Jaya Holdings Annual Report 2011

JAYA HOLDINGS LIMITED

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

JAYA HOLDINGS LIM

ITED A

NNUAL REPORT 2011


13 Tuas Crescent Singapore 638707

Tel: (65) 6265 1010

Fax: (65) 6864 5555

Email: [email protected]

Website: www.jayaholdings.com

Co Reg. No: 199002391E

CORPORATE MISSION STATEMENT

A c o m m i t m e n t t o q u a l i t y a n d integrity in all aspects of our business equipment, service and customer relationships.

A c o nst a n t d r i v e t o s a t i s f y o u r customers, while always being mindful of our responsibility to our shareholders, employees and the community.

CONTENTS

1 FINANCIAL HIGHLIGHTS

4 CORPORATE INFORMATION

5 CORPORATE GROUP STRUCTURE

6 CHAIRMANS STATEMENT

10 BOARD OF DIRECTORS

13 KEY EXECUTIVES

14 REVIEW OF OPERATIONS

22 CORPORATE GOVERNANCE

28 STATUTORY AND FINANCIAL REPORTS

Designed and produced by

(65) 6578 6522

1JAYA HOLDINGS LIMITED | ANNUAL REPORT 2011

FINANCIAL HIGHLIGHTS

263,171

307,638 307,164

GROUP REVENUE ($000)

250,000

300,000

350,000

400,000

200,000

150,000

100,000

50,000

0.00

FY07 FY08 FY09 FY10 FY11

127,401

357,063

EARNINGS PER SHARE (CENTS)

13.44

0.15

19.43

15.00

20.00

25.00

10.00

5.00

0.00


10.86

15.80

TOTAL ASSETS ($000)

992,144

601,285

858,702

800,000

1,000,000

1,200,000

600,000

400,000

200,000

0.00

977,2801,005,058


NET ASSET BACKING PER ORDINARY SHARE (CENTS)


62.06

50.00

60.00

40.00

30.00

20.00

10.00

0.00

48.6449.10

56.83

72.49

80.00

70.00

SHAREHOLDERS FUND ($000)

375,383377,743

438,504

400,000

500,000

600,000

300,000

200,000

100,000

0.00

559,426

478,884


PROFIT ATTRIBUTABLE TO SHAREHOLDERS ($000)


103,715

100,000

120,000

140,000

160,000

80,000

60,000

40,000

20,000

0.00

1,195

120,774

149,750

83,806



Fixed deposits and cash balances 29 20 102 209 231 Trade receivables and others 73 202 98 144 77 Stocks and work-in-progress 176 192 384 270 274 Investments 28 30 7 7 7 Fixed assets 295 404 397 375 388 Intangible assets 0 11 4 0 0Total 601 859 992 1,005 977

Group total assets of $977 million at 30 June 2011 were $28 million or 3% lower than the previous financial year.

Fixed assets increased as a result of more vessels being added to the charter fleet during the year.

Trade receivables and others were lower mainly due to customers paid down their outstanding accounts and reclassification of project costs from prepayments to work-in-progress as projects commenced during the financial year 2011.

Stocks and work-in-progress remained at the same level. New projects commenced during the year and completed vessels were delivered to customers and added to its charter fleet during the year.

Group net cash of $231 million at 30 June 2011 was $22 million or 11% higher than the previous financial year-end.

TOTAL ASSETS OWNED ($ MILLION)

0

200

400

600

800

1,000

1,200

2007 2008 2009 2010 2011



Shareholders fund 378 439 375 479 559 Other liabilities 78 96 133 113 55 Bank borrowings 31 204 370 360 319 Trade payables and accruals 114 120 114 53 44 Non-controlling interests 0 0 0 0 0Total 601 859 992 1,005 977

Group shareholders funds increased from $479 million at 30 June 2010 to $559 million at 30 June 2011. The increase was attributable to retained profits for the year.

Group total liabilities of $418 million at 30 June 2011 were $108 million or 21% lower than the previous financial year of $526 million. The Groups provision for cancellation and impairment charges reduced substantially after it has successfully completed the negotiations with certain key vendors. Trade payables and accruals reduced by $9 million as the Group paid down its accounts payables.

GROUP RESULTS FOR THE PAST FIVE FINANCIAL YEARS

Financial Year Ended 30 June2007

$0002008

$0002009

$0002010

$0002011

$000

Group revenue 307,638 307,164 263,171 357,063 127,401

Profit before tax 135,125 168,948 8,138 122,351 101,118

Profit attributable to shareholders 120,774 149,750 1,195 103,715 83,806

Earnings per share (cents) 15.80 19.43 0.15 13.44 10.86

Net asset backing per ordinary share (cents) 49.10 56.83 48.64 62.06 72.49

Total assets 601,285 858,702 992,144 1,005,058 977,280

Shareholders fund 377,743 438,504 375,383 478,884 559,426

TOTAL LIABILITIES AND SHAREHOLDERS FUNDS ($ MILLION)

0

200

400

600

800

1,000

1,200

2007 2008 2009 2010 2011

CORPORATE INFORMATION

4

JAYA HOLDINGS LIMITED | ANNUAL REPORT 2011

BOARD OF DIRECTORS

Stephen Le Ee Boon (Chairman)Chan Mun Lye (Chief Executive Officer)Maria Chang (Non-Executive Director)Craig J. Gilbert (Non-Executive Director)Lim Jiew Keng (Independent Director)Liow Keng Teck (Independent Director)Goon Kok Loon (Independent Director)Cosimo Borrelli (Independent Director)

EXECUTIVE COMMITTEE

Chan Mun Lye (Chairman)Maria Chang

AUDIT COMMITTEE

Lim Jiew Keng (Chairman)Liow Keng TeckMaria ChangCosimo Borrelli

NOMINATION COMMITTEE

Liow Keng Teck (Chairman)Lim Jiew KengStephen Le Ee Boon

REMUNERATION COMMITTEE

Goon Kok Loon (Chairman)Liow Keng TeckMaria Chang Cosimo Borrelli

COMPANY SECRETARY

Yeo Poh Noi Caroline

REGISTERED OFFICE

13 Tuas CrescentSingapore 638707Telephone : (65) 6265 1010Facsimile : (65) 6864 5555Email : [email protected] : http://www.jayaholdings.com

SHARE REGISTRAR

Boardroom Corporate & Advisory Services Pte. Ltd.50 Raffles Place#32-01 Singapore Land TowerSingapore 048623Telephone: (65) 6536 5355Facsimile : (65) 6536 1360

AUDITORS

Ernst & Young LLPOne Raffles QuayNorth Tower, Level 18Singapore 048583Partner: Philip Ling(appointed since FY2008)

PRINCIPAL BANKERS

Australia and New Zealand Banking Group LimitedBNP ParibasCIMB Bank BerhadCitibank N.A.Commerzbank AktiengesellschaftDBS Bank LtdHL BankKBC Bank N.V.Malayan Banking BerhadOversea-Chinese Banking Corporation LimitedPT. Bank Mandiri (Persero) TbkPT. PermataBankRabobank InternationalRHB Bank BerhadStandard Chartered BankThe Hongkong and Shanghai Banking Corporation LimitedThe Royal Bank of Scotland N.V.United Overseas Bank Limited


CORPORATE GROUP STRUCTURE

The above Group structure includes only active subsidiaries and associated companies as at 30 June 2011.A full listing of the Groups investments is disclosed under item 5 of notes to the financial statements.


Jaya Oshore Pte Ltd100%

Java Marine LinesPte Ltd

100%

Jaya Oshore(H.K.) Ltd

100%

JSE Oshore(Labuan) Pte 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%

JSE ShippingPte Ltd

100%

CHAIRMANS STATEMENT

6


I am pleased to report on behalf of the Board that the Group has done well to weather the downturn in the global economy and subsequent contraction in oil exploration and production activities. For the nancial year under review, the Group reported a net pro t attributable to shareholders of $83.8 million.

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CHAIRMANS STATEMENT

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DEAR SHAREHOLDERS

The financial year ended 30 June 2011 (FY11) concluded a

year of transition for our Group. During the year, a consortium

led by Cathay Asset Management Company Limited purchased

a controlling stake in the Group. The composition of the

Board has thus changed to reflect the new ownership of the

Group and now includes three new non-executive directors

who have replaced the previous non-executive directors. We

are also pleased to welcome Cosimo Borrelli, the Groups new

independent director.

On behalf of the Board, I am pleased to announce that we have

renewed the employment contracts for the Groups key senior

managers, including Mr Chan Mun Lye as Chief Executive

Officer. The mutual agreements will ensure continuity in

management and create an alignment of interests between

management and shareholders. The capabilities and vision

of the senior managers will position the Group to capture

opportunities as the market for offshore support vessels

(OSVs) recovers.

Members of the Board on the Executive Committee have been

continuously reviewing the Groups strategy and business plan.

Although the Group has done well to weather the downturn

in the global economy and subsequent contraction in oil

exploration and production (E&P) activities during the last

three years, the Groups strategy needed to be redefined with

clear objectives and a business plan to meet the changed

times.

The results of FY11 were achieved in a challenging environment

characterised by still-low charter rates and an oversupply of

OSVs in the market. The Group also faced added challenges

which included working under the schemes of arrangement

for our loans and also concluding the disposal of the Nantong

Dongjiang Shipyard. On behalf of the Board, I would like

to express my thanks to you as our shareholders for your

continued patience as the Group digests the final impacts from

the financial crisis.

THE WAY FORWARD

The Board and senior management are in agreement of the

need to focus on (i) increasing the size and optimising the

composition of our charter fleet to better serve our customers;

(ii) targeted marketing and improved customer service to

increase charter utilisation; and (iii) repositioning our shipyard

to focus on build-to-order shipbuilding and ship repair and

thus reduce the consolidated working capital needs of the

Group.

In the environment forecasted by analysts where global oil

prices will support increased oil exploration and production

activities, the Group will benefit from a strategy of accumulating

assets in its charter fleet through appreciation of the fleet as

well as cash flows generated from chartering activities. In

order to achieve this plan, the Group will hire the best-in-class

managers to enhance management of customer relationships

and forecast of market demand for various types of vessels.

The Board is currently undertaking an exercise to identify and

hire these managers.

The remainder of the Groups shipbuilding commitments,

which were restructured during the aftermath of the global

financial crisis, will be completed by financial year 2014. The

majority of these ships are planned for additions to the charter

fleet which is in line with the business plan outlined above.

When necessary to meet cash flow requirements, the Group

may selectively dispose vessels; however, the Group will no

longer be involved in speculative building. Given the expertise

accumulated at our shipyards in Singapore and Batam, the

Group will explore a broadening of our shipyard operations

to include repair operations for both our own fleet and third

party customers.

The Group will also explore merger and acquisition activities in

order to grow faster than it would organically. The Board will

evaluate on acquisitions of either assets or equity stakes which

will be value accretive to our shareholders and enhance the

value proposition that the Group can offer its customers.

CHAIRMANS STATEMENT

8


CHAIRMANS STATEMENT

JAYA HOLDINGS LIMITED | ANNUAANNUAL REPORT 2011

88888888888888888888888888888888888888888888888

FINANCIAL RESULTS

For the financial year ended 30 June 2011, the Group achieved a net profit attributable to shareholders of $83.8 million, 19% lower than the previous financial year of $103.7 million. Earnings per share decreased to 10.86 cents from 13.44 cents in the previous year.

Revenue

The Group recorded total revenue of $127.4 million which was 64% lower than the previous financial year. The Offshore Shipping Division generated revenue of $67.4 million, 5% higher than a year ago, on the back of higher average charter rates attributed to improved fleet composition arising from higher capacity new buildings added to the Groups charter fleet during the year. Average charter utilisation of 61% was achieved for the year under review compared to 71% in the previous financial year. Fleet size grew from 21 vessels a year ago to 23 vessels as of 30 June 2011.

Shipbuilding Divisions revenue of $60.0 million was significantly lower than the previous years revenue of $293.0 million. The lower revenue was attributed to fewer vessel sales. During the year under review, three vessels were sold compared to 11 vessels sold in the previous financial year. This shift is consistent with the Groups increasing focus on asset growth and expanding the charter fleet.

Net Profit

The Groups Net Profit attributable to shareholders was $83.8 million, with the Offshore Shipping Division as our top contributor with $60.3 million. This Net Profit included vessel disposal gains of $46.0 million compared to $30.9 million for the previous financial year, arising from charterer exercised options to purchase vessels.

The Shipbuilding Division recorded a profit of $34.2 million, 45% lower than the previous financial year of $62.4 million. This Net Profit included disposal gains of $14.2 million from the disposal of Nantong Dongjiang Shipyards assets.

Dividends

As the Company is under the schemes of arrangement, 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, dividends can only be paid out of increased paid up capital since the effective date of the schemes and an equal amount must first be prepaid to scheme creditors.

CHAIRMANS STATEMENT

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CHAIRMANS STATEMENT


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Outlook and Prospects

The offshore chartering market remained weak during the financial year under review with the market still absorbing excess tonnage. With a wider pool of available vessels in the market, it is less compelling for charterers to commit on a longer term charter. This increases competition among fleet operators and hampers the charter rates growth.

Although E&P activities have picked up and heightened the demand for offshore vessels, charter rates remain soft as the OSV market is still making adjustment to the supply and demand situations. While utilisation rate is expected to improve, charter rates are not expected to see any material change in the near term.

We remain optimistic that the long-term fundamentals of the offshore oil and gas industry will remain positive. Depleting oil reserves and increasing energy demand will drive the need for E&P activities. Increased E&P activities in deep water areas like Brazil, West Africa, Asia, etc will likely to increase demand for the larger and more sophisticated OSVs.

ACKNOWLEDGEMENT AND APPRECIATION

I am grateful to our Board of Directors for their guidance throughout the financial year.

On behalf of the Board, I wish to reiterate our gratitude to our shareholders for their continued support to the Company. I would also wish to thank our customers and suppliers for their support as the Group re-emerges from one of the most trying times in its long history. The Group is also grateful to our banks for working with us through the schemes of arrangement and we look forward to a renewed relationship of trust and transparency in the future.

Finally, the Board would like to thank our employees, who have worked tirelessly during the last fiscal year.

STEPHEN LE EE BOONCHAIRMAN

18 September 2011

BOARD OF DIRECTORS

10


CHAN MUN LYESingaporean, 60

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 ship repair, ship owning 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 Chairman of the Group and was appointed to the Board on 31 March 2011. He also sits on the Nomination Committee. Mr Le is a Managing Director and Head of Deutsche Banks Strategic Investment Group (SIG) in Asia Pacific. He joined the SIG in 2001 to build out the trading business in the region. In 2004, he built out Deutsche Banks Greater China investment activities which includes managing a significant 3rd party co-investment programs investing in state owned enterprise restructuring, distressed corporates and real estate, NPL portfolio and other strategic joint ventures. Prior to Deutsche Bank, Mr Le worked at Goldman Sachs in a top ranked equity research team focused on energy and petrochemical companies.

STEPHEN LE EE BOONSingaporean, 35

She is a Non-Executive Director of the Group and was appointed to the Board on 31 March 2011. She also sits on the Executive, Audit and Remuneration Committees. Ms Chang is a director of Deutsche Bank AG, Hong Kong Branch. She joined the Strategic Investment Group of Deutsche Bank in January 2006 and has been with the team since. As a senior member of SIG, her areas of responsibility include structuring, execution, legal and compliance, as well as restructuring and corporate governance for proprietary investments made by the SIG. Prior to joining Deutsche Bank, Ms Chang was a legal practitioner with Freshfields Bruckhaus Deringer in Hong Kong and Blake Dawson in Sydney, with extensive experience in capital markets and structured finance transactions. She graduated from the University of Sydney with Bachelor of Commerce and Bachelor of Laws (First Class Honours). Ms Chang is admitted as a solicitor to the Supreme Court of New South Wales, Australia.MARIA CHANG

Australian, 35

BOARD OF DIRECTORS

11


He is a Non-Executive Director of the Group and was appointed to the Board on 31 March 2011. Mr Gilbert is currently the Director of Research at Linden Advisors LP, an investment partnership. Prior to joining Linden Advisors in 2004, Mr Gilbert worked in the Global Corporate Investment Banking unit of Banc of America Securities in the high yield department executing several capital raising transactions and in the Global Markets Group as a research analyst. Mr Gilbert is a CPA (USA) and has a Bachelor of Science Accountancy from the University of Illinois. Mr Gilbert was awarded the CFA designation in 2004.

CRAIG J. GILBERTAmerican, 34

He is a Non-Executive and Independent Director, Chairman of the Audit Committee and a member of the Nomination 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.

LIM JIEW KENGSingaporean, 71

He is a Non-Executive and Independent Director, Chairman of the Nomination Committee and a member of both the Audit 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, 70

BOARD OF DIRECTORS

12


12

He is a Non-Executive and Independent Director and Chairman of the Remuneration Committee. Mr Goon holds a Degree in Electrical 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, Hisaka Holdings Ltd and Jurong Port Pte Ltd.

GOON KOK LOONSingaporean, 68

He is a Non-Executive and Independent Director of the Group and was appointed to the Board on 31 March 2011. He also sits on the Audit and Remuneration Committees. Mr Borrelli is a Chartered Accountant and holds a Bachelors degree in Economics from University of Adelaide, Australia. He is a Managing Director of Borrelli Walsh Limited, a specialist restructuring, insolvency and forensic accounting firm. Mr Borrelli has over 20 years of experience with formal and informal corporate restructuring, forensic accounting and financial investigations. This experience has included being appointed by courts, lenders and financiers, distressed companies, secured and unsecured creditors, investors and other interested parties. He has a strong track record in establishing and delivering restructuring and related corporate advisory arrangements in industries including financial services, property, tele-communications, retail, manufacturing and professional services.COSIMO BORRELLI

Australian, 44

13


KEY EXECUTIVES

13

FINANCE DIVISION

Thai Kum FoonChief Financial Officer

Koh Ai ChinFinancial Controller

CORPORATE SERVICESDIVISION

Admin/HRGinny SohGroup Manager

Sean OngManager Batam Yard

PurchasingToh Tong SengManager

Legal/ContractJustin ChiaManager

Internal AuditDesmond TinManager

SHIPBUILDING/SHIP REPAIRDIVISION

Lim Siew KoonPresident Shipbuilding/Ship Repair

Kwan Seng FattSenior Vice President Engineering

Lau Chor HuaSenior Manager Singapore Yard

Andy TanSenior Manager Batam Yard

Lee Boon ChyeProject Manager

OFFSHORE SHIPPINGDIVISION

MarketingPhilip TanManager

OperationsCapt. Baharrudin Bin AliManager

Engineering SupportKoh Hwee SenSenior Manager

REVIEW OF OPERATIONS

14



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OFFSHORE SHIPPING DIVISION

The offshore chartering market remained weak during the financial year under review as new vessels were added to the global charter fleet and the industry continued to be plagued by an oversupply situation. Although E&P activities have picked up and heightened the demand for offshore vessels, charter rates stayed soft with the market still absorbing excess tonnage.

The Offshore Shipping Division operates a fleet of OSVs which are essential links to the chain of activities of the upstream producers of offshore oil and gas. 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.

The Divisions fleet is young, averaging 2.5 years, compared to the highly aged profile of the global fleet of above 20 years.

Vessel type Vessel description No. of vessels Average age

Anchor handling, towing and supply vessels/anchor handling tugs

Transport oilfield supplies and equipment 18 2.2

Tow, lift and reposition anchors for oil rigs, construction vessels and barges

Utility supply vessels Carry supplies to and from offshore structures and rigs

1 7.3

Accommodation work barges Steel barges fitted with accommodation facilities for offshore construction, maintenance and decommissioning

1 0.8

Deck cargo barges Non-propelled steel barges fitted to carry heavy structures and supplies

3 3.1

23 2.5

This was achieved through the Groups continual fleet renewal strategy which involved the sale of older and lower specification vessels and the addition of newer and more sophisticated vessels built by the Groups Shipbuilding Division.

The Division recorded total revenue of $67.4 million, 5% higher than $64.1 million for the previous financial year. Fleet utilisation was lower at 61% compared to 71% recorded in the previous financial year due to soft charter market conditions. This was mitigated by improved average daily vessel charter rate of $14,126, 15% higher than $12,232 in the previous financial year as the Group added higher specification vessels to its charter fleet during the year. The Division has a total of 23 vessels in the fleet as of 30 June 2011, two vessels more than a year ago. Eight new vessels were added to the fleet while six vessels were sold/disposed of from the charter fleet during the financial year under review, as part of the Groups fleet renewal programme and due to charterers having exercised purchase options.

Anchor Handling Tug Supply Vessel (AHTS) Accommodation Work Barges


16


For the financial year under review, the Division contributed $60.3 million to the Groups total net profit and was 38% higher than the previous financial year. Included in this net profit were disposal gains of $46.0 million generated from the disposal of five vessels compared to $30.9 million from the disposal of eight vessels in the previous financial year. Higher disposal gains for the year under review were attributable to charterers exercising their purchase options.

During the financial year under review, the Group incorporated a new subsidiary in Labuan, Malaysia, to increase its presence in this area. While the implementation of the Cabotage Law in Indonesia has been postponed from January 2011 to a later date, the Group is looking at establishing joint ventures with Indonesian parties to further strengthen its presence in Indonesia.

The Divisions revenue was derived from a mix of 48% time charter, 46% bareboat charter of its vessels with the remaining coming from mobilisation fees and ship management fees.

On the geographical spread where the vessels were employed, the ASEAN countries, comprising of Malaysia, Thailand, Vietnam and Indonesia, collectively accounted for 55% of the total charter revenue. The balance of the charter revenue was contributed by customers from Australia, Middle East region and distant places including Sakhalin.

About 39% of the revenue was derived from shorter term charters with duration of six months or below, with the balance 61% from longer term charters more than six months and up to two years.

Bareboat45.6% Others

6.1%

Time 48.3%

Bareboat36.7%

Others5.9%

Time 57.4%

Indonesia22.8%

Rest of world28.9%

Indonesia27.3%

Rest of world19.9%

Australia4.4%

Russia5.7%

Qatar6.3%

Vietnam6.6%

Malaysia19.0%

Thailand6.3%

Australia4.4%

Russia1.6%

Vietnam0.5%

Qatar7.0%

Thailand24.5%

Malaysia14.8%

Chartering Revenue by Charter Type FY2011 Chartering Revenue by Charter Type FY2010

Chartering Revenue by Geographical Region FY2011 Chartering Revenue by Geographical Region FY2010


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SHIPBUILDING DIVISION

Financial year 2011 started on a sanguine note for the Shipbuilding Division on the back of a more favourable outlook of the global economic and financial climate. With the successful restructuring of the Groups bank loans and the reconfiguration of the shipbuilding programme in the previous financial year, the Division continued its activities to complete its shipbuilding pipeline in both the Singapore and Batam yards.

In February 2011, the Group made a strategic decision to dispose of the assets in its Nantong Dongjiang shipyard. The shipyard is surplus to the Groups shipbuilding capacity requirement and had remained dormant since it was mothballed in the previous financial year.

During the year under review, the Group took delivery of ten new vessels which included four anchor handling tug & supply vessels (AHTS) of 5,150 bhp, five AHTS of 8,000 bhp and one accommodation work barge. Of these ten completed vessels, two were sold upon completion at competitive prices to external customers while eight were added to the Groups charter fleet. With fewer vessel sales, the Groups shipbuilding revenue decreased from $293.0 million in the previous financial year to $60.0 million for the financial year under review. The Division contributed $34.2 million or 41% of the Groups net profit after tax. This net profit was after realising gains of $14.2 million from the disposal of the Nantong Dongjiang shipyards assets.


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Projected Completion

Vessel type FY12 FY13 FY14 Total

AHTS 8 8 16

~ 5,000 BHP 4 4

~ 8,000 BHP 4 2 6

~ 12,000 BHP 4 4

~ 16,000 BHP 2 2

PSV 2 2

Sub-sea diving / ROV support vessels 2 2

Multi-purpose maintenance vessels 1 1

Barges 1 1

Total projects 11 11 22

As at 30 June 2011, the Division has a shipbuilding programme of 22 vessels with most of them undergoing various stages of completion. Out of these 22 vessels, 11 vessels are expected to be completed in the financial year ending 30 June 2012. The remaining balance of 11 vessels are due for completion in subsequent financial years. Of the total 22 vessels under the programme, 16 are AHTS with engine capabilities ranging from the smaller 5,000 bhp to the larger 16,000 bhp. The balance includes two PSVs, two ROV support vessels, one multi-purpose maintenance vessel and one accommodation work barge. These vessels when delivered in 2013 and 2014 would be able to meet the stringent operational demands required by the rigs currently on order.

Following from the gradual recovery in the global economy, financial year 2011 also saw signs of recovery in the shipbuilding industry with shipyards taking in new orders and delivering vessels from past orders. E&P spending in 2010 recovered to the pre-crisis 2008 level and is expected to increase by about 15% in 2011 (Source: Pareto Securities). The increase in E&P spending is also targeted for deepwater exploration and drilling which signals an increase in demand for more technically sophisticated OSVs, such as AHTS and Platform Supply Vessels (PSVs) to support the activities of the offshore rigs.

There was increase in E&P activities in practically all the offshore oil field sites like Brazil, West Africa, Gulf of Mexico, Middle East, Asia and the North Sea. Brazil, which has a huge E&P programme in deepwater areas has been absorbing tonnage.

As a result of the increase in E&P activities, vessels newly delivered from the shipbuilding yards were absorbed into operation as oil majors are also demanding for newer and better quality boats to ensure safe and reliable operation. Older tonnage are also being taken off from the market as E&P companies focus on efficiency and cost savings. The Division is committed to completing its shipbuilding programme and delivering vessels of high quality and sophisticated technical capabilities to meet the demands for both shallow and deep water operations.


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SINGAPORE SHIPYARD

BATAM SHIPYARD

OUR SHIPYARDS:

Location: Tuas, Singapore Size: 24,939 sqm Shoreline: 130m Berths:

Two 90 x 20m berths One 75 x 20m berth Capacity: Build up to 3 vessels per

year Capability: Build highly-customised

and sophisticated offshore vessels Type of vessels:

8,000 to 16,000 BHP AHTSs PSVs

Location: Batam, Indonesia Size: 181,038 sqm Shoreline: 320m Berths:

Five 100 x 20m berths Capacity: Build up to 6 vessels per

year Capability: Build commercial and

customised vessels Type of vessels:

5,000 to 12,000 BHP AHTSs Accommodation barges Sub-sea diving/ROV support vessels


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HUMAN RESOURCE

As at 30 June 2011, the Group had a direct headcount of 431 employees in its corporate office and shipyards, and 286 marine crew on seamen contracts.

The Group recognises that our employees are the key resources of the organisation and aims to maximise the potential of each employee and enabling each employee to develop to their fullest potential to achieve organisational goals. This is achieved by ensuring a safety-conscious, motivated and efficient workforce. During the year, the Group placed great emphasis on communication, sharing and team building to promote better cohesion among employees from different areas within the organisation. Following from the implementation of the Integrated Enterprise Resource Planning in the prior financial year, the Group continues its efforts in this financial year to review current processes to enhance the efficiency of the organisation.

In line with the objective of maintaining a safety-conscious, motivated and efficient workforce, the Groups human resource management is guided by the following broad strategies:

Workplace Health and Safety Strategy

The Group remains focused on Safety First in our workplace to provide a safe and conducive working environment. We conduct regular safety talks and awareness programs and

ensure that safe work processes and practices are adopted by our employees and subcontractors. In addition, we continue to conduct regular health talks from various external providers to promote greater awareness among our employees.

Teamwork Strategy

We continue to maintain open communication and networking opportunities to inculcate team spirit and bonding among our employees. For the financial year under review, the employees actively participated in the Groups annual bowling competition, dinner and dance and incentive trip. These events allow employees of all levels and across different areas to build strong rapport with each other.


21


Retention Strategy

The Group reviews and enhances its compensation and benefits packages regularly; aligning with industry standards, practices and local legislation to retain its key employees as well as to attract new talents. We strive to ensure that our employees are fairly compensated and motivated to generate better business results. Our employee happiness and satisfaction at the workplace is discernable with high staff attraction and retention. We continue to nurture our workforce with provision of suitable training courses to yield improvements in performance and provide opportunities for them to develop a rewarding career with the Group.

COMPLIANCE

We are fully in compliance with ISO9001:2008 for Work Quality, ISO14001:2004 for Environment Protection, OHSAS18001:2007 and ISM Certification for Health and Safety practices. Besides being in line with our goal of providing a safe and healthy work environment for our employees and contractors, compliance with international standards is also key to meeting customers requirements.

INVESTOR RELATIONS

The Group places great emphasis on its investor relations program and strives to provide a high level of transparency

to our shareholders and investing public. Information and updates on the Groups financial performance and corporate development plans are regularly transmitted through announcements and analysts briefings. The Groups senior management also maintains good relationships with analysts and investors through meetings and presentations.

CORPORATE GOVERNANCE

22


REPORT ON CORPORATE GOVERNANCE

Jaya Holdings Limited (the Group or Company) is committed to maintaining a high standard of corporate governance within the Group 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) approve the remuneration policy for Executive Directors and key executives, and administering the share option schemes;

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

(v) monitor and review management performance; and

(vi) 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 seven Non-Executive Directors (including the Chairman) and one Executive Director. Four of the seven Non-Executive Directors are considered independent by the Nomination Committee.

Following the acquisition of a 54.7% stake in the Company by Cathay Asset Management Company Limited and a consortium, Mr Stephen Le Ee Boon, Ms Maria Chang, Mr Craig J. Gilbert and Mr Cosimo Borrelli were appointed to the Board on 31 March 2011. On the same date, Mr Tang Kok Yew, Mr Mok Weng Sun and Ms Chung Thian Siang stepped down as Non-Executive Directors.

The nature of each Directors appointment on the Board and its Committees is set out below:

Director Nature of Board Membership

Committee Membership

Audit Nomination Remuneration Executive

Stephen Le Ee Boon Non-Executive Chairman Member

Chan Mun Lye Chief Executive Officer Chairman

Maria Chang Non-Executive Director Member Member Member

Craig J. Gilbert Non-Executive Director

Lim Jiew Keng Independent Director Chairman Member

Liow Keng Teck Independent Director Member Chairman Member

Goon Kok Loon Independent Director Chairman

Cosimo Borrelli Independent Director Member Member

The Board is made up of individuals with a good balance of professional, technical and financial backgrounds with the requisite blend of expertise, skills and attributes to oversee the Groups 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 effectively.



23

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 CEO and Executive Director, Mr Chan Mun Lye and the Non-Executive Director, Ms Maria Chang. In attendance are the Chief Financial Officer and any senior executives requested by the Committee to attend.

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 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 four members, three of whom are Non-Executive/Independent Directors. They are:

Lim Jiew Keng Chairman/IndependentLiow Keng Teck IndependentMaria Chang Non-Independent appointed 31 March 2011Cosimo Borrelli Independent appointed 1 August 2011

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;


24


(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. In accordance with the requirements of Rule 716 of the SGX-ST Listing Manual, the Audit Committee and the Board are satisfied that the appointment of different auditors for certain of its subsidiaries would not compromise the standard and effectiveness of the audit of the Group.

To carry out its functions, the Audit Committee reports regularly to the Board and interacts with the external auditors and senior management. It also meets with the external auditors without the presence of senior 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 ensures independent investigations of such matters (if any) 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 four members:

Goon Kok Loon Chairman/IndependentLiow Keng Teck IndependentCosimo Borrelli Independent appointed 31 March 2011Maria Chang Non-Independent appointed 31 March 2011

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

(i) the Executive Director and senior management 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.

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.



25

A summary of Directors remunerations for the financial year ended 30 June 2011 is as follows:

Remuneration Band &Name of Director Salary Fees Bonus

Other benefits Total

% % % % %

Above $1,000,000

Chan Mun Lye 36 64 100

Below $250,000

Stephen Le Ee Boon (appointed 31 March 2011)

Maria Chang (appointed 31 March 2011)

Craig J. Gilbert (appointed 31 March 2011)

Lim Jiew Keng 100 100

Liow Keng Teck 100 100

Goon Kok Loon 100 100

Cosimo Borrelli (appointed 31 March 2011) 100 100

Chan Fook Kong (resigned 31 October 2010) 100 100

Tang Kok Yew (resigned 31 March 2011)

Mok Weng Sun (resigned 31 March 2011)

Chung Thian Siang (resigned 31 March 2011)

The remuneration of five officers, not being Directors, who received the highest emoluments during the financial year ended 30 June 2011, is provided in the following table:

Remuneration Band and number of Officers Salary BonusOther

benefits Total

% % % %

Above $500,000

2 36 59 5 100

$250,000 to $500,000

3 58 33 9 100

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 2011.

NOMINATION COMMITTEE

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

Liow Keng Teck Chairman/IndependentLim Jiew Keng IndependentStephen Le Ee Boon Non-Independent appointed 31 March 2011

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;


26


(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 Non-Executive/Independent 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 the Groups 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 are reviewed 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.

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 and monitoring 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.



27

INTERESTED PERSON TRANSACTIONS

The Company has established a procedure for recording and reporting interested person transactions. There are no interested party transactions 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 financial year ended 30 June 2011 4 4 1 3

Name & Attendance of Directors

Stephen Le Ee Boon (appointed 31 March 2011) 1

Chan Mun Lye 4

Maria Chang (appointed 31 March 2011) 1 1

Craig J. Gilbert (appointed 31 March 2011) 1

Lim Jiew Keng 4 4 1

Liow Keng Teck 4 4 1 3

Goon Kok Loon 3 3

Cosimo Borrelli (appointed 31 March 2011) 1

Chan Fook Kong (resigned 31 October 2010) 1

Tang Kok Yew (resigned 31 March 2011) 3 1

Mok Weng Sun (resigned 31 March 2011) 3 3 3

Chung Thian Siang (resigned 31 March 2011) 3

On behalf of the Board:

Stephen Le Ee Boon Chan Mun LyeDirector Director

18 September 2011

STATUTORY AND FINANCIAL REPORTS

28


29 DIRECTORS REPORT

33 STATEMENT BY DIRECTORS

34 INDEPENDENT AUDITORS REPORT

35 CONSOLIDATED INCOME STATEMENT

36 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

37 BALANCE SHEETS

38 STATEMENTS OF CHANGES IN EQUITY

40 CONSOLIDATED CASH FLOW STATEMENT

41 NOTES TO THE FINANCIAL STATEMENTS

88 DETAILS OF PROPERTIES

89 SHAREHOLDERS INFORMATION

91 NOTICE OF ANNUAL GENERAL MEETING

PROXY FORM

29


DIRECTORS REPORT

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 subsidiaries (collectively, the Group) and the balance sheet and statement of changes in equity of the Company for the financial year ended 30 June 2011.

DIRECTORS

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

Stephen Le Ee Boon (Chairman appointed on 31 March 2011)Chan Mun Lye (Chief Executive Officer)Maria Chang (appointed on 31 March 2011)Craig J. Gilbert (appointed on 31 March 2011)Lim Jiew KengLiow Keng TeckGoon Kok LoonCosimo Borrelli (appointed on 31 March 2011)

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 objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate.

DIRECTORS INTERESTS IN SHARES AND DEBENTURES

The following directors, who held 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 subsidiaries) as stated below:

Name of director

At beginningof the financial

year

At endof the financial

year At 21.7.2011

The CompanyOrdinary shares held in the name of director and/or nominees

Chan Mun Lye 5,173,587 5,173,587 5,173,587Lim Jiew Keng 525,000 525,000 525,000Liow Keng Teck 1,000,000 1,000,000 1,000,000Goon Kok Loon 10,000 10,000 10,000

Share options granted to director to subscribe for ordinary shares of the Company

Chan Mun Lye 400,000 400,000 400,000Lim Jiew Keng 345,000 250,000 250,000Liow Keng Teck 250,000 250,000 250,000

There was no change in any of the above-mentioned interests in the Company between the end of the financial year and 21 July 2011.

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 date of appointment if later, or at the end of the financial year or on 21 July 2011.

30


DIRECTORS REPORT

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 to participate in any other employee share ownership scheme implemented by the Company, and its subsidiaries and associates.

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.

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

Goon Kok Loon Liow Keng Teck Maria Chang Cosimo Borrelli

(iv) From the commencement of the ESOS to 30 June 2011, no share options have been granted under the ESOS to any controlling shareholders of the Company and their associates.

(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 options were granted under the ESOS to subscribe for ordinary shares.

(viii) During the financial year, 95,000 share options under ESOS Grant Number 11 expired.

(ix) During the financial year, 1,000, 950 and 1,015,000 share options under ESOS Grant Number 9, 11 and 12 were cancelled due to resignation of employees.

31


DIRECTORS REPORT

SHARE OPTIONS CONTD

(x) Outstanding share options to subscribe for ordinary shares as at 30 June 2011 comprise:

Outstandingoptions

Exercise priceper share Exercise period

ESOS Grant Number 9 69,500 $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 11 604,900 $1.238 25 November 2006 to 24 November 2015

ESOS Grant Number 12 500,000 $1.456 30 April 2008 to 29 April 2012

ESOS Grant Number 12 4,713,000 $1.456 30 April 2008 to 29 April 2017

6,128,400

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

Directors

Options grantedduring the

financial year

Aggregate optionsgranted since

commencementof the ESOS to

end of thefinancial year

Aggregate optionsexercised since

commencementof the ESOS to


Aggregate optionsexpired since

commencementof the ESOS

to end of thefinancial year

Aggregate optionsoutstanding at


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

Lim Jiew Keng 1,370,000 (1,025,000) (95,000) 250,000

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

(xii) 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 2011.

Since the commencement of the ESOS to 30 June 2011, no options have been granted to take up unissued ordinary shares of the subsidiaries and no ordinary shares of the subsidiaries 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 subsidiaries under options except as disclosed above.

32


DIRECTORS REPORT

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.

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:


18 September 2011


STATEMENT BY DIRECTORS

33

We, Stephen Le Ee Boon and Chan Mun Lye, 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 2011 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:


18 September 2011

34


INDEPENDENT AUDITORS REPORTTo the Members of Jaya Holdings Limited

REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

We have audited the accompanying consolidated financial statements of Jaya Holdings Limited (the Company) and its subsidiaries (collectively, the Group) set out on pages 35 to 87, which comprise the balance sheets of the Group and the Company as at 30 June 2011, 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 information.

MANAGEMENTS RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

Management is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls 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 accounts and balance sheets and to maintain accountability of assets.

AUDITORS RESPONSIBILITY

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated 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, 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 2011 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.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

Ernst & Young LLPPublic Accountants and Certified Public AccountantsSingapore

18 September 2011


CONSOLIDATED INCOME STATEMENTfor the nancial year ended 30 June 2011

35

GroupNote 2011 2010

$000 $000

Revenue 6 127,401 357,063

Cost of sales (89,108) (233,287)

Gross profit 38,293 123,776

Other income 7 74,955 37,223

General and administrative expenses (8,358) (11,492)

Other income/(expenses) 8 1,103 (19,715)

Interest expenses 9 (6,476) (8,968)

Share of profits of associates, net of tax 1,601 1,527

Profit before taxation 10 101,118 122,351

Income tax expense 11 (17,312) (18,636)

Profit after taxation 83,806 103,715

Attributable to:

Owners of the parent 83,806 103,715

Non-controlling interests*

83,806 103,715

Earnings per share attributable to owners of the parent (cents per share)

Basic 12 10.86 13.44

Diluted 12 10.86 13.44

* Non-controlling interests The amount is less than $1,000

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

36


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEfor the nancial year ended 30 June 2011

2011 2010$000 $000

Profit after taxation 83,806 103,715

Other comprehensive income:

Translation differences relating to financial statements of foreign subsidiaries (3,264) (214)

Total comprehensive income for the year 80,542 103,501

Attributable to:

Owners of the parent 80,542 103,501

Non-controlling interests*

80,542 103,501

* Non-controlling interests The amount is less than $1,000



37

BALANCE SHEETSas at 30 June 2011

Group CompanyNote 2011 2010 2011 2010

$000 $000 $000 $000

Intangible assets 13 106 233 106 106Land use rights 14 Fixed assets 15 387,606 375,435 Investment in subsidiaries 16 44,657 50,600Investment in associates 17 7,449 6,997 1,653 1,843Current assets

Stocks and work-in-progress 18 274,170 269,879 Trade receivables 19 40,658 56,839 17 1,151Other receivables and deposits 20 5,751 26,639 2,874 3,744Prepayments 21 30,948 60,046 16 25Amounts due from subsidiaries 22 247,756 134,865Fixed deposits 23 202,772 3,439 62,006 Cash and bank balances 23 27,820 205,551 648 184,799

582,119 622,393 313,317 324,584

Current liabilities

Trade payables and accruals 24 44,143 53,269 353 1,233Provisions 25 15,173 68,630 Other payables 26 8,424 16,972 37 16Amounts due to subsidiaries 22 129,825 133,213Bank borrowings 27 14,473 40 Provision for taxation 31,451 27,596 148 134

113,664 166,467 130,403 134,596

Net current assets 468,455 455,926 182,914 189,988

Bank borrowings 27 (304,167) (359,663) (5,217) (5,934)Deferred tax liabilities 28 (19) (40)

Net assets 559,430 478,888 224,113 236,603

Equity attributable to owners of the parentShare capital 29 126,460 126,460 126,460 126,460Foreign currency translation reserve (3,348) (84) Share option reserve 30 1,793 1,793 1,793 1,793Revenue reserve 434,521 350,715 95,860 108,350

559,426 478,884 224,113 236,603Non-controlling interests 4 4

559,430 478,888 224,113 236,603


STATEMENTS OF CHANGES IN EQUITYfor the nancial year ended 30 June 2011

38


Attributable to owners of the parent

GroupShare

capital (1)

Foreigncurrency

translationreserve (2)

Shareoptionreserve

Revenuereserve

Attributableto owners ofthe parent,

total

Non-controlling

interestsEquity,

total$000 $000 $000 $000 $000 $000 $000

Balance at 1 July 2009 126,460 130 1,793 247,000 375,383 4 375,387

Profit after taxation 103,715 103,715 103,715Other comprehensive income (214) (214) (214)

Total comprehensive income for the year (214) 103,715 103,501 103,501

Balance at 30 June 2010 126,460 (84) 1,793 350,715 478,884 4 478,888

Balance at 1 July 2010 126,460 (84) 1,793 350,715 478,884 4 478,888

Profit after taxation 83,806 83,806 83,806Other comprehensive income (3,264) (3,264) (3,264)

Total comprehensive income for the year (3,264) 83,806 80,542 80,542

Balance at 30 June 2011 126,460 (3,348) 1,793 434,521 559,426 4 559,430

(1) The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction.

(2) The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Groups presentation currency.



STATEMENTS OF CHANGES IN EQUITYfor the nancial year ended 30 June 2011

39

Attributable to owners of the parent

CompanyShare

capital

Shareoptionreserve

Revenuereserve Total

$000 $000 $000 $000

Balance at 1 July 2009 126,460 1,793 112,152 240,405

Profit after taxation (3,802) (3,802)Other comprehensive income

Total comprehensive income for the year (3,802) (3,802)

Balance at 30 June 2010 126,460 1,793 108,350 236,603

Balance at 1 July 2010 126,460 1,793 108,350 236,603

Profit after taxation (12,490) (12,490)Other comprehensive income

Total comprehensive income for the year (12,490) (12,490)

Balance at 30 June 2011 126,460 1,793 95,860 224,113


40


CONSOLIDATED CASH FLOW STATEMENTfor the nancial year ended 30 June 2011

2011 2010$000 $000

Cash flows from operating activitiesProfit before taxation 101,118 122,351Adjustments for: Depreciation of fixed assets 25,956 19,055 Interest expenses 6,476 8,968 Interest income (2,371) (3,058) Gain on disposal of fixed assets (60,144) (30,930) Loss on disposal of club membership 17 Amortisation of intangible assets/land use rights 119 Fixed assets written off 101 7 Share of profits of associates (1,601) (1,527) (Reversal of provision)/provision for associated shutdown costs (955) 1,025 (Reversal of impairment)/impairment of trade receivables (1,961) 663 Reversal of impairment losses and provision for associated costs (148) (23,425) Foreign exchange gains (40,329) (6,590) Impairment of land use rights 1,378 Impairment of shoreline agreement 2,565 Impairment of fixed assets 9,775

Operating cash flows before changes in working capital 26,159 100,376Decrease/(increase) in receivables, deposits and prepayments 46,409 (53,638)(Increase)/decrease in stocks and work-in-progress (5,794) 252,701Decrease in payables and accruals (18,772) (82,288)

Cash generated from operations 48,002 217,151Income tax paid (13,445) (11,482)

Net cash generated from operating activities 34,557 205,669

Cash flows from investing activitiesInterest received 2,538 1,163Construction of fixed assets/purchase of fixed assets (125,215) (148,466)Proceeds from disposal of fixed assets 118,240 66,020Proceeds from disposal of club membership 110 Partial settlement of balance consideration in relation to acquisition of a subsidiary in prior year (273)Cash distribution on liquidation of an associate 4

Net cash used in investing activities (4,327) (81,552)

Cash flows from financing activitiesBank borrowings obtained 590Repayment of bank borrowings (4,026)Interest paid (8,319) (14,023)

Net cash used in financing activities (8,319) (17,459)

Net increase in cash and cash equivalents 21,911 106,658Cash and cash equivalents at beginning of financial year 208,990 102,374Effects of exchange rate changes on cash and cash equivalents (309) (42)

Cash and cash equivalents at end of financial year (Note 23) 230,592 208,990



NOTES TO THE FINANCIAL STATEMENTS30 June 2011

41

1. CORPORATE INFORMATION

Jaya Holdings Limited (the Company) is a limited liability company incorporated and domiciled in the Republic of Singapore and is listed on the Singapore Exchange Securities Trading Limited (SGX-ST). The registered office and principal place of business of the Company is located at 13 Tuas Crescent, Singapore 638707.

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are stated in Note 5.

2. SCHEMES OF ARRANGEMENT

In prior year, the Company, Jaya Shipbuilding and Engineering Pte Ltd (JSE) and Java Marine Lines Pte Ltd (JML) entered into schemes of arrangement (Schemes) which became effective and binding on 25 February 2010. Pursuant to the Schemes, the Groups unsecured bank borrowings were restructured into a 5-year USD denominated secured loans with a principal holiday for the first two years and quarterly repayment instalments over the subsequent three years. As disclosed in Note 27 to the financial statements, the approved debts are secured by various fixed and floating charges over the assets of the Company, JSE and its wholly-owned subsidiaries, JML, Airia Jaya Marine (S) Pte Ltd (AJM) and its wholly-owned subsidiary, and a charge over all the issued and fully paid share capital in JSE, JML and Jaya Offshore Pte Ltd (JO) held by the Company.

The Group is in a net current asset position of $468,455,000 (2010: $455,926,000) as at 30 June 2011.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Basis of preparation

The consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards (FRS).

The financial statements have been prepared on a historical cost basis, except as disclosed in the accounting policies below.

The financial statements are presented in Singapore Dollars (SGD or $) and all values are rounded to the nearest thousand ($000) except when otherwise indicated.

3.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except that in the current financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (INT FRS) that are effective for annual periods beginning on or after 1 July 2010.

The adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group and the Company.


42


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTD

3.3 Standards issued but not yet effective

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

Description

Effective for annualperiods beginning

on or after

Revised FRS 24 Related Party Disclosures 1 January 2011

Amendments to INT FRS 114 Prepayments of a Minimum Funding Requirement 1 January 2011

INT FRS 115 Agreements for the Construction of Real Estate 1 January 2011

Amendments to FRS 107 Disclosures Transfers of Financial Assets 1 July 2011

Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets 1 January 2012

Except for the revised FRS 24, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the revised FRS 24 is described below.

Revised FRS 24 Related Party Disclosures

The revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised FRS 24 expands the definition of a related party and would treat two entities as related to each other whenever a person (or a close member of that persons family) or a third party has control or joint control over the entity, or has significant influence over the entity. The revised standard also introduces a partial exemption of disclosure requirements for government-related entities. The Group is currently determining the impact of the changes to the definition of a related party has on the disclosure of related party transaction. As this is a disclosure standard, it will have no impact on the financial position or financial performance of the Group when implemented in 2012.

3.4 Basis of consolidation

Business combinations from 1 July 2010

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

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

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



43

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTD

3.4 Basis of consolidation (contd)

Business combinations from 1 July 2010 (contd)

Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it is not be remeasured until it is finally settled within equity.

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

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interests proportionate share of the acquiree identifiable net assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Groups previously held equity interest in the acquiree (if any), over the net fair value of the acquirees identifiable assets and liabilities is recorded as goodwill. The accounting policy for goodwill is set out in Note 3.8(a). In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on the acquisition date.

Business combinations before 1 July 2010

In comparison to the above mentioned requirements, the following differences applied:

Business combinations are accounted for by applying the purchase method. Transaction costs dire

Documents

Jaya Holdings Annual Report 2011