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An ensemble of instrumentalists comprising

string, brass, woodwind and percussion sections

is a fitting metaphor for PSA; an organisation global

and expanding, having diverse talents, bridging

different nations and cultures, incorporating the best

experience and expertise; all in all, whose whole is

far greater than the sum of its parts! Every member

of PSA plays an important role, brings unique value,

and contributes to PSAs success; much as each

musician in an orchestra comes together to deliver a

beautiful musical performance.

The Orchestra

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Committed to Excellence

We set new standards by continuously

improving results and innovating

in every aspect of our business.

Dedicated to Customers

We help our customers, external

and internal, succeed by anticipating

and meeting their needs.

Focused on People

We win as a team by respecting,

nurturing and supporting one another.

Integrated Globally

We build our strength globally by

embracing diversity and

optimising operations locally.

Our Mission & Values

Setting the Tempo

Group Chairmans Message

Group CEOs Message

Keeping Our Rhythm

Board of Directors

Senior Management Council

Raising the Bar

Global Footprint

Group Financial Highlights

World Class Performances

The Rhythm of Business

Round of Applause

In Harmony

Touching the Heartstrings

The AscendingFish! Motif

Financial Review

Corporate Directory

1

4

6

10

12

16

18

22

26

27

28

31

100

To be the port operator of choice in the

worlds gateway hubs, renowned for

best-in-class services and successful

partnerships.

Values

Program

OurM ission

Our

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Using his baton, a conductor shapes the melodic direction

of the musical piece. He unites his musicians to create

harmonious melodies. Likewise, our Group Chairmans vision

and Group CEOs business acumen guide PSA onwards towards

greater crescendos of success.

Setting

Tempothe

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4 Every Note Counts

Group ChairmansMessage

2010 would surely be remembered as a year that saw exuberance

and dark clouds in equal measure.

The world economies were greeted with caution and uncertainty as

they entered year 2010, prayerfully hoping that the nascent recovery

which started in the second half of 2009 would be sustainable. In

the past year, economic recovery gathered pace leading to improved

economic activities worldwide and stronger than expected recovery

of global trade flows. According to the IMF, world trade was

projected to expand by 4.8% from 2009 to 2010, which represents a

remarkable surge, given the low base in 2009.

However, the global economic recovery has been patchy. Economists

now predict a two-speed recovery, slow in advanced countries and

fast in emerging market countries. Indeed, significant economic

woes continue to besiege the advanced Western economies.

The United States, still beleaguered by its stubbornly high

unemployment rate, has committed to a second stimulus package;however, the world monitors, with bated breath, whether this

stimulus will indeed strengthen United States nascent economic

recovery or just plunge it into bigger national debt.

In Europe, the sovereign debt default in Greece and the continuing

worry over the solvency of the PIIGS countries have forced many

European governments to initiate austerity measures to contain

national spending, in the process setting off social protests and

unrest, and depressing consumption. There is no easy solution

and Eurozone countries are expected to be bogged down by these

problems for months or even years ahead.

In Japan, the strong yen is crippling its exports and faltering its

economic recovery.

In 2010, China has supported the global economic initiatives by

the implementation of its own stimulus package to encourage

consumption by its citizenry. Whilst its stimulus package has

resulted in the maintenance of a relatively high GDP growth, it has

not as yet been able to meaningfully right the imbalance of global

trade flows and to have a strong, positive knock-on effect on the

rest of the world. For these to happen, it will take some time.

Whilst we continue to witness better growth rates in Asian

economies, a gradual slowdown may be inevitable given rapidly

mounting inflationary pressures, especially in China.

PSA must therefore continue to remain

very vigilant and focused so that we can be

prepared for any challenges and seize any

opportunities that come.

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5PSA International Pte Ltd Annual Report 2010

The mixed world economic performance, however, belied the

unexpectedly strong recovery in the shipping industry, not only involumes but also in freight rates. This is due in no small measure

to the skilful management of shipping capacity by lines through

the postponement of new builds, the lay-up of excess capacity, the

scrapping of old ships, and the slow steaming of deployed ships.

In all, Clarkson Research Services estimated that 2010 saw 140

million TEUs shipped, a record volume surpassing the previous

high of 137 million TEUs in 2008.

We are very pleased that our customers have performed

exceedingly well and t heir stellar output helped PSA achieve

a record volume of 65.1 million TEUs on a group-wide basis,

representing a 14.4% increase over 2009. At PSA Singapore

Terminals, the 2010 throughput of 27.7 million TEUs was 10.1%

higher than the year before. The Groups revenue and net profit

reached S$4.08 billion and S$1.18 billion respectively last year.

At this point, I would like to express my sincere thanks to

our valued customers, for placing their continued trust in us

and allowing us the privilege of sharing in their success. Our

promise of providing uncompromising and constant care has

gratifyingly been recognised by the industry, and the PSA Group

was conferred the Seatrade A sia Container Terminal Operator

Award for the third consecutive year, Lloyds List Asia Award

for Container Terminal Operator of the Year for the 10th year,

and the Asian Freight & Supply Chain Award (AFSCA) for BestGlobal Container Terminal Operating Company for the fifth

year. Regionally, Fuzhou International Container Terminal also

garnered the China Freight Industry Award for Top 10 Best

Container Terminals in China, while PSA Singapore Terminals

was the recipient of AFSCA for Best Container Terminal (Asia)

for the 21st time.

Apart from the vote of support by our customers, these awards

would not have been possible without the dedication and fortitude

of our staff, unions and management. Their sustained efforts

ensured that PSA maintained the world class service quality to

which our customers have become accustomed.

Steering the colossal PSA Group through such challenging times

is a mammoth responsibility and I am much indebted to the

dedicated members of the PSA Board whose staunch support,

astute counsel and vast experience have greatly lightened the

burden; for which I am deeply thankful. Here, I would also like

to extend a warm welcome to Ms Chan Lai Fung, who joined our

Board of Directors in March 2010 and quickly immersed herself in

the Board Committees and deliberations.

Alongside our ongoing business operations, PSA has also been

actively involved in contributing back to society. The Howe Yoon

Chong PSA scholarships, open to Singaporean students fromlow-income families, are uniquely aimed at providing education

opportunities for deserving students entering Inst itutes of

Technical Education, Polytechnics and Universities.

Besides other worthwhile projects, PSAs Corporate Social

Responsibility (CSR) work was extended to include the adoption

of NorthLight School, which aims to help students from

underprivileged or troubled family backgrounds by preparing them

for lifelong learning and employability. Besides cash donation, PSA

will provide industrial attachment opportunities to NorthLight

students.

Around the world, our terminals have also contributed

significantly towards charities throughout the year. Through staff

events and the CSR fund, PSA Singapore Terminals has donated

some S$500,000 to its adopted charities. Other efforts include

PSA Antwerps contributions and staff volunteerism to the Belgian

Paralympic Committee, the SolidarBus refugee and education

support program in Italy and the Wheelchair Campaign of Trkiye

Disabled Federation.

Within the Group, a corporate culture change process is

infectiously spreading to make PSA a more caring and fun work

place. Based on four simple principles of Being There, Making

Their Day, Choosing Your Attitude and Play, this change

management initiative motivates our staff and harnesses their

collective energies, strengths and passions.

Some analysts and economists have high expectations for

2011, believing that global economic recovery is now on a solid

foundation. I hope they are right. As for me, I continue to be

bothered by the lingering and troubling economic problems

in the developed countries and the severity of credit market

pressures and unbalances in global trade flows, all of which

require considerable time to cure. PSA must therefore continue

to remain very vigilant and focused so that we can be prepared

for any challenges and seize any opportunities that come. Most

importantly, PSA will continue to work closely with our customers

to serve them with alacrity and dedication. I have every confidence

that we will remain f leet and versatile in our responses to change,

while leveraging on our core strength in the pursuit of excellence.

FOCK SIEW WAH

Group Chairman

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6 Every Note Counts

Group CEOsMessage

2010, the year of the Tiger in the Chinese zodiac, certainly lived up to

its characterisation, .. I seek the unattainable, and try the untried.

A con ve rgen ce of a l l t he mea sures macro a nd micro

governments putting the balance sheet of the State at the disposal

of the financial systems, continued quantitative easing to support

demand, slow steaming by container shipping lines to soak

up surplus capacity all collectively had the desired effect of

calming the global markets.

PSA and the port and shipping sector in tandem with all other

industries benefited from the resulting outcome. Container

volumes recovered strongly in 2010 from the previous year and,

wi th the contr ibut ion of volumes from newly com missioned

terminals in Busan in South Korea, Chennai in India and Vung

Tau in Vietnam, PSA Group ended the year with a new peak of

65.1 million TEUs (14.4% increase year on year) handled across

its network of terminals worldwide, surpassing the previous high

of 63.2 million TEUs achieved during the heady and tumultuous

times in 2008.

In 2010, two new terminal projects were completed:

Zeebrugge International Port, in the deep-sea harbour of

Zeebrugge in Flanders, Belgium, and

Panama International Terminals in Panama City, on the

Pacific coast of Panama.

Both terminals w ill commence full commercial operations

this year.

Also in 2010 capital expenditure deferred during the globa l

economic crisis to upgrade and expand the Groups deep-sea

capabilities to service the expanding fleet of mega-size container

vessels was revived; and I am pleased to report that additional

capacity to berth and handle these mega vessels has been added

in Singapore, Tianjin in China, Sines in Portugal, and Zeebrugge

during 2010, and barring any further major economic shocks, this

capability upgrading will continue through 2011 and beyond. The

Group is also continually reviewing its network and portfolio of

port investments to match the changing landscape of global trade.

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The expansion of the Groups portfolio into overseas markets to

diversify the earnings base started in earnest post corporatisation

in 1997, and at the end of last year, the volumes handled at our

overseas terminals made up 37.4 million TEUs or 57.5% of the

Groups total volumes. This diversification into overseas markets

mitigates exposure to any single market, and has stood us well

through the economic turbulence of the recent two years.

Building strategic joint venture partnerships with key shipping

lines including MSC, PIL, CMA, Cosco, NYK and K-Line in

Singapore, Antwerp, Zeebrugge and Sines has also provided some

measure of support when global trade went into a tailspin in 2009;

today, a sizeable portion of global volumes is handled with these

strategic partnerships, the first of which was entered into in 2003

with MSC.

The Group has also been working to enhance its human

capital leadership and bench strength commensurate with an

expanding Multinational Corporation (MNC). The Groups Fish!

teambuilding and leadership program, which was first rolled out

in 2006 by Group HR, has now evolved into a global corporate

culture change platform encompassing the whole organisation

worldwide, and Fish! is now prevalent as a unifying language,

within the PSA family.

As part of the ongoing transformation of PSA into a global MNC,

we have continued to groom young and capable talents from

within the organisation, supplemented by good potential talent

from without, to build a strong, competent and committed global

leadership team.

We have also continued to align our internal organisation to

manage effectively our growing network of terminals worldwide

and to meet the challenges posed by an ever-evolving competition

landscape in a fast changing world of new emerging economies

and geo-politics. The seeds of human capital development we

have planted over the years have taken root and dovetailed well

with my personal plan of retiring by 62. This year in August,

I shall have attained this milestone age, and after close

consultations with the Group Chairman, Fock Siew Wah, I shall

be stepping down later this year as Group CEO. An internal and

external global search process for my replacement was started

earlier this year and I will continue to serve as Special Advisor to

the Group Chairman after my retirement.

I wish to thank all partners and customers for their continued

patronage all these years; PSA is grateful for the privilege of

working with and serving them.

I also wish to express my gratitude to the past and present

Chairmen and Board Directors for their strong support and

expert advice given to me. I am equally appreciative of the whole-

hearted support from my colleagues in the management team as

they rallied around me to face and surmount all the challenges

that came our way.

My heartfelt thanks also go out to the PSA staff and unions for

their selfless effort in helping the Group grow to what it is today.

Their determined and relentless drive to go the extra mile for our

customers, unparalleled commitment to getting the job done, and

willingness to change and adapt have enabled PSA to grow from

strength to strength.

I feel a sense of humility and fulfilment in helming this excellent

organisation, which is also The Worlds Port of Call, knowing

that I am a part of its success story!

We have also continued to align our internal organisation to

manage effectively our growing network of terminals worldwide

and to meet the challenges posed by an ever-evolving competition

landscape in a fast changing world of new emerging economies

and geo-politics.

EDDIE TEH

Group CEO

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Our Board of Directors and Senior Management Team keep PSA

moving forward together amid the challenging and swiftly-evolving

business environment, akin to an orchestra having to negotiate

changing keys and complex rhythms! It requires the rapport of every

member to hold the ranging tempo.

Keeping

Rhythmour

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10 Every Note Counts

Directors

Board of

TAN CHIN NAM

Main Committee:Member, Audit

Member,SupervisoryCommittee:

Middle East South Asia

CHAN LAI FUNG

Member,Supervisory Committees:

Europe & MediterraneanMarine Services

FRANK WONG

Main Committee:Member, LDCC

Chairman,Supervisory Committee:

Northeast Asia

EDDIE TEHDeputy Group Chairman

Main Committee:Member, EXCO

Member,SupervisoryCommittees:Southeast Asia,Northeast Asia,Middle East South Asia,Europe &Mediterranean,Marine Services

FOCK SIEW WAHGroup Chairman

Main Committees:Chairman, EXCOChairman, LDCC

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KOH POH TIONG

Main Committee:Member, EXCO

Member,SupervisoryCommittee:Northeast Asia

KUA HONG PAK

Main Committees:Chairman, AuditMember, EXCO

Chairman,SupervisoryCommittee:Southeast Asia

DAVINDER SINGH

Main Committee:Member, LDCC

Member,SupervisoryCommittee:

Southeast Asia

MICHAEL LIM

Main Committees:Member, EXCOMember, LDCC

Chairman,

Supervisory Committee:Middle East South Asia

NG CHEE KEONG

Main Committee:Member, Audit

Chairman,SupervisoryCommittee:

Europe & Mediterranean

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CouncilSenior M anagement

EDDIE TEHGroup CEO

CAROLINE LIMGlobal Head ofHR & CorporateAffairs

LEE CHEN YONGRegional CEO

Middle East South Asia

KENNY ONG

Regional CEOAmericasHead of Group

Business Development

ONG KIM PONGRegional CEO

Northeast Asia

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TAN PUAY HINRegional CEOSoutheast Asia

LIM PEK SUATGroup CFO

GOH MIA HOCKHead of Group

Risk Management /Technology & OperationsDevelopment

DAVID YANG

Regional CEOEurope & Mediterranean

TERENCE TANHead of Group Legal &

Company Secretary

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Music is created when musical notes are played; more musicians

playing notes together give rise to an enriching experience of

harmony, texture and emotions. At PSA, the different port projects

support and build on each other, strengthening the PSA Group and

enriching its f inancial performance.

Raising

Barthe

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25

26

SOUTHEAST ASIA

SINGAPORE

PSA SINGAPORE TERMINALS 1

THAILAND

EASTERN SEA LAEM CHABANG TERMINAL 2

VIETNAM

SP-PSA INTERNATIONAL PORT 3

MIDDLE EAST SOUTH ASIA

INDIA

TUTICORIN CONTAINER TERMINAL 4

CHENNAI INTERNATIONAL TERMINALS 5

PSA ABG KOLKATA CONTAINER TERMINAL 6

PSA ABG KANDLA CONTAINER TERMINAL 7

PAKISTAN

PSA GWADAR INTERNATIONAL TERMINALS 8

NORTHEAST ASIACHINA

DALIAN TERMINALS 9

FUZHOU TERMINALS 10

GUANGZHOU CONTAINER TERMINAL 1 1

TIANJIN TERMINALS 12

DONGGUAN CONTAINER TERMINAL 13

HONG KONG TERMINALS 14

SOUTH KOREA

INCHEON CONTAINER TERMINAL 15

PUSAN NEWPORT INTERNATIONAL

TERMINAL 16

JAPAN

HIBIKI CONTAINER TERMINAL 17

EUROPE & MEDITERRANEAN

BELGIUM & THE NETHERLANDS

PSA ANTWERP 18

PSA ZEEBRUGGE 19

ITALY

VOLTRI TERMINAL EUROPA 20

VENICE CONTAINER TERMINAL 2 1PORTUGAL

SINES CONTAINER TERMINAL 22

TURKEY

MERSIN INTERNATIONAL PORT 23

UNITED KINGDOM

PSA GREAT YARMOUTH CONTAINER

TERMINAL 24

AMERICAS

PANAMA

PSA PANAMA INTERNATIONAL TERMINAL 25

ARGENTINA

EXOLGAN CONTAINER TERMINAL 26

FootprintGlobal

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1

2

3

1413

1110

12 9 15

16 17

6

45

78

23

2120

22

24

19 18

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TEUs - Twenty-foot Equivalent Units

All a mounts in Singapore dollars2010 2009 2008 2007 2006

Volume

Throughput (million TEUs)

Singapore 27.7 25.1 29.0 27.1 24.0

Overseas 37.4 31.8 34.2 31.8 27.3

Global 65.1 56.9 63.2 58.9 51.3

Consolidated Income Statement ($ million)

Revenue 4,076 3,835 4,392 4,151 3,736

Operating Expenses (2,622) (2,631) (2,922) (2,573) (2,400)

Operating Profit 1,454 1,204 1,470 1,578 1,336

Other Income/(Expenses) 14 3 (28) 875 348

Profit from Operations 1,468 1,207 1,442 2,453 1,684

Finance Costs (340) (342) (393) (504) (405)

Share of Profit of Associates 261 244 260 239 202

Profit before Income Tax 1,389 1,109 1,309 2,188 1,481

Income Tax Expense (191) (145) (265) (248) (256)

Profit for the year 1,198 964 1,043 1,940 1,225

Non-Controlling Interests (19) 12 (4) (15) (16)

Profit attributable to Owner of the Company 1,179 976 1,039 1,925 1,209

Consolidated Financial Position ($ million)Total Assets 18,950 19,611 19,090 18,198 17,206

Total Liabilities 10,101 11,318 11,369 11,029 11,635

Total Equity 8,849 8,293 7,721 7,169 5,571

Financial Ratios

Operating Margin1 35.7% 31.4% 33.5% 38.0% 35.8%

Return on Average Total Assets2 8.0% 6.8% 7.7% 13.8% 11.9%

Return on Average Total Equity3 14.0% 12.0% 14.0% 30.5% 23.3%

Total Debt/Equity (times)4 0.93 1.13 1.19 1.20 1.73

Value-added per Employment Cost ($) 4.0 3.6 3.6 4.0 3.8

Economic Value Added ($ million) 220 173 503 507 573

Earnings per Share ($) 1.94 1.61 1.71 3.17 1.99

1 Operating profit expressed as a percentage of revenue2 Profit for the year, add back finance costs, expressed as a percentage of average total assets3 Profit for the year, expressed as a percentage of average total equity4 Total debt divided by total equity

HighlightsGroup Financial

Volume (million TEUs)

70

60

50

40

30

2006 2007 2008 2009 2010 2006 2007 2008 2009 2010

Revenue ($ million)

4,500

4,000

3,500

3,000

2,500

2,000

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SEGMENT REVENUE

2009

South East Asia 58%

Europe 30%

North East Asia 7%

Others 5%

2010

South East Asia 59%

Europe 28%

North East Asia 7%

Others 6%

2010

South East Asia 44%

Europe 25%

North East Asia 23%

Others 8%

SEGMENT NON-CURRENT ASSETS

GeoGraphical

contribution

2009

South East Asia 43%

Europe 27%

North East Asia 23%

Others 7%

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The world is our stage, and PSA is an award-winning performer,

thanks to the support and patronage of its customers. Just as each

inspired performance comes about only through diligent practice

and sensitive appreciation of the composers intentions, PSA

pledges to relentlessly improve its service offering to customers

through diligence and an innate understanding of their needs.

World

Performances

Class

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PSA operations worldwide improved in 2010 in tandem with

the global economic recovery from the doldrums a year and a

half before. Besides catering to organic growth, PSA started

new terminal operations and invested in infrastructure and

equipment to meet the growing needs and rigorous service

requirements of customers.

SOUTHEAST ASIA

PSA Singapore Terminals (ST) recorded a 10.1% growth in

throughput over 2009 and handled an annual throughput of 27.7

million TEUs in 2010. That represented an incremental volume of

more than 2 million TEUs, an exceptional increase in demand

which ST effectively met by ramping up resources through the

close co-operation of management, unions and staff.

In 2010, 44 new container shipping services were added with

about 60% of the services focusing on the key growth markets

of Intra-Asia and North-South trade. More than 200 large shipsof 10,000 TEU or bigger capacity called at ST, a testimony to

its hub status which allowed customers to capitalise on its

connectivity network, and superior infrastructure designed to

handle mega vessels efficiently. Meanwhile, the Pasir Panjang

Automobile Terminal (PPAT) handled more than a million

vehicles in 2010.

The year also marked the physical completion of Pasir Panjang

Terminal (PPT) Phases 1 and 2, comprising 23 container berths

and three Ro-Ro berths. Presently, ST is working closely with

the Ministry of Transport and Maritime and Port Authority

of Singapore to develop Phases 3 and 4 of PPT in order to meet

customers growth requirements in the new decade.

Throughout the year, PSA ST received numerous accolades.

Among them were the titles of Best Container Terminal Asia

(over 4 million TEUs) at the 24th Asian Freight & Supply

Chain Awards 2010, Container Terminal of the Year at the

Supply Chain Asia Logi stics Awards 2010, and the Cheaper

Better Faster Model Partnership Award (Institutional

Category), a Special May Day Award 2010 for enhancing

labour productivity. Additionally, Brani Terminal received

the Safety & Health Award Recognition for Projects (SHARP)

at the Workplace Safety and Health Performance Awards

2010 for implementing sound safety and health management

systems at the workplace.

PSAs investment in Laem Chabang, Thailand, registered strong

growth keeping pace with the favourable exports-driven

economic recovery. Two new shipping services plying China-

Thailand and Thailand-Vietnam-China also called at PSAs

terminal facility.

In Vietnam, SP-PSA saw a landmark year with more than

200% growth over 2009 to almost 294,000 TEUs in 2010,

and by setting four successive vessel productivity records for

Vietnamese container ports in the course of the year.

NORTHEAST ASIA

In China, Fuzhou saw an increase in container throughput,reflecting the improvement in global economy and world trade.

PSAs Fuzhou Qingzhou Container Terminal and Fuzhou

International Container Terminal had a combined throughput

of 1.17 million TEUs, notching up a growth of 17% over 2009.

PSAs Tianjin Port Pacific International Container Terminal

saw its volumes surge by 60% to reach 1.27 million TEUs and is

shaping up to be the largest PSA port project in mainland China.

Guangzhou Container Terminal handled a throughput of 0.96

million TEUs in 2010, thanks to the strong growth of China

domestic boxes.

In South Korea, our Incheon Container Terminal ha ndled in

excess of million TEUs, showing a 19.2% growth, despite

strong regional competition. The Pusan Newport International

Terminal (PNIT) is PSAs other investment in South Korea.

Commencing operations in March 2010, PNIT ended the

year with more than 548,000 TEUs. With 1.2 kilometres of

deepwater berths, PNIT is operationally tailored to efficiently

handle hub and spoke as well as relay transhipment volumes for

the Transpacific and North East Asian trade routes.

TheRhythmBusinessof

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MIDDLE EAST SOUTH ASIA

The India economy weathered the global financial crisis well

and, by 2010, it had bounced back strongly with a GDP growth

of 8%. PSAs Chennai International Terminals, seizing the robust

growth momentum, increased their container throughput to

cross the 300,000-TEU mark in 2010, up from 26,000 TEUs

handled in the three months of operations since start up in 2009.

PSA ABG Ka ndla Container Terminal experienced a 19.1%

growth in volume at 155,717 TEUs for 2010 while ABG Kolkata

Container Terminal s throughput of over 249,000 TEUs

represented almost its full capacity.

The multipurpose-built PSA Gwadar International Terminals

handled 815,000 metric tonnes of urea in 2010.

EUROPE & MEDITERRANEAN

PSA Antwerp in Belgium is the other PSA flagship terminaloutside of Singapore. It handled 14.7% more containers in 2010

over 2009. Even more spectacularly, its joint venture with

Mediterranean Shipping Company achieved a 16.2% increase in

throughput at 5.3 million TEUs, which is a record.

Meanwhile, PSA Zeebrugge pulled out all the stops to get

Zeebrugge International Port (ZIP) operational in November

2010. ZIP is fully equipped with four double hoist twin lif t

cranes and 16.5 metres of water depth alongside to handle

mainhaul mega vessels. It also has on dock rail intermodal

capacity of over 120 block trains weekly and an 80,000

square metres on dock Distripark facility. In close proximity,

Container Handling Zeebrugge (CHZ), a PSA joint venture with

Terminal Link SA, achieved over 1 million TEUs for the first

time. Upgrading works are planned in 2011 to deepen alongside

water depth to 17 metres, enabling CHZ to handle mega vessels

without restrictions.

Elsewhere in Italy, Voltri Terminal Europa (VTE) achieved a

10.8% increase in volume, resulting in an a nnual throughput

exceeding 980,000 TEUs in 2010. In May 2010, VTE obtained

the concession to Module 6, which added 233 metres of quay

and 10 hectares of yard.

Despite Portugal facing severe pressure on sovereign debts,

PSAs investment in Sines turned in a respectable 50.7% volume

increase. MSCs Eastbound Far East Lion Service which was

launched in May 2010 contributed to the strong transhipment

traffic in Sines.

Mersin International Port in Turkey did very well in 2010,

recording volume highs in three areas: highest annual container

volume, highest monthly container volume and the highest

monthly volume of container freight station boxes handled. The

terminal also reached 1 million TEUs for the first time in its history.

AMERICAS

Exolgan Container Terminal rode on the positive economic

sentiments in Argentina to handle more than 600,000 TEUsin 2010. It is currently expanding its quay to provide for three

container berths and the capability to serve Post-Panamax

vessels. Construction is expected to be completed by March 2011.

PSA Panama International Terminal handled its first vessel on

23 December 2010. This vessel carried a shipment of steel for

the Panama Canal expansion project.

MARINE

PSA Marine deployed 32 tugs to support towage operations in

Singapore and 20 tugs for its overseas towage business. To meet

the demands of the pilotage service, PSA Ma rine continued to

recruit and train pilots. At year end, there were 219 pilots, an

increase of 16 over the previous year.

PSA Marine continued to exploit technology to enha nce

customer service. Since April 2010, customers of PSA Marine

have enjoyed a more convenient way to order, amend and

enquire marine services orders with the launch of the Internet

Marine Ordering System via Smartphones, which is available

on a 24/7 basis.

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The audience affirms their appreciation for good music by

applauding the orchestra at the end of a performance. PSA

appreciates its staff for their contribution and support by

empowering them through culture change, continual learning,

and involving them in corporate social responsibility activities

it is our way of applauding our people and thanking them for

their unwavering commitment.

Round

Applauseof

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In H armony Leadership Development & Compensation Committee

(LDCC)

The LDCC oversees leadership development, talentmanagement and remuneration. It ensures that companies

within the Group have in place appropriate programs and

consistent policies for grooming leaders, developing global

talent and preparing potential successors to key leadership

positions. It also reviews the performance and approves the

remuneration of PSAs senior management.

Supervisory Committees (SCs)

The SCs align ma nagement resources to better manage

PSAs portfolio of terminals worldwide. There are five SCs,

namely: Southeast Asia SC, Northeast Asia SC, Middle East

South Asia SC, Europe & Mediterranean SC and Marine

Services SC. Each SC reviews and plans growth strategies,

and approves major capital expenditures, c ustomer

contracts, tenders and purchase contracts for all PSA

entities within its respective business purview.

The commercial practices within the PSA Group are further

guided by the Code of Business Conduct to ensure utmost

business integrity.

PSA Internationals Board of Directors plays a pivotal role

in overseeing its business affairs and providing guidance

on strategic planning, particularly in growth and fi nancialperformance.

The Board holds quarterly meetings to steer business directions,

review investment opportunities, and approve budgets and

audited accounts. Decisions are made based on a majority vote;

in the event of equal votes, the Chairman holds the deciding vote.

The Board is supported by the following Committees:

Executive Committee (EXCO)

The EXCO reviews and develops strategies for the long

term role and position of the Group. It is responsible for

approving major acquisitions and disposal of investments,

capital expenditures, the taking of loans a nd provision of

guarantees, investment policies for financial projects,

customer contracts, tenders and purchase contracts.

Audit Committee

The Audit Committee identifies significant ri sk areas

and reviews the effectiveness of control procedures and

processes to mitigate risks. It assesses the reliability of

management reporting and compliance with applicable laws

and regulations, and reviews the statutory accounts.

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Touching the H eartstringsfor the Elders and Muscular Dystrophy Association Singapore

benefited from corporate donation by PSA ST and funds

collected by its management, staff and their family members.Our creative fund raising initiatives included the annual PSA

Charity Cook-out which raised some $24,000 for the Lions

Home for the Elders. In all, PSA ST contributed close to

$500,000 to its adopted charities. In October, the Community

Chest of Singapore conferred PSA ST the SHARE Platinum

Award in recognition of its sustained high staff par ticipation

rate in the SHARE monthly donation program.

In other parts of the world, PSA Gwadar in Pakistan donated to a

local charity organization Khidmat-e-Khalq in Karachi, which

freely distributes food and clothes to the local community during

the month of Ramadan. In Thailand, Eastern Sea Laem Chabang

(ESCO) aided in the renovation of the Bang Wang Ree School in

Prachinburi Province as part of its community outreach efforts.

ESCO was also involved in the collection of flood relief aid for the

province of Ayutthaya, under the auspices of the Ruamkatanya

Foundation. In Vietnam, SP-PSA contributed to the Gratitude

Fund of Tan Thanh Commune, the Saigon Childrens Charity, as

well as the Consular Club Charity Bazaar which aids homeless

children. The terminal also donated to flood victims in Central

Viet na m. Ove r in Europ e, Volt ri Termi na l Europa in Ita ly

continues to champion the SolidarBus project a mobile vehicle

that collects relief items for Africas refugees and educates

the community on their plight. Turning to Turkey, employee

volunteers from Mersin International Port were involved in aproject organised by the Turkish Human Resources Association

to raise the awareness in youths from rural villages on the

importance of healthcare and first-aid.

PSA terminals also strongly backed causes for children

beneficiaries in India and Argentina; for the former, organising

sailing programs and a dinner for impoverished children in

Chennai and Kandla, and for the latter, making provisions for

school clothing, toys, education and first-aid campaigns, as well

as food donations for over 2000 children.

In its continuing patronage of the arts a nd sports, the PSA

Group supported the Singapore Symphony Orchestra, Arts

Sentral Asia activities and PSA ST was the official Maritime &

Shipping Sponsor for the inaugural Singapore Youth Olympic

Games 2010 in August, while PSA Antwerp sustained its six-

year partnership with the Belgian Paralympics Committee to

prepare for the 2012 London Meet.

At PSA, we remain resolute in the belief that a company is

measured not only by its bottom-line but by how it upholds the

ethics of good corporate citizenship through philanthropy, and

giving back to the communities from which it has prospered

actions which are integral to our mission of being The Worlds

Port of Call.

Embracing the responsibility of an organisation to the

communities and the environment in which it operates, PSA has

sustained its support of charitable causes and green initiativesthrough the course of 2010.

Underscoring its commitment to the community and the less

privileged, PSA Group HQ oversaw the second batch of bond-

free scholarships awarded to 13 students in Singapore, under

theHowe Yoon Chong PSA Endowment Fund. The Fund, which

consists of contributions from PSA, Temasek Holdings and NSL,

is endowed to perpetuity to provide deserving students from low

income families the opportunity to pursue a formal education.

Our Group Chairman, Fock Siew Wah, also led the way towards

PSA adopting NorthLight School as one of its social causes. A

pioneering school which helps students who are unable to cope

with mainstream education, NorthLight prepares them for

lifelong learning and employability through a values-focused and

career-oriented education. In addition to a cash donation, PSA

Group in collaboration with Singapore Terminals led educational

visits (Learning Journeys) for its teachers and affiliates to gain a

better understanding of potential job opportunities in the port.

We will also be providing places for selected NorthLight students

for industrial attachment within the company.

PSA Groups charitable efforts continued with the sponsorship

of various notable causes, including the Assisi Hospice, St

Lukes Hospital and the Community Chest. On the cultural andeducation front, we also contributed to the National Heritage

Board and Nanyang Technological University, among others.

In tandem with PSAs growing global footprint, we are

taking active steps to reduce our carbon footprint on the

planet. Spearheading these efforts in terms of corporate

sponsorship, the PSA Group made a significant donation to

Singapores National Parks Board. PSA Singapore Terminals

(ST) continued its Go Green campaign for the second year

in 2010, during which its Operations Division organised an

inaugural Go Green road show to highlight PSA STs green

initiatives and raise awareness among staff. Across PSA ST,

eco-friendly practices were carried out. These included the

planting of trees inside the terminals, testing of new equipment

with lower carbon emissions, adapting existing engineering

products and practices to reduce emissions, continued efforts

to reduce fuel usage through more efficient deployment of

equipment and achievement of Green Mark (a benchmark

scheme administered by Singapores Building and Construction

Authority to recognise environmentally friendly buildings) for

PSA STs office buildings.

Reaffirming our support to the community, PSA terminals

around the world were also actively engaged in a wide var iety

of charitable causes. The Beyond Social Ser vices, Lions Home

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Teamwork, synergy and professionalism continue to be the

hallmarks of the partnership among PSA management, staff

and unions, a partnership which has been further enhanced

since the launch of theFish! Philosophy, our common language

of corporate culture change. All across the organisation, efforts

are made to cascade the simple yet powerful Fish! Philosophy

for camaraderie, teamwork, a positive attitude and outstanding

customer service, with the aim of creating engagement and

fulfilment at work.

While Fish! continues to be espoused to all employees, the

LeaderFish! program, launched in 2009 a s a workshop for

culture change at the highest corporate level, continued to

make an impact in 2010. Facilitated by Group Human Resource

and graced by Group Chairman as a guest speaker of leadership

values, the LeaderFish! program challenged our leaders first in

Singapore and then overseas to be change champions for a greatworkplace culture. In the latter part of the year, LeaderFish!

was cascaded to senior leaders as well as young high-potentials

in the Europe & Mediterranean region.

The playing of handbells was chosen as one of the teambuilding

activities to reinforce the learning on LeaderFi sh !. The

simple act of a group of participants ringing bells musically

becomes a challenge of coordination, precision and teamwork.

Individuals soon discover that a single bell can produce a

note but when a song is called for, all the bells must ring in

synergy. Just as successful teamwork produces stunningly

beautiful musical experiences in the handbells exercise; we

believe the same truly positive experience can be multiplied

powerfully in our teams when every participant, at their

own workplaces, puts into practice what was imbibed from

LeaderFish !. The ultimate goal is for every individual to live

theFish! Philosophy as naturally as breathing.

It was the passion forFish! that led Caroline Lim, Global Head

of HR & Corporate Affairs, to accept an invitation from the

International Transport Workers Federation (ITF) a global

affiliation of labour unions in the transport sector including

ports to share her diverse and refreshing experiences in

corporate culture change, and in so doing, inspired the union

representatives with the power ofFish! at the ITF annual

conference held in Long Beach, USA, in October 2010.

Currently, PSA has 9,000 employees learning and living theFish!Philosophy. The employees of PSA International, PSA Marine

and Singapore Terminals completed their first HaveFish! Will

Travel contest in July 2010, after 18 months of nominating one

another for demonstrating goodFish! behaviour. The winners

with the highest nominations were sponsored to a vacation in

Seattle, USA, where theFish! Philosophy had originated. With

the success of the first contest in creating enthusiasm forFish!,

the second 18-month contest is already underway. Over time,

just a s mu sic tra nsc ends boundarie s, we firmly believe that

Fish! will be a unifying language for the global PSA family.

The AscendingFish! Motif

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Directors Report

Statement by Directors

Independent Auditors Report

Group Financial Statements

32

35

36

37

FinancialReview

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Year ended 31 D ecember 2010

DirectorsReport

We are pleased to submit this annual report to the member of the Company together with the audited financial statements for the

financial year ended 31 December 2010.

Directors

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

Mr Fock Siew Wah (Group Chairman)

Mr Eddie Teh Ewe Guan (Deputy Group Chairman and Group Chief Executive Officer)

Ms Chan Lai Fung (Appointed on 22 March 2010)

Mr Davinder Singh s/o Amar Singh

Mr Frank Kwong Shing Wong

Mr Koh Poh Tiong

Mr Kua Hong Pak

Mr Michael Lim Choo San

Mr Ng Chee Keong

Dr Tan Chin Nam

Directors interests

According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies Act, Chapter 50 (the

Act), particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and

infant children) in shares, debentures, warrants and share options in related corporations are as follows:

Name of director and corporation

in which interests are held

Holdings at beginning of the

year/date of appointment

Holdings at

end of the year

Fock Siew Wah

Singapore Telecommunications Limited

- Ordinary shares 3,240 3,240

Chan Lai Fung



Davinder Singh s/o Amar Singh

Singapore Airlines Limited

- S$300 million 2.15% Bonds due 2015 Nil S$500,000

Singapore Technologies Engineering Ltd


- Unvested restricted shares (performance period from 01/01/2008

to 31/12/2008) 5,095#1 2,548#1

- Conditional award of 14,500 restricted shares to be delivered

after 2009 upto21,750#2 Nil

- Unvested restricted shares (performance period from 01/01/2009

to 31/12/2009) Nil 6,197#1

- Time-based restricted shares to be delivered after 2010 Nil 11,300#3



Vertex Investment (II) Ltd

- Ordinary shares 50 Nil

Vertex Technology Fund (II)

- Ordinary shares 500 500

- Redeemable preference shares 486 486

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DirectorsReport

Name of director and corporation

in which interests are held

Holdings at beginning of the

year/date of appointment

Holdings at

end of the year

Koh Poh Tiong



Kua Hong Pak



Ng Chee Keong



Tan Chin Nam

Singapore Airlines Limited



- Ordinary shares 367 367

#1 Balance of unvested restricted shares to be released according to the stipulated vesting periods.

#2 A minimum threshold performance over a one year period is required for a ny restricted shares to b e released. A specified number of restricted shares to be

released will depend on the extent of achievement of all performance conditions and will be delivered in phases according to the stipulated vesting periods.

#3 The shares under the time-based restricted award will be vested in 2011.

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

warrants or share options of the Company, or of related corporations, either at the beginning of the fina ncial year, or date of

appointment if later, or at the end of the financial year.

Except as disclosed under the Share Options section of this report, neither at the end of, nor at any time during the financial year,

was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company

to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Except for salaries, bonuses and fees that are disclosed in note 33 to the financial statements, since the end of the last financial

year, no director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a related

corporation with the director, or with a f irm of which he is a member, or with a company in which he has a substantial financial

interest.

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Share options

The Company has not granted any share option.

The PSA Employee Share Option Plan (the Plan) granted by a subsidiary was approved and adopted by its then members at an

Extraordinary General Meeting held on 22 March 2001.

In the event of an initial public offering of the shares of the subsidiary, certain employees may be allotted a number of share options

based on the monetary value of the underlying shares at the initia l public offering price. The options shall vest one year after any

initial public offering of the shares. No options have been granted since the commencement of the Plan.

Since the end of the last financial year, none of the Companys subsidiaries have granted any options.

Auditors

The auditors, KPMG LLP, have expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

Fock Siew Wah Eddie Teh Ewe Guan

Director Director

25 February 2011

DirectorsReport

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Statement byDirectors

In our opinion:

(a) the financial statements set out on pages 37 to 98 are drawn up so as to give a true and fair view of the state of affairs of the

Group and of the Company as at 31 December 2010 and of the results, changes in equity and cash flows of the Group for

the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore

Financial Reporting Standards; and

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

they fall due.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

On behalf of the Board of Directors

Fock Siew Wah Eddie Teh Ewe Guan

Director Director

25 February 2011

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MEMBER OF THE COMPANYPSA INTERNATIONAL PTE LTD

Report on the financial statements

We have audited the accompanying financial statements of PSA International Pte Ltd (the Company) and its subsidiaries (the

Group), which comprise the statement of financial position of the Group and the Company as at 31 December 2010, the income

statement, statement of comprehensive income, statement of changes in equity a nd statement of cash f lows of the Group for the year

then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 37 to 98.

Managements responsibility for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the

provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards.

Management has acknowledged that its responsibility includes devising and maintaining a system of internal accounting controls

sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and

transactions are properly authorised and that t hey are recorded as necessary to permit the preparation of true and fair profit and

loss accounts and balance sheets and to maintain accountability of assets.

Auditors responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance

with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform

the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

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

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

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

relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal

control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting

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

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

Opinion

In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are

properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fairview of the state of affairs of the Group and of the Company as at 31 December 2010 and the results, changes in equity and cash flows

of the Group for the year ended on that date.

Report on other legal and regulatory requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries

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

KPMG LLP

Public Accountants andCertified Public Accountants

Singapore

25 February 2011

IndependentA uditors Report

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Group Company Note 2010

$000

2009

$000

2010

$000

2009

$000

Non-current assets

Property, plant and equipment 4 6,680,208 6,942,194 386 156

Intangible assets:

- Port use rights 966,055 1,094,893 - -

- Other intangible assets 609,370 678,593 138 415

5 1,575,425 1,773,486 138 415Subsidiaries 6 - - 9,739,673 8,284,148

Associates 7 7,622,888 8,139,748 - -

Financial assets 9 334,432 183,959 - -

Other non-current assets 10 32,156 35,254 - -

16,245,109 17,074,641 9,740,197 8,284,719

Current assets

Inventories 68,908 65,034 - -

Trade and other receivables 11 583,446 628,785 224,387 219,445

Cash and bank balances 14 2,052,092 1,842,438 1,095,101 1,001,668

2,704,446 2,536,257 1,319,488 1,221,113

Total assets 18,949,555 19,610,898 11,059,685 9,505,832

Share capital 15 1,135,372 1,135,372 1,135,372 1,135,372

Reserves 16 7,399,074 6,849,367 6,472,153 5,695,715

Equity attributable to owner of the Company 8,534,446 7,984,739 7,607,525 6,831,087

Non-controlling interests 314,373 308,599 - -

Total equity 8,848,819 8,293,338 7,607,525 6,831,087

Non-current liabilities

Borrowings 17 7,292,818 8,510,414 2,377,790 2,266,987

Provisions 18 62,114 66,234 - -

Other non-current obligations 19 54,028 42,918 - -

Deferred tax liabilities 21 300,441 301,587 642 669

7,709,401 8,921,153 2,378,432 2,267,656

Current liabilities

Trade and other payables 22 1,186,372 1,198,010 403,632 380,046Borrowings 17 940,825 859,742 644,096 -

Current tax payable 247,744 293,168 26,000 27,043

Bank overdrafts 14 16,394 45,487 - -

2,391,335 2,396,407 1,073,728 407,089

Total liabilities 10,100,736 11,317,560 3,452,160 2,674,745

Total equity and liabilities 18,949,555 19,610,898 11,059,685 9,505,832

Statement OfF inancial P osition

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

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Note 2010

$000

2009

$000

Revenue 24 4,076,480 3,835,432

Other income 25 80,744 83,006

Staff and related costs 26 (678,906) (681,857)

Contract services (596,885) (589,721)

Running, repair and maintenance costs (358,559) (315,862)

Other operating expenses (460,963) (528,234)

Property taxes (20,073) (22,920)

Depreciation and amortisation (573,535) (572,630)

Profit from operations 27 1,468,303 1,207,214

Finance costs 28 (340,462) (342,383)

Share of profit of associates, net of tax 261,343 243,728

Profit before income tax 1,389,184 1,108,559

Income tax expense 29 (190,699) (144,648)

Profit for the year 1,198,485 963,911

Attributable to:

Owner of the Company 1,179,002 975,875

Non-controlling interests 19,483 (11,964)


ConsolidatedIncome Statement


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Note 2010

$000

2009

$000


Other comprehensive income

Translation differences of foreign operations (722,025) (301,909)

Exchange differences on monetary items forming part of net investment in

foreign operations (121,232) 17,982

Exchange differences on hedge of net investment in a foreign operation 335,141 73,431

Effective portion of changes in fair value of cash flow hedges (30,496) 20,922

Net change in fair value of cash flow hedges transferred to income statement 16,877 25,476

Net change in fair value of available-for-sale financial assets 164,355 75,288

Share of capital reserve in associates 440 170

Share of fair value reserve in associates 3,673 (1,011)

Share of hedging reserve in associates (356) 604

Share of foreign currency translation reserve in associates (3,199) 10,199

Income tax on other comprehensive income 21 1,239 (6,541)

Other comprehensive loss for the year, net of income tax (355,583) (85,389)

Total comprehensive income for the year 842,902 878,522

Attributable to:

Owner of the Company 841,100 894,324

Non-controlling interests 1,802 (15,802)

Total comprehensive income for the year 842,902 878,522

Consolidated StatementOf Comprehensive Income


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Consolidated StatementOf Changes In Equity


Share

capital

$000

Capital

reserve

$000

Insurance

reserve

$000

Group

At 1 January 2009 1,135,372 51,390 97,357

Total comprehensive income

Profit for the year - - -


Translation differences of foreign operations - - -

Exchange differences on monetary items forming part of net investment inforeign operations - - -

Exchange differences on hedge of net investment in a foreign operation - - -

Effective portion of changes in fair value of cash flow hedges - - -

Net change in fair value of cash flow hedges transferred to income statement - - -

Net change in fair value of available-for-sale financial assets - - -

Share of reserves in associates - 170 -

Income tax on other comprehensive income - - -

Total other comprehensive income - 170 -

Total comprehensive income for the year - 170 -

Transactions with owner, recorded directly in equity

Contributions by and distributions to owner of the Company

Capital contribution by non-controlling shareholders of subsidiaries - - -

Dividend paid to non-controlling shareholders of subsidiaries - - -

Final tax exempt dividend declared and paid of $0.49 per share - - -

Total contributions by and distributions to owner of the Company - - -

Changes in ownership interests in subsidiaries

Acquisition of non-controlling interests without a change in control - - -Total changes in ownership interests in subsidiaries - - -

At 31 December 2009 1,135,372 51,560 97,357

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Foreign

currency

translation

reserve

$000

Hedging

reserve

$000

Fair value

reserve

$000

Accumulated

profits

$000

Total

attributable to

owner of

the Company

$000

Non

controlling

interests

$000

Total

equity

$000

(251,421) (71,220) 12,295 6,416,642 7,390,415 330,944 7,721,359

- - - 975,875 975,875 (11,964) 963,911

(298,805) - - - (298,805) (3,104) (301,909)

17,982 - - - 17,982 - 17,982

73,431 - - - 73,431 - 73,431

- 21,656 - - 21,656 (734) 20,922

- 25,476 - - 25,476 - 25,476

- - 75,288 - 75,288 - 75,288

10,199 604 (1,011) - 9,962 - 9,962

- (6,541) - - (6,541) - (6,541)

(197,193) 41,195 74,277 - (81,551) (3,838) (85,389)

(197,193) 41,195 74,277 975,875 894,324 (15,802) 878,522

- - - - - 7,608 7,608

- - - - - (9,402) (9,402)

- - - (300,000) (300,000) - (300,000)

- - - (300,000) (300,000) (1,794) (301,794)

- - - - - (4,749) (4,749)- - - - - (4,749) (4,749)

(448,614) (30,025) 86,572 7,092,517 7,984,739 308,599 8,293,338

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Consolidated StatementOf Changes In Equity

Share

capital

$000

Capital

reserve

$000

Insurance

reserve

$000

Group

At 1 January 2010 1,135,372 51,560 97,357

Total comprehensive income

Profit for the year - - -


Translation differences of foreign operations - - -

Exchange differences on monetary items forming part of net investment inforeign operations - - -

Exchange differences on hedge of net investment in a foreign operation - - -

Effective portion of changes in fair value of cash flow hedges - - -

Net change in fair value of cash flow hedges transferred to income statement - - -

Net change in fair value of available-for-sale financial assets - - -

Share of reserves in associates - 440 -

Income tax on other comprehensive income - - -

Total other comprehensive income - 440 -

Total comprehensive income for the year - 440 -

Transactions with owner, recorded directly in equity

Contributions by and distributions to owner of the Company

Capital contribution by non-controlling shareholders of subsidiaries - - -

Dividend paid to non-controlling shareholders of subsidiaries - - -

Final tax exempt dividend declared and paid of $0.49 per share - - -

Total contributions by and distributions to owner of the Company - - -

Changes in ownership interests in subsidiaries

Disposal of non-controlling interests without a change in control - - -Acquisition of non-controlling interests without a change in control - - -

Total changes in ownership interests in subsidiaries - - -

Changes in ownership interests in subsidiaries of an associate - - -

At 31 December 2010 1,135,372 52,000 97,357


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Foreign

currency

translation

reserve

$000

Hedging

reserve

$000

Fair value

reserve

$000

Accumulated

profits

$000

Total

attributable to

owner of

the Company

$000

Non

controlling

interests

$000

Total

equity

$000

(448,614) (30,025) 86,572 7,092,517 7,984,739 308,599 8,293,338

- - - 1,179,002 1,179,002 19,483 1,198,485

(704,386) - - - (704,386) (17,639) (722,025)

(121,232) - - - (121,232) - (121,232)

335,141 - - - 335,141 - 335,141

- (29,447) - - (29,447) (1,049) (30,496)

- 15,870 - - 15,870 1,007 16,877

- - 164,355 - 164,355 - 164,355

(3,199) (356) 3,673 - 558 - 558

- 1,239 - - 1,239 - 1,239

(493,676) (12,694) 168,028 - (337,902) (17,681) (355,583)

(493,676) (12,694) 168,028 1,179,002 841,100 1,802 842,902

- - - - - 20,708 20,708

- - - - - (10,704) (10,704)

- - - (300,000) (300,000) - (300,000)

- - - (300,000) (300,000) 10,004 (289,996)

(169) 545 - (1,268) (892) 7,199 6,307- - - (4,305) (4,305) (13,231) (17,536)

(169) 545 - (5,573) (5,197) (6,032) (11,229)

- - - 13,804 13,804 - 13,804

(942,459) (42,174) 254,600 7,979,750 8,534,446 314,373 8,848,819

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Note 2010

$000

2009

$000

Operating activities


Adjustments for:

Depreciation and amortisation 573,535 572,630

Impairment made for:

Financial assets 27 309 492

Intangible assets 27 61,017 61,172

Property, plant and equipment 27 5,275 12,740

Dividend income from financial assets 25 (3,857) (4,135)

Gain on disposal of:

Associates 25 - (565)

Property, plant and equipment 25 (11,027) (8,366)

Share of profit of associates, net of tax (261,343) (243,728)

Finance costs 28 340,462 342,383

Interest income (50,550) (59,472)

Income tax expense 190,699 144,648

Net fair value (gain)/loss on fair value hedge (4,123) 3,1872,038,882 1,784,897

Changes in working capital:

Inventories (3,874) (3,324)

Trade and other receivables (10,438) 10,232

Trade and other payables 22,720 (10,594)

Cash generated from operations 2,047,290 1,781,211

Income taxes paid (219,099) (200,301)

Cash flows from operating activities 1,828,191 1,580,910

Investing activities

Purchase of property, plant and equipment and intangible assets (489,688) (986,570)Proceeds from disposal of:

Associates - 15,719

Financial assets - 4,483

Property, plant and equipment and intangible assets 47,125 81,457

Proceeds from capital distribution from equity securities - 575

Dividends received from associates and financial assets 115,855 110,290

Interest received 52,542 54,866

Cash flows used in investing activities (274,166) (719,180)

Consolidated StatementOf Cash F lows


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Note 2010

$000

2009

$000

Financing activities

Proceeds from bank loans and notes 1,908,327 3,292,367

Repayment of bank loans and notes (2,568,278) (2,957,613)

Interest paid (331,710) (356,617)

Payment of finance lease liabilities (4,813) (3,933)

Dividends paid to owner of the Company (300,000) (300,000)

Dividends paid to non-controlling shareholders of subsidiaries (10,704) (9,402)

Capital contribution by non-controlling shareholders of subsidiaries 20,708 7,608

Repayment of loans from non-controlling shareholders of subsidiaries (5,488) (19,140)

Proceeds from loans from non-controlling shareholders of subsidiaries - 8,205

Acquisition of partial interest in a subsidiary (17,536) -

Disposal of partial interest in a subsidiary 6,307 -

Cash flows used in financing activities (1,303,187) (338,525)

Net increase in cash and cash equivalents 250,838 523,205

Cash and cash equivalents at beginning of the year 1,796,951 1,277,381

Effect of exchange rate fluctuations on cash held (12,091) (3,635)Cash and cash equivalents at end of the year 14 2,035,698 1,796,951

Cash and cash equivalents at end of the year comprises:

Cash and bank balances 2,052,092 1,842,438

Bank overdrafts (16,394) (45,487)

14 2,035,698 1,796,951

Consolidated StatementOf Cash F lows


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These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 25 February 2011.

1 Domicile and activities

PSA International Pte Ltd (the Company) is incorporated in the Republic of Singapore and has its registered office at 460

Alexandra Road, PSA Building, #38-00, Singapore 119963.

The principal activities of the Company are investment holding and the provision of consultancy services on port

management, port operations and information technology. The principal activities of the subsidiaries are mainly those of

a provider of port and marine services.

The immediate and ultimate holding company during the f inancial year is Temasek Holdings (Private) Limited, a company

incorporated in the Republic of Singapore.

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the Group) and

the Groups interests in associates and jointly-controlled entities.

2 Summary of significant accounting policies

2.1 Basis of preparation

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS).

The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities

that are carried at fair value and/or amortised cost as disclosed in the accounting policies set out below.

The financial statements are presented in Singapore dollars which is the Companys functional currency. All financial

information presented in Singapore dollars have been rounded to the nearest thousand, unless otherwise presented.

The preparation of financial statements in conformity with FR Ss requires management to make judgements, estimates

and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income

and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised

in the period in which the estimates are revised and in any future periods affected.

Information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies

that have the most significant effect on the amounts recognised in the financial statements is set out in note 3.

In 2010, the Group adopted the following revised FRSs which are relevant to its operations:

FRS 103 Business combinations (2009)

Business combinations are now accounted for using the acquisition method as at the acquisition date (see note 2.2). The

change in accounting policy has been applied prospectively to new business combinations occurring on or after 1 January

2010 and has no material impact on the Groups profit after tax.

N otes to theFinancial Statements

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FRS 27 Consolidated and separate financial statements (2009)

Acquisitions of non-controlling interests are now accounted for as described in note 2.2. The change in accounting policy

has been applied prospectively and has no material impact on the Groups profit after tax.

2.2 Consolidation

Business combinations

In 2003, the Group effected a Scheme of Arrangement (Scheme) under Section 210 of the Companies Act, Chapter 50,

as sanctioned by the High Court of Singapore. The Scheme resulted in an amalga mation of subsidiaries held by the

Company with those held by PSA Corporation Limited. Such interests acquired from parties under common control are

consolidated on the historical cost method in a manner similar to the pooling of interest method.

All other business combinations are accounted for under the acquisition method as at the acquisition date, which is t he

date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an

entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting

rights that are currently exercisable.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such

amounts are generally recognised in income statement.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group

incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is

classif ied as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to

the fair value of the contingent consideration are recognised in income statement.

Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated

financial statements from the date that control commences until the date that control ceases.

The accounting policies of subsidiaries have been adjusted where necessary to a lign them with the policies adopted by

the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interestseven if doing so causes the non-controlling interests to have a deficit balance.

Associates

Associates are those entities in which the Group has significant influence, but not control, over their financial and

operating policies. Associates are accounted for in the consolidated financial statements under the equity method.

The consolidated financial statements include the Groups share of the post-acquisition results and reserves of associates,

after adjustments to align the accounting policies with those of the Group, from the date that significant i nfluence

commences until the date that signif icant influence ceases. The latest audited financia l statements of the associates are

used and where these are not available, unaudited financial statements are used. Any differences between the unaudited

financial statements and the audited financial statements obtained subsequently are adjusted for in t he subsequent

financial year.

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The Groups investments in associates include goodwill on acquisition and other intangible assets acquired from business

combinations. Where the Groups share of losses exceeds its interest in an associate, the carrying amount of that interest

is reduced to zero and the recognition of further losses is discontinued except to the extent that the Group has incurred an

obligation or has made payments on behalf of the associate.

Jointly-controlled entities

Jointly-controlled entities are those entities over whose activities the Group has contractual agreements to jointly share

the control over the strategic financial and operating decisions of the jointly-controlled entities.

The Groups interests in jointly-controlled entities are recognised in the consolidated fina ncial statements by including

its proportionate share of the income and expenses, assets and liabilities and cash flows with items of a similar nature

on a line-by-line basis, after adjustments to align the accounting policies with those of the Group, from the date that joint

control commences until the date that joint control ceases.

Loss of control

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests

and the other components of equity relate d to the subsidiary. Any surplus or deficit ar ising on the loss of control is

recognised in the income statement. If the Group retains any interest in the previous subsidiary, then such interest is

measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or

as an available-for-sale financial asset depending on the level of influence retained.

Acquisitions of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and

therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are

based on a proportionate amount of the net assets of the subsidiary.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions,

are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with

associates are eliminated against the investment to the extent of the Groups interest in the associate. Unrealised losses

are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries, associates and jointly-controlled entities

Investments in subsidiaries, associates and jointly-controlled entities are stated in the Companys statement of financial

position at cost less accumulated impairment losses.


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2.3 Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange

rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting

date are retranslated to the functional cur rency at the exchange rate at the reporting date. Non-monetary assets and

liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at

the exchange rate at the date on which the fair value was determined. Non-monetary items in a foreign currency that are

measured in terms of historical cost are translated using the exchange rate at the date of the transaction.

Foreign currency differences arising on retranslation are recognised in the income statement, except for differences

arising on the retranslation of available-for-sale equity instruments, a financial liability designated as a hedge of the net

investment in a foreign operation that is effective (see 2.13 below), which are recognised in other comprehensive income.

Foreign operations

The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are

translated to Singapore dollar at exchange rates prevailing at the reporting date. The income and expenses of foreign

operations are translated to Singapore dollar at the average exchange rates for the year.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated

as assets and liabilities of the foreign operation and translated at the closing rate. For acquisitions prior to 1 January 2005,

the exchange rates at the date of acquisition were used.

Foreign currency differences are recognised in other comprehensive income and presented within equity in foreign

currency translation reserve. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate

share of the translation difference is allocated to the non-controlling interests.

When a foreign operation is disposed such that control, significant inf luence or joint control is lost, the relevant proportion

of the cumulative amount in the foreign currency translation reserve is transferred to the income statement as part of

the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign

operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling

interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign

operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is

transferred to the income statement.

Net investment in a foreign operation

Foreign cur rency differences arising from monetary items that in substance form part of the Groups net investment in

a foreign operation are recognised in other comprehensive income and presented within equity in the foreign currency

translat ion reserve. When the net investment is disposed of, the relevant amount in the foreign currency translation

reserve is transferred to the income statement as an adjustment to the gain or loss arising on disposal.

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2.4 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets

includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working

condition for its intended use, the cost of dismantling and removing the items and restoring t he site on which they are

located, and capitalised borrowing costs. Cost may also include transfers from equity of any gain or loss on qualify ing

cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to

the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate

items (major components) of property, plant and equipment.

The gain or loss on disposal of property, plant and equipment is determined by comparing the proceeds from disposal

with the carrying amount of property, plant and equipment, and is recognised net in the income statement.

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the

carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow

to the Group and its cost can be measured reliably. Other subsequent expenditure such as repairs and maintenance is

recognised in the income statement as incurred.

Depreciation is recognised in the income statement on a straight-line basis over the estimated useful life (or lease term, if

shorter) of each part of an item of property, plant and equipment.

Estimated useful lives are as follows:

Leasehold land 20 to 80 years

Buildings 5 to 50 years

Wharves, hardstanding and roads 3 to 50 years

Plant, equipment and machinery 3 to 25 years

Floating crafts 2 to 20 years

Motor vehicles 2 to 10 years

Computers 3 to 5 years

No depreciation is provided on capital work-in-progress until the related property, plant and equipment is ready for use.Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at eac

Documents

PSA_AR2010