Cautionary Statement - Dayang Enterprise Holdings Berhad ...dayang.listedcompany.com/misc/ar2013.pdf · respect to the Dayang Group’s financial condition, results of operations

B DAYANG ENTERPRISE HOLDINGS BHD (712243-U) • Annual Report 2013

This Annual Report contains some forward-looking statements in

respect to the Dayang Group’s financial condition, results of operations

and business. These forward-looking statements represent Dayang

Group’s expectations or beliefs concerning future events and involve

known and unknown risks and uncertainties that could cause actual

results, performance or events to differ materially from those expressed

or implied in such statements.

Readers are hereby cautioned that a number of factors could cause

actual results to differ, in some instances materially, from those

anticipated or implied in any forward-looking statement. In this respect

readers must therefore not rely solely on these statements in making

investment decisions regarding the Dayang Group. The Board and the

Dayang Group shall not be responsible for any investment decisions

made by the readers in reliance on those forward-looking statements.

Forward-looking statements speak only as of the date they are made,

and it should not be assumed that they have been reviewed or updated

in the light of new information or future events that would arise in the

interim of the publication of this Annual Report and the time of reading

this Annual Report.

Cautionary StatementRegarding Forward-Looking Statements

2013 At A GlanceF i n a n c i a l P e r f o r m a n c e

Revenue (RM’000) 552,634

Profit Before Tax (RM’000) 175,177

Net Profit (RM’000) 149,293

Total Assets (RM’000) 988,113

Shareholders’ Equity (RM’000) 666,430

Earnings Per Share (Sen) 18.11

NTA per share (Sen) 80.78

Return On Equity (%) 22.40

Gross Dividend (Sen) 8.50

Gross Dividend Yield (%) 1.47

C o n t e n t sC o n t e n t sCorporate Informat ion 2

Corporate Structure 3

Corporate Key Achievements / Mi lestones / Awards 4

5 Years F inancia l Highl ights 7

Financia l Calendar 8

Board of Di rectors 9

Message to Our Shareholders 16

Corporate Socia l Responsib i l i ty 20

Audit Committee Report 24

Statement on Risk Management and Internal Contro l 26

Statement of Corporate Governance 28

Financia l Statements 35

Analys is of Sharehold ings 88

Not ice of AGM 91

Form of Proxy 95

2 DAYANG ENTERPRISE HOLDINGS BHD (712243-U) • Annual Report 2013

Corporate Information

REGISTERED OFFICE AND HEAD OFFICESublot 5 – 10, Lot 46, Block 10,Jalan Taman Raja,98000 Miri, Sarawak, Malaysia.

SHARE REGISTRARTricor Investors Services Sdn Bhd Level 17, The Gardens, North Tower, Mid Valley City,Lingkaran Syed Putra,59200 Kuala Lumpur,Malaysia.Tel : 603 2264 3883Fax : 603 2282 1886

PRINCIPAL BANKERSRHB Bank BerhadLot 362, Block 9,Jalan Nakhoda Gampar,98000 Miri, Sarawak,Malaysia.

United Overseas Bank BerhadNo 108 & 110 Jalan Bendahara,98000 Miri, Sarawak,Malaysia.

CIMB Bank Berhad Lot 507 & 508 Block 9, MCLD,Jalan Permaisuri,98000 Miri, Sarawak,Malaysia.

COMPANY SECRETARIESBailey Kho Chung Siang (LS0000578) Bong Siu Lian (MAISCA 7002221)

LEGAL ADVISORSMessrs. Alvin Chong & Partners AdvocatesLot 176 & 177, 2nd Floor,Jalan Song Thian Cheok,93100 Kuching Sarawak,Malaysia.Tel : 082- 410111

Location of Business

AUDITORSKPMG (Firm No AF0758)Chartered AccountantsLevel 6, Westmoore House,Twin Tower Centre, Rock Road,93200 Kuching, Sarawak,Malaysia.

INCORPORATION10 October 2005Under the Companies Act 1965

STOCK EXCHANGE LISTINGMain Market Bursa Malaysia Securities Berhad Listed on 24 April 2008Stock Code : 5141Stock Name : Dayang

Datuk Hasmi Bin Hasnan Executive Chairman

Ling Suk Kiong Executive Deputy Chairman

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin Managing Director

Joe Ling Siew Loung @ Lin Shou Long Deputy Managing Director

Jeanita Anak Gamang Non-Independent Executive Director

Gordon Kab @ Gudan Bin Kab (Redesignated on 02.12.2013) Non-Independent Non-Executive Director

Wong Ping Eng (Appointed on 01.10.2013) Non-Independent Non-Executive Director

Mohd Ashraf Assai Bin Abdullah (Resigned on 29.06.2013) Non-Independent Executive Director

Chia Chu Fatt Independent Non-Executive Director

Polit Bin Hamzah Independent Non-Executive Director

Tuan Haji Abdul Aziz Bin Ishak Independent Non-Executive Director

Koh Ek Chong (Appointed on 02.12.2013) Independent Non-Executive Director

Azlan Shah Bin Jaffril (Appointed on 02.12.2013) Independent Non-Executive Director

Ali Bin Adai (Appointed on 03.03.2014) Independent Non-Executive Director

BOARD OF DIRECTORS

GROUP OPERATION LOCATION OF FACILITY

Head Office Sublot 5 – 10, Lot 46, Block 10, Jalan Taman Raja, MCLD, 98000 Miri, Sarawak, Malaysia.

Branch Office Unit 2-16-01, Tower 2, VSQ @ PJCC, Jalan Utara, 46200 Petaling Jaya, Selangor, Malaysia.

Shell HUC Project Team Office Lot 1785, Block 5, MCLD, Jalan Persatuan, Lorong 9, Krokop, 98000 Miri, Sarawak, Malaysia.

Miri Warehouse Sublot 2429, Jalan Cattleya 2, Piasau Industrial Estate, 98000 Miri, Sarawak, Malaysia.

Labuan Warehouse Lot No. CL2053118752, Kg Ranca Ranca, District of Labuan, 87000 Labuan Federal Territory, Malaysia.

Labuan Fabrication Yard 1 Lot 3, CL205384407, Off Jalan Patau Patau, 87000 Labuan Federal Territory, Malaysia.

Labuan Warehouse/Fabrication Yard 2 Lot CL 10599, Jalan Ranca-Ranca, Ranca Ranca Industrial Estate, 87000 Labuan Federal Territory, Malaysia.

Administrative/Logistic office Menara MAA, Suite M1-03B, Mezzanine Floor, No 6 Lorong Api-Api, 88000 Kota Kinabalu, Sabah, Malaysia.

Bintulu Warehouse/Fabrication Yard Lot 3061, Block 26, Kidurong Light Estate, Kemena Land District, 97000 Bintulu, Sarawak, Malaysia.

DESB Kemaman Yard 04 – 01, KSB Phase 1, Kemaman Supply Base, 24007 Kemaman, Terengganu Darul Iman, Malaysia.

Telong Kalong Yard PT 8229, Kawasan Perindustrian Telok Kalong, 24000 Kemaman, Terengganu Darul Iman, Malaysia.

3DAYANG ENTERPRISE HOLDINGS BHD (712243-U) • Annual Report 2013

Corporate Structure

Dayang Enterprise Holdings Bhd

(‘DEHB”)

100% DAYANG ENTERPRISE SDN BHD (DESB)– Offshore Topside Maintenance Services– Minor Fabrication Operations – Offshore Hook-up and Commissioning

100%

FORTUNE TRIUMPH SDN BHD (FTSB)Provision of Rental Equipment

100%

ALPHA DAYANG (B) SDN BHDDormant

DESB MARINE SERVICES SDN BHD (DMSSB)Owner and Charter of Marine Vessels

PERDANA PETROLEUM BERHADOwner and Charter of Marine Vessels

25%

50%


Corporate Key Achievements / Milestones / Awards

YEARTYPE OF AWARD

AWARDED BY DESCRIPTION

2013 Letter of Appreciation

Petronas Carigali Appreciation note for the safe and successful Temana 2013 October Turnaround Execution


Petronas Carigali Appreciation note for Southern Turnaround on September 13 (P1 Closure)


Petronas Carigali Apperciation note for Temana Turnaround

2012 Appreciation Murphy Oil & Gas MURPHY’S Contractor Engagement Session

2012 Certification Petronas Carigali Certification of Appreciation Dayang Enterprise SDN BHD for best Contractor Performance SCM-Contractors Management Sharing session 2012

2011 Appreciation Petronas Carigali Appreciation note for safe Northern and Southern turnaround

2011 Appreciation Murphy Sarawak Oil Co. Ltd

Appreciation for the support DESB on the DIVERTER valves change out

2011 Certification IQNET And SIRIM QAS International

Implemented and maintains a Quality management system which fulfils the requirement of the following standards ISO 9001:2008 for the following activities provisions of general topside construction and maintenance services to the oil and gas industry

2011 Certification SIRIM QAS International

Implemented a Quality Management System complying with ISO 9001: 2008 Quality Management System requirement

2010 Certification Chief Minister’s For being the finalist of the Sarawak Chief Ministers’ Environmental Award (CMEA)2010.Large Enterprise Category(Oil & Gas)

2010 Awards Murphy Oil & Gas In recognition of Dayang Enterprise SDN BHD for their employees contribution towards excellent HSE performance which resulted in 2 years LTI Free operation for KIKEH, Malaysia.

2010 Awards Shell Malaysia-SSB/SSPC

Celebrating 3 Years Goal Zero


Corporate Key Achievements / Milestones / Awards (continued)

YEARTYPE OF AWARD


2010 Certification Petronas Carigali Certification of Appreciation In recognition of Excellent Performance for services successfully rendered to Petronas Carigali-SBO in SAMARANG/SUMANDAK INTEGRATED SHUTDOWN 2010 with Early Completion of All Shutdown Activities By 1 day and LTI Free Safety Record(40,044 manhours and 124 UAUC)

2009-2010 Certification Petronas Carigali Certification of Appreciation In recognition of Excellent Performance for services successfully rendered to Petronas Carigali-SBO in EWG-A Blasting/Painting and Structural/Piping Replacement Activities (2009 – 2010) with LTI Free Safety Record (70,752 manhours and 474 UAUC)

2010 Certification Petronas Carigali Certification of Appreciation for Active UAUC reporting(Oct 2009 – Feb 2010 )

2009/2010 Certification Petronas Carigali Certification of Appreciation for Active UAUC Reporting (October 2009 – February 2010)

2009 Certification Petronas Carigali(SBO)

Certification of Appreciation In Recognition of Excellent Performance for Services Successfully Rendered to PETRONAS Carigali-SBO in SMG-A Blasting /Painting and Structural/Piping Replacement Activities (2009) with LTI Free safety Record(209,417 Manhours 1,266 UAUC)

2009 Certification Petronas Carigali Certification of Appreciation for Active UAUC reporting ( April-Sept 2009)

2009 Certificate of Appreciation

Petronas Carigali In Recognition of Excellent Performance for Services Successfully Rendered to PETRONAS Carigali – SBO in TBG-B Blasting/Painting and Structural/Piping Replacement Activities (2009) With LTI Free Safety Record (99,696 manhours and 833 UAUC)

2009 Certification Petronas Carigali Certification of Petronas Carigali Sarawak Operations Contractors HSE Liaison


Murphy Letter of appreciation on the Gas Compressor pulsation bottles repair and reinstatement Works.


Corporate Key Achievements / Milestones / Awards (continued)

YEARTYPE OF AWARD


2007/2008 Awards Petronas Carigali Major Contractor Category Merit Award In recognition of Provision of Providing Offshore Integrated Topside Maintenance( Including Hook-Up and Commissioning) for Oil and Gas Industry

2008/2009 Certificate of Appreciation

Petronas Carigali(SBO)

Excellent Performance for Surface Preparation Works for Samarang-F (SMJT-F) Workover Campaign in 2008 & 2009 with LTI Free Safety Record (102,514 safety manhours and 294 UAUC)

2008 Certificate of Appreciation

Petronas Carigali(SBO)

Recognition of Excellent Performance for services rendered to PCSB SBO in Semarang –F Workover Preparation Activities Phase 1 with LTI Free Safety Record (84,480 mhrs & 274 UA/UC)

2008 PETRONAS Group HSE

Awards 2007/2008

PERTONAS Carigali Recognition of an Excellent Achievement

2008 Petronas Awards

Petronas Carigali Sdn Bhd.

SBO-Contractor Senior Management HSE Meeting


Petronas Carigali SDN BHD &

Health, Safety & Environment

Department Petronas Carigali Sdn Bhd Sabah

Operation

April – September 2008 ( Active UAUC Reporting )

2007/2008 Petronas Awards

Petronas Carigali Petronas Group HSE AWARDS FY2007/2008- Contractor Category (Major)


HSE Department PCSB Sarawak

Operations

PCSB HSE Interactive Quiz for Contractor

Notes : -PMO = Peninsular Malaysia OperationTRCF = Total recordable injury case frequencyLTI = Loss Time InjuryUAUC = Unsafe Act & Unsafe Condition


5 Years Financial Highlights

Year 2009 2010 2011 2012 2013

Revenue 196,954 255,385 382,323 401,215 552,634

Gross Profit 85,793 129,742 157,372 186,025 229,617

PBT 52,401 83,059 106,478 128,235 175,177

PAT 44,785 67,731 83,129 101,242 149,293

GP Margin 43.6% 50.8% 41.2% 46.4% 41.5%

PBT Margin 26.6% 32.5% 27.9% 32.0% 31.7%

ROE 13.8% 18.2% 15.9% 17.0% 22.4%

44,785

67,731

20,000

40,000

60,000

80,000

100,000

120,000

83,129

101,242

149,293

2009 2010 2011 2012 2013

140,000

160,000

PAT (RM’000)PBT (RM’000)

52,401

83,059

20,000

40,000

60,000

80,000

100,000

120,000106,478

128,235

175,177

2009 2010 2011 2012 2013

140,000

200,000

180,000

160,000

Gross Profit (RM’000)

85,793

129,742

50,000

0

157,372

186,025

229*,617

2009 2010 2011 2012 2013

100,000

250,000

200,000

150,000

GP Margin (%)

43.6%

50.8%

10%

0%

41.2%

46.4%

41.5%

2009 2010 2011 2012 2013

20%

60%

50%

30%

40%

PBT Margin (%)

26.6%

32.5%

0%

27.9%

32%31.7%

10%

2009 2010 2011 2012 2013

15%

30%

20%

25%

35%

5%

ROE (%)

13.8%

18.2%

0%

15.9%

17%

22.4%

15%

2009 2010 2011 2012 2013

20%

25%

10%

5%

196,954

255,385

100,000

200,000

300,000

400,000

500,000

600,000

382,323401,215

552,634

2009 2010 2011 2012 2013

Revenue (RM’000)


Financial Calendar

FINANCIAL YEAR END 31 DECEMBER 2013

ANNOUNCEMENT OF RESULTS

FIRST QUARTER 22 May 2013

SECOND QUARTER 26 August 2013

THIRD QUARTER 26 November 2013

FOURTH QUARTER 26 February 2014

PUBLISHED ANNUAL REPORT AND FINANCIAL STATEMENTS

NOTICE OF ANNUAL GENERAL MEETING 21 May 2014

8TH ANNUAL GENERAL MEETING 12 June 2014

DIVIDEND

1st Interim for Year 2013

Announcement 26 August 2013

Entitlement date 13 September 2013

Payment Date 10 October 2013

2nd Interim for Year 2013

Announcement 26 February 2014

Entitlement date 17 March 2014

Payment Date 16 April 2014


Board of Directors

DATUK HASMI BIN HASNANExecutive Chairman

LING SUK KIONGExecutive Deputy Chairman

Member – Risk Management Committee

Datuk Hasmi Bin Hasnan, aged 61, was appointed Non-Independent Executive Chairman of Dayang Enterprise Holdings Bhd on 29 February 2008.

He graduated with a BSc in Estate Management from the London South Bank University, UK in 1978. He is a Senior Certified Valuer with International Real Estate Institute, USA and a member of International Real Estate Federation (FIABCI).

He began his career in 1979 as a valuer in the Land and Survey Department of Sarawak. Since 1982, he has been involved in a wide range of businesses, including valuation, project management, property development and management, construction, timber, manufacturing, trading and publishing. In June 1993, he became the Managing Director of Naim Land Sdn Bhd and has since been the main driving force behind the company’s growth and expansion.

He was awarded the Property Man of the Year for 2008 by the International Real Estate Federation (FIABCI) in Kuala Lumpur.

He is the Managing Director of Naim Holdings Berhad, a company listed on the Main Board of Bursa Malaysia Securities Berhad and director of Naim Incorporated Berhad, a non-listed public company.

Ling Suk Kiong, aged 68 is the founder of Dayang Group of Companies. He established Dayang Enterprise Sdn Bhd in 1980. He was appointed Executive Deputy Chairman of Dayang Enterprise Holdings Bhd on 29 February 2008. He has been instrumental in the growth and development of the Group. He brings with him more than thirty (30) years of experience in the Oil and Gas Industry and is mainly responsible for the overall strategic business direction of the Group.

He was awarded the Sarawak State Entrepreneur Of The Year Award 2009 in Kuching representing the Sarawak Chinese Chamber of Commerce and Industry category.

He is a Non-Independent Non-Executive Director in Perdana Petroleum Berhad, a company listed on the Main Board of Bursa Malaysia Securities Berhad. He is also a director of S.K Ling & Sons Sdn Bhd, Jasa Oilfields Supply Sdn Bhd and Kunci Prima Sdn Bhd.


Board of Directors (continued)

TENGKU DATO’ YUSOF BIN TENGKU AHMAD SHAHRUDDIN

Managing DirectorChairman – Corporate Social Responsibility Committee


JOE LING SIEW LOUNG @ LIN SHOU LONG

Deputy Managing DirectorMember – Risk Management Committee

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin, aged 51, was appointed Managing Director of Dayang Enterprise Holdings Bhd on 29 February 2008. He graduated in 1984 from the University of Toledo in the United States of America with a Bachelor of Science Degree majoring in Civil Engineering.

Upon his graduation he joined Modal Bina Sdn Bhd as a Project Engineer. Subsequently in 1988, he took up the position as Sales Engineer with Mobil Oil Malaysia Sdn Bhd. In 1991, he established Hexamas Sdn Bhd.

He was appointed Director of Dayang Enterprise Sdn Bhd in 1993. He also holds directorship in Fortune Triumph Sdn Bhd and DESB Marine Services Sdn Bhd. He holds several directorships in other private limited companies in Malaysia, including Hexamas Sdn Bhd, Hexamas Oilfield Services Sdn Bhd, Sierra Mal Sdn Bhd and Kunci Prima Sdn Bhd.

Joe Ling Siew Loung @ Lin Shou Long, aged 41, was appointed Non-Independent Deputy Managing Director on 29 February 2008. He graduated from University of Western Australia in 1993 with a Bachelor Degree in Engineering. In 1999, he obtained a Master of Business Administration degree from the same university.

He began his career in 1994 when he joined Sarawak Shell and Sabah Shell as a Trainee Engineer. In 1995, he joined POG. EP. Fochi Joint Venture as an Office Engineer. Subsequently in 1995, he joined Daiken Sarawak Sdn Bhd as a Production Engineer.

He joined Dayang Enterprise Sdn Bhd in 1997 as a Project Engineer. In 2004, he was appointed Assistant to the General Manager. In 2008, he was promoted to the role of Deputy Managing Director. He is currently responsible for overseeing and monitoring the management and operations of Dayang Group.



JEANITA ANAK GAMANGNon-Independent Executive Director

WONG PING ENGNon-Independent Non-Executive Director

Jeanita Anak Gamang, aged 41, was appointed Non-Independent Executive Director of Dayang Enterprise Holdings Bhd on 05 January 2012. She obtained a Diploma in Electrical Engineering from Mara Institute of Technology, Shah Alam in 1995.

Ms Jeanita began her career in 1997 as a Trainee Engineer in Dayang Enterprise Sdn Bhd, a subsidiary of Dayang Enterprise Holdings Bhd. From 1999 onwards, she has held the position of Head of Administration responsible for all matters related to administrative and recruitment of office personnel. She was appointed as Director of Dayang Enterprise Sdn Bhd in 2006.

Wong Ping Eng, aged 41, was appointed as our Non-Independent Non-Executive Director on 1 October 2013. She obtained a Diploma in Commerce (Financial Accounting) from Tunku Abdul Rahman College, Kuala Lumpur. She is a Certified Accountant with Malaysian Institute of Accountants and Association of Chartered Certified Accountants (ACCA).

Ms Wong has more than 15 years experience in the financial and accounting field. She started her career as Audit Assistant at KPMG, Kuching from September 1997 until December 2000. Then she moved to Naim Holdings Berhad as Accountant overall in charge of the Accounts Department in Miri until 2004. In July 2004 – 2008, she was appointed the Operations Manager for Naim’s Bandar Baru Permyjaya project in Miri where she was responsible for managing the whole Miri Operations.

In July 2008, she was promoted as Vice President – Finance and Accounts to oversee the Group Finance and Accounts Division. She was subsequently promoted as Deputy Director- Finance & IT Division and in August 2012, she was promoted as Senior Director for Naim’s Group Support Division comprising Finance & Accounts, Administration, Human Resourse and Information Technology.

Ms Wong was appointed as Executive Director of Naim Holdings Berhad on 29 November 2012 and on 9 January 2013, she was re-designated to Deputy Managing Director.



GORDON KAB @ GUDAN BIN KAB

Non-Independent Non-Executive DirectorChairman – Risk Management Committee

Member – Corporate Social Responsibility Committee

CHIA CHU FATTIndependent Non-Executive Director

Chairman – Audit CommitteeMember – Joint Remuneration And Nomination Committee

Member – Corporate Social Responsibility Committee

Gordon Kab @ Gudan Bin Kab, aged 58, was appointed as our Non-Independent Executive Director on 29 February 2008. He was re-designated as our Non-Independent Non-Executive Director on 2 December 2013. He graduated from Loughborough University of Technology, England United Kingdom, with a B.Sc (Hon.) degree in Civil Engineering.

He has over thirty (30) years of working experience in both Oil and Gas and the Construction industries. He gained extensive experience with Sarawak Shell Berhad for fifteen (15) years and Sime Darby Berhad’s Oil and Gas Engineering Division, Esteem Century Sdn Bhd.

In mid May 2000, he was engaged by Cahya Mata Sarawak Berhad as a Senior Project Manager (Central Procurement Unit) and then as Senior Project Manager for PPES Works (Sarawak) Sdn Bhd (Northern Region Operation). He then moved on to PPES Marine Resources Sdn Bhd as an Operations Manager in the Deep Sea Fishing Division in charge of vessels management and support.

He was engaged by Naim Group of Companies from 2006 to 2009. He was appointed as a Senior Head of Construction, in charge of the operation and execution of major infrastructure, engineering projects and building/institutional complexes. He was later appointed as Vice President for the Oil & Gas Division.

Chia Chu Fatt, aged 59, was appointed as our Independent Non-Executive Director on 29 February 2008. He is an accountant by profession and is the proprietor of Andy Chia & Co. He is a Fellow member of the Association of Chartered Certified Accountants (UK), a Chartered Accountant of the Malaysian Institute of Accountants and an Associate member of the Chartered Tax Institute of Malaysia. He has over thirty (30) years of working experience in Chartered Accountants firms, of which approximately four (4) years were in a medium size firm in London.

He is a Board member of Sarawak Land Development Board. He was a Sarawak State Legislative Council Assemblyman from 2006 to April 2011 and was a Councillor of Miri Municipal Council from 1988 to 1999.

He is an Independent Non-Executive Director of Ta Ann Holdings Berhad.



Polit Bin Hamzah, aged 64, was appointed as our Independent Non-Executive Director on 29 February 2008. He graduated with BSc (Hons) in Geology from University of Malaya in 1975. He worked for twenty (20) years (1975 – 1996) in the oil and gas exploration and production company (Petronas Carigali Sdn Bhd) in various technical and management positions with the last position being the General Manager in-charge of the Sabah Operations.

From 1997 – 2001, he headed the Land Custody and Development Authority, a body responsible for planning and development of lands for large scale commercial agriculture (oil palm, sago) plantations and property development throughout the state of Sarawak through partnerships with listed and private companies.

In 2002 -2003, he took up the position as the General Manager of the Sarawak Economic Development Corporation. From 2003 till to date, he continues to be involved in the Boards of various government and private owned companies in Sarawak and at the Federal level. He was a member of the Board of Lembaga Pergalakan Pelancongan Malaysia (Tourism Malaysia) a body corporate under the Ministry of Tourism, Malaysia. from 2003 – 2008.

He has been re-designated as Independent Non-Executive Director to Executive Director of Sarawak Plantation Berhad on 20 December 2012. He is also a director of KUB Sepadu Sdn Bhd.

Tuan Haji Abdul Aziz Bin Ishak, aged 62, was appointed as our Independent Non-Executive Director on 29 February 2008. A Naval Architect by profession, Tuan Haji Abdul Aziz Bin Ishak completed his secondary education at the Malay College, Kuala Kangsar in 1970 and later obtained an Ordinary National Certificate in Nautical Science from the Riversdale College of Technology, Liverpool, United Kingdom in 1974 and a Bachelor of Science in Naval Architecture and Ocean Engineering from the University of Glasgow, Scotland, United Kingdom in 1981. He later attended an Advanced Management Program at the Smeal Business School from the Pennsylvania State University in the United States of America.

He has over thirty (30) years of experience in the Oil and Gas and marine industry having started his careers as a Cadet and Deck Navigating Officer with Blue Funnel Line in Liverpool in 1971 and later joined Orient Lloyd (M) Sdn Bhd as Shipping Operations Executive in 1975. From 1981 to 1983, he was attached to Penang Port Commission as Naval Architect/Planning Engineer before joining PETRONAS, Marine Department in 1983 as Section Head. He was later promoted to Senior Manager, Technical Services of PETRONAS Tankers Sdn Bhd in 1990 and was posted to France and Japan before returning to Malaysia in 1996 as General Manager, Fleet Operations. In 1999, he was promoted to the position of Chief Executive Officer and Managing Director until his retirement in 2007.

Concurrently between 1999–2001, he was also the Senior General Manager for Fleet Management Division and Senior General Manager, LNG Shipping Business Division of MISC Berhad.

POLIT BIN HAMzAHIndependent Non-Executive Director

Chairman – Joint Remuneration and Nomination CommitteeMember – Audit Committee


TUAN HAJI ABDUL AzIz BIN ISHAKIndependent Non-Executive Director

Member – Audit CommitteeMember – Joint Remuneration and Nomination Committee



Koh Ek Chong, aged 53, was appointed as our Independent Non-Executive Director on 2 December 2013. He is an accountant by profession. Mr Koh joined Hii King Hiong & Co, in 1985 and is now one of the practicing partners. He is a Fellow member of the Association of Chartered Certified Accountants (UK), a member of Malaysian Institute of Accountants, associate member of the Chartered Tax Institute of Malaysia and a certified member of the Financial Planner Association of Malaysia.

Mr Koh was a City Councilor of Miri City Council since 2004 till 2013. He was awarded “Ahli Bintang Sarawak” ABS by the Tuan Yang Terutama TYT of Sarawak State in 2008. Mr Koh is an Ahli Kehormat of Ikatan Relawan Rakyat Malaysia with honorary title of LT KOLONEL (Kehormat) RELA. He also serves as the executive committee (EXCO) member in various non-governmental (NGO) associations.

He is an Independent Non-Executive Director of Shin Yang Shipping Corporation Berhad. and he is a member of the Board of Directors of Miri Port Authority.

Azlan Shah Bin Jaffril, aged 43, was appointed as our Independent Non-Executive Director on 2 December 2013. He graduated in Accounting from University Institute Technology Mara.

Encik Azlan started his career as an Investment Analyst with Seraya Kinta Sdn Bhd from 1993 to 1995. He then joined Ayer Molek Berhad, a plantation based company from 1995 to 1997. He was the Chairman of Youth Chamber of Malaysia of the Malay Chamber of Commerce Malaysia from 2001 to 2003. He was also the Vice President of the Football Association of Selangor (FAS) from 2004 to 2006.

He is currently a director in various private limited companies in Malaysia.

KOH EK CHONGIndependent Non-Executive Director

Member – Audit CommitteeMember – Joint Remuneration and Nomination Committee

AzLAN SHAH BIN JAFFRILIndependent Non-Executive Director



Ali Bin Adai, aged 58, was appointed as our Independent Non-Executive Director on 3 March 2014. He graduated with a Bachelor of Art degree from University of Guelph, Canada.

Encik Ali was employed with CIMB Bank Berhad as the Regional Director for East Malaysia (Sabah and Sarawak) until his retirement on 31 March 2013. He was responsible for managing 29 branches and for developing CIMB’s Retail, Commercial and Enterprise Banking businesses in East Malaysia.

He is an Independent Non-Executive Director of Sarawak Plantation Berhad.

ADDITIONAL INFORMATION ON THE BOARD OF DIRECTORS

1. Family relationships with any director and major shareholders Save for Joe Ling Siew Loung @ Lin Shou Long who is the son of Ling Suk Kiong, there are no other family relationship with the Directors and/or major

shareholders of the Company.

2. Nationality All Directors of the Company are Malaysians.

3. Any conflict of interest with the Company or its subsidiaries None of the Directors have any conflict of interest with the Company or its subsidiaries.

4. Convictions of offences (within the past 10 years, other than traffic offences) None of the Directors have been convicted for any offences.

5. Attendance of Board Meetings The details of Directors’ Board Meetings during the financial year are set out in the Statement of Corporate Governance.

ALI BIN ADAIIndependent Non-Executive Director

Member – Audit Committee


Message To Our Shareholders

Our Fellow Shareholders,

It is our greatest pleasure to present to you this Annual Report for the year ended 31 December 2013, our 6th full year as a listed entity on Bursa Malaysia.

The year 2013 was indeed an outstanding year as PETRONAS continues to ramp up its capital expenditure locally to address the declining hydrocarbon production which is of national importance. PETRONAS has awarded more than 30 production sharing contracts (PSCs) to oil majors/independent oil companies over the past three years. Based on MIDF Research, the RM300 billion capital expenditure plan set by PETRONAS remains intact with more than RM150 billion to be spent in the remaining 10 quarters until mid-2016. Recently, it awarded the 100th PSC in the busy Straits of Malacca - which is a relatively unconventional place to look for oil - to Salamander Energy Malaysia Ltd. This signifies the commitment from PETRONAS to further tap the hydrocarbon reserves in the country to boost our declining production.

Dayang’s outstanding track record in project execution has carved a strong brand name within the local oil & gas sector which continues to stand us in good stead for various project biddings.

Dayang emerged as the largest winner in the RM10 billion Pan Malaysia hook-up commissioning (HUC) contracts awarded in mid-2013, further cementing our position as the leading player in hook-up commissioning and topside maintenance services in Malaysia. The concerted effort from our team members has helped us to achieve this significant milestone which is no mean feat. Dayang secured the massive HUC job orders from Shell, Petronas Carigali, Murphy and JX Nippon, amounting to more than RM4.2 billion of order book. With this contract win, Dayang will be assured of strong visibility for the next five years, which we hope will bring more value to our fellow shareholders.

We are indeed proud to achieve this exceptional milestone which will continue to propel Dayang to greater heights going forward. Herein, we would like to express our heartfelt appreciation to all our devoted management and dedicated staff who have constantly strived to bring out their best to take Dayang to the next level. Without the tremendous support from our team members, Dayang would not be able to achieve what it has today. We are also looking forward for better times to unveil in the future, with the solid foundation that has been laid over the years.

In tandem with the massive Pan Malaysia HUC awards, Dayang’s market capitalisation has hit unprecedented levels of above RM3.0 billion, gaining by a whopping 143% over the course of 2013. We are pleasantly surprised by the strong confidence bestowed by the market and we believe that shareholders will continue to be rewarded as we strive to deliver better results going forward.


Message To Our Shareholders (continued)

Review of operations

Since securing the mega contracts in mid-2013, Dayang has been working tirelessly in preparation for the execution of the work orders. To this end, we have been undertaking aggressive hiring activities, bringing our latest headcount to 3,996 (as at 31 March 2014) from just 1867 employees at the beginning of 2013. In addition, we have entered into charter agreements with our associate, Perdana Petroleum Bhd in May 2013 to charter six accommodation vessels for five years (with a one-year extension option) to cater to the vessel requirement for our Shell HUC projects.

The strategic and synergistic collaboration with Perdana Petroleum not only ensures adequate vessel supply for Dayang to execute the jobs but also enables Dayang to ride on recovery of offshore support vessel market in Malaysia. Those contracted vessels have now been mobilised for the various HUC job orders which have started to come in full swing in 2Q14 after the inclement weather in 4Q13 and 1Q14.

The extensive preparatory works undertaken by the Group over 2013 is a significant one. Major expansion activities have come along the way to fully equip ourselves in order to ensure seamless process when it comes to project execution stage. For instance, Dayang has expanded capacity at our yards in Labuan and Kemaman. We have also spent large amount of money to procure the equipment, consumables etc, in anticipation of busy schedule in 2014 when our clients start to issue more work orders.

Continuous fleet expansion to support our increasing jobs has always been at the forefront of our business development. Dayang has placed a work boat order with Shin Yang Shipyard in Sep 2013 which will be delivered by end of 2014. At this juncture, Dayang owns a fleet of six work boats, making it one of the largest accommodation vessel owner/operator in Malaysia. Our careful planning of adding one new vessel every year continues to bode well for the Group’s operation as we strive to maximise and optimise vessel utilisation to ensure highest profitability to our shareholders.

Despite the huge HUC contract wins, we have also been executing our outstanding order book diligently. The focus and attention to successful bid for the Pan Malaysia HUC jobs have not shifted our commitment to consistently deliver with the highest quality and efficiency. More work orders and jobs were successfully completed during this period and profits also increased accordingly.

Financial review

For the financial year (FY) ended Dec 2013, Dayang recorded net profit after tax of RM149.29 million, representing an impressive 47% year-on-year increase. This is the best performance ever reported by Dayang since our inception, a great testament of how much we have grown over the years. Again, this is not possible had it been without the contributions from everyone within Dayang.

Our strong performance was also boosted by a one-off RM32.80 million reclassification of fair value reserve arising from reclassification of our investment in Perdana Petroleum Bhd as an equity-accounted associate. We take cognisance of the non-recurring nature of the fair value gain, but the gains underline our timely opportunity of the investment of which Dayang is now reaping handsome rewards.


Financial review (continued)

Dayang’s FY2013 revenue was also the best ever at RM552.63 million, compared to RM401.22 million in FY2012. The strong operational improvement largely stems from higher order backlogs and fleet utilisation. There is minimal contribution from the Pan Malaysia HUC jobs as these were only awarded in May 2013. As we have incurred the mobilisation expenses for the jobs in FY2013 and 1Q14, the true reflection of the contribution should come in meaningfully starting 2Q of FY2014. From here on, we will remain steadfast on driving our top line and continuously fine-tuning our bottom line.

In addition, strong turnaround by Perdana Petroleum Berhad has contributed to our exceptional financial performance. Our share of profit from the 25%-owned associate came in at RM14.13 million, consisting of 9.5% of our reported net profit after tax. Perdana Petroleum Berhad will be taking new vessel delivery in FY2014 which is expected to further grow its financial performance.

Apart from the good set of financial performance, Dayang’s Statement of financial position also remains healthy with only RM20.39 million net gearing (as at December 2013). This translates into 3% net gearing ratio which is significantly lower than our oil & gas peers in Malaysia. We would like to stress that this is after the result of heavy capital investment by the Group in FY2013 in order to prepare ourselves for more job orders over the next five years. Dayang’s RM154 million of capital expenditure in FY2013 (vs RM40 million in FY2012) is also the highest in our history.

In tandem with strong profitability, our shareholders’ funds for FY2013 grew to RM666.4 million from RM597.3 million. Meanwhile, cash flow generated from operating activities remained high at RM127.48million, compared to RM98.09 million in FY2012.

Dividends

Dayang has long been known as one of the very rare oil & gas players that pay decent dividends to shareholders. We have every intention to continue with this proud tradition as we always take shareholders’ benefit to our hearts.

During FY2013, Dayang announced its first interim dividend of 5 sen in Aug 2013 (prior to bonus issue) and second interim dividend of 3.5 sen in Feb 2014. All in, the dividend payment translates into circa 1.47% dividend yield which is relatively attractive, considering the capital intensive nature of oil & gas sector.

Dayang has a healthy Statement of financial position to continue rewarding our loyal shareholders who have faithfully backed the Company even in the face of adversity. We will take into consideration both the needs of capital investments and dividend payments to achieve optimal balance, in the best interest of all stakeholders and at all times.

Corporate exercise

In Dec 2013, Dayang announced that it proposed to undertake a bonus issue of up to 275m shares on the basis of 1 bonus share for every 2 existing Dayang shares. The corporate exercise has been successfully completed in Jan 2014 and the Company’s share base has been enlarged to 825 million shares which is expected to help improve trading liquidity and affordability of Dayang shares.




Prospects

Fellow shareholders, we believe that Dayang is now at an inflection point which will herald a new era of strong growth trajectory after winning the lion share of the RM10 billion Pan Malaysia HUC jobs. Having said that, we will not rest on our laurels, but instead we will continue to explore more opportunities as Petronas remains committed to its record high capital expenditure program to boost oil production. The concerted efforts by PETRONAS to drive production via various initiatives, especially enhanced oil recovery, will be a precursor to more offshore contracts going forward. Petronas is targeting to recover additional 10-15% of oil from existing fields, which will slow the decline by 2-3%, compared to international standards of 8-9%.

Progressive roll-out of more Enhanced Oil Recovery (EOR) projects and Engineering Procurement Construction Installation and Commissioning (EPCIC) projects will continue to sustain the growth momentum of the Malaysian O&G sector. Malaysia still has more than a dozen of platform-based water-alternate-gas EOR projects under study, around 8 of which are expected to be tendered for construction over the next three years. The construction of a platform for ExxonMobil’s Tapis EOR is near completion, but there are a few more brownfields in the design stages.

In addition, we gather that several fields will move into the front-end engineering design (FEED) stage over the next two years. These will ensure that Malaysia’s O&G sector remains robust over the next few years, which will ultimately benefit the local service providers. Also, there may be more EOR initiatives from Petronas given the urgency to boost domestic oil production.

Dayang could leverage on its outstanding track record to offer its relevant services to tap into the growing offshore oil & gas industry in Malaysia. Opportunities are also abound both regionally and internationally for Dayang. We are optimistic that prospects look bright and your Board will continue to explore every single opportunity diligently and vigilantly.

Acknowledgments

On behalf of our Board of Directors, we wish to express our sincere thanks to all stakeholders who have played critical roles in helping us to achieve a spectacular year in FY2013.

The strong confidence from our valued clients and business associates helps us to grow from strength to strength and the quality delivery from our vendors and suppliers ensure our impeccable track record remains intact. To our bankers, financiers and investors, we thank you for your continued support and trust in Dayang.

Last but not least, to our management and employees, thank you very much for your hard work and let us continue to “Focus towards Excellence”! May all of us have a great year ahead!

Thank you

Datuk Hasmi Bin HasnanExecutive Chairman

Tengku Dato’ Yusof Bin Tengku Ahmad ShahruddinManaging Director


Corporate Social Responsibility

Corporate Social Responsibility (CSR)

The Group is committed to promote corporate social responsibilities as an integral part of the Group whilst pursuing business growth to enhance shareholders and stakeholders value. Management recognizes that for long term sustainability, its strategic orientation will need to cater beyond the financial parameters.

During the year, the Group organized several activities to sustain its CSR responsibilities to the environment, employees and the community. Among the main programmes initiated were Health, Safety and Environment (“HSE”) awareness week, sport and recreation activities and welfare events.

THE WORKPLACE

a) Education and Individual Development

The Company values the contributions from the employees which attributes to the success of Dayang Group. The Dayang Group currently employs more than 3,500 employees in its operations. We strive our utmost best to create a conducive environment for learning and knowledge creation in the organization to improve growth and work satisfaction for our personnel. We continue to take appropriate measures to further develop and reward the competency, hard work and expertise of our talents.

The Group continuously provides its employees with skills development and training programmes that encourage progression and self- enrichment. Throughout the year under review, Dayang conducted several in-house trainings to motivate employees and to upgrade their skills. Employees have also enrolled in courses/seminars/workshops to keep abreast of current issues and updates related to their course of work.

b) Sports and Recreational Activities

The Company believes that good relationships can be fostered through sports and other activities. Sports activities within and outside the workplace have been organized with the objective of encouraging employees to live a healthy lifestyle and at the same time promote a teamwork spirit among employees.

Various social and sporting activities are organized on a regular basis, with the Company’s in-house sports club continuing its active role to encourage our employees to participate in these activities. The Company had organized sporting events such as badminton and bowling tournament during the year. The Group held its Annual Dinner on 18th January 2014 at Mega Hotel in Miri.

Other than competitions to promote a healthy lifestyle, our recreational club is also renting three badminton courts on a monthly basis to provide employees continual sporting and recreational activities.

On 1 August 2013, the Company organised a Buffet Ramadan held at Eastwood Valley Golf & Country Club Miri as a gesture of appreciation to the staff, family, clients and contractors.

A DESB/PCSB Pan Malaysia HUC teambuilding was held on 11-12 November 2013 at the Felda Residence, Sungkai, Perak to provide an opportunity for employees and the client to foster better ties and share knowledge.

The Company also held a Management QHSE Away Day cum Budget session for key personnel on 29 November – 1 December 2013 at Shangri-La Rasa Ria Resort, Kota Kinabalu, Sabah to present and discuss QHSE issues, current projects and forecast performance as well as the company’s direction and the overall budget for the Group for the next financial year.


Corporate Social Responsibility (continued)

COMMUNITY

Dayang Group is dedicated to support the community, particularly the less fortunate. We believe that charity starts by reaching out to the community around us. Our contributions are largely monetary donations to charities and worthy causes.

During the course of the year, we have donated to the following organizations:

1. Miri City Council for Miri City Day Celebration and Miri City Fest2. Sarawak Basketball Association3. Pallative Care Association of Miri4. Kelab Sukan dan Rekreasi Dayak Sarawak5. Curtin University Technology, Science and Engineering International Conference6. Pembinaan Masjid Al Faridee7. Persatuan Diabetes Malaysia8. Riam Road Secondary School, Miri Lion Dance9. Society of Disabled, Miri for disabled Welfare and Building Fund10. Asian Supply Base Sdn Bhd – Old Folks Home and Skilled Training Centre11. Perhidmatan Pengurusan Pentabiran Pelbagai AYC Asia Tenggara for Welfare and Education Fund12. Miri Dayak Sports and Recreational club (KESUDAM)13. Badan Kebajikan Bekas Relawan Negara Malaysia for ‘Kempen Cegah Jenayah, Karnival Kesihatan Dan Kempen Derma

Darah Amal 1 Malaysia14. Federation of Orang Ulu Associations Sarawak Malaysia15. Perniagaan Perusahan Pengiklanan dan Pertukangan Anak Yatim dan Cacat Tenggara Asia16. Malaysia Thalassaemia Welfare17. Sekolah Tuanku Abdul Rahman, Ipoh being sponsorship for Claret Asian Schools Debate championship 201318. Surau Al Taqwa, Ukay Perdana19. SM Sains Sultan Haji Ahmad Shah for musical instruments

These contributions were in line with the Group’s commitment to support and keep abreast with society’s evolving needs.

One unit of “Philip” Heart Start XL Smart Biphasic Defibrillator/Monitor costing RN18,000.00 was acquired and handed over to the Surgical Department of Miri Hospital on 7 January 2014 from the proceeds of a fundraising charity car wash carried out from 15 August 2013 to 30 September 2013. This charity project was held in conjunction with the Company’s Annual QHSE Week.

In conjunction with the Company’s Quality, Health, Safety and Environment (QSHE) Campaign, the Company organized a Blood Donation Drive at its Miri Head office on 21 August 2013 and successfully collected fifty-eight (58) pints of blood.

During the year, the Company also supported Charity Golf tournaments organized by Asian Supply Base Sdn Bhd – TYT’s Charity Golf Classic 2013, Society of Petroleum Engineers – SPE Sabah Section Charity Golf 2013 and Miri Golf Club – 25th KGM Amateur Open Golf Championship 2013 apart from Dayang Golf Challenge held on 19 – 20th October 2013.

A major focus of our community initiatives is in education. Each year we provide internships to deserving Malaysians to take part in the internship programme whereby we provide practical training to the undergraduates where opportunities of employment are given to them upon completion of their degree programmes. The training provided them with valuable experiences and knowledge besides the opportunity to fulfill their university requirements.



SAFE WORKPLACE PRACTICES

Dayang is committed to provide its employees with safe conditions of work. We have effective and efficient management arrangements in place to ensure the well being of staff and others who may be affected by our activities to minimise the adverse impacts to individuals and the business from ill health and injury. We take a precautionary approach by applying the requirements defined by our high Health, Safety and environment (“HSE”) standards being set at the beginning of the year. In our own HSE management practices, we comply with all HSE policies and procedures and as well as our clients’ requirements. We are committed to taking responsibility for our own safety and for the safety of others. We believe that all incidents and accidents can be prevented. We always emphasize our high HSE standards of conduct when dealing with clients, suppliers and other stakeholders.

We are constantly improving our HSE performance with the substantial increase in the size of our workforce. This is a good indication that we are managing our business effectively and responsibly. However, Dayang aims to continually improve its systems thus safeguarding against complacency. We will continue to set ourselves ever more ambitious targets.

To fulfill our HSE policy, we:

• requiregoodHSEbehaviourandfollowtherulesandinstructionsthatwehavesetinallourdailyactivities;• continuouslyimproveourpracticesandworkenvironment;.• designoursolutionsandservicestohelpourclientsimprovetheirHSEperformance;• striveforefficientandsustainableuseofenergy,resourcesandmaterialsinallouroperations;• conduct regular water sampling at all our locations/vessels to ensure that potable water is fit for human consumption

according to WHO guidelines.• Aswevaluethehealthofallouremployeeswearecontinuouslymonitoringconditionsat theworksites toensurethat

employees and contractors are not subjected to conditions that could lead to adverse health effects.• ThroughouttheyearwehaveconductedanumberofHSEtrainingsandcoursesforvariousgroupsatdifferentlevelsof

personnel to improve awareness, skills and knowledge throughout the organization.• TheCompanyorganizeditsyearlyQHSECampaignfrom2September2013to6September2013withthefollowingtheme:

“QHSE Go Hand In Hand; Right First Time; Safety Every Time”


SAFE WORKPLACE PRACTICES (continued)

An awareness campaign was also conducted at our Bintulu yard, Labuan Warehouse and on board Dayang Pertama from 5 – 9 September 2013. Other activities carried out during the QHSE Campaign were talks on Weight Management and Body Immunity, Managing An Acute Soft Tissue Injuries by TAGS Spine & Joint Specialist, Goal Zero and Life Saving Rules by HSE Advisor SMEP as well a “Noise Induces Hearing Loss” by Dr Selva, Ear, Nose, Throat Specialist of Columbia Asia Hospital, Miri.

To ensure the safety and health of our employees, various other HSE programmes and campaigns have also been organised during the year as follows:

1. HSE Training (both in-house and external)2. Conduct Pre-mob Briefing prior to mobilization of crew3. Organised Management Inspection Visit(MIV) or Management Site Visit(MSV)4. Conducted Monthly OSH Committee Meeting and LOCHSEC Meeting5. Quarterly Seniors Management HSE Engagement Session with Clients6. Monthly HSE Liaison Engagement Session with Client7. Audit by Client8. Conducted Random Drug & Alcohol Test for personnel9. Health Monitoring for BMI and Blood Pressure10. Timely disposal of Scheduled Waste

The Group will continue to identify and undertake more related events to fulfill its corporate social responsibility in any way and would contribute to preserving the values of society.

Dayang is committed to maintaining the highest HSE standards throughout our operations as well in its pursuit of its future projects and businesses.

Additional resources and HSE Management Systems are being progressively introduced and Dayang is working to achieve two international standard of certifications on safety and health management system ie OHSAS 18001:2007 and ISO 14001:2004. The two certifications are part of the company’s integrated efforts towards achieving enhanced and continuous excellence in quality, health, safety and environment. (QHSE). The implementation of the two systems is targeted to reduce accidents and reduce the risk of losing key workers through injuries, thus ensuring that disruption caused from accidents is kept low. The ISO 14001:2004 Environment Management System (EMS) is a tool to enable us to identify and control the environmental impact of our activities and products or services besides improving environmental performance continually.

In addition to enhancing the organization’s reputation and brand, the OHSAS certification also demonstrates that the organization adheres to high standards with regards to health and safety. The Company will continue with its unwavering commitment to safety through continuous education and learning process across the board.

We continue to strive to adhere to stringent occupational health and safety practices, providing a safer working environment for our workforce.



Audit Committee Report

MEMBERS OF THE AUDIT COMMITTEE

The members of the Audit Committee are as follows:

Chia Chu Fatt Chairman (Independent Non-Executive Director)Polit Bin Hamzah Member (Independent Non-Executive Director)Tuan Haji Abdul Aziz Bin Ishak Member (Independent Non-Executive Director)Koh Ek Chong (Appointed on 25/4/14) Member (Independent Non-Executive Director)Ali Bin Adai (Appointed on 25/4/14) Member (Independent Non-Executive Director)

COMPOSITION AND TERMS OF REFERENCE

The Terms of Reference of the Audit Committee (“Terms of Reference”) outlines and incorporates the roles and responsibilities of the Audit Committee as prescribed under the Listing Requirement (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and the Malaysia Code on Corporate Governance (“the Code”).

The Audit Committee comprises at least three members, all of whom are independent directors of the Board of Directors. The members choose their chair from the Independent composition of the Committee.

The Committee members are appointed by the Board of Directors, which in its opinion would exercise independent judgment based on the structure and composition of the Committee.

The Committee shall include at least one (1) person who is a member of the Malaysian Institute of Accountant or alternatively a person who must have at least 3 years’ working experience and have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967 or is a member of one the associations specified in Part II of the said Schedule.

The Secretary to the Board of Directors shall also be secretary of this Committee.

MEETINGS OF THE AUDIT COMMITTEE

The Audit Committee meets at least four times a year during the finalization of the financial accounts of the Group and its subsidiaries for the quarterly announcements to Bursa Malaysia Securities Berhad. The principal focus of any other meeting(s) will be on management control and internal audit.

At the request of the Chair, the other Executive Directors and other executives (in particular the Head of Internal Audit) will be in attendance at Committee meetings or for selected agenda items. The representatives of the external auditors may also be invited to attend the meetings.

AUDIT COMMITTEE MEETINGS HELD DURING THE FINANCIAL YEAR 2013

The Audit Committee held seven meetings during the financial year under review with the following attendance record:

Name of Directors Attendance*

Chia Chu Fatt 6/7

Polit Bin Hamzah 7/7

Tuan Haji Abdul Aziz Bin Ishak 6/7

Koh Ek Chong N/A

Ali Bin Adai N/A

*Number of meetings attended/Number of meetings held

REPORTING LINE OF THE AUDIT COMMITTEE

The Audit Committee reports directly to the Board of Directors.


Audit Committee Report (continued)

THE RESPONSIBILITIES OF THE AUDIT COMMITTEE

The Audit Committee is responsible for the following:

• Toexaminethemannerinwhichmanagementensuresandmonitorstheadequacyofthenature,extentandeffectivenessofaccountingandinternalcontrolsystems;

• Toexamineandreviewtheadequacyandeffectivenessofmanagementandoperations;

• Toreviewthestatutoryaccounts,quarterlyresultsandyearendfinancialstatementsandotherpublishedinformation,priortotheapprovalbytheBoardofDirectors;

• Tonominateandrecommendtheexternalauditorforappointment,toconsidertheadequacyofexperience,resources,auditfeeandanyissueregardingresignationordismissaloftheexternalauditor;

• Tomonitor relationshipwithexternalauditors, toensurethat therearenorestrictionsonthescopeof thestatutoryaudit;tomakerecommendationsontheauditors’appointment,remunerationanddismissal;andtoreviewtheactivities,findings,conclusionsandrecommendationsoftheexternalauditors;and

• Toreviewarrangementsestablishedbymanagementforcompliancewithregulatoryandfinancialreportingrequirements.

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The following activities were performed by the Audit Committee during the financial year ended 31 December 2013:

1) Reviewed the unaudited quarterly reports and annual financial statements of the Group and its subsidiaries with management and external auditor to ensure compliance with the generally accepted accounting principles and Financial Reporting Standards.

2) Based on the satisfactory review and discussion above, the Audit Committee recommended to the Board of Directors that the quarterly unaudited financial statements and annual financial statements to be approved for announcement to Bursa Malaysia Securities.

3) Reviewed related party transactions on a quarterly basis. Where commercial relationship existed between each director, major shareholders and persons connected to Dayang Group and its subsidiaries, the Audit Committee and the Board would ensure that such transactions were on normal commercial terms that were not more favourable to the related parties than those generally available to the public.

4) Reviewed, evaluated and discussed the internal audit plan, scope of work and reports with the Head of Internal Audit.

5) Reviewed and evaluated with external auditors in their audit plan, scope of work as well as the audit procedures to be utilized.

6) Reviewed the external auditors’ fees and services.

OVERSEEING THE INTERNAL AUDIT FUNCTION

The Committee shall oversee all internal audit functions and is authorized to commission investigations to be conducted by internal audit as it deems fit. The internal auditor shall report directly to the Committee and shall have direct access to the Chairman of the Committee.

All proposals by management regarding the appointment, transfer or dismissal of the internal auditor shall require the prior approval of the Committee.

The total cost incurred for the Group Internal Audit function in respect of the financial year ended 31 December 2013 amounted to approximately RM115, 000.00.


Statement on Risk Management and Internal Control

Introduction

The Malaysian Code on Corporate Governance (“Code”) sets out the principle that the Board of Directors (“Board”) of a listed company should establish a sound risk management framework and internal control system to safeguard shareholders’ investment and assets of the Group.

The Statement on Risk Management and Internal Control by the Board of Directors (“Board”) on the Group is made pursuant to paragraph 15.26(b) of the Listing Requirement of Bursa Malaysia Securities Berhad and in accordance with the Principles and Recommendations relating to risk management and internal control provided in the Code.

Responsibility

The Board acknowledges its responsibility for the Group’s system of risk management and internal control which includes the establishment of appropriate control and framework as well as reviewing the adequacy and integrity of these systems in particular the financial, operational, as well as compliance aspects of the Group throughout the financial year.

There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group in its achievement of objectives and strategies. The process has been in place during the year up to the date of approval of this statement and is subject to review by the Board. It should be noted that the system is designed to manage rather than to eliminate risks of failure in achieving business objectives, and that it can only provide reasonable and not absolute assurance against material misstatement or loss or the occurrence of unforeseeable circumstances.

The Board is assisted by Senior Management in implementing the board-approved policies and procedures on risk and control byidentifyingandanalyzingriskinformation;designingandoperatingsuitableinternalcontrolstomanageandcontroltheserisks;and monitoring the effectiveness of the risk management and control activities.

The Board’s responsibility for internal control does not cover the associate companies which are separately managed.

Risk Management

Charged with the responsibility to identify principal risks of the Group and ensure the implementation of a proper and appropriate system to manage these risks by the Board, the Risk Management Committee has developed the risk register and framework. Key risks of major business units are identified, assessed and categorized to highlight the source of risks, their impacts and the likelihood of occurrence. Risk profiles for the major business units, for which respective members of Senior Management are responsible, are presented to the Risk Management Committee and Board for deliberation and approval for adoption.

The risks identified for the Group are considered in formulating the strategies and plans that are approved and adopted by the Board. The strategies and plans are monitored and revised as the need arises. These processes are embedded within the Group’s overall business operations and guided by the documented policies and procedures.

Internal Control

Internal controls are embedded in the Group’s operations as follows:

• Clearly defined organizational structure with clear lines of delegation of responsibility to Committees of the Board,management and operating units.

• The internal audit function provides assurance on the effectiveness of the system of internal control within the Group.Regular internal audits are performed to review effectiveness of the control procedures and ensure accurate and timely financial management reporting.

• TheAuditCommittee reviews thequarterly interim reports andannual financial statements andalso reviewsall relatedparty transactions and conflict of interest situation. Internal audit reports are deliberated by the Audit Committee, and are subsequently presented to the Board on a quarterly basis.

Group Internal Audit

The Board acknowledges the importance of the internal audit function as part of its effort in ensuring the system of internal control of the Group is adequate and effective. The main function of the Group Internal Audit is to provide an independent objective assurance and consulting services designed to enhance work activities of the Group by emphasizing a systematic approach to evaluate and improve the effectiveness of the system of internal control.


Statement on Risk Management and Internal Control (continued)

The Group Internal Audit activities are carried out according to an annual audit plan approved by the Audit Committee. The audit plan is prepared based on the key risks identified within the Group. The internal audit provides an assessment of the adequacy and integrity of the Group’s system of internal controls and provides recommendations, if any, for the improvement of the control policies and procedures. The results of the internal audit assessments are reported periodically to the Audit Committee.

Review by Board

The Board’s review of risk management and internal control effectiveness is based on information from:

• SeniorManagementwithintheorganizationresponsibleforthedevelopmentandmaintenanceoftheriskmanagementandinternalcontrolsystem;and

• TheworkbytheinternalauditfunctionwhichsubmitreportstotheAuditCommitteetogetherwiththeassessmentoftheinternal control system relating to key risks and recommendations for improvement.

The Board is satisfied that, during the year under review, the existing system of risk management and internal control is sound and adequate to safeguard the Group’s assets at the existing level of operation of the Group. The Board recognizes that the development of risk management and internal control system is an ongoing process. Therefore, in striving for continuous improvement, the Board will continue to take appropriate action plans to further enhance the Group’s system of risk management and internal control.

The Board also received assurance from the Managing Director and Financial Officer that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects based on the risk management and internal control system of the Group.

The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Recommended Practice Guide (“RPG”) 5 (Revised), Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the annual report of the Group for the year ended 31 December 2013, and reported to the Board that nothing has come to their attention that cause them to believe that the statement intended to be included in the annual report of the Group, in all material respects:

(a) has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers, or

(b) is factually inaccurate.

RPG 5 (Revised) does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Board of Directors and management thereon. The auditors are also not required to consider whether the processes described to deal with material internal control aspects of any significant problems disclosed in the annual report will, in fact, remedy the problems.

The statement is made in accordance with a resolution of the Board of Directors dated 25 April 2014.


Statement of Corporate Governance

The Board of Directors (“The Board’) recognizes the importance of good corporate governance and had continuously ensured that a sound framework of best corporate practices is in place within the Company to enhance corporate accountability and safeguard the interests of all stakeholders.

The Board is pleased to report to the shareholders herein the manner in which the Company has applied the Principles of good governance and the extent of compliance with the Recommendations as set out in the Malaysian Code on Corporate Governance 2012 (“MCGG 2012” or “the Code”) issued by the Securities Commission as prescribed under Paragraph 15.25 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements (“Listing Requirements”). These Principles and Recommendations have been applied by the Group throughout the financial year ended 31 December 2013 unless stated otherwise.

DIRECTORS

The Board and its Responsibilities

The Group is led by the Board that controls the overall performance of the Group. The role of the Board includes the following five (5) specific areas:

(a) Reviewing and adopting strategic plans for the Group.(b) Overseeing the conduct of the Group’s business to evaluate whether the business is being properly managed.(c) Identifying principal risks and ensuring implementation of appropriate systems to manage these risks.(d) Developing and implementing an investor relations program for the Company to communicate effectively with its shareholders.(e) Reviewing the adequacy and integrity of the Group’s internal control and management systems, including systems for

compliance with applicable laws, regulations, rules, directives and guidelines.

Code of Ethics and Conduct

The Group is committed to conduct its businesses and operations with integrity, openness and accountability and to also conduct its affairs in an ethical responsible and transparent manner. The Group also has a code of conduct and ethics for employees that set the standards and ethical conduct expected of employees.

Board Balance

Currently, the Board consists of thirteen (13) members, comprising 5 Executive Directors and 8 Non-Executive Directors of which five (5) are independent. One (1) Non-Independent Non-Executive Director, two (2) Independent Non-Executive Directors were appointed during the year under review and one (1) Independent Non-Executive Director was appointed to the Board on 3 March 2014. At least one third of the Board are Independent Directors who are independent of management and are free from any businesses or other relationships that could materially interfere with the exercise of independent judgment.

The present composition of the Board is in compliance with Paragraph 15.02(1) of the Listing Requirements of Bursa Malaysia Securities Berhad which requires one third of the Board members to comprise independent members.

Under Recommendation 3.5 of the Code, it is recommended that if the Chairman of the Board is not an Independent Director, then the Board should comprise a majority of Independent Directors. As the present number of six (6) Independent Directors is below the majority number of the Board members suggested by the Code, the Board will continuously evaluate suitable candidates to be appointed as Independent Directors in order to fulfill the said recommendation in the coming years.

The Board continually evaluates its requirements as to the appropriate mix of skills and experience required to ensure that its composition remains optimal for the effective discharge of its responsibilities. Their expertise and know-how have been gained through their years of involvement as players in their respective fields. The Non-Executive Directors do not participate in the day to day management of the Group and do not engage in any business dealing with the Group in order to ensure that they remain truly capable of exercising independent judgment and act in the best interests of the Group and its shareholders.

There is a clear segregation of responsibilities between the Chairman and the Managing Director to ensure a balance of power and authority. The Chairman is responsible for ensuring Board effectiveness and conduct whilst the Managing Director is responsible for the overall management of the Group ensuring organizational effectiveness and implementation of Board policies and strategies.

In accordance with the best practices in corporate governance, Mr Chia Chu Fatt continues to play his role as the Independent Director of the Board to whom concerns of shareholders and stakeholders may be conveyed. Mr Chia is also the Chairman of the Audit Committee of the Board and a member of the Nomination and Remuneration Committee.

His email contact is [email protected].

A brief profile and status of each Director is presented on pages 9 to 15.


Statement of Corporate Governance (continued)

Board Meetings

The Board meets on a scheduled basis at least a minimum of five (5) times a year. All Board meetings are set before the beginning of the year with firm dates which enable the directors to plan their schedule to ensure full attendance of the meetings. Special Board meetings may be convened to consider urgent proposals or matters that require expeditious decision or deliberation by the Board.

The Board has met six (6) times during the financial year ended 31 December 2013 where it deliberated and considered a variety of matters affecting the Group’s operations including the Group’s financial results, business plan and the direction of the Group. All proceedings of the Board meetings are duly minuted and signed by the Chairman of the Meeting.

The details of attendance of the directors held during the financial year are as follows:-

Name of Director No of Meetings Attended Percentage of Attendance (%)

Datuk Hasmi Bin Hasnan 4/6 66.67

Ling Suk Kiong 6/6 100.00

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin 6/6 100.00

Joe Ling Siew Loung @ Lin Shou Long 5/6 83.33

Gordon Kab @ Gudan Bin Kab 6/6 100.00

Jeanita Anak Gamang 6/6 100.00

Mohd Ashraf Assai Bin Abdullah (Resigned on 29/06/13) 3/4 75.00

Tuan Haji Abdul Aziz Bin Ishak 4/6 66.67

Polit Bin Hamzah 6/6 100.00

Chia Chu Fatt 6/6 100.00

Wong Ping Eng (Appointed on 01/10/13) 1/1 100.00

Azlan Shah Bin Jaffril (Appointed on 02/12/13) N/A N/A

Koh Ek Chong (Appointed on 02/12/13) N/A N/A

Ali Bin Adai (Appointed on 03/03/14) N/A N/A

All Directors have complied with the requirement of at least 50% attendance of Board meetings held in the financial year ended 31 December 2013 pursuant to the Listing Requirements.

Supply of Information

All Directors are provided with an agenda together with appropriate board papers containing information on major financial, operational and corporate matters of the Group prior to the Board meetings. This is issued in sufficient time to enable the directors to review the papers in preparation for the meeting and to obtain further explanations, where necessary and also to give the directors time to deliberate on the issues to be raised at the meeting.

All matters discussed and resolutions passed at each Board meeting are recorded in the minutes of the Board meeting. These minutes are circulated to all Directors for their perusal and confirmation and any Director can request for further clarification on the minutes prior to their confirmation.

Directors also have direct access to the advice and services of the Company Secretaries on compliance issues and ensure that the Company’s policies and procedures are followed. The Directors are also empowered to seek independent professional advice at the expense of the Company, should they consider it necessary in their course of duties.

Insider Trading

In line with the Listing Requirements and the relevant provisions of the Capital Markets & Services Act 2007, directors and principal officers of the Group are prohibited from trading in securities based on price sensitive information and knowledge, which have not been publicly announced. Notices of closed period for trading of Dayang securities are circulated to directors and principal officers who are deemed to have access to any price sensitive information and knowledge, one month prior to the announcement of the quarterly results.



Board Committees

As part of its efforts to ensure the effective discharge of its duties, the Board has delegated specific functions to other Board Committees as prescribed under the MCCG 2012, namely the Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Risk Management Committee. Each committee have been given clear terms of reference which have been approved by the Board to operate and deliberate on issues before putting up for recommendation to the Board.

1. Audit Committee The Audit Committee is responsible for reviewing issues of accounting policies and presentation for external reporting,

monitoring the work of the internal audit function and ensures the objective and professional relationship is maintained with the external auditors. The composition of the Audit Committee is in compliance with relevant regulatory requirements. The terms of reference for the Audit Committee are spelt out in the Audit Committee Report.

2. Joint Remuneration & Nomination Committee - TodeveloptheGroup’sremunerationpolicyforExecutiveDirectorstotheBoard; - TorecommendtheremunerationpackagesandtermsofemploymentofExecutiveDirectorstotheBoard; - TorecommendtotheBoardcandidatesforappointmentasnewDirectorsandmembersofBoardCommittees; - TorecommendtotheBoarddirectors’retirementandre-electionofdirectors; - To assess the effectiveness of the Board and Board Committees and - To arrange orientation programs for new directors.

The Joint Remuneration & Nomination Committee currently consists of four (4) Independent Non-Executive Directors. During the year under review the Joint Remuneration & Nomination Committee met four times to carry out its responsibilities.

The members of the Nomination & Remuneration Committee are as follows:

Name Position Attendance

Polit Bin Hamzah Chairman 4/4Tuan Haji Abdul Aziz Bin Ishak Member 4/4Chia Chu Fatt Member 4/4Koh Ek Chong (Appointed on 25/4/14) Member N/A

The Board acknowledges the recommendation of the Code relating to the establishment of boardroom gender diversity policy. The Board has no immediate plans to implement a gender diversity policy or target, as it is of the view that the suitability of candidates is dependent on each candidate’s competency, skills, experience, character, time commitment, integrity and other qualities regardless of gender.

3. Corporate Social Responsibility Committee - TodevelopandimplementtheGroup’sCorporateSocialResponsibilityframework; - Toincorporateenvironmentallyfriendlypracticeswhilstcarryingoutouroperations; - Toestablishculturesociallyresponsiblebehaviorsamongmanagementandemployees; - To create opportunities for the Group to participate in the development of a caring and harmonious community and - Benchmarking corporate governance to best practices to look after the interests of minority shareholders.

The members of the Corporate Social Responsibility Committee are as follows:

Name Position

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin ChairmanChia Chu Fatt MemberGordon Kab @ Gudan Bin Kab Member

4. Risk Management Committee - Toestablishtheriskpoliciesandriskframeworks; - To identify, evaluate and monitor the risks portfolio, - Toformulatemitigationstrategies/actionplanstomanagetheoverallriskassociatedwithouractivities; - To recommend appropriate risk management policies and procedures which shall be reviewed regularly to ensure that

they are both appropriate and adequate for the long term viability of the Group and - To ensure a proper balance between risk incurred and potential returns to our shareholders.



4. Risk Management Committee (continued) During the year, the Risk Management Committee met once to identify and discuss the existing and potential critical risk

areas faced by the Group and the management action plans to mitigate such risks by working with the internal auditors in providing periodic reports and updates to the Audit Committee.

The members of the Risk Management Committee are as follows:

Name Position

Gordon Kab @ Gudan Bin Kab ChairmanLing Suk Kiong MemberTengku Dato’ Yusof Bin Tengku Ahmad Shahruddin MemberJoe Ling Siew Loung @ Lin Shou Long MemberPolit Bin Hamzah Member

Appointment and Retirement of DirectorsIn accordance with Article 86 of the Company’s Articles of Association, at least one-third (1/3) of the Directors for the time being, or the number nearest to one-third (1/3) shall retire from office at each Annual General Meeting. All Directors of the Company are subject to re-election by the shareholders and are subject to retire from office at least once every three (3) years.

Newly appointed directors shall hold office until the next following annual general meeting and shall then be eligible for re-election by shareholders as provided in Article 93 of the Company’s Articles of Association.

Directors’ TrainingThe Board acknowledges the importance for continuous training to keep abreast of the latest regulatory requirements and developments in the related industry. Therefore, the Directors are encouraged to evaluate their own training needs on a continuous basis and to determine the relevant programmes, seminars and briefings that would enhance their knowledge to enable the Directors to discharge their responsibilities more effectively. All the directors of the Company have completed their Mandatory Accreditation Programme as required by Bursa Malaysia Securities Berhad.

For the year under review, some of the seminars, courses and training programmes attended by the Directors were as follows:

• Directors’RemunerationSeminar2013“TheBestPractice”byMalaysianInstituteofCorporateGovernance(MICG)on28ndFebruary 2013

• PLCDirectors-IntegratingCorporateGovernancewithBusinessAcumenconductedSmartFocusBusinessConsultingon22nd April 2013

• TheMalaysianCodeofCorporateGovernance2012&StatementonRiskManagement:GuidelinesforDirectorsofListedIssuers by KPMG on 26 March 2013

• Developing&CustomizingPerformanceMetricsOutputbyJobTypeson29May2013• CorporateGovernanceStatementReportingWorkshopbySIDCon30October2013• LimitedLiabilityPartnershipbySSMon9April2013• NationalTaxConferencebyLHDNon24June2013• TaxSeminaronMalaysianBudget2014byGrantThorntonon31October2013• LatestCorporateGovernanceRequirement(2nd Edition Issued by Bursa Malaysia – Oct 2013) conducted by Smart Focus

Business Consulting on 16th November 2013• SeminarPercukaianKebangsaan2013byLHDNon19November2013• 2013AuditCommitteeInstituteBreakfastRoundtableSeriesbyKPMGon13December2013

Directors’ RemunerationThe Directors’ remuneration is linked to experience, scope of responsibilities, service seniority, performance and details of the remuneration of the Directors of Dayang for the financial year ended 31 December 2013 are as follows:

Executive Directors (RM) Non Executive Directors (RM) Total (RM)

Fees 1,816,496 284,914 2,101,410

Salary 2,864,901 - 2,864,901

Bonus 29,955,991 - 29,955,991

Other emoluments 1,319,599 - 1,319,599

Allowances 138,000 8,000 146,000

Total 36,094,987 292,914 36,387,901



Directors’ Remuneration (continued)The number of Directors in each remuneration band is as follows :-

RANGE OF REMUNERATION NUMBER OFEXECUTIVE DIRECTORS

NUMBER OFNON-EXECUTIVE DIRECTORS

RM0 – RM50,000 1 3

RM50,001 – RM100,000 - 4

RM100,001 – RM150,000 1 -

RM250,001 – RM300,000 1 -

RM12,050,001 – RM12,100,000 1 -

RM12,850,001 – RM12,900,000 2 -

Details of the Directors’ remuneration are set out in applicable bands of RM50,000 in accordance with Appendix 9C Part A(11) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Whilst the Code prescribed for individual disclosure of directors remuneration packages, the Board is of the view Directors’ remuneration are appropriately and adequately addressed by the band disclosure method adopted by the Board.

There is no service contract made between any Director and the Company or its subsidiary companies.

Relations with Shareholders and InvestorsThe Board recognizes the importance of an effective communication channel between the Board, shareholders and the investment community to ensure that they are kept informed of all material business matters affecting the Group. As such, the Board disseminate proper, timely and adequate information to the investors and shareholders through annual report, announcements, circulars to shareholders and press releases. As the Company is a member of Share Investor, the Company’s press releases and Company announcements will also be disseminated to those registered for this service.

The Group’s investor relationship is helmed by the Group Managing Director and the Head of Corporate Affairs who arranges regular briefings and discussions with analysts and investors to keep them updated on the Group’s performance, business expansion plans and other matters related to shareholders’ interest.

The Company’s Annual General Meeting (“AGM”) is the principal avenue for dialogue and interaction with the shareholders of the Company. The Board encourages shareholders’ active participation at the Company’s AGM and ensure that all Board Members and Senior Management staff are available to respond to shareholders’ enquiries during the meeting. Resolutions tabled and passed at the Meeting are released to Bursa Malaysia on the same day to enable the public to know the outcome.

The External Auditors of the Company are invited to attend the AGM to answer any questions relating to the conduct of the audit and contents of the Auditor’s Report.

The Company also maintains its corporate website at www.desb.net that allows all shareholders and investors to gain access to information about the Group.

Accountability and Audit

1. Financial Reporting The Board aims to provide a balanced, clear and comprehensive assessment of the financial performance and prospects of

the Company and the Group in all disclosures made to the stakeholders and the regulatory authorities.

The Board of Directors with the assistance of the Audit Committee oversees the financial reporting processes to ensure accuracy, adequacy of all relevant information for disclosure and that necessary steps have been taken to ensure that the Group had used all the applicable accounting policies consistently, and that the policies are supported by reasonable prudent judgments and estimates. The Board has taken due care and reasonable steps to ensure that the requirements of accounting standards and relevant regulations were fully met.


2. Internal Controls The Board has an overall responsibility for maintaining sound internal control systems to ensure shareholders’ investments

and the Group’s assets are safeguarded.

The principal role of the internal audit function is to undertake an independent and systematic assessment of the Group’s system of risk management and internal controls as established by Management in addressing the principal business risks faced by the Group. During the year under review, weaknesses noted and areas that required improvement including recommendations thereof and action plans agreed to be deployed by management to address the issues raised, were highlighted by the internal audit function by way of internal audit reports issued to the Audit Committee.

The Statement on Risk Management and Internal Control as set out on pages 26 to 27 of this Annual Report provides an overview of the Company’s approach in maintaining a sound system of internal control to safeguard shareholders’ interests and the Company’s assets.

3. Relationship with External Auditors The Board via the Audit Committee maintains a formal and transparent professional relationship with the Group’s auditors

in seeking professional advice and ensuring the compliance with the appropriate accounting standards and statutory requirements.

During the year, the Audit Committee met with the external auditors twice to discuss their audit plan, audit findings and the financial statements.

In addition, the external auditors are invited to attend the annual general meeting of the Company and are available to answer shareholders’ queries on the conduct of the statutory audit and the preparation and contents of their audit report.

Directors’ Responsibility StatementThe provisions of the Companies Act, 1965 requires the directors to be responsible in preparing the financial statements for each financial year which gives a true and fair view of the state of affairs of the Group and the Company at the end of the financial year then ended which have been made out in accordance with the provisions of the Act, applicable approved accounting standards and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

In preparing the financial statements for the financial year ended 31 December 2013, the directors have :-

∙ adoptedtheappropriateaccountingpoliciesandappliedthemconsistently;∙ ensuredthatallapplicableaccountingstandardshavebeenfollowed;∙ madejudgmentsandestimatesthatareprudentandreasonable;and∙ ensured the financial statements have been prepared on a going concern basis.

In addition, the Directors have overall responsibility to safeguard the assets of the Company and the Group by taking reasonable steps to prevent and detect fraud and other irregularities.

ADDITIONAL COMPLIANCE INFORMATION AS AT 31 DECEMBER 2013

1. Utilization of Proceeds from Corporate Exercise The proceeds raised from the rights issue effected on 7 March 2011 has been fully utilized during the financial year ended

31 December 2013 as follows:

Details ProposedUtilization

(RM’million)

ActualUtilization

(RM’million)

Unutilized/Outstanding(RM’million)

Capital expenditure and/or investmentsWorking CapitalEstimated expenses for Rights Issue

100.000 19.750 1.250

100.000 19.716 1.284

0.0000.034

(0.034)

121.000 121.000 0.000

2. SHARE BUY-BACK During the financial year ended 31 December 2013, no shares were bought back from the market. The Company resold all

the treasury shares of 300,500 units at RM5.64 per unit in the open market for a net consideration of RM1,689,027.09.



3. Options, Warrants or Convertible Securities There were no options, warrants or convertible securities exercised in respect of the financial year.

4. Depository Receipt Programme The Company did not sponsor any Depository Receipt Programme during the financial year ended 31 December 2013.

5. Imposition of Sanctions and / or Penalties There were no sanctions and/or penalties imposed on the Company or its subsidiaries, directors or management by the

relevant regulatory bodies during the financial year ended 31 December 2013.

6. Non-Audit Fees The non-audit fees incurred for services rendered to the Company and its subsidiaries by the Company’s auditors for the

financial year ended 31 December 2013 amounted to RM67,200.00.

7. Variation in Results There were no material variances between the audited results of the financial year ended 31 December 2013 and the

unaudited results previously released for the financial quarter ended 31 December 2013.

8. Profit Guarantee During the financial year, there was no profit guarantee given by the Company or its subsidiaries to any party.

9. Material Contracts There were no material contracts entered into by the Company and/or its subsidiaries during the financial year ended

31 December 2013 which involves the interests of the Directors and major shareholders.

10. Revaluation Policy The Group does not adopt a policy of regular revaluation.

11. Related Party Transactions All related party transactions are presented to the Audit Committee for their review and monitoring on a quarterly basis. The

report and the list of the related parties of the Group for year under review are then escalated to the Board for their notation. The related party transactions are disclosed on pages 85 to 86 of the Annual Report.


Director’s Report 36

Statement by Directors 39

Statutory Declaration 39

Independent Auditors’ Report to the Members 40

Statements of Financial Position 42

Statements of Profit or Loss and 43

Other Comprehensive Income

Consolidated Statement of Changes in Equity 44

Statements of Cash Flows 46

Notes to the Financial Statements 48

Financial Statements


Directors’ report for the year ended 31 December 2013

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2013.

Principal activities

The Company is principally engaged in investment holding while the principal activities of the subsidiaries are as stated in Note 5 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

Results Group CompanyRM RM

Profit for the year attributable to owners

of the Company 149,293,429 88,630,290

Reserves and provisions

There were no material transfers to or from reserves and provisions during the financial year under review except as disclosed in the financial statements.

Dividends

Since the end of the previous financial year, the Company paid:

(i) a second interim single-tier exempt dividend of RM0.05 per ordinary share of RM0.50 each totalling RM27,484,975 in respect of the year ended 31 December 2012 on 12 April 2013; and

(ii) a first interim single-tier exempt dividend of RM0.05 per ordinary share of RM0.50 each totalling RM27,484,975 in respect of the year ended 31 December 2013 on 10 October 2013.

The Company declared a second interim single-tier exempt dividend of RM0.035 per ordinary share of RM0.50 each totalling RM28,874,998 in respect of the year ended 31 December 2013 on 26 February 2014. The dividend was paid on 16 April 2014.

The Directors do not recommend any final dividend to be paid for the financial year under review.

Directors of the Company

Directors who served since the date of the last report are:

Datuk Hasmi Bin HasnanTengku Dato’ Yusof Bin Tengku Ahmad ShahruddinLing Suk KiongJoe Ling Siew Loung @ Lin Shou LongGordon Kab @ Gudan Bin KabChia Chu FattPolit Bin HamzahTuan Haji Abdul Aziz Bin IshakJeanita Anak GamangWong Ping Eng (appointed on 1 October 2013)Azlan Shah Bin Jaffril (appointed on 2 December 2013)Koh Ek Chong (appointed on 2 December 2013)Ali Bin Adai (appointed on 3 March 2014)Mohd Ashraf Assai Bin Abdullah (resigned on 29 June 2013)


Directors’ report for the year ended 31 December 2013 (continued)

Directors’ interest in shares

The interests of the Directors, including the interests of their spouses or children who themselves are not directors of the Company, in the shares of the Company and of its related corporations (other than wholly-owned subsidiaries) as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM0.50 eachAt At

1.1.2013 Bought Sold 31.12.2013

Direct interests in the Company

Datuk Hasmi Bin Hasnan 640,625 - - 640,625

Tengku Dato’ Yusof Bin Tengku

Ahmad Shahruddin 55,344,450 - - 55,344,450

Ling Suk Kiong 55,186,087 - - 55,186,087

Joe Ling Siew Loung @ Lin Shou Long 27,642,550 - - 27,642,550

Gordon Kab @ Gudan Bin Kab 3,000 - - 3,000

Chia Chu Fatt 210,937 - 100,000 110,937

Polit Bin Hamzah 179,687 - - 179,687

Tuan Haji Abdul Aziz Bin Ishak 179,687 - - 179,687

Deemed interests in the Company

Datuk Hasmi Bin Hasnan 184,947,968 - - 184,947,968

Ling Suk Kiong )

Joe Ling Siew Loung @ Lin Shou Long ) 40,812,125 - - 40,812,125

The other Directors had no interests in the shares of the Company and of its related corporations during and at the end of the financial year.

Directors’ benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements of the Company and of its subsidiaries) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than certain Directors who have significant financial interests in companies which let/rented premises to certain companies in the Group in the ordinary course of business (see also Note 29 to the financial statements).

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Issue of shares and debentures

There were no changes in the authorised, issued and paid-up capitals of the Company, nor issuances of debentures by the Company, during the financial year.

Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the financial year.


Directors’ report for the year ended 31 December 2013 (continued)

Other statutory information

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

i) there are no bad debts to be written off and no provision need be made for doubtful debts; and

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

i) that would render it necessary to write off any bad debts or provide for any doubtful debts, or

ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report, there does not exist:

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, other than impairment loss on property, plant and equipment of RM4,000,000 charged to the Group’s statement of profit or loss and other comprehensive income and the non-cash gain arising from reclassification of fair value reserve to profit or loss amounting to RM32,798,586 as disclosed in Note 3.2 and Note 30 to the financial statements respectively, the financial performance of the Group and of the Company for the financial year ended 31 December 2013 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

Subsequent event

A significant subsequent event after the end of the financial year is disclosed in Note 31 to the financial statements.

Auditors

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

………………………………………..........…..........…..Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

………………………………………..........…..........…..Ling Suk Kiong

Miri,

Date: 25 April 2014


Statement by Directors/ Statutory declaration

Statement by Directors pursuant toSection 169 (15) of the Companies Act, 1965

In the opinion of the Directors, the financial statements set out on pages 42 to 86 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia, so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2013 and of their financial performance and cash flows for the year then ended.

In the opinion of the Directors, the information set out in Note 32 on page 87 to the financial statements has been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

………………………………………….........…..Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

………………………………………….........…..Ling Suk Kiong

Miri,

Date: 25 April 2014

Statutory declaration pursuant toSection 169(16) of the Companies Act, 1965

I, Ling Suk Kiong, the Director primarily responsible for the financial management of Dayang Enterprise Holdings Bhd., do solemnly and sincerely declare that the financial statements set out on pages 42 to 87 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamedin Miri in the State of Sarawakon 25 April 2014 …………………………………… Ling Suk Kiong

Before me:


Independent Auditors’ Report to the Members of Dayang Enterprise Holdings Bhd.

Report on the Financial Statements

We have audited the financial statements of Dayang Enterprise Holdings Bhd., which comprise the statements of financial position as at 31 December 2013 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 42 to 86.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 December 2013 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

b) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

c) Our audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.


Independent Auditors’ Report to the Members of Dayang Enterprise Holdings Bhd.(continued)

Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note 32 on page 87 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Malaysian Financial Reporting Standards or International Financial Reporting Standards. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance of Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Other Matter

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMGFirm Number: AF 0758Chartered Accountants

Lee Hean KokApproval Number: 2700/12/15 (J)Chartered Accountant

Kuching,

Date: 25 April 2014


Statements of financial position as at 31 December 2013

Group Company 2013 2012 2013 2012

Note RM RM RM RM

Assets

Property, plant and equipment 3 392,561,163 267,401,777 6,061 1,895

Prepaid lease payments 4 11,226,936 11,595,032 - -

Investment in subsidiaries 5 - - 122,913,259 122,913,259

Investment in associates 6 165,516,279 2 147,334,279 2

Other investments 7 - 102,071,772 - 102,071,772

Trade and other receivables 8 - - 103,500,472 101,284,466

Total non-current assets 569,304,378 381,068,583 373,754,071 326,271,394

Inventories 9 3,220,507 1,335,880 - -

Trade and other receivables 8 279,492,002 164,895,964 36,694,763 14,557,820

Other investments 7 15,644,798 35,679,654 15,644,798 35,679,654

Deposits and prepayments 10 18,189,652 1,593,532 196,504 189,900

Current tax assets 350,690 213,231 - -

Cash and bank balances 11 101,911,481 153,632,201 19,039,160 78,420,761

Total current assets 418,809,130 357,350,462 71,575,225 128,848,135

Total assets 988,113,508 738,419,045 445,329,296 455,119,529

Equity

Share capital 275,000,000 275,000,000 275,000,000 275,000,000

Share premium 109,016,407 107,787,292 109,016,407 107,787,292

Reserves 282,413,290 214,523,078 41,076,704 37,904,631

Total equity attributable to owners of the Company

12 666,429,697 597,310,370 425,093,111 420,691,923

Liabilities

Loans and borrowings 13 43,576,035 45,375,306 - 20,000,000

Deferred tax liabilities 14 6,458,000 2,874,000 - -

Total non-current liabilities 50,034,035 48,249,306 - 20,000,000

Loans and borrowings 13 78,727,634 22,146,289 20,000,000 14,000,000

Trade and other payables 15 192,530,408 66,733,064 107,548 199,368

Current tax liabilities 391,734 3,980,016 128,637 228,238

Total current liabilities 271,649,776 92,859,369 20,236,185 14,427,606

Total liabilities 321,683,811 141,108,675 20,236,185 34,427,606

Total equity and liabilities 988,113,508 738,419,045 445,329,296 455,119,529

The notes on pages 48 to 87 are an integral part of these financial statements.



Statements of profit or loss and other comprehensive income for the year ended 31 December 2013

Group Company 2013 2012 2013 2012

Note RM RM RM RM

Revenue 16 552,634,272 401,215,481 58,230,000 57,880,000

Cost of services ( 323,017,522) ( 215,190,717) - -

Gross profit 229,616,750 186,024,764 58,230,000 57,880,000

Other income 721,702 1,286,647 463,289 969,970

Administrative expenses ( 97,750,953) ( 60,539,551) ( 3,284,394) ( 2,785,622)

Other expenses ( 192,200) ( 145,062) - -

Results from operating activities 132,395,299 126,626,798 55,408,895 56,064,348

Other non-operating expense 3.2 ( 4,000,000) - - -

Other non-operating income 30 32,798,586 - 32,798,586 -

Finance costs 17 ( 3,711,619) ( 4,001,861) ( 1,591,101) ( 2,491,540)

Finance income 18 3,567,657 5,609,957 3,596,618 6,042,980

Net finance (costs)/income ( 143,962) 1,608,096 2,005,517 3,551,440

Share of profit of equity-accounted associate, net of tax 6 14,127,000 - - -

Profit before tax 19 175,176,923 128,234,894 90,212,998 59,615,788

Income tax expense 21 ( 25,883,494) ( 26,992,580) ( 1,582,708) ( 2,864,454)

Profit for the year 149,293,429 101,242,314 88,630,290 56,751,334

Other comprehensive income, net of tax

Items that are or may be reclassified subsequently to profit or loss

Fair value changes of available-for-sale financial assets 1,850,407 28,131,563 1,850,407 28,131,563

Reclassification of fair value reserve to profit or loss 30 ( 32,798,586) - ( 32,798,586) -

Share of other comprehensive income of equity-accounted associate 6 4,055,000 - - -

Other comprehensive (loss)/income for the year ( 26,893,179) 28,131,563 ( 30,948,179) 28,131,563

Total comprehensive income for the year 122,400,250 129,373,877 57,682,111 84,882,897

Basic and diluted earnings per ordinary share (sen) 22 18.11 12.28


Consolidated statement of changes in equity for the year ended 31 December 2013

Non-distributable DistributableShare

capitalShare

premiumFair value

reserveTreasury

sharesOther

reserveRetained earnings

Total equity

Group Note RM RM RM RM RM RM RM

At 1 January 2012 275,000,000 107,787,292 2,816,616 ( 459,912) - 137,762,447 522,906,443Fair value changes of available-

for-sale financial assets - - 28,131,563 - - - 28,131,563Profit for the year - - - - - 101,242,314 101,242,314Total comprehensive income

for the year - - 28,131,563 - - 101,242,314 129,373,877Dividends to owners of the

Company 23 - - - - - ( 54,969,950) ( 54,969,950)

At 31 December 2012/ 1 January 2013 275,000,000 107,787,292 30,948,179 ( 459,912) - 184,034,811 597,310,370

Fair value changes of available-for-sale financial assets - - 1,850,407 - - - 1,850,407

Reclassification of fair value reserve to profit or loss - - ( 32,798,586) - - - ( 32,798,586)

Share of other comprehensive income of equity-accounted associate - - - - 4,055,000 - 4,055,000

Total other comprehensive loss for the year - - ( 30,948,179) - 4,055,000 - ( 26,893,179)

Profit for the year - - - - - 149,293,429 149,293,429Total comprehensive income

for the year - - ( 30,948,179) - 4,055,000 149,293,429 122,400,250Dividends to owners of the

Company 23 - - - - - ( 54,969,950) ( 54,969,950)Sale of treasury shares - 1,229,115 - 459,912 - - 1,689,027

At 31 December 2013 275,000,000 109,016,407 - - 4,055,000 278,358,290 666,429,697

(Note 12) (Note 12) (Note 12) (Note 12) (Note 12)


Consolidated statement of changes in equity for the year ended 31 December 2013 (continued)

Non-distributable Distributable

Share capitalShare

premiumFair value

reserveTreasury

sharesRetained earnings

Total equity

Company Note RM RM RM RM RM RM

At 1 January 2012 275,000,000 107,787,292 2,816,616 ( 459,912) 5,634,980 390,778,976

Fair value changes of available-for-sale financial assets - - 28,131,563 - - 28,131,563

Profit for the year - - - - 56,751,334 56,751,334

Total comprehensive income for the year - - 28,131,563 - 56,751,334 84,882,897

Dividends to owners of the Company 23 - - - - ( 54,969,950) ( 54,969,950)

At 31 December 2012/1 January 2013 275,000,000 107,787,292 30,948,179 ( 459,912) 7,416,364 420,691,923

Fair value changes of available-for-sale financial assets - - 1,850,407 - - 1,850,407

Reclassification of fair value reserve to profit or loss - - ( 32,798,586) - - ( 32,798,586)

Total other comprehensive loss for the year - - ( 30,948,179) - - ( 30,948,179)

Profit for the year - - - - 88,630,290 88,630,290

Total comprehensive income for the year - - ( 30,948,179) - 88,630,290 57,682,111

Dividends to owners of the Company 23 - - - - ( 54,969,950) ( 54,969,950)

Sale of treasury shares - 1,229,115 - 459,912 - 1,689,027

At 31 December 2013 275,000,000 109,016,407 - - 41,076,704 425,093,111

(Note 12) (Note 12) (Note 12) (Note 12) (Note 12)



Statements of cash flows for the year ended 31 December 2013

Group Company 2013 2012 2013 2012

Note RM RM RM RM

Cash flows from operating activities

Profit before tax 175,176,923 128,234,894 90,212,998 59,615,788

Adjustments for:

Amortisation of prepaid lease payments 4 368,096 184,048 - -

Depreciation of property, plant and equipment 3 25,005,206 19,318,666 2,619 358

Dividend income 19 - - ( 55,120,000) ( 55,120,000)

Gain on disposal of property, plant and equipment ( 937) ( 82,523) - -

Finance costs 17 3,711,619 4,001,861 1,591,101 2,491,540

Finance income 18 ( 3,567,657) ( 5,609,957) ( 3,596,618) ( 6,042,980)

Impairment loss on property, plant and equipment 3 4,000,000 - - -

Property, plant and equipment written off 1,575 13,405 - -

Reclassification of fair value reserve to profit or loss 30 ( 32,798,586) - ( 32,798,586) -

Share of profit of equity-accounted associate, net of tax 6 ( 14,127,000) - - -

Operating profit before changes in working capital 157,769,239 146,060,394 291,514 944,706

Changes in working capital:

Inventories ( 1,884,627) 645,206 - -

Trade and other payables 125,797,344 ( 12,950,509) ( 91,820) ( 50,818)

Trade and other receivables, deposits and prepayments ( 131,192,158) ( 15,232,556) ( 22,123,547) ( 9,262,595)

Cash generated from/(used in) operations 150,489,798 118,522,535 ( 21,923,853) ( 8,368,707)

Income tax paid ( 26,025,235) ( 25,715,606) ( 1,682,309) ( 2,856,978)

Interest paid ( 553,358) ( 327,702) - ( 324,151)

Interest received 3,567,657 5,609,957 1,360,612 3,738,519

Net cash from/(used in) operating activities 127,478,862 98,089,184 ( 22,245,550) ( 7,811,317)


Statements of cash flows for the year ended 31 December 2013 (continued)

Group Company 2013 2012 2013 2012

Note RM RM RM RM

Cash flows from investing activities

Acquisition of associate ( 43,412,098) - ( 43,412,098) -Acquisition of other investments - ( 37,697,093) - ( 37,697,093)Acquisition of prepaid lease

payments - ( 11,779,080) - -Acquisition of property, plant

and equipment, net of interest capitalised ( 154,099,720) ( 40,058,159) ( 6,785) -

Dividends received - - 55,120,000 55,120,000Proceeds from disposal of other

investments 20,034,856 - 20,034,856 -Proceeds from disposal of property,

plant and equipment 67,500 105,711 - -

Net cash (used in)/from investing activities ( 177,409,462) ( 89,428,621) 31,735,973 17,422,907

Cash flows from financing activitiesDividends paid to owners of the

Company ( 54,969,950) ( 54,969,950) ( 54,969,950) ( 54,969,950)Proceeds from borrowings 76,864,000 8,636,609 - -Proceeds from sale of treasury

shares 1,689,027 - 1,689,027 -Repayment of borrowings ( 20,448,840) ( 18,000,000) ( 14,000,000) ( 18,000,000)Term loan interest paid ( 3,291,271) ( 3,815,264) ( 1,591,101) ( 2,167,389)

Net cash used in financing activities ( 157,034) ( 68,148,605) ( 68,872,024) ( 75,137,339)

Net decrease in cash and cash equivalents ( 50,087,634) ( 59,488,042) ( 59,381,601) ( 65,525,749)

Cash and cash equivalents at 1 January 151,999,115 211,487,157 78,420,761 143,946,510

Cash and cash equivalents at 31 December 101,911,481 151,999,115 19,039,160 78,420,761

Note

Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following amounts in the statements of financial position:

Group Company 2013 2012 2013 2012

RM RM RM RM

Deposits placed with licensed banks with original maturities not exceeding three months 83,265,468 146,094,127 13,020,576 74,729,222

Cash in hand and at banks 18,646,013 7,538,074 6,018,584 3,691,539

101,911,481 153,632,201 19,039,160 78,420,761

Bank overdrafts - ( 1,633,086) - -

101,911,481 151,999,115 19,039,160 78,420,761



Notes to the financial statements

Dayang Enterprise Holdings Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The address of its registered office is Sublot 5-10, Lot 46, Block 10, Jalan Taman Raja, Miri Concession Land District, 98000 Miri, Sarawak.

The consolidated financial statements of the Company as at and for the financial year ended 31 December 2013 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “group entities”) and the Group’s interest in associates.

The Company is principally engaged in investment holding while the principal activities of the subsidiaries are as stated in Note 5 to the financial statements.

These financial statements were authorised for issue by the Board of Directors on 25 April 2014.

1. Basis of preparation

(a) Statement of compliance

The financial statements of the Group and the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

The following are the accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board but have not been adopted by the Group and the Company:

MFRS/ Amendment/ Interpretation Effective date

Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities 1 January 2014Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities 1 January 2014Amendments to MFRS 127, Separate Financial Statements (2011): Investments Entities 1 January 2014Amendments to MFRS 132, Financial Instruments: Presentation - Offsetting Financial Assets

and Financial Liabilities 1 January 2014Amendments to MFRS 136, Impairment of Assets – Recoverable Amount Disclosures

for Non-Financial Assets 1 January 2014Amendments to MFRS 139, Financial Instruments: Recognition and

Measurement – Novation of Derivatives and Continuation of Hedge Accounting 1 January 2014IC Interpretation 21, Levies 1 January 2014Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards

(Annual Improvements 2011-2013 Cycle) 1 July 2014Amendments to MFRS 2, Share-based Payment (Annual Improvements 2010-2012 Cycle) 1 July 2014Amendments to MFRS 3, Business Combinations (Annual Improvements 2010-2012 Cycle

and 2011-2013 Cycle) 1 July 2014Amendments to MFRS 8, Operating Segments (Annual Improvements 2010-2012 Cycle) 1 July 2014Amendments to MFRS 13, Fair Value Measurement (Annual Improvements 2010-2012 Cycle

and 2011-2013 Cycle) 1 July 2014Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2010-2012 Cycle) 1 July 2014Amendments to MFRS 119, Employee Benefits – Defined Benefit Plans: Employee Contributions 1 July 2014Amendments to MFRS 124, Related Party Disclosures (Annual Improvements 2010-2012 Cycle) 1 July 2014Amendments to MFRS 138, Intangible Assets (Annual Improvements 2010-2012 Cycle) 1 July 2014Amendments to MFRS 140, Investment Property (Annual Improvements 2011-2013 Cycle) 1 July 2014MFRS 9, Financial Instruments (2009) Yet to be confirmedMFRS 9, Financial Instruments (2010) Yet to be confirmedMFRS 9, Financial Instruments – Hedge Accounting and Amendments to MFRS 9,

MFRS 7 and MFRS 139 Yet to be confirmedAmendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Effective

Date of MFRS 9 and Transition Disclosures Yet to be confirmed


Notes to the financial statements (continued)

1. Basis of preparation (continued)

(a) Statement of compliance (continued)

The Group and the Company plan to apply:

• fromtheannualperiodbeginningon1January2014,thoseaccountingstandards,amendmentsorinterpretationsthat are effective for annual periods beginning on 1 January 2014, except for Amendments to MFRS 139 and IC Interpretation 21, which are assessed as presently not applicable to the Group and the Company.

• from the annual period beginning on 1 January 2015 for those accounting standards, amendments orinterpretations that are effective for annual periods beginning on or after 1 July 2014, except for Amendments to MFRS 2, Amendments to MFRS 119, Amendments to MFRS 138 and Amendments to MFRS 140, which are assessed as presently not applicable to the Group and the Company.

The initial application of the accounting standards, amendments or interpretations are not expected to have any material financial impacts to the current period and prior period financial statements of the Group and the Company except as mentioned below:

(i) MFRS 9, Financial Instruments

MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets and financial liabilities, and on hedge accounting.

(ii) MFRS 132, Financial Instruments: Presentation

The amendments to MFRS 132 clarify the criteria for offsetting financial assets and financial liabilities.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis, other than as disclosed in Note 2.

(c) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency.

(d) Use of estimates and judgements

The preparation of financial statements in conformity with MFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected thereby.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements, other than those described below:

(a) Revenue from service contracts

The Group recognises revenue from service contracts based on the stage of completion method, measured by reference to survey of works performed. Significant judgement is required in determining the stage of completion of service contracts, accruing for revenue in respect of work performed which has yet to be billed as well as assessing the recoverability of the accrued revenue. The Group relies, inter alia, on the assessment of its experienced project managers when making the judgement.

(b) Impairment assessment of property, plant and equipment as disclosed in Note 3.2 to the financial statements



2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements and have been applied consistently by Group entities, unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The Group adopted MFRS 10, Consolidated Financial Statements in the current financial year. This resulted in changes to the following policies:

• ControlexistswhentheGroupisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeentity and has the ability to affect those returns through its power over the entity. In the previous financial years, control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

• Potentialvotingrightsareconsideredwhenassessingcontrolonlywhensuchrightsaresubstantive.Intheprevious financial years, potential voting rights are considered when assessing control when such rights are presently exercisable.

• TheGroupconsidersithasde facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return. In the previous financial years, the Group did not consider de facto power in its assessment of control.

The change in accounting policy has been made retrospectively and in accordance with the transitional provision of MFRS 10. The adoption of MFRS 10 has no significant impact to the financial statements of the Group.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.

The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:

• thefairvalueoftheconsiderationtransferred;plus• therecognisedamountofanynon-controllinginterestsintheacquiree;plus• ifthebusinesscombinationisachievedinstages,thefairvalueoftheexistingequityinterestintheacquiree;

less• thenetrecognisedamount(generallyfairvalue)oftheidentifiableassetsacquiredandliabilitiesassumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.



2. Significant accounting policies (continued)

(a) Basis of consolidation (continued)

(iii) Acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(v) Associates

Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies thereof.

Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution (or included in a disposal group that is classified as held for sale or distribution). The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the associates, after adjustments, if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation to make or has made payments on behalf of the associate.

When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is recognised in the profit or loss.

When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.

Investments in associates are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investments are classified as held for sale or distribution. The cost of investment includes transaction costs.

(vi) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.




(a) Basis of consolidation (continued)

(vii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment to the underlying assets.

(b) Financial instruments

(i) Initial recognition and measurement

A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with the policy applicable to the nature of the host contract.

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise financial instruments as follows:

Financial assets

(a) Financial assets at fair value through profit or loss

Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into this category upon initial recognition.

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.

Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.

(b) Held-to-maturity investments

Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group or the Company has the positive intention and ability to hold them to maturity.

Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method.

(c) Loans and receivables

Loans and receivables category comprises debt instruments that are not quoted in an active market.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.




(b) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement (continued)

Financial assets (continued)

(d) Available-for-sale financial assets

Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss.

All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment [see Note 2(g)(i)].

Financial liabilities

All financial liabilities, other than those categorised as fair value through profit or loss, are subsequently measured at amortised cost.

Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated into this category upon initial recognition.

Derivatives that are linked to and must be settled by delivery of equity instruments that do not have a quoted price in an active market for identical instruments whose fair values otherwise cannot be reliably measured are measured at cost.

Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.

(iii) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Fair value arising from financial guarantee contracts are classified as deferred income and are amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.

(iv) Regular way purchase or sale of financial assets

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to:

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and

(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.




(b) Financial instruments (continued)

(v) Derecognition

A financial asset or a part thereof is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.

A financial liability or a part thereof is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the profit or loss.

(c) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the assets and any other costs directly attributable to bringing the assets to working condition for their intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within “other income” or “administrative expenses” respectively in profit or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.




(c) Property, plant and equipment (continued)

(iii) Depreciation (continued)

The estimated useful lives for the current and comparative periods are as follows:

Long term leasehold land 843 years Buildings 20 years Marine vessels 25 years Onboard equipment 10 years Containers 10 years Offshore equipment 5 years Furniture and fittings 10 years Office equipment 2.5 - 10 years Motor vehicles 5 years

Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate at the end of the reporting period.

(d) Leased assets

(i) Finance lease

Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, a leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset [see Note 2 (c)].

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

Leasehold land which in substance is a finance lease is classified as property, plant and equipment.

(ii) Operating lease

Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases and the leased assets are not recognised on the statement of financial position.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

Leasehold land which in substance is an operating lease is classified as prepaid lease payments.

(e) Inventories

Inventories are measured at the lower of cost and net realisable value.

Cost of inventories is measured based on the weighted average cost formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.




(e) Inventories (continued)

In the current financial year, the Group adopted the Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle) and classified spare parts as inventories unless the item of spare part is held for own use and expected to be used during more than one period in which it is classified as property, plant and equipment. In the previous financial years, all spare parts were classified as inventories. The change in accounting policy has been applied retrospectively. Nevertheless, there is no significant impact to the financial statements.

(f) Cash and cash equivalents

Cash and cash equivalents presented in the statement of cash flows consist of cash in hand, balances and deposits with banks (other than pledged deposits) and highly liquid investments which have an insignificant risk of changes in value with original maturities of three months or less and are used by the Group or the Company in the management of its short-term commitments, net of bank overdrafts.

(g) Impairment

(i) Financial assets

All financial assets (except for financial assets categorised as fair value through profit or loss and investments in subsidiaries and associates) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the impairment loss of financial asset is estimated.

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity and recognised to profit or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument is not reversed through profit or loss.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

(ii) Other assets

The carrying amounts of other assets (except for inventories) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units.




(g) Impairment (continued)

(ii) Other assets (continued)

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash generating unit.

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount of the assets in the cash-generating unit (or groups of cash-generating units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are recognised.

(h) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) State plans

Contributions to statutory pension funds are charged to profit or loss in the financial year to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(i) Revenue and other income

(i) Services

Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of service contracts. The stage of completion of a service contract is assessed by reference to survey of works performed. When the outcome of a service contract cannot be estimated reliably, revenue is recognised only to the extent of the expenses incurred that are recoverable. An expected loss on a service contract is recognised immediately in profit or loss.

(ii) Dividend income

Dividend income is recognised in profit or loss on the date that the Group or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

(iii) Management fees

Management fees are charged monthly by the Company to its subsidiaries based on services rendered and recognised in profit or loss when charged.

(iv) Vessel chartering income

Vessel chartering income is recognised in profit or loss as it accrues, at contracted rates.




(i) Revenue and other income (continued)

(v) Catering income

Revenue from catering of food and beverages is recognised in profit or loss upon the delivery of the food and beverages.

(vi) Interest income

Interest income is recognised in profit or loss as it accrues using the effective interest method, except for interest income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.

(j) Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced by the extent that it is no longer probable that the related tax benefit will be realised.

Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against the unutilised tax incentive can be utilised.

(k) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.

Capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.




(l) Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(m) Earnings per ordinary share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding adjusted for own shares held for the effects of all dilutive potential ordinary shares.

(n) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case is the Managing Director of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

(o) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of group entities at the exchange rates at the transaction dates.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rates at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments or a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.

(p) Equity instruments

Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.

(i) Issue expenses

Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from equity.

(ii) Ordinary shares

Ordinary shares are classified as equity.

(iii) Repurchase, disposal and reissue of share capital (treasury shares)

When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares that are not subsequently cancelled are classified as treasury shares in the statement of changes in equity.

Where treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the share premium account or distributable reserves, or both.

Where treasury shares are sold or reissued subsequently, the difference between the sales consideration net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity, and the resulting surplus or deficit on the transaction is presented in share premium.




(p) Equity instruments (continued)

(iv) Distributions of assets to owners of the Company

The Group measures a liability to distribute assets as a dividend to the owners of the Company at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting period and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss.

(q) Fair value measurements

From 1 January 2013, the Group adopted MFRS 13, Fair Value Measurement which prescribed that fair value of an asset or a liability, except for share-based payment and lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

In accordance with the transitional provision of MFRS 13, the Group applied the new fair value measurement guidance prospectively, and has not provided any comparative fair value information for new disclosures. The adoption of MFRS 13 has not significantly affected the measurements of the Group’s assets or liabilities other than the additional disclosures.



The

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2 Ap

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nstr

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tions

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5,15

539

2,56

1,16

3



3. Property, plant and equipment (continued)

Furniture and fittings

Company Note RM

Cost

At 1 January 2012, 31 December 2012/1 January 2013 3,579

Additions 6,785

At 31 December 2013 10,364

Accumulated depreciation

At 1 January 2012 1,326

Depreciation for the year 19 358

At 31 December 2012/1 January 2013 1,684

Depreciation for the year 19 2,619

At 31 December 2013 4,303

Carrying amounts

At 1 January 2012 2,253


At 31 December 2013 6,061

3.1 Security - Group

Marine vessels with a total carrying amount of RM174,357,147 (2012: RM60,574,502) are pledged to licensed banks for certain banking facilities granted to the Group (see Note 13).

3.2 Impairment review of property, plant and equipment - Group

The Group has recognised an impairment loss of RM4,000,000 for one of its marine vessels as other non-operating expense in the profit or loss account for the financial year ended 31 December 2013, following an assessment of the recoverable amount which was determined by an external valuer and by reference to the recent market price for similar marine vessels around the region.

3.3 Capitalisation of term loan interest - Group

Included in marine vessels construction is an amount of term loan interest capitalised amounting to RM133,010 (2012: RM141,105).



4. Prepaid lease payments - Group

Leasehold land (unexpired

term less than50 years)

Note RM

Cost

At 1 January 2012 -

Additions 11,779,080

At 31 December 2012/1 January 2013, 31 December 2013 11,779,080

Amortisation

At 1 January 2012 -

Amortisation for the year 19 184,048


Amortisation for the year 19 368,096

At 31 December 2013 552,144

Carrying amounts

At 1 January 2012 -

At 31 December 2012/1 January 2013 11,595,032

At 31 December 2013 11,226,936

The lease term of the leasehold land will expire on 2043.

5. Investment in subsidiaries

Company 2013 2012

RM RM

Unquoted shares at cost 122,913,259 122,913,259

Details of the subsidiaries, all incorporated in Malaysia, are as follows:

Name of company Principal activities Effective ownership interest and voting interest

2013 2012% %

Dayang Enterprise Sdn. Bhd. Provision of offshore topside maintenance services, minor fabrication works and offshore hook-up and commissioning services

100 100

DESB Marine Services Sdn. Bhd. Chartering of marine vessels and catering of food and beverage

100 100

Fortune Triumph Sdn. Bhd. Equipment hire 100 100



6. Investment in associates

Group Company 2013 2012 2013 2012

RM RM RM RM

At cost

Unquoted shares 2 2 2 2

Quoted shares in Malaysia 147,334,277 - 147,334,277 -

Share of post-acquisition reserves 18,182,000 - - -

165,516,279 2 147,334,279 2

Market value

Quoted shares in Malaysia 287,627,470 - 287,627,470 -

Details of the associates are as follows:

Name of Company Principal activities

Country of incorporation

Effective ownership interest and voting interest

2013 2012% %

Alpha Dayang (B) Sdn. Bhd.* Dormant Brunei 50 50

Perdana Petroleum Bhd.** Investment holding Malaysia 25 -

* The associate is presently dormant and has not made up its management accounts to date. A company incorporated in Brunei need not submit audited financial statements during the period of dormancy. As a consequence, the financial information on the associate is not presented.

** Effective from 6 February 2013, Perdana Petroleum Berhad became an associate of the Group (see Note 30).

The following table summarises the information of the Group’s material associate and reconciles the information to the carrying amount of the Group’s interest in the associates.

Group2013

Perdana Petroleum BerhadRM

Summarised financial informationAs at 31 December

Non-current assets 1,042,377,000

Current assets 139,920,000

Non-current liabilities ( 464,602,000)

Current liabilities ( 155,763,000)

Non-controlling interests 248,000

Net assets 562,180,000

Year ended 31 December

Profit for the year 61,660,000

Other comprehensive income 16,061,000

Total comprehensive income 77,721,000

Included in the total comprehensive income is:Revenue 274,648,000



6. Investment in associates (continued)

Group2013

Perdana Petroleum

BerhadRM

Other individually immaterial associate

RMTotal

RM

Reconciliation of net assets to carrying amount

Group’s share of net assets 139,843,581 2 139,843,583

Goodwill 25,672,696 - 25,672,696

Carrying amount in the statement of financial position 165,516,277 2 165,516,279

Group’s share of resultsYear ended 31 December

Group’s share of profit for the year 14,127,000 - 14,127,000

Group’s share of other comprehensive income 4,055,000 - 4,055,000

Group’s share of total comprehensive income 18,182,000 - 18,182,000

7. Other investments - Group and Company

Quoted Shares in Malaysia

RM

Unit Trust in Malaysia

RMTotal

RM

2013

Current

Financial assets at fair value through profit or loss - 15,644,798 15,644,798

- 15,644,798 15,644,798

Market value - 15,644,798 15,644,798

2012

Non-current

Available-for-sale financial assets 102,071,772 - 102,071,772

Current

Financial assets at fair value through profit or loss - 35,679,654 35,679,654

102,071,772 35,679,654 137,751,426

Market value 102,071,772 35,679,654 137,751,426



8. Trade and other receivables

Group Company

2013 2012 2013 2012

Note RM RM RM RM

Non-currentNon-tradeLoan to a subsidiary 8.1 - - 103,500,472 101,284,466

CurrentTradeTrade receivables 67,421,118 43,241,826 - -Accrued revenue 211,072,798 120,572,344 - -

278,493,916 163,814,170 - -

Non-trade

Amount due from subsidiaries 8.2 - - 36,682,346 14,545,403Other receivables 998,086 1,081,794 12,417 12,417

998,086 1,081,794 36,694,763 14,557,820

Current total 279,492,002 164,895,964 36,694,763 14,557,820

Total 279,492,002 164,895,964 140,195,235 115,842,286

8.1 The loan to a subsidiary is unsecured and bears interest at 2.50% (2012: 2.50%) per annum.

The non-current portion of the loan to a subsidiary is not repayable during the next twelve months. Nevertheless, the subsidiary may make repayments so long as such repayments do not adversely affect the ability of the subsidiary to meet its liabilities when due.

8.2 Amount due from subsidiaries is unsecured, interest free and repayable on demand.

9. Inventories - Group

2013 2012RM RM

Materials and consumables – at cost 3,220,507 1,335,880

Recognised in profit or loss:

Inventories recognised as part of cost of services 11,278,875 7,854,869

10. Deposits and prepayments

Group Company 2013 2012 2013 2012

Note RM RM RM RM

Deposits 10.1 9,729,217 718,224 183,700 183,700

Prepayments 10.2 8,460,435 875,308 12,804 6,200

18,189,652 1,593,532 196,504 189,900

10.1 Included in the Group’s deposits is a sum of RM8,435,100 (2012: RM Nil) paid as deposits for the chartering of marine vessels.

10.2 Included in the Group’s prepayments is an amount of RM5,000,000 (2012: RM Nil) paid for the mobilisation of one unit of marine vessel.



11. Cash and bank balances

Group Company 2013 2012 2013 2012

RM RM RM RM

Deposits placed with licensed banks with original maturities not exceeding three months

83,265,468 146,094,127 13,020,576 74,729,222

Cash in hand and at banks 18,646,013 7,538,074 6,018,584 3,691,539

101,911,481 153,632,201 19,039,160 78,420,761

12. Capital and reserves

12.1 Share capital

Group and Company 2013 2012

AmountRM

Number of shares

AmountRM

Number of shares

Ordinary shares of RM0.50 each

Authorised:

Opening and closing balances 500,000,000 1,000,000,000 500,000,000 1,000,000,000

Issued and fully paid:

Opening and closing balances 275,000,000 550,000,000 275,000,000 550,000,000

12.2 Share premium

Share premium comprises the premium paid on subscription of shares in the Company over and above the par value of the shares.

12.3 Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until they are derecognised or impaired.

On 6 February 2013, the reclassification of fair value reserve of RM32,798,586 to profit or loss was occasioned by the reclassification of the investment in Perdana Petroleum Berhad from an available-for-sale investment to an equity-accounted associate.

12.4 Treasury shares

In 2011, the Company repurchased 300,500 of its own shares from the open market. The average price paid for the shares purchased was RM1.53 per share. The repurchase transactions were financed by internally generated funds.

During the financial year ended 31 December 2013, the Company re-issued 300,500 treasury shares by resale in the open market. The average resale price of the treasury shares was RM5.64 per share. The net proceeds from the resale were RM1,689,027 and the resulting surplus of RM1,229,115 was presented in share premium.

12.5 Other reserve

Other reserve comprises the accumulated share of other comprehensive income of an associate.

12.6 Retained earnings

The retained earnings of the Company are distributable in full as single-tier exempt dividends.



13. Loans and borrowings

Group Company 2013 2012 2013 2012

RM RM RM RM

Non-current

Term loans - secured 43,576,035 45,375,306 - 20,000,000

Current

Revolving credits - unsecured 50,000,000 - - -

Term loans - secured 28,727,634 20,513,203 20,000,000 14,000,000

Bank overdrafts - unsecured - 1,633,086 - -

78,727,634 22,146,289 20,000,000 14,000,000

Total 122,303,669 67,521,595 20,000,000 34,000,000

13.1 Security

The term loans are secured by way of first legal charge over certain marine vessels of the Group (see Note 3).

14. Deferred tax liabilities

Movements in deferred tax liabilities during the year are as follows:

GroupAt 1.1.2012

RM

Recognised in profit or

lossRM

At 31.12.2012/

1.1.2013RM

Recognised in profit or

lossRM

At 31.12.2013

RM

Property, plant and equipment 3,406,000 4,454,000 7,860,000 3,518,000 11,378,000

Capital allowances carried forward ( 1,570,000) ( 3,416,000) ( 4,986,000) 66,000 ( 4,920,000)

1,836,000 1,038,000 2,874,000 3,584,000 6,458,000

(Note 21) (Note 21)

15. Trade and other payables

Group Company 2013 2012 2013 2012

RM RM RM RM

Trade

Trade payables 92,925,944 41,402,928 - -

Amount due to an associate 18,322,132 - - -

111,248,076 41,402,928 - -

Non-trade

Other payables 34,919,902 970,432 17,627 153,982

Accrued expenses 46,362,430 24,359,704 89,921 45,386

81,282,332 25,330,136 107,548 199,368

192,530,408 66,733,064 107,548 199,368



15. Trade and other payables (continued)

15.1 Included in other payables of the Group is an amount of RM31,368,910 (2012: RM Nil) payable to suppliers for the acquisition of property, plant and equipment.

15.2 Trade and other payables of the Group denominated in a currency other than the functional currency comprise the following:

2013 2012RM RM

Singapore Dollar (SGD) 1,132,309 101,903

Brunei Dollar (BND) 246,576 7,830

United States Dollar (USD) 1,660,126 -

16. Revenue

2013 2012RM RM

Group

Income from services rendered 535,122,410 360,362,057

Marine charter 17,323,318 38,983,366

Catering income 188,544 1,870,058

552,634,272 401,215,481

Company

Gross dividends 55,120,000 55,120,000

Management fees 3,110,000 2,760,000

58,230,000 57,880,000

17. Finance costs

Group Company 2013 2012 2013 2012

RM RM RM RM

Interest expense of financial liabilities:

- bank overdrafts - 3,551 - -

- revolving credits 553,358 324,151 - 324,151

- term loans 3,158,261 3,674,159 1,591,101 2,167,389

3,711,619 4,001,861 1,591,101 2,491,540

18. Finance income

Group Company 2013 2012 2013 2012

RM RM RM RM

Interest income of financial assets:

- short term deposits 3,567,657 5,609,957 1,360,612 3,738,519

- amount due from a subsidiary - - 2,236,006 2,304,461

3,567,657 5,609,957 3,596,618 6,042,980



19. Profit before tax

Group Company2013 2012 2013 2012

Note RM RM RM RM

Profit before tax is arrived at after charging:

Amortisation of prepaid lease payments 4 368,096 184,048 - -

Auditors’ remuneration:

- statutory audit

- KPMG 191,000 175,000 57,000 55,000

- other services

- KPMG 22,000 22,000 22,000 22,000

- Affiliates of KPMG 45,200 304,700 8,200 37,600

Depreciation of property, plant and equipment 3 25,005,206 19,318,666 2,619 358

Finance costs 17 3,711,619 4,001,861 1,591,101 2,491,540

Impairment loss on property, plant and equipment 3 4,000,000 - - -

Personnel expenses:

- contributions to the Employees

Provident Fund 8,602,562 6,605,203 67,907 48,268

- wages, salaries and others 128,145,150 90,856,480 578,608 406,546

Property, plant and equipment written off 1,575 13,405 - -

Rental of premises 3,848,564 2,491,014 - -

Rental of equipment and marine vessels 82,901,354 17,913,045 - -

and after crediting:

Dividend income from subsidiaries - - 55,120,000 55,120,000

Finance income 18 3,567,657 5,609,957 3,596,618 6,042,980

Gain on disposal of property, plant and equipment 937 82,523 - -

Investment income from unit trusts 463,289 969,970 463,289 969,970

20. Compensations to key management personnel

Compensations to key management personnel are as follows:

Group Company2013 2012 2013 2012

RM RM RM RM

Directors:

- Fees 2,101,410 2,082,300 1,716,210 1,697,100

- Remuneration 34,286,491 15,211,565 8,000 8,500

36,387,901 17,293,865 1,724,210 1,705,600

Other key management personnel:

- Short term employee benefits 563,088 526,396 37,560 37,440

36,950,989 17,820,261 1,761,770 1,743,040

Other key management personnel comprise persons other than the Directors of group entities, having authority and responsibility for planning, directing and controlling the activities of the group entities either directly or indirectly.



21. Income tax expense

Group Company2013 2012 2013 2012

RM RM RM RM

Current tax expense

Malaysian - current year 22,546,000 25,191,000 1,584,000 2,063,000

- prior year ( 246,506) 763,580 ( 1,292) 801,454

22,299,494 25,954,580 1,582,708 2,864,454

Deferred tax expense(Note 14)

- current year 3,436,000 1,001,000 - -

- prior year 148,000 37,000 - -

3,584,000 1,038,000 - -

Total income tax expense 25,883,494 26,992,580 1,582,708 2,864,454

Reconciliation of income tax expense

Group Company2013 2012 2013 2012

RM RM RM RM

Profit for the year 149,293,429 101,242,314 88,630,290 56,751,334


Profit excluding tax 175,176,923 128,234,894 90,212,998 59,615,788

Share of tax of equity-accounted associate 777,000 - - -

175,953,923 128,234,894 90,212,998 59,615,788

Tax calculated using Malaysian tax rate of 25% (2012: 25%)* 43,988,000 32,058,000 22,553,000 14,904,000

Non-deductible expenses 13,269,000 2,113,000 1,126,000 1,181,000

Non taxable income ( 22,075,000) - ( 22,095,000) ( 14,022,000)

Income exempted from tax under Section 54A of Income Tax Act, 1967 ( 8,423,000) ( 7,979,000) - -

26,759,000 26,192,000 1,584,000 2,063,000

(Over)/Under provision in prior years ( 98,506) 800,580 ( 1,292) 801,454

26,660,494 26,992,580 1,582,708 2,864,454

Less: Share of tax of equity-accounted associate ( 777,000) - - -


* In the Malaysia Budget 2014, it was announced that corporate income tax rate will be reduced to 24% for year of assessment 2016 (“YA 2016”) onwards. Consequently, any temporary differences expected to be reversed in YA 2016 are measured using this rate.



22. Earnings per ordinary share

Basic and diluted earnings per ordinary share

The calculation of basic and diluted earnings per ordinary share at 31 December 2013 was based on the profit attributable to ordinary shareholders of RM149,293,429 (2012: RM101,242,314) and the weighted average number of ordinary shares outstanding, calculated as follows:

Weighted average number of ordinary shares

2013 2012Number Number

Weighted average number of ordinary shares at 1 January 550,000,000 550,000,000

Treasury shares repurchased in previous years ( 300,500) ( 300,500)

Effect of treasury shares reissued during the year 25,042 -

549,724,542 549,699,500

Effect of bonus issue during 2014 (see Note 31) 274,862,271 274,849,750

Weighted average number of ordinary shares at 31 December (basic and diluted) 824,586,813 824,549,250

As bonus issue is a non-resource share issue which entails no cash flows, it is deemed to have been effected from the earliest possible periods. As such the earnings per share have to be re-computed as if the enlarged share capital as a result of the bonus issue was in existence throughout the current and comparative periods.

23. Dividends

23.1 Dividends per ordinary share

The dividends per ordinary share as disclosed below comprise the total dividends declared or proposed for the respective financial years.

2013 2012Sen Sen

Net dividends per ordinary share 8.50 10.00

23.2 Dividends

Dividends recognised by the Company:

Sen per share(tax exempt)

TotalRM

Date ofpayment

2013

Second interim 2012 ordinary 5.00 27,484,975 12 April 2013

First interim 2013 ordinary 5.00 27,484,975 10 October 2013

54,969,950

2012


First interim 2012 ordinary 5.00 27,484,975 8 October 2012

54,969,950



23. Dividends (continued)

23.2 Dividends (continued)

After the reporting period, the Company paid the following dividend, which will be recognised in the financial statements for the financial year ending 31 December 2014:

Sen per share(tax exempt)

TotalRM

Date ofpayment


24. Operating segments

Segment information is presented in respect of the Group’s business segments. As the Group operates within one geographical segment, geographical segment analysis is not applicable.

Performance is measured based on segment profit before tax as included in the internal management reports that are reviewed by the Managing Director (the chief operating decision maker). Segment profit is used to measure performance as management believe that such information is the most relevant in evaluating results of certain segments relative to other entities that operate within these industries.

Business segments

The Group’s business segments mainly comprise the following four major business segments:-

i) Investment holding

Provision of management and secretarial services.

ii) Topside maintenance services

Provision of offshore topside maintenance services, minor fabrication works and offshore hook-up and commissioning services for oil and gas industry.

iii) Marine charter

Chartering of marine vessels and provision of related support services.

iv) Equipment hire

Equipment hire operation.

Segment assets

The total of segment asset is measured based on all assets of a segment, as included in the internal management reports that are reviewed by the Managing Director. Segment total asset is used to measure the return on assets of each segment.

Segment liabilities

Information on segment liabilities aggregates the total liabilities, including borrowings, to allow the Managing Director to review and plan for the liquidity requirements of the Group.



24. Operating segments (continued)

Investment holding

RM

Topside maintenance

servicesRM

Marine charter

RM

Equipment hireRM

TotalRM

EliminationRM

Consolidated RM

2013RevenueExternal revenue - 535,122,410 17,511,862 - 552,634,272 - 552,634,272Inter-segment revenue 58,230,000 - 98,095,308 17,354,732 173,680,040 ( 173,680,040) -

Total segment revenue 58,230,000 535,122,410 115,607,170 17,354,732 726,314,312 ( 173,680,040) 552,634,272

ResultsSegment results 88,207,481 80,426,778 41,404,170 6,275,456 216,313,885 ( 55,120,000) 161,193,885Finance costs ( 1,591,101) ( 553,358) ( 3,803,166) - ( 5,947,625) 2,236,006 ( 3,711,619)Finance income 3,596,618 1,705,653 151,473 349,919 5,803,663 ( 2,236,006) 3,567,657

Share of profit of equity-accounted associate 14,127,000

Income tax expense ( 25,883,494)


Segment/Total assets 445,329,296 422,778,785 375,763,445 60,578,602 1,304,450,128 ( 316,336,620) 988,113,508

Segment/Total liabilities 20,236,185 292,215,864 179,816,061 41,019,762 533,287,872 ( 211,604,061) 321,683,811

Included in the segment profit or loss are:

Depreciation and amortisation of tangible assets 2,619 5,115,720 13,911,731 6,343,232 25,373,302 - 25,373,302

Impairment loss of tangible asset - - 4,000,000 - 4,000,000 - 4,000,000

2012RevenueExternal revenue - 360,362,057 40,853,424 - 401,215,481 - 401,215,481Inter-segment revenue 57,880,000 - 64,941,421 7,586,088 130,407,509 ( 130,407,509) -

Total segment revenue 57,880,000 360,362,057 105,794,845 7,586,088 531,622,990 ( 130,407,509) 401,215,481

ResultsSegment results 56,064,348 84,397,261 39,119,189 2,166,000 181,746,798 ( 55,120,000) 126,626,798Finance costs ( 2,491,540) ( 3,551) ( 3,811,231) - ( 6,306,322) 2,304,461 ( 4,001,861)Finance income 6,042,980 1,618,412 125,526 127,500 7,914,418 ( 2,304,461) 5,609,957

Income tax expense ( 26,992,580)


Segment/Total assets 455,119,529 242,331,881 298,828,597 16,048,852 1,012,328,859 ( 273,909,814) 738,419,045

Segment/Total liabilities 34,427,606 117,230,905 139,327,473 1,495,946 292,481,930 ( 151,373,255) 141,108,675

Included in the segment profit or loss are:

Depreciation and amortisation of tangible assets 358 3,594,886 13,326,461 2,581,009 19,502,714 - 19,502,714



24. Operating segments (continued)

Major customers

The following are the major customers individually accounting for 10% or more of the group revenue:

Revenue2013 2012

RM RM Segment

Companies under common control of:

- Customer A 292,746,198 241,723,529 Topside maintenance services

- Customer B 152,928,125 63,988,956 Topside maintenance services

25. Financial instruments

25.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(a) Loans and receivables (“L&R”); (b) Fair value through profit or loss (“FVTPL”); (c) Available-for-sale financial assets (“AFS”); and (d) Financial liabilities measured at amortised cost (“FL”).

Note

Carrying amount

RML&R/(FL)

RMFVTPL

RMAFSRM

2013Financial assetsGroupOther investments 7 15,644,798 - 15,644,798 -Trade and other receivables 8 279,492,002 279,492,002 - -Cash and bank balances 11 101,911,481 101,911,481 - -

397,048,281 381,403,483 15,644,798 -

CompanyOther investments 7 15,644,798 - 15,644,798 -Trade and other receivables 8 140,195,235 140,195,235 - -Cash and bank balances 11 19,039,160 19,039,160 - -

174,879,193 159,234,395 15,644,798 -

Financial liabilitiesGroupLoans and borrowings 13 122,303,669 ( 122,303,669) - -Trade and other payables 15 192,530,408 ( 192,530,408) - -

314,834,077 ( 314,834,077) - -

CompanyLoans and borrowings 13 20,000,000 ( 20,000,000) - -Trade and other payables 15 107,548 ( 107,548) - -

20,107,548 ( 20,107,548) - -

2012Financial assetsGroupOther investments 7 137,751,426 - 35,679,654 102,071,772Trade and other receivables 8 164,895,964 164,895,964 - -Cash and bank balances 11 153,632,201 153,632,201 - -

456,279,591 318,528,165 35,679,654 102,071,772



Note

Carrying amount

RML&R/(FL)

RMFVTPL

RMAFSRM

2012 (continued)Financial assetsCompanyOther investments 7 137,751,426 - 35,679,654 102,071,772Trade and other receivables 8 115,842,286 115,842,286 - -Cash and bank balances 11 78,420,761 78,420,761 - -

332,014,473 194,263,047 35,679,654 102,071,772

Financial liabilitiesGroupLoans and borrowings 13 67,521,595 ( 67,521,595) - -Trade and other payables 15 66,733,064 ( 66,733,064) - -

134,254,659 ( 134,254,659) - -

CompanyLoans and borrowings 13 34,000,000 ( 34,000,000) - -Trade and other payables 15 199,368 ( 199,368) - -

34,199,368 ( 34,199,368) - -

25.2 Net gains and losses arising from financial instruments

Group Company2013 2012 2013 2012

RM RM RM RM

Net gains/(losses) arising on:

Financial assets at fair value through profit or loss

- held for trading 463,289 969,970 463,289 969,970

Available-for-sale financial assets

- recognised in other comprehensive income ( 30,948,179) 28,131,563 ( 30,948,179) 28,131,563

- reclassified from equity to profit or loss 32,798,586 - 32,798,586 -

1,850,407 28,131,563 1,850,407 28,131,563

Loans and receivables 3,567,657 5,609,957 3,596,618 6,042,980

Financial liabilities measured at amortised cost ( 3,711,619) ( 4,001,861) ( 1,591,101) ( 2,491,540)

2,169,734 30,709,629 4,319,213 32,652,973

25.3 Financial risk management

The Group is exposed to the following risks from its use of financial instruments:

• Creditrisk • Liquidityrisk • Marketrisk

25.4 Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers. The Company’s exposure to credit risk arises principally from loans and advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries.

25. Financial instruments (continued)

25.1 Categories of financial instruments (continued)




25.4 Credit risk (continued)

Receivables from external parties

Risk management objectives, policies and processes for managing the risk

The principal customers of the Group are major oil and gas companies based in Malaysia. Management reviews the credit worthiness of all major counterparties prior to entering into any contract or transaction with them, to ensure the Group is not exposed to undue credit risk.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by their carrying amounts in the statement of financial position. Cash and cash equivalents are only placed with licensed banks/institutions.

There are no significant concentrations of credit risk as at the end of the reporting period other than trade receivable due from one (2012: Nil) counterparty of RM30,747,754 (2012: RM Nil).

Ageing analysis

The ageing of trade receivables as at the end of reporting period is as follows:

Group 2013 2012

Age of debts RM RM

Not past due 34,125,553 18,254,215

Past due more 0-30 days 22,473,354 11,946,287



67,421,118 43,241,826

Management does not expect any external counterparty to fail to meet its obligations due to the strong credit standing thereof. No impairment loss has been provided against trade receivables as at the end of the reporting period.

Other investments


Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal to or better than the Group.


As at the end of the reporting period, the Group has only invested in domestic securities. The maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.

Other investments of the Group (see Note 7) are categorised as fair value through profit or loss. The Group does not have overdue investments that have not been impaired.

The investments are unsecured.




25.4 Credit risk (continued)

Inter-company balances


The Company provides unsecured loans and advances to subsidiaries and monitors the results of the subsidiaries regularly. The subsidiaries have been reporting strong financial performance and are able to repay the loans and advances in due course.


As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.

There are no significant concentrations of credit risk as at the end of the reporting period other than the amount due from three (2012: two) subsidiaries of RM140,182,818 (2012: RM115,809,869).

Impairment losses

As at the end of the reporting period, there was no indication that the loans and advances to subsidiaries are not recoverable in full and as such no impairment loss has been made there-against.

Financial guarantees


The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made thereby to ensure that they are able to meet their obligations when due.


The maximum exposure to credit risk amounts to RM102,303,669 (2012: RM33,521,595) representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period.

As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.

The financial guarantees have not been recognised since the fair value on initial recognition was not material.

25.5 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.


The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as for as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.



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64-

--

314,

834,

077

318,

626,

850

273,

063,

661

11,8

56,0

0033

,707

,189

-

2012

Trad

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her

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66,7

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66,7

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6466

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--

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term

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,888

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5.19

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19,7

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7.85

1,63

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633,

086

--

-

134,

254,

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140,

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91,1

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19,7

60,9

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2013

Trad

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her

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107,

548

-10

7,54

810

7,54

8-

--

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term

loan

20,0

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5520

,691

,089

20,6

91,0

89-

--

20,1

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4820

,798

,637

20,7

98,6

37-

--

2012

Trad

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her

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199,

368

-19

9,36

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term

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34,0

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14,7

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--

34,1

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14,9

69,3

6821

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--

25.

Fina

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(co

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)

25.5

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M

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and

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25.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will affect the Group’s financial position or cash flows.

25.6.1 Currency risk

The Group is exposed to foreign currency risk on purchases that are denominated in a currency other than the respective functional currencies of group entities. The currencies giving rise to this risk are primarily Singapore Dollar (SGD), Brunei Dollar (BND) and United States Dollar (USD).

Exposure to foreign currency risk

The Group’s exposure to foreign currency risk attributable to currencies other than the functional currencies of group entities, based on the carrying amounts as at the end of the reporting period was:

Denominated inSGD BND USDRM RM RM

2013

Trade and other payables 1,132,309 246,576 1,660,126

2012

Trade and other payables 101,903 7,830 -

The exposure to currency risk is immaterial and hence sensitivity analysis is not presented.

25.6.2 Interest rate risk

The Group’s fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Short term other investments and short term receivables and payables are not significantly exposed to interest rate risk.

Risk management objectives, policies and process for managing the risk

The Group monitors its exposure to changes in interest rates on a regular basis.

Borrowings are negotiated with a view to securing the best possible terms, including rates of interest, to the Group.

Exposure to interest rate risk

The interest rate profile of the Group and the Company’s significant interest-bearing financial instruments, based on the carrying amounts as at the end of the reporting period was:



25.6 Market risk (continued)

25.6.2 Interest rate risk (continued)

Group Company 2013 2012 2013 2012

RM RM RM RM

Fixed rate instrumentsFinancial assets

- loan to a subsidiary - - 103,500,472 101,284,466- deposits placed with licensed

banks 83,265,468 146,094,127 13,020,576 74,729,222Financial liabilities

- term loan ( 20,000,000) ( 34,000,000) ( 20,000,000) ( 34,000,000)

63,265,468 112,094,127 96,521,048 142,013,688

Floating rate instrumentsFinancial liabilities

- term loans ( 52,303,669) ( 31,888,509) - -- bank overdrafts - ( 1,633,086) - -- revolving credits ( 50,000,000) - - -

( 102,303,669) ( 33,521,595) - -

Interest rate risk sensitivity analysis

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss and does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points (bp) in interest rates at the end of the reporting period would have increased (decreased) post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

2013Profit or loss

2012Profit or loss

Group100bp

increase RM100bp

decrease RM100bp

increase RM100bp

decrease RM

Floating rate instruments (767,000) 767,000 (251,000) 251,000

25.6.3 Other price risk

Equity price risk arises from the Group’s investments in equity securities.


Management monitors the equity investments on a portfolio basis. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by management.

There is no sensitivity analysis performed as any change will be insignificant to the Group.




25.

Fina

ncia

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(co

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)

25.7

Fa

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Th

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of c

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and

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and

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119,

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Fair value of financial instruments carried at fair value

Fair value of financial

instrumentsnot carried at fair

value*

Level 1 Level 2 Level 3 Total TotalTotal fair

value Carrying

amountRM RM RM RM RM RM RM

2012GroupFinancial assetsOther investments 102,071,772 35,679,654 - 137,751,426 - 137,751,426 137,751,426

Financial liabilitiesTerm loans – secured

(non-current) - - - - (45,375,036) (45,375,036) (45,375,036)

CompanyFinancial assetsLoan to a subsidiary

(non-current) - - - - 101,284,466 101,284,466 101,284,466Other investments 102,071,772 35,679,654 - 137,751,426 - 137,751,426 137,751,426

102,071,772 35,679,654 - 137,751,426 101,284,466 239,035,892 239,035,892

Financial liabilitiesTerm loan – secured

(non-current) - - - - (20,000,000) (20,000,000) (20,000,000)


25.7 Fair value information (continued)

* Comparative figures have not been analysed by levels, by virtue of transitional provision given in Appendix C2 MFRS 13.




25.7 Fair value information (continued)

Policy on transfer between levels

The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.

Level 1 fair value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilities that the entity can access at the measurement date.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the financial assets or liabilities, either directly or indirectly.

Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period.

Transfers between Level 1 and Level 2 fair values

There has been no transfer between Level 1 and 2 fair values during the financial year (2012: no transfer in either directions).

Level 3 fair value

Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.

Fair values of financial instruments not carried at fair value

The fair values of term loans approximate their carrying amounts as these are variable rate borrowings.

The carrying amount of the loan to a subsidiary which bears interest at a rate that is in line with prevailing rates, also approximates fair value.

26. Capital management

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain the confidence of investors, creditors and other stakeholders in the Group and to sustain the future development of its businesses.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

The Group is also required to maintain a maximum debt-to-equity ratio of 1.0 to comply with a bank covenant, failing which the bank may call an event of default. The Group has complied with this covenant.

There were no changes in the Group’s approach to capital management during the financial year.



27. Capital expenditure commitments

Group2013 2012

RM RM

Property, plant and equipment

Authorised and contracted for 71,260,000 60,200,000

28. Contingent liabilities

The Directors are of the opinion that provision is not required in respect of the following corporate guarantees, as it is not probable that a future sacrifice of economic benefits will be required:

Company2013 2012

RM RM

Contingent liabilities not considered remote

Corporate guarantees favouring banks for facilities granted to subsidiaries 283,236,000 127,373,000

29. Related parties

Identity of related parties

For the purposes of these financial statements, a party is considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel include all the Directors of the Group, and certain members of senior management of the Group.

Significant related party transactions, other than compensations to key management personnel (see Note 20) and those disclosed elsewhere in the financial statement, are as follows:

Transactions with subsidiaries

Company2013 2012

RM RM

Dividend income ( 55,120,000) ( 55,120,000)

Interest income ( 2,236,006) ( 2,304,461)

Management fees ( 3,110,000) ( 2,760,000)

Transactions with certain Directors and company in which certain Directors and close members of their families have or are deemed to have substantial interests

Group2013 2012

RM RM

Rental of premises paid 2,000,888 1,446,760



29. Related parties (continued)

Transactions with associate

Group2013 2012

RM RM

Marine vesel charter expenses 48,931,509 -

Significant party balances related to the above transactions are disclosed in the statement of financial position as well as Note 8 and Note 15 to the financial statements.

Related party transactions are based on negotiated terms. All the amounts outstanding are unsecured and expected to settle in cash.

30. Acquisition of an associate

During the financial year ended 31 December 2013, the Company has acquired additional shares in Perdana Petroleum Berhad (“PPB”) from the open market. On 6 February 2013, the Company held in total 100,793,500 ordinary shares of RM0.50 each in PPB representing 20.36% of the issued and paid-up share capital in PPB, which has since became an associate of the Company.

The reclassification of fair value reserve of RM32,798,586 to profit or loss as non-operating income was occasioned by the reclassification of the investment in PPB from an available-for-sale investment to an equity-accounted associate.

As at 31 December 2013, the Company holds in total 180,897,780 ordinary shares of RM0.50 each in PPB representing 24.87% of the issued and paid-up share capital in PPB.

31. Subsequent event

The Company has effected on the 13 January 2014, a bonus issue of 274,999,935 ordinary shares of RM0.50 each on the basis of one bonus share for every two existing ordinary shares of RM0.50 each held in the Company. The listing and quotation of the bonus shares on the Main Board of Bursa Securities was successfully done on 30 January 2014.



32. Supplementary financial information on the breakdown of realised and unrealised profit or losses

The breakdown of the retained earnings of the Group and of the Company as at 31 December, into realised and unrealised profits, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Recruitments, are as follows:

Group Company2013 2012 2013 2012

RM RM RM RM

Total retained earnings of the Company and its subsidiaries

- realised 379,982,549 296,202,070 41,076,704 7,416,364

- unrealised ( 6,458,000) ( 2,874,000) - -

373,524,549 293,328,070 41,076,704 7,416,364

Total share of retained earnings of associate

- realised 11,433,000 - - -

- unrealised 2,694,000 - - -

387,651,549 293,328,070 41,076,704 7,416,364

Less: Consolidation adjustments ( 109,293,259) ( 109,293,259) - -

Total retained earnings 278,358,290 184,034,811 41,076,704 7,416,364

The determination of realised and unrealised profits is based on the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2012.


Analysis of shareholders as at 30 April 2014

Authorised Share Capital : RM500,000,000.00Issued and Fully Paid-Up Capital : RM412,499,967.50Class of Shares : Ordinary Shares of RM0.50 eachVoting Rights : One vote per ordinary share

1. DISTRIBUTION OF SHAREHOLDERS

Size of Holdings No of Holders % No of Shares %

1 – 99 101 3.58 4,039 0.00

100 – 1,000 358 12.67 261,045 0.03

1001 – 10,000 1,528 54.09 6,052,911 0.73

10,001 – 100,000 547 19.36 17,688,887 2.15

100,001 – 41,249,995 (*) 287 10.16 474,775,296 57.55

41,249,995 and above (**) 4 0.14 326,217,757 39.54

TOTAL 2,825 100.00 824,999,935 100.00

Remark: (*) – Less than 5% of Issued Shares (**) – 5% and above of Issued Shares

2. DIRECTORS’ SHAREHOLDINGS

The Directors’ Shareholdings of Dayang Enterprise Holdings Bhd based on the Register of Directors’ Shareholdings maintained by the Company pursuant to Section 134 of the Companies Act, 1965 are as follows:-

No. of Ordinary shares heldNo Direct % Indirect %

1. Ling Suk Kiong 76,779,130 9.31 61,218,187(1) 7.42

2. Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

65,916,675 7.99 - -

3. Joe Ling Siew Loung @ Lin Shou Long 41,463,825 5.03 61,218,187(2) 7.42

4. Datuk Hasmi Bin Hasnan 960,937 0.12 254,921,952(3) 30.90

5. Jeanita Anak Gamang - - - -

6. Wong Ping Eng - - - -

7. Gordon Kab@ Gudan Bin Kab 4,500 0.00 - -

8. Chia Chu Fatt 166,405 0.02 - -

9. Abdul Aziz Bin Ishak 269,530 0.03 - -

10. Polit Bin Hamzah 269,530 0.03 - -

11. Koh Ek Chong - - - -

12. Azlan Shah Bin Jaffril - - - -

13. Ali Bin Adai - - - -

Notes: (1) Deemed interest through Vogue Empire Sdn Bhd. (2) Deemed interest through Vogue Empire Sdn Bhd. (3) Deemed interest through Naim Holdings Berhad.


Analysis of shareholders as at 30 April 2014 (continued)

3. LIST OF SUBSTANTIAL SHAREHOLDERS

The list of Substantial Shareholders of Dayang Enterprise Holdings Bhd based on the Register of Substantial Shareholders of the Company required to be kept under Section 69L of the Companies Act, 1965 and their respective shareholdings are as follows :-

No of Ordinary Shares HeldNo. Names Direct % Indirect %

1. Naim Holdings Bhd 254,921,952 30.90 0 0

2. Ling Suk Kiong 76,779,130 9.31 61,218,187 7.42

3. Tengku Dato’ Yusof Bin Tengku 65,916,675 7.99 0 0

4. Ahmad Shahruddin

5. Vogue Empire Sdn Bhd 61,218,187 7.42 0 0

6. Joe Ling Siew Loung @ Lin Shou Long 41,463,825 5.03 61,218,187 7.42

7. Datuk Hasmi Bin Hasnan 960,937 0.12 254,921,952 30.90

8. Datuk Abdul Hamed Bin Sepawi 0 0.00 254,921,952 30.90

9. Wong Siew Hong 0 0.00 61,218,187 7.42

10. Ling Mee Luong@ Lin Meilong 0 0.00 61,218,187 7.42

11. Ling Hee Luong 0 0.00 61,218,187 7.42

4. LIST OF TOP THIRTY SHAREHOLDERS

No Names Shareholdings %

1. CIMSEC Nominees (Tempatan) Sdn Bhd 131,921,952 15.99CIMB for Naim Holdings Berhad (PB)

2. Naim Holdings Berhad 82,500,000 10.00

3. Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin 65,916,675 7.99

4. Ling Suk Kiong 45,879,130 5.56

5. Naim Holdings Berhad 40,500,000 4.91

6. Vogue Empire Sdn Bhd 32,718,187 3.97

7. Ling Suk Kiong 30,900,000 3.75

8. Vogue Empire Sdn Bhd 28,500,000 3.45

9. Kumpulan Wang Persaraan (Diperbadankan) 27,202,100 3.30

10. Joe Ling Siew Loung@ Lin Shou Long 21,073,200 2.56

11. Joe Ling Siew Loung@ Lin Shou Long 17,812,500 2.16

12. Amsec Nominees (Tempatan) Sdn BhdAmtrustee Berhad for CIMB Islamic Dali EquityGrowth Fund (UT-CIMB-DALI)

16,448,650 1.99

13. Citigroup Nominees (Tempatan) Sdn BhdEmployees Provident Fund Board (CIMB PRIN)

16,030,750 1.94


4. LIST OF TOP THIRTY SHAREHOLDERS (continued)

No Names Shareholdings %

14. Malaysia Nominees (Tempatan) Sendirian BerhadGreat Eastern Life Assurance (Malaysia) Berhad (DR)

11,481,150 1.39

15. HSBC Nominees (Asing) Sdn BhdExempt AN for JPMorgan Chase Bank, National Association (Norges BK)

9,259,800 1.12

16. Lembaga Tabung Angkatan Tentera 9,095,950 1.10

17. Citigroup Nominees (Tempatan) Sdn BhdKumpulan Wang Persaraan (Diperbadankan)(CIMB Equities)

7,744,000 0.94

18. Amanahraya Trustees BerhadPublic Islamic Select Treasures Fund

7,120,312 0.86

19. Malaysia Nominees (Tempatan) Sendirian BerhadGreat Eastern Life Assurance (Malaysia) Berhad (LPF)

6,848,900 0.83

20. Citigroup Nominees (Tempatan) Sdn BhdEmployees Provident Fund Board (KAF FM)

6,800,000 0.83

21. Amanahraya Trustees BerhadPublic Islamic Opportunities Fund

4,872,525 0.59

22. HSBC Nominees (Asing) Sdn BhdBBH and CO Boston for Daiwa Rising AseanEquity Fund (JTSB SMTB)

4,523,400 0.55

23. CIMB Group Nominees (Tempatan) Sdn BhdAmTrustee Berhad for CIMB Islamic Dali Equity Theme Fund

4,368,900 0.53

24. Citigroup Nominees (Tempatan) Sdn BhdEmployees Provident Fund Board (Nomura)

4,122,500 0.50

25. Koperasi Permodalan Felda Malaysia Berhad 4,000,000 0.48

26. Koperasi Permodalan Felda Malaysia Berhad 3,448,300 0.42

27. HSBC Nominees (Asing) Sdn BhdTNTC for Baring Pacific Fund

3,253,950 0.39

28. Burhanuddin Bin Md Radzi 3,227,980 0.39

29. Hong Leong Assurance BerhadAS Beneficial Owner (Unitlinked GF)

3,216,100 0.39

30. Cheng Ah Teck @ Cheng Yik Lai 3,100,000 0.38

TOTAL 653,886,911 79.26

Analysis of shareholders as at 30 April 2014 (continued)


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the 8th Annual General Meeting of the Company will be held at Imperial Hotel, Jalan Pos, 98000 Miri, Sarawak on Thursday 12th June 2014 at 11.30 a.m. to transact the following purposes:-

AGENDA

ORDINARY BUSINESS

1. Adoption of Financial Statements To receive the Audited Financial Statements for the financial year ended 31st December 2013 together with the Reports of

the Directors and the Auditors thereon. Ordinary Resolution 1

2. Approval of Directors’ Fees To approve the payment of Directors’ Fees. Ordinary Resolution 2

3 Re-Election of Directors To re-elect the following directors who retire in accordance with Article 86(a) of the Company’s Articles of Association:- Datuk Hasmi Bin Hasnan Ordinary Resolution 3 Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin Ordinary Resolution 4 Tuan Haji Abdul Aziz Bin Ishak Ordinary Resolution 5

To re-elect the following directors who retire in accordance with Article 93 of the Company’s Articles of Association :- Wong Ping Eng Ordinary Resolution 6 Azlan Shah Bin Jaffril Ordinary Resolution 7 Koh Ek Chong Ordinary Resolution 8 Ali Bin Adai Ordinary Resolution 9

4. Appointment of Auditors To re-appoint Messrs KPMG as Auditors of the Company until the conclusion of the next Annual General Meeting and to

authorize the Directors to fix their remuneration. Ordinary Resolution 10

AS SPECIAL BUSINESS

5. To consider and if thought fit, to pass the following Ordinary Resolutions:

Ordinary Resolutions

A. Ordinary Resolution - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT) of a Revenue or Trading Nature

“THAT pursuant to Paragraph 10.09(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), approval be and is hereby given to the Company and/or its subsidiaries to enter into RRPT of a Revenue or Trading Nature as set out in Section 2.4 of the Circular to Shareholders dated 21 May 2014 with the specific related parties mentioned therein which are necessary for the Group’s day to day operations, subject to the following:

(a) That the RRPT of a revenue or trading nature entered into are in the ordinary course of business, they are at arm’s length basis and on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company; and

(b) That the proposals are subject to annual renewal and that such approval shall continue to be in force until:-

1. the conclusion of the next Annual General Meeting (“AGM”) of the Company;

2. the expiration of the period within the next AGM of the Company subsequent to the date it is required to be held pursuant to Section 143(1) of the Companies Act 1965 (“the Act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act; or

3. revoked or varied by resolution passed by the shareholders in general meeting;

whichever is the earlier;

(c) AND THAT the Directors of the Company be authorized to complete and do all such acts and things as they may consider expedient or necessary to give effect to the RRPTs contemplated and/or authorized by this Ordinary Resolution.” Ordinary Resolution 11


Notice of Annual General Meeting (continued)

B. Ordinary Resolution - Proposed Renewal of Authority To Purchase Own Shares

“THAT, subject to the compliance with Section 67A of the Companies Act 1965, and all applicable laws, guidelines, rules and regulations, the Directors of the Company be and are hereby authorized to purchase such amount of ordinary shares of RM0.50 each in the Company as determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad upon such terms and conditions as the Directors may deem fit, necessary and expedient in the interests of the Company provided THAT :-

(1) The aggregate number of shares to be purchased and/or held pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up ordinary share capital of the Company;

(2) The amount of fund to be allocated by the Company for the purpose of purchasing the shares shall not exceed the aggregate of the retained profits and share premium account of the Company at the time of purchase of Dayang shares,

(3) The Directors of the Company may decide in their discretion to retain the shares purchased as treasury shares and/or distribute them as dividends and/or resell them on the market of Bursa Securities and/or subsequently cancel all or part of them.

AND THAT authority be and is hereby given to the Directors of the Company to act and to take all such steps as are necessary or expedient to implement and finalize and give full effect to the Proposed Share Buy-Back.

AND THAT such authority conferred by this resolution shall commence immediately and shall continue to be in force until the conclusion of the next Annual General Meeting of the Company following the passing of this ordinary resolution unless earlier revoked or varied by an ordinary resolution of the shareholders of the Company in a general meeting.” Ordinary Resolution 12

C. Ordinary Resolution - Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965

“THAT pursuant to Section 132D of the Companies Act 1965 (“the Act”) and subject always to the approval of the relevant authorities, the Directors be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of the issued share capital of the Company for the time being AND THAT the Directors be and are hereby empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” Ordinary Resolution 13

6. To transact any other ordinary business that may be transacted at an Annual General Meeting, of which due notice shall have been given.

BY ORDER OF THE BOARD

BONG SIU LIAN (MAICSA 7002221)BAILEY KHO CHUNG SIANG (LS0000578)Company Secretaries

Miri, SarawakDated this 21 May 2014



Notes:-1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply

to the Company.2. To be valid, the Proxy form, duly completed must be deposited at the Registered Office of the Company at Sublot 5-10, Lot

46, Block 10, Jalan Taman Raja, 98000 Miri, Sarawak not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the Act are complied with.

4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

5. If the appointer is a corporation, this form must be executed under its common seal or under the hand of an officer or attorney duly authorized.

6. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

7. Only members registered in the Record of Depositors as at 6 June 2014 shall be eligible to attend the meeting or appoint proxy to attend and vote on his/her behalf.

8. Please take note that interested directors, interested major shareholders or interested persons connected with a director or major shareholder, and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote in respect of their direct and/or indirect shareholdings on the resolution approving the Proposed Shareholders’ Mandate.

Explanatory Notes on Special Businesses

(a) Ordinary resolution 11 – Proposed Renewal of Shareholders’ Mandate for RRPT of a Revenue or Trading Nature

The proposal, if passed, will empower the Company and its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature with the mandated related parties for a period from this Annual General Meeting till the next Annual General Meeting.

Please refer to the Circular to Shareholders dated 21 May 2014 for further information.

(b) Ordinary resolution 12 – Proposed Renewal of Authority to Purchase Own Shares

This proposed ordinary resolution, if passed, will empower the Directors of the Company to purchase up to ten percent (10%) of the total issued and paid-up share capital of the Company from the date of this Annual General Meeting. This authority unless revoked or varied by the Company at a General Meeting will expire at the next Annual General Meeting.

Please refer to the Statement on Share Buy-Back dated 21 May 2014 for further information.

(c) Ordinary resolution 13 – Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965

This ordinary resolution, if passed, will empower the Directors of the Company from the date of this Annual General Meeting, authority to issue and allot Ordinary Shares from the unissued capital of the Company up to an aggregate of ten percent (10%) of the issued and paid-up share capital of the Company for the time being, for such purposes as the Directors consider in their absolute discretion to be in the interest of the Company. This authority will, unless revoked or varied by the Company in a General Meeting, expire at the next Annual General Meeting of the Company.

The general mandate sought for issue of shares is a renewal of the mandate that was approved by shareholders on 13 June 2013. The purpose of the renewal of the general mandate is to provide flexibility to the Company for any possible fund-raising exercises, including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital and/or acquisitions.

At this juncture, there is no decision to issue any new shares. Should there be a decision to issue new shares after the general mandate has been obtained, the Company will make an announcement in respect of the purpose and/or utilisation proceeds arising from such issue.



Statement accompanying Notice of Annual General Meeting

The Directors standing for re-election at the 8th Annual General Meeting of the Company in accordance to Article 86(a) and Article 93 of the Company’s Articles of Association are as follows:

a) Article 86(a) – Retirement by Rotation - Datuk Hasmi Bin Hasnan - Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin - Tuan Haji Abdul Aziz Bin Ishak

b) Article 93 – Retirement after appointment to fill casual vacancy or to add Directors - Wong Ping Eng - Koh Ek Chong - Azlan Shah Bin Jaffril - Ali Bin Adai

The respective profiles of the above Directors are set out in the Profile of Directors on pages 9 to 15 of the Annual Report.The details of interest in securities of the Company held by the Directors are stated on page 88 of the Annual Report.

DAYANG ENTERPRISE HOLDINGS BHD(Company No. 712243-U)(Incorporated in Malaysia)

FORM OF PROXY

I/We …………………………………………………………………………………………………………………………………………………….……....

IC No/ID No/Company no………………………………………………………………………………………………………………………………...…..

of …………………………………………………………………………………………….………………..……………….……………….…... being a

member of/members of the above-named Company hereby appoint *the Chairman of the Meeting or …………………………………………………

……………………………………………. of ………………………………………………………………………………………………… or failing him,

……………………………………………………………….….……of ………….…….…………………………………………………………………...as my/our proxy/proxies to vote for me/us on my/our behalf at the 8th Annual General Meeting of the Company to be held at Imperial Hotel, Jalan Pos, 98000 Miri, Sarawak on Thursday, 12 June 2014 at 11.30 a.m. or any adjournment thereof, in the manner indicated below:-

CDS account no. of authorized nominee No. of shares held

(Please indicate with an “X” in the spaces above how you wish your votes to be casted on the resolution specified in the Notice of Meeting. If no specific direction as to the voting is indicated, the proxy/proxies will vote or abstain from voting as he/she/they think(s) fit.)

Dated this …………….. day of …………………………………… 2014

………………………………………………..Signature of Shareholder(s)/Common Seal

Notes:-1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company. 2. To be valid this form duly completed must be deposited at the Registered Office of the Company at Sublot 5-10, Lot 46, Block 10, Jalan Taman Raja, 98000

Miri, Sarawak not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the

Act are complied with.4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by

each proxy.5. If the appointer is a corporation, this form must be executed under its common seal or under the hand of an officer or attorney duly authorised.6. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities

account (omnibus account), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

7. Only members registered in the Record of Depositors as at 6 June 2014 shall be eligible to attend the meeting or appoint proxy to attend and vote on his/her behalf.

8. Please take note that interested directors, interested major shareholders or interested persons connected with a director or major shareholder, and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote in respect of their direct and/or indirect shareholdings on the resolution approving the Proposed Shareholders’ Mandate.

Resolution Agenda FOR AGAINST

Ordinary Resolution 1 To receive the Audited Financial Statements for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon

Ordinary Resolution 2 Approval of Directors’ Fees

Ordinary Resolution 3 Re-election of Director: Datuk Hasmi Bin Hasnan

Ordinary Resolution 4 Re-election of Director: Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

Ordinary Resolution 5 Re-election of Director: Tuan Haji Abdul Aziz Bin Ishak

Ordinary Resolution 6 Re-election of Director: Wong Ping Eng

Ordinary Resolution 7 Re-election of Director: Azlan Shah Bin Jaffril

Ordinary Resolution 8 Re-election of Director: Koh Ek Chong

Ordinary Resolution 9 Re-election of Director: Ali Bin Adai

Ordinary Resolution 10 Reappointment of Auditors: Messrs KPMG as Auditors authorizing the Directors to fix their remuneration

Ordinary Resolution 11 Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a revenue or trading nature

Ordinary Resolution 12 Proposed Renewal of authority to purchase own shares

Ordinary Resolution 13 Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965

The Company SecretaryDayang Enterprise Holdings BhdSublot 5 – 10, Lot 46, Block 10,Jalan Taman Raja,98000 Miri, Sarawak.

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FOLD THIS FLAP FOR SEALING

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Documents

Cautionary Statement - Dayang Enterprise Holdings Berhad ...dayang.listedcompany.com/misc/ar2013.pdf · respect to the Dayang Group’s financial condition, results of operations