Business Overview

7. BUSINESS OVERVIEW 7. BUSINESS OVERVIEW 7.1 Background and history We were incorporated under the Act as a public company limited by shares on 12 December 1995 and are principally an investment holding company whilst our subsidiaries are prinCipally involved in the provision of marine transportation, FPSO operations, vessel construction, and engineering and maintenance services to the offshore O&G companies. We were previously listed on 25 June 1997 on the then Main Board of the Kuala Lumpur Stock Exchange (now the Main Market) and were subsequently delisted on 1B April 2003 following a mandatory take-over offer by OBSB under Section 6 of the Malaysian Code of Take-overs and Mergers, 1998 as at thal time, OBSB did not intend to maintain our listing status. OBSB and its concert parties had, in September 2002, acquired about 61 % of our issued and paid-up share capital at that time, which lriggered a mandatory take-over offer for the remaining shares in our Company not already held by OBSB and its concert parties. OBSB had undertaken the aforesaid acquisition to upgrade and increase our fleet of vessels over the long-term (which would have required significant capital expenditure) to strengthen our posiUon in the offshore marine support services industry in Malaysia. Our subsequent corporate transformation and strategic focus are illustrated as follows: Pre·2005 2005 and aller CUIlCJlI struclure lind focus
Predl>mlnanUy domesliclIlly focused 4 koy 51rala91c Inlt)~lIve~ -A.H.T.S
OArmeda Perkan; Il> Se~ll!e J new cont/ac! for FPSO unit and ,,~pllnd FPSO b~s;nen OHaven: to exil the llflshore constrvCl<on business under Heven Gro~p OTransparency: 10 promote beller lraospillency and a higher level of govemoJl’:owlthln the business ‘,lith 1M IntroductiOn 01 new systems aod processH O’Steel on Woter’: constrvC\lOO of naw deep””‘t”r OSVs Buslnes9 units
• High·n1ue dedlcaled servkes backed by II 5110ng anal b.1Se
• Strong cash·no’,”, provided by long lenura FPSO conlratlS
• I,lodem neellncreaslngly fl>CllSed on deepwaler opportunities

,, ; • Innovalion and appllcotion 01 besl·in· c'”,,. lechnologles Three tl:lle segmenls: FPSO, OSV and T&1. and developing OFS segment going [l>rv”l’d Asset-baslld, servlces,focused with global execu(10n and local delivery
Pr”lor lo the reslrucluring in 2005, our businesses were organised under 2 main business units, namely BAN and Haven, with a predominantly domestic focus, BAN was established in 1977 10 provide vessel chartering services whilst Haven was established in 1987 to provide offshore construction, installation and maintenance services. In 2005, as part of our restructuring plan, we developed 4 key strategic initiatives under the acronym A.H.T,S.: (i)  Armada Perkasa: to secure a new contract for our FPSO unit and expand our FPSO  business;  (Ii)  Haven: to exit the offshore construction business under Haven Group;  (iit)  Transparency:  to promote  b~tter transparency and a higher level of governance  within our business with the introduction of new systems and processes; and  (iv)  “Steel on Water”; construction of new deepwater OSVs.
7. BUSINESS OVERVIEW (cont’d) The offshore construction business unit was deemed as a non-core segment in which we did not have a competilive advantage. As such, we decided to exit this business unit under our restructuring plan. The disposal of Haven Group’s offshore construction operations was completed in 2008. We have also put in place new systems and processes to promote a higher level of compliance within our organisation, as a foundation for our continued growth in the industry. In 2006, we launched our OSV fleet expansion programme, which is referred to as “Steel on Water”. This programme entailed the construction of 20 new deepwater OSVs with a total value of RM1 billion. The majority of these new vessels have an output of 8,000 bhp or more and are equipped with DP capability, which enables them to operate in deepwater and harsh environments. We are the first Malaysian owner and operator of a Malaysia-built DP AHTS (Annada Tuah 100) for Kikeh Field, off Sabah, the first deepwater project in Malaysia. We have taken delivery of all 20 OSVs under this programme. We believe these newer, modem and more powerful OSVs will enable us to gain a larger share of the higher margin deepwater segment. In addition to adding new vessels, we continue to monitor the vessel mix and efficiency levels of our overall fleet to ensure we have the right balance between vessel age and customer requirements.’ In 2010, we disposed 6 OSVs with an average age of 19 years. The FPSO business has also been a key focus area as FPSO contracts provide a stable and recurring cashflow for our offshore business. In 2007, we secured a new contract for our first FPSO, the Armada Perkasa, which commenced operations for Afren in the Okoro-Setu Field, Nigeria in May 2008. This was our first major step towards establishing our presence in the African market. Since then, the Armada Perkasa and our second FPSO, the Armada Perdana, which has been operational since December 2009, have met all their contractual uptime performance requirements. In 2009, we commenced the charter for our third FPSO, the Armada Perwira (which has since been renamed the Armada TGT 1), which is currently undergoing conversion and is expected to be operational in the third quarter of 2011. In December 2010, we acquired the Griffin Venture (which has since been renamed the Armada Prima) as a conversion candidate for our next FPSO project with Apache Julimar Pty Ltd for the Balnaves development in Australia, for which we secured a conditional letter of award on 30 March 2011. (The rest of this page has been intentionally left blank) 7. BUSINESS OVERVIEW (cont’d) 7.2 Overview We are a Malaysia-based international offshore services provider to the O&G industry in Malaysia and over 10 olher countries in Asia, Africa and Latin America. We provide our services through owning and operating marine assets across the O&G value chain from exploration through field development and construction, production and operations and eventually, decommissioning. Having worked extensively in shallow water, we are increasing focus on deepwater and harsh environments and work with customers ranging from NOGs ­and IOCs to Independents. We are the largest owner and operator of OSVs in Malaysia and one of the largest in South East Asia (source: Bumi Armada Independent Market Research Report by ISL). ·We have more than 40 OSVs, 4 FPSOs and under the T&I business, we have a DLB in the Caspian Sea and we are also acquiring the Acergy Hawk, a DP2 subsea installation vessel. We provide offshore services via 4 business units and 2 support units: (i) Business units FPSO Our 2 operational FPSOs, the AnTlada Perllasa and AnTlada Perdana, are operating in Nigeria. We have secured a oontract wilh Vietnam’s HUOC for our third FPSO, Ihe AnTlada Perwira (which has since been renamed as the AnTlada TGT 1), which is expected 10 commence operations in Ihe third quarter of 2011, In December 2010, we acquired the Griffin Venture (which has since been renamed the AnTlada Prima) as a conversion candidate for our next FPSO project with Apache Julimar Pty Ltd for the Balnaves development in Australia, for whicJ\ we secured a conditional leiter of award on 30 March 2011. OSV We own and operate a modem (leet of over 40 vessels comprising AHTS/AHT vessels, SSVs, utility vessels and accommodation workboats/worllbarglO’s 10 support the offshorlO’ O&G industry. T&/ We provide piplO’lay, hlO’avy lift, subsea installation, floater and mooring installation and marine spread support services. Previous work indudes installation of the pre-set moorings for thlO’ FPSO AnTlada Perdana and the mooring hook-up using an adapted in-house 12,000 bhp vessel. We own and operate a DLB undlO’r contract to PETRONAS Carigali in Ihe Caspian Sea, off Turllmenistan. We are also acquiring the Acergy Hawk, a DP2 subsea installation vlO’ssel. OFS We plan to provide a range of services required (0 cover all asplO’cts of an oIl field life cycle, from exploration through development, produclion and abandonment. We have initiated our exposure to this segment with the conversion and sale of an FSO to Petrofac, for thlO’ Sepat Field, off Terengganu, Malaysia.
7. BUSiNESS OVERVIEW (cont’d) (ii) Support units

FMS We conduct in-house management and operations of our vessel fleet in all aspects of Q&M.-We have access to over 1,300 crew members, and have offices and shore bases in Malaysia, Singapore, India, Brazil, Congo. Mexico, Nigeria and Turkmenistan, EPC We provide in-house EPICC services which entail engineering, design, procurement and project management services for our FPSOs, FSOs, modules, turret mooring systems, riser systems and pipelay and crane vessels. We have extensive experience in EPICC services from conceptual design through to commissioning and start-up. We have completed the conversion of both our current operating FPSOs, and the construction and integration of the DLB Armada Installer.
The diagram below shows the Iifecycle of an offshore O&G project and illustrates how our customers may ulilise our offshore support services in various slages throughout the lifecycle:
_____-.:O:..cF-:.F..:S.::H..:O-:.R:=Ec.:F-:.IE::L::D’–L:=I’-F:=EC”-y’-C::L::E’—­> Surveying,,’exploration Seismic surveying ;md drilling
FPSO ” ~ ,OSV
<“••

T&I m
.., 0 OFS
<“I I
Developmentl Construction Installation of platfonns, subse<l structures and nioelines  Production Oil extraction, supply/storage,,’maintenance of oroduclion units  D,­commissioning Removal of installations  <” <” <”  <” <” <” <”  <” <”

 

10~F-E:-:—–f—<“——–:——-:——-:–­7. BUSINESS OVERVIEW (cont’d) We have offices and’shore bases set up in various locations in Asia, Africa and Latin America, which allow us to provide support services for our vessel operations in Malaysian and inlernational markets. The table below sets forth the locations and functions of our offices and shore bases: Location Function Malaysia Headquarters in Kuala Lumpur and 3 shore bases located in Miri, Labuan and Kemaman to provide support and FMS for customers in South East Asia Singapore Office to support the EPICC unit India Office in Mumbai, india for our joint-venture with India’s Forbes & Company Limited offering services for the Indian offshore O&G market UAE Marketing office (n Dubai for our activities in this region Africa Shore bases in Congo and Nigeria to support our operations in West Africa and an office in Lagos. Nigeria for our joint-venture with Nigeria­based CESL for projects in Africa TUrkmenistan Shore base in Turkmenbashy and an office in Ashgabat to support our operations (n the Caspian Sea Mexico Shore base to support our operations in Mexico Brazil Marketing office in Rio de Janerio, Brazil to support our expansion into this market As at the LPD. we offer our offshore support services in various countries in Asia. Africa and Latin America as sel out below: Countries  FPSO  OSV  T&I  OFS  Asia  Brunei Darussalam  ”  Malaysia  ”  Turkmenistan  ”  Africa  Congo  ”  Nigeria  ”  Latin America  Brazil  ”  Mexico  ”  Venezuela  ”
As we operate in various countries in Asia. Africa and Latin America, we are subject to risks inherent in conducting our business internationally, as set out in Section 5.2 of this Prospectus. We attempt, to the extent possible, to minimise our exposure to these risks through contract terms and conditions as well as procuring additional insurance such as political risk insurance and kidnap and ransom insurance. Further, we believe we have taken necessary measures to ensure that our critical business, operations, equipment, assets and personnel have adequate insurance coverage, which also meets any applicable regulatory requirements in the countries in which we operate. 7. BUSINESS OVERVIEW (conl”d) For the,year ended 31 December 2010 and the 3 months ended 31 March 2011, we achieved P.AT of RM351 million and RM82 million, respectively and EBITDA of RM714 million and RM185 million, respectively. Revenue for the year ended 31 December 2010 was recorded at ‘RM1 ,241 million of which our FPSO, OSV and T&l businesses contributed approximately 44.6%, 33.8% and 21.6%, respectively, whilst revenue for the 3 months ended 31 March 2011 was recorded at RM376 million of which our FPSO, OSV, T&I and OFS businesses contributed approximately 33.3%, 26.0%, 19.6% and 21.1%, respectively. Approximately 84.8% and 67.7% of our revenue for the year ended 31 December 2010 and the 3 months ended 31 March 2011, respectively, was derived from outside of Malaysia. 7.3 Milestones and key achievements Some of our recent business milestones and key achievements are as follows: Year Achievements/Milestones 2006 • Awarded the Grand Award for Safely Excellence by EMEPMI • Exited the construction services business under Haven Group and established strategy to focus on offshore marine business
• Launch of our “Steel On Water” programme for our fleet expansion of 20 new OSVs
• First Malaysian owner and operator of a Malaysia-buill DP AHTS (Armada Tuah 100) for Kikeh Field. off Sabah, the first deepwater project in Malaysia

2007 • Third contract secured for the Armada Perkasa, Malaysia’s first FPSO, for Afren’s operations in the Okoro-Setu Field, Nigeria • Signed joint-venture with Forbes & Company Limited, India and established FBAL
• Awarded the Star Gold Award, an award that recognises Safety Excellence for 2007 by EMEPMI
• Initialed the first DP training programme in Malaysia together with the Malaysian Maritime Academy (“ALAM”)

2008 • Secured contract for the FPSO Armada Perdana. for operations of ENI’s subsidiary, NAE’s in the Oyo Field, in Nigeria • Secured our first DLB contract for the Armada Installer, for PETRONAS Carigali’s operations in the Caspian Sea, Turkmenistan
• The Armada Per1c;asa achieved first oil for Afren
• The EP Asia Pacific SheU Sarety Recognition Award 2008 was awarded ror our outstanding contribution 10 building a cullure of compliance and intervention towards “Living Goal Zero· ‘
• Our Company and BAE awarded the ISO 9001 :2008 for the full range of our services, from vessel procurement through to vessel operations

2009 • Secured contract for our third FPSO, the Armada Perwira (Which has since been renamed the Armada TGT 1), for a 7-year HUQC contract in the Te Giac Trang Field, Vietnam • Marine Money Internationat Asia’s Bank Debt Deal 01 the Year 200812009 Award for our success in securing the project flflancing for the FPSO Armada Perdana
• Award from Sarawak Shell Bemad and Sabah Shell Petroleum Co. Ltd, for achieving a “Four-Year Goal Zero Days·, which signifies 4 years of incident-free operations
• Awarded the Men! Award in recognition of HSE performance by PETRONAS Cangali Sdn Bhd
• The FPSO Armada Perdana achieved first oil for NAE
• First DP Master graduated under the DP training programme initiated with ALAM

7. BUSINESS OVERVIEW (conl’d) Year Achievements/Milestones 2010 • Frosl & Sullivan’s 2010 Malaysia Excellence Award -Oil & Gas Services Provider of the Year • The Armada Tuah 9 and the Armada Tuah 20 receive Safety Recognition for “Hurt­Free Operation <100,000 manhours” from EMEPMI
• Recognition of HSE performance by our vessels contracted to the Drilling Department Developmenl Division of PETRONAS Carigali Sdn Bhd for their “250 days free or Tolal Recordable Case”
• Award from Shell Malaysia Upstream Inlernalional, Sarawak Shell Berhad and Sabah Shell Petroleum Company Limited celebrating “1900 Goal Zero Days” for safe operations, which signilies 1,900 days of incident-free operations
• The FPSOs, the Armada Perkasa and the Armada Perdana achieved 365 days wi\hout LTI
• Successfully delivered and commissioned the DL8 Armada Installer in the Caspian Sea and completed the first campaign for PETRONAS Carigali
Awarded the first deepwater PSV contract for the Gumusut deepwater projecl, off Sabah, Malaysia, by Shell Sarawak Berhad
• Our Company and BAE were awarded (he QHSAS 18001 :2007 for HSE Management System procedures to identify, reduce and control health and safety concerns
• Our Company and 8AE were awarded the ISO 14001:2004 for Environmental Management Certification
• Acquired the Griffin Venture (Which has since been renamed the Annada Prima) as a conversion candidate for our next FPSO project

2011 • The Armada Tuah 10 received HSE Award for “1-year Operation without LTt and Downtime” from Petrovietnam Technical Services Corporation • The Brand Laureate Master Awards 2010-2011 for best brands in Logistics -Offshore and Marine Support Vessels by The Asia Pacific Brands Foundation
• Award from EMEPMI lor Marine Contractor or The Quarter Award 4Q 2010 in Recognition of Outstanding Contribution 10 Safety
• Award from EMEPMI for Marine Contraclor Of The Year Award 2010 in Recognition of Outstanding Contribution 10 Safety
• Conditional Letter of Award from Apache JuJimar Pty Ltd for the development of an FPSO for the Balnaves development in Australia
• Awarded the EPC and installation contracts by Petrofac for the FSO for the Sepat Field, off Terengganu, Malaysia, the firs\ under the marginal fields iniliative of the Malaysian Economic Transforrraation Programme
• Awarded our first conlract in Brazil, with a firm 4-year charter of the Armada Tuah 104 by Petroleo 8rasileiro SA (Petrobras)
• Acquiring the Acergy Hawk as part of our T&I business expansion to offer subsea and IRM services
• Secured a purchase option on the Aframax lanker, Monte Umbe, as a conversion candidate for our next FPSO projeci in Asia and in respect of which F8AOL has secured a leiter of award from Oil and Natural Gas Corporation Limited on 25 June 2011, which will be located al 01 Field, Western Offshore Areas, India

7. BUSINESS OVERVIEW (conl’d) 7.4 Business units

7.4.1 FPSO We provide FPSO units, which are vessels (either a converted oil tanker or newbuild) that are used for receiving hydrocarbons sourced from remote oil fields. The hydrocarbons received are processed into crude oil and slored on-board the vessel, to be later offioaded into an oil tanker or pipeline. The gas that is extracted and processed on board the FPSO can either be used or handled in the following manner: (t) for powering the compressors. power generators or other equipment on the FPSO;
(ii) re-injected into the wells to increase pressure in the reservoir to improve the extraction of more hydrocarbons;

(iii) exported to the shore via a pipeline if there is excess amounts of produced gas; or (iv) where necessitated by safety and in limited offset conditions, the gas is routed to flare. The FPSO is a technical and cost-effective solution for application in locations which are remole or do not have the required processing and production infrastructure. It eliminates the need to install large fixed oil production platforms or to lay expensive long-distance seabed pipelines from oil fields to a receiving terminal. In a more benign ocean environment, the FPSO will be spread moored. In areas where natural hazards such as typhoons, cyclones or icebergs are prevalent, an FPSO may have systems in place to release their mooring and riser system and move away to safety during an emergency. We are the first company to own and operate an FPSO in Malaysia with the launch of the Armada Perkasa in 1997. We have successfully redeployed the Armada Perkasa to 3 different fields on 2 different continents, and we believe we are the only FPSO operator to have redeployed the same FPSO 3 times (source: Bum; Armada Independent Market Research Report by ISL). The contract structure lor our FPSOs (save for Armada Prima for which we have secured a conditional letter of award on 30 March 2011 and our next FPSO project for which FBAOL has secured a letter of award on 25 June 2011) is illustrated as Follows: 2007 2010 2015 2020 Armada Perk<l5<1 Armada Perd<ll1<1 Armada TGT 1. • , … ~:;~.. ~’2::’-;:.”::’. _ ,’.~i~’· ‘.’..:’ -. ‘.-.:1 -,, . • Effedive dale of contract(‘) . ~~::I Firm charter period 1I111 Opliooo””” “rtod ;,L~’ Hole: (1) Indicates commencement of/ease period. The total NBV of our FPSOs as at 31 March 2011 is RM1 ,752 million. 98

7. BUSINESS OVERVIEW (cont’d) We intend to grow our FPSO business by leveraging on the combined industry experiences of our FPSO and EPC teams. All FPSO-related design, engineering, ‘procuJement, projeCt management and other capabilities are available in-house under the ambit of our EPC team. Please refer to Section 7.5.2 for further details on our in­house EPC unit. Further details of our FPSOs are as follows: (i) Armada Perkasa The Armada Perkasa was initially a 1975 Panamax sized tanker with storage capacity for 360,000 barrels of crude oil which was converted and commissioned as an FPSO in 1997 for IPC Malaysia ltd at the Bunga Kekwa Field, located off the coast of Malaysia and Vietnam under the Malaysia­Vietnam Commercial Arrangement Area. We believe it is one of the few FPSOs in the world to have selViced more than 2 contracts and is currently moored at a significantly shallow water depth of 13 metres, which required a complex mooring solution. Following its first 7-year charter at the Bunga Kekwa Field, it went on to selVice the Baram Field, offshore Miri, for PETRONAS Carigati Sdn Bhd in 2005/2006. Currently, the Armada Perkasa is in operation for its third FPSO project with Afren in the Okoro-Setu Field, Nigeria. The bareboat charter with Afren is for an initial firm 5-year period, which may be extended for additional 1 year periods over a further 5-year period. The total net production of the Armada Perkasa for its current contract up to the LPD is 16.1 million bbls. –._. –.,–,. 7’-” -. ‘.-, . .~.;.:.:_.. 0′,’—.. ‘_:;”;”,,~r’ -__7 ….­,–·.:”_>;:~::%i.l”‘d~T ‘ ‘. -==~~’-,~:-:\ ‘.”C”O ,-.:-~.~-.” Specifications: First oil Oil production capacity Storage capacity , Length Breadth Depth , Deadweight tonne Mooring type Hull type Accommodation Year buill Year converted 10 an FPSO Conversion shipyard Class , Flag . May 2008 . 30.000 bpd . 298,357 bbls . 211.2 metres . 32.2 metres . 17.5 metres . 58,557 tonnes . 10 point spread mooring . Single hull . 67 persons .. 1975 . 1997 . Keppel Shipyard, Singapore . AllS . Panama 7. BUSINESS OVERVIEW (conl’d) (ii) Armada Perdana We secured the contract for our second FPSO, the Armada Perdana, from ENl’s subsidiary, NAE in the Oyo Field, Nigeria in April 2008 with first oil produced in December 2009. The conversion of the Armada Perdana was engineered and project-managed in-house. In connection with this, our sUbsidiaries, AOL and BASPL, had entered into with NAE, a bareboat charter party contract (“Perdana Bareboat Charter”) and an O&M contract (“Perdana O&M Contract”). The Perdana Bareboat Charter is for a firm 5-year contract period, of which the contract period may be extended by NAE for 5 additional periods of 12 months each. Similarly, the Perdana D&M Contract is for a firm 5-year contract period and NAE may extend the contract period for 5 additional periods of 12 months each. We are currently in the midst of fonnalising an.amendment contract with NAE 10 revise the respective contract periods for the Perdana Bareboat Charter and the Perdana O&M Contract from a firm 5·year term to a firm 10-year term. The tolal net productioll for the Armada Perdana up to the lPD is 4.3 millioll bbls.
Specifications: First oil Production capacity ., storage capacity Length Breadth Depth Deadweight tonne Mooring type Hull type Accommodation Year builL Year converted (0 an FPSO Conversion shipyard Crass Flag 100
. December 2009 . 40,000 bpd . 46.0 metres . 22.6 metres . 156,483 tonnes . 12 point spread mooring . Single hull with side impact protection . 87 persons . 1984 . 2009 . Keppel Shipyard, Singapore . AaS . Panama 7. BUSINESS OVERVIEW (conl’d) (iii) Armada TGT 1 (formerly known as Armada Perwira) We secured the contract for our third FPSO, the Armada Perwira (which has since been renamed Armada TGT 1), in late-2009. 1.l is expected to start produclion in the third quarter of 2011 for HLJOC in Vietnam. The bareboat charter and the O&M agreement in respect of the HLJOC contract is for an initial firm 7-year period, which may be extended for additional 1 year periods over a further a-year period.
Specifications: Production capacity Storage capacity Length , Breadth Depth Deadweight {onne , Mooring type , Hull type , Accommodation Year builL Year converted to an FPSO Conversion shipyard Class ” Flag, , .  55,000 bpd  ..  620,000 bbls  .  274.0 metres  .  47,8 metres  ‘..  22.8 metres  .  147,000 tonnes  .  External turret  ,  .  DOUble hull  .  100 persons  .  1996  .  2011  “,  .  Keppel Shipyard, Singapore  .  ASS  .  Marshall Island
7. BUSINESS OVERVIEW (cont’d) (iv) Armada Prima (formerly known as the Griffin Venture) In December 2010, we acquired the Griffin Venture (which has since been renamed the Armada Prima) as a conversion candidate for our next FPSO project with Apache Julimar Pty Ltd for the Balnaves development in Australia,’ for which we secured a conditional letter of award on 30 March 2011.
Specifications:  Storage capacity  .  805,035 bbls  Lenglh  .  240.7 metres  Breadth  ,  ,.  41.8 metres  Depth  .  22.9 metres  Deadweight tonne  .  102.123 tonnes  Mooring type  ,  .  External turret  Hull type  ,  .  Double hull  Flag  , .  Australia
(The rest of this page has been intentionally left blank) 7. BUSINESS OVERVIEW (conl’d)
7.4.2 OSVs We own, operate and charter vessels to provide support for exploration, development and production activities in the offshore O&G industry. Equipped with in-house expertise, we are also able to project-manage the construction of our vessels. We are one of the largest OSV owners and operators in South East Asia (source: Bumi Armada Independent Market Research Report by {SLy with over 40 vessels of various types and have operated in C\ler 10 countries including Malaysia, Brunei, Vietnam, Congo, Nigeria, Venezuela and Mexico. “:-‘-.,.,’. ” .” “:’.

 

“.;:e;.

We charter our vessels on a time charter or bareboat basis, either on a long charter or short charter. The following are the various types of OSV in our fleet and their respective functions: No. of Vessel type vessels Examples or usage
AHTS/AHT 25 Used to support offshore oil rigs, platforms and other ‘offshore installations, low mobile slructures to location and position their mooring anchors, m’aking sure anchors are pl;3ced in a well-suited position. ‘ Accommodation 8 Used 10 support offshore construction activity. The main workbargelworkboals factors related to these \lessels are the number of’ people thai can be accommodaled on-board (number of beds), the clear deck space (for carrying out maintenance or construction of equipmenl) and the capacity of the crane Med on the vessel. Mooring launch 3 Used to assist mooring and unmooring of larger vessels, to a single-point mooring or mulli-buoy mooring system offshore. Standby vessel Used as a safety vessel which remains in an offshore location when any offshore operations are underway on the offshore rig, platform or installation. In the evenl that there is an emergency, these vessels provide resaJe activities. fire-fighting or olher safety inlervention operations. 7. BUSINESS OVERVIEW (conrd) Vessel type  No. of vessels  Examples of usage  ssv  2  Used as a “transport truck” for the offshore O&G industry, for the provision and transportation of equipment, Cargo pipe. cemenl, fuel oil and freshwater between supply bases and offshore platforms and facilities. SSVs tend 10 comprise smaller vessels that operate in shallow waters.  Utility vessels  2  This multipurpose vessel is commonly used 10 ferry offshore construction personnel, production materials, machineries and equipment between supply bases, offshore platforms, drilling vessels and construction barge.  Others  2  Comprises an oil recovery vessel and a survey support vessel. Oil recovery vessels are used 10 recover oil spills and survey support vessels are used to support seismic surveys.  Total  43
We replaced older, lower-end and lower tonnage vessels with our “Steel on Water” OSV fleet expansion programme which was launched in 2006 and was completed in 2010. The programme outlined the construction of 20 new OSVs with a total value of RM1 billion. This programme was initiated in anticipation of shifting trends in E&P, away from continental shelf shallow waters into deeper waters and harsher environments which require more sophisticated and higher horsepower OSVs. These newer vessels, with output in excess of 8,000 bhp, are equipped with DP capability and digital global positioning systems that allow the vessels to stay at a programmed position using computer-aided thrusters and propulsion systems. The total installed bhp of our OSVs is 220,000 bhp. We believe that the introduction of these new OSVs has enabled us to strengthen our position in the international offshore sector and our early commitment to a newbuild programme in 2006 was an opportune move, enabling us to secure shipyard slots and procure major equipment and machinery at competitive rates ahead of our competitors. We believe our’ timely inveslmentin fleet expansion ·ana fleet renewal gave us a cost advantage over our competitors. In addition to adding new OSVs, we continue to monitor the vessel mix and efficiency levels of our overall fleet to ensure we have the right balance between vessel age and customer requirements. Currently, we do not have a formal vessel replacement policy with regards to OSVs. I Company No. 370398·X I 7. BUSINESS OVERVIEW (canl’d) As at the LPD, over 50% of our fleet is aged 5 years or less and the entire OSV fleet has an average age of about 7 years. Over 90% of our OSV fleet is on lime charter to our customers. Details of our vessels are as follows:  Year  NBVas at  NO.  Vessel'(11  Type  built  Age  bhp  Bed  DP  Current location  Status·  31 March 2011  RM  ,.  Armada Tuah 6  AHT  1997  14  4,000  01,  0″  Labuan  Short charter  8,088,618  2.  Armada Tuah 8  AHT  2002  9  4,840  01,  ola  Kemaman  Long charter  12,549,876  3.  Armada Tuah 9  AHT  2002  9  5,040  ola  ola  Kemaman  lon9 charter  13-,257,444  4.  Armada Tuah 10  AHT  2003  8  5,040  ola  ola  Kemaman  Long charter  15,521,145  5.  Armada Tugas 4  AHT  2005  6  4,000  o’a  ola  Nigeria  Long charter  12.696,710  6.  Armada Tuah 20  AHTS  2004  7  5,040  o’a  ola  Nigeria  Unemployed  . 20,483,941  7.  Armada Tuah 21  AHTS  2005  6  5,040  ola  o’a  Labuan  Long charter  21,504,584  8.  Armada Tuah 22  AHTS  2005  6  5,040  ola  ola  Nigeria  Long charter  22,054,183  g.  Armadp Tuah 23  AHTS  2006  5  5,040  ola  ola  Kemaman  Long charter  22,491,590  10.  Armada Tuah 24  AHTS  2006  5  5,040  ola  ola  labuan  Unemployed  22,523,245  11.  Ventures Tuah Salu··  AHTS  2007  4  6,000  ola  o’a  Kemaman  Long charter  Not available  12.  Ventures Tuah Dua··  AHTS  2007  4  5,000  ola  o’a  Kemaman  Long charter  Not available  13.  Armada Tuah 25  AHTS  2007  4  5,040  ola  DP1  Kemaman  Long charter  30,621,200  14.  Armada Tuah 26  AHTS  2007  4  5,040  ola  DP1  Labuan  Long charter  30,527,570  15.  Armada Tuah 80  AHTS  2008  3  8,000  o’a  DP1  Labuan  Short charter  58,503,201  16.  Armada Tuah 82  AHTS  2009  2  8,000  o’a  OP1  Vietnam  Long charter  59,754,596  17.  Armada Tuah 81  AHTS  2010  1  8,000  ola  OP1  Nigeria  Long charter  74,306,039  18.  Armada Tuah 83  AHTS  2010  1  8,000  ola  OP1  Nigeria  Unemployed  69.196,989  19.  Armada Tuah 84  AHTS  2010  1  8,000  nla  OP1  Kemaman  Long charter  61,706,478  20.  Armada Tuah 85  AHTS  2010  1  8,000  ola  OP1  Kemaman  Short charter  67,464,124  21.  Armada Tuah 100  AHTS  2006  5  9,000  01,  OP2  Labuan  Long charter  53,145,758  22.  Armada Tuah 101  AHTS  2007  4  9,000  o’a  OP2  Nigeria  Short charter  49,706,113  23.  Armada Tuah 102  AHTS  2008  3  12,000  ola  OP2  Kemaman  Long charter  73,908,689  24.  Armada Tuah 104″  AHTS  2009  2  12,000  ola  OP2  Brazil  Short charter  101,726,831
105 I Company No. 37039B·X I 7. BUSINESS OVERVIEW (cont’d) Year  NBVas at  No.  Vessel'(l)  Type  built  Ag.  bhp  Bed  DP  Current location  Status’  3’\ March 2011  RM  25.  Armada Tuah 105  AHTS  2009  2  12,000  o’a  DP2  Venezuela  Long charter  95,006,003  26.  Armada Goodman  Accommodation workboat  1991  20  3,000  95  o’a  Labuan  Short charter  7,198,095  27.  Armada Topman  Accommodation workboat  1991  20  3,000  95  o’a  Labuan  Short charter  6,402,763  28.  Armada ImOin  Accommodation workboat  1998  13  4,000  140  o’a  LabuOin  Lon9 charter  19,750,441  29.  Armada Salman  Accommodation workboat  2002  9  3,600  132  o’a  Brunei  Long charter  22,497,063  30.  Armada Firman  Accommoda\\on workboat’  2004  7  4,000  200  o’a  Kemaman  Long charter  30,207,554  31.  Armada Firman 2  Accommodation workboat  2008  3  6,000  200  DP2  Nigeria  Short charter  69,013,255  32.  Armada Firman 3  Accommodation workboat  2008  3  6,000  200  DP2  Mexico  Long charter  66,964,344  33.  Mahakam  Accommodation workbarge  2004  7  o’a  300  o’a  Congo  Long charter  34,305,065  34.  Armada MutiarOi 2  Mooring launch  2008  3  750  o’a  o’a  Labuan  Long charter  3,527,405  35.  Armada Mu(iara 3  Mooring launch  2009  2  750  o’a  o’a  Miri  Long charter  3,499,255  36.  Armada Muliara 4  Mooring launch  2009  2  2 x 400  o’a  o’a  Miri  Long charter  3,474,825  37.  Armada Aman  Standby vessel  1996  15  3,600  o’a  o’a  Kemaman  Long charter  5,037,364  38.  Armada 5-”  SSV  1984  27  2,600  o’a  o’a  Nigeria  Unemployed  Not available  39.  Armada S””  SSV  19B4  27  2,600  ola  o’a  Nigeria  Long charter  Not available  40.  Armada Tugas 1′”  Utility vessel  2003  8  ‘2,500  o’a  o’a  Nigeria  Unemployed  Not available  41.  Armada Tugas 3  Utility vessel  2005  6  3,200  o’a  ola  Kemaman  Unemployed  8,626,763  42.  Armada Tugas 2  Oil recovery vessel  2003  8  3,000  o’a  o’a  Brunei  Long charter  10.343,666  43.  Armada Hydro'”  Survey support vessel  1988  23  1,060  o’a  o’a  Nigeria  Unemployed  Not available  Average age  7
106 ! Company No. 370398-X I 7. BUSINESS OVERVIEW (cont’d) Noles: nI. Not epplicable. Long cherter refers to lenures of more Ihen 18 months whilst short chertar refers 10 I!mures 01 less then 18 months. Owned by ourjoinUy-controlfed entity, OMV. Owned by ourjointly-conlrolled entity, ACL. AU our vessels ere regislered undar BAN, seve for Armede 5 end Mehekam, of which AFSL and AML are the registered owners, respeclively. o Capabla of being converted to e mooring end subsee installelion vessel for use in our T&I business unit. (1) Excludes the PSV which is currenlly under construction pursuent to Ihe PSV con/rect awerded by Shell Sarewak Berhad for the Gumusut deepweterproject, off Seba”, Meleysie. (The rest of this page has been intentionally left blank} 107
7. BUSINESS OVERVIEW (cont’d) The charter rates of each type of vessel for the 3 months ended 31 March 2011 are as follows: 3 months ended 31 March 2011 Vessel type Basis Low rate High rate Utilisation rate(2J AHTS/AHT  USDlbhp per day  1.40  2.62  Accommodation workbeaU  barge  USOlbed per day  83.35  257.50  63.9%  Other OSVS(lj  USO/unit per day  1,269  5,500  53.7%  Notes:
(1J Including mooring launches, SSVs, ulility vessels and other vessels. (2) Please refer 10 Section 12.2.7 of Ihis Prospectus for the computatiOfl formule of ulilisation rale. For historical charter rates for the years ended 31 December 2008, 2009 and 2010, and the 3 months ended 31 March 2011, please refer to Section 12.2.7 of this Prospectus. 7.4.3 T&I Our T&I services currently cover 2 main areas: pipeline and platform installation and floater installation (including riser hook up). The Armada Installer, a key marine asset for our T&l business unit, is a purpose-built DLB constructed at Keppel Shipyard in Singapore and integrated in the Caspian Sea. This vessel, which can operate in water depths of between 8 metres and 300 metres, has been commissioned and in operation since the second quarter of 2010 in the Caspian Sea. off Turkmenistan for an 8-ye”ar contract awarded by PETRONAS Carigali.
Specifications: Pipe-laying capability………………… 4-inch -48-inch diameter pipe Lifting capability……………………….. 800 tonnes Deadweight lonne 11,896 lonnes (gross), 3,569 tonnes (net) Mooring type ‘\0 point mooring system, electric drive winches Accommodation ,.. 240 beds Year built 2009 Construction shipyard……………….. Keppel Shipyard. Singapore Class ” ONV Flag Panama 108 7. BUSINESS OVERVIEW (conrd) The Armada Installer has completed her first year of pipelaying operations and achieved the following: (i)  Completed laying of 2 lengths of 12-inch diameter pipe of 7 kilometres each;  (ii)  Completed laying of 72 kilometres diameter piggy back pipe; and  of  12~jnch  diameter pipe  and  4-inch  (iii)  Completed laying of 72 kilometres of 26~jnch diameter pipe.
In 2011, the Armada Installer wJII have an 800 metric tonne crane installed. The installation of the crane is expected to commence in July 2011 and will lake between 4 and 5 months. This wHi allow the Armada Installer to undertake heavy-lift operations, which is part of the scope required under the contract with PETRONAS Cadgali. Our floater installation expertise complements our FPSO business. Our T&I business unit managed the installation of the FPSO Armada Perkasa in the Okoro-Setu Field, Nigeria, and installed all the pre-set moorings for the FPSO Armada Perdana in the Oyo Field, Nigeria. In addition to this project, we will be supporting the installation of the FPSO Armada TGT 1 (formerly known as Armada Perwira) in Vietnam and installing the FSO in the Sepat Field, off Terengganu, Malaysia. Mooring systems are installed on vessels to secure them in position at sea for production, storage and offioading. We also own and operate the Armada Tuah 104, a 12,000 bhp DP2 deepwater AHTS which can be quickly converted to be used as a mooring and subsea installation vessel for installing pre-set mooring and subsea equipment in medium to deepwater fields. Further details on the Armada Tuah 104 are set out in Section 7.4.2 above.
7. BUSINESS OVERVIEW (cont’d) We will also be expanding our T&I services with SURF installation capabilities. We are acquiring the Acergy Hawk, a DP2 subsea installation vessel, which will give us the platform to offer SURF installation as both a complementary service to our FPSQ business when bidding for new projects, as well as the ability to bid directly on SURF installation packages. In addition to SURF installation, this vessel will also allow us to bid for IRM projects.
Specifications: Lifting Cilpabilily…………… 240 lannes
Deck space ” 792 square metres Length 94.1 metres Breadth…………………………………… 18.8 metres Mooring type OP2 Accommodation 140 beds Others Helideck Sikorski S61 N, moon-poor (3 metres x 3 metres) yearbuilt… 1978 Class _…………………… ONV Flag _ Panama The NBVof our T&I assets as at 31 March 2011 is RM774 million. Our expansion in the T&I market will depend on having the right vessel as a platform to offer additional services. Our T&I business is regularly evalualing both existing and newbuild vessels and we have identified assets that we feel are of the right specification for the markets that we are bolh currently in and plan to enter in the near future.
7.4.4 OFS We have initiated our venture into the OFS segment with the conversion and sale of an FSO to Petrofac, for the Sepat Field, off Terengganu, Malaysia. In this segment, we plan to offer a range of services required to cover all aspects of the oil field life­cycle, from exploration, through development, production and abandonment. Customers are likely to require a single or a combination of services in order to maximise returns from their investment in the relevant project. OFS entails the provision of various specialised services required in the offshore mature/brownfield markets. These include, amongst others, marginal field production solutions such as EOR, process modules to enhance Ihe extraction of hydrocarbons from the reservoir as well as specific services and assets offered on a RBG basis for working in Ihe marginal and mature/brownfield environment. 7. BUSINESS OVERVIEW (cont’d) We currently offer services, either directly or through our partnerships or alliances, in the exploration (survey), development (facilities and installation), production (FPSO) and abandonment (T&l) phases of the marginal oil field/brownfield projects under our OFS business. We can also provide support vessels via our OSV business throughout the field life to the customer. 7.5 Support units 7.5.1 FMS The focus of our in-house FMS support unit is primarily the manning of and maintenance services for our vessel fleet and crew. Other items such as scheduled maintenance and repairs of vessels are also coordinated under our FMS unit. Our OSVs and FPSOs are managed centrally from Malaysia via operational shore bases. All our vessels are connected to the internet via satellite. This allows full ship-to­shOre connectivity and communication for both our offshore crew as well as our shore bases. Safety is a vital factor in the offshore O&G industry and taking this into consideration, we maintain our operalions in-house, taking a hands-on approach to the day-to-day activities on our vessels. We also view the management of our assets as a major factor in maintaining the integrity and operational capacity of our vessels. The information lechnology back-bone to our FMS unit is BASS. This system is a critical operational component as it coordinates our entire fleet and over 1,100 crew members in over 10 countries around the world. BASS also facilitates the following: (i) controls the fleet, improves management of maintenance and repairs, work practices and condition monitoring of equipment;
(ii) ensures all aspects of the fleet management are in compliance with mandatory rules and regulations as well as charterers’ requirements; and

(iii) ensures that the right materials are available and scheduled maintenance takes place on time.

7.5.2 EPC The key focus of our EPC unit is to create an in-house capability to drive growth and to provide value-added services which are complementary to our overall growth plans. Currently, our focus is on EPICC services for all our own assets and major projects and on a turnkey basis as part of our RBC business. We have successfully established our in-house expertise to design, procure and build on art major projects, such as the FPSOs, Armada Perkasa, Armada Perdana and Armada TGT 1 (formerly known as Armada Perwira) as well as the OLB Armada Installer. Over the years, we have built a good working relationship with our key partners and suppliers such as Keppel Shipyard Limited, Solar Turbines International, Rolls Royce Singapore Pte Ltd, Nam Cheong Dockyard Sdn Bhd, Drydocks World-Singapore Pte Ltd, Converteam Group SAS, Dyna-Mac Engineering Services, Oiltech Engineering and Siemens. Our in·house EPICC competencies allow us to manage our FPSO projects better and serve as an internal project risk mitigation and cost control measure. We are able to mitigate the risks involved in outsourcing detailed engineering scope to external contractors, whilst developing cost efficient solutions. All our EPICC services are in­line with the latest ISO guidelines and requirements. 7. BUSINESS OVERVIEW (cont’d) 7.6 Competitive strengths We believe that our position as an established offshore services provider in the O&G industry is due to our following strengths: (i) A Malaysia-based international offshore selVices provider with an expanding reach We are a Malaysia-based international offshore services provider to the O&G industry in Malaysia and over 10 olher countries in Asia, Africa and Latin America. We are increasing focus on deepwater and harsh environments and work with customers ranging from NOCs and IOCs to Independents. For the year ended 31 December 2010, about 84.8% of our revenue was derived from outside of Malaysia. We believe that the diversity of our geographical markets reduces our dependence and risk exposure to any single market and/or single customer. We are the first Malaysian offshore asset owner and operator in Africa and in the Caspian Sea (source: Bumi Armada Independent Marker Research Report by ISL). Through the establishment of shore bases in Congo, Mexico, Nigeria and Turkmenistan, we have been able to expand our operations internationally and into new markets. We have also established a marketing office in Brazil. We believe we have established a significant presence in West Africa, and a 50% market share of the DLB pipe-laying market in the Caspian Sea as we own and operate one of only 2 DLBs currently operating in the Caspian Sea. In addition, as more countries enforce local content requirements, we believe that our ability to develop local capability is a key advantage in penetrating and increasing our market share in new regions. For example, we believe we can maintain a competitive advantage in local markets through our Local Content Development Programme, which we have established in Malaysia, Nigeria and Turkmenistan, and which aims to provide comprehensive training for skilled local personnel. In addition, we have forged alliances with local business partners in various countries in which we operate. For instance, we have entered into joint-ventures with Nigeria-based CESL, India­based Forbes & Company Limited and Vietnam-based Vietsovpelro for local projects. We believe these programmes and alliances have facilitated our local understanding, helped reduce our risk exposure and enabled us to operate successfully in markets that may appear challenging to others. Finally, we believe that our initiative to develop local content in our markets has helped us integrate with the local communities and reduce security risks in the respective countries in which we operate, thereby helping us maintain our strong safety track record. (ii) Established and expanding FPSQ operator We are currently the eighth ranked FPSO operator by fleet size globally (source: Bumi Armada Independent Market Research Report by ISL) and have a proven track record of consistent execution in the FPSO business, delivering vessels on time, fully funded and within budget, even during difficult financial market conditions. All of our operating FPSOs have met their contractual uptime performance requirements since the commencement of operations, such as: (a) availability of Ihe FPSOs in the field as required; and
(b) operational availability of the units.

7″ BUSINESS OVERVIEW (cont”d) Over the past 4 years, we have: (a) refurbished the Armada Perkasa, for its third contract in Nigeria’s Okoro-Setu Field with Afren. We believe our technical capability has been demonstrated by our ability to relocate this FPSO 3 times i.e. to 3 different fields on 2 different continents, including currently being moored at a significantly shallow water depth of 13 metres requiring a complex mooring solution;
(b) delivered our second FPSO, the Armada Perdana, which has been operating in Nigeria’s Oyo Field with ENI’s subsidiary, NAE since December 2009;
(c) secured a contract for our third FPSO, the Armada Perwira (which has since been renamed the Armada TGT 1), which is scheduled to commence operations in the third quarter of 2011 in Vielnam’s Te Giac Trang Field with HUGe;
(d) acquired the Griffin Venture (which has since been renamed the Armada Prima) in December 2010, as a conversion candidate for our next FPSO project with Apache Julimar pty Ltd for the Balnaves development in Australia, for which we secured a conditional letter of award on 30 March 2011;and
(e) secured a purchase option on the 1997-built, double hull, 107,222 deadweight tonne Aframax tanker, Monte Umbe, as a conversion candidate for our next FPSO project in Asia.

We believe that the successful expansion of our FPSO business has resulted in large part from our lower cost base compared to that of our European competitors, allowing us to realise higher margins while offering competitive pricing to our customers. In addition, we believe we have a strong industry reputation for reliability and technical excellence, in particular with respect lo engineering and project execution. We expect our continued focus on securing long-term FPSO contracts to provide stable and recurring cashflows for our offshore business. (iii) A large and modern OSV fleet with cross-border operability We have one of the largest and most modem fleets of OSVs owned and operated out of Asia (source: Bumi Armada Independent Market Research Report by ISL). We commenced-our-OSV business with th’e establishment of BAN in 1977 and have sleadily built up our expertise and credentials in the offshore support services business. We launched our fleet expansion programme, “Steel on Water”, in 2006, and as a result have increased our fleet size by 20 OSVs in slightly over 4 years to over 40 OSVs, making us one of the largest players in the OSV market in South East Asia. We have expanded our vessel deployment footprint from our origins in Malaysia to over 10 countries in Asia, Africa and Latin America. Internationally. our OSVs operate in new and established O&G markets, such as Mexico, Vietnam, Venezuela, Nigeria, Angola and Brazil. The majority of our AHTS fleet is installed with DP systems to meet both the requirements of the lraditional offshore market and harsher deepwater offshore environments. We believe that our technical advantages provide us with the ability to operate across boundaries and to capitalise on the demand for deeper-water offshore services. As a result of our focused fleet renewal stralegy, as at the LPD, the average age of our fleet was about 7 years and over 50% of our fleet was 5 years old or less. 7, BUSINESS OVERVIEW (cont’d) (iv) Proven execution track record, with in-house expertise throughout our value chain We have structured our business to be flexible and scalable, which we believe is an important factor in building a strong platform for long-term business growth in the offshore services industry. As a result, we are able to provide our customers with a range of integrated and value-added services across our value chain. These services range from discovery and extraction to field preparation, from production to processing and full field operations and support. Furthermore, we believe that these in-house competencies provide benefits across our various services, allowing us to realise synergies through the application of these competencies to our OSV and T&I businesses as well. We have developed an in-house EPC competency which, when applied towards our FPSO contracts, we believe provides us with a competitive advantage over other FPSO operators without similar in-house expertise. This expertise has allowed us to design, engineer, procure and project-manage all our major construction activities. We are currently developing our own turret mooring systems, which we believe will be an important future competitive advantage and will allow us to expand our offerings in the FPSO market. We also focus on our fleet management capability, which we believe direclly benefits our operations. By operating our own vessels, we are able to establish and access a database of critical offshore and marine personnel whilst developing a pool of younger talent which we will be able to benefit from in the fulure. In addition, we have also invested in database and maintenance systems to support our fleet, actively tracking and coordinating both routine and planned maintenance. Having the ability to control all essential aspecls of a project, as well as having an experienced and well-trained workforce that is headquartered and operating out of a fiscal-friendly, cost-effective base in Malaysia, are important risk and cost control tools. Partially as a result of these measures, we have been able to achieve an average EBITDA margin of 62.3% for the past 3 years ended 31 December 2010. Although we may be subject to foreign taxation on income generated from our vessels operating outside of Malaysia, under Section 54A of the Income Tax Act, 1967, we currently benefit from the tax-exempt status for most of our vessels which are on time charters and which are registered und~r the Malaysian Merchant Shipping Ordinance, 1952. This benefit will continue until and unless there is a change in the said legislation. (v) Experienced and culturally diverse senior management team with proven track record, who are leading an agile organisation We have an experienced, multinational senior management team with in-depth knowledge of the offshore and marine services industry. Our Company is led by our Chief Executive Officer, Hassan Assad Basma, who has over 30 years of experience in the O&G industry, of which the last 17 years were spent in Asia. Our senior management team consists of members with an average of more than 13 years of experience each in the offshore O&G indus\ry in Asia, Africa, Australia and the Americas. 7. BUSINESS OVERVIEW (cont’d) Furthermore, our multicultural organisation is capable of attracting and pooling talents worldwide to operate across multiple countries. Our FPSO and OSV business units are headed by Andrew Day Lamshed (who has over 15 years of relevant industry experience) and Wee Yam Khoon (who has over 30 years of relevant industry experience), respectively. Our T&l business unit is headed by Massimiliano Bellotti (who has over 12 years of relevant industry experience) while Adriaan Petrus Van De Korput (who has over 25 years of relevant industry experience) is managing our EPC business unit. Please refer to Section 9.2 for their respective profiles. We are also regularly adding management capability and building talent throughout the organisation. We have a diverse talent pool which consists of members of over 20 nationalities working in over 10 countries. We have a flat organisational structure which we believe gives us the ability to react efficiently and quickly to business threats and opportunities both domestically and internationally. We believe that the combined experience and depth of knowledge of our senior management team enables us to manage our existing business in an efficient, safe and cost-effective manner, while also providing strategic direction to help ensure the successful implementation of our expansion plans. (vi) Our established partnerships with our customers and suppliers as well as with the key players throughout the offshore O&G value chain We have established relationships with NOCs, such as PETRONAS, Oil and Natural Gas Corporation Limited, Petrovielnam, CNOOC and ENI, 10Cs such as Royal Dutch Shell piC and The Exxon Mobil Corporation as well as Independents such as Afren. Given our proven track record, we believe we can offer Asian NOCs services with a familiar and trusted brand name as they venture into new markets. We view the NOCs’ familiarity with us outside of Asia, as well as the close working relationship that we have established, as an advantage over our competitors. As the developing regions in Africa, Asia and Latin America continue to grow, and as NOCs and Independents with limited or no prior capabilities in the deployment of FPSOs or experience in these regions continue to emerge as significant players among the major oil companies, we believe that there are distinct advantages for companies, such as ourselves, which can provide a broader range of relevant offshore services. Furthermore, .we believe lI!e benefit from Qur long~term relationships with our key suppliers of equipment and services as well as our strategic location in South East Asia, which is in close proximity to shipyards and fabrication yards, where the majority of fabrication for oil field vessels, including FPSOs, is currently laking place. We believe that our established relationships with such suppliers and yards allow us to obtain favourable pricing and access 10 yard space even during periods of high demand. Further details of our major customers and suppliers are set out in Sections 7.19 and
7.20 of this Prospectus. 7. BUSINESS OVERVIEW (cont’d) {vii} Strong orderbook i…. place As at the LPD, we had in place a…. orderbook of firm contracts of RM5.8 billion across our FPSO, OSV and T&I busi….ess units. All our 3 existing FPSO units and our’DLB have firm contracts in place which account for all our large assets and provide clear reve….ue and earnings visibility for the businesses going forward. This orderbook is generated in various markets with different customers, reducing our dependency on any particular market or customer. In addition to these firm contracts, there are extension options, callable at the customers’ discretion, on a majority of these firm co….tracts with a potential total value of RM2.5 billion. In lotal, as at the LPD, we had a potential total contracted orderbook of over RM8.3 billion (including total potential contract sum of RM2.5 billion over the entire option periods) in place. Further details of our orderbook are set out in Section 12.2.11 of this Prospectus. We expect to be able to grow our firm orderbook further as and when we secure new FPSO contracts, which are generally long-term (for a duration of 5 years or more) in nature. 7.7 Strategies a….d future plans Our strategies and future plans are as set oul below: 7.7.1 Further market penetratio…. i…. existi….g markets and expansio…. i….to selected new markets Over the next 2 to 3 years, we intend to increase our business presence in existing markets as well as to selectively seek opportunities to expand our business geographically and enter new markets in Latin America, Africa and Asia, either on a strategic or opportunistic basis. We believe our key competitive advantages for entering and growing in new markets are as follows: (i) we have an experienced and culturally diverse management team that brings together a range ‘of on-the-ground knowledge and lessons learnt from a variety of markets and business segments; .-Iii) when entering new markets, we leverage on our global execution capability to drive a clear Local Content Development Programme that we believe is consistent with local aspirations and is key to developing toeaI capability as well as controlling the long-term costs of our operations; (iii) where required or where we believe it is advantageous, we will team up with an established local partner to create added value either through a combined service offering or access to a local market, and (iv) we approach our investments in each existing a….d new market with a long­term view. We have e….tered new markets with a single asset, a….d used that foothold to offer our other assets or services. For example, we initially entered Nigeria with a contract for our FPSO Armada·Perkasa, and have since expa….ded our presence through the deployment of our FPSO Armada Perdana in the Oyo Field, an enlarged shore base with additional personnel, which is able to support. the FPSO Armada Perdana, the deployment of 8 OSVs and the provision of our T&I services. We are currently employing this strategy in Turkmenistan, where we have initially deployed our DLB, and intend to continue to employ this strategy as we expa….d into other new markets. 7. BUSINESS OVERVIEW (conl’d)
7.7.2 Business units Strategies and future plans for the business units FPSO • Targelto be the fourth largest FPSO player in the .world by fleet size by end­2013 • Develop our own key technologies in moorings and risers
• Focus on long-term chartern in the key markeLs of Africa, Asia and Latin America.
• FOnT! strategic alliances with key technology providers to develop new FPSO solutions

OSV • Increase foa.Js on deepwa\er and harsh environments • Expand into high-end, efficient, Clean-Design vessels
• Mainlain a balanced portfolio of higher value chartern
• On-going investment in the fleet

T&I Pull-through business via FPSO and OFS uniLs • Expand our sefl/ices in existing markets
• Acquire cost·effective assets 10 expand in Brazil, West Africa and India and also in the conventional installalion services
• Establish and expand into the SURF market and prOVide IRM services

OFS • Develop EOR and engineered production solutions • Develop RBC business
• Develop marginal field solutions

(i) FPSO We intend to capitalise on our existing FPSQ operating presence in Africa and Asia, as well as expand into new -markets in these regions and in Latin America, to grow our FPSQ business. We aim to be the fourth largest FPSQ player in the world by fleet size by the end of 2013. According to ISL, 103 FPSO installations are expected to be made between 2011 and 2015, equating to a forecast of approximately USD66 billion in capital expenditures, of which demand is predominantly expected to be driven by West African, Asian and Latin American markets (source: 8umi Armada Independent Market Research Report by ISL). Accordingly, our expansion plans entail a continued focus on opportunities in Africa and Asia. In order to facilitate expansion, we intend to leverage on our branding and reputation, which we believe we have successfully established in the last few years. As a longer term target, we may also explore suitable opportunities to expand into Latin America. We do not engage in speculative construction or conversion of FPSO, but instead commence FPSO conversions only upon securing contracts for them. We are targeting to secure another FPSQ project in the next 12 months. Our medium-Ienn target is to secure at least one new FPSO contract annually over the next few years in order to gain a greater mar1o;et share and presence. In addition, we may seek inorganic growth opportunities in this segment, including opportunistic acquisitions of FPSO operators or owners, which would provide us wilh suitable assets for our target markets. 7. BUSINESS OVERVIEW (cont’d) Moving forward, we believe FPSO O&M services may be a significant value­added service as some contracts will be based on a lump-sum rate basis. Therefore, we believe it is critical to have an efficient operational solution based on a high degree of local content and capability development, which will be both commerci;;llly competitive and socially responsible to our customers. We believe we are able to offer this solution via collaboration with local partners in the countries in which we operate. Over the next 2 to 3 years, we also inlend to improve our technological offerings and ;;lim to develop in-house capabilities in mooring and riser systems. We have to-date applied to register 2 patents for the designs of our proprietary shallow water mooring systems in the palent registries of various jurisdictions as set out in Section 7.13 of this Prospectus. We are also developing our capabilities in turret technology and solutions in partnership with a third-party company and we plan 10 implement our own turrets and mooring solutions in the near future. We believe these capabilities are critical to ensure success in the evolving FPSO market. Over the longer term, we believe there will be new solutions required in the FPSO market, particul;;lrly in respect of new processing systems, applications and regulations. While some solutions to these new developments may be engineered in-house, there will be others that we expect to be unable to completely provide, such as a gas FPSO solution. In order to be able to meet these demands successfully and with a commercially competitive soluflon, we expect that strategic alliances. collaborations and partnerships with key specialist technology providers will be a critical future step for our FPSO business. In meeting our customers’ needs and assisting them to overcome operational obstacles, we intend to continue to expand our capabilities in order to provide a wide range of services to our customers. (ii) OSV The OSV segment has historically been the principal contributor to our profitability, and we expect it to remain one of our core businesses for the foreseeable fulure. Over the next 1 to 2 years, we will be increasing our focus on the deepwater market and intend to expand our vessel fleet to include large high-end DP2 and DP3 vessels, enabling us 10 move up the OSV value chain. In addition, we believe there is a need to provide advanced, safer and cleaner (meaning lower carbon emissions and more fuel-efficient systems) vessels and therefore we intend to continue 10 build new vessels that meet these criteria. We believe that these new vessels will offer the best solutions and teChnology to our customers. As part of our future plans over the next 2 to 3 years, we intend to focus on assets that generate higher margins for the company by offering added services and capabilities 10 our customers. This includes adapting a single type of OSV with the ability to carry out various support roles (e.g. a modified PSV), so that we are able to maximise the utilisation of the vessels, while adding short-term value-added services. Furthermore, as we continue to expand our business into Africa, Asia and Latin America, we plan to construct new vessels, including large multi­purpose PSVs and accommodation workboals to service the increasing needs of these markets. These new vessels are intended to be Clean­Design and compliant with the latest regulations. 7. BUSINESS OVERVIEW (conl’d) (iii) T&I The T&I business is asset-intensive, and we generally expect to continue to seek to acquire or build appropriate vessels for potential projects in our target markets over the next 1 to 2 years. Through the expansion of our fleet, we believe that we will be able to leverage increased market share to achieve improved margins on our projects. Our DLB, Armada Installer, operational since 2010 on an a-year contract with PETRONAS Carigali, opened a new market for us in the Caspian Sea and we will be looking to explore new T&I opportunities and introduce more T&I services into this market where possible. Furthermore, as more offshore installations move into deepwater, we believe demand for subsea installations will continue to grow. We have acquired the Acergy Hawk, a cost-effective DP2 subsea installation vessel, which will also allow us to offer SURF capabilities and services as an expansion of our synergistic service to FPSO inslallation as well as to third parties. We also intend to acquire a pipelay vessel to expand the geographical offering of our T&l capabilities in Brazil, West Africa and India. We also expect that our T&I business will benefit from our future FPSO projects, such as the potential to package the installation of moorings, risers and flow-Jines for a new FPSO in our proposal to customers. Finally, we intend to offer IRM services to complete our subsea offering over the next 2 to 3 years. IRM services will allow our T&I business to benefit from “repeat customers” as the services are recurring over a longer period of time. These types of contract could also allow us to balance asset and service utilisation against any seasonal or campaign factors in the T&I business portfolio. (iv) OFS Our OFS business entails the provIsion of various specialised services required in the offshore mature/brownfield markets. These include, amongst others, marginal field production solutions such as EOR, process modules to enhance the extraction of hydrocarbons from the reservoir as w~ll as specific services and assets offered on a RBC basis for working in the marginal and mature/brownfield environment. As part of our EOR offering over the medium to 10ngeHerm, we intend to leverage on our existing engineering and EPC capabilities to offer cuslomised floating production solutions and the other supporting services, including installation, support, demobilisation and transportation. We see huge potential in the OFS segment and this will be a key part of our strategic focus in Malaysia and of our future growlh plans in providing specialised services in conjunction with our marine assets. There is a global drive towards extracting the “last-drop of oilW and we intend to provide services to support that goal. Specifically in Malaysia, as part of the Economic Transformation Programme (“ETP”), the Government of Malaysia has identified, amongst others, the following as Entry Point Projects in the Oil, Gas and Energy section of the ETP: • Rejuvenating existing fields through enhanced oil recovery; and
• Developing small fields through innovative solutions.

7. BUSINESS OVERVIEW (coni’d) The overall investment envisaged by the Government of Malaysia for these 2 segments am_aunts to approximately RM81.9 billion. We achieved a first success in relalion to the ETP by having been awarded the EPC and installation contracts to provide an FSO for the Sepat Field, off Terengganu, Malaysia by Petrofac.
7.7.3 Support units Strategies and future plans for the support units FMS • Operate and maintain own fleet • Train and develop frontline resources
• Secure new talenl to support growth plans
• Secure high level of local content
• Invest in strategic shore bases in selected areas

EPC • In-house EPC unit to support business units • Develop customised solutions for specific projects
• Control engineering, design, construction and conversion phases
• Engineering solutions developed with key software syslems

 

We believe that our in-house FMS enhance our operational and execution capabililies. Under this unit, we operate and maintain our own fleet, which is critical to ensuring vessel integrity and operational uptime. This capability is further strenglhened by our operational procedures and systems, such as the BASS fleet management system. We are committed 10 training and developing our frontline resources, as well as securing a strong “pipelinen of new talent to support our growth plans. We also incorporate a high level of local content for operations in overseas markets such as West Africa and the Caspian Sea, led by a multinalional senior management team that is experienced in those markets. We believe the development of local content and capability is a key competitive edge in driving sustainable growth. We will continue to invest with a long-term view by, amongst other, establishing shore bases in strategic markets that we enter. (ii) EPC We utilise our in-house EPC capabilities to support our business units, providing us with a proven track record in managing tight delivery schedules and budgets. We have concurrently managed 3 large projects valued at over USD800 million across our OSV, FPSO and T&I businesses through the recent economic crisis. We believe our in·house engineering capability is a key strength as it allows us to proactively control our costs as well as manage and mitigate execution risks, which is not possible when this function is outsourced lo a third-party. In addition, the engineering function also works to develop existing designs to generate new solutions. Our capabilities in this segment are supported by various systems and procedures including ISO certification, as well as engineering software and document control systems to improve efficiency and execution such as Electronic Document Management System, Plant Design and Maintenance System and Computerised Maintenance Management System. 7. BUSINESS OVERVIEW (conl’d) We believe that our support function under FMS and EPC are a competitive advantage as they allow us to mitigate execution and operational risks as well as to control our costs while remaining flexible in providing commercially viable solutions and services to our customers. We intend to continue leveraging aff these support units to maintain and expand our customer base and appeal. 7.8 Sales and marketing Our sales and marketing function comprises the following: (1) Maintaining close relationships with customers We have an experienced management team which is actively involved in assessing customers’ requirements and our business development units have in-depth knowledge of the industry and are able to assess and capitalise on industry trends and opportunities. We believe that our FPSO, OSV and T&I teams are always up-to­date with the development plans of our customers. This allows us to anticipate their future needs, enabling our marketing efforts to be focused in the right direction. We are in regular communication with our existing and potential customers to look into various areas which require our services. Customer retention is an integral part of our marketing strategy. Over the years, we believe that our ability to deliver quality services has enabled us to build on our reputation in the marketplace. The business development team capitalises on our reputation, strengths and capabilities to secure various new 0&8 support projects and contracts an a regular basis. (ii) Active corporate branding through participation in industry seminars, conferences and trade fairs We participate in various regional conferences, seminars, briefings and trade fairs related to both the O&G and maritime industries as part of our public relations and branding efforts. Printed materials such as catalogues and brochures are distributed at such events to create greater visibility and awareness of our products and services. For example, we participated in the following events: Year location Event 2007 2008 2009 2010 2011 India Malaysia Azerbaijan Singapore Malaysia Nigeria Malaysia Nigeria Soulh Africa Nigeria Singapore India Oil and Gas Summit 6th PelroMin Deepwater, Subsea and Underwater Technology Conference, Malaysia Caspian Oil and Gas ConFerence 10th Annual FPSO Congress 2009 Oil and Gas Asia Pacific Summit Nigeria Oil and Gas Conference 2010 Sabah O&G Conference and Exhibition 2010 0-8 Trade Exhibition Africa air Week 2010 Nigeria Oil and Gas Conference 2011 Turkmenistan Oil & Gas Road Show 2011 7. BUSINESS OVERVIEW (cont”d) (iiil Market awareness via media Upon achieving major milestones such as the delivery of new vessels, we seek to ensure there is sufficient media coverage, articles and other write-ups describing these latest achievements in the industry. These include local and industry-specific media as well as our own dedicated website. We believe that the media plays an important role in helping us gain greater visibility in both the local and international markets, and creates positive enquiries and referrals from the O&G industry and overall business community.

 

7.9 Major licences and permits Save as disclosed in Section 5.2.1 of this Prospectus, as at the LPD, we have obtained various licences and permits for our operalions in Malaysia and other jurisdictions in which we operate. For further details of our major licences and permits, please refer to Annexure B of this Prospectus.
7.10 Competition Our businesses operate in a highly competitive offshore marine industry. For example, while there are numerous players competing for projects in the FPSO segment, the competition is defined by technical and financial capabilities and the pricing of the proposed solution. Currently, there are 3 sUb-segments in the FPSO segment: the large players (with more than 10 units each), the medium-sized players, such as our Company (with 3 to 6 units) and the small-sized FPSO players (1 to 2 units). These sub-segments can also be used 10 reflect the size of the project that the players generally will pursue, with the large players bidding for projects of USD750 million and above, medium~sized players (such as our Company) bidding for projects of USD300 million to USD75D million and the smaller players active on smaller projects of USD150 million to USD3DD million. Most of our competitors in the FPSO segment are from Northern Europe, and unlike us, are not in close proximity to the fabrication yards in Asia, where most FPSO conversions are currently taking place. By contrast, in the OSV market, barriers to entry are relatively low and there is currently high competition and oversupply_ in t~is segment. For this reason, we have focused our OSV business on larger, advanced and Clean-Design vessels for deepwater and harsh environments where barriers to entry are higher. These barriers include investment cost for the vessels, technical knOWledge of their O&M as well as the markets and operability of the vessels. The T&l business is also very competitive and is usually tendered on a lump-sum basis, where technical capability and competitive pricing are key to being selected for projects. Competition is wide-ranging from those companies that focus only on deepwater and harsh environment projects to the niche marketllocation/shallow-water specific players. In the OFS segment, there is competition at each level of the oil field life-cycle, from players in the individual segments to specific services. 7. BUSINESS OVERVIEW (cont’d)
7.11 R&D Currently, we do not have any formal R&D facilities and systems in place, and for the past 3 financial years, we have not incurred any R&D expenditure. Our R&D policy centres on our objective of providing the right technological solutions in meeting our customers’ needs and specification requirements for each project tendered. Our team of engineers and industry experts will collaborate in formulating the appropriate technological solution, design and specifications for the tender or study. In our FPSO development unit, we focus on 4 key areas: mooring and risers, hull, gas processing and field production. Mooring and riser development involves the analysis of a complex interaction of sea-states, vessel motion and riser configurations, which is often a key consideralion in providing the most compelitive solution. We are currently developing our own turret mooring systems, which we believe will be an important future competitive advantage and will allow us to expand our offerings in the FPSO market. The turret mooring design capability is a critical component for deepwater and harsh environment FPSOs, as it gives the FPSO the ability to rotate around the turret mooring in locations where directional currents are changing and the FPSO can be easily disconnected if required, during extreme weather conditions. Hull selection involves the study of tanker types and new purpose built hull designs, which will have substanlial cost implications. We are also conducting studies of various gas technologies including LNG, LPG, gas-to-liquids and gas-to-wire as we believe this is the future direction for FPSO projects. Finally, early field production facilities and FDPSO offer customers future technologies which will accelerate their oil reservoir understanding and assist in early cash flow for their O&G field. Any new technologies and designs that are presented to the customer, if applicable, will then be patented prior lo commercialisation. In most cases, in the event that our team collaborates with other technology partners to formulate solutions for our customers, the contractual agreement will be such that any new technologies or designs developed shall belong to us or become joint property. We maintain a close working relationship with our customers and suppliers, and their feedback and preferences are communicated to our engineering and project management team to enable process improvements and expansion of our in-house capabilities. New designs developed to caler for such improvements as a result of the achievement of our engineering and -project management team are generally patented, details of which are set out in Section 7.13 of this Prospectus. Our engineering and project management team will continue to develop new technological solutions and design improvements to enable us to provide better services and improve the cost slructures of our business, 7. BUSINESS OVERVIEW (conl’d) 7.12 Corporate social responsibility (“CSR”) We are committed to minimising or mitigating any negative impact on our business and lhe environment and to implementing sustainable practices progressively, where appropriate and practical. A Corporate Sustainability Report 2009, which disclosed and reported our sustainability practice was compiled in 2010 and was audited and accorded an “A(+f by Global Reporting Initiative, one the world’s leading sustainability reporting organisation. An overview of our CSR efforts in 3 areas is as follows: (i) Community engagement We are committed to investing in and supporting the communities in which we operate, and we are constantly looking for ways to bring growth and development and help to improve the lives of the people in these communities. We have assisted various charitable organisations such as orphanages, homes for the aged and schools with funds for basic necessities, educational material and school building improvements in Malaysia, Vietnam, Nigeria and Turkmenistan. We encourage voluntary work throughout our organisation. (ii) Employment creation and skills training We have a philosophy of incorporating and maximising local content wherever we operate through job creation, use of local resources and collaboration with local companies. In Nigeria, we selected and trained Nigerians for jobs on board our 2 FPSQs. Training was conducted in Malaysia, Singapore and also at locations in Nigeria. At present, 60 Nigerians work on board the FPSO Armada Perkasa and another 60 on board the FPSQ Armada Perdana. The DlB Armada Installer is the only Turkmenistan-flagged DlB in the Caspian Sea. A total of 38 Turkmen are employed with 2 offices established; in Ashgabat and Turkmenbashy. local sourcing is prioritised and we have also invested in community development initiatives including education and culture. In Vietnam, together with our strategic partner, Vietsovpetro, we provided scholarships for 10 final year Vietnamese students of the PetroVietnam Manpower Training College in 2009. In Malaysia, to offset the shortage of Malaysian trained crew members, we recently offered scholarships to 40 school graduates from Malaysia in 2010. This is in addition to the 5 students we sponsored in 2007, 17 in 2008 and 55 in 2009. Five of the cadets are studying at the Sarawak Maritime Academy (~SMA~), while the rest are studying at ALAM. The scholarships offered are for a Diploma in Nautical Studies (“DNSD ) and a Diploma in Marine Engineering (“DME”), which are particularly important for the development of nautical and engine officers. We expect that these cadets will be offered employment opportunities with our Group once they pass their examinations and obtain relevant certifications. In addition to the global shortage of trained crew members, there has historically been a shortage of specially trained DP officers. Together with ALAM, we initiated a DP training programme in 2007 and provided funding and resources to establish the first DP training programme in Malaysia. DP training, which was previously conducted only in Singapore, was made available in Malaysia through this initiative which commenced in June 2007. The centre is now accredited by the Nautical Institute in UK as an international DP2 training centre. 7″ BUSINESS OVERVIEW (conl”d) (iii) Safe and efficient operations For the operation of our vessels and FPSOs, we have in place corporate management systems that are implemented in line with internationally recognised standards including ISO 9001 :2008, MARPOL Regulations 2002, and ISMIISPS Codes (International Safety ManagemenUlnternational Ship and Port Facility Security). We have attained ISO 9001:2000 Certification in September 2008 covering the full range of our services, from vessel procurement through to vessel operations. In October ‘2008, we were upgraded to ISO 9001:2008, the latest version of the standard. In 2010, we were certified by DNV for both ISO 14001 (for Environmental Management Certification) and OHSAS 18001 (for our HSE Management System procedures to identify, reduce and control health and safety concerns). In addition, for the past 3 years ended 31 December 2010 and as at the LPO, we have achieved the following overall HSE record: Year ended 31 December Asat Indicator 2008 2009 2010 the LPD LTI frequency 0.065 0.051 0.043 0 Total recordable injury frequency 0.131 0.202 0.085 0 Tolal manhours worked (million) 3.056 3.956 4.703 2.157 Our overall HSE record over the past 3 years up to the LPD has been improving as we recorded a declining trend in the number of incidents despite an increase in the number of total manhours worked.

7.13 Intellectual property Save as disclosed below, as at the LPO, we do not have any brand names, patents, trademarks, technical assistance agreements, franchises and other intellectual property rights: (i) Palent applications in respecl 01 a riser support system in the patent registries in the following jurisdictions: (a) Patent Application No. 1-2009-01077 (Filing Date: 25 May 2009) for the Riser Support System (Invention) under International Patent Classification E21B17/01 by Bumi Armada at the National Office of Intellectual Property, Vietnam. Inventors: Tim Latham Withall (Australian) and Hayden Marcollo (Australian);
(b) Patent Application No. PI 20091250 (Filing Date: 27 March 2009) for the Riser Support System (Invention) by Bumi Armada at the Perbadanan Harta Intelek Malaysia. Inventors: Tim Latham Withall (Australian) and Hayden Marcollo (Auslralian);
(c) Patent Application No. 2009243413 (Filing Date: 27 November 2009) for the Riser Support System (Invention) by Bumi Armada at the Australian Government IP Australia. Inventors: Tim Latham Withall (Australian) and Hayden Marcollo (Australian);

7. BUSINESS OVERVIEW (conrd) (d) Patent Application No. 2455/DEU2009 A (Filing Date: 27 November 2009) for the Riser Support System (Invention) by Bumi Armada to The Patent Office (India). Inventors: Tim Latham Withal! (Australian) and Hayden Marcollo (Australian);
(e) Patent Application No. 0,91005337 (Filing Date: 27 November 2009) for the Riser Support System by Bumi Armada at the Department of Intellectual Property (Thailand). Inventors: Tim Latham Withall (Australian) and Hayden MarcolJo (Australian);
(f) Patent Application No. 12/627,860 (Filing Date: 30 November 2009) for the Riser Support System (Invention) by Bumi Armada at the United States Patent and Trademark Office. Inventors: Tim Latham Withall (Australian) and Hayden Marcollo (Australian);
(g) Patent Application No. EP09177552.B (Filing Date: 30 November 2009) for the Riser Support System (Invention) by Bumi Armada at the European Patent Office. Inventors: Tim Latham Withall (Australian) and Hayden Marcollo (Australian);
(h) Patent Application No. 200911000021.9 (Filing Dale: 30 November 2009) for the Riser Support Syslem (Invention) by Bumi Armada at the Intellectual Property Office of the People’s Republic of China. Inventors: Tim Latham WithaU (Australian) and Hayden Marcollo (Australian); and
(i) Patent Application No. TTIAJ2009/00215 (Filing Date: 16 December 2009) for the Riser Support System (Invention) by Bumi Armada at the Intellectual Property Office (Republic of Trinidad and Tobago). Inventors: Tim Latham Withal! (Australian) and Hayden Marcollo (Australian).

(ii) Patent applications in respect of an external turret with above water connection point in the patent registries in the following jurisdictions: (a) Patent Application No. 2010227055 (Filing Date: 8 October 2010) for the External Turret with Above Waler Connection Point by Bumi Armada at the Australian Government IP Australia. Inventor: Jacob de Baan (Netherlands);
(b) Patent Application No. 10251773.7 (Filing Dale: B October 2010) for the External TUrret with” Above Water Connection Point by Bumi Armada at the European Patent Office. Inventor: Jacob de Baan (Netherlands);
(c) Patent Application No. 2BOO/MUM/2010 (Filing Date: B October 2010) for the External Turret with Above Water Connection Point by Bumi Armada at The Patent Office (India). Inventor: Jacob de Baan (Netherlands);
(d) Patent Application No. 1001001565 (Filing Date: 8 October 2010) for the External Turret with Above Water Connection Point by 8umi Armada at the Department of Intellectual Property (Thailand). Inventor; Jacob de Baan (Netherlands);
(e) Patent Application No. 1-2010-02703 (Filing Date: B October 2010) for the External Turret with Above Water Connection Point under International Patent Classification 8638 21100; B63B 21124; 863B 21/50, B63J 5/00 by Bumi Armada at the National Office of Intellectual Property, Vietnam. Inventor: ,Jacob de Baan (Netherlands);

126 7. BUSINESS OVERVIEW (cont’d) (f) Patent Application No. 12901044 (Filing Date: 8 October 2010) for the External Turret with Above Water Connection Point by Bumi Armada at the United States Patent and Trademark Office. Inventor: Jacob de Baan (Netherlands);
(g) Patent Application No. Not yet assigned (Filing Date: 6 October 2010) for the External Turret with Above Water Connection Point by Bumi Armada at the Intellectual Property Office (Republic of Trinidad and Tobago). Inventor: Jacob de Baan (Netherlands);
(h) Patent Application No. PI 20094255 (Filing Date·. 9 October 2009) for the External Turret with Above Water Connection Point by Bumi Armada at the Perbadanan Harta lntelek Malaysia. Inventor: Jacob de Baan (Netherlands);

and (i) Patent Application No. 201010549442.3 (Filing Date: 9 October 2010) for the External Turret with Above Water Connection Point by Bumi Armada at the Intellectual Property Office of the People’s Republic of China. Inventor: Jacob de Baan (Netherlands).
7.14 Environmental compliance Our business is guided by various environmental regUlations in jurisdictions where our vessels operate or are registered. Please refer to Section 7.17 of this Prospectus for further details on the regulations governing our operations. As part of our commitmenllo ensure the sustainable use and protection of our oceans for future generations and to comply with these environmental regulations, we have in place a HSE protection policy, which amongst others, is aimed at the prevention of damage to the environment and property. We are committed to achieving the highest industry standards through continuous improvement and adoption of best practices. Our strong HSE track record is evident from our numerous HSE achievement awards as well as various industry accreditations as set out in Section 7.3 of this Prospectus.
7.15 Employees We are an international or.ganisation serving_our customers’ worldwide with a multicultural team across many nationalities. As at the LPD, we have 484 on-shore employees (comprising 277 permanent employees, 123 long-term contract staff and 84 short-term contract staff), of which about 70% are Malaysians. 31 Decembet 31 December 31 December Category 2008 2009 2010 As at the LPD Senior Management 16 1615 19 Management 7390 9298 Engineers 474550 54 Executive 99 121 136 155 Technical 6674 7680 Clerical 5756 5557 General Worker 19’8 20 21 Total 377 422 444 484 7. BUSINESS OVERVIEW (conl’d) As at the LPD, our on-shore employees were localed in the following locations: Number of Location employees Kuala Lumpur 240 Kemaman 36 East Malaysia (Miri and Labuan) 56 Singapore 125 West Africa, Turkmenistan and Mexico 27 Total 464 In addition, as at Ihe LPD, we have an internal database of over 1,300 crew members who can be recruited on a permanent and/or contractual basis depending on our charter requirements. This database allows us 10 have flexibility for crew rotation as well as to meet charter crew criteria as required by the charterers. The table below sets forth the number of offshore vessel crew available to us in the ranks below as at the LPD: Rank  As at the LPD  DP MaslerJChief Officer  25  Class 1 Master  43  Chief Officer -Unlimited Licence  66  Chief Officer -DomestidNear coastal Licence  14  Chief Male Domestid2nd Officer  76  DP Walch Keeping Officer  7  Radio OfficerfDeck Cadet  39  Chief Engineer-crass 1  71  Chief Engineer  16  2nd Engineer/Repairman  83  3rd Engineer/Electrician  104  Engine Cadet  31  Medic  9  Maintenance Supervisor  3  Crane Operator  13  Chief Steward  7  Bosun  70  Cook  81  Able Bodied Seaman  251  Greaser  146  Others: Oiler. Machinist, Janitor, etc.  147  Total  1,302
None of our employees are represented by any union and we have not experienced any disruptions due lo labour disputes in the past. We believe that labour relations within our Group and our relationships with our employees are good. 7. BUSiNESS OVERVIEW (cont’d) Scholarships As mentioned in Section 7.12(ii) of this Prospectus, we have since 2007 offered scholarships to 117 students for the DNS and DME courses in ALAM and SMA. These students (cadets) are expected to undergo 3 years of studies, where 2 academic years are spent at ALAM or SMA followed by 1 year training at sea. These cadets will later be recruited by us, where suitable. DP Training Programme We also run a joint DP Training Programme together with ALAM, which was set up at our request. The DP Training Programme is the first in Malaysia and has so far successfully graduated a Malaysian DP Officers which we have recruited into our organisation. Graduate Development Programme New graduates are an important source of strong and diverse future leaders for us. Under the Graduate Development Programme, students are generally hired after graduation to work in a full-time capacity. They are placed on a robust development· plan to give them both functional and business skills. Their manager assumes a mentoring role to guide their success. This 24-month programme provides accelerated development for individuals to build their management skms. It is a formalised rotational programme, which can include assignmenls within Malaysia or Singapore, or across operating companies. This programme has been designed to accelerate the development of a select group of university graduates who have been hired on a permanent basis within a function, for example, engineering, human resources, finance, information technology or health, safety, environment and quality. Under this programme, we ensure employees receive formal feedback, typically every 6 months. However, ongoing informal feedback is provided by multiple sources, including among others, immediate supervisors, senior managers and human resources. Our Graduate Development Programme started in 2009. To date, we have successfully hired 26 young graduates. 7. BUSINESS OVERVIEW (conl’d) Training and development We pro\lide our employees with continuous training and development to enhance their skills and knowledge, with recommended courses, conferences, seminars and other training programmes. Some of the training programmes which were completed in 2010 are as follows: Training programmes Organiser (i) Ships -Sale and Purchase, Financing and Registration KL Bar Professional De\lelopment Committee
(ii) Industrial Relations Act 1967 (amended 2008) & Industrial MEF Academy Relations Regulations (gazetled October 2009)

 

(iii) Internal Audi(or (Quality and En\lironmen( Course) DNV AS Sdn Bhd (iv) Advanced Environmental Management System AUditing DNV AS Sdn Bhd
(v) Advanced Knowledge on Anchor Handling for Offshore Uni Strategic Pte ltd Fields
(vi) Combined Offshore Safety B.O.S.E.T-R Including Re-Construction and Industrial Safety Breather Training Centre Sdn Bhd

(vii) ISM & ISPS Internal Auditor Course Sealestial Marine Services Kuala Lumpur (\Iiii) 2nd Annuat Corporate Governance Summit 2010 “Truth, Asian World Summit Lies & Corporate Governance” (ix) TBOSIET at Borneo Safety Training School (BSTS). Miri Borneo Safety Training School (BSTS), Miri
(x) Project Management Professional iKompass

As part of our management succession plan to retain our key management, we have, among others, offered competitive remuneration packages and provided training and career de\lelopment opportunities. 7.16 Interruptions to business for the past 12 months There was no interruption to our business and operations which had a significant effect on operations in the 12 months preceding the LPD.
7.17 Regulation of the offshore O&G industry Rights related to the exploration and extraction of petroleum in Malaysia are vested in PETRONAS under the Petroleum De\lelopment Act 1974. All organisations seeking to participate in acti\lities relating to the exploration and extraction of petroleum in Malaysia must secure the necessary licences from PETRONAS before they are allowed to participate in these activities. Under the Petroleum Development Act 1974, organisations canying out downstream activities and de\lelopment relating to petroleum and its products, olher than PETRONAS, are reqUired to seek permission from MITI before canying out such activities. All vessels engaged in providing shipping services in the Malaysian domestic shipping sector must be licensed by the Domestic Shipping Licensing Board under the Ministry of Transport, Malaysia. Malaysia has adopted a legislative framework for the control of pollution and the protection of the environment in Malaysia. The environmental legislation applies to the offshore petroleum industry through the Environmental Quality Act 1974 and the Exclusi\le Economic Zone Act 1984. 7. BUSINESS OVERVIEW (conl’d) The Malaysian Department of Environment (~DOE”) enforces the environment legislation in respect of O&G activities carried out within Malaysian territorial waters. If the O&G activities are beyond Malaysian territorial waters and in the Economic Exclusive Zone, the regulatory control rests wlth the Petroleum Authorities (namely, PETRONAS and the Ministry of Domestic Trade Cooperatives and Consumerism, Malaysia) with input from the DOE. The Federation of Malaysian Manufacturers, Malaysian Gas Association and Society of Petroleum Engineers are the major industry associations that outline and promote environmental performance of O&G activities. The olher relevant legislations are: (i) Petroleum Mining Act 1966
(ii) Petroleum (Safety Measures) Act 1984

(iii) Continental Shelf Act 1966 (iv) Merchant Shipping Ordinance 1952 The following international conventions are applicable to our business operations: International conventions Description
ISM The ISM Code provides an international standard for the safe managemenl and operation of ships and for pollution prevention: • To ensure safety at sea
• To prevent injury or loss of life
• To avoid damage 10 the environment and to the ship

Safety Management A management system to manage all aspects of safety throughout an Syslem (SMS) organisation. Jl provides a systematic way to identify hazards and control risks white maintaining assurance that these risk controls are effeclive Intergovemmental Codes which relate to internallonal shipping, particUlarly regarding safety Maritime Consultative and marine pollution Organisation (lMCO) Intemational Convention An international treaty protecting the safety of merchant ships in the for the Safety of Life at world Sea (SOLAS) Jntemallonal Convention MARPOL was designed to minimise pollution of the seas, including for the Prevention of dumping, oil and exhausl pollution. lis slated object is: to preserve !he Pollution From Ships, marine environment through the complete elimination of pollution by oil 1973 as modified by the and other harmful substances and the minimisation of accidental Protocol of 1978 discharge of such substances (“MARPOL”) International Marine The intemational trade association representing offshore, marine and Contractors Association underwater engineering companies promoting good practice, particularly (IMCA) in Ihe areas of HSE standards, quality and efficiency and technical standards Oil Companies A voluntary association of marine companies with an Interest in the safe Intemational Marine shipment of petroleum, crude oil, liquefied gas and other associate Forum (OCIMF) products 7. BUSINESS OVERVIEW (cont”d) In addition to these international conventions, we are governed by the regulations which are applicable to our business operations in the areas in which we operate. Vessels operating in international waters are governed by the cabotage laws of the country owning the coast which gives priority to its local flagged vessels including Nigeria, Congo, Mexico, Venezuela and Turkmenistan. For example, in Nigeria, our largest market in Africa, the Coastal and Inland Shipping (Cabotage) Act 2003 (“Nigeria Act”) regulates maritime cabotage and contains provisions restricUng foreign participaUon in maritime cabotage within Nigerian coastal waters. However, the Nigeria Act empowers the Minister of Transport of Nigeria to grant waivers \0 foreign operators if he is satisfied that the Nigerian partner has at least 60% of the equity shares in the relevant joint venture. With respect to our local joint venture, CBJV, our local joint venture partner CESL owns 60% of the equity shares of CBJV.

7.18 Technology (I) FPSO
An FPSO consists of 3 major components: (1) topsides; (2) marine/hull; and (3) mooring system. Topsides By utilising various processing systems, a typical processing plant on the deck (topside) of the FPSO treats the incoming well stream fluids. Well stream fluids are a mixture of oil, gas, produced water and other impurities. The fluids are put th’rough a 3-stage separation process. The _first 2 stages of separation are designed 10 separate the bulk of the oil from the gas and produced water, the final stage consisls of a coalescer where the export oil specification (i.e. 0.5 BS&W) is achieved. The produced water is then routed to a hydro-cycione unit to remove entrained oil and then the oil-free water (which is cleaned to at least the minimum required level) is either released overboard or re-injected into the reservoir. The gas is routed to the compression systems, where it is also dried by a dehydration system. The “dry gas” may be exported lo pipeline, fe-injected into the reservoir, used ror gas lift or used as fuel. Gas FPSOs, which are used for the extraction of gas from an offshore field, have a gas processing topside, which removes the condensates or liquids from the gas and then processes the gas and the residual oil from the condensate. There is eXisting technology for LPG FPSOs, which have been built and are in use, but there has yet to be a successful development of an LNG FPSO. This is due to the technical complexities, scale and costs associated in developing a commercial LNG FPSO. 7. BUSINESS OVERVIEW (cont”d) Mar;ne/Hull The oil produced by the FPSO topsides is stored in the cargo tanks of the FPSO. These cargo tanks are periodically emptied by offloading to a transport tanker. This oil is discharged from the FPSO tanks via a fiscal metering system through an offloading hose to the awaiting tanker. When the FPSO has completely discharged the oil, the tanker sails away to a suitable onshore refinery where the oil will be further treated. There are 2 main types of FPSOs, a converted oil tanker option or a purpose built option. The choice of option to be used will depend on various criteria, which include, amongst other considerations, the size of the project, the leased contract period, environmental conditions, etc. For our past 3 FPSO projects, we have chosen to convert oil tankers which have had their marine systems repaired, hull strengthened, and then been equipped with the facilities described above (i.e. topsides). Mooring system The mooring systems will typically be either fixed directional (or spread) moored or single point rotaling (or turret) moored, and in the latter case, d(sconnectable or permanently moored. This will depend on the sea-state and water depth at the location of the FPSO in the oil field. In relatively benign waters, such as that of our 2 FPSO in Nigeria, direction and location is fixed by a permanent spread mooring. In more hostile waters such as our third FPSO contract in Vietnam, the vessel is free to rotate according to prevailing wind and current, utilising a single point turret mooring. (ii) OSV
The majority of our new OSVs are equipped with DP technology with DGPS that aHows the vessels to stay at a programmed position using computer-aided thrusters and propulsion systems built into the vessel’s hull. The DP system is made up of a computer controlled system that automates the maintenance of a vessel’s position and heading by using its own propellers, rudders and thrusters. Position reference sensors, combined with wind sensors, motion sensors and gyro compasses, provide information to the computer pertaining to the vessel’s position and the magnitude and direction of environmental forces affecting its position. Vessels thal are fitted with DP systems will have the DP acronym in their specifications, followed by the revel of redundancy (DP, DP2 or DP3). The DP-Ievel indicates the number of safety systems built ‘IIlto the system to remove redundancy or failure of the DP system. DP systems may be used to “Iocku a vessel in a fixed position in the sea, or relative to a moving object like another ship or an underwater vehicle. One may also position the ship at a favourable angle towards wind, waves and current, called weaLhervaning, allowing the vessel to operate in adverse weather conditions, avoiding costly down time to offshore operations. 7. BUSINESS OVERVIEW (cont”d) (iii) T&I Pipe-laying
The technology for installing offshore pipelines in relatively shallow/medium water is commonly referred to as Ihe S-Iay method because of the profile of the pipe. As it moves in a horizontal plane from the welding and inspection stations across the stern of the pipe-lay barge and on to the ocean floor, it forms an elongated “S·. As the pipeline moves across the stern of the lay barge and before it reaches the ocean floor, the pipe is supported by a truss-like circular structure equipped with rollers and known as a stinger. The purpose of the stinger in the S-Iay configuration is to control the angle of the pipe between the barge and the ocean floor. The curvature radius of the stinger corresponds to at least the maximum bending stress. To avoid bending at the last roller, the pipe must lift off smoothly from the stinger well ahead of the lower end of the stinger. Subsea installation by heave compensation Heave compensation is a system for increasing control over an object when it is moved to and from the seabed by a ship at sea. It relies on eliminating the vessel movemenls, so that the movement of the object itself is much more controlled. A typical offshore construction task uses heave compensation as follows: (i) The crane li.fts the module from the vessel deck;
(ii) The crane lowers the module into the water, and through the splash zone;

(iii) The crane engages heave compensation; (iv) The crane docks the module onto the subsea template, and lands it on the seabed; and
(v) The crane disconnects, disengages heave compensation and reco\lers the hook up to the surface

Heave compensation makes it possible to carry out lifting work in more severe weather conditions, thereby increasing the operational “weather window. This can have a significant impact as customers normally pay for the time the vessel is actually working, and not when the vessel is on stand-by due to weather. Hea\le compensation can therefore reduce the financial impact due to bad weather. Active heave compensation (“AHC” AHC is a modern system that utilises motion sensors stationed on board the vessel, and based on their information, it lowers or raises the load. This is either done using gas driven cylinders (which raises or lowers the wire) or by wire winches. 134 7. BUSINESS OVERVIEW (cont’d) 7. BUSINESS OVERVIEW (conl’d) 7. BUSINESS OVERVIEW (conl’d) 7.19  Major customers  Our major customers that have contributed 10% or more of our revenue for each of the last 3 years ended 31 December 2010 and/or 3 months ended 31 March 2011 are as follows:  Year ended 31 December  Customer  Nalureltype of service  No. of years or relationship Years  2008 RM million  %  2009 RM million  %  2010 RM million  %  3 months ended 31 March 2011 RM million %  NAE  FPSO and/or OSV  2  115.2  22  165.0  23  242.2  20  50.3  13  Alren  FPSO and/or OSV  3  85.8  17  95.3  13  124.7  10  24.3  6  PETRONAS  T&I and/or OSV  More lhan 15  72.9  14  57.4  B  215,~  17  75.7  20  HUOe  FPSO  1.5  75.2  10  312.6  25  60.1  16  Pelrolac limited  OSVand/or OFS  9  13.8  3  17.1  2  14.2  82.4  22  TOTAL  287.7  56  411.0  56  908.7  73  292.8  77  The charter rates and operational costs of our FPSO business are much higher than those of our conventional OSv business. As such, FPSO customers such as HLJOC. NAE and Afren contribute a significant proportion of our revenue. We have entered into long-term contracts with lhese customers for the provision of FPSO services, which we view as significant contracts in lerms of contribution to revenue and profitability, details of which are set out in Section 7.21 of this Prospectus. Whilst we are dependent on existing contracts with Ihese customers, we exp€ct to also participate in future tenders for projects involving other potential customers.  Revenue from Petrofac Limited for the 3 months ended 31 March 2011 was due to revenue from the ongoing conversion and sale of an FSO to Petrofac, for the Sepat Field, off Terengganu, Malaysia under our new OFS segment.  We are not dependent on anyone particular customer for the chartering services of OSVs as these are essenlially commodity items which are not generally designed or built to specific requirements of the customer and/or oil field.
7.20  Major suppliers  Our major suppliers that have contributed 10% or more of our purchases for each of the last 3 years ended 31 December 2010 and/or 3 months ended 31 March 2011 are as (ollows:  Year ended 31 December  Vendor  Nature/type of service  No. of years of relationship Years  2008 RM million  l’  2009 RM million  l’  2010 RM million  %  3 months ended 31 March 2011 RM million l’  Keppel Shipyard Limited  FPSO conversion  More than lQ  166.3  23  433.5  37  155.5  11  41.5  12  Rolls-Royce Marine AS  Provision or engines for OSV  More than 1Q  75.8  10  77.2  7  1.6  Sofec Inc  Turret system  1  6Q.0  4  40.2  12  TOTAL  242.1  33  510.7  44  215.5  15  83.3  25  We are not dependent on anyone particular major supplier as the various purchases from suppliers mainly relate to items utilised for the construction of new vessels. These comprise, among others, shipyard slots, spare parts and other equipment of which we have the option of sourcing from various shipyards and suppliers.  We have been in the business for many years and have established relationships with our suppliers such as Keppel Shipyard Limited, Kencana Bestwide Sdn Bhd, Solar Turbines International, Rolls-Royce Singapore Pte Ltd, Nam Cheong Dockyard Sdn Bhd, Drydocks World-Singapore Pie Ltd and Converteam Group SAS where we have been able 10 procure supplies from them at competitive prices.  Keppel Shipyard Limited has been a major supplier for the past 3 years. This was a result of the award of our FPSO refurbishment and/or conversion contracts based on, amongst others, its track record, capability and reliability. Purchases from Sofec Inc for the 3 months ended 31 March 2011 were for (he turret system for FPSO Armada TGT 1 (formerly known as Armada Perwira).
7.21 Dependence on material contracts/agreements/other matters As at the LPO, save as disclosed below and in Section 7.9 on “Major licences and permits”, there are no material contracts, agreements, arrangements or other matters which had been entered into by us which we are highly dependent on: Ii) FPSO Armada Perkasa On 3 April 2007, Afren entered into 2 contracts with our wholly-owned subsidiaries, comprising: (1) a bareboat charter with AFSL (the bareboat charter contractor) (~Perkasa Bareboat Charter”); and (2) a contract with BASPL (the O&M contractor) for the operational and maintenance services (“Perkasa O&M Contract”) in respect of the FPSO Armada Perkasa. The Perkasa Bareboat Charter and the Perkasa O&M Contract will operate for the primary term i.e. the period commencing from the commencement date (being the date of issuance of the First Provisional Acceptance Certificate which took place on 1 JUly 200B) and ending on the fifth anniversary from the said date (“Primary Term”). Afren has an option to extend the Primary Term for a period of at least 1 year but up to a maximum period of 5 years from the expiration of the Primary Term, on the same terms and conditions of the Perkasa Bareboat Charter and the Perkasa O&M Contract. Additionally, Afren has an option to purchase the FPSO Armada Perkasa during the contract period at the price stipulated in the Perkasa Bareboat Charter. (ii) FPSO Armada Perdana Our subsidiaries, AOL and BASPL had, in relation to the FPSO Armada Perdana. entered into a bareboat charter party (~Perdana Bareboat Charter”) and an O&M contract (“Perdana O&M Contracn with NAE (a SUbsidiary of EN!), respectively, both of which took effect on 15 Apri1200B. The Perdana Bareboat Charter involves a bareboat charter of the FPSO Armada Perdana consisting of a spread moored FPSO facility, including mooring system, located in the offshore of Nigeria OML-120 (Oyo Field), in water depth of approximately· 350 metres with an in.itial period -of 5. years from the date on. which NAE provides the notice of final acceptance. NAE may extend the said period for 5 additional periods of 12 months each. Any extension beyond the aforesaid periods shall be on mutually agreed terms which are not less favourable than those available in the market. The Perdana O&M Contract covers the operations and logistics and maintenance of the FPSO Armada Perdana. Similar to the Perdana Bareboat Charter, the Perdana O&M Contract has an initial period of 5 years from the date on which NAE provides the notice of final acceptance to BASPL. NAE may extend the said period for 5 additional periods of 12 months each, subject to the Perdana Bareboat Charter being extended for an identical period. Any extension beyond the aforesaid periods shall be on mutually agreed terms which are not less favourable as compared to those available elsewhere. The notice of final acceptance was issued by NAE on 11 April 2011, specifying the date of acceptance as effective from 7 June 2010. Additionally, NAE has an option to purchase the FPSO Armada Perdana during the contract period at the price stipulated in the Perdana Bareboat Charter. 7. BUSINESS OVERVIEW (conl’d) We are currently in the midst of fonnalising an amendment contract with NAE to revise the respective contract periods for the Perdana Bareboat Charter and the Perdana O&M Contract from a finn 5-year tenn to a firm 10-year term. (iii) FPSO Armada TGT 1 (formerly known as Armada PeIWira) We had, on 1 September 2009, jointly with Vietsovpetro (collectively, ~Contractor”), entered into a contract with HLJOC for the engineering, procurement, construction and installation contract for an FPSO facility for the construction of an FPSO and subsea system for the area known as Te Giac Trang Field located in offshore Vietnam, in the northern part of Block 16-1, in the Cuu Long Basin some 100 kilometres southeast of Vung Taw, 20 kilometres northwest of lhe Bach Ho Field and 35 kilometres west of the Rang Dong Field (“EPCI Contract”). Under the EPCI Conlract, the Contractor shall commence work as soon as practicable after the date of the EPCI Contract ani:! complete the same on or before the I;ompletion date (being 30 June 2011 or such other date mutually agreed by the parties). On the same date, the Contractor entered into 2 further contracts with HLJOC. The first is a bareboat charter (~PeIWira Bareboat Charter”) whjl;h the Contral;tor has novated to ATGT on 13 September 2009. The sel;ond is a 1;0nlral;I for the operational and maintenance servil;es for the FPSO (“PeIWira O&M Contral;t”). The charter period for both the Perwira Bareboat Charter and Perwira O&M Contract is for a period of 7 years, commencing from the charter I;ommenl;ement date (being the date indicated on the preliminary offshore completion I;ertificate) (“Initial Charter Period”) provided that HLJOC shall have the right to extend such Initial Charter Period (periodically) for additional 1 year periods up to the end of the design life of the FPSO (i.e. an additional 6 years), by giving 6 months written notice to the Contractor before expiration of the Initial Charter Period plus any notified extensions. Additionally, HLJOC has an option to purchase the FPSO Armada TGT 1 (formerly known as Armada Perwira) during the contract period on terms to be mutually agreed between the parties to the Perwira Bareboat Charter. (iv) OLB Armada Installer On 20 July 2009, our wholly-owned SUbsidiary, AMCC, entered into a contral;t with PETRONAS Carigali for the provision of charter selVices of the OLB Armada Installer by AMCC to PETRONAS Carigali on a bareboat I;harter basis for a years (“DLB Contract”). The charter period under the OLB Contral;t is a years, whil;h shall commence on the charter commencement date (being the date of the acceptance of the OLB Armada Installer which shall take place upon sUl;cessful completion of the sea trial of the OLB Armada Installer by PETRONAS Carigali or any other mutually agreed date). Additionally, PETRONAS Carigali has an option to purl;hase the OLB Armada Installer during the I;ontract period in the event there is early tennination without cause or a prolonged force majeure event The pril;e for the purchase is stipUlated in the OLB Contract. AMCC novated all its rights and obligations under the OLB Contract to AMCCPL on 15 March 2010. 7. BUSINESS OVERVIEW (cont”d) 1.22 Quality assurance We were awarded Quality Management System ISO 9001:2000 certification in September 200S and the ISO 9001 :200S certification in October 200S by DNV Sdn Bhd. The ISO 9001 certification was awarded as recognition of our efforts and commitment in-maintaining a quality management system, from which our customers can be assured that we have implemented the necessary internal processes to meet our obligations to them. As for our vessels, we are sUbject to international safety and classification standards under the ISM code. We comply with the ISM code by fulfilling the ISM requirements such as the establishment of a safety management system setting out procedures by which safety and pollution aspects of a vessel are managed. Each ISM..compliant vessel is inspected regularly and undergoes an intermediate suntey every 2.5 years as well as certification under drydock examination every 5 years by the relevant classification society. Marine vessels are considered sea-worthy only when they are certified by a classification society. The classification society which the majority of our fleet is registered with is the ASS.
7.23 Sources and availability of raw materials or input We have limited exposure to raw material prices in relation, but not limited to, the following: (i) Consumables such as some diesel and lubricants in relation to our FPSO and T&l operations, although the bulk of our OSV diesel is currently supplied by our customers; and
(ii) Steel and other fabrication materials, which we attempt as much as possible to mitigate our exposure to, by locking in prices as early as possible in our contracts.

 

7.24 Summary of landed properties Details of the landed properties owned, leased or occupied by our Group are set out in Annexure A of this Prospectus. (The rest of this page has been intentionally left blank)

 

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