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Industry Prospect

The Group has to date substantially completed the reflagging exercise, via its Indonesian subsidiary company, PT Pelayaran Nasional Bina Buana Raya ("BBR"), in respect of all its vessels earmarked for plying in Indonesian waters. The reflagging exercise is necessary to be carried out in order to comply with Indonesia's cabotage principle, which requires all vessels plying Indonesian waters to be Indonesia flagged and such Indonesia flagged vessels must be owned by Indonesian entities controlled by Indonesian persons.

On 9th January 2013, BBR was successfully listed on the Indonesian Stock Exchange which will allow the Group to further augment its plan to penetrate the growing Indonesian offshore market.

The construction of a bigger and deeper third drydock, measuring 190m x 45m x 9m, by the Group's shipyard in Batam since Q2FY2011 is expected to be completed by Q2FY2012.

When the third drydock becomes fully operational, the Group will be well-poised to take advantage of the buoyant demand for ship repair and conversion businesses boosted chiefly by the thriving commodity shipping and oil and gas activities in Indonesia.