MACRO CORPORATION LTD ANNUAL REPORT … CORPORATION LTD AND ITS SUBSIDIARIES ABN 18 008 722 736 1...

ABN 18 008 722 736

Suite 70 Mezzanine Floor, Pier Point Road, Cairns QLD 4870 Telephone +61 7 4052 7749 Fax +61 7 4052 7799

MACRO CORPORATION LTD

ANNUAL REPORT FOR THE YEAR ENDED

31 DECEMBER 2011

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MACRO CORPORATION LTD AND ITS SUBSIDIARIES ABN 18 008 722 736

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COMPANY DETAILS Directors Khaja Shaukath Ali Mohamed Siddique Chairman and Non-Executive Director Ahmad Shah Sahul Hameed Executive Director Raj Menon Non-Executive Director Mohamed Nasir Noor Non-Executive Director Company Secretary Khaja Shaukath Ali Mohamed Siddique Registered Office 18 Drummond Street CARLTON VIC 3053 Share Registry Computershare Investor Services Pty Limited 117 Victoria Street WEST END QLD 4101 Telephone: 1 300 55 22 70 Overseas Callers 61 7 3237 2100 Facsimile: 61 7 3229 9860 Auditors BDO (Nth Qld) 25 – 27 Aplin Street CAIRNS QLD 4870 Securities Exchange Listing Macro Corporation Ltd is listed on the Australian Securities Exchange ASX Code: MAC Home Exchange ASX Limited Exchange Plaza 2 The Esplanade PERTH WA 6000 Solicitors Walkers Property & Business Lawyers 1st Floor 155 Mulgrave Road CAIRNS QLD 4870 Banker National Australia Bank Level 2 330 Collins Street MELBOURNE VIC 3000 Westpac Shop 56 Castletown Shopping World TOWNSVILLE QLD 4810

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CORPORATE GOVERNANCE STATEMENT

The Board of Directors of Macro Corporation Ltd is responsible for the corporate governance of the Company. The Board guides and monitors the business affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

The Board of Directors acknowledges the Principles of Good Corporate Governance and Best Practice Recommendations set by the Australian Stock Exchange (“ASX”) Corporate Governance Council. However in view of the Company’s current size and extent of nature of operations, full adoption of the recommendations is currently not practical. The Board will continue to work towards full adoption of the recommendations in line with growth and development of the Company in the years ahead. Where the Company’s framework is different to the Principles of Good Corporate Governance and Best Practice Recommendations set by the Australian Stock Exchange (“ASX”) Corporate Governance Council, it has been noted.

A summary of the current corporate governance practices as adopted by the Board are as follows:

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1 – Companies should establish the functions reserved to the board and those delegated to senior

executives and disclose those functions

The primary responsibilities of the Board include:

• The approval of the annual and half-yearly financial report;

• The establishment of the long term goals of the entity and strategic plans to achieve those goals;

• The review and adoption of annual budgets for the financial performance of the Company and monitoring the results on a quarterly basis;

• Ensuring that the entity has implemented adequate internal controls together with appropriate monitoring of compliance activities; and

• Ensuring that the entity is able to pay its debts as and when they fall due.

The Company discloses the curriculum vitae of each director in its Annual Report.

Recommendation 1.2 – Companies should disclose the process for evaluating the performance of senior executives

The objective of the Company’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The Board ensures that executive reward satisfies the following criteria for good reward governance practices:

• competitiveness and reasonableness

• acceptability to shareholders

• transparency

• capital management

The remuneration structure for directors, secretaries and senior managers is based on the following factors:

• experience of the individual concerned

• the overall performance of the market in which the Company operates

• the overall performance of the Company

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CORPORATE GOVERNANCE STATEMENT (CONT)

Recommendation 1.3 – Companies should disclose the process for evaluating the performance of senior executives

Given the limited number of senior executives (1), performance is constantly reviewed by the Board as part of the ordinary course of meetings of the directors.

There have been no departures from Principle 1 during the year ended 31 December 2011.

Principle 2: Structure the Board to Add Value

Recommendation 2.1 – A majority of the board should be independent directors

Recommendation 2.2 – The chair should be an independent director

Recommendation 2.3 – The roles of the chair and the chief executive officer should not be exercised by the same individual

Recommendation 2.4 – The board should establish a nomination committee

Recommendation 2.5 – The Company should disclose the process for evaluating the performance of the board, its committees

and individual directors

• The skills, experience and expertise relevant to the position of director and period of office held by each director is disclosed within the directors’ report of the Company’s Annual Report.

• Presently the Board consists of one executive director and three non-executive directors.

• With the prior approval of the Chairman, each director has the right to seek independent legal and other professional advice at the entity’s expense concerning any aspect of the entity’s operations or undertakings in order to fulfil their duties and responsibilities as directors.

• The Company does not presently have a nomination committee. Due to the size and nature of the activities of the Company, the nomination of new directors is conducted by the Board by way of ongoing review and discussion in relation to experience deficiencies that may exist within the existing Board structure.

There have been the following departures from Principle 2 during the year ended 31 December 2011:

Recommendation 2.1 – There have been several changes occurred since 6 December 2011. The Company’s previous board with the shareholders’ approval has completed the disposal of 2 vessels and including the name Ocean Spirit at a price of AUD 3.8 million. This has resulted in a loss of $2,193,093. The company has during the month of 30 August 2011 announced to depart from tourism business to mining industry. On the 6 December 2011 the following directors have been appointed:

• Khaja Shaukath Ali Mohamed Siddiqque

• Maurice William Gerkens

• Eranur Shahda

• Ahmad Shah Sahul Hameed and the following have resigned:

• Rohit Vinod Raniga

• Navin Chandra

The independent director’s status has been ratified on 16 January 2012 by the appointment of two local independent directors namely Mohamed Nasir Bin Mohamed Noor and Raj Menon. All Directors appointed acknowledge the need to act in good faith in the interests of all shareholders.

Recommendation 2.2 & 2.3 – The Chairman appointed has been an independent and non-executive Chairman to replace Ishkandar Shah. Namely on the 6 December 2011 Murray Gerkens who resigned on 13 January 2012 and as from 16 January 2012 has been replaced by Khaja Shaukath Ali Mohamed Siddiqque. Eranur Shahda has been appointed as an executive director and CEO on 16 January 2012 who resigned on 1st March 2012 thus separating the roles of Chairman and CEO.

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Recommendation 2.4 – Due to the size of the Company’s operations, nomination of new directors is considered by the full Board and therefore the Company does not have a nomination committee.

Principle 3: Promote ethical and responsible decision-making

Recommendation 3.1 – The Company should establish a code of conduct and disclose the code

The Company has a comprehensive Policy & Procedures Manual that is provided to new Directors. Directors, management and staff are expected to act ethically and responsibly. The Board endeavours to ensure that the Directors, officers and employees of the Company act with integrity and observe the highest standards of behaviour and business ethics in relation to their corporate activities.

Specifically, that directors, officers and employees must:

• Comply with the law

• Act in the best interests of the Company

• Be responsible and accountable for their actions, and

• Observe the ethical principles of fairness, honesty and truthfulness, including disclosure of potential conflicts.

Recommendation 3.2 – The Company should establish a policy concerning trading in Company securities and disclose a

summary of that policy

The Company has a policy concerning trading in the Company’s securities by Directors, management and staff. In summary, Directors, management and staff must not deal in Macro Corporation Ltd securities when they are in possession of insider information. They must also not engage in short term trading nor deal in securities between the end of the Half-Year and Full Year reporting periods and the release to the ASX of the financial results for the relevant period.

There have been no departures from Principle 3 during the year ending 31 December 2011.

Principle 4: Safeguard integrity in financial reporting

Recommendation 4.1 – The Board should establish an audit committee

Recommendation 4.2 – The audit committee should be structured so that it: (i) consists only of non-executive directors, (ii) consists of a majority of non-executive directors, (iii) is chaired by an independent chair, who is not chair of the board; and

(iv) has at least three members.

Recommendation 4.3 – The audit committee should have a formal charter

An audit committee has been established and consist of the following:

• Raj Menon – Chairman / Independent director

• Mohamed Nasir Mohamed Noor – Independent director / Member

• Jetharee Uditananda – Retainer Consultant / Member

The board has instructed the committee to create and follow a formal charter.


Prior to the Board signing this Annual Report, the Chairman has certified that the financial statements present a true and fair view, in all material respects, of the Company’s financial condition and operational results are in accordance with relevant accounting standards.

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Principle 5: Make timely and balanced disclosure

Recommendation 5.1 – The Company should put in place mechanisms designed to ensure compliance with the ASX Listing

Rule requirements.

The Board and Company Secretary have been appointed as the persons responsible for communications with the Australian Securities Exchange (ASX). These persons are also responsible for ensuring compliance with the continuous disclosure requirements in the ASX listing rules and overseeing and co-ordinating information disclosure to the ASX. Senior Management are aware of the Continuous Disclosure requirements of the ASX and have procedures in place to disclose any information concerning the Company that a reasonable person would expect to have a material effect on the price of the Company’s securities.


Principle 6: Respect the rights of shareholders

Recommendation 6.1 – The Company should design a communications policy for promoting effective communication with

shareholders.

The Board and the Company Secretary are responsible for the communications strategy to promote effective communications with shareholders and encourage effective participation at general meetings. Due to the size of the Company, all communications are prepared and administered in-house.

The Board aims to ensure that all shareholders are informed of major developments affecting the affairs of the Company. Information is communicated to the shareholders through the annual and half-year reports, disclosures made to the ASX, notices of meetings and occasional letters to shareholders where appropriate.

The Company also makes available a telephone number and email address for shareholders to make enquiries of the Company.


Principle 7: Recognise and manage risk

Recommendation 7.1 – The Company should establish policies for the oversight and management of material business risks

and disclose a summary of those policies.

The Board is responsible for the entity’s system of internal controls. The Board constantly monitors the operation and financial aspects of the entity’s activities and considers the recommendations and advice of external auditors and other external advisers on the operations and financial risks that face the entity.

The Board ensures that recommendations made by the external auditors and other external advisers are investigated and, where considered necessary, appropriate action is taken to ensure that the entity has an appropriate internal control environment in place to manage the key risks identified.

In addition, the Board investigates ways of enhancing risk management strategies, including appropriate segregation of duties and the employment and training of suitably qualified and experienced personnel.

The board has approved the setting up of a risk and compliance committee to be function on or before second quarter 2012.

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The Company obtains statements from its financial management consultant that:

• the Company’s financial reports present a true and fair view in all material respects, of the Company’s financial condition and operational results are in accordance with the relevant accounting standards. Furthermore, the Board of Directors does, in its role, state to shareholders in the Company’s accounts that they are true and fair, in all material respects.

• the integrity of the financial statements is founded on a sound system of risk management and internal compliance and control which implements policies adopted by the Board.

• the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

The Board believes the Company’s risk management and internal compliance and control procedures are operating efficiently and effectively in all material aspects appropriate for a Company of Macro Corporation Ltd’s size and nature.

Recommendation 7.2 – The Company should require management to design and implement a risk management and internal

control system to manage the Company’s material business risks.

The Company has received an update from management as to the effectiveness of the Company’s management of its material business risks.

Recommendation 7.3 – The Company should disclose whether it has received assurance from the chief executive officer and

chief financial officer that the declaration provided in accordance with section 295A of the Corporations Act is founded on a

sound system of risk management and that the system is operating effectively in all material respects in relation to financial

reporting risks.

The Board has received assurance from the Chairman and financial consultant under Recommendation 7.3.


Principle 8: Remunerate fairly and responsibly

Recommendation 8.1 – The Board should establish a remuneration committee

Recommendation 8.2 – The Company should clearly distinguish the structure of non-executive directors’ remuneration from

that of executive directors and senior executives.

The Company does not have any scheme for retirement benefits, other than superannuation, for any directors.

There have been the following departures from Principle 8 during the year ending 31 December 2011:

Recommendations 8.1 – Due to the Company’s size, nature of operations, and limited executive team, the Board is actively involved in ongoing remuneration policy. As a result the functions which ordinarily undertaken by a remuneration committee are undertaken by the Board of directors of the Company for the year ending 31 December 2011. However the remuneration committee has since been appointed on 20th March 2012.

ASX Principles of Good Governance and Best Practice Recommendations

The Board of Directors acknowledges the Principles of Good Corporate Governance and Best Practice Recommendations issued by the ASX. During the current year, the Board will assess areas of current non-compliance and will, where it considers appropriate, take action to ensure future compliance.

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DIRECTORS’ REPORT

Your directors present their report on the company and its controlled entities for the financial year ended 31 December 2011.

DIRECTORS

The names of the directors in office at any time during or since the end of the financial year are: Khaja Shaukath Ali Mohamed Siddique (Appointed 5th December 2011) Ahmad Shah Sahul Hameed (Appointed 5th December 2011) Raj Menon (Appointed 16th January 2012) Mohamed Nasir Noor (Appointed 16th January 2012) Eranur Shahda (Appointed 5th December 2011 and

Resigned 1st March 2012) Maurice William Gerkens (Appointed 6th December 2011 and Resigned 13th January 2012) Ishkandar Shah (Resigned 1st February 2012) Rohit Vinod Raniga (Resigned 6th December 2011) Navin Chandra (Resigned 6th December 2011) Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

COMPANY SECRETARY

Maurice William Gerkens took the position of Company Secretary from Navin Chandra as at 6 December 2011 until 13 January 2012. Maurice Gerkens announced his resignation on 13 January 2012 and Eranur Shahda took the position of Company Secretary from Maurice Gerkens from 16 January 2012. Eranur Shahda resigned on 1st March 2012 and Khaja Shaukath Ali Mohamed Siddique took the position of Company Secretary from this date.

PRINCIPAL ACTIVITIES

The principal activities of the Group during the financial year were the provision of cruise boats and diving activities. The Group announced the divestment of all the cruise boats and diving activities on 30 August 2011 and completed the sale on 26 October 2011. The Group have on 12 March 2012 submitted to the authorities and announced to the ASX the acquisition of coal assets in Indonesia and have proposed to move into mining businesses.

OPERATING RESULTS

The consolidated loss of the Group after providing for income tax amounted to $3,482,032 (2010: Loss $1,500,996).

DIVIDENDS PAID OR RECOMMENDED

During or since the end of the financial year, there has been no dividend paid or declared by the company (2010: Nil).

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DIRECTORS’ REPORT (CONT)

REVIEW OF OPERATIONS The Group have divested tourism assets and have now focused on opportunities in mining industry. In particular, coal mining concessions or tenements ownership and trading.

The Group has posted a loss of $3,482,032 for the financial year ended 2011 compared with a loss of $1,500,996 for the previous financial year. The loss includes impairment and fair value write-downs of $1,102,305 on vessels and other non-current assets, along with a loss on disposal of assets of $112,927 related primarily to the disposal of the majority of the business. The result before interest, tax, profit and loss on disposal of assets, depreciation, amortisation and the impairment write-downs, was a loss of $857,489.

FINANCIAL POSITION

The net asset position of the Group has decreased by $5,514,496 from the previous balance date to $2,339,884 as at 31 December 2011. The decrease is due to the divestment of the cruise boat business which resulted in a decrease of $7,610,300 to the Group’s property, plant and equipment. The Group’s working capital, being current assets less current liabilities, has risen from a deficit of $673,342 to a surplus of $2,245,515 primarily due to a reduction in debt held by the Group.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There are significant changes in the business activities from tourism to mining. This may have mid-term and long-term effects on the financial position and value of the Group.

AFTER BALANCE DATE EVENTS

On 13 February 2012, Macro Resources Pty Ltd, a subsidiary of Macro Corporation Ltd, entered into a sale and purchase agreement with the majority shareholder PT. Sarmar Jaya Cemerlang (SJC) to acquire 70% of their shares in SJC in consideration for cash payments of US$2,000,000 and royalty payment of US$5,800,000 against future coal export income. The agreement includes an agreement to purchase the remaining 30% of shares for a consideration of US$10,700,000. SJC hold the rights to a coal project in Central Kalimantan, Indonesia. The agreement is subject to shareholder approval.

On 3 March 2012, Macro Corporation Ltd entered into a sale and purchase agreement to sell the OS IV vessel for a consideration of $3,650,000. The sale agreement is subject to shareholder approval. The carrying value of the vessel at 31 December 2011 is $2,241,874.

FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

Information about likely developments in operations of the Group and the expected results of those operations in future financial years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice of the Group. However on 12 March 2012 the board has announced the acquisition of the coal asset in Kalimantan (Indonesia) which will see mining as the future core business of the Company. This is subject to shareholder’s approval to be held towards the end of May 2012.

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INDEMNIFICATION OF OFFICERS AND AUDITORS

During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company (as named above), the Company Secretary, and all executive officers of the Company and of any related body corporate against a liability incurred as such Directors, Company Secretary or executive officer to the extent permitted by the Corporations Act 2001. The contracts of insurance prohibit disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred in their capacity as an officer or auditor.

MEETINGS OF DIRECTORS

During the year, 5 directors meetings were held. Attendances were as follows: Meetings of Board of Directors Eligible to attend Attended

Khaja Shaukath Ali Mohamed Siddique 1 1 Ahmad Shah Sahul Hameed 1 1 Mohamed Nasir Mohamed Noor - - Raj Menon - - Maurice William Gerkens 1 1 Eranur Shahda 1 1 Ishkandar Shah 3 3 Rohit Vinod Raniga 3 2 Navin Chandra 3 2

No separate meetings of the audit committee and the compliance and risk committee were held during the financial year.

INFORMATION ON DIRECTORS Khaja Shaukath Siddique Non-Executive Director Qualifications: Certificate of Competency, Master of Ship. Graduate of Institute of Shipping

Management, Singapore, The Nautical Institute and Royal Institute of Navigation, United Kingdom. Letter of Commendation by the Ministry of Foreign Affairs, Singapore.

Experience: Director of Macro Corporation and Oriental Global Resources. Over 40 years of experience in navigation, shipping management, international trading, company restructuring and shipping feasibility studies. Having held a Director position for 22 years in freight and shipping firms.

Interests in shares and options: Nil Special responsibilities: Directorships in other listed companies in past 3 years: None

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INFORMATION ON DIRECTORS (continued) Ahmad Shah Executive Director Qualifications: Modern Hospitality, Monash University, Melbourne, Australia. General Manager

Financial and Yield Management, KSA. Experience: Executive Director of Macro Corporation. Over 30 years of experience in the

hospitality industry, 19 years of which in a managerial capacity. Networking and strategic planning to achieve optimum sales and occupancy whilst delivering first class service- internationally.

Interests in shares and options: Nil Special responsibilities: Directorships in other listed companies in past 3 years: None Raj Menon Non-Executive Director Qualifications: Marine Navigate License – Foreign Going. 1st Mate Foreign Going Marine

Competency Certificate, Australia Experience: Chief officer and superintendent on board ships for general cargo. Director of

Robbos Spare Parts Wentworthville Auto Spare Parts Franchised business in Sydney, Australia. Management of Service Maintenance Absolut Waterfront Apartments.

Interests in shares and options: Nil Special responsibilities: Directorships in other listed companies in past 3 years: None Mohamed Nasir Noor Non-Executive Director Qualifications: Artist, Photographer. Photo Art Association of Singapore Commercial

Photography, Singapore. Pa-Lin Art School Graphic Art, Singapore. Experience: Director and Photographer for Aliph Productions Pty Ltd. Over 20 years of

professional expertise which covers specialisation in both commercial and industrial photography. Manages company’s sales, administration and finances and marketing the brand name ‘Aliph Productions’ to a new market frontier.

Interests in shares and options: Nil Special responsibilities: Directorships in other listed companies in past 3 years: None

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REMUNERATION REPORT (AUDITED)

This report details the nature and amount of remuneration for each key management person of Macro Corporation Ltd and for the executives receiving the highest remuneration.

The directors review the remuneration packages of all directors and executive officers/senior managers on an annual basis. Remuneration packages are reviewed with due regard to performance and other relevant factors. In order to retain and attract executives of sufficient calibre to facilitate the efficient and effective management of the company’s operations, the Board of Directors seek the advice of external advisers in connection with the structure of remuneration packages as and when required.

All key management personnel receive a base salary (which is based on factors such as length of service and experience) and superannuation. All remuneration paid to key management personnel is valued at the cost to the company and expensed.

Directors, non-executive directors and senior management are remunerated at rates appropriate for time, commitment and responsibilities. The Board of Directors determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. Fees for non-executive directors are not linked to the performance of the Group.

Key Management Personnel Remuneration Policy The remuneration structure for key management personnel is based upon a number of factors, including length of service, particular experience of the individual concerned, and the overall performance of the company. The contracts for service between the company and key management personnel are on a continuing basis. The terms of which are not expected to change in the immediate future. Upon retirement key management personnel are paid employee benefit entitlements accrued to date of retirement.

Employment Details of Members of Key Management Personnel Executive Director and Chief Executive Officer, Mr Ishkandar Shah was a permanent employee of Macro Corporation Ltd and was employed under normal statutory employment conditions. Mr Shah resigned 1 February 2012.

Executive Director, Mr Rohit Raniga was a permanent employee of Macro Corporation Ltd and was employed under normal statutory employment conditions. Mr Raniga resigned 6 December 2011.

Executive Director, Mr Navin Chandra was a permanent employee of Macro Corporation Ltd and was employed under normal statutory employment conditions. Mr Chandra resigned 6 December 2011. Executive Director, Mr Ahmad Shah, is not presently remunerated for his services as a director. Securities Received by Key Management Personnel No members of key management personnel are entitled to receive securities as part of their remuneration. Cash Bonuses, Performance-related Bonuses and Share Based Payments No members of key management personnel are entitled to receive cash bonuses, performance related bonuses or share based payments as part of their remuneration.

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REMUNERATION REPORT (AUDITED) (continued)

Key Management Personnel The following persons were key management personnel of Macro Corporation Ltd and its subsidiaries during the financial year:

Name Position Held

Ishkandar Shah

Executive Director Chairman, Chief Executive Officer (resigned 1 February 2012)

Rohit Vinod Raniga

Executive Director (resigned 6 December 2011)

Navin Chandra

Executive Director Chief Financial Officer (resigned 6 December 2011)

Ahmad Shah Sahul Hameed

Executive Director (appointed 5 December 2011)

Khaja Shaukath Ali Mohamed Siddique Director (appointed 5 December 2011) Eranur Shahda Amin Shah

Director and Chief Executive Officer (appointed 5 December 2011, resigned 1 March 2012)

Maurice William Gerkens

Director (appointed 6 December 2011, resigned 13 January 2012)

Rodney Armstrong

Senior Manager (resigned 31 January 2011)

Andrew Lowe

Senior Manager (appointed 31 January 2011, resigned 24 June 2011)

There are no Company executives to disclose as no persons met the definition that are not already disclosed as key management personnel.

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REMUNERATION REPORT (AUDITED) (continued) Details of Remuneration Long-term Post employment Short-term benefits benefits benefits Salary/Fees/ Non-cash Long Service Superannuation Performance Allowances benefits Leave contribution Total related $ $ $ $ $ %

2011 Directors

Khaja Shaukath Ali Mohamed Siddique - - - - - - Ahmad Shah Sahul Hameed - - - - - - Eranur Shahda Amin Shah - - - - - - Maurice William Gerkens 5,000 - - - 5,000 - Ishkandar Shah (Executive director, Group Chief Executive Officer,

resigned 13 January 2012) 108,963 - - 1,485 110,448 -

Rohit Vinod Raniga (Executive director,

resigned 6 December 2011) 132,437 17,497 - 10,767 160,701 - Navin Chandra (Executive director, Finance Director,

resigned 6 December 2011) 101,077 - - 9,097 110,174 -

Total key management personnel compensation 347,477 17,497 - 21,349 386,323 - Other Executives

Rodney Armstrong (Senior Manager) 11,930 - - 1,074 13,004 - Andrew Lowe (Senior Manager) 21,161 - - 1,905 23,066 - 380,568 17,497 - 24,328 422,393 - 2010 Directors

Ishkandar Shah (Executive director, Group Chief Executive Officer) 52,798 - - 540 53,338 - Rohit Vinod Raniga (Executive director, appointed 8 April 2010) 74,754 9,025 - 6,722 90,501 - Navin Chandra (Executive director, Finance Director, appointed 4 May 2010) 7,030 2,333 - 639 10,002 -

Patrick S Bluett (Executive director, General Manager, resigned 4 May 2010) 121,234 - - 10,911 132,145 - Abdul Razak Bin Abu Bakar (Non-executive director, resigned 1 November 2010) 13,940 - - 405 14,345 - Norasman Bin Ismail (Non-executive director, resigned 30 November 2010) 22,436 - - 405 22,841 - Thanggaya Munusamy (Non-executive director, deceased 11/2/10) - - - - - - Hassnain Sadiq (Non-executive director, resigned 26/3/10) 3,000 - - 270 3,270 - Total key management personnel compensation 295,192 11,358 - 19,892 326,442 - Other Executives

Rodney Armstrong (Senior Manager) 83,020 - 4,334 7,719 95,073 - 378,212 11,358 4,334 27,611 421,515 - END OF AUDITED REMUNERATION REPORT

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Tel: +61 7 4046 0000 Fax: +61 7 4051 3484 www.bdo.com.au

Cnr Aplin & Sheridan Sts Cairns Qld 4870 PO Box 6771 Cairns Qld 4870 Australia

BDO (NTH QLD) ABN 31 164 696 648 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO (NTH QLD) and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional

Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

DECLARATION OF INDEPENDENCE BY GREG MITCHELL TO THE DIRECTORS OF MACRO

CORPORATION LIMITED

As lead auditor of Macro Corporation Limited for the year ended 31 December 2011, I declare

that, to the best of my knowledge and belief, there have been no contraventions of:

• the auditor independence requirements of the Corporations Act 2001 in relation to the

audit; and

• any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Macro Corporation Limited and the entities it controlled

during the period.

GREG MITCHELL

Partner

BDO (NTH QLD)

Cairns, 30 April 2012

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2011

Consolidated Group

2011 2010

Note $ $

Revenue 3 4,887,309 7,428,414 Other income 3 17,363 - Employee benefits expense (2,828,072) (3,126,591) Vessel running expenses (1,363,125) (2,679,760) Catering expenses (657,084) (860,871) Impairment write-downs and fair value adjustments 4 (1,102,305) (1,422,839) Finance costs 4 (275,642) (199,672) Rental expenses 4 (43,897) (147,660) Loss on disposal of assets 4 (112,927) - Depreciation expense 4 (262,613) (209,537) Other expenses (869,983) (1,153,536)

Loss before income tax (2,610,976) (2,372,052)

Income tax expense (benefit) 5 871,056 (871,056)

Loss for the year (3,482,032) (1,500,996)

Other comprehensive income Gain (decrease) on revaluation of vessels to fair value (2,903,520) 2,903,520 Income tax on items of other comprehensive income 871,056 (871,056) Other comprehensive income for the year, net of tax (2,032,464) 2,032,464 Total comprehensive income for the year (5,514,496) 531,468

Loss is attributable to:

Members of Macro Corporation Ltd (3,482,032) (1,500,996)

Total comprehensive income is attributable to:

Members of Macro Corporation Ltd (5,514,496) 531,468

Earnings per share Basic earnings per share 23 ($0.038) ($0.016) Diluted earnings per share 23 ($0.038) ($0.016)

The accompanying notes form part of these financial statements.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

Consolidated Group

2011 2010

Note $ $

Assets Current Assets Cash and cash equivalents 6 443,991 49,614 Trade and other receivables 7 66,023 559,364 Financial assets 8 - 800 Inventories 9 - 39,474 Assets held for sale 10 2,241,874 2,351,874 Other current assets 11 172,093 148,380 Total Current Assets 2,923,981 3,149,506

Non-Current Assets Financial assets 8 79,112 - Property, plant and equipment 12 15,257 7,625,557 Investment property 13 - 600,000 Intangible assets 14 - 400,000 Total Non-Current Assets 94,369 8,625,557

Total Assets 3,018,350 11,775,063

Liabilities Current Liabilities Trade and other payables 15 422,956 1,402,805 Interest-bearing liabilities 16 246,314 2,249,612 Short-term provisions 17 9,196 170,431 Total Current Liabilities 678,466 3,822,848

Non-Current Liabilities Interest-bearing liabilities 16 - 56,151 Long-term provisions 17 - 41,684 Total Non-Current Liabilities - 97,835

Total Liabilities 678,466 3,920,683

Net Assets 2,339,884 7,854,380

Equity Contributed equity 18 13,919,243 13,919,243 Reserves 19 - 2,032,464 Accumulated losses (11,579,359) (8,097,327)

Total Equity 2,339,884 7,854,380


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011

Contributed Accumulated Total equity Reserves losses equity $ $ $ $

Balance at 1 January 2010 13,919,243 - (6,596,331) 7,322,912 Total comprehensive income for the year

Loss for the year - - (1,500,996) (1,500,996) Other comprehensive income

Gain on revaluation of vessels to fair value, net of tax - 2,032,464 - 2,032,464 Total comprehensive income for the year - 2,032,464 (1,500,996) 531,468 Balance at 31 December 2010 13,919,243 2,032,464 (8,097,327) 7,854,380

Total comprehensive income for the year

Loss for the year - - (3,482,032) (3,482,032) Other comprehensive income Decrease on revaluation of vessels to fair value, net of tax - (2,032,464) - (2,032,464) Total comprehensive income for the year - (2,032,464) (3,482,032) (5,514,496) Balance at 31 December 2011 13,919,243 - (11,579,359) 2,339,884


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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2011

Consolidated Group

2011 2010

Note $ $

Cash Flows from Operating Activities Receipts from customers 5,880,086 8,298,154 Payments to suppliers and employees (7,503,339) (8,299,694) Interest received 2,673 132 Interest paid (275,642) (199,672) Net cash used in operating activities 20(a) (1,896,223) (201,080)

Cash Flows from Investing Activities Proceeds from sale of investment property 580,057 - Proceeds from sale of investment 8,994 - Proceeds from sale of business 20(d) 3,550,737 - Proceeds from sale of property, plant and equipment 81,500 13,182 Purchase of property, plant and equipment (68,477) (120,215) Net cash provided by/(used in) investing activities 4,152,811 (107,033)

Cash Flows from Financing Activities Proceeds from borrowings (2,902,507) 481,127 Repayment of borrowings 1,040,296 (215,702) Net cash provided by/(used in) financing activities (1,862,211) 265,425

Net increase/( decrease) in cash and cash equivalents held 394,377 (42,688)

Cash and cash equivalents at the beginning of the year 49,614 92,302

Cash and cash equivalents at the end of the year 6 443,991 49,614


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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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The financial statements of Macro Corporation Ltd for the year ended 31 December 2011 were authorised for issue in accordance with a resolution of the directors on 30 April 2012 and covers the consolidated entity consisting of Macro Corporation Ltd and its subsidiaries as required by the Corporations Act 2001. Separate financial statements for Macro Corporation Ltd as an individual entity are no longer presented as a consequence of a change to the Corporations Act 2001. However, limited financial information for Macro Corporation Ltd as an individual entity is included in Note 2.

The financial statements are presented in the Australian currency.

Macro Corporation Ltd is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated.

The financial statements have been prepared on an accruals basis and are based on historical costs, except for, investment properties, available-for-sale financial assets and vessels and improvements that have been measured at fair value.

For the purposes of preparing the financial statements Macro Corporation Ltd is a for-profit entity.

Going Concern Basis for Preparation of Financial Statements

The financial statements have been prepared on a going concern basis which contemplates the continuity of normal trading operations and the realisation of assets and settlement of liabilities in the ordinary course of business.

The Group has sustained a net loss after tax of $3,482,032 inclusive of impairment of write-downs and net losses on disposal of assets of $1,206,063 for the year ended 31 December 2011. The disposal of assets was made in conjunction with the sale of the majority of the Group’s core business, which was finalised on 26 October 2011.

On 13 February 2012, Macro Resources Pty Ltd, a subsidiary of Macro Corporation Ltd, entered into a share sale agreement with the majority shareholder PT. Sarmar Jaya Cemerlang (SJC) to acquire 70% of their shares in SJC in consideration for cash payments of US$2,000,000 and royalty payment of US$5,800,000 against future coal export income. The agreement includes an agreement to purchase the remaining 30% of shares for a consideration of US$10,700,000. SJC hold the rights to a coal project in Central Kalimantan, Indonesia. The agreement is subject to shareholder approval.

US$50,000 was payable upon the signing of the share sale agreement with the remaining US$1,950,000 cash payments subject to the company obtaining the approval of the shareholders, its compliance with Chapters 1 & 2 of the ASX Listing Rules, as well as fulfilment of agreed terms and conditions as outlined in the share sale agreement.

The Group intends to finance the above acquisition using the proceeds from internal cash, the sale of the vessel Ocean Spirit IV (OS IV) for consideration of $3,650,000 as well as external borrowings.

The sale of OS IV, which is dependent on shareholder approval, will be crucial for the Group to have sufficient cash to fund the payment of US$2,000,000. A sale and purchase agreement exists for this vessel and will be finalised within 90 days of the shareholders’ approval of the disposal.

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)

Going Concern Basis for Preparation of Financial Statements (continued)

Directors are confident that they will be able to sufficiently fund the initial cash consideration of US$2,000,000 from the proceeds of the sale of OS IV. A number of terms and conditions are required to be fulfilled prior to the final instalment of the cash consideration being made; by this stage the viability of the project will be clear which will enable the Group to obtain external borrowing to advance the project. The royalty payment of US$5,800,000 will be funded from coal export income.

Directors have had independent assessments of the project undertaken and are confident that they will be able to obtain sufficient funds to enable the continuing of operations until revenue reaches a level to generate profits and positive cash flows. There is however material uncertainty attaching to the Group’s ability to obtain funding.

In the event that the company and the consolidated entity is unable to continue as a going concern, they may be required to realise assets at amounts different to those currently recognised, settle liabilities other than in the ordinary course of business and make provisions for other costs which may arise as a result of cessation or curtailment of normal business operations.

(a) Principles of Consolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Macro Corporation Ltd at the end of the reporting period. A controlled entity is any entity over which Macro Corporation Ltd has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered.

Where controlled entities have entered or left the consolidated Group during the year, the financial performance of those entities are included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 24 to the financial statements.

In preparing the consolidated financial statements, all inter-Group balances and transactions between entities in the consolidated Group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

(b) Income Tax

The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income).

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where the amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

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(b) Income Tax (Cont)

Where temporary differences exist in relation to investments in subsidiaries, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Tax consolidation

Macro Corporation Ltd and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation legislation. Each entity in the Group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity. The Group notified the Australian Taxation Office that it had formed an income tax consolidated Group to apply from 1 January 2004. The tax consolidated group has entered a tax funding arrangement whereby each company in the Group contributes to the income tax payable by the group in proportion to their contribution to the group’s taxable income. Differences between the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution to the head entity.

(c) Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is assigned on a first-in first-out basis.

(d) Trade and Other Receivables

Trade receivables are recognised at original invoice amounts less an allowance for uncollectible amounts and have repayment terms between 30 and 90 days. Collectability of trade receivables is assessed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance is made for doubtful debts where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms. Objective evidence of impairment include financial difficulties of the debtor, default payments or debts more than 120 days overdue. On confirmation that the trade receivable will not be collectible the gross carrying value of the asset is written off against the associated provision.

(e) Non-current Assets Held for Sale

Non-current assets classified as held for sale are those assets whose carrying amounts will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. These assets are stated at the lower of their carrying amount and fair value less costs to sell and are not depreciated or amortised.

An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for subsequent increases in fair value less costs to sell of an asset but not exceeding any cumulative impairment losses previously recognised.

(f) Property, Plant and Equipment

Each class of property plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

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(f) Property, Plant and Equipment (Cont)

Plant and equipment

Plant and equipment are measured on the cost basis except for vessels which are measured on the basis of fair value. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when 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. All other repairs and maintenance is charged to profit or loss during the financial period in which they are incurred. Vessels are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction), based on periodic valuations by external independent valuers. Increases in the carrying amount arising on revaluation of vessels are recognised, net of tax, in other comprehensive income and accumulated in reserves in equity. To the extent that an increase reverses a decrease previously recognised in profit or loss, the increase is first recognised in profit or loss. Decreases that reverse previous increases of the same asset are first recognised in other comprehensive income to the extent of the remaining surplus attributable to the asset; all other decreases are charged profit or loss. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Depreciation

The depreciable amount of all fixed assets including capitalised leased assets, is depreciated on a straight line basis over the asset’s useful life to the Group commencing from the time the asset is held ready for use.

The depreciation rates used for each class of depreciable assets are:

Class of fixed asset Depreciation rate

Vessels and improvements 5% - 10% Plant and equipment 5% – 40% Motor vehicles 15% – 33% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in profit and loss.

(g) Investment Property

Investment property is held to generate long-term rental yields. All tenant leases are on an arm’s length basis. Investment property is carried at fair value, determined annually by the directors and based upon independent valuations. Changes to fair value are recorded in profit or loss.

(h) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are transferred to entities in the Group are classified as finance leases. Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight –line basis over the period of the lease.

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(i) Financial Instruments

Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions of the instrument. For financial assets, this is equivalent to the date that the entity commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified ‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurement Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as: a. the amount at which the financial asset or financial liability is measured at initial recognition; b. less principal repayments; c. plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the

maturity amount calculated using the effective interest method; and d. less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

Financial instruments are classified as:

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after reporting date.

Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They include investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

Available-for-sale financial assets are included in non-current assets, except for those which are expected to be disposed of within 12 months after reporting date.

Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

Fair value Fair value is determined based upon current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

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(i) Financial Instruments (Cont)

Impairment At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a significant or prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in profit and loss.

Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

(j) Impairment of Assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to profit and loss, unless the asset is carried at revalued amount in which case the impairment loss is treated as a revaluation decrease.

Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

(k) Intangible Assets

Licences, Permits & Moorings Licences, permits and moorings acquired separately are carried at cost less any accumulated impairment losses. The carrying value of Marine Park licenses, permits and moorings has not been amortised, as its value to the Group is considered to have an indefinite life.

Goodwill Goodwill is initially recorded at the amount by which the purchase price for a business combination exceeds the fair value attributed to the interest in the net fair value of identifiable assets, liabilities and contingent liabilities at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.

(l) Employee Benefits

Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows.

Contributions are made by the Group to employee superannuation funds and are charged as expenses when incurred.

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(m) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within short-term financial liabilities in current liabilities on the statement of financial position.

(n) Revenue and Other Income

Revenue is measured at fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Revenue from rendering of a service is recognised upon the delivery of the service to the customers. Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. Investment property revenue is recognised on a straight-line basis over the period of lease term so as to reflect a constant periodic rate of return on the net investment. Revenue is recognised net of the amount of goods and services tax (GST).

(o) Trade and Other Payables

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Group during the reporting period which remains unpaid. The balance is recognised as a current liability with the amount normally paid within 30 days of recognition of the liability.

(p) Interest-Bearing Liabilities

Interest-bearing liabilities are initially recognised at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between the amount initially recognised and redemption value being recognised in the profit or loss over the period of the borrowings on an effective interest basis.

(q) Goods and Services Tax (GST)

Revenue, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the item of expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(r) Earnings per Share

Basic earnings per share (‘EPS’) is calculated by dividing the net profit attributable to members of the parent entity for the reporting period, after excluding any costs of servicing equity, other than ordinary shares, by the weighted average number of ordinary shares of the Company. Diluted EPS is calculated by dividing the earnings used in the determination of basic earnings per share, adjusted by the after tax effect of financing costs associated with dilutive potential ordinary shares by the weighted average number of ordinary shares and dilutive potential ordinary shares.

(s) Contributed Equity

Ordinary shares are classified as equity.

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(t) Critical Accounting Estimates and Judgements

The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.

Vessels held for sale The directors have determined that certain vessels are surplus to current operating requirements and the Group intends to dispose of them. The directors believe the criteria for classification as an asset held for sale has been met. The recoverable amounts of vessels held for sale has been determined based on fair value less costs to sell. Refer to Note 10 for details regarding the determination of the recoverable amount. If the fair value less costs to sell changed by 10% there would be a $224,187 impact on the carrying amount of vessels held for sale and profit or loss for the year.

(u) Adoption of New and Revised Accounting Standards

During the current year the Group adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory. Adoption of these Standards and Interpretations has not a material impact on the financial report of the Group.

(v) New Accounting Standards for Application in Future Periods

A number of Australian Accounting Standards and Interpretations (and IFRS and IFRIC Interpretations) are on issue but are not effective for the current year end. The reported results and position of the Group will not change on adoption of these pronouncements as they do not result in any changes to the Group’s existing accounting policies. Adoption will, however, result in changes to information currently disclosed in the financial statements. The Group does not intend to adopt any of these pronouncements before their effective dates.

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Company Company

2011 2010

$ $

NOTE 2 –PARENT ENTITY INFORMATION

The following information relates to the parent entity, Macro Corporation Ltd. The information presented has been prepared using accounting policies that are consistent with those presented in Note 1 (where applicable). STATEMENT OF FINANCIAL POSITION Assets Current assets 2,719,641 3,181,245 Non-current assets 4 3,215,804 Total assets 2,719,645 6,397,049

Liabilities Current liabilities 477,352 1,968,783 Non-current liabilities - - Total liabilities 477,352 1,968,783 Net Assets 2,242,293 4,428,266

Equity Contributed equity 13,919,243 13,919,243 Asset revaluation reserve - 666,961 Accumulated losses (11,676,950) (10,157,938) Total equity 2,242,293 4,428,266 STATEMENT OF COMPREHENSIVE INCOME Total profit for the year (1,519,012) 183,307 Other comprehensive income for the year (666,961) 666,961 Total comprehensive income for the year (2,185,973) 850,268 Guarantees Macro Corporation Ltd has not entered into any guarantees, in the current or previous financial years in relation to the debts of its subsidiaries. Contractual Commitments At 31 December 2011, Macro Corporation Ltd had not entered into any contractual commitments for the acquisition of property plant and equipment (2010: Nil). Contingent Liabilities See Note 29. Consolidated Group

2011 2010

$ $

NOTE 3 –REVENUE AND OTHER INCOME

Revenue Rendering of services 4,874,097 7,417,387 Interest 2,673 132 Rental income from investment property 10,539 10,895 4,887,309 7,428,414 Other Income Gain on disposal of investment property 9,169 -

Gain on disposal of investment and marine permit 8,194 - 17,363 -

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Consolidated Group

2011 2010

$ $

NOTE 4 – EXPENSES

Profit (loss) before income tax includes the following specific expenses:

Finance costs: interest paid or payable to other entities 275,642 199,672 Depreciation of: - vessels & improvements 226,801 136,387 - plant & equipment 22,477 54,690 - motor vehicles - 4,015 - motor vehicles under lease 13,335 14,445 262,613 209,537

Impairment write-downs - Impairment write-down of held for sale assets - 1,022,839 - Fair value write-down of investment property - 400,000 - Impairment write-down of property, plant and equipment 921,962 - - Impairment write-down of intangible assets 180,343 - 1,102,305 1,422,839 Impairment write-downs have resulted from the decision to sell assets associated with the Tourism industry. The recoverable amount at the time of the impairment write-down was determined as the assets fair value less cost to sell. The fair value less costs to sell was determined by reference to the expected sale price of the assets. Loss on disposal of assets Loss on disposal of assets on sale of business 94,427 - Loss on disposal of vessel Ocean Spirit II 18,500 - 112,927 - Rental expense on operating leases – minimum lease payments 43,897 147,660 Direct property expenditure from property generating rental income 20,075 21,543 Defined contribution superannuation expense 189,732 232,664 Bad debts 10,000 - Provision for doubtful debts 12,069 -

NOTE 5 - INCOME TAX

(a) The components of income tax expense / (benefit) comprise:

Current tax expense/(benefit) - -

Deferred tax expense/(benefit) 871,056 (871,056) 871,056 (871,056)

(b) The prima facie income tax on the profit/(loss) before income tax is reconciled to income tax as follows:

Prima facie tax expense/(benefit) at 30% (2010: 30%) (783,293) (711,616) Add/(deduct): - non deductible expenditure 3,030 3,716 – previously unrecognised deferred tax assets recognised

(2010)/reversal of deferred tax assets and current year benefit not recognised (2011) 1,651,319 (163,156)

Income tax expense/(benefit) 871,056 (871,056)

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NOTE 5 - INCOME TAX (CONT)

(c) Movements in deferred tax asset/(liabilities): 2011 Opening

Balance Profit and Loss

Other Comprehensive Income

Equity Closing Balance

Provisions 5,526 (5,526) - - - Employee benefits 63,635 (63,635) - - - Accruals 35,619 (35,619) - - - Plant and equipment (1,117,544) 246,488 871,056 - - Tax losses 1,012,764 (1,012,764) - - -

- (871,056) 871,056 - -

2010 Opening

Balance Profit and Loss

Other Comprehensive Income

Equity Closing Balance

Provisions 34,333 (28,807) - - 5,526 Employee benefits 72,840 (9,205) - - 63,635 Accruals 15,434 20,185 - - 35,619 Plant and equipment (504,452) 257,964 (871,056) - (1,117,544) Tax losses 381,845 630,919 - - 1,012,764

- 871,056 (871,056) - -

Consolidated Group

2011 2010

$ $

(d) Unrecognised deferred taxes

Unrecognised tax losses 11,266,811 6,175,756

Deferred tax assets at 30% 3,380,043 1,852,727

These benefits will only be obtained if: (i) assessable income is derived of a nature and amount sufficient to enable the

benefit from the deductions for the losses to be realised; (ii) the conditions for deductibility imposed by law are complied with; and (iii)no changes in tax legislation adversely affect the realisation of the benefit

from the deductions for the losses.

NOTE 6 – CASH AND CASH EQUIVALENTS

Cash at bank and on hand 443,991 49,614

NOTE 7 – TRADE AND OTHER RECEIVABLES

Current Trade receivables 78,092 577,784 Provision for impairment of receivables (12,069) (18,420) 66,023 559,364

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NOTE 7 – TRADE AND OTHER RECEIVABLES (CONT)

The carrying value of trade receivables is considered a reasonable approximation of fair value due to the short-term nature of the balances. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable in the financial statements. The Group does not hold any collateral as security over any receivable balance. Refer to Note 32 for more information on the risk management policy of the Group. The average credit period on provision of services is 30 days. No interest is charged on the trade receivables for the first 30 days from the date of the invoice. Thereafter, the Group has the ability to charge interest on the outstanding balances. Impairment current receivables All of the Group’s trade and other receivables have been reviewed for indicators of impairment. In the current financial year, trade receivables were found to be impaired and a provision of $12,069 (2010: $18,420) has been recorded. Consolidated Group 2011 2010

$ $

Ageing of impaired receivables: - past due (> 120 days) 12,069 18,420 Total 12,069 18,420 A reconciliation of the movement in the provision for impairment of trade receivables is shown below: At 1 January 18,420 - Movement recognised / (utilised) during the year (6,351) 18,420 Balance at 31 December 12,069 18,420 The following table details the Group’s trade and other receivables exposed to credit risk (prior to collateral and other credit enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as ‘past due’ when the counter party has failed to make a payment when contractually due. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that the debt may not be fully repaid to the Group. The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality. In addition, some of the unimpaired trade receivables are past due as at the reporting date. These relate to customers who have a good credit history with the Group. Consolidated Group

2011 2010

$ $

- within initial trade terms - 288,936 - 31 to 60 days past due but not impaired 1,698 216,641 - 61 to 90 days past due but not impaired 43,570 40,072 - more than 90 days past due but not impaired 20,755 13,715 - past due and impaired 12,069 18,420 Total 78,092 577,784

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Consolidated Group

2011 2010

$ $

NOTE 8 – FINANCIAL ASSETS

Current Securities listed on a prescribed Securities exchange (fair value) - 800

The listed equity securities categorised as available-for-sale have been issued by publicly traded companies in Australia. Fair values for these securities have been determined by reference to their quoted market prices at the reporting date.

Non-current Vendor finance on disposal of investment property and permits 79,112 -

Vendor finance has been recorded at the net present value of scheduled repayments at a discount rate of 10% per annum. The face value of the loan is $100,000.

This loan is to be received in equal monthly repayments beginning 14 November 2013 over 3 years with an interest rate of 5% per annum.

NOTE 9 – INVENTORIES

Fuel, stores, liquor and merchandise at cost - 39,474 NOTE 10 – ASSETS HELD FOR SALE Vessels 2,241,874 2,351,874 2,241,874 2,351,874 Movements in the carrying amounts (i) Marine Park licenses, permits and moorings Balance at 1 January - 50,000 Movement during the year

Reclassified to intangible assets as no longer meeting definition of ‘held for sale’ - (50,000) Balance at 31 December - - (ii) Vessels Balance at 1 January 2,351,874 - Movement during the year

Disposal of Vessel OS II (110,000) - Intangible asset transferred to held for sale 169,657 - Property, plant and equipment transferred to held for sale 3,590,682 3,374,713 Disposal of assets on sale of business (3,760,339) - Impairment write-down at 30 June 2010 - (1,006,031) Impairment write-down at 31 December 2010 - (16,808) Balance at 31 December 2,241,874 2,351,874 The vessels Ocean Spirit II and IV have been classified as held-for-sale as they are surplus to current operating requirements. The Group has disposed of the Vessel OS II during the year and intends to dispose of the vessel OS IV. The sale of the Vessel OS IV is considered to be highly probable in the next 12 months – see Note 31.

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Consolidated Group

2011 2010

$ $

NOTE 10 – ASSETS HELD FOR SALE (CONT) Impairment write-down The impairment write-down relates to the Vessels OS II that was classified as held for sale during the 2010 year. The whole amount was recognised in profit or loss. The recoverable amount of the assets was determined by an independent valuer at fair value less costs to sell.

NOTE 11 – OTHER CURRENT ASSETS

Prepayments 75,879 105,268 Final settlement due on business sale 85,714 - Deposits 10,500 43,112 172,093 148,380

NOTE 12 – PROPERTY, PLANT AND EQUIPMENT Vessels and improvements (at fair value) - 7,353,000 Accumulated depreciation - - - 7,353,000 Plant and equipment (at cost) 2,005 445,639 Accumulated depreciation (1,403) (229,163) 602 216,476

Motor vehicles (at cost) - 11,364 Accumulated depreciation - (9,232) - 2,132

Motor vehicles under lease (at cost) 19,540 79,610 Accumulated depreciation (4,885) (25,661) 14,655 53,949 Total Property, Plant and Equipment 15,257 7,625,557

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NOTE 12 – PROPERTY, PLANT AND EQUIPMENT (CONT)

Movements in the Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the financial year. Vessels & Vessels & Motor Motor improvements improvements vehicles vehicles at fair at deemed Plant & at cost under Total value cost equipment lease $ $ $ $ $ $

Consolidated Group: Balance at 1 January 2010 - 7,932,009 179,522 20,123 29,401 8,161,055

Additions - 70,179 50,036 - 38,199 158,414

Disposals - - - (13,182) - (13,182) Assets reclassified to held for sale - (3,374,713) - - - (3,374,713) Assets re-allocated 4,449,480 (4,491,088) 41,608 (794) 794 - Revaluation increment to fair value 2,903,520 - - - - 2,903,520 Depreciation expense - (136,387) (54,690) (4,015) (14,445) (209,537) Balance at 31 December 2010 7,353,000 - 216,476 2,132 53,949 7,625,557

Additions - - 68,477 - - 68,477 Disposals - - - - - - Assets reclassified to held for sale (3,416,441) - (169,998) (2,132) (2,111) (3,590,682) Revaluation decrement to fair value (2,903,520) - - - - (2,903,520) Impairment write-down (806,238) - (91,876) - (23,848) (921,962) Depreciation expense (226,801) - (22,477) - (13,335) (262,613) Balance at 31 December 2011 - - 602 - 14,655 15,257

Carrying amounts that would have been recognised if vessels were stated at cost If Vessels were stated on the historical cost basis, amounts would be as follows Deemed cost - 6,265,427 Accumulated depreciation - (1,815,947) Net book value - 4,449,480 Property, plant and equipment pledged as security Refer to Note 16 for information on property, plant and equipment pledged as security by the Group. Valuation of vessels The valuation basis of vessels is fair value being the amounts for which the assets could be exchanged between willing parties in an arm's length transaction, based on current prices in a market for similar vessels in the same location and condition. The 2010 revaluations were based on independent assessments by a member of the Auctioneers and Valuers Association of Australia as at 25 February 2011. The directors determined that the fair value of the vessels as assessed at 25 February 2011 approximated the fair value of the vessels at 31 December 2010. The revaluation surplus net of applicable deferred income taxes was credited to the asset revaluation reserve in Note 19. The independent valuer’s report did not disclose the methods and significant assumptions applied in estimating the items fair values or the extent to which the items fair values were determined directly by reference to observable prices in an active market or recent market transactions on arm’s length terms or where estimated using other valuation techniques.

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Consolidated Group

2011 2010

$ $

NOTE 13 – INVESTMENT PROPERTY

Land and building at fair value - 600,000

Movements in the carrying amounts Balance at 1 January 600,000 1,000,000 Disposal (600,000) - Write-down in fair value - (400,000) Balance at 31 December - 600,000 Amounts recognised in profit or loss for investment properties Rental income 10,539 10,895 Direct operating expenses from property that generated rental income (20,075) (21,543) (9,536) (10,648) Valuation basis The fair value model is applied to investment property. The investment property is independently revalued annually. Values are based on an active market and are performed by a registered independent valuer. Non-current assets pledged as security Refer to Note 16 for information on non-current assets pledged as security by the Group.

NOTE 14 – INTANGIBLES ASSETS Marine Park licence, permits and moorings at cost - 400,000 - 400,000

Movements in the carrying amount of marine park license, permits and moorings Balance at 1 January 400,000 350,000 Impairment write-down (180,343) - Transfer to assets held for sale (169,657) - Disposal (50,000) - Reclassified from assets held for sale - 50,000 Balance at 31 December - 400,000

Useful life Marine Park licence, permits and mooring costs have an indefinite useful life as they relate to access rights to protected marine park areas. These rights are very rare and limited to those currently on issue. The rights do not expire to the holder. Valuation basis The cost model is applied to the marine park licence, permits and moorings. As the intangible assets have an indefinite useful life the recoverable amount is assessed on an annual basis. The recoverable amount is based on fair value less costs to sell. Fair value has been determined based on assessments by the directors who have determined that the fair value of the marine park license, permits and moorings approximate the value that a third party is willing to offer to acquire these assets. Non-current assets pledged as security Refer to Note 16 for information on non-current assets pledged as security by the group.

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Consolidated Group

2011 2010

$ $

NOTE 15 – TRADE AND OTHER PAYABLES

Current Trade payables 263,748 785,057 Unearned income 62,474 - Other accruals 96,734 617,748 422,956 1,402,805 All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value. NOTE 16 – INTEREST-BEARING LIABILITIES

Current Secured borrowings at amortised cost: Cash flow factoring facility (a) - 481,127 Bank bills (b) - 1,751,500 Other payables (b) 188,073 - Lease liabilities (c) 58,241 16,985 246,314 2,249,612 Non-Current

Secured borrowings at amortised cost: Lease liabilities (c) - 56,151

(a) Cash flow factoring facilities were secured over trade receivables. This facility ceased to exist on 26 October 2011.

(b) No security is in place for bank facilities and other payables. The bank facilities ceased to exist on 26 October 2011. Other payables comprise amounts owing for services, arrangements have been entered into for deferred settlement with interest payable.

(c) The lease liabilities are secured by leased motor vehicles.

Details of the Group’s risk exposure arising from borrowings are provided in Note 32. The carrying values of the above borrowings are considered to be a reasonable approximation of fair value.

NOTE 17 – PROVISIONS

Current Employee benefits 9,196 170,431 Non-Current Employee benefits - 41,684 F

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NOTE 18 – CONTRIBUTED EQUITY

Share Capital 92,174,634 fully paid ordinary shares (2010: 92,174,634) 13,919,243 13,919,243

Movements in Share Capital

There were no movements in share capital during the financial period (2010 – no movements).

Ordinary Shares

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each

shareholder has one vote on a show of hands. The shares do not have a par value nor is there a limited amount of authorised capital.

Capital Management Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group’s debt and capital includes ordinary share capital and financial liabilities supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. The strategy adopted by management to control the capital of the Group will be revised to facilitate the development of coal opportunities. The capital for the year ended 31 December 2011 and 31 December 2010 is as follows: Consolidated Group

2011 2010

$ $

Total borrowings 246,314 2,305,763 Less cash and cash equivalents (1) (246,314) (49,614) Net debt/(cash) - 2,256,149 Total equity 2,339,884 7,854,380 Total capital 2,339,884 10,110,529

(1) Capped to total borrowings in determining total capital

NOTE 19 - RESERVES

Asset revaluation reserve - 2,032,464

Movements in the carrying amount of reserves Asset revaluation reserve Balance at 1 January 2,032,464 - Revaluation change on vessels carried at fair value (2,032,464) 2,032,464 Balance at 31 December - 2,032,464 The asset revaluation reserve records increments and decrements on the revaluation of vessels and improvements.

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Consolidated Group

2011 2010

$ $

NOTE 20 - NOTES TO THE STATEMENT OF CASH FLOWS

(a) Reconciliation of cash flows from operating activities with profit/(loss) after income tax

Profit/(loss) after income tax (3,482,032) (1,500,996) Non-cash flows in profit/(loss): Depreciation of property, plant and equipment 262,613 209,537 Gain on sale of assets (17,636) - Loss on sale of assets held for sale 112,927 - Impairment write-downs and fair value adjustments 1,102,305 1,422,839 Bad debts 10,000 - Provision for doubtful debts 12,069 18,420

Changes in operating assets and liabilities: (Increase)/decrease in trade and other receivables 481,272 115,494 (Increase)/decrease in inventories 5,423 128 (Increase)/decrease in other current assets (52,001) (42,325) Increase/(decrease) in accounts payable (1,063,483) 477,567

Increase/(decrease) in provisions (138,736) (30,688) Increase/(decrease) in deferred tax assets/liabilities 871,056 (871,056)

Net cash used in operating activities (1,896,223) (201,080) (b) Banking facilities Cashflow factoring facility - 481,127 Amount unused - - - 481,127 Loan facilities - 1,751,500 Amount unused - - - 1,751,500 (c) Non-cash financing and investing activities During the year ended 31 December 2010, the Group acquired two motor vehicles by

way of finance lease totalling $38,199. These acquisitions are not reflected in the Statement of Cash Flows.

(d) Summary of business sale On 26 October 2011 the Group sold its core business and the majority of associated

plant and equipment. Sale Price 3,800,000 Adjustments (249,263) Consideration received 3,550,737 The assets and liabilities which the Group lost control over through the above sale: Inventories 19,164 Plant and equipment 3,590,682 Intangible assets 169,657 Other 114,924 Net assets disposed 3,894,427

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Consolidated Group

2011 2010

$ $

NOTE 21 - DIVIDENDS Dividends paid during the financial year: Fully franked ordinary dividend - - Dividends not brought to account - fully franked ordinary dividend - - Franking account balance at year end 220,642 220,642

NOTE 22 – REMUNERATION OF AUDITORS

Remuneration of the auditor of the Group for: BDO - Auditing or reviewing the financial reports 108,500 33,000

- Taxation services 43,592 9,074 - Other review services: - review of Appendix 4C 17,991 6,560 170,083 48,634

Non BDO - Auditing or reviewing the financial reports - 37,000

- 37,000 170,083 85,634

NOTE 23 - EARNINGS PER SHARE 2011 2010

Basic earnings per share ($0.038) ($0.016) Diluted earnings per share ($0.038) ($0.016) Net profit/(loss) after tax used in calculation of basic and diluted earnings per share $(3,482,032) $(1,500,996) Weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share 92,174,634 92,174,634 There are no outstanding potential ordinary shares.

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NOTE 24 – INVESTMENT IN CONTROLLED ENTITIES

Equity interests in controlled entities Percentage Owned 31 Dec 31 Dec

2011 2010

% %

Macro Corporation Ltd (a)

Controlled entities of Macro Corporation Ltd: OS Cairns Pty Ltd 100 100 Ocean Spirit (Sydney) Holdings Pty Ltd 100 100 Macro Resources Pty Ltd 100 100 Obsessions Cruise Pty Ltd 100 100 Obsessions (Whitsundays) Pty Ltd 100 100 Ocean Spirit Cruises (Singapore) Pte Ltd 100 100

Controlled entity of OS Cairns Pty Ltd: Ross Edwards Nominees Pty Ltd 100 100

(a) The parent entity and all controlled entities are incorporated in Australia other than Ocean Spirit Cruises (Singapore) Pte Ltd which was incorporated in Singapore.

Consolidated Group

2011 2010

$ $

NOTE 25 – KEY MANAGEMENT PERSONNEL Key management personnel compensation Short-term employment benefits 364,974 306,550 Post-employment benefits 21,349 19,892 386,323 326,442 Further information regarding the identity of key management personnel and their compensation can be found in the Audited Remuneration Report contained in the directors' report on pages 12 to 14 of this annual report. Number of shares held by key management personnel at 31 December

Director Shares held directly Shares held indirectly 2011 2010 2011 2010 No. No. No. No. Khaja Shaukath Ali Mohamed Siddique - - - - Ahmad Shah Sahul Hameed - - - - Eranur Shahda - - - - Maurice William Gerkens - - - - Ishkandar Shah - - - - Rohit Vinod Raniga - - - - Navin Chandra - - - -

There were no movements during the financial year.

There were no options held by key management personnel.

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NOTE 26 – RELATED PARTY DISCLOSURES

(a) Equity interests in controlled entities Details of the percentage of ordinary shares held in controlled entities are disclosed in Note 24.

(b) Transactions involving Directors or Director related entities There were no transactions involving directors or director related entities during the

financial year (other than remuneration disclosed in Note 25)

(c) Ultimate controlling entity The parent entity in the wholly owned group is Macro Corporation Ltd. The immediate

and ultimate parent entity at 31 December 2011 is considered by the Directors to be Entrepreneur Development Capital Pty Ltd.

Consolidated Group

2011 2010

$ $

NOTE 27 – COMMITMENTS

Lease Commitments (i) Finance lease commitments: Payable – minimum lease payments • Not later than one year 67,240 22,755 • Later than one year but not later than five years - 67,987

Minimum lease payments 67,240 90,742 Less future finance charges (8,999) (17,606)

58,241 73,136 Representing lease liabilities: Current 58,241 16,985 Non-current - 56,151 58,241 73,136

Finance lease commitment relates to a vehicle lease with a lease term of 48 months, two vehicles leases with a lease term of 60 months each and a photo-copier lease with a lease term of 36 months.

(ii) Non-cancellable operating leases: • Not later than one year - 64,504 • Later than one year but not later than five years - 53,116 - 117,620

NOTE 28 - SEGMENT INFORMATION

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Group is managed primarily on a geographic basis that is the location of the respective tourism-related activities in Queensland, Australia. Operating segments are determined on the basis of financial information reported to the Board. Management currently identifies the Group as only having one reportable segment, being tourism. There have been no changes to the operating segment during the financial year. All significant operating decisions are based upon analysis of the entity as a single segment. The financial results of this segment are represented by financial statements of the entity.

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NOTE 29 – CONTINGENCIES

Contingent Liabilities

(i) Claims for unfair dismissal have been lodged with Fair Work Australia by two employees. The Group is defending the claims. The Directors believe the maximum potential financial impact on the Group if the claims are successful would be $46,000.

(ii) Claims amounting to $13,300 have been made by holders of My Reef cards for compensation due to termination of the program. The Group has not admitted any obligation to refund card holders who had already used the card.

The directors are not aware of any other contingencies that warrant disclosure in the financial report.

NOTE 30 – COMPANY DETAILS The company’s registered office is:

18 Drummond Street, Carlton VIC 3053 The Group’s principal place of business is: Suite 70 Mezzanine Floor, Pier Point Road, Cairns QLD 4870 NOTE 31 – SUBSEQUENT EVENTS

On 13 February 2012, Macro Resources Pty Ltd, a subsidiary of Macro Corporation Ltd, entered into a sale and purchase agreement with the majority shareholder PT. Sarmar Jaya Cemerlang (SJC) to acquire 70% of their shares in SJC in consideration for cash payments of US$2,000,000 and royalty payment of US$5,800,000 against future coal export income. The agreement includes an agreement to purchase the remaining 30% of shares for a consideration of US$10,700,000. SJC hold the rights to a coal project in Central Kalimantan, Indonesia. The agreement is subject to shareholder approval.

On 3 March 2012, Macro Corporation Ltd entered into a sale and purchase agreement to sell the OS IV vessel for a consideration of $3,650,000. The sale agreement is subject to shareholder approval.

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NOTE 32 – FINANCIAL RISK MANAGEMENT

This note discloses the Group’s objectives, policies and processes for managing and measuring these risks. The Group’s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of financial markets. The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the group is exposed to are described below.

Specific risks

• Market risk - interest rate risk and price risk

• Credit risk

• Liquidity risk

Financial instruments used The principal categories of financial instrument used by the Group are:

• Receivables

• Cash at bank

• Trade and other payables

• Interest bearing liabilities

Objectives, policies and processes

Risk management is carried out by the Group’s finance function under policies and objectives which have been approved by the Board of Directors. The Chief Financial Officer has been delegated the authority for designing and implementing processes which follow the objectives and policies. The Board receives monthly reports which provide details of the effectiveness of the processes and policies in place.

Specific information regarding the mitigation of each financial risk to which Macro Corporation Ltd is exposed is provided below.

Risk exposures and responses

(a) Market risk - interest rate risk

The Group is exposed to interest rate risk as funds are borrowed at floating and fixed rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During 2010 and 2011, the Group’s borrowings at variable rate were all denominated in Australian dollars. The group’s policy is to minimise interest rate cash flow risk exposures on long-term financing. Longer-term borrowings are therefore usually at fixed rates. At 31 December 2011 the Group is not exposed to any significant interest rate risk on borrowings as all borrowings were repaid during the year.

Significant financial assets and liabilities for which the Group is exposed to interest rate risk are as follows:

Consolidated Group

2011 2010

$ $

Financial Assets Cash and cash equivalents 443,991 49,614 Financial assets 79,112 -

Financial Liabilities Cash flow factoring facility - (481,127) Other payables (188,073) - Bank bills - (1,751,500) Net exposure 335,030 (2,183,013)

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NOTE 32 – FINANCIAL RISK MANAGEMENT (CONT)

The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in interest rates of +1% and -1% (2010: +/-1%), with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on the Group's financial instruments held at each reporting date. All other variables are held constant.

Post Tax Profit Higher/(Lower)

2011 2010 $ $ Consolidated Group +1% (100 basis points) 3,350 (21,830) -1% (100 basis points) (3,350) 21,830

(b) Other price risk

The Group was exposed to equity securities price risk. This arose from listed investments held by the Group and classified as available-for-sale. Equity instruments are held for strategic rather than trading purposes and the Group does not actively trade these investments.

The Group is not exposed to material commodity price risk.

The price risk for the unlisted securities held by the Group was immaterial in terms of the possible impact on profit or loss or total equity.

(c) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group.

Credit risk arises from cash and cash equivalents, as well as credit exposure to wholesale and retail customers, including outstanding receivables and committed transactions.

The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The utilisation of credit limits by customers is regularly monitored by line management. Customers who subsequently fail to meet their credit terms are required to make purchases on a prepayment basis until creditworthiness can be re-established.

The nature of the Group’s operations means that sales are made to a wide spread of customers with no excessive exposure to one single customer or customers and whilst credit risk is mainly influenced by factors specific to those individual customers, the concentration of sales both geographically and by industry is a contributory factor.

The Board receives monthly reports summarising the turnover, trade receivables balance and aging profile of each of the key customers individually and the Group’s other customers analysed by industry sector as well as a list of customers currently transacting on a prepayment basis or who have balances in excess of their credit limits.

The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date.

The Group’s management considers that all the financial assets that are not impaired for each of the reporting dates under review are of good credit quality, including those that are past due. See Note 7 for further information on impairment or financial assets that are past due.

None of the Group’s financial assets are secured by collateral or other credit enhancements.

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Risk Exposures and Responses (cont)

The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

(d) Liquidity risk

Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The Group endeavours to maintain cash and marketable securities to meet its liquidity requirements for up to 30-day periods.

The Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for financial liabilities as well as cash-outflows due in day-to-day business.

Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day period are identified monthly.

Financial Liability and Financial Asset Maturity Analysis

Consolidated Group 2011 Carrying Contractual Amount Cash Flows > 6 mths 6-12 mths 1 – 3 years > 3 years $ $ $ $ $ $

Financial liabilities Trade & other payables 422,956 422,956 422,956 - - - Other payables 188,073 197,888 152,792 45,096 - - Finance lease liabilities 58,241 67,290 10,162 57,128 - - Total expected outflows 669,270 681,864 585,910 95,954 - - Financial assets Cash and cash equivalents 443,991 443,991 443,991 - - - Trade and other receivables 66,023 66,023 66,023 - - - Financial assets 79,112 107,895 - - 41,959 65,936 Total anticipated inflows 589,126 617,909 510,014 - 41,959 65,936 Net (outflow)/inflow on financial instruments (80,144) (63,955) (75,896) (95,954) 41,959 65,936

Consolidated Group 2010 Carrying Contractual Amount Cash Flows > 6 mths 6-12 mths 1 – 3 years > 3 years $ $ $ $ $ $

Financial liabilities Cash flow factoring facility 481,127 481,127 481,127 - - - Bank bills 1,751,500 1,751,500 1,751,500 - - - Trade & other payables 1,402,805 1,402,805 1,402,805 - - - Finance lease liabilities 73,136 87,565 10,162 10,162 53,011 14,230 Total expected outflows 3,708,568 3,722,997 3,645,594 10,162 53,011 14,230 Financial assets Cash and cash equivalents 49,614 49,614 49,614 - - - Trade and other receivables 559,364 559,364 559,364 - - - Total anticipated inflows 608,978 608,978 608,978 - - - Net (outflow)/inflow on financial instruments (3,099,590) (3,114,019) (3,036,616) (10,162) (53,011) (14,230)

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Fair value

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid price. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The carrying value less impairment provision of trade receivables and payables is a reasonable approximation of their fair values due to their short-term nature. Similarly, the carrying value of the financial assets and liabilities is a reasonable approximation of their fair values primarily due to their short term nature.

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INDEPENDENT AUDITOR’S REPORT

To the members of Macro Corporation Limited

Report on the Financial Report

We have audited the accompanying financial report of Macro Corporation Limited, which

comprises the consolidated statement of financial position as at 31 December 2011, the

consolidated statement of comprehensive income, the consolidated statement of changes in

equity and the consolidated statement of cash flows for the year then ended, notes

comprising a summary of significant accounting policies and other explanatory information,

and the directors’ declaration of the consolidated entity comprising the company and the

entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that

gives a true and fair view in accordance with Australian Accounting Standards and the

Corporations Act 2001 and for such internal control as the directors determine is necessary to

enable the preparation of the financial report that is free from material misstatement,

whether due to fraud or error. In Note 1, the directors also state, in accordance with

Accounting Standard AASB 101 Presentation of Financial Statements, that the financial

statements comply with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We

conducted our audit in accordance with Australian Auditing Standards. Those standards

require that we comply with relevant ethical requirements relating to audit engagements and

plan and perform the audit to obtain reasonable assurance about whether the financial report

is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial report. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstatement of the financial

report, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity’s preparation of the financial report that

gives 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 the directors, as well

as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our qualified audit opinion.

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Independence

In conducting our audit, we have complied with the independence requirements of the

Corporations Act 2001. We confirm that the independence declaration required by the

Corporations Act 2001, which has been given to the directors of Macro Corporation Limited,

would be in the same terms if given to the directors as at the time of this auditor’s report.

Basis for Qualified Opinion

1. The audit report for the year ended 31 December 2010 was qualified in respect of the

carrying values of vessels and other assets totalling $10,104,874 on the basis we were

unable to evaluate the adequacy of the work undertaken by the valuer of the

relevant assets and obtain sufficient appropriate audit evidence regarding the assets’

values. As such, we were unable to satisfy ourselves that the carrying values of the

relevant assets at 31 December 2010 were not materially misstated.

For the year ended 31 December 2011 the consolidated entity has recognised an

impairment loss for property, plant and equipment of $921,962 and an impairment

loss for intangibles of $180,343 and a loss on disposal of $112,927 in the statement of

comprehensive income and also recognised a loss on revaluation of vessels at fair

value of $2,903,520 in other comprehensive income.

Based on the above, we are unable to determine whether the impairment loss and

revaluation decrease should have been recognised during the year ended 31

December 2011 or whether the loss and revaluation decrease should have been

reflected in the carrying values of the relevant assets at 31 December 2010.

2. The consolidated entity sold the business of Ocean Spirit Cruises during the year,

including the computerised reservations systems. Following the sale the consolidated

entity has not been able to obtain access to the computerised reservations system.

As a result the consolidated entity was not able to provide supporting documentation

for completeness of revenue recognised in the financial year. We are therefore

unable to express an opinion whether the revenue from rendering of services totalling

$4,874,097 included in the financial report is complete.

Qualified Opinion

In our opinion, except for the possible effects of the matter described in the Basis for

Qualified Opinion paragraph,

(a) the financial report of Macro Corporation Limited is in accordance with the Corporations

Act 2001, including:

(i) giving a true and fair view of the consolidated entity’s financial position as at 31

December 2011 and of its performance for the year ended on that date;

(ii) complying with Australian Accounting Standards and the Corporations

Regulations 2001; and

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(b) the financial report also complies with International Financial Reporting Standards as

disclosed in Note 1.

Material Uncertainty Regarding Continuation as a Going Concern

Without qualifying our opinion, we draw attention to Note 1 in the financial report, which

indicates that the consolidated entity has agreed to acquire an interest in PT. Sarmar Jaya

Cemerlang for consideration of $US 12,700,000 plus royalty payments of $US 5,800,000. The

consolidated entity has indicated that it will fund this acquisition from the sale of the Vessel

Ocean Spirit IV for $3,650,000 and external borrowings. No approval for external borrowings

is currently in place. These conditions, along with other matters as set forth in Note 1,

indicate the existence of a material uncertainty that may cast significant doubt about the

consolidated entity’s ability to continue as a going concern and therefore, the consolidated

entity may be unable to realise its assets and discharge its liabilities in the normal course of

business.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 11 to 13 of the directors’ report

for the year ended 31 December 2011. The directors of the company are responsible for the

preparation and presentation of the Remuneration Report in accordance with section 300A of

the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration

Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Macro Corporation Limited for the year ended 31

December 2011 complies with section 300A of the Corporations Act 2001.

BDO (NTH QLD)

GREG MITCHELL

Partner

Cairns, 30 April 2012

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MACRO CORPORATION LTD ABN 18 008 722 736

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SHAREHOLDER INFORMATION

1. Shareholding

(a) Distribution of Shareholders Category (size of holding) Number

1 - 1,000 120

1,001 - 5,000 527

5,001 - 10,000 24

10,001 - 100,000 46

100,001 – and over 26

743

(b) The number of shareholdings held in less than marketable parcels is 679. (c) The names of the substantial shareholders listed in the holding company’s register as at 23 March 2011 are:

Entrepreneur Development Capital Pty Ltd 61,217,406 shares held

(d) Voting rights The voting rights attached to the ordinary shares of the company are as follows: Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by

proxy has one vote on a show of hands. (e) 20 Largest shareholders – ordinary shares Number of ordinary % held of issued Name fully paid shares held ordinary capital

Entrepreneur Development Capital Pty Ltd 61,217,406 66.41%

Southern Nominees (Tempatan) SDN BHD 11,078,550 12.02%

Mr Frank Romanin 1,676,671 1.82%

Mr Ian James Cameron 1,500,000 1.63%

Baharum Mohd Amin 1,400,000 1.52%

Abu Bakar Bin Ismail 1,364,826 1.48%

Fazmin HJ Talib 1,259,500 1.37%

Ng Leong Sing 1,236,451 1.34%

Lee Choong Lim 1,236,450 1.34%

Mr Trevor Neil Hay 730,000 0.79%

Dr Salim Cassim 598,000 0.65%

National Nominees Limited 435,000 0.47%

Nefco Nominees Pty Ltd 430,000 0.47%

Mr Lawrence Charles Stapleton 430,000 0.47%

Mr Rodger Gerard Fernandez 354,988 0.39%

Mr Jit Hwa Low 350,000 0.38%

GA & AM Leaver Investments Pty Ltd 294,519 0.32%

Cimsec Nominees SDN BHD 291,000 0.32%

Mr Michael Wehbe 280,000 0.30%

Ms Bernadette Rankine 279,250 0.30%

86,442,611 93.79%

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MACRO CORPORATION LTD ABN 18 008 722 736

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SHAREHOLDER INFORMATION

2. The name of the company secretary is Khaja Shaukath Ali Mohamed Siddique. 3. The address of the principal registered office in Australia is:

18 Drummond Street, Carlton VIC 3053 The address of the principal administrative office in Australia is: Suite 70, Mezzanine Floor, Pier Point Road, CAIRNS QLD 4870 Phone: (07) 4052 7749

4. Registers of securities are held at the following address: Computershare Investor Services Pty Ltd Level 2, 45 St. George’s Terrace, PERTH WA 6000 Phone: (08) 9323 2000

5. Securities exchange listing – Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities Exchange Limited.

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MACRO CORPORATION LTD ANNUAL REPORT … CORPORATION LTD AND ITS SUBSIDIARIES ABN 18 008 722 736 1...

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