dayang ar 2012 cover ok

DAYANG ENTERPRISE HOLDINGS BHD(712243-U)

Head Offi ce

Sublot 5-10, Lot 46, Block 10, Jalan Taman Raja, Miri Concession Land District,P.O. Box 1134, 98000 Miri, Sarawak, Malaysia.

Tel : 085-420185Fax : 085-421654

Email : [email protected] Website: www.desb.net

Annual Report 2012

Focus Towards Excellence

Dayang

Enterp

rise Ho

lding

s Bhd

(712243-U)

AN

NU

AL R

EP

OR

T 2012

2 DAYANG ENTERPRISE HOLDINGS BHD (712243-U) • Annual Report 2012

Cautionary Statement Regarding Forward-Looking Statements

This Annual Report contains some forward-looking statements in

respect to the Dayang Group’s fi nancial condition, results of operations

and business. These forward-looking statements represent Dayang

Group’s expectations or beliefs concerning future events and involve

known and unknown risks and uncertainties that could cause

actual results, performance or events to differ materially from those

expressed or implied in such statements.

Readers are hereby cautioned that a number of factors could cause

actual results to differ, in some instances materially, from those

anticipated or implied in any forward-looking statement. In this respect

readers must therefore not rely solely on these statements in making

investment decisions regarding the Dayang Group. The Board and the

Dayang Group shall not be responsible for any investment decisions

made by the readers in reliance on those forward-looking statements.

Forward-looking statements speak only as of the date they are

made, and it should not be assumed that they have been reviewed

or updated in the light of new information or future events that would

arise in the interim of the publication of this Annual Report and the

time of reading this Annual Report.

DAYANG ENTERPRISE HOLDINGS BHD (712243-U) • Annual Report 2012 1

CONTENTS Cautionary Statement Regarding Forward-Looking Statements

2 Corporate Information

3 Corporate Structure

4 Corporate Key Achievements / Awards

6 5 Years Financial Highlights

7 Financial Calendar

8 Profi le of Directors

13 Message to Our Shareholders

17 Corporate Social Responsibility

21 Audit Committee Report

23 Statement on Risk Management and Internal Control

25 Statement of Corporate Governance

31 Financial Statements

80 Analysis of Shareholdings

83 Notice of Annual General Meeting

Form of Proxy

2012 At A GlanceFinancial PerformanceRevenue (RM’000) 401,215

Profi t Before Tax (RM’000) 128,235

Net Profi t (RM’000) 101,242

Total Assets (RM’000) 738,419

Shareholders’ Equity (RM’000) 597,310

Earnings Per Share (Sen) 18.42

NTA per share (Sen) 108.66

Return On Equity (%) 16.95

Gross Dividend (Sen) 10.00

Gross Dividend Yield (%) 4.20



Corporate Information

REGISTERED OFFICE AND HEAD OFFICE

Sublot 5 – 10, Lot 46, Block 10,Jalan Taman Raja,98000 Miri, Sarawak, Malaysia.

SHARE REGISTRAR

Tricor Investors Services Sdn BhdLevel 17, The Gardens, North Tower,Mid Valley City,Lingkaran Syed Putra,59200 Kuala Lumpur,Malaysia.Tel : 603 2264 3883FaX : 603 2282 1886

PRINCIPAL BANKERS

RHB Bank BerhadLot 362, Block 9, Jalan Nakhoda Gampar,98000 Miri, Sarawak, Malaysia.

United Overseas Bank BerhadNo 108 & 110 Jalan Bendahara,98000 Miri, Sarawak,Malaysia.

CIMB Bank BerhadLot 507 & 508 Block 9, MCLD,Jalan Permaisuri,98000 Miri, Sarawak,Malaysia.

COMPANY SECRETARIES

Bailey Kho Chung Siang (LS0000578)Bong Siu Lian (MAISCA 7002221)

LEGAL ADVISORS

Messrs. Alvin Chong & Partners AdvocatesLot 176 & 177, 2nd Floor,Jalan Song Thian Cheok,93100 Kuching Sarawak, Malaysia.Tel No : 082- 410111

LOCATION OF BUSINESS

AUDITORS

KPMG (Firm No AF0758) Chartered AccountantsLevel 6, Westmoore House,Twin Tower Centre, Rock Road,93200 Kuching, Sarawak,Malaysia.

INCORPORATION10 October 2005Under the Companies Act 1965

STOCK EXCHANGE LISTING

Main MarketBursa Malaysia Securities Berhad Listed on 24 April 2008Stock Code : 5141Stock Name : Dayang

BOARD OF DIRECTORS

Datuk Hasmi Bin Hasnan Non-Independent Executive Chairman

Ling Suk Kiong Non-Independent Executive Deputy Chairman

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin Executive Managing Director

Joe Ling Siew Loung @ Lin Shou Long Executive Deputy Managing Director

Gordon Kab @ Gudan Bin Kab Non-Independent Executive Director

Jeanita Anak Gamang (Appointed on 05.01.2012) Non-Independent Executive Director

Mohd Ashraf Assai Bin Abdullah (Appointed on 03.10.2012) Non-Independent Executive Director

Sulaihah Binti Maimunni (Resigned on 30.09.2012) Non-Independent Executive Director

Chia Chu Fatt Independent Non-Executive Director

Polit Bin Hamzah Independent Non-Executive Director

Tuan Haji Abdul Aziz Bin Ishak Independent Non-Executive Director

GROUP OPERATION

Head Offi ce

Branch Offi ce

Miri Warehouse

Labuan warehouse

Labuan Fabrication Yard

Administrative offi ce

Bintulu Warehouse/Fabrication Yard

DESB Kemaman Yard

LOCATION OF FACILITY

Sublot 5 – 10, Lot 46, Block 10, Jalan Taman Raja, 98000 Miri, Sarawak, Malaysia.

Lot No. L11-07, Level 11, Brem Mall, Jalan Kepong, 52000 Kuala Lumpur, Malaysia.

Sublot 2429, Jalan Cattleya 2, Piasau Industrial Estate, 98000 Miri, Sarawak, Malaysia.

Lot No. CL2053118752, Kg Ranca Ranca, District of Labuan, 87000 Labuan Federal Territory, Malaysia.

Lot 3, CL205384407, Off Jalan Patau Patau, 87000 Labuan Federal Territory, Malaysia.

Lot 2, Ground Floor, Block 16, Bandar Baru Penampang, P O Box 264, 89507 Penampang, Kota Kinabalu, Sabah, Malaysia.

Lot 3061, Block 26, Kidurong Light Estate, Kemena Land District, 97000 Bintulu, Sarawak, Malaysia.

04 – 01, KSB Phase 1, Kemaman Supply Base, 24007 Kemaman, Terengganu Darul Iman, Malaysia.


Corporate Structure

100%DAYANG ENTERPRISE SDN BHD- Offshore Topside Maintenance Services- Minor Fabrication Operations- Offshore Hook-up and Commissioning

Dayang Enterprise

Holdings Bhd (‘DEHB”)

100%FORTUNE TRIUMPH SDN BHD Provision of Rental Equipment

50%ALPHA DAYANG (B) SDN BHDDormant

100%DESB MARINE SERVICES SDN BHDOwner and Charter of Marine Vessels


Corporate Key Achievements / Awards

YEAR

2012

2012

2011

2011

2011

2011

2010

2010

2010

2010

2009/2010

TYPE OF AWARD

Appreciation

Certifi cation

Appreciation

Appreciation

Appreciation

Certifi cation

Certifi cation

Certifi cation

Certifi cation

Certifi cation

Certifi cation

AWARDED BY

Murphy Oil & Gas

Petronas Carigali

Petronas Carigali

Murphy Sarawak Oil Co. Ltd

IQNET And SIRIM QAS International

SIRIM QAS International

Sarawak Chief Minister’s Offi ce

Murphy Oil & Gas

Shell Malaysia

Petronas Carigali

Petronas Carigali

REMARK

MURPHY’S Contractor Engagement Session

Certifi cation of Appreciation Dayang Enterprise SDN BHD for best Contractor Performance SCM-Contractors Management Sharing session 2012

Appreciation note for safe Northern and Southern turnaround

Appreciation for the support DESB on the DIVERTER valves change out

Implemented and maintains a Quality management system which fulfi ls the requirement of the following standards ISO 9001:2008 for the following activities provisions of general topside construction and maintenance services to the oil and gas industry

Implemented a Quality Management System complying with ISO 9001: 2008 Quality Management System requirement

Sarawak Chief Minister’s Environmental Award (CMEA) 2010- large Enterprise Category (Oil & Gas)

Excellent HSE Performance which resulted in 2 years Loss Time Injury (LTI) Free operation for KIKE, Malaysia

SSB/SSPC : Celebrating 3 years Goal Zero

Recognition of excellent performance for services successfully rendered to Petronas Carigali – SBO in Samarang/Sumandak Intergrated Shutdown 2010 with early completion of All Shutdown Activities by 1 day and LTI Free safety record (40,044 manhours and 124 UAUC)

Recognition of excellent performance for services rendered to Petronas Carigali – SBO in EWG-A Blasting/Painting and Structural/Piping Replacement activities (2009-2010) with LTI Free safety record (70,752 manhours and 474 UAUC)

Appreciation for Active UAUC Reporting (1st, 2nd, 3rd & 4th QTR 2010).

Certifi cation of Appreciation for Active UAUC Reporting (October 2009 – February 2010)


Corporate Key Achievements / Awards (Continued)

REMARK

Certifi cation of Appreciation In Recognition of Excellent Performance for Services Successfully Rendered to PETRONAS Carigali-SBO in SMG-A Blasting /Painting and Structural/Piping Replacement Activities (2009) with LTI Free safety Record(209,417 manhours 1,266 UAUC)

Certifi cation of Appreciation for Active UAUC reporting ( April-Sept 2009)

Major Contractor Category Merit Award In recognition of Provision of Providing Offshore Integrated Topside Maintenance( Including Hook-Up and Commissioning) for Oil and Gas Industry.

Excellent Performance for Surface Preparation Works for Samarang-F (SMJT-F) Workover Campaign in 2008 & 2009 with LTI Free Safety Record (102,514 safety manhours and 294 UAUC)

Recognition of Excellent Performance for services rendered to PCSB SBO in Semarang –F Workover Preparation Activities Phase 1 with LTI Free Safety Record (84,480 mhrs & 274 UA/UC)

Recognition of an Excellent Achievement

SBO-Contractor Senior Management HSE Meeting

April – September 2008 ( Active UAUC Reporting )

PCSB HSE Interactive Quiz for Contractor

AWARDED BY

Petronas Carigali(SBO)

Petronas Carigali

Petronas



PETRONAS Carigali

Petronas Carigali Sdn Bhd

Petronas Carigali SDN BHD & Health, Safety & Environment Department Petronas Carigali Sdn Bhd Sabah Operation

HSE Department PCSB Sarawak Operations

Notes : -PMO = Peninsular Malaysia OperationTRCF = Total recordable injury case frequencyLTI = Loss Time InjuryUAUC = Unsafe Act & Unsafe condition

YEAR

2009

2009

2007/2008

2008/2009

2008

2008

2008

2008

2008

TYPE OF AWARD

Certifi cation

Certifi cation

Awards

Certifi cate of Appreciation

Certifi cate of Appreciation

PETRONAS Group HSE Awards 2007/2008

Petronas Awards Petronas Awards

Petronas Awards


5 Years Financial Highlights

Year 2008 * 2009 2010 2011 2012

Revenue 181,128 196,954 255,385 382,323 401,215

Gross Profi t 90,822 85,793 129,742 157,372 186,025

PBT 88,759 52,401 83,059 106,478 128,235

PAT 71,444 44,785 67,731 83,129 101,242

GP Margin 50.1% 43.6% 50.8% 41.2% 46.4%

PBT Margin 49.0% 26.6% 32.5% 27.9% 32.0%

ROE 22.6% 13.8% 18.2% 15.9% 17.0%

157,372

186,025

129,742

85,79390,822

Gross Profit (RM’000) PBT (RM’000)

PBT Margin (%) PAT (RM’000)

Revenue (RM’000)

GP Margin (%)

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

41.2

46.4

50.8

43.6

50.1

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

106,478

128,235

83,059

52,401

88,759

20,000

40,000

60,000

80,000

100,000

120,000

140,000

83,129

101,242

67,731

44,785

71,444

20,000

40,000

60,000

80,000

100,000

120,000

2008 2009 2010 2011 2012

2008 2009 2010 2011 2012

2008 2009 2010 2011 2012

2008 2009 2010 2011 2012

2008 2009 2010 2011 2012

2008 2009 2010 2011 2012

2008 2009 2010 2011 2012

401,215

382,323

255,385

196,954181,128

100,000

150,000

200,000

100,000

350,000

400,000

450,000

300,000

27.9%

32.0%32.5%26.6%

49.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

ROE (%)

15.9%

17%18.2%

13.8%

22.6%

5.0%

10.0%

15.0%

20.0%

25.0%Note: 2008 * Results is for 15 months period.


Financial Calendar

FINANCIAL YEAR END 31 DECEMBER 2012

ANNOUNCEMENT OF RESULTS

FIRST QUARTER 22 May 2012

SECOND QUARER 28 August 2012

THIRD QUARTER 19 November 2012

FOURTH QUARTER 26 February 2013

PUBLISHED ANNUAL REPORT AND FINANCIAL STATEMENTS

NOTICE OF ANNUAL GENERAL MEETING 22 May 2013

7TH ANNUAL GENERAL MEETING 13 June 2013

DIVIDEND

1st Interim for Year 2012

Announcement 28 August 2012

Entitlement date 14 September 2012

Payment Date 08 October 2012

2nd Interim for year 2012

Announcement 26 February 2013

Entitlement date 19 March 2013

Payment Date 12 April 2013


Datuk Hasmi Bin Hasnan, aged 60, was appointed Non-Independent Executive Chairman of Dayang Enterprise Holdings Bhd on 29 February 2008.

He graduated with a BSc in Estate Management from the London South Bank University, UK in 1978.He is a Senior Certifi ed Valuer with International Real Estate Institute, USA and a member of FIABCI.

He began his career in 1979 as a valuer in the Land and Survey Department of Sarawak. Since 1982, he has been involved in a wide range of businesses, including valuation, project management, property development and management, construction, timber, manufacturing, trading and publishing. In June 1993, he became the Managing Director of Naim Land Sdn Bhd and has since been the main driving force behind the company’s growth and expansion.

He was awarded the Property Man of the Year for 2008 by the International Real Estate Federation (FIABCI) in Kuala Lumpur.

He is the Managing Director of Naim Holdings Berhad, a company listed on the Main Board of Bursa Malaysia Securities Berhad and director of Naim Incorporated Berhad, a non-listed public company.

Ling Suk Kiong, aged 67 is the founder of Dayang Group of Companies. He established Dayang Enterprise Sdn Bhd in 1980. He was appointed Executive Deputy Chairman of Dayang Enterprise Holdings Bhd on 29 February 2008. He has been instrumental in the growth and development of our Group. He brings with him more than thirty (30) years of experience in the Oil and Gas Industry and is mainly responsible for the overall strategic business direction of our Group.

He was awarded the Sarawak State Entrepreneur Of The Year Award 2009 in Kuching representing the Sarawak Chinese Chamber of Commerce and Industry category.

He is also a director of S.K Ling & Sons Sdn Bhd, Jasa Oilfi elds Supply Sdn Bhd and Kunci Prima Sdn Bhd.

CHAIRMAN

Datuk Hasmi Bin Hasnan

DEPUTY CHAIRMAN

Ling Suk Kiong

Member – Risk Management Committee

Profi le of Directors


MANAGING DIRECTOR

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

Chairman – Corporate Social Responsibility Committee


DEPUTY MANAGING DIRECTOR

Joe Ling Siew Loung @ Lin Shou Long


Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin, aged 50, was appointed Managing Director of Dayang Enterprise Holdings Bhd on 29 February 2008. He graduated in 1984 from the University of Toledo in the United States of America with a Bachelor of Science Degree majoring in Civil Engineering.

Upon his graduation he joined Modal Bina Sdn Bhd as a Project Engineer. Subsequently in 1988, he took up the position as Sales Engineer with Mobil Oil Malaysia Sdn Bhd. In 1991, he established Hexamas Sdn Bhd.

He was appointed Director of Dayang Enterprise Sdn Bhd in 1993. He also holds directorship in Fortune Triumph Sdn Bhd and DESB Marine Services Sdn Bhd. He holds several directorships in other private limited companies in Malaysia, including Hexamas Sdn Bhd, Hexamas Oilfi eld Services Sdn Bhd, Sierra Mal Sdn Bhd and Kunci Prima Sdn Bhd.

Joe Ling Siew Loung @ Lin Shou Long, aged 40, was appointed Non-Independent Deputy Managing Director on 29 February 2008. He graduated from University of Western Australia in 1993 with a Bachelor Degree in Engineering. In 1999, he obtained a Master of Business Administration degree from the same university.

He began his career in 1994 when he joined Sarawak Shell and Sabah Shell as a Trainee Engineer. In 1995, he joined POG. EP. Fochi Joint Venture as an Offi ce Engineer. Subsequently in 1995, he joined Daiken Sarawak Sdn Bhd as a Production Engineer.

He joined Dayang Enterprise Sdn Bhd in 1997 as a Project Engineer. In 2004, he was appointed Assistant to the General Manager. In 2008, he was promoted to the role of Deputy Managing Director. He is currently responsible for overseeing and monitoring the management and operations of Dayang Group.

Profi le of Directors (Continued)


Jeanita Anak Gamang, aged 40, was appointed Non-Independent Executive Director of Dayang Enterprise Holdings Bhd on 05 January 2012. She obtained a Diploma in Electrical Engineering from Mara Institute of Technology, Shah Alam in 1995.

Ms Jeanita began her career in 1997 as a Trainee Engineer in Dayang Enterprise Sdn Bhd, a subsidiary of Dayang Enterprise Holdings Bhd. From 1999 onwards, she has held the position of Head of Administration responsible for all matters related to administrative and recruitment of offi ce personnel. She was appointed as Director of Dayang Enterprise Sdn Bhd in 2006.

Encik Mohd Ashraf Assai Bin Abdullah aged 48 was appointed Non-Independent Executive Director of Dayang Enterprise Holdings Bhd on 3 October 2012.

He graduated with a Bachelor of Science in Mechanical Engineering from New Mexico State University, USA.

Encik Mohd Ashraf has a total of 23 years combined hands on experience in both Oil and Gas and Construction industries. He gained extensive experience in engineering design, construction, fabrication, HSE, cost/planning, project management and business development in both offshore and onshore Oil and Gas sectors via his 23 years accumulated stints in Sarawak Shell Berhad Exploration & Production, Brooke Dockyard and Engineering Works Corporation, Propel Johnson Controls Sdn Bhd and others.

He has gained wealth of management experience in those companies ranging from oil & gas strategic planning including identifying, proposing and developing business opportunities in the oil & gas sectors, established land based engineering strategic business unit to capture land based infrastructure and petrochemical plants business opportunities as well as fabrication/EPCC opportunities. He had led, strategized and managed business activities, involved in business development and tender proposal preparation, EPCC project implementation, contract administration, procurement, fi nancial management, Health, safety and environment and quality assurance.

Position-wise, he has worked as safety engineer, facilities engineer, project engineer, fabrication liaison engineer, cost/planning engineer, facilities manager, project manager, senior manager – strategic front end planning , business development and project management offi ce.

Mohd Ashraf is also currently the Head/COO of Oil and Gas Division at Naim Engineering Sdn Bhd.


EXECUTIVE DIRECTOR

Jeanita Anak Gamang

EXECUTIVE DIRECTOR

Mohd Ashraf Assai Bin Abdullah


Gordon Kab @ Gudan Bin Kab, aged 57, was appointed as our Non-Independent Executive Director on 29 February 2008. He graduated from Loughborough University of Technology, England United Kingdom, with a B.Sc (Hon.) degree in Civil Engineering.

He has over thirty (30) years of working experience in both Oil and Gas and the Construction industries. He gained extensive experience with Sarawak Shell Berhad for fi fteen (15) years and Sime Darby Berhad’s Oil and Gas Engineering Division, Esteem Century Sdn Bhd.

In mid May 2000, he was engaged by Cahya Mata Sarawak Berhad as a Senior Project Manager (Central Procurement Unit) and then as Senior Project Manager for PPES Works (Sarawak) Sdn Bhd (Northern Region Operation). He then moved on to PPES Marine Resources Sdn Bhd as an Operations Manager in the Deep Sea Fishing Division in charge of vessels management and support.

He was engaged by Naim Group of Companies from 2006 to 2009.He was appointed as a Senior Head of Construction, in charge of the operation and execution of major infrastructure, engineering projects and building/institutional complexes. He was later appointed as Vice President for the Oil & Gas Division.

Chia Chu Fatt, aged 59, was appointed as our Independent Non-Executive Director on 29 February 2008. He is an accountant by profession and is the proprietor of Andy Chia & Co. He is a Fellow member of the Association of Chartered Certifi ed Accountants (UK), a Chartered Accountant of the Malaysian Institute of Accountants and an Associate member of the Chartered Tax Institute of Malaysia. He has over thirty (30) years of working experience in Chartered Accountants fi rms, of which approximately four (4) years were in a medium size fi rm in London.

He is a Board member of Sarawak Land Development Board. He was a Sarawak State Legislative Council Assemblyman from 2006 to April 2011and was a Councillor of Miri Municipal Council from 1988 to 1999.

He is an Independent Non-Executive Director of Ta Ann Holdings Berhad.


EXECUTIVE DIRECTOR

Gordon Kab @ Gudan Bin Kab

Chairman – Risk Management Committee

Member – Corporate Social Responsibility Committee

INDEPENDENT NON-EXECUTIVE DIRECTOR

Chia Chu Fatt

Chairman – Audit Committee

Member – Joint Remuneration And Nomination Committee

Member – Corporate Social Responsibility Committee


Polit Bin Hamzah, aged 63, was appointed as our Independent Non-Executive Director on 29 February 2008. He graduated with BSc (Hons) in Geology from University of Malaya in 1975. He worked for twenty (20) years (1975 – 1996) in the oil and gas exploration and production company (Petronas Carigali) in various technical and management positions with the last position being the General Manager in-charge of the Sabah Operations.

From 1997 – 2001, he headed the Land Custody and Development Authority, a body responsible for planning and development of lands for large scale commercial agriculture (oil palm, sago) plantations and property development throughout the state of Sarawak through partnerships with listed and private companies.

In 2002 -2003, he took up the position as the General Manager of the Sarawak Economic Development Corporation. From 2003 till to date, he continues to be involved in the Boards of various government and private owned companies in Sarawak and at the Federal level. He was a member of the Board of Lembaga Pergalakan Pelancongan Malaysia (Tourism Malaysia) a body corporate under the Ministry of Tourism, Malaysia. from 2003 – 2008.

He has been re-designated from Independent Non-Executive Director to Executive Director of Sarawak Plantation Berhad on 20 December 2012. He is also a director of KUB Sepadu Sdn Bhd.

Tuan Haji Abdul Aziz Bin Ishak, aged 61, was appointed as our Independent Non-Executive Director on 29 February 2008. A Naval Architect by profession, Tuan Haji Abdul Aziz Bin Ishak completed his secondary education at the Malay College, Kuala Kangsar in 1970 and later obtained an Ordinary National Certifi cate in Nautical Science from the Riversdale College of Technology, Liverpool, United Kingdom in 1974 and a Bachelor of Science in Naval Architecture and Ocean Engineering from the University of Glasgow, Scotland, United Kingdom in 1981. He later attended an Advanced Management Program at the Smeal Business School from the Pennsylvania State University in the United States of America.

He has over thirty (30) years of experience in the Oil and Gas and marine industry having started his careers as a Cadet and Deck Navigating Offi cer with Blue Funnel Line in Liverpool in 1971 and later joined Orient Lloyd (M) Sdn Bhd as Shipping Operations Executive in 1975. From 1981 to 1983, he was attached to Penang Port Commission as Naval Architect/Planning Engineer before joining PETRONAS, Marine Department in 1983 as Section Head. He was later promoted to Senior Manager, Technical Services of PETRONAS Tankers Sdn Bhd in 1990 and was posted to France and Japan before returning to Malaysia in 1996 as General Manager, Fleet Operations. In 1999, he was promoted to the position of Chief Executive Offi cer and Managing Director until his retirement in 2007.

Concurrently between 1999–2001, he was also the Senior General Manager for Fleet Management Division and Senior General Manager, LNG Shipping Business Division of MISC Berhad.


Polit Bin Hamzah

Chairman – Joint Remuneration and Nomination Committee

Member – Audit Committee

Member - Risk Management Committee


Tuan Haji Abdul Aziz Bin Ishak

Member – Audit Committee

Member – Joint Remuneration and Nomination Committee


ADDITIONAL INFORMATION ON THE BOARD OF DIRECTORS

1. Family relationships with any director and major shareholders - Save for Joe Ling Siew Loung @ Lin Shou Long who is the son of Ling Suk Kiong, there are no other family relationship with the Directors and/or major shareholders of the Company.

2. Nationality - All Directors of the Company are Malaysians.

3. Any confl ict of interest with the Company or its subsidiaries - None of the Directors have any confl ict of interest with the Company or its subsidiaries.

4. Convictions of offences (within the past 10 years, other than traffi c offences) - None of the Directors have been convicted for any offences.

5 Attendance of Board Meetings - The details of Directors’ Board Meetings during the fi nancial year are set out in the Statement of Corporate Governance.


Our company continued to scale new heights again, with its market capitalisation, growing from RM510 million from its IPO days to over RM1.8 billion within fi ve years and our share price surging to record highs --- past the RM3 band in recent days.

Our company also continued to register record profi ts yet again. It is with great pride that we share with all of you, our valued shareholders that for the year ended 31 December 2012 our Profi t after Tax (PAT) surpassed the RM100 million-mark for the fi rst time in our history! At this juncture, we wish to thank all our management and staff who have worked tirelessly, in making what used to be impossible, possible.

In all honesty, we believe we have come a long way in a relatively short time. We continue to consistently deliver good results and this is the ultimate output of collective efforts, thanks to the strong culture at Dayang.

Fellow shareholders, the year 2012 was an eventful year of tendering; a year where we believe was the watershed year for us to steer for greater heights going forward. For the most part of 2012, most of us in Dayang were busy preparing for the submission of the mega PAN Malaysia Hook-Up Commissioning (HUC) Contracts while at the same time all our teams have to cope with high level of activities for the on-going contracts. Our resources were not only spread very thin but were also stretched to the fullest. Fortunately, a lot of preparatory ground work for the HUC tenders was already done much earlier,

Message To Our Shareholders

it gives us great pleasure to present to you this Annual Report for the year ended 31 December 2012, our 5th full year as a listed entity on Bursa Malaysia.

including capacity building, expanding our fabrication yard facilities, increasing our fl eet of marine equipment and vessels and also in areas of manpower and logistics; forging strategic alliances and gearing ourselves in anticipation of these big jobs.

In fact, this tendering exercise involves every facet of our organisation and the whole spectrum of Dayang; from QA/QC to procurement, QHSE to fi nance and operations. We developed great team work and cooperation, both east and west; between our people in our Kuala Lumpur and our Miri offi ces as well as our Labuan offi ce. We were really integrated as one company in motion and in action. We also had one vision; to secure one of the many packages in the HUC Contracts to replenish our existing order book meaningfully! Everybody played their role to put in our best bids and it was a demonstration of teamwork at its best! Hopefully all the hard work will bear fruits in the months to come as we keep our fi ngers crossed for a favourable outcome which we believe could provide the next wave of strong earnings growth.

Review of Operations

2012 started off on a promising note with our wholly owned DESB Marine Services Sdn Bhd securing a RM85 million 5-year contract from Nautika Sdn Bhd for the extension of a time charter contract for our workboat, Dayang Zamrud which is currently being utilised by Brunei Shell Petroleum for well reservoir management.

The ink had barely dried on this contract, and DESB Marine Services make news again; this time taking delivery of a 199 pax accommodation workboat, MV Dayang Topaz. Immediately not long after delivery, MV Dayang Topaz was on spot charter to Petronas Carigali.

While on the subject of marine vessels charter, it is heartening to note that generally both vessel utilisation and vessel charter rates have improved for much of 2012. These factors contributed towards a signifi cant improvement to our profi ts for 2012.

In February 2012, we secured a RM125 million, three year topside maintenance contract with a two year option, from Talisman Malaysia Ltd. It is encouraging to note that after months of toiling, the revenue stream for this contract is now more stable.

During the year, activities from all the topside maintenance contracts were running high. Our focus and attention were specifi cally channelled towards the topside structural maintenance contract with Shell and Carigali where we ensured every job was properly monitored, executed and completed with the highest quality and effi ciency. More work orders and jobs were successfully completed and higher revenues were recorded during this period and profi ts also increased accordingly.

Our fellow shareholders,


Message To Our Shareholders (Continued)

Financial Review

Our company, for FY2012 raked in RM129.37 million in net profi ts, which is a whopping 51% growth from FY2011. Apart from the outstanding operational results, our prudent investment decision, resulting in RM28.13 million gains on fi nancial assets, contributed to the all-time high earnings. In tandem with the strong earnings performance, Dayang recorded RM401.21 million revenue, which is the highest ever achieved in our history. Earnings per share for the year in review stood at 18.42 sen.

It is noteworthy that Dayang’s results trumped that of consensus, set by oil and gas analysts. We are delighted that our better-than-expected results has been well-received by the investment community, as refl ected in our increasing market capitalisation.

Earnings before interest and tax (EBIT) margins, expanded by 3.6% to 31.6%; largely driven by improvements in topside maintenance services and the marine charter division. We are proud to share that our profi tability has remained stable over the years in spite of the intensifying competition which has resulted in generally weaker margins in the oil and gas industry. Our strong profi tability is largely attributable to our operational effi ciency which we believe will stand us in good stead against our competitors.

Dayang’s net tangible asset per share for the year ended December 2012 was RM1.09, its highest ever. In line with the stellar performance, Dayang announced a total of ten sen tax exempt dividend to shareholders with respect to FY2012.

As at end December 2012, Dayang had cash and bank balances of RM153.63 million, and other investments of RM35.68 million.

Dayang’s non-current liabilities stand at RM45.38 million and short term debt commitments amounted to RM22.15 million. Shareholders’ funds for the year ended December 2012 was a respectable RM597.31 million.

Cash fl ow generated from operations was RM118.52 million.

Our strong execution track record over the years has gained due recognition from our valued clients. While we take pride in our

company’s accomplishments last year, we look forward to 2013, to further stamp our mark on the oil and gas sector which is now witnessing a robust outlook, thanks to the record high capex spending commitment from Petronas.

Dividends

Dayang, in end August announced an interim tax exempt dividend of fi ve sen, the fi rst for FY2012. This dividend payment came about as a result of strong half year fi nancial performance.

At the end of February 2012, we announced a fi ve sen interim, tax exempt dividend, for the fi nancial year ended December 2011--- our second dividend payment for FY2011. It is also noteworthy that the dividend payment came on the back of record profi ts registered then.

For FY2012, we declared a total of ten sen tax exempt dividend, translating into 4.2% dividend yield (based on 31 Dec 2012 share price). We note that the decent dividend yield last year was in fact among the highest within the Malaysian oil and gas sector.

Dayang is one of the few oil and gas companies paying out regular dividends, and constantly rewarding shareholders, which is once again, testimony of our company’s strength.

Corporate Exercise

In June 2012, Dayang bought 16.58 million shares of Perdana Petroleum Bhd, and subsequently increased its shareholding up to 14.88 percent.

To recap, Dayang fi rst surfaced in Perdana Petroleum as a substantial shareholder in late 2011, with 11.53 percent, via a private placement and acquisitions from the open market.

Our thinking then when we ventured into Perdana Petroleum was moulded by an industrialist and oil and gas man, John D Rockefeller who said, “If you want to succeed you should strike out on new paths, rather than travel the worn paths of accepted success.”

Adding to this excitement, in September 2012, Dayang increased its shareholding in Perdana Petroleum, to 19.09 percent, after buying 20.84 million shares from the open market.



In the early part of this year, Dayang further strengthened its shareholding in Perdana Petroleum to 26.1 percent, after two bouts of buying from the open market.

With these acquisitions, Dayang can now equity account Perdana Petroleum’s earnings into its fi nancials.

It is noteworthy that Perdana Petroleum is on the verge of a turnaround, which makes the shares acquisition rather timely.

Dayang is also sitting on a handsome paper gain with Perdana Petroleum’s stock currently trading at above RM1.40. Dayang’s private placement of 10 percent was at a mere 71 sen, while most of the holding cost for most of the shares in Perdana Petroleum is signifi cantly below the current market price.

Prospects for the current year 2013

The RM300 billion that Petronas has set aside for spending on the oil and gas sector over fi ve years, has been a boon for all the players, including Dayang.

All in all, Petronas spent an aggregate of RM104.6 billion in 2011 and 2012, or 35 percent of the RM300 billion in capex budgeted in its 2011 to 2015 development programme. This underpins Petronas’ capex commitment to cover rising costs, upgrade asset integrity, enhance yields of existing and legacy assets, drive growth, and venture into more challenging and green fi eld projects such as enhanced oil recovery, deep-water and unconventional hydrocarbons.

Last year alone, there were 22 domestic discoveries, nine Production Sharing Contracts (PSCs) signed, two Risk Service Contracts awarded and 32 fi rst oil or gas strikes, which indicated that the Government is indeed intensifying efforts to resuscitate oil and gas production. After all, over the last seven years, it has been reported that Petronas has consistently contributed an average one-third of the Federal Government’s revenue every year.

The Government’s effort to revive production was given a shot in the arm by sustainable oil prices, at around US$100 per barrel, which we feel is likely to be sustained.

Since the beginning of 2013 until early March, Petronas’ total contracts awarded to oil and gas players have already reached

RM4.2 billion or about 4.4 times higher than RM972 million in the fourth quarter of 2012.

It is pleasing to note that our associate company Perdana Petroleum has also been a benefi ciary, securing a RM430 million job to provide four Anchor Handling Tug Supply (AHTS) vessels to Petronas Carigali Sdn Bhd.

We, the management of Dayang, are also eagerly awaiting the award of an estimated RM10 billion in hook up and commissioning contracts under the Pan Malaysia cluster of jobs.

Considering the lack of established hook-up and commissioning (HUC) companies in Malaysia, Dayang, being one of the largest with proven track record, is likely to be one of the frontrunners for the huge contracts. We believe that our impressive track record with existing clients such as Petronas Carigali and Shell speaks for itself.

In the second half of 2013, there could be the rollout of the second phase of the North Malay basin gas cluster project, which will involve a large central processing platform at the Bergading fi eld, and multiple satellite well-head platforms, not to mention the massive gas cluster projects off Sabah and Sarawak which are tied in to the expansion of the Bintulu LNG complex, to be developed in 2015.

Petronas is also likely to award more marginal oil fi elds which could be a lucrative proposition for any entrant, and also for the service providers.

All these point to a bright prospect for us at Dayang.

Capacity expansion

In September last year, we went on a capacity expansion and we acquired a fabrication yard measuring some four acres in Labuan.

With the acquisition of the four acre-yard in Rancha-Rancha Labuan and also the development of another 3 acre fabrication yard in Telok Kalong Kemaman in Terengganu, Dayang has doubled its fabrication yard space from its existing three acres yard in Labuan.

While this acquisition does not leave a signifi cant dent to our balance sheet, with the two new yards, Dayang will be better

able to handle minor fabrication works for hook up and commissioning works in the oil and gas sector.

On this note on expansion, we are glad to add that Dayang has entered into a shipbuilding agreement with Shin Yang Shipyard Sdn Bhd for the construction of a new accommodation workboat, named MV Dayang Opal, to be delivered by end of 2013. Dayang Opal, is a sister ship to Dayang Topaz.

Growth and expansion are paramount to Dayang, as we look to strengthen our presence in the oil and gas sector, and the competence levels at Dayang.

We are also beefi ng up our offi ce space, in anticipation of the heightened growth plans at Dayang.

We have always emphasised the need for co-operation and team work which has been crucial to our company’s growth thus far. We at Dayang pride ourselves in the ability of our team and our workforce which have proven time and again why we are such a force to be reckoned with.

After all, the stellar growth at Dayang is attributable to our treasured human resources, who have been instrumental in all aspects of the company’s meteoric rise.

In a nutshell, we hope Dayang will keep up the good work and maintain our growth momentum.



Acknowledgements

In early October 2012, we bid farewell to Cik Sulaihah Maimunni, who retired as an executive director, representing our substantial shareholder Naim Holdings Bhd, after serving for three years. On behalf of our Board of Directors, we wish to extend our sincere thanks and wish her every success in her endeavours. We welcomed in her place, En Mohd Ashraf Assai Bin Abdullah.

On behalf of our Board of Directors, we wish to express our sincere thanks and appreciation to you, our valued shareholders, for having confi dence and trust in us. We hope we have earned your trust. Rest assured, we will continue to add value to our company.

We also wish to thank our valued clients, business partners, associates and suppliers for working closely as a team and being a part of us all these years. Your strong support in our pursuits will defi nitely ensure further successes and lead us into a brighter future together. We hope you will continue to support and work with us.

Our thanks also go to all the fund managers and analysts who have followed our story line to every detail and for having inspired many pessimists into buying our shares! We hope you will continue to cover us and bring us to every corner of the earth where your clients are.

We would defi nitely have to thank all our employees at Dayang, who have worked tirelessly to take this company to the current highs, from a small company with nothing but fi ght in its belly a few years ago. We hope you will all continue to grow with us.

Our growth trajectory is evidence of the capable and dedicated work force we have harnessed over the years. It has taken some time, but honestly the journey has been a fruitful one.

To our colleagues at Dayang, in parting I give you a quote from John D Rockefeller, “Don’t be afraid to give up the good to go for the great,” let’s take our beloved company to greater heights and trump all expectations again. We have done it before, we can do it again! You all are a talented and committed team who can shape our destiny!

Thank you

Datuk Hasmi Bin HasnanExecutive Chairman

Tengku Dato’ Yusof Bin Tengku Ahmad ShahruddinManaging Director


WORKPLACE

The Company values the contributions from the employees which attributes to the success of Dayang Group. The Dayang Group currently employs more than 1,000 employees in its operations. We endeavour our utmost best to create a conducive environment for learning and knowledge creation in the organization to improve growth and work satisfaction for our personnel. As a dynamic organization, we will continue to build a great team of employees by fostering the right environment because we believe that great people drive great performance.

Various trainings are provided internally to motivate the employees and to upgrade their skills. Employees have also attended courses/seminars/workshops to keep abreast of current issues and updates related to their course of work.

The Company believes that good relationships can be fostered through sports and other activities. Various social and sporting activities are organized on a regular basis, with the Company’s in-house sports club continuing its active role to encourage our employees to participate in these activities. The Company had organized sporting events and activities such as Family Day for the staff and their family members, badminton and bowling tournament. The Group held its Annual Dinner on 14th January 2012 at Eastwood Valley Resort in Miri.

In August 2012, the Company organised Buffet Ramadan held at Songket, Kuala Lumpur, Impiana Cherating, Pahang as well as Eastwood Valley Golf & Country Club Miri as a gesture of appreciation to the staff, family, clients & contractors.

The Company hosted a team building exercise at the Borneo Tropical Rainforest Resort Miri for all employees of Miri Offi ce on 17 November 2012 to provide an opportunity for employees to foster better ties and share knowledge. A Brainstorming and Family Day was also organized at the Cheringin Resort, Janda Baik as a platform to discuss and brainstorm for solutions to critical and administrative issues.

The Company also held a QHSE Away Day and Budget session for key personnel on 13 – 16 December 2012 at Holiday Inn, Phuket, Thailand to present and discuss QHSE issues, current projects and forecast performance as well as the company’s direction and the overall budget for the Group for the next fi nancial year.

Corporate Social Responsibility

The Company is committed to promote corporate social responsibilities as an integral part of the Group whilst pursuing business growth to enhance shareholders and stakeholders value. We strive to build a better tomorrow by continuously enhancing the relationships with our stakeholders particularly our local communities, customers, investors, employees and suppliers.


Corporate Social Responsibility (Continued)

COMMUNITY

Dayang Group is dedicated to support the community, particularly the less fortunate. We believe that charity starts by reaching out to the community around us. Our contributions are largely monetary donations to charities and worthy causes.

During the course of the year, we have donated to the following organizations :

1. Donation to Miri City Council for Miri City Day Celebration and Miri City Fest

2. Donation to Miri Basketball Association

3. Donation to Pertubuhan Penderma Darah Sarawak

4. Donation to Kelab Sukan dan Rekreasi Dayak Sarawak

5. Donation to Student Council of Curtin University Sarawak Malaysia

6. Donation to Persatuan Sofbol Sarawak

7. Donation to Persatuan Diabetes Malaysia

8. Donation to Miri City Council for Malaysia Street Basketball competition

9. Donation to Kelab Sukan Highlanders

10. Donation to Miri Toastmasters Club

11. Donation to Program Kecermelangan UPSR Tahun 2012 SK Pasir Gajah, Kemaman

12. Donation to Majlis Persekutuan Pengakap Daerah Bintulu

13. Donation to Ex-Police Association of Malaysia (Sarawak) for Welfare and Education fund

14. Donation to Surau A1 Taqwa UP3

These contributions were in line with the Group’s commitment to support and keep abreast with society’s evolving needs.

A major focus of our community initiatives is in education. Each year we provide internships to deserving Malaysians to take part in the internship programme whereby we provide practical training to the undergraduates where opportunities of employment are given to them upon completion of their degree programmes. The training provided them with valuable experiences and knowledge besides the opportunity to fulfi ll their university requirements.

In conjunction with the Company’s Quality, Health, Safety and Environment (QSHE) Campaign, the Company organized a Blood Donation Drive at its Miri Head offi ce on 14 November 2012 and successfully collected thirty (30) pints of blood.



SAFE WORKPLACE PRACTICES

Dayang is committed to provide its employees with safe conditions of work. We have effective and effi cient management arrangements in place to ensure the well being of staff and others who may be affected by our activities to minimise the adverse impacts to individuals and the business from ill health and injury. We take a precautionary approach by applying the requirements defi ned by our high Health, Safety and environment (“HSE”) standards being set at the beginning of the year. In our own HSE management practices, we comply with all HSE policies and procedures and as well as our clients’ requirements. We are committed to taking responsibility for our own safety and for the safety of others. We believe that all incidents and accidents can be prevented. We always emphasize our high HSE standards of conduct when dealing with clients, suppliers and other stakeholders.

We are constantly improving our HSE performance with the substantial increase in the size of our workforce. This is a good indication that we are managing our business effectively and responsibly. However, Dayang aims to continually improve its systems thus safeguarding against complacency. We will continue to set ourselves ever more ambitious targets.

To fulfi ll our HSE policy, we:

• require good HSE behaviour and follow the rules and instructions that we have set in all our daily activities;• continuously improve our practices and work environment;.• design our solutions and services to help our clients improve their HSE performance;• strive for effi cient and sustainable use of energy, resources and materials in all our operations;• conduct regular water sampling at all our locations/vessels to ensure that potable water is fi t for human consumption according to

WHO guidelines.

As we value the health of all our employees we are continuously monitoring conditions at the work sites to ensure that employees and contractors are not subjected to conditions that could lead to adverse health effects.

Throughout the year we have conducted a number of HSE trainings and courses for various groups at different levels of personnel to improve awareness, skills and knowledge throughout the organisation.


SAFE WORKPLACE PRACTICES (cont’d)

A “Working at Height Safety Campaign” was organized in October 2012 at the Kemaman Supply Base Yard.

The Company organized its yearly QHSE Campaign from 7 November 2012 to 23 November 2012 with the following objectives:

i) To reinstate the management team’s commitment to provide a safe and healthy working environment towards all business activities carried out by the Company;

ii) Visits to worksites at various work locations to update employees with information from management and clients and also to gather feedback from employees on work related matters

We continue to strive to adhere to stringent occupational health and safety practices, providing a safer working environment for our workforce. As a result of our rigorously enforced policies, the Company has achieved 30,045,078 Manhours Without Loss Time Injury as at 28 February 2013.

To ensure the safety and health of our employees, various other HSE programmes and campaigns have also been organised during the year as follows:

1. HSE Training (both in-house and external)2. Conduct Pre-mob Briefi ng for any major mobolisation of crew3. Organised Management Inspection Visit(MIV) or Management Site Visit(MSV)4. Conducted Monthly OSH Committee Meeting and LOCHSEC Meeting5. Quarterly Seniors Management HSE Engagement Session with Clients6. Monthly HSE Liaison Engagement Session with Client7. Audit by Client8. Conducted Random Drug & Alcohol Test for personnel9. Health Monitoring for BMI and Blood Pressure10. Timely disposal of Scheduled Waste

The Group will continue to identify and undertake more related events to fulfi ll its corporate social responsibility in any way and would contribute to preserving the values of society.



Audit Committee Report

COMPOSITION AND TERMS OF REFERENCE

The Terms of Reference of the Audit Committee (“Terms of Reference”) outlines and incorporates the roles and responsibilities of the Audit Committee as prescribed under the Listing Requirement (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and the Malaysia Code on Corporate Governance (“the Code”).

The Audit Committee comprises at least three members, all of whom are independent directors, of the Board of Directors. The members choose their chair from the Independent composition of the Committee.

The Committee members are appointed by the Board of Directors, which in its opinion would exercise independent judgment based on the structure and composition of the Committee.

The Committee shall include at least one (1) person who is a member of the Malaysian Institute of Accountant or alternatively a person who must have at least 3 years’ working experience and have passed the examinations specifi ed in Part 1 of the 1st Schedule of the Accountants Act 1967 or is a member of one the associations specifi ed in Part II of the said Schedule.

The Secretary to the Board of Directors shall also be secretary of this Committee.

MEETINGS OF THE AUDIT COMMITTEE

The Audit Committee meets at least four times a year during the fi nalization of the fi nancial accounts of the Group and its subsidiaries for the quarterly announcements to Bursa Malaysia Securities Berhad. The principal focus of any other meeting(s) will be on management control and internal audit.

At the request of the Chair, the other Executive Directors and other executives (in particular the Head of Internal Audit) will be in attendance at Committee meetings or for selected agenda items. The representatives of the external auditors may also be invited to attend the meetings.

AUDIT COMMITTEE MEETINGS HELD DURING THE FINANCIAL YEAR 2012

The Audit Committee held fi ve meetings during the fi nancial year under review with the following attendance record:

Name of Directors Attendance*

Chia Chu Fatt 5/5

Polit Bin Hamzah 5/5

Tuan Haji Abdul Aziz Bin Ishak 5/5

*Number of meetings attended/Number of meetings held

REPORTING LINE OF THE AUDIT COMMITTEE

The Audit Committee reports directly to the Board of Directors.

MEMBERS OF THE AUDIT COMMITTEE

The members of the Audit Committee are as follows:

Chia Chu Fatt Chairman (Independent Non-Executive Director)

Polit Bin Hamzah Member (Independent Non-Executive Director)

Tuan Haji Abdul Aziz Bin Ishak Member (Independent Non-Executive Director)


Audit Committee Report (Continued)

THE RESPONSIBILITIES OF THE AUDIT COMMITTEE

The Audit Committee is responsible for the following:

• To examine the manner in which management ensures and monitors the adequacy of the nature, extent and effectiveness of accounting and internal control systems;

• To examine and review the adequacy and effectiveness of management and operations;

• To review the statutory accounts, quarterly results and year end fi nancial statements and other published information, prior to the approval by the Board of Directors;

• To nominate and recommend the external auditor for appointment, to consider the adequacy of experience, resources, audit fee and any issue regarding resignation or dismissal of the external auditor;

• To monitor relationship with external auditors, to ensure that there are no restrictions on the scope of the statutory audit; to make recommendations on the auditors’ appointment, remuneration and dismissal; and to review the activities, fi ndings, conclusions and recommendations of the external auditors; and

• To review arrangements established by management for compliance with regulatory and fi nancial reporting requirements.

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The following activities were performed by the Audit Committee during the fi nancial year ended 31 December 2012:

1) Reviewed the unaudited quarterly reports and annual fi nancial statements of the Group and its subsidiaries with management and external auditor to ensure compliance with the generally accepted accounting principles and Financial Reporting Standards.

2) Based on the satisfactory review and discussion above, the Audit Committee recommended to the Board of Directors that the quarterly unaudited fi nancial statements and annual fi nancial statements to be approved for announcement to Bursa Malaysia Securities.

3) Reviewed related party transactions on a quarterly basis. Where commercial relationship existed between each director, major shareholders and persons connected to Dayang Group and its subsidiaries, the Audit Committee and the Board would ensure that such transactions were on normal commercial terms that were not more favourable to the related parties than those generally available to the public.

4) Reviewed, evaluated and discussed the internal audit plan, scope of work and reports.

5) Reviewed and evaluated with external auditors in their audit plan, scope of work as well as the audit procedures to be utilized.

6) Reviewed the external auditors’ fees and services.

OVERSEEING THE INTERNAL AUDIT FUNCTION

The Committee shall oversee all internal audit functions and is authorized to commission investigations to be conducted by internal audit as it deems fi t. The internal auditor shall report directly to the Committee and shall have direct access to the Chairman of the Committee.

All proposals by management regarding the appointment, transfer or dismissal of the internal auditor shall require the prior approval of the Committee.

The total cost incurred for the Group Internal Audit function in respect of the fi nancial year ended 31 December 2012 amounted to approximately RM100, 000.00.


Statement on Risk Management and Internal Control

Introduction

The Malaysian Code on Corporate Governance (“Code”) sets out the principle that the Board of Directors (“Board”) of a listed company should establish a sound risk management framework and internal control system to safeguard shareholders’ investment and assets of the Group.

The Statement on Risk Management and Internal Control by the Board of Directors (“Board”) on the Group is made pursuant to paragraph 15.26(b) of the Listing Requirement of Bursa Malaysia Securities Berhad and in accordance with the Principles and Recommendations relating to risk management and internal control provided in the Code.

Responsibility

The Board acknowledges its responsibility for the Group’s system of risk management and internal control which includes the establishment of appropriate control and framework as well as reviewing the adequacy and integrity of these systems in particular the fi nancial, operational, as well as compliance aspects of the Group throughout the fi nancial year.

There is an ongoing process for identifying, evaluating and managing the signifi cant risks faced by the Group in its achievement of objectives and strategies. The process has been in place during the year up to the date of approval of this statement and is subject to review by the Board. It should be noted that the system is designed to manage rather than eliminate risks of failure in achieving business objectives, and that it can only provide reasonable and not absolute assurance against material misstatement or loss or the occurrence of unforeseeable circumstances.

The Board is assisted by Senior Management in implementing the board-approved policies and procedures on risk and control by identifying and analyzing risk information; designing and operating suitable internal controls to manage and control these risks; and monitoring the effectiveness of the risk management and control activities.

The Board’s responsibility for internal control does not cover the associate company which is separately managed.

Risk Management

Charged with the responsibility to identify principal risks of the Group and ensure the implementation of a proper and appropriate system to manage these risks by the Board, the Risk Management Committee has developed the risk register and framework. Key risks of major business units are identifi ed, assessed and categorized to highlight the source of risks, their impacts and the likelihood of occurrence. Risk profi les for the major business units, for which respective members of Senior Management are responsible, are presented to the Risk Management Committee and Board for deliberation and approval for adoption.

The risks identifi ed for the Group are considered in formulating the strategies and plans that are approved and adopted by the Board. The strategies and plans are monitored and revised as the need arises. These processes are embedded within the Group’s overall business operations and guided by the documented policies and procedures.

Internal Control

Internal controls are embedded in the Group’s operations as follows:

• Clearly defi ned organizational structure with clear lines of delegation of responsibility to Committees of the Board, management and operating units.

• The internal audit function provides assurance on the effectiveness of the system of internal control within the Group. Regular internal audits are performed to review effectiveness of the control procedures and ensure accurate and timely fi nancial management reporting.

• The Audit Committee reviews the quarterly interim reports and annual fi nancial statements and also reviews all related party transactions and confl ict of interest situation. Internal audit reports are deliberated by the Audit Committee, and are subsequently presented to the Board on a quarterly basis.


Statement on Risk Management and Internal Control (Continued)

Internal Audit

The Board acknowledges the importance of the internal audit function as part of its effort in ensuring that the system of internal control of the Group is adequate and effective. The internal audit activities of the Group are carried out according to an annual audit plan approved by the Audit Committee. The internal audit function adopts a risk-based approach and prepares its audit plans based on key risks identifi ed. The internal audit provides an assessment of the adequacy and integrity of the Group’s system of internal controls and provides recommendations, if any, for the improvement of the control policies and procedures. The results of the internal audit assessments are reported periodically to the Audit Committee.

Review by Board

The Board’s review of risk management and internal control effectiveness is based on information from:

• Senior Management within the organization responsible for the development and maintenance of the risk management and internal control system; and

• The work by the internal audit function which submit reports to the Audit Committee together with the assessment of the internal control system relating to key risks and recommendations for improvement.

The Board is satisfi ed that, during the year under review, the existing system of internal control is sound and adequate to safeguard the Group’s assets at the existing level of operation of the Group. The Board recognizes that the development of internal control system is an ongoing process. Therefore, in striving for continuous improvement, the Board will continue to take appropriate action plans to further enhance the Group’s system of internal control.

The Board also received assurance from the Managing Director and Financial Offi cer that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects based on the risk management and internal control system of the Group.

In addition, the External Auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the 2012 Annual Report, and reported to the Board that nothing has come to their attention that causes them to believe that the Statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal control.

The statement is made in accordance with a resolution of the Board of Directors dated 18 April 2013.


Statement of Corporate Governance

The Board of Directors (“The Board’) recognizes the importance of good corporate governance and had continuously ensured that a sound framework of best corporate practices is in place within the Company to enhance corporate accountability and safeguard the interests of all stakeholders.

The Board supports the principles and recommendations stated in the Malaysian Code of Corporate Governance 2012 (MCCG 2012) in promoting best corporate governance. The Board will continue the existing corporate governance practices and will undertake appropriate action in promoting the principles and recommendations of the MCCG 2012 into the existing Corporate Governance framework.

The Board is pleased to report to the shareholders herein the manner in which the Company has applied the respective principles of good governance and the extent to which it has complied with the best practices set out in the Malaysian Code on Corporate Governance 2012 (“the Code”) and the Corporate Governance Guide (“CG Guide”).

DIRECTORS

The Board and its ResponsibilitiesThe Board is collectively responsible for setting policies which promote the success of the Group.

In addition to the statutory and fi duciary duties, the Board has the overall responsibility for corporate governance, strategic direction and overseeing the investment and business of the Group. The Board’s other primary duties are to conduct regular review of the Group’s business operations and performances and to ensure that effective controls and systems exist to measure and manage business risks.

The Board also has the overall obligation to act in the best interests of the shareholders and to protect the shareholders’ investments, whilst at the same time taking into account the interests of other stakeholders in a fair and ethical manner.

Board BalanceThe Board consists of ten (10) members, comprising 7 Executive Directors and 3 Independent Non-Executive Directors. At least one third of the Board are Independent Directors who are independent of management and are free from any businesses or other relationships that could materially interfere with the exercise of independent judgment.

The present composition of the Board is in compliance with Paragraph 15.02(1) of the Listing Requirements of Bursa Malaysia Securities Berhad.

The Board continually evaluates its requirements as to the appropriate mix of skills and experience required to ensure that its composition remains optimal for the effective discharge of its responsibilities. Their expertise and know-how have been gained through their years of involvement as players in their respective fi elds. The Non-Executive Directors do not participate in the day to day management of the Group and do not engage in any business dealing with the Group in order to ensure that they remain truly capable of exercising independent judgment and act in the best interests of the Group and its shareholders.

In accordance with the best practices in corporate governance, Mr Chia Chu Fatt continues to play his role as the Independent Director of the Board to whom concerns of shareholders and stakeholders may be conveyed. Mr Chia is also the Chairman of the Audit Committee of the Board and a member of the Nomination and Remuneration Committee.

His email contact is [email protected].

A brief profi le and status of each Director is presented on pages 8 to 12.

There is a clear segregation of responsibilities between the Chairman and the Managing Director to ensure a balance of power and authority. The Chairman is responsible for ensuring Board effectiveness and conduct whilst the Managing Director is responsible for the overall management of the Group ensuring organizational effectiveness and implementation of Board policies and strategies. All Directors are jointly responsible for determining the Group’s strategic business direction.

Board MeetingsThe Board meets on a scheduled basis at least a minimum of fi ve (5) times a year. All Board meetings are set before the beginning of the year with fi rm dates which enable the directors to plan their schedule to ensure full attendance of the meetings. Special Board meetings may be convened to consider urgent proposals or matters that require expeditious decision or deliberation by the Board.

The Board has met six (6) times during the fi nancial year ended 31 December 2012 where it deliberated and considered a variety of matters affecting the Group’s operations including the Group’s fi nancial results, business plan and the direction of the Group. All proceedings of the Board meetings are duly minuted and signed by the Chairman of the Meeting.


Statement of Corporate Governance (Continued)

Board Meetings (continued)

The details of attendance of the directors held during the fi nancial year are as follows:-

• * Appointed as Director with effect from 3 October 2012.• ** Resigned as Director with effect from 30 September 2012.

All Directors have complied with the requirement that Directors must attend at least 50% of Board meetings held in the fi nancial year ended 31 December 2012 pursuant to the Listing Requirements.

Supply of InformationThe Board of Directors recognizes that the decision making process is highly dependent on the quality of information furnished. Therefore, the Company ensures that all the directors have full and timely access to information.

Each Board member receives an agenda together with appropriate board papers for each agenda item to be discussed containing information on major fi nancial, operational and corporate matters of the Group prior to the Board meetings. This is issued in suffi cient time to enable the directors to review the papers in preparation for the meeting and to obtain further explanations, where necessary and also to give the directors time to deliberate on the issues to be raised at the meeting.The Chairman of the Audit Committee would brief the Board on matters deliberated by the Audit Committee which require the attention of the Board.

Directors also have direct access to the advice and services of the Company Secretaries on compliance issues and ensure that the Company’s policies and procedures are followed. The Directors are also empowered to seek independent professional advice at the expense of the Company, should they consider it necessary in their course of duties.

Insider TradingIn line with the Listing Requirements and the relevant provisions of the Capital Markets & Services Act 2007, directors and principal offi cers of the Group are prohibited from trading in securities based on price sensitive information and knowledge, which have not been publicly announced. Notices of closed period for trading of Dayang securities are circulated to directors and principal offi cers who are deemed to have access to any price sensitive information and knowledge, one month prior to the announcement of the quarterly results.

Board CommitteesAs part of its efforts to ensure the effective discharge of its duties, the Board has delegated certain functions to the following Board Committees, namely the Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Risk Management Committee. Each committee have been given clear terms of reference which have been approved by the Board to operate and deliberate on issues before putting up for recommendation to the Board.

1. Audit CommitteeThe Audit Committee plays an active role in assisting the Board in discharging its governance responsibilities. The composition of the Audit Committee is in compliance with relevant regulatory requirements. The terms of reference for the Audit Committee are spelt out in the Audit Committee Report.

2. Nomination & Remuneration Committee- To develop the Group’s remuneration policy for Executive Directors to the Board;- To recommend the remuneration packages and terms of employment of Executive Directors to the Board;- To recommend to the Board candidates for appointment as new Directors and members of Board Committees;- To assess the effectiveness of the Board and Board Committees and- To arrange orientation programs for new directors.

Name of Director No of Meetings Attended Percentage of Attendance (%)

Datuk Hasmi Bin Hasnan 5/6 83.33Ling Suk Kiong 6/6 100.00Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin 6/6 100.00Joe Ling Siew Loung @ Lin Shou Long 5/6 83.33Gordon Kab @ Gudan Bin Kab 5/6 83.33Jeanita Anak Gamang 6/6 100.00Mohd Ashraf Assai Bin Abdullah* 2/2 100.00Sulaihah Binti Maimunni** 4/4 100.00Tuan Haji Abdul Aziz Bin Ishak 6/6 100.00Polit Bin Hamzah 5/6 83.33Chia Chu Fatt 6/6 100.00



Name Position Attendance

Polit Bin Hamzah Chairman 2/2Tuan Haji Abdul Aziz Bin Ishak Member 2/2Chia Chu Fatt Member 2/2

Name Position

Gordon Kab @ Gudan Bin Kab ChairmanLing Suk Kiong MemberTengku Dato’ Yusof Bin Tengku Ahmad Shahruddin MemberJoe Ling Siew Loung @ Lin Shou Long MemberPolit Bin Hamzah Member

Name Position

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin ChairmanChia Chu Fatt MemberGordon Kab @ Gudan Bin Kab Member

2. Nomination & Remuneration Committee (continued)The Nomination & Remuneration Committee consists of three (3) non-executive independent directors. During the year under review the Nomination & Remuneration Committee met two times to carry out its responsibilities.

The members of the Nomination & Remuneration Committee are as follows:

3. Corporate Social Responsibility Committee- To develop and implement the Group’s Corporate Social Responsibility framework;- To incorporate environmentally friendly practices whilst carrying out our operations;- To establish culture socially responsible behaviors among management and employees;- To create opportunities for the Group to participate in the development of a caring and harmonious community and- Benchmarking corporate governance to best practices to look after the interests of minority shareholders.

The members of the Corporate Social Responsibility Committee are as follows:

4. Risk Management Committee- To establish the risk policies and risk frameworks;- To identify, evaluate and monitor the risks portfolio,- To formulate mitigation strategies/action plans to manage the overall risk associated with our activities;

- To recommend appropriate risk management policies and procedures which shall be reviewed regularly to ensure that they are both appropriate and adequate for the long term viability of the Group and

- To ensure a proper balance between risk incurred and potential returns to our shareholders.

During the year, the Risk Management Committee met once to discuss on the implementation of the Risk Management plans and policies to be adopted.

The members of the Risk Management Committee are as follows:

Appointment and Retirement of DirectorsIn accordance with Article 86 of the Company’s Articles of Association, at least one-third (1/3) of the Directors for the time being, or the number nearest to one-third (1/3) shall retire from offi ce at each Annual General Meeting. All Directors of the Company are subject to re-election by the shareholders and are subject to retire from offi ce at least once every three (3) years.Newly appointed directors shall hold offi ce until the next following annual general meeting and shall then be eligible for re-election by shareholders as provided in Article 93 of the Company’s Articles of Association.

Directors’ TrainingAll the directors of the Company have completed their Mandatory Accreditation Programme as required by Bursa Malaysia Securities Berhad. The company acknowledges that continuous education is essential for the directors to keep abreast with the dynamic environment in which the Group operates. As such, the directors are continuously encouraged to attend various training programmes and seminars to further enhance their skills and knowledge in discharging their duties.



Directors’ Training (continued)Training Programmes, Conferences and Seminars attended by the Directors during the fi nancial year ended 31 December 2012 are as follows:

• Enterprise Risk Management – What A Director Must Know • 2012 Malaysian Code of Corporate Governance Implementation For PLC Directors & Implementation of Corporate Disclosure

Guide• Directors’ Academy• Accounting for MFRS : Simplifying the Approach• National Tax Conference 2012• Workshop on Recent Tax Cases : Successes and Surprises in Court.

Directors’ RemunerationThe remuneration framework for executive directors has an underlying objective of attracting and retaining directors needed to run the Company successfully.

Remuneration packages of executive directors are structured to commensurate with corporate and individual’s performance taking into consideration the prevailing market rates.

On the other hand, the level of remuneration for the Non-Executive Directors refl ects the level of responsibilities undertaken and the contribution to the Group of Companies.

The determination of remuneration packages of Directors are determined by the Board as a whole and individuals are required to abstain from discussion of their own remuneration.

Details of the remuneration of the Directors of Dayang for the fi nancial year ended 31 December 2012 are as follows:

The number of Directors in each remuneration band is as follows :-

Details of the Directors’ remuneration are set out in applicable bands of RM50,000 in accordance with Appendix 9C Part A(11) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Whilst the Code prescribed for individual disclosure of directors remuneration packages, the Board is of the view Directors’ remuneration are appropriately and adequately addressed by the band disclosure method adopted by the Board.

There is no service contract made between any Director and the Company or its subsidiary companies.

Relations with Shareholders and Investors1. Dayang values good communications with shareholders and investors and the importance of accountability to them. As such, the

Board disseminate proper, timely and adequate information to the investors and shareholders through annual report, announcements, circulars to shareholders and press releases. As the Company is a member of Share Investor, the Company’s press releases and Company announcements will also be disseminated to those registered for this service.

Executive Directors (RM) Non Executive Directors (RM) Total (RM)

Fees 1,836,600 245,700 2,082,300Salary 2,904,371 - 2,904,370Bonus 11,481,609 - 11,481,609Other emoluments 679,086 - 679,086Allowances 138,000 8,500 146,500Total 17,039,666 254,200 17,293,865

RANGE OF REMUNERATION NUMBER OF NUMBER OF EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS

RM50,001 – RM100,000 2 3RM100,001 – RM150,000 1 -RM250,001 – RM300,000 1 -RM5,450,001 – RM5,500,000 2 -RM5,550,001 – RM5,600,000 1 -



Relations with Shareholders and Investors (continued)2. The Group Managing Director and the Head of Corporate Affairs arranges regular briefi ngs and discussions with analysts and

investors to keep them updated on the Group’s performance, business expansion plans and other matters related to shareholders’ interest.

3. The Company’s Annual General Meeting (“AGM”) is the principal avenue for dialogue and interaction with the shareholders of the Company. The Board encourages shareholders’ active participation at the Company’s AGM and ensure that all Board Members and Senior Management staff are available to respond to shareholders’ enquiries during the meeting. Resolutions tabled and passed at the Meeting are released to Bursa Malaysia on the same day to enable the public to know the outcome.

4. The Company also maintains a website at www.desb.net that allows all shareholders and investors to gain access to information about the Group.

Accountability and Audit1. Financial Reporting

The Board is committed to providing a balanced, clear and comprehensive assessment of the fi nancial performance and prospects of the Company and the Group in all disclosures made to the stakeholders and the regulatory authorities.The Directors are responsible for the preparation of the fi nancial statements for each fi nancial year in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965.

The Board of Directors with the assistance of the Audit Committee oversees the fi nancial reporting process and the quality of the Group’s fi nancial statements to ensure that the reports present a true and fair view of the fi nancial position of the Group and the Company as at 31 December 2012 and the results and cash fl ows of the Group and the Company for the year then ended.In addition, The Audit Committee also assists the Board by reviewing the Unaudited Quarterly Report to Bursa Malaysia and the Annual Report to shareholders to ensure its accuracy, adequacy and completeness. These are accessible on Dayang and Bursa Malaysia’s website.

2. Internal ControlsThe Board has an overall responsibility for maintaining sound internal control systems to ensure shareholders’ investments and the Group’s assets are safeguarded.

The Board of Directors also recognizes that these systems of internal control are designed to manage rather than eliminate the risk of failure to achieve business objectives. Accordingly, the systems of internal control can only provide a reasonable but not absolute assurance against material misstatement, loss or fraud.

The Audit Committee regularly evaluates the effectiveness and adequacy of the Group’s internal control systems by reviewing actions taken on internal control issues identifi ed in reports prepared by the Group Internal Audit during its scheduled meetings.

The Statement on Risk Management and Internal Control as set out on pages 23 and 24 of this Annual Report provides an overview of the Company’s approach in maintaining a sound system of internal control to safeguard shareholders’ interests and the Company’s assets.

3. Relationship with External AuditorsThe Board via the Audit Committee maintains a formal and transparent professional relationship with the Group’s auditors in seeking professional advice and ensuring the compliance with the appropriate accounting standards and statutory requirements.

During the year, the Audit Committee met with the external auditors twice to discuss their audit plan, audit fi ndings and the fi nancial statements.

In addition, the external auditors are invited to attend the annual general meeting of the Company and are available to answer shareholders’ queries on the conduct of the statutory audit and the preparation and contents of their audit report.

Statement on Compliance with the Requirements of Bursa Malaysia in relation to Application of Principles and Adoption of Best Practices laid down in the Malaysian Code of Corporate Governance

The Board strives to ensure that the Company complies with the Principles and Best Practices of the Code. The Board will endeavour to improve and enhance the procedures from time to time.



Directors’ Responsibility StatementThe provisions of the Companies Act, 1965 requires the directors to be responsible in preparing the fi nancial statements for each fi nancial year which gives a true and fair view of the state of affairs of the Group and the Company at the end of the fi nancial year then ended which have been made out in accordance with the provisions of the Act, applicable approved accounting standards and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

In preparing the fi nancial statements for the fi nancial year ended 31 December 2012, the directors have :-· adopted the appropriate accounting policies and applied them consistently;· ensured that all applicable accounting standards have been followed;· made judgments and estimates that are prudent and reasonable; and· ensured the fi nancial statements have been prepared on a going concern basis.

In addition, the Directors have overall responsibility to safeguard the assets of the Company and the Group by taking reasonable steps to prevent and detect fraud and other irregularities.

ADDITIONAL COMPLIANCE INFORMATION AS AT 31 DECEMBER 20121. Utilization of Proceeds from Corporate Exercise

The Group raised RM121.0 million from a rights issue effected on 7 March 2011. The status of utilization of proceeds from the rights issue exercise as at 31 December 2012 is as follows:

2. SHARE BUY-BACKDuring the fi nancial year ended 31 December 2012, the Company did not purchase any of the company’s own ordinary shares from the open market to retain as treasury shares.

To date, the total number of shares bought back by the Company and retained as treasury shares is 300,500. Such treasury shares are held at a carrying amount of RM459,912. None of the treasury shares held were resold or cancelled during the fi nancial year ended 31 December 2012.

3. Options, Warrants or Convertible SecuritiesThere were no options, warrants or convertible securities exercised in respect of the fi nancial year.

4. Depository Receipt ProgrammeThe Company did not sponsor any depository receipt programme during the fi nancial year.

5. Imposition of Sanctions and / or PenaltiesThere were no sanctions and/or penalties imposed on the Company or its subsidiaries, directors or management by the relevant regulatory bodies during the fi nancial year ended 31 December 2012.

6. Non-Audit Fees

The non-audit fees incurred for services rendered to the Company and its subsidiaries by the Company’s auditors for the fi nancial year ended 31 December 2012 amounted to RM329,700.00.

7. Variation in ResultsThere were no material variances between the audited results of the fi nancial year ended 31 December 2012 and the unaudited results previously released for the fi nancial quarter ended 31 December 2012.

8. Profi t GuaranteeDuring the fi nancial year, there was no profi t guarantee given by the Company or its subsidiaries to any party.

9. Material ContractsThere were no material contracts entered into by the Company and/or its subsidiaries during the fi nancial year ended 31 December 2012 which involves the interests of the Directors and major shareholders.

10. Revaluation PolicyThe Group does not adopt a policy of regular revaluation.

11. Related Party TransactionsAll related party transactions are presented to the Audit Committee for their review and monitoring on a quarterly basis. The report and the list of the related parties of the Group for year under review are then escalated to the Board for their notation. The related party transactions are disclosed on page 78 of the Annual Report.

Details Proposed Actual Unutilized/ Utilization Utilization Outstanding (RM’million) (RM’million) (RM’million)

Capital expenditure and/or investments 100.00 85.12 14.88 Working Capital 19.72 0.03 19.75 Estimated expenses for Rights Issue 1.25 1.25 0.0

121.00 86.40 34.60

Director’s Report 32 - 34

Statement by Directors 35

Statutory Declaration 35

Independent Auditors’ Report to the Members 36 - 37

Statements of Financial Position 38

Statements of Profi t or Loss and 39Other Comprehensive Income

Consolidated Statement of Changes in Equity 40

Statements of Cash Flows 41 - 42

Notes to the Financial Statements 43 - 79

Financial Statements


The Directors have pleasure in submitting their report and the audited fi nancial statements of the Group and of the Company for the year ended 31 December 2012.

Principal activities

The Company is principally engaged in investment holding while the principal activities of the subsidiaries are as stated in Note 5 to the fi nancial statements. There has been no signifi cant change in the nature of these activities during the fi nancial year.

Results Group Company RM RM

Profi t for the year attributable to owners of the Company 101,242,314 56,751,334

Reserves and provisions

There were no material transfers to or from reserves and provisions during the fi nancial year under review.

Dividends

Since the end of the previous fi nancial year, the Company paid:

(i) a second interim single-tier exempt dividend of RM0.05 per ordinary share of RM0.50 each totalling RM27,484,975 in respect of the year ended 31 December 2011 on 12 April 2012; and

(ii) a fi rst interim single-tier exempt dividend of RM0.05 per ordinary share of RM0.50 each totalling RM27,484,975 in respect of the year ended 31 December 2012 on 8 October 2012.

The Company declared a second interim single-tier exempt dividend of RM0.05 per ordinary share of RM0.50 each totalling RM27,484,975 in respect of the year ended 31 December 2012 on 26 February 2013. The dividend was paid on 12 April 2013.

The Directors do not recommend any fi nal dividend to be paid for the year under fi nancial review.

Directors of the Company

Directors who served since the date of the last report are:

Datuk Hasmi Bin HasnanTengku Dato’ Yusof Bin Tengku Ahmad ShahruddinLing Suk KiongJoe Ling Siew Loung @ Lin Shou LongGordon Kab @ Gudan Bin KabChia Chu FattPolit Bin HamzahTuan Haji Abdul Aziz Bin IshakJeanita Anak Gamang Sulaihah Binti Maimunni (resigned on 30 September 2012)Mohd Ashraf Assai Bin Abdullah (appointed on 3 October 2012)

Directors’ report for the year ended 31 December 2012


Directors’ interest in shares

The interests of the Directors, including the interests of their spouses or children who themselves are not directors of the Company, in the shares of the Company and of its related corporations (other than wholly-owned subsidiaries) as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM0.50 each At At 1.1.2012 Bought Sold 31.12.2012

Direct interests in the Company

Datuk Hasmi Bin Hasnan 640,625 - - 640,625Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin 66,544,450 - 11,200,000 55,344,450Ling Suk Kiong 55,186,087 - - 55,186,087Joe Ling Siew Loung @ Lin Shou Long 27,923,550 - 281,000 27,642,550Gordon Kab @ Gudan Bin Kab 3,000 - - 3,000Chia Chu Fatt 210,937 - - 210,937Polit Bin Hamzah 179,687 - - 179,687Tuan Haji Abdul Aziz Bin Ishak 179,687 - - 179,687

Deemed interests in the Company

Datuk Hasmi Bin Hasnan 187,947,968 - 3,000,000 184,947,968Ling Suk Kiong 42,812,125 - 2,000,000 40,812,125

The other Directors had no interests in the shares of the Company and of its related corporations during and at the end of the fi nancial year.

Directors’ benefi ts

Since the end of the previous fi nancial year, no Director of the Company has received nor become entitled to receive any benefi t (other than a benefi t included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the fi nancial statements of the Company and of its subsidiaries) by reason of a contract made by the Company or a related corporation with the Director or with a fi rm of which the Director is a member, or with a company in which the Director has a substantial fi nancial interest, other than certain Directors who have signifi cant fi nancial interests in companies which let/rented premises to certain entities of the Group in the ordinary course of business (see also Note 28 to the fi nancial statements).

There were no arrangements during and at the end of the fi nancial year which had the object of enabling Directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Issue of shares and debentures

There were no changes in the authorised, issued and paid-up capitals of the Company, or issuance of debentures by the Company, during the fi nancial year.

Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the fi nancial year.

Other statutory information

Before the fi nancial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

i) there are no debts to be written off and no provision need be made for doubtful debts; and

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.



Other statutory information (continued)

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

i) that would render it necessary to write off any bad debts or provide for any doubtful debts, or

ii) that would render the value attributed to the current assets in the fi nancial statements of the Group and of the Company misleading, or

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

iv) not otherwise dealt with in this report or the fi nancial statements, that would render any amount stated in the fi nancial statements of the Group and of the Company misleading.

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

i) any charge on the assets of the Group or of the Company that has arisen since the end of the fi nancial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the fi nancial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the fi nancial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, the fi nancial performance of the Group and of the Company for the year ended 31 December 2012 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that fi nancial year and the date of this report.

Subsequent event

A signifi cant subsequent event after the year end is disclosed in Note 29 to the fi nancial statements.

Auditors

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

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

………………………………………..........…..........….. Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

………………………………………..........…..........….. Ling Suk Kiong

Miri,

Date: 18 April 2013



Statement by Directors pursuant toSection 169 (15) of the Companies Act, 1965

In the opinion of the Directors, the fi nancial statements set out on pages 38 to 78 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia, so as to give a true and fair view of the fi nancial position of the Group and of the Company as at 31 December 2012 and of their fi nancial performance and cash fl ows for the year then ended.

In the opinion of the Directors, the information set out in Note 31 on page 79 to the fi nancial statements has been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

………………………………………….........….. Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

………………………………………….........….. Ling Suk Kiong

Miri,

Date: 18 April 2013

Statutory declaration pursuant toSection 169 (16) of the Companies Act, 1965

I, Ling Suk Kiong, the Director primarily responsible for the fi nancial management of Dayang Enterprise Holdings Bhd., do solemnly and sincerely declare that the fi nancial statements set out on pages 38 to 79 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed in Miri in the State of Sarawakon .......………………………..... Ling Suk Kiong

Before me:

Statement by Directors/ Statutory declaration


Report on the Financial Statements

We have audited the fi nancial statements of Dayang Enterprise Holdings Bhd., which comprise the statements of fi nancial position as at 31 December 2012 of the Group and of the Company, and the statements of profi t or loss and other comprehensive income, changes in equity and cash fl ows of the Group and of the Company for the year then ended, and notes, comprising a summary of signifi cant accounting policies and other explanatory information, as set out on pages 38 to 78.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.

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

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

Opinion

In our opinion, the fi nancial statements give a true and fair view of the fi nancial position of the Group and of the Company as of 31 December 2012 and of their fi nancial performance and cash fl ows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

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

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

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

c) The audit reports on the accounts of the subsidiaries did not contain any qualifi cation or any adverse comment made under Section 174(3) of the Act.

Independent Auditors’ Report to the Members of Dayang Enterprise Holdings Bhd.


Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the fi nancial statements taken as a whole. The information set out in Note 31 on page 79 to the fi nancial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance of Special Matter No.1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Other Matters

As stated in Note 30 to the fi nancial statements, Dayang Enterprise Holdings Bhd. adopted Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting Standards (“IFRS”) on 1 January 2012 with a transition date of 1 January 2011. These standards were applied retrospectively by the Directors to the comparative information in these fi nancial statements, including the statements of fi nancial position as at 31 December 2011 and 1 January 2011, and the statements of profi t or loss and other comprehensive income, changes in equity and cash fl ows for the year ended 31 December 2011 and related disclosures. We were not engaged to report on the comparative information that is prepared in accordance with MFRS and IFRS, and hence it is unaudited. Our responsibilities as part of our audit of the fi nancial statements of the Group and of the Company for the year ended 31 December 2012 have, in these circumstances, included obtaining suffi cient appropriate audit evidence that the opening balances as at 1 January 2012 do not contain misstatements that materially affect the fi nancial position as of 31 December 2012 and the fi nancial performance and cash fl ows for the year then ended.

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose.

We do not assume responsibility to any other person for the content of this report.

KPMG Firm Number: AF 0758 Chartered Accountants

Chin Chee KongApproval Number: 1481/01/15 (J)Chartered Accountant

Kuching,

Date: 18 April 2013

Independent Auditors’ Report to the Members of Dayang Enterprise Holdings Bhd.


________________ Group _________________ __ _____________ Company ______________ 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 Note RM RM RM RM RM RMAssetsProperty, plant and equipment 3 267,401,777 246,557,772 216,015,861 1,895 2,253 2,611Prepaid lease payments 4 11,595,032 - - - - -Investment in subsidiaries 5 - - - 122,913,259 122,913,259 122,913,259Investment in an associate 6 2 2 2 2 2 2Other investments 7 102,071,772 44,817,691 - 102,071,772 44,817,691 -Trade and other receivables 8 - - - 101,284,466 103,960,005 106,477,340

Total non-current assets 381,068,583 291,375,465 216,015,863 326,271,394 271,693,210 229,393,212

Investment in an associate held for sale 6 - - 134,900,000 - - 134,900,000Inventories 9 1,335,880 1,981,086 1,298,102 - - -Trade and other receivables 8 164,895,964 149,583,694 123,154,518 14,557,820 315,197 323,456Other investments 7 35,679,654 27,105,079 - 35,679,654 27,105,079 -Prepayments and other assets 1,593,532 1,673,246 2,026,281 189,900 189,928 371,100Current tax assets 213,231 998,150 727,789 - - 104,820Cash and bank balances 10 153,632,201 217,927,396 68,963,823 78,420,761 143,946,510 12,770,910

Total current assets 357,350,462 399,268,651 331,070,513 128,848,135 171,556,714 148,470,286

Total assets 738,419,045 690,644,116 547,086,376 455,119,529 443,249,924 377,863,498

EquityShare capital 275,000,000 275,000,000 176,000,000 275,000,000 275,000,000 176,000,000Share premium 107,787,292 107,787,292 87,071,328 107,787,292 107,787,292 87,071,328Reserves 214,523,078 140,119,151 109,633,781 37,904,631 7,991,684 4,317,715

Total equity attributable to owners of the Company 11 597,310,370 522,906,443 372,705,109 420,691,923 390,778,976 267,389,043

LiabilitiesLoans and borrowings 12 45,375,306 57,251,900 84,000,000 20,000,000 34,000,000 84,000,000Deferred tax liabilities 13 2,874,000 1,836,000 1,115,000 - - -

Total non-current liabilities 48,249,306 59,087,900 85,115,000 20,000,000 34,000,000 84,000,000

Loans and borrowings 12 22,146,289 24,440,239 26,719,873 14,000,000 18,000,000 26,000,000Trade and other payables 14 66,733,064 79,683,573 57,409,916 199,368 250,186 474,455Current tax liabilities 3,980,016 4,525,961 5,136,478 228,238 220,762 -

Total current liabilities 92,859,369 108,649,773 89,266,267 14,427,606 18,470,948 26,474,455

Total liabilities 141,108,675 167,737,673 174,381,267 34,427,606 52,470,948 110,474,455

Total equity and liabilities 738,419,045 690,644,116 547,086,376 455,119,529 443,249,924 377,863,498

The notes on pages 43 to 78 are an integral part of these fi nancial statements.

Statements of fi nancial position as at 31 December 2012


___________ Group ___________ __________ Company __________ 2012 2011 2012 2011 Note RM RM RM RM

Revenue 15 401,215,481 382,322,799 57,880,000 63,070,576

Cost of services (215,190,717) (224,950,308) - -

Gross profi t 186,024,764 157,372,491 57,880,000 63,070,576

Other income 1,286,647 3,571,408 969,970 945,037Administrative expenses ( 60,539,551) ( 53,387,259) ( 2,785,622) ( 3,943,767)Other expenses ( 145,062) ( 456,116) - -

Results from operating activities 16 126,626,798 107,100,524 56,064,348 60,071,846

Finance costs 18 ( 4,001,861) ( 5,186,256) ( 2,491,540) ( 5,154,937)Finance income 19 5,609,957 4,564,082 6,042,980 7,000,414

Net fi nance income/(costs) 1,608,096 ( 622,174) 3,551,440 1,845,477

Profi t before tax 128,234,894 106,478,350 59,615,788 61,917,323

Income tax expense 20 ( 26,992,580) ( 23,349,684) ( 2,864,454) ( 5,600,058)

Profi t for the year 101,242,314 83,128,666 56,751,334 56,317,265

Other comprehensive income, net of tax

Fair value changes of available-for-sale fi nancial assets 28,131,563 2,816,616 28,131,563 2,816,616

Total comprehensive income for the year 129,373,877 85,945,282 84,882,897 59,133,881

Basic/Diluted earnings per ordinary share (sen) 21 18.42 15.42


Statements of profi t or loss and other comprehensive income for the year ended 31 December 2012


___________________Non-distributable ___________________ Fair Distributable Share Share value Treasury Retained Total capital premium reserve shares earnings equityGroup Note RM RM RM RM RM RM

At 1 January 2011 176,000,000 87,071,328 - - 109,633,781 372,705,109

Fair value changes of available-for-sale fi nancial assets - - 2,816,616 - - 2,816,616Profi t for the year - - - - 83,128,666 83,128,666Total comprehensive income for the year - - 2,816,616 - 83,128,666 85,945,282Bonus issue 11 44,000,000 ( 44,000,000) - - - -Rights issue 11 55,000,000 66,000,000 - - - 121,000,000Bonus/Rights issues expenses - ( 1,284,036) - - - ( 1,284,036)Treasury shares acquired 11 - - - ( 459,912) - ( 459,912)Dividends to owners of the Company 22 - - - - ( 55,000,000) ( 55,000,000)At 31 December 2011/ 1 January 2012 275,000,000 107,787,292 2,816,616 ( 459,912) 137,762,447 522,906,443

At 31 December 2011/ 1 January 2012 275,000,000 107,787,292 2,816,616 ( 459,912) 137,762,447 522,906,443Fair value changes of available-for-sale fi nancial assets - - 28,131,563 - - 28,131,563Profi t for the year - - - - 101,242,314 101,242,314Total comprehensive income for the year - - 28,131,563 - 101,242,314 129,373,877Dividends to owners of the Company 22 - - - - ( 54,969,950) ( 54,969,950)

At 31 December 2012 275,000,000 107,787,292 30,948,179 ( 459,912) 184,034,811 597,310,370

(Note 11) (Note 11) (Note 11) (Note 11)

CompanyAt 1 January 2011 176,000,000 87,071,328 - - 4,317,715 267,389,043Fair value changes of available-for-sale fi nancial assets - - 2,816,616 - - 2,816,616Profi t for the year - - - - 56,317,265 56,317,265Total comprehensive income for the year - - 2,816,616 - 56,317,265 59,133,881Bonus issue 11 44,000,000 ( 44,000,000) - - - -Rights issue 11 55,000,000 66,000,000 - - - 121,000,000Bonus/Rights issues expenses - ( 1,284,036) - - - ( 1,284,036)Treasury shares acquired 11 - - - ( 459,912) - ( 459,912)Dividends to owners of the Company 22 - - - - ( 55,000,000) ( 55,000,000)At 31 December 2011/ 1 January 2012 275,000,000 107,787,292 2,816,616 ( 459,912) 5,634,980 390,778,976

At 31 December 2011/ 1 January 2012 275,000,000 107,787,292 2,816,616 ( 459,912) 5,634,980 390,778,976Fair value changes of available-for-sale fi nancial assets - - 28,131,563 - - 28,131,563Profi t for the year - - - - 56,751,334 56,751,334Total comprehensive income for the year - - 28,131,563 - 56,751,334 84,882,897Dividends to owners of the Company 22 - - - - ( 54,969,950) ( 54,969,950)

At 31 December 2012 275,000,000 107,787,292 30,948,179 ( 459,912) 7,416,364 420,691,923

(Note 11) (Note 11) (Note 11) (Note 11) (Note 11)


Consolidated statement of changes in equity for the year ended 31 December 2012



Cash fl ows from operating activities

Profi t before tax 128,234,894 106,478,350 59,615,788 61,917,323

Adjustments for:Amortisation of prepaid lease payments 4 184,048 - - -Depreciation of property, plant and equipment 3 19,318,666 15,716,605 358 358Dividend income - ( 755,726) (55,120,000) (60,310,576)(Gain)/ Loss on disposal of property, plant and equipment ( 82,523) 105,991 - -Property, plant and equipment written off 13,405 - - -Finance income 19 ( 5,609,957) ( 4,564,082) ( 6,042,980) ( 7,000,414)Finance costs 18 4,001,861 5,186,256 2,491,540 5,154,937

Operating profi t/(loss) before changes in working capital 146,060,394 122,167,394 944,706 ( 238,372)

Changes in working capital:Inventories 645,206 ( 682,984) - -Trade and other payables (12,950,509) (26,076,141) ( 50,818) ( 259,589)Trade and other receivables, prepayments and other assets (15,232,556) 22,238,337 ( 9,262,595) 6,689,430

Cash generated from/ (used in) operations 118,522,535 117,646,606 ( 8,368,707) 6,191,469 Interest received 5,609,957 4,564,081 3,738,519 3,017,749 Interest paid ( 327,702) ( 47,436) ( 324,151) ( 44,411) Income tax paid (25,715,606) (23,509,561) ( 2,856,978) ( 579,626)

Net cash from/(used in) operating activities 98,089,184 98,653,690 ( 7,811,317) 8,585,181

Cash fl ows from investing activities

Acquisition of other investments ( 37,697,093) ( 69,106,154) (37,697,093) ( 69,106,154)Acquisition of prepaid lease payments ( 11,779,080) - - -Acquisition of property, plant and equipment ( 40,199,264) ( 46,380,157) - -Proceeds from disposal of property, plant and equipment 105,711 15,650 - -Proceeds from disposal of an associate - 134,900,000 - 134,900,000Dividends received - 755,726 55,120,000 55,615,727

Net cash (used in)/from investing activities ( 89,569,726) 20,185,065 17,422,907 121,409,573

Statements of cash fl ows for the year ended 31 December 2012



Cash fl ows from fi nancing activities

Proceeds from issuance of shares - 119,715,964 - 119,715,964Dividends paid to owners of the Company ( 54,969,950) ( 55,000,000) (54,969,950) ( 55,000,000)Repayment of fi nance lease liabilities - ( 717,511) - -Finance lease interest paid - ( 28,294) - -Term loan interest paid ( 3,674,159) ( 5,075,206) ( 2,167,389) ( 5,075,206)Repayment of term loan ( 18,000,000) ( 58,000,000) (18,000,000) ( 58,000,000)Purchase of treasury shares - ( 459,912) - ( 459,912)Proceeds from term loan 8,636,609 23,251,900 - -

Net cash (used in)/from fi nancing activities ( 68,007,500) 23,686,941 ( 75,137,339) 1,180,846

Net (decrease)/increase in cash and cash equivalents ( 59,488,042) 142,525,696 ( 65,525,749) 131,175,600Cash and cash equivalents at 1 January 211,487,157 68,961,461 143,946,510 12,770,910

Cash and cash equivalents at 31 December 151,999,115 211,487,157 78,420,761 143,946,510

Note

Cash and cash equivalents

Cash and cash equivalents included in the statements of cash fl ows comprise the following amounts in the statements of fi nancial position:

___________ Group ___________ __________ Company __________ 2012 2011 2012 2011 RM RM RM RM

Fixed deposits with licensed banks 146,094,127 208,568,806 74,729,222 141,890,315Cash in hand and at banks 7,538,074 9,358,590 3,691,539 2,056,195

153,632,201 217,927,396 78,420,761 143,946,510Bank overdrafts ( 1,633,086) ( 6,440,239) - -

151,999,115 211,487,157 78,420,761 143,946,510


Statements of cash fl ows for the year ended 31 December 2011


Dayang Enterprise Holdings Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”). The address of its registered offi ce is Sublot 5-10, Lot 46, Block 10, Jalan Taman Raja, Miri Concession Land District, 98000 Miri, Sarawak.

The consolidated fi nancial statements of the Company as at and for the year ended 31 December 2012 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “group entities”) and the Group’s interest in an associate. The fi nancial statements of the Company as at and for the year ended 31 December 2012 do not include other entities.

The Company is principally engaged in investment holding while the principal activities of the subsidiaries are stated in Note 5 to the fi nancial statements.

These fi nancial statements were authorised for issue by the Board of Directors on 18 April 2013.

1. Basis of preparation

(a) Statement of compliance

These fi nancial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the Companies Act, 1965 in Malaysia. These are the Group’s fi rst MFRS-compliant fi nancial statements and MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards, has been applied in the preparation thereof.

In the previous years, the fi nancial statements of the Group were prepared in accordance with Financial Reporting Standards (“FRSs”) in Malaysia. The transition from FRSs to MFRSs does not have a material impact on the Group’s fi nancial statements (see Note 30).

The Malaysian Accounting Standards Board (“MASB”) has issued various MFRSs, interpretations and amendments which are not yet effective but available for early adoption. Other than Amendments to MFRS 101, Presentation of Financial Statements, which are effective for annual periods beginning on or after 1 July 2012, the Group has not applied any of these standards, interpretations and amendments. The early adoption of the amendments to MFRS 101 has no impact on the fi nancial statements other than the presentation format of the statement of profi t or loss and other comprehensive income.

The following are the accounting standards, amendments and interpretations that have been issued by MASB but are not yet effective nor early adopted by the Group and the Company:

MFRS / Amendment / Interpretation Effective date

MFRS 10, Consolidated Financial Statements 1 January 2013MFRS 11, Joint Arrangements 1 January 2013MFRS 12, Disclosure of Interests in Other Entities 1 January 2013MFRS 13, Fair Value Measurements 1 January 2013MFRS 119, Employee Benefi ts (2011) 1 January 2013MFRS 127, Separate Financial Statements (2011) 1 January 2013MFRS 128, Investments in Associates and Joint Ventures 1 January 2013IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine 1 January 2013Amendments to MFRS 7, Financial Instruments: Disclosures - Offsetting Financial Assets and Financial Liabilities 1 January 2013Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards - Government Loans 1 January 2013Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2009-2011 Cycle) 1 January 2013Amendments to MFRS 101, Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle) 1 January 2013Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle) 1 January 2013Amendments to MFRS 132, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle) 1 January 2013Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle) 1 January 2013Amendments to MFRS 10, Consolidated Financial Statements: Transition Guidance 1 January 2013

Notes to the fi nancial statements


1. Basis of preparation (continued) (a) Statement of compliance (continued)

MFRS / Amendment / Interpretation Effective date

Amendments to MFRS 11, Joint Arrangements: Transition Guidance 1 January 2013Amendments to MFRS 12, Disclosures of Interests in Other Entities: Transition Guidance 1 January 2013Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities 1 January 2014Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities 1 January 2014Amendments to MFRS 127, Separate Financial Statements (2011): Investment Entities 1 January 2014Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities 1 January 2014 MFRS 9, Financial Instruments (2009) 1 January 2015MFRS 9, Financial Instruments (2010) 1 January 2015Amendments to MFRS 7, Financial Instruments: Disclosures - Mandatory Effective Date of MFRS 9 and Transition Disclosures 1 January 2015

The Group also plans to apply:

• from the annual period beginning on 1 January 2013, those standards, amendments or interpretations that are effective for annual periods beginning on 1 January 2013, except MFRS 11, MFRS 12, MFRS 119, MFRS 127, IC Interpretation 20, Amendments to MFRS 11 and Amendments to MFRS 12 which are presently assessed as being not applicable to the Group.

• from the annual period beginning on 1 January 2014, those standards, amendments or interpretations that are effective for annual periods beginning on 1 January 2014, except Amendments to MFRS 12 and Amendments to MFRS 127 which are presently assessed as being not applicable to the Group.

• from the annual period beginning on 1 January 2015, those standards, amendments or interpretations that are effective for annual periods beginning on 1 January 2015.

Material impacts of the initial application of those standards, amendments or interpretations, which are or are likely to be applicable to the Group and the Company and which are to be applied retrospectively, are discussed below:

(i) MFRS 9, Financial Instruments

MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classifi cation and measurement of fi nancial assets and fi nancial liabilities.

The adoption of MFRS 9 will result in a change in accounting policy for fi nancial assets. The Group is currently assessing the fi nancial impact that may arise from the adoption of MFRS 9.

(ii) MFRS 10, Consolidated Financial Statements

MFRS 10 introduces a new single control model to determine which investees should be consolidated. MFRS 10 supersedes MFRS 127, Consolidated and Separate Financial Statements and IC Interpretation 112, Consolidation – Special Purpose Entities. There are three elements to the defi nition of control in MFRS 10: (i) power by investor over an investee, (ii) exposure, or rights, to variable returns from investor’s involvement with the investee, and (iii) investor’s ability to affect those returns through its power over the investee.

(iii) MFRS 13, Fair Value Measurement

MFRS 13 establishes the principles for fair value measurement and replaces the existing guidance in different MFRSs.

(iv) Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)

The amendments to MFRS 116 clarify that items such as spare parts, stand-by equipment and servicing equipment shall be recognised as property, plant and equipment when they meet the defi nition of property, plant and equipment. Otherwise, such items are classifi ed as inventory.

The initial application of the other standards, amendments and interpretations are not expected to have any material fi nancial impacts to the fi nancial statements of current and prior periods upon their fi rst adoption.



1. Basis of preparation (continued)

(b) Basis of measurement

The fi nancial statements have been prepared on the historical cost basis, other than as disclosed in Note 2.

(c) Functional and presentation currency

These fi nancial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency.

(d) Use of estimates and judgements

The preparation of fi nancial statements in conformity with MFRSs 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 estimate are revised and in any future periods affected thereby.

There are no signifi cant areas if estimation uncertainty and critical judgements in the applying accounting policies that have a signifi cant effect on the amounts recognised in the fi nancial statements, other than that described below:

Revenue from service contracts

The Group recognises revenue from service contracts based on the stage of completion method, measured by reference to survey of works performed. Signifi cant judgement is required in determining the stage of completion of service contracts, accruing for revenue in respect of work performed which has yet to be billed as well as assessing the recoverability of the accrued revenue. The Group relies, inter alia, on the assessment of its experienced project managers when making the judgement.

2. Signifi cant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these fi nancial statements and in preparing the opening MFRS statement of fi nancial position of the Group and the Company at 1 January 2011 (being the Group’s transition date to the MFRS framework), unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the ability to exercise its power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

Investments in subsidiaries are measured in the Company’s statement of fi nancial position at cost less any impairment losses, unless the investment is classifi ed as held for sale or distribution. The cost of investments includes transaction costs.

The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group.

(ii) Accounting for business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.



2. Signifi cant accounting policies (continued)

(a) Basis of consolidation (continued)

(ii) Accounting for business combinations (continued)

Acquisitions on or after 1 January 2011

For acquisitions on or after 1 January 2011, the Group measures the cost of goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus

• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less

• the net recognised amount (generally fair value) of the identifi able assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profi t or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifi able net assets at the acquisition date.

Transaction costs, 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.

Acquisitions before 1 January 2011

The Group came into being on 29 February 2008 and recognised negative goodwill of RM22,536,312 in its then consolidated income statement for the period from 1 October 2007 to 31 December 2008.

As part of its transition to MFRS, the Group elected not to restate those business combinations that occurred before the date of transition to MFRSs, i.e. 1 January 2011.

(iii) Accounting for acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or defi cit arising on the loss of control is recognised in profi t or loss. 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 fi nancial asset depending on the level of infl uence retained.

(v) Associates

Associates are entities, including unincorporated entities, in which the Group has signifi cant infl uence, but not control, over the fi nancial and operating policies thereof.

Investment in associates are accounted for in the consolidated fi nancial statements using the equity method less any impairment losses, unless it is classifi ed as held for sale or distribution (or included in a disposal group that is classifi ed as held for sale or distribution). The cost of the investment includes transaction cost. The consolidated fi nancial statements include the Group’s share of the profi t or loss and other comprehensive income of the equity accounted associates, after adjustments, if any, to align the accounting policies with those of the Group, from the date that signifi cant infl uence commences until the date that signifi cant infl uence ceases.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation to make or has made, payments on behalf of the associate.




(a) Basis of consolidation (continued)

(v) Associates (continued)

When the Group ceases to have signifi cant infl uence over an associate, it is accounted for as a disposal of the entire interest in that associate, with the resulting gain or loss being recognised in profi t or loss. Any retained interest in the former associate at the date when signifi cant infl uence is lost is re-measured at fair value and this amount is regarded as the initial carrying amount of a fi nancial asset.

When the Group’s interest in an associate decreases but does not result in a loss of signifi cant infl uence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profi t or loss. Any gains or losses previously recognised in other comprehensive income are also reclassifi ed proportionately to profi t or loss.

Investments in associates are measured in the Company’s statement of fi nancial position at cost less any impairment losses, unless the investments are classifi ed as held for sale or distribution. The cost of investment includes transaction cost.

(vi) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of fi nancial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profi t or loss and other comprehensive income as an allocation of the profi t or loss and other comprehensive income for the year between non-controlling interests and owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a defi cit balance.

(vii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated fi nancial statements.

Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment to the underlying assets.

(b) Financial instruments

(i) Initial recognition and measurement

A fi nancial asset or a fi nancial liability is recognised in the statements of fi nancial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A fi nancial instrument is recognised initially at its fair value plus, in the case of a fi nancial instrument not at fair value through profi t or loss, transaction costs that are directly attributable to the acquisition or issue of the fi nancial instrument.

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




(b) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise fi nancial instruments as follows:

Financial assets

(a) Financial assets at fair value through profi t or loss Fair value through profi t or loss category comprises fi nancial assets that are held for trading, including

derivatives (except for a derivative that is a designated and effective hedging instrument) or fi nancial assets that are specifi cally designated into this category upon initial recognition.

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.

Other fi nancial assets categorised as fair value through profi t or loss are subsequently measured at their fair values with the gain or loss recognised in profi t or loss.

(b) Held-to-maturity investments

Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group or the Company has the positive intention and ability to hold them to maturity.

Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method.

(c) Loans and receivables

Loans and receivables category comprises debt instruments that are not quoted in an active market.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.

(d) Available-for-sale fi nancial assets

Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other fi nancial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profi t or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassifi ed from equity into profi t or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profi t or loss.

All fi nancial assets, except for those measured at fair value through profi t or loss, are subject to review for impairment [see Note 2(g)(i)].




(b) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement (continued)

Financial liabilities

All fi nancial liabilities, other than those categorised as fair value through profi t or loss, are subsequently measured at amortised cost.

Fair value through profi t or loss category comprises fi nancial liabilities that are held for trading, derivatives (except for a derivative that is a fi nancial guarantee contract or a designated and effective hedging instrument) or fi nancial liabilities that are specifi cally designated into this category upon initial recognition.

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.

Other fi nancial liabilities categorised as fair value through profi t or loss are subsequently measured at their fair values with the gain or loss recognised in profi t or loss.

(iii) Financial guarantee contracts

A fi nancial guarantee contract is a contract that requires the issuer to make specifi ed payments to reimburse the holder for a loss it incurs because a specifi ed debtor fails to make payment when due in accordance with the original or modifi ed terms of a debt instrument.

Financial guarantee contracts are classifi ed as deferred income and are amortised to profi t or loss using a straight-line method over the contractual period or, when there is no specifi ed contractual period, recognised in profi t or loss upon discharge of the guarantee. When settlement of a fi nancial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the fi nancial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.

(iv) Regular way purchase or sale of fi nancial assets A regular way purchase or sale is a purchase or sale of a fi nancial asset under a contract whose terms require delivery

of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of fi nancial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to:

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and

(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.

(v) Derecognition

A fi nancial asset or a part thereof is derecognised when, and only when the contractual rights to the cash fl ows from the fi nancial asset expire or the fi nancial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a fi nancial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profi t or loss.

A fi nancial liability or a part thereof is derecognised when, and only when, the obligation specifi ed in the contract is discharged or cancelled or expires. On derecognition of a fi nancial liability, the difference between the carrying amount of the fi nancial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the profi t or loss.




(c) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are stated at cost less any accumulated depreciation and any accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the assets and any other costs directly attributable to bringing the assets to working condition for their intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour and, for qualifying assets, capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When signifi cant 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 gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within “other income” or “administrative expenses” respectively in profi t or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefi ts embodied within the component will fl ow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profi t or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profi t or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Signifi cant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

Depreciation is recognised in profi t or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows: Long term leasehold land 843 yearsBuilding 20 yearsMarine vessels 25 yearsOnboard equipment 10 yearsContainers 10 years Offshore equipment 1 - 5 yearsFurniture and fi ttings 10 yearsOffi ce equipment 2.5 - 10 yearsMotor vehicles 5 years

Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate at the end of the reporting period.




(d) Leased assets

(i) Finance lease

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classifi ed as fi nance leases. Upon initial recognition, a leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset [see Note 2 (c)].

Minimum lease payments made under fi nance leases are apportioned between the fi nance expense and the reduction of the outstanding liability. The fi nance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confi rmed.

Leasehold land which in substance is a fi nance lease is classifi ed as property, plant and equipment.

(ii) Operating lease

Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classifi ed as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the statement of fi nancial position. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, is classifi ed as investment property.

Payments made under operating leases are recognised in profi t or loss on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefi ts from the leased asset are consumed. Lease incentives received are recognised in profi t or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profi t or loss in the reporting period in which they are incurred.

Leasehold land which in substance is an operating lease is classifi ed as prepaid lease payments.

(e) Inventories

Inventories are measured at the lower of cost and net realisable value.

Cost of inventories is measured based on the weighted average cost formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

(f) Cash and cash equivalents

Cash and cash equivalents presented in the statement of cash fl ows consist of cash in hand, balances and deposits with banks (other than pledged deposits) and highly liquid investments which have an insignifi cant risk of changes in value with original maturities of three months or less and are used by the Group or the Company in the management of its short-term commitments, net of bank overdrafts.




(g) Impairment

(i) Financial assets

All fi nancial assets (except for fi nancial assets categorised as fair value through profi t or loss and investments in subsidiaries and associates) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash fl ows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a signifi cant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the fi nancial asset’s recoverable amount is estimated.

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profi t or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of available-for-sale fi nancial assets is recognised in profi t or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale fi nancial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassifi ed from equity and recognised to profi t or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profi t or loss and is measured as the difference between the fi nancial asset’s carrying amount and the present value of estimated future cash fl ows discounted at the current market rate of return for a similar fi nancial asset.

Impairment losses recognised in profi t or loss for an investment in an equity instrument is not reversed through profi t or loss.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profi t or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profi t or loss.

(ii) Other assets

The carrying amounts of other assets (except for inventories) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash infl ows from continuing use that are largely independent of the cash infl ows of other assets or groups of assets (known as “cash-generating unit”).

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset or cash generating unit.

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.

Impairment losses are recognised in profi t or loss. Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount of the assets in the cash-generating unit (or a group of cash-generating units) on a pro rata basis.




(g) Impairment (continued)

(ii) Other assets (continued)

An impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profi t or loss in the fi nancial year in which the reversals are recognised.

(h) Employee benefi ts (i) Short-term employee benefi ts

Short-term employee benefi t obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profi t-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) State plans

Contributions to statutory pension funds are charged to the profi t or loss in the year to which they relate. Once the contributions have been paid, the Group has no further payment obligations.

(i) Revenue and other income (i) Services

Revenue from services rendered is recognised in profi t or loss in proportion to the stage of completion of service contracts. The stage of completion of a service contract is assessed by reference to survey of works performed. When the outcome of a service contract cannot be estimated reliably, revenue is recognised only to the extent of the expenses incurred that are recoverable. An expected loss on a service contract is recognised immediately in profi t or loss.

(ii) Rental income

Rental income is recognised in profi t or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Rental income from subleased property is recognised as other income.

(iii) Dividend income

Dividend income is recognised in profi t or loss on the date that the Group or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

(iv) Management fees

Management fees are charged monthly by the Company to its subsidiaries based on services rendered and are recognised in profi t or loss once charged.

(v) Vessel chartering income

Vessel chartering income is recognised in profi t or loss as it accrues, at contracted rates.




(i) Revenue and other income (continued) (vi) Catering income

Revenue from catering of food and beverages is recognised in profi t or loss upon the delivery of the food and beverages.

(vii) Interest income

Interest income is recognised in profi t or loss as it accrues using the effective interest method, except for interest income arising from temporary investment of borrowings taken specifi cally for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.

(j) Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profi t or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity, or other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous fi nancial years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of fi nancial position and their tax bases. Deferred tax is not recognised for temporary differences arising the initial recognition of goodwill and the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profi t or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profi ts will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced by the extent that it is no longer probable that the related tax benefi t will be realised.

Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profi ts will be available against the unutilised tax incentive can be utilised.

(k) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profi t or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.

Capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.




(l) Contingent liabilities

Where it is not probable that an outfl ow of economic benefi ts will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outfl ow of economic benefi ts is remote. Possible obligations, whose existence will only be confi rmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outfl ow of economic benefi ts is remote.

(m) Earnings per ordinary share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.

Diluted EPS is determined by adjusting the profi t or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

(n) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case is the Chief Executive Offi cer of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete fi nancial information is available.

(o) Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of group entities at the exchange rates at the transaction dates.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rates at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date except for those measured at fair value, which are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profi t or loss, except for differences arising on the retranslation of available-for-sale equity instruments or a fi nancial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.

(p) Equity instruments

Instruments classifi ed as equity are measured at cost on initial recognition and are not remeasured subsequently.

(i) Issue expenses

Costs directly attributable to the issue of instruments classifi ed as equity are recognised as a deduction from equity.

(ii) Repurchase of share capital

When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares that are not subsequently cancelled are classifi ed as treasury shares in the statement of changes in equity.

Where treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the share premium account or distributable reserves, or both.

Where treasury shares are sold or reissued subsequently, the difference between the sales consideration net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity, and the resulting surplus or defi cit on the transaction is presented in share premium.




3.

Pro

pert

y, p

lant

and

equ

ipm

ent

Mar

ine

Mar

ine

vess

els

Long

-ter

m

ve

ssel

s an

d

O

ffsho

re e

quip

men

t

M

otor

veh

icle

s

and

build

ing

leas

ehol

d

onbo

ard

Fi

nanc

e

Furn

iture

O

ffi ce

Fi

nanc

e

unde

r

la

nd

Bui

ldin

g eq

uipm

ent

Con

tain

ers

leas

es

Oth

ers1

and

fi ttin

g eq

uipm

ent

leas

es

Oth

ers1

cons

truc

tion

Tota

l

Gro

up

RM

R

M

RM

R

M

RM

R

M

RM

R

M

RM

R

M

RM

R

M

C

ost

A

t 1 J

anua

ry 2

011

2,43

3,62

3 2,

682,

392

192,

382,

984

2,14

5,57

2 1,

731,

311

17,1

65,6

10

5,69

3,83

5 3,

366,

835

280,

000

4,82

3,59

4 25

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25

8,61

1,45

6

Add

ition

s -

- 10

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18

9,98

4 -

4,44

6,96

7 25

0,74

6 19

5,23

0 -

562,

843

30,2

28,7

85

46,3

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57

Dis

posa

ls/W

rite

offs

-

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- (

177

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) (

1

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9)

- (

20

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393,

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ansf

ers

- 45

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0 -

- (

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1)

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1 -

- (

280

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000

(

453,

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-

A

t 31

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embe

r 201

1/

1 J

anua

ry 2

012

2,43

3,62

3 3,

136,

142

202,

888,

586

2,33

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6 -

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7,56

6 3,

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656

- 5,

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55,6

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35

304,

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157

A

dditi

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2,18

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5 -

- 5,

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1,01

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3 30

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-

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t 31

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2 2,

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3,04

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D

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t 1 J

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ansf

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( 25

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-

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A

t 31

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t 31

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uary

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00

216,

015,

861

A

t 31

Dec

embe

r 201

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1 J

anua

ry 2

012

2,42

4,96

2 2,

891,

632

168,

530,

411

258,

625

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340

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117,

991

55,6

80,7

35

246,

557,

772

A

t 31

Dec

embe

r 201

2 2,

422,

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2,73

4,82

5 22

6,42

7,90

7 21

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8 -

11,8

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81

3,58

0,28

6 55

9,56

5 -

1,55

3,92

2 18

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26

7,40

1,77

7

Th

e le

ase

term

of t

he le

aseh

old

land

will

expi

re o

n 2

Apr

il 28

51.

M

arin

e ve

ssel

s w

ith a

tota

l car

ryin

g am

ount

of R

M60

,574

,502

(201

1: R

M16

8,11

6,10

3) a

re p

ledg

ed to

a li

cens

ed b

ank

for c

erta

in b

anki

ng fa

cilit

ies

(see

Not

e 12

).

O

ther

s 1 r

efer

to a

sset

s no

t und

er fi

nanc

e le

ases

.


3. Property, plant and equipment (continued) Furniture and fi ttings Company Note RM Cost At 1 January 2011, At 31 December 2011/ 1 January 2012, 31 December 2012 3,579

Accumulated depreciation At 1 January 2011 968 Depreciation for the year 16 358

At 31 December 2011/1 January 2012 1,326 Depreciation for the year 16 358

At 31 December 2012 1,684

Carrying amounts At 1 January 2011 2,611

At 31 December 2011/1 January 2012 2,253

At 31 December 2012 1,895

4. Prepaid lease payments - Group

Leasehold land (unexpired term less than 50 years) RM Cost At 1 January 2011, 31 December 2011/1 January 2012 - Addition 11,779,080

At 31 December 2012 11,779,080

Amortisation At 1 January 2011, 31 December 2011/1 January 2012 - Amortisation for the year 16 184,048

At 31 December 2012 184,048

Carrying amountsAt 1 January 2011, 31 December 2011/1 January 2012 -

At 31 December 2012 11,595,032

The lease term of the leasehold land will expire on 2043.



5. Investment in subsidiaries ___________________ Company ___________________ 31.12.2012 31.12.2011 1.1.2011 RM RM RM Unquoted shares at cost 122,913,259 122,913,259 122,913,259

Details of the subsidiaries, all incorporated in Malaysia, are as follows: Effective ownership interest %Name of Company Principal activities 31.12.2012 31.12.2011 1.1.2011

Dayang Enterprise Sdn. Bhd. Provision of offshore topside maintenance 100 100 100 services, minor fabrication works and offshore hook-up and commissioning services

DESB Marine Services Sdn. Bhd. Chartering of marine vessels and catering of 100 100 100 food and beverage

Fortune Triumph Sdn. Bhd. Equipment hire 100 100 100

6. Investment in associates ________________ Group _________________ __ _____________ Company ______________ 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 RM RM RM RM RM RM

Non-current Unquoted shares at cost 2 2 2 2 2 2

Current Unquoted shares at cost - - 135,008,200 - - 135,008,200 Share of post acquisition reserves - - 4,091,409 - - - Less: - Dividend received - - ( 4,000,000) - - - - Accumulated impairment losses - - ( 199,609) - - ( 108,200)

- - 134,900,000 - - 134,900,000

2 2 134,900,002 2 2 134,900,002

Particulars of the associates are as follows: Effective ownership interest Principal Country of % % % AccountingName of Company activities incorporation 31.12.2012 31.12.2011 1.1.2011 year end

Alpha Dayang (B) Sdn. Bhd.** Dormant Brunei 50 50 50 31 December Syarikat Borcos Provision of Malaysia - - 40 31 December Shipping Sdn. Bhd.* marine transportation and support services

* The Company disposed of its entire equity holding constituting 40% of the total issued and paid-up capital in Syarikat Borcos Shipping

Sdn. Bhd. for a total consideration of RM134,900,000 in 2011. The conditional agreement to dispose of the associate was entered into prior to 1 January 2011 and was approved by shareholders at the extraordinary general meeting held on 10 January 2011. The disposal was completed on 18 April 2011.

** The associate is presently dormant and has not made up its management accounts to date. A company incorporated in Brunei need not submit audited fi nancial statements during the period of dormancy. As a consequence, the fi nancial information on the associate is not presented.



7. Other investments - Group and Company

Quoted Unit Shares in Trust in Malaysia Malaysia Total 31.12.2012 RM RM RM Non-current Available-for-sale fi nancial assets 102,071,772 - 102,071,772

Current Financial assets at fair value through profi t or loss - 35,679,654 35,679,654

Market value of quoted investment 102,071,772 35,679,654 137,751,426

31.12.2011 Non-current Available-for-sale fi nancial assets 44,817,691 - 44,817,691

Current Financial assets at fair value through profi t or loss - 27,105,079 27,105,079

Market value of quoted investment 44,817,691 27,105,079 71,922,770

8. Trade and other receivables

________________ Group _________________ __ _____________ Company ______________ 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 RM RM RM RM RM RM Non-current Non-trade Loan to a subsidiary - - - 101,284,466 103,960,005 106,477,340

Current Trade Trade receivables 43,241,826 14,166,268 38,948,691 - - - Accrued revenue 120,572,344 135,027,399 83,874,467 - - -

163,814,170 149,193,667 122,823,158 - - -

Non-trade Amount due from subsidiaries - - - 14,545,403 302,780 311,038 Other receivables 1,081,794 390,027 331,360 12,417 12,417 12,418

1,081,794 390,027 331,360 14,557,820 315,197 323,456

Current total 164,895,964 149,583,694 123,154,518 14,557,820 315,197 323,456

Total 164,895,964 149,583,694 123,154,518 115,842,286 104,275,202 106,800,796

The loan to a subsidiary is unsecured and bears interest at 2.50% (2011: 5.55%) per annum.



9. Inventories - Group 31.12.2012 31.12.2011 1.1.2011 RM RM RM

Material and consumables 1,335,880 1,981,086 1,298,102

Recognised in profi t or loss: Inventories recognised as part of cost of services 27,363,405 20,743,509 14,693,724

10. Cash and bank balances ________________ Group _________________ __ _____________ Company ______________ 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 RM RM RM RM RM RM Deposits placed with licensed banks with original maturities not exceeding three months 146,094,127 208,568,806 57,322,085 74,729,222 141,890,315 10,670,473 Cash in hand and at banks 7,538,074 9,358,590 11,641,738 3,691,539 2,056,195 2,100,437

153,632,201 217,927,396 68,963,823 78,420,761 143,946,510 12,770,910

11. Capital and reserves

11.1 Share capital ________________________ Group and Company ________________________ ______31.12.2012______ ______31.12.2011______ ______1.1.2011______ Amount Number Amount Number Amount Number RM of shares RM of shares RM of shares Ordinary shares of RM0.50 each

Authorised:Opening and closing balances 500,000,000 1,000,000,000 500,000,000 1,000,000,000 500,000,000 1,000,000,000 Issued and fully paid:Opening balance 275,000,000 550,000,000 176,000,000 352,000,000 176,000,000 352,000,000Bonus issue - - 44,000,000 88,000,000 - -Rights issue - - 55,000,000 110,000,000 - -

Closing balance 275,000,000 550,000,000 275,000,000 550,000,000 176,000,000 352,000,000

11.2 Share Premium _______________ Group and Company _______________ 31.12.2012 31.12.2011 1.1.2011 RM RM RM

Arising from issue of 245,825,998 ordinary shares of RM0.50 each for acquisition of subsidiaries 260 260 260 Arising from rights issue of 20,300,000 ordinary shares of RM0.50 each at a premium of RM0.50 each 10,150,000 10,150,000 10,150,000 Arising from public issue of 85,874,000 ordinary shares of RM0.50 each at a premium of RM0.95 each 81,580,300 81,580,300 81,580,300 Arising from rights issue of 110,000,000 ordinary shares of RM0.50 each at a premium of RM0.60 each 66,000,000 66,000,000 - Utilisation for bonus issue of 88,000,000 ordinary shares of RM0.50 each ( 44,000,000) ( 44,000,000) - Bonus/Rights issues expenses ( 5,943,268) ( 5,943,268) ( 4,659,232)

107,787,292 107,787,292 87,071,328



11. Capital and reserves (continued)

11.2 Share Premium (continued)

Bonus issue and rights issue

(a) A bonus issue of 88 million ordinary shares of RM0.50 each on the basis of one (1) bonus share for every four (4) existing ordinary shares of RM0.50 each held in the Company by way of capitalisation of RM44 million from the Company’s shares premium account (“the Bonus Issue”) was effected on 10 February 2011; and

(b) A renounceable rights issue of 110 million ordinary shares of RM0.50 each on the basis of one (1) rights shares for every four (4) existing ordinary shares of RM0.50 each held in the Company after the Bonus Issue, at an exercise price of RM1.10 per rights share was effected on 7 March 2011.

11.3 Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale fi nancial assets until they are derecognised or impaired.

11.4 Retained earnings

The retained earnings of the Company, which has migrated to the single-tier company income tax system, are distributable in full as single-tier exempt dividends.

12. Loans and borrowings ________________ Group _________________ __ _____________ Company ______________ 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 RM RM RM RM RM RM Non-current Term loans - secured 45,375,306 57,251,900 84,000,000 20,000,000 34,000,000 84,000,000

Current Finance lease liabilities - secured - - 717,511 - - - Revolving credits - secured - 10,000,000 10,000,000 - 10,000,000 10,000,000 Term loans - secured 20,513,203 8,000,000 16,000,000 14,000,000 8,000,000 16,000,000 Bank overdrafts - unsecured 1,633,086 6,440,239 2,362 - - -

22,146,289 24,440,239 26,719,873 14,000,000 18,000,000 26,000,000

Total 67,521,595 81,692,139 110,719,873 34,000,000 52,000,000 110,000,000

12.1 Security

The term loans and revolving credits are secured by way of a fi rst fi xed charge over some marine vessels of the Group (see Note 3).

The fi nance lease liabilities subsisting at 31 December 2010 were secured on the respective fi nance lease assets.

12.2 Finance lease liabilities

Finance lease liabilities were payable as follows: ____________________ 1.1.2011 ___________________ Present Future value of minimum minimum lease lease payments Interest payments Group RM RM RM

Less than one year 745,805 28,294 717,511



13. Deferred tax liabilities

Movements in deferred tax liabilities during the year

Recognised At Recognised At in profi t 31.12.2011/ in profi t At 1.1.2011 or loss 1.1.2012 or loss 31.12.2012 Group RM RM RM RM RM

Property, plant and equipment ( 1,913,000) ( 1,493,000) ( 3,406,000) ( 4,454,000) ( 7,860,000) Capital allowance carry-forwards 798,000 772,000 1,570,000 3,416,000 4,986,000

Total deferred tax liabilities ( 1,115,000) ( 721,000) ( 1,836,000) ( 1,038,000) ( 2,874,000)

(Note 20) (Note 20)

14. Trade and other payables

________________ Group _________________ __ _____________ Company ______________ 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 RM RM RM RM RM RM Trade Trade payables 41,402,928 59,262,138 42,092,117 - - -

Non-trade Other payables 970,432 2,446,839 2,970,948 153,982 170,866 59,232 Accrued expenses 24,359,704 17,974,596 12,346,851 45,386 79,320 415,223

25,330,136 20,421,435 15,317,799 199,368 250,186 474,455

66,733,064 79,683,573 57,409,916 199,368 250,186 474,455

Trade and other payables denominated in a currency other than the functional currency comprise the following:

31.12.2012 31.12.2011 1.1.2011 RM RM RM

Singapore Dollar (SGD) 101,903 627,590 21,225

Brunei Dollar (BND) 7,830 - -

15. Revenue 2012 2011 RM RM Group Dividend income - 755,726 Income from rental of equipment - 17,518 Income from services rendered 360,362,057 363,585,487 Marine charter 40,853,424 17,964,068

401,215,481 382,322,799

Company Gross dividends 55,120,000 60,310,576 Management fees 2,760,000 2,760,000

57,880,000 63,070,576



16. Results from operating activities Group Company 2012 2011 2012 2011 Note RM RM RM RM Results from operating activities is arrived at after charging:

Amortisation of prepaid lease payments 4 184,048 - - - Auditors’ remuneration: - statutory audit - KPMG 145,000 131,000 25,000 20,000 - other services - KPMG 25,000 37,000 25,000 37,000 - Affi liates of KPMG 304,700 262,400 37,600 37,600 Depreciation of property, plant and equipment 3 19,318,666 15,716,605 358 358 Loss on disposal of property, plant and equipment - 105,991 - - Personnel expenses: - contributions to the Employees Provident Fund 6,605,203 7,127,114 48,268 40,983 - wages, salaries and others 90,856,480 98,466,916 406,546 387,829 Property, plant and equipment written off 13,405 - - - Rental of premises 2,491,014 2,593,513 - - Rental of equipment, motor vehicle and marine vessels 17,913,045 33,209,544 - -

and after crediting:

Dividend income from - subsidiaries - - 55,120,000 59,554,850 - other investments - 755,726 - 755,726 Gain on disposal of property, plant and equipment 82,523 - - -

17. Compensations to key management personnel

Compensations to key management personnel are as follows:

Group Company 2012 2011 2012 2011 RM RM RM RM Directors: - Fees 2,082,300 2,274,300 1,697,100 1,769,100 - Remuneration 15,211,565 8,846,933 8,500 9,000

17,293,865 11,121,233 1,705,600 1,778,100 Other key management personnel: - Short term employee benefi ts 526,396 482,935 37,440 27,360

17,820,261 11,604,168 1,743,040 1,805,460

Other key management personnel comprise persons other than the Directors of group entities, having authority and responsibility for planning, directing and controlling the activities of the group entities either directly or indirectly.



18. Finance costs

Group Company 2012 2011 2012 2011 RM RM RM RM Interest expense of fi nancial liabilities that are not at fair value through profi t or loss: - bank overdrafts 3,551 2,904 - - - fi nance leases - 28,294 - - - revolving credits 324,151 457,780 324,151 457,780 - term loan 3,674,159 4,697,157 2,167,389 4,697,157 - others - 121 - -

4,001,861 5,186,256 2,491,540 5,154,937

19. Finance income

Group Company 2012 2011 2012 2011 RM RM RM RM Interest income of fi nancial assets that are not at fair value through profi t or loss: - fi xed deposits 5,609,957 4,564,082 3,738,519 3,017,749 - amount due from a subsidiary - - 2,304,461 3,982,665

5,609,957 4,564,082 6,042,980 7,000,414

20. Income tax expense

Group Company 2012 2011 2012 2011 RM RM RM RM Current tax expense Malaysian - current year 25,191,000 22,556,000 2,063,000 5,612,000 - prior year 763,580 72,684 801,454 ( 11,942)

25,954,580 22,628,684 2,864,454 5,600,058Deferred tax expense (Note 13) - current year 1,001,000 732,000 - - - prior year 37,000 ( 11,000) - -

1,038,000 721,000 - -

Total income tax expense 26,992,580 23,349,684 2,864,454 5,600,058

Reconciliation of tax expense

Profi t for the year 101,242,314 83,128,666 56,751,334 56,317,265Total income tax expense 26,992,580 23,349,684 2,864,454 5,600,058

Profi t excluding tax 128,234,894 106,478,350 59,615,788 61,917,323



20. Income tax expense (continued)

Reconciliation of tax expense (continued) Group Company 2012 2011 2012 2011 RM RM RM RM

Tax calculated using Malaysian tax rate of 25% (2011: 25%) 32,058,000 26,619,000 14,904,000 15,479,000Non-deductible expenses 2,113,000 1,442,000 1,181,000 516,000Non taxable income - - (14,022,000) (10,383,000)Income exempted from tax under Section 54A of Income Tax Act, 1967 (7,979,000) ( 4,773,000) - -

26,192,000 23,288,000 2,063,000 5,612,000

Under/(Over) provision in prior years 800,580 61,684 801,454 ( 11,942)

Total income tax expense 26,992,580 23,349,684 2,864,454 5,600,058

21. Earnings per ordinary share

Basic/Diluted earnings per ordinary share

The calculation of basic earnings per ordinary share at 31 December 2012 was based on the profi t attributable to ordinary shareholders of RM101,242,314 (2011: RM83,128,666) and the weighted average number of ordinary shares outstanding, calculated as follows:

Weighted average number of ordinary shares 2012 2011 Number Number Weighted average number of ordinary shares at 1 January 550,000,000 352,000,000 Bonus issue during the year - 88,000,000 Effect of rights issue during the year - 91,667,000 Bonus element of rights issue during the year - 7,333,000 Effect of treasury shares repurchased during the year - ( 78,000) Treasury shares repurchased in previous years ( 300,500) -

Weighted average number of ordinary shares at 31 December (basic/diluted) 549,699,500 538,922,000

In 2011, the Company repurchased 300,500 of its own shares from the open market using internally generated funds. The average price paid for the shares repurchased was RM1.53 per ordinary share.

As bonus issue is a non-resource share issue which entails no cash fl ows, it is deemed to have been effected from the earliest possible periods. As such the earnings per share have to be re-computed as if the enlarged share capital as a result of the bonus issue was in existence throughout the current and comparative periods.

22. Dividends

22.1 Dividends per ordinary share Group and Company 2012 2011 Sen Sen

Net dividends per ordinary shares 10.00 10.00



22. Dividends (continued)

22.2 Dividends paid during the year comprise: Sen per share Total Date of (tax exempt) RM payment

Group and Company

2012 Second interim 2011 ordinary 5.00 27,484,975 12 April 2012 First interim 2012 ordinary 5.00 27,484,975 8 October 2012

54,969,950

2011 Second interim 2010 ordinary 5.00 27,500,000 6 July 2011 First interim 2011 ordinary 5.00 27,500,000 14 October 2011 55,000,000

After the reporting period, the Company paid the following dividend, which will be recognised in the fi nancial statements for the year ending 31 December 2013: Sen per share Total Date of (tax exempt) RM payment

Second interim 2012 ordinary 5.00 27,484,975 12 April 2013

The dividends per ordinary share as disclosed in the preceding page comprises the total dividends declared or proposed for the fi nancial year.

23. Operating segments

Segment information is presented in respect of the Group’s business segments. As the Group operates within one geographical segment, geographical segment analysis is not applicable.

Performance is measured based on segment profi t before tax as included in the internal management reports that are reviewed by the Managing Director (the chief operating decision maker). Segment profi t is used to measure performance as management believe that such information is the most relevant in evaluating results of certain segments relative to other entities that operate within these industries.

Business segments

The Group’s business segments mainly comprise the following four major business segments:-

i) Investment holding Provision of management and secretarial services.

ii) Topside maintenance services

Provision of offshore topside maintenance services, minor fabrication works and offshore hook-up and commissioning services for oil and gas industry.

iii) Marine charter

Chartering of marine vessels and provision of related support services.

iv) Equipment hire

Equipment hire operation.



23. Operating segments (continued)

Business Segments Topside Investment maintenance Marine Equipment holding services charter rental Total Elimination Consolidated 2012 RM RM RM RM RM RM RM

Revenue External revenue - 360,362,057 40,853,424 - 401,215,481 - 401,215,481 Inter-segment revenue 57,880,000 - 64,941,421 7,586,088 130,407,509 (130,407,509) -

Total segment revenue 57,880,000 360,362,057 105,794,845 7,586,088 531,622,990 (130,407,509) 401,215,481

Results Segment results 56,064,348 84,397,261 39,119,189 2,166,000 181,746,798 ( 55,120,000) 126,626,798 Finance costs ( 2,491,540) ( 3,551) ( 3,811,231) - ( 6,306,322) 2,304,461 ( 4,001,861) Finance income 6,042,980 1,618,412 125,526 127,500 7,914,418 ( 2,304,461) 5,609,957 Income tax expense - - - - - - ( 26,992,580)

Profi t for the year 59,615,788 86,012,122 35,433,484 2,293,500 183,354,894 (55,120,000) 101,242,314

Segment/Total assets 455,119,529 242,331,881 298,828,597 16,048,852 1,012,328,859 (273,909,814) 738,419,045

Segment/Total liabilities 34,427,606 117,230,905 139,327,473 1,495,946 292,481,930 (151,373,255) 141,108,675

Included in the segment profi t or loss are: Depreciation and amortisation of tangible assets 358 3,594,886 13,326,461 2,581,009 19,502,714 - 19,502,714

2011

Revenue External revenue - 364,341,213 17,208,342 17,518 381,567,073 - 381,567,073 Inter-segment revenue 63,070,576 - 59,214,630 7,056,846 129,342,052 ( 128,586,326) 755,726

Total segment revenue 63,070,576 364,341,213 76,422,972 7,074,364 510,909,125 ( 128,586,326) 382,322,799

Results Segment results 60,071,846 80,635,276 23,559,052 2,389,200 166,655,374 ( 59,554,850) 107,100,524 Finance costs ( 5,154,937) ( 31,198) ( 3,982,786) - ( 9,168,921) 3,982,665 ( 5,186,256) Finance income 7,000,414 1,448,754 30,466 67,113 8,546,747 ( 3,982,665) 4,564,082 Income tax expense - - - - - - ( 23,349,684)

Profi t for the year 61,917,323 82,052,832 19,606,732 2,456,313 166,033,200 ( 59,554,850) 83,128,666

Segment/Total assets 443,249,924 228,740,058 261,725,057 14,073,768 959,658,412 ( 257,144,691) 690,644,116

Segment/Total liabilities 34,427,606 112,279,467 136,356,623 1,238,584 284,302,280 ( 116,564,607) 167,737,673

Included in the segment profi t or loss are: Depreciation and amortisation of tangible assets 358 3,562,278 10,190,166 1,963,803 15,716,605 - 15,716,605



23. Segment reporting (continued)

Major customers

The following are the major customers individually accounting for 10% or more of the group revenue:

Revenue 2012 2011 RM RM Segment

Companies under common control of:

- Customer A 241,723,529 288,228,129 Topside maintenance services - Customer B 28,798,495 23,419,743 Topside maintenance services - Customer C 63,988,956 52,693,341 Topside maintenance services

24. Financial instruments

24.1 Categories of fi nancial instruments

The table below provides an analysis of the Group’s fi nancial instruments, categorised as follows:

(a) Loans and receivables (L&R);(b) Fair value through profi t or loss (FVTPL);(c) Financial liabilities measured at amortised cost (FL); and.(d) Available-for-sale fi nancial assets (AFS).

Carrying L&R/ amount (FL) FVTPL AFS Note RM RM RM RM31.12.2012Financial assetsGroupOther investments 7 137,751,426 - 35,679,654 102,071,772Trade and other receivables 8 164,895,964 164,895,964 - -Cash and bank balances 10 153,632,201 153,632,201 - -

456,279,591 318,528,165 35,679,654 102,071,772

CompanyOther investments 7 137,751,426 - 35,679,654 102,071,772Trade and other receivables 8 115,842,286 115,842,286 - -Cash and bank balances 10 78,420,761 78,420,761 - -

332,014,473 194,263,047 35,679,654 102,071,772

Financial liabilitiesGroupLoans and borrowings 12 67,521,595 ( 67,521,595) - -Trade and other payables 14 66,733,064 ( 66,733,064) - -

134,254,659 (134,254,659) - -

CompanyLoans and borrowings 12 34,000,000 ( 34,000,000) - -Trade and other payables 14 199,368 ( 199,368) - -

34,199,368 ( 34,199,368) - -



24. Financial instruments (continued)

24.1 Categories of fi nancial instruments (continued)

Carrying L&R/ amount (FL) FVTPL AFS Note RM RM RM RM31.12.2011Financial assetsGroupOther investments 7 71,922,770 - 27,105,079 44,817,691Trade and other receivables 8 149,583,694 149,583,694 - -Cash and bank balances 10 217,927,396 217,927,396 - -

439,433,860 367,511,090 27,105,079 44,817,691

CompanyOther investments 7 71,922,770 - 27,105,079 44,817,691Trade and other receivables 8 104,275,202 104,275,202 - -Cash and bank balances 10 143,946,510 143,946,510 - -

320,144,482 248,221,712 27,105,079 44,817,691

Financial liabilities Group Loans and borrowings 12 81,692,139 ( 81,692,139) - - Trade and other payables 14 79,683,573 ( 79,683,573) - -

161,375,712 (161,375,712) - -

Company Loans and borrowings 12 52,000,000 ( 52,000,000) - - Trade and other payables 14 250,186 ( 250,186) - -

52,250,186 ( 52,250,186) - -

1.1.2011Financial assetsGroupTrade and other receivables 8 123,154,518 123,154,518 - -Cash and bank balances 10 68,963,823 68,963,823 - -

192,118,341 192,118,341 - -

CompanyTrade and other receivables 8 106,800,796 106,800,796 - -Cash and bank balances 10 12,770,910 12,770,910 - -

119,571,706 119,571,706 - -

Financial liabilitiesGroupLoans and borrowings 12 110,719,873 (110,719,873) - -Trade and other payables 14 57,409,916 ( 57,409,916) - -

168,129,789 (168,129,789) - -

CompanyLoans and borrowings 12 110,000,000 (110,000,000) - -Trade and other payables 14 474,455 ( 474,455) - -

110,474,455 (110,474,455) - -




24.2 Net gains and losses arising from fi nancial instruments

Group Company 2012 2011 2012 2011 RM RM RM RM

Net gains/(losses) arising on: Financial assets at fair value through profi t or loss - held for trading 969,970 945,037 969,970 945,037 Available-for-sale fi nancial assets - recognised in other comprehensive income 28,131,563 2,816,616 28,131,563 2,816,616 Loans and receivables 5,609,957 4,564,082 6,042,980 7,000,414 Financial liabilities measured at amortised cost ( 4,001,861) ( 5,186,256) ( 2,491,540) ( 5,154,937)

30,709,629 3,139,479 32,652,973 5,607,130

24.3 Financial risk management

The Group is exposed to the following risks from its use of fi nancial instruments:

• Credit risk• Liquidity risk• Market risk

24.4 Credit risk

Credit risk is the risk of a fi nancial loss to the Group if a customer or counterparty to a fi nancial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers and investment securities. The Company’s exposure to credit risk arises principally from loans and advances to subsidiaries and fi nancial guarantees given to banks for credit facilities granted to subsidiaries.

Receivables from external parties

Risk management objectives, policies and process for managing the risk

The principal customers of the Group are major oil and gas companies based in Malaysia. Management reviews the credit worthiness of all major counterparties prior to entering into any contract or transaction with them, to ensure the Group is not exposed to undue credit risk.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by their carrying amounts in the statement of fi nancial position.

There are no signifi cant concentrations of credit risk as at the end of the reporting period.

Ageing analysis

The ageing of trade receivables as at the reporting period is as follows: _______________________ Group ______________________

31.12.2012 31.12.2011 1.1.2011Age of debts RM RM RM Not past due 18,254,215 5,205,811 31,755,288Past due more 0-30 days 11,946,287 7,858,924 5,270,367Past due more 31-90 days 11,484,670 1,038,260 1,452,650Past due more 91-120 days 1,556,654 63,273 470,386

43,241,826 14,166,268 38,948,691

Management does not expect any external counterparty to fail to meet its obligations due to the strong credit standing thereof. No impairment loss has been provided against trade receivables as at the end of the reporting period.




24.4 Credit risk (continued)

Other investments

Risk management objectives, policies and processes for managing the risk

Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal to or better than the Group. Transactions involving derivative fi nancial instruments are with approved fi nancial institutions.


As at the end of the reporting period, the Group has only invested in domestic securities. The maximum exposure to credit risk is represented by their carrying amounts in the statement of fi nancial position.

Other investments of the Group (see Note 7) are categorised as fair value through profi t or loss and as available for sale fi nancial assets. The Group does not have overdue investments that have not been impaired.

The investments and other fi nancial assets are unsecured.

Inter-company balances


The Company provides advances to a subsidiary and monitors the result thereof regularly. The subsidiary has been reporting strong fi nancial performance and is able to repay the advances in due course.


As at the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount of inter-company balances in the statement of fi nancial position.

Impairment losses

As at the end of the reporting period, there was no indication that the advances to a subsidiary are not recoverable in full and as such no impairment loss has been made there-against.

Financial guarantees


The Company provides unsecured fi nancial guarantees to banks in respect of banking facilities granted to subsidiaries. The Company monitors on an ongoing basis the fi nancial performance of the subsidiaries to ensure the latter are able to discharge its obligations when due.


The maximum exposure to credit risk amounts to RM67,521,595 (31.12.2011: RM81,692,139; 1.1.2011: RM110,719,873) representing the outstanding banking facilities of the subsidiary as at the end of the reporting period. There was no indication as at that date that the subsidiaries would default on repayments.

The fi nancial guarantees have not been recognised since the fair value on initial recognition was not material.

24.5 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its fi nancial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables and borrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as for as possible, that it will have suffi cient liquidity to meet its liabilities when they fall due.




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24.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will

affect the Group’s fi nancial position or cash fl ows.

24.6.1 Currency risk

The Group is exposed to foreign currency risk on purchases that are denominated in a currency other than the

respective functional currencies of group entities. The currencies giving rise to this risk are primarily Singapore Dollar

(SGD) and Brunei Dollar (BND).

Exposure to foreign currency risk

The Group’s exposure to foreign currency risk attributable to currencies other than the functional currency of group

entities, based on the carrying amounts as at the end of the reporting period was:

Denominated in SGD BND RM RM

2012 Trade payables 101,903 7,830

2011 Trade payables 627,590 -

2010 Trade payables 21,225 -

The exposure to currency risk is immaterial and hence sensitivity analysis is not presented.

24.6.2 Interest rate risk

The Group’s investments in fi xed rate borrowings are exposed to a risk of change in their fair value due to changes in

interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash fl ows due to changes in

interest rates. Investments in equity securities and short term receivables and payables are not signifi cantly exposed

to interest rate risk.

Risk management objectives, policies and process for managing the risk

The Group monitors its exposure to changes in interest rates on a regular basis.

Borrowings are negotiated with a view to securing the best possible terms, including rates of interest, to the Group.




24.6 Market risk (continued)

24.6.2 Interest rate risk (continued)

Exposure to interest rate risk

The interest rate profi le of the Group and the Company’s signifi cant interest-bearing fi nancial instruments, based on the carrying amounts as at the end of the reporting period was:

__________________Group________________ ________________Company_____________ 31.12.2012 30.12.2011 1.1.2011 31.12.2012 30.12.2011 1.1.2011 RM RM RM RM RM RMFixed rate instrumentsFinancial assets - deposits placed with licensed banks 146,094,127 208,568,806 57,322,085 74,729,222 141,890,315 10,670,473Financial liabilities - term loan (34,000,000) (42,000,000) (100,000,000) (34,000,000) (42,000,000) (100,000,000) - fi nance lease liabilities - - ( 717,511) - - -

112,094,127 166,568,806 ( 43,395,426) 40,729,222 99,890,315 ( 89,329,527)

Floating rate instrumentsFinancial liabilities - term loan (31,888,509) (23,251,900) - - - - - bank overdraft ( 1,663,086) ( 6,440,239) ( 2,362) - - - - revolving credit - (10,000,000) (10,000,000) - (10,000,000) (10,000,000)

33,551,595 (39,692,139) (10,002,362) - (10,000,000) (10,000,000)

Interest rate risk sensitivity analysis

Fair value sensitivity analysis for fi xed rate instruments

The Group does not account for any fi xed rate fi nancial assets and liabilities at fair value through profi t or loss and does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profi t or loss.

Cash fl ow sensitivity analysis for variable rate instruments

A change of 100 basis points (bp) in interest rates at the end of the reporting period would have increased (decreased) post-tax profi t or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

31.12.2012 31.12.2011 1.1.2011 Profi t or loss Profi t or loss Profi t or loss 100bp 100bp 100bp 100bp 100bp 100bp increase decrease increase decrease increase decreaseGroup RM RM RM RM RM RM

Floating rate instruments (335,516) 335,516 (396,921) 96,921 (100,024) 100,024

CompanyFloating rate instruments - - (100,000) 100,000 (100,000) 100,000




24.6 Market risk (continued)

24.6.3 Other price risk

Equity price risk arises from the Group’s investments in equity securities.

Risk Management objectives, policies and processes for managing the risk

Fair values of investments and unit trusts are based in quoted market price at the reporting date without any deduction for transaction costs.

Equity price risk sensitivity analysis

The analysis assumes that all other variables remain constant and the Group’s equity investments move in correlation with the FTSE Bursa Malaysia KLCI (FBMKLCI).

24.7 Fair value of fi nancial instruments

The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowings approximate fair value due to the relatively short term nature of these fi nancial instruments.

The fair value of other investments is disclosure in Note 7, which is based on their quoted closing market price at the reporting date.

The fair values of other fi nancial assets and liabilities, together with the carrying amounts shown in the statement of fi nancial position, are as follows:

______31.12.2012______ ______31.12.2011______ ______1.1.2011______ Carrying Fair Carrying Fair Carrying Fair amount value amount value amount valueGroup RM RM RM RM RM RM

Term loan (non-current) 45,375,306 41,164,758 57,251,900 54,140,415 84,000,000 82,541,418

Company

Term loan (non-current) 20,000,000 18,980,735 34,000,000 32,972,966 84,000,000 82,541,148

Non-derivative fi nancial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash fl ows, discounted at the market rate of interest at the end of the reporting period.

Interest rates used to determine fair value

The interest rates used to discount estimated cash fl ows, when applicable, are as follows:

31.12.2012 31.12.2011 1.1.2011

Secured term loan 5.37% 5.43% 5.50%

24.7.1 Fair value hierarchy

Comparative fi gures have not been presented for 1 January 2011 by virtue of the exemption provided in paragraph 44G of FRS 7.




24.7 Fair value of fi nancial instruments (continued)

24.7.1 Fair value hierarchy (continued)

The table below analyses fi nancial instruments carried at fair value, by valuation method. The different levels have been defi ned as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities,

either directly (i.e. as prices) or indirectly (i.e. derived from prices).• Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

Level 1 Level 2 Level 3 Total RM RM RM RM

Group/Company31.12.2012Investment in quoted shares 137,751,426 - - 137,751,426

31.12.2011Investment in quoted shares 71,922,770 - - 71,922,770

25. Capital management

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain the confi dence investors, creditors and other stakeholders in the Group and to sustain the future development of its business.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

A subsidiary is also required to maintain a maximum debt-to-equity ratio of 1.0 to comply with a bank covenant, failing which the bank may call an event of default. The subsidiary has complied with this covenant.

There were no changes in the Group and the Company’s approach to capital management during the fi nancial year.

26. Capital expenditure commitments ______________________ Group ______________________

31.12.2012 31.12.2011 1.1.2011 RM RM RMProperty, plant and equipmentAuthorised and contracted for 60,200,000 15,180,000 70,241,000

27. Contingent liabilities

The Directors are of the opinion that provision is not required in respect of the following corporate guarantees, as it is not probable that a future sacrifi ce of economic benefi ts will be required:

____________________ Company_____________________ 31.12.2012 31.12.2011 1.1.2011

RM RM RMContingent liabilities not considered remote Corporate guarantees favouring banks for facilities granted to subsidiaries 127,373,000 131,485,000 53,585,000



28. Related parties

Identity of related parties

For the purposes of these fi nancial statements, a party is considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise signifi cant infl uence over the party in making fi nancial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control. Related parties may be individuals or other entities.

Key management personnel are defi ned as those persons having authority and responsibility for planning, directing and controlling the activities of the Group and the Company either directly or indirectly. The key management personnel include all the Directors of the Group, and certain members of senior management of the Group.

Signifi cant related party transactions, other than compensations to key management personnel (see Note 17) and those disclosed elsewhere in the fi nancial statement, are as follows:

Subsidiaries Company 2012 2011 RM RM

Dividend income (55,120,000) (59,554,851) Interest income ( 2,304,461) ( 3,982,665) Management fees ( 2,760,000) ( 2,760,000)

Company/Organisation in which certain Directors and close members of their families have or are deemed to have substantial interests

Group and Company 2012 2011 RM RM

Rental of premises paid 1,446,760 1,446,760

The amounts due from subsidiaries are disclosed in the statement of fi nancial position as well as Note 8 to the fi nancial statements.

There is no outstanding balance with other related parties as at reporting date.

Related party transactions are based on negotiated terms. All the amounts outstanding are unsecured and expected to settle in cash.

29. Subsequent event

Subsequent to 31 December 2012, the Company has acquired additional shares in Perdana Petroleum Berhad (PPB) from the open market. As at 29 March 2013, the Company holds in total 129,212,700 ordinary shares of RM0.50 each in PPB representing 26.10% (31 December 2012:19.21%) of the issued and paid-up share capital in PPB, which has since became an associate of the Company.

30. Explanation of transition to MFRSs

As stated in Note 1(a), these are the fi rst fi nancial statements of the Group and of the Company prepared in accordance with MFRSs. The accounting policies set out in Note 2 have been applied in preparing the fi nancial statements of the Group and of the Company for the fi nancial year ended 31 December 2012, the comparative information presented in these fi nancial statements for the fi nancial year ended 31 December 2011 and in the preparation of the opening MFRS statement of fi nancial position at 1 January 2011 (being the Group’s date of transition to MFRSs).

The transition to MFRSs does not have any material fi nancial impact to the fi nancial statements of the Group.



31. Supplementary fi nancial information

Breakdown of realised and unrealised profi t or losses

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2012, into realised and unrealised profi ts, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Recruitments is as follows:

Group Company 2012 2012 RM RMRetained earnings of the Company and its subsidiaries - realised 296,202,070 7,416,364 - unrealised ( 2,874,000) -

293,328,070 7,416,364

Less: Consolidation adjustments (109,293,259) -

Total retained earnings as per consolidated accounts 184,034,811 7,416,364

The determination of realised and unrealised profi ts is based on the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2011 and presented based on the format prescribed by Bursa Malaysia Securities Berhad.



Authorised Share Capital : RM500,000,000

Issued and Fully Paid-Up Capital : RM275,000,000

Class of Shares : Ordinary Shares of RM0.50 each

Adjusted Issued & Paid-Up Capital : RM274,849,750

(after deducting Treasury Shares

pursuant to Section 67A Companies Act, 1965)

Voting Rights : One vote per ordinary share

1. DISTRIBUTION OF SHAREHOLDERS

Size of Holdings No of Holders % No of Shares %

1 – 99 106 5.54 3,824 0.00100 – 1,000 221 11.55 157,078 0.031001 – 10,000 945 49.37 4,340,938 0.7910,001 – 100,000 399 20.84 14,715,899 2.68100,001 – 27,484,974 (*) 239 12.49 259,603,256 47.2227,484,975 and above (**) 4 0.21 270,878,505 49.28

TOTAL 1,914 100.00 549,699,500 100.00

Remark: (*) – Less than 5% of Issued Shares (**) – 5% and above of Issued Shares

2. DIRECTORS’ SHAREHOLDINGS

The Directors’ Shareholdings of Dayang Enterprise Holdings Bhd based on the Register of Directors’ Shareholdings are as follows:- No. of Ordinary shares heldNo Direct % Indirect %

1. Tengku Dato’ Yusof Bin Tengku 55,344,450 10.07 - - Ahmad Shahruddin2. Ling Suk Kiong 55,186,087 10.04 40,812,125(1) 7.423. Joe Ling Siew Loung @ 27,642,550 5.03 40,812,125(2) 7.42 Lin Shou Long4. Datuk Hasmi Bin Hasnan 640,625 0.12 184,949,218(3) 33.645. Jeanita Anak Gamang - - - -6. Mohd Ashraf Assai Bin Abdullah - - - -7. Gordon Kab@ Gudan Bin Kab 3,000 0.00 - -8. Chia Chu Fatt 210,937 0.04 - -9. Abdul Aziz Bin Ishak 179,687 0.03 - -10. Polit Bin Hamzah 179,687 0.03 - -

Notes:(1) Deemed interest through Vogue Empire Sdn Bhd.(2) Deemed interest through Vogue Empire Sdn Bhd.(3) Deemed interest through Naim Holdings Berhad and Custodev Sdn Bhd.

Analysis of shareholders as at 30 April 2013


3. LIST OF SUBSTANTIAL SHAREHOLDERS

The list of Substantial Shareholders of Dayang Enterprise Holdings Bhd based on the Register of Substantial Shareholders of the Company and their respective shareholdings are as follows :-

No of Ordinary Shares HeldNo. Names Direct % Indirect %

1. Naim Holdings Bhd 184,947,968 33.64 0 02. Tengku Dato’ Yusof Bin Tengku 55,344,450 10.07 0 0 Ahmad Shahruddin3. Ling Suk Kiong 55,186,087 10.04 40,812,125 7.424. Vogue Empire Sdn Bhd 40,812,125 7.42 0 05. Joe Ling Siew Loung @ Lin Shou Long 27,642,550 5.03 40,812,125 7.426. Datuk Hasmi Bin Hasnan 640,625 0.12 184,949,218 33.647. Datuk Abdul Hamed Bin Sepawi 0 0.00 184,949,218 33.648. Wong Siew Hong 0 0.00 40,812,125 7.429. Ling Mee Luong@ Lin Meilong 0 0.00 40,812,125 7.4210. Ling Hee Luong 0 0.00 40,812,125 7.42

4. LIST OF TOP THIRTY SHAREHOLDERS

No Names Shareholdings %

1. Naim Holdings Berhad 142,947,968 26.00

2. Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin 55,344,450 10.07

3. Naim Holdings Berhad 42,000,000 7.64

4. Ling Suk Kiong 30,586,087 5.56

5. Ling Suk Kiong 24,600,000 4.48

6. Vogue Empire Sdn Bhd 21,812,125 3.97

7. Vogue Empire Sdn Bhd 19,000,000 3.46

8. Joe Ling Siew Loung@ Lin Shou Long 14,048,800 2.56

9. Joe Ling Siew Loung@ Lin Shou Long 11,875,000 2.16

10. Amsec Nominees (Tempatan) Sdn Bhd 10,558,700 1.92 Amtrustee Berhad for CIMB Islamic Dali Equity Growth Fund (UT-CIMB-DALI)

11. HSBC Nominees (Asing) Sdn Bhd 8,215,500 1.49 Exempt AN for JPMorgan Chase Bank, National Association (Norges BK )

12. Citigroup Nominees (Tempatan) Sdn Bhd 5,510,400 1.00 Employees Provident Fund Board (CIMB PRIN)

13. Amanahraya Trustees Berhad 5,021,875 0.91 Public Islamic Select Treasures Fund



4. LIST OF TOP THIRTY SHAREHOLDERS

No Names Shareholdings %

14. Burhanuddin Bin Md Radzi 4,281,987 0.78

15. HSBC Nominees (Asing) Sdn Bhd 4,097,000 0.75 TNTC for Baring Pacifi c Fund

16. Citigroup Nominees (Tempatan) Sdn Bhd 4,052,900 0.74 Employees Provident Fund Board (F Templeton)

17. Citigroup Nominees (Tempatan) Sdn Bhd 4,030,000 0.73 Employees Provident Fund Board (Nomura)

18. Amanahraya Trustees Berhad 3,982,750 0.72 Public Islamic Opportunities Fund

19. CIMB Group Nominees (Tempatan) Sdn Bhd 3,574,500 0.65 CIMB Bank Berhad (EDP 2)

20. Citigroup Nominees (Tempatan) Sdn Bhd 3,091,200 0.56 Employees Provident Fund Board (AMUNDI)

21. Hong Leong Assurance Berhad 3,000,000 0.55 AS Benefi cial Owner (Unitlinked GF)

22. Citigroup Nominees (Tempatan) Sdn Bhd 2,745,100 0.50 Kumpulan Wang Persaraan (Diperbadankan) (CIMB Equities)

23. CIMB Group Nominees (Tempatan) Sdn Bhd 2,723,400 0.50 AmTrustee Berhad for CIMB Islamic Dali Equity Theme Fund

24. Cheng Ah Teck @ Cheng Yik Lai 2,480,500 0.45

25. HSBC Nominees (Tempatan) Sdn Bhd 2,320,800 0.42 BBH and CO Boston for Daiwa Asean Intraregional Demand Equity Fund (JTSB RB)

26. Citigroup Nominees (Tempatan) Sdn Bhd 2,162,500 0.39 Kumpulan Wang Persaraan (Diperbadankan) (KENANGA)

27. Universal Trustee (Malaysia) Berhad 1,927,900 0.35 CIMB-Principal Equity Fund

28. Amsec Nominees (Tempatan) Sdn Bhd 1,735,000 0.32 Pledged Securities Account for Bong Lee Min

29. Joe Ling Siew Loung @ Lin Shou Long 1,718,750 0.31

30. Maybank Nominees (Tempatan) Sdn Bhd 1,710,000 0.31 TOTAL 441,155,192 80.25



NOTICE IS HEREBY GIVEN THAT the 7th Annual General Meeting of the Company will be held at Imperial Hotel, Jalan Pos, 98000 Miri, Sarawak on Thursday 13th June 2013 at 11.30 a.m. to transact the following purposes:-

AGENDA

AS ORDINARY BUSINESS

1. To receive the Directors Report and the Audited Financial Statements for the fi nancial year ended 31st December 2012 together with the Auditors Report thereon. Ordinary Resolution 1

2. To approve the payment of Directors’ Fees in respect of the fi nancial year ended 31st December 2012. Ordinary Resolution 2

3 Re-Election of Directors To re-elect the following directors who retire in accordance with Article 86(a) of the Company’s Articles of Association:- Ling Suk Kiong Ordinary Resolution 3 Chia Chu Fatt Ordinary Resolution 4 Polit Bin Hamzah Ordinary Resolution 5

To re-elect the following director who retires in accordance with Article 93 of the Company’s Articles of Association :-

Mohd Ashraf Assai Bin Abdullah Ordinary Resolution 6

4. Appointment of Auditors To re-appoint Messrs KPMG as Auditors of the Company and to authorize the Directors to fi x their remuneration. Ordinary Resolution 7

AS SPECIAL BUSINESS

5. To consider and if thought fi t, to pass the following Ordinary Resolutions:

Ordinary Resolutions

A. Ordinary Resolution - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT) of a Revenue or Trading Nature

“THAT pursuant to Paragraph 10.09(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), approval be and is hereby given to the Company and/or its subsidiaries to enter into RRPT of a Revenue or Trading Nature as set out in Section 2.4 of the Circular to Shareholders dated 22 May 2013 with the specifi c related parties mentioned therein which are necessary for the Group’s day to day operations, subject to the following:

(a) That the RRPT of a revenue or trading nature entered into are in the ordinary course of business, they are at arm’s length basis and on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company; and

(b) That the proposals are subject to annual renewal and that such approval shall continue to be in force until:-

1. the conclusion of the next Annual General Meeting (“AGM”) of the Company;

2. the expiration of the period within the next AGM of the Company subsequent to the date it is required to be held pursuant to Section 143(1) of the Companies Act 1965 (“the Act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act; or

3. revoked or varied by resolution passed by the shareholders in general meeting;

whichever is the earlier;

(c) AND THAT the Directors of the Company be authorized to complete and do all such acts and things as they may consider expedient or necessary to give effect to the RRPTs contemplated and/or authorized by this Ordinary Resolution.”

Ordinary Resolution 8

Notice of Annual General Meeting


B. Ordinary Resolution - Proposed Renewal of Authority To Purchase Own Shares

“THAT, subject always to the Companies Act 1965, and all applicable laws, guidelines, rules and regulations, the Directors of the Company be and are hereby authorized to purchase such amount of ordinary shares of RM0.50 each in the Company as determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad upon such terms and conditions as the Directors may deem fi t, necessary and expedient in the interests of the Company provided THAT :-

(1) The aggregate number of shares to be purchased and/or held pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up ordinary share capital of the Company;

(2) The amount of fund to be allocated by the Company for the purpose of purchasing the shares shall not exceed the aggregate of the retained profi ts and share premium account of the Company at the time of purchase of Dayang shares,

(3) The Directors of the Company may decide in their discretion to retain the shares purchased as treasury shares and/or distribute them as dividends and/or resell them on the market of Bursa Securities and/or subsequently cancel all or part of them.

AND THAT authority be and is hereby given to the Directors of the Company to act and to take all such steps as are necessary or expedient to implement and fi nalize and give full effect to the Proposed Share Buy-Back.

AND THAT such authority conferred by this resolution shall commence immediately and shall continue to be in force until the conclusion of the next Annual General Meeting of the Company following the passing of this ordinary resolution unless earlier revoked or varied by an ordinary resolution of the shareholders of the Company in a general meeting.”


C. Ordinary Resolution - Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965

“THAT pursuant to Section 132D of the Companies Act 1965 (“the Act”) and subject always to the approval of the relevant authorities, the Directors be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fi t, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of the issued share capital of the Company for the time being AND THAT the Directors be and are hereby empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”


6. To transact any other ordinary business that may be transacted at an Annual General Meeting, of which due notice shall have been given.

BY ORDER OF THE BOARDBONG SIU LIAN (MAICSA 7002221)BAILEY KHO CHUNG SIANG (LS0000578)Company Secretaries

Miri, SarawakDated this 22 May 2013



Notes:-

1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.

2. To be valid, the Proxy form, duly completed must be deposited at the Registered Offi ce of the Company at Sublot 5-10, Lot 46, Block 10, Jalan Taman Raja, 98000 Miri, Sarawak not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the Act are complied with.

4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifi es the proportions of his holdings to be represented by each proxy.

5. If the appointer is a corporation, this form must be executed under its common seal or under the hand of an offi cer or attorney duly authorized.

6. Where a member of the Company is an exempt authorised nominee as defi ned under the Securities Industry (Central Depositories) Act 1991, which holds ordinary shares in the Company for multiple benefi cial owners in one securities account (omnibus account), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds

7. Only members registered in the Record of Depositors as at 7 June 2013 shall be eligible to attend the meeting or appoint proxy to attend and vote on his/her behalf.

8. Please take note that interested directors, interested major shareholders or interested persons connected with a director or major shareholder, and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote in respect of their direct and/or indirect shareholdings on the resolution approving the Proposed Shareholders’ Mandate.

Explanatory Notes on Special Businesses

(a) Ordinary resolution 8 – Proposed Renewal of Shareholders’ Mandate for RRPT of a Revenue or Trading Nature

The proposal, if passed, will empower the Company and its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature with the mandated related parties for a period from this Annual General Meeting till the next Annual General Meeting.

Please refer to the Circular to Shareholders dated 22 May 2013 for further information.

(b) Ordinary resolution 9 – Proposed Renewal of Authority to Purchase Own Shares

This proposed ordinary resolution, if passed, will empower the Directors of the Company to purchase up to ten percent (10%) of the total issued and paid-up share capital of the Company from the date of this Annual General Meeting. This authority unless revoked or varied by the Company at a General Meeting will expire at the next Annual General Meeting.

Please refer to the Statement on Share Buy-Back dated 22 May 2013 for further information.

(c) Ordinary resolution 10 – Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965

This ordinary resolution, if passed, will empower the Directors of the Company from the date of this Annual General Meeting, authority to issue and allot Ordinary Shares from the unissued capital of the Company up to an aggregate of ten percent (10%) of the issued and paid-up share capital of the Company for the time being, for such purposes as the Directors consider in their absolute discretion to be in the interest of the Company. This authority will, unless revoked or varied by the Company in a General Meeting, expire at the next Annual General Meeting of the Company.

The general mandate sought for issue of shares is a renewal of the mandate that was approved by shareholders on 14 June 2012. The purpose of the renewal of the general mandate is to provide fl exibility to the Company for any possible fund-raising exercises, including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital and/or acquisitions.

At this juncture, there is no decision to issue any new shares. Should there be a decision to issue new shares after the general mandate has been obtained, the Company will make an announcement in respect of the purpose and/or utilisation proceeds arising from such issue.

Statement accompanying Notice of Annual General Meeting

The Directors standing for re-election at the 7th Annual General Meeting of the Company in accordance to Article 86(a) and Article 93 of the Company’s Articles of Association are as follows:

a) Article 86(a) – Retirement by Rotation - Ling Suk Kiong - Chia Chu Fatt - Polit Bin Hamzah

b) Article 93 – Retirement after appointment to fi ll casual vacancy - Mohd Ashraf Assai Bin Abdullah

The respective profi les of the above Directors are set out in the Profi le of Directors on pages 8 to 12 of the Annual Report.The details of interest in securities of the Company held by the Directors are stated on page 80 of the Annual Report.


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DAYANG ENTERPRISE HOLDINGS BHD(Company No. 712243-U)(Incorporated in Malaysia)

FORM OF PROXY

I/We …………………………………………………………………………………………………………………………………………………….……....

IC No/ID No/Company no………………………………………………………………………………………………………………………………...…..

of …………………………………………………………………………………………….………………..……………….……………….…... being a

member of/members of the abovenamed Company hereby appoint *the Chairman of the Meeting or …………………………………………………

……………………………………………. of ………………………………………………………………………………………………… or failing him,

……………………………………………………………….….……of ………….…….…………………………………………………………………...as my/our proxy/proxies to vote for me/us on my/our behalf at the 7th Annual General Meeting of the Company to be held at Imperial Hotel, Jalan Pos, 98000 Miri, Sarawak on Thursday, 13 June 2013 at 11.30 a.m. or any adjournment thereof, in the manner indicated below:-

CDS account no. of authorized nominee No. of shares held

Resolutions











To receive the Directors Report and the Audited Financial Statements for the fi nancial year ended 31 December 2012 together with the Auditors Report thereon

Approval of Directors’ Fees

Re-election of Director: Ling Suk Kiong

Re-election of Director: Chia Chu Fatt

Re-election of Director: Polit Bin Hamzah

Re-election of Director: Mohd Ashraf Assai Bin Abdullah

Reappointment of Auditors : Messrs KPMG as Auditors and authorizing the Directors to fi x their remuneration

Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a revenue or trading nature

Proposed Renewal of authority to purchase own shares

Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965

FOR AGAINST

(Please indicate with an “X” in the spaces above how you wish your votes to be casted on the resolution specifi ed in the Notice of Meeting. If no specifi c direction as to the voting is indicated, the proxy/proxies will vote or abstain from voting as he/she/they think(s) fi t.)

Dated this …………….. day of …………………………………… 2013

………………………………………………..Signature of Shareholder(s)/Common Seal

Notes:-1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company. 2. To be valid this form duly completed must be deposited at the Registered Offi ce of the Company at Sublot 5-10, Lot 46, Block 10, Jalan Taman Raja, 98000

Miri, Sarawak not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the

Act are complied with.4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifi es the proportions of his holdings to be represented by

each proxy.5 If the appointer is a corporation, this form must be executed under its common seal or under the hand of an offi cer or attorney duly authorised.6 Where a member of the Company is an exempt authorised nominee as defi ned under the Securities Industry (Central Depositories) Act 1991, which holds

ordinary shares in the Company for multiple benefi cial owners in one securities account (omnibus account), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

7. Only members registered in the Record of Depositors as at 7 June 2013 shall be eligible to attend the meeting or appoint proxy to attend and vote on his/her behalf.

8. Please take note that interested directors, interested major shareholders or interested persons connected with a director or major shareholder, and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote in respect of their direct and/or indirect shareholdings on the resolution approving the Proposed Shareholders’ Mandate.

The Company SecretaryDayang Enterprise Holdings BhdSublot 5 – 10, Lot 46, Block 10,Jalan Taman Raja,98000 Miri, Sarawak.

FOLD HERE

FOLD HERE

FOLD THIS FLAP FOR SEALING

Affi xstamp


Head Offi ce

Sublot 5-10, Lot 46, Block 10, Jalan Taman Raja, Miri Concession Land District,P.O. Box 1134, 98000 Miri, Sarawak, Malaysia.

Tel : 085-420185Fax : 085-421654

Email : [email protected] Website: www.desb.net

Annual Report 2012

Focus Towards Excellence

Dayang

Enterp

rise Ho

lding

s Bhd

(712243-U)

AN

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AL R

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T 2012

dayang ar 2012 cover ok

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