Business Overview

6. BUSINESS OVERVIEW 6. BUSINESS OVERVIEW
6.1 GROUP OVERVIEW 6.1.1 Our history Our Group’s business activities centre on supporting the offshore oil and gas industry in Malaysia. We are predominantly involved in the provision of both onshore and offshore construction works, hook up and commissioning, topside major shut down and non-shutdown maintenance and upgrading services including minor fabrication services. Our other business unit also includes provision of inspections services, manpower supply and equipment rental services. We own an AHTS vessel, and have an investment in a company, SK Offshore, which owns an AWB. Our Group was formed on 2 May 1989 with the incorporation of CSB in Sarawak, east Malaysia. CSB commenced operations as a provider of inspection and of manpower supply services. Esa Bin Baharum, an engineer previously with Esso Malaysia, bought over CSB in 1990 and moved its operations to the peninsular Malaysia. In 1990, we were mainly involved in the provision of inspection and manpower supply services providing supervisory inspection and technical professional personnel to operators in the oil and gas industry. In 1992, CSB secured its first contract· from Esso Malaysia for the provision of general inspection services which provided the springboard for CSB in winning more contracts from EssQ Malaysia. Mokhtar Bin Hashim joined CSB as its Managing Director in mid 1994 to spearhead the company’s operations whilst Esa Bin Baharum focused on business and corporate developments. In 1996, CSB underwent a restructuring that resulted in both Mokhtar Bin Hashim and Esa bin Baharum having 50% equity stake in the company. At the end of 1997, CSB secured its first contract from Petronas carigali to provide technical professionals personnel over a 4-year period. The contract gave the opportunity to solicit new partners for financial support and backing. Subsequently in 1998, Alloy Oil & Gas Sdn Bhd (“AOGSB”) emerged as a shareholder of CSB with AOGSB acquiring a 70% equity stake in CSB, purchasing a 35% equity stake in the company each from IVlokhtar Bin Hashim and Esa Bin Baharum. Both Mokhtar Bin Hashim and Esa Bin Baharum remained as shareholders of CSB with each of them holding 15% equity stake in CSB. The business of providing professional manpower supply services continued through to the early 2000, with small project wins from fabricators and players in the oil and gas industry. By 2003, Mokhtar Bin Hashim had increased his eqUity stake in CSB after acqUiring Esa Bin Baharum’s 15% equity stake in CSB. Subsequent to the departure of Esa Bin Baharum, Mokhtar Bin Hashim then diversified our Group’s business into other fields such as providing minor fabrication services. In 2004, Mokhtar Bin Hashim carried out a management buyout to take control of CSB from AOGSB and simultaneously invited Cipta Pantas which resulted in Cipta Pantas and IVlokhtar Bin Hashim owning 51% and 49% eqUity stakes in CSB respectively. Under the new shareholding structure of CSB, Mokhtar Bin Hashim continues to focus on managing the company’s operations as well as securing new contracts for CSB while Cipta Pantas remained as an investor. With the financial backing from Cipta Pantas, Mokhtar Bin Hashim was then able to realise his vision to diversify the business and take CSB for the next thrust forward. The diversification was not restricted to minor fabrication services alone and by the year 2004, CSB had started to prOVide non-shutdown maintenance services. The first maintenance

 

6. BUSINESS OVERVIEW (Cont’dj services project that we provided was for Petronas Carigali, involving onshore fabrication and a topside maintenance for a platform at offshore, Terengganu. CSB continued to carry out minor fabrication services projects at third-party facilities until 2005, when its first minor fabrication yard at Jalan Jakar in Kemaman, Terengganu became operational. Carimin Engineering was then incorporated on 20 September 2005, and began business operations immediately thereafter in 2006. Carimin Engineering currently provides both onshore and offshore construction works, hook up and commissioning, topside major shutdown and non-shutdown maintenance and upgrading services including minor fabrication services. Our first major offshore hook up and commissioning and installation support services project secured in 2007 was from Murphy Oil, with a contract work value of RI\1160.0 million through competitive bidding. This was followed by another main hook up and commissioning project awarded by Talisman with a contract work value of RI\184.0 million. In order to keep pace with our expanding operations, in 2010, we relocated our fabrication facilities from the minor fabrication yard located at Jalan Jakar to Kawasan Industri Telok Kalong in Kemaman, Terengganu which has a land area size of 78,448 sq ft. Meanwhile in the manpower supply services division, the business grew steadily with contract wins from Esso Malaysia/ExxonMobil from periods 1996 to 2004 (total contract work value of RM31 million) and further extended to 2012 at a total contract work value of approximately RM140 million; Petronas Carigali from periods 1997 to 2007 (total work value of RM60 million) and further extended to 2012 at a work value of RM30 million. The Murphy Oil contract was secured in 2000 to provide manpower supply services for drilling professionals worth RM25 million and in 2006, we won another sizeable contract to provide professional manpower supply services from Talisman worth RM51 million. The business development in hook up and commissioning gathered momentum in 2010 when we secured a contract from Petronas Carigali for the provision of offshore hook up and commissioning of Petronas Carigali facilities for a 2-year period through a competitive bid (“Sarawak/Sabah HUC Contract”). Work on the 3 work package clusters under this contract began in 2011, which involved providing upgrading and rejuvenation services, major shutdown and non-shutdown maintenance and hook up and commissioning works. We commenced work activities on the Bokor and Baram A fields in June 2011 whilst the West Lutong field started in July 2011and all these fields are located offshore,East Malaysia. The total value of the work carried out as at 30 June 2013 was RM363 million. As at LPD, we have completed for the 3 work package clusters, and full work completion is anticipated in March 2014. On 13 November 2013, we secured a contract from Petronas Carigali to provide offshore hook up and commissioning and topside major maintenance for production platforms and structures located offshore peninsular Malaysia (Peninsular Malaysia HUC Contract). The duration of the contract is for 5 years i.e. up to end year 2018. Our manpower supply services business division meanwhile, continues to register new contract wins and extension of existing contracts from our existing customers. With regards to our Group-wide activities, several of our subsidiaries became operational in 2010, 2011 and 2012. 83
6. BUSINESS OVERVIEW ( Cont’d) Carimin Equipment was incorporated on 24 November 2010, and began business operations in 2011. carimin Equipment essentially provides equipment maintenance and rental services to our Group for all the projects it is involved and intend to offer similar services to third­parties in the future, operating out of our minor fabrication yard in Telok Kalong, Kemaman, Terengganu. carimin Corporate was incorporated on 24 November 2010 and its principal activities are primarily for the provision of corporate, management and support services for its projects. Carimin Resources was incorporated on 24 December 2010 with the intention of establishing project and data management services for our Group. The company is however, presently dormant. Carimin Marine incorporated on 16 August 2011 was acquired by CSB on 25 June 2012. The company holds our investment in SK Offshore who owns SK Deep Sea, an AWB, namely SK Deep Sea that is currently being chartered for our Peninsular Malaysia HUC Contract. In October 2013, Carimin Marine through its subsidiary, Carimin Airis acquired carimin Airis Vessel, an AHTS vessel at the purchase consideration of RM33.52 million. This marine vessel is part of our initiative to support our Peninsular Malaysia HUC Contract, which requires us to be equipped with the appropriate facilities as part of the project requirement under the said contract. In March 2014, we had entered into a Memorandum of Agreement to acquire an additional AWB, namely Carimin Acacia. carimin Acacia is scheduled for delivery in June 2015. Moving forward, it is our intention as we position ourselves to provide offshore marine support vessel services to third-parties as part of our growth strategy and expansion plans. CSB and Carimin Engineering have obtained ISO 9001:2008 quality management system certification for the scope of provision of manpower supply and provision of engineering, procurement, construction, hook up and commissioning services for oil and gas industry respectively. In the last decage, our Group has also received numerous awards related to our safety excellence from our esteemed customers. Since the founding of our Group in 1989, we have developed our business from the initial provision of purely inspection and manpower supply services to encompass onshore and offshore construction works, hook up and commissioning, topside major shutdown and non­shutdown maintenance and upgrading services including minor fabrication services, and providing equipment maintenance and rental services. The acquisitions of marine vessels have not only given us the competitive edge and enhancing our capabilities but it broadens our potential earnings. Our Group’s total revenue and PAT were RI\1245.58 million and RM21.90 million in FYE 2014, respectively. 6. BUSINESS OVERVIEW ( Cont’d) 6.2 OUR BUSINESS MODEL Our Group’s business model is depicted in the figure below: Business Focus -<

r ——-,r———,,——-, , -, Offshore Hook Up and Commissioning, and Production
Manpower Supply Minor Fabrication Equipment Rental -< ServicesPlatform System Services Services Maintenance and Upgrading Services Revenue Streams Access to Skilled  PETRONAS  Long Term  In-house Minor  Human Resources  Licences  Contracts  Fabrication Facilities
Competitive Advantages and Key Strengths -< Ownership of a Vessel and In-house Quality Track Record II Investment in a Assurance Vessel Owner II (a) Business focus We are principally involved in providing services that support the offshore oil and gas industry in Malaysia. We have since developed and expanded our capabilities to include the provision of offshore hook up and commissioning, and production platform system maintenance and upgrading, minor fabrication, and equipment rental services. The customers we currently support include PSC operators and contractors, engineering and fabrication companies, oil and gas supporting service providers, and other companies in the oil and gas industry. (b) Revenue streams Our main revenue streams come from providing support services to the offshore oil and gas industry. Our revenue streams are derived from providing offshore hook up and commissioning, and production platform system maintenance and upgrading, manpower supply, and minor fabrication services. Offshore hook up and commissioning, and production platform system maintenance and upgrading services was our largest contributor during FYE 2014, accounting for 64.77% of our total revenue. Manpower supply services accounted for 35.08% of our revenue in FYE 2014. In addition to serving external customers, our minor fabrication services also supports 85

 

6. BUSINESS OVERVIEW (Cont’d) our offshore hook up and commIssioning, and production platform system maintenance and upgrading services projects by fabricating temporary structures and equipment. While we also started to provide equipment rental services during the FYE 2011 and served external customers during that financial year, this business activity is currently undertaken mainly to support the activities of our subsidiaries, C58 and Carimin Engineering. In FYE 2014, revenue from the provision of eqUipment rental services accounted for 0.15% of our total revenue. (c) Competitive advantages and key strengths Our competitive advantages and key strengths are important in sustaining our business and proViding our Group with future business growth opportunities. (i) Access to skilled human resources . We have access to oil and gas industry human resources through our extensive in-house database of geoscientists, engineers, technicians, professionals, welders, riggers and other personnel. We also have access to third-party databases and industry contacts. As at LPD, our in-house database had up-to-date information on approXimately 1,000 experienced geoscientists, engineers, technicians, professionals and other personnel. Our in-house data base coupled with our access to third-party databases and industry contacts allow us to fulfil our customers’ staffing needs on short notice. (ii) PETRONAS licences Under the Malaysian Petroleum Rules 1974, operators have to obtain specific licences issued by PETRONA5 to participate in the oil and gas industry in Malaysia. C58 and Carimin Engineering have been licenced by PETRONA5 to provide a range of services, including offshore hook up and commissioning, production platform system maintenance and upgrading, manpower supply and minor fabrication services. As this is a critical factor in sustaining our business, we constantly work to ensure that we fulfil the requirements of our licences, as well as obtaining new licences to provide new products and services within the oil and gas industry in Malaysia. The stringent procedures implemented by PETRONA5 in ensuring only suitably qualified vendors and/or service prOViders are issued any licences indirectly acts as a barrier to entry helps mitigate the competitive intensity within the oil and gas industry in Malaysia. (iii) Long term contracts Our Group’s ability to continuously secure new and long term contracts, ie, for the terms more than 3 years from our customers’ is an indication of our capabilities, reliability and reputation of being able to deliver quality work, achieving high safety standards and on time completion. Long term contracts 6. BUSINESS OVERVIEW (Cont’dJ provide some assurance of business sustainability compared to other operators who may provide services on short term work or ad hoc orders. Long term contracts provide the advantage of operating our business activities at the most efficient levels, as we are able to derive cost savings from owning assets rather than renting and provides for sustainable growth through investment in our human resource. These lay the platform for us to expand our business either vertically (such as complimentary activities in engineering, procurement and construction segments) and/or horizontally (such as similar marine underwater transportation and subsea activities) within the oil and gas industry. (iv) In-house minor fabrication facilities Our minor fabrication yard located in Kawasan Industri Telok Kalong, Kemaman, Terengganu is equipped and staffed with skilled personnel enables us to carry out minor fabrication works to support our offshore hook up and commissioning projects by fabricating any structures to be used at various locations during the project and our maintenance services. We also have capabilities to undertake third-party customers’ order for fabrication of piping systems, skids and other minor steel structures. (v) Track record Since the commencement of our operations in 1989, we have built a strong track record of successfully developing our business capabilities. Having started as a provider of manpower supply services in 1990, we started to provide minor fabrication services in 2003. Consequently, in 2006 our offshore hook up and commissioning services business secured our first production platform system maintenance and upgrading services contract. Our rental services business also started during FYE 2011. Our track record and reputation has enabled us to establish our customer base which helped to secure new projects and customers. (vi) Ownership of a vessel and investment in a vessel owner We acquired Carimin Airis Vessel, an AHTS vessel in October 2013. The vessel is currently utilised to support the implementation of our offshore hook up and commissioning, and production platform system maintenance and upgrading services contract with Petronas Carigali. In addition, we have an investment comprising a 14% equity stake in SK Offshore, which owns SK Deep Sea, an AWB. The vessel is currently operating for our Group in support of our projects in Malaysia for Petronas Carigali facilities. Our vessel ownership and investment in another vessel is complementary to our business focusing on providing production platform system maintenance, upgrading, and offshore hook up and commissioning services, as AHTS and accommodation vessels are used to support works activities offshore. Our work operations, resource allocation and project execution from control of these vessels is a strength that enhances our capability to complete our . works within schedule.
6. BUSINESS OVERVIEW (Cont’dj Commercially, control of own vessels will put us in a better position to bid for offshore hook up and commissioning, and production platform system maintenance and upgrading contracts as we are able to ensure availability of the vessels to support the implementation of the contract. As part of our future plans, we intend to purchase additional offshore support vessels, which will further strengthen our capability to offer our customers a complete package, as well as creating an opportunity to provide vessel services to third-party customers. (vii) In-house quality assurance CS8 and Carimin Engineering, is currently ISO 9001:2008 quality management system accredited for scopes of work relevant to their principal business activities. Internally, we have an established in-house quality policy to ensure that specified quality standards are adopted and maintained. Our Group has a qualified and experienced Head of Quality Assurance and Quality Control to lead the quality assurance team. The importance placed in quality management is evidenced by our operational safety record, whereby as at LPD we have not experienced any loss time incident since April 2010. In addition, we have also received several awards and recognitions in relation to our safe operations from our customers providing our current and potential customers the confidence of our operations and safety quality. 6.3 PRINCIPAL ACTIVITIES

6..3.1 Principal business activities The primary business activities of our Group are centred on supporting the offshore oil and gas industry in Malaysia. Our. business activities include the provision of the following services: Offshore hook up and commissioning, and production platform system maintenance and upgrading; Manpower supply; l”linor fabrication services; Equipment rental; and l”larine services We own an AHTS, and our investment in SK Offshore, owns an AWB. 6. BUSINESS OVERVIEW ( Cont’dj

(a) Offshore hook up and commissioning, and production platform system maintenance and upgrading services We have in-house capabilities to undertake offshore hook up and commlsslonmg activities. We provide production platform system maintenance and upgrading services for our customers focusing on platforms in Brownfields. Our maintenance services are intended to facilitate safe and uninterrupted operations, while our upgrading services are mainly carried out to improve performance or efficiency, including to enhance an existing platform’s oil and gas production rate.
(i) Offshore hook up and commissioning Offshore hook up and commissioning is normally carried out in an offshore Greenfield development, where a new production platform is installed. Our hook up work typically involves the final installation of pipe systems, decks, minor structures, caissons, conductors, instrumentation, power cabling and inter-module tie-ins on an offshore production platform. These items are normally not installed at the fabrication yard to facilitate transport by barge, or to prevent damage to sensitive equipment during transit. Our commissioning . works include all testing, pre-commissioning and/or preservation, and final commissioning of all installed facilities. This is to ensure that they are in proper working condition in accordance with our customers’ specifications, and the production platform is ready to produce hydrocarbons. Our offshore hook up and commlsslonmg services typically involved the following offshore platform facilities and systems: Process eqUipment, including gas compression, gas dehydration and water injection; Process utilities, including vents, drains, fuel and blanket gas, chemical dosing, process heating and inert gas; General facilities, including fuel and lubrication tanks, air compressors, water piping, and heating, ventilation and air conditioning eqUipment; Safety systems, including fire-fighting and life boats; Power systems, including electrical power generation and distribution, and minor power distribution; Control systems, including process control, gas detection and alarms; Telecommunications systems, including telephones, public address and closed circuit television systems; Lifting equipment, including pedestal cranes, monorails and hoists; and Living and working quarters, including appliances and eqUipment. 6. BUSINESS OVERVIEW ( Cont’d)
Our personnel installing deck extension (left) and instrumentation (right) Hook up and commissioning of equipment, systems and related instrumentation encompass the disciplines of electrical, electronic and instrumentation engineering in installing and testing of electrical, electronic and instrumentation systems in accordance with customers’ specifications. In general, the hook up process mainly involves inter-connecting and interfacing the various structures, process and control systems that, together, form an offshore platform, including steel structures, piping and equipment. Some of the tasks that we undertake in relation to offshore hook up and commissioning include: Preparation works, including project planning and scheduling, procuring the required tools and materials, system design, securing the required marine vessels and transportation services, and the management of mechanical completion; Designing and fabricating systems such as pipe systems, skids, instrumentation, and permanent or temporary steel structures that are required for replacement, modification and upgrading purposes prior to the hook up process; Testing and commissioning, which are carried out to ensure that all the installed systems are fully tested and commissioned to the fullest practical extent, to the satisfaction of the customers. The objectives of our testing and commissioning include: Verifying that equipment is installed in accordance to the relevant technical drawings, scope of work and manuals; Proving that installed equipment is able to function to its design specification, requirements and intended purpose; and Compile the required test data and results for proper documentation. 6. BUSINESS OVERVIEW ( Cont’d)
Our personnel installing deck crane Our offshore hook up and commissioning services involve engineers from various disciplines, including engineers from our piping, mechanical, electrical, instrumentation and commissioning teams. We engage only experienced and competent commissioning personnel to ensure that our projects are executed safely, on time and in compliance with our customers’ quality requirements. They are also supported by our quality assurance and control department, who carry out on-site inspection and our HSE department controls and monitors safety. During the FYE 2012, our hook up and comm/sslonmg project included a project to install a mercury removal unit on a production platform offshore peninsular Malaysia. Our scope of work included fabricating the stainless steel piping spools at our fabrication yard in Kemaman, Terengganu. We installed temporary platforms on the production platform to support the mercury removal unit installation work. Our completed and on-going offshore hook up and commissioning projects are as follows: Project name Customer Work period* Approximate work value RM’million Offshore hook up and Murphy Oil 2008 -2010 160 commissioning for SK 309/311 Phase 1 Gas Development Project Hook up and Talisman 2008 -2012 84 commissioning for PM3 CAA and PM 305 Hook  up  and  Newfield  2009 -2010  1  commissioning  of  compression  facilities,
retrofit and hose tie-in at East Belumut platform 91 6. BUSINESS OVERVIEW (Cont’d) Project name Customer Work period* Approximate work value RM’million Hook up and Newfield 2010 -2011 4 commissioning of West Belumut wellhead platform Hook up and Petronas 2010 -2014 12 commissioning of Carigali Petronas Carigali facilities for 2010 to 2012 -KNJC­T Provision for hook-up Petronas 2010 -2014 4121\ commissioning of Carigali Petronas Carigali facilities (Sarawak/Sabah HUC Contract) Hook up and Petrofac 2012 -2013 16 commissioning services for West Desaru Early Production System (EPS) Project, Block PM304 Hook up and Petronas 2013 -2014 9 commissioning for ERB Carigali West Field Drilling Project Peninsular Malaysia HUC Petronas 2013 -2018 899 Contract Carigali Notes: A Total value ofwork order carried out as at LPD which mainly involved production platform system maintenance and upgrading services are further elaborated below. * Period of time work was carried out. Usually this will go beyond contractual periodoftime due to clients’extendedscope ofwork. (ii) Production platform system maintenance services We provide production platform system maintenance services to rectify faults that affect systems installed on a production platform, including piping, pumps, motors, transmitters and structural works. Typically, the production platform is first shut down and the faulty part is removed from the system. The faulty part is inspected and tested to identify the nature and extent of the fault. If the fault is found to be workable, the part is repaired. The part is replaced if the fault is found to be unworkable. We have the capability to provide fabrication services to create new parts. The repaired or new part is then calibrated to ensure that it fits in with the existing system, and re-installed. 6. BUSINESS OVERVIEW (Cont'{/)
(iii) The production platform system maintenance services that we provide involve the shut-down of the production platform, and as such we engage only experienced and competent personnel to carry out the work. In addition, the production platform system maintenance service work must be carried out without affecting any of the other systems installed on the production platform, and must be completed within a stipulated period of time. We engage only experienced and competent discipline engineers, and tradesmen such as riggers, instrument and electrical technicians, piping and structural welders and fitters, and test technicians. They are supported by our quality assurance and control department, carrying out on-site inspection, and our HSE department controls and monitors safety.
Production platform system upgrading services The production platform system upgrading projects that we carry out typically require between 0.5 million man-hours and 1.0 million man-hours of total work to execute. The number of man-hours required varies based on, among others, the number of new items that are installed per production platform, and the number of production platforms involved. Currently, our production platform system upgrading services focus on the production platform’s process piping systems. The work that we carry out includes, but is not limited to, pipeline rejuvenation. The main activity involved in pipeline rejuvenation is the replacement of the production platform’s old and/or corroded pipes and equipment with new pipes and equipment. The items that are commonly replaced include piping systems, chemical injection points, launchers/receivers, as well as the replacement of existing manual control valves with automatic control valves. In some cases, addition we also treat pipes with corrosion inhibitors to manage corrosion in the pipe interior, and to prolong the life of the pipe. Additional chemical injections skids are sometimes added to the production platform, which necessitates the installation of platform decking extensions. Other items that may be installed as part of our production platform system upgrading service include: Safety and control systems such as transmitter sensors, control valves, alarm and shutdown controls, and fire and gas detection systems; Electrical items, such as electrical motors and earthing systems; and Production platform structures, such as deck extensions to create the space required to installed new skids and launchers/receivers. The provision of our production platform system upgrading services involve engineers from various disciplines, including engineers from our structural, piping, mechanical, electrical, instrumentation and commissioning teams. We engage only experienced and competent managers, technicians and tradesmen such as welders, riggers, scaffolders, instrument and electrical technicians, blasters and painters to ensure that our projects are executed safely, on time and in compliance with our customer’s quality requirements. They are also

6. BUSINESS OVERVIEW (Cont’d) supported by our quality assurance and control department, who carry out on­site inspection, and our HSE.
Ourpersonnelcarrying outproductionplatform maintenanceservices During FYE 2012, we installed a new natural gas transmission pipeline, which included tie-ins to existing facilities on the production platforms operating offshore of east Malaysia as part of the Sarawak!Sabah HUC Contract. We also carried out upgrading and modification work to enable the production platforms to operate as a simultaneous production and drilling (“SIPROD”) platform. Prior to the implementation of the project, hydrocarbon production had to be suspended whenever drilling operations were carried out, resulting in a temporary cessation of output. With the completion of the modification and upgrading works, the production platforms can now operate on a SIPROD basis, allowing hydrocarbon production to continue while drilling operations are carried out to tap new hydrocarbon reserves or improve production from existing reserves. (b) Manpower supply services We proVide manpower supply services to our customers in the oil and gas industry, including: PSC operators and contractors; Engineering and fabrication companies; Oil and gas supporting service providers; and Other upstream oil and gas companies. While our manpower supply services are mainly for our customers in Malaysia, we also proVide manpower to customers overseas. Our manpower supply services contracts implemented in the past are summarised in Section 6.1.1 of this Prospectus and those that are currently undertaken by our Group are set out in Section 6.3 of this Prospectus. We utilise our proprietary database to assist our customers to source personnel with the relevant skills and experience to fulfil specified functions. Our manpower supply is 6. BUSINESS OVERVIEW (Cont’d) focused on experienced geoscientists, engineers, instrument technicians, electrical technicians, welders, riggers, scaffolders, blasters, painters, and skilled other tradesmen. As at LPD, our proprietary database has up-to-date information on approximately 1,000 experienced personnel. We also work with other manpower service providers where we have access to their databases. Our scope of work normally includes identifying and screening potential candidates with suitable qualifications, conducting interviews and creating a shortlist of potential personnel for our customers, who then make the final decision to accept or reject the potential personnel. We normally match our manpower supply to our customers’ requirements for specified contractual periods, which may be renewed. We hire these personnel as our employees, who then carry out their duties for our customers. Our manpower supply service currently involves supplying our customers with personnel to carry out the following types of tasks: Project development personnel; Exploration and engineering personnel; and Production ,and operational personnel

(i) Project development personnel The project development personnel that we supply to our customers possess design and fabrication expertise and skills. These personnel carry out a range of tasks for our customers, including: Detailed design; Hook up and commissioning; and Installation.
Detailed design Detailed design is normally carried out prior to physical fabrication and manufacturing work to formalise the project’s specifications, such as operating parameters, dimensions, material and equipment procurement requirements, maintenance parameters, and surface treatment. We typically supply engineers to carry out detailed design work for our customers.
Hook up and commissioning Some of our customers who carry out hook up and commissioning work utilise their in-house resources for certain portions of the project, and engage us to supply additional personnel to support their projects. We may also supply our customers with specialised third-party services, such as naval architects, survey personnel and piling specialists. 6. BUSINESS OVERVIEW (Cont’d) Installation As part of the personnel that we supply for hook up and commissioning, we also supply personnel qualified to work offshore to carry out offshore installation work. (ii) Exploration and engineering personnel The exploration and engineering personnel that we supply are mainly involved in the search for and identification of oil and gas reserves in the offshore environment. These personnel perform a range of tasks for our customers, including: Drilling services; Front end engineering development (“FEED”); . Field development planning (“FDP”); and Risk analysis. Drilling services During the exploration phase, drilling is carried out to obtain rock and fluid samples, gather data concerning underground physical conditions, and other reservoir data. Drilling is also carried out during the development phase for production and workover wells. The personnel that we supply to our customers to carry out drilling services mainly comprise workers and technicians who carry out work on drilling rigs, supervisors and managers. FEED FEED refers to the conceptual design and development work that is carried out early in an offshore exploration and production project’s Iifecycle. At this stage, the project’s design and parameters can be adjusted easily and at a relatively low cost. We typically supply engineers who have the skill and experience to carry out FEED to our customers. FDP We normally supply skilled geologist and engineers to develop FDP for our customers. A FDP is normally prepared before oil and gas reserves are developed for production. The FDP is a scheduled programme and cost estimate specifying the development activities required to develop and produce oil and gas from a particular field over the entire Iifecycle of the field. Risk analysis We supply engineers and other professionals to our customers to carry out risk analysis as part of their risk management process. Risk analysis involves reviewing the risks inherent in a project, determining the probability of a risk occurring, evaluating the risks and working out how best to mitigate and/or handle the risks. 96 6. BUSINESS OVERVIEW {Cont’dj (iii) Production and operational personnel We supply personnel who are directly involved in production of oil and gas from offshore platforms. These personnel are typically involved in the day-to-day operation and maintenance of offshore structures, including production platforms and workover rigs. The production and operational personnel perform a range of tasks for our customers, including: Maintenance services; Operations; Workover services; and Fabrication. Maintenance services The personnel that we supply typically provide services to maintain, repair and modify offshore platforms. These personnel commonly perform tasks such as minor facilities upgrade, assembly and fabrication, removal and installation, inspection, blasting and painting, and testing. We typically supply technicians and supervisors to proVide maintenance services to our customers. Operations We also supply personnel who carry out the day to day work to operate and maintain the various equipment and systems on offshore production platforms. The personnel whom we supply to carry out production operations are typically workers,: technicians and supervisors. . Workover services Workover services are carried out to enhance the production of oil and gas from existing fields, typically involving the use of a workover rig and support vessels. We normally supply workers, technicians and supervisors to our customers who carry out workover services. Fabrication We supply skilled and semi-skilled personnel such as welders, technicians and supervisors to our customers to carry out fabrication work. These personnel may possess qualifications to engage in various types of welding techniques. (c) Minor fabrication services We currently provide minor fabrication services for third-party customers, and to support the offshore hook up and commissioning, and production platform system maintenance and upgrading services projects that we undertake. Presently, we operate from our minor fabrication yard located in Kawasan Industri Telok Kalong, Kemaman, Terengganu which has a covered workshop and an open fabrication area.

 

6. BUSINESS OVERVIEW (Cont’d) We are involved in various aspects of minor fabrication, including: Producing design and technical drawings; Procurement of raw materials and components; Fabrication including cutting, rolling, bending and welding of metal products; Sub-assembly of fabricated parts and components for piping and other metal structures; On-site assembly of sub-assembled parts and components on the offshore topsides, by aligning structures and joining them by welding, bolting or riveting for minor structures and piping; and System installation, testing and commissioning. The minor fabrication work that we undertake for third-party customers is primarily to produce piping systems, skids and other minor steel structures (for example pipe spools, hand rails and platform extensions for access purposes) for installation on offshore structures. Our fabrication business also supports our production platform system maintenance and upgrading, and hook up and commissioning projects by fabricating temporary structures and equipment that are used at various times during the project, particularly during on-site installation. The temporary structures and equipment that we fabricate in-house includes support structures, ramps, ladders, piping systems and scaffolding. (d) Equipment rental We started to prOVide equipment rental services as a new business activity during the FYE 2011, when we rented out welding equipment. The equipment rental services that we provided during FYE 2012 supported the activities of our subsidiaries, CSB and Carimin Engineering. There were no rental revenue from external customers for equipment rental services in FYE 2012. For FYE 2013, revenue from the provision of equipment rental services accounted for 0.01% of our total revenue. In FYE 2014, revenue from the provision of equipment rental services accounted for 0.15% of our total revenue. (e) Marine services We acquired Carimin Airis Vessel, an AHTS vessel, in October 2013. We have an investment in a company, SK Offshore, which owns SK Deep Sea, an AWB. As at LPD, we had one representative on the board of SK Offshore. To date, we have not received any dividends from SK Offshore. The ownership structure and their involvement in SK Offshore are summarised in the follOWing table: Company Shareholding in SK Involvement in SK Offshore (%) Offshore PT Bahtera I\liaga 40.0 Operation activities of SK Internasional Offshore 98
6. BUSINESS OVERVIEW (Cont’d) Company Shareholding in SK Involvement in SK Offshore (%) Offshore Nam Cheong Dockyard 40.0 Accounting matters of SK Sdn Bhd Offshore Carimin Marine 14.0 Apply for licence for marine spread jobs from Petronas, and obtain contract for marine spread jobs by Petronas CTNS Marine Sdn Bhd 5.0 Operation activities of SK Offshore Mega Multiform 1.0 Investments Limited
SK Offshore bills our Group for chartering SK Deep Sea, and we bill our client for services rendered using SK Deep Sea. Carimin Marine has also granted SK Offshore the rights of first refusal to participate in the contracts awarded by Petronas Carigali provided tha.t: (i) there is no objection from Petronas Carigali; and
(ii) the prices and other terms quoted by SK Offshore for the participation in such contract is competitive.

As at LPD, the vessels are being utilised to support our Group’s offshore hook up and commissioning, and production platform system maintenance and upgrading services.
CariminAiris Vessel 6. BUSINESS OVERVIEW (Cont’d)
SKDeepSea While we did not recognise revenue from third-party customers from the provision of marine services for FYE 2013, as part of our future plans we intend to develop the capability to provide marine services, including vessel chartering, to external customers. In March 2014, we had entered into a Memorandum of Agreement to acquire an additional AWB, namely Carimin Acacia. Carimin Acacia is scheduled for delivery in June 2015. 6.3.2 Contracts in hand Our offshore hook up and commissioning, and production platform system maintenance and upgrading services contracts in hand as at LPD are summarised in the folloWing table: Customer  Contract duration  Approximate work value RM’million Start date  End date
Petronas Carigali -Peninsular l”1alaysia HUC Contract*  l”1ay 2013  May 2018  899.0/\
Notes: * Based on the contract duration as stated in the letter of award although the said contract was executed on 13 November 2013. The work has commenced in January 2014. Work value as estimated by our management. As at the LPD, work orders amounting to RM92.4 million has been rolled out.

 

6. BUSINESS OVERVIEW ( Cont’dj Our contracts in hand for manpower supply services as at LPD are summarised in the following table: Customer PC ”v1yanmar (Honq Kong) Ltd  Contract duration  Contract value RM’million  Start date  End date  Extension option  August 2011  Auqust 2015  1+1 year  3.0  Sarawak Shell Berhad Sarawak Shell Berhad Talisman (1) Malaysia LNG Sdn Bhd Murphy Oil Hess (Malaysia SB302) Limited  Auqust 2011  August 2015  2 years  2.0  September 2011  September 2015  1 year  2.0  December 2011  December 2014  1 year  4.5  December 2011  November 2014  1 year  0.5  February 2012  February 2015  1 year  3.0  July 2011  May 2014 (2)  – 6.4  PETRONAS Petronas Chemical Aromatics Sdn Bhd Petronas Chemicals Derivatives Sdn Bhd Petronas Chemicals Fertiliser Kedah Sdn Bhd Petronas ”v1anagement Training Sdn Bhd Petronas Technical Training Sdn Bhd Petronas Trading Corporation Sdn Bhd Petronas Chemicals Ethylene Sdn Bhd Petronas Chemicals MTBE Sdn Bhd Petronas Penapisan Terengganu Sdn Bhd Petronas Chemicals Vinyl Chloride (Malaysia) Sdn Bhd  July 2012  June 2015  1+1 year  3.0  July 2012  June 2015  1+ 1 year  0.5  July 2012  June 2015  1+1 year  0.5  July 2012  June 2015  1+1 year  0.5  July 2012  June 2015  1+1 year  0.5  July 2012  June 2015  1+1 year  0.5  July 2012  June 2015  1+1 year  0.5  July 2012  June 2015  1+1 year  0.5  July 2012  June 2015  1+1 year  0.5  July 2012  June 2015  1+1 year  0.5  July 2012  June 2015  1+1 year  0.5  Petronas Chemicals Ammonia Sdn Bhd PETUN (Malaysia) Sdn Bhd  July 2012  June 2015  1+1 year  0.5  July 2012  July 2015  1+1 year  0.5  Petronas Maritime Services Sdn Bhd Petronas Chemicals Polyethylene Sdn Bhd Petronas carigali Newfield HESS Petronas cariqali Petronas carigali PC Myanmar (Hong Kong) Ltd  July 2012  July 2015  1+1 year  0.5  July 2012  June 2015  1+1 year  0.5  January 2013  January 2016  – 0.2  January 2014  January 2015  – 6.0  April 2013  April 2017  2 years  7.5  July 2013  June 2015  1+1 year  0.5  July 2013  June 2016  1 year  2.6  June 2013  June 2015  – 3.1  Petronas Penapisan (Melaka) Sdn Bhd  July 2013  June 2015  1+1 year  0.5
6. BUSINESS OVERVIEW ( Cont’d) Customer  Contract duration  Contract value RM’million  Start date  End date  Extension option  Newfield  May 2013  May 2015  6 months  38.0  Petronas Daqanqan Berhad  July 2012  June 2015  1+1 year  0.5  Petronas Chemical Group Bhd  July 2013  June 2015  1+1 year  0.5  HESS  October 2012  October 2017  – 3.0  Petronas Technical Services Sdn Bhd  December 2013  December 2016  2 years  2.0  JX Nippon Oil & Gas Exploration (Malaysia) Sdn Bhd  January 2014  January 2017  1 year  1.0  SapuraKencana Energy Peninsula Malaysia Inc.  IVlarch 2014  March 2015  – 1.0  SapuraKencana Energy Peninsula Malaysia Inc.  May 2014  April 2015  – 1.0  PETROFAC (Malaysia-PM304) Limited  July 2014  October 2015  3 months  2.0  Total  100.8
Notes: (1) Comprising 3 contractswith cumulativecontractvalue ofRM4.5million.
(2) Although this contract has ended, work order is still on-going on request basis.

6.4 REVENUE SEGMENTATION The revenue segmentation is set out in Section 12.2.1 of this Prospectus.
6.5 EQUIPMENT AND MACHINERY Our equipment and machinery and its NBVas at 30 June 2014 are as follows: NBV as at 30 June 2014 RM’OOO Operation tools and equipment Air compressor 477 Welding machinery/generator 627 Equipment and machinery accessories/parts 299 Hydrotest equipment 81 Cargo handling equipment 400 Plant and equipment Forklifts 351 Air tugger 342 Total 2,577 6. BUSINESS OVERVIEW (Cont’d)

6.6 PROCESS FLOW (a) Production platform system maintenance and upgrading services In general, the process flow for our production platform system maintenance and upgrading services is depicted in the diagram below: Receive Work Package
+  Site Survey  + Resource Mobilisation  I  I  I  I  I  Pipes ~  Mechanical Systems 1  Electrical Systems ~  Instrumentation ~  J  Flushing  Fastening, Levelness, Alignment Inspection  Cabling Inspection  Cable and Tube Connection Inspection
~  ~ ~  L  Hydrotesting  Lubricant and Filter Uncoupled and Coupled Inspection Test Runs  Alarm and Shutdown Test  I  I 1  I  +  Re-installation
+ Final Inspection + Commissioning The work package outlining the overall scope of work is received. A survey of the site is conducted at the production platform to ascertain the type and quantity of maintenance services that are required. The resources in terms of manpower, equipment and consumables that are required are determined and mobilised. The type of work that is required varies depending on the sub-system involved. The main sub-systems that are covered under our production platform system maintenance and upgrading services are pipes, mechanical systems, electrical systems and instrumentation. Pipes: Pipes are flushed with water and/or air to clear them of residual liquid or gas. The pipe interior is checked to ensure that they are clean. 6. BUSINESS OVERVIEW ( Cont’d) Hydrotesting is carried out, whereby a length of pipe, with its associated flanges, bolts and/or valves, is sealed and filled with water. The pressure of the water is brought to a specified level, and the length of pipe is inspected for leaks. Any faults that are identified are rectified by repairing or replacing the defective component. Mechanical systems: The physical characteristics of the mechanical system are measured to ensure that they comply with the specifications. These include the installation and tightening of fasteners such as bolts and vibration dampers; the levelness of installed skids and equipment; and the alignment of motors and engines with gearboxes, pumps and generators. Any parameters that are found to fall outside the applicable specification are rectified. The lubricant and grease of mechanical systems are inspected for adequacy and cleanliness, and are topped-up or replaced as required. Filters are inspected for cleanliness and condition, and are cleaned or replaced as necessary. Electrical systems: The electrical cabling connecting various parts of the electrical system are inspected to ensure that they are correctly installed, that insulation material are in an acceptable condition, and that there are no breaks in the cabling. All earthing connections are also inspected to ensure that they are terminated. Identified faults are rectified by reconnecting, repairing or replacing the affected cable, as necessary. Electric motors are subjected to uncoupled test runs, whereby they are run without being coupled to driven equipment, to ensure that they rotate in the correct direction. Electric motors are also subjected to coupled test runs, where they are coupled with their respective equipment, to ensure that they function properly. Electric motors that are found to be faulty are repaired or replaced. Instrumentation: The electrical cable and/or tubing connecting instrumentation and the processes being monitored are inspected to ensure that connections are correctly installed. Any faults that are identified are rectified, and any electrical cables or tubing that are damaged are repaired or replaced. An alarm and shutdown test is carried out on the instrumentation system by simulating a fault condition. This is to ensure that the correct operational sequence is initiated, and all components perform according to specifications. Any faults that are identified are rectified. The various sub-systems and its components are re-installed after all of the inspection and repair works are completed. A final inspection is carried out. Commissioning is carried out upon passing final inspection.
6. BUSINESS OVERVIEW (Cont’d)

(b) Manpower supply services In general, the process flow for our manpower supply services is depicted in the diagram below: Preparation of Proposals

Negotiations ..
Recruitment of Manpower
I  I  I  Sourced Internally  Sourced Externally
I• I Training •
Mobilisation of Manpower
… Monitoring .. Project Completion Upon the identification of a potential project, a project manager is identified. The project manager prepares and submits a proposal document to the customer. Once the proposal is approved and awarded to us, the project implementation and kick-off process begins with the recruitment of manpower. The recruitment of manpower is obtained from a list of engineers and other technical personnel via internal sources from our own database and external sources from third-party databases. The manpower for the project are identified and recruited upon evaluation and confirmation from the project manager, and a project team is formed. After that, our project team attends a training workshop conducted by the project manager to familiarise themselves with the project and our standard operating procedures, and identify their respective assignments. 6. BUSINESS OVERVIEW (Cont’d) Upon completion of the training workshop, our project team, led by the project manager, is deployed to the customer’s oil platform where they will perform their tasks. The project manager monitors and evaluates the performance of the project team to ensure that the work performed is in order. A progress report containing information on developments of the project is prepared and submitted to the customer. Upon completion of the project, a final report is prepared by the project team and presented to the customer. As at the LPD, the number of individuals contracted under our manpower supply services: Length of contract (years)  Number of individuals  Less than 1 year  More than 1 year but less than 5 years  More than 5 years  Total number of individuals  Percentage of grand total (%)  Number of local individuals  Number of foreign individuals  Manpower  -Engineering and exploration  – 25  – 25  ·11.57  23  2  -Project development  3  6  – 9  4.17  9  – -Production / operations  25  157  – 182  84.26  160  22
TOTAL  28  188  – 216  100.00  192  24

6. BUSINESS OVERVIEW (Cont’dj

(c) Offshore hook up and commissioning seavices The general process flow of our offshore hook up and commissioning services is depicted in the diagram below: Preparation of Proposals
..
Negotiations ..
Project Management
I II
Sourcing of Sourcing of Personnel Materials I .. I Project Execution ..
Monitoring and Inspection
ir Testing and Commissioning
..
Project Completion 6. BUSINESS OVERVIEW ( Cant'{/) Upon the identification of a potential project, an. offshore hook up and commissioning team comprising a project manager, discipline engineers, safety engineer, quality assurance engineer and planner is formed. The offshore hook up and commissioning team prepares and submits a proposal document to the customer. Once the proposal is approved and awarded to us, the project implementation and kick-off process begins with the identification and preparation of personnel and materials such as structures, machineries and equipment that are necessary for the project. These materials are obtained from various sources including our own manufactured products from our minor fabrication yard or procured from the relevant suppliers. As for sourcing of personnel, we have two options, deploying our own team of engineers or appointing a sub-contractor to undertake the engineering project under the supervision of our project manager. Under the project execution phase, the offshore hook up and commissioning services are performed, delivered and installed on-site at the customers oil platform. The materials are transformed into operational systems such as oil and gas pipeline systems. During and after the work is performed, our project manager monitors the work progress and carries out inspections to ensure that the systems are in accordance to the customer’s requirements. Upon completion of the installation works, the testing and commissioning process is undertaken. This is to identify and rectify any weak points or issues relating to the systems. Once all the issues and weaknesses of the systems have been rectified, the operational aspects of the systems are handed over to the customer to complete the project. [ The rest of this page is intentionally left blank] 6. BUSINESS OVERVIEW (Cont’d) (d) Minor fabrication services The general process flow of our minor fabrication services is depicted in the diagram below: Design •
Preparation of Materials

Painting and Coating the Materials .­Marking …
Cutting and Fit-up ..
Welding and Assembly

Painting and Coating the Fabricated Structure

Inspection …
Delivery The process begins with design drawings displaying the physical characteristics of the structure or equipment. . Materials that are necessary for the project such as steel and paint are identified and prepared. The next phase involves painting and coating the materials, which are undertaken to provide the materials with surface protection and corrosion resistance properties. These materials are then marked in accordance to the design drawings. The markings are used as a gUide for subsequent steps including cutting and welding. After that, the marked materials are cut and fitted-up. Checks are conducted to ensure that the materials, which have been cut, fit together prior to welding. 109 6. BUSINESS OVERVIEW (Cont’d) Next, the welding and assembly process is undertaken to join the sub-components together. Another round of painting and coating is carried out to protect the exposed joints from corrosion. Finally, the fabricated structures or equipment are inspected prior to delivery to the customer. 6.7 KEY MILESTONES, AWARDS AND RECOGNITION 6.7.1 Key Milestones The following are some of our Group’s key milestones: Period  Milestones  CSB was incorporated. CSB began business operations with the provision of manpower supply .services. Secured a 2-year contract from Esso Malaysia to provide general inspection services. Secured a contract from Petronas Carigali to supply technical professionals. The contract was carried out over a 4-year period.  1989  1990  1992  1997  2000  Secured a manpower supply services contract to supply drilling professionals from Murphy Oil. Diversified our business to provide minor fabrication services for the offshore oil and gas industry. Continued to diversify our business, and started to provide production platform system maintenance services. Our first production platform system maintenance service project was for Petronas Carigali, involving topside maintenance for a platform offshore Terengganu. Cipta Pantas and IVlokhtar Bin Hashim carried out a management buyout exercise to acquire CSB. Cipta Pantas owned a 51.0% equity stake, and Mokhtar Bin Hashim owned a 49.0% equity stake in CSB at the completion of the exercise. Our minor fabrication yard located at Jalan Jakar in Kemaman, Terengganu began to operate. Carimin Engineering began business operations. Secured our first offshore hook up and commissioning contract, which was from Murphy Oil in Malaysia.  2003  2004  2005  2006  2007
6. BUSINESS OVERVIEW ( Cont’d) Period  Milestones  We also secured from Talisman.  an  offshore hook up and  commissioning  contract  2010  Secured the Sarawak/Sabah HUC Contract.  We relocated our minor fabrication facilities from Jalan Jakar in Kemaman, Terengganu to a new facility at Kawasan Industri Telok Kalong in Kemaman, Terengganu.  2011  Carimin Equipment Management began business began to provide equipment rental services.  operations.  We  CS6 received ISO 9001 :2008 quality management system certification for the scope of “Provision of manpower supply for oil and gas industry”.  Carimin Engineering received ISO 9001:2008 quality management system certification for the scope of “Provision of engineering, procurement, construction, hook up and commissioning for oil and gas industry”.  2012  Acquired Carimin Marine, which has a 14% investment in SK Offshore, who owns SK Deep Sea, an AW6, to pave way for the provision of offshore marine support vessel services.  2013  AcqUired Carimin Airis Vessel, an AHTS vessel.  Secured the Peninsular Malaysia HUC Contract.  2014  Commissioned to build Carimin Acacia, the AW6.
6.7.2 Awards and Recognitions Over the years, we were accorded awards and recognition as summarised in the following table: Subsidiary  Award and Recognition  Awarding Body  Year  CS6  Certificate of Recognition for excellent safety performance in 2000  Esso Malaysia  2000  CS6  certificate of Recognition for excellent safety performance in 2001  ExxonMobii  2001  CS6  Contractor Safety Award for safety excellence in 2002  ExxonMobil  2002  CS6  “Safest Subcontractor Award” for the Talisman Malaysia Limited mobile offshore application barge fabrication  Talisman  2003  CS6  “Gold Award” for safety excellence in  ExxonMobil  2003/2004
6. BUSINESS OVERVIEW (Cont’d) Subsidiary  Award and Recognition  Awarding Body  Year  2003/2004  C5B  “Gold Award” for safety excellence in 2004  ExxonMobil  2004  C5B  “Gold Award” for safety excellence in 2005  ExxonMobil  2005  C5B  Certificate of appreciation in 2005 for 100,000 hours without Lost Time Injury  Talisman  2005  C5B  “Gold Award” for safety excellence in 2006  ExxonMobii  2006

6.8 PRODUCTION OUTPUT, CAPACITY AND UTILISATION Production output and capacity is not applicable to our business activities as we are primarily engaged in the provision of offshore hook up and commissioning, production platform system maintenance and upgrading services including minor fabrication services. Our other business unit also includes manpower supply and equipment rental services. As at LPD, our vessels, namely Carimin Airis Vessel and 5K Deep 5ea were fully deployed.
6.9 RESEARCH AND DEVELOPMENT 6.9.1 Policy on research a,nd development We do not carry out research and development (“R&D”) as we are primarily involved in providing supporting services to the oil and gas industry. However, we continuously focus on process improvement as a means of maintaining our competitive advantages and key strengths in the follOWing areas: Enhancing business effectiveness, efficiency and productiVity to optimise operating costs; and Continually improving service quality to ensure customer satisfaction. We also keep abreast with the developments in technology and know-how in our field while continuing to evaluate the developments that may be useful to our business, and adopt those that can improve our performance in terms of efficiency, productivity, quality or other criteria. Improving and enhancing of our competitive advantages and key strengths are critical in sustaining long term business growth and success.
6.9.2 R&D facilities and personnel Currently, our Group does not have dedicated R&D facilities or personnel. 6. BUSINESS OVERVIEW ( Cont’d) 6.9.3 R&D expenditure We did not recognise any expenditure that is specific to R&D activities for the FYE 2011, FYE 2012, FYE 2013 and FYE 2014. 6.10 TECHNOLOGY AND KNOW HOW Our business activities are based on the application of technology and know-how of our experienced personnel to serve our customers. We adopt a continuous improvement approach to adopt new skills and knowledge. The technologies that are relevant to our Group include the following: Corrosion prevention expertise; Welding technology; Non-destructive testing; and Electrical and instrumentation proficiency. (a) Corrosion prevention expertise Corrosion prevention methodology is related to the prevention or minimisation of corrosion. Corrosion is particularly serious in a marine environment, where equipment is exposed to the sun, moisture and corrosive salt water. We have the capability to provide corrosion prevention services utilising the following technologies: Material selection Material selection refers to the practice of selecting materials that are resistant to corrosion in a particular operating environment. We take into consideration material selection to facilitate our Group’s maintenance and fabrication activities, including selection of type of parts . such as seamless or welded pipes for the replacement of parts, selection of steel materials for fabrication and modification activities, selection of paint materials for offshore conditions, and other activities. Painting and coating Coating is the act of covering the surface of an object to provide corrosion resistant properties. Our Group uses the following methods for coating applications: Brush painting is generally reserved for small touch-up work, or getting into inaccessible places. Some of the difficult accessible areas include crevices, corners, edges, weld lines, bolt heads, nuts and small brackets, which may require minimum dry film thickness application. 6. BUSINESS OVERVIEW ( Cont’d) Air spray is the most common method used in painting topside structures. It consists of a compressed air flow, which carries paint through the hose and out the nozzle. Large surface areas can be qUickly and efficiently coated using the air spray method. Airless spray, a method in which paint is directly pumped through the hose without any air being mixed in and atomises when striking the surface at high velocity, which enhances adhesion. This is a fast and efficient method, which minimises overspray. Commonly used coatings include: Primer, which is the first coat applied on the steel surface to provide immediate corrosion protection, and to bond the steel to the succeeding overcoats of the anti-corrosive system. Anti-corrosive coating is generally used for offshore steel structures. The purpose of anti-corrosive coating is to form a physical barrier isolating the steel from ~he environment, like water and oxygen. Specialised coatings, which include non-skid coatings for decks or walkway to provide secure footing in special areas, and heat­resistant coatings for hot surfaces, such as boilers and steam­powered equipment, as these coatings are flexible enough to survive thermal expansion and contractions, and do not blister at high temperatures. (b) Welding technology We utilise welding technology for our fabrication business activity, as well as, maintenance operations during the replacement of corroded and faulty parts and components. Welding, which is a process that joins metals, is often done by melting the work pieces and adding a filler material to form a pool of molten material that cools to become a strong joint. Sometimes pressure is also used in conjunction with heat, or by itself, to produce the weld. We currently use arc welding techniques, which is a metal-joining method that applies electrical pressure to create an electric arc between an electrode and metal work piece. The electrical energy is converted to heat which causes the metal work piece to melt at the welding point. The welding region is sometimes protected by an inert or semi-inert gas. Filler materials may be used. The main arc welding techniques that we apply include: Shielded metal arc welding (“SMAW”), which is also known as manual metal arc weldi~g or stick welding. In SIVlAW, an electric current is used to strike an arc between the base material and consumable electrode rod. The electrode is commonly made of steel and is covered with a flux that protects the weld area from oxidation and contamination by producing C02 gas during the welding process. The electrode acts as filler once it is melted. 6. BUSINESS OVERVIEW ( Cont’d) Gas tungsten arc welding C’GTAWIf), which is also known as tungsten inert gas welding, is a manual process that uses a non-consumable electrode made of tungsten, an inert or semi-inert gas mixture, and may utilise a separate filler material. In GTAW, energy is conducted across the arc through a column of highly ionised gas and metal vapours known as plasma. The use of a filler material is optional. The molten weld and arc zone are protected from atmospheric contamination by a shielding gas, which is usually, but not always, an inert gas such as argon. GTAW is characterised by a stable arc and high quality welds. This technique is useful for welding thin materials. (c) Non-destructive testing Non-destructive testing techniques are used to evaluate the properties of a component or system without causing permanent damage. We currently utilise a number of non-destructive testing techniques to perform tasks such as inspecting welds and the structural integrity of pipes. These are carried out by our approved vendors. Non-destructive tests that are used to inspect welds include radiographic (x-ray) weld inspection, ultrasonic weld inspection, and magnetic particle and dye penetration testing. Non-destructive tests that are used to inspect the structural integrity of pipes include x-ray inspection and hydrostatic testing. Welds are checked using x-ray and ultrasonic weld inspection to ensure that they possess the following qualities: The weld is free from foreign-matter inclusion, for example slag; Possess adequate penetration; The weld is free from distortions; and The dimensions of the weld are accurate. X-ray inspection is used to inspect pipes, which can accurately measure the thickness of the pipe and detect defects such as cracks, pitting and corrosion. In a hydrostatic pressure test, a length of pipe is sealed and filled with water. The water is then pressurised to the test pressure and the pressure is maintained for a specified period of time. The pipe is monitored for any water leakage, which indicates the presence of defects. In a dye penetration test, the surface of the weld that is being tested is sprayed with a liquid chemical mixture known as a ‘penetrant’. The penetrant is allowed to soak into any flaws that may be present in the surface. After a certain period of time, the surface is wiped clean to remove excess penetrant and a developer is applied to the surface to make the penetrant more visible. The surface is then inspected for any traces of penetrant, the presence of which indicates the existence of a defect. 6. BUSINESS OVERVIEW ( Cont’d) (d) Electrical and instrumentation proficiency Electrical proficiency encompasses the study and application of electricity and electromagnetism. Electrical proficiency is a broad field that encompasses many sub fields, which are centred on electromagnetism. Instrumentation proficiency is concerned with the accurate measurement of electrical properties. The central issue that is confronted by the field of instrumentation proficiency is that any measurement of an electrical circuit will inevitably change the voltages and current in it. The objective of instrumentation proficiency is to minimise the influence of the measuring circuit, or even to compensate for it. We apply the principles of electrical and instrumentation proficiency on practical situations such as hook up and commissioning, and maintenance of various types of structures and systems for offshore platforms. These works are carried out by our approved vendors. 6.11 QUALITY CONTROL PROCEDURES I QUALITY MANAGEMENT PROGRAMMES 6.11.1 Service quality The ability to provide a consistent level of service quality is an important consideration in the oil and gas industry, where safety standards are stringent. As such, we place significant emphasis on service quality and adopt stringent quality standards and controls within our business operations. This is reflected by our accreditations by following quality management system: Companies within our Group  Standard  Activity  Issuing party  Validity period  CSB  ISO 9001:2008*  Provision of manpower supply for oil and gas industry  Bureau Veritas Certification (Malaysia) Sdn Bhd  8 May 2014 to 8 May 2017  Carimin Engineering  ISO 9001:2008*  Provision of engineering, procurement, construction, hook up and commissioning for oil and gas Industry  Bureau Veritas Certification (Malaysia) Sdn Bhd  8 May 2014 to 8 May 2017
Note: * Under Department of Standards Malaysia (STANDARDS MALA YSIA) and United Kingdom Accreditation Service (UKAS) accreditation. Our quality management system accreditations provide our customers with assurance relating to the quality of our services. 6. BUSINESS OVERVIEW (Cont’dJ In addition, we have established a quality policy to ensure certain quality standards are adopted and maintained in the provision of our services to customers. Our quality policy encompasses the following: Adopting excellence and “kaizen” (business philosophy focusing on continuous improvement) in everything we do; Emphasis on customer service to achieve customer satisfaction; Strict compliance to applicable standard and regulations for all our activities; Optimising costs through maximising productivity; Recognition of the total involvement and participation of the entire workforce; Adoption of new technologies; Enhance staff competencies at all levels; and
Establishment of quality objectives. In line with our quality policy, we had set objectives for each of the following departments within our Group: Departments  Objectives  Human Resources and Administration  ——– Competency training shall be arranged within 2 months from date of request from the relevant Head of Department. On time submission of invoice (based on work done). On time payment of salary to contract personnel. On time completion of all projects. Actual cost of proiect shall not exceed stipulated budget. No major non-compliance report issued by customer for each project. On time submission of proposals. On time delivery of purchased material based on material service request.  Invoicing and Cost Control Management  Operation  Project  Quality Assurance/Quality Control  Supply Chain Management
Quality assurance controls are implemented in all sections of our operations, and our processes are regularly reviewed for continuous improvement, including: Random checking and inspection during the work process to ensure the work performed is based on specifications, including: Tolerance and defect inspection of welds; Coating thickness; 6. BUSINESS OVERVIEW (Cont’d) Condition of painted or coated surface; and Inspection and handling of special materials; Inspection of incoming materials used; Quality checks and inspection of any repaired and maintained structures, parts and components are inspected based on specifications; and Undertake various tests including hydrostatic pressure testing of pipe works (which is the process of using water under pressure to test the integrity of pipelines), and. functional tests on electrical and instrumentation, including electric cables, fittings and equipment. In addition to these internal quality checks, we also engage external parties to undertake non-destructive testing using radiography and ultrasonic inspections of welds on in-house fabricated structures and piping systems for use on platforms. As at LPD, we had a team of 15 experienced quality control and assurance personnel to ensure that our service quality meets with the needs and specification of our customers. 6.11.2 HSE HSE management is an important consideration in the oil and gas industry. Service proViders are typically required to maintain a good HSE record, and to comply With industry or customer defined HSE standards. HSE management is important in prOViding our production platform system maintenance and upgrading services, where it involves carrying our work in an operational environment where production and process equipment, instrumentation and power are in running condition, and in offshore hook up and commissioning services. We maintain a high standard of worksite safety when carrying out our production platform system maintenance and upgrading services to ensure the safety of our personnel and the production platform. We develop and implement a safety mitigation plan, which includes Hazardous Operations (Hazop) study, risk assessment, job hazard analysis, and safety audits. We manage our work processes to minimise risks and hazards and carry out safety campaigns to raise safety awareness among our personnel. For example, personnel who carry out “hot work” processes such as welding, metal cutting and grinding are properly trained, carefully monitored and managed to minimise the risk of fire and explosion. HSE and quality control and assurance personnel are also involved in on-site execution. Our internal management system includes detailed documentation relating to HSE management and contingency planning. We have maintained a good HSE record since we began proViding maintenance services in 2004 and we have received several awards and recognition from our customers in relation to our safety record. As at LPD, we have not recorded any lost time injury since April 2010. 6. BUSINESS OVERVIEW ( Cont’d) 6.12 MARKETING STRATEGIES AND DISTRIBUTION NETWORK 6.12.1 Distribution channel strategy Our distribution channel strategy is depicted in the diagram below:
Oil and Gas Industry
Our Group primarily adopts a direct distribution strategy for marketing our range of services including offshore hook up and commissioning, maintenance services, marine vessels support, minor fabrication to· the oil and gas support industry in Malaysia. Our Group primarily utilises in-house sales and marketing team to market our services. Our Group maintains operational facilities in major oil and gas industry centres in Malaysia to assist our sales and marketing activities as well as being centrally located in the facilities to support our customers as follows: An administrative office in Miri, Sarawak; An operational office and minor fabrication yard in Kawasan Industri Telok Kalong, Kemaman; and A corporate and operational office in Kuala Lumpur. Our Group’s physical presence in major oil and gas industry centres around the country enables us to qUickly and effectively gauge existing and potential customer support and demand and more effectively, conduct sales and marketing and business development activities targeted at these customers 6.12.2 Principal markets For the FYE 2014, Malaysia was our principal market, which accounted for 96.65% of our revenue.
Malaysia While we recognised revenue from Myanmar and Mozambique for FYE 2014, the revenue contribution from these countries were relatively minor, at 1.91% and 1.44% of our total revenue respectively. 6. BUSINESS OVERVIEW (Cont’d) 6.12.3 Seasonality The details on seasonality are set out in Section 12.13 of this Prospectus. 6.12.4 Operating licences The details of our major approvals and licences are set out in Section 5.6 of this Prospectus. [ The rest of this page is intentionally left blank] ICompany No.: 908388-K I 6. BUSINESS OVERVIEW ( Cont’d) 6.13 MAJOR CUSTOMERS The table below lists our Group’s customers, which represented 10% or more of our total Group’s revenue over the last 4 financial years: Customers  Total Revenue  Petronas Carigali Petrofac ExxonMobii Newfield Total
Approximate length of <: ————————————-F1fE ————————————-:> relationship 2011 2012 2013 2014 Types of services rendered (years) RM’OOO 0/0 RM’OOO 0/0 RM’OOO 0/0 RM’OOO 0/0 158,422 100.0 368,868 100.0 325,787 100.0 245,575 100.0 Offshore hook up and 17 26,678 16.84 256,015 69.41 216,237 66.37 146,662 59.72 commissioning, and production platform system maintenance and upgrading, manpower supply and minor fabrication services Manpower supply, and 8 2,575 1.63 –36,977 11.35 30,406 12.38 offshore hook up and commissioning, and production platform system maintenance and upgrading services Manpower supply services 22 35,881 22.65 47,381 12.84 24,351 7.47 -­Manpower supply services 6 6,461 4.08 1,205 0.33 1,174 0.36 25,917 10.55 71,595 45.20 304,601 82.58 278,739 85.55 202,985 82.65 121 [ Company No.: 908388-K I 6. BUSINESS OVERVIEW (Cont’dj The following factors serve to mitigate our Group’s dependency on our major customers: Petronas Carigali has been our customer for approximately 17 years, which indicates a stable business relationship. We are currently undertaking 1 contract to provide offshore hook up and commissioning, and production platform system maintenance and upgrading services for Petronas Carigali. The contract has a duration from May 2013 to May 2018. We also have 3 contracts to provide manpower supply services to Petronas Carigali, with the first contract duration from January 2013 to January 2016, the second contract duration from July 2013 to June 2015 and the third contract duration from July 2013 to June 2016.. Our contracts with Petronas Carigali provide assurance that the company will continue to be our customer for the duration of the contracts. Petronas Carigali is a subsidiary of PETRONAS, which is entrusted with developing and adding value to all the oil and gas resources in Malaysia. As such PETRONAS and its subsidiaries are principal operators in the Malaysian oil and gas industry, and will inevitably be a major source of revenue for our Group and other oil and gas supporting services providers in Malaysia. We have been dealing with Petrofac for apprOXimately 8 years, which indicates a stable business relationship with the customer. Currently, we continue to provide manpower supply services to Petrofac based on a contract which was secured in March 2009. The original validity period of the contract was up to March 2012 and since extended to October 2015. Our business relationship with ExxonMobii has been for approximately 22 years, indicating their confidence with our services provided. Revenue contribution from ExxonMobii accounted for less than 10% of our total Group’s revenue for FYE 2013. No revenue from ExxonMobii was recorded in FYE 2014 as our contract with ExxonMobii completed. Newfield has been our customer for apprOXimately 6 years, which indicates a stable business relationship with the customers. We are currently undertaking 2 contracts to proVide manpower supply services to Newfield based on a contract which was secured in May 2013 and January 2014 and is expected to end in May 2015 and January 2015 respectively. 122 I Company No.: 908388=KJ 6. BUSINESS OVERVIEW (Cont’dj On 13 November 2013, our subsidiary, Carimin Engineering had entered into the Peninsular Malaysia HUC Contract. Our management foresees that the bulk of our future revenue up to 2018 shall be derived from this contract. As such, we are dependent on this contract. The salient details of this contract are as follows: (i) The duration of the contract takes effect from 21 May 2013 and expires on 20 May 2018.
(ii) The scope of works comprises onshore preparation works, onshore pre-fabrication and yard commissioning (if any), and onshore and offshore hook up, preservation, inspection, testing, pre-commissioning and commissioning of all systems, related appurtenance and equipment of the platform. The scope of works includes all works necessary to put into initial safe operation all systems and equipment of the platform facilities. Carimin Engineering shall furnish all materials, construction tools and equipment, utilities supplies, temporary structures, consumables, labour, supervision, marine vessels, transportation and other works and services necessary except for those items explicitly stated otherwise in the contract documents to be supplied by Petronas Carigali. Carimin Engineering shall expeditiously perform and complete the offshore hook-up, inspection, testing, pre­commissioning and commissioning of the facilities in accordance with the contract documents including Petronas Carigali approved procedures and manufacturer recommended testing and commissioning procedures.

(iii) Carimin Engineering shall proVide project services the direction of Petronas Carigali for the completion of the works. The project services comprise of onshore and offshore project services namely, project execution plan, workscoping, jobcard preparation, workpack compilation, activity networking/scheduling, material take-off, material procurement, quality assurance/quality control procedures, job hazard analysis, onshore pre­fabrication, yard pre-commissioning, shiploose materials verification, onshore hook-up and commissioning, commissioning procedure/manual, handover and acceptance manual, final documentation, as-builting, project close-out report, site specific procedure for simultaneous operations, minor engineering, storage, provision of marine spread, provision of workboat spread, provision of personnel, tools and equipment, work supervision, resource planning, scheduling and control, offshore hook-up and commissioning, provision of specialist (third-party) services, material planning and control, red-line marking and topside major maintenance activities. (iv) The contract may be terminated by Petronas Carigali at any time without cause by giving 30 days prior written notice to Carimin Engineering that Petronas Carigali intends to terminate the contract, specifying the contract to be terminated and the effective date of termination.
(v) If Carimin Engineering defaults Petronas Carigali shall forthwith terminate the contract by giving 30 days written notice to Carimin Engineering specifying the contract to be terminated and the effective date of termination.
(vi) This contract is non-exclusive and Petronas Carigali reserves the right to engage other contractors to perform similar or identical scope of work and/or supply similar or identical goods at any time during the duration of this contract.

123 ICompany No.: 908388-K I 6. BUSINESS OVERVIEW (Cont’d) 6.14  MAJOR SUPPLIERS  6.14.1 Types, sources and availability of inputs  Our Group’s purchases of materials and services for FYE 2014 are as follows:  Type of materials and services  Value of pLirchases RM’OOO  010 of total Group purchases  Local 0/0  Import 0/0  Ship chartering services Sub-contracted services -Manpower supply services -Fabrication services General tools and compressed gases (1) Equipment rental (2) Welding equipment and other consumables (3) Repair and maintenance of equipment and machinery Total  71,890 66,526 66,526 -17,528 2,717 2,201 72 160,934  44.67 41.34 41.34 -10.89 1.69 1.37 0.04 100.00  100.0 100.0 100.0 -100.0 100.0 100.0 100.0 100.0  ——— Notes:  The purchase ofmaterials and services for FYE 2014 amounted to RM160.93 million.  (1) (2) (3)  Includes dust masks, chain blocks, compressed argon and oxygen gas. Includes rental ofcargo baskets, scaffolding and air compressors. Includes tungsten inert gas, welding electrodes, cables, paint, wood, gloves, flanges, valves, tape, rope, steel, gaskets and hammers.  124
ICompany No.: 908388~K I 6. BUSINESS OVERVIEW ( Cont’d’J For FYE 2014, our total purchase of materials and services amounted to RM160.93 million. All of our purchases were from local suppliers during the FYE 2014. Purchases of ship chartering services totalled RM71.89 million accounted for the largest portion of our purchases amounted to 44.67% of our total purchases for FYE 2014. Our purchases of sub-contracted services amounted to RM66.53 million during FYE 2014, which accounted for 41.34% of our total purchases was for manpower supply services. General tools and compressed gases accounted for RM17.53 million or 10.89% of total purchases forFYE 2014. The general tools and consumables that we purchased included dust masks, chain blocks, and compressed argon and oxygen gas. Equipment rental, which included the rental of cargo baskets, scaffolding and air compressors, accounted for RM2.72 million or 1.69% of our Group’s total purchases. Welding equipment and consumables, which included tungsten inert gas, welding electrodes, cables, paint, wood, gloves, flanges, valves, tape, rope, steel, gaskets and hammers, accounted for RM2.20 million or 1.37% of our total purchases for FYE 2014. Our purchases of repair and maintenance services for machinery and equipment amounted to approximately RM72,OOO during FYE 2014, which accounted for 0.04% of our total purchases. [ The rest of this page is intentionally left blank] 125
6. BUSINESS OVERVIEW (Cont’d) 6.14.2 Major suppliers Our Group’s major suppliers for each of the past 4 FYE 2.011 to 2.014 are as follows:­,—­Suppliers Total purchases Saujana Marine Sdn Bhd  Types of productslservices supplied Ship chartering service  Approximate length of relationship (years) 3  <: ———–­2011 RM’OOO 010 74,448 100.0 — -2012 RM’OOO 273,201 ————-­ 010 100.0 ——–­ 2013 RM’OOO 219,780 34,2.68 -F”E ——-­ 010 100.0 15.59 ———­ 2014 RM’OOO 160,934 11,707 ————–­ 010 100.0 7.2.7 :>  SK Offshore  Ship services  chartering  2.  – — – – – 2.2.,096  13.73  Kejuruteraan Sdn Bhd  Multitask  Fabrication services  4  10,865  14.59  8,533  3.12.  – – – – Total  10,865  14.59  8,533  3.12  34,268  15.59  33,803  21.00  “——
Saujana Marine Sdn Bhd accounted for 15.59% and 7.2.7% of our Group’s total purchases in FYE 2.013 and FYE 2.014 respectively while Kejuruteraan Multitask Sdn Bhd accounted for 14.59% of our Group’s total purchases in FYE 2.011. Saujana Marine Sdn Bhd is one of our suppliers of ship chartering services while Kejuruteraan Multitask Sdn Bhd is one of our sub-contractors for fabrication works. SK Offshore accounted for 13.73% of our Group’s total purchases in FYE 2.014. Our dependency on Saujana Marine Sdn Bhd is mitigated as we can engage the services of other ship charterers, if required. In addition, we are the owner of Carimin Airis Vessel, an AHTS vessel, and have an investment in a company, SK Offshore, which owns SK Deep Sea, an AWB. Our ability to control the vessel deployment of carimin Airis Vessel, SK Deep Sea and a proposed new purchase AWB vessel provides some mitigation against our dependency on Saujana Marine Sdn Bhd. For FYE 2.014, total charter fees paid to SK Offshore was RM2.2..1 million. As for Kejuruteraan Multitask Sdn Bhd, purchases from this sub-contractor for fabrication works did not account for more than 10.0% of our total purchases during FYE 2.012. and we did not record any purchases from this supplier during FYE 2.013 and FYE 2.014. 12.6 6. BUSINESS OVERVIEW (Cont’dj 6.15 OPERATIONAL FACILITIES Our operational facilities are located in the following locations in Malaysia: Approximate Companies within
built-up area our Group
(sq tt)Main functions Location of facilities Kuala Lumpur
B-1-4 to B-1-8 and B-7-6, C5B Corporate head Megan Avenue 1, 18,083office 189, Jalan Tun Razak Carimin Engineering 50400 Kuala Lumpur Terengganu K-11270, 2nd Floor C5B Taman Chukai Utama Branch office 1,575 24000 Kemaman Carimin Engineering
Terengganu Lot 3691, Kawasan Industri Carimin Engineering, Telok Kalong Minor fabrication 16,920Carimin Equipment 24007 Kemaman Management Terengganu Sarawak Lot 888, 2nd Floor Jalan Permaisuri Miri Waterfront C5B Branch office 1,649 98000 l\1iri 5arawak Labuan Lot 58, Block H Carimin Engineering,
Office and Rancha-Rancha Industrial Carimin EqUipment storage Warehouse Centre Management
4,222 warehouse Jalan Rancha-Rancha 87000 Labuan [ The rest of this page is intentionally left blank 1 6. BUSINESS OVERVIEW (Cont’d) 6.16 EMPLOYEES AND TRAINING
We place great emphasis on providing a conducive working environment for our employees; ensuring skills development across our Group and identifying employee performance improvement opportunities for career advancement. 6.16.1 Employees Category of employees  Length of service (years)  Number of employees  Less  More than 1  More  Total  Percentage  Number of  Number of  than 1  year but  than 5  number of  of grand  local  foreign  year  less than 5  years  employees  total (%)  employees  employees  years  Directors of CPS  – – 2  2  0.85  2  – Manaqement  1  4  5  10  4.28  10  – Professional/Executive  10  30  15  55  23.50  54  1  Clerical/Non­ 6  38  – 44  18.80  44  – Executive  General Workers  46  77  – 123  52.57  123  – TOTAL  63  149  22  234  100.00  233  1
Our Group’s employees are not represented by any union and our management enjoys a cordial relationship with our employees. We have not been engaged in any industrial disputes since our inception. We build our operational effectiveness by providing our employees training, resources and necessary equipment to enable them to deliver good performance. We provide a working environment for employees in our Group with emphasis on good moral values and ethical behaviour. Our Group places high priority on ensuring that there is continuity in our Group’s management team so as to ensure continuity and to maintain our level of competitiveness in the industry. To achieve this, it is the policy of our Group to groom new management staff to gradually assume the responsibilities of senior management and also as part of our employees’ career advancement programme. Our Group’s strategy for management continuity is driven by our top management who is responsible in identifying key competencies and requirements of candidates. [ The rest of this page is intentionally left blank] 6. BUSINESS OVERVIEW ( Cont’d) Employee segmentation by job functions Our employee segmentation by job functions as at FYE 2011, FYE 2012, FYE 2013, and FYE 2014 and LPD are as follows: Job function  Number of permanent employees  FYE 2011  FYE 2012  FYE 2013  FYE 2014  LPD  Managerial and professional  42  32  32  29  35  Technical personnel  8  8  9  5  5  -Engineers  3  3  9  5  5  -Technicians  5  5  – – – Clerical and administrative  21  30  35  20  22  Total  71  70  76  54  62
Job function  Number of contractual employees  FYE 2011  FYE 2012  FYE 2013  FYE 2014  LPD  Managerial and professional  12  25  21  30  20  Technical personnel  48  32  26  8  7  -Engineers  22  13  9  6  7  -Technicians  24  18  17  2  – -Other technical personneP)  2  1  – – – Clerical and administrative  13  14  15  11  19  Fabrication Yard Workers  23  9  7  8  9  -Skilled workers2)  11  7  7  3  3  -Semi-skilled workers3)  12  2  – 5  6  Offshore Platform Workers  249  162  135  116  117  -Skilled workers4)  50  70  76  42  41  -Semi-skilled workersS)  45  12  52  50  45  -Unskilled workers6)  154  80  7  24  31  Total  345  242  204  173  172
Notes: (1)  Comprise operation team leader andprocurement analyst.  (2)  Include quality assurance and control inspectorsl  welders and planners.  (3)  Include painters and store personnel.  (4)  Include electriciansl electrical and instrumentation technicians andsafety officers.  (5)  Include fitters and painters.  (6)  Comprise riggers and fire watchers.
6. BUSINESS OVERVIEW (Cont’d) 6.16.2 Training and development Below is a list of some programmes attended by our employees since 2011. Training dates  Training  Organiser  March 2011  Internal Audit ISO  NYB Technoloqy Resources Sdn Bhd  March 2011  Emergency Breathing System (EBS)  Construction And Industrial Safety Training Centre Sdn Bhd  March 2011  Malaysia Basic Offshore Safety & Emergency Training (M-BOSET)  Terengganu Safety Training Centre Sdn Bhd  April 2011  Huet Complete with EBS  Construction And Industrial Safety Training Centre Sdn Bhd  April 2011  Seminar’ World Day For Safety And Health At Work’  National Institute of Occupational Safety & Health  June 2011  Basic Offshore Safety Induction & Emergency Training (BOSIET) with EBS  Sequ Offshore Safety Sdn Bhd  June 2011 I  Petronas Carigali Permit To Work (PTW) Training  Construction And Industrial Safety Traininq Centre Sdn Bhd  June 2011  Petronas Carigali PTW Training  Construction And Industrial Safety Training Centre Sdn Bhd  June 2011  Petronas Carigali PTW Training  Construction And Industrial Safety Training Centre Sdn Bhd  July 2011  Professional Communication And Interpersonal Skills  Malaysian Employers Federation (MEF) Academy  August 2011  BOSIET with EBS  Segu Offshore Safety Sdn Bhd  October 2011  Forklift Safety & Material Handling Eguipment Operation Training  UMW Industries (1985) Sdn Bhd  December 2011  Safe Operating Practices for Overhead Crane  Shimba Sdn Bhd  March 2012  ISO 9001:2008 Awareness  Malaysian Employers Federation (MEF) Academy  September 2012  Hands-on Training For PETRONAS SupplY Chain Management System  PETRONAS  November 2012  Fundamentals of Oil and Gas Offshore Hook up Construction and Commissioning  Dream Catcher Consulting Sdn Bhd  March/May 2013  Primavera 6 Training  Enterprise Business Solution Sdn Bhd  March 2013  Proiect Planning and Control  Enterprise Business Solution Sdn Bhd  July 2013  Technical Report Writing  Tactics Asia  December 2013  Office Fire Fighting and Emergency First Aid Training  Jabatan Pertahanan Awam Malaysia  February 2014  Permit-to-work training  PETRONAS  March 2014  Medical training  Academy of Occupational & Medicine Environment Malaysia  April 2014  Internal Audit ISO  NYB Technology Resources Sdn Bhd  May 2014  Self-service system portal training  PETRONAS  May 2014  Fire watcher/basic rigging and slinging  Terengganu Safety Training Centre  June 2014  Hydrogen sulphide H25 safety  Segu Offshore Safety Sdn Bhd
6. BUSINESS OVERVIEW ( Cont’d’j 6.17 FUTURE PLANS AND PROSPECTS 6.17.1 Future plans Our future plans are as follows: (a) Implementation of Peninsular Malaysia HUC Contract On 13 November 2013, we secured a contract from Petronas carigali to provide offshore hook up and commissioning, production platform system maintenance and upgrading services for production platforms located offshore peninsular Malaysia. The contract’s scope of work includes the following: Infill drilling; Major facilities upgrading; Production platform modification; Host tie-in; and Pipeline replacement. The duration of contract is until 2018 and work has commenced in 2014. We will utilise internally generated funds and bank borrOWings to finance this project. (b) Purchase of vessel Our Group had entered into a Memorandum of Agreement to purchase an AWB (which is scheduled for delivery in June 2015) to support our existing business activities. The purchase of vessel will enable us to increase the level of in-house support that we are able to proVide for our offshore hook up and commissioning, and production platform system maintenance and upgrading services by transporting our manpower resources, equipment and material to our customers’ offshore work sites, and prOViding on-site accommodation. This will reduce the need to charter this type of vessels from third-parties. In addition, we will be able to prOVide marine services, including vessel chartering, to external customers. As at the LPD, the Company has paid RIVl2.48 million as deposit. The balance shall be paid via proceeds from the Listing of RM35.32 million and via bank financing of RM57.20 million. (c) Development of existing minor fabrication yard at Kawasan Industri Telok Kalong and expansion of existing equipment rental services Currently, our minor fabrication yard is located at the Kawasan Industri Telok Kalong in Kemaman, Terengganu. In November 2013, we secured a contract from Petronas Carigali for the provision of hook up and commissioning and topside major maintenance services in peninsular Malaysia. As a reSUlt, we expect that moving forward most of our operations will be concentrated in the oilfield areas offshore peninsular Malaysia, which we will support from Kemaman, Terengganu. 6. BUSINESS OVERVIEW (Cont’d) We plan to develop our fabrication yard at the Kawasan Industri Telok Kalong, Kemaman, Terengganu by constructing new facilities, including an abrasive blasting chamber, a laydown area, an open workshop and an office building. The yard development will allow the incorporation of an abrasive blasting chamber to carry out abrasive blasting, which is a technique of cleaning hard surfaces using compressed air to propel solid abrasive particles, such as sand or garnet, at high speed across the surface. Additionally there are planned purchases for new equipment and upgrades to equip this minor fabrication yard, including welding equipment and air compressors which are in conjunction with our plan to expand our existing equipment rental services. Equipment such as welding equipment and air compressors when not utilised by our Group will be rented to customers such as offshore support vessels that call on the Kemaman Marine Supply Base, Terengganu. In addition, work to expand our existing equipment rental services has commenced in 2nd quarter of 2014 with the new equipment being purchased for our minor fabrication yard at Kawasan Industri Telok Kalong, Kemaman, Terengganu. We are currently using internally generated funds and shall utilise funds from our IPO proceeds to purchase the new equipment. We expect the development of our minor fabrication yard to commence once we received funds from our IPO proceeds. (d) Provision of marine services to external customers We are the owner of Carimin Airis Vessel, an AHTS vessel, and we have a joint venture company that is the owner of SK Deep Sea, an AWB. As at LPD, these vessels were utilised to support our Group in the provision of our offshore hook up and commissioning, production platform system maintenance and upgrading services. As part of our future plans, we intend to provide marine services to external customers. The provision of marine services to external customers will allow us to diversify our business, as well as our customer and revenue base. The marine services that we provide may be based on one or a combination of the following arrangements: Time charter, where we are responsible for providing the vessel and its crew, and we operate the vessel under the charterer’s commands; and Bareboat charter, where we provide the vessel, while the charterer is responsible for proViding the crew. We intend to begin providing marine services to external customers by 2015 by utilising Carimin Airis, SK Deep Sea, and/or vessels that we purchase in the future. 6. BUSINESS OVERVIEW (Cont’d) (e) Milestones The following table indicates the timing for implementation of our future plans: Future Plans Milestone Development of existing minor fabrication yard at Kawasan Industri Telok Kalong Purchase of vessel* Provision of marine services to external customers Implementation of Peninsular Malaysia HUC Contract Expansion of existing equipment rental services YEAR  2014  2015  2016  2017  2018  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j  ..j
Note: * The delivery ofthe vessel, Carimin Acacia is schedule to be in June 2015. 6.17.2 Prospects of our Group The prospects of our Group are dependent on the following factors: Competitive advantages and key strengths; Future plans to proVide sustainable growth; and Industry outlook. (a) Competitive advantages and key strengths Our competitive advantages and key strengths will provide a platform for continuing growth and success. These include the following: Access to skilled human resources; PETRONAS licences; Long term contracts; In-house minor fabrication facilities; Track record; Ownership of a vessel and investment in a vessel owner; and In-house quality assurance. 6. BUSINESS OVERVIEW (Cont’d) (b) Future plans to provide sustainable growth We have in place a sound business and expansion plan moving forward, which are focused in the following areas: Implementation of Peninsular Malaysia HUC Contract, an offshore hook up and commissioning, and topside major maintenance services contract secured from Petronas carigali. The services are to be provided for production platforms offshore peninsular Malaysia, and the contract duration is up to 2018; Purchase of an AWB (scheduled for delivery in June 2015) to support our in­house operations, and to provide marine services to external customers. Together with our existing vessels, the new vessel will reduce the need to charter this type of vessel from third-parties, and will enable us to provide marine services to third-parties; Development of our existing minor fabrication yard in Kawasan Industri Telok Kalong, Kemaman, Terengganu and expansion of our equipment rental business,. which will allow us to diversify our customer and revenue base; and Provision of marine services to third-parties utilising our existing vessels and vessel that we purchase in the future. The provision of marine services to external customers will allow us to diversify business, as well as our customer and revenue base. Our future plans would provide us with the platform to grow and sustain our business. (c) Industry prospects and outlook The outlook of the oil and gas supporting services industry is dependent on the following factors: Performance of the oil and gas industry; Economic conditions; Development of marginal oil fields; and Market price of hydrocarbons. The performance of the oil and gas industry in recent years was as follows: Average Annual Growth Rate (“AAGR”) of Selected Oil and Gas Industry Indicators AAGR (%) Oil and Gas Fields in Operation(1) .. 8.3 PSC in Operation(1) . 7.0 Total Investment in Upstream Activities(l) .. 4.9 Average Production of Oil and Gas(1) . # Oil and Gas Reserves(2) .. 2.5
Notes: # Less than 0.1%; (1) MGR is between 31 March 2007 and 31 March 2011; (2) AAGR is between 1 January 2009 and 1 January 2013. (Source: Independent Assessment of the Oil and Gas Supporting Services Industry in Malaysia prepared by Vital Factor Consulting Sdn Bhd) 134

 

 

Comments are closed