Business Overview

6. INFORMATION ON OUR GROUP 6. INFORMATION ON OUR GROUP 6.1 OUR COMPANY 6.1.1 Background and history Our Company was incorporated in Malaysia under the Act on 2 December 2015 as a private limited company under the name of Serba Dinamik Holdings Sdn Bhd. On 13 May 2016, our Company was converted to a pUblic limited company to undertake our Listing. The principal activity of our Company is investment holding and provIsion of management services, whilst our Group is principally engaged in engineering solutions to the O&G and power generation industries. For further details of the principal activities of our subsidiaries and associates, please refer to Section 6.2 of this Prospectus. The history of our business can be traced back to June 1993 with the incorporation and commencement of Serba Dinamik. We started our business as a provider of IVIRO services for rotating equipment before expanding to IRM of static equipment in 1998. One of our earlier contracts was with a fertiliser plant in Bintulu, Sarawak where we were engaged to undertake the MRO of rotating equipment and minor fabrication works. Subsequently in 1994, we purchased a one acre piece of land in Kidurong Light Industrial Estate in Bintulu, Sarawak where we constructed our first mechanical and fabrication service centre. We grew organically during this period mainly servicing the downstream sector of the O&G industry in Bintulu, Sarawak where we provided services including, among others, MRO of rotating equipment as well as minor fabrication for non-pressurised tanks and civil works. One of our key milestones was in August 1997 where we, through our subsidiary, Serba Dinamik was selected to be a vendor company under PETRONAS VDP for the provision of “overhaul of rotating equipment for plant turnaround and inspection” services. The primary objective of the PETRONAS VDP is to nurture Bumiputera entrepreneurs in O&G related manufacturing and provision of technical services to become more competitive and established in their fields. We graduated from the PETRONAS VDP in December 2007 and have since used our track record and financial strength fostered by the programme to grow as a group providing engineering services across a number of heavy industries. As an extension of our maintenance services, we expanded our business operations in 1998 to include technical training on the maintenance of rotating equipment and related courses to personnel in O&G, power generation and heavy industries. In respect of technical training, we provide a wide range of technical courses on rotating equipment maintenance and related courses mainly in collaboration with City & Guilds and Institute of Materials, Malaysia. In 2001, we secured our first overseas contract with a global O&IVI service provider, which involved MRO of rotating equipment for upgrading of the turbine gas compressor and installation of a booster compressor for a LNG plant in Ras Laffan, Qatar. This was followed by other MRO work orders on rotating equipment which included the upgrading of instrumentation for the same LNG plant in Qatar. In September 2002, we incorporated Serba Dinamik International in Labuan to focus on our business activities overseas. To service the growing demand of our business operations, we established our second service centre in Paka, Terengganu, Malaysia in 2004 to provide minor fabrication and maintenance services for our customers including, among others, PETRONAS Integrated Petrochemical Complex located in Kerteh, Terengganu, lVIalaysia. The service centre in Paka also houses our training centre which is approved by City & Guilds. 6. INFORMATION ON OUR GROUP (Cont’d) In August 2004, we also incorporated Serba Dinamik Group Berhad as an investment holding company providing management services to subsidiaries within our Group. Subsequently, we moved from Subang Hitech Industrial Park to our existing corporate head office in Pusat Dagangan UMNO Shah Alam, Selangor, Malaysia in 2005. As part of our plans to capture opportunities in Indonesia, we incorporated Serba Dinamik Indonesia in October 2005 and established its first office in Jakarta, and subsequently followed by other offices in Riau to serve producers, operators and owners of O&G refineries and power plants in Indonesia. In February 2007, we expanded our business activities to EPCC works with a project from Malaysia LNG Sdn Bhd relating to the lubrication oil varnish remover and filtering solution equipment for gas turbines. Subsequently, in June 2007 we secured another EPCC work from PETRONAS Dagangan Berhad pertaining to design, supply, construction, testing and commissioning of a LPG pump and its associated facilities in the Bintulu LPG Bottling Plant. Both projects were completed in 2008. Since then, we have undertaken numerous EPCC works including, among others, upgrading of bitumen storage facilities at an oil terminal in Bintulu, commissioning of a new gas supply line to the stabilisation compressor in an LNG plant in Bintulu, upgrading of general service and drinking water in the terminal area for an LNG plant in Bintulu and revamping of hydraulic power units for a gas refinery plant in Malacca. In August 2010, we were appointed as a distributor of Capstone, a manufacturer of microturbine energy systems, for the distribution of microturbines in Malaysia, Indonesia and Brunei. During the same year, our subsidiary Serba Dinamik IT was incorporated to develop and provide ICT software and solutions for various industrial applications mainly to support our O&IVI operations. In the following year, Serba Dinamik IT received MSC Malaysia status for research, development and commercialisation of our in-house developed proprietary software namely AlignSoft and myPLANT. MSC Malaysia status is recognition by the Government through the Malaysia Digital Economy Corporation for ICT and ICT-facilitated businesses that develop or use multimedia technologies to produce and enhance their products and services. AlignSoft and myPLANT software are an integral part of our rotating equipment maintenance business operations. As part of our continuing expansion plans, between 2012 and 2014, we established an additional five service centres in Malaysia including two in Labuan, one in Miri, Sarawak, one in Pasir Gudang, Johor, and one in Kemaman, Terengganu. Subsequently, after completion of contracts in Pasir Gudang, Johor as well as Kemaman, Terengganu, we no longer have service centres in the respective locations. As at the LPD, we operate in five service centres throughout Malaysia inclUding one in Paka, Terengganu, one in Miri and one in Bintulu, Sarawak and two in Labuan. In April 2013 and July 2013, we incorporated Serba Dinamik London and Serba Dinamik Petroleum with offices in London and Bahrain to service our customers in the UK and Middle East, respectively. As at the LPD, we have built up track records in our operations in the Middle East working with customers including, among others, Energy Machine Services for O&M services with Petroleum Development Oman, Elliot Gas Services Saudi Arabia Ltd for O&M services with Saudi Aramco, Energy Solution W.L.L. for O&M services with Qatar Petroleum and Petroserv Limited for O&M services with Qatar Chemical Company Ltd.
6. INFORMATION ON OUR GROUP (Cont’d) In October 2013, we, through our subsidiary Serba Dinamik, was awarded a grant totalling RM4.95 million to fund part of the workshops construction and purchase of machineries and equipment for the provision of mechanical and rotating equipment maintenance services in our services centres in Malaysia. Subsequently in July 2014, we had drawn down R1\i14.47 million of the said grant to fund part of the workshops construction and purchase of machineries and equipment for our service centres in Bintulu, Sarawak and Labuan. The balance of RM0.48 million (i.e. being the TERAJU grant amount of RM4.95 million applied for less RM4.47 million drawn down by Serba Dinamik) of the TERAJU grant will no longer be available for further drawdowns as the Project has been completed. In March 2015, we established a facility in Klang, Selangor, which is to focus on systems design and specification, programming, configuration and assembly of process control systems and instrumentation, systems design and specification, configuration and assembly of auxiliary power generators and firefighting systems. As part of our intention to expand into the Brunei market, we incorporated Serba Dinamik Brunei in April 2015 and commenced operations as a representative office. In July 2015, we, through our subsidiary, Serba Dinamik Group was selected to join the Syarikat Skim Jejak Jaya Bumiputera program under TERAJU whereby its objective is to act as a catalyst for the listing of potential Bumiputera companies on Bursa Securities. In September 2015, we secured an EPCC contract followed by an O&M contract in February 2016 for three small hydropower plants along Sungai Bengkoka and Sungai Togohu, Kota Marudu, Sabah. The construction of the hydropower plants is expected to be completed by end of 2017. As at the LPD, we have mobilised works including initial site clearance and started the procurement process for turbines. Upon completion of the construction, we will undertake the O&M of the said small hydropower plants. Additionally, as part of our expansion plans in the Middle East, we incorporated our subsidiary, Serba Dinamik RMC FZE in October 2015 and obtained commercial and trading licences to operate a logistics centre in RAK, UAE. The logistics centre comprises a 1,944 sq metre warehousing space and an approximately 25,000 sq metre open yard in RAK Port. This logistics centre will also operate as one of our service centres in the Middle East. In December 2015, we further expanded our operations by establishing an additional service centre in Bahrain. As at the LPD, we operate in two service centres in the Middle East inclUding one in Bahrain and one in RAK, UAE. We achieved another key milestone when our subsidiary, Serba Dinamik, was appointed by the MITI on 22 December 2015 to be one of the anchor companies under the VDP. Besides our Group, other anchor companies appointed by the MITI under the VDP include, among others, PETRONAS, Tenaga Nasional Berhad and Telekom Malaysia Berhad. Our role as an anchor company under the VDP is to assist in the nurturing and development of Malaysian Bumiputera entrepreneurs relating to MRO of rotating equipment and IRM of static equipment and structures. As at the LPD, we have seven vendor companies registered under our VDP. In March 2015, we, through our subsidiary, Serba Dinamik, was awarded another grant totalling RM 4.66 million from TERAJU to fund part of the construction, refurbishment as well as purchase of machineries and equipment for our service centres in Bintulu, Sarawak and Labuan for the provision of maintenance and repairs of rotating equipment for Murphy’s Operations and Kebabangan Petroleum Operating Company Sdn Bhd Sabah Operations. As at the LPD, applications have been made to draw down the said grant. 6. INFORMATION ON OUR GROUP (Cant’d) As part of our Group’s asset owner business model strategy, in July 2016, our subsidiary, Serba Dinamik Indonesia, secured a 10-year leasing agreement with an engineering company in Indonesia (“the Lessee”) where the Lessee will be leasing a 0.8 MW gas power plant and its auxiliary equipment (“0.8 MW gas power plant”) from Serba Dinamik Indonesia. The engineering company in Indonesia is a company involved in design, supply and installation of heating, ventilation and air-conditioning system.

6.1.2 Recent business acquisitions in 2015 In 2015, as part of our expansion plans to complement and strengthen our portfolio of products and services, we acquired the following companies: (i) acquired a 100.00% equity interest in A R Global Engineering on 15 January 2015 for RM1.00 million to expand our competency in the provision of process control and instrumentation. A R Global Engineering is a Malaysian­based company in the provision of process control, instrumentation and related products and services. A R Global Engineering has the experience in integrating industrial automation systems using, among others, Siemens, Allen Bradley, ABB, GE Fanuc, Omron, Mitsubishi, Datac and Schneider Modicon process control and SCADA systems. The integration of process control and instrumentation forms a key part of our O&M and EPCC business segment;
(ii) acquired a 100.00% equity interest in Telegistics Asia on 15 January 2015 for RM180,000.00 to complement our ICT solutions and services business segment in developing and providing software and communications products and solutions. Telegistics Asia is a Malaysian based company that develops internet and mobile applications solutions namely live internet broadcasting, streaming and video web conferencing;

(iii) acquired a 100.00% equity interest in Quantum Offshore on 21 April 2015 for RM6.65 million to gain immediate access to its existing customer base and penetrate markets in the UK and other parts of the Europe. Quantum Offshore is a company based in the UK with offices in London and Cornwall. Quantum Offshore is involved in the design, engineering and installation of auxiliary power generators and firefighting systems primarily for the O&G industry; (iv) acquired a 30.00% equity interest in Adat Sanjung on 2 July 2015 for RM12.22 million. Adat Sanjung is a Malaysian-based company which Ultimately holds 100.00% equity in One River Power. One River Power is the holder of three Feed-In Approvals granted by the Sustainable Energy Development Authority of Malaysia for the development of three small hydropower plants in Kota Marudu, Sabah, Malaysia;
(v) acquired a 51.00% equity interest in PT Kubic Gasco on 12 August 2015 for RM3.83 million as part of our Group’s asset owner business model strategy. This acquisition will also prOVide our Group with the opportunity to enlarge and diversify our revenue base by expanding our range of products and services. PT Kubic Gasco is an Indonesian-based company principally involved in processing and supply of CNG and owns a CNG plant in Muaro Jambi, Sumatra, Indonesia. Through the acquisition of PT Kubic Gasco, we hold 45.80% and 41.82% effective equity interest in PT Delta Conusa and PT Muaro Jambi, respectively, both of which dormant, as at the LPD. For details on the CNG Plant in Indonesia, please refer to Section 7.4.5 of this Prospectus;

6. INFORMATION ON OUR GROUP (Cant’d) (vi) acquired a 51.00% equity interest in SD Advance Engineering on 31 December 2015 for RM25,500.00 to complement our competency in MRO of rotating equipment. SD Advanced Engineering is principally involved in the maintenance of microturbines and related products and services; and (vii) acquired an 80.00% equity interest in SD Controls on 31 December 2015 for RM40,000.00 to complement our competency in the provision in process control and instrumentation. SD Controls is a Malaysian-based company providing testing and calibration of process control and instrumentation. 6.1.3 Pre-IPO Exercise In conjunction with, and as an integral part of our Listing, we had implemented and completed the Pre-IPO Exercise. We have acquired from Dato’ Karim, Hj. Abdul Kadier, Dato’ Awang Daud, CKO 1 and COPE 2 the entire issued and paid-up share capital of Serba Dinamik Group comprising 73,978,860 ordinary shares of RM1.00 each for a total purchase consideration of RM531,799,999.00 which was fully satisfied by the issuance of 1,063,599,998 new Shares in our Company, credited as fully paid-up Shares, pursuant to the share purchase agreement dated 25 May 2016. Serba Dinamik Group and its subsidiaries were acquired by us free from all claims, charges, liens, encumbrances and equities, together with all rights attached thereto as at the completion date of the acquisition. As at the date of this Prospectus, the Pre-IPO Exercise has been completed. Our corporate structure after the acquisition of Serba Dinamik Group and prior to our IPO is as set out in Section 6.2 in this Prospectus. The Pre-IPO Exercise was completed on 31 May 2016. 6.1.4 Share capital Our authorised share capital is RM750,000,000.00 comprising 1,500,000,000 Shares whilst our issued and paid-up share capital is RM531,800,000.00 comprising 1,063,600,000 Shares as at the date of this Prospectus. The changes in our issued and paid-up share capital for the past three years preceding the date of this Prospectus are as follows: Cumulative issued Date of allotmenU No. of Par and paid-up share increase shares value Consideration capital RM RM 2 December 2015 2 0.50 Cash 31 May 2016 1,063,599,998 0.50 Other than 531,800,000 cash(1) Note: (1) Acquisition by Serba Dinamik Holdings from the Selling Shareholders of the entire issued and paid-up share capital of Serba Dinamik Group for a total consideration of RM531,799,999.00 which was fully satisfied by the issuance of 1,063,599,998 new Shares in our Company, credited as fully paid-up Shares. Our issued and paid-up share capital will increase to RM667,500,000.00 comprising 1,335,000,000 Shares following the completion of the Public Issue. 6. INFORMATION ON OUR GROUP (Cont’d) 6.2 OUR SUBSIDIARIES AND ASSOCIATES Our current group structure is set out below: I Quantum Offshore I I 100% I Serba Dinamik Holdings Serba Dinamik Top Luxury * I 100% I I 100% I Adat Saniunq I 30% Serba Dinamik London # 100% Serba Dinamik Petroleum 99% Serba Dinamik Intemational Serba Dinamik Indonesia 100% 75% PT Delta Conusa * @ 90% I PT KUbic Gasco I I 51% PT Muaro Jambi * Serba Dinamik Serba Dinamik Serba Dinamik 82%Qatar A 100%
Group RMC FZE 100% A R Global Engineering 100%
Serba Dinamik IT I I 100% I
Serba Dinamik Brunei 75%
SDAdvance EnQineering
51% I SD Controls I 80%
49% I Teleqistics Asia I I 100% I
Subsidiary —–Associated company Dormant # A 99.998% subsidiary of Serba Dinamik Intemational A Ceased operations and is dormant * @ A 89.81% subsidiary of PT Kubic Gasco 68
6. INFORMATION ON OUR GROUP (Cant’d) Our subsidiaries and associates as at the LPD are as follows: Company  Date and country of incorporation  Issued and paid-up share capital RM (unless otherwise stated)  Our subsidiaries  Serba Dinamik Group  19 August 2004 Malaysia  73,978,860.00  Subsidiaries of Se rba Dinamik Group  Serba Dinamik  11 June 1993 Malaysia  55,000,000.00  Serba Dinamik International  23 September 2002 Malaysia  USD14,953,946 .00  Serba Dinamik RMC FZE  22 October 2015 United Arab Emirates  AED1,000,000.00  A R Global Engineering  22 February 2008 Malaysia  250,000.00  Serba Dinamik IT  27 October 2010 Malaysia  1,000,000.00  Serba Dinamik Brunei  16 April 2015 Brunei Darussalam  BND100,000.00  SD Advance Engineering  9 August 2000 Malaysia  50,000.00  SD Controls  24 June 2000 Malaysia  50,000.00  Subsidiaries of Se rba Dinamik  Quantum Offshore  16May1991 England  GBP4,000.00  Top Luxury  27 June 2014 Malaysia  2.00
Subsidiaries of Serba Dinamik International Serba Dinamik 24 April 2013 GBP51 ,001.00 London England Serba Dinamik 1 July 2013 BHD40,000.00 Petroleum Kingdom of Bahrain 69 Our effective equity interest % 100.00 100.00 100.00 100.00 100.00 100.00 75.00 51.00 80.00 100.00 100.00 99.998 99.00 Principal activities Investment holding and provision  of  management  services  O&M  of  plants  and  facilities,
EPCC, technical training and related products and services O&M of plants and facilities, EPCC and related products and services MRO, fabrication and logistics services Process control, instrumentation and related products and services ICT software and solutions O&M of plants and facilities, EPCC and related products and services Maintenance of microturbines and related products and services Testing and calibration of process control and instrumentation Design, engineering and installation of auxiliary power generators and firefighting systems and equipment Dormant(1) IRM of static equipment and structures, and related products and services O&M of plants and facilities, EPCC and related products and services 6. INFORMATION ON OUR GROUP (Cont’d) Our effective Date and country Issued and paid-up equity Company of incorporation share capital interest Principal activities RM (unless otherwise % stated) Serba Dinamik 18 October 2005 IDR16,156,800,000 75.00 O&M of plants and facilities, Indonesia Republic of EPCC and related products and Indonesia services PT Kubic Gasco 16 February 2011 IDR24,000,000,000.00 51.00 Processing and supply of CNG Republic of Indonesia Subsidiaries of PT Kubic Gasco PT Delta Conusa 7 March 2011 IDR10,800,000,000.00 45.80 Dormant(2) Republic of Indonesia PT Muaro Jambi 7 September 2011 IDR10,000,000,000.00 41.82 Dormant(2) Republic of Indonesia Subsidiary of Serba Dinamik IT Telegistics Asia  5 August 2013  1,000.00  100.00  Internet and mobile applications  Malaysia  solutions  Our associates  Adat Sanjung  1 August 2013  10,000.00  30.00  Investment holding  Malaysia  Serba Dinamik  28 February 2005  QAR200,000.00  49.00  Ceased  operations  and  is  Qatar  Qatar  dormant(3)  Notes:
(1) Intended activity is in investment holding for future business acquisitions, but is cUfTently dormant.
(2) Establishedfor thepurposeofdevelopingnewsourcesofgasconcessionin newareas,butiscurrently dormant.
(3) Serba Dinamik Qatar is expected to be wound up by October 2017.

(The rest of this page has been intentionally left blank) 6. INFORMATION ON OUR GROUP (Cont’d) 6.2.1 Our subsidiaries (i) Serba Dinamik Group (Company No. 663460-T) Serba Dinamik Group was incorporated in Malaysia under the Act on 19 August 2004 as a public limited company under its present name. Serba Dinamik Group is principally involved in investment holding and management services and commenced its business on 28 August 2004. The authorised share capital of Serba Dinamik Group is RM100,OOO,OOO.00 comprising 100,000,000 ordinary shares of RM1.00 each. Its issued and paid-up share capital is RM73,978,860.00 comprising 73,978,860 ordinary shares of RM1.00 each. Save as disclosed below, there has been no change in the issued and paid-up share capital of Serba Dinamik Group for the past three years preceding the LPD. Cumulative Date of No. of issued and allotment! shares paid-up share increase alloted Par value Consideration capital RM RM 16 May 2016 11,888,402 1.00 Other than cash!!) 73,978,860.00 Note: (1) Pursuant to a share swap of 131,772 units of RCPS of USD1.00 each held by CKO 1 and COPE 2 in Serba Dinamik International, a Wholly-owned subsidiary of Serba Dinamik Group, into 11,888,402 ordinary shares of RM1.00 each in Serba Dinamik Group equivalent to 16.07% of the total issued and paid-up share capital of Serba Dinamik Group. Serba Dinamik Group is our wholly-owned subsidiary. As at the LPD, Serba Dinamik Group’s direct subsidiaries are Serba Dinamik, Serba Dinamik International, Serba Dinamik RMC FZE, A R Global Engineering, Serba Dinamik IT, Serba Dinamik Brunei, SD Advance Engineering and SD Controls. Details of our Group’s subsidiaries are set out in Sections 6.2.1 (ii) to 6.2.1 (ix) of this Prospectus. As at the LPD, Serba Dinamik Group’s indirect subsidiaries are Quantum Offshore, Top Luxury, Serba Dinamik London, Serba Dinamik Petroleum, Serba Dinamik Indonesia, PT Kubic Gasco, PT Delta Conusa, PT Muaro Jambi and Telegistics Asia. Details of our Group’s indirect subsidiaries are set out in Sections 6.2.2, 6.2.3, 6.2.4 and 6.2.5 of this Prospectus. As at the LPD, Serba Dinamik Group’s indirect associates are Adat Sanjung and Serba Dinamik Qatar, details of which are set out in Section 6.2.6 of this Prospectus. (The rest of this page has been intentionally left blank) 6. INFORIVIATION ON OUR GROUP (Cont’d) (ii) Serba Dinamik (Company No. 266724-K) Serba Dinamik was incorporated in Malaysia under the Act on 11 June 1993 as a private limited company under its present name. Serba Dinamik is principally involved in O&M of plants and facilities, EPCC, technical training and related products and services and commenced its business on 19 June 1993. The authorised share capital of Serba Dinamik is RM60,000,000.00 comprising 57,500,000 ordinary shares of R1’v11.00 each and 2,500,000 RCPS of RM1.00 each. Its issued and paid-up share capital is RM55,000,000.00 comprising 55,000,000 ordinary shares of RM1.00. Save as disclosed below, there has been no change in the issued and paid-up share capital of Serba Dinamik for the past three years preceding the LPD: The holders of the RCPS A and the RCPS B in Serba Dinamik have each redeemed their 500,000 RCPS A of RM1.00 each and 500,000 RCPS B of RM1.00 each, respectively, details of which are set out below: No. of Date of RCPS RCPS holder redemption redeemed Par value Consideration RM MAA Corporate 3 August 2015 500,000 1.00 Cash(1) Advisory Sdn RCPSA Bhd M3nergy 31 March 2016 500,000 1.00 Cash(2) Berhad RCPS B Notes: (1) Pursuant to the redemption of 500,000 RCPS A held by MAA Corporate Advisory Sdn Bhd.in Serba Dinamik, which was completed on 3 August 2015.
(2) Pursuant to the redemption of 500,000 RCPS B held by M3nergy Berhad in Serba Dinamik, which was completed on 31 March 2016.

Serba Dinamik is a wholly-owned subsidiary of Serba Dinamik Group, which in turn is our wholly-owned subsidiary. As at the LPD, Serba Dinamik’s direct subsidiaries are Quantum Offshore and Top Luxury, details of which are set out in Section 6.2.2 of this Prospectus. Serba Dinamik’s direct associate is Adat Sanjung, details of which are set out in Section 6.2.6(i) of this Prospectus. (iii) Serba Dinamik International (Company No. LL03436) Serba Dinamik International was incorporated in the Federal Territory of Labuan, Malaysia under the Labuan Companies Act 1990 on 23 September 2002 as a private limited company under its present name. Serba Dinamik International is principally involved in O&M of plants and facilities, EPCC and related products and services and commenced its business on 30 September 2002. The issued and paid-up share capital of Serba Dinamik International is USD14,953,946.00 comprising 394,882 ordinary shares of no par value.

6. INFORMATION ON OUR GROUP (Cant’d) Save as disclosed below, there has been no change in the issued and paid­up share capital of Serba Dinamik International for the past three years preceding the LPD: Cumulative Date of allotment! issued and paid­conversion No. of RCPS Consideration up share capital
USD 5July2013 131,772 Cash!!) 11,192,836.00 30 May 2016 (131,772) Other than cash(2) Cumulative No. of ordinary issued and paid-Date of allotment shares alloted Consideration up share capital USD 30 May 2016 131,772 Other than Cash(2) 14,953,946.00 Notes: (1) Pursuant to a sUbscription agreement dated 6 June 2013 (“Subscription Agreement’), CKO 1 and COPE 2 had subscribed a total of 131,772 RCPS in Serba Dinamik Intemational.
(2) Pursuant to the terms of the RCPS under the Memorandum and Articles of Association of Serba Dinamik International and the Subscription Agreement referred to in Note (1) above, CKO 1 and COPE 2 had, on 16 May 2016, undertaken a share swap of 131,772 units of RCPS in Serba Dinamik International, into 11,888,402 ordinary shares of RM1.00 each in Serba Dinamik Group equivalent to 16.07% of the total issued and paid-up share capital of Serba Dinamik Group.

On 30 May 2016, Serba Dinamik Group completed the conversion of 131,772 RCPS into 131,772 ordinary shares. Before the conversion of RCPS After the conversion of RCPS Holder No. of RCPS held (%) No. of RCPS held (%) Serba 131,772 100.00 Dinamik Group Before the conversion of RCPS After the conversion of RCPS No. of ordinary No. of ordinary Holder shares held (%) shares held (%) Serba 263,110 100.00 394,882 100.00 Dinamik Group Serba Dinamik International is a Wholly-owned subsidiary of Serba Dinamik Group, which in turn is our wholly-owned subsidiary. As at the LPD, Serba Dinamik International’s direct subsidiaries are Serba Dinamik London, Serba Dinamik Petroleum, Serba Dinamik Indonesia and PT Kubic Gasco, details of which are set out in Section 6.2.3 of this Prospectus. Serba Dinamik International’s direct associate is Serba Dinamik Qatar, details of which are set out in Section 6.2.6(ii) of this Prospectus. 6. INFORMATION ON OUR GROUP (Cont’d) (iv) Serba Dinamik RMC FZE Serba Dinamik RMC FZE was incorporated in RAK Maritime City Free Zone, UAE under the RAK Maritime City Free Zone Rules, UAE on 22 October 2015 as a free zone establishment with limited liability under its present name. Serba Dinamik RMC FZE is principally involved in MRO, fabrication and logistics services and commenced its business on 22 October 2015. The authorised share capital of Serba Dinamik RMC FZE is AED1,000,000.00 comprising 1,000 ordinary shares of AED1,000.00 each and its issued and paid-up share capital is AED1,000,000.00 comprising 1,000 ordinary shares of AED1 ,000.00 each. Saved as disclosed below, there has been no change in the issued and paid­up share capital of Serba Dinamik RMC FZE from 22 October 2015, being the date of incorporation of Serba Dinamik RMC FZE, up to the LPD: Cumulative No. of issued and Date of shares paid-up share allotment allotted Par value Consideration capital AED AED 22 October 2015 1,000 1,000.00 Cash 1,000,000.00 Serba Dinamik RMC FZE is a wholly-owned subsidiary of Serba Dinamik Group, which in turn is our wholly-owned subsidiary. As at the LPD, Serba Dinamik RMC FZE does not have any subsidiary or associate. (v) A R Global Engineering (Company No. 807379-W) A R Global Engineering was incorporated in Malaysia under the Act on 22 February 2008 as a private limited company under its present name. A R Global Engineering is principally involved in process control, instrumentation and related products and services and commenced its business on 24 February 2008. The authorised share capital of A R Global Engineering is RM500,000.00 comprising 500,000 ordinary shares of RM1.00 each and its issued and paid­up share capital is RM250,000.00 comprising 250,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of A R Global Engineering for the past three years preceding the LPD. A R Global Engineering is a wholly-owned subsidiary of Serba Dinamik Group, which in turn is our wholly-owned subsidiary. As at the LPD, A R Global Engineering does not have any subsidiary or associate. (vi) Serba Dinamik IT (Company No. 919896-A) Serba Dinamik IT was incorporated in Malaysia under the Act on 27 October 2010 as a private limited company under its present name. Serba Dinamik IT is principally involved in ICT software and solutions and commenced its business on 24 December 2010. 6. INFORMATION ON OUR GROUP (Cant’d) The authorised share capital of Serba Dinamik IT is RM1,000,000.00 comprising 1,000,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM1,000,000.00 comprising 1,000,000 ordinary shares of RM1.00 each. Save as disclosed below, there has been no change in the issued and paid­up share capital of Serba Dinamik IT for the past three years preceding the LPD: Cumulative No. of issued and Date of shares paid-up share allotment allotted Par value Consideration capital RM RM 12 January 2015 700,000 1.00 Cash 1,000,000.00 Serba Dinamik IT is a wholly-owned subsidiary of Serba Dinamik Group, which in turn is our wholly-owned subsidiary. As at the LPD, Serba Dinamik IT’s direct subsidiary is Telegistics Asia, details of which is set out in Section 6.2.5(i) of this Prospectus. As at the LPD, Serba Dinamik IT does not have any associate. (vii) Serba Dinamik Brunei (Company No. RC/20000177) Serba Dinamik Brunei was incorporated in Brunei Darussalam under the Companies Act, Chapter 39 on 16 April 2015 as a private limited company under its present name. Serba Dinamik Brunei is principally involved in O&M of plants and facilities, EPCC and related products and services and commenced its business on 16 April 2015. The authorised share capital of Serba Dinamik Brunei is BND1,000,000.00 comprising 1,000,000 ordinary shares of BND1.00 each and its issued and paid-up share capital is BND100,000.00 comprising 100,000 ordinary shares of BND1.00 each. Saved as disclosed below, there has been no change in the issued and paid-up share capital of Serba Dinamik Brunei from 16 April 2015, being the date of incorporation of Serba Dinamik Brunei, up to the LPD: No. of Cumulative Date of shares issued and paid-allotment allotted Par value Consideration up share capital BND BND 16 April 2015 100,000 1.00 Cash 100,000,00 The shareholders of Serba Dinamik Brunei as at the LPD are set out below: Shareholder No. of ordinary shares % Serba Dinamik Group 75,000 75.00 Dato Hamdilah bin Haji Abd Wahab 25,000 25.00 As at the LPD, Serba Dinamik Brunei does not have any sUbsidiary or associate. 75 6. INFORMA-nON ON OUR GROUP (Cont’d) (viii) SO Advance Engineering (Company No. 523088-U) SO Advance Engineering was incorporated in Malaysia under the Act on 9 August 2000 as a private limited company under the name of Serba Oinamik Advance Engineering Sdn Bhd. SO Advance Engineering changed its name to its present name on 10 August 2012. SO Advance Engineering is principally involved in maintenance of microturbines and related products and services and commenced its business on 1 April 2001. The authorised share capital of SO Advance Engineering is RM100,OOO.00 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid­up share capital is RM50,OOO.00 comprising 50,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of SO Advance Engineering for the past three years preceding the LPO. The shareholders of SO Advance Engineering as at the LPO are set out below: Shareholder No. of ordinary shares % Serba Dinamik Group 25,500 51.00 Afandi Bin Abd Hamid 13,000 26.00 Mokhtar Bin Mohd Tahir 11,500 23.00 As at the LPO, SO Advance Engineering does not have any subsidiary or associate. (ix) SO Controls (Company No. 518043-P) SO Controls was incorporated in Malaysia under the Act on 24 June 2000 as a private limited company under the name of Serba Oinamik Controls Sdn Bhd. SO Controls changed its name to its present name on 10 August 2012. SO Controls is principally involved in testing and calibration of process control and instrumentation and commenced its business on 24 June 2000. The authorised share capital of SO Controls is RM100,000.00 comprising 100,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM50,000.00 comprising 50,000 ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of SO Controls for the past three years preceding the LPO. The shareholders of SO Controls as at the LPO are set out below: Shareholder No. of ordinary shares % Serba Dinamik Group 40,000 80.00 Jagah @ Subeng Anak Mula 10,000 20.00 As at the LPO, SO Controls does not have any subsidiary or associate. 6. INFORMATION ON OUR GROUP (Cant’d) 6.2.2 Subsidiaries of Serba Dinamik (i) Quantum Offshore (Company No. 02611237) Quantum Offshore was incorporated in England under the English Companies Act 1985 on 16 May 1991 as a private limited company under its present name. Quantum Offshore is principally involved in design, engineering and installation of auxiliary power generators and firefighting systems and equipment and commenced its business on 17 June 1991. The authorised share capital of Quantum Offshore is GBP10,000.00 comprising 5,000 ordinary shares of GBP1.00 each and 5,000 non-voting shares of GBP1.00 each and its issued and paid-up share capital is GBP4,000.00 comprising 2,000 ordinary A shares of GBP1.00 each and 2,000 ordinary B shares of GBP1.00 each, the said ordinary A shares being voting shares and the said ordinary B shares being non-voting shares. There has been no change in the issued and paid-up share capital of Quantum Offshore for the past three years preceding the LPD. Quantum Offshore is a wholly-owned subsidiary of Serba Dinamik, which is a wholly-owned subsidiary of Serba Dinamik Group, which in turn is our wholly­owned subsidiary. As at the LPD, Quantum Offshore does not have any subsidiary or associate. (ii) Top Luxury (Company No. 1099493-M) Top Luxury was incorporated in Malaysia under the Act on 27 June 2014 as a private limited company under its present name. Top Luxury is currently dormant. The authorised share capital of Top Luxury is RM400,000.00 comprising 400,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM2.00 comprising two ordinary shares of RM1.00 each. There has been no change in the issued and paid-up share capital of Top Luxury since incorporation from 27 June 2014, being the date of incorporation of Top Luxury up to the LPD. Top Luxury is a wholly-owned subsidiary of Serba Dinamik, which is a wholly­owned subsidiary of Serba Dinamik Group, which in turn is our wholly-owned subsidiary. As at the LPD, Top Luxury does not have any subsidiary or associate. 6.2.3 Subsidiaries of Serba Dinamik International (i) Serba Dinamik London (Company No. 08501530) Serba Dinamik London was incorporated in England under the English Companies Act 2006 on 24 April 2013 as a private limited company under its present name. Serba Dinamik London is principally involved in IRM of static equipment and structures, and related products and services and commenced its business on 24 April 2013. The issued and paid-up share capital is GBP51 ,001.00 comprising 51,001 ordinary shares of GBP1.00 each. I Company No.: 1167905-P 6. INFORIVIATION ON OUR GROUP (Cant’d) Save as disclosed below, there has been no change in the issued and paid-up share capital of Serba Dinamik London for the past three years preceding the LPD.  Date of allotment  No. of shares allotted  Par value GBP  Conside’ration  Cumulative issued and paid-up share capital GBP  10 January 2014  50,000  1.00  Cash  51,001.00
The shareholders of Serba Dinamik London as at the LPD are set out below: Shareholder No. of ordinary shares % Serba Dinamik International 51,000 99,98 Ronald Anderson Note: (1) Negligible. As at the LPD, Serba Dinamik London does not have any subsidiary or associate. (ii) Serba Dinamik Petroleum (Company No. 86093) Serba Dinamik Petroleum was incorporated in the Kingdom of Bahrain under Decree (1) Finance 1961 and its amendments and Commercial Companies Law No: 21/2001 on 1 July 2013 as a limited liability company under its present name. Serba Dinamik PetrOleum is principally involved in O&M of plants and facilities, EPCC and related products and services and commenced its business on 2 July 2013. The authorised share capital of Serba Dinamik Petroleum is BHD40,000.00 comprising 800 ordinary shares of BHD50.00 each and its issued and paid­up share capital is BHD40,000.00 comprising 800 ordinary shares of BHD50.00 each. Save as disclosed below, there has been no change in the issued and paid-up share capital of Serba Dinamik Petroleum for the past three years preceding the LPD: No. of Cumulative Date of shares issued and paid-allotment allotted Par value Consideration up share capital BHD BHD 1 July 2013 800 50.00 Cash 40,000.00 The shareholders of Serba Dinamik Petroleum as at the LPD are set out below: Shareholder No. of ordinary shares % Serba Dinamik International 792 99,00 Fabio Cariola 8 1.00 As at the LPD, Serba Dinamik Petroleum does not have any subsidiary or associate. 78 6. INFORMATION ON OUR GROUP (Cont’d) (iii) Serba Dinamik Indonesia (Company No. 09.03.1.42.47656) Serba Dinamik Indonesia was incorporated in the Republic of Indonesia under the Company Law No. 1 of 1995 on 18 October 2005 as a limited liability company under its present name. Serba Dinamik Indonesia is principally involved in O&M of plants and facilities, EPCC and related products and services and commenced its business on 1 December 2005. The authorised share capital of Serba Dinamik Indonesia is IDR16,156,800,000.00 comprising 1,600,000 ordinary shares of IDR10,098.00 each and its issued and paid-up share capital is IDR16,156,800,000.00 comprising 1,600,000 ordinary shares of IDR10,098.00 each. There has been no change in the issued and paid-up share capital of Serba Dinamik Indonesia for the past three years preceding the LPD. The shareholders of Serba Dinamik Indonesia as at the LPD are set out below: Shareholder No. of ordinary shares % Serba Dinamik International 1,200,000 75.00 Ibrahim Abdul Fattah Surya Wijaya 240,000 15.00 Nugroho Widiantoro 160,000 10.00 As at the LPD, Serba Dinamik Indonesia does not have any subsidiary or associate. (iv) PT Kubic Gasco (Company No. AHU.0016483.AH.01.09) PT Kubic Gasco was incorporated in the Republic of Indonesia under the Company Law No. 1 of 1995 on 16 February 2011 as a limited liability company under its present name. PT Kubic Gasco is principally involved in processing and supply of CNG and commenced its business on 28 February 2011. The authorised share capital of PT Kubic Gasco is IDR24,000,000,000.00 comprising 24,000 ordinary shares of IDR1,000,000.00 each and its issued and paid-up share capital is IDR24,000,000,000.00 comprising 24,000 ordinary shares of IDR1 ,000,000.00 each. Save as disclosed below, there has been no change in the issued and paid-up share capital of PT Kubic Gasco for the past three years preceding the LPD: No. of Cumulative Date of shares issued and paid-allotment allotted Par value Consideration up share capital lOR lOR 11 August 2015 4,423 1,000,000.00 Cash 10,423,000,000.00 28 August 2015 13,577 1,000,000.00 Cash 24,000,000,000.00 6. INFORMATION ON OUR GROUP (Cant’d) The shareholders of PT Kubic Gasco as at the LPD are set out below: Shareholder No. of ordinary shares % Serba Dinamik International 12,240 51.00 PT Sinergy Sejahtera 8,400 35.00 PT Samudera Nusantara Energi 3,360 14.00 As at the LPD, PT Kubic Gasco direct subsidiaries are PT Delta Conusa and PT Muaro Jambi, details of which are set out in Section 6.2.4 of this Prospectus. As at the LPD, PT Kubic Gasco does not have any associate. 6.2.4 Subsidiaries of PT Kubic Gasco (i) PT Delta Conusa (Company No. AU.0021574.AH.01.09) PT Delta Conusa was incorporated in the Republic of Indonesia under the Company Law 40 of 2007 on 7 March 2011 as a limited liability company under its present name. PT Delta Conusa has not commenced its business and is currently dormant. The authorised share capital of PT Delta Conusa is IDR35,OOO,OOO,OOO.00 comprising 35,000 ordinary shares of IDR1,000,OOO.00 each and its issued and paid-up share capital is IDR10,800,OOO,OOO.00 comprising 10,800 ordinary shares of IDR1 ,000,000.00 each. There has been no change in the issued and paid-up share capital of PT Delta Conusa for the past three years preceding the LPD. The shareholders of PT Delta Conusa as at the LPD are set out below: Shareholder No. of ordinary shares % PT Kubic Gasco 9,700 89.81 Raden Tranggono Bunarto 1,100 10.19 As at the LPD, PT Delta Conusa does not have any subsidiary or associate. (ii) PT Muaro Jambi (Company No. AHU.0036108.AH.01.09) PT Muaro Jambi was incorporated in the Republic of Indonesia under the Company Law No. 40 of 2007 on 7 September 2011 as a limited liability company under its present name. PT Muaro Jambi has not commenced its business and is currently dormant. The authorised share capital of PT Muaro Jambi is IDR40,OOO,000,000.00 comprising 40,000 ordinary shares of IDR1,OOO,OOO.00 each and its issued and paid-up share capital is IDR10,000,OOO,OOO.00 comprising 10,000 ordinary shares of IDR1,OOO,OOO.00 each. There has been no change in the issued and paid-up share capital of PT Muaro Jambi for the past three years preceding the LPD. 6. INFORMATION ON OUR GROUP (Cont’d) The shareholders of PT Muaro Jambi as at the LPD are set out below: Shareholder No. of ordinary shares % PT Kubic Gasco 8,200 82.00 PD Muaro Jambi 1,000 10.00 PT Mokodito Sejahtera 800 8.00 As at the LPD, PT Muaro Jambi does not have any subsidiary or associate. 6.2.5 Subsidiary of Serba Dinamik IT (i) Telegistics Asia (Company No. 1057415-U) Telegistics Asia was incorporated in Malaysia under the Act on 5 August 2013 as a private limited company under its present name. Telegistics Asia is principally involved in internet and mobile applications solutions and commenced its business on 23 August 2013. The authorised share capital of Telegistics Asia is RM400,000.00 comprising 400,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is RM1 ,000.00 comprising 1,000 ordinary shares of RM1.00 each. Saved as disclosed below, there has been no change in the issued and paid-up share capital of Telegistics Asia since its incorporation up to the LPD: No. of Cumulative Date of shares issued and paid-allotment allotted Par value Consideration up share capital RM RM 5 August 2013 1,000 1.00 Cash 1,000.00 Telegistics Asia is a wholly-owned subsidiary of Serba Dinamik IT, which is a wholly-owned subsidiary of Serba Dinamik Group, which in turn is our wholly­owned subsidiary. As at the LPD, Telegistics Asia does not have any subsidiary or associate. 6.2.6 Our associates (i) Adat Sanjung (Company No.1056945-V) Adat Sanjung was incorporated in Malaysia under the Act on 1 August 2013 as a private limited company under its present name. Adat Sanjung is principally an investment holding company and commenced its business on 6 June 2015. The authorised share capital of Adat Sanjung is RM400,000.00 comprising 400,000 ordinary shares of RM1.00 each and its issued and paid-up share capital is 10,000 comprising 10,000 ordinary shares of RM1.00 each. Saved as disclosed below, there has been no change in the issued and paid­up share capital of Adat Sanjung since its incorporation up to the LPD: 6. INFORMATION ON OUR GROUP (Cant’d) No. of  Cumulative  Date  of  shares  issued and paid- allotment  allotted  Par value  Consideration  up share capital  RM  RM
1 August 2013  2  1.00  Cash  2.00  24 April 2014  8  1.00  Cash  10.00  23 June 2014  90  1.00  Cash  100.00  27 March 2015  9,900  1.00  Cash  10,000.00
The shareholders of Adat Sanjung and their shareholdings in Adat Sanjung as at the LPD are set out below: Shareholder No. of ordinary shares % Fariz Azman bin Zainul Azman 7,000.00 70.00 Serba Dinamik 3,000.00 30.00 Adat Sanjung is an associate of Serba Dinamik, which is a wholly-owned subsidiary of Serba Dinamik Group, which in turn is our wholly-owned subsidiary. (ii) Serba Dinamik Qatar (Commercial Registration No. 29941) Serba Dinamik Qatar was incorporated in Qatar under the Commercial Companies Law number 5 of 2002 on 28 February 2005 as a limited liability company under its present name. As at LPD, Serba Dinamik Qatar has ceased operations and is dormant. The authorised share capital of Serba Dinamik Qatar is QAR200,000.00 comprising 200,000 ordinary shares of QAR1.00 each and its issued and paid-up share capital is QAR200,000.00 comprising 200,000 ordinary shares of QAR1.00 each. There has been no change in the issued and paid-up share capital of Serba Dinamik Qatar since its incorporation up to the LPD. The shareholders of Serba Dinamik Qatar as at the LPD are set out below: Shareholder No. of ordinary shares % Serba Dinamik International  98,000  49.00  Abu AI-Haitham Uthman Mohammed  102,000  51.00  Ibrahim AI-Khatib
Serba Dinamik Qatar is an associate of Serba Dinamik International, which is a wholly-owned subsidiary of Serba Dinamik Group, which in turn is our wholly-owned subsidiary. Our Group does not have any outstanding warrants, options, convertible securities or uncalled capital as at the date of this Prospectus. None of our Shares and shares capital in our subsidiaries were issued and allotted at a discount or have any special terms. Our issued Shares and the issued share capital of our subsidiaries are fully paid-up. As at the LPD, neither our Company nor our subsidiaries and our associates are involved in any bankruptcy, receivership or similar proceedings.
6. INFORMATION ON OUR GROUP (Cant’d) 6.3 OUR ACHIEVEMENTS AND RECOGNITIONS The following are some of the awards and recognitions that we have received from 2011 and up to the LPD: Awards and Year Awarding Body Recognition Description
2011 Capstone Most Parts and Sales performance as Capstone agent Accessories Sold Award Asia
2012 PETRONAS Carigali Outstanding Vendor Outstanding performance throughout Sdn Bhd Award 2012 2011 2013 Asia Entrepreneur Malaysia Power Brand In recognition of compliance with Malaysia Alliance Award 2013 Power Brand Accreditation Standard with respect to Organisation and Management, and Brand Development and Management 2013 European Society for European Award for In recognition for outstanding Quality Research Best Practices 2013 ­achievements in quality management Gold Category strategies performed by Serba Dinamik IT 2014 The European European Emerging Engineering Solutions Provider of the Markets Awards 2014 Year 2015 PETRONAS Gas GM Award In appreciation of Serba Dinamik for Berhad dedicating as a partner for the Gas Processing and Utilities Division of the PETRONAS Gas Berhad 2015 MITI Anchor company for To nurture and develop Malaysian VDP Bumiputera entrepreneurs relating to MRO of rotating equipment and IRM of static equipment and structures 2016 The Brand Laureate SME Best Brand Best Brands in Services -EPCC President’s Awards 2015-2016
2016 CIDB Malaysia Certificate of In recognition of the 4 Stars achievement Achievement for the evaluation under the SCORE criteria as set by the Board of CIDB 2016 PETRONAS Gas PGB MD/CEO Award In recognition of Serba Dinamik Berhad exceptional performance in the category of maintenance services -gas processing and utilities 2016 Association The Green Era Award In recognition of Serba Dinamik Group’s Otherways for Sustainability contribution in green technology Management & Consulting, France Company No.: 1167905-P 7. BUSINESS OF OUR GROUP OVERVIEW 7.1.1 Business model Our Group’s business model is summarised below: Energy services group providing engineering solutions

IRM of staticMRO of rotating O&M equipment and servicesequipment structures
EPCC ][ Other products and services
O&G operators  Gas processing and oil refineries  Petrochemical manufacturers  Engineering companies and contractors  Independent power producers
• Upstream: Production O&G • Downstream: Processing, refining and manufacturing Power generation Asset owner
CNG plant Small gas power plants Industnal park with CUF Assets already owned. Subsequent to LPD, we commenced operations of the eNG plant in Muaro Jambi, Sumatra, Indonesia on 25 November 2016. –
Potential assets to be owned. –
7.1.2 Business activities We are an energy services group providing engineering solutions to the O&G and power generation industries with operational facilities in Malaysia, Indonesia, UAE, Bahrain and UK. As an engineering solutions provider, our business activities comprise O&M services, EPCC and other products and services. The breakdown in revenue and gross profit contributions of our business activities are as follows: Business  FYE 2013 (%)  FYE 2014 (%)  FYE 2015 (%)  FPE 2016 (%)  activities  Revenue  GP  Revenue  GP  Revenue  GP  Revenue  GP  O&M services  77.97  81.09  79.35  87.29  90.87  91.21  89.46  88.19  EPCC  19.89  18.21  12.00  8.68  8.91  8.56  10.30  11.50  Other product and services  2.14  0.70  8.65  4.04  0.22  0.23  0.24  0.31  TOTAL  100.00  100.00  100.00  100.00  100.00  100.00  100.00  100.00
More than 75.00% of our revenue was derived from the provision of O&M services which is reflected in our revenue contribution for FYE 2013, FYE 2014, FYE 2015 and FPE 2016. 7. BUSINESS OF OUR GROUP (Cont’d) O&M services Within O&M services, MRO of rotating equipment accounted for the main source of our O&M revenue for FYE 2013, FYE 2014, FYE 2015 and FPE 2016. This is as illustrated in the table below: Revenue contribution for O&M services  FYE 2013 (%)  FYE 2014 (%)  FYE 2015 (%)  FPE 2016 (%)  MRO of rotating equipment  76.30  75.29  69.50  73.65  IRM of static equipment and structures  1.67  4.05  21.37  15.81  TOTAL  77.97  79.35  90.87  89.46
Generally, we carry out MRO of rotating equipment including gas and steam turbines, engines, motors, pumps, compressors and industrial fans; and IRM of static equipment and structures including boilers, unfired pressure vessels, piping systems and structures. The types of rotating equipment that we service are usually located in, among others, O&G production platforms, gas processing plants, oil refineries, petrochemical manufacturing plants, power generation plants and LNG plants. Within the power generation industry, we service independent power producers as well as O&G customers that have power generation equipment for their own use. By using our core strengths in MRO and IRM services as a platform, we expanded into the operations of small power plants. In February 2016, we secured a contract to operate as well as maintain three small hydropower plants for 21 years in Kota Marudu, Sabah, Malaysia. The contract is expected to commence upon the completion of construction of the said hydropower plants by end of 2017. EPCC We have the capabilities to carry out EPee of plants, facilities, road infrastructure and buildings including small hydropower plants, eNG plants, microturbine generators, steel structures, piping systems, and firefighting systems. Save for the EPee works of small hydropower plants in Kota Marudu, Sabah, Malaysia, our EPee works is mainly focused on minor fabrication works including among others, steel structures, piping systems, installation of rotating and static equipment as well as construction of plants, amenities and buildings. In addition to operate and maintain, we also secured an EPee contract of the said hydropower plants in Kota Marudu, Sabah, Malaysia. While we have the capabilities to undertake various types of EPee works, our focus is in O&G and power generation industries. Other products and services Our other products and services include technical training, provision of leT solutions and services, supply of products and parts, and provision of logistics services. 7. BUSINESS OF OUR GROUP (Cont’d) 7.1.3 Our customer base Our customers and their respective revenue contribution for FYE 2015 and FPE 2016 are as follows: Revenue contribution for Customer types FYE 2015 (%) FPE 2016 (%) 59.98 O&G operators 39.85 31.05 Gas processing and oil refineries 4.91 2.48 Petrochemical manufacturers 4.46 5.65 Independent power producers 0.97 0.76 Others 1.59 0.08 TOTAL 100.00 100.00 Engineering companies and contractors 48.22 7.1.4 Industries served The industries that we served segmented by revenue for FYE 2013, FYE 2014, FYE 2015 and FPE 2016 are as follows: Revenue contribution for Industry sectors FYE 2013 (%) FYE 2014 (%) FYE 2015 (%) FPE 2016 (%) O&G 96.64 95.66 94.92 98.56 Power generation 3.29 3.58 5.03 0.76 Others 0.07 0.76 0.05 0.68 TOTAL 100.00 100.00 100.00 100.00 Note: Revenue from the power generation industry was derived from our customers who are engineering companies and contractors, as well as independent power producers. Our revenue is largely derived from the O&G industry as indicated by our revenue contribution for FYE 2013, FYE 2014, FYE 2015 and FPE 2016. Within the O&G industry, the sectors that we service include upstream production of O&G and downstream processing, refining and manufacturing sectors of the O&G industry. As for the power generation industry, we service independent power producers as well as O&G customers that have power generation equipment for their own use. 7.1.5 Additional business moving forward Moving forward we will continue to provide O&M services, EPCC and other products and services. In addition, we intend to adopt an asset ownership business model which involves majority equity participation in potential business entities where we can contribute our expertise in terms of O&M services and EPCC works. This usually involves the development of the asset including construction of the plant or facilities, extending to operation and maintenance of the asset. In situations where we do not have the resources, technology or expertise, we would consider bringing in partners with the experience or expertise to contribute to the business.

7. BUSINESS OF OUR GROUP (Cant’d) Our asset ownership business model is depicted below: Asset ownership Assets* • CNG plant
• Small gas power plant
• Industrial park with CUF

Our verti~al .. expansion • Our experience • Rotating equipment O&M • Static equipment
• Structures

Our customers’ assets • O&G production platform
• O&G refinery
• Petrochemical plant
• Power plant

Note: *Including assets owned and potential assets to be owned. The asset ownership model will be an extension of our current core competencies where we have accumulated 23 years of experience in providing MRO services for rotating equipment and 18 years of experience in IRM of static equipment and structures on our customers’ assets. In addition, we have accumulated nine years of experience in EPCC works. We will utilise these experience and capabilities in EPCC and O&M to develop, operate and maintain our assets that are owned and to be owned. We started to embark on our asset ownership business model with our CNG plant in Muaro Jambi, Sumatra, Indonesia. The development of the CNG plant was completed in June 2016 and subsequent to LPD, we commenced operations of the CNG plant on 25 November 2016. We will also be maintaining the plant. In addition, we intend to develop, own, operate and maintain the following assets as part of our future plans: (i)  one 0.8 MW gas power plant in Ambon Island, Indonesia;  (ii)  one 4 MW gas power plant in Muaro Jambi, Sumatra, Indonesia;  (iii)  one 4 MW and one 1 MW gas power plants in East Kutai in East Kalimantan,  Indonesia; and  (iv)  one industrial park with CUF in Sarawak.
7. BUSINESS OF OUR GROUP (Cont’d) 7.1.6 Our operational facilities As at the LPD, we operate from our head office in Shah Alam, Selangor, Malaysia supported by our service centres in Malaysia, Bahrain and UAE as well as offices in the UK and Indonesia. Details of our operational facilities in various countries are set out below:
Others include a logistics centre in UAE, a factory in Klang, Malaysia and a CNG plant in Muaro Jambi, Sumatra, Indonesia. Notes: (1) Operational facilities in Malaysia include our head office in Shah Alam, Selangor with five service centres including one in Miri and one in Bintulu, Sarawak, two in Labuan and one in Paka, Terengganu, as well as one factory in Klang, Selangor.
(2) Operational facilities in Indonesia are primarily offices including one in Jakarta and one in Riau and a CNG plant in Muaro Jambi, Sumatra, Indonesia. Subsequent to LPD, the CNG plant in Muaro Jambi, Sumatra, Indonesia commenced operations on 25 November 2016.
(3) Operational facilities in Bahrain consist of one office and one service centre.
(4) Operational facilities in UAE consist office, service centre and logistics centre, all housed within one facility in RAK.
(5) Operational facilities in the UK comprise two offices, one in London and one in Cornwall.

7. BUSINESS OF OUR GROUP (Cont’d) Business Strategies Moving Forward Our overall business strategies and industry focus are as depicted in the following 7.1.7 diagram: ORGANIC GROWTH INDUSTRY FOCUS O&G industry • Upstream -Production
• Downstream -Gas processing -Oil refinery -Petrochemical

Manufacturing Power industry • Upstream -Power generation ASSET OWNER INDUSTRY FOCUS O&G industry • Downstream -Gas processing Power industry • Upstream -Power generation ACQUISITION INDUSTRY FOCUS O&G industry Power industry We will continue to leverage our core competencies in the O&G and power generation industries and expand our business through the following areas: (i) continue to grow our existing business in O&M, EPee and other products and services;
(ii) owning assets where we will develop, own, operate and maintain the assets. In this respect, we will utilise our existing competency in EPee to develop the assets and O&M expertise to operate and maintain the assets; and

(iii) acquisitions or investment in companies with either expertise, track record and/or technology or companies that can add value to our business. This strategy will enlarge our target markets across diversified industries and geographical markets, and more importantly, provide business sustainability and growth. As a group serving customers locally and overseas, we will continue to focus on generating revenue from our overseas operations which contributed 65.36% and 63.27% of our revenue for the FYE 2015 and FPE 2016 respectively. Our business strategy is supported by our track record of 23 years since we commenced our business in the O&G industry in 1993. For the FYE 2013 to FYE 2015, our total revenue, gross profit and PST increased by eAGR of 61.76%, 59.55% and 55.71 %, respectively. Our Group has built a reputation in the O&M sector, which in total contributed to RM1.27 billion and RM815.66 million in revenue for FYE 2015 and FPE 2016 respectively. This is equivalent to 90.87% and 89.46% of the total revenue for FYE 2015 and FPE 2016 respectively. 7. BUSINESS OF OUR GROUP (Cant’d) Summary of our current and future business activities is depicted in the diagram below:
O&M

Other products and services: -Technical training; ICT solutions and services; and -Supply of products and parts. Logistics services in RAK, UAE O&M of small hydropower plants in Kota Marudu, Sabah CNGplant In Small gas Muaro Jambi, Industrial Park power plants in Sumatra, with CUF IndonesiaIndoneSia • Our asset owner business model strategy Notes: (1) ForFYE 2015, O&M contributed 90.87% of our total revenue followed by EPCC at 8.91% and the remaining 0.22% of our revenue was derived from other products and services. We will continue to generate revenue from these business activities in the future.
(2) As at the LPD, the logistic services in RAK, UAE has commenced operations. As at the LPD, we have completed the physical construction and installation of equipment for the CNG plant in Muaro Jambi, Sumatra, Indonesia. Subsequent to LPD, we commenced operations of the CNG plant on 25 November 2016.
(3) Our future plans include O&M of small hydropower plants in Kota Marudu, Sabah which will commence operation by end of2017. The said small hydropowerplants are owned by Adat Sanjung’s wholly-owned indirect subsidiary, One River Power. The implementation of the said project will utilise our expertise under our EPCC segment and also enable our participation as a 30.00% shareholder in Adat Sanjung. The said project enables our income recognition in three areas: i) revenue under our EPCC segment for the EPCC contract dUring the construction period; ii) revenue under our O&M segment for the O&M contract after completion and commissioning of the hydropower plants; and iii) share of results of our equity accounted associate company, Adat Sanjung. In addition, our future plans are to develop a 0.8 MW gas power plant in Ambon Island, develop a small gas powerplant in Muaro Jambi upon the approval of licences and permits, develop small gas power plants in East Kalimantan, Indonesia upon the finalisation of proposed partnership arrangement by 2017 and develop an industrial park with CUF upon the finalisation of a suitable site. Please refer to Section 7.21 ofthis Prospectus for further information of our future plans.

7.2 COMPETITIVE ADVANTAGES AND KEY STRENGTHS 7.2.1 We ranked third among companies in Malaysia providing MRO of rotating equipment to the O&G industry with 23 years track record. According to the IMR Report, we ranked third among O&G service and equipment companies in Malaysia providing MRO of rotating equipment to the O&G industry, where ranking was based on consolidated revenue for FYE 2014 of PETRONAS­licensed companies with SWEC codes for maintenance of rotating equipment.
7. BUSINESS OF OUR GROUP (Cant’d) We have 23 years of track record since the commencement of our business operations in 1993 starting with MRO and eventually incorporating IRM and EPCC services within the O&G industry. In addition to Malaysia, our provision of O&M services also extend to Indonesia, Qatar, UAE, KSA, Oman, Bahrain, India and Turkmenistan for the past three financial years and latest financial period. For the FYE 2015 and FPE 2016, our overseas revenue represented 65.36% and 63.27% of our total revenue respectively. Our customers in the past three financial years include, among others, PETROI\lAS Carigali Sdn Bhd, PETRONAS Carigali (Turkmenistan) Sdn Bhd, Sarawak Shell Berhad, PETROI\lAS Chemicals Methanol Sdn Bhd, Malaysia LNG Sdn Bhd, Sabah Shell Petroleum Company Limited, PETRONAS Methanol (Labuan) Sdn Bhd, Petrofac E&C Sdn Bhd, MB Petroleum Services L.L.C., Oman and PT Ensco Sarida, Indonesia. Some of the plant owners that we serve indirectly through our foreign business partners include Qatar Fertiliser Company, Petroleum Development Oman, Qatar Petroleum, Qatar Chemical Company Ltd and Saudi Aramco. The following charts illustrate the strengths of our O&M services comprising MRO and IRM services based on contribution to our revenue for FYE 2013, FYE 2014, FYE 2015 and FPE 2016: FYE 2013 FYE 2014 FYE 2015 FPE 2016
Others RM8.94m
MRO  MRO of rotating equipment  IRM  IRM of static equipment and structures  Others  other products and services which include provision of technical training, ICT  solutions and services and supply ofproducts and parts.  Note:
(1) For the FYE 2013, FYE 2014, FYE 2015, FPE 2016 and up to the LPD, we have not started generating any revenue from the sales of CNG from our plant in Muaro Jambi, Sumatra, Indonesia. We have established ourselves as a rotating equipment specialist with experience in providing services across a number of global brands, models and sizes of rotating equipment. Our experience ranges from gas and steam turbines to run generators with a maximum output power of 160 MW as well as pumps, compressors and industrial fans. As an independent MRO specialist, we commonly carry out MRO services after the expiration of the warranty periods of the rotating equipment. We also work in collaboration with brand owners or their agents. One of the main advantages we offer our IVIRO customers is our competitive pricing compared to brand owners or their agents. As an independent MRO specialist, this provides us with a wider scope of business growth opportunities without being restricted to a single or a small number of brands. 91 7. BUSINESS OF OUR GROUP (Cant’d) 7.2.2  We  are  a  growing, profitable  company  supported by prudent financial  track  record.  …….,  ~ ~  ~PBT margin (%)  1,402.94 Revenue (RM mil)

159.57 PBT (RM mil) 65.82 67.69 FYE 2013 FYE 2014 FYE 2015 Our Group’s revenue increased from RM536.20 million in FYE 2013 to RM1.40 billion in FYE 2015 mainly attributed to new contracts as well as expansion of our Group’s business activities and geographical coverage. We achieved a strong three-year revenue CAGR of 61.76% between FYE 2013 and FYE 2015. Similarly, our PBT grew strongly with a three-year CAGR of 55.71 % from RM65.82 million in FYE 2013 to RM159.57 million in FYE 2015. In FPE 2016, our Group recorded revenue and PBT totaling RM911.73 million and RM121.28 million respectively. Please refer to Section 12.2.6 of this Prospectus for further information on our results of operations. As a provider of O&M services, we have existing maintenance contracts with our major customers in Malaysia and overseas, some of whom have been dealing with us for an extended length of time ranging between 3 years and 22 years. These long­standing customers’ relationships provide us with stable and recurring cashflows to sustain and grow our business. Some of our major customers that contributed to 10.00% or more of our revenue for FYE 2013, FYE 2014 and FYE 2015 include PETRONAS Carigali Sdn Bhd, PETRONAS Carigali (Turkmenistan) Sdn Bhd, Energy Engineering & Services, Energy Machine Services L.L.C., Sarawak Shell Berhad and Petroserv Limited. For further details on our major customers please refer to Section 7.7 of this Prospectus. 7.2.3 We are a PETRONAS-licensed company in Malaysia. There are barriers to entry into the O&G industry in Malaysia due to the licensing requirements imposed by PETRONAS Malaysia. To participate in the O&G industry in Malaysia, it is mandatory that appropriate licences and registrations are obtained from PETRONAS and be kept current at all times. In this respect, we have obtained the necessary licences and registration from PETRONAS to facilitate the provision of products and services to oil majors, PSC and RSC operators as well as other O&G service providers in the industry. As at the LPD, we are licensed with a total of 48 SWEC codes from PETRONAS. As a Malaysian-based company, we are well positioned to benefit from this key strength that represents a barrier to entry for new entrants into the O&G industry in Malaysia. For further details on licences, please refer to Annexure A of this Prospectus. 7. BUSINESS OF OUR GROUP (Cant’d) 7.2.4 We have strong records in HSE and have implemented various safety and quality standards for our operations. Strong quality standards and HSE track records are critical in the energy industry. We are committed to safety standards and procedures with the view of promoting an incident-free and injury-free working environment. In this respect, our subsidiaries, Serba Dinamik and Serba Dinamik International, are accredited with OHSAS 18001 :2007 Occupational Health and Safety Management System, ISO 9001 :2008 Quality Management System and ISO 14001 :2004 Environmental Management System for repair, maintenance, installation and commissioning of rotating equipment and related plant and provision of maintenance and services in mechanical equipment (rotating and static). OHSAS and ISO certifications independently recognise adherence to established quality and safety standards and procedures. In addition, we have also received several awards and recognition from our customers relating to our HSE management. For further details on HSE awards and recognition, and quality standards, please refer to Section 7.16 of this Prospectus. 7.2.5 We have an experienced management team. We have an experienced management team whom we believe will continue to playa key role in the success of our Group. Our Group is headed by our Group Managing Director/Group Chief Executive Officer, Dato’ Karim and our Executive DirectorlDeputy Chief Executive Officer, Dato’ Awang Daud, whom have accumulated approximately 29 years and 34 years of experience in the energy industry, respectively. Both Dato’ Karim and Dato’ Awang Daud, who are also our Non-Independent Executive Directors, are responsible for the overall management of operations, business development and implementation of the business plan. We are supported by Syed Nazim Bin Syed Faisal, our Group Chief Financial Officer, who is responsible for the financial and accounting aspects of the Group, Afandi Bin Abd Hamid, our Vice President who manages our O&M Business Unit and Ir Abdul Halim Bin Mohd Damiah, our Vice President, who manages our EPCC Business Unit. Majority of our key management team brings with them more than 10 years of relevant experience in their respective fields. 7.3 BUSINESS STRATEGIES As a group serving customers locally and overseas, our overall business strategy is to continue to leverage our core competencies operating within the O&G and power generation industries, and also owning assets that will diversify our revenue streams and to drive our future business growth. This strategy will enlarge our targeted markets across diversified industries and geographical markets, and more importantly, provide business sustainability and growth. The following summarises our overall business strategies. 7.3.1 Deepening and widening our business activities. A typical life-cycle of an asset goes through the following stages:
Within EPCC and O&M stages of the asset life-cycle, we will offer a broader range of products and services. 93 7. BUSINESS OF OUR GROUP (Cont’d) Deepening our business activities As an example, within O&M, we will expand from MRO of rotating equipment and IRM of static equipment and structures to provide total plant and facility maintenance and turnaround services. This incorporates instrumentation, piping systems, rejuvenation and upgrades of electrical and electronic devices and process control panels, corrosion prevention and minor fabrication. These areas are complementary to our core expertise in maintenance services and we would draw on our existing capabilities or work with partners to undertake such services. As we are currently carrying out MRO of rotating equipment as part of total plant turnaround services, to undertake the total plant turnaround services would be characterised as deepening our business activities, which represent a vertical expansion of our business. In addition, we intend to provide MRO services for large turbines, compressors and generators which we are currently not servicing. When these large rotating equipment are required to be serviced outside the customers’ premises, they are normally sent to Peninsular lVIalaysia or other countries such as Singapore and Germany. In order to carry out MRO of large rotating equipment, it would require additional facilities and sizable land area, which we currently do not have. As part of our future plans, we intend to address these opportunities through our new IVIRO and IRM centre in Sarawak. For further details on our future plans, please refer to Section 7.21.1.3 of this Prospectus. For IRM services, we intend to carry out corrosion prevention including galvanising and painting, as well as preparatory works for piping systems covering sub-assembly of pipes, flanges, connectors and fittings prior to delivery to customers’ site. These are some of the services that we are currently not offering due to constraints in facilities and space which we do not have in our existing service centres. As part of our future plans, we intend to address these opportunities through our new MRO and IRIVI centre in Sarawak. For further details on our future plans, please refer to Section 7.21.1.3 of this Prospectus. Widening our business activities Within IVIRO of rotating equipment, we intend to extend our capabilities to cover marine engines and power generation facilities in large vessels; for example bulk cargo, container ships, and tankers. While these proposed activities may be a different industry from our current focus in the energy industry, the machinery and equipment used are similar. From this perspective, we can potentially expand into other industries to provide us with growth opportunities. This represents the widening of our business activities where we will address opportunities in new industries by using our existing capabilities. As for other stages of the life-cycle where we are currently not serving, we intend to provide such services in the long run. This could be achieved through a combination of our own expertise, collaboration with external partners or acquisition of companies with the required expertise and experience. This represents widening of our business activities where we will address opportunities in new service areas. 7. BUSINESS OF OUR GROUP (Cont’d) 7.3.2 We are expanding our asset ownership business model. One of our business strategies is to expand our asset ownership business model to grow our business. This will provide our Group with the opportunity to enlarge and diversify our revenue streams by expanding our range of products and services. Our asset ownership business model strategy The core strategy for our business model involves four steps: (i) Develop the asset that we have identified. This could involve using a combination of our in-house or external expertise and resources. For example, while we have EPCC expertise to construct structures, we may supplement it by using external parties to carry out civil works.
(ii) Own the asset that we have developed. Ownership of the asset will be on a majority ownership basis of more than 50.00% ownership, where it is permissible based on the respective country’s regulatory requirements.

(iii) Operate the asset once it has been developed. We will use in-house expertise and, where required, we will engage external parties to operate our asset. (iv) Maintain the asset as part of its operation. We will utilise our MRO and IRM expertise to carry out asset maintenance. The strategy for the types of asset we seek to own will be within the energy industry focusing on O&G and power generation industries. This strategy will capitalise on our existing core expertise and experience. Our assets Areas where we will be expanding on our asset ownership business model include the following: (i) We are the owner of a CNG plant in Muaro Jambi, Sumatra, Indonesia through our subsidiary, PT Kubic Gasco. The physical construction and installation of equipment in the CNG plant were completed in June 2016. Subsequent to LPD, we commenced operations of the CNG plant on 25 November 2016 where we are responsible for operating and maintaining the CNG plant. We have also commenced sales of CNG.
For further details on the CNG plant, please refer to Section 7.4.5 of this Prospectus.
(ii) We plan to develop and own a small gas power plant with a 4 MW capacity next to our existing CNG plant in Muaro Jambi, Sumatra, Indonesia. In May 2016, through our subsidiary, PT Kubic Gasco, we entered into a MOU with PT PLN (Persero), South Sumatra, Jambi, and Bengkulu provinces. PT PLN (Persero) is an Indonesian government-owned power corporation. PT PLN (Persero), South Sumatra, Jambi and Bengkulu provinces is a territorial unit responsible for the three provinces, namely South Sumatra, Jambi and Bengkulu. The said MOU is for the sales of power from our small gas power plant to PT PLN (Persero), which will commence upon the completion and commissioning of the small gas power plant. In the development of the said small gas power plant, we will use our existing expertise and experience in EPCC including engineering capabilities, procurement, fabrication and construction works. In addition, as part of our scope of work for EPCC, we will also engage other external parties to undertake among others, civil, structural, mechanical and electrical works.

7. BUSINESS OF OUR GROUP (Cont’d) As we are the exclusive agent for Capstone microturbine in Indonesia, we intend to use the Capstone microturbines for the generation of power for the said plant. Based on our experience in procuring, installing and commissioning and maintaining Capstone microturbines of similar sizes for power generation purposes, operating and maintaining the said plant will be an extension of our experience. Upon commencement of the small gas power plant, PT Kubic Gasco will be responsible for operating and maintaining the plant. We intend to take a majority stake in the ownership of the abovementioned small gas power plant through our 51.00% shareholding in PT Kubic Gasco. This would allow us to have the management control over the said asset. For further details on the development of the small gas power plant, please refer to Section 7.21.1.4(ii) of this Prospectus. (iii) We will develop and own a small gas power plant in Ambon Island, Indonesia through our subsidiary, Serba Dinamik Indonesia. On 1 July 2016, Serba Dinamik Indonesia entered into a 10-year leasing agreement with an engineering company in Indonesia (“the Lessee”) where the Lessee will be leasing a 0.8 MW gas power plant and its auxiliary equipment (“0.8 MW gas power plant”) from Serba Dinamik Indonesia. The engineering company in Indonesia is a company involved in design, supply and installation of heating, ventilation and air-conditioning system. In this respect, we will install and integrate the said small gas power plant to the electricity distribution system. Additionally, we will operate and provide maintenance of the said power plant. We expect to complete the installation at the end of 2016 and commence operations by the first quarter of 2017. In this respect, we expect to start generating revenue for FYE 2017 from the leasing of the small gas power plant facilities. For further details on the 0.8 MW gas power plant, please refer to Section 7.21.1.4(i) of this Prospectus. (iv) In November 2015, through our subsidiary, Serba Dinamik Indonesia, we entered into a MOU with PT Kutai Timur Investama, a local government district development body to form a partnership arrangement with the intention of developing small gas power plants as well as water utilities namely a water treatment plant in the regency of East Kutai in East Kalimantan, Indonesia. We intend to own, operate and maintain these said small gas power plants. Meanwhile, we will only be developing the water treatment plant for the said local government district development body. In this respect, we expect to generate revenue in the form of sales of power from our small gas power plants and EPCC of the water treatment plant. However, this is still in the preliminary stages. In the development of the said small gas power plants, we will use our existing expertise and experience in EPCC including engineering capabilities, procurement, fabrication and construction works. As part of our scope of work for EPCC, we will also engage other external parties to undertake among others, civil, structural, mechanical and electrical works. In addition to the said EPCC works, we will be bringing in external parties for the development of the water treatment plant including, among others, design, technology and other technical requirements. As for the small gas power plant, we will be using Capstone microturbines for the generation of power. Based on our experience in procuring, installing, commissioning and maintaining Capstone microturbines of similar sizes for power generation purposes, operating and maintaining the said plants will be an extension of our experience. 96 7. BUSINESS OF OUR GROUP (Cant’d) We intend to take a majority stake in the ownership of the abovementioned small gas power plants through our 75.00% shareholding in Serba Dinamik Indonesia. This would allow us to have the management control over the said assets. For further details on the development of small gas power plants and water utilities, please refer to Section 7.21.1.4(iii) of this Prospectus. (v) Part of our strategy is to develop and own an industrial park in Sarawak incorporating a eUF providing electricity, steam, chilled water, demineralised water, wastewater treatment, industrial gases and compressed air. The development of the industrial park utilises our core competencies in EPee for the development and construction of the industrial park and O&M for the maintenance of the eUF. With our experience in undertaking maintenance of eUF in Kuantan, Pahang as well as Kerteh, Terengganu, we intend to carry out the O&M of the eUF in the industrial park. Upon the completion of the industrial park, we plan to operate and maintain the eUF while the management of the industrial properties within the park would be subcontracted to an external party. We expect to generate revenue in the form of sales of eUF products and services, and the provision of services to tenants of the industrial park. As at the LPD, we are in the midst of negotiating with the authorities for a suitable site. Our expertise in asset ownership business model Our move towards the asset ownership business model will use our existing expertise and experience in the following areas: (i) EPCC: We can use our existing EPee works expertise and experience to develop our assets;
(ii) O&M including MRO and IRM services: We are able to use our existing expertise and experience in providing O&M services, inclUding I’v1RO and IRM services, to operate and maintain our assets.

We are aware that we may not have the full complement of expertise and experience to develop and operate a potentially wide range of assets. Under such situations, we will complement our existing pool of talents by engaging and/or employing the relevant experienced personnel or external parties. Our exposure in adopting the asset ownership business model We recognise that as part of our expansion plans, we are moving into an asset ownership business model which exposes us to various unforeseen situations and general business risks related to the expansion of our asset ownership business model. These include: (i) insufficient expertise, experience and resources to develop and operate all our assets;
(ii) insufficient financial resources to embark on ownership of assets and may incur higher borrowings to fund the development and operation of these assets;

(iii) obsolescence and aging assets. Further details on the risk of our asset ownership business model, please refer to Section 5.1.2 of this Prospectus. 7. BUSINESS OF OUR GROUP (Cant’d) 7.3.3 Extending our industry coverage. Most of our revenue is from the O&G industry, such as O&M services for O&G production platforms, crude O&G refineries, petrochemical manufacturing plants and LNG plants. Our business strategy is to continue our industry diversifications based on our expertise in O&M services and EPCC works, to cover other industries where we have established a previous track record including pulp and paper, wastewater treatment, desalination, mining, petrochemicals, fertilisers and metals. This is possible as all these industries use rotating and static equipment. In this respect, we can offer our MRO and IRM services, and if required, EPCC for the construction or extension of plants and facilities. 7.3.4 Expanding our overseas markets. For the FYE 2015 and FPE 2016, we served customers in markets including Southeast Asia (Malaysia and Indonesia), Central and South Asia (Turkmenistan and India), Middle East (Qatar, Oman, UAE, KSA, Kuwait and Bahrain) and Europe (UK). We will be using our existing markets as a base to extend our market coverage to other surrounding countries including more of the Gulf Cooperation Council, Middle East and European Union countries. 7.3.5 Growth through investment and acquisition In support of our business strategy and when the opportunity arises, we will continue to invest or acquire companies that are complementary or provide growth to our Group. We will explore business ventures which will add value to our supply chain and strengthen our position to become an energy services group providing engineering solutions. Through our strategic investments and acquisitions, we expect to increase our resources, expand our products and services and tap into new customer base, industries and markets. This will provide us with new sources of income whilst leveraging on our existing expertise and business. For further details on our investments and acquisitions, please refer to Section 7.21.1.5 of this Prospectus. 7.4 BUSINESS ACTIVITIES, PRODUCTS AND SERVICES 7.4.1 Business activities overview The breakdown of our revenue by business activities for the FYE 2015 and FPE 2016 are as follows: Revenue breakdown by business activities FYE 2015 FPE 2016 Business activities RM ‘000 % RM ‘000 % O&M services 1,274,906 90.87 815,664 89.46 (i) MRO of rotating equipment 975,148 69.50 671,486 73.65 (ii) IRM of static equipment 299,758 21.37 144,178 15.81and structures EPCC works 124,942 8.91 93,842 10.30 Other products and services(1) 3,094 0.22 2,220 0.24 Total 1,402,942 100.00 911,726 100.00 Note: (1) Other products and services include the provision of technical training, leT solutions and services, and supply of products and parts. 7. BUSINESS OF OUR GROUP (Cont’d) As at the LPD, the O&M services that are undertaken in Malaysia and Turkmenistan are covered by our operations in Malaysia. We have offices in Bahrain and UAE to oversee the O&M services that are undertaken in the Middle East and India, while our offices in Indonesia and the UK are responsible for projects undertaken in their respective countries. The following charts depict the trend of our revenue segmented by geographical locations (where our products are sold or services are rendered) of our customers in Southeast Asia (Malaysia and Indonesia), Central and South Asia (Turkmenistan and India), Middle East (Qatar, UAE, Oman, KSA, Kuwait and Bahrain) and Europe (UK) for the past three FYE 2013, FYE 2014 and FYE 2015, and latest FPE 2016: RM (million) Middle East % COlltribullon (Qatar, UAE, Oman. KSA, Kuwait and Bahrain)
RM(miJIion) Southeast Asia % Contnbution(47.24%) (Malaysia and Indonesia) 662.82 ‘ RM(mlHion) % Conlriblilion (0.00%) 0.00 FYE 2013 FYE 2014 FYE 2015 FPE 2016 (16.47%) (11.91%) 124.46 167.04 (7.91%) 72.15 • L–+——‘__~.—–.———,—–J FYE 2013 FYE 2014 FYE 2015 FPE 2016
For further analysis on our percentage of revenue contribution by geographical segments, please refer to Section 12.2.6.3 of this Prospectus. 7.4.2 O&M services 7.4.2.1 Overview The provision of O&M services accounted for 77.97%, 79.35%, 90.87% and 89.46% of our revenue for FYE 2013, FYE 2014, FYE 2015 and FPE 2016 respectively. All our O&M revenue was derived from maintenance services, which include MRO of rotating equipment and IRM of static equipment and structu res. 7. BUSINESS OF OUR GROUP (Cont’d) 7.4.2.2
As at the LPD, our O&M services are supported by five service centres in Malaysia, one service centre in Bahrain and one in the UAE. In countries where we do not have service centres, we undertake our services on-site or we utilise the facilities of our foreign strategic business partners who are also our customers. MRO of rotating equipment Rotating equipment is a general classification of machinery and equipment designed to generate reciprocating or circular motion, which is then used to move or agitate materials. Rotating equipment works through a system of drivers (machinery that uses an external energy source like fuel or electricity to provide the source of power to do work, for example turbines, engines or motors), driven components (equipment that uses the power source to do specific work, for example generators, pumps or compressors), transmission devices (equipment or components involved in the transfer of motion or energy from one machinery/equipment to the next, for example gears, clutches and couplings), and ancillary equipment and systems (for example inlet air system and filter, fuel system, exhaust duct and piping system). Rotating equipment is used in many different industries, including O&G (upstream and downstream), power generation, mining, agriculture, manufacturing, transportation and construction. Rotating equipment is also used in commercial applications, including for heating, ventilation and air­conditioning, escalators, elevators and travellators and back-up power generators. We are a MRO specialist for various types of rotating equipment, including gas and steam turbines, engines, motors, generators, pumps, compressors and industrial fans. Our MRO services are currently focused on rotating equipment used in the energy industry, including O&G production and refineries and power plants. These include rotating equipment at the following locations or applications: (i)  power generation;  (ii)  petrochemicals;  (iii)  crude O&G refineries;  (iv)  process and export gas compression;  (v)  crude oil handling or main oil line;  (vi)  natural gas, liquids and chemical injection; and  (vii)  fire water pump system.
As an independent service provider, we are therefore not restricted to providing MRO services for any specific brand of equipment. We are also not subjected to various principal-agent commercial agreements and conditions in the provision of services save for Capstone. In this respect, we have the expertise and experience to undertake MRO services for a diverse number of brands. We also have the expertise to undertake MRO of large rotating equipment that requires specialist skills and experience, which includes the following: (a) gas turbines to run generators with an output power up to 160 MW;
(b) steam turbines to run generators with an output power up to 50 MW;
(c) generators with an output power up to 100 MW;

100 7. BUSINESS OF OUR GROUP (Cont’d) (d) engine with an output power up to 28 MW;
(e) compressors requiring an output power up to 35 MW; and
(f) pumps requiring an output power up to 4.5 MW.

It is common for us to secure a maintenance service package, which includes the servicing of an entire rotating equipment system including the driver, driven components, transmission devices, process control and instrumentation system, and ancillary equipment and systems. As an example, a gas turbine maintenance package may comprise servicing for a gas turbine, centrifugal compressors, complete with its process logic controller, electrical devices and various instrumentations and ancillary equipment. Ancillary equipment and systems may include, among others, inlet air system and filter, fuel system, exhaust duct, lubrication oil system, compressor dry gas seals and support system, drive gearbox, auxiliary gearbox, shaft couplings, cooling system, piping system and condition monitoring system. Some of the MRO activities that are undertaken at our service centres are as set out in the following pictorial representations: Equipment under maintenance Components under maintenance
Balancing and alignment of equipment Drilling of metal parts
7. BUSINESS OF OUR GROUP (Cant’d) Some of our machinery and equipment used as part of our maintenance activities are set out in the following pictorial representations: Hydraulic machine Milling machine
Industrial video scope Pressure safety relief valve test bench
We provide a complete range of IVIRO services for rotating equipment encompassing the following scope of work: (i)  site assessment to review and identify MRO requirements;  (ii)  provision of maintenance and repair services;  (iii)  replacement and upgrades of components and spare parts;  (iv)  restoration prevention;  such  as  sandblasting,  coating,  and  lining  for  corrosion  (v)  overhaul of equipment where required and in accordance to s chedule;  (vi)  maintenance, recalibration, upgrade and retrofitting of proceand instrumentation;  ss control
(vii) provision of training to customers’ staff; and (viii) audit and inspection services to assess quality of rotating equipment. 7. BUSINESS OF OUR GROUP (Cant’d) The types of maintenance services that we provide for rotating equipment include: (a) scheduled maintenance, which are normally carried out at a predetermined intervals of time as recommended by rotating equipment manufacturers in order to minimise equipment breakdowns and failures; and
(b) unscheduled maintenance, which refers to ad-hoc repair services that are undertaken for specific problems or failures that occur suddenly or are unplanned.

Some of the types of maintenance services undertaken within scheduled and unscheduled maintenance include the following: (1) predictive maintenance;
(2) equipment overhaul;
(3) balancing and alignment;
(4) replacement and upgrades of components and parts; and
(5) maintenance of process control and instrumentation.

The description on the types of maintenance services undertaken within scheduled and unscheduled maintenance is as below: (1) Predictive maintenance Predictive maintenance, otherwise known as CBM programme, is a maintenance strategy that uses the actual condition of the rotating equipment to determine the timeliness and type of maintenance services that need to be carried out. This maintenance strategy allows our customers to optimise their maintenance resources by automatically scheduling maintenance depending on analysis of the asset’s condition data. CBM programme minimises rotating equipment failure and prevents unplanned plant shutdowns, both of which may lead to costly loss of production. We offer various inspection techniques to assist our customers in monitoring the condition of the rotating equipment which include, among others, oil analysis, vibration analysis, leak detection and visual aid inspection. We offer CBM services for rotating equipment such as gas and steam turbines, process pumps, gas compressors as well as other less critical and complicated equipment. We have the skills, knowledge and experience to initiate, set up and run the condition-monitoring programme that is customised based on our customer’s asset management philosophy/programme. 7. BUSINESS OF OUR GROUP (Cont’d) (2) Equipment overhaul The overhaul of any equipment requires the entire equipment to be stripped down to its parts and components for cleaning, repair, reconditioning, replacement and recalibration. The process of cleaning, reconditioning and repairing could include, among others, machining, fabrication, balancing, alignment, buffing, blasting and coating. In some situations, parts and components are damaged beyond repair and would need to be replaced. Once all the parts and components are restored to as close to its original condition as possible, they are reassembled and the equipment tested and commissioned. The overhaul of equipment, especially drivers like gas and steam turbines and large powered engines are major technical exercises requiring specialist skills and expertise. The overhaul of large turbines and engines are usually carried out by the OEM due to the specialised skills required. As an independent MRO specialist, we are able to undertake overhaul of large gas and steam turbines as well as large engines across a number of global brands. In some situations we work independently, while in other situations we work in collaboration with the original equipment manufacturer or authorised service providers. Based on the equipment maintenance manual, rotating equipment are generally required to undergo a major overhaul upon achieving a certain amount of running hours, usually ranging between one year and five years. Gas turbine major overhauls are typically required after 30,000 fired hours, which translates to apprOXimately three to five years under typical operational conditions. In between the major overhauls, we also perform minor overhauls such as combustion inspection and hot gas path inspection for gas turbines. Some of the MRO services that we performed onsite at customers’ premises are set out in the following pictorial representations: Overhaul of centrifugal compressors during Shutdown maintenance of petrochemical plant shutdown of an LNG plant in Qatar in Johor undertaken by our Group undertaken by our Group
7. BUSINESS OF OUR GROUP (Cant’d) (3)
(4)

Balancing and alignment Due to the A gas turbine rotorconstant movement of the rotor (the rotating part of an engine or machinery), rotor imbalance and rotating shaft misalignments are the most common faults in rotating equipment that Excessive vibration in rotating equipment can result in noise pollution, increase wear and tear and the likelihood of failure and substantially reducing the life of the equipment. We have the facility and necessary equipment to perform rotor balancing and alignment of rotating shafts, either on-site or in our service centres. Rotor imbalance occurs when the centre of mass does not coincide with the geometric centre. In reality, these centres never coincide exactly, and as a result, our objective when performing rotor balancing is to ensure the imbalance is as small as possible to reduce any negative impact on the equipment. We utilise balancing machines to identify the position and amount of imbalance and perform rotor balancing by removing or adding weight to the unit so that the mass is distributed evenly around the true axis. The misalignment of rotating shafts occurs when the centrelines of rotation of two (or more) equipment shafts are not in line with each other. Rotating shaft misalignment can result in problems including, among others, bearing and seal failures, coupling failures and broken shafts which could lead to loss of energy, production downtime and higher repair costs. We undertake alignment of rotating shafts using several methods such as conventional methods using dial indicators and more complex methods using laser alignment. Through our subsidiary, Serba Dinamik IT, we have developed an alignment monitoring programme known as AlignSoft to assist in performing precision alignment tasks and solve critical alignment problems. Replacement and upgrades of components and parts Part of our maintenance services involve replacement and upgrades of components and spare parts for rotating equipment. Our maintenance team inspects, analyses and recommends components and parts, which require replacement including, among others, turbine disks, rotating and stator blades, turbine buckets, alignment hardware and balance weights Some of the electrical and electronic parts are usually sourced from OEM. Mechanical parts are usually retrofitted and remanufactured by our machining team using reverse engineering methods. Some of our machined parts are manufactured in-house using our own CNC machines, or
7. BUSINESS OF OUR GROUP (Cant’d) CNC machining tools. We also have our own in-house supply arm that helps us to source parts and components from OEM. Where possible, we enhance and upgrade component and parts without compromising OEM specifications to improve the performance and extend the life of the rotating equipment. All our remanufactured parts are backed by a full warranty with the warranty period ranging from 6 to 12 months. (5) Maintenance of process control and instrumentation Process control systems are commonly used to execute and control one or more processes in an industrial application. They may be used to control the processing of O&G products in a refinery or the operation of a power plant. Instrumentation is the application and usage of devices that either detect or measure operating or environmental variables including, among others, temperature, pressure, level and flow. Process automation reduces the need for manual intervention and removes the need for workers to perform potentially heavy and dangerous work conditions. Typically, most machinery and equipment in an industrial processing plant, like pumps and compressors, would be integrated into a complete industrial automation system incorporating process control and instrumentation. Through our subsidiaries, A R Global Engineering and SD Controls, we have the capabilities to undertake an entire plant’s process control and instrumentation including upgrading, calibration and maintenance contract. This includes process control such as SCADA, PLC, RTUs, and instrumentations such as flow meters, level measuring instruments, gas analysers, pressure gauge, actuators as well as final control elements such as control valves, dosing or injection pumps. Some examples of process control and instrumentation devices that we service as part of our maintenance activities are set out in the following pictorial representations: PLC -Controls the operation of various equipment Flow meter instrument -Measures the speed of a and devices moving liquid, slurry or gas
7. BUSINESS OF OUR GROUP (Cont’d) Actuator (valve actuator) -Device that provides the motion to turn a valve to prevent or allow the flow of rnaterials
7.4.2.3 As part of our maintenance process, we replace, upgrade and retrofit process controllers. In some situations, our upgrade includes replacement of pneumatic controllers to electronic programmable logic controllers with digital display human-machine interface. As with final control elements like valves, we need to recalibrate them and where necessary undertake machining to bring them back to as close to its original condition as possible. Maintenance of other control elements such as pumps and compressors are carried out by our rotating equipment business operations. Similarly, we also carry out maintenance of actuators, combinations of electrical, electronic, hydraulic and/or mechanical devices that moves or controls a mechanism or system. Upon completion of our physical maintenance functions, we test the complete machines, equipment or systems, and measure their operating performance. Where required, we recalibrate equipment until they perform at the desired metrics or benchmarks. In this respect, we are supported by our service centres which are equipped with the necessary tools and equipment to perform testing and calibration. IRM of static equipment and structures Static equipment refers to objects that are part of a processing or manufacturing process that do not have any mechanical or moving parts. We carry out IRM for various types of static equipment namely boilers, unfired pressure vessels, heat exchangers, columns, reactors and separators. Both boilers and unfired pressure vessels are commonly used in process based industrial plants. Boilers are large pressure vessels that contain water or other liquids that are heated up to produce steam or for other purposes. Our IRM of boilers are specifically for steam boilers. Pressure vessels are large containers designed to hold materials, commonly liquids or gasses under high pressure. As boilers are a special type of pressure vessels, sometimes bOilers are referred to as fired pressure vessels, while pressure vessels that are not subjected to external heat are referred to as unfired pressure vessels. Heat exchangers are devices used to efficiently transfer heat from one medium (for example liquid or gas) to another without coming into direct contact with each other. 7. BUSINESS OF OUR GROUP (Cant’d) Structures are other objects that are not directly involved in the processing function, but are part of the overall plant facilities. Some examples of static structures include piping systems, pipe racks and truss, storage tanks, skids and scaffoldings. Some examples of static structures that we service are set out in the following pictorial representations: Boiler Unfired pressure vessel

 

 

7. BUSINESS OF OUR GROUP (Cont’d) We provide the following types of IRM services for static equipment and structures: (i) scheduled maintenance, which are normally carried out at predetermined intervals of time; and
(ii) unscheduled maintenance, which refers to ad-hoc repair services that are undertaken for specific problems or failures that occur suddenly or are unplanned.

In Malaysia, it is compulsory for operators to be certified by DOSH before they are allowed to provide any manUfacturing or repair services for steam boilers and unfired pressure vessels (Source: IMR Report). In this respect, we are certified by DOSH to act as repairer of steam boilers and unfired pressure vessels. We provide a complete range of services to assist our customers in its periodic inspection for boilers including steam boilers and unfired pressure vessels. In Malaysia, according to the FMA, it is compulsory for manufacturing plants to undergo inspection for its steam boilers and unfired pressure vessels every 15 to 21 months for the renewal of its certificate of fitness from DOSH (Source: IMR Report). In view of this regUlation, our scope of work for IRM services for boilers and unfired pressure vessels includes: (a) inspection and preparation of repair methods based on the ASME code of practice, which incorporates safety, health and environmental elements;
(b) liaising with inspecting authorities to witness repair work and other necessary tests in accordance with the ASME code of practice or its equivalent;
(c) chemical cleaning to eliminate scaling and to minimise equipment failure; and
(d) refractory repairs and modifications to eliminate heat leakage.

In addition, we perform IRIVI services for heat exchangers inclUding bore scope or video scope inspection, hydro jet cleaning, hydro testing, re-tubing and other repair work. We also provide rehabilitation and repair services for pipelines, which include services such as cleaning, replacement of damaged pipes, repair of weld defects, composite wrapping and pipe straightening. We undertake repair services for piping system, including among others, industrial process piping system in accordance to ASME, API, ASTM codes and standards. 7. BUSINESS OF OUR GROUP (Cont’d) List of our O&M services Some of our on-going and completed O&M services which contributed to our Group’s revenue for the past three financial years and latest financial period are set out as follows:
MALAYSIA  On-going  Provision of MRO services for rotating equipment (Sarawak and Sabah operations)  PETRONAS Carigali Sdn Bhd  Malaysia  6 years  January 2012 ­January 2018  140.60  4.30  Provision of IVIRO services for rotating equipment  Sarawak Shell Berhad  Malaysia  5 years  February 2012 ­January 2017  183.00  Provision of MRO services for rotating equipment (Peninsular operations)  PETRONAS Carigali Sdn Bhd  Malaysia  4 years  April 2013­March 2017  126.34  Provision of MRO services for rotating equipment  Malaysia L1\1G Sdn Bhd  Malaysia  3 years  January 2014­December 2016  43.56  Completed Provision of MRO services for microturbine generator at J4 platform  PETRONAS Carigali Sdn Bhd  Malaysia  2 years  November 2010­November 2012  114.01  4.35  Provision of MRO services for microturbine  PETRONAS Carigali Sdn Bhd  Malaysia  3 months  January 2013­April 2013  81.08  4.25  Plant turnaround maintenance  PETRONAS Methanol  Malaysia  7 months  April 2011 – 139.91  4.09  focusing rotating equipment package(3j  on  (Labuan) Sdn Bhd  November 2011  Provision of vendor support services and supply of spare parts for microturbine  Sabah Shell Petroleum Company Ltd  Malaysia  2 years  July 2011 -July 2013  126.07  4.08
7. BUSINESS OF OUR GROUP (Cont’d)
Value of secured work Remaining orders val.ueof fromFYE secured 2013 up to work orders MRO of rotating Contract LPD as at LPD(2j equipment period(1j (RM million) (RM million) Provision of MRO PETRONAS Malaysia 3 years August 96.94 3.76 services for gas Carigali Sdn 2011 ­compressor Bhd December inclusive of 2014 specialist and parts supply Provision of MRO PETRONAS Malaysia 3 years June 114.03 2.15 services and Carigali Sdn 2012 ­technical support Bhd May for compressor 2015 FOREIGN On-going Supply of skilled PT Gunawan Indonesia 6 years November 26.43 6.04 manpower, Construction 2011 ­equipment and July tools for rotating 2017 equipment maintenance works Provision of Elliot Gas KSA 5 years December 34.86 12.05 skilled manpower Services 2012 ­for MRO rotating Saudi Arabia December equipment Ltd 2017 services Provision of MRO PT Ensco Indonesia 4 years January 75.03 8.48 services for Sarida 2013­centrifugal June compressor and 2017 other associated equipment Supply of spare Energy Oman 4 years April 267.25 5.66 parts for Ruston Machine 2013­gas turbines Services March L.L.C. 2017 MRO of pressure Energy UAE and 3 years August 368.42 testing, COTP, Engineering Qatar 2014 ­safety relief valve & Services August and other 2017 associated rotating equipment Provision of Process Qatar 3 years January 326.56 34.43 topside Dynamic 2015 ­maintenance Company January service, MRO of 2018 pressure testing, COTP, safety relief valve and other associated rotating equipment 7. BUSINESS OF OUR GROUP (Cont’d)
Approx­imate tenure (monthsl years) MRO of pressure Midad KSA 3 years September 201.87 11.93 testing, COTP, Industrial 2015­safety relief valve Services September and other 2018 associated rotating equipment Completed Provision of MRO PETRONAS Turk-3 years August 472.44 0.77 services for Carigali menistan 2013­rotating (Turkmenistan) July equipment Sdn Bhd 2016 Provision of MRO Petroserv Qatar 2 years May 64.44 4.56 services for Limited 2014­rotating May equipment 2016 (The rest of this page has been intentionally left blank) 7. BUSINESS OF OUR GROUP (Cant’d)

IRM of static equipment and structures Customer Location MALAYSIA On-going Provision of manpower services for plant turnaround and overhaul of major machinery during Train 3 and Boilers 5  and  6  Turnaround  for  Abu  Dhabi  Gas  Liquefaction  Company Ltd.  Provision  of  inspection  and  turnaround  maintenance  for
Taweelah Asia Power Company boilers Suwaidi  UAE  4 years  July  5.70  15.45  Engineering  2013 ­ Group  July  2017
Yusof Bin UAE 3 years March 113.06 16.61 Ahmed 2014­Kanoo Co. March Ud 2017 Notes: (1) One contract may include multiple work orders/purchase orders.
(2) The remaining value is based on secured work orders that have not been recognised as at LPD. For the work orders where the contract periods have ended, the remaining value of work orders is relating to continuing work orders issued by the customers. Generally, the said work orders will be renegotiated based on an agreed pricing and scope of work prior to commencement.
(3) This includes a work order pertaining to EPCC works for procurement, fabrication and installation offirefighting system (Phase 2) for plant 1.

(The rest of this page has been intentionally left blank) 7. BUSINESS OF OUR GROUP (Cont’d) 7.4.3  EPCC  7.4.3.1  Overview  Generally, EPCC comprises the following four major functions:  (i) Engineering: This portion of work requires engineering capabilities  relating to the specifications of the total project including individual  equipment and structures.  (ii) Procurement: This portion of the work involves obtaining supply of all  raw materials, products and other items needed to construct or  fabricate the project. The procurement function aims to obtain  supplies in a timely manner, cost effectively and complying with  product, service and quality specifications.  (iii) Construction: This portion of the work relates to the construction or  fabrication of all products, parts and components and integrating them  to an operational unit, facility or plant that meets all product, quality,  safety and engineering specifications.  (iv) Commissioning: This is the final portion of the project work, where the  completed product or project is tested and installed and if required  integrated to other facilities or operations before it is finally  commissioned for live operations.  EPCC is a general term referring to the responsibility to deliver an entire defined  project. While the company awarded with an EPCC contract is responsible for  delivering the completed project, the company may sub-contract some aspects  of the contract work to third parties. Sub-contracting work is sometimes  necessary, to obtain expertise that is not available in-house or due to  compressed project time-frame requiring extra resources to complete the  project on time. In some cases, it may also be more cost effective for sub­ contractors to perform certain tasks as they may have the economies of scale in  certain specialised functions.  7.4.3.2  EPCC works  The provision of EPCC works accounted for 19.89%, 12.00%, 8.91 % and  10.30% of our revenue for FYE 2013, FYE 2014, FYE 2015 and FPE 2016,  respectively.  Our EPCC works include the following:  (i) installation of piping systems;  (ii) installation of rotating and static equipment;  (iii) installation of power generation equipment and plants;  (iv) development of infrastructure; and  (v) construction of amenities and buildings.  In addition, we carry out other EPCC related works including design, supply and  installation of process control and instrumentation, and auxiliary power  generation and firefighting systems. Save for the EPCC works of small  hydropower plants in Kota Marudu, Sabah, Malaysia where we are the main  contractor, our other EPCC contracts consist of sub-contract works from  main contractors and engineering companies.
7. BUSINESS OF OUR GROUP (Cant’d) The following is a pictorial representation of an EPCC of a piping system for a ferroalloy manufacturing plant for our customer: Supply and installation of our client’s piping system for a ferroalloy manufacturing plant in Samalaju Industrial Park in Bintulu
We have the expertise and experience to undertake EPCC works encompassing the following: (i) engineering capabilities;
(ii) procurement and supply of products;

(iii) fabrication and construction; and (iv) testing, installation and commissioning. As part of our scope of work for EPCC, we also engage external parties to undertake, among others, fabrication, construction, civil, structural, mechanical and electrical works. (i) Engineering capabilities We have in-house facilities and technical skills to undertake the complete range of engineering works that are required for the fabrication, construction and installation of power generation systems, piping systems and other mechanical and instrumentation systems. We work based on designs and specifications provided by our customers or external design and engineering consultants. (ii) Procurement and supply of products We procure a wide range of products for our EPCC works including, among others, pipes, fittings, accessories, process control and instrumentation, electrical and electronic devices, machinery and equipment, steel plates, bars and hollow sections for fabrication and parts and components for rotating equipment. Procurement for EPCC works in Malaysia is undertaken by Serba Dinamik while Serba Dinamik International is responsible for the procurement of products relating to EPCC works abroad. 115 7. BUSINESS OF OUR GROUP (Cant’d) (iii) Fabrication and construction As part of the function of our EPCC works, we are also responsible for the fabrication and construction of plants, facilities and structures. Alternatively, we may be involved in the construction of infrastructure, amenities and buildings. Depending on the nature of the project, we could either fabricate or construct the items in-house or award the construction portion to third party specialists. The types of work that we would undertake in-house include the following: (i) minor fabrication of steel works and structures;
(ii) construction of infrastructure including roads, small gas power plants and small hydropower plants;

(iii) construction of CNG plants; and (iv) construction of bUildings and amenities. We are equipped to carry out minor fabrication works with in-house facilities to carry out cutting, bending, shaping and welding and perform post-fabrication work including blasting, painting and coating as part of corrosion prevention system for plant equipment. As at the LPD, these activities are undertaken at our service centres in Labuan, Miri and Bintulu in Sarawak and Paka in Terengganu. Meanwhile, larger fabrication works are conducted on-site at customers’ premises. The following are pictorial representations of fabrication and construction of a heat exchanger:
7. BUSINESS OF OUR GROUP (Cont’d) (iv) Testing, Installation and Commissioning We have the capabilities to carry out on-site assembly, installation, hook-up and commissioning of certain packages including rotating equipment, piping system and other mechanical and instrumentation system up to the complete operations of a power plant. A final round of on-site inspection and testing is usually undertaken prior to commissioning and before the project is officially completed. We have the in-house capability to undertake post-fabrication heat treatment for some of the metal products and structures. During the heat treatment process, metal products or structures are heated to a specified temperature for a certain amount of time, which are then allowed to cool at a predetermined rate or at ambient temperature. The heat treatment process is essential in removing stresses created during rolling, bending and welding processes. The failure to remove these stresses could potentially result in metal fatigue which could lead to product or structure failure. Quality assurance and quality control measures are carried out at all phases of our fabrication process where we comply with ASME codes and standards of quality. In this respect, we inspect and test all fabricated metal products and structures prior to delivery or installation to ensure that they comply with the required standards and are free from defects. We have in-house testing facilities which include visual weld inspection, dye penetration test and hydrostatic test. In some cases, we engage independent external parties to conduct specialised testing namely destructive and radiography non-destructive testing, however this is undertaken upon request by our customers. Our EPee works are based on contracts while other EPee works are based on purchase orders. Some of our EPee works which contributed to our Group’s revenue for the past three financial years and latest financial period are set out as follows: (The rest of this page has been intentionally left blank) 7. BUSINESS OF OUR GROUP (Cont’d)
Location MALAYSIA On-going Design, supply and Sarawak Malaysia 4 years September May 40.74 delivery of Shell Berhad 2014 2018 microturbine generators for E6 Field Development project Malaysia 2 years May June 218.00 207.49 hydropower plants Power 2015 2017 EPCC of small One River Supply, fabrication Petrofac Malaysia 2 years August October 33.61 24.31 and painting of E & C Sdn 2015 2017 structural steel for Bhd RAPID Project Package 4 Completed Provision for PETRONAS Malaysia 2 years October October 36.99 supply, installation, Carigali Sdn 2013 2015 testing and Bhd commissioning of bar coding and material album system Supply and Metix Malaysia 2 years November November 48.95 20.18 installation of Malaysia 2014 2016 piping system Sdn Bhd Civil, Dongyang Malaysia 11 January November 9.70 1.08 infrastructure, Construction months 2016 2016 electrical and Malaysia instrumentation of Sdn Bhd a power plant FOREIGN On-going Provision of supply MB Oman 4 years December June 15.64 10.30 specialised for Petroleum 2013 2017 piping & painting Services works L.L.C. EPCC of CNG PT Kubic Indonesia 3 years February August 12.98 plant Gasco 2014 2017(3) Notes: (1) One contract may include multiple work orders/purchase orders.
(2)  The remaining value is based on secured work orders that have not been recognised as at LPD.  (3)  As at LPD,  the construction and installation of equipment in the  CNG  was  completed.  The  expected  completion date was extended to August 2017 to cover the warranty period.
7. BUSINESS OF OUR GROUP (Cont’d) 7.4.3.3
Process control and instrumentation Within EPCC, we provide design, supply and installation of process control and instrumentation to a wide range of industries including 0&8, power generation, manufacturing, water utility, wastewater treatment, airport, railway and marine vessels. Our core strengths in process control and instrumentation is based on our ability to configure and programme process control systems and to link them to instrumentation devices. In the provision of process control and instrumentation, our full spectrum of work includes the following: (i) identifying and specifying the total system or sub-system (for example, SCADA system);
(ii) procuring devices and software (SCADA, PLC, Instrumentation, Actuators, Final Control Elements, and software operating and application systems);

(iii) programming the PLC to control and automate the processes; (iv) install utilities (for example, power and communications);
(v) integrating all devices, utilities and systems;
(vi) installing the products and system; and

(vii) testing and commissioning the system. We are supported by our facility in Klang, Selangor which is focused on systems design and specification, programming, configuration and assembly of process control systems and instrumentation. While we are able to do all aspects of process control and instrumentation, it is common for us to undertake only parts of the entire cycle depending on the situation and our customers’ requirements. For example, we may only be involved in the upgrading of pneumatic relay control systems to the electronic PLC. (i) Industrial process automation system There are many steps involved in any manufacturing or processing plant, for example starting from the input of materials, processing the various input materials and finally finishing the products. In addition, during each step, there is consideration of the sequence of actions, specific quantity of input materials, the operating conditions such as temperature, and the timing for each step. Thus, there is a need to automate as many of these processes as possible to increase efficiency, effectiveness, quality and speed of processing. Process automation reduces or removes the need for manual intervention, thus saving on labour costs and removing the need for workers to perform heavy and dangerous work. In addition, human error is largely removed from the process as every step is programmed to be executed precisely based on defined conditions and algorithms programmed into the process automation. Furthermore, automating processes increases productivity, quality and reduces wastage.
7. BUSINESS OF OUR GROUP (Cont’d) (ii) Key components of industrial process automation In general, there are five key components in process automation used in industrial applications, namely: (1) master controller;
(2) programmable logic controller;
(3) instrumentation;
(4) actuators; and
(5) Final Control Element.

In addition, there is the HMI which is an integral part of the master controller and PLC. Schematic of key components in understanding process automation Master Controller ————-, ,—–_::1_—–, Programmable __ : Controllers for! Logic Controller : Processes :
L .. I I ,I tI ,I II Ir II II II II …. …. Process 2. 3, 4 …. Element The general description of each of the key components is as follows: (1) The master controller controls all the individual sub-systems in a manufacturing or production plant, and activating or deactivating them in a controlled and timely sequence. Due to advances in technologies, distinctions among control logic devices as master controllers are blurred. Master controller may include distributed control system, and other computerised terminal or station such as advance PLC, programmable automation controllers or SCADA
(2) The PLC controls each individual sub-system within the plant, and automates all the necessary processes within the sub­system. The PLC is linked to instrumentation devices to detect or measure process variables, analyse the data obtained, and if certain conditions are met, it will send signals to actuators to activate one or more actions in the sub-systems.
(3) Instrumentation uses sensors and measuring devices to detect or measure variables or conditions at different locations where individual processes take place. A sensor is designed to detect the presence or absence of a particular substance, while a measurement device is designed to measure, for example the flow, temperature, pressure and density of a moving fluid or stationary substance.

120 7. BUSINESS OF OUR GROUP (Cant’d) (4) Actuators receive signals from controllers and, if required, undertake one or more physical actions in response. Actuators provide the physical movement of objects, such as turning a valve.
(5) Final Control Element is the final hardware or mechanism that performs the operative task, such as a valve that opens or shuts a pipe, pump or centrifuge system.
(6) The HI\/II is primarily a computer software that provides an interface between human operators and machines that process data. HMI commonly incorporates a screen display of the entire process with the capability to zoom into any specific process or machinery, and an input device such as a mouse, keyboard or touch screen, to input the responses.

In industrial automation, we offer process control and instrumentation for diverse systems or packages where we undertake the following functions: (a) systems design and specification;
(b) procure devices (PLC, instrumentation, actuators, final control elements);
(c) configuration of devices;
(d) assembly and installation of devices; and
(e) integration to other systems where relevant.

Packages refer to modular sub-systems used for specific functions. In a rotating equipment package, we are involved in the sub-system design, supply, configuration and installation of the PLC, instrumentation, actuators (switches and relays) to interface with the rotating equipment to control (turn on or off) the rotating equipment. Other types of works that we undertake include the following: (a) conversion of relay based controllers to electronic PLC;
(b) replacement of old versions with newer versions of PLC; and
(c) integration of drive panels.

We are an independent service provider and do not represent any product principals. We are able to use any brand of PLC, instrumentation and other devices. For PLC, we have worked with numerous brands including Siemens, Allen Bradley, Schneider, ABB, GE Fanuc, Omron and Mitsubishi. As for HMI, we have worked with Proface, Siemens and Panel View. 7. BUSINESS OF OUR GROUP (Cant’d) 7.4.3.4 Auxiliary power generation and firefighting systems We acquired Quantum Offshore on 21 April 2015 which is involved in the design, engineering and installation of auxiliary power generators and firefighting systems. This acquisition will further supplement our EPCC segment of the business. The company holds a DNV Business Assurance Management System Certificate ISO 9001 :2008 which is valid for the design and manufacture of fire pumps and power generation systems to the offshore industry. DNV GL provides certification, assessment, and verification services enabling companies in a variety of industries to advance the safety and sustainability of their business. (Source: DNV GL website, https:l/www.dnvgl.com). The company’s capabilities include designing, specifying, procuring, installing and integrating the auxiliary power and firefighting equipment into the overall system. Its auxiliary power generation units are dedicated to run specific equipment and machinery. In an industrial environment including production and refining of O&G, and manufacturing of petrochemicals, firefighting systems must be installed. This is because these are hazardous areas and in the event of fire, there must be sufficient facilities in place to promptly contain any outbreak of fire and to minimise damages to life, property and the environment. In such an application, the firefighting system must have its own standalone auxiliary power to drive pumps and other firefighting equipment. In this respect, it is common to integrate the auxiliary power generation machinery with the firefighting equipment. Some of its auxiliary power generation projects are set out in the pictorial representations below: Rang Dong field development in Vietnam Maari field development in New Zealand

 

7. BUSINESS OF OUR GROUP (Cont’d) Some of its firefighting equipment projects are provided below: Vertical firefighting pump Stratfjord ‘e’ platform in Norway

In Malaysia, we are supported by our facility in Klang, Selangor which is focused on systems design and specification, configuration and assembly of auxiliary power generators and firefighting systems. 7.4.4 Other products and services Our Group’s business activities include provision of a range of other products and services comprising the following: (i) technical training;
(ii) ICT solutions and services inclUding industrial ICT applications and internet and mobile applications solutions;

(iii) supply of products and parts; and (iv) logistics services in RAK, UAE. These products and services are commonly packaged together as part of our O&M and EPCC operations, with the exception of web-based services and solutions and provision of logistics services in RAK. Other products and services accounted for RM2.22 million or 0.24% of our revenue for FPE 2016, RIVl3.09 million or 0.22% of our revenue for FYE 2015, RM65.40 million or 8.65% of our revenue for FYE 2014, and RM11.47 million or 2.14% of our revenue for FYE 2013. 7.4.4.1 Technical training The provision of technical training is a critical supporting service for our O&M business operations. There are three areas within our business operations that we proVide technical training: (i) as part of the MRO and IRM services package;
(ii) upon the request of our customers to provide customised training to their personnel; and

(iii) students, of whom we would charge a fee to undertake the technical training programme. 7. BUSINESS OF OUR GROUP (Cont’d) We are an approved training centre by City & Guilds, which is a vocational education organisation in the UK. In collaboration with City & Guilds, we have been offering two technical training programmes namely Competent Rotating Machinery Technician programme since 2008 and Advanced Diploma in O&G Operations (Mechanical Maintenance) since 2015. With our knowledge and experience in the specific field of industries, we customised our training programmes using the City & Guilds syllabus, assessments and programme guidance notes as a basis while incorporating other technical and specific course contents for each training programmes. These include, among others, techniques to inspect, repair and maintain different types of rotating equipment, HSE management, condition monitoring and vibration analysis, alignment, process control system and precision measuring instruments. Trainees will undergo a combination of classroom theoretical and tutorial training, practical workshop training as well as field training through work placement with relevant companies. Basic theoretical and tutorial training is provided at our training centre in Shah Alam, Selangor, Malaysia and subsequently, trainees will undergo practical workshop training at one of our two City & Guilds approved centres in Bintulu, Sarawak, Malaysia and Paka in Terengganu, Malaysia. Our City & Guilds approved centres are located in our service centre in Paka in Terengganu, Malaysia and Bintulu in Sarawak, Malaysia. Upon completion of the training programme, trainees will be awarded with two certifications, one from City & Guilds and another from Serba Dinamik. City & Guilds approved centre at our Paka (left) and Bintulu (right) service centres
Confined space training at our Bintulu (left) and Labuan (right) service centres
7. BUSINESS OF OUR GROUP (Cont’d) Upon graduating from our training programmes, some trainees would be given a permanent or contractual employment opportunity with our Group, depending on the availability of positions. Some of our trainees have been employed by other major industry players such as, among others, PETRONAS Carigali Sdn Bhd, JX Nippon Oil & Energy Exploration (Malaysia) Ltd and Cameron International Malaysia Sdn Bhd. As part of our technical training programmes, we also provide customised long­term training programmes for corporations such as PETRONAS group of companies, Institut Teknologi Petroleum PETRONAS (INSTEP), Petrofac Ltd, Jimah Energy Ventures Sdn Bhd and Teknik Janakuasa Sdn Bhd as well as government bodies such as Manpower Department of Malaysia and Human Resource Development Fund Malaysia. In 2014, we received a grant of RM1.20 million from the Ministry of Finance, Malaysia under the Strategic Action for Youth 1Malaysia Programme to provide a customised training programme. Some of technical training courses that we conducted for the past three financial years including scheduled courses as well as courses that are conducted on an ad-hoc basis depending on customer demand are as set out below: Number of participants Course duration 2013 2014 2013 City & Guilds courses  Competent Rotating Machinery Technician programme  4 months  35  21  31  Advanced Diploma in O&G Operations (Mechanical Maintenance)  18 months  10  Other courses  Say1 Malysia Programme  6 months  30  Fundamental of Precision Alignment Training  3 days  10  Machinery Diagnostic System for Critical Machineries  3 days  5  Practical Approach to Inspection & Maintenance of Pumps  3 days  23  Practical Approach to Precision Alignment Methods  3 days  33  36  Valve Operations I Maintenance I Inspection & Flange Breaking  3 days  20  Vibration Specialist Level 1  4 days  Vibration Practitioner Certification Level 1  4 days  10  24  Vibration Practitioner Certification Level 2  5 days  5
7. BUSINESS OF OUR GROUP (Cont’d) 7.4.4.2 ICT solutions and services The provision of ICT solutions and services are undertaken by our subsidiaries Serba Dinamik IT and Telegistics Asia, which was acquired on 15 January 2015 for RM180,OOO.00. Serba Dinamik IT is principally involved in ICT software and solutions providing mainly industrial ICT applications, while Telegistics Asia is involved in the provision of internet and mobile application solutions for corporate customers. (i) Industrial ICT applications Through our subsidiary, Serba Dinamik IT, we have developed a suite of software packages for industrial applications which are sold either to customers on a standalone basis, packaged with other IT software solutions, or packaged together with our O&M and EPCC contracts. Serba Dinamik IT is an MSC Status company in recognition of its research, development and commercialisation of in-house developed software applications namely, AlignSoft and myPLANT. The description of some of our software and their applications are set out below: Software Brief description Plant O&M Alignment Tool System (AlignSoft)  • •  Solve critical alignment problems quickly, efficiently and economically Assist in performing precision alignment tasks, produce reports, and keep track of such alignment records  Plant Monitoring System (myPLANT)  • •  For operation and maintenance personnel to record, monitor and manage plant equipment information Analyse and use of recorded data to predict the timing for plant maintenance  Risk Based Inspection System (Smart Inspector)  • •  For use by fired and unfired pressure vessels Ensure risk is taken into account when developing inspection plans on equipment  Vibration Condition Monitoring System (VibraSolve)  • •  Condition monitoring system to analyse, monitor, record and manage the level of vibrations of equipment Manage data acquisition and processing, storage and retrieval, analyse data and generate reports  Plant HSE maintenance
Audio Metric Management System  • •  Monitoring of information pertaining to the Audio Metric tests of manufacturing plant workers Aid in providing reports for DOSH  Incident Matrix and Analysis Tool  •  Monitoring of incidences at plant operation.  Personnel Protective Equipment System  • •  Monitoring of all personnel protection equipment and alerts owners when equipment’s expiry dates are approaching Aid in inspection and audit from DOSH  126
7. BUSINESS OF OUR GROUP (Cant’d) Software Brief description Supply base and warehouse management (ii) Barcoding System • Data collection system which tracks all (ActiveRFID) valuable and confidential information Catalogue Album • Inventory management system which System replaces ordinary manual procedures Online Asset Tracking • Tracking systems to optimise productivity of System asset. • Integration of assets including equipment, human resources and Standard Operating Procedures Asset Tracking System • Tracking of asset movement between using Radio offshore and onshore Frequency Identity (ATS-RFID) Internet and mobile application solutions Telegistics Asia became our subsidiary in January 2015 and its principal business is to develop and supply internet and mobile application solutions, also referred to as web-based services mainly for commercial enterprises. The software products that were developed by Telegistics Asia include: (a) live internet broadcasting (Telegistics LiveStream); and
(b) video web conferencing (Telegistics Web Conferencing).

Telegistics LiveStream and Telegistics Web Conferencing have reached commercialisation and have been awarded a certification from TOV Rheinland, a provider of technical safety and certification services. Telegistics LiveStream is a broadcasting system, which telecast live events on a dedicated web-site. In this respect, we have the facilities to provide broadcast crew equipped with video camera, IT infrastructure as well as broadcasting facilities to cater to events such as product launching, training and seminars, company announcements, press releases and signing ceremonies. Thus far, we have only provided this service to financial institutions. Telegistics Web Conferencing is a secured video web conferencing platform, which is installed directly into customers’ servers or behind their own security system such as firewall, for secured communications. With this system, companies are able to organise virtual business meetings with offices or affiliates at different locations while maintaining the security of the information shared. Thus far, we have only provided this service to financial institutions and other commercial sectors. 7. BUSINESS OF OUR GROUP (Cant’d) 7.4.4.3 Supply of products and parts The supply of products and parts forms part of our supporting activities to our O&M and EPCC business operations, as well as for external customers. Through our subsidiaries, we are the exclusive agents of the following companies and their respective products and services: (i)  Capstone for microturbines for  Malaysia, Indonesia and Brunei;  (ii)  Turbine Efficiency Group Ltd Malaysia;  for  Ruston  industrial gas turbines for  (iii)  MeteoGroup Malaysia;  Ireland  Limited  for  weather  forecasting  services  for  (iv)  Psicon BV for pumps and otheand  r re lated products for the UK and Ir an;
(v) SKF AB for monitoring equipment, condition performance based monitoring products and engineering consultancy services in respect of O&M services for Malaysia. 7.4.4.4 Logistics services We have a logistic centre comprising a 1,944 sq metre warehouse and a 25,000 sq metre open yard located within RAK Port in RAK, UAE for the provision of logistics services. This is undertaken by our subsidiary Serba Dinamik RMC FZE. RAK Port is one of the five seaports in RAK, UAE and it operates as a marine supply base for offshore O&G operators. It provides lay-by facilities for barge and workboat operators, cargo-handling services, warehousing and marine maintenance services. We also utilise part of the logistics centre as our service centre. Some of the activities that we carry out include provision of MRO services to vessels that berth at the RAK Port. As at the LPD, we have purchased and installed eight machineries and equipment at our logistics centre to support our maintenance services. Installation of perimeter fencing surrounding Site office at our logistics centre the warehouse in March 2016
For further details on expansion plans for our logistics centre, please refer to Section 7.21.1.2(ii) of this Prospectus. 128 7. BUSINESS OF OUR GROUP (Cont’d) 7.4.5 Production of eNG Part of our business activities is in the production of compressed natural gas or CNG in Muaro Jambi, Sumatra, Indonesia. CNG is natural gas that is compressed to less than 1.00% of its initial volume, while remaining in a gaseous state, making it economically viable for transportation to end-users. The production of CNG is undertaken by our subsidiary, PT Kubic Gasco. We acquired 51.00% equity interest in PT Kubic Gasco on 12 AUgust 2015 for RiIJ13.83 million. On 3 February 2016, PT Kubic Gasco obtained the following licence and permit: (i) a Trade Business Licence issued by the Head of One Stop Integrated Service Agency of Muaro Jambi Regency; and
(ii) a Business Location Permit issued by Head of One Stop Integrated Service Agency of Muaro Jambi Regency.

Our CNG plant is located on a land in Muaro Jambi measuring approximately 11,200 sq metres where we completed the physical construction and installation of equipment in June 2016. It is equipped with facilities including, among others, gas metering station, gas dryer, gas compressors, control room, microturbines, CNG buffer storage, air compressors and a CNG filling station. The natural gas is piped directly into our plant via a 500 metre pipeline from the Simpang Tuan Gas Field which is located nearby our CNG plant. The design capacity of our CNG plant is 2.5 MMSCFO. Please refer to Section 7.6.3 of this Prospectus for further information on production output, capacity and utilisation. A pictorial depiction of our CNG facilities is as set out below: Our CNG plant in Muaro Jambi, Sumatra, Indonesia
On 16 March 2016, PT Kubic Gasco entered into an operational cooperation agreement with Perusahaan Oaerah Muaro Jambi (“PO Muaro Jambi”), a district owned company, to collaborate in the commercial operations of the CNG plant in Muaro Jambi, Sumatra, Indonesia. In the operational cooperation agreement with PO Muaro Jambi, PT Kubic Gasco is responsible for providing financing, manClgement and engineering expertise to develop and operate the plant. As for the role of PO Muaro Jambi in the said agreement, it is responsible for liaising with the government body of Muaro Jambi regency, as well as ensures compliances with the applicable regulations in Muaro Jambi. In the said operational cooperation agreement, PO Muaro Jambi, as the allocation rights holder of the natural gas from the Simpang Tuan Gas Field and the holder of the provisional CNG trading permit, will receive an amount based on an agreed pricing formula for every heat value of unit in million British Thermal Units (“MMBTU”) of CNG sold. On 22 March 2016, PO Muaro Jambi obtained a provisional CNG trading permit for the purpose of equipping the plant’s facilities, running equipment calibration and 7. BUSINESS OF OUR GROUP (Cont’d) preparation of the relevant documents for the commissioning and sales of CNG, pending the issuance of the official trading permit by the first quarter of 2017. PO Muaro Jambi has a gas supply agreement with PT Pertamina EP for the supply of natural gas to support power generation and industries in Muaro Jambi, Sumatra, Indonesia and its surrounding areas. In the said gas supply agreement dated 9 October 2012, PO Muaro Jambi was allocated up to 2.5 MMSCFO of natural gas from the Simpang Tuan Gas Field for a six-year period to supply natural gas amounting to the volume of 5,475 million standard cubic feet (“MMSCF”) commencing from the date of gas-in streaming to our CNG plant. Subsequent to LPO, we commenced operations with the commissioning of our CNG plant and gas-in streaming on 25 November 2016. We, together with PO Muaro Jambi have commenced trading of CNG to two customers subsequent to LPO. Please refer to Annexure A.1 and Annexure B.1 of this Prospectus for details of the licences, permits and approvals for the CNG plant’s operations. 7.5 OUR CONTRACTS For the FYE 2013, FYE 2014 and FYE 2015, only six customers accounted for more than 10.00% or more of our revenue. They are Energy Engineering & Services, PETRONAS Carigali Sdn Bhd, PETRONAS Carigali (Turkmenistan) Sdn Bhd, Energy Machine Services L. L. C., Sarawak Shell Berhad and Petroserv Limited. Please refer to Section 7.7 of this Prospectus for further information. Although we benefit from these clients which provide significant business and growth opportunities for our Group, a significant portion of our Group revenue is also generated from contracts originating from customers other than our Major Customers as set out in Section 7.7 of this Prospectus which individually contributes a lesser contract value than that those from our major customers as set out in Section 7.7 of this Prospectus. The following terms are representative of our typical maintenance contract, although we have a number of contracts and the terms below do not purport to represent any single contract: (i) Term: Contractual period ranging from two to five years and there are renewal terms which are applicable to the contracts subject to further negotiations between the parties.
(ii) Fees: Subject to fixed fees for specified work or a schedule of rates which are essentially a description of a work activities (or task) with a combination of lump sum amounts or fixed unit rates which may be subject to further breakdown based on the daily rates, standby rates, mobilisation and demobilisation rates which represent the rates for the relevant category of labour or personnel requirement on site and at the workshop. As for the scope of works which requires the engagement of services or provision of supplies from third party, the customer will reimburse the actual cost of undertaking the scope of work with an agreed cost plus ‘mark-Up’ or margin or a fixed unit price for any specified spare parts as may be predetermined under the schedule of rates. In instances where the contract stipulates a limit to the total estimated contract value, the predetermined price of contract or estimation does not accurately reflect the contract fees until the requested works as specified under the contract is requested for by the customer.

(iii) Performance guarantee: Upon award of the work order, the customer may request for an irrevocable and unconditional guarantee to be issued to the customer to guarantee the performance of the relevant work order. 7. BUSINESS OF OUR GROUP (Cont’d) (iv) Warranty claims: For the provision of services, we provide warranty for a period of 6 to 12 months from the date of completion of works. This warranty is secured by the performance guarantee provided under the maintenance contracts. In relation to the major equipment, products and parts supplied under the maintenance contracts, i.e. turbines, compressor, transformers, etc., standard warranties are usually provided directly by the suppliers/OEM. Hence, our Group has not been exposed to liability in respect of warranty claims for products and parts. Should there be any claim raised by the customer, we will simultaneously raise a claim against the supplier/OEM. The process on the assessment of the claim will run concurrently between our Group and the customer and the supplier/OEM, in view that any validation of a claim by the Group will only be made if the supplier/OEM validates the same. In the event that the claim has been agreed between the parties, the warranty claim will be covered by the supplier/OEM.
(v) Licensing requirements: In Malaysia, the contracts awarded by the customers impose an obligation on the service providers to maintain and hold a valid license with PETRONAS for the performance of the works throughout the duration of the contract.
(vi) Currency: RM for contracts in Malaysia and USD for contracts outside Malaysia.

(vii) Payment terms: The normal credit period offered is between 30 to 90 days from the date of invoice. (Viii) Exclusivity: Non-exclusive.
(ix) Applicable governing laws: It is determined primarily on the location of the performance of the services/work. However for PETRONAS work orders which are performed outside of Malaysia, the applicable governing laws remain as Malaysia. There has been no warranty claims in relation to maintenance services provided by the Group for the past three financial years and as such no provision is made for warranty claims in the financial statements of the Group. We seek to proactively renew and renegotiate contracts before they expire to ensure business sustainability of our Group as well as to provide us with the financial resources to expand our business. Our relationship with PETRONAS Carigali Sdn Bhd and Sarawak Shell Berhad has existed for 22 and 20 years respectively and we maintain longstanding relationships with several smaller customers, particularly in Malaysia where our operating history is longer. Further as mentioned in Section 7.21 of this Prospectus, our Group is looking at expanding our current operations, where opportunities in O&G, and power generation industries exist, to mitigate against any over dependence on the domestic market by expanding our customer and revenue base over a greater geographical coverage. In regards to EPee contracts, the terms vary from one contract to another. Please refer to Section 7.4.3.2 and Section 7.20 of this Prospectus for information on our EPee contracts. The following terms are representative of provisions typically provided in our EPee contracts, although we have a number of contracts and the terms below do not purport to represent any single contract: (i) Term: The duration of the EPee works ranges between 18 months to 36 months from the date of commencement of works to its completion, depending on the scope of work provided under the EPee contracts. Save and except for variation orders issued under the EPee contracts, there will not be any extension of time. 131 7. BUSINESS OF OUR GROUP (Cont’d) (ii) Fees and payment terms: Consideration for the assigned scope of work is subject to final measurement of the bill of quantities at an agreed schedule of rates. Payments will be made, upon the issuance of certificates of completion by the independent certified auditors, on the agreed milestones as set out in the EPCC contracts. (iii) Performance bond: The EPCC contractor is commonly required to furnish performance security for due performance of the works which may take a form of a performance bonds and/or irrevocable bank guarantees. A parent guarantee may be acceptable as an alternative. The value of the performance security is between 5.00% and 10.00% of the contract sum and it is valid up to 12 months after the expiry of defects liability period or the issuance of the Certificate of Completion, whichever is later. (iv) Warranty claims and defects liability period: We provide warranty for services and products under the EPCC contracts. The defects liability period provided is typically 12 to 24 months from the date of practical completion of the works. In relation to the major equipment, products and parts supplied under the EPCC, i.e. turbines, compressor, transformers, etc., standard warranties are usually provided on a back­to-back arrangement made between us and the customers and the suppliers/OEM. Hence, our Group has not been exposed to liability in respect of warranty claims for major equipment, products and parts. Should there be any claim raised by the customer, we will simultaneously raise a claim against the supplier/OEM. The process on the assessment of the claim will run concurrently between the Group and the customer and the supplier/OEM, in view that any validation of a claim by the Group will only be made if the supplier or OEM validates the same. In the event that the claim has been agreed between the parties, the warranty claim will be covered by the supplier/OEM. There should not be any gap in the timing for settlement of such claim. In addition to the performance bond, the owner may require a design guarantee bond as an additional security against any defects in the design which is valid for a period of two to five years from the date of practical completion of the works.
(v) Liquidated damages: Compensation will be paid the owner if the EPPC contractor fails to complete the works within the stipulated time. Any delay of work which is attributable to the owner will affect their right to claim liquidated damages from the EPCC contractor.
(vi) Currency: RI’J1 for contracts in Malaysia and USD for contracts outside Malaysia.

(vii) Applicable governing laws: Malaysia or such other jurisdiction laws depending on the place of execution of the works. There has been no warranty claim in relation to services and products made qgainst the Group for the past three financial years and as such no provision is made for warranty claim, performance bond or design guarantee bond in the financial statements of the Group. (The rest of this page has been intentionally left blank) 7. BUSINESS OF OUR GROUP (Cont’d) 7.6 BUSINESS AND OPERATIONAL PROCESSES 7.6.1 Process flow for MRO services The process flow for MRO services at our service centres is depicted in the diagram below:
Cleaning, blasting Adjustment and Alignment and and coating calibration balancing
Upon receiving a work order which outlines the overall scope of work from our customers, we will then set up a project team to focus on our customers’ requests. The first process involves the disassembly of the respective parts of the equipment that requires maintenance and/or repair. Subsequently, these parts will be transported to one of our service centres or in the case of a major overhaul, our maintenance team will either transport the equipment to one of our service centres or go on-site to perform the services. Upon receiving the items for maintenance, an inspection will be conducted for diagnosis where we will then prepare an inspection report complete with photographs and recommendation for the necessary maintenance, repair and/or replacement of components and spare parts. The inspection report will then be submitted to the customer for approval along with the unit rate for the recommended services. In some cases, the inspection is conducted together with the customers’ representative or a third-party inspector and  the  scope  of work  will  be  determined  based  on  their  inspection report.  133
7. BUSINESS OF OUR GROUP (Cant’d) After receiving feedback and approval from our customers, the next process involves carrying out the necessary repair services and machining activities. Parts that cannot be repaired will be replaced with new parts that are either sourced from suppliers or provided by customers. Where possible, we will remanufacture parts and components. All repairs are carried out in accordance with specifications of customers or OEM. The next process involves cleaning, blasting and coating to restore the equipment to its original state while adjustment and calibration are undertaken for controls and instrumentation to ensure proper functionality. Our service centre in Paka, Terengganu is equipped with a blasting and spraying chamber and HVOF coating equipment, therefore these activities are undertaken internally. However, for service centres in other locations, we would use third party service providers to carry out blasting and coating services. As for rotating equipment, balancing and shaft alignment processes are undertaken on-site or at our service centres. The next process involves testing and pre-delivery inspection where we will conduct various tests on pumps and valves at our testing pits and valve test stations respectively. A representative from the customer will be present to witness the performance testing process. We may also engage external specialists to conduct non-destructive testing upon the request of customers during this stage. Pre-delivery inspection is then performed as part of the quality assurance and quality checking process before the equipment and its ancillary parts are packaged for delivery to the customer. Finally, a completion report will be drawn up along with a summary of the final costing and invoicing. (The rest of this page has been intentionally left blank) 7. BUSINESS OF OUR GROUP (Cont’d) 7.6.2 Process flow for EPee works Our general process flow for the provision of EPee works is depicted in the diagram below: ProjectTeam and [ Invitation to Bid
J l —————————————–­Discussion and Procurement ofProcurement of [ Clarifications Labour and Sub-EquipmentandJ contractor Services Materials ~ +Project Evaluation [ and Planning for Quality Check Bid Submission J l !Secured Contract [ and Finalise Supply of Materials Agreement J and Services l ———-~——————————­1[ Project Execution J L Monitoring & Inspection
J ~ Testing &[ Commissioning J ~ [ Handover J l [ After Sales Service / Maintenance
Upon receiving invitations to submit a bid to tender for works, a project team would be assigned to put together a submission detailing the project’s scope of work, timeline, and expected cost. The project team is then tasked with attending briefings, holding discussions, and seeking clarifications pertaining to the requirements and specifications of the customer. This is followed by the next process of project evaluation and planning process which involves a thorough assessment of the requirements and specifications specified in the invitation to bid, such as type of processing plants or facilities, location and layout of plant and facility, installation procedures and potential complications and risks involved. Subsequently, the project team would then recommend the types of products required depending on the type of project, for example rotating and static equipment, control system and instrumentation and the relevant technical specifications inclusive of the estimated costs, expenses and timeline for delivery. All this information will be included in the submission. Upon the successful award of the contract, the project team would then finalise the agreement with the customer in terms of the required specifications, detailed design, fabrication, installation and commissioning. 135 7. BUSINESS OF OUR GROUP (Cont’d) The next process is in project execution which encompasses procurement of equipment and materials. The process would also include conducting quality checks on the materials before they are delivered on-site. Additionally, this process would involve procurement of labour and suppliers for services including among others, civil and structural works, and wiring and electrical works. During this stage, suppliers and service providers would be assessed and appointed based on several criteria such as reliability, past performance, track record, quality and pricing. During the process of carrying out the works, project managers are usually assigned to monitor the work in progress and carry out inspections to ensure that the works are in accordance to customers’ requirements and specifications. Suppliers, in particular civil and structural contractors, are also monitored to ensure that the construction works are done according to schedule. The testing and commissioning process depending on the project requirements which may involve testing and identifying or rectifying any shortcomings or issues relating to among others, the rotating or static equipment, instrumentation or piping system. Once the plant facilities and systems are commissioned and are fully operational, the project can be officially handed over to the customer. We also provide after-sales service to our customers including standby technical support, warranty, training and maintenance. 7.6.3 Production output, capacity and utilisation Generally, production output, capacity and utilisation are not applicable to our business activities as we are primarily a service based company, with the exception of our CNG plant. The design capacity of our CNG plant in Muaro Jambi, Sumatra, Indonesia is 2.5 MMSCFD. Pending the issuance of the official trading permit, our CNG plant’s permitted capacity is 1 MMSCFD based on the provisional trading permit issued to PO Muaro Jambi. SUbsequent to the LPD, we commenced operations of the CNG plant on 25 November 2016. As the CNG plant has just commenced operations, it is too preliminary at this stage to provide production output and utilisation. (The rest of this page has been intentionally left blank) I Company No.: 1167905-P I 7. BUSINESS OF OUR GROUP (Cont’d) 7.7 MAJOR CUSTOMERS The table below lists the customers which contributed 10.00% or more of our revenue in FYE 2013, FYE 2014, FYE 2015 and FPE 2016: Approximate FYE 2013 FYE 2014 FYE 2015 FPE 2016 Geographical length of % of %of %of % of segment relationship Revenue group Revenue group Revenue group Revenue group Customer name served (Years) (RM ‘000) revenue (RM ‘000) revenue (RM ‘000) revenue (RM ‘000) revenue PETRONAS Carigali Malaysia 22 119,068 22.21 152,004 20.11 217,632 15.51 138,951 15.24 Sdn Bhd PETRONAS Carigali (Turkmenistan) Sdn Turkmenistan 3 80,945 15.10 123,689 16.37 166,401 11.86 72,008 7.90 Bhd Sarawak Shell Malaysia 20 62,556 11.67 50,140 6.63 85,646 6.10 30,663 3.36Berhad Energy Engineering & UAE, Qatar 4 –20,242 2.68 224,197 15.98 23,108 2.53Services Energy Machine Oman 4 59,538 7.88 157,826 11.25 9,306 1.02Services L.L.C Petroserv Limited Qatar 10 57,981 10.81 33,709 4.46 26,568 1.89 For the FYE 2013, FYE 2014, FYE 2015 and FPE 2016, the customers that contributed 10.00% or more of our revenue were PETRONAS Carigali Sdn Bhd, PETRONAS Carigali (Turkmenistan) Sdn Bhd, Sarawak Shell Berhad, Energy Engineering & Services, Energy Machine Services L.L.C., and Petroserv Limited. Although our top customer, PETRONAS Carigali Sdn Bhd may represent 15.51 % and 15.24% of our total revenue for FYE 2015 and FPE 2016 respectively, we are not dependent on any single one of our major customers. PETRONAS Carigali Sdn Bhd is principally involved in the O&G exploration, development and production in Malaysia. We have been providing services to PETRONAS Carigali Sdn Bhd for approximately 22 years including O&M services, EPCC works and other products and services. 137 I Company No.: 1167905-P 7. BUSINESS OF OUR GROUP (Cont’d) Revenue from PETRONAS Carigali Sdn Bhd increased from RM119.07 million for FYE 2013 to RM152.00 million for FYE 2014, and continued to increase to RM217.63 million for FYE 2015. This was mainly contributed by the increase in work orders pertaining to the following contracts: (i)  MRO services for rotating equipment in Peninsular Malaysia, Sabah and Sarawak operations;  (ii)  MRO services for gas compressor inclusive of specialist and parts supply;  (iii)  MRO services and technical support for compressor;  (iv)  MRO services for microturbine generator at J4 platform;  (v)  MRO services for microturbine.
In addition, the increase in revenue from PETRONAS Carigali Sdn Bhd was contributed by EPCC works for the supply, installation, testing and commissioning of bar coding and material album system. For the FPE 2016, revenue from PETRONAS Carigali Sdn Bhd amounted to RM138.95 million mainly due to continuing work orders pertaining to the said contracts for MRO services and EPCC works. Energy Engineering & Services is an engineering and contracting company in the Middle East. We have been working with Energy Engineering & Services for approximately four years in terms of providing O&M services to O&G customers in UAE and Qatar. Revenue from Energy Engineering & Services increased from RM20.24 million for FYE 2014 to RM224.20 million for FYE 2015, which was mainly attributed to an increase in maintenance works in relation to the contract for MRO of pressure testing, COTP, safety relief valve and other associated rotating equipment in UAE and Qatar. For FPE 2016, revenue from Energy Engineering & Services amounted to RM23.11 million contributed by continuing maintenance works in relation to the said contract. The validity of the said contract is until August 2017. PETRONAS Carigali (Turkmenistan) Sdn Bhd is principally involved in the O&G exploration, development and production in Turkmenistan. We have been providing O&M services to PETRONAS Carigali (Turkmenistan) Sdn Bhd for approximately three years. Revenue from PETRONAS Carigali (Turkmenistan) Sdn Bhd increased from RM80.95 million for FYE 2013 to RM123.69 million for FYE 2014, and continued to increase to RM166.40 million for FYE 2015. This was mainly due to an increase in maintenance works carried out on MRO services for rotating equipment in Turkmenistan. For FPE 2016, revenue from PETRONAS Carigali (Turkmenistan) Sdn Bhd amounted to RM72.01 million contributed by the said MRO services for rotating equipment in Turkemenistan. The contract of this MRO for rotating equipment in Turkmenistan is valid until July 2016. Energy Machine Services L.L.C is an engineering and contracting company in Oman. We have been working with Energy Machine Services L.L.C. for approximately four years providing a range of services including O&M services and other products and services to O&G customers in Oman Revenue from Energy Machine Services L.L.C increased from RM59.54 million for FYE 2014 to RM157.83 million for FYE 2015. This was mainly attributed to an increase in orders for the supply of spare parts for Ruston gas turbines in Oman. For FPE 2016, revenue from Energy Machine Services L.L.C. amounted to RM9.30 million attributed to orders for the supply of spare parts for Ruston gas turbines in Oman. The said contract with Energy Machine Services L.L.C is valid until March 2017. 138 I Company No.: 1167905-P 7. BUSINESS OF OUR GROUP (Cont’d) Sarawak Shell Berhad is principally involved in O&G exploration, development and production in Malaysia. We have been providing services to Sarawak Shell Berhad for approximately 20 years including O&M services, EPCC works and other products and services. Revenue from Sarawak Shell Berhad decreased from RM62.56 million for FYE 2013 to RM50.14 million for FYE 2014. This was mainly due to the completion of work orders pertaining to MRO services for rotating equipment, as well as the fulfilment of orders for the supply and delivery of microturbine generators during FYE 2013. For FYE 2015, revenue from Sawarak Shell Berhad increased to RM85.65 million, mainly due to EPCC works relating to design, supply and delivery of microturbine generators for E6 field development project. For FPE 2016, revenue from Sarawak Shell Berhad amounted to RM30.66 million, mainly due to revenue recognised for the said EPCC works as well as continuing work orders pertaining to MRO services of rotating equipment. Petroserv Limited is an engineering and contracting company in Qatar. We have been working with Petroserv Limited for approximately 10 years in terms of proViding O&M services to O&G customers in Qatar. Revenue from Petroserv Limited decreased from RM57.98 million for FYE 2013 to RM33.71 million for FYE 2014 and continued to decrease to RM26.57 million for FYE 2015. This was mainly attributed to the fulfilment of work orders pertaining to MRO services for rotating equipment in Qatar. Although we have continuing work orders from Petroserv Limited for the provision of MRO services for rotating equipment in Qatar, however we have yet to recognise revenue from the said work orders for FPE 2016. 7.8 MAJOR SUPPLIERS The table below lists the suppliers which accounted for 10.00% or more of our Group’s total purchases in FYE 2013, FYE 2014, FYE 2015 and FPE 2016 were as follows: Approximate FYE 2013 FYE 2014 FYE 2015 FPE 2016 length of Geographical relationship Purchases % of total Purchases % of total Purchases % of total Purchases % of total Supplier name Segment (Years) (RM ‘000) purchases (RM ‘000) purchases (RM ‘000) purchases (RM ‘000) purchases Technorette Sdn Malaysia 7 104,852 22.35 150,230 21.71 199,335 17.34 127,261 14.38 Bhd(I) FRZ Scientific Sdn Malaysia 9 76,790 16.37 125,984 18.21 131,886 11.48 96,865 10.95 Bhd Qatar Engineering & Qatar, KSA 4 8,737 1.86 11,604 1.68 95,394 8.30 88,713 10.02Construction Company W.L.L D-Multiserve Malaysia 4 78,202 11.30
Resources Sdn Bhd
139 I Company No.: 1167905-P I 7. BUSINESS OF OUR GROUP (Cont’d) Note:  (1)  For the FYE 2013, FYE 2014, FYE 2015 and FPE 2016, Technorette Sdn Bhd has been a major supplier to our Group. Datin Nur Aisyah being the spouse of Data’ Karim, was previously a major shareholder of Technorette Sdn Bhd. Datin Nur Aisyah had on 1 December 2015, disposed her entire equity interest in Technorette Sdn Bhd to third parties.
For the past three financial years and latest financial period under review, the increase in purchases from our three major suppliers, namely Technorette Sdn Bhd, FRZ Scientific Sdn Bhd and Qatar Engineering & Construction Company W.L.L was mainly attributed to the increase in purchases of parts, consumables, tools, equipment and services used in our operations, namely O&M operations and EPCC works. The increase in our purchases is in tandem with the increase in cost of operations and revenue. Technorette Sdn Bhd, FRZ Scientific Sdn Bhd, Qatar Engineering & Construction Company W.L.L and D-Multiserve Resources Sdn Bhd accounted for more than 10.00% of our Group’s total purchases for the FYE 2013, FYE 2014, FYE 2015 and FPE 2016. The said companies have been our suppliers for a period of between four and nine years, which indicates a stable business relationship. Our purchases from these suppliers are mainly parts, consumables, tools, equipment and services. We are not dependent on any of our major suppliers for the operations of our business as the supply of parts, consumables, tools, equipment and services are general products and services that can be sourced from other suppliers. Technorette Sdn Bhd is principally involved in the supply of mechanical, electrical and instrumentation equipment and accessories. We purchased various equipment, parts, tools and consumables such as, among others, power generation and transmission equipment and parts, instrumentation and control equipment and parts, and tools and consumables from Technorette Sdn Bhd. FRZ Scientific Sdn Bhd is principally an import and export as well as general trading company. We purchased various equipment, parts, tools and consumables such as, among others, power generation and transmission equipment and parts, instrumentation and control equipment and parts, and tools and consumables from FRZ Scientific Sdn Bhd. Qatar Engineering & Constrution Company W.L.L is an engineering and construction company providing total solutions to its clients in the oil and gas industries focusing on industrial projects, maintenance services and mechanical fabrication. We purchased various equipment, parts, tools and consumables such as, among others, power generation and transmission equipment and parts, instrumentation and control equipment and parts, and tools and consumables, as well as minor services from Qatar Engineering & Construction Company W.L.L. D-Multiserve Resources Sdn Bhd is principally involved in logistics and transportation services. We purchased various equipment, parts, tools and consumables such as, among others, power generation and transmission equipment and parts, instrumentation and control equipment and parts, and tools and consumables from D-Multiserve Resources Sdn Bhd. 140 7. BUSINESS OF OUR GROUP (Cont’d) 7.9 SALES AND MARKETING We are positioned as an energy services group with operations including O&M, EPCC and other products and services. We operate in the energy industry including O&G and power generation industries. We continue to adopt the following approaches to identify new opportunities in Malaysia as well as overseas: (i) registration of interest with PETRONAS and its subsidiaries, PSC, RSC, EPCC contractors and service providers in the O&G industry in Malaysia and overseas;
(ii) registration of interest with oil majors in the respective countries of operation including among others, PT PERTAMINA in Indonesia, Saudi Aramco, Petroleum Development Oman, Qatar Petroleum, Kuwait Petroleum Corporation and Bahrain Petroleum Company;

(iii) establish strategic business alliances working with among others, EPCC contractors, engineering companies and other maintenance service providers in Malaysia and overseas; (iv) registration of interest with state-owned power producers in Malaysia and overseas;
(v) undertake road shows overseas with proactive sales visits to existing and potential customers;
(vi) participate in local and overseas exhibitions, conferences and seminars to grow customer base and foster relationship with existing customers and business partners; and

(vii) undertake public relations exercises through press conferences and releases. As part of our marketing and promotional strategy to raise our profile, we participate in conferences and exhibitions in related areas. Some of these events that we have participated since 2013 and up to the LPD are listed below: Year Name of Event Location 2013 Total Plant Management Conference Doha, Qatar 2013 Ageing Plant Strategies by Trueventus Kuala Lumpur, Malaysia 2013 Asset Integrity Management Summit Asia 2013 Kuala Lumpur, Malaysia 2014 Rotating Equipment Reliability and Maintenance Conference AI Khobar, KSA 2014 HRDF Conference & Exhibition Sarawak, Malaysia 2015 Shell Malaysia Safety Day 2015 Sarawak, Malaysia 2015 Shell Malaysia Safety Day 2015 Sabah, Malaysia 2016 Sabah Shell HSSE Engagement Day Labuan, Malaysia 2016 Shell Malaysia Safety Day 2016 Sarawak, Malaysia 2016 GLC Explorace 2016 Kuala Lumpur, Malaysia 2016 Biogas Asia Pacific Forum Kuala Lumpur, Malaysia 7. BUSINESS OF OUR GROUP (Cont’d) 7.9.1 Distribution channel We adopt a direct and indirect distribution channel strategy to reach our customers. Generally, we submit bids to tender for contracts directly with plant owners or operators as well as indirectly through main EPCC contractors and maintenance service providers. For O&M services in Malaysia, we mainly adopt a direct distribution channel approach where we work with plant owners or operators. They primarily include national oil company, PETROI\JAS and its subsidiaries and other PSC and RSC operators. For EPCC works in Malaysia, we mainly adopt an indirect distribution channel approach where we work with main contractors. For O&M services and EPCC works overseas, we mainly adopt an indirect distribution channel approach where we work with foreign business partners comprising primarily main contractors and engineering companies to provide services to plant owners and operators. Engineering companies would typically engage our Group to provide O&M services and EPCC works as they either do not have the expertise or resources to perform such services. 7.10 SEASONALITY Generally, our business is not affected by seasonality as work orders may be given to us at any time during the year. Further, we have contracts from different countries and customers from O&G and power generation industries, diversifying our source of revenue. 7.11 BUSINESS INTERRUPTIONS We did not encounter any material business interruptions during the past 12 months of our operations prior to the LPD. 7.12 R&D 7.12.1 Our approach on R&D Our approach on R&D activities for the past three FYE 2013, FYE 2014 and FYE 2015 is focused on the development of software solutions and applications to complement our O&M business operations as well as for the sale to external customers. The objective is to provide our customers with software tools or systems to assist them in managing the performance of their plant operations. In this respect, R&D activities are undertaken by our subsidiaries, Serba Dinamik IT and Telegistics Asia primarily on the following areas: (i) development of software solutions for industrial applications such as plant maintenance, plant HSE management as well as supply base and warehouse management; and
(ii) development of web-based platform for commercial applications.

7. BUSINESS OF OUR GROUP (Cont’d) 7.12.2 Achievements in R&D We have developed for commercial use the following industrial software applications that are used in the management of plant operations: (i) AlignSoft is an alignment tool system which consists of both hardware and software designed for technicians and engineering personnel to perform precision alignment on rotating equipment and to reduce misalignment problems;
(ii) myPLANT is a software that facilitates the collection of data and information on plant equipment allowing users to compare historical trends to monitor the performance of plant equipment over time;

(iii) VibraSolve is a vibration condition monitoring system comprising both hardware and software used to analyse, monitor, record as part of the management of rotating equipment in plants; and (iv) Smart Inspector is an inspection system to assess the risk for fired and unfired pressure vessels. The above IT software were developed and commercialised by our subsidiary, Serba Dinamik IT, which is certified with MSC status. In addition, we have developed and commercialised the following web-based applications through our subsidiary, Telegistics Asia: (i) live internet broadcasting (Telegistics LiveStream), a broadcasting system for live events; and
(ii) video web conferencing (Telegistics Web Conferencing), a secured web conferencing platform.

Some of the on-going R&D activities include the development of the following software applications: (i) advanced GPS tracking;
(ii) driver monitoring and profiling;

(iii) event driven device to cellular network performance monitoring; (iv) mobile application development; and
(v) green technologies (hardware).

7.12.3 R&D facilities, personnel and expenditure Our Group does not have dedicated R&D facilities or personnel. For the FYE 2013, FYE 2014, FYE 2015 and FPE 2016, we did not recognise any expenditure that is specific to R&D activities. 7.12.4 Relevant technologies We do not utilise any major technologies in our business operations. In addition to our software solutions which are used to facilitate our O&M operations, we apply our disciplines in mechanical, electrical and electronics engineering to undertake our O&M, EPCC and process control and instrumentation business operations. 143 7. BUSINESS OF OUR GROUP (Cont’d) 7.13 INSURANCE We maintain insurance at levels that we believe are customary in the industries in which we operate to protect against various losses and liabilities that may arise from the risks and hazards of our businesses, including fire, flood and accident. We maintain insurance, to cover, among others damage to the equipment, all risks and workers compensation. We generally maintain worker’s compensation insurance in respect of death or injury to our employees in accordance with the Malaysian worker’s compensation ordinance. To determine appropriate insurance policies and levels of insurance coverage, we regularly employ risk management for purposes of analysing the risks faced by our businesses. (The rest of this page has been intentionally left blank) I Company No.: 1167905-P I 7. BUSINESS OF OUR GROUP (Cant’d) 7.14 TECHNOLOGY AND INTELLECTUAL PROPERTY Save as disclosed below, as at the LPD, we do not have any brand names, patents, trademarks, technical assistance agreements, franchises and other intellectual property rights. 7.14.1 Registered trademarks We use a number of trademarks in connection with our business. We have also registered the following trademarks which are used in our operations and businesses: Registration Place of Date of Registrationl No. Trademark Owner no. registration Validity period Class of trademark 1. Serba 06005266 Malaysia 3 April 2006 1 Expiring Class 9 -computer software mainly for field Dinamik on 3 April 2026 engineers or technicians to perform, generate and document their alignmentrmrmzm works. 2. Serba 09022411 Malaysia 21 December 20091 Class 42 computer hardware and Dinamik Expiring on 21 software such as condition monitoringVibraSolve December 2019 system which is used to monitor, record and manage the vibration condition of an equipment to ensure the condition monitoring of machinery based on the measurement of vibration, which is integrated through a local network area. 3. Serba 2010005307 Malaysia 29 March 2010 1 Class 7 -Machines and machine tools Dinamik Expiring on 29 March which includes generators of electricity.f-Gen 2020 7.14.2 Patents and other intellectual property We are not dependent on any patents or other intellectual property for the operation of our business. 7.14.3 Dependency on licenses, trademarks, patents and other intellectual property Save as disclosed in Annexure A of this Prospectus, our Group is not dependent on any other major licences, permits, registrations and other intellectual property rights for our business operations. 145
7. BUSINESS OF OUR GROUP (Cont’d) 7.15 EMPLOYEES 7.15.1 Employee segmentation by job function Our Group’s employee segmentation by job function as at the FYE 2013, FYE 2014, FYE 2015 and the LPD are as follows:  Malaysia’s operations Managerial and professional  FYE 2013 47  FYE 2014 56  FYE 2015 72  As at the LPD 76  Technical and supervisory Engineers -Technical and service personnel -Quality control/HSE personnel Clerical and administrative Sales and marketing Malaysia total  18 181 5 47 2 300  24 239 15 49 1 384  33 298 24 72 2 501  44 347 40 92 2 601  Overseas operations Managerial and professional  5  11  14  15  Technical and supervisory Engineers -Technical and service personnel Quality control/HSE personnel Others Clerical and administrative Sales and marketing Overseas total  8 37 4 17 4 75  13 138 8 26 5 201  7 209 9 8 34 6 287  8 163 9 3 36 3 237  Group total  375  585  788  838  (The rest of this page has been intentionally left blank)
7. BUSINESS OF OUR GROUP (Cant’d) 7.15.2 Employee segmentation by geographical location Our Group’s employee segmentation by geographical location as at the FYE 2013, FYE 2014, FYE 2015 and the LPD are as follows: As at the FYE 2013 FYE 2014 FYE 2015 LPD Malaysia operations Bintulu 83 94 119 189 Johor 15 Kemaman 13 28 43 40 Kota Kinabalu 1 2 24 30 Labuan 67 77 78 74 Miri 23 33 46 48 Paka 53 69 77 112 Shah Alam 60 81 114 93 Malaysia total 300 384 501 601 Overseas operations Indonesia 69 183 265 208 Bahrain 4 9 12 18 UK 2967 Brunei 4 4 Overseas total 75 201 287 237 375 585 788 838Group total Our Group’s total number of employees increased from 375 as at FYE 2013 to 585 as at FYE 2014 was as a result of expansion of our business. The increase in number of employees was mainly in vacancies relating to technical and supervisory roles such as engineers, technical and service personnel and quality control/HSE personnel. In addition, the increase in the number of employees was attributed to overall increase in both the Malaysia operations as well as overseas operations, in particu lar Indonesia where the increase was mainly attributed to the additional contract workers hired to meet the increase in work orders and to cope with the company’s expansion plans in Indonesia. Our Group’s total number of employees continued to increase from 585 employees as at FYE 2014 to 788 employees as at FYE 2015 in line with our expansion in both Malaysia operations and overseas operations. Similar to FYE 2014, the expansion of workforce was mainly in the technical and supervisory roles dominated by contract workers in Indonesia to meet the demand of work orders as well as the increase due to the acquisition of PT Kubic Gasco. There was also an increase in employees in the managerial and professional roles as well as clerical and administrative staff in our head office in Shah Alam to handle the administrative matters as a result of our overall business expansion. As at the LPD, our total employees increased from 788 employees to 838 employees due to the increase of technical and service personnel as our contract workers composition may change from time to time to suit the operations requirement. There was also an increase in the number of employees in quality control/HSE personnel to meet the requirements of the work orders in hand. As at the LPD, we have a total workforce of 838 employees, of which consists of 477 permanent and 361 contractual employees. As at the LPD, none of our employees are represented by any union and we have not experienced any disruptions due to labour disputes in the past. 147 7. BUSINESS OF OUR GROUP (Cant’d) 7.15.3 Training and development We are committed towards developing human capital and they have an important role in the continuing growth and success of our Group. To achieve this, we have put in place a human resource plan to ensure our Group is able to retain its existing skilled employees and attract new talents to be a part of its dynamic team. Our employees at all levels are given access to training and educational resources to enhance their professional development. As part of the human resource plan, our employees are encouraged to attend internal and external training, in order to enhance their technical skills and knowledge as well as to ensure that they are kept abreast with the developments of their respective fields and in our business of O&M services and EPCC works. We aim to continue investing in our employees as we are committed to deliver quality and proficient services to our customers. We also conduct training programmes jointly with City & Guilds, a training institution with distinct records of training programs recognised globally. Also, our collaboration with the Engineering Construction Industrial Training Board of UK further adds value and credential to the training programs that we have conducted so far for our employees. 7.16 ENVIRONMENTAL MATTERS, SAFETY, HEALTH AND QUALITY ASSURANCE 7.16.1 Environmental matters As a service based group, we do not generate a material amount of scheduled waste with the exception of the following types of wastes in our service centres in Malaysia as at LPD: (i) spent lubricating oils from our machines;
(ii) contaminated cotton rags from general cleaning and maintenance of the machines; and

(iii) empty paint containers from our blasting and coating activities. In Malaysia, we have engaged Kualiti Alam Sdn Bhd and Hiap Huat Chemicals Sdn Bhd, which are licensed waste management companies to dispose of the above wastes. As at LPD, there is minimal waste generated from our service centre in Bahrain. As for our CNG plant, we are subjected to environmental regulations under Upaya Pengelolaan Lingkungan-Upaya Pemantauan Lingkungan (UKL-UPL) herein referred to as Environmental Management Effort-Environmental Monitoring Effort category for business activities which have a lesser impact on the environment but which still requires an environmental approval. In 25 October 2013, we have obtained approval from Environmental Agency Regency of Muaro Jambi regarding the Recommendation of Environmental Management Effort-Environmental Monitoring Effort Gas Utilisation Activity for CNG Mother Station Capacity 2.5 MMSCFD. 7. BUSINESS OF OUR GROUP (Cant’d) 7.16.2 HSE management HSE management is an important consideration in our business operations as maintaining a good HSE record and complying with industry HSE standards are part of our commitment and assurance to our customers. In that respect, our subsidiaries, Serba Dinamik and Serba Dinamik International, has obtained the following HSE certifications: Validity Company Standard Activity Issuing party period Serba Dinamik OHSAS Provision of on-site IQNet and 4 September 18001 : maintenance, servicing SIRIM QAS 2014 to 3 2007 and overhauling for all International September kinds of turbo machinery Sdn Bhd 2017 and instrumentation ISO Repair, maintenance, Bureau Veritas 23 December 14001 : installation and Certification 2015t014 2004 commissioning of rotating (Malaysia) Sdn September equipment and related Bhd 2018 plant Serba Dinamik OHSAS Provision of maintenance IQNet and 5 June 2014 International 18001 : and services for SIRIM QAS to 2007 mechanical equipment International 4 June 2017 (rotating and static) Sdn Bhd ISO Provision of maintenance IQNet and 5 June 2014 14001 : and services for SIRIM QAS to 2004 mechanical equipment International 4 June 2017 (rotating and static) Sdn Bhd In recognition of our efforts to implement and maintain our HSE standards, the following are some of the awards and recognition that we have received from our customers: Customerl Year Awarding body Awards and recognition 2005  GE Oil & Gas Nuovo Pignone  2007  BP Chemicals (Malaysia) Sdn Bhd  2008  PETRONAS  2008  Ethylene Malaysia Sdn Bhd and Polyethylene Malaysia Sdn Bhd
Appreciation for the successful completion of Qatargas Debottlenecking Project Train 1 shutdown as it was completed 5.5 days ahead of schedule without any lost time injury Appreciation for services offered during plant shutdown in 2007 where work was completed safely without any minor or major incidents PETRONAS Group HSE awards for year 2007/2008 minor contractor category (merit award) in recognition of provision of maintenance of rotating equipment 13th shutdown from 18th Aug to 3rd Sept 2007 at PETRONAS Methanol Labuan Sdn Bhd Appreciation in contributing to the achievement of 963,000 million safe manhours of work in 4th turnaround 2008 and 5.35 million contractor’s safe manhours without lost time injury since 2004 7. BUSINESS OF OUR GROUP (Cont’d) Customerl Year Awarding body Awards and recognition 2009 PETRONAS PETRONAS GROUP HSE and sustainability awards for year 2009/2010 minor contractor safety category (merit award) in recognition of inculcating quality and HSE into every work process 2010 Malaysia Society for SME OSH award in 2010 with three star rating Occupational Safety and Health 2010 PETRONAS PETRONAS GROUP HSE and sustainability development awards for year 2009/2010 minor contractor category (merit award in safety) in recognition for enhancement of HSE and quality during hydrogen production unit 1 revamp project at PETRONAS Penapisan (Melaka) Sdn Bhd 2010 PETRONAS Certificate of appreciation for the completion of Penapisan (Melaka) cogeneration plant (heat recovery steam generator) Sdn Bhd certificate of fitness renewal in 2010 with 15,000 safe manhours without lost time injury and delay 2013 Malaysia LNG Sdn Token of appreciation for the participation and sharing at Bhd the MLNG Contractor HSE Workshop 2013 2015 Metix Malaysia Sdn Certificate of achievement for the contribution of 13,028 Bhd safe manhours without lost time injury towards the completion of the Sakura Ferroalloy project which has reached a total of 2 million safe manhours without lost time injury 2015 PETRONAS Appreciation award in recognition of excellent Chemicals Ammonia performance in unplanned shutdown in November 2015 Sdn Bhd in terms of schedule, HSE and quality 2015 PETRONAS Contractor Outstanding Behaviour and Recognition Chemicals Ammonia Award (COBRA) 2015 (Gold Award) for outstanding Sdn Bhd performance in HSE from July to December 2015 7.16.3 Quality management system We place significant emphasis on service quality and adhere to stringent quality standards. This is reflected by the fact that our subsidiaries, Serba Dinamik, Serba Dinamik International and Quantum Offshore are accredited with the following quality management systems: Company  Standard  Activity  Issuing party  Validity period  Serba  ISO 9001:  Provision  of  engineering  IQNet and  9 February 2016  Dinamik  2008  maintenance  services,  SIRIM QAS  to 14 September  construction and fabrication for  International  2018  mechanical,  instrumentation,  Sdn Bhd  piping and static equipment  Serba  ISO 9001:  Provision of maintenance and  IQNet and  5 June 2014 to  Dinamik  2008  services  for  mechanical  SIRIM QAS  4 June 2017  Internatio  equipment (rotating and static)  International  nal  Sdn Bhd  Quantum  ISO 9001:  Design and manufacture of fire  DNV Business  6 December 1996  Offshore  2008  pumps and power generation  Assurance  to 6 June 2017  systems  to  the  offshore  industry  150
7. BUSINESS OF OUR GROUP (Cant’d) As part of our quality assurance policy, we have formed an internal committee a quality management assurance team that is responsible for periodically reviewing our processes and standards to ensure that the quality standards are maintained. 7.17 SOURCES AND AVAILABILITY OF RAW MATERIALS OR INPUT As a provider of engineering solution services, we mainly utilise equipment, parts, tools, consumables and services as our main input materials to facilitate the provision of O&M services and EPCC works. Some of these equipment, parts, tools consumables, and services among others, include: (i) power generation and transmission equipment and parts such as steel diaphragms and its components for rotating equipment, turbines, burners, blades, rotor sets, motors, drive assembly and shaft parts;
(ii) instrumentation and control equipment and parts such as valves, pumps and related products, controllers, chemical dosing pots, gauge pressure equipment;

(iii) tools and consumables such as sealing materials, industrial fasteners, cables and connectors; and (iv) services are amount paid to suppliers for their supply of parts and provision of services. 7.18 GOVERNING LAWS AND REGULATIONS Our business is regulated by, and in some instances required to be licensed under specific laws of the countries that we operate in. The relevant laws and regulations governing our Group and which is material to our operations are summarised below. The following does not purport to be an exhaustive description of all relevant laws and regulations of which our business is subject to. 7.18.1 Governing laws and regulations relating to the O&G industry (i) PDA and the Petroleum Regulations The PDA vested in PETRONAS the entire ownership in and the exclusive rights, powers and privileges of exploring, exploiting, winning and obtaining petroleum which includes hydrocarbons, natural gas and bituminous shales, onshore or offshore of Malaysia. Companies who participate in activities relating to the exploration and production of petroleum in Malaysia are obliged to enter into a PSC with PETRONAS. Amongst the PSC contractors operating in Malaysia, PETRONAS Carigali Sdn Bhd is involved in exploration, development and production of hydrocarbons and generally all O&G activities taking place prior to the processing and refining of hydrocarbons. The PDA has spawned a whole support industry, which provides services and products to PSC contractors. Contractors and suppliers who wish to participate in any business or services to supply of equipment, facilities and services to the upstream O&G activities are first required to register with PETROI\JAS’ Licensing and Registration Department pursuant to the Petroleum Regulations and must also obtain a licence from PETRONAS. 7. BUSINESS OF OUR GROUP (Cont’d) Since we provide maintenance services to offshore O&G industry, and in particular, to PSC contractors, we are registered with PETRONAS and we have a valid licence to provide such services as required under the Petroleum Regulations. We are aware that failure to maintain valid licences or to comply with any condition of such licences shall make us liable to a fine not exceeding RM50,000.00 or to imprisonment for a term not exceeding two years or to both and in the case of a continuing offence, we shall be liable to a further fine of RM1,000.00 for each day or part of a day during which the offence continues. 7.18.2 Other relevant Malaysian legislation (i) OSHA Under the OSHA, our Group, has a general duty to our employees to provide and maintain the plants and systems of work that are, so far as is practicable, safe and without risks to health, provide information, instruction, training and supervision to ensure, so far as is practicable, the safety and health of our employees at work; and to provide a working environment, which is as far as possible safe, without risks to health, and adequate as regard facilities for their welfare at work. We also have a duty to ensure, so far as is practicable, that other persons, not being our employees, who may be affected are not thereby exposed to risks to their safety or health. The promulgation of the OSHA is based on a self-regulation scheme with the primary responsibility of ensuring safety and health at the workplace lying with those who create the risks and work with the risks. In line with the requirements of the OSHA, we have employed a competent person to act as the safety and health officer for the purposes of ensuring the due observance and the promotion of a safe conduct of work at the place of work. There is also the requirement to establish a safety and health committee under the OSHA as we currently employ more than 100 employees. The general penalty under the OSHA provides that a person who by any act or omission contravenes any provision under the OSHA or any regulations made thereunder shall be guilty of an offence and where no penalty is expressly provided shall, on conviction, be liable to a fine not exceeding RM1 0,000.00 and/or to imprisonment for a term not exceeding one year and in the case of a continuing offence, to a fine not exceeding RM1 ,000.00 for every day or part of a day during which the offence continues after conviction. (ii) Employment Act, 1955 The Employment Act, 1955 governs the law on the employment contracts entered into between employer and employee in Peninsular Malaysia and Federal Territory of Labuan, Malaysia. Our Group employs a vast amount of workers, in management as well as at operational level. As such, the Employment Act, 1955 is important as it also stipulates the laws on foreign workers and contractors. 7. BUSINESS OF OUR GROUP (Cont’d) (iii) FMA The FMA governs the registration and inspection of cranes and other machinery used by our Group in its day-to-day operations. We have a duty to ensure that the machineries used in carrying out our operations are in good condition and must be registered under The Factories and Machinery (l\Jotification, Certificate of Fitness and Inspection) Regulations, 1970. In this regard, we are not allowed to operate or permit to be operated any machinery in respect of which a certificate of fitness is prescribed, unless there is in force in relation to the operation of that machinery, a valid certificate of fitness issued by the DOSH. Any person who operates machinery without a valid certificate of fitness shall be gUilty of an offence and shall be liable to a fine not exceeding RM150,000.00 or to imprisonment for a term not exceeding three years or to both. (iv) EQA The EQA restricts pollution of the atmosphere, noise pollution, pollution of the soil, pollution of inland waters without a licence, prohibits the discharge of oil into Malaysian waters, discharge of wastes into Malaysian waters without a licence and prohibits open burning. The agencies responsible for implementing and monitoring Malaysia’s environmental regulations and policies are the Malaysian Department of Environment and the local environmental authority. If we fail to adhere to provisions of the EQA or any regulations made thereunder, any person who at the time of the commission of an offence was a director, chief executive officer, manager, or other similar officer of our Group shall be deemed to be guilty of that offence. For example, where a person, unless licensed, deposits any environmentally hazardous substances, pollutants or wastes into any inland waters, that person shall be guilty of an offence and shall be liable to a fine not exceeding RM1 ,000.00 or to imprisonment for a period not exceeding five years or to both. (v) Electricity Supply Act Under the Electricity Supply Act, a licence is required for the operation of any generation installation and its associated facilities, any transmission and/or interconnection facilities and the supply and sale of electrical energy to Tenaga Nasional Berhad and/or any other person permitted by the Energy Commission of Malaysia (HEe”), the statutory body established under the Energy Commission Act, 2001. The operation and maintenance of power plants, the delivery and the sale of electrical energy and generation capacity to Sabah Electricity Sdn Bhd are dependent on the licence granted by the EC. 7. BUSINESS OF OUR GROUP (Cant’d) 7.18.3 Relevant Indonesian legislations (i) Law No. 22 of 2001 regarding Oil and Natural Gas (“Law No. 22/2001”) Law No. 22/2001 contains the main substance of the provisions that oil and natural gas as a strategic resource contained in the Indonesian Mining Area is a national wealth which is controlled by the state, and its implementation by the Government of Republic of Indonesia (“Indonesian Government”) as the holder of a Mining Authorization in the Upstream Business Activities (Upstream Business Activities can be executed and controlled through cooperation agreement with the government), while the Downstream Business Activities are carried out after obtaining a permit from the Indonesian Government. Law No. 22/2001 also stipulates about penalty or imprisonment provision for those who executed unlicensed general survey, exploration and/or exploitation before execution of prior cooperation agreement, activities of processing, trading, storage, transporting without obtaining prior special business license for each activities, imitate or falsify fuel oil and abusing and/or trading the fuel subsidised by the Indonesian Government. (ii) Regulation of Minister of Energy and Mineral Resources No. 35 of 2008 regarding the Procedures of the Determination and Offering of Working Area ofO&G This regulation governs the procedures of the determination and offering of working area for exploration and exploitation. The preparation, determination and the offering of the working area of O&G is performed by Director General of O&G, while the working area is determined by Minister of Energy and Mineral Resources based on the proposal from Director General of O&G. The preparation for working area offering is performed throUgh either tenders or by direct offers. 7.18.4 Relevant RAK, UAE legislation (i) RAKMC Rules The RAKMC Rules govern the licensing and operation of companies in the RAKMC. Pursuant to the RAKMC Rules, all companies operating in RAKMC must hold a valid license and insurance. The consequence of a breach of the RAKMC Rules may lead to a fine together with our Company’s license being revoked or not renewed. (ii) Federal Law No.8 of 1980 regulating labour relations (“Labour Law”) The Labour Law provides the minimum rights and obligations for employees and employers of all the companies in UAE, save and except companies licensed by the Dubai International Financial Centre Authority. The provision of the Labour Law provides for the minimum rights and obligations of employees and employers which include the maximum working hours of 48 hours a week or eight hours a day, the overtime regulation, the end of service entitlements which is equivalent to at least three weeks for three years continuous service and 30 days for five years continuous service, and the minimum notice periods of 30 days. If the Group fails to adhere to provisions of the Labour Law, the Group may be subject to a maximum of six months’ imprisonment and/or a fine of no more than AED 10,000. 154 7. BUSINESS OF OUR GROUP (Cont’d) (iii) Federal Law No. 24 of 1999 concerning the Protection and Development of the Environment The Federal Law No. 24 of 1999 concerning the Protection and Development of the Environment establishes overarching legislation for the protection and conservation of the quality and natural balance of the environmental and the control of all forms of pollution. It prohibits the discharge of oil into the marine environment by all transportation. If we fail to adhere to this prohibition, it shall be subject to a fine between AED150,000.00 and AED1 ,000,000.00. 7.19 MATERIAL PROPERTIES AND MATERIAL EQUIPMENT Details of material properties owned by our Group or leased/tenanted by our Group and our material equipment are set out in Annexure B of this Prospectus. 7.20 HIGHLY DEPENDENT CONTRACTS As at the LPD, save as disclosed below, there are no contracts, agreements, arrangements or other matters which have been entered into by or issued to us or which we are highly dependent and is material to our Group’s business or profitability: On 21 September 2015 an EPCC contract was entered into between One River Power and Serba Dinamik, whereby Serba Dinamik has agreed to be the EPCC contractor to carry out EPCC works for the power plants in Kota Marudu, Sabah, Malaysia consisting of a 10.0 IVIW hydropower plant in Upper Bengkoka, a 5.6 MW power plant in Togohu and a 13.5 MW hydropower plant in Lower Bengkoka at Kota Marudu (“Project”), which covers the civil and structure works, electro-mechanical plant equipment and power transmission system for the Project (“Work”). As consideration for the performance and completion of the Work, One River Power, the owner of the hydropower plant and Project has agreed to pay Serba Dinamik a cash consideration in the sum of RM218.00 million subject to final measurement of bill of quantities at an agreed schedule of rates. The duration of the Project is for 18 months from the date of site possession which is to be mutually agreed between the parties or upon written instructions from One River Power, unless otherwise terminated in accordance with the terms and subject to the conditions of this agreement. The defects liability period for any work outstanding, including making good any defect or any other fault to the design, materials, goods, workmanship or equipment, is valid for 24 months from the date of practical completion. Pursuant to the terms of the EPCC contract, Serba Dinamik is required to furnish a performance bond equivalent to 5.00% of the contract sum as a performance security and the bond shall be valid from the date of issuance until 12 months after the expiry of the defective liability period or the issuance of the Certificate of Completion for Making Good Defects, whichever is later. In addition, Serba Dinamik is required to furnish a design guarantee bond for the design, including workmanship, material or equipment, which shall remain valid for a period of 5 years from the date of practical completion of the works. 7. BUSINESS OF OUR GROUP (Cant’d) 7.21 OUR FUTURE PLANS, STRATEGIES AND PROSPECTS 7.21.1 Future plans and strategies Our future plans and strategies are focused on the following areas:
O&M of small hydropower plants in Sabah, Malaysia  Upgrading of existing service centres in Malaysia  Establish a new MRO and IRM Centre in Sarawak, Malaysia  0.8 MW gas power plant in Ambon Island, Indonesia  MRO service providers
Upgrading of existing logistics centre in RAK, UAE  Establish a new fabrication facility in Johor, Malaysia  Small gas power plant in Muaro Jambi, Sumatra, Indonesia  Small hydropower generation companies

7.21.1.1 O&M of small hydropower plants By using our core strengths in MRO and IRM services as a platform, we expanded into the operations of small power plants. In February 2016, we secured a contract to operate as well as maintain three small hydropower plants for 21 years in Kota Marudu, Sabah, Malaysia. The O&M contract is expected to commence upon the completion of construction by the end of 2017. The EPee of the said hydropower plant is also undertaken by us. As at the LPD, we have mobilised works including initial site clearance and started the procurement process for turbines. The three small hydropower plants will have nominal net capacities of 10.0 MW, 13.5 MW and 5.6 MW respectively. These small hydropower plants use the run-of-river scheme which diverts a portion of the water flow from the river through a series of pipelines or penstock. The pipelines, which are laid underground, will channel the water flow into power houses that are equipped with turbines. The tail water from the power house is then fed back into the river system. We will utilise internally generated funds to undertake 0&1\11 of the said small hydropower plants. 156 7. BUSINESS OF OUR GROUP (Cont’d) 7.21.1.2 Upgrading of existing operational facilities in Malaysia and UAE Part of our future plans is to upgrade our existing service centres in Malaysia as well as invest and construct additional facilities in our logistics centre in RAK, UAE. (i) Existing service centres in Malaysia We intend to upgrade and improve four out of our five existing service centres namely one in Paka, Terengganu, one in Miri, Sarawak and two in Labuan mainly through the purchase of additional machineries, tools and equipment. They include the following purchases: (a) GNG cutting, drilling and punching machines;
(b) air compressors;
(c) welding sets;
(d) forklifts;
(e) test and calibration tools and equipment; and
(f) mobile workshops (where essential maintenance tools and equipment are housed in twenty-foot containers for ease of transportation to customers’ sites).

These machineries, tools and equipment will be utilised for our O&M services. We envisage the above to cost approximately RM7.00 million, which will be funded through the IPO proceeds. We expect to complete the above purchases by end of 2017. (ii) Existing logistics centre in RAK, UAE Our existing logistics centre in RAK, UAE comprises a large warehouse and an open yard. Part of our expansion plans is to construct an administration area within the warehouse. The footprint of the administration area will take up approximately 25.00% (approximately 500 sq metres) of the total warehouse floor space which will include constructing an additional mezzanine floor. We will also be investing in mobile workshops which are equipped with maintenance tools and equipment such as, among others, balancing equipment, pressure safety relief valve test bench, recalibration and inspection tools housed within a standard twenty­foot container for onsite maintenance. In addition, we plan to construct a covered workshop in the open yard area and install automated tools and equipment including forklifts, electric stackers, pallet jacks, pallet rackings, GNG cutting machines and welding sets for minor fabrication activities. 7. BUSINESS OF OUR GROUP (Cant’d) The construction of the administration area furnished with basic office equipment and furniture, construction of a covered workshop equipped with some tools and equipment, as well as the investment in mobile workshops are estimated to cost approximately RM8.00 million. This will be funded through the IPO proceeds. We expect to commence and complete the above plans for the logistics centre by end of 2017. Details on the service centres to be upgraded are as set out below: Service centres to  be upgraded  Owner  Tenure of lease  Paka, Terengganu  Serba Dinamik  60 years expiring on 31 August 2059
Miri, Sarawak Serba Dinamik 60 years expiring on 6 December 2069 Labuan(1) Seah Kiat Heng This property has been leased @ Seah Kiat Lim for a period of three years commencing from 1 December 2014 to 30 November 2017 Labuan(1) CSH Holdings This property has been leased Sdn Bhd for a period of two years commencing from 1 August 2016 to 30 July 2018 RAK, UAE Ras AI Khaimah This property has been leased Port for a period of five years commencing from 1 December 2015 with option to renew for another five years Note: (1) These two selVice centres currently being leased by us do not have the relevant eee. As disclosed in Section B.2 of Annexure B of this Prospectus, steps are being taken to obtain the relevant eee for these two selVice centres. If the respective landlords of the selVice centres fail to provide our Group with the relevant eee within 12 months from our Listing, we intend to relocate these selVice centres to alternative suitable locations which have valid eee within six months from the expiry of the 12-month period. The utilisation of proceeds for the upgrade on both leased selVice centres in Labuan would not be affected by the possible relocation as the aforesaid proceeds will mainly be utilised to purchase additional machineries, tools and equipment which can be moved to a new location at minimal cost. For further information on our Group’s material properties, please refer to Annexure B. 7. BUSINESS OF OUR GROUP (Cant’d) 7.21.1.3 Establishment of new facilities in Malaysia (i) Establish a new I\/IRO and IRM centre in Sarawak, Malaysia Currently, we are providing maintenance of rotating equipment for O&G production platforms, LNG plants and petrochemical manufacturing plants in Sabah, Sarawak and Labuan. As part of the maintenance process, this would include the disassembly of equipment and parts, which would either be transported to one of our service centres or undertaken on-site at the customers’ premises. As at the LPD, we have four service centres in Sarawak and Labuan, one in Miri, one in Bintulu and two in Labuan. However, our said service centres are limited in space and facilities to carry out the maintenance of large rotating equipment, parts and structures. Part of our future plans is to further expand our business operations in Sabah, Sarawak and Labuan by establishing a new MRO and IRM centre in Sarawak, which will be used as a platform to address business opportunities for our O&M operations. This is in line with one of our strategies to deepen and widen our business activities where we would address opportunities in providing IVlRO of large rotating equipment which are normally sent to Peninsular Malaysia and other countries such as Singapore and Germany when they are required to be serviced out of the customers’ premises. In order to carry out MRO of large rotating equipment, it would require additional facilities and sizable land area which we currently do not have. In addition, this said centre would enable us to carry out additional IRM services including corrosion prevention including galvanising and painting, as well as preparatory works for piping systems including sub-assembly of pipes, flanges, connectors and fittings prior to delivery to customers’ site. These are some of the services that we are currently not offering as we do not have the facilities and space in our existing service centres. Furthermore, we would use the said centre to address business opportunities within the O&G and power generation industries in Sabah, Sarawak and Labuan. Some of the developments in the O&G and power generation industries in Sarawak are as follows: (a) O&G There are three LNG plants owned and operated by PETRONAS with a total of eight LNG trains in PETRONAS Bintulu LNG Complex in Sarawak and a new ninth LNG train coming on-stream. Currently, PETRONAS Bintulu LNG Complex has a combined capacity of 24 MTPA. The new ninth LNG train will increase the complex’s production capacity by 3.6 MTPA and it is scheduled to commence in January 2017. In April 2016, PETRONAS and the Government of Sarawak entered into an MOU to conduct a joint feasibility study for the Sarawak Petrochemical Master Plan to boost the petrochemical industry in Sarawak. 159 7. BUSINESS OF OUR GROUP (Cont’d) (b) Power Generation Sarawak Energy Berhad is continuously embarking on projects to expand the power generation capacity in Sarawak. Some of the major power generation facilities in Sarawak are Bakun hydropower plant, Murum hydropower plant, Mukah coal-fired power plant, Tanjung Kidurong combined cycle power plant, and Sejingkat coal-fired power plant. Sarawak plans to develop an additional 400 MW combined cycle power plant at Tanjung Kidurong, Bintulu, a new 1,200 MW combined cycle power plant in Samalaju, Bintulu and an additional 600 MW coal-fired power plant in Balingian, Mukah. Sarawak also plans to spend between RM8.00 billion to RM10.00 billion to improve its power transmission and distribution systems across Sarawak over the next 10 years until 2025. (Source: IMR Report) In view of the above developments, we intend to leverage from our established track record and core competency with IVIRO and IRM capabilities to address business opportunities as a service provider of MRO and IRM services in Sarawak. On 25 August 2016, we received an offer to purchase Plot P20 at Kidurong Industrial Area Phase II, which is a 30-acre 60-year leasehold land in Tanjung Kidurong, Sarawak from the Bintulu Development Authority. The purchase consideration of the said land is RM12.23 million (inclusive of GST totalling RMO.69 million), subject to the execution of the sale and purchase agreement. Our new MRO and IRM centre will house the following: four acres for IVIRO workshops; five acres for blasting and coating area including galvanising plant and area for incoming materials and finished goods; nine acres for fabrication and laydown area; three acres for vendor(1) factories; six acres for warehousing and storage facilities(2); one acre for office building and training centre; and the remaining two acres for other miscellaneous area and structures such as carpark, power substation, waste water treatment plantW Notes: (1) On 22 December 2015, our subsidiary, Serba Dinamik, was appointed by the MIT! to be one of the anchor companies under the VDP. Our role as an anchor company under the VDP is to assist in the nurturing and development of Malaysian Bumiputera entrepreneurs relating to MRO of rotating equipment and IRM of static equipment and structures.
7. BUSINESS OF OUR GROUP (Cant’d)
(2) The total six acres of warehousing and storage facilities space is expected to cater to the following:
(a) Three acres will be allocated to build general warehousing facility including general storage of materials, parts and components, tools and equipment, as well as handling equipment.
(b) The remaining three acres will be allocated as storage yard which will be used as a holding area for our existing MRO operations for rotating equipment and static equipment prior to undergoing maintenance services, as well as a holding area for rotating equipment after maintenance prior to delivery to customers. This storage yard will also be used to cater for our future expansion into providing MRO of large turbines, compressors and generators.

 

(3) The main purpose of the wastewater treatment plant is for the galvanising plant which is used for coating steel parts and structures.

The estimated total cost of the new MRO and IRM centre is RM247.23 million including RM12.23 million for the land acquisition and RM235.00 million for the cost of development. Land cost -on 3 October 2016, we paid a non-refundable deposit of RM2.45 million for the said land acquisition. We expect to execute the sale and purchase agreement in relation to the land by January 2017. The remaining RM9.78 million will be funded through internally generated funds and/or bank borrowings/financing. The balance of the remaining RM9.78 million will be paid by February 2017, in accordance with the terms set out in the letter of offer. Development cost -the breakdown of the estimated development cost of RM235.00 million is as set out below: Development Costs RM million Earthworks and preliminaries  46  Industrial buildings and fabrication yards!!)  107  Office building and training centre(2)  8  Mechanical and electrical works  14  Professional, local authorities and statutory  charges  24  GST and finance charges  23  Project contingency(3)  13  TOTAL  235
Notes: (1) The estimated development cost for industrial buildings and fabrication yards includes MRO workshops, blasting and coating area (including galvanising plant and area for incoming materials and finished goods), fabrication and laydown area, vendor factories, warehousing and storage facilities as well as the waste water treatment plant. The proposed estimated bui/t­up area for the industrial buildings and fabrication yards, subject to the finalisation of our building plans and approval from the relevant authorities is as set out below: 161 7. BUSINESS OF OUR GROUP (Cont’d) Estimated built-up Facilities area (sq metres) MRO workshops 9,000 Blasting and coating area 11,000 Fabrication and laydown area 16,700 Vendor factories 11,700 Warehousing and storage facilities 20,800 Waste water treatment plant 500 (2) The proposed built-up area for the 2-storey office building and training centre, subject to the finalisation of our building plans and approval from the relevant authorities is approximately 4,300 sq metres.
(3) Project contingency refers to a budget that is set aside to cover unexpected costs during the construction process.

Out of the total development cost of RM235.00 million, we intend to utilise RM70.00 million from the IPO proceeds to fund part of the development cost while the remaining RM165.00 million will be funded through internally generated funds and/or bank borrowings/financing. Upon the completion of the 30-acre land acquisition, we will then proceed to submit our planning permission, building plans (with earthworks), engineering plans, landscape plans as well as other relevant documentations to the authorities for approval. At the same time we would commence to apply for all relevant permits and approvals including, among others, storm water management plan, drainage master plan, and construction works. We would call for tender and start the evaluation process for contractors and suppliers while the plans and applications for permits and approvals are being assessed by the authorities. We expect to obtain all the necessary approvals and permits from the authorities by June 2017 where we would subsequently commence preliminary works including earthworks, strengthening the load bearing capacity of the soil and other civil works, followed by construction of buildings, structures, amenities and facilities. We expect the physical construction and development of the land, buildings, structures, amenities and facilities to take approximately two years to be completed by mid-2019. Thereafter, we estimate that it would take approximately six to eight months to obtain all the required approvals. The operations of the MRO and IRM centre will commence upon obtaining all the necessary approvals, which is expected to be in 2020. 7. BUSINESS OF OUR GROUP (Cont’d) (ii) Establish a new fabrication facility to support EPCC works and IRM services in Johor, Malaysia Currently, most of our fabrication activities for EPCC works and IRM services are undertaken at our customers’ sites, while some works are undertaken at our own service centres. As part of our operational facility expansion plans, we will establish a new fabrication facility for EPCC work and IRM services in Bandar Penawar, Kota Tinggi, Johor. This new facility will support our fabrication works for the Refinery and Petrochemical Integrated Development (“RAPID”) project in Southern Johor, Malaysia. As RAPID is within the Pengerang Integrated Petroleum Complex (“PIPC”), it will also enable us to participate in potential future projects within PIPC. The following are the developments within Pengerang: (a) PIPC, totalling approximately 20,000 acres of land area, comprised two confirmed projects, namely the Pengerang Deepwater Terminal (“PDT”) and PETRONAS’ Pengerang Integrated Complex (“PIC”).
(b) The PDT project comprises storage capacity of 5 million cubic meters for crude oil, gas and petroleum products. The first phase of the project, namely Pengerang Deepwater Terminal 1 (“PDT1”), comprises 1.30 million cubic metres of independent storage facility and six deepwater berths with an investment of approximately RM2.00 billion. It has the capability to handle the storage, blending and distribution of crude oil, petroleum, chemical and petrochemical feedstock products, and by-products. PDT1 commenced operations in 2014. The second phase of the project, namely Pengerang Deepwater Terminal 2 (“PDT2”) will be dedicated to PETRONAS’ RAPID project.
(c) With an estimated investment of USD27.00 billion, PETRONAS’ PIC covers an area of 6,242 acres within the PIPC. The PIC consists of the RAPID project as well as six associated facilities namely the PDT2, Pengerang Co­generation Plant, Air Separation Unit, Projek Air Mentah RAPID, Re-gasification Terminal 2 and CUF. In addition, other future developments within the PIPC master plan includes, among others, plastic and fine chemicals industrial park, commercial services hub, solids logistics hub, as well as medium and light industries hub.

(Source: IMR Report) Within the Southern Johor, Malaysia, we are currently undertaking an on-going contract for supply, fabrication and painting of structural steel for RAPID project Package 4 for Petrofac E&C Sdn Bhd in RAPID. The contract is valid until October 2017. On 1 January 2016, we entered into a share sale agreement to purchase a 2.183-acre land in Kota Tinggi, Johor, Malaysia via the acquisition of Supreme Vista Industries Sdn Bhd for approximately RM2.00 million. The acquisition is expected to be completed by the third quarter of 2017. Please refer to Section 12.2.3.9 of this Prospectus for further details on the acquisition. As at the LPD, we are in the midst of preparing the building plans. 163 7. BUSINESS OF OUR GROUP (Cont’d) (iii) We have, on 17 August 2016, received the consent of the vendors of Supreme Vista Industries Sdn Bhd to establish our new fabrication facility pending completion of the share sale agreement. Accordingly, he construction of the new fabrication facility is expected to commence by first quarter of 2017 upon obtaining the approval for our building plans. We intend to carry out the following activities which are expected to be completed in the same year of 2017: (a) civil works including strengthening of load bearing capacity of the soil;
(b) construction of covered yard and workshop; and
(c) purchase of machinery and equipment including cranes, forklifts, welding sets, bending, rolling and plasma cutting machines and CNC lathe, cutting, punching and drilling machines.

We intend to utilise approximately RM20.00 million from the IPO proceeds to establish the new fabrication facility. Acquire a new corporate office building in Selangor, Malaysia As at the LPD, we operate from our head office in Selangor, Malaysia. As part of our future plans, we intend to acquire a corporate office building to house our head office and business operations. We are in the midst of assessing the preferred location for our corporate head office and expect to complete the acquisition process within a 12-month period. The intention of our Group to acquire a new corporate office building is as set out below: (a) To accommodate the increased number of employees as part of the expansion of our business;
(b) To house our employees in one main location to increase operational efficiency, minimising logistic movements and costs with a more efficient use of man-hours;
(c) To provide our employees with a comfortable and conducive work environment to enhance productivity and performance; and
(d) To enhance the visibility of our brand and elevate our corporate image and brand consciousness amongst our customers, suppliers, employees and other stakeholders.

After the acquisition of the new corporate office building, we intend to relocate all our Group’s existing employees from our existing head office in Shah Alam, Selangor to our new corporate office building. 7. BUSINESS OF OUR GROUP (Cont’d) 7.21.1.4 With the relocation of the existing employees from our existing head office to the new corporate office building, we will be able to expand our training centre capacity to accommodate more trainees at our existing head office in Shah Alam, Selangor. Our training centre is currently being conducted within one section of our existing head office in Shah Alam, Selangor. The training centre is currently being used as the venue for: (a) classroom theoretical and tutorial trainings as part of the technical trainings offered by our Group. Please refer to Section 7.4.4.1 of this Prospectus for further information on the technical trainings provided by our Group; and
(b) in-house trainings provided to our Group’s employees.

This space can also be utilised as project meeting rooms in relation to projects undertaken by the Group. We intend to utilise approximately RM30.00 million from the IPO proceeds to acquire a corporate office building. In the event that the allocated proceeds are insufficient for the corporate office building, any shortfall will be funded through internally generated funds, working capital and/or bank borrowings/financing. Developments of small gas power plants and water utilities in Indonesia We have entered into an agreement to lease out a small gas power plant on Ambon Island, Indonesia. In addition, we have entered into two MOUs which will involve the development of small gas power plants and water utilities in East Kalimantan as well as the development of a small gas power plant in Muaro Jambi, Sumatra, Indonesia. (i) 0.8 MW gas power plant in Ambon Island, Indonesia We will develop and own a small gas power plant in Ambon Island, Indonesia through our subsidiary, Serba Dinamik Indonesia. On 1 July 2016, Serba Dinamik Indonesia entered into a 1O-year leasing agreement with an engineering company in Indonesia (“the Lessee”) where the Lessee will be leasing a 0.8 MW gas power plant and its auxiliary equipment (“0.8 MW gas power plant”) from Serba Dinamik Indonesia. The engineering company in Indonesia is a company involved in design, supply and installation of heating, ventilation and air-conditioning system. The leasing is expected to start upon the commencement of operations by the first quarter of 2017. The said power plant will generate power and chilled water to serve the needs of the existing Ambon City Centre Shopping Mall. The mall is currently using power that is supplied by PT PLN (Persero). The new 0.8 MW small gas power plant will be the main source of power supply to the mall, and this will complement the existing power supply from PT PLN (Persero). In said leasing agreement, we will be responsible for operating and maintaining the said power plant upon completion of the installation works. 165 7. BUSINESS OF OUR GROUP (Cant’d) Commencement of civil works at the site
The 0.8 MW small gas power plant will be installed and integrated into the electricity Microturbine equipment to be installed distribution system at the Ambon City upon completion of civil works Centre Mall
As at the LPD, we have procured the microturbine and auxiliary equipment and started civil works at the site next to the Ambon City Centre Shopping Mall. The next step involves installation and integration of the 0.8 MW gas power plant to the electricity distribution system. We expect to complete the installation at the end of 2016 and commence operations by the first quarter of 2017. In this respect, we expect to start generating revenue for FYE 2017 from leasing of the small gas power plant facilities. The total investment is estimated at approximately USD1.12 million (exchange rate of USD1.00 to RM4.12 as at LPD). This will be funded through bank borrowings and/or internally generated funds. (ii) Development of a small gas power plant in Muaro Jambi, Sumatra, Indonesia As part of our future plans, we intend to develop and own a small gas power plant with a 4 IVIW capacity, which will be located next to our existing CNG plant in Muaro Jambi, Sumatra, Indonesia. On 17 May 2016, through our subsidiary PT Kubic Gasco, we entered into a MOU with PT PLN (Persero), South Sumatra, Jambi and Bengkulu provinces. PT PLN (Persero) is an Indonesian government-owned power corporation. PT PLN (Persero), South Sumatra, Jambi and Bengkulu provinces is a territorial unit responsible for the three provinces, namely South Sumatra, Jambi and Bengkulu. The said MOU is for the sales of power from our small gas power plant to PT PLN (Persero), which will commence upon the completion and commissioning of the small gas power plant. 166 7. BUSINESS OF OUR GROUP (Cant’d) (iii) The development of the small gas power plant provides synergy to our CNG plant, as part of our gas supply can also be used as source of fuel for our small gas power plant. In the development of the said small gas power plant, we will use our existing expertise and experience in EPCC including engineering capabilities, procurement, fabrication and construction works. In addition, as part of our scope of work for EPCC, we will also engage other external parties to undertake among others, civil, structural, mechanical and electrical works. As we are the exclusive agent for Capstone microturbine in Indonesia, we intend to use Capstone microturbines for the generation of power for the said plant. Based on our experience in procuring, installing and commissioning and maintaining Capstone microturbines of similar sizes for power generation purposes, operating and maintaining the said plant will be an extension of our experience. Upon commencement of the small gas power plant, PT Kubic Gasco will be responsible for operating and maintaining the plant. We intend to take a majority stake in the ownership of the abovementioned small gas power plant through our 51.00% shareholding in PT Kubic Gasco. This would allow us to have the management control over the said asset. We are in the midst of preparing the application of relevant licences and permits for the small gas power plant, which is expected to be submitted the third quarter of 2017 prior to the commencement of construction in the first quarter of 2018. Development of small gas power plants and water utilities in East Kalimantan, Indonesia On 20 November 2015, through our subsidiary Serba Dinamik Indonesia, we entered into a MOV with PT Kutai Timur Investama, a local government district development body to form a partnership arrangement with the intention of developing small gas power plants as well as water utilities namely a water treament plant in the regency of East Kutai in East Kalimantan, Indonesia. The MOV period is valid for five years till 2020. We intend to own, operate and maintain these said small gas power plants. Meanwhile, we will only be developing the water treatment plant for the said local government district development body. In this respect, we expect to generate revenue in the form of sales of power from our small gas power plants and EPCC of the water treatment plant. However, this is still in the preliminary stages. We will implement our development plans in stages. As at the LPD, we have started preliminary discussions on the technical and commercial aspects for the above developments prior to the finalisation of partnership and contract. Our proposed initial developments within the same MOV consist of the following: (a)  development of a 1 MW gas power plant for a local water  supply utility company;  (b)  development of a 4 MW gas power plant; and
7. BUSINESS OF OUR GROUP (Cont’d) (c) development of a water treatment plant. 7.21.1.5
In the development of the said small gas power plants, we will use our existing expertise and experience in EPCC including engineering capabilities, procurement, fabrication and construction works. As part of our scope of work for EPCC, we will also engage other external parties to undertake among others, civil, structural, mechanical and electrical works. In addition to the said EPCC works, we will be bringing in external parties for the development of the water treatment plant including, among others, design, technology and other technical requirements. As for the small gas power plant, we will be using Capstone microturbines for the generation of power. Based on our experience in procuring, installing, commissioning and maintaining Capstone microturbines of similar sizes for power generation purposes, operating and maintaining the said plants will be an extension of our experience. We intend to take a majority stake in the ownership of the abovementioned small gas power plants through our 75.00% shareholding in Serba Dinamik Indonesia. This would allow us to have the management control over the said assets. The proposed partnership arrangement is expected to be finalised by 2017. We plan to utilise approximately RM70.00 million from the IPO proceeds for the above small gas power plant developments in East Kalimantan and Muaro Jambi, Sumatra, Indonesia. Business expansion through investment and acquisition Part of our future plans is to grow our business through investment and acquisition in companies that can add value to our existing business operations or provide an incremental revenue stream to our business while enhancing our competitive advantages. Our strategy includes acquiring companies that can complement or expand our existing product and service offerings, provide us with access into new segments and/or geographical markets, and/or enable us to enhance our track record of accomplishments. In light of the above strategy, we are exploring investment opportunities in the following areas: (i) companies with technologies and skills set that are complementary or add value to our O&M services for example, companies with the technologies and skills to provide maintenance services for gas turbines with output power of more than 160 MW. In addition, target companies could also manufacture critical rotating equipment parts and components, for example turbine blades and fuel nozzles. Such target companies are likely to be outside of Malaysia. We are currently engaged with companies in the United States and Europe. The acquisition of these companies would also enable us to address the markets they serve. Thus, our acquisition will also add value to our existing business by extending our overseas coverage. Such acquisition will also provide opportunities to cross-sell our existing products and services. 168 7. BUSINESS OF OUR GROUP (Cont’d) 7.21.1.6
We intend to acquire a majority equity interest in a target company which would allow us to have management control over the operations as well as control over the technologies and any intellectual properties. (ii) small hydropower generation companies in East Coast region and Northern region of Peninsular Malaysia. We expect to have a minority equity interest in small hydropower plants as our participation in these investments are likely through invitation with specific equity participation in the form of minority partner. These investments would be similar to our investment model in our associate company, Adat Sanjung, which ultimately holds 100.00% equity in One River Power. One River Power is the holder of three Feed-In Approval certificates granted by the Sustainable Energy Development Authority of Malaysia for the development of three small hydropower plants in Kota Marudu, Sabah, Malaysia. Our provision of services to such types of small hydropower projects would be in the area of EPee works and O&M services. We will use our experience in the development of the three small hydropower plants in Kota Marudu, Sabah as a platform to develop these said small hydropower plants. As for MRO of rotating equipment and IRM of static equipment and structures, we will use our in-house expertise to undertake these functions. As at LPD, we have started to explore and expressed our interest, however these are still in the preliminary stages. For further details on the small hydropower project in Kota Marudu, please refer to Sections 7.21.1.1 and 12.2.3.4 of this Prospectus. We plan to utilise approximately RM95.00 million from the IPO proceeds for investment and acquisition of companies. For further details on utilisation of proceeds, please refer to Section 4.8 of this Prospectus. Development of industrial park in Sarawak Part of our strategy is to develop and own an industrial park in Sarawak incorporating a eUF providing electricity, steam, chilled water, demineralised water, wastewater treatment, industrial gases and compressed air. The development of the industrial park utilises our core competencies in EPee for the development and construction of the industrial park and O&M for the maintenance of the eUF. With our experience in undertaking maintenance of eUF in Kuantan, Pahang as well as Kerteh, Terengganu, we intend to carry out the O&M of the eUF in the industrial park. Upon the completion of the industrial park, we plan to operate and maintain the eUF while the management of the industrial properties within the park would be subcontracted to an external party. As at the LPD, we are in the midst of negotiating with the authorities for a suitable site. We will utilise internally generated funds and/or bank borrowings to undertake the development of industrial park in Sarawak. 169 7. BUSINESS OF OUR GROUP (Cont’d) 7.21.2 Our prospects As an energy services group providing engineering solutions to the O&G and power generation industries with operational facilities in Malaysia, Indonesia, UAE, Bahrain and UK, we believe our prospects are favourable in light of the following factors: (i) We have a strong market position among our peers. According to the IIVIR Report, we ranked third among O&G service and equipment companies in Malaysia providing MRO of rotating equipment services to the O&G industry, where ranking was based on the consolidated revenue for FYE 2014 of PETRONAS-Iicensed companies with SWEC codes for maintenance of rotating equipment. For further details on market ranking, please refer to Section 8 of this Prospectus. (ii) We have a strong historical performance which serves as a platform for continuing business growth. CAGR FYE 2013 FYE 2015 FYE 2013 to RM’OOO RM’OOO FYE 2015 Revenue 536,195 1,402,942 61.76% Gross profit 91,314 232,459 59.55% PST 65,818 159,571 55.71% PAT 61,619 156,562 59.40% Our business has been growing between FYE 2013 and FYE 2015. This will provide us with a platform to address opportunities for business growth and expansion. (iii) Our competitive advantages and key strengths as set out below, will sustain and enlarge our customer base: (a) we ranked third among companies in Malaysia providing MRO of rotating equipment to the O&G industry with 23 years track record;
(b) we are a growing and profitable company supported by a prudent financial track record;
(c) we are a PETRONAS-licensed company in Malaysia;
(d) we have strong records in HSE and have implemented various safety and quality standards for our operations; and
(e) we have an experienced management team.

For further details on competitive advantages and key strengths, please refer to Section 7.2 of this Prospectus. 7. BUSINESS OF OUR GROUP (Cont’d) (iv) Our future plans will provide sustainable growth Moving forward, we have a sound business expansion plan in place to ensure business continuity and growth as set out below: (a) O&M O&M of small hydropower plants in Sabah, Malaysia
(b) Expansion of existing facilities
(1) upgrading of our existing service centres in Malaysia; and
(2) upgrading of existing logistics centre in RAK, UAE.

 

(c) Establishment of new facilities
(1) establish a new MRO and IRM centre in Sarawak, Malaysia to expand our business operations in Sabah, Sarawak and Labuan;
(2) establish a new fabrication facility to support EPCC and IRM works in Johor in Malaysia to address potential business opportunities in Southern Johor, Malaysia; and
(3) acquire a new corporate office building in Selangor, Malaysia to house head office and operational staff.

 

(d) Development of small gas power plants and water utilities
(1) 0.8 MW gas power plant in Ambon Island, Indonesia;
(2) small gas power plant in Muaro Jambi, Sumatra, Indonesia; and
(3) small gas power plants and water utilities in East Kalimantan, Indonesia.

 

(e) New investment and acquisitions
(1) MRO service providers for access to new market segments and/or geographical markets; and
(2) small hydropower generation companies.

 

Please refer to Section 7.21.1 of this Prospectus for further details. 7. BUSINESS OF OUR GROUP (Cant’d) (v) Industry prospects and outlook Generally, the outlook for asset maintenance for the O&G and power generation industries is dependent on a combination of economic and social factors, including: (a) General economic growth, where favourable economic conditions will increase energy consumption, which would support on-going operations and maintenance of O&G, and power generation assets. The global and Malaysia’s real GOP growth is expected to fluctuate between 3.10% and 3.70%, and 4.30% and 5.00% respectively between 2016 and 2020.
(b) Population growth, where continuing population growth is expected to increase energy consumption, resulting in an expansion of the O&G, and power generation asset bases. These assets will require maintenance to ensure their continuing operations. Between 2016 and 2020 the global and lVIalaysia’s population is forecasted at CAGR of 1.10% and 1.70% respectively.
(c) Market price of crude oil and natural gas. The market price of crude oil and natural gas is dependent on world supply and demand where a situation of an increase in demand due to disruption in supply will push prices upwards. Similarly, an oversupply situation due to high production coupled with lower economic activities will place downward pressure on prices. In October 2016, the monthly price of Brent crude oil averaged at US050.00 per barrel. This is in contrast to the monthly average price of US0112.00 per barrel in June 2014.
(d) Growing demand for O&G will augur well for asset maintenance. To keep up with the growing demand for O&G, producers would have to continuingly increase production levels through a combination of greater utilisation of current assets coupled with addition of new production facilities. Between 2016 and 2020, global, Middle East and Asia & Pacific demand for oil are projected to grow at a CAGR of 1.30%, 2.60% and 2.60% respectively. Between 2016 and 2020, global, Middle East and Asia & Pacific demand for gas are projected to grow at a CAGR of 1.30%, 1.80% and 3.20% respectively.
(e) Investments in O&G industry, where investment in newly built and upcoming facilities would create new opportunities for operators providing maintenance services for such facilities.
(f) Forecasted power generating capacity, where the demand for maintenance services of power generation plants is directly related to installed power generating capacity. Between 2016 and 2020, global, Middle East and Asia & Pacific total power generating capacity is forecasted to grow at a CAGR of 1.60%, 2.00% and 2.50% respectively.

172 7. BUSINESS OF OUR GROUP (Cont’d) (g)
(h)

Aging O&G and power generation assets, where aging assets generally require more maintenance. Maintenance is required to sustain safety, efficiency, and to satisfy regulatory requirements. As an example, the average age of LNG liquefaction plants globally are approximately 15 years old, which indicates the need for upkeep, maintenance or replacement of equipment and machineries. Developments in the power generation industry in Indonesia will continue to provide opportunities for power producers. Under Indonesia’s Power Supply Business Plan (“RUPTL”) 2015-2024, the Government of Indonesia has outlined a goal for the development of the country’s power infrastructure to meet the increasing demands for electricity consumption, which is expected to increase at a CAGR of 8.70% per year between 2015 and 2024. The demands for electricity and electricity consumption will be in tandem with the increase in population. In 2015, Indonesia had a total population of 255.5 million. In addition, in 2015, the Government of Indonesia launched a programme to accelerate the increase in power generation capacity by an additional 35 GW together with the expansion of others infrastructure including an additional 45,000 kilometres of transmission networks and 109,000 megavolt amperes of substations. The programme for expansion is expected to contributed by PT PLN and independent power producers. The electricity demand forecasts are prepared based on the amount of electricity needed to support the economic growth targeted by the government as well as population growth. During the period between 2015 and 2024, the forecasted demand for electricity consumption in selected regions is as follows:  Forecasted  demand for  electricity  consumption  Population  Population  (CAGR 2015­ (CAGR  in 2015  2024)  2010-2015)  (million)  Sumatra(1)  11.6%  1.7%  55.3  Java-Bali  7.8%  1.2%  159.3  East Indonesia  11.1%  1.8%  40.9  -Kalimantan(2)  10.4%  2.1%  15.3  -Sulawesi  12.4%  1.4%  18.7  -Maluku(3)  10.3%  2.0%  2.8  Papua  9.4%  2.1%  4.0  Indonesia  8.7%  1.4%  255.5  Notes:
(1) Muaro Jambi is a regency ofJambi province in Sumatra;
(2) East Kutai is a regency of East Kalimantan province in Kalimantan;
(3) Ambon Island is part of Maluku province in Indonesia.

173 7. BUSINESS OF OUR GROUP (Cont’d) The forecasted demand for electricity consumption between 2015 and 2024 in Sumatra and East Indonesia are expected to increase at a higher CAGR compared to overall Indonesia. According to RUPTL, the power generation capacities in Sumatra and East Indonesia are barely sufficient to meet the power needs of the communities. Thus, there can be shortfalls when there are disruptions to the power supply or plants needed to undergo routine maintenance. For example, the power generation system in northern Sumatra operates almost throughout the year without backup operation, and often experience shortfalls in power supply. The south Sumatra system also experience similar issues, suffering from shortage of power for most of the year. This same situation also occurs in several other areas such as West Kalimantan, East Kalimantan, South Kalimantan, Southeast Sulawesi, Minahasa-Gorontalo, Palu, Lombok, Ambon, Ternate and Jayapura. Some of the actions taken in Sumatra and East Indonesia to overcome the problems of power shortage include rental of power generation capacity and purchasing of power from small-scale independent power producers. In addition, the RUPTL plans a small number of power plants that use LNG or CNG in East Indonesia. There are six interconnected power systems and more than 100 isolated systems spread throughout the eastern region of Indonesia. The systems are spread over the provinces of Maluku, North Maluku, Papua, West Papua, West Nusa Tenggara, East Nusa Tenggara and Riau, Belitung, Buton, Selayar, Karimun Java, Bawean and many other islands. (Source: IMR Report) The developments in the power generation industry in Indonesia above will continue to provide opportunities for the development of our power plants in Ambon Island, Muaro Jambi, Sumatra, and East Kalimantan. Please refer to Section 8 of this Prospectus for further details. (The rest of this page has been intentionally left blank)

 

 

 

Comments are closed