Business Overview

4. INFORMATION ON OUR GROUP 4. INFORMATION ON OUR GROUP 4.1 BACKGROUND INFORMATION 4.1.1 Incorporation and Commencement of Business The history of our Group can be traced back to the incorporation of OeSB in 1980. The initial business activities of our company were in the trading 01 hard\vare materials and supply of manpower lor lhe offshore Oil and Gas Industry. Mr ling Suk Kiang is the founder of our Group. The history of Our Group can be Imeed back to the incorporation of DESB in 1980. Together with his partner, Encik Harry Bin Bujang, they initially ventured into the trading of hardware materials and supply of manpower for the offshore Oil and Gas Industry. In 1991. OESS obtained our lirst contract from Sarawak ShelVSabah Shell for the provision of maintenance services focusing on topside structures. As part of our Group’s development plans to extend our markel coverage, we joined the Vendor Development Programme initiated by MOF and was an approved vendor 10 PETRONAS for the proviston of offshore platform services 10 the Oil and Gas Industry in 1996. In 1997, our Group was awarded four (4) conlracts to undertake blasting and painting, and mainlenance of topside structures by PETAONAS Carigali (to define) and Sarawak $helVSabah Shelt. In the same year, our Group incorporated FTSB mainly to provide rental of equipment. In line with our Group’s emphasis on quality, DESB was accredited with MS ISO 9001:2000 on 11 June 1999. Subsequently in 2000, our Group was awarded an additional four (4) contracts to provide maintenance services to customers including PETRONAS Carigali. Sarawak Shell. Sabeh Shell and ExxonMobil. As part of our Group’s expansion plans, we incorporated DMSSB in 2003 as a supporting arm for the charter of marine vessels. In the same year, our Group commissioned the construction of our first marine vessel, “Oayang Pertarna” with the capacity to accommodate 189 persons. On September 2005, we obtained the domestic shipping licence from the domestic shipping licensing board for “Dayang Pertama” to provide workboat and floating accommodation services. In the same year, our Group was awarded a five (S)·year contract with PETRONAS Carigali for the maintenance of topside structures. At the end of 2005, our Group commissioned the construction of our second vessel namely “Oayang Barlian-with the capacity to accommodate 189 persons. Subsequently in February 2007, “Dayang Berlian” commenced operations. In 2006, our Group secured a two (2)·year contract Irom Murphy Sabah Oil Co lid to undertake offshore technical support services for the Kikeh Oevelopment Project. This is where our Group extended the provision of offshore maintenance services to deepwaler platfOfms, which further marks a major milestone for our Group. Also in 2006, as part of our Group’s strategy to streng1hen our in·house support facilities, we acquired a supply boat namely “Oayang Maiu·. The supply boat is chartered 10 customers for marine transportation services. In 2007, our Group secured a three (3)·year contract (with option for two (2) years extension) from Sarawak Shelt/Sabeh Shell 10 undertake “Offshore Topside Maintenance Services and Related Installation Services”. In August 2007, Naim entered into a strategic partnership with our Group through the acquisition of 45% equity interest in OESS, OMSSB and FTSB from their respective shareholders. Nairn is a pUblic company listed on the Main Board of Bursa Securities and is a major property developer and contractor in Sarawek. 4. INFORMATION ON OUR GROUP (Cont’d) At the end of 2007, our Group secured a letter of award for the “Provision of Hook-up and Commissioning of PETRONAS Carigali Sdn Bhd Facilities”, which expires in 2010. Since the commencement 01 our Group’s operations in 1980. we have established ourselves as a majO/’ provider of offshore platform services within the Oil and Gas Industry with revenue of apprOldmately RM127.1 million for the FYE 30 September 2007. To-date, we have completed various contracts for the provision of offshore topside maintenance services totalling approximately RM934 million. At present, our on-going contracts have an estimated contract value worth approximately RM627 million and we have also tendered for various contracts amounting 10 approximately RM595 million. 4.1.2 Group Structure Our corporate structure is as follows:­DEHB
FTSB 100%
Our subsidiaries and their respective principal activities are as follows:­i , I Effective!, i EquitY , Date and Place 01 Interest!Issued and:r:~cf.l : Cornoratlon Incoroorallon UD Share Ca tal 1%\ PrinclnaJ Activities DESB 20 August 1980 AM2,600,OOO 100.00 Provision 01 oUshorei Malaysia topside mainlemmt:8 I services, minor fabrication works and offshore hook­, I up and commissioning I 1 FTSB 3 December 1997 AM20,OOO 100.00 IProvision of renlal I Malaysia I equipment18 November 2003 AMI 1.000,000DMSSB 100.00 ICharter of marine vessels Malaysia I
[THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 4, INFORMATION ON OUR GROUP (Conl’d) 4.1.3 Share Capital and Changes in Share Capital Our present authorised share capital is RMSOO.OOO.OOO comprising 1,000,000,000 Shares, of which AM 133,063,000 comprising 266,126.000 Shares have been issued and lully paid-up. Details of the changes in our issued and paid-up share capital since incorporation are as follows:­Cumulative Issued and Date of No. 01 Shares P~id·up Allotment Allotted Par Value Consideration Share Capital (RM) 10 Oclober 2 0,50 Subscribers’ shares 200. 29 February 245,825,998 0.50 Issued pursuant to the 2008 Acquisitions 29 February 20,300,000 0.50 Issued pursuanl 10 the 2008 Righls Issue (RM) 122,913,000 133,063.000 As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital of DEHS. 4.1.4 Listing Scheme In conjunction with, and as an integral part of the listing of and quotation for our entire issued and paid-up share capital on the Main Board of Bursa Securities, we undertook a listing scheme, whk:h involves the following exercises:­4.1.4.1 Acquisitions (a) Acquisition of DESB Pursuant to the Conditional Share Sale Agreement dated 28 December 2007 (“CSSA 1M), we acquired the entire issued and fully paid-up share capital of DESS, comprising 2,600,000 ordinary shares of AM1.00 each in DESS for a purchase consideration of RM62.503,443 which was wholly satisfied by the issuance of 125,006,621 new DEHB Shares to the respective vendors of DESS at an issue price of approximately RMO.50 per DEHS Share, in the following manner:­, Na~~ of VlDdora: 11  ..  Shantholdin s in OESB NO. of ordinary . i’: shares Of RM1:,OO ‘Nch %  No. OfOEHB Sharea las”,ed : as i::onaiderat~  Nairn VESB Tengku Yusol Bin Tengku Ahmad Shahruddin Ling Suk Kiang  1,170,000 563,412 520,000 346.588  45.0 21.7 20.0 13.3  56.252,980 27,088,550 25.001,324 16,663,767  Total  2,600,000  100.0  125,006.621
4, INFORMATION ON OUR GROUP (Conl’d) The purchase consideration of AM62,503,443 for the Acquisition of DESS was arrived at on a willing-buyer wiling-seller basis based on the audited NTA of the DESS as a1 30 September 2007 of RM66.503,443 and after deducting a net dividend of RM4,OOO,OOO declared in respect of the FYE 30 September 2007 and paid on 31 October 2007. (b) Acquisition of DMSSB Pursuant to the Condi1ional Share Sale Agreement daled 28 December 2007 (“CSSA 2”), we acquired the entire issued and fully paid-up ordinary share capital 01 DMSSB, comprising 11,000,000 ordinary shares of RM1.00 each in DMSSB, for a purchase consideration of RM55,871,S79 which was wholly satisfied by the issuance of 111,742,922 new DEHB Shares 10 the respective vendors of DMSSB at an issue price of approximately RMO.50 per DEHB Share. in the following manner:­Name of vendors  SharehQIdin • in DMSSB No. of ordinary 1 shares of ‘ AM1.DO each I %  No.otDEHB Shares luued.s consideration  Nairn  4.950,000 45.0  50,264,315  VESB  2,363.700 21.7  24.214,691  Tengku Yusof Bin Tengku  2,200,000 20.0  22,348,584  Ahmad Shahruddin   Ling Suk Kiong  1,466,300 ~ 13.3  14,895,332  Total  11,000,000 I 100.0  111,742,922
The purchase consideration of AM55.871,579 for the Acquisition of DMSSB was arrived at on a willing-buyer wiling-seller basis based on the audited NTA of DMSSB as at 30 September 2007 of RM30,818,443 and taking into consideration a net revalualion surplus on the three (3) marine vessels of DMSSB of RM25,053,136 computed as follows;­RM Open market value of Ihree (3) matine vessels  115,300,000  Less:  Nel book value as al 30 September 2007  190,246,864)  Revaluation surplus  25,053,136
The market value of lhe lhree (3) marine vessels were appraised by Knight Frank (Ooi & zaharin Sdn Bhd), an independent firm of valuers, Details of the valuation are set out in the Valuation Certificate in Section 13. (THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 4. INFORMATION ON OUR GROUP (Coot’d) (c) Acquisition of FTSB Pursuant to the Conditional Share Sale Agreement daled 28 December 2007 (“CSSA 3”). we acquired the entire issued and fully paid-up share capital of FTSB, comprising 20,000 ordinary shares of AM1.00 each in FTSB. for a purchase consideration of RM4,538,237, which was wholly satisfied by the issuance of 9.076,455 new DEHB Shares to the respective vendors of FTSB at an issue price of approximately RMO.50 per DEHB Share. in 1he following manner;. ,Name of vendors  ,  Shlreholdin • in “S8 No. of ordinary, ,,$hll~O!’ RM1.DOeach %  No. of DEHB Shares issued as conalderation  Nairn  9.000  45.0  4.084,405  VESB  6,074  30.4  2,756,519  Tengku Yusof Bin Tengku Ahmad Shahruddln  3,280  16.4  1,488,539  ling Suk Kloog Tolal  1.646 8.2 20,000 I 100.0  746,992 9,076,455
The purchase consideration of RM4,538,237 for the Acquisition of FTSB was arrived at on a willing-buyer wiling-seiler basis based on the audited NTA of the FTSB as at 30 September 2007 of RM4,53B,237. The issued and pald-up share capital of DESS. DMSSB and FTSB were acquired free from all liens. charges, equities and encumbrances together with all rights, interests, dividends, bonuses. advantages and accretions attaching thereto and all other entitlements due. The Acquisitions were completed on 29 February 2008. The completion of the Acquisitions increased our issued and paid-up share capital from AM1 comprising 2 DEHB Shares to AM122,913,OOO comprising 245,826.000 DEHB Shares. The shareholdings of the vendors of DESB, DMSSB and FTSB in our Company upon completion of the Acquisitions are as follow;­,., ..’ ,. Nairn VESB Tengku Yusof Bin Tengku Ahmad Shahruddin ling Sok Kiong Total DEHB Shares luuecl’for DES. 56,252,980 27.088,550 25,001,324 16,663.767 125,006,621 DMSSB ” 50,284,315 24,214,691 22,348.584 14.895,332 111,742,922 eltlon of F.TSB I 4,084,405 2,756,519 1,488,539 746,992 9,076,455
, .. “; ,: Total 110,621,700 54,059,760 48,838,447 32,306,091 245,825,998 [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 4, INFORMATiON ON OUR GROUP (Cont’d) 4.1.4.2 Rights Issue Upon completion of the Acquisilions. we implemented a renounceable rights issue of 20.300,000 new DEHB Shares at an issue price of RM1.00 per Shares on the basis of approximately 0.083 new DEHB Share for every one (1) existing DEHB Share held after the Acquisitions. Under the Rights Issue, VESB, Tengku Yusol Bin Tengku Ahmad Shahruddin and ling Suk Kiang partially renounced their portion of rights of allotment under the Right Issue in favour of our certain key management personnel as follow:­Nairn  OrigInal .Enttttement 9,135,000 I  RenounCed  Total Entitlement 9,135,000
IVEsa 4,464,187 (3,464.187) 1,000,000 Tengku Yusol Bin Tengku 4,033,017 I (723,017) 3,310,000 Ahmad Shahruddin Ling Suk Kiang  2,667,796 I,  (357,796) I  2,310,000  Key management  4.545.000  4,545,000  20,300,000 I  20,300,000
The Rights Issue was completed on 29 February 2008, 4.1,4.3 Public Issue The Public Issue of 85,874,000 Shares at an issue price of RM1.45 per Share are payable in full on applicaUon upon such terms and conditions as set out in this Prospectus and will be allocated and allotted in the following manner:· (a) Malaysian Public via balloting 17,600,000 Shares, represen1ing 5.00010 of our enlarged issued and paid-up share capital, 10 be allocated via balloting. will be made available for applicalion by the Malaysian Public, of which at least 30% will be set aside for Bumiputera individuals, companies, societies, co-operatives and lnstitutions; (b) Selected investors via placement 59,774,000 Shares, representing approximately 16.98% of our enlarged issued and paid-up share capital, by way of private placement to selected investors: and (e) Eligible Directors, Employees and Business Associates of our Group 8,500,000 Shares, representing 2.41% of our enlarged issued and paid·up share capital, will be made available for application by our eligible Directors, employees and business associates. Details of the Pink Form Shares Allocation are set out in Section 2.3.3. 4. INFORMATION ON OUR GROUP (Cont’d) Any IPO Shares not subscribed for under paragraph (c) above will be first re-offered to the remaining eligible Directors, employees and business associates of our Group. Subsequently, any of the re-offered Shares not taken up will be made available for application by the Malaysian Public and/or selected investors via private placement. Any further IPa Shares not subscribed for will then be subscribed by our Sole Underwriter based on the terms of the Underwriting Agreement. There is no minimum subscription amount to be raised from the IPO as the IPa Shares in paragraph (a) and (c) above are fully underwritten. The IPO Shares available for private placement to selected investors in paragraph (b) above are not underwritten as our Sole Placement Agent has received irrevocable undertakings from selected investors to take up the IPO Shares available for their application. 4.1.5 Location of Business Our Group’s operational and administrative facilities are located as follows: a ..~•r.··.•.•..••··.il•..•.••l·l·.t..•••y.,·~·….•..•.,•…..•.•…•,.’.•.,.•..,•••.•.•••.•••••••.•••••••; .••••••.•••••;.•••..•.•. ·.:.~;.· ••.·•••·.I; ………….;.·.~i •……..•APP..•..•………•.•….•…••.•…•.~·….·.•…•…•..•…~”.·..l·r..•..~…•e•..•.~.f•……•…..•… .•..J.•…e…•…•..•…·••….•…•…•..•….•..•…•.••..•.,·.•.·.:,••.•••.,••.L.!.·.,.··.•••.·i..•~t•.r.··l·.t.•·.,·…t..,··.,.•..·,.”.·••.·I,.··.·.,….,..••••..•(l••l’.••.••…,•.•.,’,.•.”•…•”….,……•..>•..,•••.•.”.•..;•.•.••.•~•.••••••••••:.·•••’··.·.·.: •••i
op~~ti86$dtSat($t6Up/.i ~” L.””,,, f”””r _ (square feet) Head-office, management, sales 3,150 Lot 868, 1st and 2rd Floor, Jalan and marketing, engineering Permaisuri, 98000 Miri, Sarawak works Engineering office 10,338 Lot 1122, 1124-1126, Block 9, Jalan Merpati, 98008, Miri, Sarawak Open yard fabrication facilities 126,909 Lot No. CL2053118752, Kg Ranca­with covered workshop and Ranca, District of Labuan, 87000 warehouse Labuan Federal Territory Administrative office 1,934 Level 2, 1st Floor, East Wing, Wisma 2020, 18 Lorang Belia Karamunsing, 88100 Kota Kinabalu, Sabah Marine office 10,131 Sublot 2429, Jalan Cattleya 2, Piasau Industrial Estate, 98000 Miri, Sarawak Branch office 1,700 The Taipan, No.6, 3-02, Jalan P. Ram lee 50350 Kuala Lumpur Presently, the abovementioned offices and workshops are rented. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLV] 4. INFORMATION ON OUR GROUP (Conl’d) 4.2 OUR BUSINESS 4.2.1 Business Activities and Business Model Business Model Our Group’s business model is depicted in the ligure below:­Bu$1nM.~ Focus  Sustainil/lle hIls;ness thul crUltl$ high wluo services
Cont Opmalion!!  Key COOlpeteocles to Mlldmose re’lO!nue and pn;>tit:>
,.. OIfshore Platform Services t ,.. ,,/IIII OJfSh<)(fl ” /( ~'” ” eMIler of 1(Tgpside “,~ Hook-upandMalnleMnCI MatH'” VIIS5lllS fatlriealion Commissioning “” Services / / T T
PETFIONAS ApptQYe<l Licences
I I

Our Group’s business model comprises three (3) components: .:.  Business Focus  .:.  Core Operations  .:.  Business Platform
BUSINESS FOCUS Our Group’s overall business focus strategy is 10 provide offshore platform services to the upstream sector of the Oil and Gas Industry to serve as our main business and revenue stream. Our Group’s focus is on offshore platforms. together with a very small number of offshore structures like SSM systems and FPSO facility. The upstream sector of the Oil and Gas Industry is focused on finding and extracting hydrocarbons, and then transporting them to various destinations for further downstream refining and processing. Our Group’s strategy of targeting the upstream sector of the Oil and Gas Industry is to provide offshore platform services including the provision of offshore topside maintenance services, charter of marine vessels, minor fabrication and offshore hook-Up and commissioning. The slgnlficant opportunities within the upstream sector of the Oil and Gas Industry in Malaysia can be demonstrated as fo[[ows:­.:. Malaysia’s spending for the upstream Oil and Gas sector, which includes exploration, development and production activities amounted to RM19.2 billion for the FYE 31 March 2007. (Source: Independent Assessment of the Offshore SUpporling Services for the Oil and Gas Industry. focusing on Offshore Topside Maintenance, Vital Factor Consuning Sdn 8hdJ To address opportunities from the large expenditure on upstream Oil and Gas sector, aUf Group provides offshore platform services for this sector of the Oil and Gas Industry in Malaysia. 4. INFORMATION ON OUR GROUP (Cont’d) .:. In 2006. Malaysia exported RM32.6 billion of crude petroleum and RM23.3 billion 01 natural gas. (Source: fndependent Assessment of the Offshore Supporting Services for the Oil and Gas fndustry, focusing on Offshore Topside Maintenance, Vital Factor Consulting Sdn Bhd) .:. According to the Ninth Malaysia Plan, during the period 2006 to 2010, RM43.8 billion has been allocated lor the development of upstream and downstream segments of the Oil and Gas Industry. Ollhis. RM13.1 billion has been allocated for upstream activities and RM30.7 billion for downstream activities. {Source: Independent Assessment of the Offshore Supporting Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vital Factor Consulting $dn Bhd} .;. Based on the latest announcement from PETAONAS on 28 June 2007, a lotal of 85 fields were in operation, of which 59 were Oil fields while the remainder 26 were Gas fields for the FYE 31 March 2007 {Source: Independent Assessment o( the Offshore Supporting Services (or the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vital Factor Consulting Scin Bhd) ‘,’ The high levels 01 activities in the upstream sector of the Oil and Gas Industry in Malaysia would provide significant business and growth opportunities for our Group. •:. Our Group currently provides Offshore Topside Maintenance Services for 309 offshore struclureslplatlorms, four (4) S8M syslems, and one (1) FPSO facility in Sabah and Sarawak waters. CORE QPERATIONS Our Group’s core operations strategy focuses on providing offshore platform services to upstream sector of the Oil and Gas Industry, including:­.:. Offshore topside maintenance services; .:. Charter of marine vessels; .:. Minor fabrication: and
…. Offshore hook-up and commissioning. The range of offshore platform services provided by our Group is essential in ensuring the uninterrupted flow of hydrocarbon being extracted from below the surface. In the current high Oil and Gas prices, any production stoppages would resuft in significant amount of foregone revenue. (a) Offshore Topside Maintenance Services One of our Group’s core operations is in the provision of offshore topside maintenance services. Since the commencement of provision of offshore topside maintenance services in 1991, our Group has buill our reputalion to become an established operator in this sector in Malaysia. Our Group’s reputation and strengths can be substantiated by the fact that we currently provide offshore topside maintenance services to 309 offshore platforms and structures. This makes us one of the major topside maintenance service providers of offshore platforms and structures. 4. INFORMATION ON OUR GROUP (Conl’d) Provision of offshore topside maintenance services covers all the steel structures sitting on lOp of the jacket. which includes deck structures like main deck, helideck and cellar deck, plus all the valves and piping, skids and modules, electrical and instrumentation, and other sub-structures. Our Group provides a range of maintenance services including inspection, repair, replacement, installation, modification, surface preparation and painting. and upgrading and refurbishment. In addition, we are also involved in technical support services comprising structural reassessment, preparation of maintenance manuals, and advise on the maintenance systems to optimise offshore maintenance activities. (b) Charter ofMarine Vessels Our Group is also involved in the charter of marine vessels to support our offshore topside maintenance services. Our Group currently has three (3) marine vessels including:­.;. Two (2) workboats, which is owned by our Group. Each has the capacity to accommodate 189 persons; .;. One (1) supply boat with capacity of approximately 490 tonnes. Our Group primarily charters our marine vessels, which provides transportation, accommodation, supply and limited work space, to support our offshore topside maintenance operations. The charter of marine vessels enables our Group to earn incremental profits, which would otherwise go to third party owners. By providing a total solution incorporating topside maintenance services and charter of marine vessels. we have an advantage over other service providers without their own marine vessels. (c) Minor Fabrication Our Group’s minor fabrication work supports our topside maintenance services. We have a fabrication yard with full in-house equipment and tools to undertake minor fabrication work, which enables our Group to provide prompt and consistent product qualily and services. Our Group also undertakes minor fabrication works tor other customers. (d) Offshore Hoole-up and Commissioning Our Group’s core operations also extend to the provision of offshore hook-up and commissioning services. This involves the interconnection and interfacing of systems such as structures, modules and equipment, and commissioning of these systems including inspeclion and lesting, and ensuring all the systems are operating effectively, efficiently and safely on the platform. Hook-up and commissioning services are considered critical as without these services, a platform cannot be put together or be functional. Our Group has recently won a major contract for hook-up and commissioning. which will see this segment of the business grow very quickly. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 4. INFORMATION ON OUR GROUP (Conl’d) BUSINESS PLATFORM To provide a sustainable business platform, our Group focuses on the following critical success factors:­.:. A major provider of offshore topside maintenance services .:. PETRONAS approved licences .:. In-house expertise and facilities as barriers to entry .:. Economies of scale .:. Long tenn contracts. (a) A Major Provider of Offshore Topside Maintenance Services Our Group is a major provider of oUshore platform services in Malaysia. As at LPD, OUf Group is contracted to provide Offshore Topside Maintenance Services to 309 offshore structures/platforms, four (4) S8M systems and one (1) FPSO facility. Being a major provider in Malaysia allows our Group to have a strong hold on the market for offshore topside maintenance services. This will ensure business sustainability for our Group as well as providing us with the financial resources to expand our business. (b) PETRONAS Approved Licences To participate in the Oil and Gas Industry in Malaysia, it is mandatory that appropriate licences be obtained from PETRONAS. Our Group has obtained various licences issued by PETRONAS to provide a range of offshore topside maintenance services. As this is a critical factor lor sustainability of our business, we are constantly ensuring that we meet the requirements of the licences as well as obtained new licences to provide new products and services within the Oil and Gas Industry in Malaysia. PETRONAS approved licences also serve as a high barrier 10 entry that helps mitigate against competitive intensity within the Oil and Gas Industry in Malaysia. (c) In-house Expertise and Facilities as Barriers to Entry
Our Group has a pool of 85 technical personnel including multi-disciplined engineers, technicians, draughtsmen, material planners, ONOe and HSE personnel. These skilled personnel cover mechanical, instrumentation, electrical, structural, piping and corrosion prevention functions. Our Group owns three (3) marine vessels Including two (2) wOrkboats to provide accommodation and workspace, and one (1) supply boat to provide transportation to support our offshore topside maintenance services. Our Group also has a fabrication yard and covered workshop with the full in­house equipment and lools to undertake minor fabrication and onshore preparation work. These in-house expertise and facilities will form barriers to entry for new entrants.
(d) Economies 01 Scale

Our Group enjoys significant economies of scale, which makes us cost competitive to win contracts, and at the same time maintain a high profit margin. Our Group’s economies 01 scale is achieved through the following means:­.:. Providing a range of offshore platform services incorporating offshOre topside maintenance services, charter of marine vessels, minor fabrication and offshore hook-Up and commissioning services. 4. INFORMATION ON OUR GROUP (Cont’d) .:. Contracted to service a large number of offshore platforms. As at 30 November 2007. our Group provides offshore topside maintenance services 10 309 offshore structuresiplattollTls, lour (4) SSM systems and one (1) FPSO facility. Servicing a large number of offshore platforms provide our Group with significant economies of scale particularly in the following areas:­.:. optimum deployment 01 machinery, equipment. supply boat, and worl<.boat with floating accommcxlation to maximise asset utilisation: .:. increased purchasing power thus reducing cost of raw materials and consumables; and .:. defraying fixed-eosts over a larger number of projects. (e) Long Term Contracts One of OUf Group’s key strengths is continuing to secure long-term contracts. Our Group has currently secured three (3) long-term contracts from PSC operators in Malaysia for the provision of offshore topside maintenance services. In addition, on 5 November 2007, our Group secured a letter of award for ‘Provision of Hook-up and Commissioning of PETAONAS Carigali Sdn Bhd Facilities’. Long-term contracts enable our Group the ability 10 operate our business activities at the most eUicient level and provide Ihe platform 10 sustain and grow the business. BUSINESS OVERVIEW The currenl business activities of our Group are depicted below: Business ActiVities of DEHB Grwp T II II
Offshore Topslda MalnleMnce Services  ,,,,,,,,. SlIuc;lurws  PIping and Valves  ElllClrk:al and In!>lfUmentalion
CharleroI Malino Vessels  W””””‘,  “”””””‘,
,,~ Fabrication  Piping Systems  Skids  -~..$tn.N;lufu
o.”,,~ Commssionlng-.”..'”
~.. Strvelures Eleclrlcal, MechaniC an(! IJlSlrumentatlon 4. INFORMATION ON OUR GROUP (Cont’d) The business activities of our Group is in the provision of offshore platform services for the Oil and Gas Industry, incorporating the following:­.:. Provision of offshore topside maintenance services: .;. Charter of marine vessels; .:. Minor fabrication; .:- Provision of offshore hook-up and commissioning. Our Group’s business activities are supported by in-house capabilities and facilities incorporating the rollowing:­(0 Extensive in-house supporting facilities including a fabrication yard located in Labuan with covered workshop, blasting and painting areas, two (2) workboats and one (‘) supply boat, and relevant equipment and tools; and .:. Experienced, skilled and multi-disciplined engineers and technical personnel, covering mechanical, structural, electrical and instrumentation for the Oil and Gas Industry. Our Group has the in-house capabilities to carry out a wide range 01 onshore preparation work to support our Group’s core business of providing offshore topside maintenance services. Some of lhese onshore supporting activities undertaken by our Group include preparation works, management of mechanical completion, pre­fabrication, pre-eommissioning, hook-Up, inspection and tes1ing. Undertaking as much of the work onshore as possible is crucial to ensure cost effectiveness, efficient workflow. prompt delivery and higher product and selVice quality. This is because work space and equipment is limited in offshore platforms or workboats, and offshore personnel wages are also much higher compared to onshore personneL In addition, our Group is able to increase our profit margin as many of the key functions and activities are undertaken in-house and not outsourced to third parties. The breakdown of our Group’s revenue by business activities for the FYE 30 September 2007 were as follows:­Revenue for the FYE 30.09.2007 Business Activities  RM’OOO  %  Offshore Topside Maintenance Services  66,262  ” 52.1  -Topside Structures’  44,843  35.3  -Piping and Valves’  17,912  14.1
-Elcctnca/and Instrumentation# 3,507 2.• Char1er of Marine Vessels 48,954 38.5 Minor Fabrication 9,269 7.3 Offshore Hook-up and Commissioning 2,649 2.1 100.0TOTAl., 127~134 [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY) 4. INFORMATION ON OUR GROUP (Conl’d) Noles:­For the FYE 30 September 2007, revenuo of our Group amount9d to RM127.134 million, excluding inter..company transactions The above percentage segmentation is based on management estimates, as all the walks undertaken, with the exception of minor fabrication, is part of the overall contract. Tolal does not add-up due to rounding For the FYE 30 September 2007, the provision of offshore topside maintenance services represented the highest revenue contribution among our Group’s four (4) core areas, amounting to 52.1% of our Group’s total revenue. Some of the activities undertaken for the provision of offshore topside maintenance services include repairing, replacement and installation, modification, surface preparation and painting, and upgrading and refurbishment of facilities on the Oil and Gas platforms and structures such as topside structures. piping and valves and electrical and instrumentation. The charter of marine vessels accounted lor 38.5% of our Group’s total revenue lor the FYE 30 September 2007. The charter of marine vessels includes workboats and supply boat. (. Workboat is essentially to provide accommodation and catering lor our Group’s workers while they are working on offshore platlorms. It also includes limited workspace and facilities like crane and olher equipment 10 facilitate minor fabricalion, repair and preparatory work. Workboat is moored near platforms that are being serviced to provide faster access. •:. Supply boat is for the transportation of personnel and supplies. Supplies include food for offshore personnel, as well as materials and consumables for offshore maintenance work. For the FYE 30 September 2007, minor fabrication and hook-up and commissioning accounted fot 7.3% and 2.1% of our Group’s total revenue respectively. Minor fabrication involves onshore fabrication of piping systems, skids and other steel structures. Our Group also provides offshore hook·up and commissioning services for electrical and instrumentation, and steel structures. 4.2.2 Competitive Strengths The competitive advantages of our Group include the following: (a) PETRONAS Approved Licence and Registrations To par1icipale in the Oil and Gas Industry in Malaysia, it is mandatory that appropriate licences be obtained from PETRONAS. Our Group has obtained licences issued by PETRONAS that enables us 10 provide offshore platlorm services for the Oil and Gas Industry, primarily in Ihe proviSion 01 oNshore topside maintenance services, charter of marine vessels. minor fabrication, and provision of offshore hook-up and commissioning services. As this is a critical lactor for the sustainability of our business, our Group is constantly ensuring that we meet the requirements of the licences as well as obtained new licences to provide new products and services within the Oil and Gas Industry in Malaysia. This is a key advantage as licensing by PETRONAS creates a barrier to entry for new operators. We are also registered as a contractor with the MOF. This allows us to tender for contracts issued by the Malaysian Government. 4. INFORMATION ON OUR GROUP (Cont’d) (b) Established Track Record With approximately twenty-seven (27) years of experience in the Oil and Gas Industry, our Group has successfully established a track record associated with quality, reliability. technical expertise. as well as service excellence. As such, our Group can use our track record as a reference to win new customers. Track record is particularly important in the Oil and Gas Industry as the industry commonly deals in very large contract amount attracting the best providers globally. As such, track record is key in winning any contracts within the Oil and Gas Industry (c) Experienced in Supporting Diverse Types of Offshore Structures Our Group provides offshore platform services incorporating offshore topside maintenance services for a diversity of exploration and production platforms and other offshore structures including the following:­-:-Drilling platforms .:. Production platforms .:. Mini-Production stations -:~ Riser platforms -> Vent and flare platforms .:. Gas compression stations .:. Living quarters .:. S6M systems.
In addition, our Group also services FPSO facilities. Our Group’s wide experience profile would provide us with a distinct competitive advantage. as we would have the track record to support our bid for most types of offshore structures. (d) Economies ofScale Our Group enjoys significant economies of scale, which serves as a competitive advantage when bidding for new contracts, and at the same time maintain a high margin. Our Group’s economies of scale is achieved through the following means:­.:. Providing a range of offshore platform services incorporating offshore topside maintenance services, charter of marine vessels, minor fabrication and offshore hook-Up and commissioning services. -:-Contracted to service a large number of offshore platforms. As at LPD, our Group provides offshore topside maintenance services to 309 offshore structures/platforms, four (4) S8M systems and one (1) FPSO facility. The large number of offshore structures/platforms provide our Group with significant economics of scale particularly in the following areas:­o optimum deployment of machinery, equipment, workboat and floating accommodation to increase effective asset utilisation; o increased purchasing power thus reducing cost of raw materials and consumables: and a defraying fixed costs over a larger number of projects. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] -46 ­4. INFORMATION ON OUR GROUP (Cont’d) (e) Comprehensive In-house Skills and Expertise Our Group provides an extensive range of services under offshore platform services. In addition, we also provide many complementary services to the same group of euslomers. In most situations, especially for all the key areas of products and services, our Group has the full in-house expertise and skills to maintain most types of offshore structures and platforms and thus, we do not rely on outsourcers or third partyexpenise. This is important as our Group is able 10 control quality and promptness of delivery of products and services. In contrast, a product and service provider thai sub-eontracts most 01 its responsibilities would face difficulties in maintaining high standards of quality and sufficient profit margin to be sustainable. (f) High Standards of Quality Our Group places significant emphasis on quality and this is reflected in our accreditation of MS ISO 9001 :2000 in Quality Management System. Stringent quality controls are implemented in each process of the operations to ensure that the final results meet the standards and specifications of customers. In addition, our Group has maintained an excellenl HSE record. Since 2004, our Group has recorded approximately 8 million man-hours with zero loss time injury for our offshore operations. In 2007, we were awarded “PETRONAS Cangali HSE Awards 2006/2007. These are achievements for our Group, which is committed to good safety practices. Service quality is a significant competitive advantage that will create customer loyalty through customer satisfaction and ensure continuing business patronage. (g) Own Marine Vessels Our Group has our own marine vessels to provide offshore accommodation for our own personnel as well as work area and equipment to facilitate offshore operations including offshore topside maintenance services and hook·up and commissioning. Currently, our Group has two (2) workboats, each capable of accommodaling 189 personnel and one (1) supply boat to provide marine transportation services. Some of the facilities provided by our Group includes sleeping quarters and recreation areas, catering including food and beverages. laundry services, fuel supply, safety and utility equipment, deck space for construclion and fabrication activities, and also a 15-tonne crane. (h) Full Range of Equipment and Tools In-House Our Group also has an open fabrication yard, a covered workshop with the full range of in-house equipment and tools. This has enabled us to provide prompt service with the assurance of product and service quality, and the abmty to undertake high volume work. This gives our Group a competitive edge over other operators that are relying on the rental of equipment and tools, or oulsource work in areas where they do not have the necessary range of equipment and tools. In this respect, our Group has made significant investments in equipment and tools used for painting and blasting, welding, floating accommodation, cranes and others. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLYj 4. INFORMATION ON OUR GROUP (Conl’d) 4.2.3 Types of Products and Services Our Group is a provider of offshore platform services for the upstream sector of the Oil and Gas Industry in Malaysia. The core business activities of our Group are:­.:. Provision 01 offshore topside maintenance services; -:. Minor fabrication: .:. Provision of offshore hook-up and commissioning services; and .:–Charter of marine vessels. (a) Provision ofOffshore Topside Maintenance Services The provision of offshore topside maintenance services is a core compelency of our Group. The overall offshore topside maintenance services is undertaken by OESS. For the FYE 30 September 2007, the provision of offshore topside maintenance services represented 52.1 % of our Group’s total revenue, whk:h amounted to RM66.3 million. Offshore topside maintenance services commonly refers to maintenance, repair and modification work done on platforms including minor facilities upgrade, procurement of materials, assembly and fabrication, removal and instaUation, inspec1ion, blasting and painting, and lesting of various sys1ems to meet optimal operational, production and safety requirements. As at LPD our Group provides offshore topside maintenance services 10 309 platforms/offshore structures and four (4) S6M systems located in Sebah and Sarawak waters. This is further segmented into the followlng:­
PETRONAS Carigali 136 2 Sarawak Shell 170 2 Murphy Sabah Oil Co Ltd 3 TOTAL 309 4 Our Group provides offshore topside maintenance services on the above platforms/offshore structures and S8M systems on a rotational basis. Generally, the oUshore structures serviced by our Group comprise a range of facilities Including:­.:.  Drilling platforms;  .:.  Production platforms;  .:.  Mini-production stations;  .:.  Riser platforms;  .:.  Vent and flare platforms;  ~.  Gas compression stations;  .:.  Living quarters; and  .:.  S8M systems.
4. INFORMATION ON OUR GROUP (Cont’d) Within the provision of offshore topside maintenance services, our Group primarily focuses on the following areas:· .:. Topside structures including substructures on main deck, helideck and cellar deck; .:. Pipes and valves; and .:. Electrical and instrumentations.
Our Group services substructures and components of the following types of modules and systems on the topside, which includes, among others, the following:­.:. Wellhead module: .:. Skidding module: .:. Derrick; .:. Production module: -,’- Utilities modules; .:. Living quarters; .:. Ductwork: .:. Mobile support frame: ” Flareboom; and .:. Helideck.
The provision of offshore topside maintenance services undertaken by our Group can be categorised as follows:­.;. Routine or Scheduled Maintenance. whereby mainlenance is carried oul on a scheduled basis; and .:. Breakdown or Emergency Maintenance, whereby maintenance is undertaken when there is a fault or failure, and has to be repaired and restored promptly. In some situations. there is a requirement for immediate response upon detection for reasons of safety. Our Group has in-house expertise and capabilities. including skills and experienced technical personnel and engineers, to carry out a wide range of offshore topside maintenance services as follows:­.:-Overall project management, prevenlive maintenance management, maintenance work instruction and material management; .:. Structural reassessment including engineering and design, preparation of maintenance manuals, scooping of work for maintenance, shutdown, non­shutdown, blasting and painting, assessment of missing, bent or damaged members. advice on the maintenance systems to rationalise and optimise the offshore maintenance activities; .:. Onshore fabrication facilities to undertake modification and fabrication fittings, welding of piping, structural beams and steel plates, and other support steel structures; .:. Replacement of corroded or faulty structures. handrails, gratings and piping spools, and removal. installation. repairing and modification of component parts of structures, piping and other related systems and equipment. and inspection and lesting of piping systems; -:. Rigging, scaffolding and work site preparation 10 lacilitate inspection. maintenance. new installation and modification works; 4. INFORMATION ON OUR GROUP (Cont’d) .:. Surtace preparation, cleaning and painting of structures, piping and related system and equipment:­o Surface preparation including pre-eleaning and solvent cleaning, blasting and cleaning by water jetting. Our Group primarily uses garnet to facilitate blasting for surface preparation; and
o Painting and coaling including external and intemal painting, and touch up coating. Our Group mainly uses industrial paints for our painting works, as some of this consists of specific functions such as corrosion­inhibitors for anti-corrosives, biocides for antj·foulants and others.

•:. Removal, modilica1ion, installation and fuoction tesling of instrument tubing, littings and instruments, machinery and related power or control systems and equipment; and .:. Others including shutdown modification and overhauls, removal and installation of heridecl< and engineering works (lor example extension of platform decks). Our Group has the following in-house facilities to support our offshore topside maintenance operations including:­.:. Two (2) in-house workboalS, each with maximum capacity of 189 persons, to provide accommodation for our offshore personnel and one (1) supply boat to facilitate our offshore topside maintenance services: and .:. One (1) onshore fabrication yard and covered workshop localed in Labuan. Our Group plays an important part as a service provider of offshore topside mainlenance for the Oil and Gas Industry in Malaysia, as these services are often critical to ensure that the integrity and safety of existing and aging ollshore platforms and structures are not compromised. This is because financial cost of production downtime due to preventable faullS or failures on platforms are normally high. (b) Minor Fabrication DESB also undertakes engineering and fabrication to support our core business in ollshore topside maintenance services. For the FYE 30 September 2007, minor fabrication operations amounted to AM9.3 million, representing 7.3% of our Group’s total revenue. Minor fabrication worl<s mainly involve fabrIcating piping systems, skids and other minor steel structures (tor example pipe spool. hand rails and platform extension for access purposes). Our Group is involved in all aspects of engineering and fabrication, including:­-:-Design and engineering drawings; .) Procurement at raw materials and components; .:. Fabrication including cutting, rolling. bending, moulding, spinning and
hammering of metal products: .:. Sub-assembly of fabricated parts and components for piping and other support structures; .:. Transportation and delivery: .:. On-site assembly of sub-assembled parts and components on 100 offshore topsides, by aligning structures and joining them by welding; bolting or riveling for minor structures and piping; and -:-Installation and commissioning of system. 4. INFORMATION ON OUR GROUP (Cont’d) Our Group currently has an open fabrication yard and a covered workshop located in Labuan, East Malaysia. (e) Provision of Offshore Hook-Up and Commissioning Services Our Group has Ihe in-house capabilities to undertake offshore hook-up and commissioning activities. Offshore hook-up and commissioning is also used to support our core business in provision of offshore topside maintenance services. For the FYE 30 september 2007, ofIshore hook-up and commissioning activities amoun1ed to RM2.6 million. representing 2.1% of our Group’s lolal revenue. In general, offshore hook-up and commissioning services mainly involves interconnection and interfacing of various process and control systems including steel structures, piping and equipment, and commissioning of these systems comprising inspection and testing. and ensuring all the systems are operating effectively. efficiently and salely on the platform. Some 01 the tasks undertaken by our Group in relation to offshore hook-up and commissioning include:­.:. preparation works including project planning and scheduling. procurement of materials and tools, system designs, management of mechanical completion; .:. minor fabrication of pipe systems and olher steel structures lor replacement. modification and upgrading purposes prior to hook-up process; .:. hook-up and commissioning of equipment, systems and related instrumentation encompass the disciplines of electrical and instrumentation engineering in installing and testing of electrical and instrumentation systems in accordance with customer specitications; and ••• lesting and inspection. At the end of 2007, our Group secured a leller of award for the ·Provision of Hook-up and Commissioning of PETAONAS Carigali Sdn Bhd Facilities’, which expires in 2010. (d) Charler ofMarine Vessels Our Group is also involved in the charter of marine vessels to the upstream Oil and Gas Industry. The charter ot marine vessels is undertaken by DMSSB. Our Group charters marine vessels including workboal and supply boat 10 provide accommodation and catering (food and beverage) lor our personnel, and provides marine transportation services to support our core business operations in offshore topside maintenance services.
Some of the facilities available in the marine vessels include the following:­.:. Sleeping quarlers and recreation areas; .) Catering including food and beverages: .:-laundry services; .:-Fuel supply; -:. Potable water: .:. Safety equipment; .:. Ulility equipment; .:. Waste control and disposal; .:. Deck space for construction, minor fabrication and crane; and .:. Clinic (with medical personnel to handle minor injuries).
Generally, workboat and supply boat are different types of vessels used for boating chores such as putting down moorings and providing transportation services.
4. INFORMATION ON OUR GROUP (Cont’d) Currently, our Group owns three (3) marine vessels including:• •:. Two workboats, “Dayang Pertarna” and “Dayang Berlian” to provide accommodation services with a capacity 01 189 persons each; and .:-One (1) supply boat, “Oayang Maju” with a capacity of approximately 490 gross lonoes to support our marine transportation services. Our Group continues to charter marine vessels (such as workboats and supply boats) from third parties to supplement our own marine vessels and accommodation facilities. For the FYE 30 September 2007, the provision of charter of marine vessels for wQrkboats and supply boat represented 38.5% of our Group’s total revenue, which amounted to approximately RM49.0 million. 4.2.3.1 Marketing and Distribution of Oil and Gas Support Sorvices Marketing Strategies The sales and marketing team of our Group utilises lhe following marketing strategies to sustain and expand our business:­.:. Position ourselves as a synergistic provider of an extensive range of services in offshore topside maintenance in the Oil and Gas Industry. Our Group has all the necessary in-house operational facilities and capabilities including our three (3) marine vessels, full range of in-house equipment and tools, a team of experienced and skilful technical personnel and engineers, and onshore labrication facilities 10 deliver our products and services effectively. efficiently and cost-competitively; .:-Continually providing excellence in qua!i1y service with the aim of developing long-term business relationship with customers; .:. Position ourselves as an established operator with 27 years of experience and track record in the Oil and Gas Industry; 0) Continually maintaining an excellent HSE record; .:-Keeping abreast of new processes and technological development to stay ahead of compelltion as well as better meet the needs and requirements of customers; .:. Continue to promote and market through participation in local and overseas trade missions and eXhibitions and fostering business relationships with existing and potential customers; and .:. Some of the promotional and marketing activities undertaken by our Group include;­o proactive sales vIsit 10 existing and potential customers; and
o participa1ion and attendance in various exhibitions and conventions to cullivate new customers and foster relationship with existing customers.

4. INFORMATiON ON OUR GROUP (Conl’d) As part of our Group’s strategies to promote our services, we actively participate and attend exhibilions and conventions including the following:­.:. NIOSH Conference and Exhibition in 2004, Kuala Lumpur; .:. NIOSH Exhibition in 2005, Kuala Lumpur; .:. HSE Exhibilion organised by PETRONAS Carigali, in 2005. Kuala Lumpur, .:. PETRONAS HSE Forum organised by PETRONAS, in July 2006, Jakarta; .:. MIDA Trade Delegation to Korea and Japan, in March 2007; and .;. PETRONAS HSE Forum organised by PETRONAS, in July 2007, Kuching.

NIOSH = Nationallnsritute for Occupational Safsty and Health MIDA = Malaysian Industrial Development Authority
To implement our marketing strategy, we have our own sales and marketing team focused on business development with existing and potential customers. Distribution Channal Strategy Our Group primarily adopts a direc1 distribution strategy for marketing our range of services including onshore topside maintenance. chaner of marine vessels, minor fabrication and offshore hook-up and commissioning to the Oil and Gas 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 East Malaysia to assist in sales and marketing activities. as well as providing support to our customers, as follows:­.:. An operational office in Miri, Sarawak; .} A fabrication facility in Labuan; .:. An administrative office in Kota Kinabalu. Sabah; and -:. A branch ollice in Kuala Lumpur.
Our Group’s physical presence in major Oil and Gas Industry centres in East Malaysia enables us to quickly and effectively gauge existing and potential customer demand, and more effectively conduct sales and marketing activities targeted at these customers. [THE REST OF THIS PAGE HAS BEEN ~EFT B~ANK INTENTIONA~~ Y] 4. INFORMATION ON OUR GROUP (Cont’d) 4.2.3.2 Process Flow The process flow for offshore topside maintenance services is depicted in the diagram below:­Work Order Roquast •
PreparaiiOn 01 Work Order
WorkO,oer PrOCl.lIement Preparation & Mobilisahon of Persool1el
!
Commission 01 Work & Progress Measurement
1
OffshOl’e In51a_8IiOn GOO Mainleoarn,;e
Offshore Final Il’lSj)eCliOn and Teslirtg 1
Completion of Work IProject Handover •
I Reoeipt otWOf1<OrdlirI I Rovlew ofWorlt. Order I I Work Order Slalus I and Approval I Inspection & SupervisionH I •
I Status RlWiewI •
: Handover Preparation I The process flow for offshore topside maintenance services begins wilh a request and receipt of the work order. The work order consists 01 lhe scope of work, work packaging, planning and costing of items and other related costs. This is followed by a on site surveyor check of the offshore topside facility to determine fault and service requirements prior to the preparation and submission of work order proposals. The work order includes an inspection of the commissioned structure or equipment for offshore topside maintenance. The statuses of the tasks are defined and data on maintenance work are recorded for review and approval before the work order is produced or issued. 4. INFORMATION ON OUR GROUP (Cont’d) Upon the approval of the work order, procurement and requisition orders will be released to the project management team or group before commencing the next process. The procurement 01 raw materials, equipment and other devices as specified for the required work order is carried out by the assigned personnel in the team prior to the start of offshore maintenance work. Mobilisation of work personnel on·site is also prepared and carried out. Work in dismantling of parts and structures or equipment are carried oul on-site offshore where required and laken onshore for repair andlor fabrication. Repair and maintenance 01 lhe offshore facility is also undertaken by the team of offshore technical personnel assigned to perform maintenance works at offshore facilities. Onshore repaired and fabricated items are transferred offshore for reinstallation. Work progress is recorded or measured and regular inspection and supervision 01 the work in progress are closely monitored and review of the status of the project is recorded. A final inspection and testing are performed on the repaired or maintained and refurbished structures, equipment and other offshore items. This process is to confirm that the structures and equipment meet with requirements and is functioning properly before the project is deemed as compleled and handed over to the owner. 4.2.3.3 Technology Used Our Group provides a wide range of offshore platform services 10 the upstream sector of the Oil and Gas Industry in Malaysia. Technologies relevant to our Group to facilitate our business operations are as lollows:­.:. Corrosion prevention engineering: .> Welding technology; .:. Mechanical engineering; and .:. Electrical and instrumentation engineering.
(a) Corrosion Prevention Engineering Corrosion is the deterioration or the useful properties of a material due to reactions with its environment. An example of corrosion is the weakening of iron or steel due to the formation 01 iron oxides or rusting. Corrosion prevention engineering is the field of engineering that is related to the prevention or minimisation of corrosion. While corrosion prevention engineering is more commonly associated with metal especially iron and sleel, it is also applied to materials such as concrete, rubber and plastics. Corrosion is particularly serious within a marine environment. where equipment is exposed to the sun. moisture and the corrosive salt water. Our Group has the capabilities 10 provide corrosion prevention engineering services utilising the following technologies:­.> Material selection; .:. Blasting; and .:. Coaling and painting. 4. INFORMATION ON OUR GROUP (Conl’d) (b) Welding Technology Welding is a fabrication process that joins malerials, usually metals by causing coalescence. Our Group utilises welding technology for our fabrication of pipes and valve systems. skids. modules and other sleel structures, as well as maintenance operations during the replacement of corroded and faulty parts and components. Welding is often done by melting the work pieces and adding a filler material to form a pool 01 molten material that cools 10 become a slrong joint. Sometimes pressure is also used in conjunction with heat, or by itself, to produce the weld. Currently. our Group mainly uses the following welding techniques:­”,” Arc welding; and .:. Gas welding.
(c) Mechanical Engineering Mechanical engineering is the application of physical principles to the creation of useful structures, devices, objects and machines. Mechanical engineers use principles such as heat, force. and the conservation of mass and energy to analyse static and dynamic physical systems, in contributing to the design of things such as structures, industrial equipment and machinery, and other objects.
Fundamental subjects of mechanical engineering include:­.:. Dynamics; .:. Statics: .:. Material science, primarily related to the mechanical strength of
materials; .:-Heat lransler; .:. Fluid dynamics; .:. Solid mechanics; .:. Pneumatics; -:-Hydraulics; and -:. Applied thermodynamics. In the design of large and complex steel structures, mechanical engineers apply these and other subjects to create a design that will meet clients’ requirements. The mechanical engineer often has to take into account non­mechanical factors such as the ease of fabrtcation, and cost. The use of computers and specialised engineering software are now common in mechanical engineering. The following types of computer programs are currently commonly used in mechanical engineering:­(0 Computer Aided Design (CAD); -:. Computer Aided Manufacturing (CAM); .:. Finite Element Analysis (FEA); and .:. Computational Fluid Dynamics (CFO); .:. Plant Design and Management System (PDMS). 4. INFORMATION ON OUR GROUP (Cont’d) Computers are now used extensively to help creale models and design drawings, and in subjecting these designs and models to simulations. PDMS and CAD programs now permit the creation 01 3-dimensk>nal models thai may be viewed Irom all angles. OUf Group employs mechanical engineering principles and makes use of relevant software in designing and fabrication of pipe and valves system and other minor steel structures. (d) Electrical and Instrumentation Engineo-ring Electrical engineering is the engineering discipline that deals with the study and applicalion of electricity and electromagnetism. Similar 10 mechanical engineering, electrical engineering is characterised by the application of knowledge 10 the creation of useful devices, objects and machines. Our Group applies the principles of electrical engineering to practical purposes such as the maintenance, and hook-up and commissioning of various types structures and systems including electrical and instrumenlations for offshore platforms. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLVI I Company No. 712243-U I 4. INFORMATION ON OUR GROUP (Cont’d) 4.2.4 Approvals, Major Licences and Permits Obtained Save as disclosed below and as at the date of this Prospectus, we have no other major licences or registrations. The major licences and registrations of our subsidiaries, together with the conditions attached thereto and slatus of compliance thereon, are as follows: -•.•••.•…….••. ·T–.-.’-•.’ …..• -.-~ -,D~ttl of.-r .. . ….. .
Approvinlil … !.Typeof”cencelRegistration! ·1 Issuancel •.Equity,Employmentand/orother MajwlSpecial. .Statusof Company Issuing Authority· ! Licence and serial number ; Validity ! Conditions Imposed’ . ‘. . . compliance
DESB SIRIM QAS Quality System Registration 11.06.1999 -No conditions imposed. Not applicable International Sdn. Certificate for provision of general 10.06.2008 Bhd. topside construction and maintenance services to the Oil and Gas Industry (AR1716)
DESB Perbendaharaan Certiticate of Registration as 19.12.2005· Notification to be given to Perbendaharaan Malaysia Sarawak • Complied I To be Malaysia Sarawak “Kontraktor’ lor mechanical 30.11.2008 on any change on the company’s information (as given to complied, if maintenance structural I piping I Perbendaharaan Malaysia Sarawak tor the issuance of the applicable fabrication I welding and topside licence) within 21 days from the date ot change. structural (357·30000427 I BP007883) OESB Perbendaharaan Certificate of RegIstration as 01.03.2006 . At least 51 % Bumiputera panicipation in the equity holding Complied MalaySia Sarawak ! “Kontraktor Bumiputera” (357­30.11.2008 level, board 01 directors level, management and staff levels of . 30000427 I BP004361) the company
OESB CIOB Registration Cenilication (1970728­20.06.2006 ­License is not transferable. Complied SR041150) as “G7” (no limit) 19.06.2009 contractor for: ~ • License is subject to review from time to time.
CE Pembinaan kejuruteraan awam .:. CE15 Kerja-Kerja Pembinaan Luar Persisir .;. CE21 Kerja·Kerja Am KeJuruleraan Awam
ME Mekanikal dan Elektrikal .) Ml1 pembinaan dan Perawatan Khusus
-58­I Company No. 712243-U I 4. INFORMATION ON OUR GROUP (Cont’d) ~-._~ Date·of Type of Iicen<;eI Registrationl . .. IISSU’U\<;el Equity, Employment andlor other MajorJ Sp~ial Status of ‘Licenceanchieiialnumber … Validit Coriditions Imposed comoiiance
DESB  PETRONAS  Licence to provide equipmentiservices  16.06.2006 ­ to prospecting companies and oil!gas  1506.2008  suppliers in Malaysia (L-61S05-V)
• The approved licence categories are as follows:-Complied Code’  S”riii<;eslsunnlies  Class  SM1­ 01 Mechanical  – Maintenance  Maintenance  Services  01.06 Structural! Piping!  Fabricationl  Welding  SMt- Ot Mechanical  CIDB- Maintenance  Maintenance  G6  Services  01.07 Topside Structural  Maintenance  SM1­Maintenance Services  05 Special categories 05.01 Gritblasting and Painting  – S02­ 03 Hook Up and  CIDB- Offshore  Commissioning  G6  Construction  S03­ 02 Minor Fabrication!  CIDB- Onshore  Welding  G6  Constructionl Fabrication  02.02 Civil Engineering
Our company should be registered with the relevant! Complied statutory/professional bodies or Government departments relating to the category as stated in the licence. • For services! supplies under Class S03-02.2 and SM1-i Complied 05.1, we are required to fulfil at least 70% Bumiputera participation in the equity holding level, board of directors level. management and staff levels of the company. -59­
I Company No. 712243-U I 4, INFORMATION ON OUR GROUP (Cont’d) DMSSB  Domestic Shipping Licensing Board  Domestic Shipping Licence No.A038203 (DSL225712006) for “Dayang Pertama”  22.09.2006 . 21.09.2008  No conditions imposed.  Not applicable  DMSSB  Domestic Shipping Licensing Board  Domestic Shipping Licence No. A040058 (DSL1512007) for “Dayang Maju”  08.02.2007· 07.02.2009  No conditions imposed.  Not applicable
ITyP!! ~flic~nCei. R!!9i~tratlonl .. .. LL.c!!nceJ’lld sHnal num~r . DESB  PETRONAS (conl’d)  DESB  Dewan Bandaraya Kota Kinabalu  DESB  Labuan Corporation  DESB  Sarawak Government
Licence to provide equipmenVservices 10 prospecting companies and oillgas suppliers in Malaysia (L-61505·V) Trade licence for provision of offshore maintenance, construction services, manpower, heavy mach;nery, vessel maintenance and Jiving quarters (DLXl023100671 DBKK156744) Lesen Perkhidmalan, Pembaikanl Penyelendaraan 1 Pemasangan (PL14802/2684/2008 SN 3929) Trading licence for provision of offshore maintenance. construction services, manpower, heavy machinery, vessel maintenance and living quarters (910829) Dale of Issual>Cel .. Validitv . 16.06.2006 ­15.06.2008 ; 08.01.2008­31.12.2008 11.01.2008 . 31.12.2008 17.06.2007 ­16.06.2008 EqiJitY,Employment and/or oilier Majorl Special .Conditions Imposed . . . • License is non transferable.
To extend our Financial Statement for the year ending 30 September 2006 and year ending 30 September 2007 and to ensure the Shareholders Funds in the company shall be positive.
• Notification to be given to PETRONAS on any change on the company’s equily interest, board of directors and management staff within 14 days from the date of change.

No conditions imposed. No conditions imposed. No conditions imposed. Status of compliance Complied Complied Complied ITo be complied, if applicable Not applicable Not applicable Not applicable -60­I Company No. 712243-U I 4. INFORMATION ON OUR GROUP (Cont’d) Company DMSSB DMSSB DMSSB DMSSB DMSSB DMSSB DMSSB DMSSB DMSSB ……,.. … ,.. Approving! . Issuing Authority Domestic Shipping Licensing Board Government of Malaysia Government of Malaysia Government of Malaysia Malaysian Communications and Multimedia Commission Malaysian Communications and Multimedia Commission Malaysian Communrcations and Multimedia Commission Registrar of Malaysian Ships Registrar of Malays,an Ships …. >:. .. . … !Dateof . ‘Type ofU”encel Registratlonl i·Iasuancel Equity, Employment and/or .other Majorl Special Licence and serial numbe, : Validity Conditions Imposed -1—–:—–.—-..—-­; Domestic Shipping Licence No. I A040059 (DSL97/2007) for “Dayang ,i Berlian~ Safe Manning Document No. 329706 for “Dayang Pertama” Manning Certificate No. 330718 for “Dayang Maju’ Safe Manning Document No. 330741 for “Dayang Berlian” : Apparatus Assignment Licence No. ! A513729 for “Dayang Pertama” Apparatus Assignment Licence No. A407242 for “Dayang Maju” Apparatus Assignment Licence No. A494206 for “Dayang Berlian” Certificate of Malaysian Registry Official No. 329706 for “Dayang Pertama” Certificate of Malaysian Registry Official No. 330718 for “Dayang Maju” i 12.012007 ­’11.01.2009 25.03.2005· 24.03.2010 03.02.2006 ­02.02.2011 . 12.01.2007­11.01.2012 04.03.2005 ­03.03.2010 25.01.2006 ­24.01.2011 . 03.112006 ­02.11.2011 Registered on : 17.06.2005 Registered on 25.01.2006 No conditions imposed. : No conditions imposed. No conditions imposed. No conditions Imposed. No conditions imposed, No conditions imposed. No conditions imposed. No conditions imposed. No conditions imposed. : Status of : compliance Not applicable Not applicable Not applicable Not applicable , Not applicable Not applicable Not applicable Not applicable Not applicable -61 ­I Company No. 712243-U I 4. INFORMATION ON OUR GROUP (Cant’d)  ., :’., ‘. ” -­… ,” ‘,:. ,~..­…  –T-Oatffof -l.  App,oYi.iilil . ..Typ!! of Iic!!nc!!l.I’l!!gistratiolil  i Issuanc!!1′ i Equity, Employm!!nt and/o. oth!!. Majorl Spacial  StatuI’ of  Company·’ .Issuing Authority .Licen”” end:se.ial number  i Validity ! Conditionalmposed ..  compliance
DMSSB  Registrar of Malaysian Ships  Certilicate of Malaysian Registry Official No. 330741 for “Dayang Berlian”  Registered on 04.01.2007  No conditions imposed.  Not applicable  DMSSB  PETRONAS  licence to provide services! supplies  23.08.2007 .  • The approved licence category are as follows:·
to Carigali companies and oil/gas 22.08.2009 suppliers In Malaysia in the area of marine vessels -for construction! maintenance (major), for anchor handling vesselltug boaVsupply vessel, for accommodation barge/ vessel and land craft/tank L634824·V (L032224) Code  Services/supplies:  . Class·  SM3 -Marine Vessels  (14) Work Vessel ­Construction/ Maintenance (Maiorl  – SM3 -Marine Vessels  (01) Anchor Handling Vessel/ Tug Boat / Suoolv Vessel  – SM3-Marine Vessels  (02) Accommodation Barael Vessel  – SM3 ­Marine Vessels  (03) Land Craft/ Tank
•  Notification to be given to PETRONAS on any change on the company’s equity interest, board 01 directors and management staff within 14 days from the date of change.  Compiled I To be complied, if applicable  Our company should be registered with the relevant statutory/professional bodies or Government departments relating to the category as stated in the licence.  Complied  To extend our Financial Statement for the year ending 30 September 2007 and year ending 30 September 2008 and to ensure the Shareholders Funds in the company shall be positive.  Complied ITo be complied, if applicable
-62­·Com  . ..••. . . .••…. ‘Dilteo!. ..! ..••••… . . •. . . ·Type..ofliciince/cRegistratlonl· .i IssuanceJ I. Equity, Employmentandfor other MajorfSpe<;ia’·· Licence andeeiialnumber’ .. i Validity··.•. ! Condilionslmposed· . .  Status of :comol”iance  DMSSB  Government  Trading licence for shipping and marine support services (914884)  12.11.2007 ­11.11.2008  No conditions imposed.  Not applicable  DMSSB  American Bureau of Shipping  Certificate of Classification as “Offshore Support Vessel” • “Dayang Pertama”  27.10.2005 ­27.04.2010  No conditions imposed.  Not applicable  DMSSB  Bureau Veritas  Certificate of Classilication as “Hull Mach Deck Ship Unrestricted” ­”Dayang Maju”  • 03.07.2006­i 10.02.2011  No conditions imposed.  Not applicable  DMSSB  American Bureau of Shipping  Certificate of Classilication as “Offshore Support Vessel” -“Dayang Bertian”  24.04.2007 ­t4.01.2012  No conditions imposed.  Not applicable

I Company No. 712243-U I 4. INFORMATION ON OUR GROUP (Cont’d) I  FTSB  Sarawak  Trading licence for equipment and  21.02.2007 ­ ‘No conditions imposed.  Not applicable  Government  machinery rental (No. 910494)  20.06.2008  .
DEHB Sarawak Trading licence for investment holding 04.012008 ­i No conditions imposed. Not applicable Government (No. 933011) 03.01.2009 [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]
-63­4. INFORMATION ON OUR GROUP (Conl’d) 4.2.5 Brand Names, Patents, Trade Marks, Licences, Technical Assistance Agreements, Franchises and Other Intellectual Property Rights Save as disclosed in Section 4.2.4, as at LPD, our Group does not have any other patents, trade marks, licences, technical assistance agreements, franchises nor intellectual property rights. 4.2.6 Dependency on Patents, Licences. Industrial, Commercial or Financial Contracts
(a) Dependency on Patents and Intellectual Property Rights Our Group is not dependent on any patents and intellectual property rights for our business operation. (b) Dependency on Major Licences Save as disclosed in Section 4.2.4 of this Prospectus, our Group is not dependent on any other major licences. (e) Dependency on Industrial, Commercial and Financial Contracts Save as disclosed below, there are no other material agreements or contracts (including informal arrangements or understanding or understandings), as at LPD, which have been entered into by us and our subsidiaries that are in subsistence and which our Group is highly dependent:­(i) On 26 June 2006, DESB ente,ed into a cont,.ct (effective as of 17 August 2005), with PETRONAS Carigali for the provision of topside structural maintenance services for PETRONAS Carigali Sabah/Sarawak operations for a period of live (5) years lor an estimated contract value of RMaoO million as at the dale of the agreement. On 27 June 2007, the contract value was increased to an estimated AM417 million. The salient terms of the above agreement are:­Scope of Work: DESB shall provide aU the supervision procedures, labour, materials, equipment, tools, facilities including transport logistics services and all other things necessary for the painting/maintenance/construction for the maintenance of a total of 136 PETRONAS platforms located in Sarawak and Sabah waters. Termination: Suspension of Works • PETRONAS CarigaH may at any lime suspend all or any part of the remaining works for any reason whatsoever by giving wrinen nolice. • Neither PETRONAS Carigali nor DESB shall be liable to the other for loss of anticipated profits sustained on account of any suspension of the works. 4, INFORMATiON ON OUR GROUP (Conl’d) Terminations without cause • PETRONAS Carigali may at any lime terminate without cause the works in whole or in part by giving written notice to DESB that PETRONAS Carigali intends 10 terminate the works, specifying the part of the works to be terminated and the effective date of termination.
• Upon such termination DESB shall stop performance of the works or the terminated portion of the works.
• PETRONAS Carigali shall pay DESB all amounts properly due for the works performed prior to date of termination.

Termination with cause • If DESB fails or refuses 10 remedy defaults complained by PETRONAS Carigali pursuant to written notice or DEHB has committed a breach of any terms of this contract PETAONAS Carigali has the right to terminate lor cause all or part of the works by written notice.
• All works shall stop upon the written notice becoming effective. PETRONAS Carigali shall retain all amounts due and payable to DESB. If the costs to Petronas for completing the works is less than the unearned balance of the contracl price PETRONAS Carigali shall pay the retained amount \0 DESB. If the costs to PETRONAS is greater than the unearned balance then PETRONAS Carigali shall deduct the difference from the retained amount. If such difference is greater than the retained amount due to DESB, DESS shall pay 10 Petronas such dmerence less retained amount.

Liquidated damages: The parties agreed that if OESS fails for any reason other than force majeure to complete the wor\(s by the completion dates DESB shall pay to PETRONAS CarigaJi by way of pre-estimated liquidated damages and not as a penalty. Disclosure: OEHB is required to seek prior written approval from PETRONAS CarigaIi for disclosure of the contract to any other parties. Force Majeure: Force majeure is a standard clause in the contract. Arbitration: All disputes arising from the contract is subject to arbitration. 4. INFORMATION ON OUR GROUP (Cont’d) (ii) On 11 September 2006, CESS entered into an agreement as contractor with Murphy Sabah Oil Co ltd. (“Murphy’) tor the provision of Offshore Technical Support Services fOr Kikeh Development Project for a period of two (2) years for an estimated contract value of AM60 million as althe dale of the agreement The salient terms of the above agreement are:­Scope of Work: DESB is to generally provide Offshore Technical Support Services.
Termination: Suspension of Works • Murphy may at any time elect at its sale option to suspend all or any part of the remaining works for any reason whatsoever by giving written nolice.
• Neither Murphy nor OeSB shall be liable 10 the other for loss of anticipated profits sustained on account of any suspension of the works.

Terminations without cause • Murphy may at any time terminate without cause the works in whole or in part by giving written notice to DESB that Murphy intends to terminate the works, specifying the part of the works to be terminated and the effective date of termination.
• Upon such termination DESB shall stop performance of the works or the terminated portion of the works,
• Murphy shall pay DESB all amounts properly due for the works performed prior to date of termination.

Termination with cause • If DESB fails or refuses to remedy defaults complained by Murphy pursuant to written notice or DESB has committed a breach of any terms of this contract Murphy has the right to terminate for cause all or part of the works by written notice.
• All works shall stop upon the wrillen notice becoming effeclive. Murphy shall retain all amounts due and payable to DESB. If the costs to Murphy for completing the works is less than the unearned balance of the contract price Murphy shall pay the retained amount to DESB. If the costs 10 Murphy is greater than the unearned balance then Murphy shall deduct the difference from the retained amount. If such difference is greater lhan the retained amount due to DESB, DESB shall pay to Murphy such difference less retained amount.

4. INFORMATION ON OUR GROUP (Conl’d) Liguidated damages: If DESB fails 10 complete inspect and test the works specified in the call out order on or before scheduled completion for reasons other than force majeure then as damages and not as penalty 10 Murphy lor such delay conlract price shall be reduced by an amount equal to zero point five percent of the contract price per week of delay after the first fifteen days beyond completion date up to a maximum of five percent of the contract price. Confidentiality: DESB shall obtain prior written approval from Murphy prior to disclosure of the contract to any other parties.
Force MajQure: Force majeure is a standard clause in the contract.
Arbitration: All disputes arising from the contract is subject to arbitration.
(ill) On 7 June 2007, DESB entered into an agreement as Contractor with Sarawak Shell and Sabah Shell (collectively ~Shell~) for the provision of Topside Living Quarter-Based Maintenance and Related Installation Services. The contract is effective from 19 March 2007 and shall expire three (3) years thereafter for an estimated contract sum of RM150 million as at the date of the agreement. Sarawak ShelVSabah Shell shall have the option to extend the duration of the contract for further period of lwo (2) years; and The salient terms of the above agreement are:­Scope of Work: DESe shall provide all the supervision procedures. labour. malerials. equipment, tools, facilities including transport logistics services and all other things necessary for the painting/maintenance/construction for the maintenance of a total of 170 Petronas platforms located in Sarawak and Sabah waters.
Termination:
Suspension of Works • Shell has the right at any lime to suspend without cause all or any part of the contract by giving DESS written notice.
• Suspension for default :.
a. in the event Shell issues a suspension notice for reason of default of DESs the notice shall include reasons for issuance and steps for rectification within a specific time.
b. DESe shall be in default until situation remedied.
c. No payment shall be made to DEse in the event Shell suspends perlormance or the contract for reasons of default of DESS.

 

4. INFORMATION ON OUR GROUP (Cont’d) • Suspension lor non-default:· In the event Shell suspends performance 01 lhe contract for reasons other than default of DESB or force majeure Shell shall authorise (amongst others) cosl of keeping facilities equipment dedicated to the suspended part of the contract as DESB is unable to redeploy such resources and standby fces for such racilities. Discontinuance and Termination • Termination:
8. Shell shall have the right at any lime and at its absolute discretion summarily terminate the contract by giving written notice to DESB b. Without prejudice to right of summary termination Shall may in the event of any default of DESB, if such default is capable of being remedied give seven days wrilten notice 10 DESB to remedy the same.
c. In the even! DESB fails to remedy within seven days Shell shall have the right to issue notice of discontinuance of the part of the contract or terminale the contract or issue suspension notice at its sale discretion

 

• Discontinuance:
Shell shall have the right at any time and at its absolute discretion to discontinue part or whole of lhe contract by giving prior written notice.
• Consequences of discontinuance:
Any written notice of discontinuance or termination shall become elleelive immediately upon delivery or specific date of the notice whereupon DESB shall among others discontinue supply of work allow Shell full access to worksite, remove all work of DESB, deliver to Shell within 30 days all plans etc.
• Payment in the event of discontinuance for termination for default:

In the event Shell gives DESB notice for discontinuance of termination pursuant to default of DESB Shell shall pay to DESB amount calculated according to contract for work satisfactorily completed prior to termination which payment shall be reduced lor additional costs incurred by Shell incurred as result of detaull of DESB and any costs incurred by Shell in having the contract completed by other contractor 4. INFORMATION ON OUR GROUP (Cont’d) • Payment in the event of discontinuance for lermination for non­default: In the event Shell discontinues or terminates lor reasons other than delault Shell shall authorise payment to cover the following among others: a. amount calculated for work done up to time of discontinuance or termination;
b. cosls 01 canoe/lallan which Shell has approved;
c. actual costs necessarily incurred by DESB to handover ;
d. any amount Shell would have to pay pursuant to contract; and
e. demobilisation fee if any.

Liability: Liabifity for works and equipment DESB shall for one incident or series of incidents arising from one event caused or contributed by negligence or otherwise of DESB or subcontractor be liable for and shall indemnify Shell from and against all loss or damage 10 the following:­• works materials and or equipment;
• Shell’s properties;
• pOllution; and
• third parties;

Confidentiality: DESB shall obtain prior written approval from Shell prior to disclosure of the contract to any other parties. Force Majeure: Force majeure is a standard clause in the contract.
Arbitration: AU disputes arising from lhe contract is subject to arbitration.
(iv) On 5 November 2007, DESB was awarded a letter of award for the contract for the provision for hook-up and commissIoning of PETRONAS Carigali facilities for year 2007 to 2010. The formal agreement has yet to be signed by the panies. 4. INFORMATION ON OUR GROUP (Conrd) 4.2.7 Principal Markets The following are the principal markets of OUf Group for lhe FYE 30 Seplember 2007:­Peninsular Malaysia
Our Group is focused on providing offShore platform services 10 the upstream sector of the Oil and Gas Industry in Malaysia, This is reflected by the fact that all of OUf revenue is derived from the local market. Our Group’s revenue contribution segmented by sectors within Malaysia is as follows:­Revenue for the F’fE 30.09.2007  Local Market  RM’OOO  %  East Malaysia  126,118  99.2  Sarawak  -_..  _-­ ..  81,070  63.8  Sabah  45,048  35.4  Peninsular Malaysia  1,016  0.8  Total  127,134  100.0
Sarawak represented the highest revenue contribution, amounting 10 63.8% of our Group’s Iolal revenue for the FYE 30 September 2007. Sabah accounted for the remainder 35.4% of our Group’s total revenue, which amounted to RM45.0 million for the FYE 30 September 2007. Our Group mainly provides offshore platform services to East Malaysia. Our Group currently provides offshore topside maintenance services for 309 offshore structures/platforms, four (4) 88M systems, and one (1) FPSO facility in the Sabah and Sarawak walers. Peninsular Malaysia accounted for the remainder 0.8% of our Group’s revenue lor the FYE 30 September 2007 which amounted 10 RM1.0 million. This is derived trom the charter of marine vessels to customers in Peninsular Malaysia. 4.2.8 Estimated Market Coverage, Position and Market Share Market Ranking of Providers of Offshore Topside Maintenance andlor Offshore Hook-up and Commissioning Services in Malaysia Market Ranking on Size of Company Based on Total Turnover In 2007, our Group ranked ninth (9th) among companies that undertake onshore topside maintenance andlor hook-up and commissioning in Malaysia based on total company revenue from the Oil and Gas sector. 4. INFORMATION ON OUR GROUP (Cont’d) Note: The above ranking of companies is based on total company revenue, which includes revenue from offshore topside maintenance and/or offshore hook-up and commissioning and/or related or non-related business activities. Nevertheless, all companies in the ranking must undertake offshore topside maintenance and/or offshore hook-up and commissioning. (Source: Independent Assessment of the Offshore Supporting Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, by Vital Factor Consulting Sdn Bhd) 4.2.9 Types, Sources and Availability 01 Raw Materials/Inputs Below is the list of major items supplied 10 us for the FYE 30 September 2007:­Systems, Raw Materials and Services  Value of Purchases  Percentage0′ Tolal Purchases  Sources 0’Supply  (RM·OOO)  (%)  l~~1  ·’7~rt  Material, Purchased  16,005  33.5  100.0  ·  · Valves  5,4’2  71.3  100.0  ·  · Pipes. Fittings and Flanges  5,970  12.5  100.0  ·  · Garnet  2,670  5.6  JOO.O  · · · Paints and Coatmgs  1.953  4. ,  700.0  Conauma~es  18,880  39.5″ ”  97.2′  2.8  · Hardware (i~~’Uding tools and consumubles  17.841  37.4  97.0  3.0  · Safety and Personal Protection EouiDment  1,039  2.2  100.0  ·  ExtemaIServices  1.2,853  26.9″  100.0  · .  · Vessel Chartering  8,143  17.1  100.0  ·  · Repair and Maintenance SeNfces  4.710  9.9  100.0  ·  Total  47,738  100.0″  ….  1.1
Noles:·  (OJ  Total purchases for the FYE 30 September 2007 amounted to RM47.738 million  (bJ  Diesol is supplied by customers  Total does not add-up due to rounding  Including purchases from Ioc8f stockists
For the FYE 30 september 2007, purchases of consumabfes and materials accounted for 39.5% and 33.5% of our Group’s total materials and services expenses respectively. The remainder 26.9% are for external services supplied by third parties, including vessel chartering and repair and maintenance services. Locally sourced materials and services accounted for 98.9% of our Group’s total material and service expenses, whilst imports accounted forthe remaining 1.1 % for the FYE 30 September 2007, 4. INFORMATION ON OUR GROUP (Cont’d) For the FYE 30 September 2007. purchases of consumables represented 39.5% of our Group’s tolal materials and services expenses. Some of the consumables purchased by our Group are hardware related prodUC1s and safety and personal protection equipment. Purchases of materials thaI used to facilitate the business operations represented 33.5% of our Group’s total materials and services expenses for the FYE 30 September 2007. Of these, some of major materials purchased by our Group, include the following:­.~ Valves; .:. Pipes, fitting and flanges: .:. Gamet; and .:. Painls and coatings.
For the FYE 30 September 2007, vessel chartering represented 17.1 % of our Group’s tola! materials and services expenses. Our Group use local operators lor the supply of vessel chartering services to supplement our in-house marine vessels. As our Group’s business is in providing offshore platform services to the upstream Oil and Gas Industry, the chartering of vessels from extemal suppliers for workboat and accommodation are part of our Group’s process of delivery products and services. The accommodatfon is mainly to house our Group’s offshore personnel during Ihe duralion 01 providing services to the offshore platforms. This is in addition to lhe use of our Group’s own marine vessels. For the FYE 30 september 2007, our Group also uses external parties to supply repair and maintenance services, which represenled 9.9″10 of our Group’s lotal malerials and services expenses. Thus far, our Group has not experienced any shortages in sourcing these materials and services for their operations. 4.2.10 Quality Control I HSE OUf Group places significant emphasis on quality and adheres to stringent quaHty standards. This is rellected by Ihe fact lhat, DESB is certified with MS ISO 9001 :2000 Quality Management System from SIRtM QAS International Sdn Bhd on 11 June 1999. This provides customers with assurance of quality of our services. In addition, our Group adopts the following stringent quality assurance approaches to ensure thaI certain qualily standards are maintain internally:­.:-In-coming materials such as pipes and valves, steel materials, garnet, paints and coatings undergo checking and inspection for specifications before being used; Compliance to customers’ various manuals and specifications such as OAtQe, HSE specifications to ensure worksites are in full operating efficiency and the working conditions and environment are safe. Other requirements are to ensure a healthy working environment for personnel on the offshore struclures and they include cleanliness of worksites. responsible disposal of scraps and wastes, and handling of equipment; [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 4. INFORMATION ON OUR GROUP (Cont’d) ‘.’ Quality assurance controls are implemented in each and every area of our operalions, including:­o random checking and inspection during the entire work process to ensure all works performed are based on specifications. such as thickness of the paints, condition of painted or coated surface, tolerance and defect inspection of the welds;
o inspection of incoming materials used; and
o quality check and inspection of the repaired and maintained, structures. parts and components based on specifications; and

.:. In addition 10 internal quality checks, our Group also utilises external parties 10 undertake the following lesting:­o Hydrostatic pressure testing of pipework, i.e. the process of using water under pressure 10 test lhe integrity of pipelines;
o Independent third party weld testing is carried out if required by client specifications such as radiographs and ultrasonic inspection of welds; and
o Funclionallests on electrical and inslruments, including electrical cables. fittings and equipments.

As there are stringent safety standards and requirements in the Oil and Gas Industry, Quality standards are critical in the continuing provision of supporting products and services. As at 30 November 2007, our Group has an experienced quality assurance team comprising six (6) personnel to ensure products and services conform to client needs and specifications. as well as quality and safety standards and requirements. HSE Management HSE Management requirements are an important requirement in the Oil and Gas Industry as the products and services provided are often critical in nature. Many operators insist that product and service providers possess a good HSE record and comply with industry or operator·defined HSE standards. HSE Management continues to be a top priority in atl PETAONAS’ operations. Our Group recognises the important role of HSE management plays in our Group’s contjnued success. Our Group’s internal management system includes a detailed documentation for HSE and contingency planning. We have maintained an excellent HSE record. Since 2004, our Group has recorded approximately a million man-hours with zero loss lime injury lor our offshore operations. In 2007, we were awarded “PETAONAS Carigali HSE Awards 200612007. These achievements are a (eflection of our commitment to good safety practices. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY) 4. INFORMATION ON OUR GROUP (Cont’d) 4.2.11 R&D Policies of R&D As our Group is primarily involved in providing offshore plat10rm services lor the Oil and Gas Industry, R&D activities are not relevant unlike the manufacturing industry. However, our Group is continuously focusing on improvement of processes lor our operations as a means of creating and sustaining competitive advantages in the following areas:­.:. Enhancing business erfectiveness. eHicrency and productivity to opfimise production and operating costs; .:. Continuous improvements in utilising existing and new technologies to meet customer requirements; and .:. Continually improving service quality 10 ensure customer satisfaction. Nevertheless. our Group has to use a number of technologies in the provision of our services. Our Group ulilises various corrosion prevention engineering lechnologies and painting, welding technologies and in-house skills and expertise to carry out our business operations. Our Group primarily relies on the application of established engineering principles and knowledge in the engineering and design of production facilities for the Oil and Gas Industry. Our Group continuously produces incremental improvements to our engineering knowledge and expertise. and production skills base through continuous practical application 01 these skills. These improvements are internalised, and enable our Group to continuously upgrade our capabilities as well as increase the efficiency of our business processes. Our Group constantly evaluates existing and new technologies, implementing those that we believe will improve our business processes or create opportunities lor new business development. 4.2.12 Interruptions in Business for the Past Twelve (12) Months There has never been any interruption in the form of trade disputes or major operational breakdown occurring within and outside our Group that may significantly impair our Group’s business performance during the past twelve (12) months preceding the date of this Prospectus. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 4. INFORMATION ON OUR GROUP (Cont’d) 4.2.13 Key Achievements/Milestones/Awards Our Group has received the following awards and recognitions:· Year  Type of Award  Awarded by  Descriptions  2007  PETRONAS Carigali HSE Awards 2006/2007  PETRONAS Carigali  Recognition of an Excellent Achievement  2007  Memo 01 Appreciation  Murphy Sabah Oil CeLld  In conjunction lor the successful 111 oillrom Kikeh’s Dry Tree Unit (DTU) achieved on 17 August 2007  2005  Certificate of Appreciation  PETRONAS Carigali  Successful and early Samarang start-up wilhoullost Time Incidenl  2005  Certificate at Appreciation  PETRONAS Carigali  Zero Lost Time Incident Safely Record with a 10lal of 3.35 million man-hours  2005  Contractor Safety Recognition Grand Award  ExxonMobii  Recognition of Safety Excellent 2005  2004  Grand Award  PETAONAS Carigali (PMO)  Recognition of Excellent HSE Perlormance 2004  2004  Certificate of Appreciation  PETAONAS Carigali  Achieving TRCF Zoro for 780,000 man-hours in year 2003  2004  Cerlilicalo 01 Appreciation  Sarawak SheU  Completion of 1 Million Man-hours Work. Recording without a Lost Time Incident  200′  Contractor Safety Recognllion Grand Award  ExxonMobii  Recognitioo of Safety Excellent 2004  2004  Cerlilicale of Awreciation  PETRONAS Carigali  Achieving TRCF Zero for 760,000 man·hours in year 2004  2003  Certificate of Appreciation  PETRONAS Carigali (PMO)  Active contributions in achieving Zero Lost Time Incident during lhe Angsi planned shutdown  2003  Cerlilicale of Appreciation  PETRONAS Carigali  Achieving good safety record and with TRCF less than 2.5  2003  Cerlificate of Appreciation  PETRONAS Carigall (PMO)  Contributions In providing excellence support in major shutdown works  2002  Certilicale of Achievement  PETRQNAS Carigali (PMO)  Oulstanding accomplishments and contributions for suet:essful 2002 onshore gas terminal shutdown
Notes:· PMO = Peninsular Malaysia Operation TRCF”, Total recordable injury case frequency
4.2.14 Productionl Operating Capacities and Output As our Group is primarily engaged in providing offshore plalform services primarily focusing on offshore topside maintenance services, conventional measures of production capacity and utilisation are not relevant 10 our operations. -75 ­4. INFORMATION ON OUR GROUP (Cont’d) 4.3 OUR SUBSIDIARIES 4.3.1 DESB (a) Background and History DeSB was incorporated in Malaysia under the Act on 20 August 1980 as a private limited company and it commenced operations in October 1980. (b) Principal Activities and ProductslServlces DESB is licensed by PETRONAS to carry out offshore maintenance and construction services and is principally involved in the provision of offshore topside maintenance services, minor fabrication works and offshore hook-up and commissioning. (c) Substantial Shareholders DESB is our wholly-owned SUbsidiary. (d) Share Capital The authorised share capital of DESB is RM5,OOQ,OOO comprising 5,000,000 ordinary shares of RM1.00 each whilst ils issued and lully paid-up share capital is AM2,600,OOO comprising 2,600,000 ordinary shares of RM1.00 each. The changes in the issued and tully paid-up share capital of DESB since its incorporation are as follows:­Date of allotment 20.08.1980 15.10.\980 01.12.1981 02.10.1998 26.09.2002 No, of shant. alloUed 2 209,998 10,000 380,100 1,999,900 Psr value (RM) 1.00 l.00 l.00 1.00 l.00 Consideration SUbscribers’ shares Cash Cash Bonus issue 01 approximately 1.727 new ordinary shares 01 AM 1.00 each for every 1 existing ordinary share 01 AM1.oo each hOld Bonus issue of approximately 3.333 new ordinary shares of AM1.00 each for every 1 existing ordinary share 01 RM1.00 each held Tot8llssued and paid-up share capital (RM) 210,000 220,000 600,100 2,600,000 As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital of DESB. (9) Subs;diary and Associated Companies As at lPD, DESB does not have any subsidiary or associated companies. 4. INFORMATION ON OUR GROUP (Cont’d) 4.3.2 DMSSB (a) Background and History DMSSB was incorporated in Malaysia under the Act on 18 November 2003 as a private limited company and it commenced operations in May 2005. (b) Principal Activities and ProductslServices DMSSB is principally involved in the chartering of marine vessels. DMSSB currently owns two (2) work. vessels known as ~Dayang Pertama” and “Dayang Berlian” and a supply boat known as “Dayang Maju”. rc) Substantial Shareholders DMSSB is our wholly-owned subsidiary. (d) Share Capital The authorised share capital of DMSSB is RM25,001.300 comprising 25,000,000 ordinary shares of RM1.00 each and 130.000 redeemable preference shares 01 AMO.Ol each. lis issued and lully paid-up share capital is RM11 ,001 ,300 comprising 11,000,000 ordinary shares of RM1.00 each and 130,000 redeemable preference shares of RMO.01 each. The changes in the issued and fully paid-up ordinary share capital of DMSSB since its incorporation are as follows:­No. of TotallNued Date qf shares Par andpal~up allotment aUolh!d value Consideration share capital (RM) (RM) 18.11.2003 100,000 1.00 Subscribers’ shares 100,()(X) 15.01.2004 2,900,000 1.00 Cash 3,000,000 29.09.2005 8,000,000 1.00 Cash 11,000,000 The changes in the issued and fully paid-up preference share capital of DMSSB since its incorporation are as tollows:­Date of  ,-No, of shares  Par  Total Issued, and petd-up  allotment  allotted  value  Consideration  share capital  (RM)  (RM)
03.10.2007 130,000 0.01 Cash 1,300 The preference shares are all held by DESB, As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital of DMSSB. (e) Subsidiary and Associated Company As at LPD, DMSSB does not have any subsidiary or associated company. 4. INFORMATION ON OUR GROUP (Cont’d) 4.3.3 FTSB (a) Background and History FTS8 was incorporated in Malaysia under the Act on 3 December 1997 as a private limited company and il commenced operations in March 1999. (b) Principal Activities and Products/Servlces The principal activities of FTSB are in the provision of rental equipment. (e) Substantial Shareholders FTSB is our wholly-owned subsidiary. (d) Share Capital The authorised share capital of FTSB is AM100,OOO comprising 100,000 ordinary shares of RM1.00 each whilst its issued and fully paid-up share capital is RM20,OOO comprising 20,000 ordinary shares of RM1.00 each. The changes in the issued and fully paid-up share capital of FTSS since its incorporation are as follows:­No. of Total issued Date of sharea Pa, and pald~~p allotment allotted value Consideration share capital (RM) (RM) 03.12.1997 2 1.00 Subscribers’ Shares 2 06.01.1999 19,998 1.00 Cash 20,000 As at LPD, there are no outstanding warrants, options, convertible securities or uncalled capital of FTSB. (e) Subsidiary and Associated Company As at LPD, FTSB does not have any subsidiary or associated company. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY) 4. INFORMATION ON OUR GROUP 4.4 INDUSTRY OVERVIEW Unless otherwise stated, the following sections are extracted from the latest available government publications 4.4.1 Overview and Outlook of the Global Economy Global growth was strong in 2007, driven by above-trend growth in most industrial economies and buoyant growth in emerging market economies, despite moderation in the United States (US) economy, higher oil prices and the onset of financial market turbulence in the second half-year. The economies of the People’s Republic of China (PR China), India and other large emerging economies such as Brazil and Russia increased their contribution to global growth, spurred by strong consumption and rising investment activity. Record high commodity prices also buoyed growth in many resource-producing economies. Benefiting from these trends, the strong growth momentum in the Asian region was further supported by rising domestic demand, which more than compensated for some moderation in electronics exports. In contrast, downside pressures on the US economy increased towards end-year, affected by the emergence of the subprime mortgage problem and further downturn in the US housing sector, with its spillover to the global financial markets. While moderation is expected in the developed economies in 2008, the growth momentum is expected to be sustained in Asia and the other emerging economies. The growth outlook would be dependent on the length and depth of the US slowdown, and the extent of the impact from financial market turbulence. Inflation is expected to remain elevated following sustained high oil and food prices. While these developments will have an impact on the Asian regional economies, the growth in the region will continue to be supported by strong domestic demand and the high growth momentum in the large economies in the region. Overall, the expectation is for global growth to moderate, reflecting a less favourable environment in the major industrial economies and continued uncertainty in the global financial markets. In 2008, global and regional inflation is expected to remain elevated based on pass through effects from higher commodity prices in the second half of 2007 and the expectation of continued high oil and food prices. Oil prices are expected to continue to be subject to pressures from sustained demand growth, supply constraints and potential supply-side shocks. Notwithstanding these trends, several risks have increased the uncertainty on the global and regional outlook. In the event of a more protracted period of significantly below-trend growth of the US economy, accompanied by a sharper slowdown in other industrialised economies, there would be a larger impact on growth across the region as trade linkages to the developed economies remain strong. A further risk is the more severe impact from disruptions in the functioning of the financial markets and the financial intermediation process. Further adverse credit-constraining developments in the financial sector in several of the major economies could precipitate more widespread financial market volatility and damage business and consumer sentiment, while potentially prolonging the downturn in economic activity as more segments of financing activity are affected. However, in the event that there are larger than expected corrections in commodity prices, commodity producing economies would be affected. (Source: Bank Negara Malaysia Annual Report 2007) 4. INFORMATION ON OUR GROUP (Cont’d) 4.4.2 Overview and Outlook of the Malaysian Economy The Malaysian economy continued its strong growth momentum, expanding by 6.3% in 2007. Growth was driven by robust domestic demand despite a weaker external environment which led to moderation in export growth. Private consumption and investment activities expanded strongly during the year. Private consumption recorded the highest growth rate since 2000, buoyed by rising disposable income following high commodity prices, salary increments in both the public and private sectors, as well as favourable labour market conditions. Strong investment in the manufacturing, services, construction, and oil and gas industries, combined with positive business sentiment, supported expansion in private investment. This was further reinforced by large inflows of foreign direct investment. The stronger growth achieved reflected the benefits of a more diversified economic base, which has strengthened the economy’s resilience to the external environment. While the contribution of the manufacturing sector remains substantial, of significance is the shift in the economic structure in the recent few years towards the services sector, which has become the main driver of growth. The services sector led growth in 2007 was supported by domestic demand activities and new growth areas in finance, business services and communications. The strong economic performance was achieved in an environment of relatively low inflation. Overall, the headline inflation rate increased at a slower pace of 2% in 2007. The outlook for the Malaysian economy in 2008 remains favourable. As a small and highly open economy, the outlook will be influenced by the current high degree of uncertainties in the global economic and financial environment, including the problems associated with the international credit markets and financial institutions. These uncertainties will have some impact on Malaysia, mainly through the trade and financial markets linkages. The resilience of the Malaysian economy to weather a slowdown in the global economy has, however, strengthened over the years, due to a number of factors. First is the emergence of domestic demand as a key driver of growth. The strong economic growth of 6.3% in 2007 was achieved due to the robust expansion in domestic activities despite a moderation in external demand. Second, Malaysia’s export markets are increasingly diversified, with almost 54% of total exports to the Asian (exclude Japan) economies (2001: 46.2%). Meanwhile, the share of Malaysia’s exports to US has declined to 15.6% in 2007 from 20.2% in 2001. Thus, while global growth is expected to moderate in 2008 due mainly to slower growth in the US, and to a lesser extent, in Europe and Japan, the outlook for strong economic growth in the Asian region and other emerging economies would support the export sector. Third, as a commodity producer, Malaysia will continue to benefit from high prices of crude oil, palm oil and rubber. In addition, the strong base in the commodity sector would further strengthen the linkages with downstream activities, including the resource-based industries which will continue to benefit from the robust domestic demand as well as demand from the regional economies. Against this backdrop, the Malaysian economy is projected to expand by 5 -6% in 2008. Domestic demand is expected to remain resilient, providing strong support to the economy. While consumer and business sentiments could be affected by the prospects of a sharper than expected global economic slowdown and uncertainties in the international financial markets, the major underlying factors supporting domestic private sector activities are expected to remain generally intact in 2008. (Source: Bank Negara Malaysia Annual Report 2007) 4. INFORMATION ON OUR GROUP (Cont’d) 4.4.3 Industry Overview 4.4.3.1 Offshore Supporting Services Industry Structure The offshore supporting services for the Oil and Gas Industry can be further segmented as follows;­Platform and Rig Operations
AccommodQtlon lind Cawing Geological and Reservoir related ……, SuppOftingK~l’­ServicesMaintenance Services
}­safety Applications and Systems Transportation aM Logistics —
~ -Information Technologl’ and Communications  Engineering. Deslgn and Architectural  DI~ling Services
Otlshore Corlstruction Activities  Underwater S6rvices  Olhers
Offshore Supporting Services involve the provision of various forms of services to support the Oil and Gas Industry from exploration and production of hydrocarbon fluids to the transportation of hydrocarbon using vessels or offshore pipelines. Our Group is principally involved in the provision 01 oUshore topside maintenance services, which are classified under offshore maintenance services. Offshore Maintenance Services comprised various different types of maintenance works for offshore structures and facilities. Some of the examples of offshore maintenance services include mechanical maintenance such as piping/structural fabrication and welding services, topside structural maintenance, rotating and stationery equipment, storage tanks, hoses, S8M systems, and electrical maintenance (such as industrial facilities and equipmenf), instrument maintenance on pneumatic or hydraulic instrument systems, fire detection system, and other types of maintenance (such as grit blasting, materials preservation, repairing of lifting equipment and others). [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 4. INFORMATION ON OUR GROUP (Cont’d) 4.4.3.2 Offshore Maintenance Services Some 01 major offshore maintenance activities undertaken for offshore structures and facilities in Oil and Gas Industry Malaysia can be further classified into the fo!lowing:-OffShOre Maintenance Services
I I II
Electrical InstrumanlMechanical OthersMaintenance Maintenance Maintenance lnd_oLI F”‘*’ie51 Gri’lllU1Il\9T~1lI1<H Slrl’Cl~ral In..rum…. S~ _P.irlTin~”.­El<>clrooiclOtgllar RIp”;,, of ~Ifiing.–~FU,tea\HWl_ WalO’ir>ll 1n5tn.omllnl Sv&l6nl EIl”lpmtl1t fMal P’ocesoing F~. OelecIlOll. Na,m 1″”….lOOn WOfI;’no:! P”,llIolI 5)141….’ …..m MxIlu’lIflllll’ld
“” ·1… Unciou P’ISlY’1 “”P’IlC1ig.n….­XIM.l,H/ 0″…W&llnead OIho1r .ortJ/IO/l tlI’VClU,” i””ld’_ D OEHBGroI$~ .””…/wMes5 Some of the main types of offshore maintenance services that are provided 10 support Malaysia’s Oil and Gas Industry are as follows:­.:. Mechanical Maintenance o Topside Structural
o StructuraVpiping fabrication and welding
o Maintenance on heat processing equipment
o Machining and fitting services
o Maintenance on Xmas treelwellhead
o Maintenance on other offshore structures and fscillties (such as rotating and stationery equipment, valves, S8M systems, hoses, columns, pressure vessels, reactor and drum, surface preparation and maintenance of all nuts and bolts, pipe flanges, and others).

•:. Electrical maintenance, lor industrial facilities and equipment. .:. Instrumental maintenance comprises maintenance services on pneumatic or hydraulic instrument system, electronic or digital instrument systems, fire detection, alarm and protection systems. •:. Other offshore maintenance services mainly consists of special categories such as grit b1asling and painting, repairing of lifting equipment, insulation works, onw line under pressure maintenance and others such as maintenance on heating ventilation air conditioning systems, risk based inspection, catalyst and absorbent change out. -82 ­4, INFORMATION ON OUR GROUP ICont’d) Our Group is involved in the provision of offshore topside maintenance primarily on structural maintenance, structures and pipes fabrication, and welding for the Oil and Gas lndUSlry in Malaysia. (Source: Independent Assessment of the Offshore $upPor1ing Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance. Vital Factor Consulting Sdn Bhd) 4.4.4 Outlook of the Oil and Gas Industry in Malaysia The outlook of the offshore topside maintenance services for the Oil and Gas Industry in Malaysia is favourable. The offshore topside maintenance services for the Oil and Gas Industry in Malaysia are forecasted to grow by 8% to 10% per annum lor the next five years. The outlook for the Offshore Topside Maintenance Services Industry as a whole is dependent on the pertormance of the Oil and Gas Industry. As such. the favourable outlook for the Offshore Topside Maintenance Services Industry in Malaysia is based on the following observations and analyses:­local Exploration Activity .:. Between the FYE 31 March 2002 and 31 March 2007, the level of Investment made by PETRONAS and PSC operators in the exploration and production of Oil and Gas Industry in Malaysia increased at an average annual rate of 17.7%. Based on the latest announcement by PETRONAS on 28 June 2007, expenditure on the upstream Oil and Gas sector registered a growth of about 20% to RM19.2 billion compared to the previous year. •:. In the Ninth Malaysia Plan, the Malaysian Government has allocated RM43.8 billion for the development of upstream and downstream segments of the Oil and Gas Industry. Of this, RM13.1 billion has been allocaled lor upstream aclivilies and RM30.7 billion for downstream activities.
•:. Belween the years ended 31 March 2002 and 31 March 2007. a total of 30 PSCs were signed between PETRONAS and PSC operators.
•:. Between FYE 31 March 2003 and 2006. the amount of offshore seismic SUlVey data recovered registered an average annual growth of 7.7%, from 351.675 line kilometres to 439,182 tine kilometres.
-:. Based on the latest announcement from PETAONAS on 28 June 2007, there were about 250,000 line kilometres of offshore seismic survey data recovered for the FYE 31 March 2007.
•:. Between FYE 31 March 2003 and 2007. the number of exploration wells drilled increased at an average annual rate of 5.1 %. There were 39 exploration wells drilled for the FYE 31 March 2007.

•:-Between FYE 31 March 2002 and 2007, the number of Oil and Gas fields in operation in Malaysia increased trom 56 to 85. Of the total 85 fields, 59 were oil fields while the remainder 26 were gas fields for the FYE 31 March 2007. 4. INFORMATION ON OUR GROUP (Conl’d) Numb,r of Platforms .:. A relatively large number of platforms for offshore Oil and Gas supporting services provide significant growth for operators within the Industry. As at September 2007, there were approximately 400 offshore platforms in Malaysia. (Source: Independent Assessment of the Offshore Supporting Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vilaf Factor Consulting Sdn Bhd) Reserves and Local Production .:. Between January 2003 and January 2007. Malaysia’s total reserves (including crude oil and condensates, and natural gas) grew at an average annual rate of 1.0%. As at 1 January 2007, Malaysia’s total reserves (including crude oil and condensates, and nalural gas) increased by 1.4 % to 20.2 billion BOE. •:. Between January 2003 and January 2007. the crude oil and condensates reserves grew at an average annual rate of 4.7 .:. As at 1 January 2007, the crude oil and condensates reserves increased by 2.1%to 5.4 billion BOE. .:. Between January 2003 and January 2007. the natural gas reserves declined marginally at an average annual rate of 0.20/0. However, as at 1 January 2007. the natural gas reserves increased marginally by 1.1% to 14.8 billion BOE. .:. Between 2002 and 2006. daily production of crude oil decreased at an estimated average annual rate of 2.1%. In 2006, preliminary data indicated that daily production of crude oil decreased by 4.()Qfo, to 548,487 Barrels per day. •:. Between 2002 and 2006, daily produclion of natural gas increased at an estimated average annual grolNth rate of 5.4%. In 2006, the daily natural gas production decreased by 0.4% to 5.8 billion standard cubic feet per day. -:. Between 2002 and 2006, sales value of lhe manufacture of refined petroleum products grew al an average annual rate of 27.’ %. In 2006, the sales value of the manufacture of refined petroleum products increased by 13.7% to AM82.1 billion. Exports .:-Between 2002 and 2006, the export value of petroleum oils, crude. and crude oils obtained from bituminous minerals increased at an average annual rale at 28.8%. In 2006, export value increased by 7.70/.. to RM32.6 billion. •:. Between 2002 and 2006, the export value of refined petroleum products Increased at an average annual rate of 29.8%. In 2006, export value increased by 26.2% to AM19.2 billion.
•:. Between 2002 and 2006, the export value of natural gas, whether or not liquefied increased at an average annual rate of 23.9%. In 2006, the export value of natural gas, whether or not liquefied increased by 12.0% to approximately RM23.3 billion.

(Source: Independent Assessment of the Offshore Supporting Stnvices for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vital Factor Consulting Sdn Bhd) 4. INFORMATION ON OUR GROUP (Cont’d) 4.4.5 Industry Players and Competition Generally. service providers 01 offshore topside maintenance for the Oil and Gas Industry face normal competitive conditions. However, there are some exceptions:­’.’ Only companies thai afe licensed or registered by PETAONAS are allowed to bid directly for work from PETAONAS and PSG operators/contractors in the Oil and Gas Industry: .:. AU companies who wish to obtain contracts from the Government or 10 bid directly for work provided by PETAONAS and PSC operators/contractors in the Oil and Gas Industry are required 10 register as contractors with the MOF; and .:. Companies who wish to carry oul construction work in Malaysia are required 10 register with the GIDB under the Construction Industry Development Board Act 1994. Companies bidding for construction related work within the Oil and Gas Industry must be registered with the relevant grade that commensurate with the size of the project before they will be considered for any bids. Although companies that provide offshore topside maintenance serv1ceS for the Oil and Gas Industry may operate under normal competitive conditions. it is imperfect due to the requirements for licensing and registration that partly inhibits free competition. As with most free enterprise environment, once all the licensing and registration requirements are complied. competition is based on a number of factors. including:­.:. Technical compliance to customers’ specifications and requirements; .:. Quality products and services; -:. Cosl competitiveness; -:. HSE management; and 0.. Prompt delivery/completion. An additional competitive factor that concerns service providers for offshore supporting services is the ability 10 demonstrate a good safety record, typically measured by wOO< tme between work-related fatalities and lost time accidents or incidents. (Source: Independent Assessment of the Offshore Supporting Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vital Factor Consulting Sdn Bhd) Generally, competition among companies in the offshore topside maintenance services for the Oil and Gas Industry is moderate. Considerations on competitive intensity are as follows:­Factors that Increase Competitive Intensity:­.:-A large proportion of the contracts are awarded on an open tender basis. This system lends to create a highly competitive environment; .:. In practice, in all-open tender situations, once the technical specifications are fully complied, the bid with the lowest price normally wins. 4. INFORMATION ON OUR GROUP (Cont’d) .:. In many situations, international firms with highly reputable track records are involved in the bidding process where large. complex and high value projects are placed on tender. •:. In many situations, there are many bidders with the relevant credentials for lender and non-lender jobs. Factors that Moderate Competitive lntensity:­.:. Competition for contracts within the Oil and Gas Industry in Malaysia is ultimately restricted to service providers with the relevant PETRONAS licences or registrations. The number of service providers with the relevant licences or registrations to provide a particular service or product may be limited, particularly in the case of more specialised services lor offshore environment; .:. Some cHents may award certain contracts based on closed tender, restricted tender or through direct negotiation. In these instances, competitive intensity is reduced; .:. The technical requirements and specifications for some complex projects may be so challenging that only a small number of the more specialised service companies are able to meet the requirements; .:. In some cases, customers may take into consideration other non-price factors, such as ability to provfde the extensive services and ability 10 meet 1he requirement and specilications timely. in awarding more challenging projects; …. Barriers to entry for the provision of offshore topside maintenance services are moderate to high, primarily due to the technical skills and knowledge required and the ability to demonstrate a good safety record. Typically good salety record is measured by work lime between work~related lalalilies and lost time accidents or incidents. These factors will help reduce the competitive pressure and provide some barriers to entry; .:. Companies that have large capacities and operations have the ability 10 undertake more and larger sized projects compared to smaller companies. Larger companies are able to enjoy economies of scale thus increasing their cost effectiveness. All these would reduce the competitive pressure for larger companies; and -:. The provision of offshore topside maintenance services is a critical part of the Oil and Gas Industry. Thus, the Oil and Gas Industry would favour established companies with sufficienl track record and experience in the required areas of expertise. (Source: Independent Assessment of the Offshore Supporling Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance. Vital Factor Consulting Sdn Bhd) Players In the Industry As at December 2007, there were approximately 59 companies in the provision of offshore topside structural maintenance services. (Source: Independent Assessment of the Offshore Supporting Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vital Factor Consulting Sdn Bhd) 4. INFORMATION ON OUR GROUP (Conl’d) 4.4.6 Laws and Regulations 4.4.6.1 Government Rogulations All rights related to the exploration and extraction of petroleum in Malaysia is vested in PETRONAS under Ihe PDA. PETRONA$ was also granted control over the carrying out of downstream activities and development relating 10 petroleum and its products under the PDA. All companies wishing 10 participate in the Oil and Gas Industry are required to obtain the necessary licences, or successfully register with PETRONAS belore they are allowed to participate in these activities. Companies who wish 10 lender for contracts from the Government are also required to register as contractors with the MOF and the GlOB. PETRONAS Licences and Registrations Applicants are required 10 specify Ihe scope of work for which the licence or regiSlTation is being applied for, based on a sel of Standardised Work and Equipmenl Categories (“SWEC·). An individual licence or registralion must be oblained for each SWEC. Companies that have obtained a licence for SWEC are allowed to participate in the upslream sector. downstream seclor, and maritime sector for the Onshore and OffshOre Oil and Gas Induslry. In contrast to a licence. companies that are registered for SWEC are allowed to only participate in the downstream sector and maritime sector of the onshore Oil and Gas Industry. Registered companies are not allowed to participate in the upstream sector. Generally, licences and registrations are effective for a period of one (1) year. However, the effective period of more than one (1) year can be considered. Our Group has obtained Ihe following licences and registrations ‘rom the relevanl authorities:­PETRONAS Licences -DESB Setvfcu Supplies Validity Period (SM 1) Maintenance Services (01) MechanICal Maintenance · (Ot.7) Topside Struclural Maintenance · (01.6) StructurallPipinglFsbricationllJVelding (OS) Special Categories · (05. ‘) Gritblasting and Painting (SO 2) Offshore Construction (03) Hook up and Commissioning (SO 3) Onshore Construction! Fabrication (02) Minor Fabrication! Welding · (02.2) Civil Enginooring 16 June 2006 until 1S June 2008 16 June 2006 until 1S June 2008 16 June 2006 until1S June 2008 4, INFORMATION ON OUR GROUP (Cont’d) PETRONAS Licences -DMSSB services Supplies Validity Period (8M 3) Marine Vessels  (01) Anchor Handling Vesselrrug BoaVSupply Vessel (02) Accommodation BargeNessei (07) Land Craft/Tank  23 August 2007 until 22 August 2009  (14) Work Vessel-Construction Maintenance (Major)
Registration with the CIDB With effect from 20 July 1995, it is mandatory under the Act of Parliament Act 520 (Act 520) lor all builders, contractors and sub-contractors, whether local or foreign, to register with the CIOB, before undertaking or executing any construction work in Malaysia. AccOfding to Act 520 01 the Construction Industry Development Board Act 1994, all organisations that undertake some form of civil engineering mechanical and electrical works must register with CIoB and hold a valid certificate of registration in order to carry out any construction work. DESB, a wholly-owned subsidiary within our Group, is registered with the CloB for the following activities, which are valid until 19 June 2009. Grade
G7 ONshore ConslruClion Works G7 General Civil Engineering Works G7 Specialfsed Fabrication and Treatment Domestic Shipping Licence With effect from 1 January 2001 onwards. all ships that are involved in providing services, other than fishing in Malaysian waters or exclusive economic zone shall be required to obtain the licence from the Domestic Shipping licensing Board. DMSSB has obtained the following licences from the Domestic Shipping licensing Board:­Name Of Vessel Descriptions . , Validity’ Period 22 September 2006 until 21Dayang Pcrtama Maintenance Supporl Vessel Seplember 2008 12 January 2007 until 11 JanuaryOayang Berlian Maintenance Support Vessel 2009 8 February 2007 until 7 FebruaryOayang Maju Supply Boat/Landing Cralt 2009 4. INFORMATION ON OUR GROUP (Cont’d) (Source: Independent Assessment of the Offshore Supporting SeIVic8s for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vita’ Factor Consulting SdnBhd) 4.4.6.2 Government Incentives PETRONAS Initiatives As part 01 the aim to promote and encourage local participation in the Oil and Gas Industry, PETRONAS has implemented the following initiatives:­v licensing and registration of companies with preference given 10 focal companies; and .:. implementation of the Vendor Development Programme (VDP) for Bumipulera entrepreneurs, In addition, PETRONAS also initiated Cost Aeduction Alliance (“CORAL”) in 1995 with the primary objective 10 reduce the operating cost of upstream operations. CORAL is a forum thaI seeks to reduce costs and enhance efficiency through sharing of facilities and logislics, standardising of equipment specifications and effective coordination of operations. The introduction of CORAL has enabled the Oil and Gas Industry in Malaysia to reduce costs by awarding a significant proportion of the projects 10 local companies. (Source: Independent Assessment of the Offshore Supporling Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance. Vilal Factor ConSUlting Sdn Bhd) 4.4.6.3 Environmentsl Regulstions The disposal of waste created during our operations include the following categories:­.:. Waste oil and dirty oil; .;. Waste thinner mixed with used paint; ..;. Waste thinner; and -:- Used garnet All the wastes listed above are categorised under the scheduled waste in lhe Environmental Quality (Scheduled Waste) Regulation ‘969. Our Group uses OMA Shipping and Forwarding Sdn Bhd for the collection of scheduled wastes from offshore structures and uses Kualiti Alam Sdn Bhd for the disposal of the scheduled wastes once they arrive on land. 4.4.7 Demand and Supply Conditions 4.4.7.1 Demand Dependencies The demand lor offshore lopside maintenance selVices is primarily dependent on the performance of the Oil and Gas InduslIy in Malaysia. Production of Oil and Gas in Malaysia may be classified into two (2) broad categories:­.;. Production of Crude Oil and Condensates; and ,. Production of Natural Gas 4. INFORMATION ON OUR GROUP (Cont’d) The demand for supporting products and services. particularly those related to exploration and production, is also dependent on lhe number of recenlly signed PSCs. Under the terms of PSCs normally signed by PETRONAS, the exploration period (including Appmisal) is between 5 to 7 years, while the development period fs between 4 106 years, and the production period is between 15 and 25 years. The number of PSCs in operation between PETRONAS and PSC operators/contractors increased from 41 lor the FYE 31 March 2002. to 64 IOf the FYE 31 March 2007. Demand for offshore topside maintenance services in Oil and Gas production are also dependent on Ihe number of Oil and Gas fields that are currently in operation in Malaysia. Based on the latesl announcement from PETRONAS on 28 June 2007. lor the FYE 31 March 2007, a lotal of 85lields were in operation, of which 59 were oil fields while the remainder 26 were gas fields. The following analysis also provides an indication of the performance of the Oil and Gas Industry in Malaysia:­.;. Between 2002 and 2006. daily production of crude all decreased at an estimated average annual rate of 2.1 %. In 2006. preliminary data indicated that daily production of crude oil decreased by 4.0%, to 548.487 barrels per day. •:. Between 2002 and 2006, daily production of natural gas increased at an estimated average annual growth rate of 5.4%. In 2006, the daily natural gas production decreased by 0.4% to 5.8 billion slandard cubic feet per day. •:-Between 2002 and 2006, sales value of the manufacture of refined petroleum products grew at an average annual rate of 27.1 %. In 2006, the sales value of the manufacture of refined petroleum products increased by 13.7% to AM82.1 billion. -:. Between 2002 and 2006, the export value of petroleum oils. crude. and crude oils obtained from bituminous minerals increased at an average annual rate of 28.8%. In 2006. export value increased by 7.7% to RM32.6 billion. •:. Belween 2002 and 2006, the export value of refined petroleum products increased at an average annual rate of 29.8%. In 2006, export value increased by 26.2% to RM19.2 billion.
•:. Between 2002 and 2006, the export value 01 natural gas, whether or not liquefied increased at an average annual rate of 23.9%. In 2006, the export value of natura! gas, whether or nol liquefied increased by 12.0% to approXimately RM23.3 billion.

(Source: Independent Assessment of the Offshore Supporting Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vital Factor Consulting Sdn Bhd) 4.4.1,2 Supply Dependencies -Raw Malerlals There are no raw material purchases per se as our Group is in the provision of offshore topside maintenance services for the Oil and Gas Industry. Our Group’s purchases primarily consist of consumables, parts and components, which are used to facilitate the provision of offshore topside maintenance services to the Oil and Gas Industry. Some of the purchases include:. 4. INFORMATION ON OUR GROUP (Conl’d) .:. Valves; .:. Steel pipes and tubes, and filtings: .:. Other secondary sleel products (such as welding electrodes, bolts and nuts); and .:. Others include paints and coatings, and garnets. (Source: Independent Assessment of the Offshore Supporting Services for the Oil and Gas Industry. focusing on Offshore Topside Maintenance. Vital Factor Consulting Sdn Bhd) 4.4.8 Substitute Products! Services Offshore topside maintenance services playa critical role in the Oil and Gas Industry. There are no direct subslitutes lor the provision of offshore topside maintenance services wi1h the exception 01 eilher undertaking these services internally by the PSC operators or owners of offshore platforms. 4.4.9 Vulnerability and Reliance On Imports As the provision of offshore supporting services for the Oil and Gas sector is a service based industry, vulnerability and reliance on imports is not as relevant. 4.4.10 Seasonality I Cyclicality The provision of offshore supporting services lor the Oil and Gas sector is essential in ensuring the uninlerrupted production of hydrocarbon. Thus there is no seasonality in Ihe demand for its services. 4.5 MAJOR CUSTOMERS 4.5.1 Customer Base Our Group primarily provides offshore platform services to Oir and Gas Industry operators. Our Group mainly services Second Tier operators within the Oil and Gas Industry namely PSC contractors such as PETAONAS Carigali, Shell and Murphy Sabah Oil Co Ltd.
For the FYE 30 September 2007, all of our Group’s revenue is derived from providing offshore topside maintenance services, charter of marine vessels. minor fabrication and offshore hook-up and commissioning services to second tier operators in the Oil and Gas Industry in Malaysia. Our Group enjoys a close and rang standing business relationship with our customers and places significant emphasis on developing and maintaining customer satisfaction. goodwill and rapport. 4. INFORMATiON ON OUR GROUP (Conl’d) 4.5.2 Major Customers The fable below list our Group’s customers thai represented 10% or more of our Group’s lolal revenue ovef the last three (3) financial years:­FYE 30 Se tember 2005  FYE 30 Se lember 2006  FYE 30 Se tember 2007  Customer Name  Revenue . (RM’QOO)  ProporUon of Group Revenue (%)  Revenue (RM’OOO)  Proportion of Group Revenue (%)  Revenue (RM’OOO)  P~portion of Group Revenue(%)  PETRONAS Carlgali (Sarawak Operations)  60,196  53.6  92.005  84.5  99.780  78.5  Sarawak Shell  21,752  19.4  16,650  15.5  20,416  16.1  ExxonMobil  16,368  14.6  – – 1,016  0.•  PETRONAS Carigali (PenVlsular Malaysia Operations)  14,074  12.5  – – – Tolal  112,390  100.1 J\  108,855  100.0  121,212  95.4  GROU,P’S TOTAL REVENUE  112,390  108,906  127,134
Note: A Over 100% due to rounding For the FYE 30 September 2007, our top customer, PETRONAS Carigali (Sarawak Operations) accounted for 78.5% of our Group’s lolal revenue. Our Group undertakes a range of activities 10 facilitate offshore topside maintenance services, minor fabrication works and charter of marine vessels services for PETAONAS Carigali. Sarawak Shell is the next largest customer, which accounted far 16.1% of our Group’s total revenue for the FYE 30 September 2007. These long-standing relationships wnh maior operators in the Malaysian Oil and Gas Industry serves as an endarsemenllor the quality of our Group’s products and services. PETRONAS Carigali and Sarawak Shell are major PSC operators in Malaysia. Accordingly, it is inevitable that they conslitute a major source of revenue for service providers for the Oil and Gas Industry in Malaysia like our Group. Please refer to Seelion 3.2.3 for the factors that serve to mitigate our dependency on them. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY] 4. INFORMATION ON OUR GROUP (Conl’d) 4.6 MAJOR SUPPLIERS The table below is a list of our Group’s suppliers, which accounted for 10% or more of our total purchases between FYE 30 September 2005 and 2007:­FYE30SeD mber 2005 FVE 30 Seotember2006 FYE ~ose te~ber:2007 , ,. Proportion PropOrtion Proportion Purchaae of.Group ofGtoupof GrOuP. ‘ PLirchaae Purchase ‘ ” PurehaMa’/Olue: valU8 )~ur~.NI,V.1U~OI PU~~~'”‘SuPPlier Name RM’OOOOI IRM’OOO0 . ‘%1 R.”‘·OOO 1,156Sabaria Jaya Setn Bhd 1,158 4.5 2.6 12,055 25.3 Bumi Armada Navigation 7,954 31.0 11,240 25.1 8,143 17.1$dn Bhd Vastalux Sdn Bhd . .2,3712,575 10.0 5.3 litak Offshore Energy 9,201532 2.1 20.5 648Services Sdn Bhd 44,849 ,-­Group’s Total Purchalies 25,691 47.738 The largest supplier was Sabaria Jaya Sdn 8hd who supplied pipes, fittings and valves to our Group. Purchases from Sabaria Jaya Sdn Bhd accounted tor 25.3% of our Group’s purchases for the FYE 30 September 2007. The second largest supplier, Bumi Armada Naviga1ion Sdn Bhd accounted lor 17.1% of our Group’s total purchases lor the FYE 30 September 2007. This is mainly for the charter of marine vessels such as workboals. The third largest supplier was Trillion Crest (M) Sdn Bhd for the supply of pipes and renovation of living quarters. Purchases from Trillion Crest (M) Sdn Bhd accounted 10r 5.9% of our Group’s purchases for the FYE 30 September 2007. As part of our Group’s philosophy for cultivating long-term supplier relationships, approximately 65% of the top twenty (20) suppliers have been dealing with our Group for seven (7) or more years. Of this, eight (8th) out of the top twenty (20) suppliers have been dealing with our Group for nine (9) or more years. We are not dependent on any single supplier. [THE REST OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLYj 4. INFORMATION ON OUR GROUP (Conl’d) 4.7 FUTURE PLANS AND STRATEGIES The future plans of our Group are focused in three (3) key areas as depicted in the diagram below:­Future Plans of DEHB Group .L
Purchase of Working Assets
.L RegionalProvision of GeographicalNew Services Expansion III
Marine Vessel  Equipment and Machinery
Onshore Maintenance Services
Charter of Marine Vessel
South East Asia (a) Purchase of Working Assets New Marine Vessel In November 2007, our Group commissioned the construction of an additional marine vessel with the capacity to accommodate 189 persons. This new marine vessel will have floating accommodation and on-deck work area. This new vessel will supplement our Group’s three (3) in-house marine vessels, which comprised two (2) workboals and one (1) supply boat. As there is an increasing demand for vessel chartering services in the Oil and Gas Industry, our Group intends 10 charter out the new marine vessel to third parties overseas. Our Group expects the new marine vessel to be completed and operational by 2009. New Equipment and Machinery Part 01 our Group’s future plan also includes investing in new equipment and machinery for our operations. This is to cater for future business growth including onshore maintenance services and regional geographical expansion into South East Asia markets. Some of the major equipment and machinery to be purchased includes:­.:. Hydroblasting equipment; .:. Welding equipment;
.:. Air compressors; and .:. Scallolding systems.
Our Group ex:pects to purchase the above new equipment and machinery for our operations by 2009. -94 ­4. INFORMATION ON OUR GROUP (Conl’d) (b) Provision of Now Services Onshore Maintenance Services Our Group intends to provide similar range of maintenance services to onshore facilities including, among others;· -:-Oil and Gas planls (such as crude Oil and Gas terminal); .:. Petrochemical plants; .:. Fertiliser plants; and .:. Methanol plants.
This is synergistic 10 our current business, which is focused on offshore platforms.
Part of our Group’s future plans is to leverage from our existing core competencies in offshore maintenance services to provide onshore maintenance services 10 onshore facilities. This will provide our Group with opportunities lor business growth. According to the Ninth Malaysia Plan, AM30.7 billion has been allocated for the development of downstream Oil and Gas segments.
Our Group expects fo provide onshore maintenance services to onshore lacilities by 2009.
Chartt!r of Marine Vt!ssels To Extt!rnal Parties As an extension of our Group’s current range 01 offshore plat10rm services lor the Oil and Gas Industry, our Group intends to charter out our marine vessels to external parties. Our Group intends to target the overseas markets where it believes that Ihe demand is higher and Ihe contracts are more lucrative. Currently our Group owns three (3) marine vessels including two (2) workboals with the capacity to accommodate 189 personnel each. These workboats provide floating accommodation for our own personnel, which incorporate on-deck area as well as a work area and a 15-tonne crane. Our Group’s supply boat is used to support our in· house marine transport services as well as charter the supply boal for third parties, Our Group has also commissioned the construction of a new marine vessel and this is expected to be completed by 2009. Some of the facilities of the new marine vessel will include Ihe following;. .:. Sleeping quarters; -:. Catering; .:. Laundry; .} Fuel supply; .:. Potable wa1er; ‘.’ Safety equipment; -:. Utility equipment and -:. Waste control and disposal.
We intend 10 commence chartering of the new marine vessel by 2009. 4, INFORMATION ON OUR GROUP (Cont’d) (c) Regional Geographical Expansion Our Group primarily services the local markel. For the FYE 30 September 2007, revenue from the local market accounted for 100% of the our Group’s total revenue. Our Group plans to expand our geographic coverage to provide a range of offshore platform services including offshore topside maintenance, charter of marine vessels, minor labricalion and offshore hook-up and commissioning to other markets outside of Malaysia. In particular, our Group has plans to expand into countries where PETRONAS has established its operations. PETAONAS is a participant in the international Oil and Gas Industry. PETRONAS has a total of 58 international ventures in 22 countries for the FYE 31 March 2007 (Source: Independent Assessment of the Offshore Supporting Services for the Oil and Gas Industry, focusing on Offshore Topside Maintenance, Vital Factor Consulting Sdn Bhd) As such, there are ample opportunities for our Group 10 provide our services 10 PETRONAS. As part of our regional geographical expansion plans, we plan to expand our business operations to address opportunities in the South East Asian region. The following lable indicates the timing lor implementation of the future plans of our Group;. Vear of Commencement 2008 2009 Purchase of Working Assets Equipment and Machinery Marine Vessel’ Provision of New Services Onshore Maintenance Services Charter ot Marine Vessel Regional Geographic Expansion South East Asian region
Expected to camp/eta and operational by 2009 [THE REST OF THIS PAGE HA.S BEEN LEFT BLANK INTENTlONA.LLY]

 

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