ASL Marine Holdings Ltd.aslmarine.listedcompany.com/misc/ar2011.pdfASL Marine Holdings Ltd. │...
Transcript of ASL Marine Holdings Ltd.aslmarine.listedcompany.com/misc/ar2011.pdfASL Marine Holdings Ltd. │...
ASL Marine Holdings Ltd.Company Registration No. 200008542N
19 Pandan Road Singapore 609271
Telephone: (65) 6264 3833 Facsmile: (65) 6268 0274
Website: www.aslmarine.com
ASL M
arine H
old
ings Ltd
. An
nu
al Rep
ort 2011
2011Annual Report
ASL Marine Holdings Ltd.
01 Corporate Profi le
02 Business Overview
04 Financial Highlights
06 Five Year Financial Summary
07 Founder’s Message
08 Chairman’s Statement
11 Operations and Financial Review
14 Board of Directors
17 Senior Management
18 Group Structure
19 Corporate Governance Report
32 Risk Management Strategies
33 Financial Statements
126 Analysis of Shareholdings
128 Notice of Annual General Meeting
Proxy Form
Corporate Information
Contents
Corporate Information
BOARD OF DIRECTORS
Executive
Ang Kok Tian (Chairman and Managing Director)
Ang Ah Nui (Deputy Managing Director)
Ang Kok Eng
Ang Kok Leong
Independent, Non-Executive
Damian Hong Chin Fock (Lead Independent Director)
Andre Yeap Poh Leong
Christopher Chong Meng Tak
AUDIT COMMITTEE
Damian Hong Chin Fock (Chairman)
Andre Yeap Poh Leong
Christopher Chong Meng Tak
NOMINATING COMMITTEE
Andre Yeap Poh Leong (Chairman)
Christopher Chong Meng Tak
Damian Hong Chin Fock
REMUNERATION COMMITTEE
Damian Hong Chin Fock (Chairman)
Andre Yeap Poh Leong
Christopher Chong Meng Tak
COMPANY SECRETARIES
Lilian Tan Yin Yen
S. Thillainathan
INVESTOR RELATIONS CONTACTS
ASL Marine Holdings Ltd.
Financial PR Pte Ltd
romil@fi nancialpr.com.sg
REGISTERED OFFICE
19 Pandan Road
Singapore 609271
Telephone : (65) 6264 3833
Facsimile : (65) 6268 0274
Email : [email protected]
Website : www.aslmarine.com
INCORPORATION DATA
Place of Incorporation : Singapore
Date of Incorporation : 4 October 2000
Co. Reg. No. 200008542N
SHARE LISTING
ASL Marine Holdings Ltd.’s shares are listed and
traded on the Main Board of the Singapore Exchange
Securities Trading Limited since March 2003.
SHARE REGISTRAR & SHARE TRANSFER OFFICE
M & C Services Private Limited
138 Robinson Road #17-00
The Corporate Offi ce
Singapore 068906
Telephone : (65) 6227 6660
Facsimile : (65) 6225 1452
AUDITORS
Ernst & Young LLP
Certifi ed Public Accountants
One Raffl es Quay
North Tower, Level 18
Singapore 048583
Partner-In-Charge: Terry Wee Hiang Bing
(appointed since the fi nancial year ended 30 June
2010)
PRINCIPAL BANKERS
United Overseas Bank Limited
DBS Bank Ltd
The Royal Bank of Scotland N.V.
Standard Chartered Bank
Oversea-Chinese Banking Corporation Limited
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 1
The Group started operations as
a trader of scrapped steel material
in 1974, and subsequently rode
on the 1980s construction sector
boom by undertaking building
construction works.
Guided by its vision to be a leading
player in the marine sector, the
Group undertook ship-breaking
activities in 1986 before venturing
into shipbuilding and shiprepair. It
successfully constructed its first
barge and tug in 1988 and 1990
respectively. In 1989, the Group
extended its vertically integrated
capabilities by providing charter
of tugs and barges and other
marine logistics services.
Headquartered and listed in
Singapore on 17 March 2003,
the Group currently owns and
operates three shipyards in
Singapore, Indonesia (Batam)
and China (Guangdong) providing
a comprehensive range of
shipbuilding and shiprepair and
conversion services spanning
myriad sectors and industries.
ASL Marine specialises in building
Offshore Support Vessels,
construction vessels, dredgers,
tugs, barges and tankers. The
Group also undertakes repairs
and conversions of all types of
vessels.
The Group operates three graving
dry docks of 300,000 dwt, 60,000
dwt and 20,000 dwt each at its
Batam shipyard. The 300,000 dwt
graving dry dock is currently one
of the largest dry docks in Batam
capable of accommodating larger
vessels such as Capesize Bulk
Carriers, Long Range Product
Tankers, Container Vessels,
Heavy-lift Ships, Floating Storage
and Offloading (“FSO”) and
Floating Production, Storage and
Offloading (“FPSO”) vessel. The
two medium-sized dry docks of
60,000 dwt and 20,000 dwt each
are to cater mainly for repair of
medium-sized vessels such as
Panamax and Handymax Bulk
Carriers and Medium Range
Products Tankers.
Equipped with a young fleet of
194 vessels consisting of barges,
towing tugs, Anchor Handling
Tugs, Anchor Handling Towing/
ASL Marine Holdings Ltd. is a vertically-
integrated marine services group
principally engaged in shipbuilding,
shiprepair and conversion, shipchartering
and other marine related services,
catering to customers mainly from Asia
Pacifi c, South Asia, Europe, Australia and
the Middle East.
Corporate Profi le
“
”
Supply vessels and other vessels,
the Group has carved a niche in
providing shipchartering services to
various industries including offshore
oil and gas, marine infrastructure,
dredging, land reclamation, marine
construction works and cargoes
transportation.
Business Overview
2
SHIPBUILDING
SHIPREPAIR AND CONVERSION
The Group provides a comprehensive range of repair and conversion
services including retro-fittings, life-extensions and repair of various
types of vessels such as:
• Tanker, Container Vessel, Bulk Carrier
• Offshore Support Vessel, Dredging Vessel, Pipe Laying
Vessel
• Jack-up Rig, Semi-submersible Rig
• FSO and FPSO
The Group’s Batam yard is equipped with the following dry docking
facilities:
• A graving dry dock measuring 340 x 60 metres to
accommodate larger vessels up to 300,000 dwt such as
Capesize bulker, FSO and FPSO
• Two medium-sized dry docks of 230 metres and 180 metres
length each to accommodate medium-sized vessels up to
60,000 dwt and 20,000 dwt respectively such as Panamax,
Handymax and medium range tankers
The Group operates three shipyards in Singapore, Batam, Indonesia
and Guangdong, China.
The Group has established a track record of building specialised
niche vessels for customers from Asia, Europe, Middle East,
America, India and Australia such as:
• Offshore Support Vessels including Heavy-Lift cum Pipelay
Vessel, Subsea Operation Vessel, Anchor Handling Towing
Supply Vessel, Platform Supply Vessel, Offshore Maintenance/
Accommodation Vessel, Rescue and Standby Vessel
• Cutter Suction Dredger and Water Injection Dredger
• Accommodation Barge, Pipe Laying Barge and Work Barge
• Commercial Vessels including Chemical Tanker (IMO II/III), Bunkering
Tanker, Product Tanker
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 3
SHIPCHARTERING
YARD FACILITIES
The Group owns a young fleet of 194 vessels consisting mainly
barges, towing tugs, Anchor Handling Tugs, Anchor Handling
Towing/Supply vessels and other vessels.
The Group charters its fleet to customers from diverse industries
including:
• Offshore oil & gas
• Marine infrastructure
• Dredging, land reclamation & marine construction works
• Marine transportation of cargoes such as coal, aggregates
and heavy equipment
The Group’s vessels are mainly deployed by customers in Singapore,
Indonesia, Australia and other South East Asia countries.
SINGAPORE
Capitalising on Singapore’s strengths in infrastructure,
telecommunications and distribution channels, the Group’s
Singapore yard also acts as a headquarter to provide technical,
engineering, logistics and procurement supports to the Batam yard
with respect to the sourcing of raw material, equipment and parts
for its operations.
BATAM, INDONESIA
The Group’s Batam yard, with a naturally sheltered deep waterfront,
has a land size of over thirty hectares. The yard is located in
a free trade zone at Batam with industrial areas designated
specifically for shipyards and developed infrastructure such as
roads, telecommunications, utilities and supporting services.
Equipped with a 300,000 dwt graving dry dock and two medium-
sized graving dry docks of 60,000 dwt and 20,000 dwt the Batam
yard is capable of repairing up to Capesize vessels.
GUANGDONG, CHINA
The shipyard in Guangdong is owned by the Group’s 60% held
subsidiary Jiang Men Hongda Shipyard Ltd. The shipyard at
Guangdong has a land size of eight hectares and it has been
engaged in mainly shipbuilding activities for smaller vessels.
Financial Highlights
4
Net Profi t ($ million)
Basic Earnings Per Share (cents)
Number of Vessels
Revenue ($ million)
Net Assets ($ million)
Net Assets Per Share (cents)
2007
2008
2009
2010
2011
318.4
400.4
435.4
363.2
468.4
2007
2008
2009
2010
2011
40.2
60.3
71.1
31.9
37.3
2007
2008
2009
2010
2011
152.9
236.5
288.6
335.8
315.3
2007
2008
2009
2010
2011
11.46
15.09
16.93
7.61
8.89
2007
2008
2009
2010
2011
59.68
78.60
96.32
105.25
80.05
2007
2008
2009
2010
2011
Tugs and Other Vessels Barges
AHT / AHTS
115
97
118
125
111
60
61
67
62
64
1
4
4
4
5
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 5
Revenue by Operations ($ million)
Gross Profi t by Operations ($ million)
2010 2011
Shipbuilding 306.3 65.4% 215.7 59.4%
Shiprepair and conversion 89.1 19.0% 81.9 22.5%
Shipchartering and rental 73.0 15.6% 65.6 18.1%
Revenue by Operations ($ million) 468.4 100.0% 363.2 100.0%
2010 2011
Shipbuilding 25.6 42.1% 17.8 35.9%
Shiprepair and conversion 18.1 29.8% 16.2 32.7%
Shipchartering and rental 17.1 28.1% 15.6 31.4%
Gross Profi t by Operations ($ million) 60.8 100.0% 49.6 100.0%
2010
2010
2011
2011
Five Year Financial Summary
6
FY2011 FY2010 FY2009 FY2008 FY2007
Profit and Loss Accounts ($’000)
Revenue 363,151 468,372 435,442 400,440 318,402
Earnings before interests, tax, depreciation
and amortisation 83,477 87,307 115,622 93,525 63,712
Profit before tax 37,802 48,070 83,949 69,857 45,133
Profit attributable to owners of the Company 31,916 37,286 71,070 60,296 40,248
Balance Sheet ($’000)
Total assets 778,920 738,612 702,689 608,805 444,172
Total liabilities 433,732 414,495 407,646 368,609 287,427
Total equity 345,188 324,117 295,043 240,196 156,745
Property, plant & equipment 493,278 437,660 397,305 255,458 216,391
Bank balances, deposits and cash 49,536 90,090 96,012 102,995 47,668
Borrowings (Net of cash) 209,279 119,173 97,300 33,636 77,820
Per Share (cents)
Basic earnings per share 7.61 8.89 16.93 15.09 11.46
Diluted earnings per share 7.61 8.89 16.93 14.60 10.72
Net assets per share 80.05 105.25 96.32 78.60 59.68
Dividend per share 1.50 3.00 4.00 4.00 2.80
Financial Ratios
Net profit margin (%) 8.8 8.0 16.3 15.1 12.6
Return on shareholders’ fund (%) 9.5 11.8 24.6 25.5 26.3
Return on total assets (%) 4.1 5.0 10.1 9.9 9.1
Debt equity ratio (times) 0.75 0.65 0.66 0.57 0.80
Net debt equity ratio (times) 0.61 0.37 0.33 0.14 0.50
Founder’s Message
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 7
Dear Shareholders,
With slowing global economy and the sovereign debt
crisis in Europe, the marine industry continued to
remain muted with an uncertain economic outlook.
The Group registered 22.5% decline in revenue
to $363.2 million in FY2011 as each of its three
business segments of shipbuilding, shiprepair and
shipchartering recorded lower revenue as compared
to last financial year. Consequently, the Group’s
earnings declined by 14.4% to $31.9 million in
FY2011.
For the shipbuilding and shiprepair segments, the
Group would continue to capitalise on the capability
and capacity of its existing yards to diversify its
customer base. For the shipchartering segment,
the Group would continue to upgrade and renew
its fleet to better meet clients’ needs.
I would like to sincerely and humbly thank all of
you for your continuous support to ASL Marine. I
would also like to take this opportunity to thank
all our business partners, customers, bankers and
employees for your continued support and belief in
ASL Marine.
Ang Sin Liu
Founder and Advisor
Chairman’s Statement
8
Dear Shareholders,
The financial year in review witnessed the industry
fundamentals remaining more on the weaker side as
the global economies continued to be engulfed by the
financial turmoil dissipating from the US and Europe.
The operating environment that the Group operates in
remained highly competitive and challenging during the
financial year FY2011. The Group however continued to
be profitable in FY2011.
The Group registered a decline of 22.5% in total revenue
to $363.2 million in FY2011 as the maritime business
environment remained tough during the financial year
and impacted the three business segments of the
Group, namely shipbuilding, shiprepair and conversion
and shipchartering operations. The three segments
recorded relatively lower revenue for FY2011. In line with
lower revenue, the gross profit for the Group declined
18.4% to $49.6 million in FY2011 whilst gross profit
margin increased marginally from 13.0% in FY2010 to
13.7% in FY2011. The other operating income increased
12.8% to $10.5 million mainly due to higher gain on
vessel sales of $10.2 million in FY2011. The Group’s net
profit attributable to equity holders declined from $37.3
million in FY2010 to $31.9 million in FY2011.
The Group recorded a 9.2% return on equity for FY2011.
The Group’s net gearing ratio increased from 0.38 as at
30 June 2010 to 0.62 as at 30 June 2011 mainly due to
borrowing arising from $50 million bonds issued during
the financial year.
Based on the respective weighted average number
of shares, the Group’s fully diluted earnings per share
reduced from 8.89 cents in FY2010 to 7.61 cents in
FY2011. The net assets per share decreased from
105.25 cents as at 30 June 2010 for 299,604,002
shares in issue to 80.05 cents as at 30 June 2011 for
419,511,294 shares in issue. There were 120,577,892
bonus shares issued in December 2010 on the basis of
4 bonus shares for every 10 existing shares.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 9
Shipbuilding operations remained as the Group’s highest
revenue contributor with 59.4% of the total revenue
contributions. Due to lower order book in the financial
year, revenue from shipbuilding operations declined
29.6% in FY2011 to $215.7 million. New shipbuilding
orders remain subdued in the industry, the Group
however managed to secure some new orders. Since the
fourth quarter of FY2011, the Group has secured new
shipbuilding orders worth approximately $159 million for
13 vessels comprising 2 units of Emergency Response
and Rescue vessels, 9 units of Anchor Handling Towing/
Supply vessels, 1 unit of Offtake Support and Supply
vessel and 1 unit of work
barge.
The Group’s shiprepair
and conversion operations
registered 8.0% decline in
revenue to $81.9 million
in FY2011 mainly due to
the absence of larger ship
conversion jobs during the
financial year. The Group
entered FY2011 with enhanced facilities at the Batam
yard with the graving dry dock lengthened from 260 to
340 metres and the addition of two new medium-sized
dry docks of 60,000 dwt and 20,000 dwt each. With
the enlarged capacity of 300,000 dwt for the graving
dock, the Group was able to accommodate and work
on larger vessels such as tankers, FSO and capesize
bulk carriers, during FY2011.
The Group’s shipchartering operations witnessed the
increase in fleet size from 177 vessels as at 30 June
2010 to 194 vessels as at 30 June 2011, comprising
barges, towing tugs, Anchor Handling Tugs, Anchor
Handling Towing/ Supply vessels and other vessels.
Revenue from the shipchartering segment declined
10.2% to $65.6 million in FY2011 mainly due to weaker
demand for towing jobs during the financial year which
affected the vessel utilisation rate and charter pricing.
The Group incurred a total capital expenditure of $122.2
million in FY2011 which included $58.7 million for
acquisition of vessels, $8.2 million for leasehold property
and building, $4.4 million for plant and machinery and
$50.4 million for assets under construction including
yard infrastructure development and vessels under
construction.
Outlook
Demand for new shipbuilding orders is expected to be
negatively impacted by the growing concerns about
slower global economic growth.
As at August 2011, the Group’s
total outstanding shipbuilding
order book from external
customers stood at approximately
$310 million for 29 vessels,
comprising 14 units of offshore
support vessels (including Diving
Support vessel, Anchor Handling
Towing/ Supply vessels, Offtake
Support and Supply vessel and
Emergency Response and Rescue vessels), 8 units
of tugs (Rotor tugs and Azimuth Stern Drive tugs), 2
units of self-propelled cutter suction dredgers and 5
units of barges and other vessels. These 29 vessels
are scheduled for progressive deliveries up to the third
quarter of 2013. Barring any unforeseen circumstances,
approximately 58% of the order book is expected to be
recognised within FY2012.
The market conditions for the shiprepair segment are
expected to remain competitive. The Group however
remains positive on the longer term outlook of the
segment with its enhanced docking facilities at the
Batam yard. The Group is currently establishing an
offshore services division to target on higher value
offshore oil and gas related conversion and repair
contracts such as FSO and FPSO.
Th e Group is well positioned
to leverage on its expanded
docking facilities at Batam
yard to enlarge its customer
base for future growth.
“
”
10
Chairman’s Statement
The Group’s shipchartering operations have an order
book of approximately $45 million as at 30 June 2011
with respect to long term shipchartering contracts. The
Group continuously aims to enhance and renew its
shipchartering fleet in order to better meet customers’
needs. As part of the fleet enhancement initiative,
the Group’s shipchartering operations have a total
outstanding delivery order of 14 new vessels worth
approximately $78 million of which long term charter
contract has been secured for 1 vessel. These new
vessels comprising towing tugs, pipe-lay barge, ROV
support vessel, Anchor Handling Tugs and barges and
they are being built internally by the Group. Demand
for this segment is underpinned by domestic marine
infrastructure, construction and land reclamation projects
such as the port expansion and construction of new
international cruise terminal, transportation needs
for natural resources in the South East Asia region
particularly in Indonesia, as well as offshore oil and gas
activities in South East Asia and Australia and the marine
infrastructure, harbour and terminal services sectors in
Australia.
Appreciation
I would like to take this opportunity to thank all our
shareholders for the support and confidence in the
Group. In appreciation of the support and to reward the
shareholders, the Board has proposed a final one-tier
tax-exempt dividend of 1.5 cents per ordinary share for
FY2011, representing a payout of approximately 20%
of the Group’s FY2011 earnings. The final dividend, if
approved at our upcoming Annual General Meeting, will
be paid on 16 November 2011.
On behalf of the Board, I would also like to express my
deep appreciation to all our management and staff for
their unceasing commitment and hard work towards
ASL Marine. Also, I would like to mention my sincerest
thanks and gratitude for my fellow directors for their
advice and guidance, and to our customers, partners,
business associates and suppliers for their strong and
loyal support.
Ang Kok Tian
Chairman and Managing Director
Operations and Financial Review
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 11
Revenue and Profitability
The Group’s revenue declined 22.5% to $363.2
million for the 12 months ended 30 June 2011
(“FY2011”). This was due to declines in all the three
business segments, namely shipbuilding, shiprepair
and conversion and shipchartering, due to the
continued tough maritime business environment.
In line with lower revenue, the Group’s gross profit
fell 18.4% to $49.6 million for FY2011. Gross profit
margin however, increased marginally from 13.0%
in FY2010 to 13.7% in FY2011.
In FY2011, other operating income for the Group
increased 12.8% to $10.5 million essentially because
it included higher gain on the disposal of plant and
equipment worth $6.2 million from the sale of 13
vessels (FY2010: $4.2 million for 20 vessels) and
gain from disposal of vessels held for sale of $4.0
million (FY2010: $2.5 million).
The Group’s administrative expenses decreased
5.1% to $9.3 million in FY2011. Other operating
expenses reduce 3.1% to $3.3 million primarily
due to the absence of impairment loss on vessels
(FY2010: $2.3 million) and lower net allowance for
doubtful trade receivables partially offset by higher
foreign exchange loss.
Finance costs of $8.9 million were 10.7% higher in
FY2011 as a result of absence of capitalisation of
$0.8 million borrowing costs recorded in FY2010.
The Group enters into “plain vanilla” interest rate
swaps to hedge against interest rate fluctuations on
its long-term borrowings.
Shipbuilding
The Group’s shipbuilding revenue declined by 29.6%
to $215.7 million in FY2011 due to lower order
book. Shipbuilding operations registered 30.6%
decline in gross profit to $17.8 million, while gross
profit margin remained relatively stable at 8.2%
(FY2010: 8.4%).
Including new shipbuilding orders secured since
the fourth quarter of FY2011 totaling approximately
$159 million for 13 vessels, the Group’s total
outstanding shipbuilding order book from external
customers stood at $310 million for 29 vessels as
at August 2011. These 29 vessels are scheduled
for progressive deliveries up to the third quarter
of 2013 and include offshore support vessels,
diving support vessels, Anchor Handling Towing/
Supply vessels, tugs, self-propelled cutter suction
dredgers and other vessels. Barring any unforeseen
circumstances, approximately 58% of the order
book is expected to be recognised within FY2012.
Shiprepair and Conversion
Revenue from the Group’s shiprepair and conversion
operations declined 8.0% to $81.9 million in FY2011
due to absence of larger ship conversion jobs during
the financial year. As a result of pricing pressures,
the segment’s gross profit declined 10.6% to $16.2
million while gross profit margin fell marginally from
20.3% in FY2010 to 19.7% in FY2011.
The Group’s docking facilities at Batam consists of a
graving dry dock of 340 metres length (300,000 dwt)
and two medium-sized dry docks of 230 metres
12
Operations and Financial Review
length (60,000 dwt) and 180 metres length (20,000
dwt) respectively. During the financial year, the
Group undertook shiprepair works on larger vessels
such as tankers, FSO and capesize bulk carriers.
Shipchartering
The Group’s shipchartering segment recorded
10.2% decline in revenue to $65.6 million in FY2011
mainly attributed to weaker market demand for
towing jobs during the year. Gross profit fell 8.2%
to $15.7 million in tandem with lower revenue, while
gross profit margin increased marginally to 23.9% in
FY2011 (FY2010: 23.4%). As at 30 June 2011, the
Group had 194 vessels in its fleet (177 vessels as
at 30 June 2010) comprising barges, towing tugs,
Anchor Handling Tugs and Anchor Handling Towing/
Supply vessels and other vessels.
The bulk of the Group’s shipchartering revenue
in FY2011 was driven by short-term and ad
hoc contracts. In FY2011, long-term contracts
with duration of more than a year contributed
approximately 11% of the shipchartering revenue.
As at 30 June 2011, the Group’s outstanding order
book for long-term shipchartering contracts stood
at approximately $45 million.
In order to better meet customers’ needs, the Group
remains strategically committed towards maximising
deployment, enhancing and renewing its fleet of
vessels. As at the end of FY2011, the shipchartering
operations had a total outstanding delivery order
of 14 new vessels worth approximately $78 million
which are being built internally by the Group. These
14 vessels under construction comprised towing
tugs, pipe-lay barge, ROV support vessel, Anchor
Handling Tugs and barges, of which a long-term
charter contract has been secured for 1 vessel.
Share of Results of Jointly-Controlled Entity and Associate
The Group’s share of losses incurred by HKR-
ASL Joint Venture Limited and the Group’s
associated company, Fastcoat Industries Pte.
Ltd. and its subsidiary amounted to $0.1 million
(FY2010: $0.2 million) and $0.6 million (FY2010:
$0.5 million) respectively. HKR-ASL Joint Venture
Limited has been dormant since the completion of
a shipchartering project in FY2009.
Operating Cash Flows
In FY2011, the Group’s net cash inflow of $34.4
million from operating activities was $29.5 million
lower as compared to $63.9 million in FY2010.
This decline was primarily due to comparatively
lower earnings, higher work-in-progress incurred
for shipbuilding projects and lower receipts on trade
receivables partially offset by lower payments on
trade payables.
The Group funded its working capital, capital
expenditure and repayment of borrowings through its
operating cash flows, external borrowings including
bonds issuance, bank loans and trust receipts as
well as proceeds from sale of vessels.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 13
Interest-bearing Loans and Borrowings
The Group’s interest-bearing loans and borrowings are set out as follows:
30 June 2011$’000
30 June 2010$’000
Due within one year:
Trust receipts (Unsecured) 34,865 25,033
Obligations under finance leases (Secured) 6,210 2,954
Short term bank loans (Secured) – 1,030
Short term bank loans (Unsecured) 9,000 1,000
Long term bank loans (Secured) 31,101 35,086
Notes issued under Multicurrency Debt Issuance Programme (Unsecured) 22,100 11,000
103,276 76,103
Due after one year:
Obligations under finance leases (Secured) 15,872 5,781
Long term bank loans (Secured) 46,767 62,379
Notes issued under Multicurrency Debt Issuance Programme (Unsecured) 92,900 65,000
155,539 133,160
Interest-bearing loans and borrowings 258,815 209,263
Gearing ratio 0.77 0.66
Gearing ratio (Net of cash) 0.62 0.38
The Group’s total interest-bearing loans and borrowings increased by $49.6
million to $258.8 million. The increase was mainly due to borrowing under
the $50 million bonds issued in March 2011 and other borrowings of $82.0
million partially offset by redemptions and repayments made of $82.4 million
during the year.
The $50 million bonds issued in FY2011 under the Company’s $300 million
Multicurrency Debt Issuance Programme comprised of fixed rate notes with a
3-year tenor maturing in March 2014. The Group’s total borrowings pursuant
to bonds issuance amounted to $115 million as at 30 June 2011 (30 June
2010: $76 million).
14
Ang Kok Tian, age 50Chairman and Managing Director
Mr K T Ang was appointed an
Executive Director of the Company
in October 2000, and Chairman of
the Board and Managing Director
in January 2003.
Mr K T Ang has been with the
Group for more than 20 years
and has extensive knowledge
and experience in the industry
and is instrumental in developing
the shipbuilding, shiprepair and
conversion and shipchartering
business of the Group. Mr K T
Ang is in charge of the Group’s
business strategies and direction,
corporate plans and policies as
well as the general management
of the Group. In particular, he
is in charge of the shipbuilding
and shiprepair divisions and is
responsible for all aspects of the
shipyard’s operations, including
estimations, negotiations and
contract finalisation. Mr K T Ang
began his career at Ang Sin Liu
Hardware, handling administration,
purchasing and marketing for the
company. He graduated from the
National University of Singapore
in 1986 where he received his
Bachelor’s Degree in Science.
Ang Ah Nui, age 47
Deputy Managing Director
Mr A N Ang was appointed
an Executive Director of the
Company in October 2000 and
Deputy Managing Director in
January 2003.
Mr A N Ang, having been with
the Group for more than 20
years, has extensive industry
knowledge and experience
and is instrumental in seeking
new markets for the business.
Mr A N Ang is jointly responsible
for the Group’s business
strategies and direction, corporate
plans and policies, and for the
general management of the
Group’s shiprepair and conversion
and shipchartering operations,
including business development
and operations.
Board of
Directors
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 15
Ang Kok Eng, age 44 Executive Director
Mr K E Ang was appointed an
Executive Director of the Company
in October 2002.
Mr K E Ang is responsible for
developing marketing strategies,
identifying new businesses and
markets and customers for Asia.
Mr K E Ang joined the Group
on 1 December 1994 and was
responsible for the operations of
the shipyards in Batam, Indonesia
and Guangdong, China. He is
also in charge of the Group’s
management information systems.
Prior to joining the Group, Mr K E
Ang was the Product Manager
of Navystar Industrial Co. Ltd,
a toy manufacturing company
based in Hong Kong and China.
He graduated from the University
of Michigan, USA in 1992 with a
Bachelor of Science Degree in
Electrical Engineering.
Ang Kok Leong, age 42
Executive Director
Mr K L Ang was appointed an
Executive Director of the Company
in October 2002.
Mr K L Ang is responsible for
developing marketing strategies,
identifying new businesses and
markets and customers for
Europe, Middle East, Australia,
South America and East Malaysia.
Mr K L Ang joined the Group on
1 January 1995 as a Marketing
Executive in the shipbuilding
division. He graduated from
Carnegie Mellon University in 1994
with a Bachelor of Science Degree
in Industrial Management.
Andre Yeap Poh Leong, age 50
Independent Director
Mr Yeap joined the Board in
January 2003.
Mr Yeap is currently a Senior
Counsel at Rajah & Tann LLP.
Prior to joining Rajah & Tann LLP
in 2004, he ran his own practice
under the name “Andre Yeap
& Co”. Mr Yeap had worked in
various law firms in Singapore.
He was a Senior Litigation Partner
at Allen & Gledhill (now known as
Allen and Gledhill LLP) where he
had worked from 1987 to 2000,
before joining the partnership of
Lee & Lee in 2001. His practice
focuses on banking, commercial
and corporate litigation with
special emphasis on securities
and stockbroking-related litigation
as well as construction litigation,
including ship and oil-rig matters,
both in Court and in arbitration.
He was appointed Senior Counsel
on 4 January 2003. He graduated
from the National University of
Singapore with a Bachelor’s
Degree in Law and is a member
of the Singapore International
Arbitration Centre.
16
Damian Hong Chin Fock, age 63
Independent Director
Mr Hong joined the Board in May
2003.
Mr Hong is also the independent
director of listed company,
Riverstone Holdings Limited,
the executive director of Shared
Services for Charities Limited
and director of several private
companies. He was a part
time lecturer at the Singapore
Management University and was
an Examiner of the Taxation Paper
for the Association of Chartered
Certified Accountants.
Mr Hong was employed by the
Inland Revenue Authority of
Singapore before joining KPMG
in 1979. He retired from KPMG
as Tax Principal in 1997 and
acted as Tax Consultant in KPMG
until 2004. Mr Hong was also
formerly a Tax Consultant in Allen
& Gledhill between 1994 to 2008.
He graduated from University of
Singapore with a Bachelor of
Social Science Degree (Upper
Class II Honours in Economics).
Christopher Chong Meng Tak, age 52Independent Director
Mr Chong joined the Board in
January 2006.
Mr Chong is a partner and co-
founder of ACH Investments Pte
Ltd, a specialist corporate advisory
firm in Singapore. He is currently
an independent director of several
listed companies including Koda
Ltd, Lorenzo International Limited,
Xpress Holdings Ltd and Ying Li
International Real Estate Limited
on the SGX-ST, Koon Holdings
Limited and GLG Corp Ltd on
the Australian Stock Exchange
and Imagi International Holdings
Ltd on the Hong Kong Stock
Exchange. Mr Chong is also a
director/trustee of several private
companies, trusts and funds.
Mr Chong has signif icant
exper ience in corporate
governance and corporate affairs.
He was a multi-award winning
analyst and the managing director
of HSBC Securities (Singapore)
Pte Ltd, formerly known as
HSBC James Capel Securities
(Singapore) Pte Ltd, and prior to
this was an executive director
of UOB Kay Hian Holdings Ltd,
formerly known as Kay Hian
James Capel Ltd.
Mr Chong holds a Bachelor of
Science degree in Economics
(1st Honours) from the University
College of Wales and a Master of
Business Administration degree
from the London Business
School. He is a member of the
Institute of Chartered Accountants
of Scotland, a Fellow of the
Australian CPAs, a Fellow of the
Hong Kong Institute of Certified
Public Accountants, a Fellow of the
Singapore Institute of Directors, a
Fellow of the Australian Institute of
Company Directors and a Master
Stockbroker of the Securities and
Derivatives Industry Association
of Australia.
Board of
Directors
Senior Management
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 17
Tay Kes SiongGeneral Manager (Shipchartering)
Capt. Tay joined the Group in October 2002 and is
responsible for managing the shipping operations
of the Group, including marketing, overall fleet
scheduling, maintenance, crew management,
shipping agencies, freight forwarding and freight
documentation.
Capt. Tay has more than 30 years of experience in
the shipping and marine industry. Prior to joining
the Group, Capt. Tay was a Marine Surveyor and
a Director of Marine Management Surveyors and
Services Pte Ltd which engaged in marine and
cargo surveys, consultancy, sea trials, compass
adjustments, pre-purchase inspections, shipping
agencies, forwarding and crew management.
S. Thillainathan Group Legal Manager and Company Secretary
Thillainathan joined the Group in July 2004 and is
responsible for the legal, secretarial and insurance
matters of the Group.
Thillainathan has more than 30 years experience
practicing and handling legal and insurance matters
in the marine industry. Before joining the Group, he
was employed as Senior Manager, Legal, by Labroy
Marine Limited for more than 7 years. Prior to that
he worked as Vice President, Legal and Secretariat
of Sembawang group of companies for more than
16 years.
Thillainathan holds a Bachelor of Laws Degree from
University of Singapore and was admitted as an
Advocate & Solicitor of the High Court of Singapore
in 1975.
Lilian Tan Yin YenGroup Financial Controller and Company Secretary
Lilian joined the Group in July 2006 and is
responsible for the Group’s accounting, finance,
treasury, secretarial, human resource and
administrative functions.
Lilian has more than 26 years experience in the
finance related fields. Her work experience includes
construction, manufacturing and trading industries.
Prior to joining the Group, she was the Group
Financial Controller of SP Corporation Ltd which
she held various managerial positions from 1992
to 2006 responsible for finance, treasury, human
resource and administrative functions. Her earlier
work experience included commercial and CPA
firms. Lilian holds a Bachelor of Accountancy
Degree from the National University of Singapore
in 1984. She is a fellow member of the Institute of
Certified Public Accountants of Singapore.
18
ASL Marine Holdings Ltd.
Shipbuilding and Shiprepair
ASL Shipyard Pte Ltd100%
Shipchartering
100% ASL Offshore & Marine Pte. Ltd.
100% Capitol Marine Pte Ltd
100% Capitol Offshore Pte Ltd
100% Capitol Shipping Pte Ltd
100% Capitol Tug & Barge Pte Ltd
100% Lightmode Pte Ltd
100% Capitol Logistics Pte. Ltd.
100% Capitol Navigation Pte. Ltd.
100% Capitol Aquaria Pte. Ltd.
100% Intan Synergy Pte. Ltd.
100% Intan Offshore Pte. Ltd.
100% Intan Oceans Pte. Ltd.
100% Intan Scorpio Pte. Ltd.
60% ASL Triaksa Offshore Pte. Ltd.
100% Capitol Oceans Pte. Ltd.
100% ASL Maritime Services Pte. Ltd.
100% Intan Maritime Investments Pte. Ltd.
Jointly Controlled Entity/Associate
PT. ASL Shipyard Indonesia10%
Hongda Investment Pte. Ltd.
60%
Jiang Men Hongda Shipyard Ltd.
Intan Overseas Investments Pte. Ltd.100%
75% PT. Cipta Nusantara Abadi
PT. Capitol Nusantara Indonesia
100% PT. Bina Kontinental Lestari
PT. Awak SamuderaTransportasi
90%
100%
100%
100% 100%
80%
50% HKR-ASL Joint Venture Limited
44.5%Fastcoat Industries Pte. Ltd.
PT. Fastcoat Industries
PT. Cemara Intan Shipyard
Group Structureas at 30 June 2011
18
Corporate Governance Report
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 19
The board of directors (the “Board”) of ASL Marine Holdings Ltd. (the “Company”) is committed to maintaining a high
standard of corporate governance by complying with the principles and guidelines of the Code of Corporate Governance
2005 (the “Code”) issued by the Ministry of Finance.
This report outlines the Company’s corporate governance practices with specific reference made to the Code. The
Board is pleased to confirm that the Company has complied with the Code, save for deviation with reference to
Guideline 3.1 (Chairman and CEO should be separate persons) which is explained in this report.
BOARD MATTERS
The Board’s Conduct of Affairs
Principle 1: Every company should be headed by an effective Board to lead and control the company.
The Board is collectively responsible for the success of the company. The Board works with
management to achieve this and the management remains accountable to the Board.
The primary function of the Board is to protect the assets and to enhance the long-term value of the Company for
its shareholders. Besides carrying out its statutory responsibilities, the Board oversees the businesses and affairs of
the Group. It reviews and advises on overall strategies, policies and objectives, sets goals, supervises management,
monitors business performance and goals achievement. The Board also oversees the processes for evaluating the
adequacy of internal controls, risk management, financial reporting and compliance and assumes responsibility for
overall corporate governance of the Group. Each director is expected, in the course of carrying out his duties, to
exercise independent judgment and act in good faith in the best interests of the Company.
The Board’s approval is required for matters such as the Group’s financial plans and annual budget, key operational
initiatives, acceptances of bank facilities, major investments and divestments proposals, material acquisitions and
disposals of assets, interested person transactions of a material nature and release of the Group’s quarterly and full year
financial results to the Singapore Exchange Securities Trading Limited (“SGX-ST”). Apart from matters that specifically
require the Board’s approval, the Board approves transactions exceeding certain threshold limits and delegates authority
for transactions below those limits to management so as to optimise operational efficiency.
To assist the Board in the execution of its responsibilities and to provide independent oversight of management,
various Board Committees, namely the Audit Committee (“AC”), Nominating Committee (“NC”) and Remuneration
Committee (“RC”), have been constituted with clear written terms of reference. These Committees are made up solely of
independent non-executive directors and the effectiveness of each Committee is constantly monitored by the Board.
No new director was appointed by the Company during the financial year ended 30 June 2011. For new appointment
to the Board, the newly-appointed director will be given a formal letter setting out his duties and obligations and he
will undergo an orientation program to be familiar with the Group’s businesses and governance practices. Directors
are also invited to yards visit and meet with management to gain a better understanding of the Group’s business
operations. To keep pace with regulatory changes, the director’s own initiatives are supplemented from time to time
with information, updates and sponsored seminars conducted by external professionals, including any changes in
legislation and financial reporting standards, government policies and regulations and guidelines from SGX-ST that
affect the Company and/or the directors in discharging their duties.
During the year, an independent non-executive director reviewed our Indonesian operations including visiting both
Batam and Jakarta and speaking to our Indonesian subsidiary’s auditors and legal advisors without the presence of
management. During the year, the independent non-executive directors attended relevant professional conferences,
seminars, workshops and courses including those conducted by SGX-ST on updates concerning guidance to the best
practice of director and the regulatory environment in Singapore. One of our independent non-executive directors has
attended, passed and obtained the Company Director Course Diploma issued by the Australian Institute of Company
Directors.
The Board conducts regular scheduled meetings and ad hoc Board meetings are convened when warranted by
circumstances relating to matters that are material to the Group. The Board meets at least six times a year. Telephonic
attendance and video conferencing at Board meetings are allowed under the Company’s articles of association. The
number of meetings held and the attendance of each director at every Board and Board Committee meetings during
the financial year ended 30 June 2011 are as follows:
20
Corporate Governance Report
Attendance at Board and
Board Committee meetings Board
Audit
Committee
Nominating
Committee
Remuneration
Committee
Number of meetings held 6 6 2 3
Number of meetings attended:
Executive directors
Ang Kok Tian 6 6* 2* 3*
Ang Ah Nui 6 6* 2* 3*
Ang Kok Eng 5 – – –
Ang Kok Leong 4 – – –
Independent non-executive
directors
Andre Yeap Poh Leong
(Chairman of NC) 5 5 2 3
Christopher Chong Meng Tak 6 6 2 3
Damian Hong Chin Fock
(Chairman of AC and RC) 6 6 2 3
* Attendance by invitation of the Committee
Board Composition and Guidance
Principle 2: There should be a strong and independent element on the Board, which is able to exercise
objective judgment on corporate affairs independently, in particular, from management. No
individual or small group of individuals should be allowed to dominate the Board’s decision
making.
The Board comprises seven directors, three of whom are independent non-executive directors. The independent non-
executive directors make up more than one-third of the Board thus providing an independent element on the Board
capable of exercising independent judgment on corporate affairs of the Group and provide management with a diverse
and objective perspective to enable balanced and well-considered decisions to be made. The NC determines, on an
annual basis, the independence of each independent non-executive director based on the guidelines provided in the
Code as one who has no relationship with any of the substantial shareholders of the Company, the Company, its
related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the
director’s independent business judgment in the conduct of the Company’s affairs.
The Board considers the current Board size and composition appropriate for the nature and scope of the Group’s
operations. The Board however intends to further review its Board size and composition taking into considerations the
key recommendations of the Singapore Corporate Governance Council announced in June 2011.
Among the directors are business leaders, financial, tax and legal professionals who possess the relevant expertise and
skill sets for effective decision-making. One of our independent non-executive directors whilst never having held an
executive position with a ship builder and ship repairer, has over 20 years experience analyzing, reviewing and advising
companies in such businesses. The profiles of the directors are set out on pages 14 to 16 of this Annual Report. The
combined business, management, finance, strategic planning and professional experience, knowledge and expertise
of the directors provide the necessary core competencies for the Board to effectively lead and manage the Group’s
businesses and operations.
The independent non-executive directors participate actively during Board meetings. In addition to providing
constructive advice to management on pertinent issues affecting the affairs and business of the Group, they also review
management’s performance in meeting goals and objectives of the Group’s business segments. The Company has
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 21
benefited from management’s access to its directors for guidance and exchange of views both within and outside of
the meetings of the Board and Board Committees. The independent non-executive directors communicate amongst
themselves and with the Company’s auditors and senior managers. Where necessary, the Company co-ordinates
informal meetings for independent non-executive directors to meet without the presence of the executive directors
and/or management.
Chairman and Chief Executive Officer
Principle 3: There should be a clear division of responsibilities at the top of the company – the working
of the Board and the executive responsibility of the company’s business – which will ensure
a balance of power and authority, such that no one individual represents a considerable
concentration of power.
Mr Ang Kok Tian is both the Chairman of the Board and the Managing Director of the Company. Mr Ang Kok Tian is
involved in the day-to-day running of the Group; he leads management in setting marketing strategies and objectives
and ensures accurate, adequate and timely flow of information between the Board, management and shareholders
of the Company. He facilitates constructive discussions between the Board and management and encourages their
effective contributions. Whilst the independent non-executive directors of the Company possess the relevant expertise
and experience in their respective professional fields, none have had significant hands-on experience in the marine
industry. Consequently, and given the current volatility and challenges of the marine industry, they are of the view that it
is in the best interests of the Group to continue to have an Executive Chairman so that the Board can have the benefit
of a Chairman who is knowledgeable about the marine industry and the businesses of the Group and is thereby better
able to guide discussions and ensures that the Board is properly briefed in a timely manner on pertinent issues and
developments. The Executive Chairman takes a leading role in ensuring the Company’s compliance with corporate
governance guidelines with the full support of the directors, Company Secretaries and management.
Mr Ang Kok Tian is supported by Mr Ang Ah Nui, the Deputy Managing Director on the setting of business strategies
and managing the day to day operations of the Group. In the absence of Mr Ang Kok Tian, Mr Ang Ah Nui would stand
in as the acting Managing Director to ensure continuity of the business operations of the Company.
To enhance the independence of the Board, an independent non-executive director, Mr Damian Hong Chin Fock has
been appointed as lead independent director to coordinate the activities of the independent non-executive directors and
act as principal liaison between the independent non-executive directors and Chairman on sensitive issues. The lead
independent director is also available to shareholders where they have concerns, for which contact through the normal
channels of the Chairman and Managing Director has failed to resolve or for which such contact is inappropriate.
All major decisions made by the Board are subject to majority approval of the Board and are reviewed by the AC,
whose members comprise only independent non-executive directors of the Company. Mr Ang Kok Tian’s performance
and remuneration are reviewed annually by the NC and RC respectively, whose members comprise only independent
non-executive directors of the Company. The Board believes that there are adequate safeguards in place to ensure
an appropriate balance of power and authority within the spirit of good corporate governance.
Board Membership
Principle 4: There should be a formal and transparent process for the appointment of new directors to
the Board.
The Board established the NC in March 2003 which currently consists of three independent non-executive directors,
namely, Mr Andre Yeap Poh Leong, Mr Damian Hong Chin Fock and Mr Christopher Chong Meng Tak. Mr Andre Yeap
is the Chairman of the NC and he is not associated in any way with the substantial shareholders of the Company.
22
Corporate Governance Report
The operations of the NC are regulated by its terms of reference, which were approved and are subject to periodic
review by the Board. The functions of the NC include making recommendations to the Board on all appointments
and re-appointments/re-elections of directors taking into consideration the mix of expertise, skills and attributes of
the directors for meeting the business and governance needs of the Group. The NC is also tasked to assess the
independence of the directors annually.
For appointment of new directors to the Board if a vacancy arises, the NC will, in consultation with the Board, evaluate
and determine the selection criteria with due consideration to the mix of skills, knowledge and experience of the existing
Board. The selection criterion includes integrity, diversity of competencies, expertise and financial literacy. The NC’s
selection process involves the evaluation of the existing strength and capabilities of the Board, assessment as to
whether the likely future needs of the Board can be fulfilled by the appointment of one person and if not, consult the
Board in respect to the appointment of two persons, seek suitably qualified candidates widely, review and undertake
background checks on the resumes received, short-list and interview candidates including a briefing of the duties
required to ensure that there are no expectations gap. The NC will seek candidates widely and beyond persons directly
known to the directors and is empowered to engage professional search firms and also give due consideration to
candidates identified by any person. The NC will interview all potential candidates in frank and detailed meetings and
make recommendations to the Board for approval.
Every year, the NC reviewed and affirmed the independence of the Company’s independent non-executive directors.
Each director is required to complete a Director’s Independence Checklist on an annual basis to confirm his
independence. The checklist is drawn up based on the guidelines provided in the Code and requires each director
to assess whether he considers himself independent despite not being involved in any of the relationships identified
in the Code. The checklist requires each director to disclose any relationship which would interfere or be reasonably
perceived to interfere with the exercise of independent judgment in carrying out the functions as an independent
non-executive director of the Company. Amongst the items included in the checklist are disclosure pertaining to any
employment including compensation received from the Company or any of its related corporations, relationship to an
executive director of the Company or its related corporations, immediate family member employed by the Company or
any of its related corporations as senior executive officer whose remuneration is determined by the RC, shareholding
or partnership or directorship (including those held by immediate family members) in an organization to which the
Company or any of its subsidiaries made, or from which the Company or its subsidiaries received, significant payments
in the current or immediate past financial year. The NC will then review the checklist completed by each director to
determine whether the director is independent. For the year under review, the NC has ascertained and is satisfied that
all non-executive directors are independent.
The NC has also reviewed directors with multiple directorships. With the exception of Mr Christopher Chong Meng Tak
who holds four concurrent directorships in other companies that have a primary listing on SGX-ST (making five such
directorships including the directorship of the Company), the remaining six directors hold fewer than two concurrent
directorships in other listed companies in SGX-ST. The NC has been informed by Mr Christopher Chong Meng Tak
that he will able to meet his obligations to the Company and in the event that any extraordinary duties are being
required by other companies he has or will be inviting an alternative director to share the responsibilities. For the year
under review, the NC is satisfied that the majority of the directors held not more than two concurrent directorships
in companies listed in SGX-ST and the directors with multiple directorships have given adequate time and attention
to the affairs of the Group through attendance at meetings of the Board and Board Committees, including electronic
and telephone communications.
Pursuant to Article 91 of the Company’s articles of association, every director (other than the Managing or Joint
Managing Director) shall retire from office once every three years and for this purpose, one-third of the Board are
to retire from office by rotation and be subject to re-election at the Company’s annual general meeting (“AGM”). In
addition, Article 97 of the Company’s articles of association provides that a newly appointed director must retire and
submit himself for re-election at the next AGM following his appointment. Thereafter, he is subject to re-election at
least once in every three years.
At the forthcoming AGM, Mr Ang Ah Nui and Mr Damian Hong Chin Fock will be retiring by rotation pursuant to Article
91 of the Company’s articles of association. Both of them, being eligible for re-election, have offered themselves for
re-election.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 23
The dates of first appointment and last re-election of each director, together with their existing directorships in listed
companies as well as past directorships in other listed companies in the last three years are set out below:
Name of director
Date of first
appointment/
last re-election
Current directorships
in listed companies
Past directorships
in other listed
companies
(from 1 July 2008 to
30 June 2011)
Ang Kok Tian
(Chairman and Managing
Director)
4 October 2000/
12 November 2002
ASL Marine Holdings Ltd. Nil
Ang Ah Nui
(Deputy Managing Director)
4 October 2000/
17 October 2008
ASL Marine Holdings Ltd. Nil
Ang Kok Eng
(Executive Director)
18 October 2002/
21 October 2009
ASL Marine Holdings Ltd. Nil
Ang Kok Leong
(Executive Director)
18 October 2002/
25 October 2010
ASL Marine Holdings Ltd. Nil
Andre Yeap Poh Leong
(Independent Non-executive
Director)
17 January 2003/
25 October 2010
ASL Marine Holdings Ltd. Nil
Damian Hong Chin Fock
(Independent Non-executive
Director)
16 May 2003/
17 October 2008
ASL Marine Holdings Ltd.
Riverstone Holdings Limited
Eng Wah Organisation
Limited.
Financial One Corp.
Christopher Chong Meng Tak
(Independent Non-executive
Director)
3 January 2006/
21 October 2009
ASL Marine Holdings Ltd.
Koda Ltd
Lorenzo International
Limited
Xpress Holdings Ltd
Ying Li International Real
Estate Limited
GLG Corp Ltd1
Koon Holdings Limited1
Imagi International Holdings
Ltd2
SKY China Petroleum
Services Ltd
Win Fund3
1 Listed on the Australian Stock Exchange2 Listed on the Hong Kong Stock Exchange3 Listed on the Luxembourg Stock Exchange
Board Performance
Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the
contribution by each director to the effectiveness of the Board.
The NC assesses the performance and effectiveness of the Board as a whole as well as the contribution of individual
directors to the effectiveness of the entire Board. The assessment process involves both a qualitative and quantitative
assessment. The qualitative assessment is undertaken by the independent non-executive directors in the form of a
discussion between themselves only. The quantitative assessment involves scoring a pre-agreed weighted score card
against various criteria including key performance indicators. The design of the quantitative assessment included input
and advice from third party professionals. This process ensure that the overall evaluation is undertaken against a set
of objective, quantitative and qualitative performance criteria that had been proposed by the NC and approved by the
Board.
24
Corporate Governance Report
The performance criteria includes the evaluation of the size and composition of the Board, the Board’s access
to information, the Board’s accountability and performance in relation to discharging its principal functions and
responsibilities, the directors’ standards of conduct and financial targets such as return on assets, return on equity
and the Company’s share price performance vis-a-vis the Singapore Straits Times Index and a benchmark index of
its industry peers. The Board, however, notes that the financial indicators provide only a snapshot of the Company’s
performance, and do not fully reflect on-going risk or measure the sustainable long-term wealth and value creation of
the Company.
In assessing the individual director’s performance and the effectiveness of the Board, the NC takes into consideration
the individual director’s industry knowledge and/or functional expertise, contribution, attendance at meetings of the
Board or Board Committees and workload requirements.
Access to Information
Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete,
adequate and timely information prior to Board meetings and on an on-going basis.
All directors have unrestricted access to the Company’s records and information. The Board members receive
quarterly management reports and budget variance reports to enable them to oversee the Group’s financial and
operational performance. The Board members also receive relevant information and comprehensive analysis furnished
by management pertaining to matters to be brought before the Board for discussion and decision. The independent
non-executive directors also, on an ad hoc basis, speak directly and privately to the CFO of the Company concerning
financial matters of the Group.
The Board and the Board Committees are furnished with complete and adequate information in a timely manner to enable
full deliberation on the issues to be considered at the respective meetings. Board papers with sufficient background
and explanatory information are circulated at least three days before each meeting. From time to time, managerial staff,
lawyers, the Company’s auditors or external consultants engaged on specific projects are invited to attend the Board
and Board Committee’ meetings so as to provide additional insight into the matters for discussions.
The Board has offsite meetings at least once in two years. These meetings are designed to focus on strategy, risk
and medium & longer term growth issues. At these meetings, the independent non-executive directors are provided
undertaking to industry trends and developments, government and international policies and opportunities and threats
that face the Company. The Board then weights up options and sets or revises growth targets and risk levels.
The Board has separate and independent access to the management and Company Secretaries at all times in carrying
out their duties. The directors, in furtherance of their duties, are entitled to take independent professional advice at the
expense of the Company when necessary. The Company Secretary assists the Chairman to ensure good information
flows within the Board and its Committees as well as the information flows between management and the independent
non-executive directors. The Company secretary also assists the Board on compliance with regulatory requirements
as well as professional development as required.
The Company Secretary attends all Board and Board Committee meetings of the Company and ensures that Board
procedures are followed and that applicable statutory and regulatory rules and regulations are complied with. Directors
are also invited from time to time to attend seminars pertaining to corporate governance and strategic business
affairs.
REMUNERATION MATTERS
Procedures for Developing Remuneration Policies
Principle 7: There should be a formal and transparent procedure for developing policy on executive
remuneration and for fixing the remuneration packages of individual directors. No director
should be involved in deciding his own remuneration.
The Board established the RC in March 2003 which currently consists of three independent non-executive directors,
namely, Mr Damian Hong Chin Fock, Mr Andre Yeap Poh Leong and Mr Christopher Chong Meng Tak. Mr Damian
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 25
Hong is the Chairman of the RC. In discharging their duties, the members have access to advice from the internal
human resources personnel, and if required, advice from external experts. The operations of the RC are regulated by
its terms of reference, which were approved and are subject to periodic review by the Board.
The RC recommends, in consultation with the Chairman of the Board, a framework of remuneration policies for key
executives and directors serving on the Board and Board Committees, and determines specifically the remuneration
package for each executive director of the Company. The RC covers all aspects of remuneration including but not
limited to directors’ fees, salaries, allowances, bonuses, share options, performance shares and benefits in kind. In
addition, the RC also reviews the remuneration of senior management. The RC’s recommendations are submitted for
endorsement by the entire Board. No director is involved in deciding his own remuneration.
The RC administers both the ASL Employee Share Option Scheme (“ESOS”) approved on 23 January 2003 and the
ASL Marine Performance Shares Scheme (“PSS”) adopted at the Extraordinary General Meeting held on 20 July 2007,
in accordance with the rules of the ESOS and PSS.
The RC determines and approves the allocation of the share options, the date of grant and the price thereof under the
ESOS. There were no share options granted during the financial year under ESOS and the executive directors did not
participate in the ESOS. Details of the ESOS are set out on pages 36 and 37 of this Annual Report.
As at the end of the financial year, there were no shares issued under the PSS. Details of the PSS are set out on page
37 of this Annual Report.
Level and Mix of Remuneration
Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors
needed to run the company successfully but companies should avoid paying more than is
necessary for this purpose. A significant proportion of executive directors’ remuneration
should be structured so as to link rewards to corporate and individual performance.
The Group’s remuneration policy is to provide remuneration packages which will reward performance and attract, retain
and motivate directors and key executives to run the Group successfully. In setting the remuneration packages, the
RC takes into consideration the remuneration and employment conditions within the same industry and in comparable
companies, and takes into account the Group’s and the individual’s performance.
The executive directors do not receive directors’ fees. The remuneration for the executive directors and the key
executives comprises primarily a basic salary component and a variable component which is the bonuses, based on
the performance of the Group as a whole and their individual performance. The service agreements entered into with
the four executive directors, namely, Mr Ang Kok Tian, Mr Ang Ah Nui, Mr Ang Kok Eng and Mr Ang Kok Leong, are
automatically renewable on a yearly basis unless terminated by either party giving written notice of not less than three
months.
The non-executive directors receive directors’ fees, in accordance with their contributions, taking into account factors
such as responsibilities, effort and time spent for serving on the Board and Board Committees. The non-executive
directors’ fees were derived using the fee structure as follows:
Audit
Committee
Nominating
Committee
Remuneration
Committee
Chairman $30,000 per annum $21,000 per annum $21,000 per annum
Member $20,000 per annum $16,000 per annum $16,000 per annum
The Company does not have service contracts with non-executive directors. Directors’ fees are recommended by the
Board and are subject to the approval of shareholders at the Company’s AGM.
The Company encourages independent non-executive directors to invest in the Company and has taken steps in the
past to ensure that this happened. The shareholdings of the individual directors of the Company are set out on page
34 of this Annual Report. None of the directors hold shares in the subsidiaries of the Company.
26
Corporate Governance Report
Disclosure on Remuneration
Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of
remuneration, and the procedure for setting remuneration in the company’s annual report.
It should provide disclosure in relation to its remuneration policies to enable investors
to understand the link between remuneration paid to directors and key executives, and
performance.
The remuneration of the directors of the Company for the financial year ended 30 June 2011 is summarised below:
Number of directors
Remuneration bands 2011 2010
$500,000 to below $600,000 2 2
$400,000 to below $500,000 2 2
Below $100,000 3 3
Total 7 7
Remuneration of executive directors and key executives
The following table shows the breakdown of the remuneration (in percentage terms) of the executive directors of
the Company and the top five executives of the Group (who are not directors) for the financial year ended 30 June
2011:
Salary1 Bonus1
Other
Benefits2 Total
% % % %
Executive directors
$500,000 to below $600,000
Ang Kok Tian 67 21 12 100
Ang Ah Nui 68 19 13 100
$400,000 to below $500,000
Ang Kok Eng 70 20 10 100
Ang Kok Leong 67 21 12 100
Key executives
$200,000 to below $300,000
Tay Kes Siong 76 24 – 100
Lilian Tan Yin Yen 76 24 – 100
$100,000 to below $200,000
Lim Soon Teck 80 20 – 100
S. Thillainathan 92 8 – 100
You Bom Lee 75 25 – 100
1 Salary and bonus includes Central Provident Fund Contributions2 Other benefits refer to car benefits
The following table shows the remuneration payable to the independent non-executive directors for the financial year
ended 30 June 2011:
Directors’ Fees
$
Independent non-executive directors
Andre Yeap Poh Leong 57,000
Damian Hong Chin Fock 67,000
Christopher Chong Meng Tak 52,000
Total 176,000
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 27
Remuneration of employees who are immediate family members of a director or the chief executive
officer
For the financial year ended 30 June 2011, saved as disclosed in the following table which shows the breakdown of
the remuneration (in percentage terms) of the Group Advisor who is the father of the executive directors, Mr Ang Kok
Tian, Mr Ang Ah Nui, Mr Ang Kok Eng and Mr Ang Kok Leong, the Company and its subsidiary companies do not have
any other employee who is an immediate family member of a director and whose remuneration exceeds $150,000.
Salary1 Bonus1
Other
Benefits2 Total
% % % %
Group Advisor
$400,000 to below $500,000
Ang Sin Liu 61 20 19 100
1 Salary and bonus includes Central Provident Fund Contributions2 Other benefits refer to car benefits
ACCOUNTABILITY AND AUDIT
Accountability
Principle 10: The Board should present a balanced and understandable assessment of the company’s
performance, position and prospects.
The Board endeavors to provide shareholders with a balanced and understandable assessment of the Group’s
performance, position and prospects on a regular basis. In presenting the quarterly financial statements announcements
and annual report to shareholders, the Board aims to provide shareholders with detailed analysis, explanation and
assessment of the financial performance, position and prospects of the Group. The analysis is further supported by
powerpoint presentation on the Group’s quarterly results and briefings of the same by the management.
In line with the requirements of SGX-ST, negative assurance confirmations on interim financial results were issued by
the Board confirming that to the best of its knowledge, nothing had come to the attention of the Board which may
render the Company’s quarterly results to be false or misleading in any material aspect.
Audit Committee
Principle 11: The Board should establish an AC with written terms of reference which clearly set out its
authority and duties.
The Board established the AC in March 2003 which currently consists of three independent non-executive directors,
namely, Mr Damian Hong Chin Fock, Mr Christopher Chong Meng Tak and Mr Andre Yeap Poh Leong. Mr Damian Hong
is the Chairman of the AC. The Board is of the opinion that the members of the AC have considerable legal, tax and
financial management expertise and also business experience with which to discharge their duties. The operations of
the AC are regulated by its terms of reference, which were approved and are subject to periodic review by the Board.
The AC meets at least six times a year.
The duties of the AC include reviewing with the internal auditor, external auditors and management, the Group’s policies
and control procedures, interested person transactions, as well as any financial information presented to shareholders.
Specifically, the AC:
• reviews the scope and results of external audit, the cost effectiveness of the audit, the independence and
objectivity of the external auditors and the nature and extent of non-audit services provided by the external
auditors;
• reviews the quarterly results announcements before submission to the Board for adoption;
• reviews the financial statements of the Group, accounting principles and policies thereto and management of
financial matters before endorsement by the Board;
28
Corporate Governance Report
• reviews the scope and results of the internal audit procedures, the adequacy of the internal control procedures
and effectiveness of the internal audit function;
• reviews the audit plans and reports of the internal and external auditors and evaluation of the internal control
systems of the Group and management’s responses and actions to correct any deficiencies;
• reviews the co-operation given by the Company’s officers to the internal and external auditors;
• recommends to the Board on the appointment or re-appointment of external auditors and their fees for
shareholders’ approval; and
• reviews interested person transactions in accordance with the requirements of the SGX-ST Listing Manual.
The AC has explicit authority to investigate any matter within the scope of its duties and is authorised to obtain
independent professional advice. It has full access to and co-operation of the management and reasonable resources
to enable it to discharge its duties properly. It also has full discretion to invite any executive director or executive officer
or any other person to attend its meetings. The AC meets with the external and internal auditors separately, at least
once a year, without the presence of management to review any areas of audit concern. Individual members of the AC
also engage the external and internal auditors separately in ad hoc meetings.
At the request of the AC, the Group undertook two audits for its financial results, one for the first half of the financial
year and the other for the full financial year.
For the financial year under review, the AC has reviewed the non-audit services provided by the Company’s external
auditors, which comprised attestation services required under the Approved International Shipping Enterprise Scheme.
The AC is satisfied that their independence and objectivity have not been impaired by the provision of those services.
The fees that are charged to the Group by the external auditors for non-audit services were $21,000 for the financial
year ended 30 June 2011 ($21,000 for the financial year ended 30 June 2010).
The AC has recommended to the Board the re-appointment of Ernst & Young LLP as the Company’s external auditors
at the forthcoming AGM.
WHISTLE-BLOWING POLICY
The Company has put in place a whistle-blowing policy and procedures duly endorsed by the AC, where employees
of the Group may, anonymously and in confidence, raise concerns about possible corporate improprieties in financial
reporting or other matters such as suspected fraud, corruption, dishonest practices etc. All reports including unsigned
reports, reports weak in details and verbal reports are considered. To ensure independent investigation into such
matters and for appropriate follow up action, all whistle-blowing reports are reviewed by the AC and the Board. In the
event that the report is about a director, that director shall not be involved in the review and any decisions with respect
to that report. The policy aims to encourage the reporting of such matters in good faith, with the confidence that any
employees making such reports will be treated fairly and be protected from reprisals. Details of the whistle-blowing
policy have been made available to all employees.
INTERNAL CONTROLS AND AUDIT
Internal Controls
Principle 12: The Board should ensure that the management maintains a sound system of internal controls
to safeguard the shareholders’ investments and the company’s assets.
The Group has a system of internal control designed to provide reasonable assurance with respect to the safeguarding
of assets and maintaining proper accounting records to ensure that financial information used for financial reporting
are reliable. The system of internal control is based within a wider framework that attempts to optimize the balance
between growth/return and related risks. More specifically, the Board attempts to:
a. Align risk with its medium and longer term business strategy. The Board thus sets the overall risk appetite which
the internal auditor and internal controls monitor.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 29
b. Preselect risk response. For each major risk or risk category, the Board decides whether to avoid, reduce,
share or accept the risk. The internal auditor and internal controls are there to ensure that the system does not
deliberately or inadvertently circumvent or override this decision.
c. Reducing operational surprises and losses.
d. Identifying cross border and cross business risk and such are risks which are not normally within the scope or
control of day-to-day management.
e. Improving the use of capital and resources.
However, the Board recognises that no internal control system could provide absolute assurance against the occurrence
of material errors, poor judgment in decision-making, human errors, losses, fraud or other irregularities. The internal
control system is designed to manage rather than eliminate the risk of failure to achieve the business objectives.
Internal and external audit reports on any material non-compliance or internal control weaknesses, including financial,
operational and compliance controls and recommendations for improvements are submitted to the AC for review semi-
annually. The AC reviews the effectiveness of the actions taken by management based on the recommendations made
by the internal and external auditors to the AC. The AC is satisfied that there are adequate internal controls within the
Group taking into account the nature and size of the Group’s business and operations.
The Group’s approach to risk management with a brief description of the nature and extent of its risk exposures are
set out on page 32 of this Annual Report.
Internal Audit
Principle 13: The company should establish an internal audit function that is independent of the activities
it audits.
The role of the internal auditor is to assist the AC to ensure that the Group maintains a sound system of controls
by regular monitoring of key controls and procedures and ensuring their effectiveness, undertaking investigations as
directed by the AC. The Company’s internal audit function is housed within the corporate services office. The AC
has also engage an independent external professional accounting firm to periodically review the Company’s internal
audit function so as to ensure that the internal audit function conforms substantially to established internal audit
standards.
The AC is responsible for the adequacy of the internal audit function, its resources and its standing and is satisfied that
the internal audit function is independent of the activities which it audits and has appropriate standing within the Group
to perform its role effectively. The internal auditor reports functionally to the Chairman of the AC and administratively
to the Group Financial Controller.
The internal auditor has unrestricted access to all records, properties, functions and co-operation from management
and staff necessary to effectively discharge his responsibilities. The internal auditor has adopted the standards for
the Professional Practice of Internal Auditing developed by The Institute of Internal Auditors to carry out internal audit
review in accordance with the annual audit plan which is formulated through the risk assessment in consultation with
and approved by the AC. The internal auditor performs checks and compliance tests on the systems of internal control
including financial and operational controls and risk management.
The AC reviews the internal audit reports and management controls in place on a semi-annual basis and is satisfied
with the adequacy of the internal controls in the Group.
COMMUNICATION WITH SHAREHOLDERS
Communication with Shareholders
Principle 14: Companies should engage in regular, effective and fair communication with shareholders.
The Board is mindful of its obligations to provide timely disclosure of material information presented in a fair and
objective manner to shareholders and investors. The communications with shareholders and investors are carried
out through various channels including the annual report, quarterly financial statements announcements including
30
Corporate Governance Report
powerpoint presentations, press releases, online management Q & A at Shareinvestor.com, announcements on
important developments and material information released through SGX-ST website which are also accessible at the
Company’s website, www.aslmarine.com.
The Company discloses the date of the release of its quarterly results at least one week prior to the date of
announcement through SGX-ST website. On the day of results announcement, the accompanying press release and/
or presentation slides are released onto the SGX-ST website. In addition, results briefing by management is also held
for analysts and media in conjunction with the release of the half-year and full year results announcements. From time
to time, the management participates in roadshows and holds meetings with investors and analysts to explain the
financial results and provide insight to the development and outlook of the industry.
The Company also engages external investor relation consultant firm to support the Group in promoting communication
with shareholders and investment community.
All shareholders will receive the annual report of the Company with notice of AGM by post and published in the
newspapers within the mandatory period. The shareholders can also access information on the Group at the Company’s
website at www.aslmarine.com. The website provides, inter alia, all publicly disclosed financial information, corporate
announcements, press releases, annual reports and profile of the Group.
Greater Shareholder Participation
Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders
the opportunity to communicate their views on various matters affecting the company.
All registered shareholders are invited to participate and given the right to vote on resolutions at general meetings. Every
matter requiring shareholders’ approval is proposed as a separate resolution. Each item of special business included
in the notice of the meeting is accompanied, where appropriate, by an explanation for the proposed resolution. Proxy
form is sent with notice of general meeting to all shareholders. If any shareholder is unable to attend the general meeting
in person, he is allowed to appoint up to two proxies to attend and vote on his behalf. The Company also allows CPF
investors to attend general meetings as observers. Voting in absentia by mail, facsimile or e-mail is currently not allowed
as such voting methods would need to be cautiously evaluated for feasibility to ensure that there is no compromise to
the integrity of the information and the authentication of the shareholders’ identity.
The results of all AGMs and EGMs are disclosed by way of a Company Announcement.
In consideration of the dilution impact to shareholders, the Company has voluntarily reduced the limit for non-pro rata
shares issue from 20% to 15% of the total number of issued shares in the capital of the Company with effect from
the last AGM.
The Board, Chairman of the AC, NC, RC and management are present at general meetings to address questions
that shareholders may have concerning the Group. The Company’s external auditors are also present to address any
relevant queries relating to the conduct of audit and the preparation and content of the auditors’ report.
VOLUNTARY LIMITS
The Company voluntarily limits the percentage of the enlarged share capital to be offered by way of a private placement
or such other way except on a pro-rata basis to all shareholders to between 10-15%.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 31
INTERESTED PERSON TRANSACTIONS
The Company has adopted an internal policy in respect of any transactions with interested persons and has set out
the procedures for quarterly review and approval of the interested person transactions to be entered into by the Group.
In accordance with Chapter 9 of the Listing Manual of SGX-ST, there were no material interested person transactions
entered into by the Group for the financial year ended 30 June 2011.
MATERIAL CONTRACTS
During the financial year, the Company and its subsidiary companies did not enter into any material contracts involving
the interests of any directors or any controlling shareholders of the Company or its associates except for the Company’s
announcement made on 28 September 2010 via SGX-ST in connection with the acquisition of property and vessels
by the Group’s subsidiaries from companies held by Koon Holdings Limited (“KHL”) in which disclosures were made
concerning the interests held by the controlling shareholders of the Company in KHL and the interest of an independent
non-executive director of the Company who is also an independent director of KHL.
DEALINGS IN SECURITIES
The Company has complied with the best practices on dealings in the Company’s securities. The Company has adopted
an internal compliance code which provides guidance to its officers and employees with regard to dealings in the
Company’s securities. The Group’s officers and employees are prohibited from dealing in the Company’s securities while
in possession of unpublished price-sensitive information of the Group, as well as during the periods commencing two
weeks before the announcement of the Company’s quarterly results and one month before the announcement of the
Company’s full year results and ending on the date of the announcement of the relevant results. The Group’s officers
and employees are also discouraged from dealing in the Company’s securities on short-term considerations.
SGX CHECKLISTS
The Company submits the following compliance checklists to SGX-ST when required:
• Acquisitions and Realisations
• Announcement of Financial Statements of SGX-ST Listed Companies
• Annual Report
• Bonus Issue of Shares and Warrants
• Circular Disclosure in relation to Employee Share Option Scheme
• Circular Disclosure in relation to Share Buy-Back Mandate
• Placement of Shares or Convertibles For Cash
• Rights Issue
• Share Split
Risk Management Strategies
32
The Group has established a framework for risk management to identify, assess and manage potential risks and
opportunities and to assist management in making informed decisions. The Group adopts a proactive approach to
managing risk of financial losses, breaches in legal and regulatory requirements, negative impact to customers and
loss of business opportunities.
The Group regularly reviews the level of risk exposure in the following key risk areas which the Group operates in:
• Legal and Country Risk
The Group has established subsidiaries operating in different countries. These overseas subsidiaries are exposed
to changes in governmental regulations and unfavourable political developments, which may limit the realisation
of business opportunities and investments in those countries.
Risks arising from non-compliance with applicable laws and regulations are managed with the assistance of the
Group’s in-house legal counsel as well as external legal advisers when necessary. Where the Group is active or
has an operating presence in a foreign jurisdiction, legal counsel from that foreign jurisdiction is sought where
appropriate. The operating head of the business unit is responsible for compliance with the applicable laws in
the country of operations.
The Group’s business operations are also exposed to uncertainties of the global economy and international
capital markets. To prepare for the fluctuations in external environment, the Board and the management
consistently keep themselves up-to-date on the changes in political and industry regulations so as to implement
appropriate measures against any adverse changes in market conditions in an efficient and timely manner.
• Operational Risk
Operational risk is the potential loss caused by a breakdown in internal process, deficiencies in people and
management, or operational failure arising from external events. The Group’s operational risk is managed at
each operating unit and monitored at the Group level. Whilst operational risk cannot be eliminated completely,
the Group evaluates the options available by weighing the cost and effectiveness of each measure taken to
minimise risk exposure. Where appropriate, the Group maintains sufficient insurance coverage for those areas
exposed to risks, taking into account the risk profile of the business in which it operates.
• Financial Risk
The Group’s financial risk management objectives and policies are set out on pages 105 to 116 of this Annual
Report. Financial risk includes market risk such as interest rate risk and foreign exchange rate risk, as well as
credit risk and liquidity risk.
• Investment Risk
The Group evaluates any investment proposals for potential ventures and business acquisitions by conducting
due diligence exercises and comparing to benchmarked rate of return taking into consideration the Group’s
level of risk exposure. All investment proposals are subject to the Board’s approval with post-investment reviews
being conducted to monitor and mitigate the risk of non-performing investments.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 33
34 Directors’ Report
40 Statement by Directors
41 Independent Auditors’ Report
42 Statements of Financial Position
44 Consolidated Income Statement
45 Consolidated Statement of Comprehensive Income
46 Statements of Changes in Equity
50 Consolidated Statement of Cash Flows
52 Notes to the Financial Statements
Financial Statements
Contents
Directors’ Report
34
The Directors are pleased to present their report to the members together with the audited consolidated financial
statements of ASL Marine Holdings Ltd. (the “Company”) and its subsidiaries (collectively, the “Group”) and the
statement of financial position and statement of changes in equity of the Company for the financial year ended 30
June 2011.
Directors
The Directors of the Company in office at the date of this report are:
Ang Kok Tian
Ang Ah Nui
Ang Kok Eng
Ang Kok Leong
Andre Yeap Poh Leong
Hong Chin Fock
Christopher Chong Meng Tak
Arrangements to enable Directors to acquire Shares and Debentures
Except as disclosed in this report, neither at the end of nor at any time during the financial year was the Company a
party to any arrangement whose objects are, or one of whose object is, to enable the Directors of the Company to
acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate.
Directors’ Interests in Shares and Debentures
The following Directors, who held office at the end of the financial year, had, according to the Register of Directors’
Shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in shares
and share options of the Company and related corporations (other than wholly-owned subsidiaries) as stated below:
Direct interest Deemed interest
Name of Directors
At the
beginning of
financial year
At the
end of
financial year
At the
beginning of
financial year
At the
end of
financial year
The Company
ASL Marine Holdings Ltd.
(Ordinary shares)
Ang Kok Tian 41,427,000 57,997,800 154,172,000* 215,840,800*
Ang Ah Nui 39,600,000 55,440,000 155,999,000* 218,398,600*
Ang Kok Eng 34,750,000 48,650,000 160,849,000* 225,188,600*
Ang Kok Leong 34,650,000 48,510,000 160,949,000* 225,328,600*
Andre Yeap Poh Leong 250,000 350,000 – –
Hong Chin Fock 250,000 350,000 – –
* Ang Kok Tian, Ang Ah Nui, Ang Kok Eng and Ang Kok Leong are brothers. Each of the brothers is deemed to
be interested in the shares held by the other brothers and their father and sister.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 35
Directors’ Interests in Shares and Debentures (cont’d)
Direct interest Deemed interest
Name of Directors
At the
beginning of
financial year
At the
end of
financial year
At the
beginning of
financial year
At the
end of
financial year
Subsidiaries
ASL Triaksa Offshore Pte. Ltd.
(Ordinary shares)
Ang Kok Tian – – 60,000 60,000
Ang Ah Nui – – 60,000 60,000
Ang Kok Eng – – 60,000 60,000
Ang Kok Leong – – 60,000 60,000
PT. Cipta Nusantara Abadi
(Ordinary shares of Rp. 50,000 each)
Ang Kok Tian – – 30,300 30,300
Ang Ah Nui – – 30,300 30,300
Ang Kok Eng – – 30,300 30,300
Ang Kok Leong – – 30,300 30,300
PT. Capitol Nusantara Indonesia
(Ordinary shares of Rp. 1,000,000 each)
Ang Kok Tian – – 2,000 2,000
Ang Ah Nui – – 2,000 2,000
Ang Kok Eng – – 2,000 2,000
Ang Kok Leong – – 2,000 2,000
Hongda Investment Pte. Ltd.
(Ordinary shares)
Ang Kok Tian – – 2,280,000 2,280,000
Ang Ah Nui – – 2,280,000 2,280,000
Ang Kok Eng – – 2,280,000 2,280,000
Ang Kok Leong – – 2,280,000 2,280,000
There was no change in any of the above-mentioned interests between the end of the financial year and 21 July
2011.
By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Ang Kok Tian, Ang Ah Nui, Ang Kok Eng and Ang
Kok Leong are deemed to have interests in the shares of the subsidiaries of the Company.
Except as disclosed in this report, no Director who held office at the end of the financial year had interests in shares,
share options, warrants or debentures of the Company, or of related corporations, either at the beginning or at the
end of the financial year.
36
Directors’ Report
Directors’ Contractual Benefits
Except as disclosed in the financial statements, since the end of the previous financial year, no Director of the
Company has received or become entitled to receive a benefit by reason of a contract made by the Company or a
related corporation with the Director, or with a firm of which the Director is a member, or with a company in which the
Director has a substantial financial interest.
Share Options
The ASL Employee Share Option Scheme (the “Scheme”) was approved and adopted by the shareholders of the
Company at an Extraordinary General Meeting held on 23 January 2003. The Scheme is administered by the
Remuneration Committee (the “RC”) of the Company comprising three independent Directors, Hong Chin Fock
(Chairman), Christopher Chong Meng Tak and Andre Yeap Poh Leong.
Details of the Scheme were set out in the Directors’ Report for the year ended 30 June 2003.
Other statutory information regarding the Scheme is set out below:
(i) Exercise Price
The exercise price to be paid upon the exercise of the options are as follows:
• the options were granted at the exercise price of $0.55 per share and no options were granted at a
discount to the then prevailing Market Price; and
• the “Market Price”, defined as the average of the last dealt price for a share, is determined by reference
to the daily Official List published by Singapore Exchange Securities Trading Limited (“SGX-ST”) for five
consecutive market days immediately prior to the date an offer to grant an option is made (“Offer Date”),
rounded up to the nearest whole cent.
(ii) Option Exercise Period
The options which were granted shall be exercisable during the option exercise period commencing after the
first anniversary of the Offer Date and expiring on, in the case of options granted to non-executive Directors
and/or associated company employees, the day preceding the fifth anniversary of the Offer Date and, in the
case of options granted to other than non-executive Directors and/or associated company employees, the day
preceding the tenth anniversary of the Offer Date.
At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary
shares of the Company are as follows:
Date of grant
of options
Exercise
price per
share
Options
outstanding
at 1/7/2010
Options
exercised
Options
outstanding
at 30/6/2011
Number
of option
holders at
30/6/2011
Exercise
period
18/12/2003 $0.55 47,000* (47,000) – –
18/12/2004
to
17/12/2013
* These were granted to the employees of the Company and were exercisable on or after 18 December
2006.
Except as disclosed in this report, there were no unissued shares of the Company or its subsidiaries under
options granted by the Company or its subsidiaries at the end of the financial year.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 37
Share Options (cont’d)
Details of options granted to non-executive Directors of the Company under the Scheme are as follows:
Name of directors
Options
granted
for financial
year ended
30/6/2011
Aggregate
options
granted since
commencement
of Scheme to
30/6/2011
Aggregate
options
lapsed since
commencement
of Scheme to
30/6/2011
Aggregate
options
exercised since
commencement
of Scheme to
30/6/2011
Aggregate
options
outstanding as
at 30/6/2011
Andre Yeap Poh Leong – 250,000 – (250,000) –
Hong Chin Fock – 250,000 – (250,000) –
Since the commencement of the Scheme until the end of the financial year:
• No options have been granted to the controlling shareholders of the Company and their associates;
• No participant has been granted 5% or more of the total options available under the Scheme;
• No options entitle the holders of the options to participate, by virtue of such holding, in any share issue of any
other company; and
• No options have been granted at a discount.
ASL Marine Performance Shares Scheme
The ASL Marine Performance Shares Scheme (the “PSS”) was approved and adopted by the shareholders of the
Company at an Extraordinary General Meeting held on 20 July 2007. The PSS is administered by the RC of the
Company.
Details of the Scheme were set out in the circular dated 4 July 2007 which is available for inspection at the registered
office of the Company.
As at the end of financial year, no award of shares have been granted by the Company under the PSS.
38
Directors’ Report
Audit Committee
The Audit Committee (“AC”) carried out its functions in accordance with Section 201B(5) of the Singapore Companies
Act, Cap. 50, including the following:
• Reviews the audit plans of the external auditors and ensures the adequacy of the Group’s system of accounting
controls and the co-operation given by the management to the external auditors;
• Reviews the quarterly and annual financial statements and the auditors’ report on the annual financial statements
of the Group before their submission to the Board of Directors;
• Reviews effectiveness of the Group’s material internal controls, including financial, operational and compliance
controls and risk management via reviews carried out by the internal auditors;
• Meets with the external auditors, other committees, and management in separate executive sessions to discuss
any matters that these groups believe should be discussed privately with the AC;
• Reviews legal and regulatory matters that may have a material impact on the financial statements, related
compliance policies and programmes and any reports received from regulators;
• Reviews the cost effectiveness and the independence and objectivity of the external auditors;
• Reviews the nature and extent of non-audit services provided by the external auditors;
• Recommends to the Board of Directors the external auditors to be nominated, approves the compensation of
the external auditors and reviews the scope and results of the audit;
• Reports actions and minutes of the AC to the Board of Directors with such recommendations as the AC considers
appropriate; and
• Reviews interested person transactions in accordance with the requirements of the SGX-ST’s Listing Manual.
The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfied that the nature
and extent of such services would not affect the independence of the external auditors. The AC has also conducted
a review of interested person transactions.
The AC convened six meetings during the year with full attendance from all members. The AC has also met with internal
and external auditors, without the presence of the Company’s management, at least once a year.
Further details regarding the AC are disclosed in the Report on Corporate Governance.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 39
Auditors
Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.
On behalf of the Board of Directors:
Ang Kok Tian
Director
Ang Ah Nui
Director
Singapore
8 September 2011
Statement by Directors
40
We, Ang Kok Tian and Ang Ah Nui, being two of the Directors of ASL Marine Holdings Ltd., do hereby state that, in
the opinion of the Directors,
(i) the accompanying statements of financial position, consolidated income statement, consolidated statement of
comprehensive income, statements of changes in equity, and consolidated statement of cash flows together
with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the
Company as at 30 June 2011 and the results of the business, changes in equity and cash flows of the Group
and the changes in equity of the Company for the year ended on that date; and
(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they fall due.
On behalf of the Board of Directors:
Ang Kok Tian
Director
Ang Ah Nui
Director
Singapore
8 September 2011
Independent Auditors’ Report
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 41
To the members of ASL Marine Holdings Ltd.
Report on the Financial Statements
We have audited the accompanying financial statements of ASL Marine Holdings Ltd. (the “Company”) and its subsidiaries (collectively, “the Group”) set out on pages 42 to 125, which comprise the statements of financial position of the Group and the Company as at 30 June 2011, the statements of changes in equity of the Group and the Company and the consolidated income statement, consolidated statement of comprehensive income and consolidated statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2011 and the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
Ernst & Young LLP
Public Accountants andCertified Public AccountantsSingapore
8 September 2011
Statements of Financial Positionas at 30 June 2011
42
The Group The Company
Note 2011 2010 2011 2010
$’000 $’000 $’000 $’000
Non-Current Assets
Property, plant and equipment 4 493,278 437,660 – 100
Lease prepayments 5 3,844 3,892 – –
Subsidiaries 6 – – 69,505 33,573
Interest in jointly-controlled entity and associate 7 953 1,825 – 1,558
Other receivable – – – 2,203
498,075 443,377 69,505 37,434
Current Assets
Inventories 8 12,591 13,151 – –
Construction work-in-progress 9 80,453 67,734 – –
Trade and other receivables 10 109,574 108,593 178,153 165,437
Deposits and prepayments 11 9,702 7,048 3,344 3,133
Derivative financial instruments 12 3,225 1,350 – –
Bank balances, deposits and cash 13 49,536 90,090 177 510
Assets held for sale 14 15,764 7,269 – –
280,845 295,235 181,674 169,080
Current Liabilities
Trade and other payables 15 131,665 134,552 36,513 30,009
Other liabilities 16 3,259 3,345 – –
Progress billings in excess
of construction work-in-progress 9 19,507 40,548 – –
Trust receipts 17 34,865 25,033 – –
Interest-bearing loans and borrowings 18 68,411 51,070 22,100 11,025
Derivative financial instruments 12 1,842 3,564 505 368
Current tax payable 8,266 12,007 – –
267,815 270,119 59,118 41,402
Net Current Assets 13,030 25,116 122,556 127,678
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 43
The Group The Company
Note 2011 2010 2011 2010
$’000 $’000 $’000 $’000
Non-Current Liabilities
Interest-bearing loans and borrowings 18 155,539 133,160 92,900 65,020
Amount due to non-controlling interests
of subsidiaries 15 – 1,469 – –
Deferred tax liabilities 19 10,378 9,747 – –
165,917 144,376 92,900 65,020
Net Assets 345,188 324,117 99,161 100,092
Equity attributable to owners of the Company
Share capital 20 83,092 83,061 83,092 83,061
Treasury shares 20 (923) (923) (923) (923)
Reserves 21 253,667 233,195 16,992 17,954
335,836 315,333 99,161 100,092
Non-Controlling Interests 9,352 8,784 – –
Total Equity 345,188 324,117 99,161 100,092
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Consolidated Income Statementfor the year ended 30 June 2011
44
Note 2011 2010
$’000 $’000
Revenue 23 363,151 468,372
Cost of sales (313,552) (407,622)
Gross profit 49,599 60,750
Other operating income 24 10,514 9,320
Administrative expenses (9,334) (9,840)
Other operating expenses (3,311) (3,418)
Finance costs 25 (8,935) (8,072)
Share of results of jointly-controlled entity and associate (731) (670)
Profit before tax 26 37,802 48,070
Tax expense 27 (4,603) (8,806)
Profit for the year 33,199 39,264
Attributable to:
Owners of the Company 28 31,916 37,286
Non-controlling interests 1,283 1,978
33,199 39,264
2011 2010
cents cents
(Restated)
Earnings per share
Basic 28 7.61 8.89
Diluted 28 7.61 8.89
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Consolidated Statement of Comprehensive Incomefor the year ended 30 June 2011
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 45
Note 2011 2010
$’000 $’000
Profit for the year 33,199 39,264
Other comprehensive income:
Translation differences relating to financial statements
of foreign subsidiaries, net of tax (5,384) 329
Share of other comprehensive income of jointly-controlled entity (141) (74)
Net fair value changes to cash flow hedges 2,359 1,531
Other comprehensive income for the year, net of tax 22 (3,166) 1,786
Total comprehensive income for the year 30,033 41,050
Attributable to:
Owners of the Company 29,465 38,753
Non-controlling interests 568 2,297
30,033 41,050
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Statements of Changes in Equityfor the year ended 30 June 2011
46
Att
rib
uta
ble
to
ow
ne
rs o
f th
e C
om
pa
ny
Eq
uit
y
Th
e G
rou
p
Sh
are
ca
pit
al
Tre
as
ury
sh
are
s
Em
plo
yee
sh
are
op
tio
n
res
erv
e
Fo
reig
n
cu
rre
nc
y
tra
ns
lati
on
res
erv
e
He
dg
ing
res
erv
e
Ac
cu
mu
late
d
pro
fits
To
tal
res
erv
es
att
rib
uta
ble
to o
wn
ers
of
the
Co
mp
an
y
No
n-
co
ntr
oll
ing
inte
res
ts
To
tal
eq
uit
y
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
At
1 J
uly
20
09
83
,05
1(9
23
)7
(96
)(2
,39
3)
20
8,9
10
20
6,4
28
28
8,5
56
6,4
87
29
5,0
43
Pro
fit f
or
the
year
––
––
–3
7,2
86
37
,28
63
7,2
86
1,9
78
39
,26
4
Oth
er
co
mp
reh
en
siv
e i
nc
om
e
Tra
nsl
atio
n d
iffer
ence
s re
latin
g
to f
inan
cial
sta
tem
ents
of
fo
reig
n s
ub
sid
iarie
s, n
et o
f ta
x–
––
41
––
41
41
28
83
29
Sh
are
of
oth
er c
om
pre
hen
sive
inco
me
of
join
tly-c
on
tro
lled
en
tity
––
––
––
––
(74
)(7
4)
Net
fai
r va
lue
chan
ges
to
ca
sh f
low
hed
ges
––
––
1,4
26
–1
,42
61
,42
61
05
1,5
31
Oth
er c
om
pre
hen
sive
inco
me
fo
r th
e ye
ar,
net
of
tax
––
–4
11
,42
6–
1,4
67
1,4
67
31
91
,78
6
To
tal
co
mp
reh
en
siv
e i
nc
om
e
fo
r th
e y
ea
r–
––
41
1,4
26
37
,28
63
8,7
53
38
,75
32
,29
74
1,0
50
Co
ntr
ibu
tio
ns
by
an
d
dis
trib
uti
on
s t
o o
wn
ers
Div
iden
ds
(No
te 3
5)
––
––
–(1
1,9
84
)(1
1,9
84
)(1
1,9
84
)–
(11
,98
4)
Issu
e o
f sh
ares
un
der
ES
OS
11
0–
(2)
––
–(2
)8
–8
To
tal
co
ntr
ibu
tio
ns
by
an
d
d
istr
ibu
tio
ns
to
ow
ne
rs1
0–
(2)
––
(11
,98
4)
(11
,98
6)
(11
,97
6)
–(1
1,9
76
)
At
30
Ju
ne
20
10
83
,06
1(9
23
)5
(55
)(9
67
)2
34
,21
22
33
,19
53
15
,33
38
,78
43
24
,11
7
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 47
Att
rib
uta
ble
to
ow
ne
rs o
f th
e C
om
pa
ny
Eq
uit
y
Th
e G
rou
p
Sh
are
ca
pit
al
Tre
as
ury
sh
are
s
Em
plo
yee
sh
are
op
tio
n
res
erv
e
Fo
reig
n
cu
rre
nc
y
tra
ns
lati
on
res
erv
e
He
dg
ing
res
erv
e
Ac
cu
mu
late
d
pro
fits
To
tal
res
erv
es
att
rib
uta
ble
to o
wn
ers
of
the
Co
mp
an
y
No
n-
co
ntr
oll
ing
inte
res
ts
To
tal
eq
uit
y
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
At
1 J
uly
20
10
83
,06
1(9
23
)5
(55
)(9
67
)2
34
,21
22
33
,19
53
15
,33
38
,78
43
24
,11
7
Pro
fit f
or
the
year
––
––
–3
1,9
16
31
,91
63
1,9
16
1,2
83
33
,19
9
Oth
er
co
mp
reh
en
siv
e i
nc
om
e
Tra
nsl
atio
n d
iffer
ence
s re
latin
g
to f
inan
cial
sta
tem
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of
fo
reig
n s
ub
sid
iarie
s, n
et o
f ta
x–
––
(4,8
10
)–
–(4
,81
0)
(4,8
10
)(5
74
)(5
,38
4)
Sh
are
of
oth
er c
om
pre
hen
sive
inco
me
of
join
tly-c
on
tro
lled
en
tity
––
––
––
––
(14
1)
(14
1)
Net
fai
r va
lue
chan
ges
to
ca
sh f
low
hed
ges
––
––
2,3
59
–2
,35
92
,35
9–
2,3
59
Oth
er c
om
pre
hen
sive
inco
me
fo
r th
e ye
ar,
net
of
tax
––
–(4
,81
0)
2,3
59
–(2
,45
1)
(2,4
51
)(7
15
)(3
,16
6)
To
tal
co
mp
reh
en
siv
e i
nc
om
e
fo
r th
e y
ea
r–
––
(4,8
10
)2
,35
93
1,9
16
29
,46
52
9,4
65
56
83
0,0
33
Co
ntr
ibu
tio
ns
by
an
d
d
istr
ibu
tio
ns
to
ow
ne
rs
Div
iden
ds
(No
te 3
5)
––
––
–(8
,98
8)
(8,9
88
)(8
,98
8)
–(8
,98
8)
Issu
e o
f sh
ares
un
der
ES
OS
13
1–
(5)
––
–(5
)2
6–
26
To
tal
co
ntr
ibu
tio
ns
by
an
d
d
istr
ibu
tio
ns
to
ow
ne
rs3
1–
(5)
––
(8,9
88
)(8
,99
3)
(8,9
62
)–
(8,9
62
)
At
30
Ju
ne
20
11
83
,09
2(9
23
)–
(4,8
65
)1
,39
22
57
,14
02
53
,66
73
35
,83
69
,35
23
45
,18
8
1
AS
L E
mp
loyee S
hare
Op
tio
n S
ch
em
e
Th
e a
cco
mp
an
yin
g a
cco
un
tin
g p
olic
ies a
nd
exp
lan
ato
ry n
ote
s f
orm
an
in
teg
ral p
art
of
the f
inan
cia
l sta
tem
en
ts.
48
Statements of Changes in Equityfor the year ended 30 June 2011
Th
e C
om
pa
ny
Sh
are
ca
pit
al
Tre
as
ury
sh
are
s
Em
plo
ye
e
sh
are
op
tio
n
res
erv
e
He
dg
ing
res
erv
e
Ac
cu
mu
late
d
pro
fits
To
tal
res
erv
es
To
tal
eq
uit
y
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
At
1 J
uly
20
09
83
,05
1(9
23
)7
(82
2)
17
,27
61
6,4
61
98
,58
9
Pro
fit
for
the y
ear
––
––
13
,02
51
3,0
25
13
,02
5
Oth
er
co
mp
reh
en
siv
e i
nc
om
e
Net
fair v
alu
e c
han
ges t
o c
ash
flo
w h
ed
ges
––
–4
54
–4
54
45
4
Oth
er
co
mp
reh
en
siv
e in
co
me
fo
r th
e y
ear,
net
of
tax
––
–4
54
–4
54
45
4
To
tal
co
mp
reh
en
siv
e i
nc
om
e
fo
r th
e y
ea
r–
––
45
41
3,0
25
13
,47
91
3,4
79
Co
ntr
ibu
tio
ns
by a
nd
d
istr
ibu
tio
ns
to
ow
ne
rs
Div
iden
ds (
No
te 3
5)
––
––
(11
,98
4)
(11
,98
4)
(11
,98
4)
Issu
e o
f sh
are
s u
nd
er
ES
OS
11
0–
(2)
––
(2)
8
To
tal
co
ntr
ibu
tio
ns
by a
nd
d
istr
ibu
tio
ns
to
ow
ne
rs1
0–
(2)
–(1
1,9
84
)(1
1,9
86
)(1
1,9
76
)
At
30
Ju
ne
20
10
83
,06
1(9
23
)5
(36
8)
18
,31
71
7,9
54
10
0,0
92
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 49
Th
e C
om
pa
ny
Sh
are
ca
pit
al
Tre
as
ury
sh
are
s
Em
plo
ye
e
sh
are
op
tio
n
res
erv
e
He
dg
ing
res
erv
e
Ac
cu
mu
late
d
pro
fits
To
tal
res
erv
es
To
tal
eq
uit
y
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
At
1 J
uly
20
10
83
,06
1(9
23
)5
(36
8)
18
,31
71
7,9
54
10
0,0
92
Pro
fit
for
the y
ear
––
––
8,1
68
8,1
68
8,1
68
Oth
er
co
mp
reh
en
siv
e i
nc
om
e
Net
fair v
alu
e c
han
ges t
o
cash
flo
w h
ed
ges
––
–(1
37
)–
(13
7)
(13
7)
Oth
er
co
mp
reh
en
siv
e in
co
me
fo
r th
e y
ear,
net
of
tax
––
–(1
37
)–
(13
7)
(13
7)
To
tal
co
mp
reh
en
siv
e i
nc
om
e
fo
r th
e y
ea
r–
––
(13
7)
8,1
68
8,0
31
8,0
31
Co
ntr
ibu
tio
ns
by a
nd
d
istr
ibu
tio
ns
to
ow
ne
rs
Div
iden
ds (
No
te 3
5)
––
––
(8,9
88
)(8
,98
8)
(8,9
88
)
Issu
e o
f sh
are
s u
nd
er
ES
OS
13
1–
(5)
––
(5)
26
To
tal
co
ntr
ibu
tio
ns
by a
nd
d
istr
ibu
tio
ns
to
ow
ne
rs3
1–
(5)
–(8
,98
8)
(8,9
93
)(8
,96
2)
At
30
Ju
ne
20
11
83
,09
2(9
23
)–
(50
5)
17
,49
71
6,9
92
99
,16
1
1
AS
L E
mp
loyee S
hare
Op
tio
n S
ch
em
e
Th
e a
cco
mp
an
yin
g a
cco
un
tin
g p
olic
ies a
nd
exp
lan
ato
ry n
ote
s f
orm
an
in
teg
ral p
art
of
the f
inan
cia
l sta
tem
en
ts.
Consolidated Statement of Cash Flowsfor the year ended 30 June 2011
50
2011 2010
$’000 $’000
Cash flows from operating activities
Profit before tax 37,802 48,070
Adjustments for:
Amortisation of lease prepayments 202 199
Allowance for impairment of doubtful receivables (net) 200 577
Bad debts written off (non-trade) – 2
Depreciation of property, plant and equipment 35,942 30,475
(Gain)/ Loss on ineffective portion of cash flow hedges on
forward currency contracts and interest rate swaps (840) 1,126
Gain on disposal of property, plant and equipment (6,169) (4,216)
Property, plant and equipment written off 15 3
Impairment loss on property, plant and equipment – 2,297
Interest expense 8,935 8,072
Interest income (135) (179)
Share of results of jointly-controlled entity and associate 731 670
Gain on disposal of assets held for sale (3,994) (2,495)
Operating profit before working capital changes 72,689 84,601
Changes in working capital:
Inventories 560 (742)
Construction work-in-progress and progress billings in excess
of construction work-in-progress (33,643) 21,459
Trade and other receivables (3,622) (38,107)
Trade and other payables 4,797 8,635
Balances with related parties (trade) (460) (924)
Bank balances, deposits and cash (restricted use) 2,003 (5,551)
Cash generated from operations 42,324 69,371
Tax paid (7,933) (5,468)
Net cash generated from operating activities 34,391 63,903
Cash flows from investing activities
Interest received 135 175
Purchase of property, plant and equipment (Note A) (104,529) (83,192)
Proceeds from disposal of property, plant and equipment 10,234 10,104
Purchase of assets held for sale – (3,231)
Proceeds from disposal of assets held for sale 9,260 8,985
Lease prepayments (243) –
Balances with related parties (non-trade) 170 1
Net cash used in investing activities (84,973) (67,158)
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 51
Note 2011 2010
$’000 $’000
Cash flows from financing activities
Interest paid (8,915) (8,029)
Dividend paid (8,988) (11,984)
Repayment of interest-bearing loans and borrowings (64,828) (89,999)
Proceeds from interest-bearing loans and borrowings 86,866 107,803
Proceeds from finance lease receivables – 1,721
Proceeds from issue of shares 26 8
Repayment of trust receipts (17,563) (83,312)
Proceeds from trust receipts 27,395 75,401
(Repayment of)/ Proceeds from loan from non-controlling interests
of subsidiaries (1,071) 289
Net cash generated from/ (used in) financing activities 12,922 (8,102)
Net decrease in cash and cash equivalents (37,660) (11,357)
Cash and cash equivalents at beginning of year 83,302 94,775
Effects of exchange rate changes on opening
cash and cash equivalents (891) (116)
Cash and cash equivalents at end of year 13 44,751 83,302
Note A:
The Group acquired property, plant and equipment with an aggregate cost of $122,211,000 (2010: $89,250,000), of
which $17,682,000 (2010: $6,058,000) was acquired by means of finance lease. The cash outflow on acquisition of
property, plant and equipment amounted to $104,529,000 (2010: $83,192,000).
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Notes to the Financial Statements30 June 2011
52
1. Corporate information
ASL Marine Holdings Ltd. (the “Company”), incorporated in the Republic of Singapore, is a public limited
company listed on the Singapore Exchange Securities Trading Limited.
The registered office and principal place of business of the Company is located at No. 19 Pandan Road,
Singapore 609271.
The principal activities of the Company are those relating to an investment holding company. The principal
activities of the subsidiaries are set out in Note 6.
2. Summary of significant accounting policies
2.1 Basis of preparation
The consolidated financial statements of the Group and the statement of financial position and statement of
changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting
Standards (“FRS”).
The financial statements have been prepared on the historical cost basis except as disclosed in the accounting
policies below.
The financial statements are presented in Singapore Dollar (“SGD” or “$”) and all values in the tables are rounded
to the nearest thousand ($’000) unless otherwise indicated.
2.2 Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year except in the current
financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (“INT
FRS”) that are effective for annual periods beginning on or after 1 July 2010. The adoption of these standards
and interpretations did not have any effect on the financial performance or position of the Group and the
Company.
2.3 Standards issued but not yet effective
The Group has not adopted the following standards and interpretations that have been issued but not yet
effective:
Effective for annual
periods beginning
Description on or after
Revised FRS 24 Related Party Disclosures 1 January 2011
Amendments to INT FRS 114 Prepayments of a Minimum Funding Requirement 1 January 2011
INT FRS 115 Agreements for the Construction of Real Estate 1 January 2011
Amendments to FRS 107 Disclosures Transfers of Financial Assets 1 July 2011
Amendments to FRS 12 Deferred Tax – Recovery of Underlying Assets 1 January 2012
Amendments to FRS 101 Severe Hyperinflation and Removal of
Fixed Dates for First- time Adopters 1 January 2012
Improvements to FRSs 2010:
– Amendments to FRS 101 First-time Adoption of Financial Reporting Standards 1 July 2011
– Amendments to FRS 107 Financial Instruments: Disclosures 1 January 2011
– Amendments to FRS 1 Presentation of Financial Statements 1 January 2011
– Amendments to FRS 34 Interim Financial Reporting 1 January 2011
– Amendments to INT FRS 113 Customer Loyalty Programmes 1 January 2011
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 53
2. Summary of significant accounting policies (cont’d)
2.3 Standards issued but not yet effective (cont’d)
Management expects that the adoption of the standards and interpretations above will have no material impact
on the financial statements in the period of initial application, except for the following:
Revised FRS 24 Related Party Disclosures
The revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships
and to eliminate inconsistencies in its application. The revised FRS 24 expands the definition of a related party
and would treat two entities as related to each other whenever a person (or a close member of that person’s
family) or a third party entity has control or joint control over the entity, or has significant influence over the entity.
The revised standard also introduces a partial exemption of disclosure requirements for government-related
entities. The Group is currently determining the impact of the expanded definition has on the disclosure of related
party transactions. As this is a disclosure standard, it will have no impact on the financial position or financial
performance of the Group when implemented in year ending 30 June 2012.
2.4 Foreign currency
(a) Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currency of
the primary economic environment in which the entity operates (its functional currency). The consolidated
financial statements are presented in Singapore Dollar, which is also the Company’s functional and
presentation currency.
(b) Foreign currency transactions and balances
Transactions in foreign currencies are measured in the respective functional currencies of the Company
and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates
approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign
currencies are translated at the exchange rate ruling at the end of the reporting period. Non-monetary
items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the
end of the reporting period are recognised in profit or loss except for exchange differences arising on
monetary items that form part of the Group’s net investment in foreign operations, which are recognised
initially in other comprehensive income and accumulated under foreign currency translation reserve in
equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group
on disposal of the foreign operations.
(c) Foreign operations
For consolidation purpose, the assets and liabilities of foreign operations are translated into SGD at
the exchange rates ruling at the end of the reporting period and their profit or loss are translated at the
average exchange rates for the year. The exchange differences arising on the translation are taken directly
to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in
other comprehensive income relating to that particular foreign operation is recognised in profit or loss.
In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation,
the proportionate share of the cumulative amount of the exchange differences are re-attributed to
non-controlling interest and are not recognised in profit or loss. For partial disposals of associates or
jointly controlled entities that are foreign operations, the proportionate share of the accumulated exchange
differences is reclassified to profit or loss.
54
Notes to the Financial Statements30 June 2011
2. Summary of significant accounting policies (cont’d)
2.5 Basis of consolidation and business combinations
(a) Basis of consolidation
Basis of consolidation from 1 July 2010
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used
in the preparation of the consolidated financial statements are prepared for the same reporting date
as the Company. Consistent accounting policies are applied to like transactions and events in similar
circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group
transactions and dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit
balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
• Derecognises the assets (including goodwill) and liabilities of the subsidiary at their carrying
amounts at the date when controls is lost;
• Derecognises the carrying amount of any non-controlling interest;
• Derecognises the cumulative translation differences recorded in equity;
• Recognises the fair value of the consideration received;
• Recognises the fair value of any investment retained;
• Recognises any surplus or deficit in profit or loss;
• Reclassifies the Group’s share of components previously recognised in other comprehensive
income to profit or loss or retained earnings, as appropriate.
Basis of consolidation prior to 1 July 2010
Certain of the above-mentioned requirements were applied on a prospective basis. The following
differences, however, are carried forward in certain instances from the previous basis of consolidation:
• Acquisition of non-controlling interests, prior to 1 July 2010, were accounted for using the parent
entity extension method, whereby, the difference between the consideration and the book value
of the share of the net assets acquired were recognised in goodwill.
• Losses incurred by the Group were attributed to the non-controlling interest until the balance was
reduced to nil. Any further losses were attributed to the Group, unless the non-controlling interest
had a binding obligation to cover these. Losses prior to 1 July 2010 were not reallocated between
non-controlling interest and the owners of the Company.
• Upon loss of control, the Group accounted for the investment retained at its proportionate share
of net asset value at the date control was lost. The carrying value of such investments as at 1
July 2010 have not been restated.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 55
2. Summary of significant accounting policies (cont’d)
2.5 Basis of consolidation and business combinations (cont’d)
(b) Business combinations
Business combinations from 1 July 2010
Business combinations are accounted for using the acquisition method. Identifiable assets acquired and
liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred
and the services are received.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in
host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed
to be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as a
change to other comprehensive income. If the contingent consideration is classified as equity, it is not
be remeasured until it is finally settled within equity.
In business combinations achieved in stages, previously held equity interests in the acquiree are
remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in
profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the
acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the
amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously
held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and
liabilities is recorded as goodwill. In instances where the latter amount exceeds the former, the excess
is recognised as gain on bargain purchase in profit or loss on the acquisition date.
Business combinations prior to 1 July 2010
In comparison to the above mentioned requirements, the following differences applied:
Business combinations are accounted for using the acquisition method. Transaction costs directly
attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly
known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net
assets.
Business combinations achieved in stages were accounted for as separate steps. Adjustments to those
fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any
additional acquired share of interest did not affect previously recognised goodwill.
When the Group acquired a business, embedded derivatives separated from the host contract by the
acquiree were not reassessed on acquisition unless the business combination resulted in a change in the
terms of the contract that significantly modified the cash flows that otherwise would have been required
under the contract.
Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic
outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to
the contingent consideration were recognised as part of goodwill.
56
Notes to the Financial Statements30 June 2011
2. Summary of significant accounting policies (cont’d)
2.6 Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners
of the Company, and are presented separately in the consolidated statement of comprehensive income and
within equity in the consolidated statement of financial position, separately from equity attributable to owners
of the Company.
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control
are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling
and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary.
Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the
consideration paid or received is recognised directly in equity and attributed to owners of the Company.
2.7 Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and operating policies
so as to obtain benefits from its activities. The Group generally has such power when it directly or indirectly,
holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls
the composition of the Board of Directors.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any
impairment losses.
2.8 Associates
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence.
This generally coincides with the Group having between 20% and 50% of the voting power, or has representation
on the board of directors. An associate is equity accounted for from the date the Group obtains significant
influence until the date the Group ceases to have significant influence over the associate.
The Group’s investment in associate is accounted for using the equity method. Under the equity method, the
investment in associate is carried in the consolidated statement of financial position at cost plus post-acquisition
changes in the Group’s share of net assets of the associate. Goodwill relating to an associate is included in
the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s
identifiable assets, liabilities and contingent liabilities over the cost of the investment is included as income
in the determination of the Group’s share of results of the associate in the period in which the investment is
acquired.
The profit or loss reflects the share of the results of operations of the associates. Where there has been a
change recognised in other comprehensive income by the associates, the Group recognises its share of such
changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the
Group and the associate are eliminated to the extent of the interest in the associates.
The Group’s share of results of its associates is shown on the face of profit or loss after tax and non-controlling
interests in the subsidiaries of associates.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does
not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate to
satisfy obligations that the Group has guaranteed or otherwise committed on behalf of.
After application of the equity method, the Group determines whether it is necessary to recognise an additional
impairment loss on the Group’s investment in its associates. The Group determines at the end of each reporting
period whether there is any objective evidence that the investment in the associate is impaired. If this is the
case, the Group calculates the amount of impairment as the difference between the recoverable amount of the
associate and its carrying value and recognises the amount in profit or loss.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 57
2. Summary of significant accounting policies (cont’d)
2.8 Associates (cont’d)
The financial statements of the associate are prepared as of the same reporting date as the Company. Where
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
Upon loss of significant influence over the associate, the Group measures and recognises any retained investment
at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence
and the fair value of the aggregate of the retained investment and proceeds from disposal is recognised in
profit or loss.
2.9 Jointly-controlled entities
A jointly-controlled entity is a contractual arrangement whereby two or more parties undertake an economic
activity that is subject to joint control, where the strategic financial and operating decisions relating to the activity
require the unanimous consent of the parties sharing control.
Interests in jointly-controlled entities are accounted for at cost less any impairment losses.
The Group’s interest in jointly-controlled entities are accounted for in the consolidated financial statements using
the equity method, whereby the Group’s share of results in jointly-controlled entities is included in the consolidated
profit or loss. In the consolidated statement of financial position, the carrying value of jointly-controlled entities
reflects the Group’s share of the underlying net assets of the jointly-controlled entities.
The most recent available audited financial statements of the jointly-controlled entities are used by the Group
in applying the equity method. Where the dates of the audited financial statements used are not co-terminous
with those of the Group, the share of results is arrived at from the last audited financial statements available
and unaudited management financial statements to the end of the accounting period.
2.10 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to initial recognition, property,
plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
The cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are
directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment.
The accounting policy for borrowing costs is set out in Note 2.20. The cost of an item of property, plant and
equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably.
When significant parts of property, plant and equipment are required to be replaced in intervals, the Group
recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise,
when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment
as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised
in profit or loss as incurred.
Depreciation of an asset begins when it is available for use and is computed on a straight-line basis over the
estimated useful lives of the assets on the following basis:
Leasehold property and buildings – 20 to 30 years
Plant and machinery – 3 to 30 years
Office equipment, furniture and fittings – 3 to 10 years
Tugs and other vessels – 1 to 25 years
Barges – 1 to 15 years
Motor vehicles – 5 to 8 years
Dry docks, quays and ancillary – 8 to 20 years
58
Notes to the Financial Statements30 June 2011
2. Summary of significant accounting policies (cont’d)
2.10 Property, plant and equipment (cont’d)
Assets under construction included in property, plant and equipment are not depreciated until such time as the
relevant assets are completed and put into operational use.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at the end of each reporting period, and
adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss
in the year the asset is derecognised.
Fully depreciated assets are retained in the financial statements until they are no longer in use and no further
charge for depreciation is made in respect of these assets.
2.11 Lease prepayment
Leases of land under which the lessor has not transferred all the risks and rewards incidental to ownership are
classified as operating leases and the payments made on acquiring the land use right represent prepaid lease
payments.
Lease prepayment for land use rights is stated at cost less accumulated amortisation. Amortisation is computed
on a straight-line basis over the term of the respective leases.
2.12 Impairment of non-financial assets
The Group assesses at the end of each reporting period whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group makes
an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets. Where the carrying amount of an
asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate valuation model is used. These calculations
are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available
fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared
separately for each of the Group’s cash-generating units to which the individual assets are allocated. These
budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term
growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses are recognised in profit or loss in those categories consistent with the function of the impaired
asset. After the recognition of an impairment loss, the depreciation (amortisation) charge for the asset shall be
adjusted in future periods to allocate the asset’s revised carrying amount, less its residual value (if any), on a
systematic basis over its remaining useful life.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 59
2. Summary of significant accounting policies (cont’d)
2.12 Impairment of non-financial assets (cont’d)
For assets excluding goodwill, an assessment is made at the end of each reporting period as to whether there
is any indication that previously recognised impairment losses recognised for an asset may no longer exist or
may have decreased. If such indication exists, the recoverable amount of the asset or cash generating unit is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the
case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss
been recognised previously. Such reversal is recognised in profit or loss. After such a reversal, the depreciation
charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on
a systematic basis over its remaining useful life.
2.13 Financial assets
Initial recognition and measurement
Financial assets are recognised in the statement of financial position when, and only when, the Group becomes
a party to the contractual provisions of the financial instrument. The Group determines the classification of its
financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets
not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial
assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified
as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This
category includes derivative financial instruments entered into by the Group that are not designated
as hedging instruments in hedge relationships as defined by FRS 39. Derivative, including separated
embedded derivatives also classified as held for trading unless they are designated as effective hedging
instruments.
The Group has not designated any financial assets upon initial recognition at fair value through profit or
loss.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair
value and any changes therein are recognised in profit or loss. Net gains or net losses on financial assets
at fair value through profit or loss include exchange differences, interest and dividend income.
Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair
value if their economic characteristics and risks are not closely related to those of the host contracts
and the host contracts are not held for trading or designated at fair value through profit or loss. These
embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss.
Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the
cash flows that would otherwise be required.
60
Notes to the Financial Statements30 June 2011
2. Summary of significant accounting policies (cont’d)
2.13 Financial assets (cont’d)
Subsequent measurement (cont’d)
(b) Loans and receivables
Non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables
are measured at amortised cost using the effective interest method, less impairment. Gains and losses
are recognised in profit or loss when the loans and receivables are derecognised or impaired and through
the amortisation process.
The Group classifies the following financial assets as loans and receivables:
• Bank balances, deposits and cash
• Trade and other receivables, including amounts due from subsidiaries, jointly-controlled entity and
related parties
(c) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as
held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the
effective interest method, less impairment. Gains and losses are recognised in profit or loss when the
held-to-maturity investments are derecognised or impaired, and through the amortisation process.
(d) Available-for-sale financial assets
Available-for-sale financial assets include equity and debt securities. Equity investments classified as
available-for sale are those, which are neither classified as held for trading nor designated at fair value
through profit or loss. Debt securities in this category are those which are intended to be held for an
indefinite period of time and which may be sold in response to needs for liquidity or in response to
changes in the market conditions.
After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any
changes in fair value of the financial assets are recognised in other comprehensive income, except for
impairment loss, foreign exchange gains and losses on monetary instruments and interest calculated
using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously
recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification
adjustment when the financial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost
less impairment loss.
Derecognition
A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On
derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss that has been recognised directly in other comprehensive
income is recognised in profit or loss.
All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e.
the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases
or sales of financial assets that require delivery of assets within the period generally established by regulation
or convention in the marketplace concerned.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 61
2. Summary of significant accounting policies (cont’d)
2.14 Bank balances, deposits and cash
Bank balances, deposits and cash comprise cash at bank and on hand and demand deposits that are readily
convertible to known amount of cash and which are subject to an insignificant risk of changes in value.
Bank balances, deposits and cash carried in the statements of financial position are classified and accounted for
as loans and receivables. The accounting policy for this category of financial assets is stated in Note 2.13(b).
2.15 Trade and other receivables
Trade and other receivables, including amounts due from subsidiaries, jointly-controlled entity and related parties
are classified and accounted for as loans and receivables. The accounting policy for this category of financial
assets is stated in Note 2.13(b).
An allowance for impairment is made for uncollectible amount when there is objective evidence that the Group
will not be able to collect the debt. Bad debts are written off when identified. Further details on the accounting
policy for impairment of financial assets are stated in Note 2.16(a) below.
2.16 Impairment of financial assets
The Group assesses at the end of each reporting period whether there is any objective evidence that a financial
asset is impaired.
(a) Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether objective evidence
of impairment exists individually for financial assets that are individually significant, or collectively for
financial assets that are not individually significant. If the Group determines that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, it includes the
asset in a group of financial assets with similar credit risk characteristics and collectively assesses them
for impairment. Assets that are individually assessed for impairment and for which an impairment loss is,
or continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost has
been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount
and the present value of estimated future cash flows discounted at the financial asset’s original effective
interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The
impairment loss is recognised in profit or loss.
When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly
or if an amount was charged to the allowance account, the amounts charged to the allowance account
are written off against the carrying value of the financial asset.
To determine whether there is objective evidence that an impairment loss on financial assets has been
incurred, the Group considers factors such as the probability of insolvency or significant financial
difficulties of the debtor and default or significant delay in payments.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed to the extent that the carrying value of the asset does not exceed its amortised
cost at the reversal date. The amount of reversal is recognised in profit or loss.
62
Notes to the Financial Statements30 June 2011
2. Summary of significant accounting policies (cont’d)
2.16 Impairment of financial assets (cont’d)
(b) Financial assets carried at cost
If there is objective evidence (such as significant adverse changes in the business environment where the
issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment
loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the
difference between the asset’s carrying amount and the present value of estimated future cash flows
discounted at the current market rate of return for a similar financial asset. Such impairment losses are
not reversed in subsequent periods.
(c) Available-for-sale financial assets
In the case of equity investments classified as available-for-sale, objective evidence of impairment include
(i) significant financial difficulty of the issuer or obligor, (ii) information about significant changes with
an adverse effect that have taken place in the technological, market, economic or legal environment in
which the issuer operates, and indicates that the cost of the investment in equity instrument may not be
recovered; and (iii) a significant or prolonged decline in the fair value of the investment below its costs.
Significant’ is to be evaluated against the original cost of the investment and ‘prolonged’ against the
period in which the fair value has been below its original cost.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its
acquisition cost (net of any principal repayment and amortisation) and its current fair value, less any
impairment loss previously recognised in profit or loss, is transferred from other comprehensive income
and recognised in profit or loss. Reversals of impairment losses in respect of equity instruments are not
recognised in profit or loss; any subsequent increase in their fair value after impairment are recognised
directly in other comprehensive income.
In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same
criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the
cumulative loss measured as the difference between the amortised cost and the current fair value, less
any impairment loss on that investment previously recognised in profit or loss. Future interest income
continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest
used to discount the future cash flows for the purpose of measuring the impairment loss. The interest
income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument
increases and the increases can be objectively related to an event occurring after the impairment loss
was recognised in profit or loss, the impairment loss is reversed in profit or loss.
2.17 Inventories
Inventories comprise raw materials and fuel on board for consumption purposes and are stated at the lower of
cost (determined on first-in-first-out basis) and net realisable value. Raw materials consist mainly of steel and
other materials used for shipbuilding and shiprepair operations.
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying
value of inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs
necessary to make the sale.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 63
2. Summary of significant accounting policies (cont’d)
2.18 Construction contracts
The outcome of a construction contract can be estimated reliably when: (i) total contract revenue can be
measured reliably; (ii) it is probable that the economic benefits associated with the contract will flow to the
entity; (iii) the costs to complete the contract and the stage of completion can be measured reliably; and (iv)
the contract costs attributable to the contract can be clearly identified and measured reliably so that actual
contract costs incurred can be compared with prior estimates. The stage of completion is measured by reference
to the percentage of direct costs incurred for work performed to date to estimated total direct costs for the
contract.
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs
are recognised as revenue and expenses respectively, by reference to the stage of completion of the contract
activity at the end of each reporting period. When the outcome of a construction contract cannot be estimated
reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable
and contract costs are recognised as expense in the period in which they are incurred. When it is probable
that total contract costs will exceed total contract revenue, the expected loss on the construction contract is
recognised as an expense immediately.
In applying the percentage of completion method, revenue recognised corresponds to the total contract revenue
(as defined below) multiplied by the actual completion rate based on the proportion of total contract costs (as
defined below) incurred to date and the estimated costs to complete.
Contract revenue comprises the initial amount of revenue agreed in the contract and variations in the contract
work and claims that can be measured reliably. A variation or a claim is recognised as contract revenue when it
is probable that the customer will approve the variation or negotiations have reached an advanced stage such
that it is probable that the customer will accept the claim.
Contract costs include costs that relate directly to the specific contract and costs that are attributable to contract
activity in general and can be allocated to the contract. Costs that relate directly to a specific contract comprise:
site labour costs (including site supervision); costs of materials used in construction; depreciation of equipment
used on the contract; costs of design, and technical assistance that is directly related to the contract.
At the end of each reporting period, the aggregated costs incurred plus recognised profit (less recognised loss)
on each contract is compared against the progress billings. Where costs incurred plus the recognised profits
(less recognised losses) exceed progress billings, the balance is presented as construction work-in-progress
within “Current Assets”. Where progress billings exceed costs incurred plus recognised profits (less recognised
losses), the balance is presented as progress billings in excess of construction in work-in-progress within
“Current Liabilities”.
2.19 Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual
provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial
recognition.
All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value
through profit or loss, directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
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Notes to the Financial Statements30 June 2011
2. Summary of significant accounting policies (cont’d)
2.19 Financial liabilities (cont’d)
Subsequent measurement (cont’d)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial liabilities are recognised in profit or loss.
The Group has not designated any financial liabilities upon initial recognition at fair value through profit or loss.
Other liabilities
After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
2.20 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
2.21 Provisions
General
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.
Provision for liquidated damages
Provision for liquidated damages is made in respect of anticipated claims from customers on contracts of which deadlines are overdue or not expected to be completed on time in accordance with contractual obligations. The utilisation of provisions is dependent on the timing of claims.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 65
2. Summary of significant accounting policies (cont’d)
2.21 Provisions (cont’d)
Provision for warranties
Provision for warranties represents the best estimate of the Group’s liability to repair vessels or replace affected parts during the warranty period. The provision is calculated based on past experience of the level of repairs and returns.
2.22 Government grants
Cash grants received from the government in relation to the Jobs Credit Scheme are recognised upon receipts. Such grants are recorded by the Group as other income in profit or loss.
2.23 Employee benefits
(a) Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group make contributions to Central Provident Fund Scheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.
(b) Employee leave entitlements
Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated liability for leave is recognised for services rendered by employees up to the end of the reporting period.
(c) Employee share option plans
Employees (including non-executive Directors) of the Group and of the Company receive remuneration in the form of share options as consideration for services rendered. The cost of these equity-settled share based payment transactions with employees is measured by reference to the fair value at the date on which the share options are granted. This cost is recognised in profit or loss, with a corresponding increase in the employee share option reserve, over the vesting period. The cumulative expense recognised for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.
No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
In the case where the option does not vest as the result of a failure to meet a non-vesting condition that is within the control of the Group or the employee, it is accounted for as a cancellation. In such case, the amount of the compensation cost that otherwise would be recognised over the remainder of the vesting period is recognised immediately in profit or loss upon cancellation.
The employee share option reserve is transferred to retained earnings upon expiry of the share options. When the options are exercised, the employee share option reserve is transferred to share capital if new shares are issued.
The Group has taken advantage of the transitional provisions of FRS 102 in respect of equity-settled awards and has applied FRS 102 only to equity-settled awards granted after 22 November 2002 that had not vested on or before 1 July 2005.
66
Notes to the Financial Statements30 June 2011
2. Summary of significant accounting policies (cont’d)
2.24 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the
arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific
asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified
in an arrangement.
For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005
in accordance with the transitional requirements of INT FRS 104.
(a) As lessee
Finance leases which transfer to the Group substantially all the risks and rewards incidental to ownership
of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or,
if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to
the amount capitalised. Lease payments are apportioned between the finance charges and reduction
of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the
periods in which they are incurred.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and
the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the
lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over
the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction
of rental expense over the lease term on a straight-line basis.
(b) As lessor
Leases where the Group retains substantially all the risks and rewards of the ownership of the asset are
classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to
the carrying amount of the leased assets and are recognised over the lease term on the same basis as
rental income. The accounting policy for rental income is set out in Note 2.26(c). Contingent rents are
recognised as revenue in the period in which they are earned.
2.25 Assets held for sale
An asset is classified as held for sale if its carrying amount will be recovered principally through a sale transaction
rather than through continuing use. Upon classification as held for sale, the asset is not depreciated and is
measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in
profit or loss.
Property, plant and equipment once classified as held for sale are not depreciated or amortised.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 67
2. Summary of significant accounting policies (cont’d)
2.26 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the
fair value of consideration received or receivable, taking into account contractually defined terms of payment
and excluding taxes or duty. Group turnover excludes intercompany transactions.
(a) Shipbuilding
Revenue from shipbuilding contracts is recognised using the percentage of completion method, provided
the work is at least 10% completed and the outcome of the contract can be reliably estimated. The
percentage of completion is measured by reference to the percentage of direct costs incurred for work
performed to date to estimated total direct costs for the contract. When the outcome of a contract cannot
be estimated reliably, revenue is recognised only to the extent of contract costs incurred that are likely
to be recoverable.
(b) Shiprepair and conversion
Revenue from fabrication and outfitting works and conversion jobs is recognised using the percentage
of completion method, provided the work is at least 10% completed and the outcome of the contract
can be reliably estimated. The percentage of completion is measured by reference to the percentage of
direct costs incurred for work performed to date to estimated total direct costs for the contract. When the
outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract
costs incurred that are likely to be recoverable.
Revenue from other shiprepair and conversion are recognised upon completion of work.
(c) Shipchartering and rental
Shipchartering revenue and rental income are recognised on a time proportion basis.
(d) Interest income
Interest income is recognised using the effective interest method.
(e) Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
2.27 Taxes
(a) Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted at the end of the reporting
period, in the countries where the Group operates and generates taxable income.
Current income taxes are recognised in profit or loss except to the extent that the tax relates to items
recognised outside profit or loss, either in other comprehensive income or directly in equity. Management
periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
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Notes to the Financial Statements30 June 2011
2. Summary of significant accounting policies (cont’d)
2.27 Taxes (cont’d)
(b) Deferred tax
Deferred tax is provided using the liability method on temporary differences at the end of the reporting
period between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
• where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries, associates
and interests in joint ventures, where the timing of the reversal of the temporary differences can
be controlled and it is probable that the temporary differences will not reverse in the foreseeable
future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilised except:
• where the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are recognised only to the extent
that it is probable that the temporary differences will reverse in the foreseeable future and taxable
profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of
each reporting period and are recognised to the extent that it has become probable that future taxable
profit will allow the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the end of each reporting period.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred
tax items are recognised in correlation to the underlying transaction either in other comprehensive income
or directly in equity and deferred tax arising from a business combination is adjusted against goodwill
on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable
entity and the same taxation authority.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate
recognition at that date, would be recognised subsequently if new information about facts and
circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as
it does not exceed goodwill) if it incurred during the measurement period or in profit or loss.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 69
2. Summary of significant accounting policies (cont’d)
2.27 Taxes (cont’d)
(c) Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
• where the sales tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
• receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statements of financial position.
2.28 Derivative financial instruments and hedging activities
The Group uses derivative financial instruments such as forward currency contracts and interest rate swaps
to hedge its risks associated with foreign currency and interest rate fluctuations. Such derivative financial
instruments are initially recognised at fair value on the date on which a derivative contract is entered into and
are subsequently remeasured at fair value. Derivative financial instruments are carried as assets when the fair
value is positive and as liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivative financial instruments that do not qualify
for hedge accounting are recognised in profit or loss for the year.
The fair value of forward currency contracts is calculated by reference to current forward exchange rates for
contracts with similar maturity profiles. The fair value of interest rate swap contracts is determined by reference
to market values for similar instruments.
For the purpose of hedge accounting, hedges are classified as:
• fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability
or an unrecognised firm commitment, that is attributable to a particular risk and could affect profit or
loss; or
• cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a
particular risk associated with a recognised asset or liability or a highly probable forecast transaction
and could affect profit or loss.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship
to which the Group wishes to apply hedge accounting and the risk management objective and strategy for
undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item
or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s
effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to
the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value
or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective
throughout the financial reporting periods for which they were designated.
(a) Fair value hedges
For fair value hedges, the carrying amount of the hedged item is adjusted for gains and losses attributable
to the risk being hedged, the derivative is remeasured at fair value and gains and losses from both are
recognised in profit or loss.
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Notes to the Financial Statements30 June 2011
2. Summary of significant accounting policies (cont’d)
2.28 Derivative financial instruments and hedging activities (cont’d)
(a) Fair value hedges (cont’d)
For fair value hedges relating to items carried at amortised cost, the adjustment to carrying value is amortised through the profit or loss over the remaining term to maturity. Any adjustment to the carrying amount of a hedged financial instrument for which the effective interest method is used is amortised to profit or loss.
Amortisation begins as soon as an adjustment exists but no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss recognised in profit or loss. The changes in the fair value of the hedging instrument are also recognised in profit or loss.
The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, the hedge no longer meets the criteria for hedge accounting or the Group revokes the designation. Any adjustment to the carrying amount of a hedged financial instrument for which the effective interest method is used is amortised to profit or loss. Amortisation begins as soon as an adjustment exists but no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.
(b) Cash flow hedges
For cash flow hedges, the effective portion of the gain or loss on the hedging instrument is recognised directly in the hedging reserve, while the ineffective portion is recognised in profit or loss.
Amounts taken to hedging reserve are transferred to profit or loss when the hedged transaction affects profit or loss, such as when hedged financial income or financial expense is recognised or when a forecast sale or purchase occurs. Where the hedged item is the cost of a non-financial asset or liability, the amounts taken to hedging reserve are transferred to the initial carrying amount of the non-financial asset or liability.
If the forecast transaction is no longer expected to occur, amounts previously recognised in hedging reserve are transferred to profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognised in hedging reserve remain in equity until the forecast transaction occurs. If the related transaction is not expected to occur, the amount is recognised in profit or loss.
2.29 Segment reporting
For management purposes, the Group is organised into operating segments based on their products and services. The segment results are regularly reviewed by management in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 34, including the factors used to identify the reportable segments and the measurement basis of segment information.
2.30 Share capital and share issue expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of ordinary shares are deducted against share capital.
2.31 Treasury shares
The Group’s own equity instruments, which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount of treasury shares and the consideration received, if reissued, is recognised directly in equity. Voting rights related to treasury shares are nullified for the Group and no dividends are allocated to them respectively.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 71
2. Summary of significant accounting policies (cont’d)
2.32 Contingencies
A contingent liability is:
(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or
(b) a present obligation that arises from past events but is not recognised because:
(i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(ii) The amount of the obligation cannot be measured with sufficient reliability.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.
Contingent liabilities and assets are not recognised in the statement of financial position of the Group, except for contingent liabilities assumed in a business combination that are present obligations and which the fair values can be reliably determined.
2.33 Related parties
A related party is defined as follows:
(a) A person or a close member of that person’s family is related to the Group and Company if that person:
(i) Has control or joint control over the Company;
(ii) Has significant influence over the Company; or
(iii) Is a member of the key management personnel of the Group or Company or of a parent of the Company.
(b) An entity is related to the Group and the Company if any of the following conditions applies:
(i) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);
(iii) Both entities are joint ventures of the same third party;
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity;
(v) The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company;
(vi) The entity is controlled or jointly controlled by a person identified in (a); or
(vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
72
Notes to the Financial Statements30 June 2011
3. Significant accounting judgments and estimates
The preparation of the Group’s financial statements requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure
of contingent liabilities at the end of each reporting period. These are assessed on an on-going basis and
are based on experience and relevant factors, including expectations of future events that are believed to be
reasonable under the circumstances. However, uncertainty about these assumptions and estimates could result
in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in
the future periods.
3.1 Judgments made in applying accounting policies
The following are the judgments made by management in the process of applying the Group’s accounting policies
that have the most significant effect on the amounts recognised in the consolidated financial statements.
(a) Revenue recognition
Total contract revenue includes an estimation of the value of variation works that is recoverable from
the customers.
The Group has recognised estimated recoverable variation works of $1,813,000 (2010: $1,215,000) as
contract revenue for which customer acceptance is pending. In making the judgment, the Group evaluates
its past experience and the history of settlements with the customers. Any shortfall in recovery of this
recoverable amount will impact the results of the Group by the same quantum.
(b) Determination of functional currency
The Group measures foreign currency transactions in the respective functional currencies of the Company
and its subsidiaries. In determining the functional currencies, judgment is required to determine the
currency that mainly influences sales prices for goods and services and of the country whose competitive
forces and regulations mainly determines the sales prices of its goods and services. The functional
currencies of the entities in the Group are determined based on management’s assessment of the
economic environment in which the entities operate and its process of determining sales prices.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below.
(a) Useful lives of property, plant and equipment
The cost of property, plant and equipment is depreciated on a straight-line basis over their estimated
economic useful lives. Management estimates the useful lives of these property, plant and equipment to
be within 1 to 30 years. These are common life expectancies applied in the shipping industry. Changes in
the expected level of usage and technological developments could impact the economic useful lives and
the residual values of these assets, therefore future depreciation charges could be revised. The carrying
amount of the Group’s property, plant and equipment is disclosed in Note 4.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 73
3. Significant accounting judgments and estimates (cont’d)
3.2 Key sources of estimation uncertainty (cont’d)
(b) Impairment of non-financial assets
The Group determines an asset’s recoverable amount based on the higher of an asset’s or cash-generating
unit’s fair value less costs to sell and its value in use. When value in use calculation is undertaken,
management estimates the expected future cash flows from the asset or cash-generating unit by applying
a suitable discount rate to calculate the present value of those cash flows. When fair value less costs
to sell is used, management engages the services of professional valuers to determine the fair values
using valuation techniques which involve the use of estimates and assumptions which are reflective of
current market conditions.
The carrying amount of the Group’s property, plant and equipment is disclosed in Note 4.
(c) Impairment of loans and receivables
The Group assesses at the end of each reporting period whether there is any objective evidence that a
financial asset is impaired. To determine whether there is objective evidence of impairment, the Group
considers factors such as the probability of insolvency or significant financial difficulties of the debtor
and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated
based on historical loss experience for assets with similar credit risk characteristics. The carrying amount
of the Group’s loans and receivables is disclosed in Notes 10 and 13.
(d) Construction contracts
The Group recognises contract revenue by reference to the stage of completion of the contract activity at
the end of each reporting period, when the outcome of a construction contract can be estimated reliably.
The stage of completion is measured by reference to the proportion that contract costs incurred for work
performed to date bear to the estimated total contract costs. Significant assumptions are required to
estimate the total contract costs that will affect the stage of completion. The estimates are made based
on past experience and knowledge of the management. The carrying amounts of assets and liabilities
arising from construction contracts are disclosed in Note 9.
(e) Income taxes
Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing
of future taxable income. Given the wide range of international business relationships and the long-term
nature and complexity of existing contractual agreements, differences arising between the actual results
and the assumptions made, or future changes to such assumptions, could necessitate future adjustments
to tax provisions already recorded. The Group establishes provisions, based on reasonable estimates, for
possible consequences of audits by the tax authorities of the respective countries in which it operates.
The amount of such provisions is based on various factors, such as experience of previous tax audits
and differing interpretations of tax regulations by the taxable entity and the relevant tax authority. Such
differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing
in the respective Group company’s domicile.
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable
profit will be available against which the losses can be utilised. Significant management judgment is
required to determine the amount of deferred tax assets that can be recognised, based upon the likely
timing and level of future taxable profits together with future tax planning strategies.
The carrying amount of the Group’s current tax payable and deferred tax liabilities at 30 June 2011 was
$8,266,000 (2010: $12,007,000) and $10,378,000 (2010: $9,747,000) respectively.
74
Notes to the Financial Statements30 June 2011
4.
Pro
pe
rty,
pla
nt
an
d e
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ipm
en
t
Th
e G
rou
p
Le
as
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isp
osals
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4)
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)
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ran
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ran
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r to
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r sale
––
––
–(8
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et
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ran
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r to
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r sale
––
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et
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24
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46
33
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8
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 75
4.
Pro
pe
rty,
pla
nt
an
d e
qu
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en
t (c
on
t’d
)
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59
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isp
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ran
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––
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–(3
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et
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ge
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(26
)–
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)(1
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t 3
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t c
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8
Assets
un
der
co
nstr
uctio
n c
om
prised
main
ly v
essels
un
der
co
nstr
uctio
n,
pla
nt
an
d m
ach
inery
as w
ell
as d
evelo
pm
en
t o
f B
ata
m a
nd
Ch
ina y
ard
facili
ties.
76
Notes to the Financial Statements30 June 2011
4. Property, plant and equipment (cont’d)
The Company
Motor
vehicles
$’000
Cost
At 1 July 2009, 30 June 2010 and 1 July 2010 227
Disposal (227)
At 30 June 2011 –
Accumulated depreciation
At 1 July 2009 103
Depreciation charge for the year 24
At 30 June 2010 and 1 July 2010 127
Depreciation charge for the year 6
Disposal (133)
At 30 June 2011 –
Net carrying amount
At 30 June 2010 100
At 30 June 2011 –
The depreciation charge for the year as shown in profit or loss is arrived at as follows:
The Group
2011 2010
$’000 $’000
Depreciation charge for the year 36,059 30,765
Depreciation included in work-in-progress carried forward (Note 9) (2,792) (2,675)
Depreciation previously included in work-in-progress now
charged to profit or loss 2,675 2,385
Depreciation charge as disclosed in Note 26 35,942 30,475
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 77
4. Property, plant and equipment (cont’d)
Included in net carrying amount of property, plant and equipment of the Group and the Company are the
following:
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Assets held under finance leases:
Motor vehicles 531 654 – 100
Plant and machinery 16,484 12,234 – –
Asset under construction 14,953 – – –
31,968 12,888 – 100
Assets pledged as security for interest-bearing
loans and borrowings:
Leasehold property and buildings 11,845 5,060 – –
Plant and machinery 8,595 10,265 – –
Tugs and other vessels 118,357 129,930 – –
Barges 34,254 39,700 – –
Dry docks, quays and ancillary 12,963 18,716 – –
186,014 203,671 – –
Borrowing costs of $817,000 at interest rates ranging from 4.75% to 5.5% per annum was capitalised as cost
of property, plant and equipment in 2010.
The Group recorded an impairment loss of $2,297,000 in 2010 which represented the write-down of assets to
their recoverable amounts, determined at the cash-generating unit level (individual vessel) and was based on
fair value less costs to sell determined with respect to valuations obtained. The impairment loss was recognised
in profit or loss under “other operating expenses” (Note 26).
78
Notes to the Financial Statements30 June 2011
5. Lease prepayments
The Group
Leasehold
land
$’000
Cost
At 1 July 2009 6,600
Net exchange differences (36)
At 30 June 2010 and 1 July 2010 6,564
Additions 243
Net exchange differences (98)
At 30 June 2011 6,709
Accumulated amortisation
At 1 July 2009 2,476
Amortisation charge for the year 199
Net exchange differences (3)
At 30 June 2010 and 1 July 2010 2,672
Amortisation charge for the year 202
Net exchange differences (9)
At 30 June 2011 2,865
Net carrying amount
At 30 June 2010 3,892
At 30 June 2011 3,844
Included in lease prepayments of the Group are the following:
The Group
2011 2010
$’000 $’000
Leasehold land mortgaged to banks as security for interest-bearing
loans and borrowings granted to a subsidiary 1,281 1,414
The Group has land use rights over 8 (2010: 7) plots of land in the People’s Republic of China, Indonesia and
Singapore where the shipyards of the Group operate. The land use rights have remaining tenures ranging from
10 to 44 years (2010: 11 to 45 years).
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 79
6. Subsidiaries
The Company
2011 2010
$’000 $’000
Unquoted equity shares, at cost 69,505 33,573
The details of the subsidiaries are as follows:
Name of subsidiaries Principal activities
Country of
incorporation
Equity
interest held
by the Company
2011 2010
% %
Held by the Company
* ASL Shipyard Pte Ltd Shipbuilding, shiprepair
and conversion and general
engineering
Singapore 100 100
** PT. ASL Shipyard Indonesia 1 Shipbuilding, shiprepair
and conversion and general
engineering
Indonesia 10 10
* ASL Offshore & Marine Pte. Ltd. Chartering of vessels and
ship management
Singapore 100 100
* Capitol Marine Pte Ltd Chartering of vessels Singapore 100 100
* Capitol Offshore Pte Ltd Chartering of vessels Singapore 100 100
* Capitol Tug & Barge Pte Ltd Chartering of vessels Singapore 100 100
* Capitol Shipping Pte Ltd Chartering of vessels Singapore 100 100
* Lightmode Pte Ltd Chartering of vessels Singapore 100 100
* Capitol Logistics Pte. Ltd. Chartering of vessels Singapore 100 100
* Capitol Navigation Pte. Ltd. Chartering of vessels Singapore 100 100
* Capitol Aquaria Pte. Ltd. Chartering of vessels Singapore 100 100
* Capitol Oceans Pte. Ltd. Chartering of vessels Singapore 100 100
* ASL Maritime Services Pte. Ltd. # Chartering of vessels Singapore 100 100
* Intan Maritime Investments Pte. Ltd. Chartering of vessels Singapore 100 100
* Intan Synergy Pte. Ltd. Chartering of vessels Singapore 100 100
* Intan Offshore Pte. Ltd. # Chartering of vessels Singapore 100 100
1 90% owned by ASL Shipyard Pte Ltd, a wholly-owned subsidiary of the Company
80
Notes to the Financial Statements30 June 2011
6. Subsidiaries (cont’d)
Name of subsidiaries Principal activities
Country of
incorporation
Equity
interest held
by the Company
2011 2010
% %
Held by the Company (cont’d)
* Intan Oceans Pte. Ltd. Chartering of vessels Singapore 100 –
* Intan Scorpio Pte. Ltd. Chartering of vessels Singapore 100 –
* ASL Triaksa Offshore Pte. Ltd. # Chartering of vessels Singapore 60 60
* Hongda Investment Pte. Ltd. Investment holding Singapore 60 60
* Intan Overseas Investments
Pte. Ltd.
Investment holding Singapore 100 100
Held through subsidiaries
** PT. ASL Shipyard Indonesia Shipbuilding, shiprepair
and conversion and general
engineering
Indonesia 90 90
** PT. Cipta Nusantara Abadi Investment holding and
provision of agency, handling
and consultancy services
Indonesia 75 75
** PT. Capitol Nusantara Indonesia Chartering of vessels and
ship management
Indonesia 60 60
** PT. Bina Kontinental Lestari Investment holding and
provision of agency, handling
and consultancy services
Indonesia 100 100
** PT. Awak Samudera Transportasi Chartering of vessels Indonesia 100 100
** PT. Cemara Intan Shipyard Shipbuilding, shiprepair and
general engineering
Indonesia 100 100
*** Jiang Men Hongda Shipyard Ltd. Shipbuilding and general
engineering
People’s
Republic of
China
60 60
* Audited by Ernst & Young LLP, Singapore
** Audited by Drs Bernardi & Co, Indonesia
*** Audited by Zhishang Certified Public Accountants Co., Ltd., People’s Republic of China# The company is dormant during the financial year
In accordance with Rule 716 of the SGX-ST Listing Manual, the Audit Committee and Board of Directors of the
Company confirmed that they are satisfied that the appointment of different auditors for its subsidiaries would
not compromise the standard and effectiveness of the audit of the Company and the Group.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 81
7. Interest in jointly-controlled entity and associate
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Interest in jointly-controlled entity
Unquoted equity shares, at cost 87 87 – –
Share of post-acquisition reserves 866 1,137 – –
953 1,224 – –
Interest in associate
Unquoted equity shares, at cost 1,558 1,558 1,558 1,558
Share of post-acquisition reserves (1,558) (957) – –
Impairment loss – – (1,558) –
– 601 – 1,558
Total interest in jointly-controlled entity
and associate 953 1,825 – 1,558
Interest in jointly-controlled entity
Details of the jointly-controlled entity are as follows:
Name of jointly-controlled entity Principal activities
Place of
incorporation
and business
Effective equity
interest held
by the Group
2011 2010
% %
Held through a subsidiary
* HKR-ASL Joint Venture Limited # Chartering of vessels Hong Kong 50 50
* Audited by Alan Chan & Company, Hong Kong# The company is dormant during the financial year
The following amounts represent the Group’s proportionate share of the results, assets and liabilities of the jointly-controlled entity, which have been equity accounted in the consolidated statement of financial position and profit or loss:
The Group
2011 2010
$’000 $’000
Turnover – –
Profit after tax (130) (179)
Current assets 166 190
Non-current assets 788 1,034
Total assets 954 1,224
Current liabilities (1) (1)
Total liabilities (1) (1)
82
Notes to the Financial Statements30 June 2011
7. Interest in jointly-controlled entity and associate (cont’d)
Interest in associate
Details of the associate are as follows:
Name of associate Principal activities
Place of
incorporation
and business
Effective equity
interest held
by the Group
2011 2010
% %
Held by the Company
* Fastcoat Industries Pte. Ltd. Investment holding and
metal galvanising, coating
and protecting operations
Singapore 44.5 44.5
Held through an associate
** PT. Fastcoat Industries Metal galvanising, coating
and protecting operations
Indonesia 44.5 44.5
* Audited by Ernst & Young LLP, Singapore
** Audited by Drs Bernardi & Co, Indonesia
The summarised financial information of the associate, not adjusted for the proportion of ownership interest
held by the Group, is as follows:
The Group
2011 2010
$’000 $’000
Turnover 2,849 3,950
Loss after tax (1,443) (1,103)
Current assets 2,326 3,359
Non-current assets 1,803 2,248
Total assets 4,129 5,607
Current liabilities (4,220) (4,256)
Total liabilities (4,220) (4,256)
8. Inventories
The Group
2011 2010
$’000 $’000
Raw materials 12,272 12,841
Bunker fuel 319 310
12,591 13,151
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 83
9. Construction work-in-progress/Progress billings in excess of construction work-in-progress
The Group
2011 2010
$’000 $’000
Construction work-in-progress and attributable profits 290,231 235,386
Progress billings (229,285) (208,200)
60,946 27,186
Represented by:
Construction work-in-progress 80,453 67,734
Progress billings in excess of construction work-in-progress (19,507) (40,548)
60,946 27,186
The construction work-in-progress included depreciation capitalised amounting to $2,792,000 (2010:
$2,675,000).
10. Trade and other receivables
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Trade and other receivables (current):
Trade receivables 98,057 100,586 – –
Less: Allowance for impairment (2,471) (5,011) – –
Net trade receivables 95,586 95,575 – –
Other receivables 8,638 9,067 – –
Insurance receivables 3,649 2,486 – –
Amount due from subsidiaries
– non-trade – – 178,153 165,437
Amount due from jointly-controlled entity and
associate
– trade 1,881 1,499 – –
– non-trade – 181 – –
14,168 13,233 178,153 165,437
Less: Allowance for impairment (180) (215) – –
Net other receivables 13,988 13,018 178,153 165,437
Total 109,574 108,593 178,153 165,437
Other receivable (non-current):
Amount due from subsidiary
– non-trade – – – 2,203
Total trade and other receivables 109,574 108,593 178,153 167,640
84
Notes to the Financial Statements30 June 2011
10. Trade and other receivables (cont’d)
Movements in allowance for impairment of doubtful trade and other receivables during the financial year is as
follows:
The Group
2011 2010
$’000 $’000
At 1 July 5,226 4,635
Charge for the year 666 610
Written-back (466) (33)
Written-off (2,763) –
Net exchange differences (12) 14
At 30 June 2,651 5,226
The ageing of trade receivables and allowance for impairment of doubtful trade receivables of the Group is as
follows:
2011 2010
Gross Impairment Gross Impairment
$’000 $’000 $’000 $’000
Not past due 42,187 – 15,797 –
Past due 0 to 3 months 19,302 – 35,272 –
Past due 3 to 6 months 4,489 – 17,479 –
Past due 6 to 12 months 15,026 – 16,878 –
More than 1 year 17,053 2,471 15,160 5,011
98,057 2,471 100,586 5,011
Trade receivables
Trade receivables are non-interest bearing and are generally on 30 to 90 days’ credit terms. They are recognised
at their original invoice amounts which represent their fair values on initial recognition.
Amount due from subsidiaries, jointly-controlled entity and associate
The non-trade balances with subsidiaries are unsecured, interest-free and are repayable on demand except
for balances with certain wholly-owned subsidiaries which bear interest ranging from 4.82% to 5.23% (2010:
3.93% to 5.05%) per annum.
The trade and non-trade balances with jointly-controlled entity and associate are unsecured, interest-free and
are repayable on demand.
Amount due from subsidiary (non-current)
The non-trade balance with subsidiary was unsecured, interest-free and was not expected to be repayable
within the next twelve months.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 85
10. Trade and other receivables (cont’d)
Trade and other receivables are denominated in the following currencies:
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Singapore Dollar 80,883 71,883 174,615 162,177
United States Dollar 19,227 30,943 3,538 5,463
Euro 7,025 3,569 – –
Indonesia Rupiah 2,199 1,295 – –
Chinese Renminbi 218 860 – –
Others 22 43 – –
109,574 108,593 178,153 167,640
11. Deposits and prepayments
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Deposits 166 293 – –
Downpayment for purchase of land,
machinery and yard development 2,455 2,734 2,454 2,454
Prepayments 7,081 4,021 890 679
9,702 7,048 3,344 3,133
12. Derivative financial instruments
Derivative financial instruments as at 30 June are as follows:
The Group
2011 2010
Assets Liabilities Assets Liabilities
$’000 $’000 $’000 $’000
Forward currency contracts 3,225 (11) 1,350 (443)
Interest rate swaps – (1,831) – (3,121)
3,225 (1,842) 1,350 (3,564)
86
Notes to the Financial Statements30 June 2011
12. Derivative financial instruments (cont’d)
The Company
2011 2010
Assets Liabilities Assets Liabilities
$’000 $’000 $’000 $’000
Interest rate swaps – (505) – (368)
(i) Forward currency contracts
The Group entered into various foreign exchange forward contracts to sell and purchase foreign currencies
on its future anticipated income and expenditure respectively. As at 30 June 2011, the terms of these
contracts and the fair value adjustments on these derivative financial instruments are as follows:
The Group
Contract or
notional
Fair value
adjustments
Forward currency contracts Maturity dates amount Assets Liabilities
$’000 $’000 $’000
2011
Sell
– fixed forward contracts 15 July 2011 –
28 February 2012
47,440 3,111 –
Buy
– fixed forward contracts 15 July 2011 –
30 December 2011
7,452 114 (11)
3,225 (11)
The terms of the forward currency contracts have been negotiated to match the terms of the
commitments.
For the cash flow hedges of the expected future sales which were assessed to be effective, a net fair
value gain of $3,090,000 (2010: $993,000) was included in the hedging reserve. Fair value loss of $59,000
(2010: gain of $72,000) was recognised in profit or loss during the year on the ineffective portion of the
cash flow hedges.
For the cash flow hedges of the expected future purchases which were assessed to be effective, a net
fair value gain of $104,000 (2010: loss of $140,000) was included in the hedging reserve. Fair values
gain of $26,000 (2010: loss of $27,000) was recognised in profit or loss during the year on the ineffective
portion of the cash flow hedges.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 87
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88
Notes to the Financial Statements30 June 2011
13. Bank balances, deposits and cash
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Cash on hand 24 42 – –
Cash at banks 35,844 32,425 177 510
Fixed deposits with banks 13,668 57,623 – –
49,536 90,090 177 510
Cash at banks of the Group amounting to $9,844,000 as at 30 June 2011 (2010: $14,815,000) earn interest
based on daily bank deposit rates.
The maturity period of fixed deposits with banks ranges from 2 days to 1 year (2010: 1 week to 1 year) for the
Group. The weighted average effective interest rate at 30 June for fixed deposits of the Group is 0.34% (2010:
0.20%) per annum.
Bank balances, deposits and cash of the Group and the Company are denominated in the following
currencies:
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Singapore Dollar 25,400 73,246 177 510
United States Dollar 18,954 8,367 – –
Euro 4,413 7,924 – –
Chinese Renminbi 98 279 – –
Indonesia Rupiah 670 273 – –
Others 1 1 – –
49,536 90,090 177 510
The Group’s restricted cash as at 30 June 2011 included cash at banks and fixed deposits amounted to
$2,116,000 (2010: $1,861,000) and $2,669,000 (2010: $4,927,000) respectively, and are set aside for specific
use with respect to certain financing facilities obtained by certain subsidiaries (Note 18).
For the purpose of statement of cash flows, cash and cash equivalents comprise the following:
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Cash on hand 24 42 – –
Cash at banks 35,844 32,425 177 510
Fixed deposits with banks 13,668 57,623 – –
49,536 90,090 177 510
Less: Restricted cash
– Cash at banks (2,116) (1,861) – –
– Fixed deposits with banks (2,669) (4,927) – –
Cash and cash equivalents 44,751 83,302 177 510
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 89
14. Assets held for sale
The Group
2011 2010
$’000 $’000
Vessels
At 1 July 7,269 845
Additions – 3,231
Disposals (5,266) (6,490)
Transfer from property, plant and equipment 13,761 9,683
At 30 June 15,764 7,269
15. Trade and other payables
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Trade and other payables (current):
Trade payables 71,302 85,554 19 64
Accrued operating expenses 44,765 34,255 1,851 1,102
Payables for yard development 12,811 9,132 – –
Other payables 515 3,295 – –
Amount due to subsidiaries
– non-trade – – 34,643 28,843
Amount due to jointly-controlled entity and associate
– trade 68 146 – –
– non-trade 79 90 – –
Amount due to non-controlling interests of subsidiaries
– non-trade 2,125 2,080 – –
131,665 134,552 36,513 30,009
Other payables (non-current):
Amount due to non-controlling interests of subsidiaries
– non-trade – 1,469 – –
Total trade and other payables 131,665 136,021 36,513 30,009
90
Notes to the Financial Statements30 June 2011
15. Trade and other payables (cont’d)
Trade payables are non-interest bearing and are normally on 30 to 120 days’ credit terms.
Amount due to subsidiaries, jointly-controlled entity and associate
The trade and non-trade balances with subsidiaries, jointly-controlled entity and associate are unsecured,
interest-free and are repayable on demand.
Amount due to non-controlling interests of subsidiaries (current)
The balance with non-controlling interests of subsidiaries is unsecured, interest-free and is repayable on
demand.
Amount due to non-controlling interests of subsidiaries (non-current)
This balance relates to non-controlling interests’ loan to subsidiaries of the Company which is unsecured,
interest-free and is not expected to be repaid within the next twelve months.
Trade and other payables are denominated in the following currencies:
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Singapore Dollar 108,656 112,144 36,513 30,009
United States Dollar 6,901 8,527 – –
Euro 4,189 1,612 – –
Indonesia Rupiah 10,935 11,764 – –
Chinese Renminbi 418 475 – –
Hong Kong Dollar 80 91 – –
Swedish Krona 145 135 – –
Japanese Yen 207 172 – –
Sterling Pound 4 30 – –
Norwegian Kroner 9 1,040 – –
Australian Dollar 94 – – –
Others 27 31 – –
131,665 136,021 36,513 30,009
16. Other liabilities
The Group
2011 2010
$’000 $’000
Deferred income 246 93
Deposits received from customers 3,013 3,252
3,259 3,345
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 91
17. Trust receipts
Trust receipts are unsecured and denominated in the following currencies:
The Group
2011 2010
$’000 $’000
Singapore Dollar 27,738 23,467
United States Dollar – 1,566
Euro Dollar 7,127 –
34,865 25,033
The effective interest rate at 30 June is 2.23% (2010: 2.12%) per annum. Interest rates are repriced within a
year.
18. Interest-bearing loans and borrowings
The Group The Company
Effective
interest
rates
Maturity
dates 2011 2010 2011 2010
$’000 $’000 $’000 $’000
Current
SGD Finance lease liabilities – secured 3.96 2012 6,210 2,953 – 25
RMB Finance lease liabilities – secured 2012 – 1 – –
SGD Floating rate – secured 2.75 1 2012 7,676 5,325 – –
USD Floating rate – secured 2.51 1 2012 1,991 – – –
SGD Fixed rate – secured 2.89 2 2012 7,008 13,454 – –
SGD Fixed rate – unsecured 4.30 2,3 2012 33,645 15,687 22,100 11,000
USD Fixed rate – secured 6.03 2 2012 9,779 10,589 – –
Euro Fixed rate – secured 5.17 2 2012 2,102 2,031 – –
RMB Fixed rate – secured 2012 – 1,030 – –
68,411 51,070 22,100 11,025
92
Notes to the Financial Statements30 June 2011
18. Interest-bearing loans and borrowings (cont’d)
The Group The Company
Effective
interest
rates
Maturity
dates 2011 2010 2011 2010
$’000 $’000 $’000 $’000
Non-current
SGD Finance lease liabilities – secured 3.96 2013 – 2017 15,872 5,781 – 20
SGD Floating rate – secured 2.75 1 2013 – 2016 13,853 10,248 – –
USD Floating rate – secured 2.51 1 2016 8,762 – – –
SGD Fixed rate – secured 2.89 2 2013 – 2014 5,693 18,267 – –
SGD Fixed rate – unsecured 4.30 2,3 2014 94,893 69,537 92,900 65,000
USD Fixed rate – secured 6.03 2 2013 – 2016 15,415 26,281 – –
Euro Fixed rate – secured 5.17 2 2013 1,051 3,046 – –
155,539 133,160 92,900 65,020
Total 223,950 184,230 115,000 76,045
1 The interest rates of these floating rate loans are repriced at intervals of 1 month for SGD loans and 3
months for USD loan.
2 Includes interest-bearing loans and borrowings with interest rate swaps.
3 Includes notes issued under the S$300 million Multicurrency Debt Issuance Programme established by the
Company in May 2008. These notes are unsecured and are issued in series or tranches and comprised
floating rate notes of $21,000,000 and fixed rate notes of $94,000,000 due in March 2014.
The net carrying amount of the Group’s assets pledged as security for interest-bearing loans and borrowings
are disclosed in Notes 4 and 5. The Group also secured borrowings by way of corporate guarantees from
the Company and certain subsidiaries and assignment of charter income and insurance of certain vessels of
subsidiaries.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 93
19. Deferred tax liabilities
The Group
2011 2010
$’000 $’000
Deferred tax assets
Unabsorbed wear and tear allowances and unutilised tax losses (344) (177)
Allowance for unutilised leave (54) (48)
Others (34) (25)
(432) (250)
Deferred tax liabilities
Differences in depreciation 10,267 9,852
Revaluation of forward contract to fair value 543 145
10,810 9,997
10,378 9,747
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current income tax liabilities and when the deferred taxes relate to the same taxable entity and the same
taxation authority. The deferred tax amounts determined after appropriate offsetting are as follows:
The Group
2011 2010
$’000 $’000
Deferred tax liabilities 10,378 9,747
At the end of the reporting period, the Group has undistributed earnings of subsidiaries for which deferred tax
liabilities have not been recognised. No liability has been recognised in respect of these differences because
the Group is in a position to control the timing of the reversal of the temporary differences and it is probable
that the temporary differences will not reverse in the foreseeable future.
94
Notes to the Financial Statements30 June 2011
20. Share capital
The Group and the Company
Number of shares Amount
Issued
share
capital
Treasury
shares
Issued
share
capital
Treasury
shares
’000 ’000 $’000 $’000
Fully paid ordinary shares, with no par value
2011
Balance at beginning of year 301,398 1,794 83,061 (923)
Issued under ASL Employee
Share Option Scheme (Note 30) 47 – 31 –
Bonus shares issued 120,578 718 – –
Balance at end of year 422,023 2,512 83,092 (923)
2010
Balance at beginning of year 301,383 1,794 83,051 (923)
Issued under ASL Employee
Share Option Scheme (Note 30) 15 – 10 –
Balance at end of year 301,398 1,794 83,061 (923)
The holders of ordinary shares (except for treasury shares) are entitled to receive dividends as and when declared
by the Company. All ordinary shares (except for treasury shares) carry one vote per share without restriction.
On 29 December 2010, the Company’s share capital has increased by 120,577,892 ordinary shares as a result
of bonus issue of four shares for every ten existing ordinary shares.
Treasury shares
During the year, the Company did not buy back any shares.
The Company holds the shares bought back as treasury shares.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 95
21. Reserves
The Group The Company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Accumulated profits 257,140 234,212 17,497 18,317
Employee share option reserve – 5 – 5
Foreign currency translation reserve (4,865) (55) – –
Hedging reserve 1,392 (967) (505) (368)
253,667 233,195 16,992 17,954
Employee share option reserve
Employee share option reserve represents the equity-settled share options granted to employees (Note 30). The
reserve is made up of the cumulative value of services received from employees recorded on grant of equity-
settled share options.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign operations whose functional currencies are different from that of the Group’s
presentation currency.
Hedging reserve
Hedging reserve records the portion of the fair value changes of derivative financial instruments designated as
hedging instruments in cash flow hedges that is determined to be effective.
22. Other comprehensive income
Tax effects relating to each component of other comprehensive income are set out below:
2011 2010
The Group
Before
tax
Tax
expense
Net
of tax
Before
tax
Tax
expense
Net
of tax
$’000 $’000 $’000 $’000 $’000 $’000
Translation differences relating
to financial statements
of foreign subsidiaries (5,384) – (5,384) 329 – 329
Share of other comprehensive
income of jointly-controlled
entity (141) – (141) (74) – (74)
Fair value changes to cash flow
hedges 2,757 (398) 2,359 1,676 (145) 1,531
(2,768) (398) (3,166) 1,931 (145) 1,786
96
Notes to the Financial Statements30 June 2011
23. Revenue
The Group
2011 2010
$’000 $’000
Shipbuilding 215,683 306,316
Shiprepair and conversion 81,900 89,061
Shipchartering and rental 65,568 72,995
363,151 468,372
24. Other operating income
The Group
2011 2010
$’000 $’000
Interest income from:
– fixed deposits and bank balances 135 155
– finance lease receivables – 24
Insurance claims 65 356
Gain on disposal of property, plant and equipment 6,169 4,216
Gain on disposal of assets held for sale 3,994 2,495
Grant income from Jobs Credit Scheme – 351
Miscellaneous income 151 1,723
10,514 9,320
The Group received cash grant of $351,000 in 2010 with respect to the Singapore government’s Job Credit
Scheme.
25. Finance costs
The Group
2011 2010
$’000 $’000
Interest expense on:
– bank loans and bonds 8,239 8,386
– finance lease 676 456
– trust receipts 430 755
– others 20 43
9,365 9,640
Less:
Interest expense capitalised in property, plant and equipment – (817)
Interest expense on trust receipts charged to cost of sales (430) (751)
8,935 8,072
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 97
26. Profit before tax
The Group
2011 2010
$’000 $’000
Profit before tax is stated after charging/(crediting):
Amortisation of lease prepayments (Note 5) 202 199
Depreciation of property, plant and equipment (Note 4) 35,942 30,475
Employee benefits expense (Note 30) 23,711 25,577
(Gain)/ Loss on ineffective portion of cash flow hedges
on forward currency contracts and interest rate swaps (840) 1,126
Impairment loss on property, plant and equipment (Note 4) – 2,297
Loss on foreign exchange (net) 3,095 539
Non-audit fees payable to auditors of the Company 21 21
Operating lease expenses (Note 29(c)) 1,007 998
Property, plant and equipment written off 15 3
Allowance for impairment of doubtful trade and other receivables (net) 200 577
27. Tax expense
Major components of tax expense for the years ended 30 June are:
The Group
2011 2010
$’000 $’000
Current income tax:
Current income tax 5,928 8,673
(Overprovision)/ Underprovision in respect of prior years (788) 683
5,140 9,356
Deferred tax:
Movements in temporary differences (827) 47
Underprovision/ (Overprovision) in respect of prior years 290 (597)
(537) (550)
4,603 8,806
98
Notes to the Financial Statements30 June 2011
27. Tax expense (cont’d)
The Group
2011 2010
$’000 $’000
Reconciliation of effective tax rate
Profit before tax 37,802 48,070
Income tax using Singapore tax rate of 17% 6,426 8,172
Tax effects of:
Expenses not deductible for tax purposes 989 458
Income not subject to tax (1) (257)
Partial tax exemption (144) (180)
Effect of different tax rates in foreign countries 863 642
Tax exempt income (915) (187)
Group relief (771) (844)
Deferred tax assets not recognised 90 1,584
Tax incentives/ concessions under foreign jurisdiction (884) (1,342)
Losses not available for carried-forward 73 520
Others (625) 154
(Overprovision)/ Underprovision in respect of prior years (498) 86
4,603 8,806
The Company and certain subsidiaries are granted the “Approved International Shipping Enterprise” incentive
by the Maritime Port Authority, under which the income from qualifying shipping operations of its Singapore
incorporated subsidiaries are exempt from tax for a period of 10 years commencing 1 January 2004 under the
Singapore Income Tax Act.
The Group has adopted a loss transfer system of group relief (group relief system) under the Singapore Income
Tax Act. Under the group relief system, a Singapore incorporated company belonging to a group may transfer
its current year unabsorbed capital allowances, trade losses and donations (loss items) to another Singapore
incorporated company belonging to the same group, to be deducted against the assessable income of the
latter company.
At the end of the reporting period, the Group has tax losses of approximately $1,375,000 (2010: $850,000)
that are available for offset against future taxable profits of the relevant subsidiary in which the losses arose, for
which no deferred tax asset is recognised due to the uncertainty of its recoverability. The use of these tax losses
is subject to the agreement of the tax authority and compliance with certain provisions of the tax legislation of
the respective country in which the subsidiary operates.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 99
28. Earnings per share
The Group
2011 2010
$’000 $’000
(a) Basic earnings per share
Basic earnings per share is based on:
(i) Profit for the year attributable to owners of the Company 31,916 37,286
No. of shares No. of shares
(Restated)
(ii) Weighted average number of ordinary shares:
Issued ordinary shares at beginning of the year 419,445,494 419,424,494
Weighted average number of ordinary shares issued
during the year 37,136 17,030
Weighted average number of ordinary shares (basic)
at end of the year 419,482,630 419,441,524
(b) Diluted earnings per share
The weighted average number of ordinary shares adjusted for the effects of all dilutive potential ordinary
shares is determined as follows:
The Group
2011 2010
No. of shares No. of shares
(Restated)
Weighted average number of ordinary shares used in
the calculation of basic earnings per share 419,482,630 419,441,524
Weighted average number of unissued ordinary shares
under share options 20,474 50,970
Weighted average number of ordinary shares that
would have been issued at fair value (14,706) (30,032)
5,768 20,938
Weighted average number of ordinary shares used in
the calculation of diluted earnings per share 419,488,398 419,462,462
The earnings per ordinary share (basic and fully diluted basis) for the financial year ended 30 June 2010
have been restated taking into consideration the bonus share issuance on 29 December 2010.
100
Notes to the Financial Statements30 June 2011
29. Commitments and contingencies
The Group
2011 2010
$’000 $’000
(a) Capital commitments
Purchase of:
Tugs and other vessels 4,361 15,210
Barges 1,655 –
Plant and machinery 81 3,003
Construction of dry docks, quays and ancillary – 10,856
6,097 29,069
(b) Operating lease commitments – As lessor
The Group entered into operating leases on its fleet of vessels. As at 30 June 2011, these non-cancellable
leases have remaining lease terms ranging from 9 months to 15 years.
Future minimum lease payments receivable under non-cancellable operating leases as at 30 June are
as follows:
The Group
2011 2010
$’000 $’000
Not later than one year 7,562 5,004
Later than one year but not later than five years 14,341 1,057
Later than five years 23,239 –
45,142 6,061
(c) Operating lease commitments – As lessee
In addition to the land use rights disclosed in Note 5, the Group has entered into commercial property
leases. There are no restrictions placed upon the Group by entering into these leases. Operating lease
payments recognised in the Group’s profit or loss during the year amounted to $1,007,000 (2010:
$998,000).
Future minimum lease payments payable under non-cancellable operating leases (excluding land use
rights) as at 30 June are as follows:
The Group
2011 2010
$’000 $’000
Not later than one year 993 619
Later than one year but not later than five years 3,973 2,476
Later than five years 9,026 6,138
13,992 9,233
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 101
29. Commitments and contingencies (cont’d)
(d) Finance lease commitments – As lessee
The Group has entered into leases for certain assets under construction, motor vehicles and plant and
machinery. These leases are classified as finance leases with expiration over the next 6 years (2010: 7
years). Under the terms of the finance lease arrangements, no contingent rents are payable. The average
effective interest rates implicit in the leases are 3.96% (2010: 2.63%) per annum for the Group and nil%
(2010: 2.5%) per annum for the Company.
Future minimum lease payments under finance leases (Note 18) together with the present value of the
net minimum lease payments for the Group are as follows:
The Group
2011 2010
Minimum
lease
payments
Present
value of
payments
Minimum
lease
payments
Present
value of
payments
$’000 $’000 $’000 $’000
Not later than one year 7,171 6,210 3,320 2,954
Later than one year but not
later than five years 17,107 15,867 6,065 5,761
More than five years 5 5 20 20
Total minimum lease payments 24,283 22,082 9,405 8,735
Less: Amounts representing finance charges (2,201) – (670) –
Present value of minimum lease payments 22,082 22,082 8,735 8,735
The Company
2011 2010
Minimum
lease
payments
Present
value of
payments
Minimum
lease
payments
Present
value of
payments
$’000 $’000 $’000 $’000
Not later than one year – – 27 25
Later than one year but not
later than five years – – 20 20
Total minimum lease payments – – 47 45
Less: Amounts representing finance charges – – (2) –
Present value of minimum lease payments – – 45 45
102
Notes to the Financial Statements30 June 2011
29. Commitments and contingencies (cont’d)
(e) Contingent liabilities
(i) Corporate guarantees (unsecured)
The Company has given the following corporate guarantees in respect of banking facilities utilised as at 30 June:
The Company2011 2010
$’000 $’000
Subsidiaries 403,870 495,693
The financial effects of FRS 39 relating to financial guarantee contracts issued by the Company are not material to the financial statements of the Company and therefore are not recognised.
(ii) Legal claim
In respect of the arbitration proceedings served in May 2009 on two wholly-owned subsidiaries of the Company by a customer in connection with an incident in November 2005 involving a tug chartered from one of the subsidiaries, the arbitration proceedings have been discontinued by the customer subsequent to the financial year end.
30. Employee benefits
The Group
2011 2010
$’000 $’000
Employee benefits expense
(including executive directors)
Salaries and bonuses 22,133 23,742
Central Provident Fund contributions 872 853
Provision for short-term accumulating
compensated absences 29 35
Other staff benefits 677 947
23,711 25,577
ASL Employee Share Option Scheme (the “Scheme”)
The Scheme was approved and adopted by the shareholders of the Company at an Extraordinary General Meeting held on 23 January 2003. Details of the Scheme were set out in the Directors’ Report for the year ended 30 June 2003. The Scheme is administered by the Remuneration Committee of the Company comprising three independent directors, Hong Chin Fock (Chairman), Christopher Chong Meng Tak and Andre Yeap Poh Leong.
Other statutory information regarding the Scheme is set out below:
(i) Exercise price
The exercise price to be paid upon the exercise of the options are as follows:
• the options were granted at the exercise price of $0.55 per share and no options were granted at a discount to the then prevailing Market Price; and
• the “Market Price”, defined as the average of the last dealt price for a share, is determined by reference to the daily Official List published by SGX-ST for five consecutive market days immediately prior to the date an offer to grant an option is made (“Offer Date”), rounded up to the nearest whole cent.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 103
30
. E
mp
loye
e b
en
efi
ts (
co
nt’
d)
AS
L E
mp
loye
e S
ha
re O
pti
on
Sc
he
me
(th
e “
Sc
he
me
”)
(co
nt’
d)
(ii)
O
pti
on
ex
erc
ise
pe
rio
d
Th
e o
ptio
ns w
hic
h w
ere
gra
nte
d s
hall
be e
xerc
isab
le d
urin
g t
he o
ptio
n e
xerc
ise p
erio
d c
om
men
cin
g a
fter
the f
irst
an
niv
ers
ary
of
the O
ffer
Date
an
d e
xp
irin
g o
n,
in t
he c
ase o
f o
ptio
ns g
ran
ted
to
no
n-e
xecu
tive D
irecto
rs a
nd
/or
asso
cia
ted
co
mp
an
y e
mp
loyees,
the d
ay p
reced
ing
th
e f
ifth
an
niv
ers
ary
of
the O
ffer
Date
an
d,
in t
he c
ase o
f o
ptio
ns g
ran
ted
to
oth
er
than
no
n-e
xecu
tive D
irecto
rs a
nd
/or
asso
cia
ted
co
mp
an
y e
mp
loyees,
the d
ay p
reced
ing
th
e t
en
th a
nn
ivers
ary
of
the O
ffer
Date
.
Deta
ils o
f th
e o
ptio
ns g
ran
ted
un
der
the S
ch
em
e o
n t
he u
nis
su
ed
ord
inary
sh
are
s o
f th
e C
om
pan
y a
t th
e e
nd
of
the f
inan
cia
l year
are
as f
ollo
ws:
Da
te o
f g
ran
t
o
f o
pti
on
s
Ex
erc
ise
pri
ce
pe
r
sh
are
No
. o
f
op
tio
ns
ou
tsta
nd
ing
at
be
gin
nin
g
of
fin
an
cia
l
ye
ar
Op
tio
ns
ex
erc
ise
d 1
Op
tio
ns
ca
nc
ell
ed
No
. o
f
op
tio
ns
ou
tsta
nd
ing
at
en
d o
f
fin
an
cia
l
ye
ar
2
No
. o
f
op
tio
ns
ex
erc
isa
ble
at
en
d o
f
fin
an
cia
l
ye
ar
2
Ma
rke
t p
ric
e
of
sh
are
s
at
da
te o
f
gra
nt
of
op
tio
nE
xe
rcis
e p
eri
od
20
11
18
/12
/20
03
$0
.55
47
,00
0(4
7,0
00
)–
––
$0
.55
18
/12
/20
04
to
17
/12
/20
13
20
10
18
/12
/20
03
$0
.55
62
,00
0(1
5,0
00
)–
47
,00
04
7,0
00
$0
.55
18
/12
/20
04
to
17
/12
/20
13
1
Th
e w
eig
hte
d a
vera
ge s
hare
price f
or
the o
ptio
ns e
xerc
ised
du
rin
g t
he y
ear
was $
0.9
4 (
20
10
: $
1.0
8).
2
Th
ere
were
no
op
tio
ns o
uts
tan
din
g a
s a
t 3
0 J
un
e 2
01
1.
Th
e w
eig
hte
d a
vera
ge r
em
ain
ing
co
ntr
actu
al lif
e f
or
the o
ptio
ns a
s a
t 3
0 J
un
e 2
01
0 w
as 3
.47
years
.
104
Notes to the Financial Statements30 June 2011
30. Employee benefits (cont’d)
ASL Employee Share Option Scheme (the “Scheme”) (cont’d)
The fair value of equity-settled share options as at the date of grant, is estimated by an external valuer using a
binomial model, taking into account the terms and conditions upon which the options were granted. The inputs
to the model used as at the date of grant are shown below.
The Group
Independent
Directors Employees
Dividend yield (%) 3.35 4.93
Expected volatility (%) 42 42
Historical volatility (%) 42 42
Risk-free interest rate (%) 1.81 3.62
Expected life of options (years) 5 10
Weighted average share price ($) 0.55 0.55
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future
trends, which may also not necessarily be the actual outcome. No other features of the option grant were
incorporated into the measurement of fair value.
31. Related party disclosures
(a) Sale and purchase of goods and services
In addition to the related party information disclosed elsewhere in the financial statements, the following
significant transactions were entered by the Group and its related parties on terms agreed between the
parties during the financial year:
The Group
2011 2010
$’000 $’000
Jointly-controlled entity and associate
Rental income 480 720
Purchase of galvanising services (246) (222)
Miscellaneous income 9 27
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 105
31. Related party disclosures (cont’d)
(b) Compensation of key management personnel
The Group
2011 2010
$’000 $’000
Short-term employee benefits 2,171 2,103
Central Provident Fund contributions 50 27
Other long-term benefits 238 284
Total compensation paid to key management personnel 2,459 2,414
Comprise amounts paid to:
• Directors of the Company 2,459 2,414
The remuneration of key management personnel is determined by the Remuneration Committee of the
Company having regard to the performance of individuals and market trends.
32. Financial risk management objectives and policies
The Group and the Company are exposed to a variety of financial risks, including market risk (interest rate
risk and foreign currency risk), credit risk, liquidity risk and capital management risk arising from its business
activities. The Group’s overall risk management strategy seeks to minimise the potential material adverse effects
from these exposures. The Group uses financial instruments such as interest rate swaps and forward currency
contracts to hedge certain financial risk exposures. It is the Group’s policy that no trading in derivative financial
instruments shall be undertaken. Exposure to foreign currency risks is also hedged naturally where possible.
The Group’s policy on financial authority limit seeks to mitigate risks by setting out the threshold of approvals
required for entry into contractual obligations and investments.
The Board has overall responsibility for the establishment and oversight of the Group’s risk management
framework. Risk management is carried out under policies approved by the Board. The Board reviews and
approves policies for managing each of these risks and they are summarised below.
There has been no change to the Group’s exposure to these financial risks or the manner in which it manages
and measures the risks.
(a) Market risk
Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates
will affect the Group’s income or the value of its holdings of financial instruments. The objective of market
risk management is to manage and reduce market risk exposures within acceptable parameters.
(i) Interest rate risk
The Group’s exposures to interest rates relates primarily to interest-earning financial assets and
interest-bearing financial liabilities. The Group’s interest rate risk mainly arises from its bank
balances, deposits and cash and borrowings with financial institutions. The Group’s policy is
to maintain an efficient and optimal interest cost structure using a mix of fixed and variable rate
borrowings as well as long-term and short-term borrowings.
The Group seeks to minimise its exposure to interest rate fluctuations through interest rate swaps,
where appropriate, over the duration of its borrowings. The Group classifies these interest rate
swaps as cash flow hedges.
106
Notes to the Financial Statements30 June 2011
32
. F
ina
nc
ial
ris
k m
an
ag
em
en
t o
bje
cti
ve
s a
nd
po
lic
ies
(c
on
t’d
)
(a)
Ma
rke
t ri
sk
(c
on
t’d
)
(i)
Inte
res
t ra
te r
isk
(c
on
t’d
)
Eff
ec
tive
in
tere
st
rate
s a
nd
re
pri
cin
g a
na
lys
is
In r
esp
ect
of
inte
rest-
earn
ing
fin
an
cia
l assets
an
d i
nte
rest-
bearin
g f
inan
cia
l lia
bili
ties t
hat
are
exp
osed
to
in
tere
st
rate
ris
k,
the f
ollo
win
g
tab
le s
ets
ou
t th
e c
arr
yin
g a
mo
un
t b
y m
atu
rity
of
the f
inan
cia
l in
str
um
en
ts t
hat
are
exp
osed
to
in
tere
st
rate
ris
k.
20
11
20
10
Th
e G
rou
p
Le
ss
tha
n
1 y
ea
r
Be
twe
en
1 t
o 5
ye
ars
Ove
r
5 y
ea
rsT
ota
l
Le
ss
tha
n
1 y
ea
r
Be
twe
en
1 t
o 5
ye
ars
Ove
r
5 y
ea
rsT
ota
l
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
Fix
ed
ra
te
Ban
k b
ala
nces,
dep
osits a
nd
cash
23
,51
2–
–2
3,5
12
72
,43
8–
–7
2,4
38
Derivative f
inan
cia
l in
str
um
en
ts
– in
tere
st
rate
sw
ap
(1,8
31
)–
–(1
,83
1)
(3,1
21
)–
–(3
,12
1)
Fin
an
ce lease lia
bili
ties
(6,2
10
)(1
5,8
67
)(5
)(2
2,0
82
)(2
,95
4)
(5,7
61
)(2
0)
(8,7
35
)
Inte
rest-
bearin
g lo
an
s a
nd
b
orr
ow
ing
s*
(52
,53
4)
(11
7,0
52
)–
(16
9,5
86
)(4
2,7
91
)(1
17
,13
1)
–(1
59
,92
2)
Flo
ati
ng
ra
te
Tru
st
receip
ts(3
4,8
65
)–
–(3
4,8
65
)(2
5,0
33
)–
–(2
5,0
33
)
Inte
rest-
bearin
g lo
an
s a
nd
b
orr
ow
ing
s**
(9,6
67
)(2
2,6
15
)–
(32
,28
2)
(5,3
25
)(1
0,2
48
)–
(15
,57
3)
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 107
32
. F
ina
nc
ial
ris
k m
an
ag
em
en
t o
bje
cti
ve
s a
nd
po
lic
ies
(c
on
t’d
)
(a)
Ma
rke
t ri
sk
(c
on
t’d
)
(i)
Inte
res
t ra
te r
isk
(c
on
t’d
)
Eff
ec
tive
in
tere
st
rate
s a
nd
re
pri
cin
g a
na
lys
is (
co
nt’
d) 20
11
20
10
Th
e C
om
pa
ny
Le
ss
tha
n
1 y
ea
r
Be
twe
en
1 t
o 5
ye
ars
Ove
r
5 y
ea
rsT
ota
l
Le
ss
tha
n
1 y
ea
r
Be
twe
en
1 t
o 5
ye
ars
Ove
r
5 y
ea
rsT
ota
l
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
Fix
ed
ra
te
Am
ou
nts
du
e f
rom
su
bsid
iaries
11
3,4
65
––
11
3,4
65
73
,95
5–
–7
3,9
55
Derivative f
inan
cia
l in
str
um
en
ts
– in
tere
st
rate
sw
ap
(50
5)
––
(50
5)
(36
8)
––
(36
8)
Fin
an
ce lease lia
bili
ties
––
––
(25
)(2
0)
–(4
5)
Inte
rest-
bearin
g lo
an
s a
nd
b
orr
ow
ing
s*
(22
,10
0)
(92
,90
0)
–(1
15
,00
0)
(11
,00
0)
(65
,00
0)
–(7
6,0
00
)
* In
clu
des f
loatin
g r
ate
s lo
an
s h
ed
ged
by in
tere
st
rate
sw
ap
s
**
Exclu
des f
loatin
g r
ate
s lo
an
s h
ed
ged
by in
tere
st
rate
sw
ap
s
108
Notes to the Financial Statements30 June 2011
32. Financial risk management objectives and policies (cont’d)
(a) Market risk (cont’d)
(i) Interest rate risk (cont’d)
Effective interest rates and repricing analysis (cont’d)
Interest on financial instruments subject to floating interest rates is contractually repriced at
intervals ranging from 1 to 11 months (2010: 1 to 6 months). Interest on financial instruments at
fixed rates is fixed until the maturity of the instrument. The other financial instruments of the Group
and the Company that are not included in the above tables are not subject to interest rate risk.
Sensitivity analysis
For the Group’s and Company’s borrowings at variable rates on which effective hedges have
not been entered into, an increase of 0.5% (2010: 0.5%) in interest rate at 30 June would have
decreased profit before tax by the amounts shown below. A decrease of 0.5% (2010: 0.5%) in
interest rate at 30 June would have an equal but opposite effect. The analysis assumes that all
other variables, in particular foreign currency exchange rates, remain constant.
The Group The Company
2011 2010 2011 2010
Profit
before tax
Profit
before tax
Profit
before tax
Profit
before tax
$’000 $’000 $’000 $’000
Floating rate instruments 336 203 – –
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 109
32
. F
ina
nc
ial
ris
k m
an
ag
em
en
t o
bje
cti
ve
s a
nd
po
lic
ies
(c
on
t’d
)
(a)
Ma
rke
t ri
sk
(c
on
t’d
)
(ii)
F
ore
ign
cu
rre
nc
y r
isk
Th
e G
rou
p is
exp
osed
to
fo
reig
n cu
rren
cy exch
an
ge ra
te m
ovem
en
ts p
rim
arily
fo
r th
e U
nited
S
tate
s D
olla
r (“
US
D”)
, E
uro
(“
EU
R”)
,
Ind
on
esia
Ru
pia
h (
“ID
R”)
an
d C
hin
ese R
en
min
bi
(“R
MB
”) o
n c
ash
flo
ws f
rom
an
ticip
ate
d s
ale
an
d p
urc
hase t
ran
sactio
ns a
nd
fin
an
cin
g
arr
an
gem
en
ts.
Su
ch
ris
ks a
re h
ed
ged
eith
er
by f
orw
ard
fo
reig
n e
xch
an
ge c
on
tracts
in
resp
ect
of
actu
al o
r fo
recaste
d c
urr
en
cy e
xp
osu
res
wh
ich
are
reaso
nab
ly c
ert
ain
or
hed
ged
natu
rally
by a
matc
hin
g s
ale
or
pu
rch
ase o
f a m
atc
hin
g a
sset
or
liab
ility
of
the s
am
e c
urr
en
cy
an
d a
mo
un
t.
Th
e G
rou
p’s
exp
osu
re t
o f
ore
ign
cu
rren
cy is a
s f
ollo
ws:
SG
DU
SD
EU
RID
RR
MB
Oth
ers
To
tal
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
Th
e G
rou
p
20
11
Fin
an
cia
l a
ss
ets
Tra
de a
nd
oth
er
receiv
ab
les
80
,88
31
9,2
27
7,0
25
2,1
99
21
82
21
09
,57
4
Dep
osits
69
34
–5
8–
–1
61
Ban
k b
ala
nces,
dep
osits a
nd
cash
25
,40
01
8,9
55
4,4
13
67
09
71
49
,53
6
10
6,3
52
38
,21
61
1,4
38
2,9
27
31
52
31
59
,27
1
Fin
an
cia
l li
ab
ilit
ies
Tra
de a
nd
oth
er
payab
les
10
8,6
56
6,9
01
4,1
89
10
,93
54
18
56
61
31
,66
5
Dep
osits r
eceiv
ed
fro
m c
usto
mers
2,1
30
17
1–
––
–2
,30
1
Inte
rest-
bearin
g lo
an
s a
nd
bo
rro
win
gs
18
4,8
50
35
,94
73
,15
3–
––
22
3,9
50
Tru
st
receip
ts2
7,7
38
–7
,12
7–
––
34
,86
5
32
3,3
74
43
,01
91
4,4
69
10
,93
54
18
56
63
92
,78
1
Ne
t fi
na
nc
ial
lia
bil
itie
s(2
17
,02
2)
(4,8
03
)(3
,03
1)
(8,0
08
)(1
03
)(5
43
)(2
33
,51
0)
Net
fin
an
cia
l lia
bili
ties d
en
om
inate
d
in
th
e r
esp
ective e
ntities’
fun
ctio
nal
cu
rren
cie
s2
17
,05
42
7,4
59
–3
42
10
3–
24
4,9
58
Cu
rren
cy e
xp
osu
re3
22
2,6
56
(3,0
31
)(7
,66
6)
–(5
43
)1
1,4
48
110
Notes to the Financial Statements30 June 2011
32
. F
ina
nc
ial
ris
k m
an
ag
em
en
t o
bje
cti
ve
s a
nd
po
lic
ies
(c
on
t’d
)
(a)
Ma
rke
t ri
sk
(c
on
t’d
)
(ii)
F
ore
ign
cu
rre
nc
y r
isk
(c
on
t’d
)
SG
DU
SD
EU
RID
RR
MB
Oth
ers
To
tal
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
Th
e G
rou
p
20
10
Fin
an
cia
l a
ss
ets
Tra
de a
nd
oth
er
receiv
ab
les
71
,88
33
0,9
43
3,5
69
1,2
95
86
04
31
08
,59
3
Dep
osits
17
91
83
16
2–
–2
90
Ban
k b
ala
nces,
dep
osits a
nd
cash
73
,24
68
,36
77
,92
42
73
27
91
90
,09
0
14
5,3
08
39
,32
81
1,5
24
1,6
30
1,1
39
44
19
8,9
73
Fin
an
cia
l li
ab
ilit
ies
Tra
de a
nd
oth
er
payab
les
11
2,1
44
8,5
27
1,6
12
11
,76
44
75
1,4
99
13
6,0
21
Dep
osits r
eceiv
ed
fro
m c
usto
mers
1,4
46
1,4
02
––
––
2,8
48
Inte
rest-
bearin
g lo
an
s a
nd
bo
rro
win
gs
14
1,2
52
36
,87
05
,07
7–
1,0
31
–1
84
,23
0
Tru
st
receip
ts2
3,4
67
1,5
66
––
––
25
,03
3
27
8,3
09
48
,36
56
,68
91
1,7
64
1,5
06
1,4
99
34
8,1
32
Ne
t fi
na
nc
ial
(lia
bil
itie
s)/
as
se
ts(1
33
,00
1)
(9,0
37
)4
,83
5(1
0,1
34
)(3
67
)(1
,45
5)
(14
9,1
59
)
Net
fin
an
cia
l lia
bili
ties d
en
om
inate
d
in
th
e r
esp
ective e
ntities’
fun
ctio
nal
cu
rren
cie
s1
32
,94
02
5,7
60
–2
57
36
7–
15
9,3
24
Cu
rren
cy e
xp
osu
re(6
1)
16
,72
34
,83
5(9
,87
7)
–(1
,45
5)
10
,16
5
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 111
32. Financial risk management objectives and policies (cont’d)
(a) Market risk (cont’d)
(ii) Foreign currency risk (cont’d)
The Company is exposed to foreign currency exchange rate movements primarily for United States
Dollar (“USD”) on its balances with related parties.
SGD USD Total
$’000 $’000 $’000
The Company
2011
Financial assets
Trade and other receivables 174,615 3,538 178,153
Bank balances, deposits and cash 177 – 177
174,792 3,538 178,330
Financial liabilities
Trade and other payables 36,513 – 36,513
Interest-bearing loans and borrowings 115,000 – 115,000
151,513 – 151,513
Net financial assets 23,279 3,538 26,817
Net financial assets denominated
in the functional currency of the
Company (23,279) – (23,279)
Currency exposure – 3,538 3,538
2010
Financial assets
Trade and other receivables 162,177 5,463 167,640
Bank balances, deposits and cash 510 – 510
162,687 5,463 168,150
Financial liabilities
Trade and other payables 30,009 – 30,009
Interest-bearing loans and borrowings 76,045 – 76,045
106,054 – 106,054
Net financial assets 56,633 5,463 62,096
Net financial assets denominated
in the functional currency of the
Company (56,633) – (56,633)
Currency exposure – 5,463 5,463
112
Notes to the Financial Statements30 June 2011
32. Financial risk management objectives and policies (cont’d)
(a) Market risk (cont’d)
(ii) Foreign currency risk (cont’d)
Sensitivity analysis
A 5% strengthening of the following foreign currencies against Singapore Dollar at 30 June would
increase/ (decrease) profit before tax by the amounts shown below.
A 5% weakening of the following foreign currencies against Singapore Dollar at 30 June would
have the equal but opposite effect. The analysis assumes that all other variables, in particular
interest rates, remain constant.
The Group The Company
2011 2010 2011 2010
Profit
before tax
Profit
before tax
Profit
before tax
Profit
before tax
$’000 $’000 $’000 $’000
USD 1,133 836 177 273
EUR (152) 242 – –
IDR (383) (494) – –
(b) Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in
financial loss to the Group. The Group manages its exposure to credit risk arising from sales to trade
customers through credit evaluation, credit limits and debt monitoring procedures on an on-going basis.
Where appropriate, the Group obtains guarantees from the customers or arrange netting agreements.
Cash terms, advance payments or letters of credit are required for customers of lower credit standing.
The Group’s major classes of financial assets are bank balances, deposits and cash and trade receivables.
Cash at banks and fixed deposits are placed in banks and financial institutions with good credit rating.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in
respect of trade receivables. The main components of this allowance are a specific loss component
that relates to individually significant exposures. Where the Group is certain that no recovery of the
amount owing is possible, the financial asset is considered irrecoverable and the amount charged to the
impairment account is written off against the carrying amount of the impaired financial asset.
The ageing analysis of trade receivables and allowance for impairment of doubtful trade receivables is
disclosed in Note 10.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 113
32. Financial risk management objectives and policies (cont’d)
(b) Credit risk (cont’d)
The concentration of credit risk relating to trade receivables is limited as the Group provides services
spanning a myriad of sectors and industries. The Group’s historical experience in the collection of trade
and other receivables falls within the recorded allowances.
At 30 June, the Group’s and the Company’s maximum exposure to credit risk is the carrying amount
of each financial asset, including derivative financial instruments. Guarantees granted by the Company
and certain subsidiaries to banks in respect of banking facilities are only given for companies within the
Group. The maximum exposure to credit risk in respect of financial guarantees at the end of the reporting
period is disclosed in Note 29.
Credit risk concentration profile
The Group determines concentration of credit risk by monitoring the business activities and geographical
areas profile of its trade receivables on an on-going basis. The credit risk concentration profile of the
Group’s net trade receivables is as follows:
The Group
2011 2010
$’000 $’000
By business activities
Shipbuilding 25,463 28,144
Shiprepair 44,202 40,131
Shipchartering 25,921 27,300
95,586 95,575
By geographical areas
Singapore 57,967 38,529
Indonesia 11,878 16,221
Rest of Asia 5,447 15,786
Europe and other countries 20,294 25,039
95,586 95,575
114
Notes to the Financial Statements30 June 2011
32. Financial risk management objectives and policies (cont’d)
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group manages its liquidity risk by maintaining a level of cash and cash equivalents deemed adequate to
finance the Group’s operations to meet its liabilities when due. The Group maintains flexibility in funding
by keeping committed credit facilities available.
The table below summarises the maturity profile of the Group’s and the Company’s financial assets and
financial liabilities based on undiscounted repayment obligations.
Contractual Cash Flows
Carrying
amounts Total
Within
1 year
Between
1 and 5
years
After 5
years
$’000 $’000 $’000 $’000 $’000
The Group
2011
Derivative Financial
Instruments
Derivative financial liabilities 1,842
– inflow – – – –
– outflow (5,232) (4,572) (660) –
Derivative financial assets (3,225)
– inflow 50,555 50,555 – –
– outflow (7,412) (7,412) – –
Non-derivative Financial
Instruments
Trade and other payables 131,665 (131,665) (131,665) – –
Deposits received from customers 2,301 (2,301) (2,301) – –
Trust receipts 34,865 (34,961) (34,961) – –
Interest-bearing loans and
borrowings 223,950 (241,065) (76,291) (164,769) (5)
391,398 (372,081) (206,647) (165,429) (5)
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 115
32. Financial risk management objectives and policies (cont’d)
(c) Liquidity risk (cont’d)
Contractual Cash Flows
Carrying
amounts Total
Within
1 year
Between
1 and 5
years
After 5
years
$’000 $’000 $’000 $’000 $’000
The Group
2010
Derivative Financial
Instruments
Derivative financial liabilities 3,564
– inflow 16,378 16,378 – –
– outflow (13,642) (11,940) (1,702) –
Derivative financial assets (1,350)
– inflow 72,029 48,867 23,162 –
– outflow (59,560) (59,560) – –
Non-derivative Financial
Instruments
Trade and other payables 136,021 (136,021) (134,552) (1,469) –
Deposits received from customers 2,848 (2,848) (2,848) – –
Trust receipts 25,033 (25,112) (25,112) – –
Interest-bearing loans and
borrowings 184,230 (197,648) (57,067) (140,561) (20)
350,346 (346,424) (225,834) (120,570) (20)
The Company
2011
Derivative Financial
Instruments
Derivative financial liabilities 505
– outflow (552) (293) (259) –
Non-derivative Financial
Instruments
Trade and other payables 36,513 (36,513) (36,513) – –
Interest-bearing loans and
borrowings 115,000 (126,336) (27,155) (99,181) –
152,018 (163,401) (63,961) (99,440) –
116
Notes to the Financial Statements30 June 2011
32. Financial risk management objectives and policies (cont’d)
(c) Liquidity risk (cont’d)
Contractual Cash Flows
Carrying
amounts Total
Within
1 year
Between
1 and 5
years
After 5
years
$’000 $’000 $’000 $’000 $’000
The Company
2010
Derivative Financial
Instruments
Derivative financial liabilities 368
– outflow (835) (291) (544) –
Non-derivative Financial
Instruments
Trade and other payables 30,009 (30,009) (30,009) – –
Interest-bearing loans and
borrowings 76,045 (83,938) (14,109) (69,829) –
106,422 (114,782) (44,409) (70,373) –
(d) Capital management risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to
maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment,
return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell
assets to reduce borrowings. No changes were made in objectives, policies or processes during the
years ended 30 June 2011 and 2010.
Management monitors capital based on the Group’s return on shareholders’ funds and net gearing (times)
ratio. The return on shareholders’ funds for the financial year was 9.5% (2010: 11.8%). Net gearing was
0.62 as at 30 June 2011 (2010: 0.38).
The return on shareholders’ funds is calculated based on net profit attributable to owners of the Company
divided by shareholders’ funds as at the end of the reporting period.
The net gearing (times) ratio is calculated based on net borrowings divided by shareholders’ funds. Net
borrowings is the sum of total interest-bearing loans and borrowings (Note 18), trust receipts (Note 17),
less bank balances, deposits and cash (Note 13).
The Group and the Company are in compliance with all externally imposed financial covenant requirements
for the financial years ended 30 June 2011 and 2010.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 117
33. Fair value of financial instruments
(a) Fair value of financial instruments that are carried at fair value
The financial instruments of the Group and the Company that are carried at fair value comprised derivative
financial instruments (Note 12) which fall under Level 2 of the fair value hierarchy.
The Group and the Company classifies fair value measurement using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. The fair value hierarchy has the following
levels:
Level 1: quoted prices (unadjusted) in active markets of identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or
liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the assets or liabilities that are not based on observable market data (unobservable
inputs).
The fair value has been determined by reference to banker quotes at the end of the reporting period
without factoring in transaction costs.
(b) Fair value of financial instruments by classes that are not carried at fair value and whose
carrying amounts are a reasonable approximation of fair value
The Group’s financial assets and liabilities include bank balances, deposits and cash, trade and other
receivables, balances with related parties and non-controlling interests of subsidiaries, trade and other
payables, trust receipts and floating rate loans.
The carrying amount of these financial assets and liabilities are a reasonable approximation of fair values,
either due to their short-term nature or they are floating rate instruments that are repriced to market
interest rates on or near to the end of the reporting period.
118
Notes to the Financial Statements30 June 2011
33
. F
air
va
lue
of
fin
an
cia
l in
str
um
en
ts (
co
nt’
d)
(c)
Fa
ir v
alu
e o
f fi
na
nc
ial
ins
tru
me
nts
by c
las
se
s t
ha
t a
re n
ot
ca
rrie
d a
t fa
ir v
alu
e a
nd
wh
os
e c
arr
yin
g a
mo
un
ts a
re n
ot
a r
ea
so
na
ble
ap
pro
xim
ati
on
of
fair
va
lue
Set
ou
t b
elo
w is t
he n
et
fair v
alu
es o
f fin
an
cia
l assets
an
d lia
bili
ties w
hic
h a
re n
ot
carr
ied
at
fair v
alu
e in
th
e s
tate
men
ts o
f fin
an
cia
l p
ositio
n a
s
at
30
Ju
ne.
Th
e G
rou
pT
he
Co
mp
an
y
Ca
rryin
g a
mo
un
tF
air
va
lue
Ca
rryin
g a
mo
un
tF
air
va
lue
20
11
20
10
20
11
20
10
20
11
20
10
20
11
20
10
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
Fin
an
cia
l a
ss
ets
Oth
er
receiv
ab
le (
no
n-c
urr
en
t) (
i)–
––
––
2,2
03
–2
,03
0
Fin
an
cia
l li
ab
ilit
ies
Fin
an
ce lease lia
bili
ties (
ii)2
2,0
82
8,7
35
21
,55
38
,53
0–
45
–4
4
Inte
rest-
bearin
g lo
an
s a
nd
bo
rro
win
gs
(fix
ed
rate
)* (
ii)1
03
,79
05
8,6
65
10
1,5
94
57
,59
59
4,0
00
44
,00
09
1,9
33
43
,13
6
Am
ou
nt
du
e t
o n
on
-co
ntr
olli
ng
in
tere
sts
o
f su
bsid
iaries (
no
n-c
urr
en
t)1
,31
01
,46
91
,19
01
,35
3–
––
–
* E
xclu
des f
loatin
g r
ate
s lo
an
s h
ed
ged
by in
tere
st
rate
sw
ap
s
(i)
The C
om
pany’
s n
on-c
urr
ent
receiv
ab
le f
rom
a s
ub
sid
iary
of
$2
,20
3,0
00
as a
t 3
0 J
une 2
01
0 h
as n
o r
ep
aym
ent
term
s a
nd
was n
ot
exp
ecte
d
to b
e r
ep
ayab
le w
ith
in t
he n
ext
twelv
e m
on
ths f
rom
rep
ort
ing
date
. A
cco
rdin
gly
, its f
air v
alu
e w
as b
ased
on
estim
atio
n a
s t
he t
imin
g o
f
the f
utu
re c
ash
flo
ws c
ou
ld n
ot
be d
ete
rmin
ed
relia
bly
.
(ii)
The f
air v
alu
e o
f finance lease lia
bili
ties a
nd
inte
rest-
bearing
lo
ans a
nd
bo
rro
win
gs w
ith f
ixed
inte
rest
rate
s a
re d
ete
rmin
ed
usin
g d
isco
unte
d
futu
re p
rin
cip
al
an
d i
nte
rest
at
the m
ark
et
inte
rest
rate
at
the e
nd
of
the r
ep
ort
ing
perio
d.
Th
e b
ala
nce w
ith
no
n-c
on
tro
llin
g i
nte
rests
of
su
bsid
iaries a
re d
ete
rmin
ed
by d
isco
un
tin
g e
stim
ate
d f
utu
re c
ash
flo
ws a
t th
e m
ark
et
inte
rest
rate
at
the e
nd
of
the r
ep
ort
ing
perio
d.
Th
e
estim
ate
d f
utu
re c
ash
flo
ws a
re p
roje
cte
d b
ased
on
man
ag
em
en
t’s b
est
estim
ate
s.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 119
34. Segment reporting
Reporting format
The primary segment reporting format is determined to be business segments as the Group’s risks and rates of
return are affected predominantly by differences in the products and services produced. Secondary information
is reported geographically. The operating businesses are organised and managed separately according to the
nature of the products and services provided, with each segment representing a strategic business unit that
offers different products and serves different markets.
Business segments
The Group has the following four main business segments:
Shipbuilding : Construction of vessels
Shiprepair and conversion : Provision of shiprepair and related services
Shipchartering and rental : Provision for chartering of vessels, transportation services and
rental of plant and machinery
Investment holding : Investment holding
Geographical segments
The Group operates in Singapore, Indonesia, Rest of Asia, Europe and other countries. In presenting information
on the basis of geographical segments, segment revenue is based on the countries in which customers are
invoiced.
Allocation basis and transfer pricing
Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities and
expenses.
Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions
with third parties. Segment revenue, expenses and results include transfers between business segments. These
transfers are eliminated on consolidation.
120
Notes to the Financial Statements30 June 2011
34
. S
eg
me
nt
rep
ort
ing
(c
on
t’d
)
(i)
Bu
sin
es
s s
eg
me
nts
Sh
ipb
uil
din
g
Sh
ipre
pa
ir
an
d
co
nve
rsio
n
Sh
ip-
ch
art
eri
ng
an
d r
en
tal
Inve
stm
en
t
ho
ldin
gE
lim
ina
tio
ns
Co
ns
oli
da
ted
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
Re
ve
nu
e a
nd
ex
pe
ns
es
20
11
Reven
ue f
rom
exte
rnal cu
sto
mers
21
5,6
83
81
,90
06
5,5
68
––
36
3,1
51
Inte
r-seg
men
t re
ven
ue
10
0,3
87
41
,42
73
3,4
02
11
,00
0(1
86
,21
6)
–
To
tal re
ven
ue
31
6,0
70
12
3,3
27
98
,97
01
1,0
00
(18
6,2
16
)3
63
,15
1
Seg
men
t re
su
lts
16
,93
11
5,5
83
22
,03
91
2,5
92
(17
,83
4)
49
,31
1
Un
allo
cate
d e
xp
en
ses
(1,8
43
)
Fin
an
ce c
osts
(8,9
35
)
Sh
are
of
pro
fit
of
join
tly-c
on
tro
lled
en
tity
an
d a
sso
cia
te(7
31
)
Tax e
xp
en
se
(4,6
03
)
Pro
fit
for
the y
ear
33
,19
9
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 121
34
. S
eg
me
nt
rep
ort
ing
(c
on
t’d
)
(i)
Bu
sin
es
s s
eg
me
nts
(c
on
t’d
)
Sh
ipb
uil
din
g
Sh
ipre
pa
ir
an
d
co
nve
rsio
n
Sh
ip-
ch
art
eri
ng
an
d r
en
tal
Inve
stm
en
t
ho
ldin
gE
lim
ina
tio
ns
Co
ns
oli
da
ted
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
Re
ve
nu
e a
nd
ex
pe
ns
es
20
10
Reven
ue f
rom
exte
rnal cu
sto
mers
30
6,3
16
89
,06
17
2,9
95
––
46
8,3
72
Inte
r-seg
men
t re
ven
ue
70
,30
34
0,4
30
37
,08
41
4,0
00
(16
1,8
17
)–
To
tal re
ven
ue
37
6,6
19
12
9,4
91
11
0,0
79
14
,00
0(1
61
,81
7)
46
8,3
72
Seg
men
t re
su
lts
20
,87
21
6,5
37
21
,51
41
6,0
56
(16
,42
2)
58
,55
7
Un
allo
cate
d e
xp
en
ses
(1,7
45
)
Fin
an
ce c
osts
(8,0
72
)
Sh
are
of
pro
fit
of
join
tly-c
on
tro
lled
en
tity
an
d a
sso
cia
te(6
70
)
Tax e
xp
en
se
(8,8
06
)
Pro
fit
for
the y
ear
39
,26
4
122
Notes to the Financial Statements30 June 2011
34
. S
eg
me
nt
rep
ort
ing
(c
on
t’d
)
(i)
Bu
sin
es
s s
eg
me
nts
(c
on
t’d
)
Sh
ipb
uil
din
g
Sh
ipre
pa
ir
an
d
co
nve
rsio
n
Sh
ip-
ch
art
eri
ng
an
d r
en
tal
Inve
stm
en
t
ho
ldin
gE
lim
ina
tio
ns
Co
ns
oli
da
ted
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
As
se
ts a
nd
lia
bil
itie
s
20
11
Seg
men
t assets
26
6,0
62
10
5,0
20
40
3,3
64
3,5
21
–7
77
,96
7
Un
allo
cate
d a
ssets
95
3
To
tal assets
77
8,9
20
Seg
men
t lia
bili
ties
94
,90
84
2,0
75
16
,91
92
,37
1–
15
6,2
73
Un
allo
cate
d lia
bili
ties
27
7,4
59
To
tal lia
bili
ties
43
3,7
32
20
10
Seg
men
t assets
26
6,6
20
10
0,9
16
36
5,5
08
3,7
43
–7
36
,78
7
Un
allo
cate
d a
ssets
1,8
25
To
tal assets
73
8,6
12
Seg
men
t lia
bili
ties
11
8,6
21
39
,34
92
3,9
78
1,5
30
–1
83
,47
8
Un
allo
cate
d lia
bili
ties
23
1,0
17
To
tal lia
bili
ties
41
4,4
95
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 123
34
. S
eg
me
nt
rep
ort
ing
(c
on
t’d
)
(i)
Bu
sin
es
s s
eg
me
nts
(c
on
t’d
)
Sh
ipb
uil
din
g
Sh
ipre
pa
ir
an
d
co
nve
rsio
n
Sh
ip-
ch
art
eri
ng
an
d r
en
tal
Inve
stm
en
t
ho
ldin
gE
lim
ina
tio
ns
Co
ns
oli
da
ted
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
$’0
00
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Notes to the Financial Statements30 June 2011
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ASL Marine Holdings Ltd. │ Annual Report 2011 │ 125
35. Dividends
The Group and
the Company
2011 2010
$’000 $’000
Declared and paid during the year:
Dividends on ordinary shares:
• First and final one-tier tax-exempt dividend for 2010: 3.0 cents
(2009: 3.0 cents) per share 8,988 8,988
• Special one-tier tax-exempt dividend for 2009: 1.0 cents per share – 2,996
8,988 11,984
Proposed but not recognised as a liability as at 30 June:
Dividends on ordinary shares, subject to shareholders’ approval
at the Annual General Meeting
• Final one-tier tax-exempt dividend for 2011: 1.5 cents
(2010: 3.0 cents) per share 6,293 8,988
6,293 8,988
36. Authorisation of financial statements
The financial statements for the year ended 30 June 2011 were authorised for issue in accordance with a
resolution of the Directors on 8 September 2011.
Analysis of Shareholdingsas at 8 September 2011
126
Class of Equity Security : Ordinary shares
Voting Rights : On a show of hands: one vote for each member
On a poll: one vote for each ordinary share
Treasury shares held by the Company will have no voting rights
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings
No. of
Shareholders %
No. of
Shares %
1 – 999 153 3.83 27,756 0.01
1,000 – 10,000 1,822 45.61 9,815,698 2.32
10,001 – 1,000,000 1,997 49.99 75,713,121 17.94
1,000,001 and above 23 0.57 336,466,319 79.73
Total 3,995 100.00 422,022,894 100.00
TOP 20 SHAREHOLDERS
S/No. Name of Shareholders No. of Shares %*
1 Ang Kok Tian 57,997,800 13.82
2 Ang Ah Nui 55,440,000 13.22
3 Ang Kok Eng 48,650,000 11.60
4 Ang Kok Leong 48,510,000 11.56
5 Ang Sin Liu 33,086,200 7.89
6 Raffles Nominees (Pte) Ltd 19,757,000 4.71
7 Ang Swee Kuan 18,130,000 4.32
8 HSBC (Singapore) Nominees Pte Ltd 10,438,800 2.49
9 Kim Eng Securities Pte. Ltd. 8,450,614 2.01
10 United Overseas Bank Nominees Pte Ltd 8,446,222 2.01
11 Citibank Nominees S’pore Pte Ltd 5,869,400 1.40
12 DBS Nominees Pte Ltd 3,494,800 0.83
13 ASL Marine Holdings Ltd – Account Share Buy-Share 2,511,600 0.60
14 Toh Kim Bock C-E Contractor Pte Ltd 2,493,400 0.59
15 Eastern Navigation Pte Ltd 2,097,200 0.50
16 Toyogo (Singapore) Pte Ltd 1,890,000 0.45
17 Hong Leong Finance Nominees Pte Ltd 1,776,200 0.42
18 DBSN Services Pte Ltd 1,454,400 0.35
19 DBS Vickers Securities (S) Pte Ltd 1,417,600 0.34
20 Lee Tian Geok 1,330,000 0.32
Total 333,241,236 79.43
* The percentage is computed based on 419,511,294 issued ordinary shares of the Company as of 8 September
2011, being 422,022,894 total shares in issue less 2,511,600 treasury shares as at that date.
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 127
SHAREHOLDINGS HELD IN THE HANDS OF PUBLIC
Based on information available to the Company and to the best knowledge of the Company as at 8 September 2011,
approximately 35% of the issued ordinary shares of the Company is held by the public and therefore, Rule 723 of the
SGX-ST Listing Manual is complied with.
SUBSTANTIAL SHAREHOLDERS AS AT 8 SEPTEMBER 2011
Direct Interest Deemed Interest
Substantial Shareholders No. of Shares % No. of Shares %
Ang Kok Tian(1) (2) (3) 57,997,800 13.82 215,840,800 51.46
Ang Ah Nui(1) (2) (3) 55,440,000 13.22 218,398,600(4) 52.06
Ang Kok Eng(1) (2) (3) 48,650,000 11.60 225,188,600 53.68
Ang Kok Leong(1) (2) (3) 48,510,000 11.56 225,328,600 53.72
Ang Sin Liu(2) (3) 33,086,200 7.89 240,752,400(5) 57.39
Ang Swee Kuan(2) (3) 18,130,000 4.32 255,708,600 60.96
Notes
(1) Ang Kok Tian, Ang Ah Nui, Ang Kok Eng and Ang Kok Leong are brothers. Each of the brothers is deemed to
have an interest in the shares held by the other.
(2) Ang Sin Liu is the father of Ang Kok Tian, Ang Ah Nui, Ang Kok Eng, Ang Kok Leong and Ang Swee Kuan. Each
of them is deemed to have an interest in the shares held by the other.
(3) Ang Swee Kuan is the sister of Ang Kok Tian, Ang Ah Nui, Ang Kok Eng and Ang Kok Leong and the daughter
of Ang Sin Liu. Each of them is deemed to have an interest in the shares held by the other.
(4) 5,845,000 shares are registered in the name of a nominee.
(5) 6,179,600 shares are registered in the name of a nominee.
Notice of Annual General Meeting
128
NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting of the Company will be held at Jurong Country Club, 9 Science Centre Road, Singapore 609078 on Tuesday, 25 October 2011 at 2.00 p.m. for the following purposes:-
Ordinary Business
1. To receive and adopt the audited financial statements and the reports of the directors and auditors of the Company for the year ended 30 June 2011.
Resolution 1
2. To declare a final one-tier tax-exempt dividend of 1.5 Singapore cents per ordinary share for the year ended 30 June 2011.
Resolution 2
3. To approve directors’ fees of S$176,000 for the year ended 30 June 2011. (2010: S$176,000) Resolution 3
4. To re-elect Mr Ang Ah Nui, a director who will retire by rotation in accordance with Article 91 of the Company’s Articles of Association and who, being eligible, will offer himself for re-election.
Resolution 4
5. To re-elect Mr Hong Chin Fock, a director who will retire by rotation in accordance with Article 91 of the Company’s Articles of Association and who, being eligible, will offer himself for re-election.
Note: Mr Hong Chin Fock, if re-elected as a director of the Company, will remain the chairman of the audit committee, a member of the nominating committee and the chairman of the remuneration committee. Mr Hong is an independent director.
Resolution 5
6. To re-appoint Ernst & Young LLP as auditors of the Company and to authorise the directors to fix their remuneration.
Resolution 6
Special Business
To consider and, if thought fit, to pass with or without any modifications, the following resolutions as ordinary resolutions:-
7. That pursuant to Section 161 of the Companies Act, Cap. 50 (the “Companies Act”) and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), authority be and is hereby given to the directors of the Company to:-
(a) allot and issue shares in the Company; and
(b) issue convertible securities and any shares in the Company arising from the conversion of such convertible securities,
(whether by way of rights, bonus or otherwise) at any time to such persons and upon such terms and conditions and for such purposes as the directors may in their absolute discretion deem fit, provided that the aggregate number of shares and convertible securities to be issued pursuant to such authority shall not exceed 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which the aggregate number of shares and convertible securities to be issued other than on a pro rata basis to shareholders of the Company shall not exceed 15% of the total number of issued shares (excluding treasury shares) in the capital of the Company, and for the purposes of this resolution and Rule 806(3) of the Listing Manual, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this resolution is passed (after adjusting for new shares arising from the conversion or exercise of any convertible securities or exercise of share options or vesting of share awards which are outstanding or subsisting at the time of the passing of this resolution approving the mandate, provided the options or awards were granted in compliance with the Listing Manual and any subsequent bonus issue, consolidation or subdivision of the Company’s shares), and unless revoked or varied by the Company
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 129
in general meeting, such authority conferred by this resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. Resolution 7
8. That:–
(a) for the purposes of Sections 76C and 76E of the Companies Act, the exercise by the directors of the Company of all the powers of the Company to purchase or otherwise acquire issued ordinary shares each fully paid in the capital of the Company (“Shares”) not exceeding in aggregate the Maximum Percentage (as hereafter defined), at such price or prices as may be determined by the directors from time to time up to the Maximum Price (as hereafter defined), whether by way of:-
(i) market purchase(s) on the SGX-ST; and/or
(ii) off-market purchase(s) (if effected otherwise than on the SGX-ST) in accordance with any equal access scheme(s) as may be determined or formulated by the directors as they consider fit, which scheme(s) shall satisfy all the conditions prescribed by the Companies Act,
and otherwise in accordance with all other laws and regulations and rules of the SGX-ST, be and is hereby authorised and approved generally and unconditionally (the “Share Purchase Mandate”);
(b) unless varied or revoked by the Company in general meeting, the authority conferred on the directors of the Company pursuant to the Share Purchase Mandate may be exercised by the directors at any time and from time to time during the period commencing from the date of the passing of this resolution and expiring on the earlier of:-
(i) the date on which the next Annual General Meeting of the Company is held or required by law to be held;
(ii) the date on which the authority conferred by the Share Purchase Mandate is revoked or varied by shareholders in general meeting; or
(iii) the date on which the Company has purchased the maximum number of Shares mandated under the Share Purchase Mandate;
(c) in this resolution:-
“Average Closing Price” means the average of the closing market prices of a Share over the five consecutive Market Days on which the Shares are transacted on the SGX-ST, immediately preceding the date of the market purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the off-market purchase, and deemed to be adjusted, in accordance with the listing rules of the SGX-ST, for any corporate action that occurs after the relevant five Market Days period;
“date of the making of the offer” means the date on which the Company makes an offer for the purchase or acquisition of Shares from holders of Shares, stating therein the relevant terms of the equal access scheme for effecting the off-market purchase;
“Market Day” means a day on which the SGX-ST is open for trading in securities;
“Maximum Percentage” means that number of issued Shares representing 10% of the total number of issued ordinary shares (excluding treasury shares) in the capital of the Company as at the date of the passing of this resolution; and
“Maximum Price” in relation to a Share to be purchased, means an amount (excluding brokerage, stamp duties, applicable goods and services tax and other related expenses) not exceeding:-
(i) in the case of a market purchase, 105% of the Average Closing Price; and
(ii) in the case of an off-market purchase pursuant to an equal access scheme, 110% of the Average Closing Price, and
130
Notice of Annual General Meeting
(d) the directors of the Company and/or any of them be and are hereby authorised to complete and do all
such acts and things (including executing such documents as may be required) as they and/or he may
consider expedient or necessary to give effect to the transactions contemplated and/or authorised by
this resolution.
Resolution 8
9. That pursuant to Section 161 of the Companies Act, authority be and is hereby given to the directors of the
Company to offer and grant options in accordance with the provisions of the ASL Employee Share Option
Scheme (the “Share Option Scheme”) and to allot and issue from time to time such number of ordinary shares
in the capital of the Company as may be required to be issued pursuant to the exercise of the options under
the Share Option Scheme, provided that the aggregate number of ordinary shares in respect of which such
options may be granted and which may be issued pursuant to the Share Option Scheme and any other share
based schemes of the Company shall not exceed 10% of the total number of issued shares (excluding treasury
shares) in the capital of the Company from time to time.
Resolution 9
10. That pursuant to Section 161 of the Companies Act, authority be and is hereby given to the directors of the
Company to grant awards in accordance with the rules of the ASL Marine Performance Shares Scheme (the
“Shares Scheme”) and to allot and issue from time to time such number of fully paid-up shares in the capital
of the Company as may be required to be issued pursuant to the vesting of the awards under the Shares
Scheme, provided that the aggregate number of shares in respect of which such awards may be granted and
which may be issued pursuant to the Shares Scheme and any other share based schemes of the Company
shall not exceed 10% of the total number of issued shares (excluding treasury shares) in the capital of the
Company from time to time.
Resolution 10
11. To transact such other business as can be transacted at an Annual General Meeting of the Company.
Notice of Books Closure and Dividend Payment Dates
NOTICE IS HEREBY GIVEN that the share transfer books and register of members of the Company will be closed on
4 November 2011, for the purpose of determining members’ entitlements to a final one-tier tax-exempt dividend of
1.5 Singapore cents per ordinary share for the year ended 30 June 2011.
Duly completed transfers received by the Company’s Share Registrar, M & C Services Private Limited at 138 Robinson
Road #17-00, The Corporate Office, Singapore 068906 up to 5.00 p.m. on 3 November 2011 will be registered to
determine members’ entitlements to the proposed dividend.
Members whose securities accounts with The Central Depository (Pte) Limited are credited with ordinary shares at
5.00 p.m. on 3 November 2011 will be entitled to the proposed dividend.
The proposed dividend, if approved by members at the Company’s Eleventh Annual General Meeting to be held on
25 October 2011, will be paid on 16 November 2011.
By Order of the Board
Lilian Tan Yin Yen and S.Thillainathan
Company Secretaries
Singapore
7 October 2011
ASL Marine Holdings Ltd. │ Annual Report 2011 │ 131
Notes
1. A member entitled to attend and vote at the Annual General Meeting may appoint not more than two proxies to
attend and vote on his behalf. Where a member appoints more than one proxy, he shall specify the proportion of
his shareholding to be represented by each proxy.
2. A proxy need not be a member of the Company.
3. The instrument appointing a proxy shall, in the case of an individual, be signed by the appointor or his attorney,
and in the case of a corporation shall be either under its common seal or signed by its attorney or a duly authorised
officer on behalf of the corporation.
4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 19
Pandan Road, Singapore 609271 not less than 48 hours before the time appointed for holding the Annual General
Meeting.
Explanatory notes on the Special Business to be transacted:-
1. The ordinary resolution proposed in resolution 7 above is to authorise the directors from the date of the above
meeting until the date of the next Annual General Meeting to allot and issue shares and convertible securities in the
Company. The aggregate number of shares and convertible securities which the directors may allot and issue under
this resolution shall not exceed 50% of the total number of issued shares (excluding treasury shares) in the capital
of the Company at the time this resolution is passed. For allotments and issues of shares and convertible securities
other than on a pro rata basis to all shareholders, the aggregate number of shares and convertible securities to be
issued shall not exceed 15% of the total number of issued shares (excluding treasury shares) in the capital of the
Company, at the time this resolution is passed.
2. The ordinary resolution proposed in resolution 8 above is to authorise the directors from the date of the above
meeting until the earliest of (i) the date on which the next Annual General Meeting of the Company is held or
required by law to be held, (ii) the date on which the authority conferred by this mandate is revoked or varied by
shareholders in general meeting, or (iii) the date on which the Company has purchased the maximum number of
shares mandated under this mandate, to purchase or otherwise acquire issued ordinary shares in the capital of the
Company by way of market purchases or off-market purchases of up to 10% of the total number of issued ordinary
shares (excluding treasury shares) in the capital of the Company. For more information on this resolution, please
refer to the letter to shareholders dated 7 October 2011.
3. The ordinary resolution proposed in resolution 9 above is to authorise the directors to offer and grant options and
to allot and issue shares in the capital of the Company pursuant to the Share Option Scheme, provided that the
aggregate number of shares in respect of which such options may be granted and which may be issued pursuant
to the Share Option Scheme and any other share based schemes of the Company shall not exceed 10% of the
total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.
4. The ordinary resolution proposed in resolution 10 above is to authorise the directors to grant awards and to allot and
issue shares in the capital of the Company pursuant to the Shares Scheme, provided that the aggregate number of
shares in respect of which such awards may be granted and which may be issued pursuant to the Shares Scheme
and any other share based schemes of the Company shall not exceed 10% of the total number of issued shares
(excluding treasury shares) in the capital of the Company from time to time.
This page has been intentionally left blank
ASL MARINE HOLDINGS LTD.(Incorporated in the Republic of Singapore)
Company Registration No. 200008542N
PROXY FORM
IMPORTANT:
1 For investors who have used their CPF monies to buy
ASL Marine Holdings Ltd.’s shares, this annual report is
forwarded to them at the request of their CPF approved
nominees and is sent solely FOR INFORMATION ONLY.
2 This proxy form is not valid for use by CPF investors and
shall be ineffective for all intents and purposes if used or
purported to be used by them.
I/We , NRIC/Passport No.
of
being a member/members of ASL Marine Holdings Ltd. hereby appoint
Name Address NRIC/
Passport No.
Proportion of
Shareholdings (%)
and/or (delete as appropriate)
Name Address NRIC/
Passport No.
Proportion of
Shareholdings (%)
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the Eleventh Annual General Meeting of the Company to be held at Jurong Country Club, 9 Science Centre Road, Singapore 609078 on Tuesday, 25 October 2011 at 2.00 p.m. and at any adjournment thereof.
(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions as set out in the notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.)
No. Resolutions For Against
Ordinary Business
1 Adoption of audited financial statements and reports
2 Declaration of final one-tier tax-exempt dividend
3 Approval of directors’ fees
4 Re-election of Mr Ang Ah Nui as director
5 Re-election of Mr Hong Chin Fock as director
6 Re-appointment of Ernst & Young LLP as auditors
Special Business
7 Authority for directors to allot and issue shares and convertible securities
8 Renewal of Share Purchase Mandate
9 Authority for directors to offer and grant options and to allot and issue shares
pursuant to the ASL Employee Share Option Scheme
10 Authority for directors to grant awards and to allot and issue shares pursuant
to the ASL Marine Performance Shares Scheme
Dated this day of 2011
Total Number of Shares Held
Signature(s) of Member(s) or Common Seal
IMPORTANTPLEASE READ NOTES OVERLEAF
Notes
1 Please insert the total number of shares in the Company held by you either in the Depository Register (as defined
in Section 130A of the Companies Act, Cap. 50) or in the Register of Members, or both. If no number is inserted,
this proxy form will be deemed to relate to all the shares held by you.
2 A member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies
to attend and vote on his behalf. A proxy need not be a member of the Company.
3 Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be represented
by each proxy.
4 The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 19 Pandan
Road, Singapore 609271 not less than 48 hours before the time appointed for the meeting.
5 The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly
authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be
executed under its common seal or under the hand of its attorney or a duly authorised officer of the corporation.
6 Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or
power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged
with the instrument of proxy, failing which the instrument may be treated as invalid.
7 A corporation which is a member may authorise by resolution of its directors or other governing body such person
as it thinks fit to act as its representative at the meeting, in accordance with Section 179 of the Companies Act,
Cap. 50.
8 The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible
or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified
in the instrument of proxy. In addition, in the case of shares entered in the Depository Register, the Company may
reject an instrument of proxy if the member, being the appointor, is not shown to have shares entered against his
name in the Depository Register as at 48 hours before the time appointed for holding the meeting, as certified by
The Central Depository (Pte) Limited to the Company.
01 Corporate Profi le
02 Business Overview
04 Financial Highlights
06 Five Year Financial Summary
07 Founder’s Message
08 Chairman’s Statement
11 Operations and Financial Review
14 Board of Directors
17 Senior Management
18 Group Structure
19 Corporate Governance Report
32 Risk Management Strategies
33 Financial Statements
126 Analysis of Shareholdings
128 Notice of Annual General Meeting
Proxy Form
Corporate Information
Contents
Corporate Information
BOARD OF DIRECTORS
Executive
Ang Kok Tian (Chairman and Managing Director)
Ang Ah Nui (Deputy Managing Director)
Ang Kok Eng
Ang Kok Leong
Independent, Non-Executive
Damian Hong Chin Fock (Lead Independent Director)
Andre Yeap Poh Leong
Christopher Chong Meng Tak
AUDIT COMMITTEE
Damian Hong Chin Fock (Chairman)
Andre Yeap Poh Leong
Christopher Chong Meng Tak
NOMINATING COMMITTEE
Andre Yeap Poh Leong (Chairman)
Christopher Chong Meng Tak
Damian Hong Chin Fock
REMUNERATION COMMITTEE
Damian Hong Chin Fock (Chairman)
Andre Yeap Poh Leong
Christopher Chong Meng Tak
COMPANY SECRETARIES
Lilian Tan Yin Yen
S. Thillainathan
INVESTOR RELATIONS CONTACTS
ASL Marine Holdings Ltd.
Financial PR Pte Ltd
romil@fi nancialpr.com.sg
REGISTERED OFFICE
19 Pandan Road
Singapore 609271
Telephone : (65) 6264 3833
Facsimile : (65) 6268 0274
Email : [email protected]
Website : www.aslmarine.com
INCORPORATION DATA
Place of Incorporation : Singapore
Date of Incorporation : 4 October 2000
Co. Reg. No. 200008542N
SHARE LISTING
ASL Marine Holdings Ltd.’s shares are listed and
traded on the Main Board of the Singapore Exchange
Securities Trading Limited since March 2003.
SHARE REGISTRAR & SHARE TRANSFER OFFICE
M & C Services Private Limited
138 Robinson Road #17-00
The Corporate Offi ce
Singapore 068906
Telephone : (65) 6227 6660
Facsimile : (65) 6225 1452
AUDITORS
Ernst & Young LLP
Certifi ed Public Accountants
One Raffl es Quay
North Tower, Level 18
Singapore 048583
Partner-In-Charge: Terry Wee Hiang Bing
(appointed since the fi nancial year ended 30 June
2010)
PRINCIPAL BANKERS
United Overseas Bank Limited
DBS Bank Ltd
The Royal Bank of Scotland N.V.
Standard Chartered Bank
Oversea-Chinese Banking Corporation Limited
ASL Marine Holdings Ltd.Company Registration No. 200008542N
19 Pandan Road Singapore 609271
Telephone: (65) 6264 3833 Facsmile: (65) 6268 0274
Website: www.aslmarine.com
ASL M
arine H
old
ings Ltd
. An
nu
al Rep
ort 2011
2011Annual Report
ASL Marine Holdings Ltd.