jaya holdings annual report 2010

7/27/2019 Jaya Holdings Annual Report 2010

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MOVING AHEAD

JAYA HOLDINGS LIMITED |ANNUAL REPORT 2010


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CONTENTS

1

4

5

FINANCIAL HIGHLIGHTS

CORPORATE INFORMATION

CORPORATE GROUP STRUCTURE

14

22

28

REVIEW OF OPERATIONS

CORPORATE GOVERNANCE

STATUTORY AND FINANCIAL REPORTS

6

10

13

CHAIRMANS STATEMENT

BOARD OF DIRECTORS

KEY EXECUTIVES

A commitment to quality and integrity in all aspects of our

business equipment, service and customer relationships.

A constant drive to satisfy our customers, while always being

mindful of our responsibility to our shareholders, employees

and the community.

CORPORATE MISSION STATEMENT

JAYA HOLDINGS LIMITED | ANNUAL REPORT 2010


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1


PROFIT ATTRIBUTABLE TO SHAREHOLDERS ($000)

100,000

120,000

140,000

160,000

80,000

60,000

40,000

20,000

0.00

1,195

120,774

149,750

103,715107,328

FY06 FY07 FY08 FY09 FY10

GROUP REVENUE ($000)

250,000

300,000

350,000

400,000

200,000

150,000

100,000

50,000

0.00

263,171

307,638 307,164

357,063

306,190


NET ASSET BACKING PER ORDINARY SHARE (CENTS)

50.00

60.00

70.00

40.00

30.00

20.00

10.00

0.00

48.6449.10

56.83

62.06

41.93


EARNINGS PER SHARE (CENTS)

FY06

25.00

20.00

15.00

10.00

5.00

0.00

0.15

15.80

19.43

13.4414.20

FY07 FY08 FY09 FY10

TOTAL ASSETS ($000)

1,000,000

1,200,000

800,000

600,000

400,000

200,000

0.00

514,355

FY06

1,005,058

FY10

601,285

FY07

858,702

FY08

992,144

FY09

SHAREHOLDERS FUND ($000)

FY06

500,000

400,000

300,000

200,000

100,000

0.00

375,383377,743

438,504478,884

318,619

FY07 FY08 FY09 FY10


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2


TOTAL ASSETS OWNED ($ MILLION)

0

200

400

600

800

1,000

1,200

2006 2007 2008 2009 2010

Fixed deposits and cash balances 49 29 20 102 209

Trade receivables and others 25 73 202 98 144

Stocks and work-in-progress 153 176 192 384 270

Investments 29 28 30 7 7

Fixed assets 258 295 404 397 375

Intangible assets 0 0 11 4 0

Total 514 601 859 992 1,005

The Groups total assets stood at $1 billion as at 30 June 2010 and were $13 million or 1% higher than the previous financial year.

Fixed assets decreased as a result of vessel disposals during the financial year under review.

Trade receivables and others were higher mainly due to billings issued by the Shipbuilding Division relating to payment milestones for a

vessel contracted for sale. In addition, the impairment loss in prepayments recognized in the previous financial year was reversed during

the financial year under review after the Group successfully negotiated for the prepayment to be applied towards ongoing projects.

Stocks and work-in-progress decreased substantially as the Group completed and delivered vessels to buyers during the financial year

under review.

Group net cash of $209 million at 30 June 2010 was $107 million or 105% higher than the previous financial year end. Accelerated

vessel sales/disposals at competitive prices improved the Groups liquidity position.


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3


TOTAL LIABILITIES AND SHAREHOLDERS FUND ($ MILLION)

0

200

400

600

800

1,000

1,200

2006 2007 2008 2009 2010

Shareholders fund 319 378 439 375 479

Other liabilities 64 78 96 133 113

Bank borrowings 64 31 204 370 360

Trade creditors and accruals 66 114 120 114 53

Minority interests 1 0 0 0 0

Total 514 601 859 992 1,005

Group shareholders funds increased from $375 million at 30 June 2009 to $479 million at 30 June 2010. The increase was attributable

to retained profits for the year.

Group total liabilities of $526 million at 30 June 2010 were $91 million or 15% lower than the previous financial year. Trade creditors

and accruals reduced by $61 million as the Group paid down its accounts payables.

Financial Year Ended 30 June2006$000

2007$000

2008$000

2009$000

2010$000

Group revenue 306,190 307,638 307,164 263,171 357,063

Profit before tax 127,868 135,125 168,948 8,138 122,351

Profit attributable to shareholders 107,328 120,774 149,750 1,195 103,715

Earnings per share (cents) 14.20 15.80 19.43 0.15 13.44

Net asset backing per ordinary share (cents) 41.93 49.10 56.83 48.64 62.06

Total Assets 514,355 601,285 858,702 992,144 1,005,058

Shareholders fund 318,619 377,743 438,504 375,383 478,884

GROUP RESULTS FOR THE PAST FIVE FINANCIAL YEARS


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4

CORPORATE INFORMATION

BOARD OF DIRECTORS

Tang Kok Yew (Chairman)

Chan Mun Lye (Chief Executive Officer)

Chan Fook Kong (Executive Director)

Mok Weng Sun (Non-Executive Director)

Chung Thian Siang (Non-Executive

Director)Lim Jiew Keng (Independent Director)

Liow Keng Teck (Independent Director)

Goon Kok Loon (Independent Director)

EXECUTIVE COMMITTEE

Chan Mun Lye (Chairman)

Chan Fook Kong

Mok Weng Sun

AUDIT COMMITTEE

Lim Jiew Keng (Chairman)

Mok Weng Sun

Liow Keng Teck

NOMINATION COMMITTEE

Liow Keng Teck (Chairman)

Tang Kok Yew

Lim Jiew Keng

REMUNERATION COMMITTEE

Goon Kok Loon (Chairman)

Mok Weng Sun

Liow Keng Teck

COMPANY SECRETARY

Yeo Poh Noi Caroline

REGISTERED OFFICE

13 Tuas Crescent

Singapore 638707

Telephone: (65) 6265 1010

Facsimile : (65) 6864 5555

Email : [email protected]

Website : http://www.jayaholdings.com

SHARE REGISTRAR

Boardroom Corporate & Advisory

Services Pte. Ltd.

50 Raffles Place

#32-01 Singapore Land Tower

Singapore 048623

Telephone: (65) 6536 5355

Facsimile : (65) 6536 1360

AUDITORS

Ernst & Young LLP

One Raffles Quay

North Tower, Level 18

Singapore 048583

Partner: Philip Ling

(appointed since FY2008)

PRINCIPAL BANKERS

Australia and New Zealand

Banking Group Limited

BNP Paribas

CIMB Bank Berhad

Citibank N.A.

Commerzbank Aktiengesellschaft

DBS Bank Ltd

KBC Bank N.V.

Malayan Banking BerhadOversea-Chinese Banking

Corporation Limited

PT. Bank Mandiri (Persero) Tbk

PT. PermataBank

Rabobank International

RHB Bank Berhad

Standard Chartered Bank

The Hongkong and Shanghai

Banking Corporation Limited

The Royal Bank of Scotland N.V.

United Overseas Bank Limited


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5

CORPORATE GROUP STRUCTURE


5

The above Group structure includes only active subsidiaries and associated companies as at 30 June 2010.

A full listing of the Groups investments is disclosed under item 5 of notes to the financial statements.

JAYA HOLDINGS LIMITED

Jaya Offshore Pte Ltd

100%

Java Marine LinesPte Ltd

100%

Jaya Offshore(H.K.) Ltd

100%

JSE ShippingPte Ltd

100%

Nantong DongjiangShipyard Company Limited

100%

Batamindo CarriersPte Ltd

35%

P.T. JayaAsiatic Shipyard

100%

Jaya InternationalTransport Pte Ltd

100%

Airia Jaya Marine (S)Pte Ltd

100%

AJM ShippingPte Ltd

100%

Jaya DMSMarine Pte Ltd

50%

DMS JayaMarine W.L.L

49%

Jaya Shipbuilding andEngineering Pte Ltd

100%


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CHAIRMANS STATEMENT


I am pleased to report on behalf of the Board that the financial performance of

the Group has been commendable and above expectations. We have managed to

turn in a Net Profit attributable to shareholders of S$103.7 million compared with a

profit of just S$1.2 million in the previous financial year.

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CHAIRMANS STATEMENT

7

DEAR SHAREHOLDERS

THE BUSINESS ENVIRONMENT

We commenced our financial year (FY 2010) which ended

30 June 2010 in the face of a rather difficult and uncertain

economic environment caused by the Global Financial Crisis.

The sombre mood of the global community, shared alike by

political and business leaders as well as the ordinary man in

the street, was clouded by fear of a severe and prolonged

Great Depression-style economic and financial downturn.

Fortunately, the two large and increasingly important countries,

China and India, continued to demonstrate their economic

dynamism and resilience. These two countries were able to

sustain their strong economic growth (partly due to massive

stimulus policies) and in so doing helped to partly counter

the depth and severity of the global crisis. Credit must also

be attributed to the governments around the world which

had launched prompt and wide-ranging fiscal initiatives to

arrest the plunging economic situation and subsequent loss of

confidence. These initiatives, which included bold and massivefiscal and monetary counter measures, have since proven to be

effective and helped to prevent a total financial meltdown and

a prolonged economic crisis.

Notwithstanding the respite and relatively lighter pain that the

world has endured compared to what was expected at the

outset of the global crisis, the past one year has not been easy

for most business enterprises. The ensuing deep recession left

few countries untouched, there were major job losses and, at

one time, financing markets seized up. The offshore and marine

industry was not spared the crisis and had to face a challenging

time. Although the price of crude oil has since stabilized from

its low of below USD 40 per barrel at the initial stage of our

financial year to its current range of between USD 70 to USD 80

per barrel by June 2010, the pick up in the industrys activities

has not been sufficiently robust. The demand for offshore

support vessels has consequently not been recovering well since

its drastic fall from the peak of 2007/08. The continuous coming

on stream of new buildings which were contracted during the

pre-crisis period meant that demand was quickly met and an

oversupply situation existed throughout the year.

In spite of such adverse conditions under which the Group had

operated during the financial year, I am pleased to report on

behalf of the Board that the financial performance of the Group

has been commendable and above expectations. We have

managed to turn in a Net Profit attributable to shareholders of

S$103.7 million compared with a profit of just S$1.2 million in

the previous financial year.

OVERCOMING OUR FUNDING CHALLENGES

In last years report, I had to explain the additional challenges

the Group had to face besides having to bear the severe impact

of the Global Financial Crisis. I would like to briefly recapitulate

these challenges and provide an account of where we are today

with respect to those which are company-specific.

As part of our dual-pronged business strategy as a fleet

operator and shipbuilder of offshore support vessels (OSVs),

we had embarked on a long range new building programme

based on the then robust growth prospects of the oil and gas

industry, before such prospects were drastically over-riddenby the ensuing Global Financial Crisis. Orders for the vessels

main engines and other key equipment had to be placed well

in advance as their delivery lead times were then in excess of

24 months. Demand for our vessels was adversely affected

as activity in the oil and gas industry dramatically slowed

down. Compounding the already difficult situation was that

our building programme was reaching a peak in its funding

requirements. This unfortunately coincided with the drastic

tightening of credit market conditions. The negative outlook

in the marine sector had also caused some of our lenders to

express reluctance to roll over or extend credit facilities granted

to the Group, which caused severe strains to our capital

structure and cashflow.

To overcome these challenges, we embarked on a three-

pronged strategy to address the situation we had found

ourselves in. Firstly, we sought to reconfigure our newbuilding

programme, through a vigorous process to cancel or defer our

commitments as much as possible so as to alleviate our cash

outflow requirements. Secondly, in order to ensure that the

Group has in place an appropriate capital structure to supportits revised build programme, we also embarked on a major



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CHAIRMANS STATEMENT

restructuring exercise on the Groups indebtedness. The third

prong of the strategy was to step up our efforts to acceleratevessel sales and disposals to build up our cash reserves.

In respect of our efforts to reconfigure the new build

programme, our management had actively engaged in

dialogue with our key equipment suppliers to secure their

co-operation in our restructuring efforts. Fortunately, we had

a long term relationship with many of them and have been

successful in reaching a good level of project cancellations

and deferments. In anticipation of costs to be incurred with

this reconfiguration exercise, we had in the prior financial year

recognized impairment losses and provisions for associated

costs for less viable projects. Following the reconfiguration

of our build programme, we have managed to write back a

portion of the impairment losses and provisions during the

financial year under review.

As previously announced, the Group had appointed nTan

Corporate Advisory Pte Ltd as its financial advisor to assist

and advise the Group in its debt restructuring exercise.

The Company and three of its key subsidiaries (being Jaya

Shipbuilding and Engineering Pte Ltd, Java Marine Lines Pte

Ltd and Airia Jaya Marine (S) Pte Ltd) each presented a debt

restructuring plan to the High Court of Singapore on 13

August 2009. Through frank and highly interactive working

relationships with our lenders, these schemes of arrangement

in their final form have each been approved unanimously by the

scheme creditors present and voting on 28 January 2010 and

sanctioned by the High Court of Singapore on 9 February 2010.

These schemes took effect from 25 February 2010. Accordingly,

the Groups unsecured bank borrowings have been restructured

into 5-year USD-denominated secured obligations under

acceptable terms. The approved debts are secured by variousfixed and floating charges over the assets of the Company and

its three subsidiaries as above mentioned.

We have also done well in regard to our third strategic thrust

of stepping up efforts to accelerate vessel sales and disposals.

Despite the tougher and more competitive landscape in the

sale and purchase market for offshore support vessels, we had

managed to sell or dispose of 19 vessels during the financial

year at competitive prices, which is the same number as

achieved in the prior financial year. Total gross proceeds from

the sale and disposal of the 19 vessels amounted to S$421.5

million compared with S$441.2 million recorded in the previous

financial year.

FINANCIAL RESULTS

Revenue

The Group recorded total revenue of $357.1 million which was

36% higher than the previous financial year. The Shipbuilding

Division recorded revenue of $293.0 million, or 70% higher

than the previous financial year. This was achieved from 11

vessels sold as compared to 7 vessels in the previous year. The

Offshore Shipping Division however recorded lower revenue of

$64.1 million or 29% lower than that of the previous year. A

combination of lower fleet utilization of 71% (FY09: 83%) and

a smaller fleet size which was 21 vessels as at 30 June 2010

compared with 24 vessels a year ago, accounted for the lower

revenue in this division.

Net Profit

The Groups Net Profit attributable to shareholders was $103.7

million, a significant improvement over the $1.2 million

recorded in the previous financial year.

The $103.7 million net profit for the financial year included

restructuring costs of $28.3 million, provision or impairment

charges and associated shutdown costs on the Nantong

Dongjiang Shipyard of $14.1 million and write-back of provision

for cancellation/deferment costs of $23.4 million charged in the

previous financial year, after the associated projects were finalized.

Excluding these non-recurring charges, Net Profit for the financial

year under review would have been $122.7 million.

In the previous financial year, the reported $1.2 million was

after impairment losses and provisions for associated costs

of $99.4 million, $71.0 million in forex and translation losseswhich resulted from the Group entering into forex contracts and

hedging its foreign currency denominated costs relating to its

shipbuilding programme. Excluding the impairment losses and

provisions for associated costs, the Groups Net Profit for the

previous financial year would have been $100.6 million.

Dividends

I regret to advise that the Board is unable to recommend a

payment of a dividend for the financial year under review.

Under the schemes of arrangement agreed with the scheme

creditors, the payment of any dividend is subject to certain


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CHAIRMANS STATEMENT

conditions to be met by the Company. These include

stipulations that dividends can only be paid out of any increasein paid up capital since the effective date of the schemes and

an equal amount must first be prepaid to scheme creditors. The

Boards present focus is to restore the Group to a sound and

solid financial footing so as to be able to meet its shipbuilding

commitments and installment repayments under the schemes

of arrangement.

Outlook and Prospects

The ship chartering market was weak during the year under

review and we expect such challenging conditions to remain

for most of the current year as it will take time for the market

to work out the oversupply situation. Charterers are getting

the benefit of having to choose from a wider pool of available

vessels for any one project due to the expansion of the global

fleet as more new buildings are progressively completed

and join the already crowded supply pool. These factors will

continue to limit charter rate growth and charter tenure length

as charterers become more confident with relying on spot

charters to optimize their productive usage of vessels once

chartered in.

Although we do not anticipate any significant pick-up in new

building undertakings by fleet owners, the sale and purchase

activities for nearly completed or recently completed vessels

should remain active. The industry downturn affecting offshore

support vessels has already pushed down their asking prices

significantly from their previous peak in 2007 and serious

ship-owners and operators are not optimistic there is much

more scope for bottom-fishing. Those with an ageing fleet

needing renewal or those operators with good prospects for

profitably deploying their vessels should be in a better position

to start rejuvenating or expand their fleets, now that the vesselfinancing market has recovered somewhat.

We remain confident that the longer term fundamentals of

the oil and gas industry will remain positive, underpinned

by continuing world energy demand growth. Inasmuch as

renewable energy has been heralded as a clean and growing

energy source, fossil fuel will remain very much the dominant

source of energy for the world in the foreseeable future.

To put ourselves in a better position to address the requirements

of the oil and gas industry and prepare for an anticipated pick

up in activity in the industry some time in the future, we have

also focused our attention on sharpening our competitive edgethrough improving our work processes. To this end, we have

implemented an Enterprise Resource Planning (ERP) system

using SAP software to integrate our production planning,

materials control and financial reporting systems. Another area

we have been putting emphasis on is raising our health, safety,

security and environmental standards, and awareness of such

standards and practices among our workforce.

ACKNOWLEDGEMENT AND APPRECIATION

I am grateful to our Board of Directors for their invaluable

counsel and contributions in navigating the company safely

through the very challenging conditions of the past year.

On behalf of the Board, I wish also to thank our shareholders

for their patience and continued support of the Companys

efforts to stabilize and improve the business. Our appreciation

also goes to our loyal equipment suppliers and subcontractors

who so admirably stood by us during these difficult times. Our

banks have also been supportive and understanding and for

that, we would like to thank them.

Last but not least, to members of the management and general

staff of the company, the past year has been a year full of

intense work activities and I know most of you had put in very

concerted efforts. Rest assured that your Board is aware of your

loyalty, commitment and hard work during the past year and on

its behalf, let me convey our deep sense of appreciation.

TANG KOK YEW

CHAIRMAN

18 September 2010


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BOARD OF DIRECTORS

He is the Chairman of the Group and a

member of the Nomination Committee.

Mr Tang joined UBS Capital as Chairman,Asia Pacific in 1999 before co-founding

Affinity Equity Partners in 2002. Prior to

UBS Capital, he was the Chief Executive

for Investment Banking, East Asia at

Union Bank of Switzerland in 1995.

Following the merger of Union Bank of

Switzerland and Swiss Bank Corporation

to form UBS, Mr Tang became Chief

Executive, Hong Kong, of UBS Group

and Asia Regional Head of Investment

Banking for UBS Investment Bank.

Prior to UBS, he served in a number of senior

roles over 20 years in Banque Indosuez

Group and Chase Manhattan Bank.

Mr Tang holds a Bachelor of Economics

(Accounting) Degree with First Class

Honours from the University of Malaya.

TANG KOK YEWMalaysian, 57

CHAN MUN LYESingaporean, 59

CHAN FOOK KONGSingaporean, 61

He is Chief Executive Officer of the Group

and also sits on the Executive Committee.

Mr Chan is a Chartered Engineer (UK)and has a Diploma in Mechanical

Engineering, an Extra First Class Engineer

(UK) qualification and is a Fellow of the

Institute of Marine Engineering, Science

& Technology (London). Mr Chan joined

the Group in 1982 as one of its founding

shareholders and prior to that, he had

12 years of experience in the shiprepair,

shipowning and operations, including 5

years as a marine engineer with various

shipping companies. Mr Chan is responsible

for the overall business development and

management of the Group.

He is the Executive Director and a member

of the Executive Committee. Mr Chan

is a FCPA Singapore and has a Bachelorof Accountancy from the University of

Singapore. Prior to joining the Group in

1993, he had over 20 years of experience

with several multinational companies

rising from accountant to finance director

positions. He is responsible for the business

development and strategic planning of the

Group and its corporate services.

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BOARD OF DIRECTORS

He is a Non-Executive Director and a

member of the Executive, Audit and

Remuneration Committees. Mr Mok is aPartner of Affinity Equity Partners. Prior to

that, he was a Partner at UBS Capital Asia

which he joined in 1997, having previously

worked with CF East Asia, a boutique

financial advisory practice. Prior to joining

CF East Asia, Mr Mok spent six years in

business development and finance roles

with Eastman Holdings, an engineering

group in South East Asia with interests

in marine-related construction services

and factory automation. Mr Mok holds a

Bachelor of Science Degree in Industrial

& Management Engineering and an

MBA degree from Rensselaer Polytechnic

Institute in New York, USA.

MOK WENG SUNMalaysian, 43

CHUNG THIAN SIANGSingaporean, 38

LIM JIEW KENGSingaporean, 70

She is a Non-Executive Director of the

Group and was appointed to the Board

on 30 September 2008. Ms Chung isan Executive Director of Affinity Equity

Partners. Prior to joining Affinity Equity

Partners, she was an Investment Manager

in the asset management subsidiary of the

Great Eastern Life group of companies in

Singapore, and a Senior Manager in the

Corporate Finance Division in Singapore

Power Limited. From 1997 to 2000,

she worked in the Investment Banking

Division of UBS, executing a variety

of corporate finance transactions in

South East Asia. From 1995 to 1996,

she worked in Deutsche Bank (formerly

Morgan Grenfell), advising on project

finance transactions. Ms Chung holds

a degree in Accountancy with Second

Upper Class Honours from Nanyang

Technological University, Singapore.

He is a Non-Executive and Independent

Director , Chairman of the Audit

Committee and a member of theNomination Committee. Mr Lim has

a Bachelor of Social Science degree

(Economics, Honours) from the University

of Singapore and had completed an

Advanced Management Programme at

Duke University (USA). Currently a director

and senior consultant at BSL Consultants

Pte Ltd, Mr Lim has had extensive

experience in the financial and banking

industry. Besides his appointments with

the Company, he is also on the board

of two other listed companies, namely

GP Batteries International Limited and

Surface Mount Technology (Holdings)

Limited. Mr Lim is a member of the

Singapore Institute of Directors.


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BOARD OF DIRECTORS


Director, Chairman of the Nomination

Committee and a member of both theAudit and Remuneration Committees.

Mr Liow has a Degree in Mechanical

Engineering (Honours) from the University

of Singapore and is also a registered

Professional Engineer (Singapore).

Before going into private practice as

an engineering consultant in 1997, Mr

Liow was with the Public Utilities Board,

as Managing Director of Development

Resources Pte Ltd, its engineering

consultancy arm. He also sits on the

boards of Manhattan Resources Ltd and

several unlisted companies. Mr Liow is

also a member of the Singapore Institute

of Directors.

LIOW KENG TECKSingaporean, 69

GOON KOK LOONSingaporean, 67


Director and Chairman of the Remuneration

Committee. Mr Goon holds a Degree inElectrical Engineering (First Class Honours)

from the University of Liverpool (UK) and

is a Fellow of the Chartered Institute of

Logistics & Transport, FCILT. Mr Goon was

President (International Business) in PSA

Corporation Ltd when he left in 2003. He

is currently Executive Chairman of Global

Maritime and Port Services Pte Ltd. In

addition, Mr Goon sits on the boards of

Venture Holdings Ltd, Yongnam Holdings

Ltd and Jurong Port Pte Ltd.

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13

FINANCEDIVISION

Thai Kum FoonChief Financial Officer

Koh Ai Chin

Financial Controller

CORPORATE SERVICESDIVISION

Admin/HRGinny SohGroup Manager

Sean OngManager - Batam Yard

Purchasing

Toh Tong SengManager

Legal/ContractJustin ChiaManager

Internal AuditDesmond TinManager

SHIPBUILDING/SHIPREPAIRDIVISION

Lim Siew KoonPresident

Kwan Seng Fatt

Senior Vice President (Engineering)

Lau Chor HuaSenior Manager - Singapore Yard

Andy TanSenior Manager - Batam Yard

Daniel TengSenior Manager - China Yard

Lee Boon ChyeProject Manager

KEY EXECUTIVES

OFFSHORE SHIPPINGDIVISION

MarketingPhilip TanManager

OperationsCapt. Baharrudin Bin AliManager

Engineering SupportKoh Hwee SenSenior Manager


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OFFSHORE SHIPPING DIVISION

The chartering market was weak during the financial year underreview due to the expansion of the global charter fleet with new

vessels coming on line and is expected to remain challenging in

the near term. Although the chartering market experienced an

uptick in charter activity early in the year, it will take some time

before charter rates recover to previous levels as the oversupply

of vessels continues to impact the global charter market.

The Offshore Shipping Division operates a relatively young fleet

due to the continual fleet renewal strategy of the Group, which

involves the regular sale of older and lower specification vessels

and the addition of newer and more sophisticated vessels built

by the Groups Shipbuilding Division. The average age of the

current fleet is 2.6 years, well below the industry average of

20 years. These vessels are primarily involved in assisting other

offshore structures and equipment including the positioning

of rigs, the handling of anchors and the supply logistics of

operating platforms.

VESSEL TYPE VESSEL DESCRIPTIONNO. OF

VESSELSAVERAGE

AGE

Anchor handlingtug and supplyvessels / anchorhandling tugs

Transport oilfield suppliesand equipment

Tow, lift and repositionanchors for oil rigs,construction vesselsand barges

15 2.7

Utilitysupply vessels

Carry supplies toand from offshorestructures and rigs

1 6.3

Platformsupply vessels

Transportation of goodsand personnel to and fromoffshore oil platforms andother offshore structures

1 0.1

Accommodationwork barges

Steel barges fitted withhousing facilities foroffshore construction anddecommissioning

1 1.0

Deckcargo barges

Non-propelled steel bargesfitted to carry heavystructures and supplies

3 2.1

21 2.6

The Offshore Shipping Division recorded total revenue of$64.1 million, a 29% drop from the previous financial year of

$90.1 million. Fleet utilization was 71% as compared to 83%

recorded in the previous financial year as a result of softer

charter market conditions. This was mitigated by an improved

average daily vessel charter rate of $12,232, 10% higher

than $11,149 in the previous financial year due to better fleet

composition. In addition, the Group recently secured two term

charter contracts amounting to US$10 million in total for two

of its mid-sized AHTS which also contributed to the improved

average daily vessel charter rate. Fleet size reduced from 24

vessels a year ago to 21 as at 30 June 2010. Seven vessels

were added to the fleet of which 2 of them were sold shortly

thereafter and a total of 8 vessels was disposed in the current

financial year as the Group capitalized on improved market

sentiment and sold/disposed vessels to generate cash to fund

its operations and to strengthen the Groups financial position

during the financial crisis. The Division generated gains of $30.9

million from the disposal of 8 vessels compared to $64.5 million

from the disposal of 11 vessels in the previous financial year.


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16


For the Divisions total chartering revenue, customers from the

oil and gas sector accounted for 90%. On the geographicalspread where the vessels were employed, the ASEAN countries,

comprising of Malaysia, Thailand and Indonesia, collectively

accounted for 67% of the total charter revenue. The balance

of the charter revenue was contributed by customers from

Australia, the Middle East region and distant places including

Sakhalin and Russia.

Worldwide20.4%

Australia4.4%

Russia1.6%

Qatar7.0%

Malaysia14.8 %

Thailand24.5%

Indonesia27.3%

CHARTERING REVENUE BY

GEOGRAPHICAL REGION FY2010

Worldwide26.6%

Australia3.2%

Saudi Arabia2.3%

Qatar16.3%

Malaysia4.6%

Thailand22.7%

Indonesia24.3%

CHARTERING REVENUE BY

GEOGRAPHICAL REGION FY2009

Bareboat36.7%

Others5.9%

Time57.4%

CHARTERING REVENUE BY CHARTER TYPE FY2010

Bareboat33.2%

Others1.1%

Time65.7%

CHARTERING REVENUE BY CHARTER TYPE FY2009

The Divisions revenue was contributed 57% by time charter,

37% by bareboat charter of its vessels, with remaining 6% from

management fees derived from managing third party vessels

and miscellaneous charges such as mobilization fees. About

8% of the revenue was derived from shorter term charters

with duration of six months or below, with the balance 92%

from longer term charters in excess of six months and up to

three years.


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The enforcement of Cabotage Law in Indonesia from January

2011 is expected to pose a challenge to non-Indonesian flaggedvessels. A total of 12 types of vessels will not be allowed for

operation by foreign-flagged vessels and as such operating

permits will no longer be issued. Accommodation barges longer

than 250ft, AHT, AHTS, ASD tugboats, PSV, Seismic vessels,

Floating Storage and Offloading / Floating Production Storage

and Offloading units and crane barges greater than 100T will

be allowed to operate under foreign flags until the end of

2010 if suitable Indonesian flag vessels are not available in the

market. Some oil companies in recent months had started to

implement the Indonesian flag requirement ahead of schedule

because many of these operators are fearful of the penalty to

be imposed. To overcome the challenge, the Group is looking

at establishing joint ventures with Indonesian parties to co-own

the vessels to meet Indonesian flag requirements.

SHIPBUILDING DIVISION

At the commencement of the financial year under review in

July 2009, the lingering effects of the global economic and

financial crisis were still imposing considerable uncertainty on

the timing of any improvements in the shipbuilding sector.

The weak oil price and economic climate had caused players

in the oil and gas industry to cut back on their exploration and

production (E&P) budgets. New build-to-order activity remained

low as the market was still absorbing deliveries of orders made

in prior years. The oversupply of vessels had naturally resulted

in charter rate erosion, adding to the disincentive for any new

vessel building.

The situation stabilized to some extent in the 2nd half of the

financial year under review as ship prices were already marked

down and the vessel financing market was re-establishing itself.

Ship owners with stronger financial muscles were also taking

a longer term view resulting in increased buyer enquiries for

the Group.

In view of the weak shipbuilding market, we undertook a

reconfiguration of our new building programme in conjunction

with our exercise to restructure the Groups bank loans. These

efforts saw us working closely with our major equipment

suppliers to defer delivery of equipment for some of our planned

new buildings to later dates. This enabled us to slow the pace of

shipbuilding and eased the pressure on the Groups cash flows.

Consequently, the Nantong Dongjiang Shipyard facility became

surplus to the Groups building capacity requirements. Hence,

the Group made a decision to shut the facility. Nevertheless,

our Singapore and Batam shipyards remained sufficiently active

and the workforce was well employed during the financial year

under review.

Following the successful restructuring of its bank loans, the

Group was well placed to carry out its moderated shipbuilding

programme. During the year under review, the Group took

delivery of 16 new vessels, namely, 9 Anchor Handling Tug &


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Supply Vessels (AHTS), 3 accommodation barges, 2 Platform

Supply Vessels (PSV), 1 Subsea Operation Vessel and 1 DeckBarge. Of these 16 completed vessels, the Group capitalized

on the improved market sentiment and sold 9 vessels upon

completion at competitive prices while 7 were added to the

Groups charter fleet. Of the 7 added to the charter fleet, 2

vessels were sold shortly thereafter. The reconfiguration of the

new vessel building programme and the acceleration of vessel

sales and disposals contributed to the strengthening of the

Groups financial position.

For the financial year under review, the Division generated

revenue of $293.0 million, a 70% increase from $172.5 million

in the previous financial year. The Division contributed

$62.4 million or 60% of the Groups net profit after tax. In

the previous financial year, the Division recorded a net loss

of $74.7 million, after charging $99.4 million of impairment

losses and provisions for associated costs and a forex loss of

$37.4 million. These impairment losses and provisions were for

projects deemed to be less viable at that time.

Very active negotiations with our equipment vendors were

carried out in regard to cancellation and/or deferment of

equipment deliveries. As a result, the Division was able to write

back $23.4 million of the provision for cancellation/deferment

costs during the financial year under review.

The demand for oil and gas is expected to increase as the global

economy recovers and industries increase their pace of activities.

The emerging economies of China, India and the Middle East

are expected to increase their energy consumption, for both

industrial and retail consumers. The International Energy Agency

forecasted that the global oil demand will increase from

84.7 million barrels per day in 2009 to 87.9 million barrels perday in 2011.

Given the estimated depletion of oil reserves from onshore and

shallow water wells of about 5-7% per annum (source: UK

Energy Research Centre Aug 2009 and Maritime Reporter), oil

prices are expected to remain stable and high. Increased stability

in oil prices around the range of US$70 to US$80 per barrel

provides support for increased exploration and production

spending which is likely to increase the demand for offshore

support vessels. E&P spending in 2010 by the oil majors is

expected to revert to the level of 2008 after experiencing a

brief dip of 8% (source: DnB NOR May 2010) in 2009. The jack-

up and semisubmersible drilling rigs contracted in prior years

are also expected to be delivered in 2010 and 2011 and are

mainly planned for deepwater operation. Thus, E&P activities

are projected to move into deepwater areas and the demand

for vessels capable of operating in harsh weather environment

will likely see an upturn.

The Group is committed to building more powerful and

technically advanced vessels to meet more stringent demands

of fleet owners and operators. As at 30 June 2010, the Group

had a shipbuilding programme of 30 vessels:

Projected Completion

Vessel type FY11 FY12 - FY14 Total

AHTS 13 10 23

~ 5,000 BHP 6 6

~ 8,000 BHP 7 4 11

~ 12,000 BHP 4 4

~ 16,000 BHP 2 2

PSV 2 2

Sub-sea diving / ROVsupport vessels 1 2 3

Barges 2 2

Total projects 16 14 30


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SINGAPORE SHIPYARD BATAM SHIPYARD

Location:Tuas, Singapore Location:Batam, Indonesia

Size:24,939 sqm Size:181,038 sqm

Shoreline:130m Shoreline:320m

Berths: Berths:

- Two 90 x 20m berths - Five 100 x 20m berths

- One 75 x 20m berth Capacity:Build commercial and

Capacity:Build up to 3 vessels per year customized vessels

Capability:Build highly-customized and

sophisticated offshore vessels

Type of vessels:

- 5,000 to 10,000 BHP AHTSs

Type of vessels: - Accommodation barges

- 8,000 to 16,000 BHP AHTSs - Sub-sea diving / ROV support vessels

- PSVs

OUR SHIPYARDS:


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CONVENTIONAL SHIPPING DIVISION

This division has been dormant since the last vessel in this

Division was disposed of in November 2008.

CORPORATE AFFAIRS AND HUMAN RESOURCES

Human Resource

As at 30 June 2010, the Group had a total headcount of 440

direct employees working in its corporate office and three

wholly owned shipyards in Singapore, Indonesia and China.

In addition, the Group worked closely with a pool of sub-

contractors who are each dedicated to specific work scopes in

the shipbuilding process such as hull structure, mechanical and

electrical installation, accommodation modules and painting.

In our vessel chartering operations, we had 288 crew members

on seamen contracts who, like the subcontracted workers, are

also not included in our direct headcount.

The Group strives to continually increase and sharpen itscompetitive edge with continuous learning and development

programmes for the staff. We recognize our employees are

our key assets through whom the Groups corporate goals

and visions can be shared and worked towards attainment.

During the year, we aimed to develop team spirit among the

staff through various formal communication sessions between

management and staff as well as employee recreation and

social functions.

To improve and streamline the various work processes within the

organization, the Group implemented an integrated Enterprise

Resource Planning system. This system went live in August

2010. The company will continue to invest in the training of

our employees so that they are equipped with the right skills to

perform their work and grow their careers with the Group.

Even as we strive towards constant process improvements,

we will continue to place strong emphasis on promoting a

close-knit, conducive and safe working environment for all our

employees so that a high level of motivation and satisfaction

comes with their jobs.

The Group has identified several corner stones and key concepts

from which it radiates its human resource management

strategies, as elaborated below.

Workplace Health and Safety

Our employees must be able to enjoy a working environment

where risks to personal safety and good health are constantly

identified and eliminated to the greatest extent possible.


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Besides encouraging employees to think of the company as one

happy family to work with, we are obliged to ensure that eachemployee returns safely at the end of each day to his or her own

family at home. The Group is therefore committed to promoting

safety awareness among its staff and subcontractors. These are

regularly carried out through in-house safety talks and training

for our employees and sub-contractors working in our yard.

Our Safety Committee includes members from various

work departments and functions. This is to ensure a wider

representation of views and in so doing we hope to reach out

to a wider awareness among employees that safe practices

are responsibilities owed by each employee to the rest of his

fellow employees.

Motivation and Reward

The Group regularly reviews and enhances its benefits and

compensation terms with reference to those of its industry

peers. This is to ensure that the Groups employment terms are

competitive and enable the Group to retain its key employees.

A well motivated workforce will ensure that targets are

aggressively pursued and each employee will give his best

performance. We are committed to nurturing our workforce

to their fullest potential with suitable training programmes and

deserving employees are identified and given promotions or

enlargement of their job scopes.

The Group continues to collaborate and support the local

polytechnics and technical institutes through sponsorship

programmes for their top students.

Team Spirit at Work

We recognize the importance of team spirit as a key driver

in ensuring that organizational goals and objectives are met.Besides interacting through formal work routines and meetings,

we believe that team spirit can also be cultivated through a

lighter vein when employees are involved in company social

events. Such events at Jaya include Christmas lunch, lunar new

year Lo Hei, Fruity Nite with durians as the main draw and

bowling competitions. These events see wide enthusiasm and

participation from all levels of the workforce.

Compliance with International Operating Standards.

Being a provider of vessels for the oil and gas industry, we take

great care to ensure that our operating standards meet with the

exacting demands of the industry. Our operations are guided

by well defined and documented manuals and procedures withwhich our personnel are well familiarized.

The Group recognizes the need to meet customers satisfaction

and abide strictly to the requirements of the QEHS (Quality,

Environment, Health and Safety Standard), which is vital to

our business. We are committed to be fully in compliance with

ISO9001:2008, ISO14001:2004, OHSAS18001:2007 and ISM

Certification at all times.

Investor Relations

The Group is committed to the creation of long term value for

its loyal shareholders, despite that its business is affected on a

macro level by the cyclical nature of the oil and gas industry. The

global economic crisis which first started in September 2008

had adversely affected the industry. For the previous financial

year ended 30 June 2009, we had a dismal performance with

a Return on Equity (ROE) of 0.3% but for the financial year

under review, we have bounced back strongly with a ROE

of 24.3%.

We are committed to keeping our shareholders and theinvesting community updated promptly on significant events

through regular announcements and analyst briefings, including

key developments of our financial restructuring exercise which

was carried out during the year. Each of our quarterly results

was supported by an analyst briefing. The results and briefing

materials were also posted on our website, which was recently

revamped to enhance user interface.


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REPORT ON CORPORATE GOVERNANCE

Jaya Holdings Limited (the Group or Company) is committed to maintaining a high standard of corporate governance within theGroup to promote accountability, transparency and corporate fairness. The Group adopts practices based on the Code of Corporate

Governance 2005 (the Code) where it is applicable and practical to the Group and the Best Practices Guide issued by the Singapore

Exchange Securities Trading Limited (the SGX-ST). Good corporate governance establishes and maintains a legal and ethical

environment in which the Group strives to preserve the interests of all stakeholders.

This statement outlines the main corporate governance practices that were in place or implemented during the financial year:

BOARD OF DIRECTORS

The primary functions of the Board are to:-

(i) oversee the business affairs of the Group, provide entrepreneurial leadership to Management and confer with them regularly;

(ii) evaluate and set strategic aims and ensure that the necessary financial and human resources are in place for the Company to

meet its objectives;

(iii) establish a framework of prudent and effective controls which enables risk to be assessed and managed;

(iv) monitor and review management performance; and

(v) set the Companys values and standards and ensure that obligations to shareholders and others are understood and met.

The Board currently has eight members, comprising six non-executive Directors (including the Chairman) and two executive Directors.

Three of the six non-executive Directors are considered independent by the Nomination Committee.

The nature of each directors appointment on the Board and its Committees are set out below:

DirectorNature of BoardMembership

Committee Membership

Audit Nomination Remuneration Executive

Tang Kok Yew Non-Executive Chairman Member

Chan Mun Lye Chief Executive Officer Chairman

Chan Fook Kong Executive Director Member

Mok Weng Sun Non-Executive Director Member Member Member

Chung Thian Siang Non-Executive Director

Lim Jiew Keng Independent Director Chairman Member

Liow Keng Teck Independent Director Member Chairman Member

Goon Kok Loon Independent Director Chairman

The Board is made up of individuals with a good balance of professional, technical and financial backgrounds with requisite blend of

expertise, skills and attributes to oversee the Companys growing businesses. The Directors take a keen interest in the Groups business

strategies and are committed to increasing the level of corporate governance in the Group so as to enable the Board to carry out such

functions more effectively.


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To enable the Board to fulfill its responsibilities, Management provides the Board with regular management and financial reports

containing complete, adequate and timely information prior to Board meetings. Should the Directors, whether as a group or individually,need independent professional advice, the Company will, upon direction by the Board, appoint a professional advisor to render such

advice. Newly appointed Directors are briefed by Management on the business activities of the Group and its strategic direction and

will also be updated on major events of the Group.

The roles of the Non-Executive Chairman and the Chief Executive Officer (CEO) are separate. There is a clear division of responsibilities

between the two Directors. The Non-Executive Chairman leads the Board to ensure its effectiveness and sets the agenda. He facilitates

the effective contribution of non-executive Directors and encourages constructive relations between the Board and Management. The

CEO focuses his attention on the day-to-day running of the operations.

The Company Secretary attends all Board meetings and ensures that Board procedures are followed. The Company Secretary also

ensures that requirements of the Companies Act and all the rules and regulations of the SGX-ST are complied with. The Company

Secretary also facilitates an open and regular flow of communication between the Company and the SGX-ST and the Accounting &

Corporate Regulatory Authority.

The Board has a process for assessing the effectiveness of the Board as a whole and the contributions of individual Directors. The

process, managed by the Nomination Committee, comprises an assessment of both qualitative and quantitative criteria. The results

of the evaluation are used to identify areas for improvement in the discharge of the Boards duties. This annual process is the principal

means by which the Board monitors performance and makes continuous improvements to the effectiveness of the Board.

All Directors are subject to retirement and re-election at least once every three years. Annually, the Nomination Committee determines

the independence of Directors according to the criteria stipulated in the Code based on each Directors declaration.

EXECUTIVE COMMITTEE

The Executive Committee was formed on 17 March 1998 with a view to assisting the Board and is responsible for supervising the

management of the Groups operations within limits of the executive power delegated by the Board. As at the date of this report,

the Executive Committee comprises the Chief Executive Officer, Mr Chan Mun Lye, Executive Director, Mr Chan Fook Kong and the

Non-executive/Non-independent Director, Mr Mok Weng Sun.

The Executive Committee carries out any instructions which the Board gives from time to time and meets regularly to review the

progress of corporate development projects and business performance. It is responsible for the day-to-day operations of the Group

and meets regularly with Senior Management to discuss both policy and operational issues, and to implement Board decisions.

AUDIT COMMITTEE

As at the date of this report, the Audit Committee comprises three members, all of whom are non-executive/independent and non-

independent Directors. They are:

Lim Jiew Keng Chairman/Independent

Liow Keng Teck Independent

Mok Weng Sun Non-independent


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The Audit Committee meets at least four times a year and performs the following functions:

(i) reviews with the external auditors their audit plans and results of the audit;

(ii) reviews the draft financial statements of the Company and the Group in conjunction with the external auditors comments

thereon prior to their submission to the Board of Directors;

(iii) reviews the reports of the internal auditor;

(iv) reviews the internal control procedures of the Company;

(v) reviews interested person transactions in accordance with the requirements of the SGX-STs Listing Manual;

(vi) reviews the external auditors management letter and the response from management; and

(vii) carries out special purpose projects to assist Management in performing evaluation and decision making.

The Audit Committee, having reviewed all non-audit services provided by the external auditors, Messrs Ernst & Young LLP, to the Group,

is satisfied that the nature and extent of such services would not affect their independence and has recommended the re-appointment

of Messrs Ernst & Young LLP as auditors at the forthcoming Annual General Meeting.

To carry out its functions, the Audit Committee reports regularly to the Board and interacts with the external auditors and senior

management staff. It also meets with the external auditors without the presence of management staff at least once a year.

The Company has implemented a whistle blowing policy which provides well-defined and accessible channels in the Group through

which the employees may raise concerns about improper conduct within the Group and possible improprieties in matters of financial

reporting, operation or other matters. The staff can disclose information directly to the Chairman of the Audit Committee, or through

the Internal Audit Office, and are assured that they are protected to the extent possible, from reprisals for reports made in good faith.

The Audit Committee will ensure independent investigations of such matters are carried out with appropriate follow-up action.

REMUNERATION COMMITTEE

The Remuneration Committee was established on 3 June 2002 and meets at least once a year. As at the date of this report, it comprises

the following three members:-

Goon Kok Loon Chairman/Independent

Liow Keng Teck Independent

Mok Weng Sun Non-independent

During the financial year, the Remuneration Committee had reviewed and approved:-

(i) the executive Directors and senior managers remuneration packages; and

(ii) the Directors fees payable to the non-executive Directors, having regard to the roles that each Director plays. The Directors fees

are submitted for shareholders approval at the Annual General Meeting.



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The Remuneration Committee also determines the eligibility of participants in the Jaya Employees Share Option Scheme (Scheme)

and the number of options to be offered to each participant in accordance with the terms and conditions of the Scheme.

A summary of Directors remunerations for financial year ended 30 June 2010 is as follows:

Remuneration Band &Name of Director

Salary%

Fees%

Bonus%

Otherbenefits

%Total

%

$250,000 and above

Chan Mun Lye 31 - 69 - 100

Chan Fook Kong 34 - 66 - 100

Below $250,000

Tang Kok Yew - - - - -

Mok Weng Sun - - - - -

Chung Thian Siang - - - - -

Lim Jiew Keng - 100 - - 100

Liow Keng Teck - 100 - - 100

Goon Kok Loon - 100 - - 100

The remuneration of five officers, not being Directors, who received the highest emoluments during the financial year ended 30 June2010, is provided in the following table:

Remuneration Band &Number of Officers

Salary%

Bonus%

Otherbenefits

%Total

%

Above $250,000

3 37 56 7 100

Below $250,000

2 52 42 6 100

None of the immediate family members of a Director or of the CEO was employed by the Company and its related companies in a

managerial position for the financial year ended 30 June 2010.

NOMINATION COMMITTEE

The Nomination Committee was established on 3 June 2002 and comprises the following three members:

Liow Keng Teck Chairman/Independent

Tang Kok Yew Non-independent

Lim Jiew Keng Independent


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The Nomination Committee meets at least once a year and its principal functions are as follows:

(i) reviews and makes recommendations in the appointment and re-appointment of Directors to the Board, based on the criteria

set out in the selection matrix which was adopted by the Nomination Committee in 2006;

(ii) decides on and proposes to the Board, for approval and implementation, the assessment process including determining a set of

performance criteria for evaluating the Boards performance from year to year;

(iii) evaluates the Boards effectiveness as a whole and the contribution of each Director to the effectiveness of the Board in accordance

with the assessment process and performance criteria mentioned above;

(iv) determines annually the independence of each Director in accordance with the guidelines on independence as set out

in the Code.

The Chairman will then act on the results of the evaluation and where appropriate, propose new members to be appointed or accept

the resignation of directors, in consultation with the Board as a whole.

ASSESSMENT OF INTERNAL CONTROLS

The Board has ultimate responsibility for the systems of internal control maintained by the Group and for reviewing their effectiveness.

The systems are intended to provide reasonable assurance, but not an absolute guarantee, against material financial misstatement

or loss, and include the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information,

compliance with appropriate legislation, regulation and best practices, and the identification and containment of business risks.

During the financial year being reported on, the Audit Committee, on behalf of the Board, has reviewed the effectiveness of theGroups framework of internal controls, the principal features of which are as follows:

Control environment

The key features of the control environment include the terms of reference for each of the Board committees, a clear organisational

structure, with documented delegation of authority from the Board to executive management and defined procedures for the approval

of major transactions and capital allocation.

Risk identification and assessment

The Groups systems of internal control have a key role in the identification and management of risks that are significant to the

achievement of its business objectives. The Board has in place a system of business risk management, which has been integrated

throughout the Group into the business planning and monitoring processes. The overall risk management process and results arereviewed formally by the Audit Committee and the Board.

Control procedures and monitoring systems

The Group has a well-developed system of planning and monitoring. Performance against the plan is regularly monitored using a

prudent basis of financial reporting and accounting policies applied consistently throughout the Group. There is regular liaison between

executive Directors and operational management and the Board receives regular presentations from the management responsible for

each principal business operation.

The Group has well-established internal audit, risk management and compliance functions. There are formal procedures in

place for both internal and external auditors to report independently conclusions and recommendations to Management and

to the Audit Committee.



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SECURITIES TRANSACTIONS

The Group has a policy on share dealings which sets out the implications of insider trading and has put in place a self regulatory andmonitoring mechanism which mirrors substantially the provisions of the Best Practices Guide issued by the SGX-ST. The Group has

adopted a code of conduct for dealings in securities of the Company by the Directors and employees, so that the Directors and staff

comply with the guidelines of the Best Practices Guide.

The Directors and officers are not allowed to deal in the Companys shares during the period commencing one month before the

announcement of the Groups full year results and ending on the date of the announcement of the full year results. For quarterly

results, they are not allowed to deal in the Companys shares during the period commencing two weeks before the announcement

of the quarterly results and ending on the date of the announcement of the quarterly results.

INTERESTED PERSON TRANSACTIONS

The Company has established a procedure for recording and reporting interested person transactions. There are no interested partytransactions entered by the Company and its subsidiaries, which are either subsisting at the end of the financial year or, if not then

subsisting, entered into since the end of the previous financial year.

MEETING ATTENDANCE

Directors attendance at Board and Board Committee Meetings

Meetings of: BoardAudit

CommitteeNominationCommittee

RemunerationCommittee

No. of meetings held in the financialyear ended 30 June 2010 4 4 1 1

Name & Attendance of Directors

Tang Kok Yew 4 - 1 -

Chan Mun Lye 4 - - -

Chan Fook Kong 4 - - -

Mok Weng Sun 4 4 - 1

Chung Thian Siang 4 - - -

Lim Jiew Keng 4 4 1 -

Liow Keng Teck 3 4 1 1

Goon Kok Loon 4 - - 1

On behalf of the Board:

Chan Mun Lye Chan Fook Kong

Director Director

Singapore18 September 2010


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STATUTORY AND FINANCIAL REPORTS

29

34

35

36

37

DIRECTORS REPORT

STATEMENT BY THE DIRECTORS

INDEPENDENT

AUDITORS REPORT

CONSOLIDATED INCOME

STATEMENT

CONSOLIDATED STATEMENT

OF COMPREHENSIVE INCOME

102

103

105

107

DETAILS OF PROPERTIES

SHAREHOLDERS

INFORMATION

NOTICE OF ANNUAL

GENERAL MEETING

PROXY FORM

38

39

41

44

BALANCE SHEETS

STATEMENT OF

CHANGES IN EQUITY

CONSOLIDATED

CASH FLOW STATEMENT

NOTES TO THE

FINANCIAL STATEMENTS


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D I R E C T O R S R E P O R T

The directors are pleased to present their report to the members together with the audited consolidated financial statements of Jaya

Holdings Limited (the Company) and its subsidiary companies (collectively, the Group) and the balance sheet and statement ofchanges in equity of the Company for the financial year ended 30 June 2010.

DIRECTORS

The directors of the Company in office at the date of this report are:-

Tang Kok Yew (Chairman)

Chan Mun Lye (Chief Executive Officer)

Chan Fook Kong

Mok Weng Sun

Chung Thian Siang

Lim Jiew Keng

Liow Keng Teck

Goon Kok Loon

ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES

Except as disclosed in this report, neither at the end of nor at any time during the financial year was the Company a party to any

arrangement whose objects are, or one of whose object is, to enable the directors of the Company to acquire benefits by means of

the acquisition of shares in or debentures of the Company or any other body corporate.

DIRECTORS INTERESTS IN SHARES AND DEBENTURES

The following directors who held office at the end of the financial year, had, according to the register of directors shareholdings

required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in shares and share options of the

Company and related corporations (other than wholly-owned subsidiary companies) as stated below:-

Name of director

At beginningof the financial

year

At endof the financial

yearAt

21.7.2010

The Company

Ordinary shares held in the name of director and/or nominees

Chan Mun Lye 5,173,587 5,173,587 5,173,587Chan Fook Kong 2,480,000 2,480,000 2,480,000

Lim Jiew Keng 525,000 525,000 525,000

Liow Keng Teck 1,000,000 1,000,000 1,000,000

Goon Kok Loon 10,000 10,000 10,000

Share options granted to director to subscribe for ordinary sharesof the Company

Chan Mun Lye 400,000 400,000 400,000

Chan Fook Kong 400,000 400,000 400,000

Lim Jiew Keng 345,000 345,000 345,000

Liow Keng Teck 250,000 250,000 250,000


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DIRECTORS INTERESTS IN SHARES AND DEBENTURES (CONTD)

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, share options,

warrants or debentures of the Company, or of related corporations, either at the beginning of the financial year or at the end of

the financial year or on 21 July 2010.

DIRECTORS CONTRACTUAL BENEFITS

Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company has received

or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or

with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

SHARE OPTIONS

Details of the Jaya Employees Share Option Scheme (formerly known as the Jaya Executives Share Option Scheme) are as

follows:-

(i) The Jaya Employees Share Option Scheme (the ESOS) was approved by the shareholders of the Company at the

Extraordinary General Meeting held on 5 September 1994. At the Extraordinary General Meeting held on 28 September

2001, the shareholders approved certain modifications to the ESOS to bring the rules of the ESOS approved on 5 September

1994 in line with the amendments introduced by the Companies (Amendment) Act 1998 (CAA) and the amendments to

the Listing Manual issued by the Singapore Exchange Securities Trading Limited (SGX-ST) on 6 April 1999.

(ii) The ESOS, as modified, caters to a larger pool of participants, namely, selected full-time employees, executive directors and

non-executive directors of the Group. Participants of the Group who are eligible to participate in the ESOS are not eligible toparticipate in any other employee share ownership scheme implemented by the Company, and its subsidiary and associated

companies.

The share options granted to participants are only exercisable after the first anniversary of the date of grant. The share options

granted to employees and executive directors of the Group have a life span of 10 years from the relevant date of grant whilst

share options granted to non-executive directors of the Group have a life span of 5 years from the relevant date of grant.

However, share options granted prior to 18 November 1998 (being the date that the CAA became operational) only have a

maximum life span of 5 years.

The subscription price of the share options is determined based on the average of the closing prices of the Companys ordinary

shares on the SGX-ST for 5 consecutive trading days immediately preceding the date of grant (the Market Price) or its

nominal value, whichever is higher. No discount has been applied to the Market Price in determining the subscription price.

The annual maximum allocation of ordinary shares under the ESOS is limited to 9,966,981 ordinary shares, out of which

the annual maximum to be allocated to the directors (both executive and non-executive) and employees are 25% and 75%

respectively.

(iii) The ESOS is administered by the Remuneration Committee which comprises the following directors:-

Goon Kok Loon

Mok Weng Sun

Liow Keng Teck



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SHARE OPTIONS (CONTD)

(iv) From the commencement of the ESOS to 30 June 2010, no share options have been granted under the ESOS to any controlling

shareholders of the Company and their associated companies.

(v) The share options granted by the Company do not entitle the holders of the share options, by virtue of such holdings, to any

rights to participate in any share issues of any other company in the Group.

(vi) During the financial year, no share options were exercised under the ESOS to subscribe for ordinary shares.

(vii) During the financial year, no share option was granted under the ESOS to subscribe for ordinary shares.

(viii) During the financial year, 50,500, 100,000, 243,900 and 660,000 share options under ESOS Grant Number 9, 10, 11 and 12

were cancelled due to resignation of employees.

(ix) Outstanding share options to subscribe for ordinary shares as at 30 June 2010 comprise:-

Outstanding

Options

Exercise price

per share Exercise period

ESOS Grant Number 9 70,500 $0.769 10 December 2004

to 9 December 2013

ESOS Grant Number 10 241,000 $1.020 6 December 2005

to 6 December 2014

ESOS Grant Number 11 95,000 $1.238 25 November 2006

to 24 November 2010

605,850 $1.238 25 November 2006

to 24 November 2015

ESOS Grant Number 12 500,000 $1.456 30 April 2008

to 29 April 2012

5,728,000 $1.456 30 April 2008

to 29 April 2017

7,240,350



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SHARE OPTIONS (CONTD)

(x) Directors granted options under the ESOS were as follows:-

Directors

Options granted

during the financial

year

Aggregate options

granted since

commencement of

the ESOS to end of

the financial year

Aggregate options

exercised since

commencement of

the ESOS to end of

the financial year

Aggregate options

outstanding at end

of the financial year

Chan Mun Lye 2,192,000 1,792,000 400,000

Chan Fook Kong 634,000 234,000 400,000

Lim Jiew Keng 1,370,000 1,025,000 345,000

Liow Keng Teck 1,370,000 1,120,000 250,000

(xi) There are no participants who received 5% or more of the total number of options available under the ESOS since the

commencement of the ESOS to 30 June 2010.

Since the commencement of the ESOS to 30 June 2010, no options have been granted to take up unissued ordinary shares

of the subsidiary companies and no ordinary shares of the subsidiary companies have been issued by virtue of the exercise of

an option to take up unissued ordinary shares.

At the end of the financial year, there are no other unissued ordinary shares of the Company and its subsidiary companies

under options except as disclosed above.

AUDIT COMMITTEE

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50, which

includes the following:-

(i) reviews with the external auditors their audit plans and results of the audit;

(ii) reviews the draft financial statements of the Company and the Group in conjunction with the external auditors comments

thereon prior to their submission to the Board of Directors;

(iii) reviews the reports of the internal auditor;

(iv) reviews the internal control procedures of the Company;

(v) reviews interested person transactions in accordance with the requirements of the Singapore Exchange Securities Trading

Limited (SGX-ST)s Listing Manual;

(vi) reviews the external auditors management letter and the response from management; and(vii) carries out special purpose projects to assist management in performing evaluation and decision making.



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AUDIT COMMITTEE (CONTD)

The Audit Committee, having reviewed all non-audit services provided by the external auditors to the Group, is satisfied that the

nature and extent of such services would not affect the independence of the external auditors.

To carry out its functions, the Audit Committee reports regularly to the Board of Directors and interacts with the external auditors

and senior management staff. It also meets with the external auditors without the presence of management staff at least once a

year.

Further details regarding the Audit Committee are disclosed in the Report of Corporate Governance as set out in the Annual Report

of the Company.

AUDITORS

Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.

On behalf of the Board of Directors:


Director Director

18 September 2010



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We, Chan Mun Lye and Chan Fook Kong, being two of the directors of Jaya Holdings Limited, do hereby state that, in the opinion

of the directors:-

(i) the accompanying balance sheets, consolidated income statement, consolidated statement of comprehensive income,

statements of changes in equity and consolidated cash flow statement together with the notes thereto are drawn up so as to

give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2010 and of the results of the

business, changes in equity and cash flows of the Group and changes in equity of the Company for the year ended on that

date; and

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

when they fall due.

On behalf of the Board of Directors:


Director Director

18 September 2010

S T A T E M E N T B Y T H E D I R E C T O R S


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We have audited the accompanying financial statements of Jaya Holdings Limited (the Company) and its subsidiary companies

(collectively, the Group) set out on pages 36 to 101, which comprise the balance sheets of the Group and the Company as at 30June 2010, the statements of changes in equity of the Group and the Company and the consolidated income statement, consolidated

statement of comprehensive income and consolidated cash flow statement of the Group for the year then ended, and a summary of

significant accounting policies and other explanatory notes.

MANAGEMENTS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions

of the Singapore Companies Act, Cap. 50 (the Act) and Singapore Financial Reporting Standards. This responsibility includes

devising and maintaining a system of internal accounting controls sufficient 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 profit and loss account and balance sheet and to maintain accountability

of assets; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the

circumstances.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on these financial 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the

financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant

to the entitys preparation and fair presentation of the financial 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 entitys internal control. An auditalso includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by

management, as well as evaluating the overall presentation of the financial statements.

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

OPINION

In our opinion,

(i) the consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company

are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give

a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2010 and the results, changes in

equity and cash flows of the Group and the changes in equity of the Company for the year ended on that date; and

(ii) the accounting and other records required by the Act to be kept by the Company and by those subsidiary companies

incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the

Act.

Ernst & Young LLP

Public Accountants and Certified Public Accountants

Singapore

18 September 2010

I N D E P E N D E N T A U D I T O R S R E P O R TTo the Members of Jaya Holdings Limited


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Group

Note 2010 2009

$000 $000

Revenue 6 357,063 263,171

Cost of sales (233,287) (126,719)

Gross profit 123,776 136,452

Other income 7 37,223 67,567

General and administrative expenses (11,492) (8,120)

Other expenses 8 (19,715) (180,158)

Interest expenses 9 (8,968) (9,726)

Share of profits of associated companies, net of tax 1,527 2,123

Profit before taxation 10 122,351 8,138

Income tax expense 11 (18,636) (6,915)

Profit after taxation 103,715 1,223

Attributable to:-

Equity holders of the parent 103,715 1,195

Minority interests 28

103,715 1,223

Earnings per share attributable to equity holders of the parent (cents per share)

- Basic 12 13.44 0.15

- Diluted 12 13.44 0.15

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

C O N S O L I D A T E D I N C O M E S T A T E M E N Tfor the financial year ended 30 June 2010


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2010 2009

$000 $000

Profit after taxation 103,715 1,223

Other comprehensive income:

Translation differences relating to financial statements

of foreign subsidiaries (214) 1,151

Total comprehensive income for the year 103,501 2,374

Attributable to:

Equity holders of the parent 103,501 2,346

Minority interests 28

103,501 2,374

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

C O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E I N C O M Efor the financial year ended 30 June 2010


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Group Company

Note 2010 2009 2010 2009

$000 $000 $000 $000

Intangible assets 13 233 2,899 106 106

Land use rights 14 1,415

Fixed assets 15 375,435 390,985

Subsidiary companies 16 50,600 42,501

Associated companies 17 6,997 6,827 1,843 1,907

Current assets

Vessel held for sale 15 5,958

Stocks and work-in-progress 18 269,879 383,656

Gross amount due from customers for contract work 19 29,677

Trade receivables 20 56,839 25,797 1,151 89

Other receivables and deposits 21 26,639 5,669 3,744 4,660

Prepayments 22 60,046 36,887 25 33

Amounts due from subsidiary companies 24 134,865 142,153

Fixed deposits 25 3,439 96,626 63,957

Cash and bank balances 25 205,551 5,748 184,799 424

622,393 590,018 324,584 211,316

Current liabilities

Trade creditors and accruals 26 53,269 113,514 1,233 1,585

Provision 27 68,630 69,138

Other creditors 28 16,972 40,464 16 83

jaya holdings annual report 2010

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