Business Overview

4. INFORMATION ON THE DELEUM GROUP 4. INFORMATION ON THE DELEUM GROUP 4.1 BACKGROUND 4.1.1 Incorporation and Commencement of Business Deleum was incorporated in Malaysia under the Act on 23 November 2005 as a private limited company under the name of Deleum Sdn Bhd. Subsequently, on 15 September 2006, it was converted to a public limited company and assumed its present name of Deleum Berhad. Deleum commenced business on 29 November 2005 as an investment holding company. It had on 29 November 2005 entered into a sale and purchase agreement, to acquire the entire issued and paid-up share capital of DSSB. The Acquisition of DSSB was completed on 20 December 2005. Subsequently, on 28 December 2005, Deleum acquired the entire issued and paid-up share capital of DSHL. The internal group reorganisation resulted in Deleum being the new holding company of DSSB and DSHL, with the same shareholders as those immediately prior to the reorganisation. In addition to the aforementioned Acquisitions, disposals of certain subsidiaries and associate corporations were also carried out to streamline the business operations of the Group. The history of the Deleum Group dates back to 1976 where DSSB began operations in marketing telecommunication equipment. In 1982, DSSB diversified into the Malaysian oil and gas industry and established itself as a service company. On obtaining exclusive representations, for the provision of drilling rigs and drilling services, gas turbines as well as pneumatic electronic instruments, DSSB became a PETRONAS licensed service company. Solar Turbines Inc appointed DSSB in 1982 as its representative on an exclusive basis for the sale and marketing of gas turbines, compressors and generators for use in the oil and gas industry in Malaysia and subsequently in 1996, the power generation sector as well. After the acquisition by the Solar Turbines Inc of Turbomach SA, Turbomach SA appointed DSSB in 2005 as its sales and marketing representative in Malaysia for the power generation sector. TSSB was formed in 1987 as a joint venture between DSSB and Solar Turbines Inc to provide after sales technical service for gas turbine packages in Malaysia. In 1985, DSSB was appointed to act as the sole and exclusive sales and marketing agent by Vetco Singapore (Pte) Ltd (currently known as Vetco Gray Pte Ltd) (“Vetco Gray”) for Vetco products and services in Malaysia. In 1991, Vetco Gray and DSSB formed a joint venture through VGD to undertake the manufacture, assembly and sale of Wellheads, Christmas Trees, conductors and other ancillary equipment. However, in 1999, VGD ceased operations. DSSB secured in 1985 another sole and exclusive sales representative right with Single Buoy Moorings Inc for the sale of their products, including single point mooring systems, floating storage and offloading systems and floating production storage and offloading systems, in Malaysia.

 

4. INFORMATION ON THE DElEUM GROUP (Cant’d) In 1987, DSS8 acquired a majority interest of 51% in Cameo (Malaysia) Sdn 8hd and thus formed a joint venture with Cameo Services International Inc (“Cameo”). Following the successful transfer of technology and skills to the local personnel, DSS8 then in 2001 purchased the remaining shares owned by Cameo and changed the name of Cameo (Malaysia) Sdn 8hd to DOSS8, making it a wholly owned subsidiary of DSS8. DOSSB today provides an extensive range of oilfield services to PSC operators in Malaysia. In 2000, DSSB was appointed as a sole and exclusive representative in Malaysia for the sale of submarine cables and umbilicals and offshore support services by Duco ltd, part of the Technip Group. Over the years, in addition to STI, Vetco, SBM and Duco, the Group has established relationships with other principals and partners who are internationally renowned in supporting the oil and gas industry, such as ReedHycalog and Grayloc Products ltd. The Group has also developed its own capabilities specifically in providing specialised products and services to the oil and gas industry, for example, Wireline rental and services, Integrated Wellhead maintenance services, specialty chemicals, and other related products and services. Since its diversification into the Malaysian oil and gas industry 1982, the Group has grown from strength to strength and is today, one of the leading companies in the provision of supporting specialised products and services for the oil and gas from exploration to production in Malaysia. The principal business activities of the Group cover the following areas: • Specialised equipment and services;
• Oilfield equipment and services; and
• Oilfield chemicals and services.

The Deleum Group’s other business activities through its associate corporations include bulking services and an IPP. With approximately 25 years of experience in the oil and gas industry, the Group has become a provider of supporting specialised products and services to the oil and gas industry in Malaysia.
Act;”” Ceased Operation

4. INFORMATION ON THE DElEUM GROUP (Cont’d) Details of the subsidiary and associate corporations of the Company are summarised below: 4. INFORMATION ON THE DELEUM GROUP (Cont’d)
Subsidiaries of Deleum  DSSB  10 July 1976/ Malaysia  RM10,OOO,OOO  100.0  Provision of supporting specialised products and services for the exploration and production of oil and gas  DSHl  26 January 1995/ Hong Kong  HK$100  100.0  Investment holding company  DFSSB  21 August 2006/ Malaysia  RM100  100.0  Presently dormant, proposed manufacture ofDRA  TOSB  21 December 2005/ Malaysia  RM100,000  100.0  Presently dormant, proposed provision of gas turbine overhaul and maintenance services  Subsidiaries of ossa  DOSSB  20 March 1978/ Malaysia  RM1,OOO,OOO  100.0  Provision of supporting specialised products and services  TSSB  6 November 1987/ Malaysia  RM2,600,OOO  74.0  Provision of gas turbine technical services  DCSB  5 July 1982/ Malaysia  RM100,OOO  60.0  Development and supply of oilfield chemicals and services  WSB  10 May 1985/ Malaysia  RM135,002  100.0  Ceased operations in 2004  DHSB  18 February 1984/ Malaysia  RM2  100.0  Ceased operations in 1997  VSM  11 June 1981/ Malaysia  RM404,000  90.0  Ceased operations in 2004  Subsidiaries of OSHl  DUCl  26 October 1998/ BVI  USD10  60.0  Investment holding company  DPCl  10 October 2001/ BVI  USD10  60.0  Dormant  Associate Corporation of ossa  2MC  19 April 1985/ Malaysia  RM1,700,OOO  32.0  Provision of bulking services for the oil and gas industry  Associate Corporation of DUel  CUPl  24 April 1995/ Cambodia  USD12,000,OOO  12.0  Independent power producer operating in Cambodia
4.1.3 Share Capital and Changes in Share Capital The present authorised share capital of Deleum is RM100,000,000 comprising 100,000,000 Shares. The issued and paid-up share capital of Deleum is RM66,000,000 comprising 66,000,000 Shares. Details of the changes in the issued and paid-up share capital of the Company since its incorporation are as follows:
23.11.2005 2 1.00 Subscribers’ shares 2 20.12.2005 59,999,998 1.00 Otherwise than cash, 60,000,000 pursuant to the Acquisition of DSSB 06.04.2007 6,000,000 1.00 Pursuant to Rights 66,000,000 Issue
4.1.4 Listing Scheme In conjunction with, and as an integral part of the listing and quotation for the entire issued and paid-up share capital of Deleum on the Main Board of Bursa Securities, the Company undertook a listing scheme which involved the following: (a) Rights Issue Deleum undertook a Rights Issue of 6,000,000 new Deleum Shares at an issue price of RM1.00 per Rights Issue Share to the existing shareholders of Deleum. The Rights Issue was undertaken on the basis of one (1) new Deleum Share for every existing ten (10) Deleum Shares. The Rights Issue was completed on 6 April 2007. Under the Rights Issue, Tan Sri Dato’ Mohd Ibrahim Bin Mohd Zain renounced his portion of rights of allotment under the Rights Issue in favour of LMSB. The Rights Shares were allotted to the shareholders of Deleum in the following manner as agreed:-
Dato’ Izham Bin Mahmud  225,000  2,475,000  3.75  Datin Che Bashah @ Zaiton Binti Mustaffa  679,412  7,473,536  11.32  IMHSB  490,588  5,396,464  8.18  Datuk Vivekananthan all M. V. Nathan  885,000  9,735,000  14.75  Hi Abd Razak Bin Abu Hurairah  150,000  1,650,000  2.50  LMSB  2,179,412  18,679,412  28.30  Tan Sri Dato’ Mohd Ibrahim Bin Mohd Zain  5,294,124  8.02  Chandran Aloysius Rajadurai  420,000  4,620,000  7.00  HSB  970,588  10,676,464  16.18  Total  6,000,000  66,000,000  100.00

 

4. INFORMATION ON THE DELEUM GROUP (Cont’d) (b) Public Issue The Public Issue comprises the issuance of 14,000,000 Issue Shares at an issue price of RM2.55 per Share payable in full on Application upon such terms and conditions as set out in this Prospectus. The Public Issue will be allocated and allotted in the following manner:­(i) Public 4,000,000 Public Issue Shares will be made available for application by individuals, companies, societies, co­operatives and institutions, of which at least 30% is to be set aside strictly for Bumiputera individuals, companies, societies, co-operatives and institutions. (ii) Eligible Employees and/or Business Associates of the Group 4,000,000 Public Issue Shares will be reserved for the eligible employees and business associates of the Deleum Group. The Public Issue Shares are to be allocated to 192 eligible employees of the Group based on the following criteria as approved by the Company’s Board of Directors:­Designation and position; Length of service; and Performance. The Public Issue Shares to be allocated to 26 business associates of the Group will be based on the following criteria as approved by the Company’s Board of Directors:­Length of relationship; and Recognition of contribution and support to the Group’s growth. None of the directors of Deleum are eligible to the pink form save for the eligible Directors of Deleum as set out in Section 4.1.4 (c)(i) below. (iii) Placees 6,000,000 Public Issue Shares are reserved for Private Placement to selected investors, which are to be identified. Any of the Public Issue under Section 4.1.4 (b)(ii) above, not taken up by Deleum’s eligible employees and/or business associates of the Deleum Group, will be reoffered to Deleum’s eligible employees and/or business associates of the Deleum Group. Subsequently, any of the Public Issue reoffered which are not taken up will be made available for application by the Public under Section 4.1.4 (b)(i) via balloting and/or selected investors via Private Placement.
4. INFORMATION ON THE DELEUM GROUP (Cont’d) (c) Offer For Sale The Offer For Sale comprises the offer for sale by the Offerors of 6,450,000 Deleum Shares held by them collectively at an offer price of RM2.55 per Share which is payable in full on application upon such terms and conditions as set out in this Prospectus. The Offer Shares will be allocated in the following manner:­(i) Independent Directors of the Group 450,000 Offer Shares will be reserved for the Independent Directors of the Group as follows:-
Datuk Ishak Bin Imam Abas  Independent Non­Executive Director  150,000  Dato’ Kamaruddin Bin Ahmad  Independent Non­Executive Director  150,000  Chin Kwai Yoong  Independent Non­Executive Director  150,000  Total  450,000
Save for the eligible Directors disclosed under Section 4.1.4 (c)(i) above, none of the Directors of Deleum are eligible to the pink form allocation. (ii) Placees 6,000,000 Offer Shares are reserved for Private Placement to selected investors, which are to be identified. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.1.5 Location of Business The Group’s head office is located at 42, Jalan Bangsar Utama 1, Bangsar Utama 59000 Kuala Lumpur. Details of the other locations of business where the Group operates from including their warehouses, operational and support offices, are set out below: ,.,~~,;:  ‘l:ocadon”: :’ “,..~”.:);  ;.,; ‘;,x;”:i.  >:.::~;lM;, :’Nature”‘,f”fF,: i:d:i(,t,J?:c ,  1,  Sarawak  Lot 1315 Miri Waterfront Commercial Centre 98008, Miri Sarawak  Sales, marketing and operations,  2.  Labuan  Asian Supply Base Ranca Ranca Industrial Estate PO Box 80751 87017 Labuan  Technical services, storage facilities, workshop and logistics centre,  3,  Terengganu  Kemaman Supply Base Warehouse 22 PO Box 102 24007 Kemaman  Technical services, storage facilities, workshop and logistics centre,  4,  Selangor  Lot 46. Lower Ground Floor Kompleks Selayang Batu 8%, Jalan Ipoh 68100 Batu Caves Selangor Darul Ehsan  Storage facility.
Presently, the abovementioned offices and workshops are rented, save and except for item 1, which is owned by the Group, Details of ownership of the properties owned by the Group are set out in Section 8.1 of this Prospectus. The Group’s overhaul and repair operations for gas turbines are currently located at Aired Sdn Bhd’s (“Airod”) facility in the Sultan Abdul Aziz Airport, Subang. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON THE DELEUM GROUP (Cont’d)

 

4.2 TYPES OF PRODUCTS AND/OR SERVICES The structure of the oil and gas industry may be depicted as follows:
Exploration Refining!Production Transportation Processing Distribution ;/ ~lipj:ii::irtirig ;’;; Products;and
“:>§ery’iC$S,.”” The supporting specialised products and services supplied by Deleum Group are primarily utilised in the upstream sector of the oil and gas industry, which focuses on exploration and production of oil and gas. The range of supporting specialised products and services provided by Deleum Group includes the following:
Gas Turbine Packages
Subsea Production Systems and Umbilicals
Other Equipment and Services Wireline Equipment and Services
Production and Drilling Equipment and Services Production Equipment and Storage Vessels
Gas Turbine Overhaul Services
Wellhead Maintenance Services
Subsea Wellhead Systems Maintenance
Other Offshore Equipment and Services
Gas Turbine Parts and Components
Solid Deposit Solutions
Drag Reducing Agent
Gas Turbine Technical Services
The Deleum Group’s other business activities through its associate corporations include bUlking services as well as an IPP. 41 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.2.1
Specialised Equipment and Services Deleum Group supplies a range of specialised equipment and technical services, comprising gas turbine packages, subsea production systems and umbilicals, and other equipment and services. Gas Turbine Packages Gas turbine packages supplied by Deleum Group comprise the following: generator sets; compressor sets; and mechanical drive sets.
Deleum Group supplies gas turbine packages through DSSB. Deleum Group has the capability to be involved in every stage of a gas turbine solution, from initial consultation and design to commissioning. After commissioning, it also has the capability to provide technical support and maintenance throughout the lifespan of a gas turbine. The majority of gas turbine packages supplied are used in the oil and gas industry, with the bulk of these installed on offshore oil and gas production platforms. Gas turbine packages supplied by Deleum Group to the oil and gas industry are primarily utilised by customers such as PCSB, PGB, Talisman, SSB, SSPC, EMEPMI, and Nippon Oil Exploration (M) Sdn Bhd (“Nippon”) and consist of: Gas turbine generator sets for offshore facilities; Gas turbine compressor sets for offshore facilities and onshore compression stations; and Gas turbine mechanical drive sets for offshore facilities.
Several gas turbine packages supplied by the Group were also installed for non-oil and gas industry applications, including district cooling and industrial power generation. The Group supplied gas turbine packages to Gas District Cooling (M) Sdn Bhd for the following gas district cooling plants: Kuala Lumpur City Center; and Universiti Teknologi Petronas.
The Group also supplied gas turbine packages to the follOWing for their co­generation plants: Malaysian Mosaic Ltd; and Muda Paper Mills Sdn Bhd.
Deleum Group’s association and partnership with STr enables Deleum Group to provide the highest possible level of support to its customers. Gas turbines supplied by Deleum Group have rated power-generating capacity of between 1 megawatt to 15 megawatts. By offering packages that integrate multiple gas turbines, the Group’s gas turbine packages are competitive for power generation applications of between 1 megawatt to 50 megawatt.
4. INFORMATION ON THE DELEUM GROUP (Cont’d) DSSB provides services covering all stages of the gas turbine procurement process. Services provided by OSSB are as follows: Initial consultation with the customer to determine customer needs and specifications; Equipment selection and plant design; Gas turbine package performance, engineering and other data; Preliminary project economic evaluation and total cost of ownership evaluation; and Procurement of gas turbines and auxiliary systems.
OSSB also assists in the design and engineering, procurement and delivery of the total gas turbine package, incorporating gas turbine, generator, compressor and other systems. Upon delivery, TSSB, a subsidiary of Oeleum Group is involved in the installation and commissioning. TSSB provides after sales support for the gas turbine package after commissioning. For co-generation plants, the Group also has the capability to develop and undertake: Turnkey projects; and Build, Own and Operate or Transfer Projects (“BOOIBOT”).
Subsea Production Systems and Umbilicals The Group provides complete subsea production systems and umbilicals to its customers. The provision of subsea production systems includes the design, procurement, installation and commissioning of subsea production and control systems. Subsea production systems consists of subsea Wellheads and manifolds, control systems and umbilicals. Subsea Wellhead systems consist of structures, valves, pipes and fittings that are used to control the flow of hydrocarbons from a sub-surface well. Subsea Wellhead systems are installed on the seafloor, and are typically controlled from a surface platform through the surface control system. Subsea Wellheads are designed to operate continuously under intense pressure and in a corrosive environment for up to twenty (20) years. As carrying out underwater maintenance on subsea Wellhead systems is expensive or even impossible, these systems are designed not to require any maintenance. A subsea manifold acts as a hub connecting several subsea Wellheads to a production platform. Hydrocarbons extracted from subsea Wellhead systems are conveyed to the subsea manifold through pipes running on the seafloor, and from the manifold to the production platform via a riser. Subsea control systems are used to control and monitor subsea production systems. A typical subsea control system would include a control module to control electronic and hydraulic systems, a chemical injection distribution system, and Wellhead instrumentation. The master control, power, communications and hydraulic power units are located on the surface. The surface portion of the subsea control system is connected to the subsea portion by subsea umbilicals. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.2
Subsea umbilicals refer to cables used to connect surface platforms to subsea equipment, including subsea Wellhead systems and subsea manifolds. Subsea umbilicals provide power and/or control to subsea systems. Subsea umbilicals normally consist of electrical, hydraulic and/or chemical lines, bundled together in a protective casing. Oilfield Equipment and Services Deleum Group supplies a range of oilfield equipment and services, including: Wireline equipment and services; Wellhead maintenance services; Production and drilling equipment and services; Subsea Wellhead systems maintenance; Production equipment and storage vessels; and Other offshore equipment and services.
Deleum Group also provides gas turbine technical services through its SUbsidiary, TSSB. TSSB is a joint venture formed in 1987 between DSSB and STICO, a wholly owned subsidiary of STI. TSSB provides the following range of comprehensive services: Gas turbine overhaul services; Gas turbine parts and components; and Technical services.

Wireline Equipment and Services Wireline services refer to the range of services performed using Wireline tools, and a single-strand or multi-strand wire or cable in hydrocarbon wells. Deleum Group offers Wireline services through its subsidiary DOSSB. The Wireline equipment and services business of Deleum Group is segmented into the following: Provision of Wireline services; Sales of Wireline equipment; and Rental of Wireline equipment.
Deleum Group performs a wide range of Wireline services, including: MUlti-imaging; Slickline perforation; Running and pulling Wireline plugs; Heavy Wireline fishing; Bailing sand and debris; Paraffin cutting; Bottom hole pressure and temperature measurement; and Down-hole surveys.
4. INFORMATION ON THE DELEUM GROUP (Cant’d) DOSSB owns and operates the following major equipment necessary for providing Wireline services: Hydraulic mast equipment; Winches and Zone 2-power pack; and A wide range of Wireline tools including amongst others, memory logging, multi-imaging, perloration and measurement tools.
In addition to the services offered above, DOSSB is able to provide onshore maintenance of Wireline equipment and Wireline tools at its workshop located in Labuan. Onshore maintenance service is required for all major equipment and tools. Wellhead Maintenance Services Deleum Group, through its subsidiary DOSSB, provides a range of maintenance services for Wellhead maintenance services, including: Planned maintenance; Corrective maintenance; Computer data management; Trouble-shooting and solution provider; Parts and inventory management; and Procurement and management of critical spares.
DOSSB is currently engaged in the provision of planned maintenance on a contractual basis to PSC operators in East Malaysia. Planned maintenance has the following advantages: Reduces the probability of random equipment failure, and thereby reduces production downtime; Reduces the probability of hydrocarbon leak; Increases offshore platform safety; and Extends the useful life of the Wellhead.
DOSSB has the capability to disassemble Wellheads and Christmas Trees, enabling the Group to transport equipment for offsite maintenance at its workshop located in Labuan. This is commonly done in cases where space constraints offshore do not allow for work to be done on large items. DOSSB personnel engaged in Surlace Wellhead and Christmas Tree maintenance have an average of fifteen (15) years of specialised experience in this field. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) Production and Drilling Equipment and Services Deleum Group supplies production and drilling equipment through its subsidiary, DSSB. Production and drilling equipment refers to equipment, materials and consumables used to facilitate the extraction of hydrocarbon from underground reserves. Production and drilling equipment supplied by Deleum Group includes: Drill bits; Specialised connectors and clamps; and Seamless casing.
Drill Bits A drill bit is a piece of equipment installed at the end of the drill collar which is designed to break down rock so as to facilitate penetration of the earth’s crust into the hydrocarbon reserve. A typical drill bit is made of high strength steel. DSSB supplies a range of drill bits to operators involved in drilling activities, including: Roller cone drill bits; and Fixed cutter drill bits.
Specialised Connectors and Clamps Specialised connectors and clamps refer to specially engineered and manufactured equipment that is used to form a secure, sealed connection between two different systems or objects. The engineering and manufacturing requirements of these specialised connectors and clamps are generally high, as they often operate under demanding conditions and their proper function is critical to safety. Seamless Casing Seamless casings refer to seamless stainless steel pipes used as casings for wells. Seamless casings run down wells and are cemented to support and protect the Wellbore. The seamless casings form a physical barrier to prevent potential cross-contamination between subterranean water and the oil and gas being extracted to the surface. Subsea Wellhead Systems Maintenance Deleum Group is involved in providing maintenance services for subsea systems primarily for surface control systems. After sales maintenance services includes planned and corrective maintenance. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) Production Equipment and Storaqe Vessels Deleum Group is involved in the supply, installation and after-sales services of production equipment supplied for production facilities and on storage vessels (example: FPSOs and FSOs), including: Fluid transfer lines (“FTL”). Mooring systems; and Offshore offloading systems.
FPSOs are equipped with onboard production, processing and storage facilities, whereas FSOs are primarily equipped with storage facilities. A common component of FPSO’s and FSO’s production system is the turret mooring system (i.e. a system that connects the subsea riser to the FPSO/FSO). There are two (2) turret mooring systems in widespread use: Internal turret system (Le. turret is part of the vessel); and External turret system (i.e. turret is protruding from the bow or stern of the vessel). The offshore offloading system’s major components consists of various mooring-configured buoys, which act as a connection that facilitates the transfer from the storage facilities located onboard the vessel to tankers or pipelines for transportation onshore. Gravity Actuated Pipes (“GAP”) are new FTLs, which comprise a bundle of neutrally buoyant flow lines, suspended at pre-determined depth, between two (2) floating facilities, or a fixed structure and a floating facility. Other Offshore Equipment and Services Deleum Group’s subsidiary DOSSB is also engaged in the provision of other equipment and services for the offshore oil and gas industry. These include gas lift valves which assists in enhancing production, cementing equipment and accessories and equipment for drilling rigs namely automated drilling systems. The Deleum Group also has supplied and is also able to supply and carry out offshore drilling rig operations for PSC operators engaged in the exploration and production of oil and gas in Malaysia. Offshore drilling rig operations comprise a range of services, including: Provision of offshore drilling rig; Manage rig operations; and Supply of skilled and unskilled manpower to operate the offshore drilling rig.
4. INFORMATION ON THE DELEUM GROUP (Cont’d) Gas Turbine Overhaul Services Gas turbines are long-lived assets that are generally engineered with a lifespan of twenty (20) years. With proper maintenance and upgrades, useful lifespan can be extended. Gas turbine overhauls are typically required after 30,000 fired hours (equivalent to approximately five (5) years under typical operational conditions), and are usually the single most expensive maintenance item for a gas turbine operator. The Company currently has the facilities to carry out offsite overhaul, repair and testing for the following STI gas turbines installed in Malaysia: Saturn 10; Centaur 40; Centaur 50; and Taurus 60.
Other STI gas turbine models, particularly the larger capacity models, are sent back to the manufacturer for overhaul. Deleum Group together with STI intend to expand its capabilities to include the overhaul of larger capacity models, as the installed base increases. For those turbines that are overhauled locally, the Group undertakes performance testing of the turbines prior to delivery to customers at its own specially built test cells. All technical staff at the facility are local and trained by STI. A considerable amount of technical skill and experience has been transferred to the Malaysian technical staff over the course of the joint venture between DSSB and STI. STI continues to provide training and technical support services to TSSB as and when required, to ensure compliance with STI specifications. Gas Turbine Parts and Components Deleum Group supplies the follOWing parts and components for gas turbine packages: Standard replacement parts; Fuel system components; Air filtration components; Lubricating oil system components; and Control system components.
Parts and components are supplied during the course of scheduled gas turbine maintenance and servicing. Some of which are also supplied to replace those that have worn out or failed during the course of normal operations. Deleum Group sources its parts and components solely from the original gas turbine manufacturer. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.3 Gas Turbine Technical Services After sales Gas turbine technical services provided by TSSB include: On-site maintenance; Scheduled and unscheduled maintenance; Systems upgrade and retrofit; and Technical training.
Gas turbine technical services are provided by personnel consisting of Field Service Representatives, Turbomachinery Specialists and Turbine Control Retrofit Technicians. All technical services personnel are trained by the OEM. Their skills and knowledge are continually updated to keep abreast with advances in gas turbine technology. TSSB has the capability to provide onsite maintenance (or field services) for all STI gas turbine packages. The after sales support outlined above is a significant source of recurring revenue for Deleum Group. The Group has an installed gas turbine base of 179 gas turbine packages, with a further 25 gas turbine packages scheduled for delivery during the financial year ending 31 December 2007. The average fleet age of the installed gas turbine packages is approximately twenty (20) years. Oilfield Chemicals and Services Deleum Group supplies a range of specialty chemicals and related services for the oil and gas industry. The chemicals and related services currently supplied by Deleum Group include: Solid deposit solutions; and Drag Reducing Agent.
In addition to formulating specialty chemicals, Deleum Group through its subsidiary DCSB (a joint venture with Navdeep), undertakes R&D activities with strategic partners and customers for development of technology for the enhancement of crude oil production. In addition, Deleum Group also provides other services to its customers. Solid Deposit Solutions Deleum Group supplies Solid Deposit Solutions through DCSB which was jointly developed with PASS. Due to changes in temperature, pressure and composition of crude oil during production, solid deposits of wax, other asphaltene solid hydrocarbon and non­hydrocarbon material can form in and around the Wellbore, production tubing and other locations in the production path. These deposits can increase resistance to flow thereby reducing the rate of oil production. Thus this solution is designed to remove the deposits and enhance oil production. 4. INFORMATION ON THE DElEUM GROUP (Cont’d) 4.2.4 4.2.5 Drag Reducing Agent ORA is used to reduce drag as liquid hydrocarbons are pumped through a pipeline. This reduces the loss of energy due to friction as the liquid hydrocarbon flows through the pipeline, thus allowing higher throughput without additional pump pressure. By reducing drag, ORA increases transmission efficiency by increasing the rate at which liquid hydrocarbons can be pumped through a particular pipeline. Oeleum Group supplies ORA through OSSB. OSSB operates a ORA storage facility in Kemaman, Terengganu, and also provides equipment and technical services to inject the ORA into the pipeline. Business Operations of Associate Corporation of DSSB Oeleum Group is involved in the provision of bUlking services through its associate corporation, 2MC. Bulking Services Oeleum Group’s associate corporation 2MC is engaged in the provision of bulking services. The company currently provides dry and liquid bulking services at the Asian Supply Base in labuan. The company currently provides dry bulking and liquid services for the following materials: Barite; Cement; Bentonite; Oil-based mud; Base oil; Water-based mud; Brine; and Other miscellaneous mud products.
2MC also provides other supporting services to the oil and gas industry: logistics and handling of oil well cement; Blending of chemicals in bulk; Rental of equipment, such as silos; Warehousing and rental of space; and Other services.
Business Operations of Associate Corporation of DUCl Oeleum Group’s associate corporation CUPl is an IPP operating in Cambodia. Independent Power Production CUPl currently operates a power plant located in Phnom Penh, Cambodia and delivers a net capacity of 35 megawatts of electricity to the Phnom Penh transmission grid, since 1997. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.6 Technology Used The oil and gas industry utilises a significant amount of technology, particularly in exploration and production. The Deleum Group has access to the technology necessary to provide supporting specialised products and services to its customers. It is not uncommon in the oil and gas industry to utilise external expertise and technology, as there may be no local technology available or manufacturing of certain specialised equipment and services for the oil and gas industry. The Group relies on in-house expertise and locally developed technology, and this is supported by the technology, expertise and supply of products from its strategic partners/principals. Examples of the various types of technology used by the Deleum Group and its sources are as follows: ;Tes:tiIii)J~y;;~t;·,.li’ “.w(“ji§;’ t;;Er~iiti’ler’lPl;in~ipaCi:; ‘:f .” ”’i~t<J’? t,..1iti~:··;,f Subsea production systems Vetco Umbilicals Duco GAP systems S8M Gas turbine technology STI Solid deposit solutions In-house development in collaboration with PRSS The abovementioned technology relevant to the Group is as detailed below: Subsea Production Systems Subsea production systems refer to offshore production systems whereby the production equipment are installed on the seabed. Subsea production systems range in size and complexity from a single subsea system or multiple subsea systems producing through a subsea manifold, to offshore production facilities. Subsea production systems typically consist of the following major components: Subsea Wellhead systems; Subsea control systems; and Umbilicals.
Subsea Wellhead systems consist of structures, valves, pipes and fittings that are used to control the flow of hydrocarbons from a sub-surface well. Subsea Wellhead systems are installed on the seafloor, and are typically controlled from a surface platform through the surface control system. Umbilicals proVide power and control to the subsea components of the subsea system, and link these components back to the surface platform. The subsea control systems enable operators on the surface platform to monitor and control the various components of the subsea production system. In subsea production systems with multiple subsea Wellhead systems, the subsea manifold acts as a hub connecting several subsea Wellhead systems to the production platform. Hydrocarbon extracted from subsea Wellhead systems are conveyed to the subsea manifold through pipes running on the seafloor, and from the manifold to the production platform via a riser. 51 4. INFORMATION ON THE DELEUM GROUP (Cont’d) All of the major components of a subsea production system are typically designed to operate continuously under intense pressure and in a harsh environment for up to twenty (20) years. Umbilicals Umbilicals refer to cables used to connect surface control equipment to subsea equipment. Umbilicals normally consist of electrical, hydraulic and/or injection lines, bundled together either in thermoplastic hoses, steel tubing or a similar protective casings. Umbilicals are a critical component in any subsea development. as they control and monitor subsea equipment. Umbilicals are also engineered and designed with a useful life in excess of twenty (20) years, similar to that of subsea equipment. Gravity Actuated Pipe System A GAP system is a deepwater fluid transfer system, comprising a neutrally buoyant bundle of flow lines, suspended at a pre-determined depth, between two floaters, or a floater and a fixed structure. GAP systems are typically used for the transfer of hydrocarbons between gathering satellite facilities and a FPSO. The principal components of a GAP system are: Pipe Carrier; Flowlines and umbilicals; Flexible Jumpers for joining to production and/or storage facilities; and Buoyant supports and clump weights.
The pipe carrier forms the backbone of the GAP system, providing buoyancy to the GAP system and structural support for flowlines and umbilicals. The pipe carrier is fabricated such that bulkheads separate individual sections from each other, thereby avoiding full flooding of the pipe carrier. GAP technology can be a substitute to seabed flowlines as a means of fluid transfer in a deepwater environment. The main advantages of GAP technology over seabed flowlines are that the system is installed at a shallower water depth. The advantages of this are: Higher fluid temperature, ensuring more efficient fluid flow and minimising wax or hydrate formation; Reduced need for flowline insulation; Higher fluid arrival temperature; Reduced cost of chemicals; Easier start-up; and More efficient and lower cost for maintenance as the system is suspended at diver-depth.
4. INFORMATION ON THE DELEUM GROUP (Cont’d) Other advantages of GAP technology includes: System can be designed to accommodate any diameter and number of flow lines; System contains umbilicals, for power, data transfer, chemical injection, and other items between the platform and/or production and storage facilities; and GAP system has no seabed contact, and thus there is no need for span correction. The main pipe carrier is fabricated onshore and launched by tug. Installation at site is carried out with tugboats and a diver support vessel. No lay barges are required. Gas Turbine Technology A gas turbine is a type of internal combustion engine. Within the gas turbine, chemical energy (fuel) is converted to heat energy which in turn is converted to mechanical energy (rotational shaft) to drive an electric generator, compressor(s) or a pump. The basic components of a gas turbine consist of a compressor, combustor, turbine, output shaft and exhaust system. Basic Gas Turbine Outside air is filtered and drawn into the engine through a series of rotating blades (compressor section) and then flows into a combustion chamber where fuel is added. The air and fuel mixture is ignited and burned producing hot gas. This hot gas moves at high velocity and expands across the turbine section. The turbine converts the energy from the high velocity gas into useful rotational power through a series of turbine rotor blades. Rotational power from the turbine section is delivered to driven equipment through the output shaft. The hot exhaust gas is ducted away from the turbine section into the atmosphere. Gas Turbine Applications The turbine operation described above is called a Simple Cycle or Open Cycle gas turbine system or application. In addition to this, there are an additional two (2) types of applications of gas turbines in use: Combined Cycle gas turbine system, where waste heat from the hot exhaust gas is ducted through a boiler to generate steam to drive the steam turbine; and Combined Heat and Power (co-generation) gas turbine systems, where waste heat from the hot exhaust gas is used to perform other useful work, such as industrial heating or district cooling. Combined Cycle and Co-generation systems are generally more efficient compared to the Simple Cycle gas turbine system as they recover heat energy that would otherwise be lost. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) Solid Deposit Solutions Deleum Group has successfully collaborated with PRSS to develop a new chemical treatment system for solid deposition problem in an oil well. Successful field trials have been carried out, and Deleum Group is in the position now to supply this technology to oil and gas operators. Deleum Group and PRSS have agreed to collaborate in R&D and field trial activities for the purposes of overcoming the solid deposition problem in production wells, with the objective of finding and producing a solution to this problem. Additional R&D is currently on-going, and Deleum Group also plans to market and supply Solid Deposit Solutions to overseas operators. Due to changes in temperature, pressure and composition of crude oil during production, solid deposits of wax, other asphaltene solid hydrocarbon and non­hydrocarbon material can form in and around the Wellbore, production tubing and other locations in the production path. These deposits can increase resistance to flow thereby reducing the rate of oil production. Thus this solution is designed to remove the deposits and enhance oil production. Chemical injection pumps are used to simultaneously inject controlled quantities of chemicals directly into the Wellbore. A chemical reaction occurs, generating heat in the Wellbore and creating a reaction product. The heat, in combination with the reaction product, dissolves and disperses the organic solid in the Wellbore and tubing, and flows out of the well, along with produced crude oil, thereby restoring well productivity. The reaction product also has corrosion inhibition properties. As the nature of the solid deposit choking may differ from well to well in terms of chemical composition and the physical properties, DCSB carries out R&D work to formulate the exact solid deposit solution composition required for each well. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK

I Company No: 715640-T I 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.7 Approvals, Major Licences and Permits Obtained As at 6 April 2007, being the latest practicable date before the printing of this Prospectus, there are no approvals, major licences and permits obtained by the Group other than those approvals, major licences and permits detailed below. The conditions imposed and status of compliance are as disclosed below: Q~spr.rptionaridi7iITf~-:~,;,C:-‘ ‘A-‘. fa’ al DateLEXpi,y’,,’:

‘r~p~fe~3~’~i.Y-;”-(:·1,~,s:-“i’;t,Yh~’·~,.’W According to the FIC letter dated 8 December 2005, Deleum was required to maintain at least 51 % of Bumiputera equity interest at 8 December 2005 and 27 FIC Approval all limes. However, pursuant to the FIC letter dated 27 March March 20071 . 2007, the FIC informed thai the company, listed on Bursa Securities will be subject to the terms and conditions imposed by the SC. In relation thereto, the previous equity condition imposed by the FIC in its letter dated 8 December 2005, will be cancelled. In accordance with the SC’s letter dated 6 December 2006, Deleum will need to comply with, amongst others. the National Development Policy requirement whereby Bumiputera investors holding 30% of the enlarged share capital of Deleum to be approved by MIT!. FIC Approval To maintain at least 51% of Bumiputera equity interest in TSSB at I In compliance all times. 29 December 20041 • TSSB FIC To maintain at least 30% Bumiputera equity interest in DCSB at all I In complianceFIC ApprovalDCSB FIC times. 20 November 20031 • Company shall endeavour to improve the company’s standing in In compliance Contractor DSSB MoF Registered Bumiputera order for 51% Bumiputera majority to be maintained in equity shareholding. composition of the Board of Directors and company 5 October 20061 staff at management and employee levels. 4 October 2009 DSSB Approved with the condition that only one (1) company, either In compliance DSSB or DOSSB is allowed to participate in anyone (1) 5 October 20061 MoF Registered Contractor government procurement in the category of petroleum industrial 4 October 2009 equipment. 55 I Company No: 715640-T I 4. INFORMATION ON THE DELEUM GROUP (Cant’d)
15 July 20061 14 July 2009
Certificate of Additional Approved with the condition that only one (1) company, either In complianceDOSSB MoF Category (Petroleum DOSSB or DSSB is allowed to participate in anyone (1) Industrial equipment) government procurement in the category of petroleum industrial equipment. 2 October 20061 14 July 2009
DSSB PETRONAS Licence to supply I • This licence may be revoked if the company is in liquidation, I In compliance equipment! services to winding·up or dissolution. mining companies and petroleum/gas suppliers in I • The company shall inform PETRONAS of any changes to the Malaysia (Licence No. L­company such as equity ownership, board of directors and 28307-K) management personnel in fourteen (14) days from the date of such changes. Failure to do so may cause Ihe licence to be 1 May 20061 revoked. 30 April 2008
• The company shall not engage any other company as principal, agent, sub-contractor or otherwise to provide any services or facilities, equipments or tools on its behalf without the prior written consent from PETRONAS.
• The company shall recruit local workers available in Malaysia and the recruitment of foreign workers will only be allowed when the company has proved that there are no local workers that are capable of doing such work.
• The company shall, unless with the consent of PETRONAS. operate its activities in Malaysia and to use local facilities

such as bank, insurance and other professional services or otherwise, managed by Malaysians or firms or companies incorporated in Malaysia. 56

I Company No: 715640-T I 4. INFORMATION ON THE OELEUM GROUP (Cont’d)
.,D~~dP\io,n~arjCf–~-;.,;3l?:~:~I.;~::Li~,~1t~!~,’~,~~f~,L71’1~f~~~~__~1: :: Status-of,· … ,Appr~yal DatelJ”lP’r;Y.~.~ .”.’:~t:’:’·., :'<;’.\;~” ••, •• ,; . ~. ~::~D.’Q’·:\’t· ., ·,~:~~~·~}:t..:;· “__ ~Major\eo’nditjons:lmposed’ : ~ . ,.’u Co1n’pliance: ~-~, In compliance equipmenV services to
Licence to supply I. This licence may be revoked if the company is in liquidation, winding-up or dissolulion. mmmg companies and petroleum/gas suppiiers in I • The company shall inform PETRONAS of any changes to the Malaysia (Licence No. L­
company such as equity ownerShip, board of directors and 38274-0).
management personnel in fourteen (14) days from the date of such changes. Failure to do so may cause the licence to be 1 October 2006/
revoked. 30 September 2008
• The company shall not engage any other company as principal, agent, sub-contractor or otherwise to provide any services or facilities, equipments or tools on its behalf without the prior written consent from PETRONAS.
• The company shali recruit local workers available in Malaysia and the recru~ment of foreign workers will only be allowed when the company has proved that there are no local workers that are capable of doing such work.
• The company shali, unless with the consent of PETRONAS, operate its activities in Malaysia and to use local facilities such as bank, insurance and other professional services or otherwise, managed by Malaysians or firms or companies incorporated in Malaysia

57 I Company No: 715640-T I 4. INFORMATION ON THE DELEUM GROUP (Cont’d) ‘Qe’,,,,riplio!, al1″I,-‘-::, ‘;, > ,l en’; -~ J; ‘” ilo I’,’ ‘.:’,i-,’c”~: -I;’;;”;’;’;}I~ .. ” ;r.:! ‘~~ t. ” -1 ,~ .’ . .Statu~ of ,i”Ap,provol O,,-letE~piry_ :” :.;.r<:.’ _” i’ ‘. !, ~mDan~~-i :A~th(ul.tv,i~’;l Compliance’O.le’ ·MOIOr·Con’lIllons IlllpoSe~k . ‘. TSSB I PETRONAS In compliance equipmenV services to winding-up or dissolution, Licence to supply I’ This licence may be revoked if the company is in liquidation, mining companies and petroleum/gas suppliers in I • The company shall intorm PETRONAS of any changes to the Malaysia (Licence No, L­company such as equity ownership, board of directors and 165849-A) management personnel within fourteen (14) days from the date of such changes. Failure to do so may cause the licence 1 July 2006/ to be revoked, 30 June 2007 • The company shall not engage any other company as principal, agent, sub-contraclor or otherwise to provide any services or facilities, equipments or tools on its behalf without the prior written consent of PETRONAS
• The company shall recruit local workers available in Malaysia and the recruitment of foreign workers will only be allowed when the company has proved that there are no local workers that are capable of doing such work,
• The company shall, unless with the consent of PETRONAS, operate its activities in Malaysia and to use local facilities such as bank, insurance and other professional services or otherwise, managed by Maiaysians or firms or companies incorporated in Malaysia,

DSSB CIDB Registered Contractor I None In compliance (No, 0120031224­WP091358) 24 December 2006/ 23 December 2009
58 I Company No: 715640-T I 4. INFORMATION ON THE DELEUM GROUP (Cant’d) io-i . “,~~~:r~-::_,:;_~” ” ,)’W.~:;:’;;_’i”‘;i ;.Ccimoan~'”  (;;~, ,t.•t:.!’, t,’ ·:~’,t~ ,..,;~~;~;~-;-:~”,~lj Authority·,’ ‘.!;’  Descrlptloh’8lldJ’ ,;:;,;” ‘Ap*O,’1~n)a’tet EXpii)li;lOBt• .’\,~~. ·t:;::;f~·,;~~:, ..,~-,  ~n~i~~l~!-~.1i~~fl~-:_i-~!JI\.~iii?:~~,H~,,: ;~:_:~~I~i:;-;., h­~~~;. ~,~ ~: ;Maio-r>eo_ndltion$_\l(riPOse~ L~it”i ,~,~;,~ ,~~.”‘!;,t~i·~a.~~ .. ~~ .” ,. ,r ,t ~ ‘t~ ~ ~’:  “,. ‘1;: ‘c'” ‘Status of: .” Compliance ”  DSSB  SIR 1M Berhad  Registered Supplierl Contractor (Registration certificate No. D 0036) 17 April 20071 15 April 2009  None  In compliance  TSSB  Director General of Environmental Quality  Written Approval for erection of fuel burning equipment and chimney under Environmental Quality (Clean Air) Regulation 1978. (Approval No. APB/l011 2004) 11 May 20041 ­ • TSSB shall erect 6 units of fuel burning equipment (Gas TUrbine) and 4 units of chimney. • TSSB shall obtain prior written approval in writing from the Director General of Environmental Quality before making any modification fo the specification of the fuel burning equipment and the chimney. • TSSB shall comply with all instructions of the Department of Environmental Quality from lime to lime and without breaching any provisions under the Environmental Quality Act 1974 and its regulations.  In compliance  TOSB  MIDA  Income tax exemption for 10 years from the date fixed by Ihe Ministry of International Trade and Industry, in relation to overhaul, repair, servicing and testing of gas turbines activities 31 May 2006/·  • The company shall invest at least RM18 million in fixed assets, excluding cost on land, within 3 years from the date of this letter. • The value shall be increased by at least 30% for such activity 10 be operated by the company. • The number of staff at the managerial, technical and supervisory levels shall be at least 15% of the Company’s total workforce. • Turbines to be restored must be dismantled and rebuilt and that the company shall conduct the dynamic balancing and testing of gas turbines activities. • The company shall submit to MIDA the project implementation progress report every 6 months.  In progress
59 I Company No: 715640-T I 4. INFORMATION ON THE DELEUM GROUP (Cont’d)
60 I Company No: 715640-T I 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.2.8 Brand Names, Patents, Trade Marks, Licences, Technical Assistance Agreements, Franchises And Other Intellectual Property Rights As at 6 April 2007, the Deleum Group uses the trade names “Delcom” and “Deleum”, typically in conjunction with a logo depicted as follows.
The Deleum Group through DSSB has made an application for the registration of the trademark “Delcom” and the above logo as a Class 42 trade mark in Malaysia.
i:.~.~,., *r~:/;j~f;’~rTt:ar ~’:4~’f/.;;
.j,O “,,’c’., .,l!egl~~.~. ,,’,AA if::owtte’r;,t:t:f~,’~~C,$ij
OSSB I “Oelcom” 22 April Further clarification on the application has been furnished Malaysia “Delcom” 42 OSSB 05006124 20051 to PHIM Pendin 42 OSSB 05006125 22 April Further clarification on the application has been furnished Malaysia I .~ ..;W to PH1M20051 Pending Malaysia I 357.i “Delcom” Malaysia I “Delcom” 35 Malaysia I 35~ OSSB 07002988 16 February 20071 Pending OSSB 07002986 16 February 20071 Pendin OSSB 07002987 16 February 20071 Pendin I Pending Registration
I Pending Registration I Pending Registration
61
I Company No: 715640-T I
4. INFORMATION ON THE DELEUM GROUP (Cont’d) I~PI!Ili!<i!iQij··l··· ‘DaIB!le:~lied, ~1;bME¥:;;~-‘:L~t~’:J 16 February 62
4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.2.9 Operating or Trading Mechanism Gas Turbine Overhaul Process Flow The process flow for gas turbine package overhaul undertaken by TSSB is depicted below: Receive Order Disassembly Engine Condition Report Cleaning Inspection Retain, Repair or Replace Assembly Standard Performance Test Pre-delivery Inspection Delivery of Gas Turbine Upon receipt of a purchase order from the customer, arrangements are made to collect the gas turbine unit. The gas turbine is decommissioned, removed from site, and packed for shipment. At the overhaul facility, the gas turbine package is disassembled in accordance with STI specifications. The customer may witness the disassembly process. Disassembled parts are carefully tagged and stored. Any abnormalities observed during this stage are photographed and reported to the customer. The gas turbine parts and components are inspected and an Engine Condition Report complete with photographs of the gas turbine condition is prepared, and a copy is sent to the customer. Gas turbine parts that require cleaning are cleaned mechanically and chemically. Cleaning of parts and components are carried out in accordance with STI for that part or component. The necessary repairs are then carried out on gas turbine parts and components that require additional corrective maintenance. Parts that cannot be repaired are replaced with new parts. All repairs are carried out in accordance with STI methods. Repaired parts are also checked. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) Final assembly of the gas turbine is carried out in accordance with operating procedures established by STI. The assembled gas turbine is brought to the test cell facility for Standard Performance Testing. The gas turbine is installed in the appropriate test bed and tested in accordance with STI standards. A representative from STI is usually present during each Standard Performance Test. A representative from the customer may also be present. Pre-delivery Inspection is performed as part of the Quality Assurance process. The gas turbine is then delivered to the customer. General Process Flow for Oilfield Services The general process flow for oilfield services undertaken by DOSSB, namely wireline and surface Wellhead maintenance services is depicted below: Obtain access plan and programme ~
Mobilisation of crew and equipment to work location !
Crew executes the tasks ~
Daily operation report faxed to base –. Daily operation report faxed to client ~
Monthly operation highlights summarIsed .I.
Monthly operation highlights sent to client 1
Customer approves monthly operation highlights and service completion certificate 1
Invoice customers together with service completion certificate 4. INFORMATION ON THE DELEUM GROUP (Cant’d) After securing the Wireline and/or Wellhead Maintenance service contract, OOSSB, obtains the Wireline and/or Wellhead Maintenance access plan and programme from the customer. OOSSB then mobilises a Wireline and/or Wellhead Maintenance crew and equipment to the work location. The work location is typically located at a hydrocarbon producing well, and may be onshore or offshore. At the work location, the Wireline and/or Wellhead Maintenance crew executes the required Wireline and/or Wellhead Maintenance activities. A daily Wireline and/or Wellhead Maintenance service operation report is compiled and faxed to the customer, and to OOSSB’s operational base. The daily Wireline and/or Wellhead Maintenance service operation reports are compiled and a summary of monthly operational highlights is also prepared. This summary is also sent to the customer. The customer will approve monthly Wireline and/or Wellhead Maintenance service operational highlights, and upon successful completion of Wireline and/or Wellhead Maintenance activities the customer will approve a service completion certificate. General Gas Turbine Package Process Flow The general process flow of OSSS’s gas turbine package operations is depicted below: Technical Support for Basic/Detailed Engineering
+ Submit Tender Proposal J.

Engineering J.
Procurement J.
Manufacturing + Testing + Delivery J.
Commissioning OSSB works together with potential customers by providing technical support for basic or detailed engineering and design for gas turbine package specification based on planned power generation and gas compression needs and application. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) A tender proposal is then submitted, containing a technical proposal detailing the technical capabilities of Deleum Group and how they relate to the project. A commercial proposal is also included focusing on pricing and related matters. If Deleum Group is successful in securing the project, DSSB provides assistance in carrying out detailed engineering work to design the gas turbine package. STI is primarily responsible for equipment procurement, with DSSB undertaking procurement of items such as inlet and exhaust ducting, waste heat recovery units or heat recovery steam generators, electrical and instrumentation systems, and other equipment. STI undertakes manufacturing of gas turbine packages in accordance with the customer’s specifications. DSSB coordinates with STI shipping forwarders, and the customer to ensure that the gas turbine package is delivered safely in a timely manner. TSSB then undertakes installation and commissioning of gas turbine packages. Gas turbine packages are handed over to the customer upon successful commissioning. 4.2.10 Market Coverage The principal markets of Deleum Group for the financial year ended 31 December 2006 are:
East MalaysiaPeninsular Malaysia Joint Development Area
Principal Markets of Deleum Group Segmented The Group’s proforma consolidated revenue contribution by principal markets is as follows:
Deleum Group is focused on providing supporting specialised products and services to the oil and gas industry operators in Malaysia. The Group’s customers are active in all of the major oil and gas producing areas in Malaysia I.e. Terengganu, Sarawak, and Sabah. This is reflected by the fact that 93.35% of its proforma consolidated revenue is derived from Peninsular and East Malaysia. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) The largest revenue contribution was from East Malaysia, accounting for 54.95% of the Group’s total proforma revenue. Revenue from Peninsular Malaysia represented 38.40% of the Group’s total proforma revenue. The Joint Development Area represented 6.65% of the Group’s total revenue for the financial year ended 31 December 2006. 4.2.11 New or Proposed Products/Services The new proposed products and services that the Group plans to venture into is highlighted in Section 4.11 below.
4.2.12 Principal Markets for Products and Services The breakdown of revenue by business products and services of the Group based on the Group’s proforma consolidated income statements for the three (3) financial years ended 31 December 2006 is as follows: 126,378  46.9  36.0  226,921  52.5  Oilfield equipment and  134,927  50.0  210,817  61.5  200,805  46.4  services  Oilfield chemicals and  8,372  3.1  8,436  2.5  4,691  1.1  services Total  269,677  100.0  342,316  100.0  432,417  100.0

THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.13 Supply of Services, Materials and Equipment to the Deleum Group Below is the list of major items supplied to the Group as at 31 December 2006:
Specialised Equipment  278,779  35,357  243,422  Technical Services  63,591  9,298  54,293  Parts and Accessories  41,777  7,252  34,525  Chemicals and Consumables  2,255  1,044  1,211  Total  386,402  52,951  333,451  100.0%  13.7%  86.3%
Total purchases made by the Deleum Group for the financial year ended 31 December 2006 totalled RM386.4 million. Purchases for specialised equipment accounted for approximately 72.2% of the Deleum Group’s purchases during FYE2006. Purchases related to technical services; parts and accessories accounted for approximately 16.5 % and 10.8% respectively. Chemicals and consumables accounted for approximately 1.0%. For the FYE2006, imported raw materials, specialised equipment and services accounted for approximately 86.3% of Deleum Group purchases, while locally sourced raw materials, specialised equipment and services accounted for the remaining 13.7% Deleum Group purchases imported raw materials, specialised equipment and services for the following reasons: Significant items are not readily available from local sources. For example, specialised equipment which includes gas turbine packages, subsea systems and certain chemicals. The manufacture of items such as these are highly specialised, and in some instances controlled by patents and other intellectual property rights. As a result, they are not widely manufactured in Malaysia; and Some of the items are specified by the customer, and as a result their source is predetermined. Thus far, management has not experienced any shortages in sourcing these materials for their operations. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.14 Quality Control and Health, Safety and Environment Deleum Group places significant emphasis on quality and this is demonstrated by the Group’s quality accreditations: . Subsidiary  Accreditation  ..:. Accreditation Body  Date of .. Accreditation  DOSSB ‘ ”  12 March 2004  DOS8B ‘<}  1809001:2000  SIRIM QAS Intemational Sdn Bhd  12 March 2004  TSSB  23 April 2004
Notes: (1) For the Miri operations office.
(2) For the Labuan workshop and storage facility.

Due to the stringent safety standards and requirements in the oil and gas industry, quality standards are critical in the provision of supporting products and services. The Deleum Group has an experienced quality assurance team that ensures that products and services conform to customer needs and specifications, as well as external quality and safety standards and requirements. Health, Safety and Environment Policy Health, Safety and Environment (“HSE”) protection are important considerations in the oil and gas industry. PETRONAS and PSC operators routinely require that suppliers of supporting specialised products and services that bid for contracts comply with HSE policies and demonstrate a good HSE record. Deleum Group develops and implements company specific HSE Management Systems, which are compatible with the overall Group HSE Management System. Deleum Group’s safety co-ordinators are responsible for managing their respective company’s HSE Management System, and report back monthly to Group HSE. Hj Abd Razak Bin Abu Hurairah, the Executive Director of Deleum Group, is the Chairman of the Group HSE Committee. He is assisted by a HSE Manager who is a qualified and registered safety officer, and coordinates and implements all HSE-related matters in compliance with local legislation and Occupational Health and Safety Act Standards. The committee meets at least once every quarter to discuss the abovementioned HSE-related issues as well as programmes and priorities and to exchange best practices. Over the past ten (10) years, Deleum Group has recorded 2.3 million accident-free man-hours. This is an achievement for Deleum Group, which is always committed to achieving zero Loss Time Incidents (“LTI”). 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.15 Research and Development Policies of R&D Deleum Group believes in the importance of R&D in order to create and sustain competitive advantages through enhancing business effectiveness, efficiency and productivity to optimise production and operating costs. Presently, there are three (3) staff engaged in R&D work. The R&D and field trial activities conducted jointly by DCSB, with PRSS for the purpose of finding a solution to overcome the solids deposition problems in production wells led to the development of the new technology for removal of solid deposits, jointly with PRSS. Routine analysis work is carried out internally by the team, however for more detailed and extensive studies, the team has access to PRSS’ R&D facilities. The estimated amounts in relation to R&D expenses by the Group during the last three (3) financial years are as follows:
Going forward, the Group shall explore opportunities in identifying and collaborating with other agencies and parties in furthering its R&D activities, and participating in any new projects. Achievements of R&D Deleum Group has successfully collaborated with PRSS to develop a new technology to address solid deposit problems in production wells. Successful field trials have been carried out, and Deleum Group has generated revenue from the applications of this technology in Malaysia. Deleum Group also plans to market and supply solid deposit solutions to overseas operators. The solid deposit solutions are designed to address solid deposit problems in oil production wells. Due to changes in temperature, pressure and composition of crude oil during production, a solid deposit of wax, other aspaltene solid hydrocarbon and non-hydrocarbon material can form in and around the Wellbore, production tubing and other locations in the production path. These deposits can constrict the production flow of oil to the surface, thereby reducing well productivity. As the nature of the solid deposit choking may differ from well to well in terms of chemical composition and the physical properties, DCSB carries out R&D work to formulate a suitable composition for each well. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.16
R&D Strategy Deleum Group’s R&D efforts are focused towards developing chemicals with applications in the oil and gas industry, with the ultimate aim of driving future business needs by developing novel chemicals to meet customer needs. To implement this strategy, the Group plans to undertake R&D utilising in-house resources, collaborate actively with its joint venture partner in DCSB, Navdeep, to develop oilfield chemicals as well as continue its successful R&D collaboration with PRSS. These R&D plans are on-going. As such, the Deleum Group plans to work on specific customer solutions in the second half of 2007. Competitive Advantages The competitive advantages of Deleum Group in the oil and gas industry include the following: • PETRONAS licensed company;
• Experienced management team and skilled employees;
• Established track record and market reputation;
• Good safety track record;
• Strategic alliances with key global players;
• Investment in facilities and specialised equipment;
• Established customer base of multinational corporations; and
• Financial strength of the Group.

PETRONAS Licensed Company Deleum Group, through its operating subsidiaries, is licensed and registered with PETRONAS to supply supporting products and services to the oil and gas industry. Deleum Group subsidiaries that hold PETRONAS licences and registrations are: • DSSB;
• DOSSB; and
• TSSB.

In addition, DSSB is also presently registered as a Class G7 Contractor with CIDB. This allows DSSB to tender for projects of unlimited contract value in specialised registered fields. DSSB and DOSSB are registered as a contractor with the MoF, which allows DSSB and DOSSB to tender for contracts issued by the Malaysian Government. Experienced Management Team and Skilled Employees The Group’s Executive Directors and management team consists of eleven (11) highly experienced and motivated individuals (as detailed in Sections 5.2 and 5.5 of this Prospectus). Dato’ Izham Bin Mahmud, the Executive Chairman has more than 10 years of experience with the Group, Datuk Vivekananthan all M. V. Nathan, the Deputy Executive Chairman has more than 45 years of experience in the oil and gas industry and 25 years with the Group. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) The Group is further supported by Chandran Aloysius Rajadurai the Group Managing Director and Hj Abd Razak Bin Abu Hurairah the Executive Director of Deleum, who have both in excess of 24 years experience in the oil and gas industry coupled with more than fifteen (15) years hands-on experience with the Group. Further invaluable experience is added from the rest of the management team in various fields in technical, marketing, sales, accounting and corporate secretarial matters. The Group has drawn and will continue to draw on the collective experiences and knowledge of those individuals to ensure that the Group continues to grow and play an integral role in supporting and servicing the oil and gas industry. Coupled with their dedication, the Deleum Group is poised to further achieve its future goals and continue to develop and expand its reach both locally and internationally. Established Track Record and Market Reputation With approximately 25 years of experience in the oil and gas industry, the Group has successfully established a reputable track record associated with quality, reliability, technical expertise, as well as service excellence. As such, the Group can use its track record as a reference to win new customers. Good Safety Track Record Deleum Group’s subsidiaries have a good safety track record, enjoying long uninterrupted periods of operations without any LTI or fatalities, as highlighted in Section 4.2.14. Strategic Alliances with Key Global Players The provision of supporting specialised products and services to the oil and gas industry involves highly specialised fields such as gas turbines, subsea production systems, offshore production platforms and others. As there are no local manufacturers of these types of specialised equipment and systems, the oil and gas industry is dependent on overseas manufacturers and service providers. This is common in the oil and gas industry where proven technologies and experienced operators are highly regarded. Deleum Group has access to this technology, services and products through its strategic alliances as mentioned in Section 4.2.6. Investment in Facilities and Specialised Equipment The Group has over the past 20 years, invested extensively in equipment and facilities to support its operations. To date, the Group has invested approximately RM30.0 million in oilfield equipment and facilities. As highlighted in Section 4.1.5 of this Prospectus, the Group has strategically positioned operational facilities, located in the major centres of the Malaysian oil and gas industry including Labuan, Kemaman and Miri. The Group’s presence and established facilities in the abovementioned locations enables the Group to provide effective support to its customers who operate offshore oil and gas production facilities. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.2.17 4.2.18 Established Customer Base of Multinational Corporations Deleum Group has been providing supporting specialised products and services to approximately 35 customers since entering the industry. Deleum Group generally enjoys fong-term business relationships with its customers. This is reflected by the fact that the average length of relationship between the Group and its twenty (20) largest customers is 9 years as at 31 December 2006 as detailed in Section 4.9 of this Prospectus. Approximately 60% of the Group’s top twenty (20) customers have been dealing with the Group for five (5) years or more, and 20% have been dealing with the Group for twenty (20) years or more. In addition, the Group’s two (2) largest customers, SSB/SSPC and PCSB for the last three (3) financial years ended 31 December 2006, have been dealing with the Group since the Group began operating in the oil and gas industry. The established customer base is a reflection of the customer loyalty, which provides continuity, as well as ready demand for the Group’s supporting specialised products and services. Financial Strength of the Group The Deleum Group has been profitable and operating on a net cash position for over the last ten (10) financial years. This is reflected by the Group’s very low debt to equity ratio of 0.05 times as at 31 December 2006. As such, the Group relies primarily on its internally generated funds. This thus reduces its financing cost significantly and gives it a competitive edge and flexibility. The low gearing ratio means that Deleum Group should have easy access to credit facilities based on the Group’s assets and profitability record to address future opportunities. Dependency on Commercial Contracts As at 6 April 2007, being the latest practicable date to the printing of the Prospectus, there are no material agreements (inclUding informal arrangements or understandings) in the ordinary course of business which have been entered into by the Deleum Group on which the Group is highly dependent. Interruptions in Business for the Past Twelve (12) Months There has been no interruption in the form of trade disputes or major operational breakdown occurring within and outside the Group that may significantly impair the Group’s business performance during the past twelve (12) months. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.19 Human Resources As at 6 April 2007, the total number of employees of the Deleum Group was 208 persons as illustrated below:
Both Senior Management and Professional staff collectively represent approximately 11 % of the Group’s total staff strength. The Group’s Engineering and Technical and Supervisory personnel represent the bulk of the Group’s employees comprising of approximately 51 % of total staff strength, the bulk of which are the Technical and Service Personnel with 35%. The Engineers 16% and Quality, Health and Safety and Environment personnel represented 1% of total Group employees. As at 6 April 2007, the total employee base of 208 includes 36 (approximately 17% of the total Group’s employees) who are employed on contract or project basis, principally comprising of Senior Management (1), Engineers (6), Technical and Service Personnel (23), Support and Administration (2), Clerical and Related Occupations (1) and Operations/ Field Personnel (3). Human capital in Deleum is one of its key assets. On-the-job training coupled with scheduled training, succession planning and incentive-driven remuneration are the drivers to motivate its employees to continue enhancing and supporting the Group’s operations. Deleum Group undertakes training programmes for its employees in various categories. Operational Personnel are sent for periodic training on health and safety and usage and utilisation of equipment, whilst field personnel are sent for training with Deleum Group’s principals and partners periodically to keep abreast with developments and changes in technology. Emphasis is also placed on information technology and soft skills, where employees  are  required  to  attend  courses  to  enhance  their  information  technology, communication, management and peo ple skills.  Further,  employees  are  sent  for  seminars,  conferences  and  trade
shows/exhibitions to increase their understanding and technical skills as well as to network and to give them more exposure to the oil and gas industry. Through these various training efforts and initiatives, Deleum Group is able to retain and enhance its human capital. None of the employees of Deleum Group are members of any unions. As at 6 April 2007, being the latest practicable date prior to the issuance of this Prospectus; the Group has not been’ involved in any material industrial disputes with any of its employees in the past five (5) years. 74 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.2.20 Key Achievementsl Milestonesl Awards The Deleum Group has received the following awards in the past: AWard  Year  : Awarded by: ,  ; Comments/Reasons for Award  Appreciation Award to DOSSB  2005  PCSB  For Samarang Early Start-Up. Category Level 3 in the SMEP HSE·MS Self Assessment Questionaire. In recognition of management’s commitment to the success of the Malaysian Integrated Maintenance Contract Quality Team.  Certificate of Achievement for providing SMEP with Maintenance of Solar Gas Turbines  2003  Shell, Exploration & Production Division  President’s Quality Award  2002  STI  Health, Safety & Environment Award (Gold Award) to DOSSB  2002  PCSB  In recognition of its Excellent Achievement in the Contractor Category.  Award for Lost Time Incident to DOSSB  1998  SSB  Another record breaking year without lost time incident.  Gold Star Safety Award to Cameo (Malaysia) Sdn Bhd 1  1997  ESSO  In recognition of its safety achievement. In recognition of its safety achievement. In recognition of its safety achievement. In recognition of its safety achievement. In recognition of its safety achievement. In recognition of its safety achievement.  Safety Achievement Award to Cameo (Malaysia) Sdn Bhd 1  1996  Offshore Division of ESSO  Gold Star Safety Award to Cameo (Malaysia) Sdn Bhd 1  1995  Offshore Division of ESSO  Safety Achievement Award to Cameo (Malaysia) Sdn Bhd 1  1994  Offshore Division of ESSO  Safety Achievement Award to Cameo (Malaysia) Sdn Bhd 1  1992  Offshore Division of ESSO  Safety Recognition Award for Contractors to Cameo (Malaysia) Sdn Bhd 1  1991  Offshore Division of ESSO
Note: (1) Cameo (Malaysia) Sdn Bhd is currently known as DOSSB. The numerous abovementioned awards reflect the Group’s commitment to safety as well as the illustrious historical track record of the Group for the past decade. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.2.21 Modes of Marketing! Distributions! Sales Marketing strategies The sales and marketing team of the Deleum Group utilises the following marketing strategies to sustain and expand its business: Position the Group as a provider of a synergistic range of supporting specialised products and services to the oil and gas industry; Position the Group as an established service provider with approximately 25 years of experience and track record in the oil and gas industry; Continue to meet the quality expectations and requirements of customers with the aim of establishing long-term business relationships; and Continue to promote and market through participation in local and overseas exhibitions and fostering business relationships with existing and potential customers. Some of the promotional and marketing activities undertaken by the Group include: proactive sales visit to potential customers; exposing new and existing customers to new technologies; seminars and site visits; continuous education; and participation and attendance in various exhibitions and conventions to cultivate new customers and foster relationship with existing customers
As part of its strategy to promote its products and services, Deleum Group actively participates and attends exhibitions and conventions including the following:
PetroMin Deepwater & Subsea Technology Conference and Exhibition, Kuala Lumpur Annual Asia Oil & Gas Conference, Kuala Lumpur Asian Oil, Gas and Petrochemical Engineering Exhibition, Kuala Lumpur Asia Pacific Drilling Technology Conference and Exhibition, Kuala Lumpur Deepwater Drilling Asia PetroMin Deepwater Technology, Kuala Lumpur Asian Council on Petroleum Conference and Exhibition (“ASCOPE”) Participant
Participant Exhibitor Speaker and Participant
Participant Speaker and Participant Participant
2006 2006 2005 2004 2004 2003 2001 Deleum Group’s Directors and senior managers such as department and business unit heads, and senior technicians are responsible for implementing the Group’s marketing strategy. These senior staff are focused on business development with existing and potential customers. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.3 SUBSIDIARIES OF DELEUM 4.3.1 DSSB (a) Background and history DSSB was incorporated in Malaysia under the Act on 10 July 1976 as a private limited company. DSSB embarked into the provision of oil and gas services in 1982. (b) Principal Activities and Products/Services The principal activities of the DSSB are the provision of supporting specialised products and services for the exploration and production of oil and gas. (c) Substantial Shareholders The substantial shareholders of DSSB are as follows:
Oeleum  10,000,000  100.00  LMSB  (1) 10.000,000  HSB  (1) 10,000,000
Oato’ Izham Bin  (2) 10,000,000  Mahmud  Oatuk  (2) 10,000,000  Vivekananthan  all M. V. Nathan  Hj  Abd  Razak  (2) t 0,000,000  Bin  Abu  Hurairah  Sian  Rahimah  (3) 10,000,000  Abdullah  Faye  Miriam  (3) 10,000,000  Abdullah  Hugh  Idris  (3) 10,000,000  Abdullah
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 4. INFORMATION ON THE DELEUM GROUP (Cont’d) Notes: (1) Deemed interested by virtue of its substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of hislher substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB pursuant to Section 6A of the Act.

(d) Share Capital The authorised share capital of DSSB is RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM10,000,000 comprising 10,000,000 ordinary shares of RM1.00 each. The changes in DSSB’s issued and paid-up share capital since incorporation are as follows:
(e) 4.3.2 DSHL (a) 10/7/1976 2 1.00 Subscribers’ 2 shares 26/10/1976 9,998 1.00 Cash 10,000 25/3/1978 10,000 1.00 Cash 20,000 15/2/1982 80,000 1.00 Cash 100,000 18/12/1984 250,000 1.00 Rights Issue 350,000 29/12/1984 300,000 1.00 Cash 650,000 26/12/1985 90,000 1.00 Cash 740,000 26/12/1985 260,000 1.00 Bonus Issue 1,000,000 29/8/1987 700,000 1.00 Cash 1,700,000 31/12/1990 300,000 1.00 Cash 2,000,000 8/6/1999 3,000,000 1.00 Bonus Issue 5,000,000 31/12/2001 5,000,000 1.00 Bonus Issue 10,000,000 SubsidiarylAssociate Corporation DSSB is the holding company for the oil and gas related companies within the Group. DSSB has six (6) subsidiaries, namely DOSSB, TSSB, DCSB, WSB, DHSB and VSM and one (1) associate corporation, 2MC. The details of the subsidiaries and associate corporation within the Group are disclosed in the ensuing sections. Background and History DSHL was incorporated in Hong Kong under the Hong Kong Companies Ordinance on 26 January 1995 as a private limited company. DSHL commenced its business in 1995. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) (b) Principal Activities and Products/Services DSHL is principally an investment holding company.
(c) Substantial Shareholders The substantial shareholders of DSHL are as follows:

‘~ame ~f ‘/ ~~ :::~ I· SU.!?$t$!nt~1 ;<it ,;l?h~reIi9Iders ~:., .c’ .;;,. Direct;: .. ~ ;”..  ~~­; ;y ‘liidirect. “,~;. .,  NQ. ot’Sl1a~l!s. ~ ,0 ;’,c; ” ,’t :!:;. ‘:.., ije1d ,’.’, :~ ~;,  No.otS.hi!\res .””,~ ~ ‘” 1I’ r k . ? ;-:’;~~’–>~; \,’~v ~Id’~  :c ‘, •. ‘.’ ~. -+’;. ..,~~~ ~.. W”o  Deleum LMSB HSB Dato’ Izham Bin Mahmud Datuk Vivekananthan all M. V. Nathan Hj Abd Razak Bin Abu .Hurairah Sian Rahimah Abdullah Faye Miriam Abdullah Hugh Idris Abdullah  100 100.00 ————-. — -(1) 100 (1) 100 (2) 100 (2) 100 (2) 100 (3) 100 (3) 100 (3) 100  -100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Notes: (1) Deemed interested by virtue of its substantial shareholding in Deleum. which in turn has 100% shareholding in DSHL pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleum. which in turn has 100% shareholding in DSHL pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleurn, which in turn has 100% shareholding in DSHL pursuant to Section 6A of the Act.

(d) Share Capital The authorised share capital of DSHl is HK$1 ,000 comprising 1,000 ordinary shares of HK$1.00 each. The issued and paid-up share capital is HK$100 comprising 100 ordinary shares of HK$1.00 each. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) The changes in DSHl’s issued and paid-up share capital since incorporation are as follows:
26/1/1995 2 1.00 Cash 11/2/1995 98 1.00 Cash 100.00 (e) Subsidiary/Associate Corporation DSHl has two (2) subsidiaries, DPCl and DUCL. DUCl has a 20% equity interest in CUPL. Other than Opel, DUCl and CUPl, DSHl has no other subsidiary or associate corporation. 4.3.3 DFSSB (a) Background and history DFSSB was incorporated on 21 August 2006 in Malaysia under the Act as a private limited company. (b) Principal Activities and Products/Services DFSSB is presently dormant. It is intended for DFSSB to undertake the manufacture of ORA. (c) Substantial Shareholders The substantial shareholders of DFSSB are as follows:
Deleum  100  100.00  LMSB  (1) 100  HSB  (1) 100  Dato’ Izham Bin Mahmud  (2) 100  Datuk Vivekananthan all M. V. Nathan  (2) 100  Hj Abd Bin Hurairah  Razak Abu  (2) 100  Sian Rahimah Abdullah  (3) 100  Faye Abdullah  Miriam  (3) 100
100.00 100.00 100.00 100.00 100.00 100.00 100.00 4. INFORMATION ON THE DELEUM GROUP (Cont’d)
Notes: (1) Deemed interested by virtue of its substantial shareholding in Deleum, which in tum has 100% shareholding in DFSSB pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DFSSB pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DFSSB pursuant to Section 6A of the Act.

(d) Share Capital The authorised share capital of DFSSS is RM500,000 comprising 500,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM100 comprising 100 ordinary shares of RM1.00 each. The changes in DFSSS’s issued and paid-up share capital since incorporation are as follows:
(e)  Subsidiary/Associate Corporation  DFSSS does not have any subsidiary or associate corporation.  4.3.4  TOSe  (a)  Background and history  TOSS was incorporated in Malaysia under the Act on 21 December  2005 as a private limited company.  (b)  Principal Activities and Products/Services  TOSS is presently dormant. It is intended that TOSS will undertake  the provision of gas turbine overhaul and maintenance services once it  commences its business.  81

 

 

4. INFORMATION ON THE DELEUM GROUP (Cant’d) (c) Substantial Shareholders The substantial shareholders of TOSS are as follows:
Deleum 100,000 100.00 LMSB (1) 100,000 HSB (1) 100,000 Dato’ Izham Bin (2) 100,000 Mahmud Datuk (2) 100,000 Vivekananthan all M. V. Nathan Hj Abd Razak (2) 100,000 Bin Abu Hurairah Sian Rahimah (3) 100,000 Abdullah Faye Miriam (3) 100,000 Abdullah Hugh Idris (3) 100,000 Abdullah 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Notes: (1) Deemed interested by virtue of its substantial shareholding in Deleum, which in tum has 100% shareholding in TOSB pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in TOSB pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in TOSB pursuant to Section 6A of the Act.

(d) Share Capital The authorised share capital of TOSS is RM100,OOO comprising 100,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM100,OOO comprising 100,000 ordinary shares of RM1.00 each. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) The changes in TOSB’s issued and paid-up share capital since incorporation are as follows:
21/12/2005  2  1.00  Subscribers’  2  shares  3/3/2006  99,998  1.00  Cash  100,000
(e) Subsidiary/Associate Corporation TOSB does not have any subsidiary or associate corporation. 4.4 SUBSIDIARIES OF DSSB 4.4.1 DOSSB (a) Background and history DOSSB was incorporated in Malaysia under the Act on 20 March 1978 as a private limited company under the name of Cameo (Malaysia) Sdn Bhd and assumed its present name on 29 May 2001. DOSSB commenced business in 1979. (b) Principal Activities and Products/Services DOSSB’s principal activity is in the provision of supporting specialised products and services. (c) Substantial Shareholders The substantial shareholders of DOSSB are as follows:
DSSB  1,000,000  100.00  Deleum  (l) 1,000,000  LMSB  (2) 1,000,000  HSB  (2) 1,000,000
Dato’ Izham Bin  (3) 1,000,000  Mahmud  Datuk  (3) 1,000,000  Vivekananthan  all M. V. Nathan  Hj  Abd  Razak  (3) 1,000,000  Bin  Abu  Hurairah
100.00 100.00 100.00 100.00 100.00 100.00 4. INFORMATION ON THE DELEUM GROUP (Cont’d)
Sian  Rahimah  (4) 1,000,000  100.00  Abdullah  Faye  Miriam  (4) 1,000,000  100.00  Abdullah  Hugh  Idris  (4) 1,000,000  100.00  Abdullah
Notes: (1) Deemed interested by virtue of its 100% shareholding in DSSB, which in turn has 100% shareholding in DOSSB pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of its substantial shareholding in Deleum, which in turn has 100% shareholding in OSSB, which in turn has 100% shareholding in DOSSB pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleum, which in tum has 100% shareholding in DSSB, which in turn has 100% shareholding in OOSSB pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Oeleum, which in turn has 100% shareholding in DSSB, which in turn has 100% shareholding in OOSSB pursuant to Section 6A of the Act.

(d) Share Capital The authorised share capital of DOSSB is RM1,OOO,000 comprising 1,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM 1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each. The changes in DOSSB’s issued and paid-up share capital since incorporation are as follows:
20/3/1978  2  1.00  Subscribers’  2  shares  13/7/1979  99,998  1.00  Cash  100,000  5/12/1994  900,000  1.00  Bonus Issue  1,000,000
(e) Subsidiary/Associate Corporation DOSSB does not have any subsidiary or associate corporation.
4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.4.2  TSSB  (a)  Background and history  TSSB was incorporated in Malaysia under the Act on 6 November  1987  as  a  private  limited  company  pursuant  to  a  joint  venture  between  DSSB and STI for the provision of after sales technical  service for gas turbine packages in Malaysia. TSSB commenced its  business in 1988.  (b)  Principal Activities and Products/Services  TSSB is principally engaged in the provision of gas turbine overhaul  and technical services.  (c)  Substantial Shareholders  The substantial shareholders of TSSB are as follows:

DSSB  1,924,000  74.00  STICO’  676,000  26.00  Deleum  LMSB  HSB  Dato’ Izham Bin  Mahmud  Datuk  Vivekananthan  all M. V. Nathan  Hj  Abd  Razak  Bin  Abu  Hurairah  Sian  Rahimah  Abdullah  Faye  Miriam  Abdullah  Hugh  Idris  Abdullah
(t) 1,924,000
(2) 1,924,000
(2) 1,924,000
(3) 1,924,000
(3) 1,924,000
(3) 1,924,000
(4) 1,924,000
(4) 1,924,000
(4) 1,924,000

74.00 74.00 74.00 74.00 74.00 74.00 74.00 74.00 74.00 Notes: (1) Deemed interested by virtue of its 100% shareholding in DSSB, which in turn has substantial shareholding in TSSB pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of its substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has substantial shareholding in TSSB pursuant to Section 6A of the Act.

4. INFORMATION ON THE DELEUM GROUP (Cont’d) (3) Deemed interested by virtue of his substantial shareholding in LMSB. which in turn has substantial shareholding in Deleum, which in turn has a 100% shareholding in DSSB, which in turn has substantial shareholding in TSSB pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has substantial shareholding in TSSB pursuant to Section 6A of the Act.

STICO is a subsidiary of STI, which in turn is a wholly owned subsidiary of Caterpillar Incorporated. Caterpillar Incorporated is listed on the NYSE. (d) Share Capital The authorised share capital of TSSB is RM5,000,000 comprising 5,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM2,600,000 comprising 2,600,000 ordinary shares of RM1.00 each. The changes in TSSB’s issued and paid-up share capital since incorporation are as follows:
6/11/1987  4  1.00  Subscribers’  4  shares  5/1/1988  99,996  1.00  Cash  100,000  10/10/2000  2,500,000  1.00  Cash  2,600,000
(e)  Subsidiary/Associate Corporation  TSSB does not have any subsidiary or associate corporation.  4.4.3  DCSB  (a)  Background and history  DCSB was incorporated in Malaysia under the Act on 5 July 1982 as  a  private  limited  company  under the  name  of  Oelcom  Services  (Sarawak) Sdn Bhd and assumed its present  name  on  3 January  2002.  OCSB commenced its business in 2003. DCSB is the joint  venture  vehicle  for  Navdeep  and  OSSB  in  the  field  of  oilfield  chemicals and services.  (b)  Principal Activities and Products/Services  OCSB is principally engaged in the development and supply of oilfield  chemicals and services.
4. INFORMATION ON THE DELEUM GROUP (Cont’d) (c) Substantial Shareholders The substantial shareholders of DCSB are as follows: “Njtme,of;,,-i~:;%’ . Substantial?’ ::i SharehQlders~~:  ,,\,;r,~…:’>Direct~ .,:,:”i'” ::  ; >?,. “! ~;’lndjreCt’,,,,,’ –.’ ‘.  ;,·No. of Shareil ,.. it”‘,,;-‘ . ;h”” . ;:’ Held ‘;:’oJo:  . ,’NO:9t.~ha~; ,,~, .~. L:: . .,.’ Helef’; . %  DSSB Navdeep Deleum LMSB HSB Dato’ Izham Bin Mahmud Datuk Vivekananthan all M. V. Nathan Hj Abd Razak Bin Abu Hurairah Sian Rahimah Abdullah Faye Miriam Abdullah Hugh Idris Abdullah Deepak Vijaysingh Bhimani (Hindu Undivided Family) Sandhya Deepak Bhimani  60,000 40,000 ———. – 60.00 40.00 . ———- -(1)60,000 (2)60,000 (2)60,000 (3) 60,000 (3) 60,000 (3) 60,000 (4) 60,000 (4)60,000 (4)60,000 (5) 40,000 (5) 40,000  –60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 60.00 40.00 40.00
Notes: (1) Deemed interested by virtue of its 100% shareholding in DSSB, which in turn has substantial shareholding in DCSB pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of its substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has substantial shareholding in DCSB pursuant to Section 6A of the Act.

4. INFORMATION ON THE DELEUM GROUP (Coni’d) (3) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleurn, which in turn has 100% shareholding in DSSB, which in turn has substantial shareholding in DCSB pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has substantial shareholding in DCSB pursuant to Section 6A of the Act.
(5) Deemed interested by virtue of his/her substantial shareholding in Navdeep, which in turn has substantial shareholding in DCSB pu rsuant to Section 6A of the Act.

(d) Share Capital The authorised share capital of DCSB is RM500,000 compnslng 500,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. The changes in DCSB’s issued and paid-up share capital since incorporation are as follows:
51711982  2  1.00  Subscribers’  2  shares  31/12/2003  99,998  1.00  Cash  100,000
(e)  SUbsidiary/Associate Corporation  DCSB does not have any subsidiary or associate corporation.  4.4.4  WSB  (a)  Background and history  WSB was incorporated in Malaysia under the Act on 10 May 1985 as  a private limited company.  (b)  Principal Activities and Products/Services  WSB ceased operation in 2004.
4. INFORMATION ON THE DELEUM GROUP (Cont’d) (c) Substantial Shareholders The substantial shareholders of WSB are as follows:
DSSB Deleum LMSB HSB Dalo’ Izham Bin Mahmud Datuk Vivekananthan all M. V. Nathan Hj Abd Razak Bin Abu Hurairah Sian Rahimah Abdullah Faye Miriam Abdullah Hugh Idris Abdullah  135,002  100.00  (1) 135,002 (2) 135,002 (2) 135,002 (3) 135,002 (3) 135,002 (3) 135,002 (4) 135,002 (4) 135,002 (4) 135,002  100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Notes: (1) Deemed interested by virtue of its 100% shareholding in DSSB, which in turn has 100% shareholding in WSB pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of its substantial shareholding in Deleum, which in tum has 100% shareholding in DSSB, which in turn has 100% shareholding in WSB pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has 100% shareholding in WSB pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has 100% shareholding in WSB pursuant to Section 6A of the Act.

(d) Share Capital The authorised share capital of WSB is RM250,OOO comprising 250,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM 135,002 comprising 135,002 ordinary shares of RM1.00 each. 89
4. INFORMATION ON THE DELEUM GROUP (Cont’d) The changes in WSB’s issued and paid-up share capital since incorporation are as follows:
10/5/1985  2  1.00  Subscribers’  2  shares  18/4/1988  135,000  1.00  Cash  135,002
(e)  SUbsidiary/Associate Corporation  WSB does not have any subsidiary or associate corporation.  4.4.5  DHSB  (a)  Background and history  DHSB was incorporated in Malaysia under the Act on 18 February  1984 as a private limited company.  (b)  Principal Activities and Products/Services  DHSB ceased operation in 1997.  (c)  Substantial Shareholders  The substantial shareholders of DHSB are as follows:

DSSB  2  100.00  Deleum  11)2  100.00  LMSB  (2)2  100.00  HSB  (2)2  100.00  Dala’ Izham Mahmud  Bin  (3)2  100.00  Daluk Vivekananthan all M. V. Nathan  (3)2  100.00  Hj Abd Razak Bin Abu Hurairah  (3)2  100.00  Sian Rahimah Abdullah  14)2  100.00  Faye Abdullah  Miriam  (4)2  100.00
4. INFORMATION ON THE DELEUM GROUP (Cant’d)
Notes: (1) Deemed interested by virtue of its 100% shareholding in DSSB, which in turn has 100% shareholding in DHSB pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of its substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has 100% sharehoiding in DHSB pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has 100% shareholding in DHSB pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has 100% shareholding in DHSB pursuant to Section 6A of the Act.

(d) Share Capital The authorised share capital of DHSS is RM1,OOO,OOO comprising 1,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM2 comprising 2 ordinary shares of RM1.00 each. The changes in DHSS’s issued and paid-up share capital since incorporation are as follows:
18/2/1984 2 1.00 Subscribers’ 2.00 Shares (e)  Subsidiary/Associate Corporation  DHSB does not have any subsidiary or associate corporation.  4.4.6  VSM  (a)  Background and history  VSM was incorporated in Malaysia under the Act on 11 June 1981 as  a  private  limited  company  under  the  name  of  Fleet  Telecommunication Industry Sdn Bhd. Subsequently, it changed its  name to D M Alcatel (M) Sdn Bhd and then Petrodyne Sdn Shd on  19 December 1983 and  24 May 1989 respectively.  The company  assumed its present name on 23 March 1998.

4. INFORMATION ON THE DELEUM GROUP (Cant’d) (b) Principal Activities and Products/Services VSM ceased operation in 2004, (c) Substantial Shareholders The substantial shareholders of VSM are as follows:
DSSB Datuk Vivekananthan all M, V, Nathan Deleum LMSB HSB Dato’ Izham Bin Mahmud Hj Abd Razak Bin Abu Hurairah Sian Rahimah Abdullah Faye Miriam Abdullah Hugh Idris Abdullah  363,600 40,400  90,00 10.00  (3) 363,600 (1)363,600 (2)363,600 (2) 363,600 (3) 363,600 (3) 363,600 (4) 363,600 (4)363,600 (4) 363,600  90,00 90,00 90,00 90,00 90.00 90,00 90,00 90,00 90.00
Notes: (1) Deemed interested by virtue of its 100% shareholding in DSSB, which in turn has substantial shareholding in VSM pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of its substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has substantial shareholding in VSM pursuant to Section 6A of the Act. .
(3) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleurn, which in tum has 100% shareholding in DSSB, which in turn has substantial shareholding in VSM pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has substantial shareholding in VSM pursuant to Section 6A of the Act.

4. INFORMATION ON THE DELEUM GROUP (Cant’d) (d) Share Capital The authorised share capital of VSM is RM20,000,000 comprising 20,000,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM404,000 comprising 404,000 ordinary shares of RM1.00 each. The changes in VSM’s issued and paid-up share capital since incorporation are as follows:
11/6/1981 2 RM1.00 Subscribers’ 2 share 15/6/1981 98 RM1.00 Cash 100 2/1/1982 299,900 RM1.00 Cash 300,000 24/12/1986 104,000 RM1.00 Cash 404,000 (e) SUbsidiary!Associate Corporation VSM does not have any subsidiary or associate corporation. 4.5 SUBSIDIARIES OF DSHl 4.5.1 DUCl (a) Background and History
DUCl was incorporated in BVI under BVI’s International Business Companies Act (Cap. 291) on 26 October 1998 as a private limited company under the name of Deleum Integrated Services Limited. DUCl assumed its present name on 10 October 2001. DUCl commenced its business in 2003.
(b) Principal Activities and Products/Services DUCl is principally an investment holding company.
(c) Substantial Shareholders The substantial shareholders of DUCl are as follows:

 

4. INFORMATION ON THE DELEUM GROUP (Cont’d)
Deleum  (ll6  60.00  lMSB  (2)6  60.00  HSB  (2l 6  60.00  Dato’ Izham Bin  (3)6  60.00  Mahmud  Datuk  (3l 6  60.00  Vivekananthan  all M. V. Nathan  Hj Abd Razak  60.00  Bin Abu  Hurairah  Sian Rahimah  60.00  Abdullah  Faye Miriam  60.00  Abdullah  Hugh Idris  60.00  Abdullah
Notes: (1) Deemed interested by virtue of its 100% shareholding in DSHl, which in turn has substantial shareholding in DUCl pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of its substantial shareholding in Deleum, which in tum has 100% shareholding in DSHl, which in turn has substantial shareholding in DUCl pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of his substantial shareholding in lMSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSHl, which in turn has substantial shareholding in DUCl pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSHl, which in turn has substantial shareholding in DUCl pursuant to Section 6A of the Act.

Kirkcowan is a corporation incorporated in BVI providing nominee and trust services. Kirkcowan holds these shares as nominee for party(ies) who is/are not promoters, directors, substantial shareholders or key management and technical personnel of the Company nor for any person(s) related or connected to promoters, directors, substantial shareholders or key management and technical personnel of the Company. (d) Share Capital The authorised share capital of DUCl is USD50,000 compnslng 50,000 ordinary shares of USD1.00 each. The issued and paid-up share capital is USD10.00 comprising 10 ordinary shares of USD1.00 each. 94 4. INFORMATION ON THE OELEUM GROUP (Cont’d) The changes in DUCl’s issued and paid-up share capital since incorporation are as follows:
30/10/1998 10 10.00 Cash 10.00 (e)  Subsidiary/Associate Corporation  DUCl is an investment holding company which principal asset is its  20% equity interest in CUPL. Other than CUPl, DUCl does not have  any other subsidiary or associate corporation.  4.5.2  OPCl  (a)  Background and history  OPCl was incorporated in BVI under BVI’s International Business  Companies Act (Cap. 291) on 10 October 2001 as a private limited  company.  (b)  Principal Activities and Products/Services  opel is presently dormant.  (c)  Substantial Shareholders  The substantial shareholders of DPCl are as follows:

DSHL  6  60.00  Kirkcowan·  4  40.00  Deleum  (1)6  LMSB  (2)6  HSB  (2)6  Data’ Izham Bin Mahmud  (3)6  Datuk Vivekananthan all M. V. Nathan  (3) 6  Hj Abd Bin Hurairah  Razak Abu  (3)6
60.00 60.00 60.00 60.00 60.00 60.00 4. INFORMATION ON THE DELEUM GROUP (Cant’d)
Sian Rahimah Abdullah  (4) 6  60.00  Faye Abdullah  Miriam  (4) 6  60.00  Hugh Abdullah  Idris  (4)6  60.00
Notes: (1) Deemed interested by virtue of its 100% shareholding in DSHL, which in turn has substantial shareholding in DPCL, pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of its substantial shareholding in Deleum, which in turn has 100% shareholding in DSHL, which in turn has substantial shareholding in DPCL pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSHL, which in turn has substantial shareholding in DPCL pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleurn, which in turn has 100% shareholding in DSHL, which in turn has substantial shareholding in DPCL pursuant to Section 6A of the Act.

Kirkcowan is a corporation incorporated in BVI providing nominee and trust services. Kirkcowan holds these shares as nominee for party(ies) who is/are not promoters, directors, substantial shareholders or key management and technical personnel of the Company nor for any person(s) related or connected to promoters, directors, substantial shareholders or key management and technical personnel of the Company. (d) Share Capital The authorised share capital of OPCl is US050,OOO comprising 50,000 ordinary shares of US01.00 each. The issued and paid-up share capital is US010 comprising 10 ordinary shares of US01.00 each. The changes in OPCl’s issued and paid-up share capital since incorporation are as follows:
10/10101 10 1.00 Cash 10.00 (e) Subsidiary/Associate Corporation OPCl does not have any subsidiary or associate corporation. 96 4. INFORMATION ON THE OELEUM GROUP (Cant’d) 4.6 ASSOCIATE CORPORATION OF OSSB 4.6.1  2MC  (a)  Background and history  2MC was incorporated in Malaysia under the Act on 19 April 1985 as  a private limited. 2MC commenced its business in 1986.  (b)  Principal Activities and Products/Services  2MC is principally engaged in the provision of bulking services for the  oil and gas industry.  (c)  Substantial Shareholders  The substantial shareholders of 2MC are as follows:

DSSB  544,000  32.00  Sabahebat Sdn Bhd  677,280  39.84  Baker Hughes Inteq France SA’  478,720  28.16  Deleum  (1)544,000  LMSB  (2)544,000  HS8  (2) 544,000  Dato’ Izham Bin Mahmud  (3) 544,000  Datuk Vivekananthan all M. V. Nathan  (3)544,000  Hj Abd Razak Bin Abu Hurairah  (3)544,000  Sian Rahimah Abdullah  (4)544,000  Faye Miriam Abdullah  (4) 544,000  Hugh Idris Abdullah  (4) 544,000  Abdul Razak Harris  (5)677,280
4. INFORMATION ON THE DELEUM GROUP (Cont’d) Notes: (1) Deemed interested by virtue of its 100% shareholding in DSSB, which in turn has substantial shareholding in 2MC pursuant to Section 6A of the Act.
(2) Deemed interested by virtue of its substantial shareholding in Deleum, which in tum has 100% shareholding in DSSB, which in turn has substantial shareholding in 2MC pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of his substantial shareholding in LMSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has substantial shareholding in 2MC pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his/her substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSSB, which in turn has substantial shareholding in 2MC pursuant to Section 6A of the Act.
(5) Deemed interested by virtue of his substantial shareholding in Sabahebat Sdn Bhd, which in turn has substantial shareholding in 2MC pursuant to Section 6A of the Act.

Baker Hughes Inteq France S.A. is a subsidiary of Baker Hughes Incorporated, a company based in the United States and listed on the NYSE. (d) Share Capital The authorised share capital of 2MC is RM2,500,000 compnslng 2,500,000 ordinary shares of RM1.00 each. The issued and paid-up share capital is RM1,700,000 comprising 1,700,000 ordinary shares of RM1.00 each. The changes in 2MC’s issued and paid-up share capital since incorporation are as follows:
19/4/1985 2 1.00 Subscribers’ 2 shares 19/4/1986 100,000 1.00 Cash 100,002 30/10/1986 299,998 1.00 Cash 400,000 13/3/1987 100,000 1.00 Cash 500,000 2/8/2004 1,200,000 1.00 Cash 1,700,000 (e) SubsidiarylAssociate Corporation 2MC does not have any subsidiary or associate corporation. 4. INFORMATION ON THE DElEUM GROUP (Cont’d) 4.7 ASSOCIATE CORPORATION OF DUCl 4.7.1  CUPl  (a)  Background and history  CUPl was incorporated in Cambodia on 24 April 1995 as a private  limited company. CUPl commenced its business in 1997.  (b)  Principal Activities and Products/Services  CUPl is principally an independent power producer in Cambodia.  (c)  Substantial Shareholders  The substantial shareholders of CUPl are as follows:

DUCl  2,400,000  20.00  leader  7,200,000  60.00  Universal (Hong  Kong) Company  Ltd’  GUH  Holdings  2,400,000  20.00  Berhad 1\  DSHl  Deleum  lMSB  HSB
Date’ Izham Bin Mahmud Datuk Vivekananthan all M. V. Nathan Hj Abd Razak Bin Abu Hurairah Sian Rahimah Abdullah Faye Miriam Abdullah Hugh Idris Abdullah (1) 2,400,000
(2) 2,400,000
(3) 2,400,000
(3) 2,400,000
(4) 2,400,000
(4) 2,400,000
(4) 2,400,000
(5) 2,400,000
(5) 2,400,000
(5) 2,400,000

20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 4. INFORMATION ON THE DELEUM GROUP (Cant’d) Notes: (1 ) Deemed interested by virtue of its substantial shareholding in DUCl, which in turn has substantial shareholding in CUPl pursuant to Section 6A of the Act. (2) Deemed interested by virtue of its 100% shareholding in DSHl, which in turn has substantial shareholding in DUCl, which in turn has substantial shareholding in CUPl pursuant to Section 6A of the Act.
(3) Deemed interested by virtue of its substantial shareholding in Deleum, which in turn has 100% shareholding in DSHl, which in turn has substantial shareholding in DUCl, which in turn has substantial shareholding in CUPl pursuant to Section 6A of the Act.
(4) Deemed interested by virtue of his substantial shareholding in lMSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSHl, which in turn has substantial shareholding in DUCl, which in turn has substantial shareholding in CUPl pursuant to Section 6A of the Act.
(5) Deemed interested by virtue of hislher substantial shareholding in HSB, which in turn has substantial shareholding in Deleum, which in turn has 100% shareholding in DSHl, which in turn has substantial shareholding in DUCl, which in turn has substantial shareholding in CUPl pursuant to Section 6A of the Act.

leader Universal (Hong Kong) Company Limited is a subsidiary of leader Universal Holdings Berhad, a company listed on the Main Board of Bursa Securities. 1\ GUH Holdings Berhad is a company listed on the Main Board of Bursa Securities. (d) Share Capital The registered share capital of CUPL is USD20,000,000 comprising 20,000,000 ordinary shares of USD1.00 each. The issued and paid­up share capital is USD12,000,000 comprising 12,000,000 ordinary shares of USD1.00 each. The changes in CUPL’s issued and paid-up share capital since incorporation are as follows:
24/4/95  3,000,000  1.00  Cash  3,000,000  8/9/95  600,000  1.00  Cash  3,600,000  5/12195  1,800,000  1.00  Cash  5,400,000  117196  2,000,000  1.00  Cash  7,400,000  1517196  ·2,400,000  1.00  Cash  9,800,000  9/8/96  2,200,000  1.00  Cash  12,000,000
As at 31 December 2003, the balance of USDO.99 per share was fully paid-up. (e) Subsidiary/Associate Corporation CUPL does not have any subsidiary or associate corporation. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.8 INDUSTRY OVERVIEW 4.8.1 Overview of the Global Economy The outlook for global performance remains fairly optimistic. Global growth in 2007 is forecast to be sustained at above 4% for the fifth consecutive year. A growth of 4.5% is anticipated in 2007 (5.0% in 2006), with further easing of inflationary pressures and with some moderation in growth of world trade. The adjustment in the US housing market is expected to gradually have a broader impact on consumption. Recovery in Japan would continue, albeit at a more measured pace, while prospects for the euro area now look brighter following signs of a broad-based recovery in the major member countries. Notwithstanding the more moderate pace of expansion in external demand, growth in the Asian region is expected to remain encouraging, supported increasingly by domestic demand, particularly in PR China and India. In the US, the prospect for further housing market weakness lingers as the ratio of residential property investment to GDP remains above its historical average while oversupply persists as evident from the high housing inventories and homeowner vacancy rafes. There may be some spillover effects into consumption activity and other sectors of the economy in the early part of the year. Import demand may also be more broadly affected, given the moderating domestic demand. This anticipated outcome would contribute to a further improvement in the US external imbalance, which has been a major area of concern associated with the adjustment of global imbalances. The impact of the moderation of growth in the US on global economic momentum in 2007 depends significantly on the sustainability of the recovery in Europe and Japan and the strength of domestic sources of growth in the rest of Asia. However, while these economies have relied on external demand to support growth and recovery, the share of European and Japanese exports to the US has declined noticeably (EU-15: 24% in 2000 to 20% of total exports in 2006; Japan: 30% in 2000 to 23% of total exports in 2006). With respect to domestic demand, the euro area economy appears to be better positioned to sustain its expansion. Labour market conditions are expected to continue improving in line with stronger economic activity and higher wage settlements supporting consumer spending. Germany’s recovery is also seen to be contributing to global demand, as reflected in the trend of a stronger rise of German imports from economies outside the euro area. In Japan, however, concerns persist on the prospects for a stronger recovery in private consumption. Enhanced consumption activity needs to be supported by a sustained uptrend in wage and income growth. Nonetheless, the strength in investment spending is expected to prevail as Japanese corporations are well-positioned to benefit from the continued expansion of global and regional demand. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) With an anticipated moderate softening in external demand, especially in the first half of 2007, regional economies are projected to expand at a slightly less rapid pace in 2007. Domestic demand is expected to playa central role in cushioning the impact of the moderation in external demand. In addition, flexibility in monetary and fiscal policy following the easing of inflationary pressures and improving fiscal positions of regional economies, would provide further support to growth in domestic demand. This development is evident given the more accommodative monetary policy stance in Indonesia, Thailand and the Philippines. Higher consumption activity is also increasingly supported by rising income levels amid improving labour market conditions as seen in the lower levels of unemployment and rising real wages. Recent developments suggest a revival in investment trends. Several large infrastructure projects have been announced or have commenced operations. Such projects include the relocation of the administrative centre and the expansion of public housing supply in Korea, the building of the integrated resorts in Singapore, and public infrastructure projects in Thailand and the Philippines. Trends also suggest that the global semiconductor industry, a key export sector of the region, is poised to record another favourable year with forecast growth of 9.5 -10%. Demand for electronic products with advanced features has driven technology enhancement in the semiconductor industry, leading to the production of high-performance microprocessors, graphics processors and memory chips. The new Microsoft operating system, Vista, is expected to lend support to sales in the PC segment in the second half of 2007 as demand increases. Meanwhile, in the broad commodity markets, despite some recent corrections, indications are that demand and prices would be generally sustained at elevated levels. In PR China, rebalancing growth away from investment and export-related activities towards private consumption remains a key focus for policy makers. GDP growth in PR China is expected to ease moderately in 2007 due to slower exports and policy measures undertaken to restrain over-investment and promote economic rebalancing. Ongoing infrastructure projects related to rural development and several significant events like the Olympics 2008, Shanghai World Expo and Guangzhou Asian Games 2010 would continue to support strong investment growth. Global inflation has started to stabilize amid easing oil prices. However, underlying demand conditions for commodities remain firm, especially in fast­growing regions, which suggests that prices would remain supported in the longer term. Going forward, while easing oil prices and slowing global growth may generally prompt some degree of monetary easing, monetary policy responses are expected to vary based on country-specific circumstances and conditions. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.8.2 Global financial markets have grown significantly, driven by expanding capital flows and growth of new financial intermediaries. These developments have increased volatility and potential mis-pricing of risks across a number of asset classes and markets. Persistently strong capital inflows have also prompted policy responses by selected monetary authorities in the region. The large increase in carry trades and derivative trades and increased integration of global financial markets have raised the risks of sudden and large adjustments in financial markets and asset prices. Markets remain vulnerable to a sharp correction that could be triggered by a significant change in expectations. The recent developments at the end of February and early March in the global, regional and domestic equity markets reflect the potential for contagion. Nonetheless, the capacity to absorb the volatility from time to time would depend on the resilience and fundamentals of the underlying economies. While global growth is expected to remain favourable in 2007, several key risks could affect this outlook. One risk is a sharper-than expected US moderation. Although oil prices have declined from their recent peaks, geo­political developments could suddenly reverse this trend with implications for slower global growth and renewed inflationary pressures. Furthermore, while recent developments suggest that the US current account deficit is improving, the risk of a disorderly adjustment still remains. In addition, events that prompt the unwinding of carry trades could also contribute to destabilizing developments in the international financial system. (Source: Bank Negara Malaysia Annual Report 2006) Overview of the Malaysian Economy Supported by sustained global growth and· resilient domestic demand, the Malaysian economy is expected to register solid growth in 2007, with real GDP expanding by 6%. This pace is consistent with the expansion in productive capacity following the strengthening of the recovery in capital formation. In 2007, investment, particularly private investment, is expected to playa major role in sustaining growth as strong domestic and external demand, coupled with high levels of capacity utilisation, induced firms to expand capacity. In addition, investment activity by the public sector is also expected to expand substantially with the commencement of work on infrastructure and other projects under the Ninth Malaysia Plan (“9MP”). Firm-level investment is also expected to benefit from the reduction in the corporate tax rate that was announced in the 2007 Budget, while ample liquidity in the financial system will ensure funding would be adequate. The year will also see broad-based growth as the mining and construction sectors, which had contracted in 2006, are expected to register positive growth. The construction sector, in particular, will benefit from higher pUblic expenditure as well as strong demand in the non-residential properties segment. In the mining sector, growth would be driven by a recovery in natural gas output after major upgrading work on the MLNG2 plant is completed. In addition, the Kikeh oil field in Sabah, which was discovered in 2004, is expected to start production in the fourth quarter of the year. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) The growth momentum during the year will be influenced by both external and domestic factors. The global economy is expected to expand more moderately in the first half of the year, mirroring the slower growth expected in the US during this period. In addition, the global electronics industry is expected to see demand remain stable in the first half of the year before new products boost demand in the second-half year. On the domestic front, a number of major. developments are expected to impact growth, mainly towards the latter part of the year. These include the more rapid implementation of public projects, the start of production at the Kikeh oil field and the significant increase in tourist arrivals for the Visit Malaysia Year 2007 during the peak summer travel season. Reflecting these factors, the Malaysian economy is expected to enjoy stronger growth in the second half­year. Inflation is expected to remain benign during the year. After having increased in 2006 following the partial reduction of fuel and other subsidies, inflation is expected to trend downwards during the year. Price pressures from demand conditions are expected to remain subdued, given that the economy would be on a balanced growth path during the year. In addition, lower oil and energy prices would mitigate imported inflation. As a result of these factors, the average inflation rate for 2007 is expected to be in the range of 2 -2.5%. The current account is forecasted to record a surplus, driven by the trade surplus and improved services receipts arising from the tourism sector. Inflows of foreign direct investment are expected to remain substantial. Balancing these inflows, however, would be the strong outflows that are characteristic of a highly open economy. The nation’s external indebtedness is expected to decline as the public sector will continue to register net repayment of its external obligations. Similarly, the strong performance of the trade, oil and gas and financial sectors would see significant repatriation of profits and dividends by foreign direct investors back to their home offices. In addition, Malaysian investors and firms are expected to intensify the diversification of their portfolios by investing abroad. These healthy two-way flows will combine to improve Malaysia’s fundamentals while enhancing the economic integration with the regional and global economies. (Source: Bank Negara Malaysia Annual Report 2006) THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.8.3 Overview of the Oil and Gas Sector The oil and gas industry plays a significant role as a major contributor to the growth and development of the Malaysian economy, contributing in terms of domestic production and as a major generator of export earnings. The supporting products and services sector plays a critical supporting role in ensuring the effective facilitation of operations in the oil and gas industry. In 2006, the sales value of the domestic manufacture of refined petroleum products amounted to RM82.4 billion. In 2006, export value of major product segments of the oil and gas industry are as follows: Export value of crude petroleum amounted to RM32.6 billion; Export value of refined petroleum products amounted to RM19.2 billion; Export value of residual petroleum products amounted to RM525.7 million; Export value of liquefied propane and butane amounted to RM2.0 billion; Export value of natural gas amounted to RM23.3 billion; and Export value of other gaseous hydrocarbons amounted to RM2.9 billion. In addition to its contribution to the nation’s foreign exchange earnings, the oil and gas industry also contributes towards employment generation, value-added creation and income generation. (Source: Independent Assessment of the Supporting Specialised Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) 4.8.4 The Segments/Sectors of the Industry The structure of the oil and gas industry may be depicted as follows:
Distribution Segmentation of the Oil and Gas Industry Exploration comprises activities that are related to the prospecting of undiscovered hydrocarbons. Exploration activities include the collection and interpretation of seismic survey data, and exploratory drilling and core analysis. Deleum Group is involved in providing exploration drilling through the operation of drilling rigs. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) Production comprises activities that are related to the extraction of hydrocarbons from identified hydrocarbon reserves. Production activities directly related to the extraction of hydrocarbons include drilling for hydrocarbons, completion, and production platform engineering and construction. Deleum Group is involved in the following production activities: Provision of gas turbine technical services; Subsea production development; Provision of production equipment and storage vessels; Provision of offshore drilling rig operations; Provision of production and drilling equipment and services; Supply of generator set, and mechanical drive gas turbine packages; Provision of Wireline products and services; Provision of Wellhead and Christmas Tree maintenance services; Provision of oilfield chemicals and related services.
Transportation comprises the activities related to the transportation of extracted hydrocarbons from production fields to storage facilities and refineries. Transportation includes the operation of onshore and offshore hydrocarbon pipelines, and the operation of hydrocarbon transport vessels. Deleum Group is involved in the supply of Drag Reducing Agents, which are chemicals used to increase the efficiency of petroleum transmission through pipelines. The Group is also involved in providing fluid transfer lines. Refining/Processing comprises activities that are related to the processing of extracted hydrocarbons into a form that may be utilised by intermediate and final users. Distribution comprises activities that are related to the transportation and distribution of refined hydrocarbons to end-users. Supporting Products and Services are used to facilitate the exploration, production through to the distribution of oil and gas. Some examples include, among many others, oil and gas power generation equipment, Oil and gas production equipment, seismic surveying services, wireline services, maintenance of equipment and machinery, pipeline fabrication and offshore platform fabrication and maintenance. Deleum Group is primarily involved in the provision of supporting specialised products and services for oilfield exploration and production. (Source: Independent Assessment of the Supporting Specialised Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.8.5 Future Growth and Drivers of Growth of the Industry Outlook and Growth Forecast of the Supporting Products and Services for the Oil and Gas Industry The outlook for the supporting products and services for the oil and gas industry in Malaysia is favourable. The supporting products and services for the oil and gas industry in Malaysia is forecasted to grow by 5% to 8% per annum for the next five years. The outlook for the supporting products and services for the oil and gas industry as a whole is dependent on the outlook of the overall oil and gas industry. As such, the favourable outlook of the supporting products and services for the oil and gas industry in Malaysia is based on the following observations and analyses: Local Exploration Activity Between the financial years ended 31 March 2000 and 31 March 2006, Investment in the exploration and production sectors of the Malaysian oil and gas industry by PETRONAS and PSC operators increased at an average annual rate of 21.7%. Investment increased by 30.9% in 2006, to approximately RM16.1 billion; Between the years ended 31 March 2001 and 31 March 2006, a total of 28 PSCs were signed between PETRONAS and PSC operators. During the financial year ended 31 March 2006, 9 PSCs were signed and a record 60 PSCs were in operation; Offshore seismic survey activity declined at an average annual rate of 6.4% between the years ended 31 March 2002 to 31 March 2004. During the year ended 31 March 2004, Offshore seismic survey data recovered increased by 9.3% to 384,247 line kilometres. The amount of offshore seismic survey data recovered in 2006 was 14.3% higher compared to 2004. A total of 439,182 line kilometres of seismic data were recovered in 2006; The number of exploration wells drilled increased at an average annual rate of 14.3% between the years ended 31 March 2002 to 31 March 2006. During the year ended 31 March 2006, a total of 53 exploration wells were drilled; Local Production Between the financial years ended 31 March 2002 and 2006, daily crude oil and condensates production increased at an average annual growth rate of 1.0%. During the financial year ended 31 March 2006, production of crude oil and condensates declined by 5.0% to 699,100 Barrels of Oil Equivalent (“BOE”) per day; Between the financial years ended 31 March 2002 and 2006, daily natural gas production increased at an average annual growth rate of 0.9%. During the financial year ended 31 March 2006, production of natural gas increased by 0.2% to reach 957,000 BOE per day; 4. INFORMATION ON THE DELEUM GROUP (Cont’d) Exports Between 2002 and 2006, the export value of crude petroleum increased at an average annual rate of 28.8%. In 2006, export value increased by 7.7% to reach 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 reach RM19.2 billion; Between 2002 and 2006, the export value of natural gas increased at an average annual rate of 23.9%. In 2006, export value increased by 12.0% to reach RM23.3 billion; Imports Between 2002 and 2006, the import value of gas turbines, which comprises “Gas Turbines of Power Not Exceeding 5,000 kW” and “Gas Turbines of Power Exceeding 5,000 kW”, declined at an average annual rate of 8.4%. In 2006, provisional data indicates that import value declined by 23.2% to RM274.0 million; Between 2002 and 2006, the import value of gas turbines “Gas Turbines of Power Not Exceeding 5,000 kW” increased at an average annual rate of 10.0%. In 2006, provisional data indicates that import value declined by 15.0% to RM52.8 million; Between 2002 and 2006, the import value of “Gas Turbines of Power Exceeding 5,000 kW” declined at an average annual rate of 11.0%. In 2006, provisional data indicates that import value declined by 25.0% to RM221.2 million; Between 2001 and 2005, the import value of “Gas Turbine Parts and Components” increased at an average annual rate of 34.1 %. In 2005, import value increased by 55.0% to reach RM804.8 million. Between January and October 2006, import value totalled RM474.8 million, representing a decline of 33.5% compared to the corresponding period in 2005; Between 2002 and 2006, the import value of “Gas Compressors for Hydrocarbon Drilling” declined at an average annual rate of 26.9%. In 2006, provisional data indicates that import value declined by 72.8% to RM16.4 million; Between 2002 and 2006, the import value of “Parts and Accessories for Drilling Rigs” increased at an average annual rate of 23.4%. In 2006, provisional data indicates that import value increased by 109.1% to reach RM258.1 million. (Source: Independent Assessment of the Supporting Specialised Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) 4. INFORMATION ON THE DELEUM GROUP (Cont’d) Drivers of Growth Some of the drivers of growth for the oil and gas industry and supporting products and services are as follows: Market Price of Hydrocarbons Sustained at a High Level Sustained high market price for hydrocarbons is likely to encourage hydrocarbon producers to maintain production at a high level, or even to increase production. In turn, a high level of production is likely to drive growth in the demand for supporting products and services to increase the efficiency and/or production capacity of existing production facilities. In addition, a sustained high market price for hydrocarbons may lead to the development of marginal or previously commercially unviable deposits. The development of these hydrocarbon deposits will drive growth in the oil and gas industry, and of supporting products and services. PETRONAS reported that during the year ended 31 March 2006, operators intensified exploration, development and production activities to capitalise on the high oil price scenario. The market prices of hydrocarbons are continued to be relatively high (in nominal terms) in early 2007, after increasing in 2005 and 2006. This in turn has driven high level of activity in the oil and gas industry, including in the provision of supporting products and services. Technological Advances Technological advances that enhance production efficiency, lower production cost, or enable production to take place in previously inaccessible areas are likely to increase demand for supporting product and service providers, particularly for providers with access to these technological advances. Existing hydrocarbon producers may be inclined to apply these technological advances to increase production efficiency, lower cost or improve recovery rates. Technological advances that enable production in previously inaccessible areas may drive growth by bringing new deposits into production. This drives growth of supporting product and service providers. PETRONAS Policy and Leadership PETRONAS has a policy of nurturing the development of local oil and gas industry operators, including local supporting product and services providers. In addition, PETRONAS encourages Malaysian operators to participate in the oil and gas industry overseas. Qualified Malaysian oil and gas industry operators, including local supporting product and services providers, are encouraged to support PETRONAS’ foreign operations. As at 31 March 2006, PETRONAS had interests a total of 62 upstream (exploration and production) ventures in 23 overseas countries. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.8.6 Opening of Acreage for New Exploration The opening of new blocks of Malaysian territorial waters for exploration, development and production will create new demand for supporting products and services. With a large proportion of shallow water (generally with depth of less than 200 metres) already allocated to PSC operators, the opening of new acreage is most likely to be for deep-water exploration, development and production. Between 1976, when the current PSC model was initiated, and October 1999, PETRONAS had signed a total of 70 PSCs with various oil and gas industry operators. 9 new PSCs were signed during the year ended 31 March 2006, and a historical high of 60 PSCs were in operation in Malaysia. (Source: Independent Assessment of the Supporting Specialised Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) Players and Competition Competitive Nature and Intensity in Malaysia Competitive Conditions Supporting Product and Services Providers in the oil and gas industry face normal competitive conditions, in that operators normally have to compete with each other for business. However, there are some conditions as follows: Only operators that are licensed or registered by PETRONAS are allowed to bid directly for work provided by PETRONAS and PSC operators in the oil and gas industry. Operators who wish to carry out construction work in Malaysia are required to register with the CIDB under the Construction Industry Development Board Act 1994. All builders, contractors and sub-contractors (including operators carrying our civil engineering, mechanical and electrical works) who wish to tender for Government projects must also register with Pusat Khidmat Kontraktor (“PKK”) of the Ministry of Entrepreneur Development. All operators who wish to obtain contracts from the Government or to bid directly for work provided by PETRONAS and PSC operators in the oil and gas industry are reqUired to register as contractors with the MoF. Thus, although operators within the supporting product and services providers in the oil and gas industry operate under normal competitive conditions, it is imperfect due to the requirements for licensing and registration that partly inhibits free competition. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) As with most free enterprise environments, 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 Cost competitiveness; Prompt delivery/completion.
An additional competitive factor that concerns supporting products and service providers is the ability to demonstrate a good safety record, typically measured by work time between work-related fatalities and lost time accidents or incidents. PETRONAS and other major oil and gas industry operators typically require that their suppliers provide proof that they have a good health and safety record when submitting bids for contracts. Basis of competition The basis of competition within the supporting product and services providers in the oil and gas industry is mainly as follows: Most work contracts are based on open tender. This system creates a normal competitive environment; In virtually all open tender situations, once the technical specifications are fully complied, the bid with the lowest price wins; For large, complex and high value jobs, in many situations, international firms with highly reputable track records are involved in the bidding process; In many situations there are many bidders with the relevant credentials for tender and non-tender jobs; However, competition is restricted to companies with the relevant licences and registrations from PETRONAS and various Government bodies. Operators in the Industry Gas Turbine Sector The total number of gas turbine manufacturers is limited, as a high degree of technical expertise is required to successfully design, develop, and manufacture gas turbines. Virtually all gas turbines used in Malaysia are imported. The principal global manufacturers of gas turbines that may be suitable for use in the oil and gas industry include: Solar Turbines Inc.; General Electric Corp.; Rolls-Royce pIc; SiemensAG; Kawasaki Heavy Industries, Inc.; Hitachi; Mitsubishi Power Systems; and MTU Aero Engines.
Global gas turbine manufacturers operating in Malaysia are typically supported by local partners. (Source: Independent Assessment of the Supporting Specialised Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.8.7 Relevant Laws and Regulations (a) Government laws, regulations and policies Government regulations All rights related to the exploration and extraction of petroleum in Malaysia is vested in PETRONAS under the PDA. PETRONAS was also granted control over the carrying out of downstream activities and development relating to petroleum and its products under the PDA. All operators wishing to participate in the oil and gas industry are required to obtain the necessary licences, or successfully register with PETRONAS before they are allowed to participate in these activities. Operators who wish to tender for contracts from the Government are also required to register as contractors with the MoF, and the CIDB. All companies that are in the manufacturing of petrochemical products have to apply for a manufacturing licence from MIDA or MIT!. According to the Industrial Coordination Act, 1975 which mandates all companies with shareholders’ funds of RM2.5 million or above, or engaging 75 or more full-time employees to attain a manufacturing licence (Source: Independent Assessment of the Supporting Specialised Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) PETRONAS Licences and Registrations Applicants are required to specify the scope of work for which the licence or registration is being applied for, based on a set of Standardised Work & Equipment Categories (“SWEC”). An individual licence or registration must be obtained for each SWEC. Companies that have obtained a license for a SWEC are allowed to participate in the upstream sector, downstream sector, and maritime sector of the oil and gas industry. In contrast to a licence, companies that are registered in a SWEC are allowed to only participate in the downstream sector and maritime sector of the oil and gas industry. Registered companies are not allowed to participate in the upstream sector or in the offshore sector. Generally, licenses and registration are effective for a period of one (1) year. However, licenses and registration that are effective for a period of more than one (1) year, can be considered. Deleum Group currently holds the PETRONAS licences and registrations that are relevant to its business. (Source: Independent Assessment of the Supporting Specialised Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) The details of the licences and registrations held by the Deleum Group are detailed in Section 4.2.7 of this Prospectus. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) (b)
(c)

Government initiatives and incentives PETRONAS Initiatives As part of the aim to promote and encourage local participation in the oil and gas industry, PETRONAS has implemented the following initiatives: • Licensing and registration of companies with preference given to local companies. Manufacturing Incentives for Petrochemicals Major Government incentives are also available for the manufacturing of petrochemicals. These include: • Pioneer Status;
• Investment Tax Allowance;
• Reinvestment Allowance.

Eligibility for incentives under Pioneer Status and Investment Tax Allowance will be determined according to the priorities termed as “promoted activities’ or “promoted products”. In addition, the level of value-added, technology and industrial linkages will also be taken into consideration. As part of the Malaysian Government’s intention to nurture the development of the Petrochemicals Industry, it is listed as a promoted activity eligible for Pioneer Status. DFSSB had obtained Pioneer Status for industries located in the Eastern Corridor of Peninsular Malaysia, Sabah and Sarawak, with the tax exemption of 100% on the statutory income for five (5) years under the Promotion of Investments Act 1986, for the production of “Drag Reducing Agent” in August 2006. TOSB had obtained the income tax exemption for ten (10) years from the date fixed by MITI, in relation to overhaul, repair and servicing. Other incentives also include Reinvestment Allowance. All manufacturing companies that have been in operation for at least 12 months and incur qualifying capital expenditure to expand production capacity, modernise and upgrade production facilities, diversify into related products, and automate its production facilities can obtain a Reinvestment Allowance. Environmental Regulations TSSB has obtained for its Test Cell facility a written certificate of approval for the Erection of Fuel Burning Equipment, and Chimneys under rules 36 and 38 of the Department of Environment’s Environmental Quality (Clean Air) Regulations 1978. Under the terms of this certificate, TSSB is allowed to install and operate fuel burning equipment and chimneys, including up to six (6) gas turbine units and up to four (4) chimneys. The Test Cell facility operated by TSSB is used to test and verify the power output of overhauled gas turbines before they are returned to customers. (Source: Independent Assessment of the Supporting Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.8.8 4.8.9 Demand and Supply As highlighted in Section 4.2.6 above, the Group relies on the technology derived from its principals and partners. The industry dynamics governing the demand and supply of these specialised products and services can be broken down as follows: (a)  Supply Dependencies;  (b)  Demand; and  (c)  Demand Dependencies.
The abovementioned three (3) factors which affect the demand and supply of supporting specialised products and services are explained in Section 11, subsections 1.8, 1.9 and 1.10, respectively, of this Prospectus. Substitute Products/Services There are limited practical substitutes for most of the exploration and production technologies, products and services. As such, Deleum Group faces limited threat of substitutes. One potential exception is in the use of reciprocating engines in place of gas turbines for power generation on offshore production platforms. Reciprocating Engines A reciprocating engine, also known as a piston engine, is a type of internal combustion engine that utilises one or more pistons to convert pressure into a rotating motion. A range of fuels can be used in reciprocating engines, including gasoline, diesel fuel, oil or natural gas. A wide range of reciprocating engines are currently in use, generating power in a wide range of applications. The more familiar reciprocating engine types include: Petrol engines in passenger cars and motorcycles; Diesel engines in commercial vehicles, locomotives and ships; Diesel engines for electric power generation.
Reciprocating engines are a potential substitute to gas turbine engines in power generating applications on offshore platforms in the oil and gas industry. The advantages of reciprocating engines over gas turbines generally include lower capital cost per unit of power output. Diesel engines may be cheaper to operate, due to their inherent fuel efficiency. Mitigating Factors The advantages of gas turbine engines over reciprocating engines include the following: Gas turbines typically have a higher power to weight ratio compared to reciprocating engines; The availability of gas turbines is generally higher compared to reciprocating engines. Lost production due to reciprocating engine unavailability is a critical economic factor; 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.8.10 4.8.11 The reliability of gas turbines is generally higher compared to Reciprocating engines. Gas turbines operate with only the rotor rotating in a balanced mode. Reciprocating engines have many moving parts. which may cause vibration and metal fatigue due to the reciprocating motion of the pistons; Reciprocating engines generally produce more vibration than gas turbine engines of comparable power output due to the reciprocating motion of their pistons. An offshore production platforms that houses a reciprocating engines generally has to be more robust compared to one that houses a gas turbine of comparable power to accommodate the greater weight, volume and vibration of a reciprocating engine. As a result, any potential capital saving from purchasing a Reciprocating engine may be offset by the increased cost of fabricating the structure. (Source: Independent Assessment of the Supporting Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) Prospects and Outlook Please refer to Section 11. subsection 1.15 of this Prospectus for details pertaining to the prospects and outlook of the oil and gas industry. Reliance on and Vulnerability to Imports The supporting products and services for the oil and gas industry in Malaysia is generally dependent on imported raw materials, systems and services. Raw materials, systems and services are imported for the following reasons: Certain items are not readily available from local sources. For example, gas turbine packages, subsea production system and wellhead products, and drag reducing agent are not commonly manufactured in Malaysia. The manufacture of items such as these are highly specialised. and in some instances controlled by patents and other intellectual property rights. As a result. they are not commonly manufactured in Malaysia. Some of the items are specified by the customer, and as a result their source is predetermined. Local operators can mitigate their vulnerability to a disruption in imports by forming joint ventures. or by entering into exclusive distribution agreements with international suppliers, as these international suppliers will then have an interest in supporting their local partners. In addition. local operators who have long business relationships with international suppliers also mitigate against their vulnerability to a disruption in imports. (Source: Independent Assessment of the Supporting Products and Services for the Oil and Gas Industry prepared by Vital Factor Consulting Sdn Bhd) 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.9 MAJOR CUSTOMERS Based on the Group’s proforma consolidated income statements for the last three (3) financial years ended 31 December 2006, the major customers (representing 10% or more of revenue) of the Group are as follows:
1. SSB/SSPC Specialised equipment 25 25.92 27.88 18.86 and services, oilfield equipment and services, and oilfield chemicals and services
2. MDFT Specialised equipment 2 1.82 15.76 and services 3. PCSB Specialised equipment 25 21.77 15.7025.90 and services, oilfield equipment and services, and oilfield chemicals and services
4. Murphy Specialised equipment 11 6.25 13.72 and services 5. PGB Specialised equipment 24 9.41 8.80 10.33 and services, and oilfield equipment and services
6. EMEPMI Specialised equipment 25 23.62 7.32 7.29 and services, oilfield equipment and services, and oilfield chemicals and services
7. Talisman Specialised equipment 5 14.35 7.98 5.93 and services, and oilfield equipment and services
Total 95.07 85.95 87.59 For the financial year ended 31 December 2006, the top twenty (20) customers of Deleum Group represented 99.7% of the Group’s proforma revenue, amounting to RM430.9 million. The remaining 0.3% of Group proforma revenue was spread across approximately fifteen (15) other customers. For FYE2006, the bulk of the Deleum Group’s revenue was spread over a broader band of customers namely SSB/SSPC, MDFT, PCSB, Murphy and PGB, which contributed to 74.4% or RM321.6 million of the total revenue for the year. The average business relationship of the abovementioned five (5) major customers is approximately 18 years, which indicates a long-term and stable business relationship, hence providing a base for continued business relationship. Any dependency on these customers is also mitigated by the activity levels of other existing and new PSC operators in the coming years. 4. INFORMATION ON THE DELEUM GROUP (Cant’d) Deleum Group has been a provider of a wide range of supporting specialised products and services to both SSB/SSPC and PCSB over the past 25 years, which includes: Specialised equipment and services; Oilfield equipment and services; and Oilfield chemicals and services
SSB/SSPC and PCSB both being PSC operators, are two (2) of the main participants in the Malaysian oil and gas industry. It is inevitable that they would be a major source of revenue for Deleum Group. SSB/SSPC and PCSB are likely to continue incorporating the Group’s products and services into their operations due to the specialised nature of the products, and the established Deleum Group’s local support. The Deleum Group is also the exclusive sole representative and authorised provider of maintenance services for certain specialised equipment and systems used by SSB/SSPC and PCSB. As a result, there may not be many similar alternatives in the market for the Group’s supporting products and services. Deleum Group generally enjoys long-term business relationships with its customers. This is reflected by the fact that as at FYE2006, the average length of relationship between the Group and its twenty (20) largest customers is 9 years. Approximately 60% of the Group’s top twenty (20) customers have been dealing with the Group for five (5) years or more, and 20% have been dealing with the Group for twenty (20) years or more. These long-standing relationships with major operators in the Malaysian oil and gas industry serve as an endorsement for the quality of Deleum Group’s products and services. More importantly, it indicates that Deleum Group has a stable customer base to sustain and grow the business in the future. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON THE DELEUM GROUP (Cant’d) 4.10 MAJOR SUPPLIERS Based on the Group’s proforma consolidated income statements for the last three (3) financial years ended 31 December 2006, the major suppliers (representing 10% or more of purchases) of the Group are as follows:
1. STICO Specialised equipment and 25 55.40 21.30
35.63 services, and oilfield equipment and services
Vetco Gray Specialised equipment and 2. 25 10.10 28.10 20.24 services, and oilfield equipment and services
3. Solar Oilfield equipment and 25 13.90 20.70 18.63 Turbines services Asia
4. SBM Specialised equipment and 22 4.60 10.30 8.49 Offshore services Contractors Inc
Total 84.00 80.40 82.99 The top twenty (20) suppliers of Deleum Group accounted for 96.4% of total Group purchases for the financial year ended 31 December 2006. The largest supplier was STICO for the supply of specialised equipment and services, and oilfield equipment and services to the Group. Purchases from STICO accounted for 35.6% of total Group purchases for the financial year ended 31 December 2006. The second largest supplier was Vetco Gray for the supply of specialised equipment and services, and oilfield equipment and services to the Group. Purchases from Vetco Gray accounted for 20.3% of total Group purchases for the financial year ended 31 December 2006. Solar Turbines Asia based in Singapore is the third largest supplier to the Group, supplying oilfield equipment and services. Purchases from Solar Turbines Asia accounted for 18.6% of total Group purchases for the financial year ended 31 December 2006. The three (3) largest suppliers collectively accounted for 74.5% of total Group purchases for the financial year ended 31 December 2006. Deleum Group generally enjoys a long-term relationship with its suppliers. This is reflected by the fact the average length of the relationship between the Group and its top twenty (20) suppliers is nine (9) years. Furthermore, 35% of the Group’s top twenty (20) suppliers have been dealing with the Group for ten (10) years or more, and 30% have been dealing with the Group for twenty (20) years or more. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) 4.11 FUTURE PLANS, STRATEGIES AND PROSPECTS The future plans of Deleum Group are focused in three (3) key areas, as depicted in the diagram below: Customised Specialty
Extension of ASEANMaintenance Services Chemicals
Middle East Africa Overview of the Future Plans of Deleum Group Development of New Products Customised Specialty Chemicals DCSB has successfully collaborated with PRSS to develop chemical systems that remove organic solid deposits in oil wells and help resurrect wells with low production rates, or closed oil wells. Building on this success, the Group is currently undertaking R&D activities to develop customised specialty chemicals for other solutions e.g. removal of wax from sludge tanks and pipelines or other industrial applications. Current tests conducted together with customers proved the.chemicals to be effective. Deleum Group plans to primarily utilise in-house resources to carry out the R&D necessary to develop customised specialty chemicals. With more new wells coming on stream plus existing wells, there will be some degree of rework required after some years to restore production output. The chemicals that the Group produces can be readily used in this area. The Group plans to accelerate the development of specialty chemicals for the above solutions by the second half of 2007. 4. INFORMATION ON THE DELEUM GROUP (Cont’d) Development of New Services Extension of Maintenance Services to Other Systems and Equipment As part of its future plans, Deleum Group plans to expand on the current portfolio of maintenance services to cover a wider range of systems and equipment for the exploration and production of oil and gas. The Deleum Group currently provides maintenance services for gas turbines, Wellhead and Christmas Trees and subsea Wellhead systems. As such, the Group already has an established customers base and existing expertise to expand on its maintenance services. Deleum Group plans to continue enhancing its oilfield services by acquiring further high technology downhole and surface tools for more efficient operations to compliment its services to its existing customers. The Group plans to accelerate and place more emphasis on this thrust from the second half of 2007 onwards. The Group also intends to expand its gas turbine technical services capability by developing its ability to overhaul higher capacity gas turbine models than of those currently being overhauled. The Group plans to commence development of expanded gas turbine overhaul services in its own dedicated facility by the second half of 2007. The Deleum Group is continuously seeking new partnerships with expertise and new technologies to expand its current scope of specialised products and services to the oil and gas industry. Geographic Expansion Deleum Group primarily services the local market. For FYE2006, revenue from Peninsular and East Malaysia accounted for 93.35% of total Group revenue while the remaining 6.65% was derived from the Joint Development Area. The Group plans to expand its geographic coverage to provide supporting specialised products and services to markets outside of Malaysia. It is expected that export revenue will account for a significant proportion of the Group revenue in the future. As part of the Group’s future plans, Deleum Group plans to expand its presence overseas into the ASEAN region, the Middle East, and in Africa countries where opportunities in oil and gas industry exist. Furthermore, in line with the Group’s continuing support to PETRONAS, part of the Group’s future plans is to expand its presence overseas in countries where PETRONAS has established operations. Deleum Group expects to commence initiatives for overseas expansion from the second half of 2007 onwards. No material contribution is expected from these initiatives for the financial year ending 31 December 2007.

 

 

 

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