Seizing - listed company

bh global marine limiTeD annUal rePorT 2011 1

SeizingNew Horizons

A n n u a l R e p o r t 2 0 1 1

CONTENTS

1 Corporate Profile

2 At A Glance

3 Corporate Structure

4 Our Businesses

11 Corporate Milestones

12 Financial Highlights

14 Chairman Statement

16 CEO’s Operational and Financial Review

21 Financial Calendar

22 Board of Directors

24 Key Management

26 Investor Relations

27 Human Resource

28 Corporate Social Responsibility

29 Corporate Governance

39 Financial Contents

VISIONWe aim to be a world class Corporation and market leader for integrated electrical

solutions and specialty products for the marine & offshore and oil & gas industries

MISSIONTo be a consistent and established provider for Electrical, Instrumentation and

Telecommunication (“EIT”) solutions and specialty products to the marine & offshore

and oil & gas industries, delivering best values and superior customer services through

the development of exceptional team performance and best business practices.


Established in the 1960s and listed on the SGX-

Mainboard since September 2005, BH Global

Marine Ltd (“BH Global” or collectively known

as the “Group”) has progressed from mere

Supply Chain Management to an integrated

group providing premium electrical products and

Electrical, Instrumentation and Telecommunication

(“EIT”) solutions to the Marine & Offshore and Oil &

Gas industries. The Group was also hailed as the

first marine concept stock to be dual-listed on the

Taiwan Stock Exchange via the issuance of Taiwan

Depository Receipts on 20th October 2010.

Headquartered in Singapore, BH Global has

expanded its regional footprints together with its

joint venture partners and distribution channels

into South-East Asia, East Asia, Middle East,

India subcontinent, Europe and Australia. With

over 40 years of operating experience, BH Global

has established itself as a reputable and reliable

business partner that carries a premium product

portfolio of certified, internationally renowned brand

partners and manufacturers.

Leveraging on its extensive product knowledge,

BH Global scaled up the value chain and extended

its service offerings to include Manufacturing and

Engineering Services to better meet customers’

needs. Consequently, BH Global’s customer

base grew and it currently has over 800 local and

international customers, which include shipyards,

ship owners, international operators, ship

management companies, ship chandlers, repair

contractors, national oil companies & independents

and power and utilities companies

cOrpOrate prOfIle

2 bh global marine limiTeD annUal rePorT 2011

OUr GeOGrapHIcal Market

at a GlaNce

awardS & accOladeS- Receipt of Merit Award for Best Investor Relations for a newly listed company at the Singapore

Corporate Awards- Selected by Forbes Asia as one of the “200 Best Companies Under A Billion” in Asia Pacific in

2006

- Receipt of Silver Award for the Best Investor Relations for Companies under S$500 million market capitalization at the Singapore Corporate Awards

- 2nd time recipient of the distinct recognition of one of the “200 Best Companies Under A Billion” in Asia Pacific by Forbes Asia

- Only marine company to win the Promising Brand Award Category under Singapore Prestigious Brand Awards

- Chosen as one of the Best Performers in ST Marine Annual Suppliers’ Performance Evaluation

- 2nd time recipient of Silver Award for the Best Investor Relations for Companies under S$300 million market capitalization at the Singapore Corporate Awards

- Receipt of the Gold Award for the Best Investor Relations for Companies under S$300 million market capitalization at the Singapore Corporate Awards

- Receipt of Silver Award for Best Managed Board for Companies under S$300 million market capitalization at the Singapore Corporate Awards

- Receipt of Best CFO award for Companies under S$300 million market capitalization at the Singapore Corporate Awards

we are BH GlOBal. we are a GlOBal SOlUtION for you.

2007

2008

2009

2010

2011

Africa

Australia

ChinaBharain

British Virgin Island

Brunei

Dubai

FranceGermany

Holland

Hong Kong

Taiwan

India

Indonesia

Japan

Maldives Malaysia

Mauritius

Singapore

Mumbai

Nepal

Norway

Oman

Philippines

Qatar

Saudi Arabia

Thailand

United Kingdom

USA

Vietnam

Our excellent logistical infrastructure enables us to offer our products and services worldwide. We are able to service customers in Dubai within one to three days. In FY2011, 47% of our revenue contribution came from Singapore, 23% from South-East Asia, 23% from Europe, 2% from East Asia, 3% from the Middle East,while the remaining came from countries spanning all over the globe–including Argentina, Australia, Canada, India, Mauritius and United States of America.

Canada Finland

Greece


70%

100%

51%

100%

cOrpOrate StrUctUre

SUPPlY Chain managemenT manUFaCTUring

100% 60%

50%

100%60%

70%

34%

30%

25%

100%

100%100%

100%

100%

engineering SerViCeS

90%

60%

60%

100%

100%

GULF SPECIALTY STEEL INDUSTRIES LLC (Oman)

BENG HUI MARINE ELECTRICAL PTE LTD (Singapore)

BH GLOBAL MARINE INDIA PRIvATE LIMITED (India)

SANSHIN MARINE (S.E.A.) PTE LTD (Singapore)

YORKSHIRE MARINE & OFFSHORE (S) PTE LTD (Singapore)

GL LIGHTING INTERNATIONAL PTE LTD (Singapore)

DREAM MARINE SHIP SPARE PARTS TRADING L.L.C (Dubai)

HAN JIANG PTE LTD (Singapore)

GL LIGHTING HOLDING PTE LTD (Singapore)

GENERAL LUMINAIRE (SHANGHAI) CO., LTD (PRC)

GENERAL LUMINAIRE CO., LTD (Taiwan)

100%

Z-POWER AUTOMATION PTE LTD (Singapore)

Z-POWER AUTOMATION CO. LTD. (vietnam)

SKY HOLDING PTE LTD (Singapore)

SKY WIRE (HK) LTD (Hong Kong)

GLOBAL STEEL INDUSTRIES PTE LTD (Singapore)

BH MARINE & OFFSHORE ENGINEERING PTE LTD (Singapore)

PT. BH MARINE & OFFSHORE ENGINEERING (Indonesia)

PT. DWI UTAMA MANDIRI SUKSES (Indonesia)

OIL & GAS SOLUTIONS PTE LTD (Singapore)

DALIAN NAUTICAL OFFSHORE & MARINE TECHNOLOGIES CO., LTD (PRC)

LONG LIFE HOLDING PTE LTD (Singapore)

PT. LONG LIFE MARINE INDUSTRIES (Indonesia)


BH Global boasts a comprehensive range of marine electrical products like marine cables, lighting systems

and marine electrical consumables from international renowned brand partners/manufacturers. These

products not only meet product safety specifications, but are also technically certified to marine class

approvals. BH Global has over S$30 million worth of inventory, consisting of 8,000 product line items from

international premium manufacturers & suppliers.

This premium product portfolio allows BH Global to support ship chandlers, ship owners, ship-management

companies, shipyards and fabrication contractors in their new-build, repair and retrofitting projects.

OUr BUSINeSSeS

SUpply cHaIN MaNaGeMeNt


Headquartered in Singapore, BH Global’s warehouse is strategically located in close proximity

to its customers. Over 200,000 square feet, the facility houses a warehouse equipped

with state-of-the-art storage facilities, material handling equipment, cable cutting & reeling

machines, manufacturing grounds and logistics offices. BH Global has its own truck fleet

and has developed a strong alliance with international freight forwarders to provide fast track

and timely deliveries to customers within the Asia-Pacific region and the Middle East within 3

working days.

BH Global differentiates itself from other distributors with its capabilities in providing on-site/

off-site support with its sales, technical & engineering support team available 365 days a year.

BH Global also introduces a cable management program whereby interim storage for ordered

products will be provided to support customers’ on-going projects for just-in-time deliveries.

The total cable management solution will also be accompanied with project inventory reports.

The vast distribution network and strong infrastructure in place makes BH Global a Reliable and

Valued Partner to their customers.


BH Global provides custom design, manufacturing, testing and commissioning of marine electrical

switchboards, bridge consoles, distribution panels, alarm monitoring systems and integrated marine

automation systems. BH Global, through its 60% owned subsidiary, Z-Power Automation Pte Ltd, serves

major shipyards and rig builders in the ASEAN region for new builds, conversion and retrofitting projects.

BH Global, through its 60% owned subsidiary, Sky Holding Pte Ltd, manufactures and supplies specialty

steel wires for electric power and telecommunications cables. Sky Holding counts cable manufacturing

companies based in G.C.C Countries and ASEAN countries as key customers.

OUr BUSINeSSeS

MaNUfactUrING•

•


BH Global has also expanded into the

manufacturing of galvanized steel wires for use

in armouring cables in the Sultanate of Oman.

The manufacturing plant in Oman is expected to

be completed by early 2013 with an initial annual

capacity of 60,000 tonnes of galvanized steel wire

at an estimated annual value of US$60 million. The

Group has plans to increase its capacity gradually

to reach 200,000 tonnes per annum.

New plaNt IN OMaN

Oman


Engineering Services was initiated in FY2010 to provide turnkey installation services for fire and gas,

safety and security systems and other marine sub-contracting businesses targeted at new-build, repairs

and retrofitting projects. This Division also specialises in engineering, procurement and construction

management (“EPCM”) and front end engineering design (“FEED”) for electrical, instrumentation and

telecommunications (“EIT”) systems for onshore and offshore facilities.

The Group also operates a 5-hectares fabrication yard in Indonesia’s Batam island to offer fabrication

services to Indonesian customers. BH Global has embarked on an expansion programme to gradually

increase both the operational land area and capacity over the next few years.

OUr BUSINeSSeS

eNGINeerING SerVIceS


This new business is synergistic and complementary in nature to the Group’s core

business in Supply Chain Management and Manufacturing. It further enhances BH

Global’s capabilities in cross-selling within its 3 business segments and to provide

strategic advises to their customers on the most efficient solutions package.

Batam


OUr BUSINeSSeS

jOINt VeNtUreS

led lIGHtING

BH Global entered into a strategic partnership to form GL Lighting Holding Pte Ltd (“GL Holding”) and GL

Lighting International Pte Ltd (“GL International”) in 2011. GL Holding’s 2 wholly-owned subsidiaries, General

Luminaire (Shanghai) Co Ltd (“GL Shanghai”) and General Luminaire Co Ltd (Taiwan) (“GL Taiwan”), collectively

has more than 12 years of experience in LED lighting business and has an established technical track record

in LED modules, controls, electronic, power management, optical and luminaire design.

GL Shanghai houses a strong technical team equipped with know-how in optic design, thermal management,

electronic and luminaire development capabilities, developing many ideal LED solutions to both commercial &

industrial and marine & offshore lighting industry.

These LED light control systems can be used as energy saving tool by incorporating scheduled management,

status feedback and temperature management for further reduce and saving of energy. The Group’s LED

products are subjected to 100% ICT, Burn-in test, IP test, Hi-pot testing and vibration test before delivering

to customers.


1960 – Late Mr. Lim Jee Chye, the Father of Executive Directors, founded Guan Hup Electrical & Hardware Pte Ltd. to stock and supply electrical cables with three partners

1988 – Guan Hup Electrical & Hardware Pte Ltd voluntarily dissolved and founder started business through Beng Hui Electrical Trading Pte Ltd with Mr. Alvin Lim (Chairman), Mr Vincent Lim (CEO) and Ms. Eileen Lim (Director)

1990 – Expanded product portfolio to include industrial and marine cables, marine lighting equipment, marine lamps and other marine electrical accessories from Japan, Europe and Asia

1995 – Commercialisation of marine lamps under in-house brands, “Sunlux” and “Nippon” aimed at meeting Europe and Japan technical standards respectively

– Started Horizontal Integration process, by acquiring distributorship and partner with renown European / Japanese manufacturers to broaden product ranges. This process enhance the position of our Supply Chain Management business in the Marine & Offshore industries

2005 – Successfully listed on SGX-Mainboard on 12 September 2005; Relocated from shophouses at Sam Leong Road to 8 Penjuru Lane, a land site of approximately 91,795 square feet

2006 – Record earnings of S$11.2 million in the first year of listing on SGX-Mainboard

– Strengthened foothold among the Chinese shipyards with the successful acquisition of Yorkshire Marine & Offshore (S) Pte Ltd

– Penetrated the offshore market with the contract to supply cables to Labroy Marine Ltd for its first jack-up drilling rig and $2.5 million contract from Modec International LLC – USA, a major player in the oil and gas sector

– Middle East consortium led by Emirates Capital Pte Ltd, which has vast network in the Middle East marine and offshore market, took a strategic 4.4% stake in BH Global

2007 – Proposed Bonus Issue of 140 million new ordinary shares on the basis of 1 bonus share for every 2 ordinary shares to increase trading liquidity

– Receipt of Merit Award for Best Investor Relations for a newly listed company at the Singapore Corporate Awards

– Selected by Forbes Asia as one of the “200 Best Companies Under A Billion” in Asia Pacific in 2006

– Ranked Top 40 out of 672 companies in The Business Times Corporate Transparency Index

2008 – Expanded warehousing facilities with newly acquired land area of approximately 124,934 square feet at 10 Penjuru Lane

– Started to grow vertically by M&A with business partners who synergize with our Supply Chain Management business

– Receipt of Silver Award for the Best Investor Relations for Companies under S$500 million market capitalization at the Singapore Corporate Awards

– 2nd time recipient of the distinct recognition of one of the “200 Best Companies Under A Billion” in Asia Pacific by Forbes Asia

– Only marine company to win the Promising Brand Award Category under Singapore Prestigious Brand Awards

– Chosen as one of the Best Performers in ST Marine Annual Suppliers’ Performance Evaluation

2009 – Achieved record turnover of S$101.6 million, crossing the $100 million mark for the first time in corporate history

– Invested in Z-Power Automation Pte Ltd to enhance position as one –stop marine electrical solutions provider

– Invested in Sky Holding Pte Ltd to expand into specialty steel and other types of wire for armouring cables

– Ranked 15th out of over 670 companies in The Business Times Corporate Transparency Index

– 2nd time recipient of Silver Award for the Best Investor Relations for Companies under S$300 million market capitalization at the Singapore Corporate Awards

2010 – First Marine Concept stock to be dual-listed on Taiwan Stock Exchange via the issuance of Taiwan Depository Receipts

– Initiated new business segment, Engineering Services to provide turnkey installation services for fire and gas, safety and security systems and other marine sub-contracting businesses targeted at newbuilds, repairs and retrofitting projects

– Secured first major contract for floating, production, storage and offloading (“FPSO”) from local prominent shipyard

– Expanded geographical footprints into Vietnam, China, India and the Middle East

– Receipt of the Gold Award for the Best Investor Relations for Companies under S$300 million market capitalization at the Singapore Corporate Awards

2011 – Receipt of Silver Award for the Best Managed Board for Companies under S$300 million market capitalization at the Singapore Corporate Awards

– Receipt of Best CFO award for Companies under S$300 million market capitalization at the Singapore Corporate Awards

– Overseas sales surpassed local sales – Expanded product portfolio to include LED (Light Emitting

Diodes) Lightings through subscribing 70% and 25% equity interest in GL Lighting International Pte Ltd and GL Lighting Holding Pte Ltd (“GL Holding”) respectively. GL Holding holds 100% equity interest in General Luminaire (Shanghai) Co. Ltd and General Luminaire Co. Ltd (Taiwan)

– Established presence in the Middle East through a Joint Venture agreement to manufacture galvanised steel wire in the Sultanate of Oman

cOrpOrate MIleStONeS


tUrNOVer ($’000) Net prOfIt# ($’000)

143,442

12,920

101,636

14,681

103,001

11,353

94,557

19,238

81,870

17,516

20112010200920082007 20112010200920082007

fINaNcIal HIGHlIGHtS

2011 2010 2009 2008 2007

SINGapOre 67,698 73,504 78,611 78,058 70,671

SOUtH-eaSt aSIa 33,130 12,042 11,473 7,314 3,839

eUrOpe 33,241 4,237 4,048 1,281 1,253

eaSt aSIa 2,876 3,539 3,434 5,049 3,768

MIddle eaSt 3,826 6,088 3,647 2,772 2,194

OtHer 2,671 3,591 423 83 145

tOtal 143,442 103,001 101,636 94,557 81,870

GeOGrapHIcal SeGMeNt


SHareHOlder’S eQUIty ($’000) earNINGS per SHare* (ceNtS)

2.69

3.50

2.63

4.584.17

112,914

75,152

103,338

65,509

51,311

20112010200920082007 20112010200920082007

2011 2010 2009 2008 2007

SUpply cHaIN MaNaGeMeNt 62,020 66,796 85,427 94,557 81,870

MaNUfactUrING 17,108 19,039 16,209 - -

eNGINeerING SerVIceS 64,314 17,166 - - -

tOtal 143,442 103,001 101,636 94,557 81,870

SaleS BreakdOwN By prOdUctS

# Attributable to owners of the parent.* EPS for 2007 have been calculated based on adjusted ordinary shares to 420,000,000 shares for 140,000,000 bonus shares allotted and issued to existing shareholders on 21 February 2008. EPS for 2010 have been

calculated based on weighted average number of ordinary shares of 432,000,000 adjusted for 60,000,000 new shares issued in the capital of the company on the Taiwan Stock Exchange on 20 October 2010.


dear Shareholders,

On behalf of the Board of Directors, I would like to present to you the annual report of BH Global Marine Limited (“BH Global” or the “Group”) for the financial year ended 31 December 2011 (“FY2011”).

fy2011 at a GlaNceThe Group recorded 39% year-on-year (“y-o-y”) increase in revenue to S$143.4 million in FY2011 (FY2010: S$103.0 million), all-time high since FY2006. This milestone was achieved because of the sterling performance by the Group’s new Engineering Services business division. Engineering Services was introduced in 4QFY2010 to complement demand for traditional core business segment, Supply Chain Management and also to expand the Group’s portfolio offerings. Engineering Services contributed S$64.3 million or 44.8% to the Group’s revenue in FY2011, overtaking Supply Chain Management as the key revenue driver for the Group in FY2011.

The Group registered 17% y-o-y increase in gross profit to S$39.1 million in FY2011 but gross profit margin slid to 27.3% in FY2011 from 32.4% in FY2010 due to change in product mix. Projects secured under the Engineering Services are of relatively higher contractual value than Supply Chain Management’s projects but yield lower margins.

The Group concluded FY2011 with a net profit attributable to shareholders of S$12.9 million

(FY2010: S$11.4 million), representing basic earnings per ordinary share of 2.69 Singapore cents (FY2010: 2.63 Singapore cents).

fy2011: a year Of cONtINUed expaNSION aNd GrOwtH We have gradually evolved from a traditional distributor to an integrated solutions provider over the years. BH Global strives to provide turnkey solutions to customers in the Marine & Offshore and Oil & Gas sectors and hence has embarked on growth strategies to achieve that target:

• Increase competitive edge by expanding portfolio offerings

Under Supply Chain Management business division, the Group carries more than 8,000 product line items from 370 international premium manufacturers & suppliers. The Group has consistently secured new agency rights from renowned principals and has expanded its touch points and sales support network across the borders like in India and China. The Group has also recently added LED lighting to its existing product portfolio. LED lighting is proven to be capable of saving power consumption of more than 90% and last 10 times longer than traditional florescent lighting. These can translate into greater costs savings for the Group’s customers without compromising on the efficiency and luminosity of the lighting.

The Group has entered into a strategic partnership with a joint venture partner to co-develop LED lighting with in-house brand for marine & offshore applications. Our partner has more than 10 years of experience in LED lighting applications and has operations in both China and Taiwan. Our partner has a strong team of technical engineers who have the capability to resolve the heat dissipation issue of LED lighting. We believe in the latent potential of LED lighting in marine and offshore applications given its cost efficiency and environmental friendly nature.

The Group has also further strengthened in its Manufacturing business division in FY2011. The Group’s subsidiary, Z-Power Automation Pte Ltd has recently secured new agency


cHaIrMaN StateMeNt

alVIN lIM Hwee HONGExecutive Chairman

bh global marine limiTeD annUal rePorT 2011 15bh global marine limiTeD annUal rePorT 2011 15

and distributorship rights from global players and also expanded into Vietnam via a Joint Venture agreement during the year. The manufacturing plant in Oman producing galvanised steel wires for infrastructure players in the Middle East will also expand the Group’s customer base and revenue streams.

Engineering Services was introduced back in 4QFY2010 and has surpassed Supply Chain Management to be the Group’s key revenue driver in FY2011. Leveraging on our wealth of industry experience and established track record, we believe we are well-positioned to advise customers the most appropriate solutions package. Apart from the potential positive spill-over to Supply Chain Management, the Engineering, Procurement & Construction Management and Front-End Engineering Design projects secured will be an additional revenue stream for the Group.

• Expansion of geographical footprints

The Group is entrenched in Singapore and China and has recently moved into India, Vietnam and Middle East with its strategic business ventures. The fabrication facility in Batam, Indonesia allows us to capitalise on the full-implementation of Cabotage Rule ,which requires domestic sea transportation of all goods and persons to be carried out by Indonesian flagged vessels owned by Indonesian companies, and the surging market demand for marine transportation within the country. Our distribution network across the region will allow us to render timely support and delivery to our customers and also to leverage on the booming Oil & Gas sector in this part of the world.

In line with the Group’s strategical overseas expansion plan, revenue derived from overseas as a percentage of the Group’s revenue increased from 28.6% in FY2010 to 52.8% in FY2011.

fy2011: a year Of recOGNItION aNd dIStINctIONWe were awarded the Singapore Corporate Awards for the fifth consecutive year in 2011. BH Global clinched the Silver Medal for Best Managed Boards for companies with less than S$300 million market capitalisation and our CFO, Mr Keegan Chua was conferred the Best CFO award for companies with less than S$300 million market capitalisation. This is a strong testament to the Group’s continuous efforts in ensuring effective communications with our stakeholders. We will continue to focus on the high degree of timeliness and transparency in our communication to the investment community.

MOVING aHeadThe robust oil prices will continue to stimulate demand for Exploration & Production activities and spending for drilling activities in the region. Various market reports indicated positive sentiments in the Oil & Gas and Offshore Marine sectors and also the need for newer and more sophisticated Offshore Support Vessels. There is also growing demand of vessel replacement for existing fleet aged 20 years and above. A series of contract wins including jack-up rigs, semi-submersible and vessel deployment to oil fields support the rebounding offshore market.

We were involved in several M&A activities such as the LED lighting investment and Joint Venture with our Middle East partner in setting up the Oman galvanised steel wire manufacturing plant during the year to further enhance our business offerings so as to capture market share during the recovery trend. FY2012 will be a year when the Group will focus on consolidating and integrating the new business ventures to harness positive synergies in the near future. We will evaluate and elaborate on the resources deployment so as to maximise efficiency and cost benefits throughout the Group. We will continue to build upon the current order book to secure a steady stream of future revenue and loyal customer pool. We will focus our effort in building up track record for new business ventures and eventually for our turnkey solutions package.

a wOrd Of apprecIatIONTo reward our shareholders for their unwavering support, we are pleased to propose a first and final cash dividend of 0.7 Singapore cents per ordinary share (one-tier tax exempt) for FY2011, representing a dividend payout ratio of 26.0%.

Last but not least, I would like to take this opportunity to express my heartfelt gratitude and appreciation to our board of directors, the management team and our employees for their dedication and commitment; and to our shareholders, customers, vendors and other stakeholders for their continuous support.

Thank you!

alvin lim hwee hongChairman

16 bh global marine limiTeD annUal rePorT 201116 bh global marine limiTeD annUal rePorT 2011

ceO’S OperatIONal aNd fINaNcIal reVIew

OperatIONal reVIew

SUpply cHaIN MaNaGeMeNt

The Group distributes a comprehensive range of marine and offshore electrical products like cables, lighting systems and consumables from international renowned brand partners/manufacturers under its Supply Chain Management. These products not only meet product safety specifications, but are also technically certified to ABS, DNV and other class standards. BH Global has over S$30 million worth of inventory as at 31 December 2011, consisting of 8,000 product line items from 370 international premium manufacturers & suppliers housed in its over 200,000 square feet warehousing facility. The Group services ship chandlers, ship owners, ship-management companies, shipyards and fabrication contractors in their new-build, repair and conversion projects.

The Supply Chain Management business division remains to be the Group’s core business and the division contributed about 43.2% to the Group’s revenue for the financial year ended 31 December 2011 (“FY2011”) (FY2010: 64.8%). Revenue contribution from this division declined 7.2% year-on-year (“y-o-y”) to S$62.0 million in FY2011 primarily due to softer market demand. A new business division, the Engineering Services, was initiated in 4QFY2010 in a bid to stimulate demand for the Group’s core business and also to diversify the Group’s revenue stream in the future.

The major contract for floating, production, storage and offloading (“FPSO”) vessel secured in FY2010 is close to completion. Exploration and Production activities, well-supported by robust oil prices, continue to be vibrant. Enquiries for new-build, particularly Offshore Support Vessels remained healthy. We believe that we are well-positioned to benefit from this uptrend with our complementary Engineering Services business division.

MaNUfactUrING

The Manufacturing business division has two sub-divisions namely Marine Switchboards (“MS”) and Galvanised Steel Wire (“GSW”). BH Global’s 60% owned subsidiary, Z-Power Automation Pte Ltd (“Z-Power”), specializes in assembly, manufacturing and repairing of switchboards, distribution panels, consoles , control systems and switchgears. It serves major shipyards and ship owners in the ASEAN region for new builds, conversion and conversion projects.

Z-Power is the appointed OEM manufacturer and technical service and maintenance agent of Niigata Power System of Japan, an established and reputable provider of diesel engines and its related products. Z-Power has also been appointed as the service agent and authorized distributor of Lilaas As (Norway) (“LAS”) and Valcom SRL (Italy) (“SRL”) respectively in the first quarter 2012. LAS is one of the world’s leading manufacturers of various types of control levers and joysticks for the marine and offshore industries with 50 years of experience in development and production. SRL, on the other hand, is a designer and manufacturer of measurement and control instruments for the marine and offshore, oil and gas, chemical and petrochemical industries, among others, for close to 40 years.

Z-Power has also expanded its footprints across the region with the newly-incorporated Joint Venture Company in Vietnam, Z-Power Automation (Vietnam) Co., Ltd. (“JV Company”) with IPE Automation Sdn. Bhd., in January 2012. The 50%-owned JV Company will be in

VINceNt lIM HUI eNGChief Executive Officer

bh global marine limiTeD annUal rePorT 2011 17bh global marine limiTeD annUal rePorT 2011 17

the business of manufacturing, installation and maintenance of industrial electrical equipment and industrial electricity signal system for marine, offshore, factories, industrial manufacturing system. This is in line with the Group’s strategies to expand product offerings and regional footprints.

The Group operates its GSW sub-division under its 60% owned subsidiary, Sky Holding Pte Ltd, which has the niche in manufacturing and supplying specialty steel wires for electric power and telecommunications cables. Sky Holding counts cable manufacturing companies based in G.C.C Countries and ASEAN countries as key customers.

The Group has also incorporated a wholly-owned subsidiary, Global Steel Industries Pte. Ltd. (“Global Steel”) in May 2011 under its GSW sub-division. In October 2011, Global Steel entered into a Joint Venture agreement with Takamul Investment Company S.A.O.C., to establish a joint venture company, Gulf Specialty Steel Industries LLC (“GSSI”) in the Sultanate of Oman. GSSI will carry on the businesses of development, construction and operation of a plant for the manufacture of galvanized steel wire products for use in armouring cables in the Sultanate of Oman. The ground breaking ceremony of the manufacturing plant in Oman was held in February 2012. We expect the construction to be completed and ready for production by 1st Quarter 2013. The plant is capable of producing 60,000 tonnes of galvanized steel wire at an estimated annual value of US$60 million at the initial stage. The Group has plans to increase its capacity gradually to reach 200,000 tonnes per annum.

Oman is in the midst of industrial and infrastructure development and hence demand for underground cables remains high. Currently, the Group will have to supply these galvanised steel wires from Singapore or China to the Middle East market. These imports will be then be subjected to significant import tax and high logistics expenses. Thus, the Group is able to capitalise on the market demand, achieve costs savings and render more timely support to the customers with the establishment of a manufacturing facility in Oman.

The Manufacturing division contributed S$17.1 million in FY2011 (FY2010: S$19.0 million), representing about 11.9% (FY2010: 18.5%) of the Group’s revenue. MS contributed S$11.9 million to the division’s revenue in FY2011 (FY2010: S$12.7 million) while GSW contributed S$5.2 million in FY2011 as compared to S$6.3 million in FY2010. Revenue contribution from GSW sub-division declined 18% y-o-y mainly due to keen direct competition from the Middle East market.

eNGINeerING SerVIceS

Engineering Services was initiated in FY2010 to provide turnkey installation services for fire and gas, safety and security systems and other marine sub-contracting businesses targeted at new build, repairs and retrofitting projects. This Division also specialises in engineering, procurement and construction management (“EPCM”) and front end engineering design (“FEED”) for electrical, instrumentation and telecommunications (“EIT”) systems for onshore and offshore facilities.


ceO’S OperatIONal & fINaNcIalreVIew (cONt’d)

The Group also operates a 5-hectares fabrication yard in Indonesia’s Batam Island that has the capability of constructing tugs, barges and oil tankers. We are acquiring another piece of land with area of 30-hectares to embark on an expansion programme in phases to gradually increase both the operational land area and capacity over the next 3-5 years.

Our subsidiary, Oil & Gas Solutions Pte Ltd, has also incorporated a 70%-owned subsidiary, Dalian Nautical Offshore & Marine Technologies Co., Ltd. (“DNO”) in Dalian, China in November 2011. DNO is formed to hire the more cost-competitive local Chinese engineers and also to open up China markets for SCM’s products.Revenue contribution from the Engineering Services has more than doubled from S$17.2 million in FY2010 to S$64.3 million in FY2011, representing approximately 44.8% of the Group’s revenue in FY2011. This division is the key revenue driver for the Group in FY2011 and we believe that this trend will continue in the near future.

We have gained momentum in our contract wins during the year. These orders will continue to keep our yard busy till 1H2012. BH Global will be providing engineering and fabrication services as part of our work scope in these contracts which are awarded by a major oil company in Indonesia.

Demand for natural resources like coal in Indonesia and the full implementation of the Cabotage Rule will continue to stimulate demand for Indonesian-flagged marine transportation within the country. The Group will continue to build a track record for this new business division so as to secure a steady stream of revenue and profits in the future.

New BUSINeSS VeNtUreS

The Group has invested US$5.0 million to acquire 25% of the enlarged share capital in GL Lighting Holding Pte Ltd (“GLH”) in May 2011. GLH and its subsidiaries are in the business of manufacturing and sales of LED lighting modules and fixtures with specialisation in controls, electronics, power management, optics, fixture design and integration in China and Taiwan. Subsequently in September 2011, BH Global entered into a Joint Venture agreement to subscribe for 70% equity interest in the share capital of GL Lighting International Pte Ltd, which is engaged in the distribution, sale, installation, consultancy, commissioning and repairs of LED lightings, fixtures and LED related products.

LED lighting is able to achieve up to 90% savings in power consumption without compromising on luminance and it is able to last for 50,000 hours. We are working on the integration of LED light engines and modules for renowned lighting manufacturers. We believe in the latent potential of LED lighting and are convinced that it will be set to replace conventional lighting in the near future. Being an established marine lighting player, BH Global sees the opportunity to tap on this growing business segment.

BUSINeSS cONtINUIty MaNaGeMeNt (“BcM”)

The Group has applied and obtained Singapore BCM Standards SS540 in 2012. Obtaining this certification would mean that the Group has in place policies, measures and strategic to plan to ensure business continuity and recovery of critical business units in times of contingency or significant business disruptions.


fINaNcIal reVIew

Steady GrOwtH The Group’s revenue increased 39% year-on-year (“y-o-y”) to S$143.4 million for the financial year ended 31 December 2011 (“FY2011”) primarily driven by the surge in revenue contribution from the new business segment, Engineering Services. Revenue contribution from the Supply Chain Management business segment declined 7% y-o-y to S$62.0 million in FY2011 (FY2010: S$66.8 million) largely due to softer market demand while revenue contribution from Manufacturing business segment decreased 10% from $19.0 million in FY2010 to S$17.1 million in FY2011. These were offset by the revenue contribution from the Engineering Services business segment which jumped 275% y-o-y to S$64.3 million in FY2011 (FY2010: S$17.2 million), representing about 44.8% of the Group’s revenue in FY2011 (FY2010: 16.7%).

Singapore remains the traditional foothold of the Group, contributing S$67.7 million or 47.2% to the Group’s revenue in FY2011 (FY2010: S$73.5 million or 71.4% of the Group’s revenue). In line with the Group’s strategy to expand geographical footprints, revenue derived from South-East Asia and other countries grew 247.5% y-o-y to S$75.7 million in FY2011 (FY2010: S$29.5 million). This was mainly attributable to the contribution from the Engineering Services and Manufacturing business segments that successfully secured more orders across the region.

prOfItaBIlItyThe Group reported 17.1% y-o-y increase in gross profit to S$39.1 million in FY2011 as compared to S$33.4 million in FY2010. However, Change in product mix gave rise to a lower gross profit margin of 27.3% in FY2011 (FY2010: 32.4%) as projects secured under the Engineering Services generally yield lower margins.

OperatING expeNSeSOperating expenses, including administrative, selling and distribution expenses, increased 22.4% y-o-y to S$23.1 million in FY2011 (FY2010: S$18.9 million). This was mainly attributable to higher personnel cost, allowance for doubtful debts and fair value adjustment of contingent consideration in a business combination offset by a revised and lower provision for stock obsolescence . Despite higher volume of sales activities, operating expenses were kept under firm control at 16.1% of the Group’s revenue in FY2011 (FY2010: 18.3%).

Net prOfItThe Group concluded FY2011 with a net profit attributable to shareholders of S$12.9 million, 14% y-o-y increase from S$11.4 million in FY2010. This was represented by basic earnings per ordinary share of 2.69 Singapore cents in FY2011 (FY2010: 2.63 Singapore cents).


ceO’S OperatIONal & fINaNcIalreVIew (cONt’d)

apprecIatING tHe SHareHOlderSTo express the Group’s heartfelt thanks to the shareholders’ unwavering support, the Board of Directors is pleased to recommend a first & final cash dividend of 0.7 Singapore cents per ordinary share (one-tier tax exempt) for the financial year ended 31 December 2011. This represented a dividend payout ratio of 26.0% in FY2011.

HealtHy BalaNce SHeetWith the introduction of new Engineering Services business segment and new facility in Batam, Indonesia, the Group’s property, plant and equipment increased to S$34.3 million as at 31 December 2011 (31 December 2010: S$22.2 million). The strategic M&A activities entered during the year has also boosted the Group’s investment in associated companies and joint venture to S$6.3 million and S$2.0 million respectively as at 31 December 2011 (31 December 2010: N.A and S$1.5 million respectively).

The Group has fully utilised the total proceeds raised during the issuance of Taiwan Depository Receipts during the year for the capital expenditure in its Oman galvanised steel wire manufacturing facility and necessary working capital needs. To further finance its expansion of the Engineering Services business segment, the

Group undertook a comfortable net gearing ratio of 9.5% as at 31 December 2011 (31 December 2010: net cash).

The cash and cash equivalents position remained strong at S$17.0 million as at 31 December 2011 (31 December 2010: S$24.5 million), registering net asset value per ordinary share of 23.5 Singapore cents as at 31 December 2011 (31 December 2010: 22 Singapore cents).

cONclUSIONBH Global has gradually evolved from a traditional trading distributor to an integrated solutions provider in the marine & offshore and oil & gas sectors. The Group will continue to work towards expanding its product portfolio and geographical footprints either organically or through strategic partnerships in Middle East and Asia. BH Global remains committed to strategically build up a track record for its new Engineering Services business which will enhance its competitive edge in the challenging market environment.

Vincent lim hui engChief executive officer


fINaNcIalcaleNdar

201127 January FY 2010 Full year results announcement

30 March Annual General Meeting

27 April Payment of dividend

27 April 1Q result announcement

27 July 2Q result announcement

25 October 3Q result announcement

2012*8 February FY 2011 Full year results announcement (with analysts briefing)

24 April Annual General Meeting

25 May Payment of dividend (Subject to Shareholders’ approval at AGM)

3 May 1Q 2012 results announcement

30 July 2Q 2012 results announcement

30 October 3Q 2012 results announcement

* Dates stated may subject to change


alVIN lIM Hwee HONGExecutive Chairman

Alvin Lim Hwee Hong is our Executive Chairman and has been a Director of our Company since April 2004. He has overall responsibility for the day-to-day operations of our Group. He is also responsible for the strategic and business development of our Group. Alvin Lim Hwee Hong has more than 25 years of working experience, most of which is related to the marine electrical supply industry. He has in-depth knowledge of the supply of marine electrical products and has an extensive network of contacts in this industry. Prior to joining our Company, Alvin Lim Hwee Hong was the managing director of Beng Hui Electric Trading Pte Ltd (“BHET”) from 1987 to 2003. Since 1994, he has been an executive director of Sanshin Marine (S.E.A.) Pte Ltd (“SMSEA”). He was a sales executive of Guan Hup Electrical & Hardware Pte Ltd from 1985 to 1987.

VINceNt lIM HUI eNGChief Executive Officer

Vincent Lim Hui Eng is our Chief Executive Officer and has been a Director of our Company since April 2004. He is responsible for overseeing the sales and procurement functions within our Group. Vincent Lim Hui Eng is also in charge of our Group’s business development activities. He has more than 20 years of working experience, all of which has been in the marine electrical supply industry. Prior to joining our Company, he was an executive director of BHET from 1987 to 2003. Since 1994, Vincent Lim has been an executive director of SMSEA.

patrIck lIM HUI peNGChief Operating Officer

Patrick Lim Hui Peng is our Chief Operating Officer and has been a Director of our Company since April 2004. He is responsible for overseeing our Group’s shipbuilding project tenders. He also shares the responsibility of overseeing the sales and procurement functions of our Group with Vincent Lim Hui Eng. He has more than 20 years of working experience, of which about 17 years is related to the marine electrical supply industry. Prior to joining our Company, he was an executive director of BHET from 1993 to 2003. Since 1994, he has been an executive director of SMSEA. He was a technician with the Republic of Singapore Navy from 1986 to 1992.

BOard Of dIrectOrS


lOH weNG wHyeIndependent Director

Loh Weng Whye was appointed as an Independent Director of our Group on 3 August 2005 and as the Lead Independent Director since 5 Feburary 2007. He is a veteran in power industry and infrastructure development in Singapore and the region, with over 35 years of experience in senior appointments with the civil service, government-linked companies and the private sector. While with the Public Utilities Board, he headed Generation Projects responsible for the management and commissioning of power projects worth more than S$3 billion. He was also the founding General Manager (Projects) of Tuas Power Ltd. Mr Loh was formerly President of ST Energy Pte Ltd and SembCorp Energy Pte Ltd. He was appointed Advisor to Green Dot Capital, an investment and holding company under Temasek Holdings. He was the Senior Advisor to YTL Power International in the S$3.8 billion mega acquisition of PowerSeraya Ltd. Currently, Mr Loh sits on the boards of Singapore and overseas corporations, including four SGX mainboard-listed companies. He also holds advisory appointments in external councils and charity organizations. He sat on the mechanical and production engineering advisory/consultative committees of NUS and NTU for many years. Holding MSc.(Ind. Engg.) and BEng.(Mechanical) degrees, he is a Professional Engineer (Singapore), a Member of the Singapore Institute of Directors and was elected a Fellow of the Institution of Engineers, Singapore in 1995.

daVId cHIa tIaN BINIndependent Director

David Chia Tian Bin was appointed as an Independent Director of our Group on 3 August 2005. He is currently a director of AXIA Equity Pte. Ltd. which provides business advisory services to companies in Singapore and the region. Prior to this and since 1990, he was actively involved in the private equity and venture capital industry in Asia as a director of an investment advisory firm engaged in direct investments in the region. From 1980 to 1990, David Chia Tian Bin was engaged in providing audit and financial consulting services in Singapore and Hong Kong with an international firm of accountants. He is also an independent director on the board of Jasper Investments Limited. He holds a Bachelor of Accountancy (Honours) from the National University of Singapore. He is a Fellow of the Institute of Certified Public Accountants of Singapore and a member of the Singapore Institute of Directors.

wINStON kwek cHOON lINIndependent Director

Winston Kwek Choon Lin was appointed as an Independent Director of our Group on 3 August 2005. He is currently a partner in the law firm of Rajah & Tann LLP. Specialising in admiralty and shipping law, Winston Kwek Choon Lin is experienced in maritime issues. Since 2000, he has been nominated by various established legal publications as one of the leading lawyers in the region, especially in areas of shipping and maritime law. Winston Kwek Choon Lin graduated with a Bachelor of Law (Honours) from the National University of Singapore in 1990 and was called to the Singapore Bar in March 1991. Since 2003, he is also Adjunct Associate Professor in the Faculty of Law at the National University of Singapore.


jOHNNy lIM HUay HUa is our director of Operations since April 2004. He is responsible for managing the logistics and distribution functions within our Group. Johnny Lim Huay Hua has about 20 years of working experience, of which about 16 years is related to the marine electrical supply industry. Prior to joining our Company, he has been an executive director of BHET from 1993 to 2003. Since 1994, he was an executive director of SMSEA. In 1991, he was an employee of BHET in-charge of logistics.

eIleeN lIM cHye HOON is our director of Human resource and administration since April 2004. She is responsible for overseeing human resource and administration matters. Eileen Lim Chye Hoon has more than 25 years of working experience and has been in-charge of finance, personnel and administrative functions. Prior to joining our Company, she was an executive director of BHET from 1998 to 2003. From 1988 to 1998, she was an employee of BHET in-charge of accounting matters. She held the position of an accounts clerk of Guan Hup Electrical & Hardware Pte Ltd from 1982 to 1988.

keeGaN cHUa tze wee is our chief financial Officer and is responsible for all aspects of financial planning, financial budgeting and control matters. Keegan Chua has about 18 years of experience in accountancy, audit and finance. Prior to joining our Group in December 2006, he had assumed auditing, finance and accounting positions in various accounting firms and an SGX mainboard-listed company. Keegan Chua obtained his Bachelor of Accountancy (Honours) degree from The Nanyang Technological University in 1994 and is a member of the Institute of Certified Public Accountants of Singapore. In 2011, he was awarded the Best Chief Financial Officer of the year (companies with less than $300 million in market capitalization) at the Singapore Corporate Awards.

lee ka MeNG is a director of yorkshire Marine & Offshore (S) pte ltd (yMO), our subsidiary, since October 2005. He is responsible for the marketing and procurement functions as well as the daily operations of YMO. With around 41 years of working experience in the electrical engineering field, he is responsible for building up YMO’s relationship with customers and suppliers. Prior to joining our Group, he was running his own company trading similar products as the Group. He had close to 20 years of in-depth experience with reputable companies like Behn Meyer & Co Pte Ltd, ASEA Pte Ltd, United Motor Works Pte Ltd, etc. Lee Ka Meng was one of the pioneer trainees of and had extensive training, both local and overseas, with the Republic of Singapore Navy.

aNG cHeNG SIew came on board as a Managing director of z-power automation pte ltd in 2009.He has more than 40 years of technical experience in the marine industries. He started his career with Keppel Harbour, than under British Swan Hunter as an apprentice in 1970 and rose to the rank of Technician,foreman ,Electrical engineer, Shipyard manager,and Works manager, in various Keppel corporation yards and Subsidaries like Keppel Tuas,Keppel Benoi, yard as well as Keppel Singmarine Benoi and Gul yard in charge of all the Electrical repairs,new builds as well as Yard facilities and development. He also sail on board an Electrical engineer with subsidiary, Kapal management for Keppel owned Bulk carriers. All in all 25 years in the Keppel group of companies. In 1994, he set up his own engineering company for 8 years supporting Niigata Power System of Japan as their service agent for the Far East on their Main Engines and Propulsion Remote Control System. Subsequently, he joined Total Automation Ltd (later known as Wartsila Automation)as a Division Manager in 2002 to set up a department for Switchboard manufacturing as well as manufacturing of Niigata’s Engines and Propulsion Remote Control System as well as Alarm panels.

From left to right: Johnny Lim Huay Hua, Eileen Lim Chye Hoon, Keegan Chua Tze Wee, Lee Ka Meng

key MaNaGeMeNt


dr. SteVeN wONG has been the founder and Managing director of Sky Holding pte ltd (“Sky”) since 2003 before it became a subsidiary of the Group. He graduated with M.B,B.S (Rgn), MBA (USA), MSIM (Singapore) and FIMS (UK) and has 21 years of various business experiences from government tenders, trading, wholesale, regional sole agencies, to industrial product manufacturing with wide range of industries and products knowledge. Prior to setting up SKY, he was working with China Import & Export Corporations for various projects on import of machineries to China and on promotion of export raw materials and products out from China factories and government sectors for 10 years. Subsequently, in 2003, he set up SKY specializing in manufacturing and supplying of specialized steel wire to energy cable industry.

daNIel ONG BeNG cHONG joined us as project director of BH Marine & Offshore engineering pte ltd in 2010. He has over 20 years of working experience mainly in the Marine Electrical & Automation field. He started his career as an apprentice with Keppel Singmarine Dockyard & Engineering Pte Ltd for 3 years. After which he joined Ka Seng Electrical Engineering as Electrical supervisor & Schlumberger Ship Electrical Engineer for the next 3 years cumulatively. He was based in Batam for the next 10 years with PT Nanindah Mutiara Shipyard, a subsidiary of the then main board listed company, Labroy Marine Ltd (“Labroy”), as an Electrical Engineer and was promoted to Head of its Electrical Department (Ship Repair Division). During his 10 Years with Labroy he handled various projects like livestock carrier conversion and new build of tugs, accommodation barges, AHTS, floating docks & etc. He moved on to join another main board listed company, Beng Kuang Marine Ltd as Project Director to set up its subsidiary, Venture Automation & Electrical Engineering Pte Ltd (“VAE”) and oversee larger projects such as DP3 accommodation pipe lay barges, DP 3 AHTS and conversion of AHTS to Seismec & ROV vessels. He is also the Project Manager in charge of offshore platforms, drilling rigs, marine vessels, floating docks, floating production storage and offloading vessels and power generation plant & was

also involved in the building facility & development set up of its Nexus Yard at Batam Indonesia. During his 4 years in charge at VAE, he also secured the agency rights of Autronica Fire Detection, Suppression & Gases system before joining our Group.

SOH l.p. dION is co-founder and Managing director of Oil & Gas Solutions pte ltd (“OGS”) which was formed in 2010. He has been dynamically involved in the oil & gas industry for over 15years, primarily in project pursue of FPSOs conversion business directly with the field operators & owners. In 2000, Soh L.P. Dion formed his own company to serve the offshore industry in Electrical & Instrumentation (“E&I”) package as this niche service was identified by major oil companies as the competency shortfall during start up and operation. His success in mitigating the client risk of E&I services was recognised and over the years, his dynamic and energetic nature has also won over continual repeat customers whom had complete trust in his competence in delivering quality and prompt project delivery. Under his leadership, OGS has nurtured into a company capable of providing a complete Turnkey Electrical, Instrumentation, Controls & Telecoms EPCM for the offshore oil & gas sector.

tOMMy HO is the technical & engineering director of Oil & Gas Solutions pte ltd. Graduated with a Degree and PHD in Physics from Concordia and armed with over 25 years of EPC experience in the oil & gas sector primarily in the offshore industry. His broad experience with oil companies spectrum spans from Shell, Chevron, Exxon Mobil Inc. in the North & South America as well as major EPC such as Monenco and AMI Offshore Inc. In addition, his previous assignment includes project management and strategic business relocation in USA, Brazil and Korea for an extensive period of time. In 2003, he was assigned to Singapore as a Project Director for a FPSO conversion project of EPCM E&I work scope. He jointly set-up Oil & Gas Solutions Pte. Ltd with BH Global and Mr Soh L.P Dion in 2010, an EIT and Marine System EPCM firm and managing over 60 engineers/designers.

From left to right: Ang Cheng Siew, Dr. Steven Wong, Daniel Ong Beng Chong, Soh L.P. Dion, Tommy Ho


INVeStOr relatIONS

Since its listing in 2005, the Group is committed

to good corporate governance and remains

dedicated to continuously improve on the

communications with its shareholders and the

investing community. Bagging the Best Investor

Relations Award at the Singapore Corporate

Award for 4 consecutive years since 2007 best

demonstrates the Group’s commitment and

dedication towards corporate disclosures and

communications.

BH Global strives to announce its financial results

well within the regulatory timeline. It is often

within the first batch of companies that reports

its financial results within 30 days of the financial

period / year end. BH Global will also make

timely announcements to keep the investment

community updated on its corporate activities

and development.

BH Global practices the hosting of semi-annual

results briefing with analysts, fund managers

and retail traders, highlighting to the attendees

the business model and operations, investment

merits and also sharing with them financial

highlights and business outlook. To allow

investors to have a better picture of the Group’s

business, BH Global arranges regular plant visits

to its facility at 8 Penjuru Lane.

The management also participates actively in

media supplements and engages the investment

community by speaking to the financial media.

Mainstream media that have featured BH Global

includes Straits Times, Business Times, Lianhe

Zaobao and the Edge, as well as online media

and trade publications.

Going forward, the Board of Directors would

like to reaffirm their commitment to maintaining

a high level of transparency to shareholders and

the investing community.


HUMaN reSOUrce

peOple deVelOpMeNt

BH Global values human capital and believes that developing a strong talent pool will continue to drive the Group’s growth. To maintain and ensure high standards of professionalism, BH Global has a range of training and development programs to cater to its employees. It continuously reviews its learning and development plans, and takes active steps to ensure that training programs are relevant to both employee and business needs. BH Global has created a conducive learning environment for its employees that promotes and supports individual development.

The employees are encouraged to participate in seminars and courses sponsored by the Group to broaden their existing skills and knowledge. Through such programs, BH Global hopes to improve job satisfaction and thereby talent retention.

cOrpOrate cUltUre

Corporate culture shapes the behavior of employees in an organization. Through its long history, BH Global has built up certain sets of acceptable behaviors like teamwork, integrity and performance. These are included in its

employees’ handbook and new hires will be introduced to these codes during their orientation program. Management also conducts regular talks to existing employees to remind and reinforce BH Global’s culture. By instilling and providing avenues to communicate this culture and codes clearly to its employees, the Group will be able to react to challenges in the business environment, both internal and external, on a united front.

key perfOrMaNce INdIcatOrS

Performance goals and personal development plans will be assessed, reviewed and implemented annually. Appraisal meetings will be held on a quarterly basis to gather feedback from employees on their career progress as well as to review their performance against their key performance indicators. There may be changes to the performance goals within the year due to varying market environment and/or different performance measures, but all changes will be clearly communicated over to the workforce before it is implemented. Rewards and remuneration will be dependent on a year-end assessment which will also form the basis of next year’s performance goals and development plans.


cONtrIBUtIONS tO cOMMUNIty

Small effort goes a long way. BH Global has committed itself to seeking meaningful ways in making positive differences to the community. BH Global has directed its corporate social responsibility initiatives in the areas of education and community development through volunteerism and monetary donations.

cOMMUNIty eNGaGeMeNt aNd VOlUNteerISM

BH Global adopts a hands-on approach in its corporate social responsibility (“CSR”) initiatives by actively encouraging its employees to partake in volunteering programs jointly organised by non-profit organisations, local community, social institutions and/or other corporate entities. BH Global hopes to generate greater awareness and concern for the well-being of others amongst its employees through these activities.

BH Global, together with local community centre, hosted a Chinese New Year Lunch on February 2011 for more than 50 elderly participants living within Jalan Besar neighbourhood. Over 30 employees including Chairman, Mr. Alvin Lim and CEO, Mr Vincent Lim, put up song and dance performances at the lunch event. Each elderly participant also received a red packet and goodie

bag at the end of the event. These warm gestures and lovely company earned roaring applauses and heartfelt appreciation from the elderly crowd. In 2011, BH Global has teamed up with local communities to jointly organise “Back to School” event to assist students from lower-income family to select and purchase stationeries and assessment books. BH Global sponsored breakfast coupons, Popular Bookstore cash vouchers, transportation for the event and BH Global’s employees were actively involved in facilitating more than 200 students with their purchases.

MakING a dIffereNce tO tHe leSS fOrtUNate

Apart from corporate volunteering program, BH Global also contributes back to society by supporting charitable causes. The Group has made regular donations through non-profit organisations and social institutions like Singapore Children’s Society, Kidney Dialysis Foundation Pte Ltd, Disabled People’s Association, and Singapore Heart Foundation etc.

In 2011, BH Global also donated through Singapore Ship Chandlers Association to support Japanese Red Cross Society in their immediate relief efforts for the Japan disaster in March 2011.

cOrpOrateSOcIal reSpONSIBIlIty

BH GLOBAL MARINE LIMITED ANNUAL REPORT 2011 29

CORPORATE GOVERNANCE REPORT

The Group is committed to achieving and maintaining high standards of corporate governance. The Group has substantively complied with the recommendations of the Code of Corporate Governance 2005 (“Code”) through effective self-regulatory corporate practices to protect and enhance the interests of its shareholders. This report describes the Group’s corporate governance processes and activities in conjunction with the Singapore Exchange Securities Trading Limited’s requirements that issuers describe its corporate governance practices with specifi c reference to the Code in its annual reports.

Principle 1: The Board’s conduct of its Affairs

The Board’s principal functions are:

1. approving the Group’s strategic plans, key operational initiatives, major investments and divestments and funding requirements;

Guideline 1.1 of the Code: The Board’s role

2. reviewing the performance of the business and approving the release of the fi nancial results announcement of the Group to shareholders;

3. providing guidance in the overall management of the business and affairs of the Group;

4. overseeing the processes for internal control, risk management, fi nancial reporting and statutory compliance; and

5. approving the recommended framework of remuneration for the Board and key executives as may be recommended by the Remuneration Committee.

The Board has delegated certain specifi c responsibilities to four (4) board committees, namely, the Audit Committee (“AC”), Nomination Committee (“NC”), Remuneration Committee (“RC”) and Risk Management Committee (“RMC”). More information on these committees is set out below. The Board accepts that while these board committees have the authority to examine particular issues and will report to the Board their decisions and recommendations, the ultimate responsibility for the fi nal decision on all matters lies with the entire Board.

The Board meets at least four (4) times in a year. The frequency of meetings and the attendance of each Director at every board and board committee meeting are disclosed on page 37 in this Report. Ad-hoc meetings, at times over teleconference, are held to discuss urgent matters. Article 110 of the Company’s Articles of Association allows for participation in board meetings by means of telephone conference or any other similar communications equipment.

Matters which are specifi cally reserved for decision by the Board include those involving business plans, material acquisitions and disposals of assets, corporate or fi nancial structuring, corporate strategy, share issuances, dividends, and shareholder matters.

All Directors are regularly updated by Management on the industry, business, operations and corporate governance practices of the Group. The Company will, from time to time, organise seminars and briefi ng sessions for the Directors to keep pace with fi nancial, corporate governance, regulatory and other changes. All Directors are members of the Singapore Institute of Directors (“SID”), and eligible to receive updates and training from SID. Directors and Senior Management are encouraged to attend SID courses and subscribe for journal updates on matters of topical interest.

A formal letter is provided to each Executive Director upon his appointment, setting out the Director’s duties and obligations.

Guideline 1.3 of the Code: Disclosure on delegation of authority by Board to Board Committees

Guideline 1.4 of the Code: Board to meet regularly

Guideline 1.5 of the Code: Matters requiring Board approval

Guideline 1.6 and 1.8 of the Code: Directors to receive appropriate training

Guideline 1.7 of the Code: Formal letter to be provided to directors setting out duties and obligations

30 BH GLOBAL MARINE LIMITED ANNUAL REPORT 2011

CORPORATE GOVERNANCE REPORT (CONT’D)

Principle 2: Board Composition and Guidance

The Board currently comprises six (6) Directors of whom three (3) are non-executive and independent Directors. The Board is supported by various board committees, namely, the NC, AC, RC and RMC whose functions are described below. The Board has been able to exercise objective judgment independently from Management and no individual or small group of individuals dominate the decisions of the Board.

The Board is of the opinion that, given the scope and nature of the Group’s operations, the present size of the Board is appropriate for effective decision making. The Board is made up of Directors who are qualifi ed and experienced in various fi elds including business and management, accounting and fi nance, engineering and industry, and law. The profi les of each of the Directors are provided in pages 22 and 23 of this Annual Report. Accordingly, the current Board comprises persons who as a group, have core competencies necessary to lead and oversee the Company.

The non-executive Directors are also involved in reviewing the corporate strategies, business operations and practices of the Group, as well as reviewing and monitoring the performance of Management in achieving agreed goals and objectives.

Guideline 2.1 of the Code: One-third of directors to be independent

Guideline 2.3and 2.4 of the Code: Board to determine its appropriate size and comprise directors with core competencies

Guideline 2.5 and 2.6 of the Code: Role of NEDs and regular meetings of NEDs.

As at 31 December 2011, the Board comprises the following members:

Name of DirectorPosition held on the Board

Date of fi rst appointment to the Board

Date of last re-election as Director

Nature of appointment

Alvin Lim Hwee Hong Chairman 23.04.2004 10.03.2010 Executive/Non-independent

Vincent Lim Hui Eng Director 23.04.2004 30.03.2011 Executive/Non-independent

Patrick Lim Hui Peng Director 23.04.2004 14.04.2009 Executive/Non-Independent

Loh Weng Whye Director 03.08.2005 14.04.2009 Non-executive/Independent

David Chia Tian Bin Director 03.08.2005 10.03.2010 Non-executive/Independent

Winston Kwek Choon Lin

Director 03.08.2005 30.03.2011 Non-executive/Independent

Principle 3: Chairman and Chief Executive Offi cer

Mr Alvin Lim Hwee Hong is the Executive Chairman of the Board and Mr Vincent Lim Hui Eng is the Chief Executive Offi cer of the Company, effective since January 2008. Mr Alvin Lim Hwee Hong and Mr Vincent Lim Hui Eng are siblings.

The roles of the Executive Chairman and Chief Executive Offi cer are separate and their responsibilities are clearly defi ned to ensure a check and balance of power and authority.

Guideline 3.1 of the Code: Chairman and CEO should be separate persons



The Executive Chairman will, amongst other responsibilities, lead the Board, ensure effective communication with shareholders, encourage constructive relationship between the Board and Management, as well as between Board members, and promote high standards of corporate governance. The Chief Executive Offi cer manages the business of the Company and implements the Board’s decisions.

In view of the sibling relationship between the Executive Chairman and the Chief Executive Offi cer, the Board has appointed Mr Loh Weng Whye as the Lead Independent Director since February 2007.

Guideline 3.2 of the Code: Chairman’s role

Guideline 3.3 of the Code: Appointment of LID where Chairman and CEO are related by close family ties

Principle 4: Board Membership Principle 5: Board Performance

The NC comprises the following Directors:-

Mr Winston Kwek Choon Lin (Chairman) Mr Loh Weng Whye (Member) Mr Vincent Lim Hui Eng (Member)

Save for Mr Vincent Lim Hui Eng, the other members of the NC are non-executive and independent Directors.

The NC makes recommendations to the Board on all board appointments. It is responsible for re-nomination of directors at regular intervals taking into consideration the Directors’ contribution and performance at Board meetings, including attendance, preparedness and participation.

The independence of each Director has been reviewed annually by the NC based on the Code’s defi nition of what constitutes an independent director. Based on this review, the NC has confi rmed the independence of the Directors concerned.

The NC is also of the view that the Directors are able to and have adequately carried out their duties as Directors of the Company. As Board meetings are planned and scheduled well in advance of the meeting dates, Directors have been able to attend almost all of the Board and Committee meetings.

Pursuant to the Articles of Association of the Company:

(a) one third of the Directors shall retire from offi ce at the Annual General Meeting;

(b) Directors appointed during the course of the year will submit themselves for re-election at the next Annual General Meeting of the Company; and

(c) the Chief Executive Offi cer shall be subjected to retirement and re-election by shareholders.

The NC has adopted guidelines for annual assessment of the effectiveness of the Board as a whole and of the contribution of each individual director to the effectiveness of the Board and has performed the necessary assessment for the fi nancial year.

Guideline 4.1 of the Code: NC to comprise at least three directors, majority of whom are independent; chairman not associated with a substantial shareholder

Guideline 4.3 of the Code: NC to determine directors’ independence annually



Principle 6: Access to Information

The Board is provided with adequate and timely information prior to Board meetings and on an on-going basis. Board papers are distributed in advance of each meeting to Directors. The Company circulates copies of the minutes of the meetings of all board committees to all members of the Board to keep them informed of on-going developments within the Group.

The Directors have separate and independent access to the Company’s Senior Management and the Company Secretary at all times. Should the Directors, whether as a group or individually, require independent professional advice, such professionals (who will be selected with the approval of the Board Chairman or the Chairman of the Committee requiring such advice) will be appointed at the Company’s expense.

The Company Secretary attends the Company’s Board, AC, RC and NC meetings and is responsible for ensuring that Board procedures are followed. The Company Secretary’s role is also to advise the Board on governance matters and to assist the Board and Senior Management in ensuring that the Company complies with rules and regulations which are applicable to the Company.

Guideline 6.1 and 6.2 of the Code: Management obliged to provide Board with adequate and timely information and include background and explanatory information

Guideline 6.3 and 6.5 of the Code: Directors to have access to Company Secretary; role of Company Secretary to be clearly defi ned and procedure for Board to take independent professional advice at company’s expense

BOARD COMMITTEES

Principle 7: Remuneration Matters / Procedures for Developing Remuneration Policies

The RC comprises entirely of non-executive Directors, all of whom, including the Chairman, are independent:

Mr Loh Weng Whye (Chairman)Mr David Chia Tian Bin (Member)Mr Winston Kwek Choon Lin (Member)

The RC is responsible for ensuring a formal and transparent procedure for developing an appropriate executive remuneration policy and a competitive framework and will recommend to the Board for endorsement, a framework of remuneration which should cover various aspects of remuneration, including but not limited to, directors’ fees, salaries, allowances, bonuses, and benefi ts-in-kind, and the specifi c remuneration packages for each executive director and key executive in order to retain and motivate each of them to run the business and operations successfully. External consultants’ advice will be sought when a major remuneration review is conducted.

Guidelines 7.1 and 7.2 of the Code: RC to consist entirely of NEDs; majority, including RC chairman, must be independent & RC to recommend remuneration of directors and CEO, and to review remuneration of senior management

Principle 8: Level and Mix of Remuneration

In recommending a remuneration framework, the RC takes into account the performance of the Group as well as the directors and key executives, aligning their interests with those of shareholders and linking rewards to corporate and individual performance as well as industry benchmarks. The review of remuneration packages takes into consideration the longer term interests of the Group. It covers various aspects of remuneration including salaries, fees, allowances, bonuses, perks and benefi ts-in-kind. The Committee’s recommendations are based on Management’s reports and recommendations, made in consultation with the Chairman of the Board and submitted for endorsement to the entire Board. The payment of directors’ fees is subject to the approval of shareholders. Factors such as level of contribution, effort and time spent, and responsibilities and leadership of the Non-Executive Directors are considered when determining the level of their fees.

Guideline 8.2 Remuneration to consider contribution, effort, time spent and responsibilities



The service contracts for the Executive Chairman, Chief Executive Offi cer and Chief Operating Offi cer were for a fi xed period of two (2) years with effect from 1 January 2009. However, the Board extended their service contracts until 31 December 2011 while a review was being conducted by the RC. Subsequently, on 1 January 2012, the Company entered into new service contracts with the Executive Chairman, Chief Executive Offi cer and Chief Operating Offi cer. The RC is responsible for reviewing the compensation commitments in the event of an early termination, as stipulated in the service contracts.

Guideline 8.3 of the Code: Fixed appointment period for executive directors, RC to review compensation for early termination

Principle 9: Disclosure on Remuneration

The remuneration of the Directors for the fi nancial year are as follows:

Name of Directors Salary Bonus / Profi t-Sharing Fees Guideline 9.1 and 9.2 of the Code: Disclosure of directors’ remuneration and top 5 executives of the Company in bands of $250,000

Below S$250,000Mr Loh Weng Whye – – 100%Mr David Chia Tian Bin – – 100%Mr Winston KwekChoon Lin – – 100%S$750,000 to S$999,999Mr Patrick Lim Hui Peng 46% 47% 7%S$1,000,000 to S$1,249,999Mr Alvin Lim Hwee Hong 34% 61% 5%Mr Vincent Lim Hui Eng 34% 61% 5%

The remuneration of the Top Nine (9) Key Executives for the fi nancial year are as follows:

Name of Key Executives Salary Bonus Fees

Below S$250,000Mr Lee Ka Meng 79% 16% 5%Mr Keegan Chua Tze Wee 70% 30% –Mr Ang Cheng Siew 76% 16% 8%Mr Steven Wong 100% – –Mr Daniel Ong Boon Chong 100% – –S$250,000 to S$499,999Mr Johnny Lim Huay Hua 69% 22% 9%Ms Eileen Lim Chye Hoon 69% 22% 9%Mr Soh L P. Dion 70% 27% 3%Mr Tommy Ho 73% 27% –

Mr Johnny Lim Huay Hua and Ms Eileen Lim Chye Hoon are siblings of Mr Alvin Lim Hwee Hong, Mr Vincent Lim Hui Eng and Mr Patrick Lim Hui Peng.



Principle 10: Accountability of the Board and Audit

The Board is responsible for providing a balanced and understandable assessment of the Company’s performance, position and prospects, including interim and other price sensitive reports. Management also provides to members of the Board annual budgets and targets, and monthly management accounts.

Guideline 10.1 & 10.2 of the Code: Board’s responsibility to provide balanced, understandable assessment of Company’s performance and position on interim basis and management accounts

Principle 11: Audit Committee

The AC comprises:

Mr David Chia Tian Bin (Chairman) Mr Loh Weng Whye (Member) Mr Winston Kwek Choon Lin (Member)

The AC members are all non-executive and independent Directors capable of discharging their responsibilities appropriately. The members collectively have many years of experience in accounting and audit, business and fi nancial management, law and engineering. The Board considers that the members of the AC are appropriately qualifi ed to discharge the responsibilities of the AC.

The AC has explicit authority to investigate any matter within its terms of reference. It has full access to and the co-operation of Management and the full discretion to invite any Director or executive offi cer to attend its meetings, and has reasonable resources to enable it to discharge its functions properly.

The AC’s scope of work is governed by written terms of reference. Specifi cally, the AC meets on a periodic basis to perform the following functions:¬

(a) assist the Board of Directors in the identifi cation and monitoring of areas of signifi cant business risks with the help of internal and external auditors;

(b) review the effectiveness of the fi nancial and accounting control systems and management of exposure to fi nancial and business risks;

(c) review compliance with the Listing Manual and the Code of Corporate Governance;

(d) review with the external and internal auditors their respective audit plans, reports and their evaluation of the Group’s system of risk management and internal controls;

(e) recommend the appointment of auditors and to review the level of audit fees;

(f) review the independence of the Company’s auditors on an annual basis;

(g) review the adequacy of the internal audit function;

(h) review the Group’s quarterly and annual reports and announcements before they are submitted to the Board for approval;

Guideline 11.1 and 11.2 of the Code: AC should comprise at least three directors, all non-executives and the majority of whom, including the chairman, are independent and Board to ensure AC members are qualifi ed

Guideline 11.3 of the Code: AC to have explicit authority to investigate and have full access to management and reasonable resources

Guideline 11.4 of the Code: Duties of AC

Guideline 11.5 of the Code: AC to review independence of external auditors annually



(i) review the consolidated statement of fi nancial position and income statement of the Group and other fi nancial statements and other documents accompanying the same and thereafter to submit the same to the Board for approval; and

(j) review interested person transactions.

The AC has reviewed and is satisfi ed with the level of co-operation rendered by Management to the external auditors, the adequacy of the scope and quality of their audits, having regard to the adequacy of the resources and experience of staff to be assigned to the audit, and size and complexity of the Group and its businesses and operations, and the independence and objectivity of the external auditors. In the course of its review, the AC also met with the external auditors without the presence of Company’s Management.

Both the AC and Board have reviewed the appointment of different auditors for its subsidiaries and/or signifi cant associated and joint venture companies and are satisfi ed that the appointment of different auditors would not compromise the standard and effectiveness of the audit of the Company and the Group.

Accordingly, the Company has complied with Rules 712 and 716 of the Listing Rules of the Singapore Exchange Securities Trading Limited.

Management has put in place a whistle-blowing policy duly endorsed by the AC and approved by the Board where employees of the Group can access the appropriate person to raise concerns about possible improprieties in matters of fi nancial management and reporting or other matters. The policy encourages employees to identify themselves because appropriate follow-up enquiry or investigation may not be possible unless the source of information is identifi ed. Concerns expressed anonymously will nevertheless be investigated, with due consideration given to:

(a) The seriousness of the issue raised;(b) The credibility of the concern; and(c) The likelihood of verifi cation against known sources.

Guideline 11.6 of the Code: AC to meet internal and external auditors, without presence of management, annually

Guideline 11.7 of the Code: AC to review arrangements for staff to raise possible improprieties to AC

Principle 12: Internal controls

Internal Controls

The AC and RMC assist the Board in the oversight of risk management responsibilities, internal controls and governance process.

The AC, with the assistance of the Internal Auditor (“IA”), periodically reviews the effectiveness of the Group’s internal controls relating to fi nance, operational, and compliance controls.

During the year, IA worked closely with Management to align its subsidiaries to the Group’s internal control environment and compliance standard in order to strengthen the internal checks and balances.

The IA made periodical audits to its subsidiaries to review their key operations and business practices to ensure compliance with the Group’s system of internal controls. Signifi cant control issues were highlighted with recommendation provided by IA and swift action taken by management. An Internal Control Self Assessment Survey was conducted to assist the board and management to review the adequacy and effectiveness of the system of internal controls.



Based on the overall risk assessment of the Group as well as the results and fi ndings of the external and internal audits and Internal Control Self Assessment, the Board – with concurrence of the AC, is satisfi ed that the system of internal controls and procedures is adequate and effective to provide reasonable assurance of achieving its internal control objectives and to address fi nancial, operational and compliance risks.

Risk Management

In addition, the Board has set up the RMC which comprises:

Mr. Alvin Lim Hwee Hong (Executive Chairman)Mr. Vincent Lim Hui Eng (Chief Executive Offi cer)Mr. Keegan Chua Tze Wee (Chief Financial Offi cer)

The RMC is chaired by the Executive Chairman , Mr. Alvin Lim Hwee Hong.

The main objective of the RMC is to assist the Board and AC to review and implement best corporate governance practices, with reference to compliance, enterprise risk management and internal controls. The primary responsibilities of the RMC include:

• Identifying, assessing, and managing the Group’s risk including managing the Group’s enterprise risk programme;

• Reviewing the effectiveness of internal controls and to implement changes where required;

• Ensuring compliance with statutory, regulatory requirements and the Group’s policies and procedures; and

• Promoting awareness of the importance of risk management within the Group

The Group has implemented an Enterprise Risk Management System. An Enterprise Risk Assessment (ERA) has been carried out to form a “Risk Map” of the high priority business risks. Based on the Risk Map, measures were taken to address and monitor the top business risks. In addition, a Fraud Prevention & Detection Survey was carried out to strengthen the risk-control governance model.

Based on the Enterprise Risk Assessments, the Board is satisfi ed with the risk management process in place, and in its opinion, that the effectiveness and adequacy of the controls have been appropriately reviewed through the management and independent assurance provided by the Group’s internal auditors and external auditors.

Guideline 12.1and 12.2 of the Code: AC to review adequacy of fi nancial, operational and compliance controls and risk management policies and Board to comment on the adequacy of the internal controls

Principle 13: Internal audit

The Group outsourced its internal audit function to JF Virtus Pte Ltd, an independent assurance service provider (“Internal Auditor”) which specialises in risk management and internal auditing. Internal Auditor reports directly to the AC Chairman on audit matters, and to the Executive Chairman or Chief Executive Offi cer on administrative matters. The AC is satisfi ed that the appointed internal auditor meets the standards set by internationally recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors.

The primary objective of the internal audit is to assure the AC and the Board that sound risk management processes and controls are in place and operating effectively.

Guideline 13.1 of the Code: IA should meet standards set by internationally recognised professional bodies



The AC is satisfi ed that the internal audit function is adequately resourced and comprehensively covers the major activities within the Group.

Guideline 13.2 and 13.3 of the Code: IA to report to AC chairman, and CEO administratively and is adequately resourced

Principle 14 and 15: Communications with Shareholders

(a) Communications with Shareholders

The Company has appointed an investor relation consultant, Financial PR Pte Ltd, to support the Group in facilitating communication with shareholders and the investment community. The Company also ensures that timely and adequate disclosure of information on matters of material impact or signifi cance relating to the Group are made to shareholders of the Company, in compliance with the requirements set out in the Listing Manual of the Singapore Exchange Securities Trading Limited, with particular reference to the Corporate Disclosure Policy set out therein.

Guideline 14.1 of the Code: Company to regularly convey pertinent information

(b) Greater Shareholder Participation

At general meetings, shareholders of the Company will be given the opportunity to present their views and to put questions regarding the Group to Directors and Management. The Directors and Management will be present at these meetings to address any questions that shareholders may have. The external auditors will also be present to assist the Board in addressing queries by shareholders.

The Articles of Association of the Company allows a member of the Company to appoint up to two proxies to attend and vote at general meetings. For the time being, the Board is of the view that this is adequate to enable shareholders to participate in general meetings of the Company and is not proposing to amend its Articles of Association to allow votes in absentia. Separate resolutions on each distinct issue are tabled at general meetings and voting on each resolution is carried out systematically with proper recording of votes cast and the resolution passed.

Guideline 15.3 of the Code: Committee chairman and external auditors to be presents at AGMs

Guideline 15.4 of the Code: Companies encouraged to amend Articles to avoid imposing limit on number of proxies for nominee companies

ATTENDANCE AT BOARD & COMMITTEE MEETINGS

The number of Directors’ and board committees’ meetings and the record of attendance of each Director during the fi nancial year ended 31 December 2011 is set out below:

Types of Meetings BoardAudit

CommitteeNominating Committee

Remuneration Committee

Names of Directors

No. of Meetings

Held

No. of Meetings Attended

No. of Meetings

Held


No. of Meetings

Held


No. of Meetings

Held


Alvin Lim Hwee Hong 4 4 – – – – – –Vincent Lim Hui Eng 4 4 – – 1 1 – –Patrick Lim Hui Peng 4 4 – – – – – –Winston Kwek Choon Lin 4 2 4 3 1 1 2 2Loh Weng Whye 4 4 4 4 1 1 2 2David Chia Tian Bin 4 4 4 4 – – 2 2



ADDITIONAL INFORMATION

Dealings in SecuritiesThe Company has procedures in place in line with Rule 1207(19) in relation to dealings in the Company’s securities by its offi cers. The Company has informed its offi cers not to deal in the Company’s shares whilst they are in possession of unpublished material price sensitive information and during the period commencing two weeks before quarterly announcement and one month before the full year announcement, as the case may be, and ending on the date of announcement of such fi nancial results.

Material ContractsThere were no other material contracts entered into by the Company or its subsidiary, involving the interests of any Director (other than service contracts entered into between the Executive Directors and the Company) or controlling shareholder nor have such other contracts been entered into since the end of the previous fi nancial year.

Interested Person TransactionsThere were no interested person transactions above S$100,000.

Utilisation of Proceeds from the Taiwan Depository Receipts (“TDRs”) IssueThe proceeds raised from the Company’s TDRs issue, after deducting listing expenses of approximately S$0.90 million, was approximately S$20.4 million. As at 31 December 2011, the Company has utilized the proceeds as follows:

Intended use of proceeds

Amount allocated(S$’000)

Amount transferto/(from)(S$’000)

Amount allocated

after transfer(S$’000)

Amount utilised(S$’000)

Balance as at 31.12.2011

(S$’000)Descriptions

(S$’000)

Repayment of bank loans

10,300 – 10,300 10,300 – Revolving Credit: S$2,500Bank trade facilities: S$6,884Term loan: S$916

Investment in galvanized steel wire manufacturing plant

3,000 – 3,000 3,000 – Share subscription: S$3,000

Purchase of fi xed assets

2,000 (217) 1,783 1,783 – Leasehold property: S$1,783

Working capital 5,091 217 5,308 5,308 – Trade Suppliers: S$5,308Total 20,391 – 20,391 20,391 –



FINANCIAL CONTENTS

40 Directors’ Report44 Statement by Directors45 Independent Auditor’s Report46 Consolidated Income Statement47 Consolidated Statement of Comprehensive Income48 Statements of Financial Position49 Statements of Changes in Equity52 Consolidated Statement of Cash Flows54 Notes to the Financial Statements 105 Statistics of Shareholdings107 Notice of Annual General Meeting Proxy FormIBC Corporate Information


DIRECTORS’ REPORT

The directors are pleased to present their report to the members together with the audited consolidated fi nancial statements of BH Global Marine Limited (the “Company”) and its subsidiaries (collectively, the “Group”) and the statement of fi nancial position and statement of changes in equity of the Company for the fi nancial year ended 31 December 2011.

1 Directors

The directors in offi ce at the date of this report are:

Alvin Lim Hwee Hong (Executive Chairman) Vincent Lim Hui Eng (Executive Director and Chief Executive Offi cer) Patrick Lim Hui Peng (Executive Director and Chief Operating Offi cer) Loh Weng Whye (Lead Independent Non-executive) Winston Kwek Choon Lin (Independent Non-executive) David Chia Tian Bin (Independent Non-executive)

2 Arrangement to enable directors to acquire benefi ts

Neither at the end of nor at any time during the fi nancial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate.

3 Directors’ interest in shares or debentures

(a) The directors of the Company holding offi ce at the end of the fi nancial year had no interests in the shares or debentures of the Company and related companies as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 164 of the Companies Act, Cap. 50, except as follows:

Number of ordinary sharesShareholdings

registered in theirown names

Shareholdings in whicha director is deemedto have an interest

At1.1.2011

At31.12.2011

At1.1.2011

At31.12.2011

The CompanyAlvin Lim Hwee Hong 3,828,690 3,928,690 282,828,600 286,675,600Vincent Lim Hui Eng 3,828,690 3,828,690 282,828,600 286,675,600Patrick Lim Hui Peng 3,828,690 3,828,690 282,828,600 286,675,600Loh Weng Whye 215,000 215,000 – –

Immediate and Ultimate Holding Company Beng Hui Holding (S) Pte Ltd

Alvin Lim Hwee Hong 420,000 420,000 – –Vincent Lim Hui Eng 420,000 420,000 – –Patrick Lim Hui Peng 420,000 420,000 – –

DIRECTORS’ REPORT


3 Directors’ interest in shares or debentures (cont’d)




At1.1.2011

At31.12.2011

At1.1.2011

At31.12.2011

SubsidiariesZ-Power Automation Pte. Ltd.Alvin Lim Hwee Hong – – 1,610,000 1,610,000Vincent Lim Hui Eng – – 1,610,000 1,610,000Patrick Lim Hui Peng – – 1,610,000 1,610,000

Sky Holding Pte. Ltd.Alvin Lim Hwee Hong – – 405,000 405,000Vincent Lim Hui Eng – – 405,000 405,000Patrick Lim Hui Peng – – 405,000 405,000

Sky Wire (HK) LimitedAlvin Lim Hwee Hong – – 10,000 10,000Vincent Lim Hui Eng – – 10,000 10,000Patrick Lim Hui Peng – – 10,000 10,000

BH Marine & Offshore Engineering Pte LtdAlvin Lim Hwee Hong – – 300,000 300,000Vincent Lim Hui Eng – – 300,000 300,000Patrick Lim Hui Peng – – 300,000 300,000

Oil & Gas Solutions Pte. Ltd.Alvin Lim Hwee Hong – – 750,000 750,000Vincent Lim Hui Eng – – 750,000 750,000Patrick Lim Hui Peng – – 750,000 750,000

Long Life Holding Pte. Ltd.Alvin Lim Hwee Hong – – 1,200,000 1,200,000Vincent Lim Hui Eng – – 1,200,000 1,200,000Patrick Lim Hui Peng – – 1,200,000 1,200,000

PT. Long Life Marine IndustriesAlvin Lim Hwee Hong – – 2,000 2,000Vincent Lim Hui Eng – – 2,000 2,000Patrick Lim Hui Peng – – 2,000 2,000

DIRECTORS’ REPORT (CONT’D)


3 Directors’ interest in shares or debentures (cont’d)




At1.1.2011

At31.12.2011

At1.1.2011

At31.12.2011

PT. BH Marine & Offshore EngineeringAlvin Lim Hwee Hong – – 2,000 2,000Vincent Lim Hui Eng – – 2,000 2,000Patrick Lim Hui Peng – – 2,000 2,000

GL Lighting International Pte. Ltd.Alvin Lim Hwee Hong – – – 210,000Vincent Lim Hui Eng – – – 210,000Patrick Lim Hui Peng – – – 210,000

PT. Dwi Utama Mandiri SuksesAlvin Lim Hwee Hong – – – 250Vincent Lim Hui Eng – – – 250Patrick Lim Hui Peng – – – 250

Gulf Specialty Steel Industries LLCAlvin Lim Hwee Hong – – – 1,020,000Vincent Lim Hui Eng – – – 1,020,000Patrick Lim Hui Peng – – – 1,020,000

The deemed interests of Alvin Lim Hwee Hong, Vincent Lim Hui Eng and Patrick Lim Hui Peng in the shares of the Company are by virtue of their shareholdings in Beng Hui Holding (S) Pte Ltd. At 31 December 2011, Beng Hui Holding (S) Pte Ltd holds 286,675,600 shares in the Company.

By virtue of Section 7(4) of the Companies Act, Cap. 50, the directors Alvin Lim Hwee Hong, Vincent Lim Hui Eng and Patrick Lim Hui Peng are deemed to have an interest in shares held by the Company in all of its wholly-owned subsidiaries.

(b) The directors’ interests in the shares of the Company at 21 January 2012 were the same at 31 December 2011.

4 Directors’ contractual benefi ts

Since the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t (other than disclosed in the consolidated fi nancial statements and this report) by reason of a contract made by the Company or a related corporation with the director or with a fi rm of which he is a member, or with a company in which he has a substantial fi nancial interest.



5 Share options

No option to take up unissued shares of the Company or its subsidiaries was granted during the fi nancial year.

There were no shares issued during the fi nancial year by virtue of the exercise of options to take up unissued shares of the Company or its subsidiaries whether granted before or during the fi nancial year.

There were no unissued shares of the Company or its subsidiaries under option at the end of the fi nancial year.

6 Audit Committee

The members of the Audit Committee during the year and at the date of this report are:

David Chia Tian Bin (Chairman)Loh Weng Whye (Member)Winston Kwek Choon Lin (Member)

The Audit Committee carried out its functions specifi ed in Section 201B(5) of the Singapore Companies Act. Their functions are detailed in the Report on Corporate Governance.

The Audit Committee is satisfi ed with the independence and objectivity of the external auditors and has nominated Baker Tilly TFW LLP for re-appointment as auditors of the Company at the forthcoming Annual General Meeting.

7 Independent auditor

The independent auditor, Baker Tilly TFW LLP has expressed its willingness to accept re-appointment.

On behalf of the directors

Alvin Lim Hwee Hong Vincent Lim Hui EngDirector Director

28 March 2012



In the opinion of the Directors:

(i) the consolidated fi nancial statements of the Group and the statement of fi nancial position and statement of changes in equity of the Company as set out on pages 46 to 104 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2011 and of the results, changes in equity and cash fl ows of the Group and changes in equity of the Company for the fi nancial year then ended; and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the directors

Alvin Lim Hwee Hong Vincent Lim Hui EngDirector Director

28 March 2012

STATEMENT BY DIRECTORS


Report on the Financial Statements

We have audited the accompanying fi nancial statements of BH Global Marine Limited (the “Company”) and its subsidiaries (the “Group”) as set out on pages 46 to 104, which comprise the statements of fi nancial positions of the Group and Company as at 31 December 2011, and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash fl ows of the Group and statement of changes in equity of the Company for the fi nancial year then ended, and a summary of signifi cant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation of fi nancial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls suffi cient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profi t and loss accounts and balance sheets and to maintain accountability of assets.

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

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

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

OpinionIn our opinion, the consolidated fi nancial statements of the Group and the statement of fi nancial position and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and Company as at 31 December 2011 and the results, changes in equity and cash fl ows of the Group and changes in equity of the Company for the fi nancial year ended on that date.

Report on Other Legal and Regulatory Requirements

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

Baker Tilly TFW LLPPublic Accountants andCertifi ed Public AccountantsSingapore

28 March 2012

INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OF BH GLOBAL MARINE LIMITED


Group2011 2010

Note $’000 $’000

Revenue 3 143,442 103,001

Cost of sales (104,353) (69,638)

Gross profi t 39,089 33,363

Other operating income 337 99Selling and distribution expenses (15,208) (13,306)Administrative expenses (7,865) (5,556)Finance costs 4 (309) (258)

16,044 14,342Share of results of joint ventures 467 215Share of results of associated companies (4) (15)

Profi t before tax 5 16,507 14,542

Tax expense 7 (3,234) (2,594)

Profi t for the year 13,273 11,948

Profi t attributable to:Equity holders of the Company 12,920 11,353Non-controlling interests 353 595

13,273 11,948

Earnings per share (EPS) (expressed in cents per share)

– Basic 8 2.69 2.63

– Diluted 8 2.69 2.63

CONSOLIDATED INCOME STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

The accompanying notes form an integral part of these fi nancial statements.


Group2011 2010

$’000 $’000

Profi t for the year 13,273 11,948

Other comprehensive income:Currency translation differences arising on consolidation, net of tax 17 (101)

Total comprehensive income for the year 13,290 11,847

Total comprehensive income attributable to:Equity holders of the Company 12,917 11,263Non-controlling interests 373 584

13,290 11,847

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME



Group Company2011 2010 2011 2010

Note $’000 $’000 $’000 $’000

Non-current assetsProperty, plant and equipment 9 34,256 22,171 – –Investment in subsidiaries 10 – – 15,535 15,358Investment in joint ventures 11 2,015 1,481 826 823Investment in associated companies 12 6,277 75 6,296 90Deferred tax assets 13 264 160 – –Intangible assets 14 1,578 1,058 49 49Total non-current assets 44,390 24,945 22,706 16,320

Current assetsInventories 15 56,552 47,329 – –Due from customers on construction contracts 16 20,462 2,547 – –Trade receivables 17 37,979 35,742 – –Other receivables 18 5,166 1,538 43,059 34,077Cash and cash equivalents 20 16,952 24,484 139 11,847Total current assets 137,111 111,640 43,198 45,924Total assets 181,501 136,585 65,904 62,244

Non-current liabilitiesDeferred tax liabilities 13 937 – – –Finance lease liabilities 21 3 6 – –Total non-current liabilities 940 6 – –

Current liabilitiesDue to customers on construction contracts 16 84 2,095 – –Trade payables 22,004 12,975 – –Other payables 22 7,323 6,939 2,953 2,657Provision for warranty 23 355 888 – –Bank borrowings 24 28,353 5,329 – –Finance lease liabilities 21 46 14 – –Tax payable 3,358 2,596 19 70Total current liabilities 61,523 30,836 2,972 2,727Total liabilities 62,463 30,842 2,972 2,727Net assets 119,038 105,743 62,932 59,517

EquityShare capital 25 43,461 43,461 43,461 43,461Retained earnings 69,544 59,965 19,471 16,056Currency translation reserve (91) (88) – –Equity attributable to equity holders of the Company,

total 112,914 103,338 62,932 59,517Non-controlling interests 6,124 2,405 – –Total equity 119,038 105,743 62,932 59,517

STATEMENTS OF FINANCIAL POSITIONAT 31 DECEMBER 2011



Group

Attributable to equity holders of the Company

Note

Share capital

$’000

Currency translation

reserve $’000

Retained earnings

$’000Total $’000

Non-controlling

interests $’000

Total equity$’000

At 1 January 2010 23,069 2 52,081 75,152 18 75,170Profi t for the year – – 11,353 11,353 595 11,948

Other comprehensive income

Currency translation differences arising on consolidation, net of tax – (90) – (90) (11) (101)

Total comprehensive income for the year – (90) 11,353 11,263 584 11,847

Contribution by and distribution to equity holders of the Company

Issue of shares 25 21,328 – – 21,328 – 21,328Share issue expenses 25 (936) – – (936) – (936)Dividends 28 – – (3,360) (3,360) – (3,360)

Total contribution by and distribution to equity holders of the Company 20,392 – (3,360) 17,032 – 17,032

Changes in ownership interest in subsidiaries

Acquisitions of subsidiaries 10(d) – – – – 679 679Incorporation of a subsidiary – – – – 498 498Additional investment in a subsidiary – – – – 517 517Changes in ownership interest in a

subsidiary that do not result in loss of control 10(f) – – (109) (109) 109 –

Total changes in ownership interest in subsidiaries – – (109) (109) 1,803 1,694

Total transactions with equity holders of the Company 20,392 – (3,469) 16,923 1,803 18,726

At 31 December 2010(Balance carried forward) 43,461 (88) 59,965 103,338 2,405 105,743


STATEMENTS OF CHANGES IN EQUITY



Group

Attributable to equity holders of the Company

Note

Share capital

$’000

Currency translation

reserve $’000

Retained earnings

$’000Total $’000

Non-controlling

interests $’000

Total equity$’000

At 31 December 2010 (Balance brought forward) 43,461 (88) 59,965 103,338 2,405 105,743

Profi t for the year – – 12,920 12,920 353 13,273

Other comprehensive income

Currency translation differences arising on consolidation, net of tax – (3) – (3) 20 17

Total comprehensive income for the year – (3) 12,920 12,917 373 13,290

Distribution to equity holders of the Company

Dividends 28 – – (3,360) (3,360) – (3,360)

Total distribution to equity holders of the Company – – (3,360) (3,360) – (3,360)

Changes in ownership interest in subsidiaries

Incorporation of a subsidiary – – – – 3,275 3,275Changes in ownership interest in a

subsidiary that do not result in loss of control 10(f) – – 19 19 71 90

Total changes in ownership interest in subsidiaries – – 19 19 3,346 3,365

Total transactions with equity holders of the Company – – (3,341) (3,341) 3,346 5

At 31 December 2011 43,461 (91) 69,544 112,914 6,124 119,038

STATEMENTS OF CHANGES IN EQUITY (CONT’D)




CompanyShare

capitalRetainedearnings Total

Note $’000 $’000 $’000

At 1 January 2010 23,069 12,065 35,134

Profi t and total comprehensive income for the year – 7,351 7,351

Contributions by and distribution to equity holders of the CompanyIssue of shares 25 21,328 – 21,328

Share issue expenses 25 (936) – (936)

Dividends 28 – (3,360) (3,360)

At 31 December 2010 43,461 16,056 59,517

Profi t and total comprehensive income for the year – 6,775 6,775

Distribution to equity holders of the CompanyDividends 28 – (3,360) (3,360)

At 31 December 2011 43,461 19,471 62,932


STATEMENTS OF CHANGES IN EQUITY (CONT’D)



2011 2010Note $’000 $’000

Cash fl ows from operating activitiesProfi t before tax 16,507 14,542

Adjustments for:Depreciation of property, plant and equipment 2,829 1,422Impairment loss on goodwill 180 –Interest income (36) (17)Interest expense 309 258Gain on disposal of property, plant and equipment (31) –Share of results of joint ventures (467) (215)Share of results of associated companies 4 15Fair value adjustment of contingent consideration in a business combination 312 –Impairment loss on investment in an associated company 30 –Operating cash fl ows before working capital changes 19,637 16,005

Inventories (9,223) (5,106)Due from customers on construction contracts, net (19,926) (452)Receivables (5,928) 2,753Payables 8,530 (8,223)Currency translation adjustments 13 (32)Cash (used in)/generated from operations (6,897) 4,945

Interest paid (309) (258)Income tax paid (2,529) (4,743)Net cash used in operating activities (9,735) (56)

Cash fl ows from investing activitiesInterest received 36 17Investment in joint ventures 11 – (900)Investment in associated companies 12 (6,236) (90)Acquisitions of subsidiaries, net of cash acquired 10(d) (3,919) (103)Proceeds from disposal of property, plant and equipment 38 2,748Purchase of intangible asset – (49)Purchase of property, plant and equipment 9 (10,694) (4,625)Increase in fi xed deposit under pledge (275) (1,387)Contribution from non-controlling interests 3,365 –Net cash used in investing activities (17,685) (4,389)

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011



2011 2010Note $’000 $’000

Cash fl ows from fi nancing activitiesNet drawdown of short term borrowings 19,831 749Drawdown of bank borrowings 3,500 –Repayment of bank borrowings (2,225) (1,316)Repayment of fi nance lease liabilities (51) (16)Net proceeds from issuance of shares 25 – 20,392Dividends paid to shareholders of the Company 28 (3,360) (3,360)

Net cash from fi nancing activities 17,695 16,449

Net (decrease)/increase in cash and cash equivalents (9,725) 12,004Cash and cash equivalents at beginning of fi nancial year 22,461 10,457

Cash and cash equivalents at end of fi nancial year 20 12,736 22,461


CONSOLIDATED STATEMENT OF CASH FLOWS (CONT’D)



These notes form an integral part of and should be read in conjunction with the accompanying fi nancial statements.

1 Corporate information

The Company (Co. Reg. No. 200404900H), is incorporated and domiciled in Singapore. The address of its registered offi ce is at 8 Penjuru Lane, Singapore 609189.

The principal activity of the Company is that of investment holding. The principal activities of its subsidiaries are disclosed in Note 10 to the fi nancial statements.

The Company’s immediate and ultimate holding company is Beng Hui Holding (S) Pte Ltd, incorporated in Singapore. Related companies are subsidiaries of Beng Hui Holding (S) Pte Ltd.

2 Signifi cant accounting policies

a) Basis of preparation

The fi nancial statements, (expressed in Singapore dollars which is the Company’s functional currency), have been prepared in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”). The fi nancial statements have been prepared under the historical cost convention except as disclosed in the accounting policies below.

The preparation of fi nancial statements in conformity with FRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the fi nancial statements and the reported amounts of revenues and expenses during the fi nancial year. Although these estimates are based on management’s best knowledge of current events and actions and historical experiences and various other factors that are believed to be reasonable under the circumstances, actual results may ultimately differ from those estimates.

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

The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are signifi cant to the fi nancial statements are disclosed in Note 2(bb) to the fi nancial statements.

The carrying amounts of cash and cash equivalents, trade and other current receivables and payables approximate their respective fair values due to the relatively short-term maturity of these fi nancial instruments.

In the current fi nancial year, the Group has adopted all the new and revised FRS and Interpretations of FRS (“INT FRS”) that are relevant to its operations and effective for the current fi nancial year. The adoption of these new/revised FRSs did not result in substantial changes to the Group’s and Company’s accounting policies and had no material effect on the fi nancial statements.

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)


2 Signifi cant accounting policies (cont’d)

a) Basis of preparation (cont’d)

(i) Measurement of non-controlling interests in business combinations

With effect from 1 January 2011, the Group has applied the amendments to FRS 103 Business Combinations resulting from the Improvements to FRSs 2010 in measuring at the acquisition date, non-controlling interests that are not present ownership interests and do not entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation. With the amendment, such non-controlling interests are now measured at fair value.

Previously, the Group’s accounting policy enables the Group to elect on a transaction-by-transaction basis whether to measure non-controlling interests that are not present ownership interests and do not entitle holders to proportionate share of the acquiree’s net assets on liquidation at fair value, or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifi able net assets, at the acquisition date.

This change has been made the Group’s accounting policy (see note 2(d)) and will apply prospectively to new business combinations occurring on or after 1 January 2011. This change has no material impact on the fi nancial statements of the Group.

(ii) Identifi cation of related party relationships

With effect from 1 January 2011, the Group has applied the revised FRS 24 Related Party Disclosures (2010) to identify parties that are related to the Group and for determination of required related party disclosures. The wordings in the revised FRS 24 were improved to provide clarity and additional guidance in the defi nitions and disclosures for related parties.

The adoption of FRS 24 (2010) affects only disclosures made in the fi nancial statements. There is no fi nancial effect on the fi nancial statements of the Group. The Group’s related party disclosures are in Note 29.

At the end of the reporting period, the following FRS and INT FRS were issued, revised or amended but not effective:

FRS 19 Employee Benefi tsFRS 27 Separate Financial StatementsFRS 28 Investments in Associates and Joint VenturesFRS 110 Consolidated Financial StatementsFRS 111 Joint ArrangementsFRS 112 Disclosure of Interests in Other EntitiesFRS 113 Fair Value MeasurementsAmendments to FRS 1 Presentation of Items of Other Comprehensive IncomeAmendments to FRS 12 Deferred Tax: Recovery of Underlying AssetsAmendments to FRS 101 Severe Hyperinfl ation and Removal of Fixed Dates for First-time AdoptersAmendments to FRS 107 Disclosures -Transfers of Financial Assets

The Group anticipates that the adoption of these FRSs and INT FRSs (where applicable) in future periods will have no material impact on the fi nancial statements of the Company and the consolidated fi nancial statements of the Group.





b) Revenue recognition

Revenue comprises the fair value for the consideration received or receivable for the sale of goods and rendering of services, net of goods and services tax, rebates and discounts, and after eliminating sales within the Group. Revenue is recognised to the extent that it is probable that the economic benefi ts associated with the transaction will fl ow to the entity, and the amount of revenue and related cost can be reliably measured.

Revenue from sale of goods is recognised when the Group has delivered the products to the customer and signifi cant risks and rewards of ownership of the goods have been passed to the customer.

Interest income is recognised on a time proportion basis using the effective interest method.

Revenue from services is recognised during the fi nancial year in which the services are rendered, by reference to completion of the specifi c transaction assessed on the basis of the actual service provided as a proportion of the total services to be performed. The accounting policy for revenue from construction contracts is disclosed in Note 2(l).

Dividend income is recognised when the rights to receive payment is established.

c) Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the fi nancial and operating policies so as to obtain benefi ts from its activities. The Group generally has such power when it directly or indirectly, holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls the composition of the board of directors. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has control over another entity.

In the Company’s statement of fi nancial position, investment in subsidiaries are accounted for at cost less accumulated impairment losses. On disposal of the investment, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profi t or loss.

d) Basis of consolidation

The consolidated fi nancial statements comprise the fi nancial statements of the Company and its subsidiaries at the end of the reporting period. The fi nancial statements of the subsidiaries are prepared for the same reporting date as the parent company. Consistent accounting policies are applied for like transactions and events in similar circumstances.

Intragroup balances and transactions, including income, expenses and dividends, are eliminated in full. Profi ts and losses resulting from intragroup transactions that are recognised in assets, such as inventory and property, plant and equipment, are eliminated in full.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Business combinations are accounted for using the acquisition method. The consideration transferred for the acquisition comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.





d) Basis of consolidation (cont’d)

Any excess of the fair value of the consideration transferred in the business combination, the amount of any non-controlling interest in the acquiree (if any) and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the fair value of the net identifi able assets acquired is recorded as goodwill. Goodwill is accounted for in accordance with the accounting policy for goodwill stated in Note 2(g). In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profi t or loss on the date of acquisition.

Non-controlling interests are that part of the net results of operations and of net assets in a subsidiary attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. They are showed separately in the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of fi nancial position. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if the subsidiary incurred losses and the losses allocated exceed the non-controlling interests in the subsidiary’s equity.

For non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation, the Group elects on an acquisition-by-acquisition basis whether to measure them at fair value, or at the non-controlling interests’ proportionate share of the acquiree’s net identifi able assets, at the acquisition date. All other non-controlling interests are measured at acquisition date fair value or, when applicable, on the basis specifi ed in another standard.

In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profi t or loss.

Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions (ie transactions with owners in their capacity as owners).

When a change in the Company’s ownership interest in a subsidiary result in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts recognised in other comprehensive income in respect of that entity are also reclassifi ed to profi t or loss or transferred directly to retained earnings if required by a specifi c FRS.

e) Associated companies

An associated company is an entity over which the Group has signifi cant infl uence and that is neither a subsidiary nor an interest in a joint venture. Signifi cant infl uence is the power to participate in the fi nancial and operating policy decisions of the investee but is not control or joint control over those policies.

Investments in associated companies are accounted for in the consolidated fi nancial statements using the equity method of accounting.

Investment in associated companies are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.





e) Associated companies (cont’d)

In applying the equity method of accounting, the Group’s share of its associated companies’ post-acquisition profi ts or losses is recognised in the profi t or loss and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements and distributions received from associated companies are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the associated company.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifi able assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Group’s share of the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in the Group’s profi t or loss.

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

Upon loss of signifi cant infl uence over the associate, the Group measures any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of signifi cant infl uence and the fair value of the aggregate of the retained investment and proceeds from disposal is recognised in profi t or loss.

Gains and losses arising from partial disposals or dilutions in investment in associated companies in which signifi cant infl uence is retained are recognised in profi t or loss.

In the Company’s fi nancial statements, investment in associated companies are carried at cost less accumulated impairment loss. On disposal of investment in associates, the difference between the disposal proceeds and the carrying amount of the investment is recognised in profi t or loss.

f) Joint ventures

A joint venture is a contractual arrangement whereby the group and other parties undertake an economic activity that is subject to joint control that is when the strategic fi nancial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.

The Group’s interest in joint ventures is accounted for in the consolidated fi nancial statements using equity method.

Investment in joint ventures is initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.





f) Joint ventures (cont’d)

In applying the equity method of accounting, the Group’s share of its joint ventures’ post-acquisition profi ts or losses is recognised in profi t or loss and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements and distributions received from joint venture are adjusted against the carrying amount of the investment. When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the joint venture.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifi able assets, liabilities and contingent liabilities of the joint venture recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Group’s share of the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately as income in the Group’s profi t or loss.

Where a group entity transacts with a joint venture of the Group, profi ts and losses are eliminated to the extent of the Group’s interest in the relevant joint venture.

Upon loss of signifi cant infl uence over the joint venture, the Group measures any retained investment at its fair value. Any difference between the carrying amount of the joint venture upon loss of signifi cant infl uence and the fair value of the aggregate of the retained investment and proceeds from disposal is recognised in profi t or loss.

Gains and losses arising from partial disposals or dilutions in investment in joint ventures in which signifi cant infl uence is retained are recognised in profi t or loss.

In the Company’s fi nancial statements, investment in joint ventures are carried at cost less accumulated impairment loss. On disposal of investment in joint ventures, the difference between the disposal proceeds and the carrying amount of the investment is recognised in profi t or loss.

g) Goodwill

Goodwill is initially measured at cost and is subsequently measured at cost less any accumulated impairment losses.

The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.

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

On disposal of a subsidiary, associated company and jointly controlled entity, the attributable amount of goodwill is included in the determination of the profi t or loss on disposal.

The Group’s policy for goodwill arising on the acquisition of associated companies and joint ventures are described in Notes 2(e) and 2(f).





h) Property, plant and equipment

All items of property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and any impairment in value. The cost of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset.

On disposal of a property, plant and equipment, the difference between the net disposal proceeds and its carrying amount is taken to profi t or loss.

Depreciation is calculated on a straight-line basis to write off the cost of property, plant and equipment over their expected useful lives. The estimated useful lives are as follows:

Number of years

Extension, addition and alteration works 10-50

Motor vehicles 5

Warehouse equipment and fi ttings 5

Computer and offi ce equipment 3

Furniture, fi ttings and renovation 5

Yard facilities 10

Plant and machinery 5

The leasehold properties are depreciated based on the shorter of 50 years or lease period.

The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each reporting date. The effects of any revision are recognised in profi t or loss when the changes arise.

Fully depreciated assets are retained in the fi nancial statements until they are no longer in use.

i) Intangible assets

Club membership

Club membership is stated at cost less impairment losses, if any. Club membership with indefi nite useful live is tested for impairment annually, or more frequently if the events or circumstances indicate that the carrying value may be impaired.

j) Impairment of non-fi nancial assets excluding goodwill

At each reporting date, the Group assesses the carrying amounts of its non-fi nancial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.





j) Impairment of non-fi nancial assets excluding goodwill (cont’d)

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profi t or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A previously recognised impairment loss for an asset other than goodwill is only reversed if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. A reversal of an impairment loss is recognised immediately in profi t or loss.

k) Inventories

Inventories are stated at the lower of cost and net realisable value. The cost of fi nished goods and work-in-progress includes raw materials, direct labour and related production overheads based on normal operating capacity but excludes borrowing costs.

Cost is determined on the following basis:Marine electrical equipment, steel products and consumables – fi rst-in fi rst-out Armouring steel – weighted average Others – specifi c identifi cation

Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.

l) Construction contracts

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at end of the reporting period (“percentage-of-completion method”). When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

The stage of completion is measured by reference to the proportion of contract costs incurred to date to the estimated total costs for the contract. Costs incurred during the fi nancial year in connection with future activity on a contract are excluded from the costs incurred to date when determining the stage of completion of a contract. Such costs are shown as construction contract work-in progress on the statement of fi nancial position unless it is not probable that such contract costs are recoverable from the customers, in which case, such costs are recognised as an expense immediately.

At the end of the reporting date, the cumulative costs incurred plus recognised profi t (less recognised loss) on each contract is compared against the progress billings. Where the cumulative costs incurred plus the recognised profi ts (less recognised losses) exceed progress billings, the balance is presented as due from customers on construction contracts. Where progress billings exceed the cumulative costs incurred plus recognised profi ts (less recognised losses), the balance is presented as due to customers on construction contracts.

Progress billings not yet paid by customers and retentions by customers are included within “trade receivables”. Advances received are included within “other payables”.





m) Lease

Finance leases

Leases of property, plant and equipment where the Group assumes substantially all the risks and rewards incidental to ownership are classifi ed as fi nance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased asset or the present value of the minimum lease payments. Each lease payment is allocated between the liability and fi nance charges. The corresponding rental obligations, net of fi nance charges, are included in borrowings. The interest element of the fi nance cost is taken to profi t or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The asset acquired under fi nance leases are depreciated over the shorter of the useful life of the assets or the lease term.

Operating leases

Leases where a signifi cant portion of the risks and rewards incidental to ownership are retained by the lessor are classifi ed as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are taken to profi t or loss on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period expires, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

n) Income taxes

Income tax on the profi t or loss for the year comprises current and deferred tax. Income tax is recognised in profi t or loss except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity.

Current tax is the expected tax payable or recoverable on the taxable income for the current year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable or recoverable in respect of previous years.

Deferred income tax is provided using the liability method, on all temporary differences at the end of the reporting period arising between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements, except where the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination, and at the time of the transaction, affects neither the accounting nor taxable profi t or loss.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associated companies and joint ventures, except where the timing of the reversal of the temporary difference can be controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised to the extent that it is probable that future taxable profi t will be available against which the deductible temporary differences can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on currently enacted or substantively enacted tax rates at the end of the reporting period.

Deferred tax are charged or credited to equity if the tax relates to items that are credited or charged in the same or a different period, directly to equity.





o) Financial assets

i) Classifi cation

The Group classifi es its fi nancial assets according to the purpose for which the assets were acquired. Management determines the classifi cation of its fi nancial assets at initial recognition and re-evaluates this designation at every reporting date. The Group’s only fi nancial assets are loans and receivables and at fair value through profi t or loss.

Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. They are included in current assets, except those maturing later than 12 months after the end of the reporting period which are classifi ed as non-current assets. Loans and receivables are classifi ed within trade and other receivables and cash and cash equivalents on the statement of fi nancial position.

Financial assets, at fair value through profi t or loss

This category has two sub-categories: fi nancial assets held for trading, and those designated upon initial recognition at fair value through profi t or loss. A fi nancial asset is classifi ed as held for trading if it is acquired principally for the purpose of selling in the short term. Financial assets designated as at fair value through profi t or loss at initial recognition are those that are managed and their performance are evaluated on a fair value basis, in accordance with a documented Group’s investment strategy. Derivatives are also categorised as held for trading unless they are designated as effective hedging instruments. Assets in this category are presented as current assets if they are either held for trading or are expected to be realised within 12 months after the end of the reporting period.

ii) Recognition and derecognition

Regular purchases and sales of fi nancial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a fi nancial asset, the difference between the net sale proceeds and its carrying amount is recognised in profi t or loss. Any amount in the fair value reserve relating to that asset is also transferred to profi t or loss.

iii) Initial measurement

Financial assets are initially recognised at fair value plus transaction costs except for fi nancial assets at fair value through profi t or loss, which are recognised at fair value. Transaction costs for fi nancial assets at fair value through profi t and loss are recognised as expenses.

iv) Subsequent measurement

Financial assets, at fair value through profi t or loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method, less impairment.

Gains or losses arising from changes in the fair value of fi nancial assets at fair value through profi t or loss, including effects of currency translation, are recognised in profi t or loss in the fi nancial year in which the changes in fair values arise.

Interest income on fi nancial assets are recognised separately in profi t or loss.





o) Financial assets (cont’d)

v) Impairment

The Group assesses at each reporting date whether there is objective evidence that a fi nancial asset or a group of fi nancial assets is impaired.

Loans and receivables

Signifi cant fi nancial diffi culties of the debtor, probability that the debtor will enter bankruptcy or fi nancial reorganisation, and default or delinquency in payments are considered indicators that the receivable is impaired.

The carrying amount of these assets is reduced through the use of an impairment allowance account, and the amount of the loss is recognised in profi t or loss. The allowance amount is the difference between the asset’s carrying amount and the present value of estimated future cash fl ows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in profi t or loss.

If in subsequent periods, the impairment loss decreases, and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profi t or loss to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversed date.

p) Financial liabilities

Financial liabilities are recognised on the statement of fi nancial position when, and only when, the Group becomes a party to the contractual provisions of the fi nancial instrument.

Financial liabilities are recognised initially at fair value, plus, in the case of fi nancial liabilities other than derivatives, directly attributable transaction costs.

Subsequent to initial recognition, derivatives are measured at fair value. Other fi nancial liabilities (except for the fi nancial guarantees) are measured at amortised cost using the effective interest method.

For fi nancial liabilities other than derivatives, gains and losses are recognised in profi t or loss when the liabilities are derecognised, and through the amortisation process. Any gains or losses arising from changes in fair value of derivatives are recognised in profi t or loss. Net gains or losses on derivatives include exchange differences. A fi nancial liability is derecognised when the obligation under the liability is extinguished.

q) Financial guarantees

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

Financial guarantee contracts are initially recognised at their fair values plus transaction costs. Financial guarantees are classifi ed as fi nancial liabilities.

Subsequent to initial measurement, the fi nancial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the expected amount payable to the holder. Financial guarantees contracts are amortised in profi t or loss over the period of the guarantee.





r) Derivative fi nancial instruments and hedge accounting

The Group’s activities expose it primarily to the fi nancial risks of changes in foreign exchange rates and interest rates.

The Group uses derivative fi nancial instruments (primarily foreign currency forward contracts) to hedge its risks associated with foreign currency fl uctuations relating to certain fi rm commitments and forecasted transactions. The signifi cant interest rate risk arises from bank borrowings.

The use of fi nancial derivatives is governed by the Group’s policies approved by the board of directors, which provide written principles on the use of fi nancial derivatives consistent with the Group’s risk management strategy. The Group does not use derivative fi nancial instruments for speculative purposes.

Derivative fi nancial instruments are initially measured at fair value on the contract date, and are re-measured to fair value at subsequent reporting dates.

Changes in the fair value of derivative fi nancial instruments that do not qualify for hedge accounting are recognised in profi t or loss as they arise.

s) Provisions for other liabilities

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past event, and it is probable that an outfl ow of economic resources will be required to settle that obligation and the amount can be estimated reliably. Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the reporting date. Where the effect of the time value of money is material, the amount of the provision shall be discounted to present value using a pre-tax discount rate that refl ects the current market assessment of the time value of money and risks specifi c to the obligation.

When discounting is used, the increase in the provision due to passage of time is recognised as a fi nance cost in profi t or loss.

t) Employee benefi ts

Defi ned contribution plans Defi ned contribution plans are post-employment benefi t plans under which the Group pays fi xed contributions into separate entities such as the Central Provident Fund, and will have no legal or constructive obligation to pay further contributions once the contributions have been paid. Contributions to defi ned contribution plans are recognised as an expense in the period in which the related service is performed.

Employee leave entitlement

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





u) Foreign currencies

Functional and presentation currency

Items included in the fi nancial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The fi nancial statements of the Group and the Company are presented in Singapore Dollars, which is the Company’s functional currency.

Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Currency translation gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profi t or loss, except for currency translation differences on net investment in foreign operations and borrowings and other currency instruments qualifying as net investment hedges for foreign operations, which are included in the currency translation reserve within equity in the consolidated fi nancial statements.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

Translation of Group entities’ fi nancial statements

The results and fi nancial position of all the group entities (none of which has the currency of a hyperinfl ationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing rates at the reporting date;

(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) All resulting exchange differences are taken to the currency translation reserve within equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations (including monetary items that, in substance, form part of the net investment in foreign entities), and of borrowings and other currency instruments designated as hedges of such investments, are taken to the foreign currency translation reserve.

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

On disposal of a foreign group entity, the cumulative amount of the currency translation reserve relating to that particular foreign entity is reclassifi ed from equity and recognised in profi t or loss when the gain or loss on disposal is recognised.





v) Dividends

Interim dividends are recorded during the fi nancial year in which they are declared payable. Final dividends are recorded in the Group’s fi nancial statements in the period in which they are approved by the Company’s shareholders.

w) Share capital

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of ordinary shares are deducted against share capital.

x) Cash and cash equivalents

For the purpose of presentation in the consolidated statement of cash fl ows, cash and cash equivalents comprise cash on hand, deposits with fi nancial institutions which are subject to an insignifi cant risk of change in value, bank overdrafts that form an integral part of the Group’s cash management, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignifi cant risk of changes in value. Bank overdrafts are presented as current borrowings on the statement of fi nancial position.

y) Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with other components of the Group. Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s chief operating decision maker for making decisions about allocating resources and assessing performance of the operating segments.

z) Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party, or exercise signifi cant infl uence over the other party in making fi nancial and operating decision. Parties are also considered to be related if they are subject to common control or common signifi cant infl uence. Related parties may be individual or corporate entities.

aa) Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Where the grant relates to an asset, the fair value is recognised as deferred capital grant on the statement of fi nancial position and is amortised to profi t or loss over the expected useful life of the relevant asset by equal annual instalments.

When the grant relates to an expense item, it is recognised in profi t or loss over the period necessary to match them on a systematic basis to the costs that it is intended to compensate.





bb) Signifi cant accounting estimates and judgments

The preparation of the Group’s fi nancial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date.

Key sources of estimation uncertainty

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

Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Signifi cant judgment is involved in determining the group-wide provision for income taxes. There are certain transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the fi nal tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The carrying amount of the Group’s income tax payable, deferred tax assets and liabilities at 31 December 2011 are $3,358,000, $264,000 and $937,000 (2010: $2,596,000, $160,000 and $Nil) respectively.

Impairment of trade and other receivables

The Group assesses at each reporting date whether there is any objective evidence that a fi nancial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or signifi cant fi nancial diffi culties of the debtor and default or signifi cant delay in payments.

Where there is objective evidence of impairment, the amount of future cash fl ows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amounts of the Group’s trade and other receivables at 31 December 2011 are disclosed in Notes 17 and 18.

Write down for slow-moving inventories

Management reviews the inventory ageing listing on a periodic basis. This review involves comparison of the carrying amount of the aged inventory items with the respective net realisable value. The purpose is to ascertain whether a write down is required to be made in the fi nancial statements for slow-moving items. Management is satisfi ed that the inventories have been written down adequately in the fi nancial statements. The carrying amount of inventories at 31 December 2011 is $56,552,000 (2010: $47,329,000) after write-down of $424,000 (2010: $2,152,000) during the year.

Impairment of non-fi nancial assets

The Group assesses annually whether there are any indicators of impairment of all non-fi nancial assets at each reporting date. Goodwill is tested for impairment annually and at other times when such indicators exist. Other non-fi nancial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable.

When value in use calculations are undertaken, management must estimate the expected future cash fl ows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash fl ows. Further details of the key assumptions applied in the impairment assessment of goodwill and the carrying amount of the goodwill, are given in Note 14 to the fi nancial statements.





bb) Signifi cant accounting estimates and judgments (cont’d)

Property, plant and equipment

The Group reviews the residual values and useful lives of property, plant and equipment at each reporting date in accordance with the accounting policy in Note 2(h). The estimation of the residual amount and useful lives involves signifi cant judgment.

During the year, the useful lives of certain assets were revised. As a result of this review, the estimated useful lives of certain assets have been increased from 5 years to 10 years. The change in estimates reduced the depreciation charge for the year by $232,000.

The net carrying amount of property, plant and equipment at 31 December 2011 is $34,256,000 (2010: $22,171,000) and the annual depreciation charge for the fi nancial year ended 31 December 2011 is $2,829,000 (2010: $1,422,000) (Note 9).

Construction contracts

The Group uses the percentage-of-completion method in accounting for its contract revenue where it is probable that contract costs are recoverable. The stage of completion is measured by reference to the contract costs incurred to-date compared to the estimated total costs for the contract.

Signifi cant assumptions are required in determining the stage of completion, the extent of the contract costs incurred, the estimated total contract revenue and contract costs, as well as the recoverability of the contracts. Total contract revenue also includes an estimation of the variation works and claims that are recoverable from the customers. In making these estimates, the Group has applied on past experience and knowledge of the project managers/engineers. The carrying amounts of assets and liabilities arising from construction contracts at 31 December 2011 are disclosed in Note 16.

Provision for warranty

Provision for warranty represents the best estimate of the Group’s liability to repair switchboards or replace affected parts during warranty period. During the year, the Group revises the basis of provision from 4% of the project sales to 1.6% of the project sales. The change in estimates result in reversal of provision of $533,000 to the profi t or loss. The carrying amount of provision for warranty at 31 December 2011 is $355,000 (2010: $888,000) (Note 23).

3 Revenue

Group2011 2010

$’000 $’000

Sales of goods 79,343 94,496Services rendered 3,890 2,420Construction revenue 60,209 6,085

143,442 103,001




4 Finance costs

Group2011 2010$’000 $’000

Interests on borrowings– fi nance leases 3 2– loans 105 131– overdraft 41 4– trust receipts 160 121

309 258

5 Profi t before tax

Group2011 2010$’000 $’000

Profi t before tax is arrived at after charging:Allowance for impairment of receivables (Note 17) 1,326 761Audit fees paid to:– auditors of the Company 163 150– other auditors 7 5Non-audit fees paid to: – auditors of the Company 16 41– other auditors 171 2Bad trade debts written off 12 23Cost of inventories included in cost of sales 96,987 62,784Depreciation of property, plant and equipment (Note 9) 2,829 1,422Fair value adjustment of contingent consideration in a business combination (Note 10(e)) 312 –Impairment loss on goodwill (Note 14(a)) 180 –Impairment loss on investment in an associated company 30 –Inventories written down 424 2,152Rental expenses– Land and warehouse 1,025 721– Other 25 19Provision for warranty (Note 23) – 424Staff costs (Note 6) 17,984 13,242and crediting:Allowance for impairment of receivables written back (Note 17) 511 160Foreign exchange gain (net) 190 14Interest income 36 17Rental income 16 3Gain on disposal of property, plant and equipment 31 –Reversal of provision for warranty (Note 23) 533 –Reversal of inventories written down (Note 15) 173 –




6 Staff costs

Group2011 2010

$’000 $’000

Paid to directors of the Company– Fee 330 300– Remuneration 2,669 2,482– CPF 26 34

Paid to other directors of subsidiaries– Fee 110 120– Remuneration 1,861 1,604– CPF 69 56

Key management staff (non-directors)– Salaries and related costs 910 1,044– CPF 24 41

Other staff– Salaries and related costs 10,447 6,629– CPF 998 665

Staff training and welfare 540 26717,984 13,242

7 Tax expense

Tax expense attributable to profi ts is made up of:

Group2011 2010

$’000 $’000

Current income tax– Singapore 3,226 2,679– Foreign 120 –Deferred tax (Note 13) (57) (125)

3,289 2,554(Over)/under provision of income tax in prior year (55) 40

3,234 2,594




7 Tax expense (cont’d)

The income tax expense on the results of the fi nancial year differs from the amount of income tax determined by applying the Singapore standard rate of income tax to profi t before tax due to the following factors:

Group2011 2010$’000 $’000

Profi t before tax 16,507 14,542Less: share of results of joint ventures and associated companies (463) (200)

16,044 14,342

Tax calculated at a tax rate of 17% 2,727 2,438Singapore statutory stepped income exemption (106) (111)Income not subject to tax (20) (127)(Over)/under provision of income tax in prior year (55) 40Expenses not deductible for tax purposes 795 159Effect of different tax rates in other countries 30 12Deferred tax assets not recognised 182 92Tax incentive (287) –Utilisation of previously unrecognised deferred tax assets (68) –Others 36 91

3,234 2,594

8 Earnings per share

The calculation of the basic and diluted earnings per share attributable to equity holders of the Company is based on the following data:

Group2011 2010$’000 $’000

Net profi t for the year attributable to equity holders of the Company 12,920 11,353

Group2011 2010$’000 $’000

Weighted average number of ordinary shares for basic and diluted earnings per share 480,000 432,000

Basic and diluted earnings per share are calculated by dividing the profi t after tax attributable to equity holders of the Company by the weighted average number of ordinary shares.




9 Property, plant and equipment – Group

Leasehold properties

Extension, addition & alteration

worksMotor

vehicles

Warehouse equipment

& fi ttings

Computer & offi ce

equipment

Furniture, fi ttings &

renovationYard

facilitiesPlant and

machinery Total$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

2011CostAt 1.1.2011 6,130 10,864 455 476 1,724 1,445 2,794 3,038 26,926Acquisition of a

subsidiary 4,147 – – – – – – – 4,147Additions 1,706 – 392 367 560 211 3,732 3,806 10,774Disposals – – (4) – (3) – (5) – (12)

At 31.12.2011 11,983 10,864 843 843 2,281 1,656 6,521 6,844 41,835

Accumulated depreciationAt 1.1.2011 640 1,449 340 335 833 638 187 333 4,755Depreciation

charge 166 435 76 65 517 267 698 605 2,829Disposals – – (3) – (2) – – – (5)

At 31.12.2011 806 1,884 413 400 1,348 905 885 938 7,579

Net carrying valueAt 31.12.2011 11,177 8,980 430 443 933 751 5,636 5,906 34,256

2010CostAt 1.1.2010 6,130 10,827 371 425 949 809 – – 19,511Acquisitions of

subsidiaries – – – – 121 36 2,491 2,978 5,626Additions – 37 99 51 762 636 303 2,737 4,625Disposals – – (15) – (108) (36) – (2,677) (2,836)

At 31.12.2010 6,130 10,864 455 476 1,724 1,445 2,794 3,038 26,926

Accumulated depreciationAt 1.1.2010 483 1,016 289 279 531 382 – – 2,980Acquisitions of

subsidiaries – – – – 16 4 139 282 441Depreciation

charge 157 433 51 56 288 253 48 136 1,422Disposals – – – – (2) (1) – (85) (88)

At 31.12.2010 640 1,449 340 335 833 638 187 333 4,755

Net carrying valueAt 31.12.2010 5,490 9,415 115 141 891 807 2,607 2,705 22,171




9 Property, plant and equipment – Group (cont’d)

The net carrying amounts of leasehold property and extension, addition and alteration works amounting to $8,844,080 (2010: $9,116,000) is mortgaged to secure banking facilities granted to the Group (Note 24). At the end of the reporting period, the net carrying values of property, plant and equipment of the Group under fi nance lease arrangements amounted to $307,100 (2010: $36,000) (Note 21).

During the year, the Group acquired property, plant and equipment of which $80,000 was acquired by means of fi nance leases (Note 21).

10 Investment in subsidiaries

Company2011 2010

$’000 $’000

Unquoted equity shares, at costAt 1 January 17,500 13,648

Capital injections in subsidiaries (b) – 1,256Incorporations of subsidiaries (c) 510 1,245Acquisitions of subsidiaries (d) – 1,198Contingent consideration arrangement (e) – 153

510 3,852

At 31 December 18,010 17,500

Movement of allowance for impairment:At 1 January 2,142 2,296Impairment charge/(written back) 333 (154)At 31 December 2,475 2,142Net carrying amount 15,535 15,358




10 Investment in subsidiaries (cont’d)

(a) Details of subsidiaries:

Name of subsidiary (Country of incorporation) Principal activities

Group’s effective equity interest held

2011%

2010%

Beng Hui Marine Electrical Pte Ltd* (Singapore)

Wholesalers and retailers of electrical goods, appliances and other related products in marine supply and servicing

100 100

Sanshin Marine (S.E.A.) Pte Ltd* (Singapore)

Wholesale trade in marine equipment and accessories

100 100

Yorkshire Marine & Offshore (S) Pte Ltd* (Singapore)

Wholesale trade in marine equipment and accessories

100 100

BH Marine & Offshore Engineering Pte Ltd (“BHMOE”)*

System integration contractor providing turnkey electrical and instrumentation installation services

90 90

Z-Power Automation Pte Ltd* (Singapore)

Assembler, manufacturer and repairer of switchboards and switchgears for vessels

60 60

Sky Holding Pte Ltd (“SKY”)* (Singapore)

Manufacturer and supplier of specialty steel wire and other types of wire

60 60

Oil & Gas Solutions Pte Ltd* (Singapore)

Providing marine and offshore related services and products

60 60

GL Lighting International Pte Ltd*@ (Singapore)

Wholesale of lighting related products and facilities

70 –

Global Steel Industries Pte Ltd (“GSI”)*@ (Singapore)

Investment holding 100 –

Long Life Holding Pte Ltd (“LLH”)* (Singapore)

Securing engineering and installation facilities for the marine and offshore sectors

60 60

Subsidiaries held by SKYSky Wire (M) Sdn Bhd#^ (Malaysia) Dormant – 60Sky Wire (HK) Limited# (Hong Kong) Dormant 60 60Subsidiary held by BHMOEPT. BH Marine & Offshore Engineering

(“PTE”)** (Indonesia)Provision of engineering and installation services in the marine and offshore sector

90 90

Subsidiary held by LLHPT. Long Life Marine Industries**

(Indonesia)Provision of engineering and installation facilities for the marine and offshore sectors

60 60

Subsidiary held by PTEPT. Dwi Utama Mandiri Sukses#

(Indonesia)Investment holding 90 –

Subsidiary held by GSIGulf Specialty Steel Industries LLC@## Manufacturer and supplier of specialty steel

wire and other types of wire51 –

* Audited by Baker Tilly TFW LLP ** Audited by independent overseas member fi rms of Baker Tilly International ^ Struck off during the fi nancial year # Audited by other fi rms of certifi ed public accountants ## Not required to be audited as the Company was incorporated during the year @ Newly incorporated during the year





(b) Capital injections in subsidiaries

In 2010, the Company injected additional capital into the following subsidiaries:

$’000

Name of subsidiaryBH Marine & Offshore Engineering Pte Ltd 300Z-Power Automation Pte Ltd (“ZPA”) 956

1,256

The above capital injections did not change the effective equity interests held by the Company in these subsidiaries.

The capital injection in ZPA had resulted a goodwill of $178,000 (Note 14(a)).

(c) Incorporations of subsidiaries

2011

During the year, the Company subscribed shares in the following subsidiaries:

i) On 12 April 2011, the Company subscribed 1 ordinary share in GL Lighting International Pte Ltd (“GLI) at consideration of $1, representing 100% equity interest in GLI. The principal activity of GLI is that of wholesale of lighting related products and accessories.

Subsequently on 27 October 2011, GLI issued additional 299,999 ordinary shares at $1 each. The Company subscribed for additional 209,999 ordinary shares in GLI at total consideration of $209,999. The equity interest in GLI is diluted to 70%.

The effect of dilution of interest is disclosed in Note 10(f).

ii) On 13 May 2011, the Company subscribed 1 ordinary share in Global Steel Industries Pte Ltd (“GSI”) at consideration of $1, representing 100% equity interest in GSI. The principal activity of GSI is an investment holding company.

Subsequently on 14 June 2011, GSI issued additional 299,999 ordinary shares at $1 each and the Company subscribed in full the additional shares issued at total consideration of $299,999.

iii) On 15 November 2011, the subsidiary, GSI subscribed 1,020,000 ordinary shares in Gulf Specialty Steel Industries LLC (“GSSI”) at consideration of OMR1,020,000 (equivalent to S$3,463,450), representing 51% equity interest in GSSI. The principal activities of GSSI are to carry on the businesses of development, construction and operation of a plant for the manufacture of galvanised steel wire products for use in armouring cables and security fences in the Sultanate of Oman.

2010

In 2010, the Group subscribed shares in the following subsidiaries:

i) On 3 June 2010, the Company subscribed 75,000 ordinary shares in Oil & Gas Solutions Pte Ltd (“OGS”) at total consideration of $1,245,000, representing 60% equity interest in OGS. OGS is principally engaged in the business of providing marine related services and products.

The incorporation of OGS has resulted in goodwill of $498,000 which is mainly attributed to the expertise and future prospects of the subsidiary.





(c) Incorporations of subsidiaries (cont’d)

2010 (cont’d)

ii) On 5 August 2010, a subsidiary, BH Marine & Offshore Engineering Pte Ltd incorporated a wholly-owned subsidiary, PT. BH Marine & Offshore Engineering (“PTE”), a company registered in Batam, Indonesia at registered capital of US$200,000 (equivalent to S$281,640). PTE is principally engaged in provision of engineering and installation services in the marine and offshore sector.

(d) Acquisitions of subsidiaries

2011

On 23 November 2011, a subsidiary, PT. BH Marine & Offshore Engineering (“PTE”) acquired 100% equity interest in PT Dwi Utama Mandiri Sukses (“PTD”) at a total cash consideration of $3,919,000.

The acquired subsidiary has not contributed any revenue or result to the Group since the date of acquisition to 31 December 2011. The subsidiary’s assets and liabilities at 31 December 2011 were $4,147,000 and $928,000 respectively. If the acquisition had occurred on 1 January 2011, the Group revenue would have been $143,442,000 and total profi t would have been $13,346,000.

The goodwill arising on this acquisition amounting to $700,000 is attributable to all its rights to a plot of leasehold industrial land located at Tanjung Uncang, Batam, Indonesia (the “Property”) whereby PTE has been renting the property from PTD since 1 February 2010, with an approximate area of 52,000 m2.

Fair values of identifi able asset and liability of subsidiary at acquisition date:

Group 2011 $’000

Property, plant and equipment 4,147Deferred tax liability (928)

Net identifi able assets acquired 3,219Goodwill (Note 14(a)) 700

Total cash paid 3,919Less: Cash and cash equivalents in subsidiary acquired –Cash outfl ow on acquisition of subsidiary 3,919





(d) Acquisitions of subsidiaries (cont’d)

2010

As disclosed in Note 11(d), the Company acquired 60% equity interest in Long Life Holding Pte Ltd (“LLH”) and its subsidiary, PT. Long Life Marine Industries.

Acquisition-date consideration transferred

Group2010$’000

Fair value of previously held interest (Note 11(d)) 748Cash paid 450Total consideration transferred 1,198

The acquired subsidiaries have contributed revenues of $228,000 and net profi t of $271,000 to the Group since the date of acquisition to 31 December 2010. The subsidiaries’ assets and liabilities at 31 December 2010 were $7,820,000 and $5,593,000 respectively. If these acquisitions had occurred on 1 January 2010, the Group revenue would have been $104,906,000 and total profi t would have been $11,796,000.

The goodwill arising on these acquisitions amounting to $180,000 is attributable to the expertise, technological know-how and future prospects of these subsidiaries.

Fair values of identifi able assets and liabilities of subsidiaries at acquisition date:

Group2010$’000

Cash and cash equivalents 347Inventories 946Trade and other receivables 1,019Property, plant and equipment 5,185Trade and other payables (5,800)

Net identifi able assets 1,697

Less: Non-controlling interest measured at the non-controlling’s proportionate share of subsidiaries’s net assets (679)

Net identifi able assets acquired 1,018Goodwill (Note 14 (a)) 180Less: Fair value of previously held interest (748)

Total cash paid 450Less: Cash and cash equivalents in subsidiaries acquired (347)Net cash outfl ow from acquisition of subsidiaries 103





(e) Contingent consideration arrangement

(i) In year 2009, pursuant to the Sale and Purchase Agreement of Sky Holding Pte Ltd (“SKY”) between the Company and Wong Chan Seng and Steven Wong (collectively, the Vendors), the total purchase consideration paid by the Company is based on 1.188 times the average of the net operating profi t after tax (excluding extraordinary and non-recurring items) (“Net Operating PAT”) of SKY for the fi nancial years ended 31 December 2009, 31 December 2010 and 31 December 2011 (“Actual Consideration”). The Actual Consideration shall be determined on the issuance of the statutory report for the fi nancial year ended 31 December 2011. In the event the Actual Consideration shall be less than $1,782,000, the Vendors jointly and severally undertake to pay an amount of shortfall to the extent of the performance guaranteed.

For the fi nancial year ended 31 December 2011, the directors determined that the performance guaranteed of SKY will not be met. No adjustment is made to recognise the contingent receivable of $1,782,000 in the fi nancial statements as the amount is unlikely to be recovered.

(ii) In the previous fi nancial year, pursuant to the Joint Venture Agreement of OGS between the Company and Soh Long Ping, Chang Kainy and Tommy Ho, the Company is required to subscribe additional shares in OGS based on 60% of the aggregate of the FY 2010 and FY 2011 net profi t after tax and the total subscription price shall not exceed $4,950,000. The estimated fair value of the contingent consideration at the acquisition date of $153,000 was recognised in the previous year’s fi nancial statements.

In accordance with FRS 103 Business Combinations, the management re-assessed the fair value of contingent consideration during the year and the fair value change of $312,000 is recognised in profi t or loss (Note 5).

(f) Changes in ownership interests in subsidiaries

2011

As disclosed in Note 10(c), upon the completion of the additional share allotment of GLI, the Company’s equity interest in GLI is diluted to 70%. The effects of the dilution are as follows:

2011$’000

Carrying amount of non-controlling interest acquired 71

Consideration received from non-controlling interest, net of transaction costs 90

Difference recognised in retained earnings within equity 19





(f) Changes in ownership interests in subsidiaries (cont’d)

2010

In the previous fi nancial year, subsequent to the capital injection in BH Marine & Offshore Engineering Pte Ltd (“BHMOE”) as disclosed in (b) above, on 1 October 2010, the Company entered into a Joint Venture Agreement with a joint venture partner to allot an aggregate of 33,000 new shares in BHMOE to the joint venture partner for a total cash consideration of $100.

Upon the completion of the share allotment, the Company’s equity interest in BHMOE is diluted to 90.1%. The effects of the dilution are as follows:

2010 $’000

Carrying amount of non-controlling interest acquired 109

Consideration received from non-controlling interest, net of transaction costs *

Difference recognised in retained earnings within equity 109

* Less than $1,000.

11 Investment in joint ventures

a) Included in investment in joint ventures of the Company is an amount of $743,000 (2010: $739,000) being equity loan due from joint venture. The amount is unsecured, interest-free and has no fi xed repayment term.

b) The summarised fi nancial information of the joint ventures at the end of the fi nancial year based on the percentage of ownership held by the Group, is as follows:

Group

2011 2010$’000 $’000

Assets 2,158 1,982Liabilities 878 1,252Revenues 1,853 1,762Profi t for the year 467 215




11 Investment in joint ventures (cont’d)

c) The following information relates to the joint venture at the end of the fi nancial year:

Name of joint venture(Country of incorporation) Principal activities


2011%

2010%

Dream Marine Ship Spare Parts Trading LLC# (Dubai, UAE)

Trading in electrical components and spare parts of ships and boats

34 34

# Audited by other fi rms of certifi ed public accountants

d) On 5 May 2010, the Company subscribed 800,000 ordinary shares in Long Life Holding Pte Ltd (“LLH”) at total consideration of $900,000, representing 50% equity interest in LLH. LLH is principally engaged in the business of securing engineering and installation contracts in marine and offshore sectors. LLH is accounted as investment in joint venture in the fi nancial statements.

On 5 August 2010, LLH incorporated a wholly-owned subsidiary, PT. Long Life Marine Industries (“PTL”), a company registered in Batam, Indonesia at registered capital of US$200,000 (equivalent to S$278,640). PTE is principally engaged in provision of engineering and installation facilities in the marine and offshore sector.

Subsequently on 11 October 2010, the Company entered into agreement to acquire additional 10% equity interest in LLH for a consideration of $450,000 and LLH become a 60% owned subsidiary of the Company.

The fair value of the net assets of LLH and PTL at the acquisition date which approximated the carrying amount of the investment of $748,000 have been transferred to cost of investment in subsidiaries (Note 10(d)).

12 Investment in associated companies

The following information relates to the associated companies:

Name of associates (Country of incorporation) Principal activities


2011%

2010%

Hang Jiang Pte Ltd* (Singapore) Export of marine related goods and product

30 30

GL Lighting Holding Pte Ltd (“GLH”)* (Singapore)

Investment holding 25 –

Subsidiaries held by GLHGeneral Luminaire (Shanghai) Co., Ltd#

(People’s Republic of China)Research and development, manufacturing and selling LED lighting modules and fi xtures

25 –

General Luminaire Co., Ltd# (Taiwan) Trading business of LED lighting modules and fi xtures

25 –

* Audited by Baker Tilly TFW LLP# Audited by other fi rms of certifi ed public accountants




12 Investment in associated companies (con’d)

The summarised fi nancial information of the associates at the end of the fi nancial year based on the percentage of ownership held by the Group is as follows:

Group2011 2010$’000 $’000

Assets 7,830 77Liabilities 1,458 2Revenue 1,110 –Net loss 4 15

13 Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same fi scal authority.

The movements in the deferred tax account are as follows:

Group2011 2010$’000 $’000

Balance at beginning of the year (160) (35)Tax credit to profi t or loss (Note 7) (95) (125)Acquisition of a subsidiary (Note 10(d)) 928 –Balance at end of the year 673 (160)

Representing:

Group2011 2010$’000 $’000

Non-currentDeferred tax assets (264) (160)Deferred tax liabilities 937 –

673 (160)

The following are the major deferred tax assets/(liabilities) recognised by the Group and the movements thereon, during the year.




13 Deferred tax (con’d)

Accelerated tax depreciation

Provision for warranty

Fair value adjustment on

acquisition of a subsidiary Others Total

$’000 $’000 $’000 $’000 $’000

2011At 1 January 2011 (31) 151 – 40 160(Charged)/credited to profi t or

loss for the year (48) (91) – 234 95Acquisition of a subsidiary – – (928) – (928)At 31 December 2011 (79) 60 (928) 274 (673)

2010At 1 January 2010 (20) 78 – (23) 35(Charged)/credited to profi t or

loss for the year(11) 73 – 63 125

At 31 December 2010 (31) 151 – 40 160

Group2011 2010

$’000 $’000

Unrecorded deferred tax assets:

Unabsorbed capital allowances – 53Unutilised tax losses 693 528Others 17 15

710 596

No deferred tax assets has been recognised in respect of the above balances, as the future profi t streams are not probable. The realisation of the future income tax benefi ts from tax loss carry forwards is available for an unlimited future period subject to the conditions imposed by law including the retention of majority shareholders as defi ned.




14 Intangible assets

Group Company2011 2010 2011 2010

$’000 $’000 $’000 $’000

Goodwill arising on business combination (a) 1,529 1,009 – –Club membership 49 49 49 49

1,578 1,058 49 49

a) Goodwill arising on business combination

Group2011 2010$’000 $’000

Cost:At 1 January 2,873 1,864

Capital injection in a subsidiary (Note 10(b)) – 178Incorporation of a subsidiary (Note 10(c)) – 498Acquisitions of subsidiaries (Note 10 (d)) 700 180Arising from contingent consideration arrangement (Note 10(e)) – 153

700 1,009At 31 December 3,573 2,873

Accumulated impairmentAt 1 January 1,864 1,864Impairment charge (Note 5) 180 –At 31 December 2,044 1,864Net carrying amount 1,529 1,009

Impairment test for goodwill

Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units (CGUs) that are expected to benefi t from that business combination. Before recognition of impairment losses, the carrying amount of goodwill had been allocated as follows:

Group2011 2010$’000 $’000

Manufacturing (single CGU) 178 178Engineering services (comprised several CGUs) 1,531 831

1,709 1,009




14 Intangible assets (cont’d)

a) Goodwill arising on business combination (cont’d)

Impairment test for goodwill (cont’d)

The recoverable amounts of the CGUs are determined from value-in-use calculations. The key assumptions for the value-in-use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that refl ect current market assessments of the time value of money and the risks specifi c to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

The key assumptions used are as follows:Group

Growth rates

Discount rates

$’000 $’000

Manufacturing 10 2Engineering Services 10 2 At 31 December 2011, before impairment testing, goodwill of $1,531,000 was allocated to the Engineering Services division. Due to the unfavourable business performance of a CGU, an impairment loss against goodwill of $180,000 was made to reduce its recoverable amount. The impairment charged is included within ‘Administrative expenses’ in the consolidated income statement.

15 Inventories

Group2011 2010

$’000 $’000

Raw material 11,631 1,591Work-in-progress 12,932 6,356Finished goods 31,989 39,382

56,552 47,329

In 2011, the Group had recognised a reversal of $173,000 being the inventory write down made in prior years, as the inventory were sold above the carrying amount in 2011.




16 Due from/(to) customers on construction contractsGroup

2011 2010$’000 $’000

Costs incurred to-date 49,229 4,592Attributable profi ts recognised to-date 6,577 1,748

55,806 6,340Less: Progress billing to-date (35,428) (5,888)

20,378 452Presented as:Due from customers on construction contracts 20,462 2,547Due to customers on construction contracts (84) (2,095)

20,378 452

17 Trade receivables

Group2011 2010

$’000 $’000

Trade receivables 39,727 36,675Less: allowance for impairment of trade receivables (1,748) (933)

37,979 35,742

Movements of allowance for impairment of trade receivables are as follows:

At 1 January 933 332Allowance made during the year (Note 5) 1,326 761Allowance written back during the year (Note 5) (511) (160)At 31 December 1,748 933

Included in trade receivables is an amount of $335,000 (2010: $881,000) due from a joint venture company.

18 Other receivables

Group Company2011 2010 2011 2010

$’000 $’000 $’000 $’000

Amount due from an associated company 68 – 8 –Deferred costs 269 – – –Sundry deposits 3,079 562 4 –Prepayments 326 755 3 4Amounts due from subsidiaries (Note 19) – – 43,008 34,039Advance payment to suppliers 980 69 – –Sundry receivables 444 152 36 34

5,166 1,538 43,059 34,077

The amount due from an associated company is non-trade in nature, unsecured, interest-free and repayable on demand.




19 Amounts due from subsidiaries

Company2011 2010

$’000 $’000

Interest-free advances 35,588 26,314Loans at variable interest rates 7,420 7,725

43,008 34,039

The amounts due from subsidiaries are non-trade in nature, unsecured and repayable on demand. Loan from subsidiaries are at variable interest rates range from 1.659% to 2.221% (2010: 1.9614% to 2.947%) per annum based on the average cost of funds incurred by the Group.

20 Cash and cash equivalents

Group Company2011 2010 2011 2010$’000 $’000 $’000 $’000

Cash at bank and on hand 14,709 22,516 139 11,847Fixed deposits 2,243 1,968 – –

Cash and cash equivalents 16,952 24,484 139 11,847

Less: fi xed deposits pledged (2,243) (1,968)Less: bank overdraft (Note 24) (1,973) (55)

Cash and cash equivalents as per consolidated statement of cash fl ows 12,736 22,461

Fixed deposits of $2,243,000 (2010: $1,968,000) are pledged to banks to cover bankers’ letter of guarantees and bank overdraft. The interest rates of fi xed deposits at 31 December 2011 range from 0.21% to 0.90% (2010: 0.16% to 0.63%) per annum.




21 Finance lease liabilities

The minimum lease payment under the fi nance lease liabilities are payable as follows:

Group2011 2010$’000 $’000

Not later than one fi nancial year 48 13Later than one fi nancial year but not later than fi ve fi nancial years 4 11

Total minimum lease payments 52 24Less: Future fi nance charges (3) (4)

Present value of fi nance lease liabilities 49 20

Representing fi nance lease liabilities:– Current 46 14– Non-current 3 6

49 20

The weighted average effective interest rate of the fi nance lease liabilities at the end of the reporting period is 6.60% (2010: 7.09%) per annum. The net book value of motor vehicles acquired under fi nance lease agreements are disclosed in Note 9.

22 Other payables

Group Company2011 2010 2011 2010$’000 $’000 $’000 $’000

Accrued operating expenses 3,605 3,110 56 311Deferred revenue 855 598 – –Provision for directors’ fees– directors of the Company 330 300 330 300– directors of subsidiaries 110 120 – –Amounts due to directors of the Company 1,632 1,453 1,632 1,453Amount due to a subsidiary – – 294 294Advance payment from customers 24 818 – –Other creditors 302 387 176 146Contingent consideration on business combination 465 153 465 153

7,323 6,939 2,953 2,657

The amounts due to directors and a subsidiary are non-trade in nature, unsecured, interest-free and repayable on demand.




23 Provision for warranty

The Group gives warranties on certain products and undertakes to repair or replace items that fail to perform satisfactorily. A provision is recognised at the fi nancial year end for expected warranty claims based on the management’s estimation of the level of repairs and returns.

Movements in provision for warranty are as follows:

Group2011 2010

$’000 $’000

At 1 January 888 464(Reversal)/provision made during the year (Note 5) (533) 424At 31 December 355 888

24 Bank borrowings

Group2011 2010

$’000 $’000

Term loan 1 (secured) 533 933Term loan 2 (secured) – 1,417Term loan 3 (secured) 3,092 –Working capital loan (unsecured) 6,410 2,000Trust receipts 16,345 924Bank overdraft (Note 20) 1,973 55

28,353 5,329

Term loans of the Group are secured by legal mortgage of the Group’s leasehold property and extension, addition and alteration works (Note 9), existing fi rst fi xed charge over a subsidiary’s fi xed property and assets and covered by corporate guarantee from the Company.

Term loan 1 is repayable over 59 monthly instalments of $33,340 each and a fi nal instalment of $32,940. The fi rst instalment commenced on 1 May 2008. Term loan 2 is repayable over 35 monthly instalments of $83,340 each and a fi nal instalment of $83,100, the fi rst instalment commencing on 30 May 2009. Term loan 3 is repayable over 59 monthly instalments of $58,334 each and a fi nal instalment of $58,294. The fi rst instalment commenced in June 2011.

Notwithstanding to the above, the term loans are subjected to review, recall, alter or cancel from time to time at the lender’s discretion. Accordingly, these loans are classifi ed under current liabilities.

The working capital loan and trust receipts are covered by corporate guarantee from the Company and joint and several guarantee by certain directors of a subsidiary.

Bank overdraft is secured by fi xed deposits of the Group (Note 20).




24 Bank borrowings (cont’d)

Interest rates at the end of the reporting period were as follows:

Term loan 1 – Variable rate at 1% (2010: 1%) per annum over the bank’s cost of funds rate.

Term loan 2 – Variable rate at Nil (2010: 1.25%) per annum over the bank’s cost of funds rate.

Term loan 3 – Variable rate at 1.25% per annum over the bank’s cost of funds rate.

Working capital loan – Variable rate range from 1.30% to 3.00% (2010: 3.00%) per annum above the fi nancial institution’s prevailing Enterprise Base Rate.

Trust receipts – Variable rate range from 1.44% to 2.75% (2010: 1.25%) per annum above SIBOR.

Bank overdraft – 5.25% per annum.

25 Share capital

Group and Company2011 2010

Number of issued shares

Total share capital

Number of issued shares

Total share capital

$’000 $’000 $’000 $’000Issued and fully paid up– Ordinary shares with no par value

Balance at 1 January 480,000 43,461 420,000 23,069Share issue – – 60,000 21,328Share issue expenses – – – (936)Balance at 31 December 480,000 43,461 480,000 43,461

In the previous fi nancial year, the Company issued 60,000,000 ordinary shares at $0.365 each for a total cash consideration of $21,328,000 pursuant to the issuance of Taiwan Depository Receipts on the Taiwan Stock Exchange.

The holder of ordinary shares is entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction.

26 Contingent liability

As at 31 December 2011, the Company has provided unsecured corporate guarantees of $61,706,000 (2010: $57,706,000) for fi nancing facilities granted by fi nancial institutions to its subsidiaries.

No material losses under these guarantees are expected.




27 Commitments

a) Lease commitments

The Group leases various warehouses and land from non-related parties under non-cancellable operating lease agreements. The leases have an average tenure of between 28 to 39 years, varying terms, escalation clauses and renewal options. No restrictions are imposed on dividends or further leasing.

Commitments in relation to non-cancellable operating leases contracted for but not recognised as liabilities, are payable as follows:

Group2011 2010

$’000 $’000

Within 1 fi nancial year 555 439Between 2 to 5 fi nancial years 2,220 1,756Over 5 fi nancial years 12,008 11,983

14,783 14,178

The leases have varying terms and escalation clauses. Renewals of leases are subject to approval by lessor. Lease terms do not contain restrictions on the Group’s activities concerning dividends, additional debt or further leasing.

b) Capital commitments

Capital commitments contracted for at the end of the reporting period but not recognised in the fi nancial statements:

Group Company2011 2010 2011 2010$’000 $’000 $’000 $’000

Expenditure for property, plant and equipment 20,832 17,042 – –Additional shares subscription in a subsidiary – – 697 383Subscription of shares in joint venture companies – 4,590 – –

20,832 21,632 697 383

c) Forward foreign exchange contracts

At 31 December 2011, the Group entered forward foreign exchange contracts at notional amounts of $Nil (2010: $1,566,000).

The fair values of outstanding forward foreign exchange contracts (which are not accounted as hedging instruments) at the end of the reporting period are approximate to the contracted amounts.

Forward currency contracts are valued using a valuation technique (primarily forward pricing model) with market observable inputs such as foreign exchange spot and forward rates.




28 Dividends

Group2011 2010$’000 $’000

First and fi nal (one-tier) tax exempt dividend:– 0.7 cents per share for the fi nancial year ended 31 December 2010 (2010: 0.8 cents per

share for the fi nancial year ended 31 December 2009) 3,360 3,360

The directors have proposed a fi rst and fi nal (one-tier) tax exempt dividend for the fi nancial year ended 31 December 2011 of 0.7 cents (2010: 0.7 cents) per share amounting to a total of $3,360,000 (2010: $3,360,000). These fi nancial statements do not refl ect this dividend payable, which will be accounted for in the shareholders’ equity as an appropriation of retained earnings in the fi nancial year ending 31 December 2012.

29 Related party transactions

In addition to information disclosed elsewhere in the fi nancial statements, the following transactions took place between the Group and related parties, who are not members of the Group during the fi nancial year on terms agreed by the parties concerned:

Group2011 2010$’000 $’000

With jointly controlled entities

Sales of goods 833 1,040Sales of property, plant and equipment – 3,906

With associated companies

Research and development cost 186 –Purchase of goods 4 –




30 Financial risk instruments

Categories of fi nancial instruments

Financial instruments at the end of the reporting period are as follows:

Group Company2011 2010 2011 2010$’000 $’000 $’000 $’000

Financial assetsTrade and other receivables 39,485 36,821 43,799 34,812Cash and cash equivalents 16,952 24,484 139 11,847Loans and receivables 56,437 61,305 43,938 46,659

Financial liabilitiesTrade and other payables 27,661 18,241 2,488 2,504Borrowings 28,402 5,349 – –At amortised cost 56,063 23,590 2,488 2,504Contingent consideration of business combination 465 153 465 153

56,528 23,743 2,953 2,657

Financial risk management

The Group’s activities expose it to market risk (including foreign exchange risk, interest rate risk, liquidity and commodity price risk) and credit risk. The Group’s overall fi nancial risk management strategy seeks to minimise adverse effects from the unpredictability of fi nancial markets on the Group’s fi nancial performance.

The Board of Directors provides written principles for overall fi nancial risk management and written policies covering the specifi c areas above. Such written policies are reviewed annually by the Board of Directors and periodic reviews are undertaken to ensure that the Group’s policy and guidelines are complied with. Risk management is carried out by the Risk Management Committee under the policies approved by the Board of Directors.

There has been no signifi cant change to the Group’s exposure to these fi nancial risks or the manner in which it manages and measures fi nancial risk. Market risk and credit risk exposures are measured using sensitivity analysis indicated below.

a) Market risk

Foreign exchange risk

Foreign currency risk arises on certain purchases that are denominated in currencies other than the respective functional currencies of entities in the Group. The currencies that give rise to this risk are primarily United States dollar, Euro and United Arab Emirates dirham.

The Group’s fi nancial risk management policy is to hedge any exposure exceeding US$100,000 or EUR70,000 based on the weekly foreign exchange requirement report and cash fl ow of the Group. It is not the Group’s policy to take speculative positions in foreign currencies.




30 Financial risk instruments (cont’d)

a) Market risk (cont’d)

Foreign exchange risk (cont’d)

The Group’s foreign currency exposure is as follows:USD Euro AED Others Total

S$’000 S$’000 S$’000 S$’000 S$’000

At 31 December 2011Financial assetsCash and cash equivalents 1,702 145 – 271 2,118Trade and other receivables 4,802 553 777 8 6,140

6,504 698 777 279 8,258Financial liabilitiesTrade payables (4,340) (941) (15) (150) (5,446)Gross statement of fi nancial position exposure 2,164 (243) 762 129 2,812Next six-months’ forecast purchases (4,907) (1,372) – – (6,279)Net currency exposure (2,743) (1,615) 762 129 (3,467)

At 31 December 2010Financial assetsCash and cash equivalents 3,145 539 – 730 4,414Trade and other receivables 5,750 92 773 482 7,097

8,895 631 773 1,212 11,511

Financial liabilitiesTrade payables (2,430) (1,009) – (984) (4,423)Gross statement of fi nancial position exposure 6,465 (378) 773 228 7,088Next six-months’ forecast purchases (3,635) (481) – – (4,116)Gross exposure 2,830 (859) 773 228 2,972Foreign currency forwards 417 1,128 – – 1,545Net currency exposure 3,247 269 773 228 4,517

The Company’s foreign currency exposure based on the information provided by key management is $777,000 (2010: $773,000) included in other receivables and amount due from a joint venture company which are denominated in United Arab Emirates dirham.

Sensitivity analysis of the Group’s and Company’s foreign exchange risk exposure are not presented as a reasonably possible change of 5% in the foreign currencies exchange rates against the respective functional currencies of the Group’s entities, with all other variables held constant will have no signifi cant impact on the Group’s and Company’s net profi t.





a) Market risk (cont’d)

Interest rate risk

The Group’s exposure to the risk of changes in interest rates arise mainly from the Group’s fi xed deposits placed with fi nancial institutions and bank borrowings. For interest income from the fi xed deposits, the Group manages the interest rate risks by placing fi xed deposits with reputable fi nancial institutions on varying maturities and interest rate terms. Interest expense from bank borrowings arises from term loans, working capital loan, factoring loan and trust receipts (Note 24).

The Company’s exposure to interest rate risk is minimal as the impact of interest rate fl uctuations on loans to subsidiaries (Note 19) are insignifi cant, and the Company has no interest-bearing liabilities.

Sensitivity analysis of the Group’s and Company’s interest rate risk exposures are not presented as the impact of an increase/decrease of 50 basis points in interest rates are not expected to be signifi cant.

Commodity price risk

The Group has commodity price risk as copper and steel are its main raw materials. Copper and steel are traded commodities and their prices are subject to the fl uctuations of the world commodity markets. Any signifi cant increases in the prices for copper and steel will have a material adverse impact on the fi nancial position and results of operation. The Group’s profi tability will be adversely affected if the Group is unable to pass on any increase in raw material prices to its customers on a timely basis or fi nd cheaper alternative sources of supply.

The Group monitors the material price fl uctuation closely and as far as possible, locked in material prices on confi rmed orders.

b) Liquidity risk

Liquidity risk is the risk that the Group will encounter diffi culty in meeting fi nancial obligations due to shortage of funds. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of fi nancial assets and liabilities. The Group manages the liquidity risk by maintaining suffi cient cash to enable them to meet their normal operating commitments and having an adequate amount of committed credit facilities (Note 24).

The table below summarises the maturity profi le of the Group’s non-derivative fi nancial liabilities at the end of the reporting period based on contractual undiscounted repayment obligations.





b) Liquidity risk (cont’d)

1 year or less 1 to 5 year Total$’000 $’000 $’000

Group2011Trade and other payables 27,661 – 27,661Bank borrowings 26,258 2,672 28,930Finance lease obligations 48 4 52Contingent consideration of business combination 465 – 465

54,432 2,676 57,108

2010Trade and other payables 18,241 – 18,241Bank borrowings 4,504 957 5,461Finance lease obligations 13 11 24Contingent consideration of business combination – 153 153

22,758 1,121 23,879

Company2011Trade and other payables 2,488 – 2,488Contingent consideration of business combination 465 – 465Financial guarantee contracts 61,706 – 61,706

64,659 – 64,659

2010Trade and other payables 2,504 – 2,504Contingent consideration of business combination – 153 153Financial guarantee contracts 57,706 – 57,706

60,210 153 60,363

At the end of the reporting period, the Company does not consider it probable that a claim will be made against the Company under the intragroup fi nancial guarantee.

The table below analyses the Group’s derivative fi nancial instruments for which contractual maturities are essential for an understanding of the timing of the cash fl ows into relevant maturity groups based on the contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash fl ows.





b) Liquidity risk (cont’d)

GroupLess than 1 year

2011 2010$’000 $’000

Gross – settled currency forwards– Receipts – 1,545– Payments – (1,566)

c) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in fi nancial loss to the Group. The Group has credit policies in place to ensure that sale of products are made to customers with appropriate credit histories and the exposure to credit risk is monitored on an ongoing basis by the directors. Credit evaluations are performed on all customers requiring credit extension or credit limit. The maximum exposure to credit risk is represented by the carrying amount of loans and receivables in the statement of fi nancial position and the following:

Company2011 2010

$’000 $’000

Corporate guarantees provided to banks for subsidiaries’ borrowings (Note 24) 61,706 57,706 At the end of the reporting period, there were signifi cant concentrations of credit risks primarily on trade receivables.

The Group’s 4 (2010: 4) largest trade receivables amounted to $12,741,000 (2010: $11,508,000) and this represented 34% (2010: 32%) of total trade receivables and of which one major corporate customer represented 16% (2010: 9%) of total trade receivables.





c) Credit risk (cont’d)

The Group’s trade receivables comprise the following:

Group2011 2010$’000 $’000

Not past due 19,471 20,348Past due but not impaired 18,508 15,394Past due and impaired 1,748 933

39,727 36,675

Financial assets that are past due but not impaired

Past due 0 to 3 months 11,790 9,178Past due 3 to 6 months 1,265 4,351Past due over 6 months 5,453 1,865

18,508 15,394

Financial assets that are past due and impaired

Full allowance for impairment of trade receivables had been provided for debts which are past due and impaired.

d) Capital risk

The Group’s objective when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholders’ value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings.

The capital structure of the Group mainly consists of equity and borrowings and the Group’s overall strategy remains unchanged from 2010.

31 Fair value

The carrying amounts of fi nancial assets and liabilities are reasonable approximation of fair values due to their short-term nature except for the equity loan due from a joint venture as disclosed in Note 11. However, the Group does not anticipate the carrying amount at the end of the reporting period to be signifi cantly different from the value that would eventually be settled.

Forward currency contracts are included in Level 1 of the fair value hierarchy which is measured based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

The Group and the Company has no other fi nancial instruments.




32 Segment information

For management purpose, the Group is organised into business segments, with each segment representing a strategic business segment that offers different products/services. The Group has three main business segments, Supply Chain Management, Manufacturing and Engineering Services.

Supply Chain Management is further sub-divided into:

a. Marine cables and accessories; b. Marine lighting equipment and accessories; andc. Others

Manufacturing is further sub-divided into:

d. Marine switchboards; ande. Galvanised steel wire

The following tables present revenue, segment results, assets and liabilities, depreciation, goodwill arising from consolidation written off, other signifi cant non-cash expenses and capital expenditure information for the Group.

Group2011 2010

$’000 $’000

Segment revenue

Supply Chain ManagementSales to external customersMarine cables and accessories 44,552 47,027Marine lighting equipment and accessories 11,312 12,989Others 6,156 6,780

62,020 66,796Intersegment sales 13,648 2,742Subtotal 75,668 69,538

ManufacturingSales to external customersMarine switchboards 11,896 12,702Galvanized steel wire 5,212 6,337

17,108 19,039Intersegment sales 613 7Subtotal 17,721 19,046

Engineering ServicesSales to external customersEngineering and installation 64,314 17,166Intersegment sales 26,509 13Subtotal 90,823 17,179Less: Eliminations (40,770) (2,762)Total revenue 143,442 103,001




32 Segment information (cont’d)

Group2011 2010$’000 $’000

Segment results

Supply Chain ManagementMarine cables and accessories 9,425 7,819Marine lighting equipment and accessories 3,359 2,994Others 1,828 1,556

14,612 12,369

ManufacturingMarine switchboards 1,313 1,556Galvanised steel wire (236) (183)

1,077 1,373

Engineering ServicesEngineering and installation 355 600Total segment results 16,044 14,342

Share of results of joint ventures 467 215Share of results of associated companies (4) (15)Net profi t before tax 16,507 14,542Tax expense (3,234) (2,594)Net profi t after tax 13,273 11,948Non-controlling interests (353) (595)Net profi t attributable to equity holders of the Company 12,920 11,353

Group Assets and LiabilitiesAssetsSupply Chain ManagementMarine cables and accessories 50,680 70,082Marine lighting equipment and accessories 17,660 16,912Others 5,556 7,634ManufacturingMarine switchboards 9,608 9,147Galvanised steel wire 9,915 6,705Engineering ServicesEngineering and installation 87,818 25,945Unallocated corporate assets 264 160Total assets 181,501 136,585





Group2011 2010

$’000 $’000

Group Assets and Liabilities (cont’d)Segment assets includes:

Investment in joint venture and associated companiesSupply Chain ManagementMarine cables and accessories 2,046 1,556Marine lighting equipment and accessories 6,246 –

8,292 1,556

Additions to non-current assetsSupply Chain ManagementMarine cables and accessories 1,599 48Marine lighting equipment and accessories 406 13Others 220 7ManufacturingMarine switchboards 131 84Galvanised steel wire – 15Engineering ServicesEngineering and installation 12,565 6,896

14,921 7,063

LiabilitiesSupply Chain ManagementMarine cables and accessories 15,699 11,492Marine lighting equipment and accessories 3,987 3,174Others 2,170 1,657ManufacturingMarine switchboards 3,119 3,551Galvanised steel wire 39 1,311Engineering ServicesEngineering and installation 33,117 7,055Unallocated corporate liabilities 4,332 2,602Total liabilities 62,463 30,842

Other segment informationDepreciationSupply Chain ManagementMarine cables and accessories 664 696Marine lighting equipment and accessories 169 192Others 92 100ManufacturingMarine switchboard 117 91Galvanised steel wire 16 15Engineering ServicesEngineering and installation 1,771 328

2,829 1,422





Group2011 2010$’000 $’000

Other signifi cant non-cash expenses

Supply Chain ManagementMarine cables and accessories 344 1,934Marine lighting equipment and accessories 87 525Others 21 304ManufacturingMarine switchboards 12 541Armouring steel wire – 56Engineering servicesEngineering and installation 1,218 –

1,682 3,360

Segment results

Performance of each segment is evaluated based on segment profi t or loss which is measured differently from the net profi t or loss before tax in the consolidated fi nancial statements.

Segment assets

The amounts provided to the Management with respect to total assets are measured in a manner consistent with that of the fi nancial statements. Management monitors the assets attributable to each segment for the purposes of monitoring segment performance and for allocating resources between segments. All assets are allocated to reportable segments other than deferred income tax assets which are classifi ed as unallocated assets.

Segment liabilities

The amounts provided to Management with respect total liabilities are measured in a manner consistent with that of the fi nancial statements. All liabilities are allocated to the reportable segments based on the operations of the segments other than current tax payables which are classifi ed as unallocated liabilities.

Geographical Information

The turnover by geographical segments is based on the billing location of customers. The assets and capital expenditure of the Group are signifi cantly located in Singapore.

The following table provides an analysis of the Group’s revenue by geographical market, which is analysed based on the billing address of each individual customer:





Geographical Information (cont’d)

Group2011 2010

$’000 $’000

Singapore 67,698 73,504Indonesia 26,412 5,871Norway 30,355 3,967South-East Asia 6,718 6,171East Asia 2,876 3,539Middle East 3,826 6,088Other countries 5,557 3,861

143,442 103,001

Other countries comprise Africa, Australia, Bangladesh, Belgium, Germany, Holland, India, Mauritius, Netherlands, United Kingdom and United States of America.

Information about major customer

Revenue of approximately $50,084,000 (2010: $Nil) are derived from 2 (2010: Nil) external customers that individually contribute to more than 10% of the Group revenue and are attributable to the Engineering Services segment.

33 Events after the balance sheet date

Subsequent to the year end, the Group subscribed equity interests in the following companies:

a) 50% equity interest on a joint venture company, Z-Power Automation (Vietnam) Co., Ltd, incorporated in Socialist Republic of Vietnam, for a total cash consideration of USD150,000. The principal activity of the joint venture company are manufacturing of industrial electrical equipment, including various kind of switchboards, transformers, electricity controlling and management system, industrial electricity signal system for marine, offshore, factories, industrial manufacturing system as well as installation and maintenance of such equipment.

b) 70% equity interest in a subsidiary, Dalian Nautical Offshore & Marine Technologies Co., Ltd, incorporated in People’s Republic of China, for a total consideration of RMB750,000. The principal activity of the subsidiary is the provision of marine and offshore related services and products.

The establishment of these companies are not expected to have material impact on the results and positions of the Group for the fi nancial year ending 31 December 2012.




34 Authorisation of fi nancial statements

The consolidated fi nancial statements of the Group and the statement of fi nancial position and statement of changes in equity of the Company for the fi nancial year ended 31 December 2011 were authorised for issue in accordance with a resolution of the directors dated 28 March 2012.


STATISTICS OF SHAREHOLDINGS

DISTRIBUTION OF SHAREHOLDERS BY SIZE OF SHAREHOLDINGS As at 15 March 2012

Size of ShareholdingsNo. of

Shareholders % No. of Shares %

1 – 999 50 1.89 23,877 0.001,000 – 10,000 764 28.86 4,796,784 1.0010,001 – 1000,000 1,812 68.46 97,426,839 20.301,000,001 AND ABOVE 21 0.79 377,752,500 78.70TOTAL 2,647 100.00 480,000,000 100.00

TWENTY LARGEST SHAREHOLDERSAs at 15 March 2012

Shareholder’s NameNumber of

Shares Held %

1 BENG HUI HOLDING (S) PTE LTD 286,675,600 59.722 CITIBANK NOMINEES SINGAPORE PTE LTD 43,134,000 8.993 UNITED OVERSEAS BANK NOMINEES PTE LTD 5,709,500 1.194 LIM HWEE HONG 3,928,690 0.825 LIM HUAY HUA 3,828,690 0.806 LIM HUI ENG 3,828,690 0.807 LIM HUI PENG 3,828,690 0.808 MAYBAN NOMINEES (SINGAPORE) PTE LTD 3,061,000 0.649 LIM CHYE HOON 2,917,140 0.6110 DBS NOMINEES PTE LTD 2,865,500 0.6011 PHILLIP SECURITIES PTE LTD 2,621,500 0.5512 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 2,248,500 0.4713 GOH LAY SUAN GINA 1,912,000 0.4014 UOB KAY HIAN PTE LTD 1,752,000 0.3715 WEE BOH HUAT 1,703,000 0.3516 MAYBANK KIM ENG SECURITIES PTE LTD 1,593,000 0.3317 OCBC SECURITIES PRIVATE LTD 1,411,500 0.2918 OCBC NOMINEES SINGAPORE PTE LTD 1,351,000 0.2819 GOH CHENG HIAN 1,250,000 0.2620 SEE YONG HAI 1,105,000 0.23

TOTAL 376,725,000 78.50

AS AT 31 DECEMBER 2011


SUBSTANTIAL SHAREHOLDERSAs at 15 March 2012

Direct Interest % Deemed Interest %

Beng Hui Holding (S) Pte Ltd 286,675,600 59.72 – –

Lim Hwee Hong 3,928,690 0.82 286,675,600 59.72

Lin Hui Eng 3,828,690 0.80 286,675,600 59.72

Lim Hui Peng 3,828,690 0.80 286,675,600 59.72

Lim Huay Hua 3,828,690 0.80 286,675,600 59.72

Lim Chye Hoon 2,917,140 0.61 286,750,600 59.74

Rule 723 of the SGX Listing Manual – Free FloatBased on the information available to the Company as at 15 March 2012, approximately 36.40% of the issued Share Capital of the Company is being held by the public and theefore, Rule 723 of the Listing Manual of the SGX-ST has been complied with.

STATISTICS OF SHAREHOLDINGS (CONT’D)

AS AT 31 DECEMBER 2011


NOTICE IS HEREBY GIVEN that the Annual General Meeting of BH GLOBAL MARINE LIMITED (the “Company”) will be held at the Boardroom, 8 Penjuru Lane, Singapore 609189 on Tuesday, 24 April 2012 at 10.00 a.m. to transact the following business:-

AS ORDINARY BUSINESS1. To receive and adopt the Audited Financial Statements of the Company for the fi nancial year ended 31 December

2011 and the Reports of the Directors and the Auditors thereon. (Resolution 1)

2. To declare a Final Dividend of 0.7 Singapore cent per ordinary share (one-tier tax exempt) for the fi nancial year ended 31 December 2011. (Resolution 2)

3. To approve the Directors’ Fees of S$330,000 for the fi nancial year ended 31 December 2011 (2010: S$300,000). (Resolution 3)

4. To re-elect the following Directors retiring pursuant to Article 104 of the Company’s Articles of Association:-

(a) Mr Patrick Lim Hui Peng; and(b) Mr Loh Weng Whye.

(See Explanatory Note 1)

(Resolution 4)(Resolution 5)

5. To re-appoint Messrs Baker Tilly TFW LLP as auditors of the Company and to authorise the Directors to fi x their remuneration. (Resolution 6)

AS SPECIAL BUSINESSTo consider and, if thought fit, to pass, with or without modifi cations, the following resolutions as Ordinary Resolutions:-

6. Share Issue MandateThat pursuant to Section 161 of the Companies Act, Chapter 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, authority be given to the Directors of the Company to issue shares (“Shares”) whether by way of rights, bonus or otherwise, and/or make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares at any time and upon such terms and conditions and to such persons as the Directors may, in their absolute discretion, deem fi t provided that:

(a) the aggregate number of Shares (including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed fi fty per centum (50%) of the total number of issued Shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, of which the aggregate number of Shares and convertible securities to be issued other than on a pro-rata basis to all shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued Shares (excluding treasury shares) in the share capital of the Company;

NOTICE OF ANNUAL GENERAL MEETING


(b) for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph (a) above, the total number of issued Shares (excluding treasury shares) shall be based on the total number of issued Shares (excluding treasury shares) of the Company as at the date of the passing of this Resolution, after adjusting for:

(i) new Shares arising from the conversion or exercise of convertible securities;

(ii) new Shares arising from exercising share options or vesting of Share awards outstanding or subsisting at the time this Resolution is passed; and

(iii) any subsequent bonus issue, consolidation or subdivision of Shares;

(c) and that such authority shall, unless revoked or varied by the Company in general meeting, continue in force until:

(i) the conclusion of the Company’s next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier; or

(ii) in the case of Shares to be issued in accordance with the terms of convertible securities issued, made or granted pursuant to this Resolution, until the issuance of such Shares in accordance with the terms of such convertible securities. (See Explanatory Note 2) (Resolution 7)

7. Authority to allot and issue shares under the BH Global Performance Share PlanThat authority be and is hereby given to the Directors to grant awards in accordance with the BH Global Performance Share Plan and allot and issue from time to time such number of Shares in the capital of the Company as may be required to be issued pursuant to the vesting of awards under the BH Global Performance Share Plan, provided always that the aggregate number of additional ordinary Shares to be allotted and issued pursuant to BH Global Performance Share Plan shall not exceed fi fteen per centum (15%) of the total number of issued Shares (excluding treasury shares) in the share capital of the Company from time to time. (See Explanatory Note 3) (Resolution 8)

8. To transact any other business which may properly be transacted at an Annual General Meeting.

On behalf of the Board

Alvin Lim Hwee HongExecutive Chairman5 April 2012

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)


Explanatory Notes:-

1. Mr Loh Weng Whye will, upon re-election as Director of the Company, continue to serve as a member of the Audit Committee and will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

2. The proposed Ordinary Resolution 7, if passed, will empower the Directors from the date of the Annual General Meeting until the date of the next Annual General Meeting, to allot and issue Shares and convertible securities in the Company up to an amount not exceeding fi fty per centum (50%) of the total number of issued Shares (excluding treasury shares) in the capital of the Company, of which up to twenty per centum (20%) may be issued other than on a pro-rata basis. For the purpose of this resolution, the total number of issued Shares (excluding treasury shares) is based on the Company’s total number of issued Shares (excluding treasury shares) at the time this proposed Ordinary Resolution is passed after adjusting for new Shares arising from the conversion or exercise of convertible securities, the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this proposed Ordinary Resolution is passed and any subsequent bonus issue, consolidation or subdivision of Shares.

3. The proposed Ordinary Resolution 8, if passed, will empower the Directors of the Company, to allot and issue Shares in the Company of up to a number not exceeding in total fi fteen per centum (15%) of the total number of issued Shares (excluding treasury shares) in the share capital of the Company from time to time pursuant to the grant of share awards under the BH Global Performance Share Plan.

Notes:-

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies in his/her stead.

2. A proxy need not be a member of the Company.

3. If the appointor is a corporation, the instrument appointing a proxy must be executed under seal or the hand of its duly authorised offi cer or attorney.

4. The instrument appointing a proxy must be deposited at the registered offi ce of the Company at 8 Penjuru Lane, Singapore 609189 not later than 48 hours before the time appointed for the Meeting.

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)


This page has been intentionally left blamk

I/We (Name)

(NRIC No./Passport No./Company Registration No.)

of

(Address) being a member/ members of BH GLOBAL MARINE LIMITED (the “Company”), hereby appoint:-

Name Address NRIC/Passport No.Proportion of shareholdings

*and/or

Name Address NRIC/Passport No.Proportion of shareholdings

as *my/our proxy/proxies to attend and vote for *me/us on *my/our behalf and, if necessary, to demand a poll at the Annual General Meeting (“AGM”) of the Company to be held at the Boardroom, 8 Penjuru Lane, Singapore 609189 on Tuesday, 24 April 2012 at 10.00 a.m., and at any adjournment thereof.

*I/We direct *my/our proxy/proxies to vote for or against the Ordinary Resolutions to be proposed at the AGM as indicated with an “X” in the spaces provided hereunder. If no specifi ed directions as to voting are given, the *proxy/proxies will vote or abstain from voting at *his/their discretion.

No. Ordinary Resolutions For Against

1. To receive and adopt the Audited Financial Statements of the Company for the fi nancial year ended 31 December 2011.

2. To declare a Final Dividend of 0.7 Singapore cent per ordinary share (one-tier tax exempt) for the fi nancial year ended 31 December 2011.

3. To approve the Directors’ Fees of S$330,000 for the fi nancial year ended 31 December 2011.4. To re-elect Mr Patrick Lim Hui Peng as Director.5. To re-elect Mr Loh Weng Whye as Director.6. To re-appoint Messrs Baker Tilly TFW LLP as auditors of the Company and to authorise the

Directors to fi x their remuneration.7. To approve the Share Issue Mandate.8. To authorise allotment and issue of shares under the BH Global Performance Share Plan.

Dated this day of 2012

Signature/Common Seal of Member(s)

* Delete as appropriate.

BH GLOBAL MARINE LIMITED(Company Registration Number: 200404900H)(Incorporated in the Republic of Singapore)

Important:1. For investors who have used their CPF monies to buy BH

Global Marine Limited’s shares, this Annual Report 2011 is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

3. CPF Investors who wish to vote should contact their CPF Approved Nominees.PROXY FORM

Total No. of Shares No. of Shares

CDP Register

Register of Member

Notes:-

1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. Such proxy need not be a member of the Company.

2. Where a member of the Company appoints two proxies, he shall specify the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each such proxy.

3. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or duly authorised offi cer.

4. A corporation which is a member of the Company may authorise by resolution of its directors or other governing body such person as it thinks fi t to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the Companies Act, Chapter 50 of Singapore.

5. The instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or notarially certifi ed copy thereof, must be deposited at the registered offi ce of the Company at 8 Penjuru Lane, Singapore 609189 not later than 48 hours before the time set for the Annual General Meeting.

6. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defi ned in Section 130A of the Companies Act, Chapter 50 of Singapore), he should insert that number of shares. If the member has shares entered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register and shares registered in his name in the Register of Members of the Company, he should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by the member of the Company.

7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed in the instrument appointing a proxy or proxies. In addition, in the case of members of the Company whose shares are entered against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against their names in the Depository Register 48 hours before the time set for holding the Annual General Meeting as certifi ed by The Central Depository (Pte) Limited to the Company.

8. A Depositor shall not be regarded as a member of the Company entitled to attend the Annual General Meeting and to speak and vote thereat unless his name appears on the Depository Register 48 hours before the time set for the Annual General Meeting.

BOard Of dIrectOrS

Alvin Lim Hwee Hong Executive Chairman

Vincent Lim Hui Eng Executive Director and Chief Executive Officer

Patrick Lim Hui Peng Executive Director and Chief Operating Officer

Loh Weng Whye Lead Independent Director

David Chia Tian Bin Independent Director

Winston Kwek Choon Lin Independent Director

cOMpaNy Secretary

Pan Mi KeayToon Choi Fan

aUdIt cOMMIttee

David Chia Tian Bin ChairmanLoh Weng WhyeWinston Kwek Choon Lin

NOMINatING cOMMIttee

Winston Kwek Choon Lin ChairmanLoh Weng WhyeVincent Lim Hui Eng

reMUNeratION cOMMIttee

Loh Weng Whye ChairmanDavid Chia Tian BinWinston Kwek Choon Lin

rISk MaNaGeMeNt cOMMIttee

Alvin Lim Hwee Hong ChairmanVincent Lim Hui EngKeegan Chua Tze Wee

SHare reGIStrar aNd SHare traNSfer OffIce

Tricor Barbinder Share Registration Services(A division of Tricor Singapore Pte. Ltd.)80 Robinson Road #02-00Singapore 068898

INdepeNdeNt aUdItOr

Baker Tilly TFW LLPCertified Public Accountants15 Beach Road #03-10 Beach CentreSingapore 189677Partner-in-charge: Joseph Toh Kian Leong*(a member of the Institute of Certified Public Accountants of Singapore)*Appointed in financial year 2010

reGIStered OffIce

8 Penjuru LaneSingapore 609189Registration Number: 200404900H

cOrpOrate INfOrMatION

N o . 8 P e n j u r u L a n e , S i n g a p o r e 6 0 9 1 8 9 Registration No: 200404900H

Seizing - listed company

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