236 9,093 4,318 430 (1,707) 14,370

Income tax expense (1,798)Profit after tax 12,572

Segment assets 228,214 25,398 232,592 12,844 – 499,048Unallocated assets 36

499,084

Segment liabilities 134,136 14,686 107,419 3,691 – 259,932Unallocated liabilities 2,004

261,936



41 seGment information (cont’d)indonesia

regional domestic Bulkcontainer container carriershipping shipping & tanker others eliminations Groupus$’000 us$’000 us$’000 us$’000 us$’000 us$’000

2011

Capital expenditure 40,142 11,112 30,646 274 – 82,174Depreciation 7,045 2,445 12,271 89 – 21,850Write-back of doubtful

trade debts (7) (3) – (12) – (22)Allowance for doubtful

trade debts 269 72 – 13 – 354

indonesiaregional domestic Bulk

container container carriershipping shipping & tanker others eliminations Groupus$’000 us$’000 us$’000 us$’000 us$’000 us$’000

2010

revenue– External customers 272,140 35,960 57,755 3,286 – 369,141– Inter-segment 350 1,144 659 2,310 (4,463) –

272,490 37,104 58,414 5,596 (4,463) 369,141

Segment results 8,211 1,550 1,798 1,403 (758) 12,204Finance income 125 18 121 60 (130) 194Finance costs (1,502) (566) (585) (1) 123 (2,531)Share of results of

associates – – 919 255 – 1,174Profit before tax 6,834 1,002 2,253 1,717 (765) 11,041

Income tax expense (1,648)Profit after tax 9,393

Segment assets 151,671 25,987 246,448 15,033 – 439,139Unallocated assets 15

439,154

Segment liabilities 102,705 24,010 75,104 4,684 – 206,503Unallocated liabilities 2,212

208,715

Capital expenditure 492 507 4,263 379 – 5,641Depreciation 5,500 2,488 9,883 120 – 17,991Write–back of doubtful

trade debts (1) – – (141) – (142)Allowance for doubtful

trade debts 122 24 20 147 – 313



41 seGment information (cont’d)

Geographical information

The revenue of Container Shipping and Others segments (see (i) below) based on geographical location is as follows:

revenue2011 2010

us$’000 us$’000

Indonesia 210,120 173,924South East Asia (excluding Indonesia) 117,634 86,945Middle East and Indian Sub-continent 34,635 38,335Far East 8,728 3,835Others 8,803 8,347Total revenue for Container Shipping and Others 379,920 311,386

(i) Revenue is allocated to each geographical segment based on the origination of the shipment. The directors believe it could be inaccurate to analyse assets and capital expenditure by geographical segment because these cannot be meaningfully allocated to the different routes as the vessels do not operate on fixed routes.

For Bulk Carrier & Tanker, charterers of the Group’s vessels have the discretion to operate within a wide trading area and are not constrained by a specific sea-route. As such, no geographical segment information is presented.

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 income tax.

Segment revenue, expenses and results include transfers between business segments. These transfers are eliminated on consolidation.



42 disPosal of suBsidiary

On March 8, 2010, the Group disposed of its entire interests in a subsidiary, SILkargo (LLC), to a related company for a cash consideration of US$380,000.

Details of the disposal are as follows:

Group2010

us$’000

Property, plant and equipment 64Inventories 249Other receivables 123Prepaid operating expenses 126Cash and bank balances 225Trade and other payables and liabilities (273)Due to immediate holding company (136)Non-controlling interests (193)Foreign currency translation and other reserves 34Net assets derecognised 219

Gain on disposal:

Consideration received 380

Net assets derecognised (219)

161

Net cash inflow arising on disposal:

Cash consideration received 380

Cash and cash equivalents disposed of (225)

155



43 eVents after the rePortinG Period

1. On March 13, 2012, MV Sinar Jombang, with a deadweight of 5,450 tons which was built in 1998, owned by PT Samudera Shipping Services, a subsidiary, caught fire in Tanjung Selatan waters, Tanah Laut regency, South Kalimantan, on her way from Jakarta to Balikpapan.

There were no casualties and environmental damage due to the fire.

The vessel was fully covered by hull and machinery (H&M) insurance while the Group’s liability on the cargoes and other third party claims were fully covered by protection and indemnity (P&I) insurance, with a total deductible amount of approximately US$50,000 for both H&M and P&I.

The Group will continue its operational activity as usual and a replacement vessel is being prepared.

As at the date of this report, the Board does not foresee any significant impact to the business and financials of the Group. The carrying amount of the vessel as at December 31, 2011 was US$3.45 Million.

2. On 8 March 2012, the Company entered into a joint venture agreement to incorporate a joint venture company in Malaysia, Samudera Intermodal Sdn Bhd, ("Samudera Intermodal") in which the Company owns 65% interest. Samudera Intermodal will engage in the ship agency business in Malaysia. The Company contributed MYR 650,000 (approximately US$218,000) for the 65% equity interest.


statistic oF sHareHoLdersas at 19 March 2012

No. of Issued Shares : 539,131,199No. of Issued Shares (excluding Treasury Shares) : 538,038,199No. of Treasury Shares Held : 1,093,000 Class of shares : Ordinary shares Voting rights : 1 vote per ordinary share (no vote for treasury shares)

range of shareholdings no. of shareholders % no. of shares %

1 - 999 106 1.97 43,720 0.01

1,000 - 10,000 3,093 57.47 13,350,048 2.48

10,001 - 1,000,000 2,156 40.06 91,388,000 16.95

1,000,001 and above 27 0.50 434,349,431 80.56

5,382 100.00 539,131,199 100.00

shareholdinGs held in hands of PuBlic

Based on information available to the Company as at 19 March 2012, approximately 34.10% of the issued ordinary shares of the Company is held by the public and therefore, Rule 723 of the Listing Manual issued by SGX-ST is complied with.

toP 20 shareholders

no. name of shareholder no. of shares %*

1 PT. Samudera Indonesia 209,250,000 38.89

2 DBS Nominees Pte Ltd 109,378,700 20.33

3 UOB Nominees (2006) Pte Ltd 38,980,000 7.24

4 DB Nominees (S) Pte Ltd 11,459,000 2.13

5 Mitsui and Co Ltd 9,600,000 1.78

6 CIMB Securities (S) Pte Ltd 7,236,611 1.34

7 Phillip Securities Pte Ltd 5,288,800 0.98

8 United Overseas Bank Nominees Pte Ltd 4,952,600 0.92

9 HSBC (Singapore) Nominees Pte Ltd 4,491,600 0.83

10 Maybank Kim Eng Securities Pte Ltd 3,331,502 0.62

11 Toh Ong Tiam 3,328,000 0.62

12 UOB Kay Hian Pte Ltd 3,182,400 0.59

13 Ang Ah Beng 2,743,000 0.51

14 OCBC Securities Private Ltd 2,270,418 0.42

15 OCBC Nominees Singapore Pte Ltd 2,262,800 0.42

16 NBU International Limited 2,220,000 0.41

17 Hexacon Construction Pte Ltd 1,960,000 0.36

18 Teo Cheng Tuan Donald 1,680,000 0.31

19 Poh Boh Sim 1,472,000 0.27

20 Lim Hock Beng 1,350,000 0.25

426,437,431 79.22


statistic oF sHareHoLdersas at 19 March 2012

* The percentage of shareholdings was computed based on the issued share capital of the Company as at 19 March 2012 of 538,038,199 shares (which excludes 1,093,000 shares which are held as treasury shares representing approximately 0.20% of the total number of issued shares excluding treasury shares).

suBstantial shareholders

name direct interest % deemed interest %

PT Samudera Indonesia Tbk (note 1) 351,180,000 65.27 – –

PT Samudera Indonesia Tangguh (note 2) – – 351,180,000 65.27

PT Ngrumat Bondo Utomo (note 3) – – 351,180,000 65.27

Note:

1. 38,680,000 shares are held by UOB Nominees (2006) Pte Ltd and 103,250,000 shares are held by PT Bank Sumitomo Mitsui Indonesia through DBS Nominees Pte Ltd.

2. PT Samudera Indonesia Tangguh’s deemed interest arises from its interest of 57.98% in PT Samudera Indonesia Tbk.

3. PT Ngrumat Bondo Utomo’s deemed interest arises from its interest of 9.51% and 26.77% in PT Samudera Indonesia Tbk and PT Samudera Indonesia Tangguh respectively.


notice oF annuaL GeneraL MeetinG(Company Registration No. 199308462C)(Incorporated in Singapore with limited liability)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Samudera Shipping Line Ltd (“the Company”) will be held at M-Hotel Singapore, Anson III, Level 2, 81 Anson Road, Singapore 079908, on Wednesday, 25 April 2012, at 10.00 a.m. for the following purposes:

as ordinary Business

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 31 December 2011 together with the Auditors’ Report thereon. (resolution 1)

2. To declare a final one-tier tax exempt dividend of 0.30 Singapore cents per share for the year ended 31 December 2011 (2010: 0.50 Singapore cents per share). (resolution 2) 3. To re-elect the following Directors of the Company retiring pursuant to Article 91 of the Articles of Association

of the Company: Mr Anwarsyah (resolution 3) Mr Asmari Herry Prayitno (resolution 4) Mr David Lim Teck Leong (resolution 5) Mr Lee Chee Yeng (resolution 6)

Mr David Lim Teck Leong will, upon re-election as Director of the Company, remain as Chairman of the Remuneration Committee and a member of the Audit and Nominating Committees and will be considered independent.

Mr Lee Chee Yeng will, upon re-election as Director of the Company, remain as Chairman of the Nominating Committee and a member of the Audit and Remuneration Committees and will be considered independent.

4. To approve the payment of Directors’ fees of S$162,000 for the year ended 31 December 2011 (2010: S$158,750). (resolution 7)

5. To re-appoint Messrs Deloitte & Touche LLP as the Auditors of the Company and to authorise the Directors of the Company to fix their remuneration. (resolution 8) 6. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

123ANNUAL REPORT 2011SAMUDERA SHIPPING LINE LTD


as sPecial Business

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications: 7. authority to issue shares

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Directors of the Company be authorised and empowered to:

(a) (i) issuesharesintheCompany(“shares”)whetherbywayofrights,bonusorotherwise;and/or (ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would

require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the DirectorsoftheCompanymayintheirabsolutediscretiondeemfit;and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instruments made or granted by the Directors of the Company wh i le this

Resolution was in force,

provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) to be issued pursuant to this Resolution shall not exceed fifty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the capital oftheCompany(ascalculatedinaccordancewithsub-paragraph(2)below);

(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, 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 of the passing of this Resolution, after adjusting for:

(a) newsharesarisingfromtheconversionorexerciseofanyconvertiblesecurities;

(b) new shares arising from exercising share options or vesting of share awards which are outstanding orsubsistingatthetimeofthepassingofthisResolution;and

(c) anysubsequentbonusissue,consolidationorsubdivisionofshares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading Limited) and theArticlesofAssociationoftheCompany;and


notice oF annuaL GeneraL MeetinG (Company Registration No. 199308462C)(Incorporated in Singapore with limited liability)

(4) unless revoked or varied by the Company in a general meeting, such authority 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 earlier. [See Explanatory Note (i)] (resolution 9)

8. renewal of shareholders’ mandate for interested Person transactions

That for the purposes of Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited:

(a) approval be given for the renewal of the mandate for the Company, its subsidiaries and associated companies or any of them to enter into any of the transactions falling within the types of Interested Person Transactions as set out on pages 4 and 5 of the Company’s Appendix to the Annual Report dated April 10, 2012 (the “Appendix”) with any party who is of the class of Interested Persons described in the Appendix, provided that such transactions are carried out on normal commercial terms and in accordance with the review procedures of the Company for such Interested Person Transactions as setoutintheAppendix(the“Shareholders’Mandate”);

(b) the Shareholders’ Mandate shall, unless revoked or varied by the Company in a general meeting, 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 earlier;and

(c) authority be given to the Directors of the Company to complete and do all such acts and things (including executing all such documents as may be required) as they may consider necessary, desirable or expedient to give effect to the Shareholders’ Mandate as they may think fit. [See Explanatory Note (ii)] (resolution 10)

By Order of the Board

Yeo Poh Noi CarolineSecretary

Singapore,10 April 2012



explanatory notes:

(i) The Ordinary Resolution 9 in item 7 above, if passed, will empower the Directors of the Company, effective 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 or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant Instruments convertible into shares and to issue shares pursuant to such Instruments, up to a number not exceeding, in total, 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to shareholders.

For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent bonus issue, consolidation or subdivision of shares.

(ii) The Ordinary Resolution 10 proposed in item 8 above, if passed, will authorise the Interested Person Transactions as described in the Appendix and recurring in the year and will empower the Directors of the Company to do all acts necessary to give effect to the Shareholders’ Mandate. This authority will, unless previously revoked or varied by the Company in a general meeting, expire at 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.

notes:

1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint not more than two proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at No. 6 Raffles Quay #25-01, Singapore 048580 not less than forty-eight (48) hours before the time appointed for holding the Meeting.


notice oFBooK cLosure(Company Registration No. 199308462C)(Incorporated in Singapore with limited liability)

NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of Samudera Shipping Line Ltd (the “Company”) will be closed on 8 May 2012 for the preparation of dividend warrants.

Duly completed registrable transfers received by the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road #17-00, The Corporate Office, Singapore 068906 up to 5.00 p.m. on 7 May 2012 will be registered to determine shareholders’ entitlements to the proposed final one-tier tax exempt dividend of 0.30 Singapore cents per share (“Dividend”). Members whose Securities Accounts with The Central Depository (Pte) Limited are credited with shares at 5.00 p.m. on 7 May 2012 will be entitled to the proposed Dividend.

Payment of the Dividend, if approved by the members at the Annual General Meeting to be held on 25 April 2012 will be made on 21 May 2012.

ProXy form(Please see notes overleaf before completing this Form)

I/We,

of being a member/members of Samudera Shipping Line Ltd (the “Company”), hereby appoint:

name nric/Passport no. Proportion of shareholdings

no. of shares %

address

and/or (delete as appropriate)

name nric/Passport no. Proportion of shareholdings

no. of shares %

address

or failing the person, or either or both of the persons, referred to above , the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on 25 April 2012 at 10.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please indicate your vote “for” or “against” with a tick [√] within the box provided.)

no. resolutions relating to: for against

1 Directors’ Report and Audited Accounts for the year ended 31 December 2011

2 Payment of proposed final one-tier tax exempt dividend

3 Re-election of Mr Anwarsyah as a Director

4 Re-election of Mr Asmari Herry Prayitno as a Director

5 Re-election of Mr David Lim Teck Leong as a Director

6 Re-election of Mr Lee Chee Yeng as a Director

7 Approval of Directors’ fees amounting to S$162,000

8 Re-appointment of Messrs Deloitte & Touche LLP as Auditors

9 Authority to issue new shares

10 Renewal of Shareholders’ Mandate for Interested Person Transactions

Dated this day of 2012

Signature of Shareholder(s)or, Common Seal of Corporate Shareholder

samudera shiPPinG line ltd(Company Registration No. 199308462C)(Incorporated in Singapore with limited liability)

imPortant:1. For investors who have used their CPF monies to buy Samudera Shipping Line

Ltd’s shares, this Report is forwarded to them at the request of the 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.

3. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.

total number of shares in: no. of shares

(a) CDP Register

(b) Register of Members

notes:

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at No. 6 Raffles Quay #25-01, Singapore 048580 not less than 48 hours before the time appointed for the Meeting.

6. 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 either under its seal or under the hand of an officer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument.

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, Chapter 50 of Singapore.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible, or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged 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.


6 Raffles Quay, #25-01, Singapore 048580. Telephone: (65) 6403 1687CO. REG. NO.: 199308462C

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