2009 making headway,value delivering

Making Headway,

Ezion Holdings Limited

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Corporate Profile

Ezion Holdings Limited (“Ezion” and together with its subsidiaries the “Group”) has 2 main business divisions

that specializes in the development, ownership and chartering of strategic offshore assets and the provision of

offshore marine logistics and support services to the offshore oil and gas industries.

The Group is the owner of the largest and most sophisticated class of Multi-Purpose Self-Propelled Jack-up

Rigs (“Liftboats”) in the world and one of the first to introduce the usage of Liftboats in Asia & Middle East.

Ezion’s Liftboats are used mainly for well-servicing, commissioning, maintenance and decommissioning of

offshore platforms. The Group has a fleet of 4 Liftboats that are expected to come into service in the current

financial year.

The Group is also the owner of a fleet of 25 vessels, consisting of tugs, ballastable barges, offshore support

vessel and self-propelled barge that are used in the provision of offshore marine logistics and support services

to the offshore oil and gas industries. The Group’s fleet of ballastable barges, one of the largest in the region,

has been specially reinforced and modified to carry the prefabricated modules in the construction of LNG

extraction facilities and jackets for the offshore oil and gas industries.

The Group’s operating companies also offers a range of services to include marine consulting related to the

development & construction and marine logistics solutions for marine offshore facilities.

Branch offices in Korea, The United States of America, and Australia provide logistics, supercargo, engineering

and freight forwarding to complement existing operations.

YEAR-END RESULTS

Corporate Profile

Ezion Holdings Limited (“Ezion” and together with its subsidiaries the “Group”) has 2 main business divisions

that specializes in the development, ownership and chartering of strategic offshore assets and the provision of

offshore marine logistics and support services to the offshore oil and gas industries.

The Group is the owner of the largest and most sophisticated class of Multi-Purpose Self-Propelled Jack-up

Rigs (“Liftboats”) in the world and one of the first to introduce the usage of Liftboats in Asia & Middle East.

Ezion’s Liftboats are used mainly for well-servicing, commissioning, maintenance and decommissioning of

offshore platforms. The Group has a fleet of 4 Liftboats that are expected to come into service in the current

financial year.

The Group is also the owner of a fleet of 25 vessels, consisting of tugs, ballastable barges, offshore support

vessel and self-propelled barge that are used in the provision of offshore marine logistics and support services

to the offshore oil and gas industries. The Group’s fleet of ballastable barges, one of the largest in the region,

has been specially reinforced and modified to carry the prefabricated modules in the construction of LNG

extraction facilities and jackets for the offshore oil and gas industries.

The Group’s operating companies also offers a range of services to include marine consulting related to the

development & construction and marine logistics solutions for marine offshore facilities.

Branch offices in Korea, The United States of America, and Australia provide logistics, supercargo, engineering

and freight forwarding to complement existing operations.

GAINING GROUND:We increased our vessel count this past year, and were therefore able to provide more offshore logistics support services. This in turn, enabled the revenue of FY2009 to increase by 137%, and gross profit to increase by 106%.

VENTURING AHEAD:The year in review saw Ezion enter into a joint venture which led to the initiation of OMS Alliance. This joint venture will be instrumental in supporting the first phase development of the Gorgon gas fields in Australia.

GROWING IN TALENT:This year, we welcome many talented new individuals into the Ezion team. These executive appointments are not only in line with the Group’s strategy for progress, but are also significant additions in our pursuit to establish a strong global presence.

Rise in revenue

New Contracts, New Subsidiaries

Increased personnel

1 Corporate Profile | 2 Letter to Shareholders | 5 Operations Review | 8 Corporate Structure |

10 Our Directors | 12 Our Key Executives | 13 Corporate Governance and Financial Contents

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OPERATIONAL HIGHLIGHTS

CONTENTS

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On behalf of the Board of Directors, we are pleased to present to you the Annual Report for the financial year ended 31 December 2009 (“FY2009”).

RobuSt ExpaNSIoN

During the year in review, our strength and expertise in chartering and offshore support services, coupled with our increase in fleet size enabled the Group to increase its revenue from S$31.1 million in FY2008 to S$73.6 million in FY2009, reflecting an increase of 136.9%. There was also greater contribution from the marine services division in FY2009 as compared to FY2008. With the increase in revenue, the Group registered S$29.3 million in gross profit, an increase of S$15.1 million or 105.8%. The Group also

recorded net profit of S$17.1 million, growing 113% over the year.

Earnings Per Share increased to 2.52 cts in FY2009 from 1.25 cts in the previous year ending. Net Asset Value per share at the financial year-end 31 December 2009 increased to 24.89 cts from 18.80 cts a year before.

StRatEgIC gRowth

In FY2009, the Group led a consortium that successfully secured a contract to supply marine logistics vessels to US energy company Chevron for the first phase developmental work of Gorgon gas fields. The gas fields are located on the north-west coast of Western Australia and contain

During the year in review, our strength and expertise in chartering and

offshore support services, coupled with our increase in fleet size enabled

the Group to increase its revenue from S$31.1 million in FY2008 to S$73.6

million in FY2009, reflecting an increase of 136.9%.

Letter to Shareholders

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resources of about 40 trillion cubic feet of gas. The contract is expected to contribute to our performance in FY2010. Leveraging on the contract secured and the infrastructure built, we will endeavour to further support Chevron and the other major energy companies in the region in both upcoming new marine logistics work and other related services in FY2010.

The Group has also, in January 2010, delivered and chartered the first of four multi-purpose self-propelled jack-up rigs (“liftboats”) to Ezra Holdings. Named the Lewek Leader, it is currently being deployed in the Inim field of ExxonMobil in West Africa. The next liftboat is scheduled for delivery in 2Q10, with another two units in the second half of 2010.

LookINg ahEad

Alongside the gradual recovery of the global economy, fossil fuel prices have begun to stabilise. The International Energy Agency has predicted that global oil demand will pick up in 2010. This will likely encourage greater investment and development in oil exploration, and the Group will seek to leverage on such opportunities.

The energy sector is also steering towards cleaner energy sources. Hence, development of existing gas fields will gain pace while work is likely to commence on new gas fields in various parts of the world. The increase in exploration activities will boost the Group’s business opportunities in marine and offshore logistics-related work.

In line with our progressive positioning for growth, the Group increased its management strength in FY2009. Key appointments made have strong technical capabilities and business networks in the USA, Africa, the Middle East, Australia, and Papua New Guinea, hence reinforcing the Group’s capacity for business expansion into these areas.

Going forward, the Group will also seek to increase its capabilities and services to meet its customers’ requirements through strategic tie-ups, joint ventures, and mergers & acquisitions. We will also continue to raise capital from our existing key assets as equity that go towards the building of our strategic assets to meet the demand of the oil & gas industry. We believe this will go towards both enhancing our financial position and generate better return on equity for our shareholders.

With an improving economic environment, the Group is looking to build on the progress made in FY2009. This includes securing additional marine and offshore logistics work in oil & gas projects and targeting future business from the Gorgon Project in Australia.

Looking ahead, Ezion plans to be a global dominant liftboat company and capitalise in the opportunities that are present in the offshore oil and gas industry as well as the offshore wind farm development market.

dIvIdENdS

The Directors have recommended a final tax-exempt dividend of 0.06 Singapore cents per ordinary share, pending approval at the forthcoming Annual General Meeting.

aCkNowLEdgEmENtS

We thank God for His continuous blessings. We would also like to express heartfelt gratitude to the directors, our management and staff for their advice, effort and commitment. Last but not least, we thank our business associates, partners and bankers for their support and trust.

With an expansion in our fleet size and capabilities, our enhanced managerial leadership and our strong financial base, the Group is set to make even bigger strides forward.

Lee kian Soo Chairman

Chew thiam keng Chief Executive Officer

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Our strategy of prudence continues to pay off and has netted a 113% gain in net profit to S$17.1 million on the back of a 137% rise in revenue to S$73.6 million.

GROWING

OUR RESULTS

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Operations Review

StRoNg, CompREhENSIvE ExpaNSIoN

FY2009 saw the Group register revenue of S$73.6 million, a rise of 136.9%, largely due to an increase in revenue contribution from the chartering and offshore support services segment, which saw growth because of the Group’s larger vessel count.

As a result of the revenue growth, the Group booked $29.3 million in gross profit, an increase of S$15.1 million or 105.8%.

Gross profit margin was 39.8% in FY2009. Net profit grew 113%, from S$8.0 million to S$17.1 million.

On a per share basis, Earnings Per Share grew 101.6%, from 1.25 cents in FY08 to 2.52 cents in FY09. Net Asset Value per share was 24.89 cents as of 31 December 2009, compared with 18.80 cts in the previous year.

The increase in other income from $3,000 in FY08 to $1.61 million in FY09 was primarily due to the gain on disposal of a vessel no longer strategic to the Group.

Corresponding to the increase in business activities, higher administrative expenses were recorded. This increase was also attributable to the increase in our senior management staff strength, in order to better position the Group for business expansion.

Other operating expenses saw an increase due to the impairment loss of S$2.0 million on plant and equipment, and the allowance for doubtful debts of S$1.1 million.

The Group also saw significant contribution from the share of profit of joint venture companies due to the positive contribution from our joint venture in Australia. This amounted to S$2.4 million.

In terms of business segments, revenue for our Chartering and Offshore Support services segment grew from $26.4 million in FY08 to $61.2 million in FY09. Marine services also saw expansion, growing from $4.6 million in FY08 to $12.5 million in FY09.

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Operations Review

Revenue from our Chartering and Offshore Support services segment grew 131%, while Marine Services also saw expansion, growing 168%.

makINg hEadway The Group’s joint venture company, Offshore Marine Services Alliance Pty Ltd (“OMSA”), has secured a contract with Chevron for the first phase development of the Gorgon gas fields in Australia.

The contract will see Ezion supplying a fleet of logistics vessels to a multinational oil company for the next three and a half years. This fleet will support the development of the Greater Gorgon Area gas fields off the northwest coast of Western Australia. The fields are expected to yield up to 40 trillion cubic feet of gas.

With the contract for the first phase development secured, the Group is currently tendering for works related to the second phase of the Gorgon Project. We believe that the Group’s involvement in Gorgon will position us well in the securing of future vessel supply contracts. Meanwhile, the Group is also looking at other opportunities to develop our marine logistics base in Australia to support its growing oil & gas industry.

dELIvERINg vaLuE

The year also saw the delivery and deployment of the Group’s first of four multi-purpose self-propelled jack-up rigs (“liftboats”) where it is currently being deployed in the Inim field of ExxonMobil in West Africa. The subsequent three liftboats are expected to be delivered in the various parts of FY2010.

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In February 2010, the Group announced that it will divest a 51% equity stake in its wholly-owned subsidiary, Teras Conquest 1 Pte Ltd, the Company which owns its first liftboat, Lewek Leader, to a private equity fund for US$14.8m cash. Following this, the liftboat will be chartered back to Ezion for a maximum period of 7 years.

A strategic move such as this allows us to raise capital from existing key assets and frees the capital for expanding the Group’s liftboat fleet. To continually deliver greater value, the Group will also be exploring other liftboat opportunities in locations such as the North Sea, where day-rates are expected to bring in higher margins.

In addition to the divestment of Teras Conquest 1 Pte Ltd, the Group also placed out 70 million new shares in June 2009, raising S$43.4 million primarily for the acquisition of offshore and marine assets.

The company has utilized S$34.1 million of the net proceeds of S$ 42.3 million as at the date of this report as per the company’s announcement dated 9th November 2009 and 21st December 2009.

These activities further strengthen our capital base for future expansion.

137%

113%

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100% Teras Cargo Transport Pte Ltd

Teras Cargo Logistics Limited100%

EZION HOLDINGS

LIMITED

Eminent 237 Pte Ltd100%







Eminent Offshore Logistics Pte. Ltd.50%

Northern Offshore Pte Ltd100%

Teras Offshore Pte Ltd100%

Teras Transporter Pte Ltd100%

Teras Transporter 2 Pte Ltd100%

Teras 281 Pte Ltd100%




Teras 338 Pte Ltd 100%

Teras 339 Pte Ltd 100%


Teras Conquest 1 Pte Ltd100%




Ezion Investments Pte Ltd100%

Teras Pacific Pte Ltd100%

Teras Atlantic Pte Ltd100%

Ezion Maritime Pte Ltd100%

Meridian Maritime Cargo Logistics. LLC100%

Teras Progress Pte Ltd100%

Teras Harta Maritime Limited100%

BVI Company

Australia

Bahamas

Singapore

Corporate Structure

OMSA Ningaui Pte Ltd50%

Offshore Marine Services

Alliance Pty Ltd

33.33%

Teras Seaprojects Pte Ltd100%

Teras America, LLC100% Teras Cargo Transport

(America), LLC

100%

USA

100% Meridian Maritime Pte Ltd


100% Teras Pegasus Pte Ltd

Teras Oilfield Support Limited100%

We continue to ink joint ventures, establish new subsidiaries and deploy new assets to strengthen our capabilities and offer a more comprehensive array of services to our customers.

GROWING

OUR POTENTIAL

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Our Directors

mR LEE kIaN Soo Non-Executive Chairman and Non- Executive Director

Appointed the Non-Executive Chairman and Non-Executive Director since 1 June 2007, Mr Lee Kian Soo is also the founder of the Ezra Group of Companies (“Ezra”) with 30 years of experience in the shipping and offshore support service industry. Prior to founding Ezra, Mr Lee has worked in various established companies which include Jurong Shipyard, Sembawang Shipyard and Offshore Supply Association. Mr Lee has been responsible for the strategic planning, business development and marketing of Ezra since its inception in 1992.

mR ChEw thIam kENg Chief Executive Officer and Executive Director

Mr Chew Thiam Keng was appointed the Executive Director on 1st March 2007, and was appointed as the Chief Executive Officer on 1st June in the same year. Mr Chew is responsible for the Group’s operations in strategic planning, corporate management and business development. Before joining the Group, Mr Chew was the Managing Director/ CEO of KS Energy Services Limited for about 5 years and was the Executive Director of Kian Ann Engineering Ltd. between 1996 and November 2001. Before that, Mr Chew was with the Development Bank of Singapore Limited for nine years working in the areas of banking such as corporate finance and retail banking. Mr Chew holds a Master Degree in Business Administration from the University of Hull and a Bachelor Degree (Honours) in Mechanical Engineering from the National University of Singapore.

CaptaIN LaRRy gLENN JohNSoN Chief Operating Officer and Executive Director

Captain Larry Glenn Johnson was appointed an Executive Director cum Chief Operating Officer of the Group since 13 February 2008. He is a seasoned Marine Professional with over 32 years of experience in the maritime industry. He holds a valid USCG Masters License with 18 years of management experience, which include 11 years of P&L responsibilities. He also had the opportunity to work with ExxonMobil Development Corporation, Chevron, Aker Kvaerner, Conoco Phillips, Batelle Corp. MARAD and USCG as a marine consultant for a number of oil and gas projects. Before joining the Group, Captain Johnson worked at Foss Maritime Company for 24 years, with his last position as the Director International Operations. He recently retired as Senior Vice President of America Cargo Transport Corp (ACTC), an US Government Contractor for Visa, MSP and USC05 cargoes operating in the Gulf of Mexico, Asia, Australia and Middle East.

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dR waNg kaI yuEN Independent Non-Executive Director

Dr Wang Kai Yuen is an Independent Non-Executive Director appointed on 28 July 2000. He currently also serves as the Chairman of the Audit Committee and is a member of both the Remuneration and Nominating Committees. Dr Wang sits on the Board of Superbowl Holdings Ltd, Xpress Holdings Ltd, Asian Micro Holdings Ltd, COSCO Corporation (Singapore) Limited, Hiap Hoe Ltd, ComfortDelGro Corporation Limited, CAO (Singapore) Corporation Ltd, Matex International Ltd, China Lifestyle Food & Beverages Group Ltd, HLH Corp, EOC Ltd and A-Sonic Aerospace Ltd. Dr Wang retired from Fuji Xerox Singapore Software Centre in January 2010 as the Centre Manager. Dr Wang served as a Member of Parliament for the Bukit Timah Constituency from December 1984 till April 2006. He was the Chairman of Feedback unit from 2002 till his retirement from politics. Dr Wang graduated from the National University of Singapore with a Bachelor in Engineering (First Class Honours in Electrical and Electronics). He also holds a Master of Science in Electrical Engineering and a PhD in Engineering from Stanford University. He received a Friend of Labour Award in 1988 for his contributions to the Singapore labour movement.

mR LIm thEaN EE Independent Non-Executive Director

Mr Lim Thean Ee is an Independent Non-Executive Director appointed on 28 July 2000. He has been appointed the Chairman of the Remuneration Committee with effect from 18 July 2008 and is a member of both the Audit and Nominating Committees.He serves as the Managing Director of Coastal Navigation Pte Ltd and is also the Chairman of Depot Estate Businesses Association and Telok Blangah Community Club Management Committee; the Vice-Chairman of Telok Blangah Citizens’ Consultative Committee.

mR taN wooN hum Independent Non-Executive Director

Mr Tan Woon Hum is an Independent Non-Executive Director appointed since 21 March 2007. He is a member of the Audit Committee, the Remuneration Committee and the Nominating Committee. Mr Tan has been appointed as Chairman of the Nominating Committee with effect from 1 June 2007. Mr Tan is a partner in the corporate finance and international finance practice of Shook Lin & Bok LLP. He has been practicing law for more than 15 years and his areas of expertise include REITs, funds and M&A. He also advises on licensing and regulatory matters in the financial sector and has previously advised on a wide range of corporate finance transactions, particularly cross border mergers and acquisitions, joint ventures, strategic investments and listed company matters. He has been involved in 17 of the 19 listed S-REITs (as at December 2007) transactions of various structures, magnitude and complexity. Mr Tan also sits on the Board of AP Oil International Ltd and Yong Xin International Holdings Ltd.

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mR SoNNy JoE SaNdERSCEO of subsidiary - Teras Cargo Transport Pte Ltd

Mr Sonny Joe Sanders joined our wholly owned subsidiary, Teras Cargo Transport Pte Ltd (Teras) in June 2009 and is responsible for Teras’s operations in strategic planning, corporate management and business development. Prior to joining the Group, Mr Sanders served as President at America Cargo Transport Corp & The Jore Group for 19 years. He has more than 35 years of experience in management and ownership of land and marine transportation companies and is the recipient of many industry awards. He was responsible for forward activities and logistics on Sakhalin Island over a period of seven years for various global construction and oil/gas companies. The companies led by Mr Sanders consistently gained respect and market share in the US Department of Defence cargo requirements and the US preference cargo fields. He has recently been honored for his achievements in the transportation efforts of humanitarian aid to third world locations, including West Africa, Haiti, Sudan, North Korea and Afghanistan.

mR gaRy mCFaddENDirector of Operations

Mr Gary McFadden joined the Group as Director of Operations in August 2009. He is responsible for the operations of the marine service of the Group and has over 35 years of experience in the Maritime Industry, of which 28 years were spent sailing on merchant vessels around the world. He graduated from the Maine Maritime Academy in 1974 and holds a valid United States Coast Guard Chief Engineers License. Before joining the Group, Mr McFadden worked as a Technical Consultant and Marine Advisor to ExxonMobil Corporation for offshore installation projects and modular deliveries for onshore construction projects including Kearl Oil Sands Project, Adriatic LNG Gravity Base Structure, Sakhalin Island, Russia Sealift and Orlan Gravity Base Structure for Exxon Neftigas Ltd.

Our Key Executives

mR ChEah booN pINChief Financial Officer

Mr Cheah Boon Pin is responsible for all accounting, financial and taxation matters. He joined the Group in June 2007 bringing with him over 10 years of experience in auditing and commercial accounting. Before joining the Company, Mr Cheah had served in financial management positions in 2 Singapore Exchange Main Board listed companies. He holds an ACCA accounting qualification and is a member of the Institute of Certified Public Accountant of Singapore.

mR poh LEoNg ChINg (davId)Chief Commercial Officer

Mr Poh Leong Ching, David, is responsible for the marketing and operations of the Group’s entire fleet of vessels which includes tugs, ballastable vessels, offshore support vessels and multi-purpose self-propelled jack-ups (“Liftboats”). Under his credentials are over 15 years of experience in the sales and operations of vessels and cranes. Mr Poh was the Marketing Manager of Tiong Woon Marine Pte Ltd and Tat Hong Holdings Group before joining the Group.

mR dERRICk ChINgBusiness Development Manager

Mr Derrick Ching joined the Group in March 2008 and is responsible for marketing of the Group’s fleet of Jack-ups and vessels. Mr Ching has more than 8 years of experience in the oil and gas industry and has successfully completed several upgrading and refurbishment of offshore drilling rigs. On top of that, he is also experienced in heavy lift accommodation barges, seismic vessels and pipe layers.

Corporate Governance and Financial Contents

Corporate Governance Report

Directors’ Report

Statement by Directors

Independent Auditor’s Report

Balance Sheets

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Financial Statements

Shareholders’ Information

Notice of Annual General Meeting

Notice of Books Closure

Proxy Form

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Ezion Holdings Limited (“Ezion” or the “Company”) observes high standards of corporate governance in line with the

principles and guidelines of the Code of Corporate Governance 2005 (“Code”) so as to ensure greater transparency,

accountability and protections of shareholders’ interest.

The Company’s corporate governance practices on each of the principles of the Code are outlined in the following

sections.

BOARD MATTERS

Principle 1 Board’s Conduct of its Affairs

The Board oversees the business of Company and assumes responsibility for the overall strategic plans, key operational

initiatives, major investment and funding proposals, fi nancial performance reviews and corporate governance practices.

The Board provides the direction and goals for the management and monitors the performance of these goals to

enhance the shareholders’ value. The Company has in place fi nancial authorization and approval limits for operating

and capital expenditure, procurement of goods and services, acquisitions and disposal of investments and treasury

transactions. Within these guidelines, the Board approves transactions above certain thresholds. The Board also

approves the fi nancial results for release to the Singapore Exchange Securities Trading Limited (SGX-ST)

The Board is supported in its tasks by Board Committees such as the Audit Committee, Nominating Committee and

Remuneration Committee, which have been established to assist in the execution of its responsibilities.

The Board conducts regular scheduled meetings, previously at least twice a year and from year 2009 onwards, at least

four times a year. Ad-hoc meetings are convened as and when warranted by particular circumstances. The Company’s

Articles of Association provide for meetings to be held via telephone conference. The attendance of the Directors at

meetings of the Board and Board Committees, as well as frequency of such meetings, is disclosed in this report.

Principle 2 Board Composition And Guidance

The size and composition of the Board are reviewed from time to time by the Nominating Committee, which strives to

ensure that the size of the Board is conducive to effective discussions and decision-making and that the Board has an

appropriate balance of independent directors.

The majority of our directors are non-executive and independent directors. The Nominating Committee reviews the

independence of each director on an annual basis and it considers a director as independent if he has no relationship

with the Group or its offi cers that could interfere, or reasonably perceived to interfere, with the exercise of the director’s

independent business judgement with a view to the best interest of the Company.

The Board currently comprises the following members:

(i) Mr Lee Kian Soo Non-Executive Chairman

(ii) Mr Chew Thiam Keng Executive Director and CEO

(iii) Captain Larry Glenn Johnson Executive Director and COO

(iv) Dr Wang Kai Yuen Independent Director

(v) Mr Lim Thean Ee Independent Director

(vi) Mr Tan Woon Hum Independent Director

As a group, the Directors bring with them a broad range of industry knowledge, expertise and experience in areas such

as fi nance, legal, business and management. The diversity of the directors’ experience allows for the useful exchange of

ideas and view as well as provide for effective decision-making. The profi le of each Board member is set out on pages

10 and 11 of this Annual Report.

The Board considers the present size appropriate for the current nature and scope of the Group’s operations.

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Principle 3 Chairman And Chief Executive Offi cer

There is a clear separation of the roles and responsibilities of the Chairman and the Chief Executive Offi cer (CEO). This is

to ensure appropriate balance of power and authority, accountability and decision-making.

Mr Lee Kian Soo, who is the Non-Executive Chairman, and Mr Chew Thiam Keng, the CEO of the Company are not

related to each other. The CEO is responsible for the day-to-day management of the affairs of the Company and the

Group. He plays a leading role in developing and expanding the businesses of the Group and ensures that the Board is

kept updated and informed of the Group’s business.

The Chairman’s responsibilities include:

1) scheduling meetings and leading the Board to ensure its effectiveness and approves the agenda of Board

meetings in consultation with the CEO;

2) reviewing key proposals and board papers before they are presented to the Board and ensures that Board

members are provided with accurate and timely information;

3) ensuring that Board members engage Management in constructive debate on various matters including strategic

issues and business planning processes; and

4) promoting high standards of corporate governance.

Principle 4 Board Membership

NOMINATING COMMITTEE

The Nominating Committee (“NC”) comprises three Directors, all of whom, including the Chairman are independent. The

NC members are:

Mr Tan Woon Hum (Chairman)

Dr Wang Kai Yuen

Mr Lim Thean Ee

The NC’s responsibilities include the following:

review and assess all candidates for directorships before making recommendation to the Board for appointment

of directors;

review and recommend to the Board the retirement and re-election of directors in accordance with the Company’s

Articles of Association at each Annual General Meeting (“AGM”);

review the independence of directors annually;

review the composition of the Board annually to ensure that the Board has appropriate balance of independent

directors and to ensure an appropriate balance of expertise, skills, attributes and ability among the directors;

evaluate the performance and effectiveness of the Board as a whole.

The NC reviews and assesses candidates for directorship before making recommendations to the Board. In

recommending new directors to the Board, the NC takes into consideration the skills and experience and the current

composition of the Board, and strives to ensure that the Board has an appropriate balance of independent directors as

well as directors with the right profi le of expertise, skills, attributes and ability.

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In evaluating a director’s contribution and performance for the purposes of re-nomination, the NC takes into consideration

a variety of factors such as attendance, preparedness, participation and candour. The NC makes recommendation for

new directors and retirement of directors.

The Directors submit themselves for re-nomination and re-election at regular intervals of at least once every three years.

The Company’s Articles of Association provides that one third of the Board, or the number nearest to one third is to retire

by rotation at every AGM. In addition, the Company’s Articles of Association also provides that newly appointed Directors

are required to submit themselves for re-nomination and re-election at the next AGM of the Company.

Principle 5 Board Performance

The NC has established a formal assessment process to assess the effectiveness of the Board as a whole. The

performance criteria for Board evaluation are based on fi nancial and non-fi nancial indicators such as an evaluation of

the size and composition of the board, the Board’s access to information, board processes, strategy and planning, risk

management, accountability, board performance in relation to discharging its principal functions, communication with

senior management and standards of conduct of the directors.

The Board and Management have strived to ensure that directors appointed to the Board possess the experience,

knowledge and skills critical to the Group’s business to enable the Board to make sound and well-considered decisions.

Principle 6 Access To Information

The Board members are provided with adequate and timely information prior to Board meetings and on an ongoing

basis. The Board has separate and independent access to the Group’s senior management and the advice and services

of the Company Secretaries who are responsible to the Board for ensuring board procedures are followed and the

relevant statutory rules and regulations are complied with. Under the Articles of Association of the Company, the decision

to appoint or remove the Company Secretaries can only be taken by the board as a whole. At least one of the Company

Secretaries will be present at board meetings.

The Board may also take independent professional advice as and when necessary to enable it to discharge its

responsibilities effectively at the expense of the Company. The Board is updated on the regulations of the SGX-ST,

Companies Act, corporate governance policies and other statutory requirements.

Attendance at Board and Board Committees’ meetings held during the year 2009 is as set out below:

Type of Meetings BoardAudit

CommitteeNominating Committee

Remuneration Committee

Total No. Held 4 4 1 2

Attendance

Lee Kian Soo 4 N/A N/A N/A

Chew Thiam Keng 4 N/A N/A N/A

Larry Glenn Johnson 3 N/A N/A N/A

Dr Wang Kai Yuen 4 4 1 2

Lim Thean Ee 4 4 1 2

Tan Woon Hum 4 4 1 2

N/A: Not Applicable

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REMUNERATION MATTERS

Principle 7 Procedures for Developing Remuneration PoliciesPrinciple 8 Level and Mix of RemunerationPrinciple 9 Disclosure of Remuneration

The Remuneration Committee (“RC”) comprises three Directors, all of whom including the Chairman are independent.

The RC members are as follows:

Mr Lim Thean Ee (Chairman)

Dr Wang Kai Yuen

Mr Tan Woon Hum

The RC’s responsibilities include the following:

review and recommend to the Board an appropriate and competitive framework of remuneration for the Board

and key executives of the Group;

recommend to the Board specifi c remuneration packages for each Executive Director, taking into account factors

including remuneration packages of executive directors in comparable industries as well as the performance of

the Company and that of the executive directors;

review and make recommendation on the fees of independent non-executive directors for approval by the Board;

and

ensure the remuneration policies and systems of the Group support the Group’s objectives and strategies.

administration of the Ezion Employee Share Plan and the Ezion Employee Share Option Scheme.

The remuneration package adopted for the Executive Directors is as per the service contract entered into between the

respective Director and the Company. The RC will review and recommend the specifi c remuneration package for each

Executive Director upon recruitment. Thereafter, the RC will review subsequent increments, bonuses and allowances

where these payments are discretionary. No Director or member of the RC is involved in deciding his own remuneration.

Non-Executive Directors do not have any service contracts with the Company. Save for Directors’ fees, Non-Executive

Directors do not receive any remuneration from the Company.

Directors’ fees are set in accordance with a remuneration framework comprising basic fees and additional fees for

serving on any of the committees. Directors’ fees are subject to approval of shareholders of the Company as a lump

sum payment at the AGM of the Company.

No immediate family members of a Director or CEO have remuneration exceeding S$150,000 during the year.

Remuneration of Directors and Key Executives

A breakdown showing the level and mix of each individual director’s remuneration payable for FY 2009.

No. of Directors in remuneration band

Remuneration Band 2008 2009

$500,000 and above – 1

$250,000 to below $500,000 2 1

Below $250,000 4 4

Total 6 6

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Details of Directors’ remunerations

Directors Fees %Salary & CPF%

Bonus & CPF%

Other Benefi ts %

Total %

Lee Kian Soo – – – – –

Chew Thiam Keng – 65 33 2 100

Larry Glenn Johnson – 74 15 11 100

Dr Wang Kai Yuen 100 – – – 100

Lim Thean Ee 100 – – – 100

Tan Woon Hum 100 – – – 100

Remuneration of the top 5 key executives

Remuneration Band 2008 2009

Below $250,000 4 5

Total 4 5

Principle 10 Accountability

The Company keeps the shareholders updated on the Group’s fi nancial performance, positions and prospects through

quarterly fi nancial results announcements and annual fi nancial reports. The Company also issues announcements on

developments in the Group’s business on an on-going and timely basis.

Management provides the Board with the relevant information such as management accounts on the performance of the

Group on a timely and on going basis in order that the Board may effectively discharge its duties.

AUDIT

Principle 11 Audit CommitteePrinciple 12 Internal ControlPrinciple 13 Internal Audit

The Audit Committee (“AC”) comprises three Directors, all of whom including the Chairman are independent. The AC

members are:

Dr Wang Kai Yuen (Chairman)

Mr Lim Thean Ee

Mr Tan Woon Hum

The AC performs the following functions:

a) review with the external auditors, their audit plan, evaluation of the accounting controls, audit reports and any

matters which the external auditors wish to discuss;

b) review with the internal auditors, their audit plan, the adequacy of the internal audit procedures and their

evaluation of the effectiveness of the overall internal control systems, including fi nancial, operational and

compliance controls and risk management;

c) review the quarterly and annual fi nancial statements, including announcements to shareholders and the SGX-ST

prior to submission to the Board so as to ensure the integrity of the Company’s fi nancial statements;

d) review any significant findings and recommendations of the external and internal auditors and related

management response and assistance given by the management to auditors;

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e) review interested person transactions to ensure that internal approval procedures approved by the shareholders

are adhered to; and

f) conduct annual review of the independence and objectivity of the external auditors, including the volume of non-

audit services provided by the external auditors, to satisfy itself that the nature and extent of such services will not

prejudice the independence and objectivity of the external auditors before confi rming their re-nomination.

The AC has full access to and receives full co-operation from Management, and has full discretion to invite members

of Management to attend its meetings and has been given reasonable resources to enable it to discharge its functions.

The External Auditors have direct and unrestricted access to the AC, which is empowered to conduct or authorise

investigations into any matters within its terms of reference.

The AC has reviewed the overall scope of the external audits and the assistance given by the Company’s offi cers to the

auditors. It met with the Company’s external auditors to discuss the results of their respective examinations and their

evaluation of the Company’s system of internal accounting controls. The AC has also met with the auditors, without the

presence of management.

The AC has reviewed the quarterly and annual fi nancial statements of the Company and the Group for the fi nancial year

ended 31 December 2009 as well as the independent auditors’ report thereon. The AC has also reviewed interested

person transactions of the Group in the fi nancial year.

The Group maintains a system of internal controls for all companies within the Group, but recognises that no internal

control system will preclude all errors and irregularities. The system is designed to manage rather than to eliminate the

risk of failure to achieve business objectives. The controls are to provide reasonable, but not absolute, assurance to

safeguard shareholders’ investments and the Group’s assets.

The AC and the Board of Directors reviews the effectiveness of the key internal controls, including fi nancial, operational

and compliance controls, and risk management on an on-going basis. There are formal procedures in place for the

external auditors to report independently their fi ndings and recommendations to the AC. The Company has in FY2009

outsourced its internal audit function to Yang Lee & Associates, a fi rm of certifi ed public accountants.

The internal auditors report directly to the AC and make recommendations on their fi ndings.

The Group’s external auditors also contribute an independent perspective on the internal control systems arising from

their audit and annually report their fi ndings to the AC.

In line with the Code, the AC have incorporated a “whistle blowing policy” into the Company’s internal control procedures

to provide a channel for staff to raise in good faith and in confi dence, without fear of reprisals, concerns about possible

improprieties in fi nancial reporting or other matters. The objective of such a policy is to ensure independent investigation

of such matters and for appropriate follow-up action.

The AC has conducted an annual review of all non-audit services by the auditor to satisfy itself that the nature and extent

of such services will not prejudice the independence and objectivity of the auditors.

The Board is kept informed of the AC’s activities.

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COMMUNICATION WITH SHAREHOLDERS

Principle 14 Communication with ShareholdersPrinciple 15 Greater Shareholder Participation

The Company believes in engaging in regular, effective and fair communication with shareholders and is committed to

conveying pertinent information to shareholders on a timely basis. All material and price sensitive information as well

as information on the Company’s new initiatives are publicly released via SGXNET on a timely basis. In addition, the

Company also responds to enquiries from investors, analysts, fund managers and the press.

At the general meetings of the Company, shareholders are given the opportunity to air their views and ask questions

regarding the Company and the Group. The Articles of Association of the Company allow shareholders to appoint one or

two proxies to attend and vote in their stead.

Each item of special business included in the notice of the general meetings is accompanied, where appropriate, by

an explanation for the proposed resolution. Separate resolutions are proposed for substantially separate issues at the

meeting. The Chairmen of the Audit, Remuneration and Nominating Committees are normally available at the meeting

to answer those questions relating to the work of these committees. The External Auditors are also present to assist the

Directors in addressing any relevant queries by shareholders.

In preparation for the annual general meeting, shareholders are encouraged to refer to SGX’s investor guides, namely ‘An

Investor’s Guide To Reading Annual Reports’ and ‘An Investor’s Guide To Preparing For Annual General Meetings’. The

guides, in both English and Chinese versions are available at the SGX website via this link:

http://www.sgx.com/wps/portal/marketplace/mp-en/investor_centre/investor_guide

DEALINGS IN SECURITIES

The Company has adopted an internal code with regards to dealings in securities to provide guidance for its directors

and offi cers.

The Company’s code provides that Directors and employees are prohibited from dealing in the securities of the Company

whilst in possession of unpublished material price-sensitive information and during the period commencing two weeks

before the quarterly results announcement and one month before the full year results announcement and ending on the

date of the announcements of the relevant results.

Directors and executive offi cers are also required to observe insider trading laws at all times even when dealing in

securities within the permitted trading period. In addition, the Directors and executive offi cers are expected not to deal in

the Company’s securities for short-term considerations.

INTERESTED PERSON TRANSACTIONS (“IPTs”) POLICY

The Company has adopted an internal policy in respect of any transactions with interested persons and has set out the

procedures for review and approval of the Company’s interested persons transactions with Ezra Holdings Limited, its

subsidiaries and associated companies, which are covered by a Shareholders’ Mandate renewed at the Annual General

Meeting of the Company held on 29 April 2009 (“Shareholders’ Mandate”).

The AC reviews the Shareholders’ Mandate at regular internals, and is satisfi ed that the review procedures for IPTs and

the reviews to be made periodically by the AC in relation thereto are adequate to ensure that the IPTs will be transacted

on normal terms and will not be prejudicial to the interests of the Company and its minority shareholders.

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Interested Person Transactions for FY2009

Name of Interested Person

Aggregate value of allinterested person transactions during the fi nancial year under review (excluding transactions

less than $100,000 and transactions conducted

under shareholders’ mandate pursuant to Rule 920)

Aggregate value ofall interested person

transactions conductedduring the fi nancial year under

review under shareholders’ mandate pursuant to Rule 920

(excluding transactions less than $100,000)

(A) Purchases

Emas Offshore Pte Ltd

Jit Sun Investments Pte Ltd

(B) Sales

Ezra Marine Services Pte Ltd

S$’000

–

360

–

S$’000

3,371

–

249

MATERIAL CONTRACTS

There were no material contracts entered into by the Company and its subsidiaries involving the interests of its CEO,

Directors or Controlling Shareholders.

SPONSORSHIP

The Company is currently under the SGX-ST Catalist sponsor-supervised regime. The continuing sponsor of the

Company is Stamford Corporate Services Pte. Ltd. There is no non-sponsor fees paid to the sponsor by the Company.

The amount of fees paid to Stamford Law Corporation, an affi liate of Stamford Corporate Services Pte. Ltd., for work

done in FY2009, was S$167,000.

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Directors’ Report

We are pleased to submit this annual report to the members of the Company together with the audited fi nancial

statements for the fi nancial year ended 31 December 2009.

Directors

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

Lee Kian Soo

Chew Thiam Keng

Captain Larry Glenn Johnson

Dr Wang Kai Yuen

Lim Thean Ee

Tan Woon Hum

Directors’ interests

According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies Act,

Chapter 50 (the “Act”), particulars of interests of directors who held offi ce at the end of the fi nancial year (including those

held by their spouses and infant children) in shares, debentures, warrants and share options in the Company and in

related corporations (other than wholly-owned subsidiaries) are as follows:

Direct Deemed

Name of director and corporation in which interests are held

Holdings at beginning of

the year

Holdings at end of the

year

Holdings at beginning of

the year

Holdings at end of the

year

The CompanyDr Wang Kai Yuen 150,000 150,000 – –

Lim Thean Ee 1,146,000 1,146,000 – –

Chew Thiam Keng 36,220,000 35,155,000 142,000,000 142,000,000

Lee Kian Soo – – 100,000,000 100,000,000

By virtue of Section 7 of the Act, Chew Thiam Keng, is deemed to have interests in the subsidiaries of the Company,

which are wholly-owned, at the beginning of the year and at the end of the year.

Except as disclosed in this report, no director who held offi ce at the end of the fi nancial year had interests in shares,

debentures, warrants or share options of the Company, or of related corporations, either at the beginning of the fi nancial

year or at the end of the fi nancial year.

There were no changes in any of the above mentioned interests in the Company between the end of the fi nancial year

and 21 January 2010, except for Lim Thean Ee who has direct interests of 1,200,000 shares in the Company and Chew

Thiam Keng who has direct interests of 35,075,000 shares in the Company as at 21 January 2010.

Except as disclosed under the “Share Options” Section of this report, neither at the end of, nor at any time during the

fi nancial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable

the directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company

or any other body corporate.

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Directors’ Report

During the fi nancial year, the Company and its related corporations have in the normal course of business entered into

transactions with companies in which a director of the Company has a substantial fi nancial interest. Such transactions

comprised lease of offi ce and charter of vessels carried out on normal commercial terms as set out in note 24 to the

fi nancial statements. The director has neither received nor become entitled to receive any benefi t arising out of these

transactions other than those to which he is ordinarily entitled to as shareholder of these companies.

Except for the transactions disclosed in the preceding paragraph and short-term employee benefi ts as disclosed in note

24 to the fi nancial statements, since the end of the last fi nancial year, no director 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 he is a member, or with a company in which he has a substantial fi nancial interest.

Share options

Director Option and Executive Option Agreements

The grant of share options to Captain Larry Glenn Johnson under the Director Option Agreement and to 2 key executives

under the Executive Option Agreements was approved by its members at an Extraordinary General Meeting held on 23

November 2009 (the “Vesting Reference Date”).

Other information regarding the above share options granted is set out below:

The exercise price of each option is fi xed at $0.45.

The share options shall be exercised, in whole or in part, in accordance with the following schedule over 4 years:

i. 25% of the share options shall vest 12 months after the Vesting Reference Date; and

ii. an additional 25% of the share options shall vest on each anniversary of the Vesting Reference Date

thereafter.

All options are settled by physical delivery of shares.

The options granted expire after 5 years or upon cessation of the employment of Captain Larry Glenn Johnson or

the 2 key executives.

At the end of the fi nancial year, details of the options granted under the Director Option and Executive Option

Agreements on the unissued ordinary shares of the Company are as follows:

Date ofgrant ofoptions

Exerciseprice

per share

Optionsgranted on 23/11/09

Optionsexercised

Optionsforfeited/expired

Optionsoutstandingat 31/12/09

Numberof optionholders at 31/12/09

Exerciseperiod

23/11/2009 $0.45 9,000,000 – – 9,000,000 3

23/11/2010 to

23/11/2014

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Directors’ Report

Details of options granted to the director of the Company are as follows:

Name of director

Options grantedfor fi nancialyear ended

31 December2009

Aggregateoptions

granted sincecommencement

of Scheme to31 December

2009

Aggregateoptions

exercised sincecommencement

of Scheme to31 December

2009

Aggregateoptions

outstandingas at

31 December2009

Captain Larry Glenn Johnson 4,000,000 4,000,000 – 4,000,000

Ezion Employee Share Option Scheme

The Ezion Employee Share Option Scheme (the Scheme) was approved and adopted by its members at an Extraordinary

General Meeting held on 23 November 2009. The Scheme is administered by the Company’s Remuneration Committee,

comprising three directors, Lim Thean Ee, Dr Wang Kai Yuen and Tan Woon Hum.

Other information regarding the Scheme is set out below:

The exercise price of the options can be set at a discount to the market price not exceeding 20% of the market

price in respect of options granted at the time of grant.

For options granted at market price, they can be exercised 1 year after the date of grant.

For options granted at a discount, they can be exercised 2 years after the date of grant.


The options granted expire after 10 years or such earlier date as may be determined by the Remuneration

Committee.

Since the commencement of the Scheme to 31 December 2009, no share options have been awarded pursuant to the

Scheme.

Share option granted to a director of a subsidiary

On 22 March 2009, the Company granted an option to a director of a subsidiary to purchase 30% interest in the

subsidiary from the Company at cost upon satisfaction of certain conditions.

Except as disclosed above, there were no unissued shares of the Company or its subsidiaries under options granted by

the Company or its subsidiaries as at the end of the fi nancial year.

Employee Share Plan

The Employee Share Plan (the “Plan”) was approved and adopted by members of the Company at the Extraordinary

General Meeting held on 29 April 2008. The Plan is administered by a committee comprising of the directors of the

Company. On 13 May 2009, 230,000 treasury shares had been awarded to certain employees pursuant to the Plan.

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Directors’ Report

Audit Committee

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

Dr Wang Kai Yuen (Chairman and independent director)

Lim Thean Ee (Independent director)

Tan Woon Hum (Independent director)

The Audit Committee performs the functions specifi ed in Section 201B of the Act, the SGX Listing Manual and the Code

of Corporate Governance.

The Audit Committee has held 4 meetings since the last directors’ report. In performing its functions, the Audit

Committee met with the Company’s external and internal auditors to discuss the scope of their work, the results of their

examination and evaluation of the Company’s internal accounting control system.

The Audit Committee also reviewed the following:

assistance provided by the Company’s offi cers to the internal and external auditors;

quarterly fi nancial information and annual fi nancial statements of the Group and the Company prior to their

submission to the directors of the Company for adoption; and

interested person transactions (as defi ned in Chapter 9 of the SGX Listing Manual).

The Audit Committee has full access to management and is given the resources required for it to discharge its functions.

It has full authority and the discretion to invite any director or executive offi cer to attend its meetings. The Audit

Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.

The Audit Committee is satisfi ed with the independence and objectivity of the external auditors and has recommended

to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming

Annual General Meeting of the Company.

Auditors

The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Chew Thiam KengDirector

Captain Larry Glenn JohnsonDirector

Singapore18 March 2010

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Statement by Directors

In our opinion:

(a) the fi nancial statements set out on pages 28 to 81 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, changes in equity and cash

fl ows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies

Act, Chapter 50 and Singapore Financial Reporting Standards; 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.

The Board of Directors has, on the date of this statement, authorised these fi nancial statements for issue.

On behalf of the Board of Directors

Chew Thiam KengDirector

Captain Larry Glenn JohnsonDirector


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Independent Auditors’ Report

We have audited the fi nancial statements of Ezion Holdings Limited (the Company) and its subsidiaries (the Group),

which comprise the balance sheets of the Group and the Company as at 31 December 2009, the income statement,

statement of comprehensive income, statement of changes in equity and cash fl ow statement of the Group for the year

then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 28 to

81.

Management’s responsibility for the fi nancial 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, Chapter 50 (the Act) and Singapore Financial Reporting Standards. This

responsibility includes:

(a) devising and maintaining a system of internal accounting controls suffi cient to provide a reasonable assurance

that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly

authorised and that they are recorded as necessary to permit the preparation of true and fair profi t and loss

accounts and balance sheets and to maintain accountability of assets;

(b) selecting and applying appropriate accounting policies; and

(c) 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 judgement, 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 the 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.

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 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.

KPMG LLPPublic Accountants and

Certifi ed Public Accountants


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Balance Sheets

Group Company

Note 2009 2008 2009 2008$’000 $’000 $’000 $’000

Non-current assetsPlant and equipment 4 260,060 143,557 489 580

Subsidiaries 5 – – 140,973 87,653

Joint ventures 6 10,056 6,114 6,017 6,187

Other non-current assets 7 192 240 4,825 6,000

270,308 149,911 152,304 100,420

Current assetsInventories 8 1,019 1,036 – –

Trade receivables 9 24,195 6,857 4,315 3,639

Other current assets 7 28,801 21,850 9,719 4,485

Cash and cash equivalents 10 40,284 34,697 12,528 15,010

94,299 64,440 26,562 23,134

Total assets 364,607 214,351 178,866 123,554

Equity attributable to equity holders of the CompanyShare capital 11 160,270 117,926 160,270 117,926

Reserves 12 (3,254) (472) (139) (186)

Accumulated profi ts/(losses) 20,547 3,474 (5,858) (7,612)

Total equity 177,563 120,928 154,273 110,128

Non-current liabilitiesFinancial liabilities 13 122,757 44,320 16,319 7,034

Other payables 14 2,811 3,723 – –

125,568 48,043 16,319 7,034

Current liabilitiesTrade payables 15 15,663 3,915 19 –

Other payables 14 12,200 17,781 4,045 1,211

Financial liabilities 13 32,903 23,288 3,893 4,954

Current tax payable 710 396 317 227

61,476 45,380 8,274 6,392

Total liabilities 187,044 93,423 24,593 13,426

Total equity and liabilities 364,607 214,351 178,866 123,554

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

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Consolidated Income Statement

GroupNote 2009 2008

$’000 $’000

Revenue 17 73,613 31,074

Cost of sales (44,284) (16,821)

Gross profi t 29,329 14,253

Other income 1,609 3

Administrative expenses (7,154) (3,746)

Other expenses (5,876) (845)

Results from operating activities 17,908 9,665

Finance income 266 439

Finance expense (2,509) (1,782)

Net fi nance expense 19 (2,243) (1,343)

Share of results of joint ventures, net of tax 2,421 (107)

Profi t before income tax 18 18,086 8,215

Income tax expense 20 (964) (177)

Profi t for the year 17,122 8,038

Attributable to:Owners of the Company 17,122 8,038


Earnings per shareBasic and diluted earnings per share (cents) 21 2.52 1.25


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Consolidated Statement of Comprehensive Income

2009 2008$’000 $’000


Other comprehensive incomeTranslation differences relating to fi nancial statements of foreign operations (680) 149

Exchange differences on monetary items forming part of net investment in foreign

operations (2,149) 1,465

Other comprehensive income for the year, net of income tax (2,829) 1,614

Total comprehensive income for the year 14,293 9,652

Attributable to:Owners of the Company 14,293 9,652

Total comprehensive income for the year 14,293 9,652


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Share capital

Treasury shares

Foreign currency

translation reserve

Accumulated profi ts

Totalequity

$’000 $’000 $’000 $’000 $’000

GroupAt 1 January 2008 117,926 – (1,900) (4,564) 111,462

Profi t for the year – – – 8,038 8,038

Other comprehensive incomeTranslation differences relating to fi nancial

statements of foreign operations – – 149 – 149

Exchange differences on monetary items forming

part of net investment in foreign operations – – 1,465 – 1,465

Total comprehensive income for the year – – 1,614 8,038 9,652

Transactions with owners, recorded directly in equityPurchase of treasury shares – (186) – – (186)

At 31 December 2008 117,926 (186) (286) 3,474 120,928


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Share capital

Treasury shares

Foreign currency

translation reserve

Statutory reserve

Accumulated profi ts

Totalequity

$’000 $’000 $’000 $’000 $’000 $’000

GroupAt 1 January 2009 117,926 (186) (286) – 3,474 120,928

Profi t for the year – – – – 17,122 17,122

Other comprehensive incomeTranslation differences relating to fi nancial

statements of foreign operations – – (680) – – (680)

Exchange differences on monetary items

forming part of net investment in foreign

operations – – (2,149) – – (2,149)

Total comprehensive income for the year – – (2,829) – 17,122 14,293

Transactions with owners, recorded directly in equityIssue of shares 43,400 – – – – 43,400

Share issue expenses (1,056) – – – – (1,056)

Dividends paid – – – – (386) (386)

Treasury shares transferred – 54 – (7) – 47

Share-based payment transactions – – – – 337 337

At 31 December 2009 160,270 (132) (3,115) (7) 20,547 177,563


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Consolidated Cash Flow Statement

Note 2009 2008$’000 $’000

Cash fl ow from operating activitiesProfi t for the year 17,122 8,038

Adjustments for:Income tax expense 964 177

Depreciation expense 4 8,477 3,730

Gain on disposal of plant and equipment (1,283) (3)

Finance expense 2,509 1,782

Finance income (266) (439)

Plant and equipment written off – 4

Impairment loss on trade receivables 1,177 289

Impairment loss on plant and equipment 4 3,799 –

Equity-settled share-based payment transactions 384 –

Share of results of joint ventures (2,421) 107

Operating profi t before changes in working capital 30,462 13,685

Changes in working capital:Inventories – (1,036)

Trade receivables and other assets (25,024) (6,860)

Trade and other payables 5,151 21,975

Cash generated from operating activities 10,589 27,764

Income taxes paid (493) (153)

Net cash from operating activities 10,096 27,611

Cash fl ows from investing activitiesAdvance payments for purchase of plant and equipment (17,995) (16,517)

Interest received 212 507

Payment for investing in joint ventures (1,275) (2,140)

Proceeds from disposal of plant and equipment 9,465 40

Proceeds from disposal of investment in joint venture – 715

Purchase of plant and equipment (126,647) (79,347)

Net cash used in investing activities (136,240) (96,742)

Cash fl ows from fi nancing activitiesInterest paid (2,559) (1,763)

Net proceeds from issue of new shares 42,344 –

Purchase of treasury shares – (186)

Dividends paid (386) –

Proceeds from borrowings 113,850 47,964

Repayment of borrowings (21,874) (7,034)

Deposits pledged (4,817) –

Net cash from fi nancing activities 126,558 38,981

Net increase/(decrease) in cash and cash equivalents 414 (30,150)

Cash and cash equivalents at 1 January 34,697 64,879

Effect of exchange rate fl uctuations 356 (32)

Cash and cash equivalents at 31 December 10 35,467 34,697


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These notes form an integral part of the fi nancial statements.

The fi nancial statements were authorised for issue by the Board of Directors on 18 March 2010.

1 Domicile and activities

Ezion Holdings Limited (the “Company”) is incorporated in the Republic of Singapore and has its registered offi ce

at 15 Hoe Chiang Road, #12-05 Tower Fifteen, Singapore 089316.

The principal activities of the Company are those of an investment holding company and provision of

management services to its subsidiaries. The principal activities of the subsidiaries are set out in note 5 to the

fi nancial statements.

The consolidated fi nancial statements relate to the Company and its subsidiaries (together referred to as the

“Group”) and the Group’s interests in joint ventures.

2 Basis of preparation

(a) Statement of compliance

The fi nancial statements have been prepared in accordance with Singapore Financial Reporting Standards

(“FRS”).

(b) Basis of measurement

The fi nancial statements have been prepared on the historical cost basis, except as disclosed in the

accounting policies set out in note 3.

(c) Functional and presentation currency

The fi nancial statements are presented in Singapore dollars which is the Company’s functional currency.

All fi nancial information presented in Singapore dollars has been rounded to the nearest thousand, unless

otherwise stated.

(d) Use of estimates and judgement

The preparation of financial statements in conformity with FRSs requires management to make

judgements, estimates and assumptions that affect the application of accounting policies and the reported

amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimates are revised and in any future periods

affected.

Judgement made by management in the application of FRSs, and accounting policies that have the most

signifi cant effect on the amounts recognised in the fi nancial statements and that have a signifi cant risk of

resulting in a material adjustment within the next fi nancial year are discussed in note 25.

The accounting policies set out below have been applied consistently to all periods presented in these

consolidated fi nancial statements, and have been applied consistently by the Group.

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2 Basis of preparation (cont’d)

(e) Changes in accounting policies

(i) Overview

Starting as of 1 January 2009 on adoption of new/revised FRSs, the Group has changed its

accounting policies in the following areas:

Determination and presentation of operating segments

Presentation of fi nancial statements

Disclosure of contractual maturity analysis

(ii) Determination and presentation of operating segments

As of 1 January 2009, the Group determines and presents operating segments based on the

information that internally is provided to the top level management, who is the Group’s chief

operating decision maker. This change in accounting policy is due to the adoption of FRS

108 Operating Segments. Previously operating segments were determined and presented in

accordance with FRS 14 Segment Reporting. The new accounting policy in respect of operating

segment disclosures is presented as follows.

Comparative segment information has been re-presented in conformity with the transitional

requirements of such standard. Since the change in accounting policy only impacts presentation

and disclosure aspects, there is no impact on earnings per share.

An operating segment is a component of the Group that engages in business activities from

which it may earn revenues and incur expenses, including revenues and expenses that relate to

transactions with any of the Group’s other components. An operating segment’s operating results

are reviewed regularly by the top level management to make decisions about resources to be

allocated to the segment and assess its performance, and for which discrete fi nancial information

is available.

Segment results that are reported to the top level management include items directly attributable

to a segment as well as those that can be allocated on a reasonable basis. Unallocated items

comprise mainly corporate assets (primarily the Company’s plant and equipment), head offi ce

expenses, and income tax liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire plant and

equipment.

(iii) Presentation of fi nancial statements

The Group applies revised FRS 1 Presentation of Financial Statements (2008), which became

effective as of 1 January 2009. As a result, the Group presents in the consolidated statement

of changes in equity all owner changes in equity, whereas all non-owner changes in equity are

presented in the consolidated statement of comprehensive income.

Comparative information has been re-presented so that it also is in conformity with the revised

standard. Since the change in accounting policy only impacts presentation aspects, there is no

impact on earnings per share.

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2 Basis of preparation (cont’d)

(e) Changes in accounting policies (cont’d)

(iv) Disclosure of contractual maturity analysis

The Group applies the amendments to FRS 107 Financial Instruments: Disclosures, which became

effective as of 1 January 2009. As a result, the Group discloses the maximum amount of issued

fi nancial guarantees in the earliest time period for which the guarantees could be called upon in

the contractual maturity analysis. Previously, the Group disclosed the maximum amount of issued

fi nancial guarantees in the contractual maturity analysis only if the Group assessed that it is

probable that the guarantee would be called upon.

FRS 107 does not require comparative information to be restated and therefore, the contractual

maturity analysis for the comparative period has not been represented. Since the change in

accounting policy only impacts presentation and disclosure aspects, there is no impact on earnings

per share.

3 Signifi cant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these fi nancial

statements, and have been applied consistently by Group entities, except as explained in note 2(e), which

addresses changes in accounting policies.

(a) Consolidation

(i) Business combinations

Business combinations are accounted for under the purchase method. The cost of an acquisition

is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or

assumed at the date of exchange, plus costs directly attributable to the acquisition.

The excess of the Group’s interest in the net fair value of the identifi able assets, liabilities and

contingent liabilities over the cost of acquisition is credited to the profi t or loss in the period of the

acquisition.

(ii) Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to

govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In

assessing control, potential voting rights that are presently exercisable are taken into account. The

fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the

date that control commences until the date that control ceases.

(iii) Joint ventures

Joint ventures are those entities over whose activities the Group has joint control, established

by contractual agreement and requiring unanimous consent for strategic fi nancial and operating

decisions. Joint ventures are accounted for using the equity method. The consolidated fi nancial

statements include the Group’s share of the income, expenses and equity movements of joint

ventures, after adjustments to align the accounting policies with those of the Group, from the date

that signifi cant infl uence or joint control commences until the date that signifi cant infl uence or joint

control ceases.

When the Group’s share of losses exceeds its interest in a joint venture, the carrying amount

of that interest (including any long-term investments) is reduced to zero and the recognition of

further losses is discontinued except to the extent that the Group has an obligation or has made

payments on behalf of the investee.

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3 Signifi cant accounting policies (cont’d)

(a) Consolidation (cont’d)

(iv) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-

group transactions, are eliminated in preparing the consolidated fi nancial statements. Unrealised

gains arising from transactions with joint ventures are eliminated against the investment to the

extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as

unrealised gains, but only to the extent that there is no evidence of impairment.

(v) Accounting for subsidiaries and joint ventures by the Company

Investments in subsidiaries and joint ventures are stated in the Company’s balance sheet at cost

less accumulated impairment losses.

(b) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the

Group entities at the exchange rates at the dates of the transactions. Monetary assets and

liabilities denominated in foreign currencies at the reporting date are retranslated to the functional

currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in

foreign currencies that are measured at fair value are retranslated to the functional currency at the

exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in the profi t or loss, except for

differences arising on the retranslation of monetary items that in substance form part of the Group’s

net investment in foreign operations (see below).

(ii) Foreign operations

The assets and liabilities of foreign operations are translated to Singapore dollars at exchange rates

at the reporting date. The income and expenses of foreign operations are translated to Singapore

dollars at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income. When a foreign

operation is disposed of, in part or in full, the relevant amount in the foreign currency translation

reserve is transferred to profi t or loss as part of the profi t or loss on disposal.

(iii) Net investment in foreign operations

Exchange differences arising from monetary items that in substance form part of the Company’s net

investment in a foreign operation are recognised in the Company’s profi t or loss. Such exchange

differences are reclassifi ed to other comprehensive income in the consolidated fi nancial statements.

When the foreign operation is disposed of, the cumulative amount in equity is transferred to profi t

or loss as an adjustment to the profi t or loss arising on disposal.

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(c) Plant and equipment

(i) Owned assets

Items of plant and equipment are measured at cost less accumulated depreciation and

accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset.

When parts of an item of plant and equipment have different useful lives, they are accounted for as

separate items (major components) of plant and equipment.

(ii) Subsequent expenditure

The cost of replacing part of an item of plant and equipment is recognised in the carrying amount

of the item if it is probable that the future economic benefi ts embodied within the part will fl ow to

the Group and its cost can be measured reliably. The costs of the day-to-day servicing of plant

and equipment are recognised in profi t or loss as incurred.

Costs incurred on subsequent dry-docking of vessels are capitalised and depreciated over the

shorter of period to next estimated dry-docking and fi ve years. When signifi cant dry-docking costs

are incurred prior to the expiry of the depreciation period, the remaining costs of the previous dry-

docking are written off in the month of the next dry-docking.

(iii) Disposal

Gains or losses arising from the retirement or disposal of plant and equipment are determined by

comparing the proceeds from disposal with the carrying amount of the asset, and are recognised

net within other income in profi t or loss.

(iv) Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its

residual value.

Depreciation is recognised in the profi t or loss on a straight-line basis over the estimated useful

lives of each part of an item of plant and equipment, since this most closely refl ects the expected

pattern of consumption of the future economic benefi ts embodied in the asset. Leased assets are

depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain

that the Group will obtain ownership by the end of the lease term.

The estimated useful lives for the current and comparative periods are as follows:

Vessels 8 – 25 years

Assets on board the vessels 3 – 10 years

Dry-docking expenditure 5 years

Rig and other oil and gas related assets 10 – 15 years

Plant and offi ce equipment 2 years

Renovation, furniture and fi ttings 2 years

Motor vehicles 5 years

Depreciation methods, useful lives and residual values are reviewed at each fi nancial year-end, and

adjusted as appropriate.

No depreciation is provided on assets under construction.

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(d) Financial instruments

(i) Non-derivative fi nancial assets

The Group initially recognises loans and receivables and deposits on the date that they are

originated. All other fi nancial assets (including assets designated at fair value through profi t or loss)

are recognised initially on the trade date at which the Group becomes a party to the contractual

provisions of the instrument.

The Group derecognises a fi nancial asset when the contractual rights to the cash fl ows from the

asset expire, or it transfers the rights to receive the contractual cash fl ows on the fi nancial asset in

a transaction in which substantially all the risks and rewards of ownership of the fi nancial asset are

transferred. Any interest in transferred fi nancial assets that is created or retained by the Group is

recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the balance sheet when,

and only when, the Group has a legal right to offset the amounts and intends either to settle on a

net basis or to realise the asset and settle the liability simultaneously.

Loans and receivables

Loans and receivables are fi nancial assets with fi xed or determinable payments that are not quoted

in an active market. Such assets are recognised initially at fair value plus any directly attributable

transaction costs. Subsequent to initial recognition, loans and receivables are measured at

amortised cost using the effective interest rate method, less any impairment losses.

Loans and receivables comprise trade receivables and other assets.

Cash and cash equivalents comprise cash balances and bank deposits.

(ii) Non-derivative fi nancial liabilities

The Group initially recognises debt securities issued and subordinated liabilities on the date that

they are originated. All other fi nancial liabilities (including liabilities designated at fair value through

profi t or loss) are recognised initially on the trade date at which the Group becomes a party to the

contractual provisions of the instrument.

The Group derecognises a fi nancial liability when its contractual obligations are discharged or

cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the balance sheet when,

and only when, the Group has a legal right to offset the amounts and intends either to settle on a

net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative fi nancial liabilities: loans and borrowings, and trade and

other payables.

Such fi nancial liabilities are recognised initially at fair value plus any directly attributable transaction

costs. Subsequent to initial recognition, these fi nancial liabilities are measured at amortised cost

using the effective interest rate method.

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(d) Financial instruments (cont’d)

(ii) Non-derivative fi nancial liabilities (cont’d)

Intra-group fi nancial guarantees

Financial guarantees are fi nancial instruments issued by the Group that requires the issuer to make

specifi ed payments to reimburse the holder for the loss it incurs because a specifi ed debtor fails to

meet payment when due in accordance with the original or modifi ed terms of a debt instrument.

Financial guarantees are recognised initially at fair value and are classifi ed as fi nancial liabilities.

Subsequent to initial measurement, the fi nancial guarantees are stated at the higher of the initial

fair value less cumulative amortisation and the amount that would be recognised if they were

accounted for as contingent liabilities. When fi nancial guarantees are terminated before their

original expiry date, the carrying amount of the fi nancial guarantees is transferred to profi t or loss.

(iii) Share capital

Ordinary shares

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of

ordinary shares and share options are recognised as a deduction from equity, net of any tax

effects.

Repurchase of share capital (treasury shares)

When share capital recognised as equity is repurchased, the amount of the consideration paid,

which includes directly attributable costs, net of any tax effects, is recognised as a deduction from

equity. Repurchased shares are classifi ed as treasury shares and are presented as a deduction

from total equity. When treasury shares are sold or reissued subsequently, the amount received

is recognised as an increase in equity, and the resulting surplus or defi cit on the transaction is

transferred to / from retained earnings.

(e) Leases

(i) When entities within the Group are lessees of a fi nance lease

Leased assets in which the Group assumes substantially all the risks and rewards of ownership

are classifi ed as fi nance leases. Upon initial recognition, the leased asset is measured at an

amount equal to the lower of its fair value and the present value of the minimum lease payments.

Subsequent to initial recognition, the asset is accounted for in accordance with the accounting

policy applicable to that asset. Leased assets are depreciated over the shorter of the lease term

and their estimated useful lives. Lease payments are apportioned between fi nance expense and

reduction of the lease liability. The fi nance expense is allocated to each period during the lease

term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the

remaining term of the lease when the lease adjustment is confi rmed.

At inception, an arrangement that contains a lease is accounted for as such based on the terms

and conditions even though the arrangement is not in the legal form of a lease.

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(e) Leases (cont’d)

(ii) When entities within the Group are lessees of an operating lease

Where the Group has the use of assets under operating leases, payments made under the leases

are recognised in profi t or loss on a straight-line basis over the term of the lease. Lease incentives

received are recognised in profi t or loss as an integral part of the total lease payments made.

Contingent rentals are charged to profi t or loss in the accounting period in which they are incurred.

(iii) When entities within the Group are lessors of a fi nance lease

When entities within the Group are lessor of the fi nance lease, the amounts due under the leases,

after deduction of unearned charges, are included in “Finance lease receivables” as appropriate.

The difference between the gross receivable and present value of the receivable is recognised as

unearned interest. Interest receivable is recognised over the periods of the leases so as to give a

constant rate of return on the net investment in the leases.

(iv) When entities within the Group are lessors of an operating lease

Where the Group leases out assets under operating leases, the leased assets are included in

balance sheets according to their nature and, where applicable, are depreciated in accordance with

Group’s depreciation policies. Revenue arising from operating leases is recognised in accordance

with the Group’s revenue recognition policies.

(f) Inter-company loans

In the Company’s fi nancial statements, inter-company loans to subsidiaries are stated at fair value

at inception. The difference between the fair value and the loan amount at inception is recognised as

additional investments in subsidiaries in the Company’s fi nancial statements. Subsequently, these loans

are measured at amortised cost using the effective interest rate method. The unwinding of the difference

is recognised as interest income in profi t or loss over the expected repayment period.

Inter-company loans, where settlement is neither planned nor likely to occur in the foreseeable future,

are in substance, part of the holding company’s net investment in the entities and are stated at cost less

accumulated impairment losses.

Such balances are eliminated in full in the Group’s consolidated fi nancial statements.

(g) Impairment

(i) Financial assets (including receivables)

A fi nancial asset not carried at fair value through profi t or loss is assessed at each reporting date

to determine whether there is objective evidence that it is impaired. A fi nancial asset is impaired if

objective evidence indicates that a loss event has occurred after the initial recognition of the asset,

and that the loss event had a negative effect on the estimated future cash fl ows of that asset that

can be estimated reliably.

Objective evidence that fi nancial assets are impaired can include default or delinquency by a

debtor, restructuring of an amount due to the Group on terms that the Group would not consider

otherwise, indications that a debtor or issuer will enter bankruptcy, the disappearance of an active

market for a security. In addition, for an investment in an equity security, a signifi cant or prolonged

decline in its fair value below its cost is objective evidence of impairment.

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(g) Impairment (cont’d)

(i) Financial assets (including receivables) (cont’d)

The Group considers evidence of impairment for receivables at both a specifi c asset and collective

level. All individually signifi cant receivables are assessed for specifi c impairment. All individually

signifi cant receivables found not to be specifi cally impaired are then collectively assessed for any

impairment that has been incurred but not yet identifi ed. Receivables that are not individually

signifi cant are collectively assessed for impairment by grouping together receivables with similar

risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default,

timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as

to whether current economic and credit conditions are such that the actual losses are likely to be

greater or less than suggested by historical trends.

An impairment loss in respect of a fi nancial asset measured at amortised cost is calculated as the

difference between its carrying amount and the present value of the estimated future cash fl ows

discounted at the asset’s original effective interest rate. Losses are recognised in profi t or loss and

refl ected in an allowance account against receivables. Interest on the impaired asset continues

to be recognised through the unwinding of the discount. When a subsequent event causes the

amount of impairment loss to decrease, the decrease in impairment loss is reversed through profi t

or loss.

(ii) Non-fi nancial assets

The carrying amounts of the Group’s non-fi nancial assets, other than inventories, are reviewed

at each reporting date to determine whether there is any indication of impairment. If any such

indication exists, then the asset’s recoverable amount is estimated. For goodwill, the recoverable

amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use

and its fair value less costs to sell. In assessing value in use, the estimated future cash fl ows

are discounted to their present value using a pre-tax discount rate that refl ects current market

assessments of the time value of money and the risks specifi c to the asset. For the purpose of

impairment testing, assets that cannot be tested individually are grouped together into the smallest

group of assets that generates cash infl ows from continuing use that are largely independent of the

cash infl ows of other assets or groups of assets (the “cash-generating unit, or CGU”). Subject to

an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which

goodwill has been allocated are aggregated so that the level at which impairment is tested refl ects

the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired

in a business combination is allocated to groups of CGUs that are expected to benefi t from the

synergies of the combination.

The Group’s corporate assets do not generate separate cash infl ows. If there is an indication that

a corporate asset may be impaired, then the recoverable amount is determined for the CGU to

which the corporate asset belongs.

An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its

estimated recoverable amount. Impairment losses are recognised in profi t or loss. Impairment

losses recognised in respect of CGUs are allocated fi rst to reduce the carrying amount of any

goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the

unit (group of units) on a pro rata basis.

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(g) Impairment (cont’d)

(ii) Non-fi nancial assets (cont’d)

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment

losses recognised in prior periods are assessed at each reporting date for any indications that the

loss has decreased or no longer exists. An impairment loss is reversed if there has been a change

in the estimates used to determine the recoverable amount. An impairment loss is reversed only to

the extent that the asset’s carrying amount does not exceed the carrying amount that would have

been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(h) Inventories

Inventories are stated at the lower of cost and net realisable value.

The cost of inventories is calculated using the fi rst-in-fi rst-out principle, and includes expenditure incurred

in acquiring the inventories, production or conversion costs and other costs incurred in bringing the

inventories to their present location and condition. When inventories are consumed, the carrying amount

of those inventories is recognised in income statement in the year in which the consumption occurs.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated

costs of completion and selling expenses.

(i) Employee benefi ts

(i) Defi ned contribution plans

A defi ned contribution plan is a post-employment benefi t plan under which an entity pays fi xed

contributions into a separate entity and will have no legal or constructive obligations to pay further

amounts. Obligations for contributions to defi ned contribution plans are recognised as an expense

in profi t or loss in the periods during which services are rendered by employees.

(ii) Short-term employee benefi ts

Short-term employee benefi t obligations are measured on an undiscounted basis and are expensed

as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profi t-

sharing plans if the Group has a present legal or constructive obligation to pay this amount as a

result of past service provided by the employee and the obligation can be estimated reliably.

(iii) Share-based payment transactions

The grant date fair value of share-based payment awards granted to employees is recognised as

an employee expense, with a corresponding increase in equity, over the period that the employees

unconditionally become entitled to the awards. The amount recognised as an expense is adjusted

to refl ect the number of awards for which the related service and non-market vesting conditions

are expected to be met, such that the amount ultimately recognised as an expense is based on

the number of awards that do meet the related service and non-market performance conditions at

the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair

value of the share-based payment is measured to refl ect such conditions and there is no true-up

for differences between expected and actual outcomes.

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(j) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive

obligation that can be estimated reliably, and it is probable that an outfl ow of economic benefi ts will be

required to settle the obligation. Provisions are determined by discounting the expected future cash fl ows

at a pre-tax rate that refl ects current market assessments of the time value of money and the risks specifi c

to the liability.

(k) Revenue recognition

(i) Chartering and offshore support services

Revenue from chartering and offshore support services relates to chartering of vessels and is

recognised in profi t or loss on a straight-line basis over the respective term of the charter.

(ii) Rendering of marine services

Revenue from rendering of marine services is recognised when the related services have been

rendered.

(iii) Sale of goods

Revenue from the sale of goods is measured at the fair value of the consideration received or

receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is

recognised when the signifi cant risks and rewards of ownership have been transferred to the buyer,

recovery of the consideration is probable, the associated costs and possible return of goods can

be estimated reliably, there is no continuing management involvement with the goods, and the

amount of revenue can be measured reliably.

(iv) Management services fees

Management services fees are recognised when the related services are rendered.

(v) Dividend income

Dividend income is recognised in profi t or loss when the shareholders’ right to receive payment is

established.

(l) Finance income and expenses

Finance income comprises interest income on bank deposits and fi nance leases. Interest income is

recognised as it accrues in profi t or loss, using the effective interest rate method.

Finance expenses comprise interest expense on borrowings. All borrowing costs are recognised in profi t

or loss using the effective interest rate method, except to the extent that they are capitalised as being

directly attributable to the acquisition, construction or production of an asset which necessarily takes a

substantial period of time to be prepared for its intended use or sale.

(m) Government grants – Jobs Credit Scheme

Cash grants received from the government in relation to the Jobs Credit Scheme are recognised upon

receipt. Such grants are provided to defray the wage costs incurred by the Group and are offset against

staff costs in the fi nancial statements.

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(n) Income tax expense

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profi t

or loss except to the extent that it relates to items recognised directly in equity or other comprehensive

income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using

tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable or

receivable in respect of previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets

and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. Deferred tax

is not recognised for the following temporary differences: the initial recognition of assets or liabilities in

a transaction that is not a business combination and that affects neither accounting nor taxable profi t,

and differences relating to investments in subsidiaries and joint ventures to the extent that it is probable

that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable

temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax

rates that are expected to be applied to the temporary differences when they reverse, based on the laws

that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities

are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to

income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but

they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be

realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences,

to the extent that it is probable that future taxable profi ts will be available against which they can be

utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is

no longer probable that the related tax benefi t will be realised.

(o) Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS

is calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the

weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profi t or loss attributable to ordinary shareholders and the

weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of

all dilutive potential ordinary shares, which comprise share options granted to employees.

(p) Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may

earn revenues and incur expenses, including revenues and expenses that relate to transactions with any

of the Group’s other components. All operating segments’ operating results are reviewed regularly by the

Group’s top level management to make decisions about resources to be allocated to the segment and

assess its performance, and for which discrete fi nancial information is available.

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Notes to the Financial Statements4

P

lant

and e

quip

ment

Vess

els

und

er

cons

truc

tion

Vess

els

Ass

ets

on

boar

d th

e ve

ssel

s

Dry

-do

ckin

g ex

pend

itur

e

Rig

and

ot

her

oil

and

gas

rela

ted

asse

ts

Pla

nt a

nd

offi

ce

equi

pmen

t

Ren

ovat

ion,

fu

rnit

ure

and

fi tt

ings

Mot

or

vehi

cles

Tota

l $’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

Gro

upC

ost

At

1 J

anuar

y 2008

31,6

80

41,5

37

3,7

98

––

55

112

167

77,3

49

Ad

diti

ons

18,7

05

44,7

65

10

160

6,3

88

99

248

180

70,5

55

Dis

posa

ls–

––

––

(3)

(112)

–(1

15)

Writ

e off

––

––

–(5

)–

–(5

)

Tran

slat

ion d

iffer

ence

s on c

onso

lidat

ion

49

345

(27)

291

––

–460

At

31 D

ecem

ber

2008

50,4

34

86,6

47

3,7

81

162

6,4

79

146

248

347

148,2

44

Ad

diti

ons

99,6

10

43,8

94

34

25

–44

55

113

143,7

75

Dis

posa

ls–

(8,1

82)

––

––

––

(8,1

82)

Rec

lass

ifi ca

tion

(232)

232

––

––

––

–

Tran

slat

ion d

iffer

ence

s on c

onso

lidat

ion

(4,2

71)

(2,7

18)

(66)

(4)

(111)

––

–(7

,170)

At

31 D

ecem

ber

2009

145,5

41

119,8

73

3,7

49

183

6,3

68

190

303

460

276,6

67

Acc

umul

ated

dep

reci

atio

n an

d i

mpa

irm

ent

loss

es

At

1 J

anuar

y 2008

–700

235

––

10

25

25

995

Dep

reci

atio

n c

har

ge

for

the

year

–3,0

49

393

3106

40

72

67

3,7

30

Dis

posa

ls–

––

––

(2)

(76)

–(7

8)

Writ

e off

––

––

–(1

)–

–(1

)

Tran

slat

ion d

iffer

ence

s on c

onso

lidat

ion

–35

4–

2–

––

41

At

31 D

ecem

ber

2008

–3,7

84

632

3108

47

21

92

4,6

87

Dep

reci

atio

n c

har

ge

for

the

year

–7,0

76

412

38

659

59

154

79

8,4

77

Imp

airm

ent

loss

es–

3,7

99

––

––

––

3,7

99

Tran

slat

ion d

iffer

ence

s on c

onso

lidat

ion

–(3

04)

(25)

(2)

(25)

––

–(3

56)

At

31 D

ecem

ber

2009

–14,3

55

1,0

19

39

742

106

175

171

16,6

07

Car

ryin

g am

ount

At

1 J

anuar

y 2008

31,6

80

40,8

37

3,5

63

––

45

87

142

76,3

54

At

31 D

ecem

ber

2008

50,4

34

82,8

63

3,1

49

159

6,3

71

99

227

255

143,5

57

At

31 D

ecem

ber

2009

145,5

41

105,5

18

2,7

30

144

5,6

26

84

128

289

260,0

60

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4 Plant and equipment (cont’d)

Plant and offi ce

equipment

Renovation, furniture

and fi ttingsMotor

vehicles Total $’000 $’000 $’000 $’000

CompanyCostAt 1 January 2008 50 112 167 329

Additions 96 248 180 524

Disposals (3) (112) – (115)

At 31 December 2008 143 248 347 738

Additions 29 55 113 197

At 31 December 2009 172 303 460 935

Accumulated depreciation and impairment lossesAt 1 January 2008 10 25 25 60

Depreciation charge for the year 37 72 67 176

Disposals (2) (76) – (78)

At 31 December 2008 45 21 92 158

Depreciation charge for the year 55 154 79 288

At 31 December 2009 100 175 171 446

Carrying amountAt 1 January 2008 40 87 142 269

At 31 December 2008 98 227 255 580

At 31 December 2009 72 128 289 489

Impairment loss

During the year ended 31 December 2009, the Group recognised an impairment loss of $3,799,000 (2008: Nil)

with respect to the potential divestment of the Group’s non-strategic vessels.

Security

The vessels and rig are pledged to secure the term loan facilities granted by fi nancial institutions (see note 13).

The depreciation charge of the Group is recognised in the following line items of profi t or loss:

Group 2009 2008$’000 $’000

Cost of sales 8,185 3,551

Administrative expenses 292 179

8,477 3,730

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5 Subsidiaries

Company2009 2008$’000 $’000

Equity investments, at cost 15,389 5,429

Impairment losses (200) (200)

15,189 5,229

Loans to subsidiaries 125,784 82,424

140,973 87,653

The loans to subsidiaries are interest-free, unsecured and settlement is neither planned nor likely to occur in

the foreseeable future. As the amounts are, in substance, a part of the Company’s net investments in the

subsidiaries, they are stated at cost.

Details of the subsidiaries are as follows:

Name of subsidiary Principal activitiesCountry of

incorporationEquity held by

the Group2009 2008

% %

Teras Transporter Pte Ltd * Ship owner and provision of ship

chartering services

Singapore 100 100

Teras Transporter 2 Pte Ltd * Ship owner and provision of ship

chartering services

Singapore 100 100

Northern Offshore Pte Ltd * Shipping agent and provision of ship

chartering services, ship management

services and engineering works

Singapore 100 100

Teras Offshore Pte Ltd * Shipping agent and provision of ship

chartering services, ship management

services and engineering works

Singapore 100 100

Teras 281 Pte Ltd * Ship owner and provision of ship

chartering services

Singapore 100 100


chartering services

Singapore 100 100


chartering services

Singapore 100 100


chartering services

Singapore 100 100


chartering services

Singapore 100 100


chartering services

Singapore 100 100

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5 Subsidiaries (cont’d)



the Group2009 2008

% %


chartering services

Singapore 100 100

Teras Conquest 1 Pte Ltd * Ship owner and provision of ship

chartering services

Singapore 100 100


chartering services

Singapore 100 100


chartering services

Singapore 100 100


chartering services

Singapore 100 100

Teras Atlantic Pte Ltd * Ship owner and provision of ship

chartering services

Singapore 100 100

Teras Pacifi c Pte Ltd * Ship owner and provision of ship

chartering services

Singapore 100 100

Teras Progress Pte Ltd * Ship owner and provision of ship

chartering services

Singapore 100 100

Meridian Maritime Pte Ltd * Ship owner and provision of ship

chartering services

Singapore 100 100

Ezion Maritime Pte Ltd * Shipbuilding and provision of

engineering and management services

Singapore 100 100

Ezion Investments Pte Ltd * Investment holding Singapore 100 100

Northern Offshore (Australia)

Pty Ltd **, #

Shipping agent and provision of ship

chartering services

Australia – 100

Teras Oilfi eld Support Ltd ** Rig and other related equipment owner

and provision of rig chartering and

related services

British Virgin

Islands

100 100

Teras Cargo Logistics Ltd ** Ship owner, provision of ship chartering

services and cargo transportation

British Virgin

Islands

100 100

Teras Harta Maritime Ltd ** Ship owner and provision of ship

chartering services

Bahamas 100 100

Teras Pegasus Pte Ltd* Ship owner and provision of ship

chartering services

Singapore 100 –

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5 Subsidiaries (cont’d)



the Group2009 2008

% %

Teras 250 Pte Ltd* Ship owner and provision of ship

chartering services

Singapore 100 –

Teras Cargo Transport Pte

Ltd * and its subsidiaries:

Cargo transportation Singapore 100 100

Teras Seaprojects Pte Ltd* Cargo transportation Singapore 100 –

Teras America LLC** and its

subsidiary:

Cargo transportation United States of

America

100 –

Teras Cargo Transport

(America) LLC**


America

100 –

Meridian Maritime Cargo

Logistics LLC**


America

100 –

* Audited by KPMG LLP

** Not required to be audited in accordance with the law of the country of incorporation

# In June 2009, the subsidiary issued new shares to two joint venture parties, which resulted in a dilution

of its ownership percentage from 100% to 33%, and the entity amended its name to Offshore Marine

Services Alliance Pty Limited.

6 Joint ventures

Group Company2009 2008 2009 2008$’000 $’000 $’000 $’000

Investment in joint ventures 3,615 652 725 725

Loans to joint ventures 6,441 5,462 5,292 5,462

10,056 6,114 6,017 6,187

The loans to joint ventures are interest-free, unsecured and settlement is neither planned nor likely to occur in

the foreseeable future. As the amounts are, in substance, a part of the Company’s net investments in the joint

ventures, they are stated at cost.

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6 Joint ventures (cont’d)

Details of joint ventures are as follows:

Name of joint venturesCountry of

incorporationEquity held

by the Group2009 2008

% %

Eminent Offshore Logistic Pte Ltd*,# and its subsidiaries: Singapore 50 50

Eminent 237 Pte Ltd* Singapore 50 50







Offshore Marine Services Alliance Pty Ltd** Australia 33 –

OMSA Ningaui Pte Ltd* Singapore 50 –

* Audited by KPMG LLP

** Audited by Deloitte Touche Tohmatsu, Australia

# A director of the Company has fi nancial interest in the other shareholder of the joint venture.

The summarised fi nancial information of the joint ventures representing the Group’s share are as follows:

2009 2008$’000 $’000

Assets and liabilitiesCurrent assets 9,723 3,138

Non-current assets 14,889 12,808

Total assets 24,612 15,946

Current liabilities 10,506 2,790

Non-current liabilities 10,494 12,516

Total liabilities 21,000 15,306

ResultsRevenue 19,908 1,307

Expenses (17,487) (1,414)

Profi t/(loss) after taxation 2,421 (107)

There were no capital commitments and contingent liabilities as at 31 December 2008 and 2009.

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7 Other assets

Group Company2009 2008 2009 2008$’000 $’000 $’000 $’000

Non-currentNon-trade amounts due from a subsidiary – – 4,825 6,000

Finance lease receivables 192 240 – –

192 240 4,825 6,000

CurrentAdvances to suppliers:

- trade 8,243 3,175 – 4

- non-trade 17,492 8,101 10 –

Deposits to suppliers:

- trade 3 303 – 126

- non-trade 143 9,359 143 –

Deferred expenditure 771 – – –

Finance lease receivable 43 30 – –

Prepayments 422 695 18 23

Non-trade amounts due from:

- subsidiaries – – 9,097 4,145

- joint ventures 1,630 140 397 140

- affi liates – 43 – 43

Interest receivables 54 – 54 –

Other receivables – 4 – 4

28,801 21,850 9,719 4,485

Total 28,993 22,090 14,544 10,485

An affi liate is a company in which a director of the Company has substantial fi nancial interest or is a director.

The non-trade amounts due from a subsidiary amounting to $5,896,000 (2008: $7,091,000) are unsecured,

interest-free and repayable by 2015 (2008: 2015). The remaining outstanding balances are unsecured, interest-

free and repayable on demand.

Outstanding balances with joint ventures and affi liates are unsecured, interest-free and repayable on demand.

There is no allowance for doubtful debts arising from outstanding balances with related parties.

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7 Other assets (cont’d)

Future minimum lease receipts under fi nance leases together with the present value of the net minimum lease

receipts for the Group are as follows:

Total future minimum lease

receiptsUnearned interest

Present value

$’000 $’000 $’000

At 31 December 2009Within 1 year 133 (90) 43

After 1 year but within 5 years 296 (104) 192

429 (194) 235

At 31 December 2008Within 1 year 136 (106) 30

After 1 year but within 5 years 437 (197) 240

573 (303) 270

The weighted average effective interest rate for fi nance lease receivables is 41.25% (2008: 41.25%) per annum.

8 Inventories

Inventories relate to marine equipment held for resale and are stated at cost.

9 Trade receivables

Group Company2009 2008 2009 2008$’000 $’000 $’000 $’000

Trade receivables – third parties 25,498 6,494 – 26

Impairment losses (1,562) (551) – –

Net trade receivables – third parties 23,936 5,943 – 26

Amounts due from:

- affi liates 400 914 – –

- subsidiaries – – 4,315 3,613

400 914 4,315 3,613

Impairment losses (141) – – –

259 914 4,315 3,613

Total trade receivables 24,195 6,857 4,315 3,639

Outstanding balances with affi liates and subsidiaries are unsecured, interest-free and repayable on demand.

The Group’s primary exposure to credit risk relating to trade receivables arising mainly from the chartering income

by the subsidiaries. These customers are internationally dispersed, and are engaged in a wide spectrum of

offshore activities. Management believes that no additional credit risk beyond amounts provided for collection

losses is inherent in the Group’s trade receivables.

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9 Trade receivables (cont’d)

The maximum exposure to credit risk for trade receivables due from third parties at the reporting date (by type of

customer) is:

Group Company2009 2008 2009 2008$’000 $’000 $’000 $’000

Multi-national companies 20,935 4,909 – –

Small-medium enterprises 2,976 898 – –

Government related entities 25 136 – 26

23,936 5,943 – 26

Impairment losses

The ageing of trade receivables due from third parties at the reporting date is:

GrossImpairment

losses GrossImpairment

losses2009 2009 2008 2008$’000 $’000 $’000 $’000

GroupNot past due or less than 60 days overdue 9,518 (350) 4,029 –

Past due 61 – 120 days 5,819 (176) 1,451 (28)

Past due more than 120 days 10,161 (1,036) 1,014 (523)

25,498 (1,562) 6,494 (551)

CompanyNot past due or less than 60 days overdue – – 26 –

The change in impairment loss in respect of trade receivables due from third parties during the year is as follows:

Group2009 2008$’000 $’000

At 1 January 551 260

Impairment loss 1,031 289

Translation differences on consolidation (20) 2

At 31 December 1,562 551

Based on historical default rates, the Group believes that no additional impairment allowance is necessary in

respect of trade receivables not past due or past due up to 120 days, except for those identifi ed as impaired by

the Group. These receivables are mainly arising from customers that have a good record with the Group.

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10 Cash and cash equivalents

Group Company2009 2008 2009 2008$’000 $’000 $’000 $’000

Cash at bank and in hand 29,284 19,625 1,528 510

Fixed deposits 11,000 15,072 11,000 14,500

Cash and cash equivalents 40,284 34,697 12,528 15,010

Deposits pledged (4,817) –

Cash and cash equivalents in the cash fl ow

statement 35,467 34,697

The interest rates for cash at bank and fi xed deposits for the Group and the Company ranges between 0.03%

to 0.75% per annum, receivable from daily to quarterly basis (2008: 0.02% to 4.35% per annum receivable from

daily to monthly basis).

The deposits were pledged as security to obtain credit facilities (note 13).

11 Share capital

Group and Company2009 2008

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

Fully paid ordinary shares, with no par value:At 1 January 643,978 117,926 643,978 117,926

Shares issued during the year 70,000 42,344 – –

At 31 December 713,978 160,270 643,978 117,926

Issuance of ordinary shares

On 26 June 2009, the Company issued 70 million shares at $0.62 per share (2008: Nil) amounting to

$42,344,000 (net of transaction costs of $1,056,000). All issued shares are fully paid.

Share buyback

Pursuant to the Share Buyback Mandate approved at the Extraordinary General Meeting on 27 April 2008, the

Company repurchased a total of 800,000 ordinary shares during the year ended 31 December 2008. The shares

were repurchased by way of market acquisitions at prices ranging from $0.1557 to $0.2975 per share and the

total consideration paid including transaction costs was $186,000. The repurchased shares were reserved as

Company’s treasury shares. This amount is classifi ed as a deduction from equity under treasury shares. At 31

December 2008, the Company held 800,000 of its own uncancelled shares.

During the year, the Company issued 230,000 treasury shares to certain employees pursuant to the Employee

Share Plan (note 16).

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11 Share capital (cont’d)

Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern

in order to provide returns for shareholders and benefi ts for other stakeholders and to maintain an optimal capital

structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may issue

new shares, buy back issued shares, obtain new borrowings or reduce its borrowings.

The Group monitors capital based on gearing ratio. The gearing ratio is calculated as net debt divided by total

equity. Net debt is calculated as fi nancial liabilities, less cash and cash equivalents. Total equity includes equity

attributable to owners of the Company and reserves.

Group2009 2008$’000 $’000

Financial liabilities 155,660 67,608

Less: Cash and cash equivalents (40,284) (34,697)

Net debt 115,376 32,911

Total equity 177,563 120,928

Gearing ratio (times) 0.65 0.27

There were no changes in the Group’s approach to capital management during the year.

The vessels-owning companies are required to have a minimum share capital of S$50,000 as required by the

Maritime and Port Authority of Singapore.

Except for the above, the Company and its subsidiaries are not subject to externally imposed capital

requirements.

12 Reserves

Group Company2009 2008 2009 2008$’000 $’000 $’000 $’000

Treasury shares (132) (186) (132) (186)

Foreign currency translation reserve (3,115) (286) – –

Statutory reserve (7) – (7) –

(3,254) (472) (139) (186)

Treasury shares

Treasury shares comprise the cost of the Company’s shares held by the Group. At 31 December 2009, the

Group held 570,000 of the Company’s shares (2008: 800,000).

Foreign currency translation reserve

The foreign currency translation reserve comprises:

(a) foreign exchange differences arising from the translation of the fi nancial statements of subsidiaries whose

functional currencies are different from the functional currency of the Company;

(b) the exchange differences on monetary items which form part of the Group’s net investment in foreign

operations, provided certain conditions are met.

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12 Reserves (cont’d)

Statutory reserve

The statutory reserve comprises the difference between the fair value and the cost of treasury shares issued to

certain employees pursuant to the Employee Share Plan.

Dividends

Subject to the approval by the shareholders at the next Annual General Meeting, the directors have proposed

a fi nal (one-tier) dividend of 0.06 cents (2008: 0.06 cents) per share, amounting to a net dividend of $428,000

(2008: $386,000) in respect of the fi nancial year ended 31 December 2009 based on the share capital as at that

date. The proposed dividend has not been included as a liability in the fi nancial statements.

13 Financial liabilities

Group Company2009 2008 2009 2008$’000 $’000 $’000 $’000

Non-currentSecured bank loans 116,789 44,320 4,824 6,000

Unsecured bank loans 5,898 – 3,444 –

Finance lease liabilities 70 – 70 –

Intra-group fi nancial guarantees – – 7,981 1,034

122,757 44,320 16,319 7,034

CurrentSecured bank loans 30,081 20,232 1,072 1,090

Unsecured bank loans 2,809 3,056 1,177 3,056

Finance lease liabilities 13 – 13 –

Intra-group fi nancial guarantees – – 1,631 808

32,903 23,288 3,893 4,954

Total fi nancial liabilities 155,660 67,608 20,212 11,988

Secured bank loans

All the bank loans were secured by corporate guarantees from the Company, fi rst legal charge on the Group’s

vessels, legal assignment of the rental proceeds from the Group’s vessels, assignment of insurances in respect

of vessels in bank’s favour and all monies standing to the credit of the Group’s receiving operating account in

respect of the vessels maintained by the Group with the bank.

The corporate guarantee expires when the bank loans are fully settled.

The bank loans are secured on vessels and rig with a carrying amount of $111,144,000 (2008: $89,234,000).

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13 Financial liabilities (cont’d)

Terms and debt repayment schedule

Terms and conditions of outstanding loans and borrowings are as follows:

Nominalinterest

rate

2009 2008 Year of

maturityFacevalue

Carryingamount

Facevalue

Carryingamount

% $’000 $’000 $’000 $’000

Group

US$ fl oating rate loans 1.75-3.73 2010-2015 146,870 146,870 64,552 64,552

S$ fi xed rate loans 5.00 2012-2013 8,707 8,707 – –

Short term US$ fl oating rate loans 5.75-6.25 2009 – – 3,056 3,056

Finance lease liabilities 2.80 2016 83 83 – –

155,660 155,660 67,608 67,608

Company

US$ fl oating rate loans 2.23 2015 5,896 5,896 7,090 7,090

S$ fi xed rate loans 5.00 2013 4,621 4,621 – –

Short term US$ fl oating rate loans 5.75-6.25 2009 – – 3,056 3,056

Finance lease liabilities 2.80 2016 83 83 – –

10,600 10,600 10,146 10,146

Finance lease liabilities

At the reporting dates, the Group and the Company have obligations under fi nance leases that are payable as

follows:

2009 2008Principal Interest Payments Principal Interest Payments

$’000 $’000 $’000 $’000 $’000 $’000

Group and CompanyPayable:

Within 1 year 13 3 16 – – –

After 1 year but within 5 years 52 10 62 – – –

After 5 years 18 4 22 – – –

Total 83 17 100 – – –

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13 Financial liabilities (cont’d)

The following are the expected contractual undiscounted cash outfl ows of fi nancial liabilities, including interest

payments and excluding the impact of netting agreements:

Cash fl owsCarrying amount

Contractual cash fl ows

Within 1 year

Within 2 to 5 years

After 5 years

$’000 $’000 $’000 $’000 $’000

Group

2009

Financial liabilitiesSecured bank loans 146,870 (157,253) (34,798) (120,750) (1,705)

Unsecured bank loans 8,707 (9,422) (3,185) (6,237) –

Finance lease liabilities 83 (100) (16) (62) (22)

Trade payables 15,663 (15,663) (15,663) – –

Other payables 15,011 (15,011) (12,200) (2,811) –

186,334 (197,449) (65,862) (129,860) (1,727)

2008

Financial liabilities

Secured bank loans 64,552 (68,750) (22,223) (46,527) –

Unsecured bank loans 3,056 (3,098) (3,098) – –

Trade payables 3,915 (3,915) (3,915) – –

Other payables 21,504 (21,504) (17,781) (3,723) –

93,027 (97,267) (47,017) (50,250) –

Company

2009

Financial liabilitiesSecured bank loans 5,896 (6,340) (1,218) (4,582) (540)

Unsecured bank loans 4,621 (5,073) (1,384) (3,689) –

Finance lease liabilities 83 (100) (16) (62) (22)

Trade payables 19 (19) (19) – –

Other payables 4,045 (4,045) (4,045) – –

Intra-group fi nancial guarantees 9,612 (140,973) (140,973) – –

24,276 (156,550) (147,655) (8,333) (562)

2008

Financial liabilitiesSecured bank loans 7,090 (7,985) (1,343) (6,642) –

Unsecured bank loans 3,056 (3,098) (3,098) – –

Other payables 1,211 (1,211) (1,211) – –

11,357 (12,294) (5,652) (6,642) –

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14 Other payables

Group Company2009 2008 2009 2008$’000 $’000 $’000 $’000

Non-currentDeposits and advances from:

- supplier 2,811 2,860 – –

- customers – 863 – –

2,811 3,723 – –

CurrentPayables to suppliers 1,225 2,214 – –

Deposits and advances from customers 8,274 13,612 201 –

Non-trade amounts due to subsidiaries – – 1,632 –

Accrued interest payable 104 154 20 –

Accrued expenses 1,722 1,313 1,647 838

Employee benefi ts 124 61 108 61

Other payables 751 427 437 312

12,200 17,781 4,045 1,211

Total 15,011 21,504 4,045 1,211

Non-trade amounts due to subsidiaries are unsecured, interest-free and repayable on demand.

15 Trade payables

Group Company2009 2008 2009 2008$’000 $’000 $’000 $’000

Trade payables 13,068 2,184 19 –

Amounts due to:

- joint ventures 748 – – –

- affi liates 1,847 1,731 – –

15,663 3,915 19 –

Outstanding balances with joint ventures and affi liates are unsecured, interest-free and repayable on demand.

16 Share-based payments

At 31 December 2009, the Group has the following share-based payment arrangements:

(a) Director Option and Executive Option Agreements (equity-settled)

On 23 November 2009, the Group granted share options to a director and 2 key executives pursuant to

the Director Option Agreement and the Executive Option Agreements respectively.

Other information regarding the above share options granted is set out below:


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16 Share-based payments (cont’d)

(a) Director Option and Executive Option Agreements (equity-settled) (cont’d)

The share options shall be exercised, in whole or in part, in accordance with the following schedule

over 4 years:

i. 25% of the share options shall vest 12 months after the grant; and

ii. an additional 25% of the share options shall vest on each anniversary of the Vesting

Reference Date thereafter.


The options granted expire after 5 years or upon cessation of the employment of the director or

the 2 key executives.

At the end of the fi nancial year, details of the options granted under the Director Option and Executive

Option Agreements on the unissued ordinary shares of the Company are as follows:

Date ofgrant ofoptions

Exerciseprice

per share

Optionsgranted

on 23/11/09

Optionsexercised

Optionsforfeited/expired

Optionsoutstanding

at 31/12/09

Numberof optionholders

at 31/12/09

Exerciseperiod

23/11/2009 $0.45 9,000,000 – – 9,000,000 3

23/11/2010

to

23/11/2014

No options were exercisable as at 31 December 2009.

Fair value of share options and assumptions

The grant date fair value of share options granted was measured based on the Black-Scholes formula.

Expected volatility is estimated by considering historic average share price volatility. The inputs used in the

measurement of the fair values at grant date of the share-based payment plan are as follows:

Tranche A Tranche B Tranche C Tranche DFair value at grant date ($) 0.42 0.52 0.57 0.61

Share price at grant date ($) 0.77 0.77 0.77 0.77

Exercise price ($) 0.45 0.45 0.45 0.45

Expected volatility 95% 109% 107% 107%

Option life 5 years 5 years 5 years 5 years

Expected dividends (cents) 0.15 0.15 0.15 0.15

Risk-free interest rate 0.50% 0.65% 0.82% 1.15%

There are no market conditions associated with the share option grants.

Employee expenses

2009 2008$’000 $’000

Total expense recognised as employee costs 153 –

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(b) Ezion Employee Share Option Scheme (equity-settled)

The Ezion Employee Share Option Scheme (the “Scheme”) was approved and adopted by its members

at an Extraordinary General Meeting held on 23 November 2009. The Scheme is administered by the

Company’s Remuneration Committee. The Executive Directors and Employees of the Group shall be

eligible to participate in the Scheme.

Other information regarding the Scheme is set out below:

The exercise price of the options can be set at a discount to the market price not exceeding 20%

of the market price in respect of options granted at the time of grant.

For options granted at market price, they can be exercised 1 year after the date of grant.

For options granted at a discount, they can be exercised 2 years after the date of grant.


The options granted expire after 10 years or such earlier date as may be determined by the

Remuneration Committee.

Since the commencement of the Scheme to 31 December 2009, no share options have been awarded

pursuant to the Scheme.

(c) Share option granted to director of subsidiary (equity-settled)

On 22 March 2009, the Company granted an option to a director of a subsidiary to purchase 30% interest

in the subsidiary from the Company at cost upon satisfaction of either of the following events:

that within a period of 24 months, the accumulated audited net profi t of the Subsidiary Group

exceeds the sum of US$1.5 million; or

that within a period of 36 months, the accumulated audited net profi t of the Subsidiary Group

exceeds US$2 million; or

as may be mutually agreed by the Parties.

Fair value of share option and assumptions

The grant date fair value of the option is measured based on the projected net tangible assets of the

Subsidiary Group as at the expected vesting date.

Employee expenses

2009 2008$’000 $’000


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(d) Employee Share Plan (equity-settled)

The Employee Share Plan (the “Plan”) was approved and adopted by members of the Company at

the Extraordinary General Meeting held on 29 April 2008. The Plan is administered by a committee

comprising of the directors of the Company. The Executive Directors and Employees of the Group shall

be eligible to participate in the Plan.

On 13 May 2009, 230,000 treasury shares have been awarded to certain employees pursuant to the Plan.

Employee expenses

2009 2008$’000 $’000


17 Revenue

2009 2008

$’000 $’000

Chartering and offshore support services 61,187 26,445

Marine services 12,426 4,629

Total revenue 73,613 31,074

18 Profi t before income tax

The following items have been included in arriving at profi t before income tax:

Group2009 2008$’000 $’000

Foreign exchange (gain)/loss (489) 35

Gain on disposal of plant and equipment (1,283) (3)

Impairment losses on:

- trade receivables 1,177 289

- plant and equipment 3,799 –

Non-audit fees paid to auditors of the Company 94 2

Operating lease expense 4,724 5,432

Plant and equipment written off – 4

Staff costs 4,362 2,311

Contributions to defi ned contribution plans, included in staff costs 88 94

Equity-settled share-based payment transactions, included in staff costs 384 –

Staff costs include key management personnel compensation as disclosed in note 24.

During the year, the Group received $61,000 of government grant in relation to the job credit scheme which were

offset against staff costs.

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19 Finance income and expense

Group2009 2008$’000 $’000

Finance lease income 108 89

Interest income:

- bank 104 413

- related corporations 54 (63)

Finance income 266 439

Interest expense on bank loans (2,509) (1,782)

Finance expense (2,509) (1,782)

Net fi nance cost recognised in profi t or loss (2,243) (1,343)

20 Income tax expense

Group2009 2008$’000 $’000

Current tax expenseCurrent year 396 100

(Over)/under provision in respect of prior years (27) 13

Foreign tax suffered 595 64

964 177

Reconciliation of effective tax rate

Profi t before income tax 18,086 8,215

Share of results of joint ventures (net of tax) (2,421) 107

Profi t before income tax excluding share of results of joint ventures 15,665 8,322

Tax calculated using Singapore tax rate of 17% (2008: 18%) 2,663 1,498

Effect of different tax rates in other countries (13) 17

Income not subject to tax (2,467) (139)

Net tax exempt income under Section 13A of Income Tax Act (1,830) (2,231)

Expenses not deductible for tax purposes 1,718 838

Foreign tax suffered 595 64

(Over)/under provision in respect of prior years (27) 13

Unrecognised deferred tax assets during the year 368 123

Others (43) (6)

964 177

For 2009, the effective applicable tax rate is lower than 17% (2008: 18%) as no provision is made for taxation

for certain income in view of the exempt profi ts earned by the Group under Section 13A of the Income Tax Act

during the fi nancial year.

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20 Income tax expense (cont’d)

Unrecognised deferred tax liabilities

At 31 December 2009, deferred tax liabilities of $1,509,000 (2008: $116,000) for temporary differences of

$8,878,000 (2008: $642,000) related to investments in subsidiaries were not recognised because the Company

controls whether the liability will be incurred and it is satisfi ed that it will not be incurred in the foreseeable future.

Unrecognised deferred tax assets

The Group has unutilised tax losses of approximately $2,884,000 (2008: $721,000) that are available for offset

against future taxable profi ts, subject to the agreement of the tax authorities and compliance with relevant

provisions of the tax legislation of the respective countries in which the subsidiaries operate.

Deferred tax assets have not been recognised in respect of these items as it is not probable that future taxable

profi t will be available against which the Group can utilise the benefi ts.

21 Earnings per share

Basic and diluted earnings per share

Basic and diluted earnings per share for the years ended 31 December 2009 and 2008 were based on the

net profi t attributable to ordinary shareholders and weighted average number of ordinary shares, calculated as

follows:

Group2009 2008$’000 $’000

Net profi t attributable to ordinary shareholders of the Company 17,122 8,038

Weighted average number of ordinary shares

2009 2008(’000) (’000)

Issued ordinary shares at 1 January 643,178 643,978

Effect of new shares issued 36,247 –

Effect of issue of own shares repurchased 146 –

Effect of own shares repurchased – (259)

Weighted average number of ordinary shares at 31 December 679,571 643,719

The share options granted under the Director Option and Key Executive Agreements were not included in the

computation of diluted earnings per share as the share options are anti-dilutive.

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22 Operating segments

The Group has two reportable segments, as described below, which are the Group’s strategic business units.

The strategic business units offer different products and services, and are managed separately because they

require different technology and marketing strategies. For each of the strategic business units, the Group’s top

level management reviews internal management reports on at least a quarterly basis. The following summary

describes the operations in each of the Group’s reportable segments:

(a) Chartering and offshore support services: engaged in vessel and oil and gas related assets chartering;

and

(b) Marine services: engaged in procurement of equipment and provision of management and engineering

services.

Other operations include general corporate activities.

The accounting policies of the reportable segments are the same as described in notes 2 and 3.

Information regarding the results of each reportable segment is included below. Performance is measured based

on segment profi t before income tax, as included in the internal management reports that are reviewed by the

Group’s top level management. Segment profi t is used to measure performance as management believes that

such information is the most relevant in evaluating the results of certain segments relative to other entities that

operate within these industries. Inter-segment pricing is determined on an arm’s length basis.

Chartering and offshore

support services

Marine services Others

Total operations

$’000 $’000 $’000 $’000

31 December 2009

External revenue 61,187 12,426 – 73,613

Finance income – – 266 266

Finance expense (2,509) – – (2,509)

Depreciation 8,189 – 288 8,477

Reportable segment profi t before income tax 14,899 3,577 (2,811) 15,665

Share of results of joint ventures, net of tax 2,421 – – 2,421

Profi t before income tax 18,086

Income tax expense (964)

Profi t for the year 17,122

Other material non-cash items:

- Impairment of plant and equipment 3,799 – – 3,799

Reportable segment assets 313,348 9,055 32,148 354,551

Investment in joint ventures 10,056 – – 10,056

Total assets 364,607

Reportable segment liabilities 175,366 2,757 8,921 187,044

Capital expenditure 143,578 – 197 143,775

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22 Operating segments (cont’d)

Chartering and offshore

support services

Marine services Others

Total operations

$’000 $’000 $’000 $’000

31 December 2008

External revenue 26,445 4,629 – 31,074

Finance income – – 439 439

Finance expense (1,719) – (63) (1,782)

Depreciation 3,554 – 176 3,730

Reportable segment profi t before income tax 9,079 1,868 (2,625) 8,322

Share of results of joint ventures, net of tax (107) – – (107)

Profi t before income tax 8,215

Income tax expense (177)

Profi t for the year 8,038

Reportable segment assets 185,975 497 21,765 208,237

Investment in joint ventures 6,114 – – 6,114

Total assets 214,351

Reportable segment liabilities 81,670 – 11,753 93,423

Capital expenditure 70,031 – 524 70,555

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Notes to the Financial Statements2

2

Opera

ting s

egm

ents

(cont’

d)

G

eogra

phic

al

segm

ents

The b

usin

esses o

f th

e G

roup

are

op

era

ted

in f

our

princip

al

geogra

phic

al

are

as,

nam

ely

, S

ingap

ore

, A

ustr

alia

, Far

East

and

AS

EA

N c

ountr

ies,

Am

ericas a

nd

oth

ers

. I

n p

resenting i

nfo

rmation o

n t

he b

asis

of

geogra

phic

al

segm

ents

, segm

ent

reve

nue i

s b

ased

on t

he g

eo

gra

phic

al

locatio

n o

f custo

mers

. S

eg

ment

assets

are

based

on t

he g

eogra

phic

al lo

cation o

f th

e a

ssets

.

Sin

gapore

Aust

ralia

Far

East

and

ASE

AN

countr

ies

Am

eri

cas

Oth

er

countr

ies

Tota

lopera

tions

2009

2008

2009

2008

2009

2008

2009

2008

20

09

20

08

20

09

20

08

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

Reve

nue f

rom

exte

rnal

custo

mers

14,1

59

7,7

98

12

,476

9,7

54

14,8

30

9,5

81

30,0

39

626

2,1

09

3,3

15

73

,61

33

1,0

74

Non-c

urr

ent

assets

238,0

26

117,5

23

4,3

48

––

–2

–2

7,9

32

32

,38

82

70

,30

81

49

,91

1

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22 Operating segments (cont’d)

Major customers

During the fi nancial years ended 31 December 2009 and 2008, there are certain customers of the Group’s

chartering and offshore support services and marine services segments that individually contributed 10 percent or

more of the Group’s revenue. The details of these customers are as follows:

Group2009 2008$’000 $’000

Customer A 24,685 –

Customer B 8,605 –

Customer C 1,579 6,095

Customer D 1,753 7,737

Customer E 1,586 3,113

Total 38,208 16,945

23 Commitments

(a) Capital commitment

Group2009 2008$’000 $’000

Contracted but not provided for 271,073 290,128

(b) Operating lease commitments (as lessee)

At the reporting dates, the Group have commitments for future minimum lease payments under non-

cancellable operating leases as follows:

Group2009 2008$’000 $’000

Within 1 year 8,140 1,945

After 1 year but within 5 years 1,999 792

After 5 years – –

10,139 2,737

Operating lease payments for the fi nancial year ended 31 December 2009 represents rentals payable by

the Group for its offi ce space and vessel charters. The leases from offi ce rental and vessel charter are for

a period ranging from 1 to 4 years from 1 January 2010 to 31 December 2013.

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23 Commitments (cont’d)

(c) Operating lease income commitments (as lessor)

The Group charters out its vessels. At the reporting dates, the total future minimum lease receivables

under non-cancellable operating lease rentals are as follows:

Group2009 2008$’000 $’000

Within 1 year 76,264 32,026

After 1 year but within 5 years 109,970 192,367

After 5 years – 8,347

186,234 232,740

Operating lease income represents rentals receivable from customer on the Group’s vessels charter. The

lease terms are negotiated on fi xed terms till expiry of the lease.

24 Related parties

For the purposes of these fi nancial statements, parties are considered to be related to the Group if the Group

has the ability, directly or indirectly, to control the party or exercise signifi cant infl uence over the party in making

fi nancial and operating decisions, or vice versa, or where the Group and the party are subject to common control

or common signifi cant infl uence. Related parties may be individuals or other entities.

Other than disclosed elsewhere in the fi nancial statements, the transactions with related parties are as follows:

Directors and key management personnel compensation

The key management personnel compensation is as follows:

Group2009 2008$’000 $’000

Short-term employee benefi ts 2,101 1,492

Share-based payments 365 –

Details of options granted to directors under the scheme are described in note 16. The above amounts are

included under staff costs.

The directors’ compensation is as follows:

Group2009 2008$’000 $’000

Director fees 114 106

Director remuneration 1,036 806

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24 Related parties (cont’d)

Other transactions with key management personnel

Group2009 2008$’000 $’000

Transactions with companies in which a director of the Company has substantial fi nancial interestsChartering and marine service income received and receivable* 249 849

Chartering and marine service cost paid and payable 3,281 2,885

Rental expense paid and payable 360 163

* In 2008, chartering and marine service income includes an amount of $701,000 whereby the charter contracts were entered

into before the appointment of the director.

Other related party transactions

Group2009 2008$’000 $’000

Transactions with joint ventures

Interest income received and receivable 54 (63)

Chartering and marine service income received and receivable 6,079 –

Chartering and marine service cost paid and payable 774 –

Management fee income from joint ventures 961 –

Recharge of expenses to a joint venture 504 –

Transactions with other related partiesMarine services – 552

25 Accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors,

including expectations of future events that are believed to be reasonable under the circumstances.

The selection of critical accounting policies, the judgements and other uncertainties affecting application of

those policies and the sensitivity of reported results to changes in condition and assumptions are factors to be

considered when reviewing the consolidated fi nancial statements. The principal accounting policies are set forth

in note 3. The Group believes the following critical accounting policies involve the most signifi cant judgements

and estimates used in the preparation of the fi nancial statements.

Useful lives and depreciation of vessels and vessel component costs

The cost of the Group’s vessels is depreciated on a straight-line basis over the vessels’ useful lives. Management

estimates the economic useful life of the Group’s vessels to be 8 to 25 years based on their age and condition,

with a new vessel estimated to have a useful life of a maximum of 25 years. This is a common life expectancy

applied in the shipping industry. Changes in the expected level of use of the assets and market factors could

impact the economic useful lives of the vessels, therefore future depreciation charges could be revised.

The residual values of the vessels are based on the amount that the vessels are expected to fetch as scrap metal

upon decommissioning of the vessels. Metal prices are subject to volatile market conditions over time. Future

changes in these prices could impact the estimates of residual value used in calculating depreciation expense.

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25 Accounting estimates and judgements (cont’d)

The Group estimates the useful life of its vessel component costs by reference to the average historical periods

between two dry-dockings of vessels of similar age, and expected usage of the vessel until its next dry-docking.

Any changes in the economic useful lives of the vessels and the vessel component costs would impact the

depreciation charges and consequently affect the Group’s results.

Impairment of plant and equipment

The Group assesses the impairment of plant and equipment whenever events or changes in circumstances

indicate that the carrying value may not be recoverable. Factors considered important that could trigger an

impairment review include the following:

Extended periods of idle time;

Inability to contract specifi c assets or groups of assets; and

Signifi cant negative industry or economic trends.

The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent

in the application of the Group’s accounting estimates in relation to plant and equipment affect the amounts

reported in the fi nancial statements, especially the estimates of the expected useful economic lives and the

carrying values of those assets. If business conditions were different, or if different assumptions were used in the

application of this and other accounting estimates, it is likely that materially different amounts could be reported in

the Group’s fi nancial statements.

Management had assessed the recoverable amount of the vessels based on its value in use using cash fl ow

forecast. Based on the cash fl ow forecast, management determined that no impairment to the vessels is

considered necessary.

Impairment of trade receivables

Trade receivables are recorded at the invoiced amount and do not bear interest. The allowance for doubtful

receivables is the Group’s best estimate of the amount of probable credit losses in the Group’s existing accounts

receivables.

Management uses judgement to determine the allowance for doubtful receivables which are supported by

historical write-off, credit history of the customers and repayment records. The Group reviews its allowance for

doubtful receivables monthly. Balances which are past due for more than 120 days are reviewed individually for

collectibility. Accounts balances are charged off against the allowance after all means of collection have been

exhausted and the potential for recovery is considered remote. Actual results could differ from estimates.

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26 Financial risk management

Overview

Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies and systems are reviewed regularly to refl ect changes in market conditions and the Group’s activities.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

The Group’s principal fi nancial instruments comprise cash and cash equivalents and bank loans. The main purpose of these fi nancial instruments is to fi nance the Group’s operations. The other fi nancial instruments such as trade and other payables are directly from its operations.

Credit risk

The Group’s maximum exposure to credit risk are carrying amount of trade and other receivables, amounts due from joint ventures, fi xed deposits and cash and bank balances.

The Group has a credit policy in place which establishes credit limits for customers and monitors their balances on an ongoing basis. Therefore, the Group does not expect to incur material credit losses. Fixed deposits and cash and cash equivalent are placed with regulated fi nancial institutions. Hence, minimal credit risk exists with respect to these assets.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specifi c loss component that relates to individually signifi cant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identifi ed. The collective loss allowance is determined based on historical data of payment statistics for similar fi nancial assets.

The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfi ed that no recovery of the amount owing is possible. At that point, the fi nancial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired fi nancial asset.

The Group’s top three (2008: two) most signifi cant customers account for 78% (2008: 57%) of the trade

receivables due from third parties at 31 December 2009.

Cash and fi xed deposits are placed with banks and fi nancial institutions which are regulated.


The credit risk represents the loss that would be recognised upon a default by the parties to which the guarantees were given on behalf of. To mitigate these risks, management continually monitors the risks and has established processes including performing credit evaluations of the parties it is providing the guarantee on behalf of. Guarantees are only given to its subsidiaries or related parties.

There are no terms and conditions attached to the guarantee contracts that would have a material effect on the amount, timing and uncertainty of the Company’s future cash fl ows.

The intra-group fi nancial guarantees are eliminated in preparing the consolidated fi nancial statements. Estimates of the Company’s obligations arising from fi nancial guarantee contracts may be affected by future events, which cannot be predicted with any certainty. The assumptions may well vary from actual experience so that the actual liability may vary considerably from the best estimates.

Intra-group fi nancial guarantees comprise guarantees granted by the Company to banks in respect of banking facilities amounting to $140,973,000 (2008: $50,484,000).

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26 Financial risk management (cont’d)

Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate

by management to fi nance the Group’s operations and to mitigate the effects of fl uctuations in cash fl ows.

Typically the Group ensures that it has suffi cient cash on demand to meet expected operational expenses for a

period of 60 days, including the servicing of fi nancial obligations; this excludes the potential impact of extreme

circumstances that cannot reasonably be predicted, such as natural disasters.

The Group’s funding is obtained from shares placement, funds generated from operations and bank loans. As at

31 December 2009, the Group has undrawn banking facilities amounting to $50,723,000.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity

prices will affect the Group’s income or the value of its holdings of fi nancial instruments. The objective of market

risk management is to manage and control market risk exposures within acceptable parameters, while optimising

the return on risk.

Interest rate risk

The Group’s interest rate exposure relates primarily to its long-term debt obligations as they are subject to

fl uctuating interest rates that reset according to market rates change. Surplus funds are placed in fi xed deposits

accounts with regulated banks that interest rate varies according to market rates.

Sensitivity analysis

For the variable rate fi nancial assets and liabilities, a change of 100 bp in interest rate at the reporting date would

increase/(decrease) profi t or loss by the pre-tax amounts shown below. This analysis assumes that all other

variables, in particular foreign currency rates, remain constant.

Profi t or loss100 bp 100 bp

increase decrease$’000 $’000

Group31 December 2009Interest-bearing loans (1,469) 1,469

31 December 2008Interest-bearing loans (676) 676

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Foreign currency risk

The Group is exposed to currency risk through transactions in foreign currencies and through its investments on

foreign operations. The Group’s main operations are denominated in US dollars and the functional currencies

of these operations are in US dollars. The currency in which the Group presents its consolidated fi nancial

statements are affected by movements in the exchange rates of US dollars against Singapore dollars.

The primary purpose of the Group’s foreign currency hedging activities is to protect against the volatility

associated with foreign currency liabilities created in the normal course of business. The Group entered into

foreign exchange forward contracts to sell US dollars and to purchase Singapore dollars to hedge the payments

of the subsidiary’s certain Singapore dollars transactions. The foreign exchange forward contracts mature on

the same month as the repayment dates of the transactions. As at 31 December 2009, the notional amount of

foreign exchange forward contracts amounted to $Nil (2008: $4,110,000). The mark-to-market loss on these

derivatives not recognised by the Group as at 31 December 2009 is $Nil (2008: $114,000).

In respect of other monetary assets and liabilities held in currencies other than the functional currencies of

respective entities, the Group ensures that the net exposure is kept to an acceptable level by buying currencies at

spot rates, where necessary, to address short term imbalances.

Balances are denominated in the following currencies:

Singapore dollar

US dollar

Australian dollar Others Total

$’000 $’000 $’000 $’000 $’000

Group31 December 2009

Loans to joint ventures – 5,292 1,149 – 6,441

Trade receivables and other assets 474 50,786 1,928 – 53,188

Cash and cash equivalents 14,979 24,390 915 – 40,284

Trade and other payables (4,203) (26,321) – (150) (30,674)

Financial liabilities (8,790) (146,870) – – (155,660)

2,460 (92,723) 3,992 (150) (86,421)

31 December 2008Loans to joint ventures – 5,462 – – 5,462

Trade receivables and other assets 350 28,597 – – 28,947

Cash and cash equivalents 16,426 18,249 22 – 34,697

Trade and other payables (3,932) (21,481) (6) – (25,419)

Financial liabilities – (67,608) – – (67,608)

12,844 (36,781) 16 – (23,921)

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Foreign currency risk (cont’d)

Singapore dollar

US dollar

Australian dollar Total

$’000 $’000 $’000 $’000

Company31 December 2009Loans to subsidiaries 125,784 – – 125,784

Loans to joint ventures – 5,292 – 5,292

Trade receivables and other assets 10,694 7,864 301 18,859

Cash and cash equivalents 12,367 161 – 12,528

Trade and other payables (3,625) (439) – (4,064)

Financial liabilities (4,704) (15,508) – (20,212)

140,516 (2,630) 301 138,187

31 December 2008Loans to subsidiaries 82,424 – – 82,424

Loans to joint ventures – 5,462 – 5,462

Trade receivables and other assets 3,840 10,284 – 14,124

Cash and cash equivalents 14,818 192 – 15,010

Other payables (1,211) – – (1,211)

Financial liabilities – (11,988) – (11,988)

99,871 3,950 – 103,821

Exposure to currency risk - Sensitivity analysis

The following table indicates the approximate change in the Group’s profi t before tax and equity in response to

a 10% change in the foreign exchange rates to which the Group has signifi cant exposure at the reporting date.

The sensitivity analysis includes balances between group entities where the denomination of the balances is in a

currency other than the functional currencies of the lender or the borrower.

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Foreign currency risk (cont’d)

A 10% strengthening of Singapore dollar against the following currencies at the reporting date would increase /

(decrease) equity and profi t or loss by the pre-tax amounts shown below. This analysis assumes that all other

variables, in particular interest rates, remain constant.

Group CompanyEquity Profi t or loss Equity Profi t or loss$’000 $’000 $’000 $’000

31 December 2009Singapore dollar (12,578) (1,227) – –

US dollar – (698) – (698)

Australian dollar – (399) – (30)

Others – 15 – –

31 December 2008Singapore dollar (8,242) (99) – –

US dollar – (579) – (579)

Australian dollar – (2) – –

A 10% weakening of Singapore dollar against the above currencies would have had the equal but opposite

effect on the above currencies to the pre-tax amounts shown above, on the basis that all other variables remain

constant.

Estimation of fair values

The following summarises the signifi cant methods and assumptions used in estimating the fair values of fi nancial

instruments of the Group and Company.

Non-derivative fi nancial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future

principal and interest cash fl ows, discounted at the market rate of interest at the reporting date. For fi nance

leases, the market rate of interest is determined by reference to similar lease agreements.


The value of fi nancial guarantees provided by the Company to its subsidiaries is determined by reference to the

difference in the interest rates, by comparing the actual rates charged by the bank with these guarantees made

available, with the estimated rates that the banks would have charged had these guarantees not been available.

Other fi nancial assets and liabilities

The carrying amounts of fi nancial assets and liabilities with a maturity of less than one year (including trade and

other receivables, cash and cash equivalents, and trade and other payables) are assumed to approximate their

fair values because of the short period to maturity. All other fi nancial assets and liabilities are discounted to

determine their fair values.

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Carrying amount of fi nancial assets and liabilities

The following table summarises the carrying amount of fi nancial assets and liabilities as at 31 December by FRS

39 categories:

NoteLoans and receivables

Liabilities at amortised

cost$’000 $’000

Group31 December 2009Assets Other assets* 7 2,836 –

Trade receivables 9 24,195 –

Cash and cash equivalents 10 40,284 –

LiabilitiesFinancial liabilities 13 – (155,660)

Other payables 14 – (15,011)

Trade payables 15 – (15,663)

67,315 (186,334)

31 December 2008Assets Other assets* 7 10,119 –





Trade payables 15 – (3,915)

51,673 (93,027)

Company31 December 2009Assets Other assets* 7 14,516 –





Trade payables 15 – (19)

31,359 (24,276)

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Carrying amount of fi nancial assets and liabilities (cont’d)

NoteLoans and receivables

Liabilities at amortised

cost$’000 $’000

Company31 December 2008Assets Other assets* 7 10,458 –





29,107 (13,199)

* Excludes advances to suppliers and prepayments

27 New accounting standards and interpretations issued but not yet effective for the fi nancial year ended 31 December 2009

The Group has not applied the following accounting standards (including their consequential amendments) and

interpretations that have been issued as of the balance sheet date but are not yet effective:

Amendment to FRS 32 Financial Instruments: Presentation – Classifi cation of Rights Issues

Amendments to FRS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items

Amendments to FRS 102 Share-based Payment - Group Cash-settled Share-based Payment

Transactions

FRS 103 (revised) Business Combinations and FRS 27 (revised) Separate and Consolidated Financial

Statements

Improvements to FRSs 2009

INT FRS 117 Distributions of Non-Cash Assets to Owners

The amendments to FRS 102 on group cash-settled share-based payment transactions will become effective

for the Group’s fi nancial statements for the year ending 31 December 2011. The amendments require an entity

receiving goods or services in either an equity-settled or a cash-settled share-based payment transaction to

account for the transaction in its separate or individual fi nancial statements. The application of these amendments

is not expected to have any signifi cant impact on the Group’s fi nancial statements.

The amendments to FRS 102 on group cash-settled share-based payment transactions will become effective

for the Group’s fi nancial statements for the year ending 31 December 2011. The amendments require an entity

receiving goods or services in either an equity-settled or a cash-settled share-based payment transaction to

account for the transaction in its separate or individual fi nancial statements. The application of these amendments

is not expected to have any signifi cant impact on the Group’s fi nancial statements.

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27 New accounting standards and interpretations issued but not yet effective for the fi nancial year ended 31 December 2009 (cont’d)

FRS 103 (revised 2009) and FRS 27 (amended) will become effective for the Group’s fi nancial statements for

the year ending 31 December 2010. FRS 103 (revised 2009) introduces signifi cant changes to the accounting

for business combinations, both at the acquisition date and post acquisition, and requires greater use of fair

values. The amendments will mainly impact the accounting for transaction costs, step acquisitions, goodwill and

non-controlling interests (NCI) (previously minority interests). The revised FRS 103 will be applied prospectively

and therefore there will be no impact on prior periods in the Group’s fi nancial statements for the year ending 31

December 2010.

The amended FRS 27 requires accounting for changes in ownership interests by the Group in a subsidiary, while

maintaining control, to be recognised as an equity transaction. When the Group loses control of a subsidiary, any

interest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profi t

or loss. The amendments will be applied prospectively to transactions with NCI and therefore there will be no

impact on prior periods in the Group’s fi nancial statements for the year ending 31 December 2010.

Improvements to FRSs 2009 will become effective for the Group’s fi nancial statements for the year ending 31

December 2010 for amendments relating to:

FRS 102 Share-based Payments

FRS 38 Intangible Assets

INT FRS 109 Reassessment of Embedded Derivatives

INT FRS 116 Hedges of a Net Investment in a Foreign Operation


December 2011 for amendments relating to:

FRS 1 Presentation of Financial Statements

FRS 7 Statement of Cash Flows

FRS 17 Leases

FRS 36 Impairment of Assets

FRS 39 Financial Instruments: Recognition and Measurement

FRS 105 Non-current Assets Held for Sale and Discontinued Operations

FRS 108 Operating Segments


December 2010. Improvements to FRSs 2009 contain amendments to numerous accounting standards that

result in accounting changes for presentation, recognition or measurement and disclosure purposes. The Group

is in the process of assessing the impact of these amendments.

INT FRS 117 will become effective for the Group’s fi nancial statements for the year ending 31 December 2010.

INT FRS 117 prescribes the accounting treatment of distributions of non-cash assets by an entity to owners. It

clarifi es that such distribution should be measured at the fair value of the non-cash assets and the difference

between the carrying amount and the fair value of non-cash assets to be distributed should be recognised in

profi t or loss. INT FRS 117 will be applied prospectively.

Other than the changes relating to FRS 103 and FRS 27, the initial application of these standards (including

their consequential amendments) and interpretations is not expected to have any material impact on the Group’s

fi nancial statements. The Group has not considered the impact of accounting standards issued after the balance

sheet date.

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28 Subsequent events

The following events took place subsequent to 31 December 2009:

(a) On 18 January 2010 (the “Grant Date”), the Company granted 3,920,000 share options to its employees

in accordance with the Scheme as disclosed in note 16. A total of 1,400,000 share options were granted

to executive directors. The options granted to a controlling shareholder, who is also an executive director,

is subject to approval of shareholders at a general meeting to be convened by the Company. The

Company will make further announcement in due course. The information relating to the share options

granted are as follows:


The holder can exercise not more than half of the options granted at the end of the second

anniversary from the Grant Date.

The holder can exercise any options granted not previously exercised at the end of the third

anniversary from the Grant Date.

The options granted expire after 10 years.

(b) On 25 February 2010, the Company entered into an agreement with a private equity fund to dispose 51%

of the issued and paid-up shares capital in a wholly-owned subsidiary, Teras Conquest 1 Pte Ltd. The

consideration receivable amounted to US$14.79 million.

Teras Conquest 1 Pte Ltd is an asset holding company which owns a multi-purpose self-propelled jack-up

rig.

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SHAREHOLDERS’ INFORMATION

As at 15 March 2010

General Information on Share Capital

Total no. of issued shares : 713,408,000 (excluding treasury shares)

Class of shares : Ordinary share

Voting rights : One vote per share (no vote for treasury shares)

Number of treasury shares : 570,000

Percentage of treasury shares : 0.08% as against the total number of issued shares excluding treasury shares

DISTRIBUTION OF SHAREHOLDINGS

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

1 - 999 2 0.05 924 0.00

1,000 - 10,000 2,239 53.39 15,987,118 2.24

10,001 - 1,000,000 1,921 45.80 99,623,000 13.95

1,000,001 and above 32 0.76 598,366,958 83.81

4,194 100.00 713,978,000 100.00

SUBSTANTIAL SHAREHOLDERSSubstantial Shareholders as per Register of Substantial Shareholders as at 15 March 2010

Direct Interest % Deemed Interest %

Chan Fooi Peng 1 142,000,000 19.90 35,075,000 4.92

Ezra Holdings Limited 100,000,000 14.02 – –

APG Algemene Pensioen Groep N.V. 46,818,000 6.56 – –

Chew Thiam Keng 2 35,075,000 4.92 142,000,000 19.90

Lee Kian Soo 3 – – 100,000,000 14.02

Lee Chye Tek Lionel 4 – – 100,000,000 14.02

Legg Mason, Inc – – 65,080,000 9.12

Stichting Pensioenfonds ABP 5 – – 46,818,000 6.56

Notes:

1. By virtue of shares held directly by Madam Chan Fooi Peng’s spouse, Mr Chew Thiam Keng, she is deemed to be interested in

the shares of the Company held by Mr Chew Thiam Keng.

2. By virtue of shares held directly by Mr Chew Thiam Keng’s spouse, Madam Chan Fooi Peng, he is deemed to be interested in

the shares of the Company held by Madam Chan Fooi Peng.

3. By virtue of Mr Lee Kian Soo’s shareholding in Ezra Holdings Limited, he is deemed to be interested in the shares of the

Company held by Ezra Holdings Limited.

4. By virtue of Mr Lee Chye Tek Lionel’s shareholding in Ezra Holdings Limited, he is deemed to be interested in the shares of the

Company held by Ezra Holdings Limited.

5. By virtue of Stichting Pensioenfonds ABP’s interest in APG Algemene Pensioen Groep N.V., it is deemed to be interested in the

shares of the Company held by APG Algemene Pensioen Groep N.V.

6. The percentage of shareholdings is computed based on the issued and paid up share capital of the Company comprising

713,408,000 shares (excluding treasure shares) as at 15 March 2010.

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TOP 20 SHAREHOLDERS

No. Name of Shareholder No. of Shares % **

1 Chan Fooi Peng 142,000,000 19.90

2 Ezra Holdings Limited 100,000,000 14.02

3 DBSN Services Pte Ltd 56,107,038 7.86

4 Citibank Nominees Singapore Pte Ltd 55,433,537 7.77

5 Chew Thiam Keng 35,075,000 4.92

6 HSBC (S) Nominees Pte Ltd 33,494,500 4.69

7 Morgan Stanley Asia (S) Securities Pte Ltd 17,428,000 2.44

8 Nylect Holdings Pte Ltd 15,372,000 2.15

9 DBS Nominees Pte Ltd 15,109,154 2.12

10 Kim Eng Securities Pte. Ltd. 11,990,000 1.68

11 Chow Joo Ming 11,000,000 1.54

12 DBS Vickers Securities (S) Pte Ltd 9,113,000 1.28

13 Raffl es Nominees (Pte) Ltd 9,020,000 1.26

14 United Overseas Bank Nominees Pte Ltd 8,764,000 1.23

15 OCBC Securities Private Ltd 7,666,000 1.07

16 Phillip Securities Pte Ltd 7,185,729 1.01

17 Waterworth Pte Ltd 7,000,000 0.98

18 CIMB-GK Securities Pte. Ltd. 6,987,000 0.98

19 Kim Seng Holdings Pte Ltd 6,000,000 0.84

20 Lim & Tan Securities Pte Ltd 5,422,000 0.76

560,166,958 78.50

** The percentage of issued ordinary shares is calculated based on the number of issued ordinary shares of the Company as at 15

March 2010, excluding 570,000 ordinary shares held as treasury shares as at that date.

PERCENTAGE OF SHAREHOLDING HELD IN PUBLIC’S HANDS

Based on information made available to the Company as at 15 March 2010, approximately 45.28% of the Company’s

shares (excluding treasury shares) were held in the hands of the public, and accordingly, Rule 723 of Section B of the

SGX-ST Listing Manual is complied with.

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NOTICE IS HEREBY GIVEN that the Annual General Meeting of Ezion Holdings Limited (“the Company”) will be held

at No. 87 Science Park Drive, Science Hub, Portsdown Room Level 1, Singapore Science Park I, Singapore 118260 on

Wednesday, 28 April 2010 at 10.00 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 declare a fi rst and fi nal dividend of 0.06 cents per share tax exempt (one-tier) for the year ended 31 December

2009. (Resolution 2)

3. To re-elect the following Directors of the Company retiring pursuant to Article 107 of the Articles of Association of

the Company:

Dr Wang Kai Yuen (Resolution 3) Mr Lim Thean Ee (Resolution 4) (See Explanatory Note (i))

4. To approve the payment of Directors’ fees of S$114,000 for the year ended 31 December 2009.

(Resolution 5)

5. To re-appoint KPMG LLP as the Auditors of the Company and to authorise the Directors of the Company to fi x

their remuneration. (Resolution 6)

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 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 (“SGX-ST”), the Directors of the Company be hereby 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) options, 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 Instruments made or granted by the Directors of the Company while this Resolution was

in force,

provided that:

(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued

in pursuance of the Instruments, made or granted 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 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);

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(2) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose of determining the

aggregate number of shares that may be issued under sub-paragraph (1) above, the total number of

issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding

treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting

for:

(a) new shares arising from the conversion or exercise of any convertible securities;

(b) new shares arising from exercising share options or vesting of share awards which are outstanding

or subsisting at the time of the passing of this Resolution, provided the options or awards were

granted in compliance with Part VIII of Chapter 8 of the Listing Manual; and

(c) any subsequent bonus issue, consolidation or subdivision of shares;

(3) until 31 December 2010 or such period as may be determined by SGX-ST, the fi fty per centum (50%) limit

in sub-paragraph (1) above may be increased to one hundred per centum (100%) for the Company to

undertake pro-rata renounceable rights issues;

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

the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by

the SGX-ST) and the Articles of Association of the Company; and

(5) unless revoked or varied by the Company in a general meeting, such authority shall continue in force until

the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual

General Meeting of the Company is required by law to be held, whichever is earlier.

(See Explanatory Note (ii) (Resolution 7)

7. Authority to issue placement shares at a discount

That, subject to the grant of the Share Issue Mandate proposed to be tabled as Resolution 7 above and pursuant

to the terms and conditions of the Share Issue Mandate, the Directors of the Company be hereby authorised and

empowered to issue new shares and/or Instruments other than on a pro-rata basis at a discount not exceeding

twenty per centum (20%), to the weighted average price for trades done on the SGX-ST for the full market day

on which the placement or subscription agreement in relation to such shares and/or Instruments is executed,

provided that:

(1) if trading in the Company’s shares is not available for a full market day, the weighted average price shall

be based on trades done on the preceding market day up to the time the placement or subscription

agreement is signed;

(2) in exercising the authority conferred by this Resolution, the Directors complies with the provisions of the

Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the

SGX-ST), and the Articles of Association of the Company; and

(3) unless revoked or varied by the Company in a general meeting, such authority shall continue in force

until (i) the conclusion of the next Annual General Meeting of the Company; (ii) the date by which the next

Annual General Meeting of the Company is required by law to be held; or (iii) 31 December 2010 or such

other timeline as the SGX-ST shall extend, whichever is earlier.

(See Explanatory Note (iii)) (Resolution 8)

8. Authority to issue shares under the Ezion Employee Share Plan

That the Directors of the Company be hereby authorised to offer and grant awards (“Awards”) in accordance

with the provisions of the Ezion Employee Share Plan (the “Plan”) and to allot and issue or deliver from time to

time such number of fully-paid shares as may be required to be issued or delivered pursuant to the vesting of the

Awards under the Plan, provided that:-

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(i) the aggregate number of shares to be issued pursuant to the Plan shall not exceed three point-fi ve per

cent (3.5%) of the total issued share capital of the Company as at 31 March 2008; and

(ii) the aggregate number of shares to be issued pursuant to the Plan, when added to the number of shares

issued and issuable in respect of such Awards and other shares issued and/or issuable under other share-

based incentive schemes of the Company, shall not exceed fi fteen per cent (15%) of the total number of

the issued shares (excluding treasury shares) in the capital of the Company from time to time and that

such authority 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.

(See Explanatory Note (iv))

(Resolution 9)

9. Authority to issue shares under the Ezion Employee Share Option Scheme

That the Directors of the Company be hereby authorised and empowered to offer and grant options in

accordance with the rules of the Ezion Employee Share Option Scheme (“the Scheme”) and to issue from time

to time such number of shares in the capital of the Company as may be required to be issued pursuant to the

exercise of options granted by the Company under the Scheme, whether granted during the subsistence of this

authority or otherwise, provided always that the aggregate number of additional ordinary shares to be issued

pursuant to the Scheme, when added to the number of shares issued and issuable in respect of such Scheme

and other shares issued and/or issuable under other share-based incentive schemes of the Company, shall not

exceed fi fteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital

of the Company from time to time and that such authority 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.

(See Explanatory Note (v)) (Resolution 10)

10. Renewal of Shareholders’ Mandate for Interested Person Transactions

That for the purposes of Chapter 9 of the Listing Manual:-

(a) the shareholders’ mandate for the Company, its subsidiaries and associated companies (the “Group”) or

any of them to enter into any of the transactions falling within the types or categories of interested person

transactions as described in the appendix to this Notice (the “Appendix”) with Ezra Holdings Limited, its

subsidiaries and associated companies be and is hereby approved, provided that such transactions are

entered into on an arm’s length basis, on normal commercial terms and in accordance with the guidelines

for interested person transactions as set out in the Appendix;

(b) the aforesaid shareholders’ mandate shall, unless earlier revoked or varied by the Company in general

meeting, continue in force until the next Annual General Meeting of the Company or the date by which

such Annual General Meeting is required by law to be held; and

(c) the Directors of the Company and/or any of them be and are hereby authorised to complete and do

all such acts and things (including, without limitation, executing all such documents and approving any

amendment, alteration or modifi cation to any document) as they may consider desirable, expedient or

necessary or in the interests of the Company to give effect to the aforesaid shareholders’ mandate and/or

this Resolution.

(See Explanatory Note (vi)) (Resolution 11)

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11. Renewal of Share Buyback Mandate

That:

(a) for the purposes of the Listing Manual, and pursuant to Article 52 of the Company’s Articles of Association,

the Directors of the Company be hereby authorised to exercise all the powers of the Company to

purchase or otherwise acquire the issued ordinary shares fully paid in the capital of the Company not

exceeding in aggregate the Prescribed Limit (as hereafter defi ned) during the Relevant Period (as hereafter

defi ned), at such price(s) as may be determined by the Directors of the Company from time to time up to

the Maximum Price (as hereafter defi ned), whether by way of:

(i) on-market purchase(s) (“Market Purchase(s)”), transacted on the SGX-ST through Quest-ST,

the trading system of the SGX-ST which replaced the Central Limit Order Book (CLOB) trading

system as of 7 July 2008 or, as the case may be, any other stock exchange on which the shares

may for the time being be listed and quoted, through one or more duly licensed stockbrokers

appointed by the Company for the purpose; and/or

(ii) off-market purchase(s) (“Off-Market Purchase(s)”) (if effected otherwise than on the SGX-

ST) in accordance with any equal access scheme(s) as may be determined or formulated by the

Directors as they may consider fi t, which scheme(s) shall satisfy all the conditions prescribed by the

Companies Act and the Listing Manual;

(b) unless varied or revoked by the Company in general meeting, the authority conferred on the Directors of

the Company pursuant to the Share Buyback Mandate may be exercised by the Directors at any time and

from time to time during the period commencing from the passing of this Resolution and expiring on the

earlier of:

(i) the conclusion of the next Annual General Meeting of the Company or the date by which such

Annual General Meeting is required by law to be held;

(ii) the date on which the purchases or acquisitions of shares by the Company pursuant to the Share

Buyback Mandate are carried out to the full extent mandated; or

(iii) the date on which the authority contained in the Share Buyback Mandate is varied or revoked by

ordinary resolution of the Company in general meeting;

(c) in this Resolution:

“Prescribed Limit” means that number of issued shares representing 10% of the issued ordinary share

capital of the Company as at the date of passing of this Resolution unless the Company has effected a

reduction of its share capital in accordance with the applicable provisions of the Companies Act, at any

time during the Relevant Period or within any one fi nancial year of the Company, whichever is the earlier,

in which event the issued ordinary share capital of the Company shall be taken to be the amount of the

issued ordinary share capital of the Company as altered;

“Relevant Period” means the period commencing from the date on which the Annual General Meeting

is held and expiring on the date the next Annual General Meeting is held or is required by law to be held,

whichever is the earlier; and

“Maximum Price” in relation to a share to be purchased, means an amount (excluding brokerage,

stamp duties, applicable goods and services tax and other related expenses) not exceeding:

(i) in the case of a Market Purchase: 105% of the Average Closing Price;

(ii) in the case of an Off-Market Purchase: 120% of the Highest Last Dealt Price, where:

“Average Closing Price” means the average of the closing market immediately prices of a share over

the last fi ve market days, on which transactions in the shares were recorded, immediately preceding the

day of the Market Purchase, and deemed to be adjusted for any corporate action that occurs after the

relevant fi ve market-day period;

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“Highest Last Dealt Price” means the highest price transacted for a share as recorded on the market

day on which there were trades in the shares immediately preceding the day of the making of the offer

pursuant to the Off-Market Purchase; and

“day of the making of the offer” means the day on which the Company announces its intention to

make an offer for the purchase of shares from shareholders of the Company stating the purchase price

(which shall not be more than the Maximum Price calculated on the foregoing basis) for each share and

the relevant terms of the equal access scheme for effecting the Off-Market Purchase; and

(d) the Directors of the Company be and are hereby authorised to complete and do all such acts and things

(including executing such documents as may be required) as they may consider expedient or necessary to

give effect to the transactions contemplated by this Resolution.

(See Explanatory Note (vii)) (Resolution 12)

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

By Order of the Board

Lim Ka Bee

Secretary

Singapore, 12 April 2010

Explanatory Notes:

(i) Dr Wang Kai Yuen will, upon re-election as a Director of the Company, remain as Chairman of the Audit Committee, member of

the Nominating Committee, member of the Remuneration Committee and will be considered independent.

Mr Lim Thean Ee will, upon re-election as a Director of the Company, remain as member of the Audit Committee, member of the

Nominating Committee, Chairman of the Remuneration Committee and will be considered independent.

(ii) Ordinary Resolution 7 in item 6 above, if passed, will empower the Directors of the Company, effective 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 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 shareholders. The 50% limit referred to in the preceding sentence

may be increased to 100% for the Company to undertake pro-rata renounceable rights issues subject to timeline stated below.

For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury

shares) 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 any

convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time when this

Ordinary Resolution is passed and any subsequent bonus issue, consolidation or subdivision of shares.

The 100% renounceable pro-rata rights issue limit is one of the new measures implemented by the SGX-ST as stated in a

press release entitled “SGX introduces further measures to facilitate fund raising” dated 19 February 2009 and which became

effective on 20 February 2009 until 31 December 2010. The effectiveness of these measures will be reviewed by the SGX-ST

at the end of the period. It will provide the Directors with an opportunity to raise funds and avoid prolonged market exposure by

reducing the time taken for shareholders’ approval, in the event the need arises. Minority shareholders’ interests are mitigated as

all shareholders have equal opportunities to participate and can dispose their entitlements through trading of nil-paid rights if they

do not wish to subscribe for their rights shares. It is subject to the condition that the Company makes periodic announcements

on the use of the proceeds as and when the funds are materially disbursed and provides a status report on the use of proceeds

in the annual report.

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(iii) Ordinary Resolution 8 in item 7 above is pursuant to measures implemented by the SGX-ST as stated in a press release entitled

“SGX introduces further measures to facilitate fund raising” dated 19 February 2009 and which became effective on 20 February

2009. Under the measures implemented by the SGX-ST, issuers will be allowed to undertake non pro-rata placements of new

shares priced at discounts of up to 20% to the weighted average price for trades done on the SGX-ST for a full market day

on which the placement or subscription agreement in relation to such shares is executed, subject to the conditions that (a)

shareholders approval be obtained in a separate resolution (the “Resolution”) at a general meeting to issue new shares on a non

pro-rata basis at discount exceeding 10% but not more than 20%; and (b) that the resolution seeking a general mandate from

shareholders for issuance of new shares on a non pro-rata basis is not conditional upon the Resolution.

It should be noted that under the Listing Manual of the SGX-ST, shareholders’ approval is not required for placements of new

shares, on a non pro-rata basis pursuant to a general mandate, at a discount of up to 10% to the weighted average price for

trades done on the SGX-ST for a full market day on which the placement or subscription agreement in relation to such shares is

executed.

(iv) Resolution 9 is to authorise the Directors to offer and grant Awards under the Plan and to allot and issue shares pursuant to the

vesting of Awards under the Plan, provided that the number of shares issued and issuable in respect of such Awards:-

(a) shall not exceed three point-fi ve per cent (3.5%) of the total issued share capital of the Company as at 31 March 2008;

and

(b) the aggregate number of shares to be issued pursuant to the Plan, when added to the number of shares issued and

issuable in respect of such Awards and other shares issued and/or issuable under other share-based incentive schemes of

the Company, shall not exceed fi fteen per cent (15%) of the issued shares of the Company from time to time.

Based on the issued share capital of the Company as at 31 March 2008, the total number of shares, which may be issued or

issuable in respect of such Awards, is 22,539,230 shares.

(v) Resolution 10, if passed, will empower the Directors of the Company, effective 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 or

such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company

pursuant to the exercise of options granted or to be granted under the Scheme up to a number not exceeding in aggregate,

when added to the number of shares issued and issuable in respect of such Awards and other shares issued and/or issuable

under other share-based incentive schemes of the Company, fi fteen per centum (15%) of the total number of issued shares

(excluding treasury shares) in the capital of the Company from time to time.

(vi) Resolution 11, if passed, will authorise the Group to enter into interested person transactions with certain interested persons

of the Group. The interested persons transaction mandate shall, unless revoked or varied by the Company in general meeting,

continue in force until the next Annual General Meeting of the Company. Further details on the interested person transactions and

interested persons referred to herein are set out in the Appendix, which is enclosed with this Notice.

(vii) Resolution 12 is to renew the mandate to permit the Company to purchase or acquire issued ordinary shares in the capital of the

Company on the terms and subject to the conditions of the Resolution. The actual amount of funding required for the Company

to purchase or acquire its ordinary shares, and the impact on the Company’s fi nancial position, cannot be ascertained as at the

date of this Notice as these will depend on the number of ordinary shares purchased or acquired and the price at which such

ordinary shares were purchased or acquired.

The illustrative fi nancial effects of the purchase or acquisition of such ordinary shares by the Company pursuant to the proposed

Share Buyback Mandate on the audited fi nancial accounts of the Group and the Company for the fi nancial year ended 31

December 2009 are set out in greater detail in the Appendix, which is enclosed together with this Notice.

Notes:

1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint not more than two

proxies 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 15 Hoe Chiang Road, #12-05

Tower Fifteen Singapore 089316 not less than forty-eight (48) hours before the time appointed for holding the Meeting.

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Notice of Books Closure

NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members Of Ezion Holdings Limited (the

“Company”) will be closed on 6 May 2010 for the preparation of dividend warrants of a fi rst and fi nal dividend of 0.06

cents per share tax exempt (one-tier) (the “Final Dividend”).

Duly completed registrable transfers in respect of ordinary shares in the capital of the Company together with all relevant

documents of title received by the Company’s Share Registrar, M&C Services Private Limited, 138 Robinson Road #17-

00 The Corporate Offi ce, Singapore 068906 up to the close of business at 5.00 p.m. on 5 May 2010 will be registered to

determine shareholders’ entitlements to the Final Dividend, subject to the approval of the shareholders of the Company

to the Final Dividend at the Annual General Meeting to be held on 28 April 2010.

Subject as aforesaid, shareholders whose Securities Accounts with The Central Depository (Pte) Limited are credited with

ordinary shares in the capital of the Company as at 5.00 p.m. on 5 May 2010 will be entitled to the Final Dividend.

Payment of the Final Dividend, if approved by the members at the Annual General Meeting to be held on 28 April 2010

will be made on 18 May 2010.

By Order of the Board

Lim Ka Bee

Secretary

Singapore, 12 April 2010

EZION HOLDINGS LIMITED(Company Registration No. 199904364E)

(Incorporated in the Republic of Singapore)

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

*I/We,

of

being* a member/members of Ezion Holdings Limited (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings

No. 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 at No. 87,

Science Park Drive, Science Hub, Portsdown Room, Level 1 Singapore Science Park I, Singapore 118260 on Wednesday,

28 April 2010 at 10.00 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 Against

1 Directors’ Report and Audited Accounts for the year ended 31 December 2009

2 Payment of fi rst & fi nal dividend

3 Re-election of Dr Wang Kai Yuen as a Director

4 Re-election of Mr Lim Thean Ee as a Director

5 Approval of Directors’ fees amounting to S$114,000

6 Re-appointment of KPMG LLP as Auditors

7 Authority to issue new shares

8 Authority to issue placement shares at a discount

9 Authority to issue shares under the Ezion Employee Share Plan

10 Authority to issue shares under the Ezion Employee Share Option Scheme

11 Renewal of Shareholders’ Mandate for Interested Person Transactions

12 Renewal of Share Buyback Mandate

Dated this day of 2010

Signature of Shareholder(s)

or, Common Seal of Corporate Shareholder

*Delete where inapplicable

IMPORTANT:

1. For investors who have used their CPF monies to buy Ezion Holdings Limited’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.

Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members

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 15 Hoe Chiang Road,

#12-05 Tower Fifteen Singapore 089316 not less than forty-eight (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 forty-eight (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

Lee Kian SooChew Thiam KengCaptain Larry Glenn JohnsonDr Wang Kai YuenLim Thean EeTan Woon Hum

audIt CommIttEE

Dr Wang Kai Yuen – ChairmanLim Thean EeTan Woon Hum

REmuNERatIoN CommIttEE

Lim Thean Ee – ChairmanDr Wang Kai YuenTan Woon Hum

NomINatINg CommIttEE

Tan Woon Hum – ChairmanDr Wang Kai YuenLim Thean Ee

REgIStEREd addRESS

15 Hoe Chiang Road #12-05Tower Fifteen Singapore 089316

Telephone 65 6309 0555Facsimile 65 6222 7848

Website: www.ezionholdings.comEmail: [email protected]

pRINCIpLE baNkERS

OVERSEA-CHINESE BANKING CORPORATION LIMITED65 Chulia StreetOCBC CentreSingapore 049513

DBS BANK LTD6 Shenton WayDBS Building Tower OneSingapore 068809

MALAYAN BANKING BHD 2 Battery RoadMaybank TowerSingapore 049907

UNITED OVERSEAS BANK LIMITED80 Raffles Place UOB PlazaSingapore 048624

audItoRS

KPMG LLPPartner-in-charge – Tan Huay Lim(Appointed since 10 December 2007)16 Raffles Quay#22-00 Hong Leong BuildingSingapore 048581

ShaRE REgIStRaR

M&C SERVICES PRIVATE LIMITED138 Robinson Road #17-00The Corporate Office Singapore 068906

CompaNy SECREtaRIES

Lim Ka BeeCheah Boon Pin

15 Hoe Chiang RoadTower Fifteen, #12-05

Singapore 089316Tel: (65) 6309 0555Fax: (65) 6222 7848

Email: [email protected]


w w w . e z i o n h o l d i n g s . c o m

This document has been prepared by the Company and its contents have been reviewed by the Company’s Sponsor, Stamford Corporate Services Pte Ltd, for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (the “Exchange”) . The Company’s Sponsor has not independently verified the contents of this document.

This document has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this document including the correctness of any of the statements or opinions made or reports contained in this document.

The contact person for the Sponsor is Mr Yap Lian Seng Telephone number: 6389 3000 Email: [email protected]

2009 making headway,value delivering

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