& ITS SUBSIDIARIES Registration Number: 197902647M 2012 FULL YEAR FINANCIAL STATEMENTS ANNOUNCEMENT TABLE OF CONTENTS Description Page 1. Consolidated Profit and Loss Statement 1 2 2. Balance Sheets 3 5 3. Consolidated Cash Flow Statement 6 7 4. Statements of Comprehensive Income 8 5. Statements of Changes in Equity 9 11 6. Audit 13 7. Auditors Report 13 8. Accounting Policies 13 9. Changes in Accounting Policies 13 10. Earnings and Net Asset Value per Ordinary Shares 14 11. Review of Group Performance 15 18 12. Variance from Prospect Statement 18 13. Prospects 19 14. Dividend Distribution 19 15. Segmental Reporting 20 21 16. Breakdown of sales 21 17. Annual Dividend 21 18. Interested Person Transactions 22 19. Disclosure in relation to Rule 704 (13) 22
(co regn no : 197902647M) Unaudited Full Year Financial Statements PART I INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF YEAR AND FULL YEAR RESULTS 1(a)(i) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year Group FY2012 FY2011 +/( ) US$'000 US$'000 % Revenue 374,325 414,775 (9.8) Cost of sales (359,877) (410,970) (12.4) Gross profit 14,448 3,805 279.7 Other income 22,736 11,012 106.5 Selling and administration expenses (72,901) (47,549) 53.3 Other expenses (14,582) (10,368) 40.6 Share of (loss) profit of associates and joint venture (2,246) 5,514 n.m. Finance costs (22,291) (18,485) 20.6 Loss before income tax (74,836) (56,071) 33.5 Income tax expense (2,200) (26) 8361.5 Loss for the year (77,036) (56,097) 37.3 Attributable to: Equity holders of the Company (73,693) (52,215) 41.1 Non controlling interests (3,343) (3,882) (13.9) (77,036) (56,097) 37.3 1
1(a)(ii) items, which if significant must be included in the income statement. Group FY2012 FY2011 +/( ) US$ 000 US$ 000 % Depreciation of property, plant and equipment Included in cost of sales 21,656 16,206 33.6 Included in administrative expenses 768 909 (15.5) 22,424 17,115 31.0 Capitalised in construction in progress 4,486 4,333 3.5 26,910 21,448 25.5 Interest on borrowings Included in finance costs 22,291 18,485 20.6 Capitalised in construction in progress 11,996 12,789 (6.2) 34,287 31,274 9.6 Net loss for the year was stated after crediting (charging): Bad debts written off (709) 100.0 Reversal of allowance for doubtful debts trade 150 100.0 Allowance for doubtful debts: Trade Non trade (7,175)* (18,428)* (1,078) 565.6 100.0 Impairment loss on available for sale investment (3,395)* (2,354) 44.2 Impairment loss on goodwill (3,436) 100.0 Property, plant and equipment written off (21) 100.0 Loss arising from the changes in the fair value of (2,965) (2,501) 18.6 foreign exchange forward contracts Profit arising from the changes in the fair value of 278 71 291.5 interest rate swap contracts Profit (Loss) on disposal of property, plant and equipment 20,419 (450) n.m. Profit on disposal of investment in associates 9,266 (100.0) Loss on disposal of investment in a subsidiary (247) 100.0 Interest income 763 463 64.8 Net foreign exchange loss (4,518) (4,875) (7.3) *Please see section entitled Other items on Page 17 2
1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year Balance Sheets The Group The Company As at 31 Dec 2012 As at 31 Dec 2011 As at 31 Dec 2012 As at 31 Dec 2011 US$ 000 US$ 000 US$ 000 US$ 000 ASSETS Current assets Cash and bank balances 26,756 36,515 15,316 4,571 Fixed deposits 33,440 44,845 29,665 41,952 Trade receivables 85,353 89,642 260,438 328,261 Gross amount due from customers for contract 76,899 131,850 Work Current portion of finance lease receivables 14,878 8,862 Deposits, prepayments and other receivables 90,441 60,762 197,829 166,649 Current portion of loan receivables 441 77,440 8,855 Inventories 405,008 359,979 Derivative financial instruments 8,942 2,439 8,942 2,439 Total current assets 742,158 734,894 589,630 552,727 Non current assets Trade receivables 1,124 1,583 Finance lease receivables 97,172 Loan receivables 9,000 20,728 96,762 Property, plant and equipment 412,813 348,875 334 829 Goodwill 38,314 39,922 Investment in subsidiaries 180,480 182,861 Investment in associates and joint venture 7,403 8,552 Available for sale investments 158 3,553 Derivative financial instruments 3,709 3,709 Deposits long term 2,394 2,406 Total non current assets 471,206 526,500 180,814 284,161 Total assets 1,213,364 1,261,394 770,444 836,888 3
Balance Sheets The Group The Company As at 31 Dec 2012 As at 31 Dec 2011 As at 31 Dec 2012 As at 31 Dec 2011 US$ 000 US$ 000 US$ 000 US$ 000 LIABILITIES AND EQUITY Current liabilities Borrowings from financial institutions 222,474 259,356 27,771 69,989 Current portion of finance lease payables 10,605 7,823 449 477 Loan from related party 8,513 8,022 8,513 8,022 Trade payables 320,330 323,450 202,905 184,055 Gross amount due to customers for contract 1,119 321 work Other payables 59,168 60,942 175,191 209,359 Deferred gain short term 468 468 Loan payable short term 81,818 77,260 Derivative financial instruments 573 9,515 Income tax payable 2,126 926 1,200 Total current liabilities 707,194 661,308 502,804 471,902 Non current liabilities Borrowings from financial institutions 180,343 222,895 22,905 23,773 Finance lease payables 47,826 1,927 307 898 Loan from related party 10,642 12,032 10,642 12,032 Loan payable 76,966 77,260 Deferred gain long term 7,359 7,826 Derivative financial instruments 460 828 460 4,537 Total non current liabilities 246,630 322,474 34,314 118,500 Total liabilities 953,824 983,782 537,118 590,402 Capital, reserves and non controlling interests Share capital 300,087 240,104 300,087 240,104 Capital reserves 1,546 1,212 1,546 1,546 Acquisition deficits (28,595) (12,305) Hedging deficits 96 (373) Translation deficits 24,686 23,120 31,113 31,112 Accumulated profits (losses) (28,901) 44,792 (99,420) (26,276) Equity attributable to equity holders of the 268,919 296,550 233,326 246,486 Company Non controlling interests (9,379) (18,938) Total equity 259,540 277,612 233,326 246,486 Total liabilities and equity 1,213,364 1,261,394 770,444 836,888 4
1(b)(ii) Aggregate amount of group s borrowings and debt securities Amount repayable in one year or less, or on demand As at 31 Dec 2012 As at 31 Dec 2011 Secured Unsecured Secured Unsecured US$ 000 US$ 000 US$ 000 US$ 000 233,079 90,331 267,179 8,022 Amount repayable after one year As at 31 Dec 2012 As at 31 Dec 2011 Secured Unsecured Secured Unsecured US$ 000 US$ 000 US$ 000 US$ 000 228,169 10,642 224,822 88,998 Details of any collateral The Group s borrowings are primarily secured by a personal guarantee from a director, fixed deposits, the mortgage of the relevant vessels and certain property, plant and equipment and inventory, shipyard contracts, insurance taken over the mortgaged vessels, charter agreements and income and proceeds from sale of vessels. 5
1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year Group FY2012 FY2011 US$ 000 US$ 000 Cash flow from (used in) operating activities: Operating activities Loss before income tax (74,836) (56,071) Adjustment for: Share of loss (profit) of associates and joint venture 2,246 (5,514) Depreciation of property, plant and equipment 22,424 17,115 Interest expense 22,291 18,485 Interest income (763) (463) Profit arising from changes in fair value of (278) (71) interest rate swap contracts Loss arising from changes in fair value of 2,965 2,501 foreign exchange forward contracts Foreign exchange loss (gain) 3,161 (485) Property, plant and equipment written off 21 (Profit) Loss on disposal of property, plant and equipment (20,419) 450 Profit on disposal of investment in associates (9,266) Loss on disposal of investment in a subsidiary 247 Bad debts written off 709 Allowance for doubtful debt Trade 7,025 1,078 Non trade 18,428 Impairment loss on available for sale investment 3,395 2,354 Impairment loss on goodwill 3,436 Operating cash flows before movements in working capital (9,948) (29,887) Trade receivables 4,758 (23,802) Construction work in progress 21,198 (134) Finance lease receivables 60,100 9,044 Other receivables, prepayments and deposits (11,523) 2,558 Inventories (23,870) (47,316) Trade payables 2,895 (18,149) Other payables 8,546 19,875 Cash generated from (used in) operations 52,156 (87,811) Income tax paid (1,000) (43) Interest received 763 463 Net cash from (used in) operating activities 51,919 (87,391) 6
Group FY2012 FY2011 US$ 000 US$ 000 Investing activities Acquisition of subsidiaries 2,545 Investment in joint ventures (441) (300) Proceeds from disposal of investment in an associate 26,600 Loan receivables (4,941) (4,500) Purchases of property, plant and equipment (59,976) (29,825) Proceeds from disposal of property, plant and equipment 51,446 31,735 Net cash generated (used in) from investing activities (13,912) 26,255 Financing activities Proceeds on borrowings from financial institutions 309,396 231,754 Repayment of borrowings from financial institutions (392,159) (165,645) Repayment of finance lease obligations (2,703) (3,319) Repayment of loan from a related party (2,080) (2,235) Repayment of loans from non controlling interest in a subsidiary (8,700) Proceeds on issue of shares, net of expenses 59,983 Dividend paid (7,522) Interest paid (32,278) (28,515) Deposits pledged for borrowings from financial institutions (1,103) (770) Net cash generated (used in) from financing activities (60,944) 15,048 Net decrease in cash and bank balances (22,937) (46,088) Cash and bank balances at beginning of year 69,251 116,713 Effects of exchange rate changes on the balance of cash held in 506 (1,374) foreign currencies Cash and bank balances at end of year 46,820 69,251 Cash and bank balances at end of year include the following: Cash and bank balances 26,756 36,515 Less: Bank overdraft (1,318) (1,154) 25,438 35,361 Fixed deposits 35,834 47,251 Less: Deposits pledged for borrowings from financial institutions (14,452) (13,361) Deposits earmarked for refund guarantee and other fixed deposits 21,382 33,890 Total 46,820 69,251 7
1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER The Group FY2012 US$'000 FY2011 US$'000 Loss for the year (77,036) (56,097) Other comprehensive income (expense): Exchange differences on translating foreign operations 1,566 789 Fair value changes for available for sale financial investments (132) Return of capital upon disposal of investment in a subsidiary 334 Cash flow hedge 469 874 Other comprehensive income (expenses) for the year, net of tax 2,369 1,531 Total comprehensive expense for the year (74,667) (54,566) Total comprehensive expense attributable to: Equity holders of the Company (71,324) (50,684) Non controlling interests (3,343) (3,882) (74,667) (54,566) The Company Loss for the year (73,144) (24,907) Other comprehensive income (expense): Exchange differences on translating foreign operations 1 (2) Other comprehensive income (expense) for the year, net of tax 1 (2) Total comprehensive expense for the year (73,143) (24,909) Total comprehensive expense attributable to: Equity holders of the Company (73,143) (24,909) Non controlling interests (73,143) (24,909) 8
STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Group FY 2012 Share capital Capital Reserves Acquisition Deficits Hedging Surplus (Deficits) Translation Surplus (Deficits) Accumulated Profits (Losses) Attributable to equity holders of the Company Noncontrolling interests Total Equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 At 1 January 2012 240,104 1,212 (12,305) (373) 23,120 44,792 296,550 (18,938) 277,612 Acquisition of additional shares in a (16,290) (16,290) 12,902 (3,388) subsidiary Rights issue, net of expense 59,983 59,983 59,983 Total comprehensive income 334 469 1,566 (73,693) (71,324) (3,343) (74,667) (expense) for the year At 31 December 2012 300,087 1,546 (28,595) 96 24,686 (28,901) 268,919 (9,379) 259,540 9
STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER (CONT D) Group FY 2011 Share capital Capital Reserves Acquisition Deficits Hedging Surplus (Deficits) Translation Surplus (Deficits) Accumulated Profits (Losses) Attributable to equity holders of the Company Noncontrolling interests Total Equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 At 1 January 2011 240,104 1,344 (580) (1,247) 22,331 104,529 366,481 (329) 366,152 Dividend paid (7,522) (7,522) (7,522) Acquisition of a subsidiary (25,564) (25,564) Acquisition of additional shares from non controlling interest (11,725) (11,725) 10,837 (888) Total comprehensive income (expense) for the year (132) 874 789 (52,215) (50,684) (3,882) (54,566) At 31 December 2011 240,104 1,212 (12,305) (373) 23,120 44,792 296,550 (18,938) 277,612 10
STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER (CONT D) Share capital Capital Reserves Translation Surplus (Deficits) Acquisition Deficits Hedging Deficits Accumulated Profits (Losses) Total Equity COMPANY US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 FY 2012 At 1 January 2012 240,104 1,546 31,112 (26,276) 246,486 Rights issue, net of expense 59,983 59,983 Total comprehensive expense for the year 1 (73,144) (73,143) At 31 December 2012 300,087 1,546 31,113 (99,420) 233,326 Share capital Capital Reserves Translation Surplus (Deficits) Acquisition Deficits Hedging Deficits Accumulated Profits (Losses) Total Equity COMPANY US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 FY 2011 At 1 January 2011 240,104 1,546 31,114 6,153 278,917 Dividend on ordinary shares (7,522) (7,522) Total comprehensive expense for the year (2) (24,907) (24,909) At 31 December 2011 240,104 1,546 31,112 (26,276) 246,486 11
1(d)(ii) Details of any changes in the company s share capital arising from rights issue, bonus issue, share buy backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration of acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. On 8 May 2012, the Board of Directors passed resolutions to approve the allotment of 945,214,500 new ordinary shares at $0.08 per share each pursuant to the Company s rights issue exercise ( Rights Issue ). Share issue expenses incurred for the rights issue amounting to US$797,554 were charged against the share capital. This resulted in the net increase in share capital from the rights issue of US$59,983,059 (approximately S$74,600,000). As announced by the Company on 26 November 2012, the Company has utilised S$74.6 million from the Rights Issue for the funding of a vessel for charter (S$42.0 million) and for working capital purposes (S$32.6 million). 1(d)(iii) and (iv) Statement showing all sales, transfers, disposals, cancellation and/or use of treasury shares as at the end of the current financial year reported on. Information pursuant to clause 1(d)(iii): Total number of issued shares excluding treasury shares As at 31 Dec 2012 As at 31 Dec 2011 2,835,643,500 1,890,429,000 Information pursuant to clause 1(d)(iv): The Company does not have any treasury shares as at end of the immediately preceding financial and during the current financial period. 12
2. Whether the figures have been audited, or reviewed and in accordance with which auditing standard or practice The figures have not been audited or reviewed by the Company s auditors. 3. Where the figures have been audited or reviewed, the auditor s report (including any qualifications or emphasis of a matter) Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied The Group has applied the same accounting policies and methods of computation in the financial statements for the current financial period compared with those of the audited financial statements as at 31 December 2011 except for the changes mentioned in Section 5. 5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reason for, and the effect of, the change In the current financial year, the Group and the Company have adopted all new and revised FRSs and Interpretations of FRS ( INT FRS ) that are relevant to its operations and effective for annual periods beginning on or after 1 January 2012. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Group s and the Company s accounting policies and have no material effect on the financial statements except as disclosed below: The Company has changed its functional currency from Singapore dollars to United States dollars with effect from 1 January 2012. The Company and its subsidiaries have invoiced customers in both United States dollars and Singapore dollars prior to 1 January 2012. As the borrowings of the Company and its subsidiaries have been increasingly denominated in United States dollars, the Company negotiated with its customers to invoice primarily in United States dollars in order to reduce its foreign currency exposure with effect from 1 January 2012. Following the change in invoicing currency, the Company re evaluated the requirements in the Singapore Financial Reporting Standard 21 The Effects of Changes in Foreign Exchange Rates ( FRS 21 ) and determined that the functional currency of the Company to be United States dollars. In line with FRS 21, this change will be applied prospectively. As a result of the change in functional currency, the Company presented the current financial statements in United States dollars. 13
6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends The Group FY 2012 FY 2011 +/( ) % Earnings (Loss) per ordinary share of the Group for the financial period based on net profit attributable to shareholders: (i) Based on the weighted average number of shares (US (2.81) (2.35) 19.6 cents) Weighted average number of shares 2,620,056,000 2,219,199,000 18.1 (ii) On a fully diluted basis (US cents) (2.81) (2.35) 19.6 Adjusted weighted average number of shares 2,620,056,000 2,219,199,000 18.1 Note: The weighted average number of shares above for FY2012 and FY2011 has been computed in accordance with Paragraph 26 of the Financial Reporting Standards 33 on Earnings Per Share. 7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year. Net asset value per ordinary share based on issued share capital at the end of the financial period (US cents) As at 31 Dec 2012 The Group As at 31 Dec 2011 +/( ) % As at 31 Dec 2012 The Company As at 31 Dec 2011 +/( ) % 9.15 14.69 (37.7) 8.23 13.04 (36.9) 14
8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group s business. It must include a discussion of the following: (a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and (b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current period reported on Review of Group Performance 1. FY 2012 versus FY 2011 Revenue FY 2012 Shipbuilding, ship repair and conversion Chartering Leasing Geophysical Subsea services Elimination (Note 1) Group US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 External revenue 55,370 267,438 8,886 23,012 19,619 374,325 Inter segment revenue 25,600 (25,600) Total revenue 80,970 267,438 8,886 23,012 19,619 (25,600) 374,325 FY 2011 External revenue 104,606 229,280 12,497 53,427 14,965 414,775 Inter segment revenue 86,000 6,198 (92,198) Total revenue 190,606 229,280 18,695 53,427 14,965 (92,198) 414,775 Variance External revenue (49,236) 38,158 (3,611) (30,415) 4,654 (40,450) Inter segment revenue (60,400) (6,198) 66,598 Total revenue (109,636) 38,158 (9,809) (30,415) 4,654 66,598 (40,450) 15
Gross profit (loss) FY 2012 Shipbuilding, ship repair and conversion Chartering Leasing Geophysical Subsea services Elimination (Note 1) Group US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Gross profit (loss) (25,846) 40,968 8,562 (14,395) 5,159 14,448 FY 2011 Gross profit (loss) (27,737) 31,281 12,483 (17,371) 5,149 3,805 Variance 1,891 9,687 (3,921) 2,976 10 10,643 Note 1 Inter segment revenue are eliminated upon consolidation. Revenue External and internal revenue decreased by US$40.5 million and US$66.6 million respectively. Shipbuilding, ship repair and conversion The external revenue for the segment decreased US$49.2 million as a result of slower progress of shipbuilding work on existing vessels sold to external customers and no new shipbuilding order being secured. The decrease is mitigated by an increase in ship repair revenue. Chartering The rise in revenue (US$38.2 million) was contributed primarily by better utilisation rates and higher charter rates. Leasing The decrease in revenue (US$3.6 million) is due to the decrease in six vessels sale of four vessels in Q1 2012 and Q4 2012 and the transfer of two vessels to the chartering segment in Q2 2012. Geophysical The decrease in revenue (US$30.4 million) is primarily due to a reduced fleet size and lower utilisation of the seismic vessel. Subsea services The increase in revenue (US$4.6 million) is due to higher utilisation rate of the vessel. 16
Gross profit (loss) The improvement in gross profit amounting to US$10.6 million was primarily contributed by (1) the chartering segment and subsea services, and (2) lower gross losses in the shipbuilding and geophysical segments. This increase is partially offset by the decrease in gross profit in the leasing segment. The increase in the gross profit in the chartering segment is contributed primarily by better utilisation rates and higher charter rates, while the increase in gross profit in the subsea services segment is contributed by higher utilization of its vessel. The gross loss in shipbuilding in 2012 is due to (1) lower revenue arising from slower progress on existing contract and low order book and (2) provision for foreseeable losses and reversal of profits recognised for a contracted vessel, while the gross loss in 2011 was mainly due to the provision for termination of three contracts. The decrease in the gross loss of the geophysical segment was primarily due to decreased number of vessels deployed. The decrease in gross profit in the leasing segment is due to reduced number of vessels. Other income Other income increased by US$11.7 million primarily as a result of (1) gain on disposal of property, plant and equipment (US$20.4 million), (2) increase in interest income (US$0.3 million), (3) gain arising from changes in fair value of interest rate swap (US$0.2 million), and (4) increase in scrap sales (US$0.1 million), negated by reduced profit from disposal of associates (US$9.3 million). Other expenses Other expenses increased by US$4.2 million primarily as a result of (1) increase in impairment loss in available for sale investment (US$1.0 million), (2) impairment loss on goodwill in relation to a subsidiary, Reflect Geophysical Pte Ltd (US$3.4 million), and (3) loss on disposal of a subsidiary (US$0.2 million), partially offset by loss on disposal of property, plant and equipment (US$0.4 million). Selling and administrative expenses The increase in selling and administrative expenses by US$25.4 million is primarily attributable to (1) an increase in allowance for doubtful debts (US$24.4 million) and (2) sales commission incurred for the sale of vessels. Finance cost The finance costs increased by US$3.8 million mainly due to increased interest incurred on additional loan facilities drawn down on the enlarged fleet. Other items Following a default by one of the Group s bareboat chartering customers, the Group took action to, and did recover the vessels involved. In the process, certain claims have arisen which are the subject of an ongoing litigation. Arising from the situation, the Group has, as a matter of prudence, provided for estimated losses related to its investment in, and receivables from, the company concerned. In addition to the above, the Group has provided for approximately US$2.5 million in relation to debts owed by a customer in the geophysical segment. 17
Share of (loss) profit of associates and joint venture Share of loss of associates and joint venture in FY2012 amounting to US$2.2 million was primarily due (1) loss arising from an associate contributed by (a) provision for impairment of vessels and (b) provision for doubtful debts for one of its customers; and (2) the absence of the contribution of profit from an associate disposed in the last quarter of FY2011. Non controlling interests In FY2012, the loss attributable to the non controlling interests is primarily contributed by three subsidiaries. Review of Balance Sheet &/or Cash Flow ASSETS The material contributing factors to the decrease in total assets of US$1,261.4 million as at 31 December 2011 to US$1,213.4 million as at 31 December 2012 was due to decrease in (1) cash and bank balance, (2) fixed deposit, (3) trade receivables, (4) vessels under construction, (5) loan receivables, (6) finance lease receivables resulting from the sale of vessels, and (7) impairment in available for sale investment and goodwill, partially offset by increase in other receivables, costs incurred for vessels under inventories, and additions to property, plant and equipment. LIABILITIES The material contributing factors to the decrease in total liabilities of US$983.8 million as at 31 December 2011 to US$953.8 million as at 31 December 2012 was from the decrease in borrowings, trade and other payables, partially offset by increase in finance lease payables. 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. On 11 February 2013, the Company released a profit warning on SGXNET regarding an expected loss for the financial year ended 31 December 2012. The actual results for the financial year ended 31 December 2012 correspond with the profit warning issued. 18
10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. Global economic conditions as well as the general environment of the shipbuilding industry remain challenging. Additionally, the shipyard is under utilized due to lower order intake. In this challenging environment, the Group is focusing on monetizing its assets through the sale of completed vessels, the completion and delivery of contracted vessels and building its fabrication, subcontracting, ship repair work and shipbuilding order book. On the chartering front, the Group will explore opportunities and continue to grow its chartering fleet. Reflect Geophysical Pte Ltd ( Reflect ), a subsidiary, was unsuccessful in obtaining an order from the Singapore High Courts for a short to medium term standstill of claims from its creditors pursuant to a section 210(10) application when the case was heard on 19 February 2013. Reflect is seeking legal advice on the next course of action. In FY2012, the Group has impaired goodwill in relation to its investment in Reflect of US$3.4 million and provided US$2.5 million for debts owing to Reflect by a customer. In Q2 2012, following a default by one of the Group s bareboat chartering customers, the Group took action to, and did recover the vessels involved. In the process of an ongoing litigation with the counter party, letters of undertaking amounting to AUD14.0 million were issued as financial security Out of the AUD14.0 million, the potential exposure to the Group is up to AUD8.645 million. Based on legal advice received by the Group, it believes that it has a good arguable case on this litigation. 11. Dividend (a) Current Financial Period Reported On Any dividend recommended for the current financial period reported on? No. (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend recommend for the corresponding period of the immediately preceding financial year reported on? No. (c) Date payable Not applicable. (d) Books closure date Not applicable. 12. If no dividend has been declared/(recommended), a statement to that effect No dividend has been declared/recommended in the current financial period reported on. 19
PART II ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT 13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer s most recently audited annual financial statements, with comparative information for the immediately preceding year. (a) By business segment: FY2012 Shipbuilding, Ship Repair and Conversion Chartering Leasing Geophysical Subsea Services Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 External revenue 55,370 267,438 8,886 23,012 19,619 374,325 External cost of sales (81,216) (226,470) (324) (37,407) (14,460) (359,877) Segment results (25,846) 40,968 8,562 (14,395) 5,159 14,448 Other income 22,736 Other expenses (14,582) Share of (loss) profit of associates and joint venture (2,246) (2,246) Finance costs (22,291) Unallocated expenses (72,901) Loss before income tax (74,836) Income tax expense (2,200) Loss for the year (77,036) (b) By business segment: FY2011 Shipbuilding, Ship Repair and Conversion Chartering Leasing Geophysical Subsea Services Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 External revenue 104,606 229,280 12,497 53,427 14,965 414,775 External cost of sales (132,343) (197,999) (14) (70,798) (9,816) (410,970) Segment results (27,737) 31,281 12,483 (17,371) 5,149 3,805 Other income 11,012 Other expenses (10,368) Share of (loss) profit of associates and joint venture 5,514 5,514 Finance costs (18,485) Unallocated expenses (47,549) Loss before income tax (56,071) Income tax expense (26) Loss for the year (56,097) 20
(c) By geographical area In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. FY2012 FY2011 US$'000 US$'000 Revenue Asia Pacific 189,936 250,554 America 32,997 51,775 Europe 98,584 76,257 Africa 20,119 6,213 Middle East 32,689 29,976 374,325 414,775 14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments Please refer to paragraph 8. 15. A breakdown of sales FY2012 FY2011 +/( ) US$'000 US$'000 % (a) Sales reported for first half year 203,675 122,868 65.8 (b) Operating loss after tax before deducting noncontrolling interests reported for first half year (41,932) (29,200) 43.6 (c) Sales reported for second half year 170,650 291,907 (41.5) (d) Operating loss after tax before deducting minority interests reported for second half year (35,104) (26,897) 30.5 16. A breakdown of the total annual dividend (in dollar value) for the issuer s latest full year and its previous full year FY2012 US$'000 FY2011 US$'000 (a) Proposed in FY2010 and paid in FY2011 7,522 7,522 21
17. Interested Person Transactions There is no interested person transaction that falls under a general mandate by shareholders. The Group has not obtained a general mandate by shareholders for interested person transactions. Aggregate value of all transactions excluding transactions conducted under shareholders mandate pursuant to Rule 920 (excluding transactions less than $100,000) FY 2012 US$ 000 Rent expense to Samling Singapore Pte Ltd 544 Interest expense to Brizill International Limited 1,467 Amount of excess collateral in connection with accounts receivables financing arrangement with an interested person as at 31 December 2012 977 18. Person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704 (13). Pursuant to Rule 704 (13) of the Listing Manual, we confirm that there is no person occupying managerial position in the Company or its principal subsidiaries who is a relative of a director, chief executive officer or substantial shareholder of the Company. BY ORDER OF THE BOARD SEE KIAN HENG GROUP CHIEF FINANCIAL OFFICER 22 February 2013 This release may contain forward looking statements that involve risks and uncertainties. Actual future performance, outcomes, and results may differ materially from those expressed in forward looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, exchange rate movement, cost of capital and capital availability, competition from other shipbuilding and chartering companies, shifts in customer demands, customers and partners, changes in operating expenses, including employee wages, benefits and training, governmental and public policy changes. You are cautioned not to place undue reliance on these forward looking statements, which are based on current view of management on future events. 22