SAMUDERA SHIPPING LINE LTD BUILDING ON OUR …samudera.listedcompany.com/misc/ar2009.pdf · 2010-04-12 · in 1979 and was a General Manager of its feeder division since 1993

01S A M U D E R A S H I P P I N G L I N E L T D

SAMUDERA SHIPPING LINE LTD

BUILDING ON OUR STRENGTHSANNUAL REPORT 2009

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RATIONALE

Despite a year fraught with challenges, we remained steadfast to our values that continue to guide us forward, thereby enabling us to emerge stronger from adversity. As a symbol of strength and stability, the 2009 Samudera Shipping Line Ltd (Samudera) Annual Report draws inspiration from the enduring presence of stones and rocks, to reinforce the Company’s resilient position in today’s changing global economy.

CONTENTS

Corporate Profi le 02

Board of Directors 04

Chairman’s Message 06

Operations Review 10

Financial Highlights 12

Group Structure 13

Fleet List 14

Service Network 16

Financial Contents 17

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01S A M U D E R A S H I P P I N G L I N E L T D 01010101011010101010101010101010S A MS A MS A MS A MS A MS A MS A MS A MS A MS A MS A MS A MS A MS A MS A MS A MA M U D EU D EU DU D EU D EU D EU D EU D EU D EU D EU D EU D EU D EU D EU DDU D R A R A R AR A R A R AR A R A AR AR AR A AAAAA S HS HS H IS H IS H IS H IS H IS H IS H IS H IS H IS H IS H II P PP PP P IP P IP P IP P IP P IP P IP PP PP P IP P IP P IP P IP IIP N GN GN GN GN GN G N G N G N G N G N G N G N G N G N G N GG L I NL I NL I NL I NL I NL IL IL IL I NL I NL I NL I NL I NL E LE LE LE LE LE LE LE LE LE LE LE LLLLT DT DT DT DT DT DT DT DT DT DTTT DT D

VISION

To become a leading and reputable integrated

cargo transportation company in the markets

that we serve

MISSION

To provide high quality cargo transportation to

excellent customers

To enhance the welfare of employees and the

values for shareholders through sustainable

business growth and optimum profi t

VALUES

• We believe that our people are our most

important resource

• We believe teamwork is very important, and

value individual creativity and innovation

• We believe in the importance of corporate

growth and profi t

• We value and provide our customers with

high quality services

• We maintain prudence and good corporate

governance in conducting our business

• We care for and act to protect our environment


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02

Samudera Shipping Line Ltd “Samudera” was incorporated in Singapore in 1993. The Company was converted into a public company on 2nd October 1997 when its shares got listed and quoted on SESDAQ. Following an approval from the Singapore Exchange Securities Trading Limited, its shares have been transferred from SESDAQ to the MainBoard, where Samudera’s shares are now listed and quoted since July, 2000.

Samudera is a regional Container Shipping line serving the Middle East and the Indian Sub-continent in the west, South East Asia and Indo-China at the center and the Far East to the north. This extensive network of services is run from its headquarters in Singapore, with able support from its own offi ces in Dubai, Mumbai, Kolkata and Chennai for the Middle East and the Indian Sub-continent operations, Bangkok, Ho Chi Minh, Klang and Jakarta for the South East Asia and Indo-China operations, and Shanghai for the Far East operations.

Samudera provides feeder services to Main Line Operators between the deep-harbor “hub” ports and the outlaying “spoke” ports. It also provides inter-region and intra-region Container Shipping services to the end users, i.e. the manufacturers, buyers, exporters, importers etc.

Singapore and Dubai are the main “hub” ports that the Group serves. Its regular and punctual services connect the ports of South East Asia and the Indian Sub-continent with Singapore, while from Dubai hub it runs the intra-Gulf service serving the “spoke” ports in the Upper Gulf region as well as regional services linking the Gulf region with the Indian Sub-continent. Serving several major ports in China, Samudera’s Far East service acts as a bridge between South East Asia and China refl ecting the growing intra-Asia trade.

In addition to Container Shipping, the Group, through its wholly-owned subsidiary Foremost Maritime Pte Ltd “Foremost”, is engaged in Industrial Shipping. It positions itself as a reliable logistics partner to its industrial customers in distributing their bulk cargo – liquid, gas and dry. In order to provide a reliable and stable sea transportation solution, it invests in modern and young tonnage of size optimum to customer’s needs.

The vessels are then deployed primarily on dedicated basis against medium to long-term contracts, either on Time Charter basis or on the basis of Contract of Affreightment. Participation in this business segment has allowed the Group to diversify and spread its business risks.

The Group values its extensive regional network of own offi ces, through which it aims to exercise tighter control of processes, offer a better quality of service to its customers, and explore business development opportunities.

Over the years, through professional and competent services to its valued customers, the Group has been able to develop a well-respected and well-recognized “Samudera” brand name. Through a combined application of management prudence and growth through diversifi cation, the Group is confi dent of continuing to provide quality services to its customers and value to its shareholders.

CORPORATE PROFILE

02


CONSOLIDATING OUR STRENGTHS


04

RANDY EFFENDI (1)EXECUTIVE CHAIRMAN Mr Randy Effendi is responsible for the overall management, strategic planning and business development of the Company and its subsidiaries. He is also a member of the Nomination Committee of the Company. Mr Randy Effendi has been with the Samudera Indonesia Group since 1981 and had held several positions prior to becoming its President Director. He holds a Bachelor of Economics degree (majoring in Accountancy) from the University of Indonesia and a Master in Management degree from the Asian Institute of Management, Manila, the Philippines.

HAMDI ADNAN (2)EXECUTIVE DIRECTOR AND CFOMr Hamdi Adnan is responsible for the overall fi nance, administration and personnel functions of the Company and its subsidiaries. Since 1990, Mr Hamdi held the position of the Corporate Managing Director – Finance and Administration of the Samudera Indonesia Group. Prior to that, he was a Principal in Ernst & Young (Indonesia), an international public accounting fi rm. Mr Hamdi holds a Bachelor of Economics degree (majoring in Accountancy) from the University of Indonesia.

MASLI MULIA (3)EXECUTIVE DIRECTORMr Masli Mulia is responsible for logistics and forwarding business of the Group. Mr Masli joined the Samudera Indonesia Group in 1971 and had held several positions prior to becoming its Corporate Managing Director - Forwarding & Warehousing Group in 1990. He is also the President Director of PT Silkargo Indonesia and PT GAC Samudera Logistics which he held from 2003 until now. Beside that, Mr Masli is the Chairman of Asean Federation of Forwarders Associations (AFFA). Mr Masli was the Chairman of Indonesian Forwarders Association (INFA) from 2003 to March 2009. In 1980, he obtained the certifi cate of Ocean-going Offi cer/Master from the Indonesian Merchant Marine Academy.

ASMARI HERRY PRAYITNO (4)EXECUTIVE DIRECTORMr Asmari Herry Prayitno is responsible for operations. He served on board the ships of Samudera Indonesia Group for seven years prior to assuming responsibilities in the offi ce. He joined the Samudera Indonesia Group in 1979 and was a General Manager of its feeder division since 1993. Prior to that, he was the General Manager of a shipping company engaged in Container Shipping in the region. Mr Asmari Herry holds a Bachelor degree from the Merchant Marine College in Indonesia.

ANWARSYAH (5)EXECUTIVE DIRECTORMr Anwarsyah is responsible for the fi nance, administrative functions, human resources and information technology of the Company and its subsidiaries. He has been with the Samudera Indonesia Group since 1985 and has held various positions in internal audit, fi nance, marketing, forwarding and agency services. Mr Anwarsyah holds a Bachelor of Economics degree (majoring in Accountancy) from the Gadjah Mada University in Jogjakarta, Indonesia and a Master in Management degree from the Institut Pendidikan Dan Pembinaan Manajemen in Indonesia.

BOARD OF DIRECTORS

1

43

2

5

04



DHRUBAJYOTI DAS (6)EXECUTIVE DIRECTORMr Dhrubajyoti Das is responsible for overall commercial activities of the Group. He leads the Company’s efforts in adding new routes and network in its container shipping business. Mr Das also oversees investor relations activities of the Company. As a Director of Foremost and LNG East-West (Singapore), Mr Das oversees industrial shipping business of the Group. He joined the Samudera Indonesia Group in 1992 and was Head of its Corporate Business Development prior to his present appointments. Mr Das holds a Bachelor of Technology (Hons) degree from the Indian Institute of Technology, Kharagpur, India and a Master in Business Management degree from the Asian Institute of Management, Manila, the Philippines.

CHNG HEE KOK (7)LEAD INDEPENDENT AND NON-EXECUTIVE DIRECTORMr Chng Hee Kok is the Chairman of the Audit Committee as well as a member of the Nomination and Remuneration Committee of the Company. In addition, Mr Chng was appointed as the Lead Independent Director of the Company in February 2008. He is CEO of HG Metal Manufacturing Ltd. He graduated with a Bachelor of Engineering (First Class Honours) degree from the University of Singapore in 1972 and a Master of Business Administration degree from the National University of Singapore in 1984. He was a Member of Parliament from 1984 to 2001. Mr Chng is a Director of a number of public listed companies including People’s Food Holdings, Pacifi c Century Regional Developments Ltd, Full Apex Holdings Ltd and CHT Holdings Ltd.

DAVID LIM TECK LEONG (8)INDEPENDENT AND NON-EXECUTIVE DIRECTORMr David Lim Teck Leong is the Chairman of the Remuneration Committee of the Company. He is also a member of the Audit Committee and the Nomination Committee of the Company. Mr Lim has been in the legal practice since 1982 and is the senior partner of a law fi rm in Singapore. He obtained his degree in law from King’s

College, London University and qualifi ed as a Barrister-at-Law at Gray’s Inn, London. Mr Lim is a Fellow of the Singapore Institute of Directors.

ANUGERAH PEKERTI (9)INDEPENDENT AND NON-EXECUTIVE DIRECTORMr Anugerah Pekerti is a member of the Audit Committee. He holds a Ph.D. in Business Administration from the University of Southern California, USA. Mr Pekerti has over 30 years of experience in consulting, training and education in USA, Germany and Indonesia. His expertise is in the fi elds of Business Ethics and Corporate Governance, Organisational Development and Entrepreneurship. Presently, Mr Pekerti serves as a Member of the Board of Habitat for Humanity International and two corporate boards in Indonesia.

LEE CHEE YENG (10)INDEPENDENT AND NON-EXECUTIVE DIRECTORMr Lee Chee Yeng joined the Company as an Independent and Non-Executive Director in 2006. He is the Chairman of the Nomination Committee as well as a member of the Audit and Remuneration Committee of the Company. He holds a Degree in Business Administration, First Class Honours from the University of Singapore. Mr Lee has many years of experience in container terminals, multi-purpose terminals, cargo logistics and airport services. As Director (Operations)/Director (Information Systems), he was instrumental in the rapid growth of PSA Container Terminals and the development of strategic systems like CITOS System and PORTNET System. He was awarded the Public Administration Medal (Gold). He is presently the CEO of St Luke’s Hospital.

6

9

7

8 10



06

OVERVIEWFor the shipping industry in general and container shipping in particular, 2009 was a turbulent year fi lled with challenges. Following the fi nancial crisis in the 4th quarter of 2008, consumer demand in the developed economies plunged and trade fi nancing became scarce. These led to a sharp contraction in world trade and the resulting plunge in demand for container shipping. The problem of demand contraction was further compounded by massive overcapacity. Low freight rates, idle capacity and weak consumer demand were thus common themes of the year. Nevertheless, via closer engagement with our clients and partners, we responded quickly to the changing market conditions by rationalizing capacity where necessary in order to improve utilization level and reduce operating costs, without compromising on the reliability and frequency of our services.

FINANCIAL REVIEWOur group revenue fell 25.5% to US$330.2 million in 2009, compared to a year ago, dragged down by a 30.2% decline in container shipping revenue to US$273.6 million. The revenue decrease for container shipping was however partially mitigated by a 27.8% improvement in industrial shipping revenue to US$56.8 million, which was primarily due to the addition of four off-shore support vessels to the operated fl eet.

In line with the decline in business activity, our cost of services fell 18.3% to US$319.0 million. This was due to lower charter hire rates and the fact that fewer container vessels were deployed during the year. Nevertheless, the reduction in cost of services, and other operating expenses was outpaced by the decline in Group revenue, and the result was a loss from operations of US$4.5 million for FY09, as compared to a profi t from operations of US$32.6 million in FY08. All in all, our group registered a net loss after tax of US$8.8 million, compared to a net profi t after tax of US$26.7 million in 2008.

06

CHAIRMAN’S MESSAGE



BUSINESS REVIEWOverall, our container volume handled decreased 16.5% to 1.26 million TEUs in 2009, from 1.51 million TEUs in 2008. In tandem with PSA International’s (PSA) 13.1% decline in containers handled in its Singapore terminals as compared to 2008, our throughput at the dominant port operator’s terminals in Singapore also fell, though by a smaller amount of 11.8% to 1.14 million TEUs in 2009

In response to the lower demand for container shipping services, we initiated the termination and rationalization of some of our service routes. Our Kandla-Dubai service was thus terminated in January 2009, while the Korea-Malaysia Straits (KMS) service was terminated in February. This, together with the effects of the termination of our China Straits-India (CSI) service, and the rationalization of our Bangkok service in late 2008, on which the number of vessels deployed was reduced from four to three, inevitably caused our container volumes handled to fall in 2009.

On a positive note, our good mix of owned and chartered-in container vessels that are hired under charter arrangements of varying time period, allowed us to adapt quickly to changing market conditions by adjusting our capacity accordingly to better fi t market needs. Moreover, we also enjoyed lower charter hire rates for some of our vessels, as their previous charter arrangements expired during the year.

An example of how we were nimble in our deployment of vessels was clearly displayed with the launch of a new service, the Chittagong-Yangon Express (CYX), in the fi rst quarter of 2009. This additional string of service was launched to meet the seasonal demand peak in Myanmar and was subsequently terminated at the close of the peak season.

Also, to replace the Singapore-Karachi shuttle service that was terminated in 2008, we introduced a new service Nhava Sheva-Karachi Express (NKX) linking Singapore, Nhava Sheva, Karachi, Pipavav, Colombo, Penang and Port Klang in the second quarter of 2009.

We also entered into a number of slot swap arrangements by which we secured space in several intra-Asia services operated by other shipping lines against the space that we offered them in services operated by us. This helped us to continue our market presence in several sectors despite the termination of our vessel deployment in those sectors.

On the industrial shipping front, four additional off-shore support vessels were deployed to support the operation of the Tangguh LNG Terminal at Bintuni Bay, Papua of Indonesia in the second quarter of the year.

In addition, LNG Tangguh Towuti, a 145,700 CBM LNG (liquefi ed natural gas) vessel, in which we hold a 25% stake, has been chartered out on a 20-year period and is engaged in the transportation of LNG from Indonesia to North Asia and North America. This vessel began operations in the fourth quarter of 2008 and continues to provide a stable source of income.

OUTLOOK & PLANSIn the absence of further fi nancial shocks, the risk of a return to a recession is rather unlikely. Volumes have picked off from their lows, and the global economic rebound also appears to be slowly nudging up container shipping rates. We are hopeful that this uptick in the container shipping sector will be sustainable.

In general, we believe recovery in the shipping industry is expected to be slow for the current year. Although the level of global trade activity has seen an improvement and there have been a number of cancellations on newbuilding orders along with the scrapping of old ships, the existing idle fl eet capacity together with new capacity expected to come onstream will continue to be an issue for the time being. Taken together, 2010 container trade dynamics will remain in a delicate position.


0808

Bunker prices continue to be on an uptrend and are expected to remain volatile. In response to this, we will continue to closely monitor our hedging requirements, and engage in hedging activity when appropriate. We will work closely with our customers in pursuit of our application of bunker surcharges, which when implemented, is expected to partly mitigate the adverse impact of increase in bunker costs.

In addition to the slot swap arrangements currently in place, we are pursuing several additional slot swap arrangements. This will help us to secure additional space in the intra-Asia market, enhance our market coverage & increase our service frequencies while improving the utilization level of our feeder services.

In the midst of what lies ahead, we will continue to work closely with our customers and partners in striving to achieve optimal schedules and service routes. While exploring new opportunities, we will as always remain prudent in our fi nancial and cost management effort.

ACKNOWLEDGEMENTAs a result of the full support and trust of all our customers, agents, partners, business associates and shareholders, we were able to ride through the highly uncertain business environment in the past year. For this, we are very grateful and we want to thank each and every one of them for their continued belief and confi dence in us.

We are also very thankful to all our employees for their diligence, perseverance and professionalism, as they have worked very hard, and hand-in-hand with the management to deal with this downturn.

Looking ahead, we do believe that we are heading for a cyclical upturn, slowly but surely, and on this note, we will continue to focus on strengthening our business fundamentals, and steering our Group to greater heights.

Randy EffendiExecutive Chairman



STRENGTH IN UNITY


10

OPERATIONS REVIEW

CONTAINER SHIPPINGSamudera’s container shipping volume handled for the year in review was 1,258,565 TEUs. This was 16.5% less than the 1,507,528 TEUs handled in 2008. Despite the lower volume handled on most of the Group’s services, the Myanmar trade and the India Sub-continent trade recorded an increase in the container volume handled.

Further demonstrating its quick response to changing trade conditions, the Group took steps to rationalize some of its shipping services. Services terminated in the beginning of 2009 include the Kandla-Dubai service and the Korea-Malaysia Straits (KMS) service. These terminations came shortly after the Group’s termination of the China Straits-India (CSI) service, and the rationalization of the Group’s Bangkok service in December 2008, on which the number of vessels deployed was reduced from four to three.

Shortly after the termination of CSI and its withdrawal of vessel in KMS service, the Group entered into several slot swap arrangements with intra-Asia operators in order to secure space in the Far East market, i.e. at key ports in China and Korea. This enabled the Group to maintain its market presence despite termination of vessel deployment in some services. Towards the latter part of the year, the Group intensifi ed its efforts to increase such slot exchanges in the Far East market with a view to increase service frequency and expand market coverage.

In place of its Singapore-Karachi shuttle service, the Group introduced the Nhava Sheva-Karachi Express (NKX) in the second quarter of 2009. This service, offered in partnership with another industry player, links Singapore, Nhava Sheva, Karachi, Pipavav, Colombo, Penang and Port Klang. For this service, the partner deployed two vessels, while Samudera deployed one vessel, and all three vessels have a capacity of 2,500 TEUs each.

The year under review also saw the Group seizing an opportunity that was presented by seasonal demand peaks in the Bangladesh-Myanmar trade activity, with the introduction of a new service, the Chittagong-Yangon Express (CYX). This shuttle service links Bangladesh directly with Myanmar and deploys one 1,060 TEUs vessel which calls at the ports of Singapore, Chittagong and Yangon, every 14 days.

Commencing September 2009, the Group entered into a slot swap arrangement with an existing operator for its Singapore Chittagong shuttle service (CGX) enabling the Group to increase its service frequency without deploying additional vessel in that route.

With the aim of growing the inter-island container shipping business in Indonesia, the Group also introduced a new service between Surabaya and Samarinda in November 2009.

10



As of 31 December 2009, Samudera operates a fl eet of 26 container vessels with a total carrying capacity of 24,564 TEUs. Of these, nine vessels are owned and 17 are chartered-in. The Group calls at 31 ports and operates 23 main services, either by the deployment of its own vessels, chartered vessels or via slot exchange and non-vessel operating common carrier (NVOCC) arrangements.

INDUSTRIAL SHIPPINGToday, Samudera is positioned as a reliable and committed partner to its industrial shipping customers. Engaged in the distribution of bulk cargo – liquid, gas and dry, the Group is able to provide reliable and stable sea transportation solutions, as it believes in investing in modern and young tonnage of various sizes that best suit its customer’s needs. These vessels are then deployed on a dedicated basis, be it on time charter or via contracts of affreightment. Participating in the industrial shipping business has thus far enabled the Group to diversify and spread its business risks.

The Group added four harbour tugs via time-charter, to its fl eet in the second quarter of 2009. Two of the harbour tugs are of about 3,600 HP each, while the other two are about 4,930 HP each. The harbour tugs were added to support the operation of the Tangguh LNG Terminal at Bintuni Bay, Papua of Indonesia.

In addition, LNG Tangguh Towuti, a 145,700 CBM membrane type liquefied natural gas (LNG) vessel, in which the Group holds a 25% stake, has been chartered out to BP Berau Limited, on a 20-year period, for the transportation of LNG from Indonesia to North Asia and North America. Developed under a joint venture with NYK Line and Fiona Trust and Holding Cooperation, this vessel was operational from the fourth quarter of 2008 and continues to provide a stable source of income.

In view of possible business opportunities and existing cabotage regulations in Indonesia, which restricts the transportation of chemical cargo within the country to Indonesia-fl agged tankers, the Group will look into re-fl agging more of its industrial shipping fl eet into Indonesia-fl ag vessels.

At the close of 2009, the Group’s industrial shipping fl eet stands at 26 vessels. Of which, there are nine chemical tankers with capacities ranging from 2,700 DWT to 11,200 DWT, two oil tankers of 17,700 DWT each, two gas tankers, two offshore service boats, one oil barge, four harbour tug boats and six coal / bulk carriers of which two bulk carriers are currently under construction and expected to be completed and delivered in 2011.

OTHERSThe Group has taken steps to divest its logistic operations in order to focus on its core business activity of cargo transportation by sea. The Group will continue to retain its agency network through own offi ces throughout the region, for better control and customer service.


12

FINANCIAL HIGHLIGHTS

TURNOVER (US$ MIL) NET PROFIT* (US$ MIL)PROFIT BEFORE TAX (US$ MIL)

352.8

407.4 408.8377.2

443.3

330.2

04 05 06 07 0908 04 05 06 07 0908

32.6

12.2

50.7

22.128.4

(7.5)

04 05 06 07 0908

32.2

9.8

49.6

20.526.0

(8.9)

04 05 06 07 0908

TOTAL ASSETS (US$ MIL)

04 05 06 07 0908

303.8

258.5

221.4

321.9

428.3444.1

GEARING (TIMES)

04 05 06 07 0908

0.39

0.16

0.23

0.31

0.69

0.82CURRENT RATIO (TIMES)

04 05 06 07 0908

2.89

3.24

2.94

3.54

3.003.21

EARNINGS PER SHARE (US CENTS)

7.03

1.82

9.09

3.794.83

(1.64)

NTA PER SHARE (US CENTS)

04 05 06 07 0908

35.76

41.37

32.51

40.0742.25

40.63

DIVIDEND PER SHARE (SG CENTS)

04 05 06 07 0908

1.0

3.8

3.0

1.5 1.5

* Net profi t after Minority Interests

Nil



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

2. SILkargo Logistics (Singapore) Pte Ltd contributes 49% of issued share capital. The Group has control over the fi nancial and operating policies via majority representation on the board of directors of SILkargo LLC.

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

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

GROUP STRUCTURE(as at 1 March 2010)

SAMUDERA SHIPPING LINE LTD

FOREMOST MARITIME PTE LTD 100%

SAMUDERA INDONESIASINGAPORE PTE LTD 100 %

SAMUDERA EMIRATESSHIPPING LLC1 33%

SAMUDERA SHIPPING LINE(INDIA) PVT LTD 100%

GALAXY SHIPPING SERVICESSDN BHD 60%

PT JARDINE TANGGUHTRANSPORT SERVICES 40%

SILKARGO LOGISTICS(SINGAPORE) PTE LTD 100%

SAMUDERA TRAFFIC CO., LTD3 49%

SILKARGO LLC2 49%

SAMUDERA SHIPPING LINE(VIETNAM) CO., LTD 51%

PT SAMUDERA SHIPPING SERVICES 95%

LNG EAST-WEST SHIPPING* 25%


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14

INDUSTRIAL SHIPPING

Name Of Vessel Flag Capacity Year Built Control

Oil Tanker

01 Sinar Emas Singapore 17,726 DWT 2000 Owned

02 Sinar Jogya Singapore 17,766 DWT 2001 Owned

Chemical Tanker

03 Sinar Busan Singapore 10,600 DWT 2006 Owned

04 Sinar Agra Singapore 11,244 DWT 2006 Owned

05 Sinar Bontang Indonesia 3,785 DWT 1992 Owned

06 Sinar Labuan Indonesia 3,519 DWT 1994 Owned

07 Sinar Bunyu Singapore 3,426 DWT 2001 Owned

08 Sinar Johor Indonesia 3,098 DWT 1991 Owned

09 Sinar Bukom Indonesia 3,097 DWT 1990 Owned

10 Sinar Tokyo Singapore 2,949 DWT 2004 Owned

11 Sinar Anyer Indonesia 2,781 DWT 1996 Owned

Gas Tanker

12 LNG Tangguh Towuti * Singapore 145,700 CBM 2007 Owned

13 Amanah Indonesia 1,560 CBM 1981 Owned

Marine Off Shore Support Unit

14 Aquatic Conserver Indonesia 400 DWT 1995 Owned

15 Cumawis 110 Indonesia 350 DWT 1995 Owned

16 Nurhidayah Indonesia 102 DWT 1996 Owned

17 SMIT Cayman Bahamas 4,930 HP 2008 Charter

18 SMIT Montserrat Bahamas 4,930 HP 2008 Charter

19 KST Super Singapore 3,600 HP 2008 Charter

20 KST Sunrise Singapore 3,600 HP 2007 Charter

Dry Bulk

21 Hull No. S-1334 ** Singapore 57,700 DWT 2011 Owned

22 Hull No. S-1339 ** Singapore 57,700 DWT 2011 Owned

23 Sinar Tuban Indonesia 5,500 DWT 2005 Owned

24 Sinar Barito Indonesia 4,700 DWT 2003 Owned

25 Sinar Borneo Indonesia 4,700 DWT 2003 Owned

26 Sinar Banjar Indonesia 4,700 DWT 2003 Owned

Total 232,903 DWT

17,060 HP

147,260 CBM

* LNG Tangguh Towuti is owned through an associated company, in which the Group has 25% stake.** Scheduled for delivery in the fi rst half of 2011

FLEET LIST(as at 1 March 2010)



CONTAINER SHIPPING

Name Of Vessel Flag Capacity Year Built Control

01 Thomas Mann Liberia 2,586 TEUs 2003 Chartered

02 Sinar Sabang Singapore 1,740 TEUs 2008 Owned

03 Sinar Sumba Singapore 1,740 TEUs 2008 Owned

04 Sinar Subang Panama 1,708 TEUs 2008 Chartered

05 Sinar Sangir Panama 1,700 TEUs 2008 Chartered

06 Sinar Biak Panama 1,471 TEUs 1995 Chartered

07 Sinar Bima Singapore 1,118 TEUs 2008 Owned

08 Frisia Lahn Liberia 1,114 TEUs 2008 Chartered

09 Sinar Buton Panama 1,060 TEUs 2008 Chartered

10 Sinar Bromo Panama 1,060 TEUs 2009 Chartered

11 Sinar Bontang Panama 1,054 TEUs 2002 Chartered

12 Sinar Solo Panama 1,054 TEUs 1999 Chartered

13 Sinar Bandung Panama 1,054 TEUs 2004 Chartered

14 Sinar Banten Panama 1,054 TEUs 2008 Chartered

15 Sinar Bangka Panama 1,054 TEUs 2000 Chartered

16 Sinar Bitung Panama 1,032 TEUs 2007 Chartered

17 Oriental Bright Panama 1,001 TEUs 1996 Chartered

18 Sinar Ambon Indonesia 287 TEUs 2006 Owned

19 Bali Gianyar Indonesia 283 TEUs 2007 Chartered

20 Sinar Demak Indonesia 265 TEUs 2005 Owned

21 Sinar Jambi Indonesia 265 TEUs 2005 Owned

22 Sinar Bintan Indonesia 241 TEUs 2005 Owned

23 Sinar Padang Indonesia 241 TEUs 2006 Owned

24 Sinar Ende Indonesia 152 TEUs 1978 Owned

25 Caraka JN III-23 Indonesia 115 TEUs 1991 Chartered

26 Caraka JN III-31 Indonesia 115 TEUs 1993 Chartered

Total 24,564 TEUs



16

SOUTH EAST ASIA We have 8 services covering main ports at Jakarta, Surabaya, Semarang, Belawan, Palembang and Panjang with sailing frequency ranging from 1 to 3 sailings per week. There are 9 services serving Singapore, Malaysia, Thailand, Vietnam and Yangon with sailing frequency of 5 sailings per week.

INDIAN SUB-CONTINENTWe operate 4 services with a weekly sailing covering India, Bangladesh, Sri Lanka and Pakistan.

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

INTER-ISLAND INDONESIAWe have 4 services covering main ports of Jakarta, Surabaya, Pontianak and Banjarmasin with sailing frequency ranging from 1 to 2 sailings per week.

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

SERVICE NETWORK BY REGION (as at 1 March 2010)


FINANCIALS

Corporate Governance Report 18

Interested Person Transactions 25

Key Executives 26

Risk Management Policies and Processes 28

Directors’ Report 30

Statement by Directors 33

Independent Auditors’ Report 34

Balance Sheets 36

Consolidated Profi t and Loss Account 38

Consolidated Statement of 39Comprehensive Income

Consolidated Statement of 40Changes in Equity

Consolidated Statement of Cash Flows 42

Notes to the Financial Statements 44

Statistics of Shareholders 108

Notice of Annual General Meeting 110

Proxy Form

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18 SAMUDERA SHIPPING LINE LTD

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

BOARD OF DIRECTORS (PRINCIPLES 1, 2, 3 AND 6)

The Company has an effective Board to lead and control its operations and affairs. The Board of Directors (the “Board”) consists of ten directors, four of whom are independent and non-executive directors, making up more than one-third of the Board. The objective judgment of the independent and non-executive directors on corporate affairs and their collective experience and contributions are valued by the Company. The Board is of the view that the current board size is appropriate, taking into account the nature and scope of the Company’s operations.

The Board, as a whole, combines people with industry knowledge, general commercial experience, accounting, fi nancial, legal and capital market background, all of whom as a group, provides the Board with a good mix of the necessary experience and expertise to direct and lead the Group:

Randy Effendi (Executive Chairman)Hamdi Adnan (Executive Director and CFO)Masli Mulia (Executive Director)Asmari Herry Prayitno (Executive Director)Anwarsyah (Executive Director)Dhrubajyoti Das (Executive Director)Chng Hee Kok (Lead Independent and Non-Executive Director)David Lim Teck Leong (Independent and Non-Executive Director)Anugerah Pekerti (Independent and Non-Executive Director)Lee Chee Yeng (Independent and Non-Executive Director)

During the fi nancial year ended 31 December 2009 (“FY2009”), the Board met fi ve times to approve the annual budget, review the Company’s quarterly performance, and full-year results. Ad-hoc meetings are convened when circumstances require. The Company’s Articles of Association (the “Articles”) allow a board meeting to be conducted by way of a tele-conference. Frequency of Board meetings and Committee meetings held during FY2009 are set out in Table “A”.

The principal functions of the Board are:

• To set up and to review the broad policies, strategies and fi nancial objectives of the Group;• To supervise the management of the business and affairs of the Group and the performance of Management;• To review the fi nancial performance of the Group;• To oversee the processes for evaluating the adequacy of internal controls, risk management, fi nancial reporting

and compliance;• To approve the nomination of board directors and appointment of key executives;• To review and approve annual budgets, major funding proposals, potential investment and divestment

proposals, including material capital investment; and• To assume responsibility for corporate governance.

CORPORATE GOVERNANCE REPORT


SAMUDERA SHIPPING LINE LTD 19


BOARD OF DIRECTORS (PRINCIPLES 1, 2, 3 AND 6) (CONT’D)

To enable the Board to fulfi ll its responsibilities, Management provides the Board with a management report containing complete, adequate and timely information prior to Board meetings. Should the directors, whether as a group or individually, need independent professional advice, the Company will, upon direction by the Board, appoint a professional advisor selected by the group or the individual to render the advice. Newly appointed directors are given orientation briefi ngs by Management on the business activities of the Group and its strategic directions, so as to familiarise them with the Group’s operations and encourage effective participation in Board discussions. All directors are updated on major milestones of the Group.

The Company encourages all existing directors to attend seminars, conferences or any courses in connection to new laws, regulations and commercial risks conducted by professional bodies including active participation in the Singapore Institute of Directors.

Mr Randy Effendi, as the Executive Chairman of the Company, plays a pivotal role in steering the strategic direction and growth of the Group’s business. Strategic decisions are made in consultation with the Board. Objectivity and independence of Board decisions are maintained through the professionalism of each member of the Board of Directors, including the Independent Non-Executive Directors, who have demonstrated a high level of commitment in their role as Directors.

As Chairman, Mr Randy Effendi is also responsible for:

(a) the workings of the Board, ensures that board meetings are held when necessary and sets the agenda of the Board Meetings in consultation with the other Directors and Management; and

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

Although the Group does not have a designated Chief Executive Offi cer (“CEO”), as the Chairman and the most senior executive, Mr Randy Effendi performs the duties and responsibilities of a CEO and bears executive responsibility for the day-to-day operation of the Group’s business which is carried out with the assistance of the other Executive Directors.

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

The Directors have separate and independent access to the Company’s senior management and the advice and services of the Company Secretary. The Directors may, in appropriate circumstances, seek independent professional advice concerning the Company’s affairs.

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



NOMINATING COMMITTEE (“NC”) (PRINCIPLES 4 AND 5)

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

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

Its key functions include:

• To conduct a formal assessment on the effectiveness of the Board as a whole and to assess the contribution by each individual director to the effectiveness of the Board, particularly when a director serves on multiple Boards;

• To establish procedures for and make recommendations to the Board on the appointments of new directors, including making recommendations on the composition of the Board generally and the balance between executive and non-executive directors appointed to the Board and re-appointments;

• To regularly review the Board structure, size and composition having regard to the scope and nature of the operations and the core competencies of the directors as a group;

• To establish procedures for evaluation of the Board’s performance and propose objective performance criteria which shall be approved by the Board;

• To determine the independence of each director, namely the independent directors; and• To ensure that all Board appointees undergo an appropriate induction programme.

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

(a) the Group’s strategic and business plans and operational requirements; and(b) the suitability of candidates for Board appointment, based on their skills, expertise and experience.

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

During FY2009, the NC had met twice to assess and evaluate effectiveness of the Board and the Board’s performance as a whole, including to:-

(a) review the board composition and assess the independence of each director; and (b) recommend the re-election of directors retiring pursuant to the Articles and Section 153(6) of the Companies

Act, Cap. 50 (the “Act”).




NOMINATING COMMITTEE (“NC”) (PRINCIPLES 4 AND 5) (CONT’D)

The NC has recommended the re-election of three Directors, Messrs Anwarsyah, Asmari Herry Prayitno and Masli Mulia, who are retiring under the Articles, at the forthcoming Annual General Meeting (“AGM”). Mr Anugerah Pekerti, who is retiring pursuant to Section 153(6) of the Act, has indicated that he does not wish to seek re-appointment at the AGM. The Board has noted Mr Pekerti’s intention and has accepted the NC’s recommendation of the three Directors retiring under the Articles and who will be offering themselves for re-election.

The NC has established evaluation procedures and performance criteria for the assessment of the Board’s performance as a whole. The Board is of the view that the fi nancial indicators set out in the Code as guides for the evaluation of the Board are more a measure of the Management’s performance and are less applicable to the Non-Executive Directors.

REMUNERATION COMMITTEE (PRINCIPLE 7)The Remuneration Committee (“RC”) comprises three members, all of whom are Independent and Non-Executive Directors. The RC is chaired by Mr David Lim Teck Leong and the other members of the RC are Messrs Chng Hee Kok and Lee Chee Yeng.

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

• To recommend to the Board a framework of remuneration for executive directors and key executives that are competitive and suffi cient to attract, retain and motivate key executives of the required quality to run the Company successfully; and

• To review and determine the specifi c remuneration packages and terms of employment for each executive director and senior executives.

During FY2009, the RC met once to review and determine the remuneration packages of the Executive Directors and key executives, to ensure that Directors are adequately but not excessively remunerated, and to review and recommend the non-executive directors’ fees, which are subject to the shareholders’ approval at the AGM. The RC also considered, in consultation with the Chairman, amongst other things, their responsibilities, skills, expertise and contribution to the Company’s performance and whether the remuneration packages are competitive and suffi cient to ensure that the Company is able to attract and retain the best available executive talent.

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




DISCLOSURE ON REMUNERATION (PRINCIPLES 8 AND 9)

Remuneration of Directors and key executives who are not Directors

The fees and remuneration paid to each of the Directors of the Company and top fi ve key executives who are not directors (“key executives”) for FY2009 are set out below. A breakdown of the level and mix of the remuneration payable to each individual director and top fi ve key executives for FY2009 are as follows:

Range of Remuneration Name of Personnel Salary Bonus Benefi ts Fees

Below US$250,000 Key ExecutivesCho Wee Keong 60% 7% 33% 0%Hermawan Fridiana Herman 50% 11% 39% 0%Lim Kee Hee 76% 17% 7% 0%Ong Yaw Teh 46% 5% 49% 0%Tan Meng Toon 73% 14% 13% 0%

Independent Non-Executive DirectorsAnugerah Pekerti 0% 0% 0% 100%Chng Hee Kok 0% 0% 0% 100%Lee Chee Yeng 0% 0% 0% 100%David Lim Teck Leong 0% 0% 0% 100%

Executive DirectorsAsmari Herry Prayitno 92% 8% 0% 0%Anwarsyah 58% 5% 37% 0%Dhrubajyoti Das 61% 5% 34% 0%Hamdi Adnan 68% 8% 24% 0%Masli Mulia 67% 7% 26% 0%

US$250,001 to US$500,000

Executive DirectorRandy Effendi 67% 8% 25% 0%

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

AUDIT COMMITTEE (PRINCIPLE 11)

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

The Board is of the opinion that the AC members are appropriately qualifi ed to discharge their responsibilities. Two of the members, Messrs Chng and Anugerah Pekerti, have accounting or related fi nancial management background, while Mr Lim has a legal background and Mr Lee’s expertise is in container terminals and cargo logistics. All members are familiar with fi nancial statements.




AUDIT COMMITTEE (PRINCIPLE 11) (CONT’D)

The AC met fi ve times during FY2009 to review the budget for the year, the audit plan/report, the audit fi ndings, the report on interested person transactions, the reports on internal audit activities for the year, including updates on the fi ndings in relation thereto and the announcements of the quarterly and full-year results before being approved by the Board for release to the SGX-ST.

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

The key responsibilities of the AC include the following:

• To review the external and internal audit plans/audit reports, including the nature and scope of the audit before the audit commences, the management letter issued by the external auditors (if any) and Management’s response to the letter and to ensure Management’s cooperation with auditors;

• To review the internal auditors’ evaluation of the Company’s system of internal controls;• To review the announcements of the quarterly and annual results prior to their submission to the Board for

approval for release to the SGX-ST;• To review interested person transactions in accordance with the requirements of the Listing Rules of the SGX-ST;• To review all non-audit services provided by the external auditors to determine if the provision of such services

would affect the independence of the external auditors; and• To review and recommend the re-appointment of the external auditors.

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

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

INTERNAL CONTROLS AND INTERNAL AUDIT (PRINCIPLES 12 AND 13)

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

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




INTERNAL CONTROLS AND INTERNAL AUDIT (PRINCIPLES 12 AND 13) (CONT’D)

As for the operational and compliance controls, the Group has periodically reviewed these control areas through the various heads of department, and has continuously made improvements with the assistance of the internal audit department. The internal auditor reports to the AC on audit matters. The internal auditor has adopted the Standards for Professional Practice of Internal Auditing set by The Institute of Internal Auditors.

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

COMMUNICATION WITH SHAREHOLDERS (PRINCIPLES 10, 14 AND 15)

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

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

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

DEALINGS IN THE COMPANY’S SECURITIES

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

The Code prohibits the offi cers of the Group from dealing in the Company’s securities during the period commencing one month before the announcement of the Company’s full year fi nancial results and two weeks before the announcements of each of the Company’s quarterly fi nancial results, and ending on one day after the announcement.

TABLE “A”DIRECTORS’ ATTENDANCE AT BOARD AND COMMITTEE MEETINGS

Meetings of Board Audit CommitteeNominating Committee

Remuneration Committee

Total held in FY2009 5 5 2 1

Randy Effendi 5 2Hamdi Adnan 5Masli Mulia 5Anwarsyah 5Dhrubajyoti Das 5Asmari Herry Prayitno 5Chng Hee Kok 5 5 2 1David Lim Teck Leong 5 5 2 1Anugerah Pekerti 5 5Lee Chee Yeng 5 5 2 1




INTERESTED PERSON TRANSACTIONS

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

Interested person

Aggregate value of alltransactions excludingtransactions conducted

under shareholders’ mandatepursuant to Rule 920 of the

SGX-ST Listing Manual

Aggregate value of alltransactions conductedunder a shareholders’mandate pursuant to

Rule 920 of the SGX-STListing Manual

2009US$’000

2008US$’000

2009US$’000

2008US$’000

ExpensesImmediate holding companyPT Samudera Indonesia Tbk

Agency Commissions – 116 2,600 3,230

Offi ce rental – 43 87 91

Related companyPT Samudera Indonesia Ship Management

Ship management fees – 893 741

PT Perusahaan Pelayaran Nusantara Panurjwan

Building rental – 9 24 16

Vessel charter hire – 424 1,074 809

PT Masaji Tatanan Container

Container depot storage / repair – 155 403 306

PT Prima Nur Panurjwan

Stevedorage – 762 2,964 2,075

– 1,509 8,045 7,268

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

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

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



MR LIM KEE HEE is the Senior General Manager of the

Company who is responsible for the trade and marketing

functions. He has over 20 years of experience in the

shipping industry where he had served in various senior

management positions prior to joining the Company. Mr

Lim holds a Bachelor of Science from the then University

of Singapore and a Graduate Diploma in Financial

Management from the Singapore Institute of Management.

CAPTAIN ROYCE CHOO ENG CHYE held various senior

positions in the shipping industry for the past 12 years

prior to joining the Company in 1999. At present, he holds

the position as an Operations General Manager and is

responsible for the fl eet management of the Company.

Captain Royce obtained a Certifi cate of Competency in

Master of Foreign-Going Ship from Auckland Nautical

Institute, New Zealand in 1986.

MR CHAN NGOK CHUIN joined the Company in 2002

as MIS General Manager to oversee the management

information systems of the Group. He holds a Bachelor

of Science major in Computer Science and Mathematics

from Brandon University, Canada and a Master of

Business Administration major in Strategic Management

from the Nanyang Technological University, Singapore.

Mr Chan has more than 17 years of experience in the IT

fi eld such as system implementation, Portnet interfaces,

designing and developing real time applications

system, providing management and leadership in all

computerization projects in the South East Asia region,

Hong Kong, Taiwan, China, Europe and America.

CAPTAIN CHAN CHEOW CHAN joined the Company in 1996.

He holds a position of General Manager who is responsible

for the Liner Business. Prior to his current appointment,

he was a Deputy General Manager responsible for the

Business Development of the Company. Before joining

Samudera, Captain Chan had many years of experience

in various aspects of shipping business. He obtained

a Certifi cate of Competency in Master of Foreign-Going

Ship from the Singapore Marine Department in 1988.

MR HERMAWAN FRIDIANA HERMAN is the Finance &

Administration General Manager of the Company, who

is responsible for the Group’s fi nance & administration.

He started his career with KPMG Indonesia as an auditor,

thereafter he moved on to accounting and fi nance

position with PT Samudera Indonesia Tbk. as a Group

Accountant in 1992. Mr Hermawan holds a Bachelor of

Economics degree (majoring in Accountancy) from the

University of Indonesia.

MR OH KIAN BENG joined the Company in 1992. He holds

the position of General Manager who is responsible

for the Sales & Marketing as well as Customer Service

functions. Prior to joining the Company, Mr Oh had many

years of marketing experience in the shipping industry.

CAPTAIN TAN MENG TOON is the General Manager of

the Company and is in charge of the trade function

in controlling and managing the service routes within

the Company’s network. Captain Tan had hands-

on experience as an offi cer in several local-owned

and foreign-owned ship management companies,

as a Ship Master and as a technical superintendent

and operations manager of a foreign-owned ship

management company. Captain Tan holds a Foreign

Ocean Going Master (Class I) Certifi cate.

MR PATRICK ONG YAW TEH is our Country Representative

in Shanghai and China. He joined the Company in March

2000 and is responsible for promoting Samudera’s

brand name in the region as well as managing the day-

to-day operational matter. Besides, he is also involved

in marketing, exploring business opportunity and

customers’ networking in China. He holds a Bachelor of

Arts & Social Sciences from the National University of

Singapore in 1991.

KEY EXECUTIVES



MR CHO WEE KEONG is our Country Representative posted

to Hong Kong since June 2000 to oversee the performance

and manage the day-to-day business routine over there.

He is also responsible for marketing and customers’

networking in Hong Kong. Mr Cho obtained a Bachelor

of Science (Economics), University of London through

Singapore Institute of Management in 1995.

CAPTAIN JIMMY WONG HONG TIM is our Country

Representative in Vietnam. He is stationed in Vietnam

to oversee the day-to-day operational matter as well to

promote trade and marketing activities. He has successfully

gained support from the local customers in Vietnam.

Captain Jimmy obtained a Certifi cate of Competency in

Master of Foreign-Going Ship from Singapore Polytechnic

in 1992 and a Master of Business Administration from the

University of Dubuque, Iowa, USA in 1996.

MR AMURSJAH AGUSTIAR is our Country Representative

for Thailand as well as Vietnam since April 2008. He is

responsible for the day-to-day operational matters as

well as to promote trade and marketing activities. Prior

to the existing assignment, Mr Amursjah Agustiar was

the Country Representative in Malaysia for 6 years to

promote Samudera’s presence and gain local support for

the Group. Mr Amursjah Agustiar is experienced on the

operations of shipping agency as he had been with PT

Samudera Indonesia Tbk since 1982, as General Manager

of the General Agency Division, acting as shipping agent

for various main line operators. He graduated from the

Merchant Marine Academy in Jakarta and PPM Institute of

Management, Jakarta.

MR TEGUH BASUSETO is our Country Representative in

Vietnam. He oversees and manages the business in the

country in all aspects of marketing/trade, operations, and

fi nance. Mr Teguh has been with Samudera Indonesia Group

since 1998 and had held various senior positions within the

Group. He holds a Master of Business Administration degree

from the City University, Washington, USA, in 1997.

MR GUNAWAN FATAHILLAH is our Regional Representative

in the Middle East region since July 2008, who is responsible

for the daily operational matters which includes promoting

trade and marketing. Prior to his current position, he was

our Country Representative in Thailand from June 2001 to

July 2008, as well as a Managing Director of Samudera

Vietnam at Ho Chi Minh from June 2007 to July 2008.

Mr Gunawan started as a Finance Manager in our Jakarta

offi ce from 1999 to May 2001 and he holds a Bachelor

of Economics degree (majoring in Accounting) from

University of Indonesia, Jakarta and a Master of Business

Administration (majoring in International Business) from

the University of Technology Sydney, Australia.

MR MUHAMMAD WILLY is our Country Representative in

Malaysia who is responsible for day-to-day marketing,

operation and fi nance matters as well as exploring business

opportunity and customers’ networking in Malaysia. Prior

to his current position, he was a General Manager in

Samudera Indonesia, SSL Division, Jakarta offi ce. He holds

a Bachelor of Science from Gunadarma University in 1997

and a Master in Management from PPM Graduate School

of Management, Jakarta, Indonesia in 2000.

CAPTAIN SHAKTIDHAR MENON is our Regional

Representative in the Middle East since November

2009. Prior to his current position, he was our Country

Representative in India from July 1999 to October 2009.

Captain Shakti has many years of shipping experience

and obtained a Certifi cate of Competency as Master

of Foreign-Going Ship in 1990. He is also a member

of The Chartered Institute of Logistics and Transport,

The Institute of Marine Technologists, The Institute of

Insurance Surveyors and Adjusters and The Company of

Master Mariners.

MR RAKESH VIJAY is our Country Representative for Indian

Sub-Continent and is stationed in Mumbai. He joined the

Company in 2001 as a Finance Manager. Mr Rakesh has more

than 15 years of experience in various aspects of shipping

business. He holds a Bachelor of Commerce degree from

the University of Mumbai and is also a Certifi ed Chartered

Accountant as well as Cost and Works Accountant.

KEY EXECUTIVES



RISK MANAGEMENT POLICIES AND PROCESSES

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

The risk management issues are mainly in the following areas:

• Strategic Direction • Investment • Operation • Financial

STRATEGIC DIRECTION

1. The Board proactively engages strategy specialists to participate in its periodic strategy evaluation exercise. The Board sets the strategic direction, which essentially is a combination of three components viz. EXPAND, SYNERGIZE, EXCELL. The Strategy of Expansion is to develop markets and capacities. The Strategy of Synergy is sharing and collaboration of activities, network and resources of other Group companies. The Strategy of Excellence is to improve capabilities and competencies.

2. The Group adopts a portfolio approach in terms of business lines. Within shipping industry, it participates in two different areas: regional container shipping and industrial shipping, each having its own characteristics, unique risk and profi tability patterns.

INVESTMENT

1. Written approval from Board is necessary prior to implementation of any new investment. The relevant business unit submits the proposal complete with a detailed feasibility study. The approval process involves a rigorous review of various aspects, including but not limited to:

a) competition and market b) demand – supply c) pre-operating project management risks, including risks of delay and cost overrun d) operational risks and expertise necessary e) valuation risks f ) currency risks g) level of borrowing h) interest rate risk i) cash fl ow and returns j) country risk k) legal issues

2. The Group adopts a prudent approach in managing the funding of investments. In particular special attention is paid in managing the level of gearing on a consolidated basis. Although it covenants a gearing ratio of not higher than 2:1 (being the ratio of interest bearing debt over net worth) to its lenders, it consistently maintains a gearing level, which is lower than its covenants.



3. For external borrowings, it ensures that it works with a bank or a fi nancial institution who is fi nancially sound and who understands the Group’s business and its risk characteristics. The Group believes that by choosing its lenders properly, it can expect a continuing support from the fi nancing community at attractive terms.

OPERATION

1. The Group relies on proper Organization Structures to ensure a smooth running of operations in relation to Group’s goals and the industry environments and various geographical areas that it operates in.

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

3. The Group engages PT Samudera Indonesia Ship Management, a related company, for ship management of the majority of its owned vessels. PT Samudera Indonesia Ship Management is an ISO 9001 accredited company and has system and procedures in place, which are in compliance with the requirements of the ISM Code. The ship management agreements are entered into on arms length basis. In addition, the Group also engages other ship management company, a non-related company, to handle two of its chemical tankers. The third party ship management company, being a specialized company in that industry, ensures that the Group’s vessels are in compliance with various regulations e.g. IMO regulations including ISM Code, Classifi cation Society’s rules, Oil Major Terminal vetting inspections, CDI inspections etc.

4. The Group takes necessary insurance covers for example Hull & Machinery, Protection & Indemnity, Time Charterers’ Liability and War Risk cover as and when necessary.

5. When entering an entirely new market, the Group usually seeks assistance from suitable consultant(s) or resource persons who are knowledgeable about local market condition.

FINANCIAL

Please refer to Note 38 to the fi nancial statements of the Annual Report.

In the fourth quarter of 2009, the Group engaged a risk management consultant who is assisting the Group in developing an Enterprise Risk Management framework in order to improve further its risk management policies and processes.

RISK MANAGEMENT POLICIES AND PROCESSES



DIRECTORS’ REPORT

The directors are pleased to present their report to the members together with the audited consolidated fi nancial statements of Samudera Shipping Line Ltd (the “Company”) and its subsidiaries (collectively, the “Group”) for the fi nancial year ended 31 December 2009 and balance sheet of the Company as at 31 December 2009.

DIRECTORS

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

Randy EffendiHamdi AdnanMasli MuliaAnwarsyahDhrubajyoti DasAsmari Herry PrayitnoChng Hee KokDavid Lim Teck LeongAnugerah PekertiLee Chee Yeng

ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES

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 or debentures of the Company or any other body corporate.

DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The following directors, who held offi ce at the end of the fi nancial year, had, according to the register of directors’ shareholdings required to be kept under section 164 of the Singapore Companies Act, Cap. 50, an interest in shares of the Company and related corporations (other than wholly-owned subsidiaries) as stated below:

Direct interest Deemed interestAs at

1 January 2009

As at 31 December

2009

As at 21 January

2010

As at 1 January

2009

As at 31 December

2009

As at 21 January

2010Ultimate holding companyPT Samudera Indonesia TangguhOrdinary shares of Rp 1,000 each

Randy Effendi 2,000 2,000 2,000 – – –



DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (CONT’D)

Direct interest Deemed interestAs at

1 January 2009

As at 31 December

2009

As at 21 January

2010

As at 1 January

2009

As at 31 December

2009

As at 21 January

2010Immediate holding companyPT Samudera Indonesia TbkOrdinary shares of Rp 500 each

Randy Effendi 1,604,852 1,604,852 1,604,852 – – –Hamdi Adnan 851,500 871,000 871,000 – – –Masli Mulia 658,500 658,500 658,500 – – –Asmari Herry Prayitno 500 500 500 – – –

The CompanySamudera Shipping Line LtdOrdinary shares

Randy Effendi 1,200,000 1,200,000 1,200,000 – – –Hamdi Adnan 960,000 960,000 960,000 – – –Anwarsyah 12,000 12,000 12,000 – – –Dhrubajyoti Das 486,000 486,000 486,000 – – –Asmari Herry Prayitno 60,000 60,000 60,000 – – –David Lim Teck Leong – – – 60,000 60,000 60,000

Except as disclosed in this report, no director who held offi ce at the end of the fi nancial year had interests in shares, share options, warrants or debentures of the Company, or of related corporations, either at the beginning of the fi nancial year, at the end of the fi nancial year or on 21 January 2010.

DIRECTORS’ CONTRACTUAL BENEFITS

Except as disclosed in the fi nancial statements, since the end of the previous fi nancial year, no director of the Company has received or become entitled to receive a benefi t by reason of a contract made by the Company or a related corporation with the director, or with a fi rm of which the director is a member, or with a company in which the director has a substantial fi nancial interest except that certain directors have employment relationships with related corporations of the immediate holding company and received remuneration in those capacities.

AUDIT COMMITTEE

The Audit Committee performed the functions specifi ed in accordance with section 201B(5) of the Singapore Companies Act, Cap. 50. The functions performed are disclosed in the Corporate Governance Report.

DIRECTORS’ REPORT



AUDITORS

Ernst & Young LLP will not be seeking re-election and Deloitte & Touche LLP has been nominated to be the auditors for the ensuing year. The appointment is subject to shareholders’ approval at the Annual General Meeting on 27 April 2010.

On behalf of the board of directors,

Hamdi AdnanDirector

AnwarsyahDirector

Singapore26 March 2010

DIRECTORS’ REPORT



We, Hamdi Adnan and Anwarsyah, being two of the directors of Samudera Shipping Line Ltd, do hereby state that, in the opinion of the directors:

(a) the accompanying balance sheets, consolidated profi t and loss account, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash fl ows together with the notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2009 and the results of the business, changes in equity and cash fl ows of the Group for the fi nancial year then ended; and

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

On behalf of the board of directors,

Hamdi AdnanDirector

AnwarsyahDirector


STATEMENT BY DIRECTORS



We have audited the accompanying fi nancial statements of Samudera Shipping Line Ltd (the “Company”) and its subsidiaries (collectively, “the Group”), which comprise the balance sheets of the Group and the Company as at 31 December 2009, the consolidated statement of changes in equity, consolidated profi t and loss account, consolidated statement of comprehensive income and consolidated statement of cash fl ows of the Group for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these fi nancial statements in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the Act) and Singapore Financial Reporting Standards. This responsibility includes 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 account and balance sheet and to maintain accountability of assets; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

AUDITORS’ 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 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 and fair presentation of the fi nancial statements 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.

INDEPENDENT AUDITORS’ REPORTFor the fi nancial year ended 31 December 2009

To the Members of Samudera Shipping Line Ltd



OPINION

In our opinion,

(a) the consolidated fi nancial statements of the Group and the balance sheet of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2009 and the results, changes in equity and cash fl ows of the Group for the year ended on that date; and

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

Ernst & Young LLPPublic Accountants and Certifi ed Public Accountants


INDEPENDENT AUDITORS’ REPORTFor the fi nancial year ended 31 December 2009

To the Members of Samudera Shipping Line Ltd



Note Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Share capital and reservesShare capital 3(a) 68,761 68,761 68,761 68,761Treasury shares 3(b) (174) – (174) –Accumulated profi ts 4 165,226 179,469 114,469 129,286 Other reserves 5 (3,700) (8,874) – –Foreign currency translation reserve 6 (11,488) (11,577) – –

218,625 227,779 183,056 198,047Minority interests 2,834 2,795 – –

221,459 230,574 183,056 198,047

Subsidiaries 7 – – 54,549 54,894Associated companies 8 7,302 1,913 12,312 12,312Fixed assets 9 249,313 258,561 127,924 132,683Deferred taxation 31(c) 30 81 – –Cash and bank balances 19 273 1 – –

Current assets

Stocks 2,062 1,652 – –Trade debtors 10 37,374 49,408 25,876 37,896Advance payments for vessels purchase 11 78,403 33,250 – –Prepaid operating expenses 13,934 10,923 6,417 6,199Other debtors and deposits 12 6,204 2,116 1,089 631Due from immediate holding company (trade) 13 670 675 – –

Due from subsidiaries (trade) 14 – – 3,906 2,594Due from subsidiaries (non-trade) 15 – – 22,048 17,996Due from associated company (non-trade) 17 1,714 1,519 1,714 1,519Due from minority shareholder of a subsidiary (non-trade) 48 48 48 48

Investment securities 18 494 902 494 902Cash and bank balances 19 46,298 67,228 36,111 51,513

187,201 167,721 97,703 119,298

BALANCE SHEETSas at 31 December 2009

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



Note Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Current liabilities

Trade creditors 20 24,511 20,140 15,439 15,761Other creditors and liabilities 21 13,584 17,942 4,584 8,272Due to subsidiary (non-trade) 22 – – – 351Due to immediate holding company (trade) 13 581 383 512 153

Due to related companies (trade) 16 1,904 484 8 47Hire purchase creditors 23 207 202 46 45Bank term loans (secured) 24 15,167 17,360 8,005 7,986Provision for tax 1,901 1,501 371 406

57,855 58,012 28,965 33,021

Net current assets 129,346 109,709 68,738 86,277

Non-current liabilitiesHire purchase creditors 23 903 1,107 103 146Bank term loans (secured) 24 163,902 138,584 80,364 87,973

221,459 230,574 183,056 198,047

BALANCE SHEETSas at 31 December 2009




Note Group2009 2008

US$’000 US$’000

Turnover 25 330,193 443,252Cost of services (319,022) (390,342)

Gross profi t 11,171 52,910Other operating income 26 408 1,014Marketing expenses (6,512) (8,680)Administrative expenses (8,377) (11,572)Other operating expenses 27 (1,217) (1,024)

(Loss)/profi t from operations 28 (4,527) 32,648Financial income 30(a) 475 1,156Financial expense 30(b) (4,039) (4,726)

Operating (loss)/profi t (8,091) 29,078Share of results of associated companies 593 (632)

(Loss)/profi t before tax (7,498) 28,446Income tax expense 31 (1,256) (1,697)

(Loss)/profi t after tax (8,754) 26,749

Attributable to:Equity holders of the Company (8,853) 26,037Minority interests 99 712

(8,754) 26,749

(Loss)/earnings per share (US cents)- Basic and diluted 32 (1.64) 4.83

CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 31 December 2009




Note Group2009 2008

US$’000 US$’000

(Loss)/profi t after tax (8,754) 26,749

Other comprehensive income:Net unrealized loss on revaluation of cash fl ow hedge 5(b) 101 12Share of other comprehensive income of associates 5(b) 5,073 (7,152)Foreign currency translation 81 (1,250)

Other comprehensive income for the fi nancial year 5,255 (8,390)

Total comprehensive income for the fi nancial year (3,499) 18,359

Total comprehensive income attributable to:Equity holders of the Company (3,590) 17,712Minority interests 91 647

(3,499) 18,359

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEfor the year ended 31 December 2009




CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2009


Share capital(Note 3(a))

Treasury shares(Note 3(b))

US$’000 US$’000

Balance as at 1 January 2008 68,761 –

Translation effect due to change in functional currency – –Total comprehensive income for the year – –Additional investment in subsidiary by a minority interest – –Dividend paid (Note 33) – –Transfer to statutory reserves fund – –

Balance as at 31 December 2008 68,761 –

Balance as at 1 January 2009 68,761 –

Total comprehensive income for the year – –Purchase of treasury shares (Note 3(b)) – (174)Dividend paid (Note 33) – –

Balance as at 31 December 2009 68,761 (174)



Attributable to equity holders of the GroupAccumulated

profi ts(Note 4)

Foreign currencytranslation reserve

(Note 6)Other reserves

(Note 5) TotalMinority interests Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

158,533 (9,535) (1,735) 216,024 1,575 217,599

846 (857) – (11) 11 –26,037 (1,185) (7,140) 17,712 647 18,359

– – – – 675 675(5,946) – – (5,946) (113) (6,059)

(1) – 1 – – –

179,469 (11,577) (8,874) 227,779 2,795 230,574

179,469 (11,577) (8,874) 227,779 2,795 230,574

(8,853) 89 5,174 (3,590) 91 (3,499)– – – (174) – (174)

(5,390) – – (5,390) (52) (5,442)

165,226 (11,488) (3,700) 218,625 2,834 221,459



CONSOLIDATED STATEMENT OF CASH FLOWSfor the year ended 31 December 2009

Note 2009 2008US$’000 US$’000

Cash fl ows from operating activities(Loss)/profi t before tax (7,498) 28,446Adjustments for:Depreciation of fi xed assets 17,345 14,315Gain on disposal of fi xed assets (18) (417)Loss/(gain) on disposal of investment securities 255 (4)Interest expense 4,039 4,726Interest income (475) (1,156)Allowance for doubtful trade debts 167 1,259Allowance for doubtful non-trade debts 1 –Share of results of associated companies (593) 632Unrealised gain on investment securities (47) (136)Write back of allowance for doubtful trade debts (121) (143)Write back of allowance for doubtful non-trade debts (1) –Fixed assets written off 5 1Currency realignment 290 116

Operating cash fl ows before working capital changes 13,349 47,639 (Increase)/decrease in:Stocks (410) 263 Trade debtors 11,987 3,333Other debtors and deposits (4,088) 1,555 Prepaid operating expenses and advance paid (3,011) (25,222)Due from immediate holding company 5 (675)Due from related companies – 24 Due from associated company (195) (1,519)Due from minority shareholder of a subsidiary – 4

Increase/(decrease) in:Trade creditors 4,372 (384)Other creditors and liabilities (4,257) 3,973Due to related companies 1,420 (351)Due to immediate holding company 198 183

Cash fl ows from operations 19,370 28,823 Interest paid (4,039) (4,726)Income tax paid (840) (2,131)

Net cash fl ows from operating activities 14,491 21,966




CONSOLIDATED STATEMENT OF CASH FLOWSfor the year ended 31 December 2009

Note 2009 2008US$’000 US$’000

Cash fl ows from investing activitiesInterest income received 475 1,156Proceeds from disposal of fi xed assets 19 4,309 Proceeds from disposal of investment securities 200 3,726Purchase of fi xed assets (53,201) (125,243)Purchase of investment securities – (500)Dividend received from an associated company 335 327Dividend paid to minority shareholders (52) (113)Additional investment in subsidiary by a minority interest – 675

Net cash fl ows used in investing activities (52,224) (115,663)

Cash fl ows from fi nancing activitiesRepayment of hire purchase liabilities (203) (89)Proceeds from bank term loans 43,900 105,613Repayment of bank term loans (21,053) (16,205)Purchase of treasury shares (174) –Dividend paid (5,390) (5,946)Decrease in pledged deposits (4,493) 355Decrease in call and fi xed deposits (non-current) – 4,699

Net cash fl ows from fi nancing activities 12,587 88,427

Net decrease in cash and cash equivalents (25,146) (5,270)Net effect of exchange rate changes on cash and cash equivalents (5) (301)Cash and cash equivalents at beginning of year 64,761 70,332

Cash and cash equivalents at end of year 34(a) 39,610 64,761




1. CORPORATE INFORMATION

The Company, incorporated and domiciled in Singapore, is a public limited company listed on the Offi cial List of the Singapore Exchange Securities Trading Limited. The address of the Company’s registered offi ce and its principal place of business is 6 Raffl es Quay, #25-01, Singapore 048580.

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

The principal activities of the Company are the owning and operating of ocean-going ships and the provision of containerised feeder shipping services. The principal activities of its subsidiaries are disclosed in Note 7 to the fi nancial statements.

There have been no signifi cant changes in the nature of the activities of the Company and its subsidiaries during the fi nancial year.

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The consolidated fi nancial statements of the Group and the balance sheet of the Company have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).

The fi nancial statements are presented in United States Dollars (USD or US$) and all values in the tables are rounded to the nearest thousand (US$’000) unless otherwise indicated. The fi nancial statements have been prepared on a historical cost basis, except as disclosed in the accounting policies below.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous fi nancial year except as follows:

On 1 January 2009, the Group adopted the following standards and interpretations mandatory for annual fi nancial periods beginning on or after 1 January 2009.

• FRS 1 Presentation of Financial Statements (Revised)• Amendments to FRS 18 Revenue• Amendments to FRS 23 Borrowing Costs• Amendments to FRS 32 Financial Instruments: Presentation and FRS 1 Presentation of Financial

Statements – Puttable Financial Instruments and Obligations Arising on Liquidation• Amendments to FRS 101 First-time Adoption of Financial Reporting Standards and FRS 27 Consolidated and

Separate Financial Statements – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate• Amendments to FRS 102 Share-based Payment – Vesting Conditions and Cancellations

NOTES TO THE FINANCIAL STATEMENTS 31 December 2009




2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.2 Changes in accounting policies (cont’d)

• Amendments to FRS 107 Financial Instruments: Disclosures • FRS 108 Operating Segments• Improvements to FRSs issued in 2008• INT FRS 113 Customer Loyalty Programmes• INT FRS 116 Hedges of a Net Investment in a Foreign Operation• Amendments to INT FRS 109 Reassessment of Embedded Derivatives and FRS 39 Financial Instruments:

Recognition and Measurement – Embedded Derivatives• INT FRS 118 Transfers of Assets from Customers

Adoption of these standards and interpretations did not have any effect on the fi nancial performance or position of the Group. They did however give rise to additional disclosures, including, in some cases, revisions to accounting policies.

The principal effects of these changes are as follows:

FRS 1 Presentation of Financial Statements – Revised Presentation

The revised FRS 1 separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, while all non-owner changes in equity are presented in the statement of other comprehensive income. In addition, the Standard introduces the statement of comprehensive income which presents income and expense recognised in the period. This statement may be presented in one single statement, or two linked statements. The Group has elected to present this statement as two linked statements.

Amendments to FRS 107 Financial Instruments: Disclosures

The amendments to FRS 107 require additional disclosure about fair value measurement and liquidity risk. Fair value measurements are to be disclosed by source of inputs using a three level hierarchy for each class of fi nancial instrument. In addition, reconciliation between the beginning and ending balance for Level 3 fair value measurements is now required, as well as signifi cant transfers between Level 1 and Level 2 fair value measurements. The amendments also clarify the requirements for liquidity risk disclosures. The liquidity risk disclosures and fair value measurement disclosures are presented in Note 38 and Note 39 to the fi nancial statements respectively.

FRS 108 Operating Segments

FRS 108 requires disclosure of information about the Group’s operating segments and replaces the requirement to determine primary and secondary reporting segments of the Group. The Group determined that the reportable operating segments are the same as the business segments previously identifi ed under FRS 14 Segment Reporting.

Improvements to FRSs issued in 2008

In 2008, the Accounting Standards Council issued an omnibus of amendments to FRS. There are separate transitional provisions for each amendment. The adoption of the following amendments resulted in changes to accounting policies but did not have any impact on the fi nancial position or performance of the Group:




2.2 Changes in accounting policies (cont’d)

Improvements to FRSs issued in 2008 (cont’d)

FRS 1 Presentation of Financial Statements: Assets and liabilities classifi ed as held for trading in accordance with FRS 39 Financial Instruments: Recognition and Measurement are not automatically classifi ed as current in the balance sheet. The Group amended its accounting policy accordingly and analysed whether Management’s expectation of the period of realisation of fi nancial assets and liabilities differed from the classifi cation of the instrument. This did not result in any re-classifi cation of fi nancial instruments between current and non-current in the balance sheet.

FRS 16 Property, Plant and Equipment: Replaces the term “net selling price” with “fair value less costs to sell”. The Group amended its accounting policy accordingly, which did not result in any change in the fi nancial position.

FRS 23 Borrowing Costs: The defi nition of borrowing costs is revised to consolidate the two types of items that are considered components of “borrowing costs” into one – the interest expense calculated using the effective interest rate method calculated in accordance with FRS 39. The Group has amended its accounting policy accordingly which did not result in any change in its fi nancial position.

2.3 Standards issued but not yet effective

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

Description

Effective for annual periods beginning

on or after

Amendments to FRS 27 Consolidated and Separate Financial Statements 1 July 2009Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Item 1 July 2009

Revised FRS 103 Business Combinations 1 July 2009Amendments to FRS 105 Non-current Assets Held for Sale and Discontinued Operations 1 July 2009INT FRS 117 Distributions of Non-cash Assets to Owners 1 July 2009Improvements to FRSs issued in 2009: 1 July 2009– Amendments to FRS 38 Intangible Assets 1 July 2009– Amendments to FRS 102 Share-based Payment 1 July 2009– Amendments to INT FRS 109 Reassessment of Embedded Derivatives 1 July 2009– Amendments to INT FRS 116 Hedges of a Net Investment in a Foreign Operation 1 July 2009– Amendments to FRS 1 Presentation of Financial Statements 1 January 2010– Amendments to FRS 7 Statement of Cash Flows 1 January 2010– Amendments to FRS 17 Leases 1 January 2010– Amendments to FRS 36 Impairment of Assets 1 January 2010– FRS 39 Financial Instruments: Recognition and Measurement 1 January 2010– Amendments to FRS 105 Non-current Assets Held for Sale and Discontinued Operations 1 January 2010– Amendments to FRS 108 Operating Segments 1 January 2010






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

Description

Effective for annual periods beginning

on or after

Amendments to FRS 102 Share-based Payment – Group Cash-Settled share-based Payment Transactions 1 January 2010

Amendments to FRS 32 Financial Instruments: Presentation – Classifi cation of Rights Issues 1 February 2010

INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010Revised FRS 24 Related Party Disclosures 1 January 2011INT FRS 114 FRS 19 – The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and their Interaction – Amendments relating to Prepayments of a Minimum Funding Requirements 1 January 2011

Except for the revised FRS 103 and the amendments to FRS 27, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the fi nancial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the revised FRS 103 and the amendments to FRS 27 are described below.

Revised FRS 103 Business Combinations and Amendments to FRS 27 Consolidated and Separate Financial Statements

The revised standards are effective for annual periods beginning on or after 1 July 2009. The revised FRS 103 introduces a number of changes in the accounting for business combinations occurring after 1 July 2009. These changes will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. The Amendments to FRS 27 require that a change in the ownership interest of a subsidiary (without loss of control) is accounted for as an equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. Other consequential amendments were made to FRS 7 Statement of Cash Flows, FRS 12 Income Taxes, FRS 21 The Effects of Changes in Foreign Exchange Rates, FRS 28 Investments in Associates and FRS 31 Interests in Joint Ventures. The changes from revised FRS 103 and Amendments to FRS 27 will affect future acquisitions or loss of control and transactions with minority interests. The standards may be early applied. However, the Group does not intend to early adopt.

2.4 Signifi cant accounting judgements and estimates

The preparation of the Group’s fi nancial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.




2.4 Signifi cant accounting judgements and estimates (cont’d)

(a) Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which has the most signifi cant effect on the amounts recognised in the fi nancial statements:

(i) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Signifi cant judgement is involved in determining the Group-wide provision for income taxes. There are certain transactions and computation for which the ultimate tax determination is uncertain during the course of business. The Group recognises liabilities for expected tax issues based on 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 recognised, 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 tax payables at the balance sheet date was US$1,901,000 (2008: US$1,501,000).

(ii) Determination of functional currency

The Group measures foreign currency transactions in the respective functional currencies of the Company and its subsidiaries. In determining the functional currencies of the entities in the Group, judgement is required to determine the currency that mainly infl uences sales prices for goods and services and of the country whose competitive forces and regulations mainly determines the sales prices of its goods and services. The functional currencies of the entities in the Group are determined based on management’s assessment of the economic environment in which the entities operate and the entities’ process of determining sales prices.

(iii) Operating lease commitments – as lessor

The Group has entered into charter hire leases on its vessels. The Group has determined that it retains all the signifi cant risks and rewards of ownership of these vessels which are leased out on operating leases.

(b) Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet dates, 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:






2.4 Signifi cant accounting judgements and estimates (cont’d)

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

(i) Investments in subsidiaries and associated companies

The Company determines whether investments in subsidiaries and associated companies are impaired at least on an annual basis and measures the recoverable amount of the investments whenever there is an indication that the investments may be impaired. This requires an estimation of the value in use of the investments. Estimating the value in use requires the Company to make an estimate of the expected future cash fl ow from the subsidiaries and associated companies and also to choose a suitable discount rate in order to calculate the present value of those cash fl ows. As at 31 December 2009, except for SILkargo Logistics (Singapore) Pte Ltd, Samudera Indonesia Singapore Pte Ltd and Samudera Emirates Shipping (LLC), for which allowance for impairment loss on the investments have been made, there is no evidence of impairment on investments in other subsidiaries and associated companies. The carrying amount of investments in subsidiaries and associated companies at balance sheet date is US$54,549,000 and US$12,312,000 (2008: US$54,894,000 and US$12,312,000) respectively.

(ii) Depreciation of vessels and vessel improvements

The cost of vessels and vessel improvements of the Group and the Company is depreciated on a straight-line basis over the useful life of the vessels. Management estimates the useful life of these vessels to be within 4 to 25 years. The carrying amount of the Group’s vessels and vessel improvements at balance sheet date is US$217,450,000 and US$324,000 (2008: US$229,225,000 and US$288,000) respectively. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore, future depreciation charges could be revised.

(iii) Impairment of loans and receivables

The Group assesses at each balance sheet 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.

2.5 Foreign currency

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate of exchange ruling at the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.




2.5 Foreign currency (cont’d)

Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in the profi t and loss account except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign subsidiaries, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassifi ed from equity to profi t or loss of the Group on disposal of the foreign operation.

The assets and liabilities of foreign operations are translated into USD at the rate of exchange ruling at the balance sheet date and their statements of comprehensive income are translated at the average exchange rates for the year. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the deferred cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in the profi t and loss account.

2.6 Basis of consolidation

The consolidated fi nancial statements comprise the fi nancial statements of the Company and its subsidiaries as at the balance sheet date. The fi nancial statements of the subsidiaries used in the preparation of the consolidated fi nancial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied for like transactions and events in similar circumstances.

All intra-group balances, transactions, income and expenses and unrealised profi ts and losses resulting from intra-group transactions are eliminated in full.

Acquisitions of subsidiaries are accounted for by applying the purchase method. 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. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s identifi able assets, liabilities and contingent liabilities is recorded as goodwill on the balance sheet. Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifi able assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in the profi t and loss account on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are not reassessed on acquisition unless the business combination results in a change in the terms of the contract that signifi cantly modifi es the cash fl ows that would otherwise be required under the contract.

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.






2.7 Transactions with minority interests

Minority interests represent the portion of profi t or loss and net assets in subsidiaries not held by the Group and are presented separately in the consolidated profi t and loss account and within equity in the consolidated balance sheet, separately from parent shareholders’ equity. Transactions with minority interests are accounted for using the entity concept method, whereby, transactions with minority interests are accounted for as transactions with equity holders. On acquisition of minority interests, the difference between the consideration and book value of the share of the net assets acquired is refl ected as being a transaction between owners and recognised directly in equity. Gain or loss on disposal to minority interests is recognised directly in equity.

2.8 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.

In the Company’s fi nancial statements, investments in subsidiaries are accounted for at cost less any impairment losses.

2.9 Associated companies

An associated company is an entity, not being a subsidiary or a joint venture, in which the Group has signifi cant infl uence. The associated company is equity accounted for from the date the Group obtains signifi cant infl uence until the date the Group ceases to have signifi cant infl uence over the associated company.

The Group’s investments in associated companies are accounted for using the equity method. Under the equity method, the investment in associated companies is measured in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associated company. Goodwill relating to an associated company is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associated company’s identifi able assets, liabilities and contingent liabilities over the cost of the investment is deducted from the carrying amount of the investment and is recognised as income as part of the Group’s share of profi t or loss of the associated company in the period in which the investment is acquired.

When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associated company.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associated companies. The Group determines at each balance sheet date whether there is any objective evidence that the investment in the associated company is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associated company and its carrying value and recognises the amount in the profi t or loss.

The fi nancial statements of the associated companies used in the preparation of the consolidated fi nancial statements are prepared for the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.




2.9 Associated companies (cont’d)

In the Company’s fi nancial statements, investments in associated companies are accounted for at cost less any impairment losses.

2.10 Impairment of non-fi nancial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash infl ows that are largely independent of those from other assets. In assessing value in use, the estimated future cash fl ows expected to be generated by the asset 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. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount.

Impairment losses are recognised in the profi t and loss account except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in the profi t and loss account unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

2.11 Financial assets

Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the fi nancial instrument.

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial assets not at fair value through profi t or loss, directly attributable transaction costs.

A fi nancial asset is derecognised when the contractual right to receive cash fl ows from the asset has expired. On derecognition of a fi nancial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that has been recognised in other comprehensive income is recognised in the profi t and loss account.






2.11 Financial assets (cont’d)

All regular way purchases and sales of fi nancial assets are recognised or derecognised on the trade date i.e. the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of fi nancial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned.

(a) Financial assets at fair value through profi t or loss

Financial assets held for trading are classifi ed as fi nancial assets at fair value through profi t or loss. Financial assets held for trading are derivatives (including separated embedded derivatives) or fi nancial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, fi nancial assets at fair value through profi t or loss are measured at fair value. Any gains or losses arising from changes in fair value of the fi nancial assets are recognised in the profi t and loss account. Net gains or net losses on fi nancial assets at fair value through profi t or loss include exchange differences, interest and dividend income.

(b) Loans and receivables

Financial assets with fi xed or determinable payments that are not quoted in an active market are classifi ed as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in the profi t and loss account when the loans and receivables are derecognised or impaired, and through the amortisation process.

2.12 Fixed assets

All items of fi xed assets are initially recorded at cost. The cost of an item of fi xed assets is recognised as an asset if, and only if, it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item can be measured reliably. Subsequent to recognition, fi xed assets and fi xtures are measured at cost less accumulated depreciation and accumulated impairment losses.

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




2.12 Fixed assets (cont’d)

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

Vessels - 15 - 25 yearsVessel improvements - 4 - 10 yearsDeferred charges - 20 - 30 monthsMotor vehicles - 5 yearsEquipment - 3 - 7 yearsFurniture and fi ttings - 5 yearsRenovation - 3 yearsFreehold properties - 15 - 50 years

Deferred charges represent drydocking expenditure incurred for major overhauls of vessels, which is deferred when incurred and depreciated over a period from the current drydocking date to the next estimated drydocking date (normally 2½ years). When signifi cant drydocking expenditures recur prior to the expiry of the depreciation period, the remaining carrying value of the previous drydocking is expensed in the month of the subsequent drydocking.

Vessels and property under construction are stated at cost, which includes the progress billings paid in accordance with the construction contracts and interest charges arising from borrowings used to fi nance the construction or installation during the construction periods. Assets under construction are not depreciated as these assets are not yet available for use. Depreciation will be provided for when these assets are put into use.

The carrying values of fi xed assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each fi nancial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefi ts embodied in the items of fi xed assets.

An item of fi xed assets is derecognised upon disposal or when no future economic benefi ts are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profi t and loss account in the year the asset is derecognised.

2.13 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, bank balances and fi xed deposits.






2.14 Impairment of fi nancial assets

The Group assesses at each balance sheet date whether there is any objective evidence that a fi nancial asset is impaired.

(a) Assets carried at amortised cost

If there is objective evidence that an impairment loss on fi nancial assets carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the fi nancial asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in the profi t and loss account.

When the asset becomes uncollectible, the carrying amount of impaired fi nancial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the fi nancial asset.

To determine whether there is objective evidence that an impairment loss on fi nancial assets has been incurred, 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.

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

(b) Assets carried at cost

If there is objective evidence (such as signifi cant adverse changes in the business environment where the issuer operates, probability of insolvency or signifi cant fi nancial diffi culties of the issuer) that an impairment loss on fi nancial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the current market rate of return for a similar fi nancial asset. Such impairment losses are not reversed in subsequent periods.

2.15 Stocks

Stocks, comprising oil and spare parts on board of the vessels for consumption purposes, are stated at cost (determined on a fi rst-in, fi rst-out basis). Allowance is made for deteriorated, damaged, obsolete and slow-moving stocks.




2.16 Financial liabilities

Financial liabilities within the scope of FRS 39 are recognised on the balance sheet 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, all fi nancial liabilities are measured at amortised cost using the effective interest method, except for derivatives, which are measured at fair value.

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

2.17 Financial guarantee

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

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

2.18 Borrowing costs

Borrowing costs are recognised in the profi t and loss account as incurred except to the extent that they are capitalised. Borrowing costs are capitalised if they are directly attributable to the acquisition, construction or production of a qualifying asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are ready for their intended use or sale.

2.19 Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that an outfl ow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each balance sheet date and adjusted to refl ect the current best estimate. If it is no longer probable that an outfl ow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that refl ects, where appropriate, the risks specifi c to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a fi nance cost.






2.20 Leases

(a) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the fi nance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the profi t and loss account. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in the profi t and loss account on a straight-line basis over the lease term. The aggregate benefi t of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classifi ed as operating leases.

2.21 Revenue

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

(a) Rendering of services

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

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

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




2.21 Revenue (cont’d)

(b) Interest income

Interest income is recognised using the effective interest method.

(c) Dividend income

Dividend income is recognised when the Group’s right to receive payment is established.

(d) Rental income

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

2.22 Income taxes

(a) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the balance sheet date.

Current taxes are recognised in the profi t and loss account except that the tax relates to items recognised outside the profi t and loss account, either in other comprehensive income or directly in equity.

(b) Deferred tax

Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for fi nancial reporting purposes.

Deferred tax assets and liabilities are recognised for all temporary differences, except:

• Where the deferred tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction affects neither the accounting profi t nor taxable profi t or loss; and

• In respect of temporary differences associated with investments in subsidiary and associated company, where the timing of the reversal of the temporary differences can be controlled by the Group and it is probable that the temporary differences will not be reversed in the foreseeable future; and

• In respect of deductible temporary differences and carry-forward of unused tax credits and unused tax losses, if it is not probable that taxable profi t will be available against which the deductible temporary differences and carry-forward of unused tax credits and unused tax losses can be utilised.






2.22 Income taxes (cont’d)

(b) Deferred tax (cont’d)

The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profi t will allow the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date.

Deferred income tax relating to items recognised outside profi t or loss is recognised outside profi t or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

(c) Sales tax

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

• Where the sales tax incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• Receivables and payables that are stated with the amount of sales tax included.

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

2.23 Employee benefi ts

The Group participates in the national pension schemes as defi ned by the laws of the countries in which it has operations. Contributions to defi ned contribution pension schemes are recognised as an expense in the period in which the related service is performed.




2.24 Share buyback

Shares purchased in connection with the share buyback programme approved by the Company’s shareholders may only be funded out of surplus available for dividend or distribution. When share capital recognised as equity is reacquired, the amount of consideration paid or received is recognised directly in equity. Reacquired shares are classifi ed as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in the profi t and loss account on the purchase, sale, issue or cancellation of the Group’s own equity instruments.

2.25 Hedge accounting

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

For the purpose of hedge accounting, hedges are classifi ed as:

– Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised fi rm commitment; or

– Cash fl ow hedges when hedging exposure to variability in cash fl ows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised fi rm commitment; or

– Hedges of a net investment in a foreign operation.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash fl ows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the fi nancial reporting periods for which they were designated.

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

Cash fl ow hedges

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

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






2.25 Hedge accounting (cont’d)

Cash fl ow hedges (cont’d)

If the forecast transaction or fi rm commitment is no longer expected to occur, the cumulative gain or loss previously recognised in equity are transferred to the profi t and loss account. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, any cumulative gain or loss previously recognised in other comprehensive income remain in other comprehensive income until the forecast transaction or fi rm commitment affects profi t or loss.

2.26 Segment reporting

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

2.27 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confi rmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised on the balance sheet of the Group.

3. SHARE CAPITAL AND TREASURY SHARES

(a) Share capital

Group and Company2009 2008

No. of shares US$’000 No. of shares US$’000

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

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



3. SHARE CAPITAL AND TREASURY SHARES (CONT’D)

(b) Treasury shares


No. of shares US$’000 No. of shares US$’000

Issued and fully paid:

Balance at beginning – – – –Acquired during the fi nancial year (1,093,000) (174) – –

Balance at end of year (1,093,000) (174) – –

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

The Company acquired 1,093,000 (2008: nil) shares in the Company through purchases on the Singapore Exchange during the fi nancial year. The total amount paid to acquire the shares was approximately US$174,000 (2008: nil) and this was presented as a component within shareholders’ equity.

4. ACCUMULATED PROFITS

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Balance at beginning of year 179,469 158,533 129,286 119,160

Translation effect due to change in functional currency – 846 – –

Dividend paid (Note 33) (5,390) (5,946) (5,390) (5,946)

Transfer to statutory reserves fund – (1) – –Net (loss)/profi t for the year (8,853) 26,037 (9,427) 16,072

Balance at end of year 165,226 179,469 114,469 129,286

5. OTHER RESERVES

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Statutory reserve 64 64 – –Hedging reserve (3,764) (8,938) – –

(3,700) (8,874) – –





5. OTHER RESERVES (CONT’D)

(a) Statutory reserve

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

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

(b) Hedging reserve

The hedging reserve record the portion of the fair value changes on derivative fi nancial instruments designated as hedging instruments in cash fl ow hedges that is determined to be an effective hedge.

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Balance at beginning of year (8,938) (1,798) – –

Net change in the hedging reserve 101 12 – –

Share of net change in associated company’s hedging reserve 5,073 (7,152) – –

Balance at end of year (3,764) (8,938) – –

6. FOREIGN CURRENCY TRANSLATION RESERVE

The foreign currency translation reserve represents exchange differences arising from the translation of the fi nancial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Balance at beginning of year (11,577) (9,535) – –

Translation effect due to change in functional currency – (857) – –

Currency translation 89 (1,185) – –

Balance at end of year (11,488) (11,577) – –



7. SUBSIDIARIES

Company2009 2008

US$’000 US$’000

Unquoted equity shares, at cost 55,255 55,255Less: Allowance for impairment loss (706) (361)

54,549 54,894

Movements in allowance for impairment loss during the fi nancial year were as follows:

Balance at beginning of year (361) (361)Impairment loss for the year (345) –

Balance at end of year (706) (361)

Details of the subsidiaries as at 31 December are as follows:

Name Principal activitiesCountry of

incorporation Equity interest

heldCost of investment held

by the Company2009 2008 2009 2008% % US$’000 US$’000

Held by the Company

Foremost Maritime Pte Ltd (“Foremost”)

Owning and chartering of vessels

Singapore 100 100 54,163 54,163

SILkargo Logistics (Singapore) Pte Ltd (“SILkargo”)

Sea freight forwarding, shipping agency and container freight station services

Singapore 100 100 345 345

Samudera Indonesia Singapore Pte Ltd (“SISIN”)

Investment holding(In process of being strike off )

Singapore 100 100 345 345

Samudera Emirates Shipping (LLC)(“SES”) ** 1

Shipping agency United Arab Emirates

16 16 16 16

Galaxy Shipping Services Sdn Bhd *

Shipping agency Malaysia 60 60 191 191

Samudera Shipping Line (India) Pvt Ltd *

Shipping agency India 100 100 28 28





7. SUBSIDIARIES (CONT’D)



heldCost of investment held

by the Company2009 2008 2009 2008% % US$’000 US$’000

Held by the Company

Samudera Traffi c Co. Ltd (“STC”)*** 2

Shipping agency Thailand 49 49 114 114

Samudera Shipping Line (Vietnam) Co., Ltd***

Shipping agency Vietnam 51 51 53 53

Held through subsidiaries

PT Samudera Shipping Services *

Owning and chartering of vessels

Indonesia 95 95 – –

Samudera Emirates Shipping (LLC)(“SES”) ** 1

Shipping agency United Arab Emirates

17 17 – –

SILkargo (LLC)(“SIL”) ** 3

Freight forwarding, cargo handling, packaging and clearing agent

United Arab Emirates

49 49 – –

55,255 55,255

All Singapore incorporated subsidiaries above are audited by Ernst & Young LLP, Singapore.

* Audited by member fi rms of Ernst & Young Global in respective countries** Audited by UHY Saxena, Dubai*** Audited by member fi rms of Grant Thornton in respective countries

1 The Company and a subsidiary, Foremost, contributed 16% and 17% of the issued share capital of SES respectively. Hence, the Group’s total effective interest in SES is 33%. As the Group has control over the fi nancial and operating policies via majority representation on the board of directors of SES, the latter is deemed to be a subsidiary of the Group.

2 As the Group has control over the fi nancial and operating policies via majority representation on the board of directors of STC, the latter is deemed to be a subsidiary of the Group. The Company entered into an agreement where it is entitled to a 60% share of the net profi ts of the subsidiary.

3 SILkargo contributed 49% of the issued share capital of SIL. As the Group has control over the fi nancial and operating policies via majority representation on the board of directors of SIL, the latter is deemed to be a subsidiary of the Group.




8. ASSOCIATED COMPANIES

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Unquoted equity shares, at cost 12,312 12,312 12,312 12,312Dividend received (335) (327) – –Share of post acquisition losses (19) (285) – –Share of hedging reserve (3,705) (8,778) – –Translation difference (951) (1,009) – –

7,302 1,913 12,312 12,312

Details of the associated companies as at 31 December are as follows:



heldCost of investment held by

the Company2009 2008 2009 2008% % US$’000 US$’000

Held by the Company

PT Jardine Tangguh Transport Services # 1

Shipping agency Indonesia 40 40 195 195

LNG East-West Shipping Company (Singapore) Pte. Limited ##

Owning, managing and chartering of vessels and ship brokering

Singapore 25 25 12,117 12,117

12,312 12,312

# Audited by PricewaterhouseCoopers, Indonesia## Audited by Moore Stephens, Singapore

1 The Company entered into an agreement where it is only entitled to a 32% share of net profi ts of the associated company.




8. ASSOCIATED COMPANIES (CONT’D)

The summarised fi nancial information of the associated companies, not adjusted for the proportion of ownership interests held by the Group, is as follows:

Group2009 2008

US$’000 US$’000

Assets and liabilities:Current assets 17,008 15,883Non-current assets 175,855 177,122

Total assets 192,863 193,005

Current liabilities 19,634 20,180Non-current liabilities 155,298 176,582

Total liabilities 174,932 196,762

Results:Revenue 25,275 8,497 Net profi t/(loss) for the year 2,261 (2,851)




9. FIXED ASSETS

Group VesselsVessel

improvementsDeferred charges

US$’000 US$’000 US$’000

CostAs at 1 January 2008 155,897 2,379 11,701Additions 117,421 34 4,632Disposals (4,044) (161) –Written off – – –Translation difference – – –

As at 31 December 2008 and 1 January 2009 269,274 2,252 16,333Additions – 192 6,347Disposals – – –Written off – – (18)Reclassifi cation (167) 166 –Translation difference – – –

As at 31 December 2009 269,107 2,610 22,662

Accumulated depreciationAs at 1 January 2008 30,527 1,640 9,501Charge for the year 9,842 327 2,833Disposals (320) (3) –Written off – – –Translation difference – – –

As at 31 December 2008 and 1 January 2009 40,049 1,964 12,334Charge for the year 11,609 322 3,759Disposals – – –Written off – – (13)Reclassifi cation (1) – –Translation difference – – –

As at 31 December 2009 51,657 2,286 16,080

Net book valueAs at 31 December 2009 217,450 324 6,582

As at 31 December 2008 229,225 288 3,999



Property under

constructionMotor

vehicles Equipment

Furnitureand

fi ttings RenovationFreehold

landFreehold

properties TotalUS$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

– 783 3,893 496 1,209 14,807 5,694 196,8591,078 292 3,002 18 – – – 126,477

– (127) (1) – – – – (4,333)– – (4) – (29) – – (33)

(121) (23) (41) (16) (1) – – (202)

957 925 6,849 498 1,179 14,807 5,694 318,768416 127 928 10 29 – – 8,049

– (29) – – – – – (29)– – (2) – – – – (20)– 1 – – – – – –

55 4 5 – 1 – – 65

1,428 1,028 7,780 508 1,209 14,807 5,694 326,833

– 429 3,182 296 700 – 125 46,400– 149 697 67 250 – 150 14,315– (118) (1) – – – – (442)– – (3) – (29) – – (32)– (6) (21) (7) – – – (34)

– 454 3,854 356 921 – 275 60,207– 155 1,067 49 234 – 150 17,345– (28) – – – – – (28)– – (2) – – – – (15)– 1 – – – – – –– 2 7 1 1 – – 11

– 584 4,926 406 1,156 – 425 77,520

1,428 444 2,854 102 53 14,807 5,269 249,313

957 471 2,995 142 258 14,807 5,419 258,561




9. FIXED ASSETS (CONT’D)

Company VesselsMotor

vehiclesUS$’000 US$’000

CostAs at 1 January 2008 – 286Additions 113,316 169Disposals – (33)

As at 31 December 2008 and 1 January 2009 113,316 422Additions – 122

As at 31 December 2009 113,316 544

Accumulated depreciationAs at 1 January 2008 – 150Charge for the year 2,470 67Disposals – (23)

As at 31 December 2008 and 1 January 2009 2,470 194Charge for the year 4,533 80

As at 31 December 2009 7,003 274

Net book valueAs at 31 December 2009 106,313 270

As at 31 December 2008 110,846 228



EquipmentFurniture and

fi ttings RenovationFreehold

landFreehold

properties TotalUS$’000 US$’000 US$’000 US$’000 US$’000 US$’000

2,666 203 1,079 14,807 5,694 24,7351,180 1 – – – 114,666

– – – – – (33)

3,846 204 1,079 14,807 5,694 139,368723 – – – – 845

4,569 204 1,079 14,807 5,694 140,213

2,356 88 641 – 125 3,360402 29 230 – 150 3,348

– – – – – (23)

2,758 117 871 – 275 6,685605 29 207 – 150 5,604

3,363 146 1,078 – 425 12,289

1,206 58 1 14,807 5,269 127,924

1,088 87 208 14,807 5,419 132,683




9. FIXED ASSETS (CONT’D)

(a) The net book value of motor vehicles of the Group and Company as at 31 December 2009 under hire purchase contracts amounted to US$190,000 and US$121,000 (2008: US$291,000 and US$185,000) respectively.

(b) The Group’s and the Company’s vessels with net book value of US$192,106,000 and US$106,313,000 (2008: US$210,570,000 and US$110,846,000) respectively have also been placed under or currently undergoing legal mortgage to secure the Company’s and subsidiaries’ bank term loans (Note 24).

(c) The following shows the net book value of vessels of the Group that are chartered out to third parties under operating leases:

Group2009 2008

US$’000 US$’000

Cost 64,310 93,645Accumulated depreciation (18,045) (18,879)

Net book value 46,265 74,766

The depreciation charge for vessels chartered out under operating leases in 2009 is US$2,740,000 (2008: US$3,909,000).

The charter hire income for the year amounted to US$12,914,000 (2008: US$17,942,000).

10. TRADE DEBTORS

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Trade debtors 38,889 50,900 27,208 39,272Less: Allowance for doubtful debts (1,515) (1,492) (1,332) (1,376)

37,374 49,408 25,876 37,896




10. TRADE DEBTORS (CONT’D)

Movements in allowance for doubtful debts during the fi nancial year were as follows:

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Balance at beginning of year (1,492) (877) (1,376) (591)Allowance for the year (167) (1,259) (62) (1,232)Write back of allowance 121 143 101 143Written off against allowance 23 501 5 304

Balance at end of year (1,515) (1,492) (1,332) (1,376)

Trade debtors are non-interest bearing and are generally on 30 to 60 day terms. They are recognised at their original invoiced amounts which represent their fair values on initial recognition.

Trade debtors that are past due but not impaired

The Group has trade debtors amounting to US$3,378,000 (2008: US$5,166,000) that are past due at the balance sheet date but not impaired. These trade debtors are unsecured and the analysis of their aging at the balance sheet date are as follows:

Group2009 2008

US$’000 US$’000

Trade debtors past due:Lesser than 31 days 1,919 3,27731 to 60 days 489 57561 to 90 days 249 468More than 91 days 721 846

3,378 5,166




10. TRADE DEBTORS (CONT’D)

Trade debtors that are impaired

The Group’s trade debtors that are impaired at the balance sheet date and the movements of the allowance account used to record the impairment were as follows:

GroupIndividually impaired2009 2008

US$’000 US$’000

Trade debtors – nominal amounts 3,291 6,078Less: Allowance for impairment (1,515) (1,492)

1,776 4,586

Movements in allowance account:

Balance at beginning of year (1,492) (877)Allowance for the year (167) (1,259)Write back of allowance 121 143Written off against allowance 23 501

Balance at end of year (1,515) (1,492)

Trade debtors that are individually determined to be impaired at the balance sheet date relate to debtors who have delayed in payments or have indication of default on payments. These trade debtors are not secured by any collateral or credit enhancements.

Trade debtors are denominated in the following currencies:

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

United States Dollar 24,410 33,564 19,567 29,027Singapore Dollar 6,219 8,794 6,190 8,729Indonesian Rupiah 2,459 2,300 – –Others 4,286 4,750 119 140

37,374 49,408 25,876 37,896




11. ADVANCE PAYMENTS FOR VESSELS PURCHASE

These balances are advance payments made to the shipyards for the vessels purchase.

During the fi nancial year, borrowing costs of approximately US$636,000 (2008: US$280,000), arising from borrowings obtained specifi cally for the vessels purchase, were capitalised under advance payments.

12. OTHER DEBTORS AND DEPOSITS

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Other debtors 1,003 771 943 251Deposits 1,911 983 32 38Loans to employees 46 46 6 26Insurance claims receivable 3,244 316 108 316

6,204 2,116 1,089 631

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

Other debtors and deposits are denominated in the following currencies:

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

United States Dollar 4,303 1,386 1,051 540Singapore Dollar 40 66 38 65Indian Rupee 1,555 339 – –Others 306 325 – 26

6,204 2,116 1,089 631

13. DUE FROM/TO IMMEDIATE HOLDING COMPANY (TRADE)

The amounts due from/to immediate holding company are unsecured, interest-free and are to be settled in cash within the next twelve months.




14. DUE FROM SUBSIDIARIES (TRADE)

Company2009 2008

US$’000 US$’000

Due from subsidiaries 4,610 3,279Less: Allowance for doubtful debts (704) (685)

3,906 2,594

Movement in allowance for doubtful debts during the fi nancial year were as follows:

Balance at beginning of year (685) (643)Allowance for the year (19) (42)

Balance at end of year (704) (685)

These balances are unsecured, interest-free and are to be settled in cash within the next twelve months.

15. DUE FROM SUBSIDIARIES (NON-TRADE)

These balances are unsecured, interest-free and are expected to be settled in cash within the next twelve months.

16. DUE TO RELATED COMPANIES (TRADE)

These balances are unsecured, interest-free and are to be settled in cash within the next twelve months.

17. DUE FROM ASSOCIATED COMPANY (NON-TRADE)

These balances are unsecured and interest bearing at rate of 0.50% (2008: 0.50%) above 6-month LIBOR per annum. The amount is expected to be settled in cash within the next twelve months.




18. INVESTMENT SECURITIES


US$’000 US$’000

Quoted debt and note securities 494 902

Investment securities are stated at market value which approximates their fair value and may be disposed any time at the discretion of the Company.

The quoted debt and note securities have maturities of 3 years (2008: 2 and 4 years). The weighted average effective interest rate is 1.72% (2008: 1.87%) per annum.

19. CASH AND BANK BALANCES

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Non-currentCall and fi xed deposits 1 1 – –Cash at bank 272 – – –

273 1 – –

CurrentCall and fi xed deposits 29,705 43,353 28,072 38,635Cash at bank and in hand 16,593 23,875 8,039 12,878

Cash and bank balances 46,298 67,228 36,111 51,513

Total cash and bank balances 46,571 67,229 36,111 51,513

Cash and bank balances are denominated in the following currencies:

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

United States Dollar 36,671 49,489 30,995 40,604Singapore Dollar 2,421 8,375 2,244 8,176Indonesian Rupiah 963 3,151 3 14Thai Baht 3,584 2,111 1,815 784Indian Rupee 1,132 1,949 356 394Others 1,800 2,154 698 1,541

46,571 67,229 36,111 51,513




19. CASH AND BANK BALANCES (CONT’D)

Fixed deposits are made for varying periods between 1 day to 3 years (2008: 1 week to 3 years) depending on the immediate cash requirements of the Group. These current portion of fi xed deposits can be withdrawn anytime at the discretion of management. Non-current portion of cash and bank balances represents a deposit with maturity date of more than a year. Interest rates on fi xed deposits range from 0.05% to 9.00% (2008: 0.03% to 12.50%) per annum.

Cash at banks earns interest at fl oating rates based on daily bank deposit rates ranging from 0.00% to 2.50% (2008: 0.00% to 2.50%) per annum.

20. TRADE CREDITORS

Trade creditors are non-interest bearing and are normally settled on 30 to 60 day terms.

Trade creditors are denominated in the following currencies:

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

United States Dollar 13,040 8,755 8,639 7,270Singapore Dollar 6,927 8,279 6,647 8,177Others 4,544 3,106 153 314

24,511 20,140 15,439 15,761

21. OTHER CREDITORS AND LIABILITIES

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Accrued operating expenses 9,860 15,346 2,485 6,636Other creditors 884 674 411 396Deferred income 2,781 1,762 1,688 1,240Derivative fi nancial instruments (Note 39) 59 160 – –

13,584 17,942 4,584 8,272




22. DUE TO SUBSIDIARY (NON-TRADE)

The amount due to subsidiary was unsecured, interest-free and was settled in full during the current fi nancial year.

23. HIRE PURCHASE CREDITORS

Group

Minimum lease

payments InterestPresent value of payments

2009 US$’000 US$’000 US$’000

Later than fi ve years 86 2 84Later than one year but not later than fi ve years 964 145 819

1,050 147 903Not later than one year 275 68 207

1,325 215 1,110

2008

Later than fi ve years 295 15 280Later than one year but not later than fi ve years 1,028 201 827

1,323 216 1,107Not later than one year 282 80 202

1,605 296 1,309




23. HIRE PURCHASE CREDITORS (CONT’D)

Company

Minimum lease

payments InterestPresent value of payments

2009 US$’000 US$’000 US$’000

Later than fi ve years – – –Later than one year but not later than fi ve years 118 15 103

118 15 103Not later than one year 53 7 46

171 22 149

2008

Later than fi ve years 1 – 1Later than one year but not later than fi ve years 167 22 145

168 22 146Not later than one year 52 7 45

220 29 191

Hire purchases bear interest ranging from 2.2% to 15.0% (2008: 2.2% to 15.0%) per annum.

All assets acquired under hire purchases are secured against the assets under lease. The net book value of assets under hire purchases is disclosed in Note 9.

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




24. BANK TERM LOANS (SECURED)

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Not later than one year 15,167 17,360 8,005 7,986

Later than one year but not later than fi ve years 68,635 70,004 31,627 31,502

Later than fi ve years 95,267 68,580 48,737 56,471

163,902 138,584 80,364 87,973

179,069 155,944 88,369 95,959

The details of bank term loans are as follows:

Loans outstandingas at 31 December

2009 2008US$’000 US$’000

(a) The Company

(i) SGD21,590,000 repayable in 120 monthly instalments commencing September 2006 with a certain remaining amount to be paid at the end of the term with an option to extend for a further 10 years. Interest is payable at 0.95% above Swap Offer Rate per annum. 12,695 13,181

(ii) SGD2,052,750 repayable in 120 monthly instalments commencing October 2007. Interest is payable at 0.95% above Swap Offer Rate per annum. 1,128 1,247

(iii) USD23,120,000 repayable in 40 quarterly instalments commencing May 2008 with a certain remaining amount to be paid at the end of the term. Interest is payable at 1.22% above LIBOR per annum. 20,109 22,011

(iv) USD33,600,000 repayable in 48 quarterly instalments commencing June 2008. Interest is payable at 1.35% above LIBOR per annum. 29,204 31,963

(v) USD28,400,000 repayable in 48 quarterly instalments commencing October 2008. Interest is payable at 1.35% above LIBOR per annum. 25,233 27,557

88,369 95,959




24. BANK TERM LOANS (SECURED) (CONT’D)


2009 2008US$’000 US$’000

(b) Subsidiaries

(i) USD11,550,000 repayable in 40 quarterly instalments commencing August 2000 and a fi nal instalment for the remaining outstanding amount. Interest is payable at 1.20% above LIBOR per annum. – 1,732

On 4 April 2001 and 19 April 2001, a subsidiary entered into two interest rate swap agreements, each on a notional principal of USD5,197,500, with a bank to hedge against the USD LIBOR. Under these agreements which end on 5 May 2010, the subsidiary will pay a fi xed interest rate of 5.80% and 5.65% per annum respectively. In return it will receive interest at USD 3-month LIBOR per annum.

The loan was fully repaid during the current fi nancial year.

(ii) USD12,100,000 repayable in 40 quarterly instalments commencing January 2001 and a fi nal instalment for the remaining outstanding amount. Interest is payable at 1.20% above LIBOR per annum. 1,512 2,722

On 4 April 2001 and 19 April 2001, a subsidiary entered into two interest rate swap agreements, each on a notional principal of USD5,898,750, with a bank to hedge against the USD LIBOR. Under these agreements which end on 31 January 2011, the subsidiary will pay a fi xed interest rate of 5.85% and 5.70% per annum respectively. In return it will receive interest at USD 3-month LIBOR per annum.

(iii) USD3,650,000 repayable in 32 equal quarterly instalments commencing October 2003. Interest is payable at 1.30% above LIBOR per annum.


– 1,255

(iv) USD5,125,000 repayable in 40 equal quarterly instalments commencing July 2004. Interest is payable at 1.30% above LIBOR per annum.


– 2,947

(v) USD8,120,000 repayable in 14 equal quarterly instalments with interest payable at 1.625% above SIBOR. On 13 March 2008, a partial payment amounting to USD2,320,000 was made. On 6 June 2008, the loan agreement was amended to 15 equal quarterly instalments of USD348,000, commencing July 2008. Interest is payable at 2.25% above SIBOR. 3,132 4,524






2009 2008US$’000 US$’000

(b) Subsidiaries (cont’d)

(vi) USD875,000 repayable in 10 equal quarterly instalments commencing April 2008. Interest is payable at 1.625% above SIBOR. 262 613

(vii) USD16,450,000 repayable in 40 equal quarterly instalments commencing October 2006. Interest is payable at 1.05% above LIBOR per annum. 11,104 12,749

(viii) USD16,450,000 repayable in 40 equal quarterly instalments commencing January 2007. Interest is payable at 1.05% above LIBOR per annum. 11,515 13,160

(ix) USD8,150,000 repayable in 24 equal quarterly instalments commencing April 2008 with interest payable at 1.625% above SIBOR. On 6 June 2008, the loan agreement was amended to 30 equal quarterly instalments of USD252,000 each commencing July 2008, and a fi nal instalment of USD250,000. Interest is payable at 2.5% above SIBOR. 6,298 7,306

(x) USD56,877,000 (2008: USD12,977,000), part of a facility amounting to USD84,000,000, repayable in 48 equal quarterly instalments commencing after delivery of the vessels. Interest is payable at 0.55% above LIBOR per annum. 56,877 12,977

90,700 59,985

Total 179,069 155,944

The bank term loans are secured as follows:

1. Bank term loans (a)(i) and (a)(ii)

- legal mortgage over freehold properties of the Company; - assignment of insurance; and - assignment of income or proceeds of sale if any.

2. Bank term loans (a)(iii) to (a)(v)

- corporate guarantees from the Company; - legal mortgages over certain vessels of the Group (Note 9); - assignment of income derived from charter hire contracts; and - assignment of insurance of the vessels.





3. Bank term loans (b)(i) to (b)(x) except (b)(v)

- corporate guarantees from the Company; - legal mortgages over certain vessels of the subsidiaries (Note 9); - assignment of income derived from charter hire contracts; and - assignment of insurance of the vessels.

4. Bank term loans (b)(v)

- corporate guarantee from the Company and a subsidiary; - legal mortgages over certain vessels of the subsidiary (Note 9); - assignment of income derived from charter hire contracts; and - assignment of insurance of the vessels.

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

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

United States Dollar 165,246 141,516 74,546 81,531Singapore Dollar 13,823 14,428 13,823 14,428

179,069 155,944 88,369 95,959

25. TURNOVER

Turnover of the Group represents revenue from freight operations, charter hire income and freight forwarding service income. Intra-group transactions and turnover from associated companies have been excluded from the Group’s turnover.




26. OTHER OPERATING INCOME

Group2009 2008

US$’000 US$’000

Gain on disposal of fi xed assets 18 417Gain on disposal of investment securities – 4Unrealised gain on investment securities 47 136Rental income 300 324Claim income 1 79Others 42 54

408 1,014

27. OTHER OPERATING EXPENSES

Group2009 2008

US$’000 US$’000

Claim expenses 161 510Foreign exchange loss 646 452Loss on disposal of investment securities 255 –Others 155 62

1,217 1,024

28. (LOSS)/PROFIT FROM OPERATIONS

This is determined after charging the following:

Group2009 2008

US$’000 US$’000

Directors’ fees 115 116Non-audit fees paid/payable to the auditors of the Company 41 47Operating lease expenses 73,753 89,873Personnel expenses (Note 29) 10,927 14,781



29. PERSONNEL EXPENSES

Group2009 2008

US$’000 US$’000

Wages, salaries and bonuses 10,271 13,614Central Provident Fund and other pension costs 656 1,167

10,927 14,781

The above note includes directors’ and key executives’ remuneration as disclosed in Note 35.

30. FINANCIAL INCOME/(EXPENSE)

Group2009 2008

US$’000 US$’000

(a) Financial income Interest income - cash and bank balances 458 1,112 - quoted debt and note securities 17 44

475 1,156

(b) Financial expense Interest expense - bank term loans (3,961) (4,706) - hire purchase creditors (78) (20)

(4,039) (4,726)

(3,564) (3,570)





31. INCOME TAX EXPENSE

(a) Major components of income tax expense

Major components of income tax expense for the years ended 31 December are:

Group2009 2008

US$’000 US$’000

Profi t and loss account

Current income tax: Current income taxation 1,310 1,543 (Over)/under provision in respect of previous years (104) 3

Deferred income tax: Current year 50 151

Income tax expense recognised in the profi t and loss account 1,256 1,697

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

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

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



31. INCOME TAX EXPENSE (CONT’D)

(b) Relationship between tax expense and accounting profi t

The reconciliation between tax expense and the product of accounting (loss)/profi t multiplied by the applicable corporate tax rate for the years ended 31 December 2009 and 2008 is as follows:

Group2009 2008

US$’000 US$’000

(Loss)/profi t before tax (7,498) 28,446

Tax at statutory tax rate at 17% (2008: 18%) (1,275) 5,120Adjustments: Non-deductible expenses 929 14 Income not subject to taxation – (826) Effect of AIS status – (2,623) Deferred tax assets not recognized 922 – Effect of different applicable tax rates for foreign subsidiaries and

associated companies 768 52 (Over)/under provision in respect of previous years (104) 3 Others 16 (43)

Income tax expense recognised in the profi t and loss account 1,256 1,697

The corporate income tax rate applicable to Singapore companies of the Group was reduced to 17% for the year of assessment 2010 onwards from 18% for the year of assessment 2009.

The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.

(c) Deferred taxation

Deferred income tax assets as at 31 December relate to the following:

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

An excess of tax written down value over net book value of fi xed assets 1 2 – –

Provisions 28 78 – –Others 1 1 – –

30 81 – –





31. INCOME TAX EXPENSE (CONT’D)

(d) Unrecognised tax losses

As at the balance sheet date, the Group and the Company have tax losses of approximately US$5,300,000 (2008: US$226,000) and US$5,100,000 (2008: US$Nil) respectively that are available for offset against future taxable profi ts of the companies in the Group and the Company in which the losses arose for which no deferred tax asset is recognised due to uncertainty of recoverability. The use of these tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operate.

32. (LOSS)/EARNINGS PER SHARE

The (loss)/earnings per share is calculated by dividing the (loss)/profi t attributable to ordinary equity holders of the Company of US$(8,853,000) (2008: US$26,037,000) by the weighted average number of shares in issue during the fi nancial year of 538,516,037 (2008: 539,131,199). The basic and diluted earnings per share are the same as there are no potential dilutive shares.

33. DIVIDENDS

Company2009 2008

US$’000 US$’000

Declared and paid during the year:

Dividend on ordinary shares:Final dividend paid – 1.50 Singapore cents per ordinary share (tax exempt) in respect of previous fi nancial year (2008: 1.50 Singapore cent per ordinary share, tax exempt) 5,390 5,946

Proposed but not recognised as a liability as at 31 December:

Dividend on ordinary shares subject to shareholders’ approval at the AGM:Final tax exempt dividend for fi nancial year ended 31 December 2009 of Nil Singapore cents per share, total dividend payable amounting to SGD Nil (2008: 1.50 Singapore cents per share, total dividend payable amounting to SGD8,087,000) – 5,616



34. NOTES TO CASH FLOW STATEMENT

(a) Cash and cash equivalents

Cash and cash equivalents included in the consolidated statement of cash fl ows comprise the following:

Group2009 2008

US$’000 US$’000

Total cash and bank balances (Note 19) 46,571 67,229Less: Pledged deposits (6,961) (2,468)

39,610 64,761

Call and fi xed deposits

The Company’s fi xed deposits totalling US$1,096,000 (2008: US$1,078,000) have been pledged to a bank to secure bankers’ guarantee facilities of US$1,749,000 (2008: US$1,640,000) given to suppliers of goods and services in the ordinary course of business.

Fixed deposits of subsidiaries totalling US$611,000 (2008: US$85,000) have been pledged to certain banks to secure bankers’ guarantee facilities of US$1,010,000 (2008: US$456,000) given to suppliers of goods and services in ordinary course of business.

Cash at bank

Included in cash at bank of the Group is an amount of US$5,254,000 (2008: US$1,305,000) pledged to certain banks to secure loans of the Group amounting to US$78,568,000 (2008: US$111,895,000) (Note 24).

(b) Purchase of fi xed assets

During the fi nancial year, the Group acquired fi xed assets with aggregate cost of US$53,201,000 (2008: US$126,477,000) of which US$Nil (2008: US$1,234,000) was acquired by means of hire purchase. Cash payment of US$53,201,000 (2008: US$125,243,000) was made to purchase fi xed assets of the Group.





35. RELATED PARTY TRANSACTIONS

An entity or individual is considered a related party of the Group for the purposes of the fi nancial statements if:

(i) it possesses the ability (directly or indirectly) to control or exercise signifi cant infl uence over the operating and fi nancial decisions of the Group or vice versa; or

(ii) it is subject to common control or common signifi cant infl uence.

In addition to those related party information disclosed elsewhere in the fi nancial statements, the following signifi cant transactions between the Group and related parties who are not members of the Group took place during the year at terms agreed between the parties.

Group2009 2008

US$’000 US$’000

ExpensesImmediate holding companyAgency commissions 2,600 3,346Offi ce rental 87 134

Related companiesShip management fees 893 741Building rental 24 25Vessel charter hire 1,074 1,233Container depot storage/repair 403 461Stevedorage charges 2,964 2,837

OthersFees paid to a fi rm of which a director of the Company is a member 11 19

Compensation of key management personnel

Group2009 2008

US$’000 US$’000

Short-term employee benefi ts 2,631 5,119Pension contributions 68 83

Total compensation paid to key management personnel 2,699 5,202

Comprise amounts paid to:• Directors of the Company 1,089 3,475• Key executives 1,610 1,727

2,699 5,202



36. CONTINGENT LIABILITIES AND COMMITMENTS

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

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

2009 2008US$’000 US$’000

Future minimum lease payments- not later than one year 38,847 57,515- later than one year but not later than fi ve years 61,471 95,641- later than fi ve years – 65

100,318 153,221

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

(b) Operating lease commitments – Group as lessor

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

Future minimum lease receivables under non-cancellable operating leases as at 31 December are as follows:

2009 2008US$’000 US$’000

Future minimum lease receivables- not later than one year 13,959 17,172- later than one year but not later than fi ve years 1,995 6,994

15,954 24,166





36. CONTINGENT LIABILITIES AND COMMITMENTS (CONT’D)

(c) Capital commitments

Capital expenditure contracted for as at the balance sheet date but not recognised in the fi nancial statements are as follows:

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Capital commitment in respect of fi xed assets 20,022 69,123 – –

37. SEGMENT INFORMATION

For management purposes, the Group is organised on a world-wide basis into three main operating divisions, namely:

- Container Shipping- Industrial Shipping- Others

Others include forwarding, agency and other services.

The Group’s risks and rates of return are affected predominantly by differences in the services rendered.

Management monitors the operating results of its operating divisions separately for the purpose of making decisions about resource allocation and performance assessment.



37. SEGMENT INFORMATION (CONT’D)

2009Container Shipping

Industrial Shipping Others Eliminations Group

US$’000 US$’000 US$’000 US$’000 US$’000

Turnover- External customers 271,937 52,471 5,785 – 330,193- Inter-segment 1,696 4,378 2,593 (8,667) –

273,633 56,849 8,378 (8,667) 330,193

Segment results (8,449) 4,378 (168) (288) (4,527)Financial income 324 74 77 – 475Financial expense (3,058) (979) (2) – (4,039)Share of results of associated companies – 468 125 – 593

(Loss)/profi t before tax (11,183) 3,941 32 (288) (7,498)

Income tax expense (1,256)

Loss after tax (8,754)

Segment assets 237,455 193,132 13,502 – 444,089Unallocated assets 30

444,119

Segment liabilities 130,701 85,123 4,935 – 220,759Unallocated liabilities 1,901

222,660

Capital expenditure 3,229 49,411 521 – 53,161Depreciation 7,567 9,605 173 – 17,345Allowance for doubtful debts 62 12 93 – 167






2008Container Shipping

Industrial Shipping Others Eliminations Group

US$’000 US$’000 US$’000 US$’000 US$’000

Turnover- External customers 390,396 43,492 9,364 – 443,252- Inter-segment 1,399 974 3,679 (6,052) –

391,795 44,466 13,043 (6,052) 443,252

Segment results 23,816 8,280 1,680 (1,128) 32,648Financial income 875 152 129 – 1,156Financial expense (2,744) (1,976) (6) – (4,726)Share of results of associated companies – (1,002) 370 – (632)

Profi t before tax 21,947 5,454 2,173 (1,128) 28,446

Income tax expense (1,697)

Profi t after tax 26,749

Segment assets 262,986 153,504 11,706 – 428,196Unallocated assets 81

428,277

Segment liabilities 124,480 67,143 4,579 – 196,202Unallocated liabilities 1,501

197,703

Capital expenditure 120,068 5,218 1,192 – 126,478Depreciation 5,191 8,922 202 – 14,315Allowance for doubtful debts 1,232 27 – – 1,259




Geographical information

The turnover of Container Shipping and Others operating divisions based on geographical location is as follows.See (i) below.

Turnover2009 2008

US$’000 US$’000

Indonesia 148,322 212,099South East Asia (excluding Indonesia) 72,759 105,091Middle East and Indian Sub-continent 40,786 51,337Far East 4,200 14,867Others 11,655 16,366

Total turnover for Container Shipping and Others 277,722 399,760

(i) Revenue is allocated to each geographical segment based on the origination of the shipment. The directors believe it could be inaccurate to analyse assets and capital expenditure by geographical segment because these cannot be meaningfully allocated to the different routes as the vessels do not operate on fi xed routes.

For Industrial Shipping, charterers of the Group’s vessels have the discretion to operate within a wide trading area and are not constrained by a specifi c sea-route. As such, no geographical segment information is presented.

Allocation basis and transfer pricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise income tax.

Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment revenue, expenses and results include transfers between business segments. These transfers are eliminated on consolidation.

38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

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

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned fi nancial risks and the objectives, policies and processes for the management of these risks.





38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(a) Credit risk

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

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

Credit risk concentration profi le

The Group determines concentrations of credit risk by monitoring the country and customer profi le of its trade debtors on an on-going basis. The credit risk concentration profi le of the Group’s trade debtors at the balance sheet date is as follows:

Group2009 2008

US$’000 % of total US$’000 % of total

By country:

Singapore 21,577 57.7 29,939 60.6Indonesia 9,125 24.4 7,323 14.8Myanmar 1,242 3.3 1,139 2.3United Arab Emirates 1,101 3.0 5,136 10.4China 349 0.9 976 2.0Other countries 3,980 10.7 4,895 9.9

37,374 100.0 49,408 100.0

By customers:

Main line operators 25,067 67.1 36,417 73.7Agents 1,428 3.8 2,355 4.8Others 10,879 29.1 10,636 21.5

37,374 100.0 49,408 100.0




(a) Credit risk (cont’d)

At the balance sheets date, approximately 27% (2008: 32%) of the Group’s trade debtors were due from 5 major customers who are main line operators located in Singapore.

Financial assets that are neither past due nor impaired

Trade and other debtors that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash and cash equivalents and investment securities that are neither past due nor impaired are placed with or entered into with reputable fi nancial institutions or companies with high credit ratings.

Financial assets that are either past due or impaired

Information regarding fi nancial assets that are either past due or impaired is disclosed in Note 10.

(b) Liquidity risk

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

The Group and the Company monitor and maintain a level of cash and cash equivalents deemed adequate by the management to fi nance the Group’s operation and mitigate the effects of fl uctuation of cash fl ows.

Analysis of fi nancial instruments by remaining contractual maturities

The table below summarises the maturity profi le of the Group’s and the Company’s fi nancial assets and liabilities at the balance sheet date based on contractual undiscounted repayment obligations.






(b) Liquidity risk (cont’d)

2009Less than

1 year 1 to 5 years Over 5 years TotalGroup US$’000 US$’000 US$’000 US$’000

Financial assetsInvestment securities 494 – – 494Trade and other debtors 43,578 – – 43,578Due from related companies 2,384 – – 2,384Due from minority shareholder of a subsidiary 48 – – 48

Cash and bank balances 46,298 273 – 46,571

Total undiscounted fi nancial assets 92,802 273 – 93,075

Financial liabilitiesTrade creditors 24,511 – – 24,511Other creditors and liabilities 13,584 – – 13,584Due to related companies 2,485 – – 2,485Loans and borrowings 17,766 77,302 99,693 194,761

Total undiscounted fi nancial liabilities 58,346 77,302 99,693 235,341

Total net undiscounted fi nancial assets/(liabilities) 34,456 (77,029) (99,693) (142,266)

Company


Cash and bank balances 36,111 – – 36,111

Total undiscounted fi nancial assets 91,286 – – 91,286

Financial liabilitiesTrade creditors 15,439 – – 15,439Other creditors and liabilities 4,584 – – 4,584Due to related companies 520 – – 520Loans and borrowings 9,487 36,121 51,466 97,074






(b) Liquidity risk (cont’d)

2008Less than

1 year 1 to 5 years Over 5 years Total

Group US$’000 US$’000 US$’000 US$’000


Cash and bank balances 67,228 1 – 67,229

Total undiscounted fi nancial assets 121,896 1 – 121,897




Company


Cash and bank balances 51,513 – – 51,513

Total undiscounted fi nancial assets 113,099 – – 113,099









(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash fl ows of the Group’s and the Company’s fi nancial instruments will fl uctuate because of changes in market interest rates. The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and borrowings, fi xed deposits and investments in debt securities. The Group does not hedge its investment in fi xed rate debt securities as they have active secondary or resale markets to ensure liquidity.

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

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

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

Information relating to the Group’s interest rate exposure is disclosed in Note 18, Note 19, Note 23 and Note 24.

Sensitivity analysis for interest rate risk

The following table demonstrates the sensitivity to a reasonably possible change in the SGD and USD interest rates, with all other variables held constant, of the Group’s profi t net of tax (through the net impact of interest expense on fl oating loans and borrowings and interest income on fi xed deposits and investment securities).

GroupIncrease/

(decrease) in basis points

Effect on profi t net of

taxUS$’000

2009

- Singapore Dollar 25 (29)(25) 29

- United States Dollar 25 (160)(25) 160




(c) Interest rate risk (cont’d)Sensitivity analysis for interest rate risk (cont’d)

GroupIncrease/

(decrease) in basis points

Effect on profi t net of

taxUS$’000

2008

- Singapore Dollar 25 (19)(25) 19

- United States Dollar 25 (180)(25) 180

(d) Foreign currency risk

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

The Group and the Company also hold cash and cash equivalents denominated in foreign currencies for working capital purposes. At the balance sheet date, such foreign currency balances approximately amount to US$9,900,000 and US$5,116,000 for the Group and the Company respectively.

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

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

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity to a reasonably possible change in the exchange rate of SGD against USD, with all other variables held constant, of the Group’s profi t net of tax.






(d) Foreign currency risk (cont’d)Sensitivity analysis for foreign currency risk (cont’d)

GroupStrengthen/(weaken) inexchange

Effect onprofi t net of

taxUS$’000

2009- Singapore Dollar 5.00% (598)

(5.00%) 598

2008- Singapore Dollar 5.00% (466)

(5.00%) 466

(e) Bunker price risk

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

As at 31 December 2009, the Group has no outstanding bunker price hedging contracts.

39. FINANCIAL INSTRUMENTS

Fair value of fi nancial instruments

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

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

Group CompanyCarrying amount Fair value Carrying amount Fair value2009 2008 2009 2008 2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Hire purchase creditors 1,110 1,309 1,151 1,074 149 191 163 196

The fair values as disclosed in the table above are estimated by discounting expected future cash fl ows using the current interest rate of similar type of instruments at the balance sheet date.



39. FINANCIAL INSTRUMENTS (CONT’D)

Fair value of fi nancial instruments (cont’d)

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

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

The fair value of these fi nancial assets and liabilities is based on the current rates available for debt with the same maturity profi le.

Current trade debtors, other debtors and deposits, trade creditors, other creditors and liabilities, cash and cash equivalents, and bank term loans at fl oating rate

The carrying amount of these fi nancial assets and liabilities are reasonable approximation of fair values, either due to their relatively short-term nature or that they are fl oating rate instruments that are re-priced to market interest rates on or near the balance sheet date.

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

The Group classifi es fair value measurement using a fair value hierarchy that refl ects the signifi cance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 - Quoted prices (unadjusted) in active markets for indentical assets or liabilities

Investment securities

Fair value is determined directly by reference to the market bid price obtained from the bank/portfolio manager at the balance sheet date.

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

Interest rate swap contracts

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






Fair value of fi nancial instruments (cont’d)

(c) Fair value of fi nancial instruments that are carried at fair value (cont’d)

• Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) (cont’d)

Derivative fi nancial instruments and hedging activities

Derivative fi nancial instruments included in the balance sheets at 31 December are as follows:

Group

2009 2008Assets Liabilities Assets Liabilities

US$’000 US$’000 US$’000 US$’000

Interest rate swaps – 59 – 160Forward currency contracts 2 – 3 –

2 59 3 160

Interest rate swap contracts entered by the Group are cash fl ow hedges which were assessed to be highly effective. As at 31 December 2009, the net fair value loss of US$59,000 (2008: US$160,000) was recognised as a liability with a corresponding loss recognised in the hedging reserve. The details of the interest rate swap contracts are disclosed in Note 24(b).

During the year, a gain of US$2,000 (2008: US$3,000) has been recognised in the profi t and loss account in relation to the change in fair value of various forward contracts that the Group has entered into, based on valuations provided by banks.

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

Forward currency contracts Maturity datesContract or

notional amountFair value

adjustmentsGroup US$’000 US$’0002009Forward currency contracts 23/6/2010 to 29/6/2010 570 2

2008Forward currency contracts 9/6/2009 to 24/6/2009 320 3

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

The Group has no fi nancial instrument under Level 3. During the current fi nancial year, there were no transfers of fi nancial instruments between the levels of the fair value hierarchy.





Categories of fi nancial assets and fi nancial liabilities

Group Company2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Financial assets at fair value through profi t and loss:

Investment securities 494 902 494 902

Loan and receivables:Trade debtors 37,374 49,408 25,876 37,896Other debtors and deposits 6,204 2,116 1,089 631Due from related companies 2,384 2,194 27,668 22,109Due from related party 48 48 48 48Cash and bank balances 46,571 67,229 36,111 51,513

92,581 120,995 90,792 112,197

Financial liabilities carried at amortised cost:

Trade creditors 24,511 20,140 15,439 15,761Other creditors and liabilities 13,584 17,942 4,584 8,272Due to related companies 2,485 867 520 551Loans and borrowings 180,179 157,253 88,518 96,150

220,759 196,202 109,061 120,734



40. CAPITAL MANAGEMENT

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

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2009 and 31 December 2008.

41. EVENTS AFTER THE BALANCE SHEET DATE

On 8 March 2010, the Company’s wholly-owned subsidiary, SILkargo Logistic (Singapore) Pte Ltd, has entered into a Sale and Purchase Agreement with PT. Silkargo Indonesia (a subsidiary of PT Samudera Indonesia Tbk) for the disposal and purchase of its 49% equity interest in the issued and paid-up share capital of SILkargo LLC (“Silkargo”), a company registered with the Department of Economic Development, Dubai, United Arab Emirates (the “Disposal”), for a consideration of US$380,000 (the “Purchase Consideration”). Following the Disposal, Silkargo will cease to be a subsidiary in the Group.

The Purchase Consideration was arrived at on a willing-buyer and willing-seller basis, having regard to Silkargo’s net tangible assets of approximately US$380,000 as at 5 January 2010, and is to be settled in cash on the completion date of the Disposal. The Disposal is not expected to have any material impact on the net tangible assets or earnings per share of the Company.

42. AUTHORISATION OF FINANCIAL STATEMENTS

The fi nancial statements for the year ended 31 December 2009 were authorised for issue in accordance with a directors’ resolution dated 26 March 2010.




STATISTICS OF SHAREHOLDERS as at 16 March 2010

No. of Issued Shares : 539,131,199No. of Issued Shares (excluding Treasury Shares) : 538,038,199No. of Treasury Shares Held : 1,093,000 Class of Shares : Ordinary shares Voting Rights : 1 vote per ordinary share (no vote for treasury shares)

ANALYSIS OF SHAREHOLDERS

Range of Shareholdings No. of Shareholders % No. of Shares %

1 - 999 96 1.70 40,143 0.011,000 - 10,000 3,258 57.66 14,168,063 2.6310,001 - 1,000,000 2,268 40.14 87,485,500 16.221,000,001 and above 28 0.50 437,437,493 81.14

5,650 100.00 539,131,199 100.00

SHAREHOLDINGS HELD IN HANDS OF PUBLIC

Based on information available to the Company as at 16 March 2010, approximately 33.41% of the issued ordinary shares of the Company is held by the public and therefore, Rule 723 of the Listing Manual issued by SGX-ST is complied with.

TOP 20 SHAREHOLDERS

No. Name of Shareholder No. of Shares %*

1 PT. Samudera Indonesia 209,250,000 38.892 DBS Nominees Pte Ltd 110,690,200 20.573 UOB Nominees (2006) Pte Ltd 38,980,000 7.244 DB Nominees (S) Pte Ltd 12,953,000 2.415 Mitsui And Co Ltd 9,600,000 1.786 CIMB-GK Securities Pte. Ltd. 7,429,401 1.387 United Overseas Bank Nominees Pte Ltd 6,024,492 1.128 Phillip Securities Pte Ltd 4,751,800 0.889 HSBC (Singapore) Nominees Pte Ltd 3,873,600 0.7210 Kim Eng Securities Pte. Ltd. 3,221,000 0.6011 Ang Ah Beng 2,743,000 0.5112 OCBC Securities Private Ltd 2,721,400 0.5113 Tskline (S) Pte Ltd 2,400,000 0.4514 OCBC Nominees Singapore Pte Ltd 2,371,200 0.4415 NBU International Limited 2,220,000 0.4116 UOB Kay Hian Pte Ltd 2,159,400 0.4017 Hexacon Construction Pte Ltd 1,960,000 0.3618 Tan Kok Sing 1,759,000 0.3319 Teo Cheng Tuan Donald 1,680,000 0.3120 Poh Boh Sim 1,472,000 0.27

428,259,493 79.58

* The percentage of shareholdings was computed based on the issued share capital of the Company as at 16 March 2010 of 538,038,199 shares (which excludes 1,093,000 shares which are held as treasury shares representing approximately 0.2% of the total number of issued shares excluding treasury shares).



SUBSTANTIAL SHAREHOLDERS

Name Direct Interest %* Deemed Interest %*

PT Samudera Indonesia Tbk (note 1) 351,180,000 65.27 - -PT Samudera Indonesia Tangguh (note 2) - - 351,180,000 65.27PT Ngrumat Bondo Utomo (note 3) - - 351,180,000 65.27

* The percentage of shareholdings was computed based on the issued share capital of the Company as at 16 March 2010 of 538,038,199 shares (which excludes 1,093,000 shares which are held as treasury shares representing approximately 0.2% of the total number of issued shares excluding treasury shares).

Note:

1. 38,680,000 shares are held by UOB Nominees (2006) Pte Ltd and 103,250,000 shares are held by DBS Nominees Pte Ltd.

2. PT Samudera Indonesia Tangguh’s deemed interest arises from its interest of 57.98% in PT Samudera Indonesia Tbk.

3. PT Ngrumat Bondo Utomo’s deemed interest arises from its interest of 9.50% and 25.90% in PT Samudera Indonesia Tbk and PT Samudera Indonesia Tangguh respectively.

STATISTICS OF SHAREHOLDERS as at 16 March 2010



NOTICE OF ANNUAL GENERAL MEETING(Company Registration No. 199308462C)

(Incorporated in Singapore with limited liability)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Samudera Shipping Line Ltd (“the Company”) will be held at M Hotel Singapore, 81 Anson Road, Singapore 079908, Function room Shenton Room, Level B1, on 27 April 2010 at 10:30 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 31 December 2009 together with the Auditors’ Report thereon. (Resolution 1)

2. To re-elect the following Directors retiring pursuant to Article 91 of the Company’s Articles of Association:-

Mr Anwarsyah (Resolution 2) Mr Asmari Herry Prayitno (Resolution 3) Mr Masli Mulia (Resolution 4)

3. To approve the payment of Directors’ fees of S$162,000 for the year ended 31 December 2009 (2008: S$162,000). (Resolution 5)

4. To appoint Messrs Deloitte & Touche LLP as the Auditors of the Company in place of the retiring Auditors, Messrs Ernst & Young LLP and to authorise the Directors to fi x their remuneration. [See Explanatory Note (i)] (Resolution 6)

5. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and if thought fi t, to pass the following resolutions as Ordinary Resolutions, with or without any modifi cations:

6. Authority to issue shares up to 50 per centum (50%) of the issued shares in the capital of the Company

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Directors of the Company be authorised and empowered to:

(a) (i) issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise; and/or



(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Company may in their absolute discretion deem fi t; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors of the Company while this Resolution was in force,

provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not exceed fi fty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose of determining the aggregate number of shares and Instruments that may be issued under sub-paragraph (1) above, the percentage of issued shares and Instruments shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

(a) new shares arising from the conversion or exercise of the Instruments or any convertible securities (b) new shares arising from exercising share options or vesting of share awards outstanding and

subsisting at the time of the passing of this Resolution; and (c) any subsequent bonus issue, consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions

of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading Limited) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force (i) until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier or (ii)





in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the Instruments. [See Explanatory Note (ii)] (Resolution 7)

7. RENEWAL OF SHAREHOLDERS’ MANDATE FOR INTERESTED PERSON TRANSACTIONS

That for the purposes of Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited:

(a) approval be given for the renewal of the mandate for the Company, its subsidiaries and target associated companies or any of them to enter into any of the transactions falling within the types of Interested Person Transactions as set out on page 5 to page 6 of the Company’s Appendix dated 9 April 2010 (the “Appendix”) with any party who is of the class of Interested Persons described in the Appendix, provided that such transactions are carried out in the normal course of business, at arm’s length and on commercial terms and in accordance with the guidelines of the Company for Interested Person Transactions as set out in the Appendix (the “Shareholders’ Mandate”);

(b) the Shareholders’ Mandate shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier; and

(c) authority be given to the Directors to complete and do all such acts and things (including executing all such documents as may be required) as they may consider necessary, desirable or expedient to give effect to the Shareholders’ Mandate as they may think fi t. [See Explanatory Note (iii)] (Resolution 8)

By Order of the Board

Yeo Poh Noi CarolineSecretarySingapore, 9 April 2010





Explanatory Notes:

(i) The Company has received notice from a shareholder of the Company, PT Samudera Indonesia Tbk, nominating Messrs Deloitte & Touche LLP as the Auditors of the Company in place of the retiring Auditors, Messrs Ernst & Young LLP. Messrs Deloitte & Touche LLP have expressed their willingness to accept the appointment. The proposal for the appointment will be put to the shareholders’ approval at this Annual General Meeting. The notice of nomination is enclosed.

(ii) The Ordinary Resolution 7 in item 6 above, if passed, will empower the Directors of the Company from the date of this Meeting until the date of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to existing shareholders of the Company

For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of the Company will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new shares arising from the conversion or exercise of the Instruments or any convertible securities, the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent bonus issue, consolidation or subdivision of shares.

(iii) The Ordinary Resolution 8 proposed in item 7 above, if passed, will authorise the Interested Person Transactions as described in the Appendix and recurring in the year and will empower the Directors to do all acts necessary to give effect to the Shareholders’ Mandate. This authority will, unless previously revoked or varied by the Company in a general meeting, expire at the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting is required by law to be held whichever is the earlier.

Notes:

1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2. The instrument appointing a proxy must be deposited at the Registered Offi ce of the Company at No. 6 Raffl es Quay #25-01, Singapore 048580 not less than forty-eight (48) hours before the time appointed for holding the Meeting.




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SAMUDERA SHIPPING LINE LTD [Company Registration No. 199308462C]

(Incorporated In The Republic of Singapore)

PROXY FORM(Please see notes overleaf before completing this Form)

I/We,

of

being a member/members of Samudera Shipping Line Ltd (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of ShareholdingsNo. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of ShareholdingsNo. of Shares %

Address

or failing the person, or either or both of the persons, referred to above , the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on 27 April 2010 at 10:30 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specifi c direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please indicate your vote “For” or “Against” with a tick [ ] within the box provided.)

No. Resolutions relating to: For Against1 Directors’ Report and Audited Accounts for the year ended 31 December 2009

2 Re-election of Mr Anwarsyah as a Director

3 Re-election of Mr Asmari Herry Prayitno as a Director

4 Re-election of Mr Masli Mulia as a Director

5 Approval of Directors’ fees amounting to S$162,000

6 Appointment of Messrs Deloitte & Touche LLP as Auditors

7 Authority to allot and issue new shares

8 Renewal of Shareholders’ Mandate for Interested Person Transactions

Dated this day of 2010

Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members

Signature of Shareholder(s)or, Common Seal of Corporate Shareholder

IMPORTANT:

1. For investors who have used their CPF monies to buy Samudera Shipping Line Ltd’s shares, this Report is forwarded to them at the request of the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

3. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specifi ed. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specifi ed to enable them to vote on their behalf.

29Mar_Samudera 2009 Financial_Proxy.indd 1729Mar_Samudera 2009 Financial_Proxy.indd 17 29/03/2010 7:18 PM29/03/2010 7:18 PM

Notes :

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defi ned in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifi es the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the registered offi ce of the Company at No. 6 Raffl es Quay #25-01, Singapore 048580 not less than 48 hours before the time appointed for the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an offi cer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certifi ed copy thereof must be lodged with the instrument.

7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fi t to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible, or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.


CORPORATE InfORmATIOn

BOARd Of dIRECTORs ExecutiveRandy Effendi (Chairman)Hamdi AdnanMasli MuliaAnwarsyahDhrubajyoti DasAsmari Herry Prayitno

non-ExecutiveChng Hee Kok (Lead Independent Director)David Lim Teck LeongAnugerah PekertiLee Chee Yeng

AudIT COmmITTEE Chng Hee Kok (Chairman) David Lim Teck LeongAnugerah PekertiLee Chee Yeng

nOmInATIOn COmmITTEE Lee Chee Yeng (Chairman)Chng Hee KokDavid Lim Teck LeongRandy Effendi

REmunERATIOn COmmITTEE David Lim Teck Leong (Chairman)Chng Hee KokLee Chee Yeng

sECRETARy Yeo Poh Noi Caroline

REgIsTEREd OffICE 6 Raffles Quay #25-01Singapore 048580Tel: (65) 6403 1687Fax: (65) 6403 1889

shARE REgIsTRAR M&C Service Private Limited138 Robinson Road #17-00The Corporate OfficeSingapore 068906

AudITORsErnst & Young LLPCertified Public AccountantsOne Raffles Quay North Tower Level 18Singapore 048583

Partner-in-ChargeNelson Chen Wee TeckAppointed with effect from Financial Year 2007

PRInCIPAl BAnkERsDVB Group Merchant Bank (Asia) Ltd77 Robinson Road #30-02SIA BuildingSingapore 068896

Citibank N.A. Singapore3 Temasek Avenue #14-00Centennial TowerSingapore 039190

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

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

NATIxIS50 Raffles Place #41-40Singapore Land TowerSingapore 048623

Fortis Bank SA/NV, Singapore 63 Market Street #21-01 Singapore 048942

SAMUDERA SHIPPING LINE LTD6 Raffl es Quay, #25-01, Singapore 048580, Telephone: 65 6403 1687CO. REG. NO. : 199308462C


Documents

SAMUDERA SHIPPING LINE LTD BUILDING ON OUR …samudera.listedcompany.com/misc/ar2009.pdf · 2010-04-12 · in 1979 and was a General Manager of its feeder division since 1993