PT BERLIAN LAJU TANKER Tbk AND ITS SUBSIDIARIES

P.T. BERLIAN LAJU TANKER Tbk AND ITS SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIODS ENDED JUNE 30, 2011 AND 2010 (WITH AUDITED COMPARATIVE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION FIGURES AS OF DECEMBER 31, 2010)


TABLE OF CONTENTS

Page

DIRECTORS’ STATEMENT LETTER

CONSOLIDATED FINANCIAL STATEMENTS – as of June 30, 2011 and 2010 and for the periods then ended (With audited comparative Consolidated Balance Sheets figures as of December 31, 2010)

Consolidated Statements of Financial Position 1 Consolidated Statements of Comprehensive Income 3 Consolidated Statements of Changes in Equity 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

JUNE 30, 2011 (UNAUDITED)

(WITH AUDITED COMPARATIVE FIGURES AS OF DECEMBER 31, 2010)

June 30, December 31,

Notes 2011 2010

US$'000 US$'000

ASSETS

NON-CURRENT ASSETS

Property, vessels and equipment - net 4 2,430,450 2,346,239

Deferred charges and security deposits 5 27,520 22,562

Goodwill 6 75,739 75,739

Investments in associates 7 12,645 7,955

Available-for-sale investments 9 34,302 34,302

Total Non-Current Assets 2,580,656 2,486,797

CURRENT ASSETS

Inventories 28,769 16,281

Trade accounts receivable 8 153,793 160,166

Other accounts receivable and other current assets 13,876 11,820

Prepaid expenses and taxes 40,722 17,572

Advances 19,293 13,801

Short-term investments 9 89,830 79,964

Cash 10 108,053 84,284

Total Current Assets 454,336 383,888

TOTAL ASSETS 3,034,992 2,870,685

See accompanying notes to consolidated financial statements

which are an integral part of the consolidated financial statements.

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

JUNE 30, 2011 (UNAUDITED)

(WITH AUDITED COMPARATIVE FIGURES AS OF DECEMBER 31, 2010) (Continued)


Notes 2011 2010

US$'000 US$'000

EQUITY AND LIABILITIES

CAPITAL AND RESERVES

Share capital 11 109,575 109,575

Additional paid-in capital 12 209,003 209,003

Treasury stocks 13 (86,628) (86,628)

Translation adjustment (1,523) 1,009

Revaluation reserve 14 302,232 300,731

Difference arrising from changes in equity of subsidiaries 2,305 -

Retained earnings 227,699 184,519

Capital and reserves attributable to equityholders of the Company 762,663 718,209

Non-controlling interests 111,909 -

Total Equity 874,572 718,209

NON-CURRENT LIABILITIES

Long-term liabilities - net of current maturities

Loans from financial institutions 15 745,485 708,505

Bonds payable 16 132,573 148,261

Notes payable 17 281,400 316,000

Obligations under finance lease 18 422,347 342,769

Other loans from non-financial institutions 19 21,879 17,634

Deferred income 20 1,745 1,850

Post-employment benefits 21 5,928 5,180

Convertible bonds 22 167,384 165,057

Derivative financial instruments 23 79,389 75,775

Total Non-Current Liabilities 1,858,130 1,781,031

CURRENT LIABILITIES

Short-term bank loans 24 15,122 14,459


Trade accounts payable 25 25,409 63,943

Other current liabilities 3,435 4,642

Dividends payable 621 486

Taxes payable 26 1,050 1,665

Accrued expenses 27 30,310 44,452

Unearned revenue - 551

Current maturities of long-term liabilities

Loans from financial institutions 15 138,826 178,661

Bonds payable 16 22,682 -

Obligations under finance lease 18 53,454 49,383


Total Current Liabilities 302,290 371,445

TOTAL EQUITY AND LIABILITIES 3,034,992 2,870,685



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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE PERIODS ENDED JUNE 30, 2011 AND 2010

Notes 2011 2010

US$'000 US$'000

Operating Revenues 28 323,111 329,661

Voyage Expenses 29 (120,822) (93,116)

Operating Revenues after Voyage Expenses 202,289 236,545

Charter Expenses (23,680) (33,626)

Vessel depreciation and ship operating expenses

Ship operating expenses 30 (58,513) (57,455)

Vessel depreciation 4 (66,768) (71,818)

(125,281) (129,273)

Gross Profit 53,328 73,646

General and Administrative 31 (13,862) (12,751)

Income before financial and other items 39,466 60,895

Net financial and other items

Finance cost 32 (79,703) (63,425)

Investment income 33 4,164 2,177

Share in profits of associates 7 4,690 942

Other gains and losses 34 56,109 28,053

(14,740) (32,253)

Income Before Tax 24,726 28,642

Tax Expense 26 (804) (744)

Income for the period 23,922 27,898

Other Comprehensive Income

Translation adjustment (2,532) (621)

Net revaluation during the period 14 21,419 75,430

Net gain (loss) on revaluation of available-for-sale investments - 6,493

Other Comprehensive Income for the period 18,887 81,302

Total Comprehensive Income for the period 42,809 109,200

Income attributable to:

Equityholders of the company 23,262 27,898

Non-controlling interests 660 -

Total 23,922 27,898

Comprehensive income attributable to:

Equityholders of the company 42,149 109,200

Non-controlling interests 660 -

Total 42,809 109,200

Earnings Per Share 35

Basic (cents per share) 0.0021 0.0050

Diluted (cents per share) - 0.0031



June 30,

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

JUNE 30, 2011 AND 2010

Difference

Net unrealized arrising from

Subscribed gain (loss) on changes in

and paid-up Additional Treasury available-for-sale Translation Revaluation equity of Non-controlling

capital stock paid-in capital stock investments adjustment reserve subsidiaries Appropriated Unappropriated Sub total interests Total equity

US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000

Balance at December 31, 2009 70,936 115,001 (86,628) 757 414 235,671 - 5,898 306,710 648,759 - 648,759

Profit for the period - - - - - - - - 27,898 27,898 - 27,898

Other comprehensive income for the period - - - 6,493 (621) 75,430 - - - 81,302 - 81,302

Total comprehensive income for the period - - - 6,493 (621) 75,430 - - 27,898 109,200 - 109,200

Transfer to retained earnings - - - - - (24,190) - - 24,190 - - -

Balance at June 30, 2010 70,936 115,001 (86,628) 7,250 (207) 286,911 - 5,898 358,798 757,959 - 757,959

Balance at December 31, 2010 109,575 209,003 (86,628) - 1,009 300,731 - 5,898 178,621 718,209 - 718,209

Profit for the period - - - - - - - - - 23,262 23,262 660 23,922

Other comprehensive income for the period - - - - (2,532) 21,419 - - - 18,887 - 18,887

Total comprehensive income for the period - - - - (2,532) 21,419 - - 23,262 42,149 660 42,809

Transfer to retained earnings - - - - - (19,918) - - 19,918 - - -

Issuance of shares through initial public offering by a subsidiary - - - - - - 2,305 - - 2,305 111,248 113,553

Difference from non-controlling interests - - - - - - - - - - 1 1

Balance at June 30, 2011 109,575 209,003 (86,628) - (1,523) 302,232 2,305 5,898 221,801 762,663 111,909 874,572



Retained earnings

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CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIODS ENDED JUNE 30, 2011 AND 2010

2011 2010

US$'000 US$'000

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 318,846 329,868 Payments to suppliers and employees (310,713) (264,792) Interest paid (56,026) (36,401) Profit sharing paid (2,107) (1,988) Income tax paid (804) (744) Receipts from insurance claim 1,810 (458)

Net Cash Generated from (Used in) Operating Activities (48,994) 25,485

CASH FLOWS FROM INVESTING ACTIVITIESWithdrawal (placement) of temporary investments - net (9,866) (58,044) Net proceeds from sale of property, vessels and equipment 93,501 40,001 Acquisitions of property, vessels and equipment (100,210) (85,216) Interest received 4,164 2,095 Increase in security deposits - (6,000)

Net Cash Used in Investing Activities (12,411) (107,164)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from bank loans and loans from financial institutions 650,518 154,277 Payments of bank loans and loans from financial institutions (652,335) (97,176) Proceeds from placement of new shares of

a subsidiary - net of issuance expenses 113,553 - Payment of obligations under finance lease (28,984) (16,925) Proceeds from issuance of convertible bonds - 125,000 Payment of convertible bonds - (95,506) Payment of loans from non-financial institutions 2,422 6,309

Net Cash Generated from Financing Activities 85,174 75,979

NET INCREAE (DECREASE) IN CASH 23,769 (5,700)

CASH AT BEGINNING OF PERIOD 84,284 118,732

CASH AT END OF PERIOD 108,053 113,032

See accompanying notes to consolidated financial statementswhich are an integral part of the consolidated financial statements.

June 30,

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P.T. BERLIAN LAJU TANKER Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2011 (UNAUDITED) AND DECEMBER 31, 2010 (AUDITED) AND FOR THE PERIODS ENDED JUNE 30, 2011 AND 2010

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1. GENERAL

a. Establishment and General Information

P.T. Berlian Laju Tanker Tbk (the Company) is a limited liability company incorporated in Indonesia. Its activities comprise mainly of local and overseas shipping services. In 2010, the Company‟s articles of association have been amended as stated in notarial deed No. 26 dated July 29, 2010 of Amrul Partomuan Pohan S.H., LLM, notary in Jakarta, concerning, among others, the increase in the Company‟s paid up capital stock. The Company is domiciled in Jakarta and has two branches in Merak and Dumai, and representative offices in China, Brazil, United Arab Emirates and Taiwan. Its head office is located at Wisma BSG, 10

th Floor, Jalan Abdul Muis No. 40, Jakarta.

b. Public Offering of Shares and Bonds

The Company's offering of 2,100,000 shares to the public through the stock exchanges in Indonesia, at a price of Rp 8,500 per share, was approved by the Minister of Finance of the Republic of Indonesia in his Decision Letter No. S1-076/SHM/MK.01/1990 dated January 22, 1990. These shares were listed on the stock exchanges in Indonesia on March 26, 1990. On January 27, 1993, the Company obtained the notice of effectivity from the Chairman of the Capital Market and Financial Institution Supervisory Agency (Bapepam&LK) in his letter No. S-109A/PM/1993 for its Rights Issue I to the stockholders totaling 29,400,000 shares at a price of Rp 1,600 per share. These shares were listed on the Jakarta and Surabaya stock exchanges (currently the Indonesian Stock Exchange) on May 24, 1993. On December 26, 1997, the Company obtained the notice of effectivity from the Chairman of Bapepam&LK in his letter No. S-2966/PM/1997 for its Rights Issue II with Pre-emptive Rights to stockholders totaling to 305,760,000 shares with 61,152,000 warrants at an exercise price of Rp 1,200 per warrant. The holders of warrants can exercise the right to purchase from July 16, 1998 to January 20, 2003. Based on notarial deed No. 32 dated October 17, 2002 of Amrul Partomuan Pohan, S.H., LLM, notary in Jakarta, the Company decided to extend the period of warrants for five (5) years until January 18, 2008. If the warrants are not exercised during this period, the warrants will expire and will have no value. The shares were listed on the Jakarta and Surabaya stock exchanges on January 16, 1998. The Company conducted a stock split of 4:1 in 2002 and 2:1 in 2004 thus, the warrants‟ exercise price since 2005 became Rp 150 per share.

On December 18, 2000, the Company obtained the notice of effectivity from the Chairman of Bapepam&LK in his letter No. S-3690/PM/2000 for its Rights Issue III with Pre-emptive Rights to stockholders totaling 61,152,000 shares. The Company issued 53,958,150 new common shares with a nominal value of Rp 500 per share at a price of Rp 1,100 per share. On September 22, 2006, the Company obtained the eligibility to list all of the Company‟s shares on the SGX-mainboard based on letter No. RMR/IR/YCH/260407 from the SGX-ST. In connection with the Company‟s listing of shares, the Company also amended certain provisions of its Articles of Association as approved by the shareholders in their Extraordinary Shareholders Meeting held on September 11, 2006. On May 4, 2007, and May 17, 2007, BLT Finance B.V., a subsidiary, issued US$ 400 million 7.5% Guaranteed Senior Notes due 2014 and US$ 125 million Zero Coupon Guaranteed Convertible Bonds due 2012, respectively, which were both registered on the SGX-ST.

P.T. BERLIAN LAJU TANKER Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2011 (UNAUDITED) AND DECEMBER 31, 2010 (AUDITED) AND FOR THE PERIODS ENDED JUNE 30, 2011 AND 2010 (Continued)

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On June 25, 2007, the Company obtained the notice of effectivity from the Chairman of Bapepam&LK in his letter No. S-3117/BL/2007 for its public offering of Sukuk Ijarah Bonds year 2007 amounting to Rp 200 billion and Berlian Laju Tanker III Bonds year 2007 amounting to Rp 700 billion. On May 15, 2009, the Company obtained the notice of effectivity from the Chairman of Bapepam&LK in his letter No. S-3908/BL/2009 for its public offering of Sukuk Ijarah II Bonds year 2009 amounting to Rp 100 billion and Berlian Laju Tanker IV Bonds year 2009 amounting to Rp 400 billion. On June 29, 2009, the Company obtained the notice of effectivity from the Chairman of Bapepam&LK in his letter No. S-5658/BL/2009 for its Rights Issue IV with Pre-emptive Rights to stockholders. In connection with such rights issue, the Company issued 1,392,310,059 new common shares at Rp 425 per share. On February 10, 2010 and March 29, 2010, BLT International Corporation, a subsidiary, issued US$ 100 million and US$ 25 million, respectively, 12% Guaranteed Convertible Bonds due 2015. On June 30, 2010, the Company obtained the notice of effectivity from the Chairman of Bapepam&LK in his letter No. S-5872/BL/2010 for its Rights Issue V with Pre-emptive Rights to stockholders. In connection with such rights issue, the Company issued 5,569,240,235 new common shares at Rp 220 per share.

PT Buana LIstya Tama Tbk, a subsidiary, offer 6,650,000 thousand shares to public on Indonesian Stock Exchange (the “IDX”) at offer price Rp 155 per share, and has been approved by The Indonesian Capital Markets and Financial Institution Supervisory Agency (Badan Pengawas Pasar Modal dan Lembaga Keuangan or “Bapepam-LK”) in his Decision Leter No. S-5214/BL/2011 dated May 10, 2011. Those shares are listed on The Indonesian Stock Exchange dates May 23, 2011.

As of June 30, 2011, issued shares of 11,550,831,470 have been listed on the stock exchanges in Indonesia and Singapore.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Statements of Compliance and Basis of Preparation

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) in relation to the Company‟s listing of equity securities on the SGX-ST. Such IFRS consolidated financial statements have been prepared on the historical cost basis, except for vessels and certain financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Further, such IFRS consolidated financial statements are presented in US Dollars, which is the currency of the primary economic environment in which the Company and the majority of its subsidiaries operate (their functional currency). Historical cost is generally based on the fair value of the consideration given in exchange for assets. The principal accounting policies are set out below.

b. Principles of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.


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Income and expenses of subsidiaries acquired or disposed of during the years presented are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in-line with those used by the Company. All intra-company transactions, balances, income and expenses are eliminated on consolidation. Changes in the ownership interests of the Company and its subsidiaries‟ in subsidiaries that do not result in the Company and its subsidiaries losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Company and its subsidiaries‟ interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.

When the Company and its subsidiaries lose control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognized in other comprehensive income and accumulated in equity, the amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Company had directly disposed of the relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings as specified by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.

c. Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred, liabilities incurred or assumed and equity interests issued by the Company and its subsidiaries in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as incurred. The acquiree‟s identifiable assets, liabilities assumed and contingent liabilities that meet the condition for recognition are recognized at their fair value at the acquisition date, except that:

deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in accordance with IAS 12, Income Taxes and IAS 19, Employee Benefits respectively;

liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Company and its subsidiaries entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2, Share-based Payment at the acquisition date; and

assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations are measured accordance with that Standard.


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Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain. Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognized amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.

When the consideration transferred by the Company and its subsidiaries in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the „measurement period‟ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognized in profit or loss. When a business combination is achieved in stages, the Company and its subsidiaries‟ previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Company and its subsidiaries obtain control) and the resulting gain or loss, if any, is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company and its subsidiaries reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. Business combinations that took place prior to 1 January 2010 were accounted for in accordance with the previous version of IFRS 3.

d. Investments in Associates An associate is an entity over which the Company has significant influence, and is neither a subsidiary nor an interest in a joint venture. Significant influence, is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.


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The results of operations and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting except when classified as held for sale, in which case it is accounted for in accordance with IFRS 5 “Noncurrent Assets Held for Sale and Discontinued Operations”. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Company‟s share in the net assets of the associate, less any impairment in the value of individual investments. Losses of the associates in excess of the Company and its subsidiaries‟ interest in those associates are not recognized, unless the Company and its subsidiaries have incurred legal or constructive obligations or made payments on behalf of the associate. Any excess of the cost of acquisition over the Company‟s share in the fair values of the identifiable net assets of the associates at the date of acquisition is recognized as goodwill. Goodwill is included within the carrying amount of investment and is assessed for impairment as part of the investment. Any excess of the Company‟s share in the fair values of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized in profit and loss in the year of acquisition.

The requirements of IAS 39 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group‟s investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36, Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount, Any impairment loss recognized forms part of the carrying amount of the the investment. Any reversal of that impairment loss is recognized in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases. Where the Company or its subsidiaries transact with an associate of the Company, profits and losses are eliminated to the extent of the Company‟s interest in the relevant associate.

e. Foreign Currency Transactions and Translation

Functional and presentation currency

The individual financial statements of each of the consolidated entities are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in US Dollar, which is the Company‟s functional currency and presentation currency for the consolidated financial statements. Transactions and Balances

In preparing the financial statements of the individual entities, transactions in currencies other than the entity‟s functional currency are recorded at the exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.


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Group Companies

The results and financial position of all the entities (none of which has the currency of a hyper inflationary economy) that have a functional currency different from the group presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities are translated at the closing rate at the end of the reporting period;

(ii) income and expenses are translated at average exchange rates (unless this average is not

a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions);

(iii) all resulting exchange differences are recognized as a separate component of equity. On

consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to shareholders‟ equity. When a foreign operation is sold, exchange differences that were recorded in equity are recognized as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

f. Property, Vessels and Equipment

Vessels

Vessels are stated at their revalued amount, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the end of the reporting period. Depreciation of vessels is calculated on a straight line basis over the estimated useful life of the vessels between 5 – 25 years. Any revaluation increase arising on the revaluation of such vessels is credited to vessels revaluation reserve, except to the extent that it reverses a revaluation decrease, for the same asset which was previously recognized in profit or loss, in which case the increase is credited to profit and loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such vessels is charged to profit or loss to the extent that it exceeds the balance, if any, held in the vessels revaluation reserve relating to a previous revaluation of such vessels.

Depreciation on revalued vessels is charged to profit or loss. As the vessels are used, a transfer is made from revaluation reserve to retained earnings equivalent to the difference between depreciation based on revalued carrying amount of the vessels and depreciation based on the vessels‟ original cost. On subsequent sale or retirement of a revalued vessel, the attributable revaluation surplus remaining in the vessels revaluation reserve is transferred directly to retained earnings. Vessels in the course of construction are carried at cost less any impairment loss. Costs, including professional fees, incurred while under construction are capitalized in accordance with the Company‟s accounting policy. Depreciation of these vessels commences when the vessels are ready for their intended use. Borrowing costs are not capitalized because the vessels are measured at fair values. The vessels‟ residual values, estimated useful lives and depreciation method are reviewed at each financial year end, with the effect of any changes in estimate accounted for on a prospective basis.


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The gain or loss arising on sale or retirement of vessels is determined as the difference between the sales proceeds and carrying amount of the vessel and is recognized in profit or loss. Dry docking cost

Included in the balance of property, vessels and equipment is dry docking cost which is capitalized when incurred. Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Years

Buildings and premises

20

Oil tanks 10 Transportation equipment 5 Office furniture and fixtures 5 Office and dormitory equipment 5 Landrights is accounted for as operating leases and amortized over the lease term. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. The cost of maintenance and repairs is charged to operations as incurred. Other subsequent expenditures which meet the asset recognition criteria are capitalized. When assets are retired or otherwise disposed of, the cost and the related accumulated depreciation and any impairment loss are removed from the accounts and any resulting gain or loss is reflected in the current operations. Construction in progress is stated at cost, which includes the progress billing paid in accordance with the construction contracts. Construction in progress is transferred to the respective property and equipment account when completed and ready for use.

Depreciation begins when the property and equipment become available for use. An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is recognized in profit or loss in the year the item is derecognized. The asset‟s residual values, estimated useful lives and depreciation method are reviewed at each financial year end with the effect of any changes in accounting estimate accounted for on a prospective basis.

g. Goodwill Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition less any accumulated impairment losses.


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For the purpose of impairment testing, goodwill is allocated to each of the Company and its subsidiaries' cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in subsequent periods. On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

h. Inventories

Inventories are stated at cost or net realizable value, whichever is lower. Cost is determined using the first-in, first-out method.

i. Prepaid Expenses

Prepaid expenses are amortized over their beneficial periods using the straight-line method.

j. Post-Employment Benefits

The Company provides defined post-employment benefits to its employees in accordance with Indonesian Labor Law No. 13/2003. No funding has been made to this defined benefit plan.

The cost of providing post-employment benefits is determined using the Projected Unit Credit Method with actuarial valuations being carried out at the end of each reporting period. The accumulated unrecognized actuarial gains and losses that exceed 10% of the present value of the Company‟s defined benefit obligations is recognized on straight-line basis over the expected average remaining working lives of the participating employees.

Past service cost is recognized immediately to the extent that the benefits are already vested, or otherwise amortized on a straight-line basis over the average years until the benefits become vested. The post-employment benefits obligation recognized in the consolidated statement of financial position represent the present value of the defined benefit obligation, as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost.

k. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. The Company and the subsidiaries‟ liability for current tax is calculated using tax rates that have been enacted or substantively enacted at by the end of the reporting period. Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.


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Deferred tax liabilities are recognized for taxable temporary differences arising on investment in subsidiaries and associates except when the Company is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. The carrying amount of deferred tax asset is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the liability is settled or the asset realized. The measurement of deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Company and subsidiaries expect, at the reporting date, to recover or settle the carrying amount of their assets and liabilities. Deferred tax assets and liabilities are offset in the consolidated statement of financial position when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and management intends to settle the current tax assets and current tax liabilities on a net basis.

Tax expense on revenues from vessels subject to final tax is recognized proportionately based on the revenue recognized in the current year. The difference between the final tax paid and current tax expense in the consolidated statement of income is recognized as prepaid tax or tax payable. Prepaid final tax is presented separately from final tax payable.

l. Financial Assets

All financial assets are recognized and derecognized on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the time frame established by the market concerned, and are initially measured at fair value plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.

Financial assets are classified into the following categories: either as financial assets at „fair value through profit or loss‟, „held-to maturity‟, „available-for-sale' (AFS) financial assets‟ and „loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Effective Interest Method The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Income is recognized on an effective interest basis for debt instruments. Financial Assets at Fair Value through Profit or Loss (FVTPL) Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.


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A financial asset is classified as held for trading if: • it has been acquired principally for the purpose of selling it in the near term; or • on initial recognition it is part of a portfolio of identified financial instruments that the Group

manages together and has a recent actual pattern of short-term profit-taking; or • it is a derivative that is not designated and effective as a hedging instrument. A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if: • such designation eliminates or significantly reduces a measurement or recognition

inconsistency that would otherwise arise; or • the financial asset forms part of a group of financial assets or financial liabilities or both,

which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and IAS 39,

Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the „other gains and losses' line item in the consolidated statement of comprehensive income. Held-to-Maturity Investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Company and its subsidiaries have the positive intent and ability to hold to maturity. Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using the effective interest method less any impairment. Available-for-Sale Investments (AFS) AFS financial assets are non-derivative financial assets that are either designated in this category or not classified in other categories and are initially measured at fair value plus directly attributable transaction cost. At subsequent reporting dates, available-for-sale investments except, unquoted AFS equity investments, are stated at fair value. Gains and losses arising from changes in fair value are recognized in other comprehensive income, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognized in other comprehensive income is included in the profit or loss for the year. The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognized in profit or loss are determined based on the amortized cost of the monetary asset. Other foreign exchange gains and losses are recognized in other comprehensive income.


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AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at the end of each reporting period. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables (including trade and other accounts receivables, bank balances and cash, and advances) are measured at amortized cost using the effective interest method, less any impairment. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. Impairment of Financial Assets Financial assets, other than those carried at fair value through profit and loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For listed and unlisted equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

For all other financial assets, including fund under investment management classified as AFS, objective evidence of impairment could include: • significant financial difficulty of the issuer or counterparty; or • default or delinquency in interest or principal payments; or • it becoming probable that the borrower will enter bankruptcy or financial re-organization. For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Company and its subsidiaries‟ past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables. For financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between the asset‟s carrying amount and the present value of estimated future cash flows, discounted at the financial asset‟s original effective interest rate. For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods. 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 is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss.


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With the exception of AFS equity instruments, 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 recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. In respect of AFS equity securities, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. Derecognition of Financial Assets The Company and its subsidiaries derecognise a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company and its subsidiaries neither transfer nor retain substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company and its subsidiaries recognise their retained interest in the asset and an associated liability for amounts it may have to pay. If the Company and its subsidiaries retain substantially all the risks and rewards of ownership of a transferred financial asset, the Company and its subsidiaries continue to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss. On derecognition of a financial asset other than in its entirety (e.g. when the Company and its subsidiaries retain an option to repurchase part of a transferred asset or retains a residual interest that does not result in the retention of substantially all the risks and rewards of ownership and the Company and its subsidiaries retain control), the Company and its subsidiaries allocate the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in profit or loss. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.

m. Financial Liabilities and Equity Instruments

Financial liabilities and equity instruments of the Company and its subsidiaries are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and equity instrument. The accounting policies adopted for specific financial liabilities are set out below. Equity Instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.


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Repurchase of the Company's own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

Financial Liabilities The financial liabilities of the Company and its subsidiaries are classified as either financial liabilities at fair value through profit and loss or other financial liabilities.

Financial liabilities at fair value through profit and loss (FVTPL) Financial liabilities at FVTPL have two subcategories: financial liabilities held for trading and those designated as at FVTPL on initial recognition. A financial liability is classified as held for trading if:

It has been incurred principally for the purpose of repurchasing in the near future: or

It is a part of an identified portfolio of financial instruments that the Company and its subsidiaries manages together and has a recent actual pattern of short-term profit-taking: or

It is a derivative that is not designated and effective as a hedging instrument.

A financial liability, other than a financial liability held for trading, may be designated as at FVTPL upon initial recognition if:

Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise: or

The financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company and its subsidiaries‟ documented risk management or investment strategy, and information about the grouping is provided internally on that basis: or

It forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement, permits the entire combined contract (asset or liability) to be designated as at FVTPL.

At each reporting date subsequent to initial recognition, financial liabilities at FVTPL are measured at fair value, with changes in fair value recognized directly in profit or loss in the period in which they arise. Other Financial Liabilities

Other financial liabilities (including bank and other borrowings, trade payables and other payables) are initially measured at fair value, and are subsequently measured at amortized cost, using the effective interest method. Effective Interest Method The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.


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Derecognition of Financial Liabilities The Company and its subsidiaries derecognise financial liabilities when, and only when, the obligations of the Company and its subsidiaries are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

n. Derivative Financial Instruments

Derivative financial instruments are categorized as FVTPL and are initially measured at fair value on the contract date, and are remeasured to fair value at subsequent reporting dates. Changes in the fair value of derivative financial instruments are recognized in profit or loss as they are not designated and do not qualify for hedge accounting. Derivatives embedded in other financial instruments or other non-financial host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contract and the host contract is not carried at fair value with changes in fair value recognized in profit or loss. A derivative is presented as a non-current asset or non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities. The use of financial derivatives is governed by the Company‟s policies approved by the Board of Directors consistent with the Company‟s risk management strategy. The Company does not use derivative financial instruments for speculative purposes.

o. Revenue and Expense Recognition

Revenue from freight operations is recognized as income by reference to the percentage of completion of the voyage as at the end of the reporting period. Unearned revenue received is recognized as liability. Time charter revenue is recognized on accrual basis evenly over the terms of the time charter agreements. Voyage freight is recognized evenly over the duration of each voyage. Revenues from agency services and storage services are recognized when the services are rendered to customers.

Interest income on interest-bearing instruments is recognized when it is probable that the economic benefits will flow to the Company and its subsidiaries. Interest income is accrued on a time basis by reference to the principal amount outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset‟s net carrying amount on initial recognition. Expenses are recognized when incurred.

p. Leasing Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.


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The Company or its Subsidiaries as Lessor Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term.

The Company or its Subsidiaries as Lessee Assets held under finance leases are initially recognized as assets of the Company or subsidiaries at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges, which are recognized directly in profit or loss, and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Contingent rentals are recognized as expenses in the periods in which they are incurred. Operating lease payments are recognized as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred. In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Sale and Leaseback Assets sold under a sale and leaseback transaction are accounted for as follows: If the sale and leaseback transaction results in a finance lease, any excess of sales proceeds over the carrying amount of the asset is deferred and amortized over the lease term.

If the sale and leaseback transaction results in an operating lease, and it is clear that the transaction is established at fair value, any profit or loss is recognized immediately. If the sale price is below fair value, any profit or loss is recognized immediately except that, if the loss is compensated for by future lease payments at below market price, it shall be deferred and amortized in proportion to the lease payments over the period for which the asset is expected to be used. If the sale price is above fair value, the excess over fair value is deferred and amortized over the period for which the asset is expected to be used. For operating leases, if the fair value at the time of a sale and leaseback transaction is less than the carrying amount of the asset, a loss equal to the amount of the difference between the carrying amount and fair value is recognized immediately. For finance leases, no such adjustment is necessary unless there has been an impairment in value, in which case the carrying amount is reduced to recoverable amount.

q. Finance Cost

Interest expense and similar charges are expensed in the year when they are incurred.


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r. Loss per Share

Basic loss per share is computed by dividing loss for the year by the weighted average number of shares outstanding during the year. Diluted loss per share is computed by dividing loss for the year by the weighted average number of shares outstanding as adjusted for the effect of all dilutive potential ordinary shares.

s. Impairment of Tangible Assets Other than Goodwill

At the end of each reporting period, the Company and its subsidiaries review the carrying amounts of their tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company and its subsidiaries estimate the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of the fair value less costs to sell and 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 for which the estimated of future cash flows have not been adjusted. If the recoverable amount of the asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

t. Provisions

Provisions are recognized when the Company and its subsidiaries have a present obligation (legal or constructive) as a result of a past event, it is probable that the Company and its subsidiaries will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.


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3. CONSOLIDATED SUBSIDIARIES

Details of the Company‟s subsidiaries, whether owned directly or indirectly, are as follows:

Subsidiary Domicile Type of Business 2011 2010

1. Indigo Pacific Corporation Labuan, Malaysia Investment holding 100% 100%

1.1 Indigo Pacific Corporation British Virgin Investment holding 100% 100%

Islands

1.1.1 Melani Maritime Inc. Panama Owner and operator 100% 100%

of vessel

1.1.2 Zona Overseas International Panama Owner and operator 100% 100%

Shipping S.A. of vessel

1.1.3 Kunti Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.4 Jembawati Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.5 Tirtasari Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.6 Pergiwo Navigation Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.7 Fatmarini Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.8 Harsanadi Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.9 Hartati Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.10 BLT Finance Corporation British Virgin Financing 100% 100%

Islands

1.1.11 Pujawati Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.12 Pertiwi Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.13 Anggraini Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.14 Emerald Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.15 BLT Finance B.V. The Netherlands Financing 100% 100%

1.1.16 Tridonawati Maritime Corporation Liberia Owner and operator 100% 100%

of vessel

1.1.17 Purbasari Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.18 Tridonawati Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.19 Trirasa Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.20 Pramoni Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.21 Fatmarini Shipping Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.22 Frabandari Shipping Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.23 Harsanadi Shipping Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.24 Hartati Shipping Pte. Ltd Singapore Owner and operator 100% 100%

of vessel

1.1.25 Nogogini Shipping Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.26 Nolowati Shipping Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.27 Ratih Shipping Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

1.1.28 Universal Grace Ltd. Hong Kong Owner and operator 100% 100%

of vessel

1.1.29 BLT Maritime Corporation British Virgin Investment holding 100% -

Island

Percentage of Ownership

and Voting Power Held


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2 Diamond Pacific International Labuan, Malaysia Investment holding 100% 100%

Corporation

2.1 Diamond Pacific International British Virgin Investment holding 100% 100%

Corporation Islands

2.1.1 Lenani Maritime Inc. Panama Owner and operator 100% 100%

of vessel

2.1.1.1 Ontari Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

2.1.2 Averina Maritime S.A. Panama Shipping agency 100% 100%

2.1.3 Gandari Navigation Pte. Ltd. Singapore Operator of vessel 100% 100%

2.1.4 GBLT Shipmanagement Pte. Ltd. Singapore Ship management 100% 100%

2.1.4.1 GBLT Shipmanagement Ltd. United Kingdom Ship management 100% 100%

2.1.4.1.1 Harsanadi Shipping Ltd. United Kingdom Operator of Vessel 100% 100%

2.1.4.1.2 Hartati Shipping Ltd. United Kingdom Operator of Vessel 100% 100%

2.1.4.1.3 Frabandari Shipping Ltd. United Kingdom Operator of Vessel 100% 100%

2.1.4.1.4 Fatmarini Shipping Ltd. United Kingdom Operator of Vessel 100% 100%

2.1.4.1.5 Nolowati Shipping Ltd. United Kingdom Operator of Vessel 100% 100%

2.1.4.1.6 Nogogini Shipping Ltd. United Kingdom Operator of Vessel 100% 100%

2.1.4.1.7 Ratih Shipping Ltd. United Kingdom Operator of Vessel 100% 100%

2.1.5 Cendanawati Navigation Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

2.1.6 Frabandari Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

2.1.7 Brotojoyo Maritime Pte. Ltd. Singapore Owner and operator 100% 100%of vessel

2.1.8 Berlian Laju Tanker Pte. Ltd. Singapore Operator of Vessel 100% 100%

2.1.9 Anjasmoro Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

2.1.10 Gas Lombok Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

2.1.11 Gas Sumbawa Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

2.1.12 Berlian Laju Tanker DMCC Dubai Shipping agency 100% -

2.2 BLT LNG Tangguh Corporation Marshall Islands Owner and operator 100% 100%

of vessel

3. Asean Maritime Corporation Labuan, Malaysia Investment holding 100% 100%

3.1 Gold Bridge Shipping British Virgin Investment holding 100% 100%

Corporation Islands

3.1.1 Bauhinia Navigation S.A. Panama Owner and operator 100% 100%

of vessel

3.1.2 Cempaka Navigation S.A. Panama Owner and operator 100% 100%

of vessel

3.1.3 Gold Bridge Shipping Ltd. Hong Kong Shipping agency 100% 100%

3.1.3.1 BLT Shipping Shanghai Co. Ltd. China Shipping agency 100% 100%

3.1.4 Great Tirta Shipping S.A. Panama Owner and operator 100% 100%

of vessel

3.1.4.1 Dewayani Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.5 Hopeway Marine Inc. Panama Owner and operator 100% 100%

of vessel

3.1.6 Lestari International Panama Owner and operator 100% 100%

Shipping S.A. of vessel

3.1.6.1 Gandini Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.7 Quimera Maritime S.A. Panama Owner and operator 100% 100%

of vessel

3.1.8 South Eastern Overseas Panama Owner and operator 100% 100%

Navigation S.A. of vessel

3.1.9 Zenith Overseas Maritime S.A. Panama Owner and operator 100% 100%

of vessel

3.1.9.1 Gandari Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.10 Zona Shipping S.A. Panama Owner and operator 100% 100%

of vessel

3.1.10.1 Dewi Sri Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.11 Dahlia Navigation S.A. Panama Owner and operator 100% 100%

of vessel

3.1.12 Eglantine Navigation S.A. Panama Owner and operator 100% 100%

of vessel

3.1.13 Wulansari Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel




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3.1.14 Yanaseni Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.15 Indradi Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.16 Gold Bridge Shipping Agencies S.A. Panama Shipping agency 100% 100%

3.1.17 Elite Bauhinia Navigation Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.18 Cempaka Navigation Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.19 Dahlia Navigation Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.20 Freesia Navigation S.A. Panama Owner and operator 100% 100%

of vessel

3.1.21 Gerbera Navigation S.A. Panama Owner and operator 100% 100%

of vessel

3.1.22 Mustokoweni Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.23 Ulupi Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.24 Erowati Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.25 Gas Papua Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.26 Rasawulan Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.27 Gas Sulawesi Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.28 Gagarmayang Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.29 Prita Dewi Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.30 Purwati Martime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.31 Pradapa Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.32 Pergiwati Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.33 Badraini Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.34 Barunawati Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.35 Gas Maluku Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.36 Barawati Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.37 Gas Bali Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.38 Eustoma Navigation S.A. Panama Owner and operator 100% 100%

of vessel

3.1.39 Puspawati Maritime Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.1.40 Diamond Flow Ltd. Hong Kong Investment holding 100% 100%

3.1.41 Likabula International Limited Hongkong Investment holding 100% 100%

3.1.42 Richesse International Corp. British Virgin Investment holding 100% 100%

Islands

3.1.42.1 Richesse Logistics (International) Hong Kong Investment holding 100% 100%

Ltd.

3.1.42.1.1 Richesse Logistics (Fangcheng China Storage and sale of 100% 100%

Port) Co. Ltd. chemical products




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3.1.43 Hyacinth Navigation S.A. Panama Owner and operator 100% 100%

of vessel

3.1.44 Irish Maritime International S.A Panama Owner and operator 100% 100%

of vessel

3.1.45 Gerbera Navigation Pte. Ltd. Singapore Operator of vessel 100% -

3.2 BLT Chembulk Corp. BVI British Virgin Investment holding 100% 100%

Islands

3.2.1 Chembulk Tankers LLC Marshall Islands Investment holding 100% 100%

3.2.1.1 Chembulk Trading II LLC Marshall Islands Owner and operator of 100% 100%

vessel

3.2.1.2 Chembulk Management LLC United States of Ship management 100% 100%

America

3.2.1.3 Chembulk Management B.V. The Netherlands Ship management 100% 100%

3.2.1.4 Chembulk Management Pte. Ltd. Singapore Ship management 100% 100%

3.2.1.5 CBL Tankers Do Brazil Ltda. Brazil Ship management 100% 100%

3.2.1.6 BLT Chembulk Group Corporation British Virgin Operator of vessel 100% 100%

Islands

3.2.1.7 BLT Chembulk Group Europe A / S Den Mark Ship management 100% -

3.2.2 Chembulk Barcelona Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.3 Chembulk Gibraltar Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.4 Chembulk Hong Kong Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.5 Chembulk Houston Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.6 Chembulk Kobe Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.7 Chembulk New York Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.8 Chembulk Savannah Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.9 Chembulk Shanghai Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.10 Chembulk Ulsan Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.11 Chembulk Virgin Gorda Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.12 Chembulk Yokohama Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.2.13 Chembulk New Orleans Pte. Ltd. Singapore Owner and operator 100% 100%

of vessel

3.3 BLT International Corporation Hongkong Investment Holding 100% 100%

3.4 Nevaeh Limited British Virgin Investment Holding 51% 51%

Island

4. PT Banyu Laju Shipping Indonesia Owner and operator 100% 100%

of vessel

4.1 Banyu Laju Corporation Labuan, Malaysia Investment holding 100% 100%

5. PT Brotojoyo Maritime Indonesia Owner and operator 100% 100%

of vessel

6. PT Buana Listya Tama Tbk Indonesia Owner and operator 62.32% 100%

of vessel

6.1 PT Anjasmoro Maritime Indonesia Owner and operator 62.32% 100%

of vessel

6.2 PT Pearl Maritime Indonesia Owner and operator 62.32% 100%

of vessel

6.3 PT Ruby Maritime Indonesia Owner and operator 62.32% 100%

of vessel

6.4 PT Sapphire Maritime Indonesia Owner and operator 62.32% 100%

of vessel

6.5 PT Citrine Maritime Indonesia Owner and operator 62.32% 100%

of vessel

6.6 PT Diamond Maritime Indonesia Owner and operator 62.32% 100%

of vessel

6.7 PT Emerald Maritime Indonesia Owner and operator 62.32% 100%

of vessel

6.8 PT Jade Maritime Indonesia Owner and operator 62.32% 100%

of vessel




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6.9 PT Onyx Maritime Indonesia Owner and operator 62.32% 100%

of vessel

6.10 PT Topaz Maritime Indonesia Owner and operator 62.32% 100%

of vessel

6.11 PT Bayu Lestari Tanaya Indonesia Shipping agency 62.32% 100%

6.11.1 PT Berlian Dumai Logistics Indonesia General Trading 62.32% 100%

6.12 PT Gemilang Bina Lintas Tirta Indonesia Operator of vessel 62.32% 100%

6.13 PT Karya Bakti Adil Indonesia Crew Agency 62.32% 100%

6.14 PT BLT International Group Indonesia Investment holding 62.32% 100%

6.15 PT BLT Meo Indonesia Owner and operator 31.16% 50%

vessel

6.16 BLT Shipping Corporation British Virgin Investment holding 62.32% -

Island

6.17 BLT Marina Shipping Corporation British Virgin Investment holding 62.32% -

Island



4. PROPERTY, VESSELS AND EQUIPMENT

Exchange

January 1, 2011 Difference Additions Deductions Reclassifications Revaluations June 30, 2011

US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000

Cost/ Valuation :

Owned vessels 2,246,787 - 14,559 (104,711) 115,460 41,556 2,313,651

Leased vessels 551,801 - 93,500 - - 10,256 655,557

Vessels under construction 155,040 - 85,401 - (115,460) - 124,981

Others :

Transportation equipment 2,048 - 32 - - - 2,080

Office furniture and fixtures 4,158 17 111 - - - 4,286

Office and dormitory

equipment 1,021 - 13 (6) - - 1,028

Buildings and premises 3,275 21 95 - - - 3,391

Building in progress 34,900 - - - - - 34,900

Advances for purchase of vessels 20,250 - - - - - 20,250

Total 3,019,280 38 193,711 (104,717) - 51,812 3,160,124

Accumulated depreciation:

Owned vessels 620,725 - 56,512 (10,616) - - 666,621

Leased vessels 46,401 - 10,256 - - - 56,657

Others :

Transportation equipment 1,340 - 115 - - - 1,455

Office furniture and fixtures 3,209 13 260 - - - 3,482


equipment 503 - 37 (5) - - 535

Buildings and premises 863 1 60 - - - 924

Total 673,041 14 67,240 (10,621) - - 729,674

Net Carrying Amount 2,346,239 2,430,450


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Exchange

January 1, 2010 Difference Additions Deductions Reclassifications Revaluations December 31, 2010

US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000

Cost/ Valuation :

Owned vessels 1,952,241 - 165,517 - (14,780) 143,809 2,246,787

Leased vessels 381,302 - 647 (1,508) 133,824 37,536 551,801

Vessels under construction 107,174 - 156,910 - (109,044) - 155,040

Others :

Storage tanks 1,625 (1) - (1,624) - - -

Transportation equipment 1,919 - 137 (8) - - 2,048

Office furniture and fixtures 4,056 54 96 (48) - - 4,158


equipment 885 2 183 (49) - - 1,021

Buildings and premises 2,846 (42) 481 (10) - - 3,275

Building in progress 20,767 - 14,133 - - - 34,900

Advances for purchase of vessels 46,905 - 20,250 (36,905) (10,000) - 20,250

Total 2,519,720 13 358,354 (40,152) - 181,345 3,019,280

Accumulated depreciation:

Owned vessels 490,241 - 130,308 - 176 - 620,725

Leased vessels 31,302 - 15,275 - (176) - 46,401

Others :

Storage tanks 1,224 - - (1,224) - - -

Transportation equipment 1,150 (1) 199 (8) - - 1,340

Office furniture and fixtures 2,581 41 623 (36) - - 3,209


equipment 574 (44) 20 (47) - - 503

Buildings and premises 673 35 155 - - - 863

Total 527,745 31 146,580 (1,315) - - 673,041

Net Carrying Amount 1,991,975 2,346,239

The vessels are stated at their revalued amounts being the fair value as of June 30, 2011 and December 31, 2010, reviewed by management, and supported by an independent professional valuation. The Company and its subsidiaries completed the sale of several vessels. In conjunction with the sale, the Company and its subsidiaries entered into lease agreements with the purchasers to lease back the vessels for a period of 4 – 11 years. After an evaluation of the terms and substance of the leaseback, the Company‟s Directors are satisfied that for the leaseback, all the risks and rewards incidental to ownership of the vessels still rest with the Company and its subsidiaries (seller-lessee) and classified the transactions as finance lease. Vessel depreciation expense charged to operations is US$ 66,768 thousand and US$ 71,818 thousand in 2011 and 2010, respectively. Vessels under construction as of June 30, 2011 and December 31, 2010 consist of six vessels and nine vessels, respectively, which are estimated to be completed between 2011 to 2012. Advances for purchase of vessels as of June 30, 2011, represent advance payments made during the year for the purchase of three second hand vessels. Advances for purchase of vessels as of December 31, 2010 represent advance payments on the purchase of three second hand vessels. In 2010, one vessel was paid in full, while the advances made for the two second hand vessels were refunded. Building in progress represents construction of chemical storage tanks and related facilities.


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5. DEFERRED CHARGES AND SECURITY DEPOSITS In connection with lease agreements, the Company and its subsidiaries paid non-interest bearing security deposits of US$ 22,195 thousand. The difference of US$ 7,164 thousand between the nominal value of the non-interest bearing deposit and its fair value is considered as deferred rent and amortized on a straight-line basis over the lease term. Amortization of deferred rent of US$ 597 thousand each year, are included under charter expenses. Interest income recognized on the security deposits.

6. GOODWILL

June 30, December 31,2011 2010

US$'000 US$'000

Goodwill, beginning balance 84,286 84,286

Less accumulated impairment losses (8,547) (8,547)

Goodwill, ending balance 75,739 75,739

Goodwill represents the excess of the cost of acquisition over the Company‟s interest in the fair value of the assets and liabilities of the acquired subsidiaries. The Company and its subsidiaries test goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. For impairment testing purposes, goodwill amounting to US$ 72,354 thousand and US$ 11,932 thousand has been allocated to Chembulk Tankers LLC and Goldbridge Shipping Corporation, respectively, the cash generating units determined by the Company that is expected to benefit from the business combination. The recoverable amounts of the cash-generating units are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rate, growth rates and expected changes to selling prices and direct costs during the year. Management estimates the discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the cash-generating unit. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market. The Company and its subsidiaries prepare cash flow forecasts derived from the most recent financial budgets approved by management. The rate used to discount the forecast cash flows from the cash generating units is the average borrowing rate at the end of the reporting period as adjusted to estimate the rate that the market would expect from the investment. This rate does not exceed the average long-term growth rate for the relevant markets.


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7. INVESTMENTS IN ASSOCIATES


2011 2010

US$'000 US$'000

Cost 91,037 91,037

Less:

Share of post-acquisition loss (3,761) (8,451)

Return of capital (8,400) (8,400)

Sale of investment (32,453) (32,453)

Reclassified as available-for-sale (33,778) (33,778)

Total 12,645 7,955

In April 2010, the long-term receivables amounting to US$ 2,323 thousand were paid by Teekay BLT Corporation.

Details of the associates are as follows:

Name of Place of Place of

Associate Incorporation Operation Nature of Business


2011 2010

% %

PT Berlian Limatama Indonesia Indonesia Cargo shipping services 50 50

Teekay BLT Corporation Marshall Islands Indonesia Cargo shipping services 30 30

Thai Petra Transport Co. Ltd. Thailand Thailand Port services (agency) 30 30

Briliant Hero Industrial Hongkong Hongkong Investment holding 22.69 22.69

Limited

Jiangsu Xinrong Shipyard China China Ship repair, conversion

Company Limited and steel structure - -



In 2009, Asean Maritime Corporation acquired 45% ownership in Brilliant Hero Industrial Limited, an investment holding company, and an effective ownership of 21.80% in Jiangsu Xinrong Shipyard Company Limited, engaged in ship repair, conversion and steel structure, through the acquisition of 100% ownership in Nevaeh Limited, an investment holding company, at an acquisition cost of USD 66,231 thousand. On November 1, 2010, Asean Maritime Corporation sold 49% of its ownership in Nevaeh Limited to Mitsui & Co. Ltd., a third party, for US$ 32,957 thousand, wherein the US$ 32,886 thousand was paid in cash and the remaining amount of US$ 71 thousand will be payable on the Redemption Date of Brilliant Hero 3% Preference Shares. The Company and its subsidiaries have retained the 11.12% interest as an available-for-sale investment whose fair value at the date of disposal was US$ 34,302 thousand.

8. TRADE ACCOUNTS RECEIVABLE


2011 2010

US$'000 US$'000

Related parties 3 236

Third parties 153,790 159,930

Total 153,793 160,166


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The table below shows the aging of past due but unimpaired trade receivables:


2011 2010

US$'000 US$'000

1 - 60 days 47,368 42,692

60 - 120 days 23,339 26,185

120 - 180 days 14,332 16,015

More than 180 days 33,560 44,865

Total 118,599 129,757

The Company and subsidiaries do not hold any collateral over these balances. Based on a review of the status of the individual receivable accounts at the end of the year, the Company‟s management determined that there has not been a significant change in the credit quality and that all trade accounts receivable are collectible. Accordingly, no allowance for doubtful accounts was provided.

9. INVESTMENTS Short-term investments Short-term investments consist of funds under investment management and investments in mutual funds, and are carried at fair value as follows:


US$'000 US$'000

Held-for-trading 501 483 Available-for-sale 89,329 79,481

Total 89,830 79,964

The Company‟s subsidiary entered into an Investment Service Agreement with UBS AG in 2011, Danatama Capital Management Limited in 2010 and Investment Management Contract Service Agreement with P.T. Danatama Makmur to manage funds which will be invested, in among others, government bonds corporate bonds, certificate of deposit and money market instruments.

Long-term Investment Available-for-sale The long-term investment represents 11.12% ownership interest in Jiangsu Xinrong Shipyard Company Limited, carried of US$ 34,302 thousand.


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10. CASH


2011 2010

US$'000 US$'000

Cash on hand 1,875 1,059

Cash in banks and time deposits 106,178 83,225

Total 108,053 84,284

Interest rates per annum on time deposits

U.S. Dollar 0.15% 0.15%

Rupiah 5.75% - 6.16% 6.00% - 6.60%

Singapore Dollar 0.7% 0.7%

11. SHARE CAPITAL

The Company has authorized capital stock of 14,676,480,000 ordinary shares with par value of Rp 62.50 per share. Movements in share capital are as follows:


2011 2010

US$'000 US$'000

Balance at beginning of the year 109,575 70,936

Issuance of shares through rights issue - 38,639

Balance at end of the year 109,575 109,575

Details of the Company‟s number of shares outstanding (in full amounts) are as follows:


2011 2010

Balance at beginning of the year 11,138,480,470 5,569,240,235

Issuance of new shares through rights issue - 5,569,240,235

Balance at end of the year 11,138,480,470 11,138,480,470

At the Extraordinary General Meeting of Stockholders as stated in notarial deed no. 26 dated July 29, 2010 of Dr. A Partomuan Pohan, SH., LL.M, notary in Jakarta, the stockholders approved the issuance of new shares through a Rights Issue with Pre-emptive Rights. The Company issued 5,569,240,235 common shares at an exercise price of Rp 220 per share.


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12. ADDITIONAL PAID-IN CAPITAL

This account represents additional paid-in capital in connection with the following:

US$'000

Balance of additional paid-in capital as of January 1, 2010 115,001

Issuance of shares through rights issue 94,002

Balance of additional paid-in capital as of June 30, 2011 and

December 31, 2010 209,003

13. TREASURY STOCKS At the Extraordinary General Meeting of Stockholders in May 2006, the stockholders approved to repurchase a maximum of 10% of the issued and paid-up shares, at a purchase price of Rp 2,750 per share. The details of treasury stocks are as follows:

Percentage

Number to issued

of shares shares Cost

% US$'000

Treasury stocks 412,351,000 3.57 86,628

June 30, 2011 and December 31, 2010

14. REVALUATION RESERVE


2011 2010

US$'000 US$'000

Balance at beginning of year 300,731 235,671

Revaluation during the period 21,419 87,098

Transfer to retained earnings (19,918) (22,038)

Balance at end of year 302,232 300,731

The revaluation reserve arises on the revaluation of vessels. Where revalued vessels are sold, the portion of the revaluation reserve that relates to that vessel, and is effectively realized, is transferred directly to retained earnings.


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15. LONG-TERM LOANS FROM FINANCIAL INSTITUTIONS


US$'000 US$'000

At amortized cost:

DnB NOR Bank, ASA, Singapore / BNP Paribas /

ING Bank N.V. / NIBC Bank Ltd./ Nordea Bank

Finland PLC / Standard Chartered Bank / Skandinaviska

Enskilda Banken AB (publ) 637,336 -

Bank Mandiri, Jakarta 34,572 38,597

Bank Syariah Mandiri / Bank Pembangunan Daerah Jawa Timur /

Bank Muamalat Indonesia/ Bank Jabar Banten Syariah 32,929 35,924

Bank Negara Indonesia 29,585 31,837

Deutsche Investitions und Entwicklungsgesselschaft MBH 29,386 29,354

Mitsubishi UFJ Lease & Finance Co. Ltd. 27,742 29,175

Indonesia Eximbank 26,777 29,783

Bank UOB Indonesia 19,309 21,087

Bank Syariah Mandiri / Bank Syariah BRI / Bank Muamalat

Indonesia / BPD Jatim Divisi Usaha Syariah 16,412 16,840

Bank Mega 12,182 13,174

Bank Central Asia 8,206 10,194

ING Bank N.V., Singapore 5,374 9,911

Dialease Maritime S.A., Japan 4,501 5,141

DnB NOR Bank, ASA, Singapore / Fortis Bank S.A./N.V.

ING Bank N.V. / NIBC Bank Ltd. - 494,386

DVB Group Merchant Bank (Asia) Ltd. / Nordea Bank

Finland Plc, Singapore - 71,481

DVB Group Merchant Bank (Asia) Ltd., Singapore - 25,344

DnB NOR Bank, ASA, Singapore - 11,787

Mount Gede LLC - 7,281

DnB NOR Bank, ASA, Singapore / NIBC Bank Ltd. - 5,870

Total 884,311 887,166 Current maturities 138,826 178,661 Long-term portion - Net 745,485 708,505

The ranges of average interest rates per annum are as follows:


U.S. DollarFixed - 7.50% - 17.00%Variable 1.45% - 4.75% 0.7% - 4.75%

above LIBOR/ above LIBOR/SIBOR SIBOR

RupiahFixed 10.5% - 13.50% 12.5% - 17%

Japanese YenVariable 2% - 4% above 1.5% - 2% above

JPY LIBOR JPY LIBOR


- 34 -

The details of the loans are as follows:

A. In February 2011, a subsidiary obtained loan from DnB NOR Bank ASA (as Agent and Security Trustee), BNP Paribas, ING Bank N.V., NIBC Bank Ltd., Nordea Bank Finland Plc, and Standard Chartered Bank through Senior Secured Credit Facilities with maximum credit of USD 685 million, which consist of:

Facility A amounting to USD 615 million to refinance the Company and its subsidiaries loan from Mount Gede LLC, DVB Group Merchant Bank (Asia) Ltd., ING Bank N.V., Fortis Bank S.A./N.V., NIBC Bank Ltd., DVB Group Merchant Bank (Asia) Ltd., Nordea Bank Finland Plc., and DnB NOR Bank ASA. This loan is payable in 18 quarterly installments of USD 15,400 thousand and a final installment payment of USD 337,800 thousand upon maturity on February 2016. Such facility is secured by a registered mortgage on subsidiaries vessels.

Facility B amounting to USD 70 million to finance construction of new vessels. The tenor of each of the Facility B loans shall be less than 5 years.

In May 2011, Skandinaviska Esdkilda Banken AB (publ) has joined as one of the lenders. Interest rate is at LIBOR plus certain percentage.

B. In May 2009, the Company obtained a financing facility from Bank Mandiri with a maximum credit amount of Rp 500 billion payable in 18 quarterly installments until 2013. This loan is collateralized by the Company and certain subsidiaries‟ vessels. Interest rate is at certain percentage, which is paid monthly.

C. In November 2010, the Company obtained a loan from Bank Syariah Mandiri (as Facility and Security Agent), Bank Pembangunan Daerah Jawa Timur, Bank Muamalat Indonesia, and Bank Jabar Banten Syariah through a long-term investment loan facility under Syariah scheme with a total maximum credit of Rp 344,785 million. These loan facilities are payable quarterly. Such loans are collateralized by a subsidiary‟s vessel. The subsidiary‟s receivable amounting to USD 72.5 million was used as fiduciary collateral. Indicative return is at certain percentage, which is payable quarterly.

D. In March 2010, the loan from Bank Negara Indonesia, Jakarta was obtained through an Investment Refinancing Credit Loan amounting to Rp 337 billion. This loan is payable in 60 monthly installments until March 2015 and secured by two subsidiary‟s vessels. Interest rate is at certain percentage which is paid monthly.

E. In April 2010, a subsidiary obtained a loan from Deutsche Investitions-und Entwicklungsgesellschaft mbH through a long-term investment facility amounting to USD 29.75 million. This loan is payable in 13 semi-annual installments with balloon payment of USD 8,925 thousand on the last repayment date and due on March 15, 2018. The loan is secured by a subsidiary‟s vessel. Interest is at LIBOR plus certain percentage, which is paid semi-annually.

F. The loan from Mitsubishi UFJ Lease & Finance Co. Ltd. is obtained through a JPY 2,537

million (equivalent to USD 28,431 thousand) mortgage facility. This loan is payable in 84 monthly installments with a balloon payment of JPY 1,551 million on the last repayment date. Such loan is secured by the subsidiary‟s vessel. Interest rate is at Yen LIBOR plus a certain percentage.

G. The loan from Indonesia Eximbank was obtained through a Rp 400 billion export facility loan with a maturity date of March 2014. This loan is payable in 20 quarterly installments and secured by the subsidiaries‟ vessels. Interest rate is at certain percentage, which is paid monthly.


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H. The loan from Bank UOB Indonesia is obtained through a Term Loan Facility amounting to USD 8,760 thousand, payable in 10 quarterly installments of USD 360 thousand each and a final installment payment of USD 5,160 thousand upon maturity in October 2011. Such facility is secured by a registered mortgage on a subsidiary's vessel and the assignment of accounts receivable in respect of the vessel used as collateral. Interest is at SIBOR plus certain percentage. Also, in May 2010, the Company and Bank UOB agreed to extend the maturity date of its short-term bank loans from 2010 to 2013. As of the date of the amendment, this loan has an outstanding balance of Rp 150 billion. This loan is payable in 11 quarterly installments of Rp 7,500 million each and a ballon payment of Rp 67,500 million on the last payment date. Interest rate is at certain percentage.

I. The loan from Bank Syariah Mandiri (as Facility and Security Agent), Bank Syariah BRI, Bank

Muamalat Indonesia, and BPD Jatim Divisi Usaha Syariah with a total maximum credit of Rp 180 billion is a long-term investment loan facilities under Syariah scheme. These loan facilities are payable in 20 quarterly installments with balloon payments in the total amount of Rp 20 billion on the last repayment date. Such loans are collateralized by the subsidiaries‟ vessels. Indicative return is at certain percentage, which is payable quarterly.

J. In August 2010, the Company obtained a loan from Bank Mega with a maximum credit of USD 15 million or 60% value of a subsidiary‟s vessel. This loan is payable in 84 monthly installments until August 2017 and secured by a subsidiary‟s vessel. Interest is at certain percentage which is paid monthly.

K. The loan from Bank Central Asia was obtained through an installment loan facility with a total maximum credit of Rp 170 billion. This loan is payable in monthly installments until 2012 and bears interest at a certain percentage, which is payable monthly. In November 2006, the Company obtained an investment credit facility with a maximum credit of USD 34 million from Bank Central Asia. This loan is payable in 84 monthly installments until 2013 and collateralized by a subsidiary‟s vessel. Interest rate is at SIBOR plus certain percentage, which is paid monthly. This loan was prepaid in December 2010. In January 2005, the Company obtained an investment credit facility with maximum credit of Rp 125 billion, due in 5 years and bears floating interest rate which is paid monthly. The loans are collateralized by certain Company‟s vessels. This loan was fully repaid in January 2010.

L. In November 2005, subsidiaries obtained loan facilities from ING Bank N.V., Singapore with a maximum credit of USD 19,900 thousand. These loan facilities are payable in semi-annual installments until November 2015 and collateralized by the subsidiaries‟ vessels. Interest rate is at LIBOR plus certain percentage, which is paid monthly.

M. In December 2004, a subsidiary obtained loan from Dialease Maritime S.A., Japan with maximum credit of JPY 1,347,250 thousand (equivalent to USD 12,859 thousand). This loan is payable in 28 quarterly installments until 2011 and collateralized by the subsidiary‟s vessel. Interest rate is at LIBOR plus certain percentage, which is paid quarterly.

N. The loans from DnB NOR Bank ASA, Singapore, Fortis Bank S.A/N.V., ING Bank N.V., and NIBC Bank Ltd., consist of the following credit facilities:

USD 165 million secured term loan facility which is payable in 20 quarterly installments until 2013 and bears interest at LIBOR plus certain percentage, which is paid between 1-6 months. This facility is secured by vessels.

USD 400 million term loan facility which is repayable in 40 consecutive quarterly installments of USD 8 million for the 1st to 39th installments, and USD 88 million for the 40th installments and bears interest at LIBOR plus certain percentage


- 36 -

depending on the value maintenance ratio of the vessels used as collaterals, which is paid between 1 - 3 months. This facility is also secured by the subsidiary‟s vessels.

USD 100 million reducing revolving loan facility which is payable in 20 quarterly installments of USD 5 million until 2012, and bears interest at LIBOR plus certain percentage depending on the value maintenance ratio of the vessels used as collateral, which is paid between 1 - 3 months. This facility is also secured by the subsidiary‟s vessels.

USD 65 million credit Facility which is payable in 32 quarterly installments until 2015. Interest rate is at LIBOR plus certain percentage which is paid between 1 - 3 months. This loan is collateralized by the subsidiaries‟ vessel.

All of these loans were prepaid in March 2011.

O. The loans from DVB Group Merchant Bank (Asia) Ltd. and Nordea Bank Finland Plc, Singapore Branch were obtained through a USD 114 million senior secured revolving credit facility. The credit facility shall be reduced quarterly by one-fortieth (1/40

th) of such amount.

The balance of all outstanding drawings is due to be paid in 2015. Interest rate is at LIBOR plus certain percentage, which is paid between 1 – 6 months. This loan is secured by the subsidiaries‟ vessels and assignment of insurances and earnings of the subsidiaries‟ vessels. This loan was prepaid in March 2011.

P. The loan from DVB Group Merchant Bank (Asia) Ltd. is obtained through a USD 27 million credit facility. This loan is payable in 20 quarterly installments until 2014 and collateralized by a corporate guarantee from the Company and a subsidiary‟s vessel. Interest rate is at LIBOR plus certain percentage, which is paid quarterly. This loan was prepaid in June 2010. In September 2005, subsidiaries obtained a loan from DVB Group Merchant Bank (Asia) Ltd., Singapore with maximum credit of USD 43 million. This loan is payable in 32 quarterly installments until 2013 and collateralized by the subsidiaries‟ vessels. Interest rate is at LIBOR plus certain percentage depending on the loan to value percentage, which is paid between 1 - 3 months. In January 2010, a subsdiary and DVB Group Merchant Bank (Asia) Ltd agreed to extend the maturity date of its short-term bank loans from 2010 to 2012. As of the date of the amendment, this loan has an outstanding balance of USD 18,437 thousand. This loan is payable in 7 quarterly installments of USD 972 thousand each and a ballon payment of USD 11,634 thousand. Interest rate is at certain percentage. The above loans were prepaid in March 2011.

Q. In May 2010, a subsidiary obtained a loan from DnB NOR Bank ASA, Singapore with maximum credit of USD 12.5 million. This loan is payable in 20 quarterly installments until 2015 and secured by a subsidiary‟s vessel. Interest rate is at LIBOR plus certain percentage which is paid quarterly. This loan was prepaid in March 2011.

R. Loan obtained from Mount Gede LLC is a Secured Junior Term Loan Facility with maximum credit of USD 7,800 thousand. The loan is secured by a registered mortgage over the subsidiaries‟ vessels and a guarantee by the Company. Such loan shall be repaid in full on December 31, 2011. Interest rate is at certain percentage.


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This loan was prepaid in March 2011.

S. In April 2009, certain subsidiaries obtained a loan from Dnb NOR Bank ASA, Singapore and NIBC Bank Ltd. with a maximum credit of USD 31.5 million. The loan is payable in 16 quarterly installments until 2013 and secured by the subsidiaries‟ vessels. Interest rate is at LIBOR plus certain percentage, which is paid quarterly. This loan was prepaid in March 2011.

In relation to the above loan facilities, the Company and its subsidiaries are required to fulfill certain covenants, including among others the maintenance of certain financial ratios.

16. BONDS PAYABLE


2011 2010

US$'000 US$'000

At amortized costs:

Berlian Laju Tanker III Bond 81,103 77,556

Berlian Laju Tanker IV Bond 39,393 37,512

Sukuk Ijarah I 23,173 22,159

Sukuk Ijarah II 11,586 11,034

Total 155,255 148,261

Current maturities 22,682 -

Bonds payable - net 132,573 148,261

Berlian Laju Tanker III Bond On July 5, 2007, the Company issued Rupiah Bonds amounting to Rp 700 billion with fixed interest rate at 10.35% per annum, payable every three months. The bonds are unsecured and have a term of 5 years, due on July 5, 2012. The bondholders‟ right is pari-passu without preferential rights with other creditors of the Company. All the bonds were sold at nominal value and are listed on the Indonesia Stock Exchange (formerly Surabaya Stock Exchange) with PT Bank Mandiri (Persero) Tbk as Trustee. On December 18, 2007, the Bondholders approved the replacement of PT Bank Mandiri (Persero) Tbk as Trustee and the appointment of PT CIMB Niaga Tbk as the new Trustee. On March 17, 2008, PT CIMB Niaga Tbk as the Trustee issued a notice for the Company‟s failure to comply with one of the covenants under the Trustee Agreement, which is to maintain a ratio of Net Debt to Equity of not more than 2.5:1. On June 16, 2008, the Bondholders approved to amend the debt covenant on the Net Debt to Equity Ratio on the Trustee Agreement from 2.5:1 to 4.5:1 for the year ending December 31, 2008 and 3.5:1 after December 31, 2008 based on the Company‟s statutory accounts prepared under generally accepted accounting principles in Indonesia.


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Berlian Laju Tanker IV Bond On May 29, 2009, the Company issued Rupiah Bonds amounting to Rp 400 billion, consisting of three series of bonds: (i) the Series A Bonds with a nominal value of Rp 60 billion bearing fixed interest rate of 14.25% per annum and are due on May 28, 2010, (ii) the Series B Bonds with a nominal value of Rp 150 billion, bearing interest rate of 15.50% per annum and are due on May 28, 2012, and (iii) the Series C Bonds with a nominal value of Rp 190 billion, bearing fixed interest rate of 16.25% per annum and are due on May 28, 2014. Interest is paid every three months. On May 28, 2010, the Company redeemed and retired the Series A Bonds at principal amount of Rp 60 billion. These bonds are unsecured and the bondholders' right is pari-passu without preferential rights with other creditors of the Company. At any time after the first anniversary of the Bonds, the Company may redeem the Bonds at prevailing market price. The Company is also required to comply with several covenants, which include among others, a Net Debt to Equity ratio of 3.5:1. All of the bonds were sold at nominal value and are listed on the Indonesia Stock Exchange with PT Bank CIMB Niaga Tbk as trustee.

Sukuk Ijarah I

On July 5, 2007, the Company issued Sukuk Ijarah amounting to Rp 200 billion. The Sukuk Ijarah are unsecured and have a term of 5 years, due on July 5, 2012. The Sukuk Ijarah were offered under the condition that the Company shall pay to Sukuk Ijarah holders a sum of Ijarah Benefit Installment amounting to Rp 20,600 million per annum. The Sukuk Ijarah holders‟ right is pari-passu without preferential rights with other creditors of the Company. At anytime after the first anniversary of the Sukuk Ijarah, the Company may redeem the Sukuk Ijarah at prevailing market price. All of the Sukuk Ijarah were sold at nominal value and are listed on the Indonesia Stock Exchange (formerly Surabaya Stock Exchange) with PT Bank Mandiri (Persero) Tbk as trustee. On December 18, 2007, the Bondholders approved the replacement of PT Bank Mandiri (Persero) Tbk Trustee and the appointment of PT Bank CIMB Niaga Tbk as the new Trustee. On March 17, 2008, PT Bank CIMB Niaga Tbk as the Trustee issued a notice for the Company‟s failure to comply with one of the covenants under the Trustee Agreement, which is to maintain a ratio between Net Debt to Equity of not more than 2.5:1. On July 4, 2008, the Holders approved to amend the debt covenant on the Net Debt to Equity Ratio on the Trustee Agreement from 2.5:1 to 4.5:1 for the year ending December 31, 2008 and 3.5:1 after December 31, 2008 based on the Company‟s statutory financial statements prepared under generally accepted accounting principles in Indonesia. Sukuk Ijarah II On May 29, 2009, the Company issued Sukuk Ijarah II amounting to Rp 100 billion, consisting of two series of bonds: (i) the Series A which has a total nominal value of Rp 45 billion, due on May 28, 2012 and entitle the holders a sum of Ijarah Benefit Installment of Rp 155,000 thousand per annum for every Rp 1 billion nominal amount, and (ii) the Series B which has a total nominal value of Rp 55 billion, due on May 28, 2014, and entitle the holders a sum of Ijarah Benefit Installment of Rp 162,500 thousand per annum for every Rp 1 billion nominal amount.


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These Sukuk Ijarah are unsecured and the holders' right is pari-passu with other creditors of the Company. At any time after the first anniversary of the Sukuk Ijarah II, the Company may redeem the Sukuk Ijarah at prevailing market price. The Company is also required to comply with several covenants, which include among others, a Net Debt to Equity ratio of 3.5:1 based on the Company‟s statutory financial statements prepared under generally accepted accounting principles in Indonesia. All of the Sukuk Ijarah were sold at nominal value and are listed on the Indonesia Stock Exchange with PT Bank CIMB Niaga Tbk as trustee.

17. NOTES PAYABLE

On May 4, 2007, BLT Finance B.V. (BLTF BV), a subsidiary, issued Guaranteed Senior Notes (the Notes) amounting to US$ 400 million with fixed interest of 7.5% per annum payable every six months in arrears commencing November 15, 2007. The Notes have a term of seven years and mature on May 15, 2014. The Notes were offered at 100% of the nominal value and are listed on the Singapore Stock Exchange Securities Trading Limited. The Notes are unconditionally and irrevocably guaranteed on a senior basis by the Company and certain subsidiaries.

The Notes may be redeemed at the option of BLTF BV as follows:

At anytime prior to May 15, 2011 up to 35% of the Notes with the net proceeds of one or more

public equity offerings at a redemption price of 107.5% of their principal amount plus accrued and unpaid interest provided certain conditions are met;

On or after May 15, 2012, all or any portion of the Notes at a redemption price equal to 100% of the principal amount plus the Applicable Premium (as defined in the Terms and Conditions of the Notes) as of, and accrued and unpaid interest if any, to the date of redemption;

On May 15, 2012 until May 14, 2013 all or part of the Notes at a redemption price equal to 103.75% of the principal amount plus the accrued and unpaid interest if any, to the date of redemption;

On May 15, 2013 until May 14, 2014 all or part of the Notes at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest if any, to the date of redemption, or

At anytime in the event of certain changes affecting taxation in Indonesia or Netherlands, in whole at their principal amount plus all additional amounts due as of, and accrued and unpaid interest if any, to the date of redemption.

In the occurrence of change in control, the holders of the Notes have the right to require BLTF BV to redeem all or some of the Notes at 101% of the principal amount plus the accrued and unpaid interest if any, to the date of redemption. The Notes are designated as fair value through profit or loss on initial recognition because of the embedded call and put options. The fair value as of the reporting date is determined based on quoted market price and may not be reflective of the repurchase price that BLTF BV will have to pay on maturity or early redemption.

The changes in carrying amount of the Notes are as follows:


US$'000 US$'000

Fair value at beginning of the year 316,000 249,809 Changes in fair values (34,600) 62,000

281,400 311,809 Reissue (repurchase) of Notes - 4,191

Fair value at end of year 281,400 316,000


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18. OBLIGATIONS UNDER FINANCE LEASE

Present value Present valueMinimum lease of minimum Minimum lease of minimum

payments lease payments payments lease payments

US$'000 US$'000 US$'000 US$'000

Less than 1 year 62,288 53,454 51,932 49,383

1 - 2 years 294,115 269,229 220,110 204,089

More than 2 years 234,352 153,118 208,155 138,680

Total 590,755 475,801 480,197 392,152Less future finance charges 114,954 - 88,045 -

Present value of minimum

lease payments 475,801 475,801 392,152 392,152

December 31, 2010June 30, 2011

In 2011 and 2010, additional sale and leaseback transactions were carried out by the Company‟s subsidiaries vessels which were classified as finance lease.

19. OTHER LOANS FROM NON-FINANCIAL INSTITUTIONS


2011 2010

US$'000 US$'000

Long-term

Teekay Corporation 10,636 11,227

PRC Limited 12,424 9,410

Total 23,060 20,637

Current maturities (1,181) (3,003)

Long-term portion - net 21,879 17,634

Short-term

Teekay BLT Corporation 10,200 10,200

The Company‟s loan from Teekay Corporation is payable in 22 semi-annual installments, unsecured, and bears annual interest of 8% which is payable on a quarterly basis. The subsidiary‟s loan from PRC Limited bears floating interest rate based on People‟s Bank of China‟s interest rate over 5 years‟ loan. The subsidiary‟s short-term loan from Teekay BLT Corporation is non-interest bearing, unsecured and have no fixed repayment terms.

20. DEFERRED INCOME In 2008, the Company and its subsidiaries entered into sale and leaseback of vessels to third parties where the selling price is higher by US$ 2,500 thousand than the fair values of the vessels, and the excess was accounted for as deferred income and amortized over the lease term. Amortization of deferred income 2011 and 2010, are accounted for as reduction of charter expenses.


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21. POST-EMPLOYMENT BENEFITS The Company and its subsidiaries provide post-employment benefits to its qualifying employees in accordance with Indonesian Labor Law No. 13/2003. Amounts recognized in profit or loss in respect of these post-employment benefits are as follows:

2011 2010

US$'000 US$'000

Current service cost 251 172

Interest costs 225 221

Net actuarial losses 35 45

Total 511 438

The amounts included in the statements of financial position arising from the Company‟s obligation in respect of these post-employment benefits are as follows:


2011 2010

US$'000 US$'000

Present value of unfunded obligations 6,530 5,657

Unrecognized actuarial losses (602) (477)

Net liability 5,928 5,180

< Movements in the net liability recognized in the consolidated statements of financial position are as follows:


2011 2010

US$'000 US$'000

Beginning of the year 5,180 4,126

Employee benefits cost for the year 511 942

Payments during the year - (83)

Translation adjustment 237 195

End of the year 5,928 5,180

The cost of providing post-employment benefits is computed using the following key assumptions:

Discount rate : 8% per annum Salary increment rate : 12% per annum Mortality rate : Mortality Table 2 of Indonesia Resignation rate : 10% per annum until age 36 then decreasing linearly to 0% until

age 55


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22. CONVERTIBLE BONDS


US$'000 US$'000

At fair value through profit or loss US$ 125 million Zero Coupon Guaranteed

Convertible Bonds due 2012 - - At amortized cost:US$ 125 million 12% Guaranteed Convertible Bonds

due 2015 (As amended in 2010) 47,553 46,607 US$ 125 million 12% Guaranteed Convertible Bonds due 2015 119,831 118,450

Total 167,384 165,057

US$ 125 million Zero Coupon Guaranteed Convertible Bonds due 2012 (Amended in 2010 to become US$ 125 million 12% Guaranteed Convertible Bonds due 2015). At the time of issue, the U$125 million Zero Coupon Guaranteed Convertible Bonds due 2012 were designated as fair value through profit or loss with any resultant gain or loss recognized in profit or loss. The fair value at the end of the reporting period is determined based on quoted market price and may not be reflective of the amount that BLTF BV will have to pay to the bondholders to satisfy their conversion rights or upon redemption of the Bonds. On May 17, 2010, BLTF BV redeemed and retired US$ 76,100,0000 of the Zero Coupon Guaranteed Convertible Bonds due 2012 at 116.82%. In December 2010, the bonds held by certain subsidiaries amounting to US$ 48,900,000 were redeemed by BLTF BV and subsequently reissued to investors on December 1, 2010 at 96%.

On December 14, 2010, the terms and conditions of the US$ 125 million Zero Coupon Guaranteed Convertible Bonds due 2012 were amended as described below. The Maturity Date is changed to February 10, 2015 and bears interest rate of 12%. The Conversion Price is Rp 409 per share with conversion period from June 27, 2007 to January 31, 2015. The number of shares to be delivered upon conversion will be determined by dividing the principal amount of the Bond to be converted (translated into Rupiah at the fixed rate of Rp. 9,362.00 = US$1.00 (the “Fixed Exchange Rate”) by the Conversion Price in effect at the Conversion Date. Notwithstanding the Conversion Right of the bondholders, BLT and/or any of BLT‟s subsidiaries have the option to pay to the relevant bondholders an amount of cash in US Dollar equivalent to the weighted average market price of the shares converted, to satisfy the conversion right. In addition, at the option of the BLTF BV on or at any time after February 10, 2013 but not less than 20 days prior to the Maturity Date, redeem the Bonds in whole but not in part at their principal amount, plus accrued interest as at the date of redemption, provided that no such redemption may be made unless the closing price of the Shares on the Indonesian Stock Exchange for each of 20 consecutive Trading Days in any 30 consecutive Trading Day period immediately prior to the date upon which notice of such redemption is published is at least 130 per cent of the Conversion Price then in effect. BLTF BV will, at the option of the holder, redeem all or some of that holder‟s Bonds on February 10, 2012, at principal amount plus any accrued interest as at the date of redemption. Unless previously redeemed, converted or purchased, BLTF BV will redeem the bonds at its principal amount plus accrued interest on February 10, 2015.


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The Company‟s management believes that, for accounting purposes, there was a substantial modification on the terms of the convertible bonds that led to the extinguishment of the US$ 125 million Zero Coupon Guaranteed Convertible Bonds due 2012. The convertible bonds above were considered a hybrid instrument containing a debt host contract and embedded derivatives. The Company‟s management also made an assessment of the embedded derivatives and decided to bifurcate the embedded derivatives which are not closely related to the host contract. The embedded derivatives are measured at fair value with changes in fair value recognized in profit and loss while the debt host contract was initially recognized at fair value and subsequently measured at amortized cost. US$ 125 Million 12% Guaranteed Convertible Bonds Due 2015 On February 10, 2010 and March 29, 2010, BLT International Corporation (BLT IC), a subsidiary, issued 12% Guaranteed Convertible Bonds amounting to US$ 100,000,000 and US$ 25,000,000, respectively. The bonds were issued at 100% of the face value and were unconditionally and irrevocably guaranteed by the Company. The bondholders have the right to convert the bonds into ordinary shares of the Company, with par value of Rp 62.50 each, at any time on or after March 23, 2010 up to January 15, 2015. The number of shares to be delivered upon conversion will be determined by dividing the principal amount of the bonds to be converted, translated into Rupiah at a fixed rate of Rp 9,362 to US$ 1, by the conversion price in effect at the time of the conversion date. The initial conversion price is Rp 737 per share, which is subject to adjustments. In August 2010, BLT IC had adjusted the conversion price to Rp 409 per share. Notwithstanding the Conversion Right of the bondholders, BLT IC has the option to pay the relevant bondholders an amount of cash equivalent to the Cash Settlement Amount of the shares converted, at any time to satisfy the Conversion Right. To the extent that the Company does not hold sufficient treasury shares or is unable to issue shares, the BLT IC shall pay an amount of cash to the bondholders equivalent to the Mandatory Cash Settlement Amount, to satisfy the Conversion Rights. BLT IC will, at the option of the bondholders, redeem the bonds on February 10, 2013 at principal amount plus accrued interest. The bond may also be redeemed at the option of BLT IC on or after February 10, 2013 at 100% of principal amount plus accrued interest.

The convertible bonds above were also considered a hybrid instrument containing a debt host contract and embedded derivatives. The Company‟s management also made an assessment of the embedded derivatives and decided to bifurcate the embedded derivatives which are not closely related to the host contract. The embedded derivatives are measured at fair value with changes in fair value recognized in profit and loss while the debt host contract was initially recognized at fair value and subsequently measured at amortized cost.


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23. DERIVATIVE FINANCIAL INSTRUMENTS The Company utilizes cross currency and interest rate swap contracts to manage exposure to foreign currency and interest rate movement to manage exposures in crude oil price volatility. Details of the derivative contracts are shown below:

Notional amounts Notional amounts

as at June 30, as at December 31,

2011 2010

'000 '000 Asset Liability Asset Liability

US$'000 US$'000 US$'000 US$'000

Cross currency swaps US$ 102,273 US$ 102,273 - 274 - 6,688

Interest rate swaps US$ 800,000 US$ 800,000 - 67,140 - 59,234

Embedded options US$ 173,900 US$ 173,900 - 11,975 - 9,853

Total - 79,389 - 75,775

Fair value as at

June 30,

2011 2010

December 31,

Fair value as at

Cross currency swaps The cross currency swaps require periodic exchange of payments based on the Rupiah and US Dollar notional amounts and final exchange or net settlement of the notional (principal) amounts on the maturity of the contracts. The cross currency swaps outstanding will mature on July 2012.

Interest rate swaps The interest rate swaps require periodic exchange of floating and fixed interest payments on the US Dollar notional amounts and mature on January 2015. Embedded options The embedded options represent the fair value of the conversion option and cash settlement option in the US$ 125 million 12% Guaranteed Convertible Bonds due 2015 (as amended in 2010) and the US$ 125 million 12% Guaranteed Convertible Bonds due 2015. The above derivatives are measured at the present value of future cash flows estimated and discounted based on applicable yield curves for the duration of the instruments. For accounting purposes, these contracts are not designated and documented as hedging instruments, and therefore hedge accounting is not applied. Gains and losses on these contracts recognized in earnings consist of the changes in fair value of the contract and the periodic net settlements of the related interest on the notional amount, details of which are as follows:

2011 2010

US$'000 US$'000

Net change in fair value (3,614) (7,394)

Net settlements (3,152) 7,628

Net gain (loss) (6,766) 234


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24. SHORT-TERM BANK LOANS

Loan obtained from Bank Mizuho Indonesia is a time revolving loan with a total combined maximum credit of Rp 130 billion or its US Dollar equivalent, due on October 18, 2011 and secured by subsidiary vessel. Interest rate per annum is at the bank‟s cost of funds or SIBOR plus certain percentage, which is paid between 7 - 30 days.

25. TRADE ACCOUNTS PAYABLE


2011 2010

US$'000 US$'000

Related parties 2,050 3,173

Third parties 23,359 60,770

Total 25,409 63,943

The accounts payable to third parties represent liabilities to other shipping companies as agents, sub-agents and to suppliers for purchases of oil, fuel and spare parts, vessel equipment, and other disbursements.

26. TAXATION

a. Details of taxes payable included in the consolidated statements of financial position are as follows:


US$'000 US$'000

Corporate income tax of the Company and its subsidiaries 31 38 Income taxes

Article 21 176 974 Article 23 75 23 Article 25 1 4 Article 26 20 11

Value added tax 680 568 Final tax payable 67 47

Total 1,050 1,665

b. Details of tax expense included in the consolidated statements of comprehensive income are as follows:

2011 2010

US$'000 US$'000

Income tax of foreign and local subsidiaries 768 539 Income tax on agency operations - Company 23 25 Final tax on storage revenue and agency 13 180

Total 804 744


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27. ACCRUED EXPENSES June 30, December 31,

2011 2010

US$'000 US$'000

Interest 20,269 17,006

Vessel operating and docking 8,181 25,238

Others 1,860 2,208

Total 30,310 44,452

28. OPERATING REVENUES

2011 2010

US$'000 US$'000Vessels revenues

Chemical 248,789 249,774

Oil 32,343 51,691

Gas 24,003 23,304

FPSO 17,376 3,823

Others 600 1,069

Total 323,111 329,661

There were no operating revenues made with related parties in 2011 and 2010.

29. VOYAGE EXPENSES

2011 2010

US$'000 US$'000

Fuel 90,684 64,478

Port charges 30,138 28,638

Total 120,822 93,116

30. SHIP OPERATING EXPENSES

2011 2010

US$'000 US$'000

Salaries 30,026 26,484

Insurance 4,757 4,358

Repairs and maintenance 4,434 6,233

Spare parts 4,175 4,718

Lubricants 3,831 3,607

Transportation 1,737 2,766

Crews' meal allowances 1,652 1,203

Processing of documents 1,513 1,809

Supplies 1,461 1,464

Docking 1,406 197

Others 3,521 4,616

Total 58,513 57,455


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31. GENERAL AND ADMINISTRATIVE

2011 2010

US$'000 US$'000

Salaries 7,209 6,453

Office expenses 1,665 1,901

Professional fees 1,003 496

Transportation 879 836

Pension benefits 511 438

Depreciation 472 472

Marketing 472 317

Telecommunication 391 399

Representation 211 540

Bank charges 189 145

Others 860 754

Total 13,862 12,751

32. FINANCE COSTS

2011 2010US$'000 US$'000

Interest expense on:

Bonds, convertible bonds and notes payables 35,418 27,587

Loans from banks and financial institution and other loans from

non-financial institutions 23,159 21,606

Sub-total 58,577 49,193

Profit sharing allocation and fees 2,107 1,988

Obligations under finance leases 17,327 10,712

Amortization of provision 1,692 1,532

Total 79,703 63,425

33. INVESTMENT INCOME 2011 2010

US$'000 US$'000

Interest income 1,763 1,674

Realized gain on available-for-sale investments 2,401 503

Total 4,164 2,177


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34. OTHER GAINS AND LOSSES

2011 2010

US$'000 US$'000

Net revaluation 30,393 83,207

Change in fair value of convertible bonds and notes payable

designated as at fair value through profit and loss 34,600 (44,671)

Net gain (loss) on derivative transactions (6,766) 234

Foreign exchange loss - net (6,306) (7,599)

Net gain (loss) on disposal of property, vessels and equipment (599) (2,113)

Insurance claim 1,810 (456)

Others - net 2,977 (549)

Total 56,109 28,053

35. EARNINGS PER SHARE Earnings for the year

2011 2010

US$'000 US$'000

Profit for the periods for the computation of basic

earnings per share 23,262 27,898

Unrealized fair value change of convertible bonds

designated as FVTPL 12,179 (6,458)

Income for the periods for the computation of diluted

earnings per share 35,441 21,440

The effect of unrealized fair value change of convertible bonds designated as FVTPL on the loss per share is anti-dilutive, accordingly, diluted loss per share was no longer presented. Profit Per Share

2011 2010

US$'000 US$'000

Net Residual Income - Basic 23,262 27,898

Net Residual Income - Diluted 35,441 21,440


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2011 2010

Weighted average of outstanding

shares for the purposes of basic

earnings per share

(in full amount) 11,138,480,470 5,569,240,235

Potential effect of dilutive common

shares (in full amount):

Convertible bonds 3,980,566,748 1,323,214,478

Weighted average of outstanding

shares for the purposes of diluted

earnings per share

(in full amount) 15,119,047,218 6,892,454,713

Earnings per share (in full amount)

- Basic 0.0021 0.0050

- Diluted - 0.0031

In 2011, the potential shares on convertible bonds are anti-dilutive, accordingly, therefore diluted earnings per share was no longer presented.

36. DIVIDENDS AND APPROPRIATION FOR GENERAL RESERVES

Based on notarial deed of the Annual General Meeting of Stockholders No. 3 from Dr. A. Partomuan Pohan, S.H., LL.M. dated July 7, 2011, the Company decided not to declare any dividends and no appropriation for general reserves.

37. NATURE OF RELATIONSHIP AND TRANSACTIONS WITH RELATED PARTIES

Nature of Relationship

a. The ultimate controlling party of the Company and its subsidiaries is PT Bagusnusa Samudera

Gemilang (Bagusnusa).

b. PT Tunggaladhi Baskara is a major stockholder of the Company.

c. Bagusnusa is the parent company of PT Tunggaladhi Baskara. The majority stockholder of Bagusnusa is Mr. Hadi Surya, one of the Company‟s commissioners.

d. Bagusnusa is the majority shareholder of PT Garuda Mahakam Pratama.

e. Pan Union Agencies Pte. Ltd., Poseidon Elite Navigation Pte. Ltd. and Pan Union Shipping

Pte. Ltd. are wholly-owned, directly or indirectly, by Ms. Siana Anggraeni Surya, one of the Company‟s directors.

f. PT Arpeni Pratama Ocean Line Tbk is owned by a close member of the family of Mr. Hadi Surya.


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Transactions with Related Parties In the normal course of business, the Company and its subsidiaries entered into certain transactions with related parties. These transactions included the following: a. Expenses paid to related parties accounted for 1.05% and 0.32% of total operating expenses

in 2011 and 2010, respectively. The details of expenses from related parties are as follows:

2011 2010

US$'000 US$'000

Pan Union Agencies Pte. Ltd. 1,448 506

Thai Petra Transport Co. Ltd. 979 62

PT Arpeni Pratama Ocean Line Tbk 308 149

PT Garuda Mahakam Pratama 129 112

Total 2,864 829

b. The remuneration of the Company‟s key management (commissioners and directors) during

the year are as follows:

2011 2010

US$'000 US$'000

Short-term benefits 731 688

Post-employment benefits 165 153

Total 896 841

38. SEGMENT INFORMATION IFRS 8 requires operating segments to be identified on the basis of internal reports on components of the Company and its subsidiaries that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance. For management reporting purposes, the Company and its subsidiaries are principally organized based on type of vessels chartered - chemical, gas, oil, and floating production, storage and offloading (FPSO). The following summary describes the operations in each of the reportable segments: a. Chemical tankers : provides maritime transportation of liquid chemical (organic and non-

organic) and vegetable oil and animal fats.

b. Gas tankers : provides maritime transportation of liquified gas, which include among others, LPG, propylene, propane and LNG.

c. Oil tankers : provides maritime transportation of lubricating oil (base oil and

additives), crude oil and petroleum products.

d. FPSO : provides processing and storage of oil.

Assets and liabilities that relate jointly to two or more operating segments are allocated to their respective segments, if and only if, their related revenues and expense are also allocated to those segments.


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2011Chemical Gas Oil FPSO Others * TotalUS$'000 US$'000 US$'000 US$'000 US$'000 US$'000

REVENUESExternal revenues 248,789 24,003 32,343 17,376 600 323,111

Total segment revenues 248,789 24,003 32,343 17,376 600 323,111

Segment expensesVoyage Expenses

Port Charges 27,168 332 2,549 89 - 30,138 Fuel 80,494 921 9,171 98 - 90,684

Total Voyage Expenses 107,662 1,253 11,720 187 - 120,822

Charter Expenses 22,051 - 1,629 - - 23,680 Vessel Depreciation and Ship Operating Expenses

Ship operating expenses:Salaries 20,128 4,566 4,653 679 - 30,026 Repairs and maintenance 4,491 267 952 130 - 5,840 Spare parts 426 1,275 2,078 396 - 4,175 Insurance 2,404 414 1,435 504 - 4,757 Lubricants 2,372 517 942 - - 3,831 Transportation 841 237 576 83 - 1,737 Processing of documents 932 281 254 46 - 1,513 Supplies 801 295 331 34 - 1,461 Crews' meal allowances 906 256 304 186 - 1,652 Others 2,714 352 407 48 - 3,521

Total Ship Operating Expenses 36,015 8,460 11,932 2,106 - 58,513 Vessel Depreciation 42,793 10,361 11,470 2,144 - 66,768

Total segment expenses 208,521 20,074 36,751 4,437 - 269,783

Segment result 40,268 3,929 (4,408) 12,939 600 53,328

Unallocated income and expensesChange in fair value of convertible

bonds and notes payable 34,600 Other gains and losses - net (8,884) Finance costs (79,703) Net revaluation increase 30,393 General and administrative expenses (13,862) Investment income 4,164 Share in profits of associates 4,690

Income before tax 24,726 Tax expense (804)

Income for the period 23,922

Income attributable to non-controlling interests (660)

Income attributable to equityholders of the Company 23,262

Other InformationCapital additions 188,984 25,751 8,784 - - 223,519 Depreciation 42,793 10,361 11,470 2,144 - 66,768

AssetsSegment assets 1,779,353 326,227 257,108 88,535 - 2,451,223

Unallocated 583,769

Consolidated total assets 3,034,992

LiabilitiesSegment liabilities 16,690 5,547 20,244 858 - 43,339

Unallocated 2,117,081

Consolidated total liabilities 2,160,420

* Represents agency and storage services


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2010Chemical Gas Oil FPSO Others * TotalUS$'000 US$'000 US$'000 US$'000 US$'000 US$'000

REVENUESExternal revenues 249,774 23,304 51,691 3,823 1,069 329,661

Total segment revenues 249,774 23,304 51,691 3,823 1,069 329,661

Segment expensesVoyage Expenses

Port Charges 26,565 575 1,496 2 - 28,638 Fuel 56,720 315 7,443 - - 64,478

Total Voyage Expenses 83,285 890 8,939 2 - 93,116

Charter Expenses 31,997 - 1,629 - - 33,626 Vessel Depreciation and Ship Operating Expenses

Ship operating expenses:Salaries 19,055 3,263 3,618 548 - 26,484 Repairs and maintenance 5,351 119 935 25 - 6,430 Spare parts 2,919 601 1,123 75 - 4,718 Supplies 922 202 290 50 - 1,464 Insurances 2,569 359 1,129 301 - 4,358 Transportation 1,707 383 518 158 - 2,766 Crews' meal allowances 615 199 306 83 - 1,203 Processing of documents 972 228 507 102 - 1,809 Lubricants 2,008 702 878 19 - 3,607 Others 2,640 753 1,124 99 - 4,616

Total Ship Operating Expenses 38,758 6,809 10,428 1,460 - 57,455 Vessel Depreciation 47,031 7,989 13,072 3,726 - 71,818

Total segment expenses 201,071 15,688 34,068 5,188 - 256,015

Segment result 48,703 7,616 17,623 (1,365) 1,069 73,646

Unallocated income and expensesChange in fair value of convertible

bonds and notes payable (44,671) Other gains and losses - net (10,580) Finance costs (63,425) Net revaluation increase 83,304 General and administrative expenses (12,751) Investment income 2,177 Share in profits of associates 942

Income before tax 28,642 Tax expense (744)

Income for the period 27,898

Other InformationCapital additions 3,214 68,106 1,184 - - 72,504 Depreciation 47,031 7,989 13,072 3,726 - 71,818

AssetsSegment assets 1,641,725 344,983 263,590 46,448 - 2,296,746

Unallocated 383,455

Consolidated total assets 2,680,201

LiabilitiesSegment liabilities 52,415 4,716 9,757 846 - 67,734

Unallocated 1,854,508

Consolidated total liabilities 1,922,242

* Represents agency and storage services


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Geographical Information The Company is domiciled in Indonesia and the principal holding companies of foreign subsidiaries are domiciled in Malaysia. Segment information based on geographic segment is presented below:

Malaysia Indonesia Elimination Consolidated

US$'000 US$'000 US$'000 US$'000

REVENUES

External revenues 257,972 65,139 - 323,111

Inter-segment sales 11,505 - (11,505) -

Total revenues 269,477 65,139 (11,505) 323,111

2011

Malaysia Indonesia Elimination Consolidated

US$'000 US$'000 US$'000 US$'000

REVENUES

External revenues 284,124 45,537 - 329,661

Inter-segment sales 3,243 - (3,243) -

Total revenues 287,367 45,537 (3,243) 329,661

2010

39. RECONCILIATION OF IFRS AND INDONESIAN GAAP

For statutory reporting purposes in Indonesia, the Company continues to prepare consolidated financial statements in accordance with Indonesian GAAP. IFRS varies in certain significant respect from Indonesian GAAP. The application of IFRS that affected the preparation and presentation of the consolidated financial statements is discussed below. a. Goodwill

Under Indonesian GAAP, goodwill arising from business acquisition is recognized as an asset and amortized as an expense over its useful life using straight-line method. The amortization period should not exceed five years, unless a longer period not exceeding 20 years can be justified. The Company is amortizing goodwill over 20 years. At each reporting date, management assessed whether there was any indication of impairment of the cash-generating unit to which the goodwill is attached to. Under IFRS, goodwill arising from business acquisition is initially recognized at cost, and is subsequently measured at cost less any accumulated impairment losses. In applying IFRS, the Company ceases amortizing goodwill starting January 1, 2003, the transition period when the Company first prepared its IFRS financial statements. The accumulated amortization of US$ 3,747 thousand recognized under Indonesian GAAP as of December 31, 2002 has been eliminated with a corresponding decrease in the cost of goodwill. In 2008, under Indonesian GAAP, the Company and its subsidiaries recognized goodwill impairment amounting to US$ 29,136 thousand. Under IFRS, goodwill impairment in 2008 amounted to US$ 8,547 thousand.


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b. Property, Vessels and Equipment

Effective January 1, 2009, for Indonesian GAAP reporting purposes the Company and its subsidiaries adopted the revaluation model in measuring the vessels subsequent to initial recognition.

For IFRS reporting purposes, the Company and its subsidiaries adopted the Revaluation Model in measuring the vessels subsequent to initial recognition, since January 1, 2003, the time their first IFRS consolidated financial statements were prepared.

Also, under Indonesian GAAP, the cost of acquired landrights is capitalized as land, which is not depreciated. Under IFRS, land use rights are considered as leases and such rights are amortized over the period the holder is expected to retain the landrights.

c. Financial Instruments

Under Indonesian GAAP, prior to January 1, 2010, short-term and long-term bank loans are stated at nominal values, being the principal amount of the loan. Transaction costs on bank borrowings were classified as deferred charges and amortized on a straight-line basis over the period of the borrowings. For bonds payable, bonds issuance costs are deducted directly from the proceeds of the bonds. The difference between the net proceeds and principal amount of the bonds is amortized on a straight-line basis over the term of the bonds. All the proceeds obtained from the issuance of convertible bonds are recognized as liabilities.

Effective January 1, 2010, financial liabilities other than those measured at FVTPL, are

measured at amortized cost. As a result, transaction costs on the short-term and long-term

bank loans and the bond issuance costs on the bonds payable were amortized using the

effective interest rate, and deducted from the principal amount. Security deposits are recorded

at fair value.

Under IFRS, financial liabilities other than those measured at FVTPL, are measured at amortized cost.

Under Indonesian GAAP, prior to January 1, 2010, non-interest bearing security deposits on operating leases are recorded at undiscounted amounts. Effective January 1, 2010, non-interest bearing security deposits are accounted for similar with IFRS. Under IFRS, non-interest bearing security deposits on operating leases are recorded at fair value. The difference between the fair value and nominal amount is recorded as deferred rent and is amortized on a straight line basis over the lease term. Interest income is accreted on the security deposits using the effective interest rate.

d. Investment in Associates Under Indonesian GAAP, when significant influence over an associate is lost, the investor measures any investment retained on the former associate at cost. Under IFRS, the investor measures at fair value any investment the investor retains in the former associate and recognize in profit and loss any difference between: (i) the fair value of any retained investment and any proceeds from disposing of the part of interest in the associate and (ii) the carrying amount of the investment at the date the significant influence is lost.


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e. Measurement and Reporting Currency

Effective January 1, 2009, the Company changed its recording and reporting currency under Indonesian GAAP from Indonesian Rupiah to U.S. Dollar. However, for statutory reporting purposes in Indonesia, the Company‟s subsidiaries domiciled in Indonesia whose functional currency is the U.S. Dollar, maintain their books of accounts in Rupiah and present their financial statements also in Rupiah. For financial statement consolidation purposes, the Indonesian Rupiah financial statements of those subsidiaries were translated to U.S. Dollar, because of the change in reporting currency of the Company for Indonesian GAAP reporting purposes, from Indonesian Rupiah to U.S. Dollar. Under IFRS, the Company‟s subsidiaries domiciled in Indonesia but whose functional currency is the U.S. Dollar should measure their transactions in terms of their functional currency. IFRS allows the use of a presentation currency other than the functional currency. Management has determined that the Company‟s functional currency is the US. Dollar. For IFRS reporting purposes, the transactions of the Company‟s subsidiaries whose functional currency is the U.S. Dollar were measured in terms of their functional currency.


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A summary of the significant adjustments to consolidated profit for the period ended June 30, 2011 and year ended December 31, 2010 and to consolidated stockholders‟ equity as of June 30, 2011 and December 31, 2010 from Indonesian GAAP to IFRS are set forth below:

Note 2011 2010

US$'000 US$'000

Profit for the period and year according to the consolidated

statements of income prepared

under Indonesian GAAP 21,847 24,490

IFRS adjustments - increase (decrease) due to:

Amortization of goodwill (a) 1,437 1,436

Net revaluation decrease (b) - 609

Amortization of landrights (b) (22) (22)

Measurement of financial liabilities

at amortized cost (c) - 1,385

Total adjustments 1,415 3,408

Profit for the period and year in accordance with IFRS 23,262 27,898


2011 2010

US$'000 US$'000

Equity according to the consolidated

balance sheets prepared

under Indonesian GAAP 839,119 684,171

IFRS adjustments - increase (decrease) due to:

Amortization of goodwill (a) 15,682 14,245

Impairment of goodwill (a) 20,589 20,589

Revaluation reserve (b) (3,803) (3,803)

Depreciation of revalued vessels (b) (24,928) (24,928)

Gain on sale of property adjustment based on

revalued amounts of vessels (b) (57,773) (57,773)

Difference between depreciation expense based

on revalued amounts and historical cost (b) 95,020 95,020

Amortization of landrights (b) (189) (167)

Revaluation decrease (b) (9,646) (9,646)

Amortization of deferred rent (c) (687) (687)

Interest on security deposits (c) 421 421

Foreign exchange loss (c) (190) (190)

Option premium on convertible bonds (c) 177 177

Measurement of financial liabilities

at amortized cost (c) (875) (875)

Unrealized gain on sale of an associate (d) 524 524

Translation adjustment and effect of remeasurement (e) 1,131 1,131

Total adjustments 35,453 34,038

Equity in accordance with IFRS 874,572 718,209


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a. Reconciliation of consolidated statements of financial position between IFRS and Indonesian GAAP at June 30, 2011.

INDONESIAN Reconciling

GAAP Items IFRS

US$ US$ US$

('000) ('000) ('000)

Property, vessels and equipment - net 2,431,781 (1,331) 2,430,450

Investments in associates 12,645 - 12,645

Other non-current assets 99,668 37,893 137,561

Total Non-Current Assets 2,544,094 36,562 2,580,656

Trade accounts receivable 153,793 - 153,793

Available-for-sale investments 89,830 - 89,830

Cash 108,053 - 108,053

Other current assets 102,633 27 102,660

Total Current Assets 454,309 27 454,336

Total Assets 2,998,403 36,589 3,034,992

Share capital 109,575 - 109,575

Additional paid-in capital 208,826 177 209,003

Treasury stocks (86,628) - (86,628)

Translation adjustment (18,824) 17,301 (1,523)

Revaluation reserve 306,035 (3,803) 302,232

Difference arrising from changes to equityholders of the Company 2,305 - 2,305

Retained earnings 205,921 21,778 227,699

Capital and reserves attributable to equityholders

of the Company 727,210 35,453 762,663

Non-controlling interests 111,909 - 111,909

Total Equity 839,119 35,453 874,572


Loan from financial institutions 744,349 1,136 745,485

Bonds payable 132,573 - 132,573

Notes payable 281,400 - 281,400

Obligations under finance lease 422,347 - 422,347

Other non-current liabilities 276,325 - 276,325

Total Non-current Liabilities 1,856,994 1,136 1,858,130

CURRENT LIABILITIES

Short-term bank loans 15,122 - 15,122

Trade accounts payable 25,409 - 25,409

Current maturities of long-term liabilities 216,143 - 216,143

Other current liabilities 45,616 - 45,616

Total Current Liabilities 302,290 - 302,290

Total Equity and Liabilities 2,998,403 36,589 3,034,992


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b. Reconciliation of consolidated statements of financial position between IFRS and Indonesian GAAP at December 31, 2010.


GAAP Items IFRS

US$ US$ US$

('000) ('000) ('000)

Property, vessels and equipment - net 2,347,570 (1,331) 2,346,239

Investments in associates 7,955 - 7,955

Other non-current assets 96,722 35,881 132,603

Total Non-Current Assets 2,452,247 34,550 2,486,797

Trade accounts receivable 160,166 - 160,166

Available-for-sale investments 79,964 - 79,964

Cash 84,284 - 84,284

Other current assets 58,850 624 59,474

Total Current Assets 383,264 624 383,888

Total Assets 2,835,511 35,174 2,870,685

Share capital 109,575 - 109,575

Additional paid-in capital 208,826 177 209,003

Treasury stocks (86,628) - (86,628)

Translation adjustment (16,292) 17,301 1,009

Revaluation reserve 304,534 (3,803) 300,731

Retained earnings 164,156 20,363 184,519

Total Equity 684,171 34,038 718,209


Loan from financial institutions 707,562 943 708,505

Bonds payable 148,261 - 148,261

Notes payable 316,000 - 316,000

Obligations under finance lease 342,769 - 342,769

Other non-current liabilities 265,496 - 265,496

Total Non-current Liabilities 1,780,088 943 1,781,031

CURRENT LIABILITIES

Short-term bank loans 14,459 - 14,459

Trade accounts payable 63,943 - 63,943

Current maturities of long-term liabilities 230,854 193 231,047

Other current liabilities 61,996 - 61,996

Total Current Liabilities 371,252 193 371,445

Total Equity and Liabilities 2,835,511 35,174 2,870,685


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c. Reconciliation of consolidated statement of comprehensive income between IFRS and Indonesian GAAP for the period ended June 30, 2011.


GAAP Items IFRS

US$ US$ US$

('000) ('000) ('000)

Operating revenues 323,111 - 323,111

Voyage expenses (120,822) * - (120,822)

Operating revenues after voyage

expenses 202,289 - 202,289

Charter expenses (23,680) * - (23,680)

Vessel depreciation and ship

operating expenses

Ship operating expenses (58,513) * - (58,513)

Vessel depreciation (66,768) * - (66,768)

(125,281) - (125,281)

Gross profit 53,328 - 53,328

General and administrative (13,840) (22) (13,862)

Income before financial and other

items 39,488 (22) 39,466


Finance cost (79,703) - (79,703)

Investment income 4,164 - 4,164

Share in profits of associates 4,690 - 4,690

Other gains and losses 54,672 1,437 56,109

(16,177) 1,437 (14,740)

Income before tax 23,311 1,415 24,726

Tax expense (804) - (804)

Income for the period 22,507 1,415 23,922

Income attributable to non-controlling interests (660) - (660)

Income attributable to equityholders of the Company 21,847 1,415 23,262

* Presented as "Total direct costs" in Indonesian GAAP consolidated financial statements.


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d. Reconciliation of consolidated statement of comprehensive income between IFRS and Indonesian GAAP for the year ended at June 30, 2010.


GAAP Items IFRS

US$ US$ US$

('000) ('000) ('000)

Operating revenues 329,661 - 329,661

Voyage expenses (93,116) * - (93,116)

Operating revenues after voyage

expenses 236,545 - 236,545

Charter expenses (34,313) * 687 (33,626)

Vessel depreciation and ship

operating expenses

Ship operating expenses (57,455) * - (57,455)

Vessel depreciation (71,818) * - (71,818)

(129,273) - (129,273)

Gross profit 72,959 687 73,646

General and administrative (12,729) (22) (12,751)

Income before financial and other

items 60,230 665 60,895


Finance cost (64,544) 1,119 (63,425)

Investment income 2,598 (421) 2,177

Share in profits of associates 942 - 942

Other gains and losses 26,008 2,045 28,053

(34,996) 2,743 (32,253)

Income before tax 25,234 3,408 28,642

Tax expense (744) - (744)

Income for the period 24,490 3,408 27,898

Income attributable to non-controlling interests - - -

Income attributable to equityholders of the Company 24,490 3,408 27,898

* Presented as "Total direct costs" in Indonesian GAAP consolidated financial statements.


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40. FINANCIAL INSTRUMENTS

A. Capital Risk Management

The Company and its subsidiaries manage their capital to ensure that they will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Group consists of debt, which includes the borrowings, cash, short-term investments and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. The Company‟s Board of Directors periodically reviews the Company‟s capital structure. As part of this review, the Board of Directors considers the cost of capital and the related risks.

The gearing ratio is as follows:

June 30, December 31, June 30, December 31,2011 2010 2011 2010

US$'000 US$'000 US$'000 US$'000

Debt 1,979,318 1,924,962 2,002,333 1,943,732Cash and short-term

investments 197,883 164,248 197,883 164,248

Net debt 1,781,435 1,760,714 1,804,450 1,779,484

Equity 839,119 684,171 874,572 718,209

Net debt to equity ratio 212% 257% 206% 248%

Indonesian GAAP IFRS

B. Financial Risk Management Objective

The Company and its subsidiaries‟ also have established financial risk management and policy which seeks to ensure that adequate financial resources are available for the development of the Company and its subsidiaries‟ business while managing their foreign exchange, interest rate, credit and liquidity risks. The Company and its subsidiaries operate within defined guidelines that are approved by the Board of Directors, and policies in respect of the major areas of treasury activity.


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Foreign Exchange Risk Management

The Company and its subsidiaries conduct business in currencies other than their respective functional currency primarily in Indonesian Rupiah, Japanese Yen, Singapore Dollar and British Pound Sterling. Foreign currency exposures and fluctuations have not had a material impact on the Company and its subsidiaries in recent years. It is the Company and its subsidiaries‟ policy to manage foreign exchange risks within prudent levels so as to maximize profits. The Company and its subsidiaries have practices that include the periodic review of the impact of movements in foreign exchange rates on profitability so that appropriate action is taken to mitigate these risks. It is also the policy of the Company and its subsidiaries to enter into cross currency and interest rate swap derivative contracts to cover exposures on specific foreign currency principal and interest payments. These contracts are entered into as economic hedge of the risk exposure although hedge accounting has not been applied. Interest Rate Risk Management The Company and its subsidiaries are also exposed to interest rate risk as they also borrow funds in Rupiah and U.S. Dollar at both fixed and floating interest rates. The risk is managed by maintaining an appropriate mix between fixed and floating rate borrowings and minimizing the exposure through cross currency swap contracts (combined interest rate swap contracts and forward foreign exchange contracts). Credit Risk Management

The Company and its subsidiaries‟ exposure to credit risk is primarily attributable to trade and other accounts receivable, investments and bank balances. In determining the credit terms for customers, the management considers the following factors: the financial strength of the customer, the customer‟s historical payment record, the length of the relationship with the customer and the distance or duration of a specific voyage. Based on these factors, the Company and its subsidiaries‟ credit terms may vary. The credit terms may also be modified based on negotiations with each customer. It is the Company and its subsidiaries‟ policy to monitor the financial standing of these receivables on an on-going basis to ensure that the Company and its subsidiaries are exposed to minimal credit risk. Bank balances and investments are placed with credit worthy financial institutions. Although the Company and its subsidiaries generate more than 5% of their revenue from Pertamina (National Oil Company of Indonesia), there has been no history of credit default with Pertamina.

Fuel Risk Management The Company and its subsidiaries‟ earnings are affected by changes in the price of bunker fuel. Their strategy for managing the risk on fuel price, aims to provide their protection against sudden and significant increase in bunker fuel prices. In meeting these objectives, the fuel management program allows for the prudent use of approved instruments such as bunker swaps with approved counterparties and within approved credit limits. Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Company and its subsidiaries‟ short, medium and long-term funding and liquidity management requirements. The Company and its subsidiaries manage liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.


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Liquidity and Interest Rate Risk Tables

The following tables detail the Company and its subsidiaries remaining contractual maturity for its non-derivative financial assets and liabilities. The tables have been drawn up based on the undiscounted cash flows of financial assets based on the contract and obligations of the counterparty and financial liabilities based on the earliest date on which the Company and its subsidiaries can be required to pay. The table includes both interest and principal cash flows. Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument. The other financial instruments of the Company and its subsidiaries that are not included in the tables are non-interest bearing and are therefore not subject to interest rate risk. The Company and its subsidiaries‟ policy is to borrow principally on the floating rate basis but to retain a proportion of fixed rate debt. The objectives for the mix between fix and floating rate borrowings are set to reduce the impact of an upward change in interest rate while enabling benefits to be enjoyed if interest rates fall. The Company and its subsidiaries expect to meet their other obligations by utilizing operating cash flows, proceeds of maturing financial assets, bank and equity financing. Other Price Risks In addition to market price risk on short-term investments, the Company is exposed to market price risks on the notes payable in 2010 and convertible bonds and notes payable in 2009 which were classified as financial liability at fair value through profit or loss. To manage its price risk, the Company‟s management supervises and monitors the Company and its subsidiaries‟ performance. C. Fair Value of Financial Instruments

The fair values of financial assets and financial liabilities are determined as follows:

the fair values of financial assets and financial liabilities with standard terms and conditions and traded on active markets are determined with reference to quoted market prices;

the fair values of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments;

the fair value of derivative instruments are calculated using quoted prices. Where such prices are not available, discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives. Foreign currency forward contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts. Interest rate swaps are measured at the present value of future cash flows estimated and discounted based on the applicable yield curves from quoted interest rates.


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41. COMMITMENTS a. The Company and its subsidiaries have some charter contracts with Pertamina amounting to

US$ 12 million - US$ 25 million per year, which will end between 2011 - 2016.

At the reporting date, the Company and its subsidiaries have contracts with Pertamina with the following future minimum lease receipts:


US$'000 US$'000

Within one year 22,840 21,174 In the second to fifth years inclusive 71,453 80,914

Total 94,293 102,088

Revenues earned by the Company and its subsidiaries on those contracts, which were included in operating revenues, amounted to US$ 13,666 thousand and US$ 11,712 thousand in 2011 and 2010, respectively.

b. The Company and its subsidiaries have outstanding charter contracts under operating leases with third parties amounting to US$ 1 million to US$ 65 million per year, which will end between 2011 - 2022. At the reporting date, the Company and its subsidiaries have outstanding commitments under non-cancellable charter contracts, with scheduled maturities as follows:


2011 2010

US$'000 US$'000

Within one year 64,160 53,882

In the second to fifth years inclusive 221,845 143,144

After five years 195,190 129,471

Total 481,195 326,497

c. The subsidiaries have several contracts with shipyards in Japan for the construction of new vessels with total contract price of approximately JPY 23,913 million.

d. In 2010, the subsidiary entered into purchases of three second hand vessels agreement amounting to USD 20,250 thousand.

e. In April 2008, Chembulk Tankers LLC, obtained an irrevocable Standby Letter of Credit (SBLC) facility from ING Bank N.V, Singapore Branch amounting to US$ 29,200 thousand. Such SBLC is secured by a subsidiary‟s vessel and is reduced periodically by US$ 3,600 thousand and matures on January 19, 2019.

f. On January 17, 2008 Richesse Logistics (Fangcheng Port) Co., Ltd. entered into an agreement with Fangcheng Port Group Co. Ltd. for the reclamation and use of land with a total area of 360 million square meters. A total of 83 million square meters represent capital contribution of Fangcheng Port Group Co. Ltd. and the remaining 277 million square meters will be purchased for RMB 83 million. The agreement also mentioned that Richesse Logistics (Fangcheng Port) Co., Ltd. will be responsible for, among others, applying the license to use the property.

As of June 30, 2011, Richesse Logistics (Fangcheng Port) Co., Ltd, has paid US$ 20.9 million, which is included under the construction in progress account.


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42. EVENTS AFTER THE REPORTING PERIOD On July 18, 2011, a subsidiary obtained loan from Clio Marine Inc. with maximum credit of JPY 3,600,000,000 and interest rate is at 4% per annum and matures in one year.

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PT BERLIAN LAJU TANKER Tbk AND ITS SUBSIDIARIES

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