ANNUAL REPORT 2011

ANNUAL REPORT 2011

04 Corporate Information

06 Notice of Annual General Meeting

07 Statement Accompanying Notice of AGM

08 Chairman’s Statement

09 Corporate Social Responsibility

10 Statement on Corporate Governance

15 Statement on Internal Control

16 Risk Management Statement

18 Board of Directors

19 Directors’ Profile

22 Deputy Chief Executive Officer’s Profile

23 Audit and Risk Management Committee Report

25 Directors’ Report

27 Statement by Directors and Statutory Declaration

28 Independent Auditors’ Report

30 Statements of Financial Position

31 Statements of Comprehensive Income

32 Statements of Changes in Equity

33 Statements of Cash Flows

35 Notes to the Financial Statements

63 List of Vessels and Property

64 Analysis of Shareholdings

67 Proxy Form

Table of Contents

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GLOBAL CARRIERS BHD 329687-X

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BOARD OF DIRECTORS

DATO’ AZLAN BIN HASHIM Non-Executive Chairman

PROF. TAN SRI DATO’ DR. MOHAMED RASHDAN BIN BABA Non-Independent Non-Executive Director

KAMIL BIN DATUK ABDUL RAHMANSenior Independent Non-Executive Director

MOHAMED SHAH BIN ABU BAKARIndependent Non-Executive Director(Resigned on 5 August 2011 & appointed on 23 August 2011)

DATO’ CAPTAIN JAFFAR BIN LAMRI Independent Non-Executive Director

ABDUL KARIM BIN ISMAILNon-Independent Non-Executive Director(Appointed on 17 August 2011& Resigned on 28 March 2012)

DATO’ MOHD ZAFER BIN MOHD HASHIMNon-Independent Non-Executive Director(Resigned on 9 August 2011)

SENIOR MANAGEMENT

NOR AZRINA AZLANDeputy Chief Executive Officer

AISHAH BINTI HASHIM (LS 01204)Company Secretary

ADAM SHAH BIN AZLANGeneral Manager

ABD RAMAN BIN ABU SAMAHFinancial and Planning

CAPTAIN MOHD YUSNI BIN RAZALIFleet Management

Corporate Information

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ANNUAL REPORT 2011

AUDITORS

SJ Grant Thornton Chartered AccountantsLevel 11, Sheraton Imperial CourtJalan Sultan Ismail50250 Kuala LumpurTel : (603) 2692 4022, 2692 2168Fax : (603) 2712 7922

STOCK EXCHANGE LISTING

Bursa Malaysia Securities BerhadMain MarketStock Name/Code: GLOBALC/7242

REGISTERED OFFICE

11th Floor, Tower Block EPlaza PekelilingJalan Tun Razak50400 Kuala LumpurTel : (603) 4145 3333Fax : (603) 4044 1790

SHARE REGISTRARS

Insurban Corporate Services Sdn Bhd149-B, Jalan Aminuddin BakiTaman Tun Dr Ismail60000 Kuala LumpurTel : (603) 7729 5529Fax : (603) 7728 5948

PRINCIPAL BANKER

AmBank BerhadLevel 18, Menara DionJalan Sultan Ismail50250 Kuala Lumpur

Corporate Information - CONTINUED -

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AUDIT AND RISK MANAGEMENT COMMITTEE

KAMIL BIN DATUK ABDUL RAHMANSenior Independent Non-Executive DirectorChairman

ABDUL KARIM BIN ISMAILNon-Independent Non-Executive Director(Appointed on 17 August 2011 & Resigned on 28 March 2012)


DATO’ CAPTAIN JAFFAR BIN LAMRIIndependent Non-Executive Director

NOMINATION AND REMUNERATION COMMITTEE

DATO’ AZLAN BIN HASHIM Non-Executive ChairmanChairman


MOHAMED SHAH BIN ABU BAKAR Independent Non-Executive Director(Resigned on 5 August 2011 & appointed on 23 August 2011)

EXECUTIVE COMMITTEE

DATO’ AZLAN BIN HASHIM Non-Executive ChairmanChairman

MOHAMED SHAH BIN ABU BAKAR Independent Non-Executive Director(Resigned on 5 August 2011 & appointed on 23 August 2011)




VESSEL ACQUISITION, OPERATION AND DISPOSAL COMMITTEE

MOHAMED SHAH BIN ABU BAKAR Independent Non-Executive DirectorChairman





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NOTICE IS HEREBY GIVEN that the Seventeenth Annual General Meeting of the Company will be held at Global Carriers Training Hall, 12th Floor, Tower Block E, Plaza Pekeliling, Jalan Tun Razak, 50400 Kuala Lumpur on 20 June 2012 at 11.00 a.m. to consider the following matters:-

AGENDA

1. To receive and adopt the audited financial statement for the financial year ended 31 December 2011 together with the reports of the Directors and Auditors thereon.

(Resolution 1)

2. To re-elect Kamil bin Datuk Abdul Rahman as a Director retiring pursuant to Articles 80 and 81 of the Company’s Articles of Association.

(Resolution 2)

3. To consider and, if thought fit, pass the following resolution:-

(i) That Dato’ Azlan bin Hashim who retires pursuant to section 129 of the Companies Act, 1965 be and is hereby re-appointed as a Director of the Company to hold office until the next Annual General Meeting.

(Resolution 3)

(ii) That Prof. Tan Sri Dato’ Dr. Mohamad Rashdan bin Baba who retires pursant to section 129 of the Companies Act, 1965 be and is hereby re-appointed as a Director of the Company to hold office until the next Annual General Meeting.

(Resolution 4)

4. To approve the payment of Director’s fee in respect of the financial year ended 31 December 2011.

(Resolution 5)

5. To re-appoint Messrs SJ Grant Thornton, as auditors of the Company and to authorise the Directors to fix their remuneration.

(Resolution 6)

6. Special Business: To consider and if thought fit to pass the following

resolutions:-

Ordinary Resolution – Authority to allot shares pursuant to Section 132D of the Companies Act, 1965

That pursuant to section 132D of the Companies Act 1965, the Directors be and are hereby empowered to allot and issue new shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution in any one financial year does not exceed 10% of the issued capital of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares on Bursa Malaysia Securities Berhad and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.

(Resolution 7)

7. To transact any other ordinary business for which due notice shall have been given.

By Order of the Board

AISHAH BINTI HASHIM (LS 01204)Company Secretary

Kuala LumpurDate: 29 May 2012

Notice Of Annual General Meeting

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Notes

A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him/her. A proxy may but need not be a member of the Company and if he/she is not a member of the Company, he/she shall be an advocate or an approved company auditor or a person approved by the Companies Commission of Malaysia.

Where a member appoints more than one (1) proxy (subject always to a maximum of two (2) proxies at each meeting), the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.

In the case of a corporate body, the proxy appointed must be in accordance with the Memorandum and Articles of Association, and the instrument appointing a proxy shall be given under the Company’s Common Seal or under the hand of an officer or attorney duly authorised.

The form of Proxy must be deposited at the Company’s Registered Office at 11th Floor, Tower Block E, Plaza Pekeliling, Jalan Tun Razak, 50400 Kuala Lumpur not less than 48 hours before the time set for the meeting or any adjournment thereof.

Explanatory Notes on Special Business:

a. Ordinary Resolution no. 7

The ordinary resolution, if passed, will empower the Directors to allot and issue new shares not exceeding 10% of the issued capital of the Company for the time being for such purposes as the Directors deem fit in the interest of the Company. This authority unless revoked or varied by the Company in the general meeting, will expire at the next annual general meeting of the Company.

As at the date of this Notice, the company did not issue any shares under the mandate granted to the Directors at the last Annual General Meeting of the Company held on 23 May 2011 and which will lapse at the conclusion of the 17th Annual General Meeting of the Company.

The general mandate for issue of shares will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment projects(s), working capital and/or acquisitions.

ANNUAL REPORT 2011

5. Profile of Directors standing for re-election as

in Agenda 2 of the Notice of Annual General Meeting are set out in the Directors’ profile section herein of this Annual Report. Their shareholdings in the company are set out in Substantial Shareholders & Directors’ Shareholdings section herein of this Annual Report.

Pursuant to Paragraph 8.28(2) of the Bursa Malaysia Securities Berhad Listing Requirements, appended below are:

1. The Director who are standing for re-election under Articles 80 and 81 of the Company’s Articles of Association at the Seventeenth Annual General Meeting is Kamil bin Datuk Abdul Rahman.

2. The Directors who are seeking re-appointment pursuant to Section 129 of the Companies Act, 1965 are ;

(i) Dato’ Azlan bin Hashim (ii) Prof. Tan Sri Dato’ Dr. Mohamed Rashdan bin Baba.

3. The date, time and place of the Seventeenth

Annual General Meeting are as follows: Date: 20 June 2012 Time: 11.00 a.m. Place: Global Carriers Training Hall, 12th Floor, Tower Block E, Plaza Pekeliling, Jalan Tun Razak, 50400 Kuala Lumpur.

4. A total of 6 Board Meetings were held during the financial year ended 31 December 2011. The number of meetings attended by each Director is as follows:

Board of Directors Total Meetings attended Percentage(%)

Dato’ Azlan bin Hashim 6/6 100

Prof. Tan Sri Dato’ Dr. Mohamed Rashdan bin Baba 6/6 100

Kamil bin Datuk Abdul Rahman 6/6 100

Mohamed Shah bin Abu Bakar 5/6 83

Dato’ Captain Jaffar bin Lamri 6/6 100

Abdul Karim bin Ismail 3/3 100

Dato’ Mohd Zafer bin Mohd Hashim 3/3 100

Statement Accompanying Notice of Annual General Meeting

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Chairman’s Statement

Financial Performance

On behalf of the Board of Directors, I hereby presentthe Annual Report and the Audited Financial Statements of Global Carriers Bhd for the financial year ended 31 December 2011.

The Group recorded an after tax loss of RM 1.7 million on a turnover of RM 59.4 million in 2011, as compared to an after tax loss of RM 18.1 million on a turnover of RM 58.1 million in the preceding year. This represents an increase in revenue of RM 1.3 million or 2.2 % and a decrease in after tax loss of RM 16.4 million or 90.6 % as compared to 2010.

The decrease in after-tax loss was attributable to a gain on revaluation of investment property amounting to RM 14.0 million during the year. If this gain on revaluation was excluded from the year’s result, the Group had still recorded a lower after tax loss by RM 2.4 million or 13.3 % in 2011 as compared with the preceding year.

The Year in Review

The Group faced another difficult year of challenges as anticipated. Global GDP growth moderated to 3.8% (2010: 5.2%) and global trade growth declined to 6.9% (2010: 12.7%), weighed down by uncertainties surrounding fiscal issues in the advanced economies and geopolitical tensions. In Malaysia, the economy recorded a growth of 5.1% compared with 7.2% in 2010 amidst the challenging international economic environment in 2011. (Source: Bank Negara Annual Report 2011). Significantly, these developments have dragged out the prevailing 5-year old shipping downturn which started in 2007.

The operating environment remained unrelenting dur-ing the year with freight rates still being weighed down by an enduring tonnage oversupply. Added to that, geopolitical tensions in the Middle East and Northern Africa as well as the continuing weak global shipping market accentuated the trend of European and other foreign-flagged ships coming over to this side of the globe to market their vessels. Chemical tankers also continued to encroach upon the clean petroleum

product (CPP) segment adding to competitive pressures.

Bunker prices (IFO 180) rose about 35% (from USD 519 to USD 702 per tonne) during the year while operating expenses increased due to increasing costs of spares and maintenance works. Technical breakdowns were also some of the other challenges faced by the Group in addition to the difficult operating environment.

Outlook & Prospects We expect prospects for the shipping sector to stay uncertain without clear signs of either a significant or sustained recovery. Although the shipping sector is recognized as one that is inherently cyclical, its present downturn has been one of the longest in recent memory. The industry has been hit by more than a few unprecedented challenges this time around and these would have a dampening effect on any attempts at recovery by the industry as a whole in the near term. Persistent key issues that continue to plague the shipping sector are the excess tonnage in the market, crew shortages, high bunker prices and low freight rates.

Whilst the short-term prospect for the Group looks to remain a challenge, we hope to cautiously steer the Group out of these present stormy waters with added and sustained efforts. We will persist with measures we have found effective in enhancing revenue and optimizing costs.

Acknowledgements

The Board and I wish to thank the relevant financial institutions, oil majors, charterers, shipyards, suppliers and shareholders for their continued support to the Group.

Last but not least, I would also like to thank the Board of Directors, Management and staff for their commitment, dedication, efforts, contributions and loyalty shown to the Group throughout the year.

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ANNUAL REPORT 2011

Since inception, Global Carriers has been involved with various programs organized either internally or externally to carry out its corporate social responsibility agenda. Thus far, we have been consistent with our efforts notwithstanding the many challenges the Company have been facing the shipping downturn of the past few years.

In 2011, the Company continued to actively sponsor staff and crew training. These training courses comprised the Company’s contribution to the development and enhancement of knowledgeable and skilled Malaysian seafaring professionals, in line with the national aspiration to be a maritime nation.

Some of the many training courses and seminars to which we sponsored participants were as follows:-

1. Merchant Navy Leadership2. Shipboard Safety Officer3. Basic Safety Training4. Tanker Familiarization5. Oil Tanker Training6. Bridge Resource & Team Management 7. Medical Care/ Tanker First Aid8. Global Maritime Distress Safety System (GMDSS)

Refresher9. Tanker Safety: International Safety Awareness

(ISM) Awareness10. International Ship & Port Facility (ISPS) Awareness11. Combined ISPS and ISM Code – The Internal

Auditor12. Risk Control Program Awareness Training13. Behavioral Safety14. Ship Vetting15. The 2010 Manila Amendments to the STCW

(Standards of Training, Certification and

Corporate Social Responsibility

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Watchkeeping) Convention & Code16. Update of IMO Rules & Regulations Preparing for

Port State Control (PSC) Inspections17. Port State Control (PSC) Seminar18. Seminar: Electronic Chart Display & Information

System (ECDIS)19. Optimizing Operational Efficiency for Oil Storage

& Transportation

In line with its tradition of contributing to the development of education in the country, Global Carriers sponsored a total of 8 undergraduates from a few local institutes of higher learning to do their practical training in the Company. These students’ attachments were for periods of between 4 to 6 months. This annual attachment program is to help students supplement their academic knowledge with actual practical experience in the workforce. In addition to this office attachment program, the Company also offered cadet berths to 25 students pursuing diploma and degree courses in maritime / nautical studies.

The Company lent its premises to a blood donation drive for the National Blood Bank last year with our staff enthusiastically helping out with the soliciting of donors. We also invited orphans from Sekolah Agama Darul Furqan to break fast with us during the holy month of Ramadhan. These represent some of the other community contributions that the Company undertook during 2011.

We at Global Carriers reaffirm our commitment towards contributing to the community through socially-responsible business philosophy, culture and practices.


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there is a need. The meetings are normally convened in conjunction with the release of quarterly results. For the financial year 2011, the Board met six (6) times with almost 100% attendance by all members. Board meetings were held on 17 February 2011, 13 April 2011, 18 May 2011, 24 August 2011, 7 October 2011 and 16 November 2011, at the registered office of the Company. Details of their respective attendance are set out in the notes to the Directors’ Profile in this Annual Report. The Board is well informed and sufficiently updated on the operational developments in the Group through such regular meetings.

Official decisions were also made via Board of Directors’ resolutions and they were sufficiently briefed before signing the resolutions. Whether decisions are made in Board meetings or via circular resolutions, the Board will first review the matters to be resolved. In their meetings, the Board normally deliberated the Group’s financial and business performance against budget, status of corporate exercise, draft announcement on the quarterly results and other matters raised in relation to the business of the Group.

Particular attention is given to the future expansion plans, operational activities, cost management, strengthening of workforce competency and enhancing the shareholders’ value. Equal importance is also given to adequate internal control and management information system that are in place.

Prior to any Board meetings or before signing circular resolutions, the Directors were given explanation including any required documents. This is to ensure that they have ample time to obtain further explanation and/or be briefed properly before the meeting and/or before signing the Board of Directors’ resolution. Depending on the meeting agenda and subject to Board of Directors’ resolution, all Directors have access to the advice and services of the Company Secretary and Management.

In accordance with the Articles of Association of the Company, all Directors, who are appointed by the Board are subject to election by shareholders and shall retire from office at least once in three years. The Articles also provide that at least one-third of the Directors or if the number is not three or multiple of three, then the number nearest to one-third shall retire from office and subject to re-election by rotation during the Company’s Annual General Meeting.

The Board has established the Nomination and Remuneration Committee that is empowered to make recommendations of nominees to the Board. All decisions on appointments are made by the Board after considering the recommendations of the Nomination and Remuneration Committee in accordance with the Company’s Articles of Association.

This Committee, comprising of a Non-Executive Chairman and two Non-Executive Directors, involved in assessing the existing Directors, and identifying, nominating, recruiting, appointing, and orientating new Directors. The Committee also ensures the

The Malaysian Code on Corporate Governance (“Code”), introduced in March 2000, sets out the principles and best practices that companies may apply in the direction and management of their business and affairs towards achieving the ultimate objectives of maximising shareholders’ value.

The principles and best practices of the Code were incorporated into the revamped listing requirements of the Bursa Malaysia Securities Berhad in January 2001 and listed companies are required to disclose the extent of compliance with the Code or in areas where there are deviations, the alternative, the key principles and the extent of its compliance with the best practices throughout the financial year ended 31 December 2011.

PRINCIPLES OF CORPORATE GOVERNANCE

BOARD OF DIRECTORS

The present members of the Board of Directors are as follows:-

Dato’ Azlan bin Hashim Non-Executive Chairman

Prof. Tan Sri Dato’ Dr. Mohamed Rashdan bin BabaNon-Independent Non-Executive Director

Kamil bin Datuk Abdul RahmanSenior Independent Non-Executive Director

Mohamed Shah bin Abu BakarIndependent Non-Executive Director (Resigned on 5 August 2011 & appointed on 23 August 2011) Dato’ Captain Jaffar bin LamriIndependent Non-Executive Director

Abdul Karim bin IsmailNon-Independent Non-Executive Director(Appointed on 17 August 2011& Resigned on 28 March 2012)

Dato’ Mohd Zafer bin Mohd HashimNon-Independent Non-Executive Director(Resigned on 9 August 2011)

Encik Kamil bin Datuk Abdul Rahman has been appointed as the Senior Independent Director since 2002.

The members of the Board currently consists of five (5) Directors with a diverse mix of skills and experience in shipping, oil and gas, finance and corporate, engineering, and manufacturing. A brief profile of each Board member is provided in this Annual Report.

The Directors, with different backgrounds and expertise, had contributed significantly towards the direction and advancement of the Group. The presence of Non-Executive and Independent Directors is essential in order to safeguard the interests of parties such as the minority shareholders, employees, creditors and others.

The Board normally meets more than once in every quarter or at more frequent intervals as and when

Statement On Corporate Governance

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ANNUAL REPORT 2011

selection of Board members has an appropriate balance of expertise and abilities by reviewing the skills, experiences and other qualities of the Directors thus strengthen the composition of the Board and contributes extensively to the effectiveness of the Board.

All Directors had attended and completed the Mandatory Accreditation Programme in compliance with the Listing Requirements of Bursa Malaysia Securities Berhad. They participate in conferences, seminars and training programmes aimed at building and enhancing the necessary skills in performing their duties as Directors.

The Board recognises that such continuing trainings are based on the need to gain relevant insights, to comprehend and meet the challenges arising from evolving the needs and demands of the industry.

During the year under review, all Directors have attended the relevant training programs to further enhance their knowledge to enable them to discharge their duties and responsibilities more effectively.

The Board noted that for the year 2011 since the last Annual General Meeting, no query was received from the public.

BOARD OF COMMITTEES

Audit and Risk Management Committee

The Audit and Risk Management Committee presently comprises the following members:-

ChairmanKamil bin Datuk Abdul Rahman Senior Independent Non-Executive Director

Members Dato’ Captain Jaffar bin Lamri Independent Non-Executive Director

Abdul Karim bin IsmailNon Independent Non-Executive Director(Appointed on 17 August 2011 & Resigned 28 March 2012)


The Committee met five (5) times during the financial year 2011.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee presently comprises the following members:-

ChairmanDato’ Azlan bin HashimNon-Executive Chairman

MembersProf. Tan Sri Dato’ Dr. Mohamed Rashdan bin BabaNon-Independent Non-Executive Director

Mohamed Shah bin Abu BakarIndependent Non-Executive Director(Resigned on 5 August 2011 & appointed on 23 August 2011)

The primary function of the Nomination and Remuneration Committee is to setup the policy framework and to recommend to the Board, the nomination procedures, remuneration package and other terms of employment. The determination of the nomination and remuneration for Non-Executive Directors will be a matter to be decided by the Board as whole with the Director concerned abstaining from deliberations and voting on decision in respect of his individual nomination and remuneration package.The terms of reference of the Nomination and Remuneration Committee is presented in the Nomination and Remuneration Committee Report.

The Committee met once during the financial year 2011.

Note: The Nomination Committee and the Remuneration Committee have been merged and renamed as the Nomination and Remuneration Committee with effect from 12 May 2011.

Vessel Acquisition, Operation and Disposal Committee

The Vessel Acquisition, Operation and Disposal Committee presently comprise the following members:-

ChairmanMohamed Shah bin Abu BakarIndependent Non-Executive Director(Resigned on 5 August 2011 & appointed on 23 August 2011)

Members Dato’ Captain Jaffar bin Lamri Independent Non-Executive Director

Abdul Karim bin IsmailNon Independent Non-Executive Director(Appointed on 17 August 2011& Resigned on 28 March 2012)


Statement On Corporate Governance - CONTINUED -

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The primary function of the Vessel Acquisition, Operation and Disposal Committee is to advise the Board on acquisition operation and disposal of vessel(s). The primary duties of the Committees are:

- Review and assess vessel acquisition, operation and disposal plans & strategies with the Management, within the context of the Board-approved overall business plan and strategy;

- Investigate and evaluate vessel acquisition, operation and disposal candidates on behalf of the Company;

- Perform feasibility studies in relation to vessel acquisition, operation and disposal intentions; and

- Recommend vessel acquisition, operation and disposal feasibilities, plans & strategies and candidates to the Board as appropriate.

Since there was no transactions relating to the acquisition or disposal of vessels, there was no meeting convened during the financial year 2011 and most matters relating to the performance of the fleet were discussed at the newly set up committee namely, the Executive Committee.

Executive Committee

The Executive Committee presently comprises the following members:-

ChairmanDato’ Azlan bin HashimNon- Executive Chairman

Members Mohamed Shah bin Abu BakarIndependent Non-Executive Director(Resigned on 5 August 2011 & appointed on 23 August 2011)

Dato’ Captain Jaffar bin Lamri Independent Non-Executive Director

Abdul Karim bin IsmailNon Independent Non-Executive Director(Appointed on 17 August 2011& Resigned on 28 March 2012)

Dato’ Mohd Zafer bin Mohd HashimNon-Independent Non-Executive Director (Resigned on 9 August 2011)

The primary function of the Executive Committee is to provide greater responsiveness in the process of decision-making for board matters. The primary duties of the Committee are:

- Review and provide advice regarding material issues prior to board submission.

- Provide oversight of management succession plan for key executive positions.

- Review and deal with administrative board matters between board meetings.

- Evaluate and approve the appointment of shipyard/contractor and determine the quantum of the budget for the ship docking/other repairs project within its authority limit.

The Committee met three (3) times during the financial year 2011

DIRECTORS’ REMUNERATION

The remuneration for all Directors are determined to ensure that the Company attracts and retains the Directors needed to run the Group successfully. The Board presently undertakes the process of determining their remuneration, fee and other remuneration on a competitive scale with other organisation within the same industry.

The annual remuneration of Directors of the Company for the financial year ended 31 December 2011 is as follows:-


Range of Annual Remuneration

Number of DirectorsExecutive Non-Executive

Below RM50,000 - 7

RM50,001 to RM100,000 - -

RM100,001 to RM150,000 - -

RM150,001 to RM200,000 - -

RM200,001 to RM250,000 - -

RM250,001 to RM500,000 - -

Above RM500,000.00 - -

SHAREHOLDERS

The Board subscribes to the belief that shareholders should be sufficiently kept updated on all material business matters. The release of financial results on quarterly basis and various announcements provide the shareholders the information and overview of the Group’s performance and operations.

The Board also encourages the shareholders to attend the annual general meetings which are normally held in May each year. Notices of general meetings are distributed to shareholders within the reasonable and sufficient time frame. All shareholders are eligible to attend and vote on all resolutions. Adequate time is also given during the general meetings to allow shareholders to seek clarification or ask questions on pertinent and relevant matters. The Board and key management personnel are always in attendance at the general meetings to answer questions and queries raised.

The Board values dialogue with its stakeholder, including shareholders, potential investors, and analysts. The Board is also prepared to meet up with them to explain or further clarify any information already disclosed in its published reports, circulars and/or announcements. All queries or clarification sought can be addressed to Encik Kamil bin Datuk Abdul Rahman, the Senior Independent Non-Executive Director, who will then bring such matters up to the Board. Each members of the Board will be able to handle any query and/or clarification based on their area of responsibility.

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ANNUAL REPORT 2011

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board aims to present a balanced, clear and meaningful assessment of the Company’s and Group’s financial positions and prospects in all the reports to shareholders, investors, and regulatory authorities. This assessment is primarily provided in the annual reports through the Chairman’s Statement and in the audited financial statements. The announcements of quarterly results and press releases on these results also reflect the Board’s commitment to give regular updated assessment on the Company’s and the Group’s performance.

Responsibility Statement for Preparing the Annual Audited Accounts

The Board has seen and approved the Annual Audited Financial Statements for the financial year ended 31 December 2011 and collectively and individually accept full responsibility for the accuracy of the information given and confirms that after making reasonable enquiries to the best of their knowledge and belief, there are no other facts, the omission of which would make any statement or information therein misleading.

Pursuant to Paragraph 15.27(a) of Chapter 15 of the Listing Requirements of Bursa Malaysia Securities Berhad, the Directors are required by the Malaysian company law to prepare for each accounting period, financial statements which give a true and fair view of the state of affairs of the Group and the Company as at the end of the accounting period and of the profit or loss for that period. In preparing the financial statements the Directors are required to select and apply consistently suitable accounting policies and make reasonable and prudent judgments and estimates. Applicable accounting standards also have to be followed and a statement made to that effect in the financial statements, subject to any material departures being disclosed and explained in the notes to the financial statements. The Directors are required to prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business. The Directors are responsible for ensuring proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the Company and to ensure that the financial statement comply with the Companies Act, 1965. They are also responsible for taking reasonable steps to safeguard the assets of the Company and of the Group and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Audit and Risk Management Committee

The Audit and Risk Management Committee shall be appointed by the Board from amongst their members. The membership of Audit and Risk Management Committee shall consist of not less than 3 members, the majority of whom shall be Non-Executive

Directors. The Chairman of the Committee shall be an Independent Non-Executive Director.

The terms of reference of the Audit and Risk Management Committee are outlined in this Annual Report.

For the financial year under review, the Committee had five (5) meetings. The attendance of Committee members are tabled out in the audit report section. The Committee took the task of reviewing the process of preparing and implementation of internal procedures, finding solutions and providing avenues for mitigating the elements of risk and maintaining control. In every financial quarter, the Committee assumes the task of reviewing the draft announcements for the Group’s financial results.

The Audit and Risk Management Committee acknowledged the establishment of internal audit function in the Group. This is to ensure its independence in discharging its duties and responsibilities. The fulfillment of internal audit function in the Group is not confined to, but includes:-

• Appraising the effectiveness and application of administrative and financial controls and the reliability and integrity of data that is produced within the Group;

• Evaluating the adequacy and ascertaining the level of compliance with the Group’s policies, plans, procedures and compliance with laws and regulations;

• Ascertaining the adequacy of controls for safeguarding Group’s assets from losses of all kinds and as appropriate, verifying the existence of such assets;

• Reviewing the operations of the Group as a whole from the point of view of the economy, efficiency and effectiveness with which resources are employed and making cost effective recommendations to the management; and

• Conducting special review or investigations required by the Management or by the Audit Committee of the Board.

Internal Control

The Directors recognise and acknowledge their responsibility for the Group’s system of internal controls covering not only financial controls but also operation and compliance control. This task is acknowledged primarily for the purpose of safeguarding shareholder’s investment and the assets of the Group.

The internal control systems involve each functional entity within the Group including the Board. It is designed to meet the Group’s needs in its functional and operational environment and to manage the risk to which it is exposed. The systems, however, by nature can only provide reasonable assurance towards meeting the Group’s objective and protection against non-compliance and losses.

The key elements of the Group’s internal control systems are set out in the section on Statement on Internal Control.


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Relationship with Auditors

The Board has delegated the function of reviewing its relationship with the external auditors to the Audit and Risk Management Committee, as stated in the section on Audit and Risk Management Committee Report of this Annual Report. The Audit and Risk Management Committee will meet the external auditors without the presence of Management at least once a year.

BEST PRACTICES OF CORPORATE GOVERNANCE

During the year, the Group has taken steps to ensure continuing compliance with all the Best Practices of Corporate Governance as set out in the Code.

OTHER INFORMATION

Material Contracts

There were no material contracts entered into by the Company and its subsidiaries which involve directors’ and major shareholders’ interests either still subsisting at the financial year ended 31 December 2011 or entered into since the end of the previous financial year.

Imposition of Sanctions/Penalties

The Company was not imposed any sanction or penalty during the year.

Utilisation of Proceeds

The Company did not make any corporate proposal to raise funds during the financial year under review.

Share Buy-Back

The Company did not make any share buy-back during the financial year under review.

Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities issued by the company in respect of the financial year.

American Depository Receipt or Global Depository Receipt Programmes

During the financial year under review, the Company did not sponsor such programmes.

Variation in Results

There was no material variance between the audited results for the financial year ended 31 December 2011 and the unaudited results previously announced. Apart from this, the Company did not make any announcement on estimates, forecasts, or projections of its financial results.

Profits Guarantee

The Company did not issue or give any profit guarantee during the financial year under review.

Revaluation Policy

Property, plant and equipment, will be reviewed at each balance sheet date to determine whether there is any indication of impairment. An impairment loss will be recognised whenever the carrying amount in the books of an item of property, plant and equipment exceeds its recoverable amount.

The Group adopted the fair value method under the FRS 140 to measure its investment property and the fair value of investment property shall reflect market conditions at the balance sheet date. The Group now recognises gain on fair value adjustment on its asset in compliance with FRS 140.


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ANNUAL REPORT 2011

The Malaysian Code on Corporate Governance requires the Board of public listed companies to maintain a sound system of internal control to safeguard shareholders’ investment and the companies’ assets.

RESPONSIBILITY

The Board recognises the importance of sound internal control and risk management practices to good corporate governance. The Board affirms its overall responsibility for maintaining a sound system of internal control and reviewing their adequacy and integrity so as to safeguard shareholders’ investment and Group’s assets. The system of internal control covers, inter alia, financial, operational, compliance controls and risk management. A separate risk management statement is attached as an integral part of the statement on internal control.

The Board is expected in the discharge of its stewardship responsibilities in identifying risks relating to various aspects of the Group’s business and ensures implementation of appropriate systems to control and manage these risks on an ongoing basis.

The Board will continue and enhance the structured approach of the existing procedures and processes in which risks are being identified, assessed, and reviewed.

The Board will be guided by the “Statement on Internal Control: Guidance for Directors of Public Listed Companies” issued by the Task Force on Internal Control in February 2001.

INTERNAL CONTROL SYSTEM

The internal control system which involves each business and key management from each business, including the Board, has been formulated to meet the Group’s particular needs and to appropriately manage the risks.

Due to the limitations that are inherent in any system of internal control, such systems are designed to mitigate rather than eliminate the likelihood of fraud or error. Accordingly, these systems can provide only reasonable and not absolute assurance against material misstatement or loss. The concept of reasonable assurance also recognises that the cost of control procedures should not exceed the expected benefits.

The Group has an ongoing process to review the effectiveness, adequacy and integrity of the system of internal control and these are subjected to regular review. The key elements of internal control include:

• A clearly defined line of responsibilities and different level of delegations exist in the management structure;

• Key responsibilities are properly segregated; and

• Policies, procedures, guidelines and standards of the Group whether in financial, operation and compliance controls have been established.

The processes of monitoring the system of internal control are embedded in the periodic examination by the Internal Audit Department of the adequacy and effectiveness of internal control. The audit findings are reported directly to the Audit and Risk Management Committee of the Company.

The Internal Audit Department performs its duties in accordance with its annual audit plan which covers the management, operational and system audit and risk management of the Group. The Audit and Risk Management Committee comprises mainly of Independent Non-Executive Directors and has full access to both internal and external auditors.

The systematic program in implementing and continuously improving the Group’s internal control system has been established, as described below:

• Defined delegation of responsibilities to Committees of the full Board and to operating division and/or departments, including authorisation levels for all aspects of the business;

• Defined tools and/or mechanism for identifying principal risks and implementation of appropriate system to manage these risks;

• Detail budgeting process, where operating units prepare budgets for the coming year, which are thereafter approved by both the full Board and the operating units;

• Close monitoring of results against budgets, with major variances being followed up and management action taken;

• Documented internal procedures set out in a series of procedural manuals, which include compliance with International Classification Societies’ requirements, safety management and pollution control guidelines;

• Regular internal audit visits, including inspection on-board vessels to monitor compliance with policies and procedures, and safety and operation requirements;

• Regular and comprehensive information provided to the Board and Management, covering quality of compliance with the internal procedures;

• Regular visits by the Management to the operating entities i.e on-board of the vessels;

• Review on the adequacy and the integrity of the system, management information system and including system for compliance with applicable laws, regulations, rules, directives and guidelines.

The Board believes that the Company’s system of internal control provides a reasonable though not absolute assurance that weaknesses or deficiencies are identified and corrective actions are taken in a timely manner.

Statement On Internal Control

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Global Carriers Bhd recognises and takes proactive measures to manage the various risks posed by the ever-changing business environment. The risks which include operational risk, commercial risk, market risk, financial risk, and legal risk are comprehensively dealt with and systematically managed.

The key strength of the Global Carriers Bhd lies in its prudent risk management culture supported by a risk management framework which emphasises on effective risk management and risk-return management as critical success factors for sustainable profitability, strong assets quality and continuous enhancement of shareholders’ value.

Global Carriers Bhd continues to direct corporate-wide efforts to maintain its risk-conscious corporate culture which is instilled through communication, training, clear policies, procedures, organizational structure and clearly defined roles and responsibility. Continuous commitment of the employees in managing risks, and together with a proper risk management framework in place would ensure the risk management functions are carried out effectively.

Risk Management Statement

OVERALL RISK MANAGEMENT FRAMEWORK

Global Carriers Bhd’s risk management infrastructure provides clear accountability and responsibility for the risk management process based on the following fundamental principles:

1. The Board of Directors (“Board”) is ultimately responsible for the management of risk. The Board, through the Risk Management Committeee (“RMC”) maintains overall responsibility for risk oversight.

2. The RMC is responsible for total risk oversight with includes inter-alia reviewing and approving risk management policies and limits, reviewing risk exposure and portfolio composition and ensuring that infrastructure, resources and systems are put in place for risk management activities.

3. The Heads of Department are responsible for overseeing the development and assessing the effectiveness of policies.

4. The Risk Management Division is responsible for ensuring the risk policies are implemented and complied with and also responsible for the identification, measurement and monitoring the risks.

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ANNUAL REPORT 2011

5. Individual employees are to ensure that their day-to-day business activities are carried out within the established risk policies, procedures and limits.

6. The Audit Committee’s role, supported by Internal Audit Division, is to provide an independent assessment of the adequacy and reliability of risk management processes and system of internal controls, and compliance with risk policies and regulatory requirements.

STRUCTURE & COMPOSITION OF RISK MANAGEMENT

RISK MANAGEMENT PROCESSGlobal Carriers Bhd has established, within its risk management framework, a structured approach to risk management with balances risk against return, as well as integrated risk management processes for operational risk, commercial risk, market risk, financial risk, and legal risk. The risk management process contains a number of key elements.

The key elements of the above are as follows: The identification of key Corporate Risks associated

with the organizational Mission, Vision, Goals and Objectives;

The measurement of these risks in terms of the

Probability of occurrence and the Impact on the organization resulting from the consequences;

Evaluate the existing controls to manage the risks; Confirm ownership and time lines for managing

and monitoring the controls; Decide on Risk Treatment; Develop Action Plan; and Continuous monitoring to ensure compliance and

update risk assessment.

OVERALL RISK MANAGEMENT

Review the risk management process implemented by Global Carriers Bhd and results of the process to facilitate the identification, evaluation, monitoring and management of risks.

Review adequacy of the internal operational processes to identify key organizational risks and systems in place to monitor and manage these risks.

Review adequacy of the Global Carriers Bhd policies and procedures relating to internal control, financial, auditing and accounting matters such that it complies with our business practices.

Risk Management Statement - CONTINUED -

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DATO’ CAPTAIN JAFFAR BIN LAMRI Independent Non-Executive Director

ABDUL KARIM BIN ISMAILNon-Independent Non-Executive Director(Appointed on 17 August 2011& Resigned on 28 March 2012)


Board Of Directors

DATO’ AZLAN BIN HASHIMNon-Executive Chairman



MOHAMED SHAH BIN ABU BAKARIndependent Non-Executive Director(Resigned on 5 August 2011 & appointed on 23 August 2011)

There were six (6) Board meetings convened during the year.

The attendance of each Director during the year is set out below:-

DIRECTORS NO. OF BOARD MEETINGS ATTENDED

Dato’ Azlan bin Hashim 6/6

Prof. Tan Sri Dato’ Dr. Mohamed Rashdan bin Baba 6/6

Kamil bin Datuk Abdul Rahman 6/6

Mohamed Shah bin Abu Bakar 5/6

Dato’ Captain Jaffar bin Lamri 6/6

Dato’ Mohd Zafer bin Mohd Hashim 3/3

Abdul Karim bin Ismail 3/3

The date, time and venue of the meetings are set out below:-

DATE VENUE TIME

17-02-2011 Global Carriers Bhd, 11th Floor, Plaza Pekeliling 15.00






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ANNUAL REPORT 2011

PROF. TAN SRI DATO’ DR. MOHAMED RASHDAN BIN BABANon-Independent Non-Executive Director

Prof. Tan Sri Dato’ Dr. Mohamed Rashdan Bin Baba, aged 77, was appointed to the Board of the Company on 13 June 2007. He currently serves as members of Nomination Committee and Remuneration Committee.

Prof. Tan Sri Dato’ Dr. Mohamed Rashdan holds a Bachelor of Science degree from the University of Reading, United Kingdom and a Doctorate (PhD) from the University of Leeds, United Kingdom. He also completed the 83rd Advanced Management Programme at Harvard University, USA. Prof. Tan Sri Dato’ Dr. Mohamed Rashdan also received Honorary Doctor of Science (DSc) from the University of Reading, United Kingdom and the Malaysia Multimedia University and Honorary Doctor of Laws (LLD) from the University of Leeds, United Kingdom and the Universiti Kebangsaan Malaysia.

Prof. Tan Sri Dato’ Dr. Mohamed Rashdan was also the Executive Chairman of Telekom Malaysia Berhad from 1987 to 1995. Prior to this, he was the Executive Chairman of Kumpulan Guthrie Berhad and sat on the board of several subsidiary companies of Kumpulan Guthrie Group from 1982 to 1987. He was the founding Vice-Chancellor of Universiti Kebangsaan Malaysia from 1969 to 1971 and Universiti Pertanian Malaysia from 1971 to 1982. He was an independent non-executive director of Far East Holdings Berhad (1990 to 2002), AMFB Holdings Berhad (1996 to 2003), AMMB Holdings Berhad (1996 to 2005), AmInvestment Group Berhad (2005) and Amcorp Group Berhad (1988 to 2007). He also sat on the board of AMBB Capital Berhad and AmMerchant Bank Berhad from 1996 to 2005.

Prof. Tan Sri Dato’ Dr. Mohamed Rashdan’s shareholding information in the Company is set out in the Substantial Shareholders and Directors’ Shareholding in this Annual Report. He has no family relationship with any directors of the Company and/or Shareholders of the Company. He has never been charged for any offences within the past ten (10) years.

Director’s Profile

DATO’ AZLAN HASHIMNon-Executive Chairman

Y.Bhg Dato’ Azlan Hashim, a Malaysian, aged 70, was appointed to the Board of Global Carriers Bhd on 1 January 2003. He served as an Executive Chairman of the Company from 1 January 2007 until 1 January 2011. He changes his designation from Executive Chairman to Non-Executive Chairman with effect from 1 January 2011. Currently, he is the Chairman of the Executive Committee and Nomination & Remuneration Committee.

Dato’ Azlan is a Fellow of the Institute of Chartered Accountants (Ireland), Economic Development Institute (World Bank, Washington) and Institute of Bankers Malaysia. Dato’ Azlan, a qualified Chartered Accountant, served with the Malayan Railways from 1966 to 1971 and was its Chief Accountant for two years. In 1972, he became a Partner of a public accountant firm, Azman Wong Salleh & Co. and was a Senior Partner of the firm prior to joining the Board of AMDB Berhad in 1982 to July 2007.

He is the Deputy Chairman of AMMB Holdings Berhad and Chairman of AmInternational (L) Limited and PT AmCapital Indonesia. He is currently the Non-Executive Director of AmFraser Securities Pte Ltd & AmFrasers International Pte Ltd. He also sits on the Boards of Metrod (M) Berhad, Paramount Corporation Berhad, Sapura Industrial Berhad and Kesas Holdings Berhad.

Dato’ Azlan’s shareholding information in the Company is set out in the Analysis of Shareholdings & Substantial Shareholders and Directors’ Shareholdings in this Annual Report.

He has no family relationship with any directors of the Company and/or major Shareholders of the Company except indirect relationship with AmBank (M) Berhad. His daughter sits as Senior Management of the Company, holding the position of Deputy Chief Executive Officer. She is also a shareholder of Global Carriers Bhd.

He has never been charged for any offence within the past ten (10) years.

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Director’s Profile - CONTINUED -


Encik Kamil bin Datuk Abdul Rahman, a Malaysian, aged 63, was appointed to the Board on 10 October 2001 as an Independent Non-Executive Director. He is presently the Chairman of the Audit and Risk Management Committee.

His area of specialisation is in corporate governance, corporate finance and risk management.

He graduated with a Bachelor of Commerce degree from the University of Otago, New Zealand and subsequently qualified as a Chartered Accountant of the Institute of Chartered Accountants of New Zealand. He is also a Fellow Chartered Secretary of the Institute of Chartered Secretaries and Administrators, United Kingdom, and a Chartered Accountant of the Malaysian Institute of Accountants.

His previous positions were as Executive Director of Commerce International Merchant Bankers Berhad and Senior Vice-President of Bank of Commerce (M) Berhad.

He is also a Director of Khind Holdings Berhad, Bukit Katil Resources Berhad (not listed on Bursa Malaysia), WDM Holdings Berhad (not listed on Bursa Malaysia) and the Malaysia South Africa Business Council (a company limited by guarantee).

He has no family relationship with any directors of the Company and/or major Shareholders of the Company. He has never been charged for any offences within the past ten (10) years.

MOHAMED SHAH BIN ABU BAKARIndependent Non-Executive Director Encik Mohamed Shah bin Dato’ Abu Bakar, a Malaysian aged 62, was appointed to the Board on 30 January 1996. He is currently serves as the Chairman of Vessel Acquisition Operation and Disposal Committee and members of Nomination Committee and Remuneration Committee.

He graduated in 1973 with an Honours degree in Engineering from the University of Canterbury in New Zealand.

Encik Mohamed Shah started his career as the Mechanisation Engineer in the Farmer Organisation Authority (LPP) in 1973. He then left LPP and joined Agrinova Sdn Bhd as the Project Manager in 1977. In 1979, he resigned and served as the Service Manager for Tractors Malaysia Berhad for a period of 7 years after which he left for Tate & Lyle Sdn Bhd as the Mechanisation Consultant. In 1986, he started his own company, which is involved in the manufacturing of automotive components.

Encik Mohamed Shah is a Director of Tracoma Holdings Berhad since 1995, and several private limited companies.


Encik Mohamed Shah’s Shareholding information in the Company is set out in the Substantial Shareholders and Directors’ Shareholdings.

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ANNUAL REPORT 2011


Dato’ Captain Jaffar bin Lamri, a Malaysian aged 57, was appointed to the Board on 1 March 2010 as an Independent Non-Executive Director. He obtained a Master Mariner Class 1 from Royal Melbourne Institute of Technology (RMIT) University, Melbourne Australia. He is a Fellow of Malaysian Maritime Institute (IKMAL) where he was the President from 1994 to 1997 and from 2003 – 2007. He is also an Honorary Member of Royal Selangor Yacht Club.

In 1974, he commenced his career in shipping with Ocean Fleets Ltd United Kingdom and later served MISC Bhd until 1984. He served Marine Department Peninsular Malaysia as Harbour Master of Perak from 1985 to 1987 and as the Head of Navigation Safety Division from 1987 to 1990. He was the Petroleum Industry of Malaysia Mutual Aid Group (PIMMAG) Operations and Training Manager from 1998 to 2001 and General Manager from 2001 to 2004. Thereafter, he was appointed as Chief Operating Officer of Petronas Sungai Udang Port Sdn Bhd from 2005 to 2007. He was the Head of Maritime Services Division in Petronas Maritime Services Sdn Bhd from 2007 to 2009.

Dato’ Captain Jaffar bin Lamri is currently the Managing Director of Centre of Maritime Excellence Sdn Bhd, a company specializes in maritime training, consultancy and marine services for port, shipping and oil & gas industry.


Director’s Profile - CONTINUED -

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NOR AZRINA BINTI AZLANDeputy Chief Executive Officer

Nor Azrina binti Azlan, aged 42, a Malaysian, joined Global Carriers Bhd in 2004 as the Head of Corporate Services. She was appointed as Deputy Chief Executive Officer of the Company on October 2010 and was also appointed as director of the Group’s subsidiary companies in March 2010.

She graduated with a Masters in Accountancy and Bachelor of Business Administration from George Washington University, Washington DC, USA and began her career as Officer in Corporate Banking at Arab Malaysian Merchant Bank Berhad (now known as AmBank Berhad) in 1995.

Nor Azrina joined K&N Kenanga Berhad in 1996 and was a member of the team that established the Securities Borrowing and Lending unit of the group. By 1999, she was offered the position of Investment Manager at AmAssurance Berhad where she was part of the team that set up the Investment Department. Nor Azrina later joined Deloitte Corporate Advisory in 2002, specializing in consulting, corporate advisory, corporate finance and mergers & acquisitions.

She is a daughter of the chairman of the Company. Her shareholding in the company is set out in the substantial shareholders’ shareholding. She has never been charged for any offence within the past ten (10) years.

Deputy Chief Executive Officer’s Profile

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ANNUAL REPORT 2011

COMPOSITION

Members of the Audit and Risk Management Committee, their respective designations and directorships are as follows:-

Kamil bin Datuk Abdul RahmanChairman, Senior Independent Non-Executive Director

Dato’ Mohd Zafer bin Mohd HashimMember, Non-Independent Non-Executive Director(Resigned on 9 August 2011)

Abdul Karim bin IsmailMember, Non-Independent Non-Executive Director(Appointed on 17 August 2011 & Resigned on 28 March 2012)

Dato’ Captain Jaffar bin LamriMember, Independent Non-Executive Director

TERMS OF REFERENCE

Membership

The Audit and Risk Management Committee shall be appointed by the Board from amongst the Directors and shall consist of not less than three (3) members, a majority of whom shall be Independent Directors and at least one member of the Committee must be a member of the Malaysian Institute of Accountants or possesses such other qualifications and/or experience as approved by Bursa Malaysia Securities Berhad.

No alternate Director shall be appointed as a member of the Committee.

In the event of any vacancy in the Committee resulting in the non-compliance of subparagraph 15.10(1) of the Listing Requirements of Bursa Malaysia Securities Bhd, the Board of Directors shall, within three (3) months of the event, appoint such number of new members as may be required to make up the minimum number of three (3) members.

Chairman

The Chairman of the Committee shall be an Independent Director appointed by the Board. He shall report on each meeting of the Committee to the Board.

Secretary

The Committee shall appoint an executive of the Company to be the secretary of the Committee, and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it, supported by explanatory documentation to the Committee members prior to each meeting.

The secretary shall be responsible for keeping minutes of meetings of the Committee and circulating them to the Committee members and to other members of the Board.

Attendance and Meetings

The Committee will meet as frequently as the Chairman shall decide, with due notice of issues to be discussed and should record its conclusions whilst discharging its duties and responsibilities.

The Committee shall meet at least four (4) times a year and such additional meetings as the Chairman shall decide in order to fulfil its duties. In addition, the Chairman may call a meeting of the Committee if a request is made by any Committee member, the Company’s Principal Officer, or the internal or external auditors. In the absence of the Chairman, the members present shall elect from among their members, a Chairman, who shall be an Independent Non-Executive Director.

The Committee may invite any members of the management, employees and other Directors to be present at meetings of the Committee.

Quorum

The quorum for a meeting shall be two (2) Independent Non-Executive Directors.

Authority

The Committee shall, wherever necessary and reasonable for the performance of its duties in accordance with a procedure to be determined by the Board of Directors and the cost of the Company:-

a. to investigate any activity within its terms of reference;

b. to have the resources which are required to perform its duties;

c. to have full and unrestricted access to information pertaining to the Company and the Group, their records, properties and personnel;

d. to have direct communication channels with the external auditors and the person(s) carrying out the internal audit function, as well as employees of the Group;

e. to consult external legal or other independent professionals as necessary to discharge their duties;

f. to have immediate access to reports on fraud or irregularities from both external and internal auditors; and

g. to convene meetings with the external auditors, excluding the attendance of the executive members of the Committee, whenever deemed necessary.

Duties / Functions

The duties of the Audit and Risk Management Committee include, but not limited to the following:-

• to consider the appointment of the external auditor, the audit fee and any questions of resignation or dismissal;

• to discuss with the external auditor before the audit commences, audit plan, the nature and scope of the audit;

• to review the external auditor’s management letter and management’s response, and assistance given by the employees of the Company or Group to the external auditor;

Audit and Risk Management Committee Report

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• any other matters as may be directed by the Board from time to time.

Reporting Of Breaches To The Exchange

Where the Committee is of the view that a matter reported by it to the Board of Directors of the Company has not been satisfactorily resolved resulting in a breach of Bursa Malaysia Securities Berhad Listing Requirements, the Committee shall promptly report such matter to Bursa Malaysia Securities Berhad.

Review Of The Audit And Risk Management Committee

The Board of Directors must review the term of office and performance of the Committee and each of its members at least once every three (3) years to determine whether the Committee and members have carried out their duties in accordance with their terms of reference.

Summary Of Activities

The Audit and Risk Management Committee met five (5) times during the financial year ended 31 December 2011. The attendances of each member at the Audit and Risk Management Committee meetings held are as follows:

In discharging its functions and duties as mentioned above, the Committee considered the overall coverage of both the internal and external audits. It also reviewed the results of their respective examinations and evaluations of the Group’s operational and financial control systems and compliance procedures.

• to review the independence and objectivity of the external auditors and their services;

• to consider whether there is reason (supported by grounds) to believe that the Company’s external auditor is not suitable for re-appointment;

• to discuss with the external auditor, his evaluation of the system of internal controls;

• to consider the reports prepared by internal audit function and external auditors, the major findings and management’s response thereto;

• to review the quarterly and annual financial statements, prior to the approval by the Board of Directors, focusing particularly on:-- any changes in or implementation of

accounting policies and practices;- major judgmental areas;- significant adjustments arising from the audit

and unusual events;- the going concern assumption; and- compliance with accounting standards and

other regulatory requirements;

• to discuss problems and reservations arising from the interim and final audits and any matter the Committee may wish to discuss (in the absence of management, where necessary);

• to oversee the internal control structure to ensure operational effectiveness and protect the Group’s assets from misappropriation;

• to review the adequacy of the scope, functions and resources of the internal audit department to be able to undertake its activities independently and objectively, and whether it has the necessary authority to carry out its work;

• to review the internal audit programs and results, the risk management and methodology, investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

• to review the evaluation of the system of internal control with the auditors and management information system,

• to review any appraisal or assessment of the performance of members of the internal audit function;

• to approve any appointment, resignation or termination of senior staff members of the internal audit function;

• to consider any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction or course of conduct that raises questions of management integrity, and that the internal control procedures with regard to the transactions are sufficient;

• to ensure that proper processes and procedures are in place to comply with all laws, regulations and rules established by all relevant regulatory bodies; and

Audit and Risk Management Committee Report - CONTINUED -

Internal Audit Function

The Group Internal Auditor is independent and performs audit assignments with impartiality, proficiency and due professional care. During the financial year, the Internal Audit function reviewed compliance with policies, procedures and standards, relevant external rules and regulations, as well as assessing the adequacy and effectiveness of the Group’s system of internal controls. The Group Internal Auditor undertakes regular and systematic review of the system of controls so as to provide reasonable assurance that such system continues to operate satisfactorily and effectively in the Company and the Group.

Members Meeting Attendance

Percentage (%)

Kamil bin Datuk Abdul Rahman 5/5 100

Dato’ Captain Jaffar bin Lamri 5/5 100

Dato’ Mohd Zafer bin Mohd Hashim * 3/3 100

Abdul Karim bin Ismail ** 1/1 100

* Resigned on 9 August 2011** Appointed on 17 August 2011 & Resigned on 28 March 2012

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ANNUAL REPORT 2011

The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2011.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of its subsidiaries are disclosed in Note 7 to the Financial Statements.

There have been no significant changes in the nature of the activities of the Company and its subsidiaries during the financial year.

FINANCIAL RESULTS

Group (RM) Company (RM)Net loss for the financial year 1,661,320 76,646,144

Attributable to:

Owners of the parent 6,779,234 --

Non-controlling interest (5,117,914) --

Net loss for the financial year 1,661,320 76,646,144

DIVIDENDS

No dividend have been declared or paid by the Company since the end of the previous financial year.

The Directors do not recommend any dividend for the financial year ended 31 December 2011.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year.

DIRECTORS

The Directors in office since the date of the last report are:-

Dato’ Azlan bin Hashim (Chairman)Kamil bin Datuk Haji Abdul RahmanProfessor Tan Sri Dato’ Dr. Mohamed Rashdan bin Haji BabaDato’ Captain Haji Jaffar bin LamriMohamed Shah bin Dato’ Abu Bakar (resigned on 5.8.11; appointed on 23.8.11)Abdul Karim bin Ismail (appointed on 17.8.11; resigned on 28.3.12)Dato’ Mohd Zafer bin Mohd Hashim (resigned on 9.8.11)

In accordance with Articles 80, 81 and 87 of the Company’s Articles of Association, Kamil bin Datuk Haji Abdul Rahman retires at the forthcoming Annual General Meeting and, being eligible, offers himself for re-election.

The following Directors who held office at the end of the financial year had, according to the register required to be kept under Section 134 of the Companies Act 1965, interest in shares in the Company as shown below:-

The CompanyNumber of ordinary shares

at 1.1.2011 Bought Sold at 31.12.2011Direct Shareholdings:-

Haji Mohamed Shah bin Abu Bakar 4,026 - - 4,026

Dato’ Azlan bin Hashim 10,768,000 - - 10,768,000

No other Directors at end of the financial year held interest in shares and debentures of the Company and its related corporations during the financial year.

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling 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.

Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other than benefits as disclosed in the Note 25 to the financial statements) 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.

Directors’ Report

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ISSUE OF SHARES AND DEBENTURES

There were no share and debentures issued during the financial year.

REDEEMABLE CUMULATIVE CONVERTIBLE SECURED LOAN STOCKS (“RCCSLS”)

The main features of the RCCSLS are as disclosed in Note 15 to the financial statements.

REDEEMABLE UNSECURED LOAN STOCKS (“RULS”)

The main features of the RULS are as disclosed in Note 16 to the financial statements.

SIGNIFICANT EVENTS DURING THE YEAR

The significant events during the financial year are disclosed in Note 31 to the financial statements.

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps:

(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that there were no bad debts to been written off and

adequate provision had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company have been

written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

(a) which would render it necessary to write off any bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

(d) not otherwise dealt with in this report of the financial statements which would render any amount stated in the financial statement misleading.

At the date of this report, there does not exist:

(a) any charge on the assets of the Group and the of Company which has arisen since the end of the financial year which secures the liability of any person; and

(b) any contingent liability of the Group and of the Company which has arisen since the end of financial year.

In the opinion of the Directors:

(a) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due;

(b) the results of operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

(c) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made.

AUDITORS

The Auditors, Messrs SJ Grant Thornton have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

.......................................................…………….... DATO’ AZLAN BIN HASHIM CHAIRMAN

Kuala Lumpur27 April 2012

.......................................................………………. KAMIL BIN DATUK HAJI ABDUL RAHMAN DIRECTOR

Directors’ Report - CONTINUED -

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ANNUAL REPORT 2011

In the opinion of the Directors, the financial statements set out on pages 30 to 62 are drawn up in accordance with the Companies Act, 1965 and Financial Reporting Standards in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of their financial performance and cash flows for the financial year then ended.

Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

............................................................................... ...............................................................................DATO’ AZLAN BIN HASHIM KAMIL BIN DATUK HAJI ABDUL RAHMAN CHAIRMAN DIRECTOR

Kuala Lumpur27 April 2012

STATUTORY DECLARATION

I, Abd Raman bin Abu Samah, being the Officer primarily responsible for the financial management of Global Carriers Bhd, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 30 to 62 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )theabovenamed at Kuala Lumpur in )the Federal Territory this day of 27 April 2012 ) )...................................................................................... ABD RAMAN BIN ABU SAMAH

Before me:

Commissioner for Oaths

Statement By Directors

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Report on the Financial Statements

We have audited the financial statements of Global Carriers Bhd, which comprise the statements of financialposition as at 31 December 2011 of the Group and of the Company and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes as enumerated in Notes 1 to 34 and set out on pages 30 to 62.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about 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 our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, 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, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of their financial performance and cash flows for the financial year then ended.

Emphasis of matter

Without qualifying our report, we draw attention to Note 2 to the financial statements which discloses the premise upon which the Group and the Company have prepared the financial statements by applying the going concern assumption, notwithstanding that the Group and the Company incurred a net loss of RM1,661,320 and RM76,646,144 respectively during the financial year ended 31 December 2011 and as of that date, the Group and the Company have net current liabilities of RM99,206,599 and RM18,205,388 respectively. The Board of Directors of the Group and the Company have proposed to dispose off the Company’s existing shares of its Ship Owning Subsidiaries and the investment property in one of its subsidiaries. The proposals, subject to approval of relevant authorities and successful completion, will provide the necessary cash flows to enable the Group and the Company to meet all the obligations as and when they fall due and therefore, the Directors are of the opinion that the going concern basis preparation of financial statements is appropriate.

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:-

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(c) The auditors’ reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.

Independent Auditors’ Report

28

ANNUAL REPORT 2011

Other Reporting Responsibilities

The supplementary information set out in Note 35 on page 62 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

SJ GRANT THORNTON NG CHEE HOONG(NO. AF: 0737) CHARTERED ACCOUNTANTCHARTERED ACCOUNTANTS (NO: 2278/10/12(J)) PARTNERKuala Lumpur 27 April 2012

Independent Auditors’ Report - CONTINUED -

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NoteGROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

ASSETSNon-current assets

Non-current assets 5 257,545,688 265,084,217 - -

Property, plant and equipment 6 40,000,000 26,000,000 - -

Investment in subsidiaries 7 - - 46,823,034 46,865,034

Other investment 8 611 611 - -

Non-current assets 297,546,299 291,084,828 46,823,034 46,865,034

Current assetsInventories 9 1,948,376 1,605,199 - -

Trade receivables 10 2,209,696 4,371,768 - -

Other receivables 11 3,189,429 2,599,654 10,500 10,000

Amount due from subsidiaries 12 - - 188,469,538 260,245,976

Tax recoverable 42,116 41,441 8,000 7,326

Fixed deposits with licensed banks 13 2,220,439 2,197,575 - -

Cash and bank balances 5,650,813 3,292,590 2,314 1,504

Current assets 15,260,869 14,108,227 188,490,352 260,264,806

Total ASSETS 312,807,168 305,193,055 235,313,386 307,129,840

EQUITY AND LIABILITIESEQUITY

Equity attributable to owners of the parent:Share capital 14 83,723,505 83,723,505 83,723,505 83,723,505

Redeemable Cumulative Convertible Secured Loan Stock (RCCSLS)

15 241,412 241,412 - -

Share premium 5,379,421 5,379,421 5,379,421 5,379,421

Accumulated losses (43,853,400) (37,074,166) (79,996,852) (3,350,708)

45,490,938 52,270,172 9,106,074 85,752,218

Non-controlling interest 31,801,833 26,683,919 - -

Total EQUITY 77,292,771 78,954,091 9,106,074 85,752,218LIABILITIES

Non-current liabilitiesRedeemable Cumulative Convertible Secured Loan Stock (RCCSLS)

15 4,255,096 4,875,304 - -

Redeemable unsecured loan stocks (RULS) 16 19,511,572 29,267,356 19,511,572 29,267,356

Borrowings 17 97,280,261 117,073,963 - -

Non-current liabilities 121,046,929 151,216,623 19,511,572 29,267,356

Current liabilitiesTrade payables 18 18,897,196 14,839,815 - -

Other payables and accruals 19 19,150,571 15,526,390 2,589,852 1,649,713

Amount due to subsidiaries 12 - - 149,629,933 166,218,289

Redeemable Cumulative Convertible Secured Loan Stock (RCCSLS)

15 1,085,364 620,208 - -

Redeemable unsecured loan stocks (RULS) 16 9,755,785 9,755,785 9,755,785 9,755,785

Borrowings 17 65,578,552 34,280,143 44,720,170 14,486,479

Current LIABILITIES 114,467,468 75,022,341 206,695,740 192,110,266

Total LIABILITIES 235,514,397 226,238,964 226,207,312 221,377,622Total EQUITY AND LIABILITIES 312,807,168 305,193,055 235,313,386 307,129,840

The accompanying notes form an integral part of the financial statements.

Statement Of Financial Position AS AT 31 DECEMBER 2011

30

ANNUAL REPORT 2011

NoteGROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

Revenue 20 59,446,135 58,127,189 - -

Other income 21 2,369,890 812,086 22,285 21,304

Depreciation (14,799,656) (12,893,066) - -

Staff costs 22 (16,131,639) (16,143,800) (543,086) (148,453)

Other expenses (34,194,243) (35,873,113) (72,008,564) (2,156,958)

Finance costs 23 (12,351,635) (11,903,755) (4,116,779) (3,237,685)

Exceptional items 24 13,999,828 (237,790) - -

Loss before tax 25 (1,661,320) (18,112,249) (76,646,144) (5,521,792)

Tax expense 26 - - - -

Net loss for the financial year (1,661,320) (18,112,249) (76,646,144) (5,521,792)

Other comprehensive income for financial year - - - -

Total comprehensive loss for financial year (1,661,320) (18,112,249) (76,646,144) (5,521,792)

Attributable to:

Owner of the parent (6,779,234) (20,105,547) (76,646,144) (5,521,792)

Non-controlling interest 5,117,914 1,993,298 - -

Net loss for the financial year (1,661,320) (18,112,249) (76,646,144) (5,521,792)

Loss per share attributable to equity holders of the Company (sen) 27

Basic (4.05) (12.01) - -

Fully diluted - - - -


Statement Of Comprehensive Income FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

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Attributable to owners of the parent

Non-distributable

Share Capital

RCCSLS Equity

Component

Share Premium

Accumulated Losses Total

Non-Controlling

Interest

Total Equity

(RM) (RM) (RM) (RM) (RM) (RM) (RM)

GROUPBalance at 1 January 2010 418,617,526 241,412 5,379,421 (351,862,640) 72,375,719 20,231,621 92,607,340

Total comprehensive loss for the financial year - - - (20,105,547) (20,105,547) 1,993,298 (18,112,249)

Transaction with owners:

Acquisition of equity interest in subsidiaries - - - - - 4,459,000 4,459,000

Capital reduction & consolidation (334,894,021) - - 334,894,021 - - -

Balance at 31 December 2010 83,723,505 241,412 5,379,421 (37,074,166) 52,270,172 26,683,919 78,954,091

Total comprehensive loss for the financial year - - - (6,779,234) (6,779,234) 5,117,914 (1,661,320)

Balance at 31 December 2011 83,723,505 241,412 5,379,421 (43,853,400) 45,490,938 31,801,833 77,292,771

COMPANYBalance at 1 January 2010 418,617,526 - 5,379,421 (332,722,937) 91,274,010 91,274,010

Total comprehensive income for the financial year

- - - (5,521,792) (5,521,792) - (5,521,792)

Transaction with owners:

Capital reduction (334,894,021) - - 334,894,021 - - -

Balance at 31 December 2010 83,723,505 - 5,379,421 (3,350,708) 85,752,218 - 85,752,218

Total comprehensive loss for the financial year - - - (76,646,144) (76,646,144) - (76,646,144)

Balance at 31 December 2011 83,723,505 - 5,379,421 (79,996,852) 9,106,074 - 9,106,074


Statement Of Changes In Equity FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

32

ANNUAL REPORT 2011

GROUP COMPANY2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

CASH FLOWS FROM OPERATING ACTIVITIESLoss before tax (1,661,320) (18,112,249) (76,646,144) (5,521,792)

Adjustments for:Depreciation of property, plant and equipment 14,799,656 12,893,066 - -

Interest expense 12,351,635 11,903,755 4,116,779 3,237,685

Interest income (22,864) (21,304) - (21,304)

Fair value adjustment of investment property (14,000,000) - - -

Property, plant and equipment written off 172 257,000 - -

Gain on disposal of property, plant and equip-ment - (19,210) - -

Impairment loss on trade receivables 1,701,362 - - -

Impairment loss on amount due from subsidiaries - - 71,168,106 -

Impairment loss on investment in subsidiary - - 92,000 -

Operating profit/(loss) before working capital changes 13,168,641 6,901,058 (1,269,259) (2,305,411)

Inventories (343,177) 89,553 - -

Receivables (129,065) 1,532,693 (500) 31,826

Payables 5,693,785 8,611,180 (467,087) (271,868)

Subsidiaries - - (15,980,024) 15,136,234

Cash from/(used in) operating activities 18,390,184 17,134,484 (17,716,870) 12,590,781Tax paid (674) - (674) -

Net cash from/(used in) operating activities 18,389,510 17,134,484 (17,717,544) 12,590,781

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (7,261,299) (15,189,050) - -

Proceeds from disposal of property, plant and equipment - 40,049 - -

Interest received 22,864 21,304 - 21,304

Investments in subsidiaries - - (50,000) (4,641,002)

Net cash used in investing activities (7,238,435) (15,127,697) (50,000) (4,619,698)

CASH FLOWS FROM FINANCING ACTIVITIESRedemption of RULS (9,755,783) (9,755,784) (9,755,783) (9,755,784)

Repayment of term loan (18,728,984) (68,589,803) - -

Repayment of RCCSLS (155,052) (465,159) - -

Drawdown of term loan 30,000,000 74,430,307 30,000,000 -

Subscription of ordinary shares in subsidiaries by a minority shareholder - 4,459,000 - -

Interest paid (10,363,860) (11,903,755) (2,709,554) (3,237,685)

Net cash (used in)/from financing activities (9,003,679) (11,825,194) 17,534,663 (12,993,469)


Statement Of Cash Flows FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

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GROUP COMPANY2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

CASH AND CASH EQUIVALENTS

Net changes 2,147,396 (9,818,407) (232,881) (5,022,386)

Brought forward (8,996,314) 822,093 (14,484,975) (9,462,589)

Carried forward (6,848,918) (8,996,314) (14,717,856) (14,484,975)

NOTE TO THE STATEMENTS OF CASH FLOWS:

Cash and cash equivalents comprise:

Cash and bank balances 5,650,813 3,292,590 2,314 1,504

Fixed deposits with licensed banks 2,220,439 2,197,575 - -

Bank overdraft (14,720,170) (14,486,479) (14,720,170) (14,486,479)

(6,848,918) (8,996,314) (14,717,856) (14,484,975)


Statement Of Cash Flows FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011 - CONTINUED -

34

ANNUAL REPORT 2011

1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office and principal place of

business of the Company is located at 11th Floor, Tower Block E, Plaza Pekeliling, Jalan Tun Razak, 50400 Kuala Lumpur.

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are stated in Note 7 to the financial statements.

There have been no significant changes in the nature of these activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors passed on 27 April 2012.

2. GOING CONCERN

The Directors have prepared the Group’s and the Company’s financial statements on a going concern assumption, not withstanding that the Group and the Company incurred a net loss of RM1,661,320 and RM76,646,144 respectively during the financial year ended 31 December 2011 and as of that date, the Group and the Company have net current liabilities of RM99,206,599 and RM18,205,388 respectively. The Board of the Directors of the Group and the Company have proposed to dispose off the Company’s

existing shares of its Ship Owning Subsidiaries and the investment property in one of its subsidiaries. The proposals, subject to approval of relevant authorities and successful completion, will provide the necessary cash flows to enable the Group and the Company to meet all the obligations as and when

they fall due and therefore, the Directors are of the opinion that the going concern basis of preparation of financial statements is appropriate.

3. BASIS OF PREPARATION

3.1 Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies Act, 1965 in Malaysia and Financial Reporting Standards issued by the

Malaysian Accounting Standards Board (“MASB”). At the beginning of the current financial year, the Group and the Company adopted new and revised FRSs which are mandatory for financial periods

beginning on or after 1 January 2011 as described fully in Note 3.4 to the financial statements. 3.2 Basis of measurement

The financial statements of the Group and of the Company are prepared under the historical cost convention, unless otherwise indicated in the other significant accounting policies.

3.3 Functional and presentation currency

The financial statements are presented in Ringgit Malaysia (RM) which is the Company’s functional currency and all values are rounded to the nearest RM except otherwise stated. 3.4 Financial Reporting Standards (FRSs)

3.4.1 Adoption of new and revised Financial Reporting Standards (FRS)

The accounting policies adopted by the Group and the Company are consistent with those of the previous financial year except the following new and revised FRSs and IC Interpretations.

Effective for annual financial period beginning 1 March 2010:

Amendments to FRS 132 - Financial Instruments: Presentation. Amendments relating to classification of rights issues

Effective for annual financial period beginning 1 July 2010:

(a) FRS 1 - First-time Adoption of Financial Reporting Standards (Revised) (b) FRS 3 - Business Combinations (Revised) (c) FRS 127 - Consolidated and Separate Financial Statements (Revised) (d) IC Interpretation 12 - Service Concession Arrangements (e) IC Interpretation 17 - Distributions of Non-cash Assets to Owners (f) Improvements to FRSs issued in 2009

Effective from 30 August 2010:

Amendment to IC - Agreements for the Construction of Real Estate. Amendment relating to Interpretation 15 the deferment of the effective date of the IC Interpretation 15.

Notes To The Financial Statements 31 DECEMBER 2011

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Effective for annual financial period beginning 1 January 2011:

(a) Amendment to FRS 1 - Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopt ers. Amendment relating to transition provisions for first-time adopters

(b) Amendments to FRS 1 - Additional Exemptions for First-time Adopters. Amendment relating to transition provision for first-time adopters in the industry of oil and gas (c) Amendments to FRS 2 - Group Cash-settled Share-based Payment Transactions. Amendments relating to the scope and accounting for group cash-settled share-based

payments transactions (d) Amendments to FRS 7 - Improving Disclosures about Financial Instruments. Amendments relating

to the fair value measurement using fair value hierarchy and disclosure of liquidity risk

(e) IC Interpretation 4 - Determining whether an Arrangement contains a Lease (f) IC Interpretation 18 (*) - Transfers of Assets from Customers (g) Improvements to FRSs issued in 2010 and mandatory for annual financial periods beginning on or

after 1 January 2011.

(*) During the financial year 2010, MASB approved and issued IC Interpretation 18 - Transfers of Assets from Customers and requires the interpretation to be applied prospectively to all transfers of assets from customers received on or after 1 January 2011.

IC Interpretation 12 is not expected to be relevant to the operations of the Group and of the Company.

Initial application of the above standards, amendments and interpretations did not have any material impact on the financial statements of the Group and of the Company except for the following:-

FRS 3 Business Combination (Revised)

The revised standard continues to apply the acquisition method to business combinations, with some significant changes. All payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the Statement of

Comprehensive Income. There is a choice to measure the non-controlling interest in the acquiree at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed.

FRS 127 Consolidated and Separate Financial Statements (Revised)

The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value, and a gain or loss is recognised in profit or loss. Losses are required to allocate to non-controlling interests, even if it results in the non-controlling interest to be in a deficit position.

IC Interpretation 17 Distributions of Non-cash Assets to Owners

This interpretation provides guidance on accounting for arrangements whereby an entity distributes non-cash assets to shareholders either as a distribution of reserves or as dividends. The Company should

measure the dividend payable at the fair value of the assets to be distributed when the dividend is appropriately authorised and is no longer at the discretion of the Company. On settlement of the dividend, the difference between the dividend paid and the carrying amount of the assets distributed

is recognised in profit or loss. If the dividend remains unpaid at the end of the financial year end, the dividend payable carrying amount is reviewed with any changes recognised in equity.

3.5 Standards issued but not yet effective

New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards

To converge with International Financial Reporting Standards (“IFRSs”) in 2012, the MASB had on 19 November 2011, issued a new MASB approved accounting framework, the Malaysian Financial Reporting

Standards (“MFRSs”), which are mandatory for annual financial periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture and IC Interpretation

15 Agreements for Construction of Real Estate, including its parent, significant investor and venture (“Transitioning Entities”).

Transitioning Entities will be allowed to defer adoption of the new MFRSs for an additional one year. Consequently, adoption of the MFRSs by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2013. However, the Group and the Company do not qualify as Transitioning Entities and are therefore required to adopt the MFRSs for the financial period beginning on or after 1

January 2012.

The Group and the Company have not early adopted the MFRS Framework.

Notes To The Financial Statements - CONTINUED -

36

ANNUAL REPORT 2011

In presenting its first MFRS financial statements, the Group and the Company will be required to restate the comparative financial statements to amounts reflecting the application of MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening retained profits.

The Group and the Company have not completed its quantification of the financial effects of the differences between Financial Reporting Standards (“FRS”) and accounting standards under the MFRS

Framework and are in the process of assessing the financial effects of the differences. Accordingly, the consolidated financial performance and financial position as disclosed in these financial statements for

the financial year ended 31 December 2011 could be different if prepared under the MFRS Framework.

The Group and the Company expect to be in a position to fully comply with the requirements of the MFRS Framework for the financial year ending 31 December 2012.

3.6 Significant Accounting Estimates and Judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s accounting policies and reported amounts

of assets, liabilities, income and expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations

of future events that are believed to be reasonable under the circumstances. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the

estimate results.

Information about significant judgements estimates and assumption that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below:-

3.6.1 Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Depreciation of property, plant and equipment

Property, plant and equipment are depreciated on a straight-line basis over their useful life. Management estimated the useful life of these assets to be within 3 to 25 years and reviews the useful life of depreciable assets at each end of reporting date. At end of reporting date, management assesses that the useful life represent the expected utility of the assets to the Group. Changes in the expected level of usage and technological developments could impact the economic useful life and the residual values of these

assets, therefore future depreciation charges could be revised.

The carrying amount of the Group’s property, plant and equipment at the end of the reporting date is disclosed in Note 5 to the financial statements.

Impairment of property, plant and equipment

An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

The carrying amount of the property, plant and equipment are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined from other assets. Therefore, recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs to.

Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objectives that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors

such as probability of insolvency or significant financial difficulties of the receivables and default and significant delay in payments.

Where there is objectives evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics.


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3.6.2 Management judgement

The following are significant management judgements in applying the accounting policies of the Group that have the most significant effects on the financial statements.

Classification between investment properties and owner-occupied properties

The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital

appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group accounts for the portions separately. If the portions could not be sold separately, the property is an

investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes.

Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of consolidation

The Group’s financial statements consolidate the audited financial statements of the Company and all of its subsidiaries, which have been prepared in accordance with the Group’s accounting policies. The financial statement of the Company and its subsidiaries are all drawn up to the same reporting date.

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

Business combinations are accounted for using 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.

In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured 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 interest’s

proportionate share of the acquiree net identifiable assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of the non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill in the statement of financial position. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.

Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented separately in the consolidated statement of comprehensive

income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interest are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.

4.2 Foreign currencies translation

The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the functional currency of the parent Company.


38

ANNUAL REPORT 2011

Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items at year-end exchange rates, whether realised or unrealised, are recognised in profit or loss except for exchange differences arising from monetary items that form part of

the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity.

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated). Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined. Exchange differences arising on the

translation of non-monetary items carried at fair value are included in profits or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

4.3 Property, plant and equipment, depreciation

Property, plant and equipment are initially stated at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Capital work in progress consists of vessel under construction for intended use as property, plant and equipment. The amount is stated cost and not depreciated until the assets is fully completed and brought into use.

All property, plant and equipment are subsequently stated at cost less accumulated depreciation and less any impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such costs as individual assets with specific useful lives and

depreciation, respectively. All other repair and maintenance costs are recognised in profit or loss as incurred.

Depreciation is recognised on the straight line method in order to write off the cost or valuation of each asset over its estimated useful life. Property, plant and equipment are depreciated based on the

estimated useful lives of the assets as follows :

Ships 4 % Motor vehicles 20 % Equipment, furniture and fittings 10 % - 33 1/3 % Dry-docking 20 % - 40 %

Restoration cost relating to an item of property, plant and equipment is capitalised only if such expenditure is expected to increase the future benefits from the existing property, plant and equipment

beyond its previously assessed standard of performance.

The residual values, useful lives and depreciation method are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable, or at least annually to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

Property, plant and equipment are derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss.

4.4 Other investment

Non-current investments other than investment in subsidiaries are shown at cost and provision is only made where, in the opinion of the Directors, there is impairment in value. Impairment in the value of an investment is recognised as an expense in the financial period in which the impairment is identified.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the statements of comprehensive income.

4.5 Investment property

Investment properties consist of land and buildings held for capital appreciation or rental purpose and not occupied or only an insignificant portion is occupied for use or in the operations of the Group.

Investment properties are initially measured at cost, including transaction cost. Subsequent to initial recognition, investment properties are measured at fair value and are revalued annually and are included in the statement of financial position at their open market values. These are determined by


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external professional valuers with sufficient experience with respect to both the location and the nature of the investment property and supported by market evidence. Any gain or loss resulting from either a change in the fair value or the sale of an investment property is immediately recognised in profit or loss within ‘change in fair value of investment property.

Investment properties are derecognised when either they are disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in the profit or loss in the financial year of retirement or disposal.

4.6 Impairment of non-financial assets

At each reporting date, the Group and the Company review the carrying amounts of its non-financial assets to determine whether there is any indication of impairment by comparing its carrying amount with its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a cash-generating unit or groups of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to those units or group of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rate basis.

An impairment loss is recognised as an expense in the profit or loss immediately, except for the assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous

revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses for an asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset recoverable amount since the last impairment loss was recognised. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment

loss been recognised for the asset in prior years.

Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

An impairment loss recognised for goodwill shall not be reversed in a subsequent period.

4.7 Subsidiaries

A subsidiary is a company in which the Group or the Company has the power to exercise control over the financial and operating policies so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

Investment in subsidiary is stated at cost less any impairment losses in the Company’s financial position.

Upon the disposal of investment in a subsidiary, the difference between the net disposal proceed and its carrying amount is included in profit or loss.

4.8 Financial instruments

Financial assets and financial liability are recognised when the Group becomes a party to the contractual provisions of the financial instruments.

Financial assets and financial liabilities are measured initially at fair value plus transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value. Financial assets and financial liabilities are measured subsequently as described

below.

Embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.


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4.8.1 Financial assets

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:

(a) loans and receivables; (b) financial assets at fair value through profit or loss; (c) held to maturity investments; and (d) available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss or in other comprehensive income.

All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired or when the financial assets and all substantial risks and rewards are transferred.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the market place concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date, i.e. the date that the Group and the Company commit to purchase or sell the asset.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of

discounting is immaterial. Gains or losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. The Group’s and the Company’s

cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

4.8.2 Financial liabilities

After the initial recognition, financial liability is classified as financial liability at fair value through profit or loss or other financial liabilities measured at amortised cost using the effective interest method.

A financial liability is derecognised when the obligation under the liability is extinguished, discharged, cancelled or expired, or through amortisation process. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are

substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amount is

recognised in profit or loss.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.

Other financial liabilities

The Group’s and Company’s financial liabilities include borrowings, trade and other payables.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.


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4.8.3 Compound financial instruments

Compound financial instruments issued by the Group comprise convertible notes that can be converted to share capital at the option of the holder, and the number of shares to be issued does not vary with changes in their fair value.

The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially at the difference between the fair value of the compound financial instrument as a whole and

the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.

4.9 Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

4.9.1 Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant

financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually

are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the

portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flow discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an

allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

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

4.10 Inventories

Inventories are stated at the lower of cost and net realisable value and are determined on the First-In-First Out basis (FIFO). The cost of inventories includes direct costs and transportation charges necessary to bring the inventories to their present locations and condition.

4.11 Cash and cash equivalents

Cash and cash equivalents comprise cash and bank balances, short term demand deposits, bank overdrafts and highly liquid investments that are readily convertible to known amount of cash and which

are subject to an insignificant risk of changes in value.

Bank overdrafts are shown in current liabilities in the statements of financial position.

For the purpose of the financial position, cash and cash equivalents restricted to be used to settle a liability of 12 months or more after the reporting date are classified as non-current asset.

4.12 Equity, reserve and dividend payments

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Share capital represents the nominal value of shares that have been issued. Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

The revaluation reserve within equity comprises gains and losses due to the revaluation of property, plant


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ANNUAL REPORT 2011

and equipment. Foreign currency translation differences arising on the translation of the Group’s foreign entities are included in the exchange translation reserve. Gains and losses on certain financial instruments are included in reserves for available-for-sale financial assets and cash-flow hedges respectively.

Retained earnings include all current and prior period retained profits.

Dividends on redeemable preference shares are recognised as a liability and expressed on an accrual basis. Other dividends are accounted for in shareholder’s equity as an appropriation of retained earnings and recognised as a liability in the period in which they are declared. All transactions with owners of the parent are recorded separately within equity.

4.13 Provisions

Provisions are recognised when there is a present legal or constructive obligation that can be estimated reliabily, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.Provisions are not recognised for future operating losses.

Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

Provisions are reviewed at each end of the reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the

obligation, the provision is reversed. Where the effect of the time of money is material, provision are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

4.14 Borrowings cost

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

Other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

4.15 Employee benefits

4.15.1 Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the financial year, in which the associated services are rendered by employees of the Group and the Company.

4.15.2 Defined contribution plans

Obligation for contributions to defined contribution plan such as Employees Provident Fund (“EPF”) are recognised as an expense in the statement of comprehensive income as incurred.

4.16 Revenue recognition

The results of liner voyages, completed and uncompleted, up to the reporting date date are included in the operating profit for the financial year. For voyages which remain uncompleted as at the reporting date, the freight receivable for cargoes loaded onto vessels up to the reporting date and their relevant discharging costs are accrued in the statements of comprehensive income.

The results of other voyages and that of other services rendered by the Group are accounted for on a time accrual basis.

Rental income from investment property is recognised on accrual basis.

4.17 Income tax

4.17.1 Income tax

Current tax expense is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been enacted or substantively enacted by the reporting date. Current tax for current and prior periods is recognised in financial position as liability (or asset) to the extent that it is unpaid (or refundable). Current tax is recognised in profit or loss except


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to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

4.17.2 Deferred tax

Deferred tax liabilities and assets are provided for under the liability method in respect of all temporary differences at the end of the reporting period between the carrying amount of an asset or liability in the financial position and its tax base including unused tax losses and capital allowances.

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

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investment in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be

controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward unused tax credits and unused tax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable

that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of a deferred tax asset is reviewed at each end of the reporting period. If it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it

becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profit. Unrecognised deferred tax assets are reassessed at each end of the reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by

the end of the reporting period.

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

goodwill on acquisition.

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

and the same taxation authority.

4.18 Segmental results

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified to makes strategic decisions. Additional disclosures on each of these segments are shown in Note 28.


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ANNUAL REPORT 2011

5. PROPERTY, PLANT AND EQUIPMENT

GroupShips Dry-

DockingMotor

VehiclesEquipment, furniture &

fittings

Capital work in

progressTotal

Cost (RM) (RM) (RM) (RM) (RM) (RM)

Balance as at 1.1.2010 219,125,886 3,333,113 604,012 3,755,997 50,494,052 277,313,060Additions 14,956,092 - 95,901 137,057 - 15,189,050Disposals - - (104,196) - - (104,196)Written off (300,000) - - - - (300,000)Transfer 50,817,982 (323,930) - - (50,494,052) -

Balance as at 31.12.2010 284,599,960 3,009,183 595,717 3,893,054 - 292,097,914Addition 385,509 6,796,242 - 79,548 - 7,261,299Written off - - - (1,649) - (1,649)

Balance as at 31.12.2011 284,985,469 9,805,425 595,717 3,970,953 - 299,357,564

Accumulated depreciation

Balance as at 1.1.2010 11,755,345 - 319,646 2,171,997 - 14,246,988Charge for the financial year 11,147,275 1,190,139 119,696 435,956 - 12,893,066Disposals - - (83,357) - - (83,357)Written off (43,000) - - - - (43,000)

Balance as at 31.12.2010 22,859,620 1,190,139 355,985 2,607,953 - 27,013,697Charge for the financial year 11,412,372 2,871,857 118,110 397,317 - 14,799,656Written off - - - (1,477) - (1,477)

Balance as at 31.12.2011 34,271,992 4,061,996 474,095 3,003,793 - 41,811,876

Net carrying amount

31.12.2011 250,713,477 5,743,429 121,622 967,160 - 257,545,688

31.12.2010 261,740,340 1,819,044 239,732 1,285,101 - 265,084,217

6. INVESTMENT PROPERTYGROUP

2011 (RM) 2010 (RM) At beginning of financial year 26,000,000 26,000,000 Fair value adjustment during the financial year 14,000,000 - At end of financial year 40,000,000 26,000,000

The valuation report of building was issued on 18 June 2011 by Raine & Horne International Zaki + Part-ners Sdn Bhd, a Chartered Surveyor and Registered Valuers using the open market value.

The investment property has been pledged to the bank to secure banking facilities granted to the Company as disclosed in Note 17.


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7. INVESTMENT IN SUBSIDIARIESCOMPANY

2011 (RM) 2010 (RM)

Unquoted shares, at cost 65,368,689 65,318,689

Less: Allowance for impairment loss At 1 January 18,453,655 18,453,655 Impairment loss recognised 92,000 -

At 31 December 18,545,655 18,453,655

46,823,034 46,865,034

Details of the subsidiaries are as follows:-

Country Effective equity Name of company incorporated 2011 2010 Principal activities % % Budisukma Sdn. Bhd. Malaysia 100 100 Dormant Ruby Tankers (M) Sdn. Bhd. Malaysia 100 100 Dormant Mashaha Tankers (M) Sdn. Bhd. Malaysia 100 100 Dormant Marina Shipping Sdn. Bhd. Malaysia 100 100 Dormant Budisukma Teguh Sdn. Bhd. Malaysia 100 100 Dormant Budisukma Aman Sdn. Bhd. Malaysia 100 100 Dormant Budisukma Permai Sdn. Bhd. Malaysia 100 100 Dormant Budisukma Makmur Sdn. Bhd. Malaysia 100 100 Dormant Budisukma Damai Sdn. Bhd. Malaysia 100 100 Dormant Budisukma Suci Sdn. Bhd. Malaysia 100 100 Dormant Global TS Sdn. Bhd. Malaysia 100 100 Shipping management services Global BIkhlas Sdn. Bhd. Malaysia 51 51 Shipping freight services Budisukma Setia Sdn. Bhd. Malaysia 100 100 Dormant Budisukma Sepadu Sdn. Bhd. Malaysia 100 100 Dormant Budisukma Satria Sdn. Bhd. Malaysia 100 100 Dormant Budisukma Puncak Sdn. Bhd. Malaysia 100 100 Dormant Global Budijasa Sdn. Bhd. Malaysia 100 100 Shipping freight services Budisukma Logistics Sdn. Bhd. Malaysia 90 90 Dormant GCP Tower Sdn. Bhd. Malaysia 100 100 Property investment and management Global Mulia 2 Sdn. Bhd. Malaysia 100 100 Shipping freight services Global Mulia Sdn. Bhd. Malaysia 100 100 Shipping freight services Global BMesra Sdn. Bhd. Malaysia 51 51 Shipping freight services Global BMesra Dua Sdn. Bhd. Malaysia 51 51 Shipping freight services Marinst Maju Sdn. Bhd. Malaysia 100 100 Dormant

Held by Budisukma Sdn. Bhd. Budisukma Shipping Agency Malaysia 100 100 Dormant Sdn.Bhd.

All the above subsidiaries are audited by SJ Grant Thornton.


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ANNUAL REPORT 2011

8. OTHER INVESTMENTGROUP

Investment in quoted shares in Malaysia 2011 (RM) 2010 (RM)

Cost 167,470 167,470 Less: Allowance for impairment loss (166,859) (166,859)

611 611

Market value of quoted shares 611 611

9. INVENTORIESGROUP

2011 (RM) 2010 (RM) At cost:- Engineering spares and parts 1,948,376 1,605,199

10. TRADE RECEIVABLESGROUP

2011 (RM) 2010 (RM)

Trade receivables 5,057,803 5,518,513

Less: Allowance for impairment loss At 1 January 1,146,745 1,146,745 Impairment loss recognised 1,701,362 -

At 31 December (2,848,107) (1,146,745)

2,209,696 4,371,768

Trade receivables are non interest bearing and generally on 30 to 60 days (2010: 30 to 60 days) term.

The ageing analysis of these trade receivables are as follows:-

2011 Gross (RM) Individually Impaired (RM) Net (RM)

Not past due 841,243 - 841,243 Past due for 1-30 days 476,994 - 476,994 Past due for 31-60 days 242,565 - 242,565 Past due for 61-90 days 73,816 - 73,816 More than 121 days 3,423,185 2,848,107 575,078 5,057,803 2,848,107 2,209,696

2010 Gross (RM) Individually Impaired (RM) Net (RM)

Not past due 1,405,853 - 1,405,853 Past due for 1-30 days 246,901 - 246,901 Past due for 31-60 days 24,370 - 24,370 Past due for 61-90 days 1,064,811 - 1,064,811 More than 121 days 2,776,578 1,146,745 1,629,833

5,518,513 1,146,745 4,371,768

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

The net carrying amount of trade receivables is considered a reasonable approximate of fair value. The maximum exposure to credit risk is the carrying value of each class of receivables mentioned above. Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.


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11. OTHER RECEIVABLES

GROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

Other receivables 3,446,617 2,856,842 10,500 10,000 Less: Allowance for impairment loss (257,188) (257,188) - -

3,189,429 2,599,654 10,500 10,000

12. AMOUNT DUE FROM/(TO) SUBSIDIARIES

COMPANY

Investment in quoted shares in Malaysia 2011 (RM) 2010 (RM)

Amount due from subsidiaries 507,544,345 508,152,677

Less: Allowance for impairment loss At 1 January 247,906,701 247,906,701 Impairment loss recognised 71,168,106 -

At 31 December (319,074,807) (247,906,701)

188,469,538 260,245,976

The amount due from/(to) subsidiaries with non-interest bearing are unsecured and repayable on de-mand.

13. FIXED DEPOSITS WITH LICENSED BANKS

The interest rates and maturities of deposits as at 31 December 2011 were as follows:-

GROUP AND COMPANY Annual interest rates Range of maturities

Fixed deposits from licensed banks

2011 (%)

2.50 ~ 3.00

2010 (%)

2.00 ~ 3.10

2011 (Days)

30

2010 (Days)

30

14. SHARE CAPITAL

GROUP AND COMPANY

Number of ordinary shares Amount

2011 2010 2011 (RM) 2010 (RM) Authorised: At 31 December 1,000,000,000 1,000,000,000 1,000,000,000 1,000,000,000 Issued and fully paid: At 1 January (2011: RM0.50 each; 2010: RM1.00 each) 167,447,010 418,617,526 83,723,505 418,617,526

Capital reduction and consolidation - (251,170,516) - (334,894,021)

At 31 December (2011: RM0.50 each) 167,447,010 167,447,010 83,723,505 83,723,505

At end of financial year 2010, 418,617,526 ordinary shares of RM1 each have been reduced and consoli-dated into 167,447,010 ordinary shares of RM0.50 each.

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ANNUAL REPORT 2011

15. REDEEMABLE CUMULATIVE CONVERTIBLE SECURED LOAN STOCKS (“RCCSLS”)

GROUP

2011 (RM) 2010 (RM) Equity component 241,412 241,412 Liability component - Current 1,085,364 620,208 - Non – current 4,255,096 4,875,304

5,340,460 5,495,512

Total 5,581,872 5,736,924

The salient features of the RCCSLS are as follows:-

(a) The RCCSLS bears an interest of 7% per annum payable quarterly in arrears. (b) The RCCSLS is for a period of ten (10) years from the date of issue. (c) The RCCSLS is secured by 2nd mortgage on the vessel and guaranteed by the holding company. (d) The holder of the RCCSLS has the right at any time to convert the RCCSLS into fully paid ordinary shares of Ringgit Malaysia One (RM1) only or market value determined by external auditor; which ever is lower, at a price ratio of one (1) ordinary share for every one (1) RCCSLS. (e) The RCCSLS shall be repayable by quarterly installment at the end of quarter after the delivery and acceptance of the vessel or two (2) years after first disbursement of RCCSLS whichever comes first.

16. REDEEMABLE UNSECURED LOAN STOCKS (“RULS”)

GROUP AND COMPANY 2011 (RM) 2010 (RM)

Portion due within one financial year 9,755,785 9,755,785 Portion due after one financial year 19,511,572 29,267,356

29,267,357 39,023,141

The salient features of the RULS are as follows:-

(a) the RULS shall be redeemed for cash during a stipulated period from the end of the second financial year onwards until the maturity date of 23 May 2014 as indicated below:-

RM As at:- 23 May 2012 9,755,785 23 May 2013 9,755,785 23 May 2014 9,755,787 29,267,357

(b) the RULS are for a period of eight (8) calendar years from the date of issue; (c) the RULS bears an interest of 5.75% (2010: 5.75%) per annum payable annually in arrears.


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17. BORROWINGSGROUP COMPANY

Secured 2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM) Current Term loan I 4,644,504 4,644,504 - - Term loan II 4,968,600 4,258,800 - - Term loan III 4,613,700 4,258,780 - - Term loan IV 3,315,788 3,315,790 - - Term loan V 3,315,790 3,315,790 - - Term loan VI 30,000,000 - 30,000,000 - Overdraft 14,720,170 14,486,479 14,720,170 14,486,479

65,578,552 34,280,143 44,720,170 14,486,479

Non current Term loan I 33,672,440 38,316,944 - - Term loan II 9,579,500 13,838,300 - - Term loan III 8,159,900 12,418,720 - - Term loan IV 22,934,211 26,249,999 - - Term loan V 22,934,210 26,250,000 - -

97,280,261 117,073,963 - -

Total borrowings 162,858,813 151,354,106 44,720,170 14,486,479

The borrowings are secured by the following:-

(i) Bank overdraft (a) Third party first legal charge over the investment property of a subsidiary; and (b) Legal assignment of rental proceeds in respect of the subject security as and when tenanted.

(ii) Term loan The term loans are secured by the following:-

(a) Assignment of proceeds on contractors of borrowers’ vessels under construction’s irrecoverable bank guarantee.(b) Debenture creating a first fixed charge and floating charge over all present and future assets

of the subsidiaries.(c) Corporate guarantee of the Company. (d) Deed of charge and assignment over the charter contract of the borrowers.(e) Deed of assignment of shipbuilding contracts of subsidiaries.(f) Deed of charge and assignment over all policies and contracts of insurance of the subsidiaries.(g) Deed of charge and assignment over all permits, licenses, liquidated damages and warranty

in connection to the vessel to which the term loans financed.(h) Memorandum of deposit with respect to the shares of the subsidiaries furnished by the Company.(i) Deed of assignment over the charter proceeds of the other subsidiary’s charter contract if

the subsidiaries not yet secure a charter contract after delivery of the vessels.(j) Deed of assignment over bank accounts maintained with the subsidiaries into which all charter proceeds received from the Charter Contract are to be remitted.(k) Mortgage over vessel upon completion of the vessels to which the term loans financed.(l) Deed of subordination between the Company and the subsidiaries.

The borrowings bear interest at rates ranging from 3.00% to 7.50% (2010: 5.65% to 6.60%) per annum.

(iii) The repayments of borrowings are as follows:-

Term loan I

The term loan is repayable by way of 112 monthly installments amounted to RM387,042.

Term loan II and III

The term loans are repayable by way of 72 monthly installments amounted to RM354,900 commencing after delivery of the vessel.


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ANNUAL REPORT 2011

Term loan IV and V

The term loans are repayable by way of 112 monthly installments amounted to RM276,316.

Term loan VI

The term loan shall be repayable in May 2012.

18. TRADE PAYABLES

Trade payables are non-interest bearing and are generally on 30 to 90 (2010: 30 to 90) days terms.

19. OTHER PAYABLES

GROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)Accrued interests

- RULS 981,676 1,308,901 981,676 1,308,901 - RCCSLS 347,089 67,114 - - - Term Loans 1,687,935 384,748 1,080,000 - Amount due to a shipbuilder 3,945,408 3,945,408 - - Amount due to a Director 8,432,525 6,000,000 - - * Others 3,755,938 3,820,219 528,176 340,812

19,150,571 15,526,390 2,589,852 1,649,713 * Included therein are rental security deposits amounting to RM554,447 (2010: RM551,239) received by

one of the subsidiaries of the Group.

Amount due to a Director is interest free, unsecured and repayable on demand.

20. REVENUEGROUP

2011 (RM) 2010 (RM)

Shipping income 56,764,573 55,614,700 Rental income from investment property 2,681,562 2,512,489

59,446,135 58,127,189

21. OTHER INCOMEGROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

Gain on foreign exchange realised 17,703 187,523 17,703 - Fixed deposit interest 22,864 21,304 - 21,304 Reversal of prior year expenses - 556,979 - - Insurance claim 2,324,741 17,459 - - Others 4,582 28,821 4,582 -

2,369,890 812,086 22,285 21,304

22. STAFF COSTSGROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

Salaries, wages, allowances and bonus 15,120,620 14,978,107 501,000 129,000 Social security contributions 24,891 42,852 686 103 Contributions to defined contribution plan 986,128 1,122,841 41,400 19,350

16,131,639 16,143,800 543,086 148,453

Staff costs includes head office and crew salaries, allowances, bonuses and contribution to Employees Provident Fund, excluding Directors’ remuneration.


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23. FINANCE COSTSGROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM) Interest expense: - RULS 1,910,458 2,318,445 1,910,458 2,318,445 - overdraft interest 1,126,321 919,240 1,126,321 919,240 - loan interest 8,930,276 8,289,555 1,080,000 - - RCCSLS 384,580 376,515 - -

12,351,635 11,903,755 4,116,779 3,237,685

24. EXCEPTIONAL ITEMS

GROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

Fair value adjustment of investment property 14,000,000 - - - Property , plant and equipment written off (172) (257,000) - - Gain on disposal of property, plant and equipment - 19,210 - -

13,999,828 (237,790) - -

25. LOSS BEFORE TAX

Loss before tax is determined after charging/(crediting), amongst others, (excluding the exceptional items) the following items:-

GROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)Auditors’remuneration:-

- statutory - current financial year 164,500 146,000 26,000 29,500 - underprovision in prior financial year - 4,000 - 4,000 - non-statutory 4,000 4,000 4,000 4,000 Depreciation of property, plant and equipment 14,799,656 12,893,066 - - Directors’ remunerations (Note A) - fees 234,419 197,548 234,419 197,548 - other emoluments * current 298,000 1,364,750 298,000 1,364,750 * overprovision in prior year (225,000) - (225,000) - Fixed deposits interest (22,864) (21,304) - (21,304) Impairment loss on trade receivables 1,701,362 - - - Impairment loss on amount due from subsidiaries - - 71,168,106 - Impairment loss on investment in subsidiary - - 92,000 -

Loss/(gain) on foreign exchange realised 211,717 391,944 (17,703) -

Note A: The details of Directors’ remunerations of the Group and of the Company are as follows:-

GROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM) Directors of the Company Executive Directors Salary & Bonus - Current - 1,125,000 - 1,125,000 - Overprovision in prior year (225,000) - (225,000) - Emoluments - 8,000 - 8,000 Defined contribution plan - 168,750 - 168,750

Non Executive Directors Fees 234,419 197,548 234,419 197,548 Emoluments 73,000 63,000 73,000 63,000

82,419 1,562,298 82,419 1,562,298

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26. TAX EXPENSE

No provision for current year’s taxation is made in the financial statements on business income due to availability of unabsorbed tax loss of the subsidiaries concerned and the income of the Group derived from the operations of sea-going Malaysian registered ships is exempted from income tax under Section 54A of the Income Tax Act, 1967. Effective from Year of Assessment 2012, income tax exemption 100% of statutory income from 100% to 70% of statutory income from “Malaysian Ships”, the remaining 30% of statutory income is deemed to be total income chargeable to tax.

A reconciliation of income tax expense on loss before tax with the applicable statutory income tax rate is as follows:-

GROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

Loss before tax (1,661,320) (18,112,249) (76,646,144) (5,521,792)

Income tax at rate of 25% (2010: 25%) (415,330) (4,528,062) (19,161,536) (1,380,448)

Tax effect in respect of:-

Income not subject to tax (3,849,297) (2,818,681) - - Non allowable expenses 2,923,627 6,050,332 18,862,301 1,380,448 Deferred taxation not recognised 1,341,000 1,296,411 299,235 -

- - - -

The Group’s and the Company’s unutilised tax losses amounted to approximately RM116,541,000 (2010: RM107,595,000) and RM1,197,000 (2010: RMNil) respectively which is subject to the approval by the tax authorities.

The Group’s unabsorbed capital allowances which can be carried forward to offset against future tax-able profit amounted to approximately RM141,247,000 (2010: RM113,424,000).

27. LOSS PER SHARE

Basic loss per share

Basic loss per ordinary share for the financial year is calculated by dividing the loss for the financial year attributable to ordinary equity holders of the Company by the number of shares outstanding during the financial year.

GROUP

2011 (RM) 2010 (RM)

Loss attributable to shareholders of the Company 6,779,234 20,105,547

Number of ordinary shares in issue 167,447,010 167,447,010

Basic loss per share (sen) 4.05 12.01

Diluted loss per share

No diluted loss per share is calculated as there are no potential dilution on the ordinary shares of the Company as at year end.


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28. DEFERRED TAX

The deferred tax assets as at reporting date are made up of temporary difference arising from:-

GROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

Difference between depreciation and capital allowances 152,319,000 120,914,000 - - Unabsorbed tax losses (116,541,000) (107,595,000) (1,197,000) - Unutilised capital allowances (141,247,000) (113,424,000) - -

(105,469,000) (100,105,000) (1,197,000) -

Since the Group has substantial tax losses and its shipping income is tax exempt, deferred tax asset is not recognised in the financial statements.

29. SEGMENTAL REPORTING

For the management purposes, the Group is organised into business units based on their products and services, which comprises the following:

Shipping Ship owner & shipping freight services. Property investment Business of letting of properties. Shipping management services Provide shipping and management services. Others Investment holding.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

Shipping Property Investments

Shipping Management

ServicesOthers Eliminations Total

(RM) (RM) (RM) (RM) (RM) (RM) GROUP 2011 Revenue External 56,764,573 2,681,562 - - - 59,446,135 Inter-segment - Brokerage fee - - 892,137 - (892,137) - - Management fees - - 2,340,000 - (2,340,000) - - Rental income - 549,240 - - (549,240) - Total revenue 56,764,573 3,230,802 3,232,137 - (3,781,377) 59,446,135 Results Segment results 2,517,049 15,259,891 (5,726,457) (1,360,168) - 10,690,315 Finance costs (8,170,661) - (1,402,375) (4,116,779) 1,338,180 (12,351,635) Loss before tax (1,661,320) Tax expense - Net loss for the financial year (1,661,320)

Assets and liabilities

Segment assets/ Total assets 268,195,538 40,612,491 3,969,611 29,528 - 312,807,168

Segment liabilities/ Total liabilities 163,297,885 1,017,602 23,882,239 47,316,671 - 235,514,397


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ANNUAL REPORT 2011

Shipping Property Investments

Shipping Management

ServicesOthers Eliminations Total

(RM) (RM) (RM) (RM) (RM) (RM)

Other information Capital expenditure 7,181,750 - 78,249 1,300 - 7,261,299 Depreciation 14,300,407 - 499,250 - - 14,799,657 Fair value adjustment of investment property - (14,000,000) - - - (14,000,000)

Impairment loss on trade receivables 1,701,362 - - - - 1,701,362 Property, plant and equipment written off - - 172 - - 172

GROUP 2010

Revenue External 55,614,700 2,512,489 - - - 58,127,189 Inter-segment - Brokerage fee - - 732,319 - (732,319) - - Management fees - - 2,310,000 - (2,310,000) - - Rental income - 609,192 - - (609,192) -

Total revenue 55,614,700 3,121,681 3,042,319 - (3,651,511) 58,127,189

Results Segment results (132,378) 2,434,771 (6,225,050) (2,285,837) - (6,208,494)

Finance costs (8,666,070) - - (3,237,685) - (11,903,755) Loss before tax (18,112,249) Tax expense -

Net loss for the financial year (18,112,249)

Assets and liabilities

Segment assets Total assets 274,128,418 26,433,636 4,613,107 17,894 - 305,193,055

Segment liabilities/ Total liabilities 165,563,731 1,230,498 18,770,181 40,674,554 - 226,238,964

Other information Capital expenditure 14,956,092 - 232,958 - - 15,189,050 Depreciation 12,352,642 - 540,424 - - 12,893,066 Gain on disposal of property, plant and equipment - - (19,210) - - (19,210)

Property, plant and equipment written off 257,000 - - - - 257,000

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets and revenue, interest-bearing loans, borrowings and expenses, and corporate assets and expenses.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one financial year.


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30. RELATED PARTY DISCLOSURE

Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subjectto common control or common significant influence. Related parties may be individuals or other entities.

The Group has a related party relationship with its subsidiaries, Directors and other key management personnel.

Transactions with key management personnel Key management personnel compensation

The remuneration of Directors and other members of key management personnel during the financial year are as follows:-

GROUP COMPANY

2011 (RM) 2010 (RM) 2011 (RM) 2010 (RM)

Salaries and other short term employee benefits 1,843,729 3,376,248 501,686 1,522,651 Post-employment benefits:- Defined contribution plan 282,573 460,710 41,400 188,100

2,126,302 3,836,958 543,086 1,710,751

Other members of key management personnel comprise persons other than the Directors of the Group and of the Company, having authority and responsibility for planning, directing and controlling the

activities of the Group either directly or indirectly.

31. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) Global Budijasa Sdn Bhd a wholly-owned subsidiary company had on 14 April 2011 established a joint venture company with PT Nuangsa Harapan Prima (a company incorporated in Jakarta, Indonesia) namely PT Layar Jasa M Lestari as a limited liability company.

Global Budijasa Sdn Bhd will be acquiring 61,250 (sixty one thousand two hundred fifty) ordinary shares of IDR8,809 (eight thousand eight hundred and nine Indonesian Rupiah) each representing 49%

equity interest in PT Layar Jasa M Lestari for atotal cash consideration of IDR539,551,250 (five hundred thirty nine million five hundred fifty one thousand two hundred fifty Indonesian Rupiah). PT Nuangsa Harapan Prima on the other hand, will be acquiring 63,750 (sixty three thousand seven hundred

fifty) ordinary shares of IDR8,809 (eight thousand eight hundred and nine Indonesian Rupiah) each representing 51% equity interest in PT Layar Jasa M Lestari for a total cash consideration of IDR561,573,750 (five hundred sixty one million five hundred seventy three thousand seven hundred fifty Indonesian Rupiah).

The authorised share capital of PT Layar Jasa M Lestari is IDR 4,404,500,000 (four billion four hundred four million five hundred thousand Indonesian Rupiah) and its paid up share capital is IDR1,101,125,000 (one billion one hundred one million one hundred twenty five thousand Indonesian Rupiah). PT Layar Jasa M Lestari is currently dormant and its intended principal activity is to conduct domestic and international sea transportation.

(b) On 18 April 2011, the Company announced the following proposal:-

(i) Proposed Acquisition by the Company of all equity interest in Global Bikhlas Sdn Bhd, Global Bmesra Sdn Bhd and Global Bmesra Dua Sdn Bhd held by GMV-Global Sdn Bhd (“GGSB”), a wholly-owned subsidiary of Global Maritime Ventures Berhad which in turn is a 90%-owned subsidiary of Bank

Pembangunan Malaysia Berhad (“BPMB”) for a total purchase consideration of approximately RM31.55 million;

(ii) Proposed Placement of up to 100 million five-year redeemable cumulative convertible preference shares of RM0.01 each by the Company at an issue price of RM0.50 each;

(iii) Proposed Exemption sought by BPMB, GGSB and the parties acting in concert with them from the obligation to extend a take-over offer for all the remaining securities not already owned by them under Paragraph 16 Practice Note 9 of the Malaysian Code on Take-overs and Mergers, 2010; and

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ANNUAL REPORT 2011


On 30 April 2011, the Company entered into the following agreement (“Agreement”):-

(i) Share sale agreement between the Company and GGSB for the Proposed Acquisition.

(ii) RCCSLS agreement between GCB and GGSB for the issuance of RCCSLS by GCB pursuant to the Proposed Acquisition.

(iii) RCCPS subscription agreement between GCB, GGSB and Dato’ Azlan Bin Hashim for the Proposed Placement.

However, on 18 November 2011, the Company will not proceed with the above proposal as the Company was unable to fulfill part of the conditions precedence as stipulated in the said Agreement.

32. CATEGORIES OF FINANCIAL INSTRUMENTS

The table below provides an analysis of financial instruments categorised as follows:-

(a) Loans and receivables (L&R); and (b) Other liabilities measured at amortised cost (AC);

Carrying Amount(RM)

L&R(RM)

AC(RM)

Group 2011

Financial assets Trade and other receivables (Notes 10,11) 5,399,125 5,399,125 - Fixed deposits with licensed bank (Notes 13) 2,220,439 2,220,439 - Cash and bank balances 5,650,813 5,650,813 -

13,270,377 13,270,377 - Financial liabilities Trade and other payables (Notes 18,19) 38,047,767 - 38,047,767 Redeemable cumulative convertible secured loan stock (Note 15) 5,340,460 - 5,340,460 Redeemable unsecured loan stock (Notes 16) 29,267,357 - 29,267,357 Borrowings (Notes 17) 162,858,813 - 162,858,813

235,514,397 - 235,514,397 Group 2010

Financial assets Trade and other receivables (Notes 10,11) 6,971,422 6,971,422 - Fixed deposits with licensed bank (Notes 13) 2,197,575 2,197,575 - Cash and bank balances 3,292,590 3,292,590 -

12,461,587 12,461,587 -

Financial liabilities Trade and other payables (Notes 18,19) 30,366,205 - 30,366,205 Redeemable cumulative convertible secured loan stock (Notes 15) 5,495,512 - 5,495,512 Redeemable unsecured loan stock (Notes 16) 39,023,141 - 39,023,141 Borrowings (Notes 17) 151,354,106 - 151,354,106

226,238,964 - 226,238,964 Company 2011

Financial assets Other receivables (Notes 11) 10,500 10,500 - Amount due from subsidiaries (Notes 12) 188,469,538 188,469,538 - Cash and bank balances 2,314 2,314 -

188,482,352 188,482,352 -

Financial liabilities Other payables (Notes 19) 2,589,852 - 2,589,852 Amount due to subsidiaries (Notes 12) 149,629,933 - 149,629,933 Redeemable unsecured loan stock (Notes 16) 29,267,357 - 29,267,357 Borrowing (Notes 17) 44,720,170 - 44,720,170

226,207,312 - 226,207,312

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Carrying Amount(RM)

L&R(RM)

AC(RM)

Company 2010 Financial assets Other receivables (Notes 11) 10,000 10,000 - Amount due from subsidiaries (Notes 12) 260,245,976 260,245,976 - Cash and bank balances 1,504 1,504 -

260,257,480 260,257,480 -

Financial liabilities Other payables (Notes 19) 1,649,713 - 1,649,713 Amount due to subsidiaries (Notes 12) 166,218,289 - 166,218,289 Redeemable unsecured loan stock (Notes 16) 39,023,141 - 39,023,141 Borrowing (Notes 17) 14,486,479 - 14,486,479

221,377,622 - 221,377,622

33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. Financial risk management policy is established to ensure that adequate resources are available for the development of the Group’s business whilst managing its credit risk, liquidity risk,

foreign currency risk and interest rate risk. The Group operates within clearly defined policies and procedures that are approved by the Board of Directors to ensure the effectiveness of the risk management process.

The main areas of financial risks faced by the Group, the Company and the policy in respect of the major areas of treasury activity are set out as follows:

(a) Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. It is the Group’s policy to enter into financial instrument with a diversity of creditworthy counterparties. The Group does not expect to incur material credit losses of its financial assets or other financial instruments.

Concentration of credit risk exists when changes in economic, industry and geographical factors similarly affect the group of counterparties whose aggregate credit exposure is significant in relation

to the Group’s total credit exposure. The Group’s portfolio of financial instrument is broadly diversified along industry, product and geographical lines, and transactions are entered into with

diverse creditworthy counterparties, thereby mitigate any significant concentration of credit risk.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. The Group does not offer credit terms without the approval of the head of

credit control.

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is limited to the carrying amounts in the statements of financial position.

(b) Liquidity risk

Liquidity and cash flow risks are the risks that the Group and the Company will not be able to meet its financial obligations as they fall due, as a result shortage of funds.

In managing its exposures to liquidity and cash flow risks arises principally from its various payables, loans and borrowings, the Group and the Company maintain a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities as and when they fall due.

The Group and the Company aim at maintaining a balance of sufficient cash and deposits and flexibility in funding by keeping diverse sources of committed and uncommitted credit facilities from various banks.

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ANNUAL REPORT 2011

As at 31 December 2011, the Group’s and the Company’s non-derivative financial liabilities which have contractual maturities are summarised below:-

GROUP

Current Less than 1 year

(RM)

Non-currentMore than

1year(RM)

Secured: Bank overdraft (Note 17) 14,720,170 - Term loans (Note 17) 50,858,382 97,280,261 RCCSLS (Note 15) 1,085,364 4,255,096 66,663,916 101,535,357

Unsecured: RULS (Note 16) 9,755,785 19,511,572 Trade payables (Note 18) 18,897,196 - Other payables (Note 19) 19,150,571 -

47,803,552 19,511,572

COMPANY

Current Less than 1 year

(RM)

Non-currentMore than

1year(RM)

Secured: Bank overdraft (Note 17) 14,720,170 - Term loan (Note 17) 30,000,000 - 44,720,170 - Unsecured: RULS (Note 16) 9,755,785 19,511,572 Other payables (Note 19) 2,589,852 - Amount due to subsidiaries (Note 12) 149,629,933 - 161,975,570 19,511,572 (c) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

To mitigate the Group’s exposure to foreign currency risk, the Group is exposed to foreign currency risk on sales, purchases, investments, and borrowings that are denominated in a currency other than the respective functional currencies of Group entities. The currency giving rise to this risk is primarily U.S. Dollar (USD), Singapore Dollar (SGD) and Indonesia Rupiah (IDR).

The Group’s exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period was:


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Group 2011

Denominated in USD (RM) SGD (RM) IDR (RM)

Trade receivables 2,907,322 - - Trade payables 1,792,913 5,120,922 17,469 Cash and bank balances 103,807 - - 4,804,042 5,120,922 17,469

Group 2010

Denominated in USD (RM) SGD (RM) IDR (RM)

Trade receivables 2,446,566 - - Trade payables 1,891,487 2,272,195 8,516 Cash and bank balances 38,707 - - 4,376,760 2,272,195 8,516

Foreign currency sensitivity analysis:

The following table demonstrates the sensitivity of the Group’s and the Company’s profit for the financial year to a reasonably possible change in the USD, SGD and IDR exchange rates against the respective functional currency of the Group, with all other variables held constant.

GROUPLoss for the year

(RM)Equity(RM)

USD/RM - Strengthened 0.12% 5,566 5,566 - Weakened 0.12% (5,566) (5,566) SGD/RM - Strengthened 0.07% (4,957) (4,957) - Weakened 0.07% 4,957 4,957 IDR/RM - Strengthened 0.89% 155 155 - Weakened 0.89% (155) (155)

Exposures to foreign exchange rates vary during the financial year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the

Group’s exposures to foreign currency risk.

(d) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s and the Company’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates.

The Group’s and the Company’s interest rate management objective is to manage the interest expenses consistent with maintaining an acceptable level of exposure to interest rate fluctuation. In

order to achieve this objective, the Group’s and the Company’s targets a mix of fixed and floating debts based on assessment of its existing exposure and desired interest rate profile.


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ANNUAL REPORT 2011

The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments, based on carrying amount as at end of the reporting year were as follows:

GROUP 2011 (RM)

COMPANY 2011 (RM)

Fixed rate instrument Financial assets Short term deposits with licensed banks 2,220,439 -

Financial liabilities Borrowings 162,858,813 44,720,170

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

The following table illustrates the sensitivity of profit and equity to a reasonable possible change in interest rate of +/- 100 basis point (“bp”). These changes considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes interest rate. All other variables are held constant.

Profit For The Year Equity

+100 bp(RM)

-100 bp(RM)

+100 bp(RM)

-100 bp(RM)

Group 31 December (1,606,394) 1,606,384 (1,606,384) 1,606,384

Company 31 December 447,202 (447,202) 447,202 (447,202)

(e) Fair value of financial instruments

The carrying amounts of short term receivables and payable, cash and cash equivalents and short term borrowings approximate their fair values due to the relatively short term nature of these financial instruments and insignificant impact of discounting.

The fair value of other financial assets and liabilities, together with the carrying amounts shown in the statements of financial position, are as follows:

2011 2010

Carrying Amount (RM)

Fair Value (RM)

Carrying Amount (RM)

Fair Value (RM)

Group Redeemable Unsecured Loan Stocks (RULS) 29,267,357 28,819,584 39,023,141 38,805,698 Redeemable Cumulative Convertible Secured Loan Stock (RCCSLS) - Liability component 5,340,460 5,271,318 5,495,512 5,472,697 Other investment 611 611 611 611

Company Redeemable Unsecured Loan Stocks (RULS) 29,267,357 28,819,584 39,023,141 38,805,698

The following summarises the methods used in determining the fair value of financial instruments:

(i) RULS and RCCSLS

The fair value of RULS and RCCSLS are estimated by discounting the expected future cash flows using the current interest rates for liabilities with similar risk profile.

(ii) Other investment

The fair value of quoted shares is determined by reference to stock exchange quoted market bid prices at the close of the business on the reporting date.


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34. CAPITAL MANAGEMENT

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investors, creditors and market

confidence and to sustain future development of the business. The Directors monitor and determine to maintain debt-to-equity ratio that complies with debt covenants and regulatory requirements.

GROUP 2011 (RM)

GROUP 2010(RM)

Total loans and borrowings 197,466,630 195,872,759 Less: Cash and cash equivalents 7,871,252 5,490,165 Net Debt 189,595,378 190,382,594 Total equity 77,292,771 78,954,091 Debt-to-equity ratio 2.45 2.41

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity equal to or not less than the 25% of the issued and paid-up-capital (excluding treasury shares) and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

35. DISCLOSURE OF REALISED AND UNREALISED PROFITS/LOSSES

With the purpose of improving transparency, Bursa Malaysia Securities Berhad has on 25 March 2010, and subsequently on 20 December 2010, issued directives which require all listed corporations to disclose the breakdown of unappropriated profits or accumulated losses into realised and unrealised on group and company basis in the annual audited financial statements.

The breakdown of accumulated losses as at the reporting date which has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and the Guidance on Special Matter No. 1 - Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, are as follows:

GROUP 2011 (RM)

COMPANY 2011(RM)

Total accumulated losses of the Company and its subsidiary companies: - Realised 57,853,400 79,996,852 - Unrealised (14,000,000) -

Total accumulated losses as per consolidated financial statements 43,853,400 79,996,852

The above disclosures were approved by the Board of Directors in accordance with a resolution of the Directors on 27 April 2012.


ANNUAL REPORT 2011

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LIST OF VESSELS OWNED BY THE GROUP AS AT 19 APRIL 2012

Registered Owner Name of Vessel Type of Vessel Year Built Capacity

Global Budijasa Sdn. Bhd. MT. Budi Jasa Product Tanker 2005 12,000 DWT

Global Mulia Sdn Bhd MT. Budi Mulia Product Tanker 2007 7,000 DWT

Global Mulia 2 Sdn Bhd MT. Budi Mulia Dua Product Tanker 2007 7,199 DWT

Global BMesra Sdn Bhd MT. Budi Mesra Product Tanker 2008 6,922 DWT

Global BMesra Dua Sdn Bhd MT. Budi Mesra Dua Product Tanker 2008 6,922 DWT

Global BIkhlas Sdn Bhd MT. Budi Ikhlas Product Tanker 2008 9,890 DWT

Total 49,933 DWT

LIST OF PROPERTY AS AT 19 APRIL 2012

Location Description / Existing Use

Land / Built-up Area (Square Metre)

Tenure / Age of Building

Net Book Value as at 31.12.11 (RM’000)

Lot No. 644, Section 47Jalan Kampar off Jalan Tun Razak

50400 Kuala Lumpur

18-storey Tower Block, Plaza Pekeliling, including 2-level

basement car park/Investment for rental

27,016 m2/290,797.83 ft2

Freehold/ 35 years

40,000

List Of Vessels And Properties


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Analysis Of Shareholdings

Authorised Share Capital - RM 1,000,000,000Paid-up Share Capital - RM 83,723,505Type Of Share - Ordinary share of RM0.50 each One vote per ordinary share

ANALYSIS OF SHAREHOLDINGS AS AT 19 APRIL 2012

Size Of Shareholdings No. Of Shareholders % Of Shareholders No. Of Shares Held % Of Issued CapitalLess than 100 38 1.77 1,492 0.00

100 - 1,000 927 43.18 501,978 0.30

1,001 - 10,000 904 42.11 3,045,106 1.82

10,001 - 100,000 236 10.99 6,776,066 4.05

100,001 - 1,000,000 2 7 1.26 6,584,419 3.93

OVER 1,000,000 15 0.70 150,537,949 89.90

2,147 100.00 167,447,010 100.00

SUBSTANTIAL SHAREHOLDERS AS AT 19 APRIL 2012

NAME OF SHAREHOLDERSNO. OF SHARES HELD

% OF ISSUED CAPITALDIRECT INDIRECT

Data Hasrat Sdn. Bhd 36,000,000 - 21.50

Bank Pembangunan Malaysia Berhad 21,123,953 - 12.62

AmBank (M) Berhad 19,306,406 - 11.53

BSNC Leasing (M) Sdn. Bhd 13,148,316 - 7.85

AmBank (M) Berhad 12,428,634 - 7.42

Dato’ Azlan bin Hashim 10,768,000 - 6.43

DIRECTORS’ SHAREHOLDINGS AS AT 19 APRIL 2012

NAME OF SHAREHOLDERSNO. OF SHARES HELD

% OF ISSUED CAPITALDIRECT INDIRECT

Dato’ Azlan bin Hashim 10,768,000 3,050,920 8.26

Tan Sri Dato’ Dr. Mohamed Rashdan bin Baba - - -

Kamil bin Datuk Abdul Rahman - - -

Mohamed Shah bin Abu Bakar 4,026 - 0.00

Dato’ Captain Jaffar bin Lamri - - -

Abdul Karim bin Ismail - - -

NOTE: Deemed to have interest in Global Carriers Bhd shares held by family members.

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ANNUAL REPORT 2011

Analysis Of Shareholdings - CONTINUED -

TOP 30 SHAREHOLDERS AS AT 19 APRIL 2012

NO NAME OF SHAREHOLDERS NO. OF SHARES %

1 Data Hasrat Sdn. Bhd 36,000,000 21.50

2 Bank Pembangunan Malaysia Berhad 21,123,953 12.62

3 AmSec Nominees (Tempatan) Sdn. Bhd. 19,306,406 11.53 AmBank (M) Berhad

4 BSNC Leasing (M) Sdn. Bhd. 13,148,316 7.85

5 AmSec Nominees (Tempatan) Sdn. Bhd. 12,428,634 7.42 AmBank (M) Berhad

6 Public Nominees (Tempatan) Sdn. Bhd. 10,768,000 6.43 Pledged Securities Account for Azlan bin Hashim

7 AmSec Nominees (Tempatan) Sdn. Bhd. 8,000,000 4.78 Tigarar Berkat Sdn. Bhd.

8 Tujuan Mekar Sdn. Bhd. 6,500,000 3.88

9 Detik Jalur Sdn. Bhd. 6,000,000 3.58

10 CIMSEC Nominees (Tempatan) Sdn. Bhd. 5,051,045 3.02 Danaharta Managers Sdn. Bhd.

11 Puncak Exotika Sdn. Bhd. 4,000,000 2.39

12 ABB Nominees (Tempatan) Sdn. Bhd. 3,325,600 1.99 AFFIN Bank Berhad

13 Amanah International Finance Sdn. Bhd. 2,049,595 1.22

14 RHB Capital Nominees (Tempatan) Sdn. Bhd. 1,432,400 0.86 Pledged Securities Account for Nor Azrina binti Azlan

15 AmSec Nominees (Tempatan) Sdn. Bhd. 1,404,000 0.84 AmEquities Sdn. Bhd.

16 Adam Malik bin Azlan 700,000 0.42

17 Adam Shah bin Azlan 700,000 0.42

18 Tan Yong Tian 500,080 0.30

19 Lai Thiam Poh 435,100 0.26

20 AmSec Nominees (Tempatan) Sdn. Bhd. 363,600 0.22 AmEquities Sdn. Bhd. for Mohamad bin Hashim

21 Nor Ashikin binti Khamis 341,400 0.20

22 Nik Mohamad Pena bin Nik Mustapha 300,000 0.18

23 Pan Lee Chin 281,720 0.17

24 Lim Boon Seong 240,000 0.14

25 Nor Azrina binti Azlan 218,520 0.13

26 BIMSEC Nominees (Tempatan) Sdn. Bhd. 215,000 0.13 Pledged Securities Account for Nik Abdul Aziz bin Mohamed Kamil

27 Mark Ravi a/l Sivagnanam 201,900 0.12

28 Premium Capital Sdn. Bhd. (in liquidation) 200,719 0.12

29 Ong Ka Seong 200,000 0.12

30 Jurong Shipyard Pte. Ltd. 180,240 0.11

TOTAL 155,616,228 92.95

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ANNUAL REPORT 2011

I / We ...........................................................................................................................................................

of ...........................................................................................................................................................

being a member / members of Global Carriers Bhd hereby appoint

...........................................................................................................................................................

of ...........................................................................................................................................................

or failing him / her, ...........................................................................................................................................................

of ...........................................................................................................................................................

as *my / our proxy to vote on *my / our behalf at the Annual General Meeting of the Company, to be held at Global Carriers Training Hall, 12th Floor, Tower Block E, Plaza Pekeliling Jalan Tun Razak, 50400 Kuala Lumpur on 20 June 2012 at 11.00 a.m. and at any adjournment thereof.[*Strike out whichever is not applicable]

NO. RESOLUTIONS FOR AGAINST

1To receive and adopt the audited financial statements for the financial year ended 31 December 2011 together with the reports of the Directors and Auditors thereon

2To re-elect Kamil bin Datuk Abdul Rahman as a Director retiring pursuant to Articles 80 and 81 of the Company’s Articles of Association

To re-appoint the following Directors as a Directors retiring pursuant to section 129 of the Companies Act, 1965 ;

3 i) Dato’ Azlan bin Hashim

4 ii) Prof. Tan Sri Dato’ Dr. Mohamed Rashdan bin Baba

5 To approve the payment of Director’s fee in respect of the financial year ended 31 December 2011

6 To re-appoint Messrs. SJ Grant Thornton, as auditors of the Company and to authorise the Directors to fix their remuneration

SPECIAL BUSINESS

7Ordinary ResolutionAuthority to allot shares pursuant to Section 132D of the Companies Act, 1965

[Should you desire to direct your Proxy as to how to vote on the Resolution set out in the Notice of Meeting, please indicate with “x” in the appropriate space. Unless otherwise instructed, the proxy may vote or abstain from voting at his discretion.]

Signed this .............................. day of ..............................2012No. of Shares Held CDS Account No.

........................................................................................................Signature of First / Sole Shareholder or Common Seal]

Proxy Form


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NOTES :

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him/her. A proxy may but need not be a member of the Company and if he/she is not a member of the Company, he/she shall be an approved company auditor or person approved by the Registrar of Companies.

2. Where a member appoints more than one (1) proxy [subject always to a maximum of two (2) proxies at each meeting], the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.

3. In the case of a corporate body, the proxy appointed must be in accordance with the Memorandum and Articles of Association, and the instrument appointing a proxy shall be given under the Company’s Common Seal or under the hand of an officer or attorney duly authorized.

4. The Form of Proxy must be deposited at the Company’s Registered office at 11th Floor, Tower Block E, Plaza Pekeliling, Jalan Tun Razak, 50400 Kuala Lumpur not less than 48 hours before the time set for the meeting or any adjournment thereof.

Explanatory Notes on Special Business:

a. Ordinary Resolution no. 7 The ordinary resolution, if passed, will empower the Directors to allot and issue new shares not exceeding 10% of the issued capital of the Company for the time being for such purposes as the Directors deem fit in the interest of the Company.

This authority unless revoked or varied by the Company in the general meeting, will expire at the next annual general meeting of the Company.

As at the date of this Notice, the company did not issue any shares under the mandate granted to the Directors at the last Annual General Meeting of the Company held on 23 May 2011 and which will lapse at the conclusion of the 17th Annual General Meeting of the Company.

The general mandate for issue of shares will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment projects(s), working capital and/or acquisitions.

The Company SecretaryGLOBAL CARRIERS BHD (329687-X)

11th. Floor, Tower Block E, Plaza PekelilingJalan Tun Razak

50400 WP Kuala Lumpur, MY

POSTAGE STAMP

FOLD HEREFOLD HERE


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ANNUAL REPORT 2011 - I3investor

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