Dayang Enterprise Holdings Bhd DAYANG …dayang.listedcompany.com/misc/AR2009.pdfDayang Enterprise Holdings Bhd (712243-U) Annual Report 2009 DAYANG ENTERPRISE HOLDINGS BHD (712243-U)

Dayang Enterprise Holdings Bhd (712243-U)Annual Report 2009

DAYANG ENTERPRISE HOLDINGS BHD(712243-U)

Focus Towards Excellence

DAYANG ENTERPRISE HOLDINGS BHD (712243-U)

Head Offi ceSublot 5-10, Lot 46, Block 10,Jalan Taman Raja,Miri Concession Land District,P.O. Box 1134, 98000 Miri,Sarawak, Malaysia.Tel : 085-420185Fax : 085-421654 Email : [email protected] : www.desb.net

Annual Report 2009Annual Report 2009


Annual Report 20092

Cautionary Statement Regarding Forward-Looking Statements

This Annual Report contains some forward-looking statements in respect to the Dayang Group’s fi nancial

condition, results of operations and business. These forward-looking statements represent the 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.


Annual Report 2009 1

C o n t e n t s 2 Corporate Information

3 Corporate Structure

4 Corporate Key Achievements / Awards

6 5 Years Financial Highlights

7 Profi le of Directors

12 Message To Our Shareholders

15 Corporate Social Responsibility

18 Audit Committee Report

20 Statement on Internal Control

21 Statement of Corporate Governance

27 Financial Statements

67 Analysis of Shareholdings

69 Notice of Annual General Meeting

Form of Proxy

2009 At A Glance

Financial PerformanceRevenue (RM’000) 196,954

Profi t Before Tax (RM’000) 52,401

Net Profi t (RM’000) 44,785

Total Assets (RM’000) 462,592

Shareholders’ Equity (RM’000) 323,743

Earnings Per Share (Sen) 12.72

NTA per share (Sen) 91.97

Return On Equity (%) 13.83

Gross Dividend (Sen) 5.00

Gross Dividend Yield (%) 2.89


Annual Report 20092

Corporate Information

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

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

AUDITORSKPMG (Firm No AF0758) Chartered AccountantsLevel 6, Westmoore HouseTwin Tower Centre, Rock Road93200 Kuching, Sarawak, Malaysia.

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

SHARE REGISTRARTricor Investors Services Sdn BhdLevel 17, The Gardens, North Tower,Mid Valley City,Lingkaran Syed Putra,59200 Kuala Lumpur Malaysia.Tel: 603-22643883Fax: 603-22821886

PRINCIPAL BANKERSRHB Bank BerhadLot 362, Block 9Jalan Nakhoda Gampar98000 Miri.

United Overseas Bank BerhadNo 108 & 110 Jalan Bendahara98000 Miri.

CIMB Bank BerhadLot 507 & 508 Block 9, MCLDJalan Permaisuri,98000 Miri.

Location of Business

STOCK EXCHANGE LISTINGMain MarketBursa Malaysia Securities BerhadListed on 24 April 2008Stock Code : 5141Stock Name : Dayang

INCORPORATION10 October 2005Under the Companies Act 1965

BOARD OF DIRECTORSDatuk Hasmi Bin Hasnan Chairman

Ling Suk Kiong Deputy Chairman

Tengku Yusof Bin Tengku Ahmad Shahruddin Managing Director

Joe Ling Siew Loung @ Lin Shou Long Deputy Managing Director

Sulaihah Binti Maimunni (Appointed 01.02.10) Executive Director

Harry Bin Bujang Executive Director

Gordon Kab@ Gudan Bin Kab Executive Director

Dr Sharifuddin Bin Abdul Wahab (Resigned on 31.01.10) Executive Director

YB Chia Chu Fatt Independent Non-Executive Director

Polit Bin Hamzah Independent Non-Executive Director

Tuan Haji Abdul Aziz Bin Ishak Independent Non-Executive Director

GROUP OPERATION

Head Offi ce

Branch Offi ce

Miri Warehouse

Labuan warehouse

Labuan Fabrication Yard

Administrative offi ce

Bintulu Warehouse/Fabrication Yard

DESB Kemaman Yard

LOCATION OF FACILITY

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

Lot No. L11-07, Level 11, Brem Mall, Jalan Kepong, 52000 Kuala Lumpur, Malaysia.

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

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

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

Level 2, 1st Floor East Wing, Wisma 2020, 18 Lorong Belia Karamunsing, 88100 Kota Kinabalu, Sabah, Malaysia.

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

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



Corporate Structure

Dayang Enterprise Holdings Bhd (‘DEHB”)

Our Group is a major provider of offshore platform services within the Oil and Gas Industry.

We are principally involved in the provision of offshore topside maintenance services, minor fabrication operations, offshore hook-up and commissioning and, charter of marine vessels relating to the Oil and Gas Industry.

100%Dayang Enterprise

Sdn Bhd(DESB)

Provision of offshore Topside Maintenance

Services, minor fabrication and offshore hook-up and

commissioning

100%DESB Marine Services

Sdn Bhd (DMSSB)

Owner and Charter of marine vessels

40%Syarikat Borcos

Shipping Sdn Bhd(SBSSB)

Provision of marine transportation and support

services as well as integrated land-logistics

services

100%Fortune Triumph

Sdn Bhd (FTSB)

Provision of rental equipment


Annual Report 20094

Corporate Key Achievements / Awards

Notes : -PMO = Peninsular Malaysia OperationTRCF= Total recordable injury case frequency

YEAR

2009/2010

2009

2009

2007/2008

2008/2009

2008

2008

2008

2008

2008

2007

2007

TYPE OF AWARD

Certifi cation

Certifi cation

Certifi cation

Awards

Certifi cate of Appreciation


PETRONAS Group HSE Awards 2007/2008

Petronas Awards

Petronas Awards

Petronas Awards

PETRONAS Carigali HSE Awards 2006/2007

Memo of Appreciation

AWARDED BY

Petronas Carigali

Petronas Carigali(SBO)

Petronas Carigali

Petronas



PETRONAS Carigali

Petronas Carigali Sdn Bhd

Petronas Carigali SDN BHD & Health, Safety & Environment Department Petronas Carigali Sdn Bhd Sabah Operation

HSE Department PCSB Sarawak Operations

Petronas Carigali

Murphy Sabah Oil Co. Ltd

AWARDED BY

Certifi cation of Appreciation for Active UAUC Reporting (October 2009 – February 2010)

Certifi cation 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)

Certifi cation of Appreciation for Active UAUC reporting ( April-Sept 2009)

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.

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)

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)

Recognition of an Excellent Achievement

SBO-Contractor Senior Management HSE Meeting

April – September 2008 ( Active UAUC Reporting )

PCSB HSE Interactive Quiz for Contractor

Recognition of an Excellent Achievement

In conjunction for the successful 1st oil from Kikeh’s Dry Tree Unit (DTU) achieved on 17 August 200



Corporate Key Achievements / Awards (Continued)

YEAR

2005

2005

2005

2004

2004

2004

2004

2004

2003

2003

2003

2002

TYPE OF AWARD



Contractor Safety Recognition Grand AwardGrand Award



Contractor Safety Recognition Grand Award





Certifi cate of Achievement

AWARDED BY

PETRONAS Carigali

PETRONAS Carigali

ExxonMobil

PETRONAS Carigali (PMO)

PETRONAS Carigali

Sarawak Shell

ExxonMobil

PETRONAS Carigali


PETRONAS Carigali



AWARDED BY

Successful and early Samarang start-up without Lost Time Incident

Zero Lost Time Incident Safety Record with a total of 3.35 million

Recognition of Safety Excellent 2005

Recognition of Excellent HSE Performance 2004

Achieving TRCF Zero for 780,000 man hours in year 2003

Completion of 1 Million Man-hours Work Recording without a Lost Time Incident

Recognition of Safety Excellent 2004

Achieving TRCF Zero for 780,000 man hours in year 2004

Active contributions in achieving Zero Lost Time Incident during the Angsi planned shutdown

Achieving good safety record and with TRCF less than 2.5

Contributions in providing excellence support in major shutdown works

Outstanding accomplishments and contributions for successful 2002 onshore gas terminal shutdown.

Notes : -PMO = Peninsular Malaysia OperationTRCF= Total recordable injury case frequency


Annual Report 20096

5 Years Financial Highlights

5 Year Financial Highlights (in RM’000)

Year End 30 September 30 September 30 September 31 December 31 December 2005 2006 2007 2008 * 2009

Revenue 112,390 108,906 127,134 181,128 196,954 Gross Profi t 51,124 47,992 59,599 90,822 85,793 PBT 31,344 31,191 39,233 88,759 52,401 PAT 22,188 22,697 28,852 71,444 44,785 GP Margin 45.5% 44.1% 46.9% 50.1% 43.6% PBT Margin 27.9% 28.6% 30.9% 49.0% 26.6%

2005 2006 2007 2008* 2009

Revenue (RM’000)

112

,390

108

,906

127

,134

181

,128

Gross Profi t (RM’000)

51,

124

47,

992 59,

599

90,

822

PBT (RM’000)

31,

344

31,

191

39,

233 5

2,40

1

Note: The fi nancial highlights for years 2005 to 2007 are presented on a proforma basis as if the subsidiaries were part of Dayang Enterprise Holdings Bhd Group and are for illustrative purposes only.

2008 * Results are for the 10 months from 1 March 2008 to 31 December 2008 after DESB, DMSSB and FTSB became wholly owned subsidiaries of DEHB.

PAT (RM’000)

22,

188

22,

697

28,

852

44,

785

GP Margin (%)

45.

5%

44.

1%

46.

9%

43.

6%

PBT Margin (%)

27.

9%

28.

6%

30.

9%

49.

0%

196,

954

2005 2006 2007 2008* 2009 2005 2006 2007 2008* 2009

2005 2006 2007 2008* 20092005 2006 2007 2008* 20092005 2006 2007 2008* 2009

85,7

93

88,

759

71,

444

50.

1%

26.

6%



Profi le of Directors

Datuk Hasmi Bin HasnanChairman

Datuk Hasmi Bin Hasnan, aged 57, 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 Certifi ed Valuer with International Real Estate Institute, USA and a member of 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 Cendera Sdn Bhd and has since been the main driving force behind the company’s growth and expansion. He was awarded the title of Panglima Gemilang Bintang Kenyalang on 9th September 2000.

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

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

Ling Suk KiongDeputy ChairmanChairman – Risk Management Committee

Ling Suk Kiong, aged 64 is the founder of Dayang Group of Companies. He established Dayang Enterprise Sdn Bhd in 1980. He was appointed Deputy Chairman of Dayang Enterprise Holdings Bhd on 29 February 2008. He has been instrumental in the growth and development of our Group. He brings with him approximately twenty-nine (29) years of experience in the Oil and Gas Industry and is mainly responsible for the overall strategic business direction of our 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 also a director of S.K Ling & Sons Sdn Bhd, Jasa Oilfi elds Supply Sdn Bhd and Kunci Prima Sdn Bhd.


Annual Report 20098

Tengku Yusof Bin Tengku Ahmad ShahruddinManaging Director Chairman – Corporate Social Responsibility CommitteeMember – Risk Management Committee

Tengku Yusof Bin Tengku Ahmad Shahruddin, aged 47, 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 Leonhardt, Kerps and Lefevre Structural Engineering as a Structural Engineer in 1984. In 1985, 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 FortuneTriumph Sdn Bhd and DESB Marine Services Sdn Bhd. He holds several directorships in other private limited companies in Malaysia, including Hexamas Sdn Bhd, Hexamas Oilfi eld Services Sdn Bhd, Sierra Mal Sdn Bhd and Kunci Prima Sdn Bhd.

Joe Ling Siew Loung @ Lin Shou LongDeputy Managing DirectorMember – Risk Management Committee

Joe Ling Siew Loung @ Lin Shou Long, aged 37, was appointed Non-Independent Deputy Managing Director on 29 February 2008. He graduated from University of Western Australia in 1993 with a Bachelor of Engineering Degree. 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 Offi ce Engineer. Subsequently in 1995, he joined Daiken Sarawak Sdn Bhd as a Production Engineer.

He joined Dayang Enterprise Sdn Bhd in 1997 and was appointed Assistant General Manager. He is currently responsible for overseeing and monitoring the management and operations of Dayang Group.

Profi le of Directors (Continued)



Harry Bin BujangExecutive Director

Harry Bin Bujang, aged 53, was appointed as Non-Independent Executive Director of Dayang Enterprise Holdings Bhd on 29 February 2008. He joined Dayang Enterprise Sdn Bhd in 1981 and was appointed director in 1989. He is also a Director in Fortune Truimph Sdn Bhd and DESB Marine Services Sdn Bhd.

He brings with him extensive experience in the Oil and Gas Industry as a result of over twenty-eight (28) years of direct working experience in the industry. He currently oversees the operations and human resources for the offshore operations. He also holds directorship in Jasa Oilfi elds Supply Sdn Bhd and Vogue Empire Sdn Bhd.

Sulaihah Binti MaimunniExecutive Director

Cik Sulaihah Binti Maimunni aged 53 was appointed Non-Independent Executive Director of Dayang Enterprise Holdings Bhd on 1 February 2010.

Ms Sulaihah a civil engineering graduate from Swansea University, United Kingdom has more than 26 years of engineering and construction experience. She has worked with Minconsult Sdn Bhd., an engineering consulting fi rm from 1980 as Design Engineer and UEM Group Berhad and its subsidiaries since 1988 holding various positions such as Director of Business Development & Engineering and Executive Director/Chief Executive Offi cer being her last portfolio before her departure from the UEM Group in 2007.

Prior to her last position in the UEM Group, she was seconded to Sarawak Hidro Sdn. Bhd., the owner of the Bakun Hydroelectric Project, for two years as the Managing Director. Ms Sulaihah also has vast overseas experience in countries like Vietnam, Indonesia, Qatar and India.

Her capabilities are in company management, project management at concept, design and implementation, project development and procurement, marketing and fi nancial encompassing viability analysis, management and fund raising for large scale privatized and non-privatized infrastructure and land development projects.



Annual Report 200910


Gordon Kab @ Gudan Bin KabExecutive DirectorChairman – Risk Management CommitteeMember – Corporate Social Responsibility Committee

Gordon Kab @ Gudan Bin Kab, aged 54, was appointed as our Non-Independent Executive Director on 29 February 2008. He graduated from Loughborough University of Technology, England United Kingdom, with a B.Sc (Hon.) degree in Civil Engineering.

He has over twenty-nine (29) years of working experience in both Oil and Gas and the Construction industries. He gained extensive experience with Sarawak Shell Berhad for fi fteen (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/institutuional complexes. He was later appointed as Vice President for the Oil & Gas Division.

YB Chia Chu FattIndependent Non-Executive DirectorChairman – Audit CommitteeMember – Joint Remuneration And Nomination CommitteeMember – Corporate Social Responsibility Committee

YB Chia Chu Fatt,aged 56, was appointed as our Independent Non-Executive Director on 29 February 2008. YB Chia is an accountant by profession and is the proprietor of Andy Chia & Co. He is a Fellow member of the Association of Chartered Certifi ed 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 fi rms, of which approximately four (4) years were in a medium size fi rm in London.

He is also a Director of Koperasi Serbaguna Miri Berhad and Miri Transport Company Sdn Bhd and a Board member of Sarawak Land Development Board. YB Chia is also a Sarawak State Legislative Council Assemblyman since 2006 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 HamzahIndependent Non-Executive DirectorChairman – Joint Remuneration and Nomination CommitteeMember – Audit Committee

Polit Bin Hamzah, aged 60, 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) 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 get 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 is an Independent Non-Executive Director of Sarawak Plantation Berhad.

Tuan Haji Abdul Aziz Bin IshakIndependent Non-Executive DirectorMember – Audit CommitteeMember – Joint Remuneration and Nomination Committee

Tuan Haji Abdul Aziz Bin Ishak, aged 58, 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 Certifi cate 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 Offi cer 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 Offi cer 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.

Please refer to page 67 for Directors’ securities holdings in the Company.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.All Directors are Malaysians.None of the Directors have any confl ict of interest with the Company.None of the Directors have been convicted for any offences.Please refer to page 21 for Directors attendance at board meetings held during the fi nancial year.



The past year has witnessed unprecedented global economic and fi nancial turbulence, starting with the collapse of Lehman Brothers in the United States of America in September 2008. On 16 January 2009, the price of crude oil hit a low of USD36.51 per barrel. Major world economies have implemented stimulus packages to counter the crisis and since then, the price of crude oil has been moving upwards and is presently hovering above USD80 per barrel. Operating amidst such erratic and uncertain economic conditions was most challenging and no easy task for any business. The low price of petroleum was a signifi cant factor causing our clients to cut back on spending for the most parts of 2009. Decisions on awards of project work orders were also deferred due to the economic meltdown. It did not help that some of our contracts were near the tail-end of their contractual terms. Despite these adverse conditions, Dayang continued to deliver commendable profi ts and results in all key business areas. The economic downturn also provided Dayang an opportunity to strengthen its corporate and organisational structures, in capacity expansion as well as new business development and human resources management. We believe our Company is now on a stronger footing and is poised to chart a stronger growth path in the years ahead.

Currently, we expect our clients to increase capital and operating expenditures in the oil and gas sector. Moreover, new contracts amounting to RM2.5 billion will be up for bidding this year. It will be exciting times as Dayang anxiously awaits and hopes for the favourable outcomes of the tenders that it has participated or will be participating in the next few months.

Dear Fellow Shareholders,

Message To Our Shareholders



Message To Our Shareholders (Continued)

Performance Review

As mentioned in our 2008 annual report, integral to the Company’s plan to list and quote its ordinary share capital on the Main Market of Bursa Malaysia Securities Berhad, the Company acquired on 29 February 2008 the entire equity interests in Dayang Enterprise Sdn. Bhd., DESB Marine Services Sdn. Bhd. and Fortune Triumph Sdn. Bhd. Consequent on the Company changing its reporting date in the last fi nancial period, the previous fi nancial statements were presented for the 15 months from 1 October 2007 to 31 December 2008. Notwithstanding this, the group income statement only consolidated the revenue and results of the three subsidiaries for the 10 months from 1 March 2008 to 31 December 2008 using the acquisition method of accounting. When reviewing the group performance for the current year against the previous period, this fact must be borne in mind.

For the year under review, Group turnover recorded was RM196.95 million. This represented an increase of 8.7% over the previous period’s turnover of RM181.13 million. The Group achieved a profi t before tax (PBT) of RM52.40 million and profi t attributable to shareholders (PATS) of RM44.79 million for the year ended 31 December 2009. As compared to the 10 months in the previous period, PBT was down by 41% and PAT down by 37%.

The Group recognised a negative goodwill (being the excess of the fair value of the net assets of the subsidiaries acquired over the acquisition cost of the subsidiaries) of RM22.54 million as income in the previous period. This, coupled with the fact that the work orders carried out in 2009 had a much lower profi t margin contribution compared to those in the previous period, explained the lower PBT and PATS for the current year under review. The Group was no doubt having a less favourable year in 2009 in terms of margins as compared to 2008, not unlike other oil & gas service providers. As we had mentioned in our previopus annual report, 2008 was an exceptional year where oil price was at its all time high at USD147 per barrel in July 2008.

Earnings attributable to shareholders were registered at 12.72 sen per share as compared to 31.48 sen in 2008.

Balance Sheet Strength

The Group continues to maintain a very healthy balance sheet, with net assets of RM323.75 million and a net gearing of 0.34 time as at 31 December 2009. Cash and bank balances stood at RM57.23 million.

Dividends

The Board declared and paid an interim dividend of 5.25 sen net of tax, amounting to RM18,480,000 for the fi nancial period ended 31 December 2008 on 27 March 2009. A further interim single-tier dividend of 5 sen tax exempt amounting to RM17,600,000 was declared and paid on 21 December 2009 for the fi nancial year ended 31 December 2009. The Board is not recommending a fi nal dividend for the fi nancial year ended 31 December 2009 as the Group has to conserve some of its cash for up and coming capital expansion, investments as well as for operational needs to fund new and recurring contracts.

Sustaining Profi table Growth:

In 2009 we had put in place many measures to accelerate growth in a profi table manner. Hopefully this will bear fruits in the ensuing years.

• Excellent Health Safety and Environment (HSE) Track Record

The Group continues to invest and impress with quality HSE performance and track records. The Group’s emphasis on “NO HARM TO PEOPLE, PROPERTY AND ENVIRONMENT” continues to take centre stage at the heart of every business activity and function. For the year under review, the Group has recorded more than 15 million man hours without any lost time due to injury of workers nation-wide, a stellar performance by any contractor in the oil and gas fraternity.

• Organisational Structure: We have specifi cally created a new business development

division, to spearhead the development of new businesses that the Group intends to venture into and groom new team leaders to focus on their respective business units to lead the Group into the next decade.

This new structure will open up opportunities for leadership development, provides a platform for nurturing internal resources and provide focus to the group businesses.



• Skills and Talent Management The severe economic downturn has worked to our

advantage, enabling us to position Dayang as a stable career destination. Human resource continues to be the cornerstone of our business model and Dayang takes pride on being able to leverage our pool of skilled and semi-skilled employees for profi table business growth. We continue to work with our partners and clients to fi ll capability gaps and source expertise wherever we lack the requisite in-house resources, either on a long term or project-specifi c basis. Steps have been taken to meet the challenges of retention, skill upgrades, remuneration and the career aspirations of our talented pool of employees who, in our business, are our main vital assets.

These included structured induction path, capability building programs, differentiated rewards systems, career progression plan and succession planning.

We are confi dent that the measures now being taken will enhance the effectiveness of our talent management initiatives.

• IT in Business We believe in investing in IT as a business enabler. Over

the years, our outlay in specifi c IT solutions has enabled our business to run effi ciently. For example, in line with the requirements of our clients, we invested in engineering planning software, Primavera, in 2009.

We are constantly upgrading our IT needs and our IT activities are governed within a structured framework focusing on IT-business alignment, value delivery, service and support and total cost of ownership.

• Capacity Expansion For the year under review, we added a second fabrication

yard of our own in Labuan in anticipation of increasing activities in minor fabrication works in the near future. In our Kemaman operations, a minor fabrication yard was also set up. The expansion in these minor fabrication facilities is crucial for the execution of our contractual obligations.

In July 2009, our fourth workboat MV Dayang Zamrud was commissioned and she is now operating for Brunei Shell Petroleum in Brunei, registering our fi rst foray into the regional markets.

Our Group has also taken pro-active steps to acquire 40% of Syarikat Borcos Shipping Sdn Bhd (SBSSB), an associate company that owns a fl eet of 33 offshore support vessels, including fast crew boats and anchor handling tugs and offshore support vessels.

Outlook and Current Year’s Prospects

While no country is insulated from the impact of the global meltdown, Malaysia’s economy provides relatively greater stability. However, 2010 will remain challenging as world

economies generally still look very fragile. For Dayang, we foresee a return to robust growth conditions after economic recovery takes root, hopefully sooner rather than later.

The recent award of the estimated RM400 million-contract by Shell comes as welcome news and boosts Dayang’s order book to a very healthy RM1.0 billion and should provide the impetus and stimulus for more exciting times ahead. The year 2010 will also be a signifi cant year as there will be RM2.5 billion worth of new contracts to bid for. This usually happens every 3 to 5 years. Our excellent track record will put us in a good stead against the competition and if Dayang is fortunate to win some of these contracts, the outlook for the next few years would be brighter.

Dayang has looked beyond its current frontiers and forged strategic alliances and partnerships with Brunei companies, namely, Alpha One Engineering Sdn Bhd and Nautika Sdn Bhd, to cushion the impact of any shortfall in its business and in preparation for future growth. This is one growth sector that we will embark on more aggressively.

Again, rest assured, your Board will continuously and vigilantly work towards securing better, more sustainable and profi table contracts and businesses, going forward. The pace of development will be accelerated from here on. Do enjoy the journey ahead of us.

Acknowledgement

Before we conclude, we would like to thank everyone for the support and continued commitment which has helped us navigate these diffi cult times. We would also like to express our sincere gratitude to our colleagues, our clients and customers, business associates, shareholders, and members of the Board for their valuable assistance. We will continue to work towards enhancement of shareholder values and remain committed to justifying the faith and trust you have placed upon us. We pledge to deliver our utmost.

With best wishes,

Datuk Hasmi Bin HasnanExecutive Chairman

Tengku Yusof Bin Tengku Ahmad ShahruddinManaging Director

Message To Our Shareholders (Continued)



Corporate Social Responsibility

The Company led by the Board of Directors is also committed to promote corporate social responsibilities as an integral part of the Group whilst pursuing business growth to enhance shareholder and stakeholder value.

The Company values the contributions from the employees who have contributed to the success of Dayang Group. Our employees are our key assets and we place great importance on human capital development. The Group is committed towards providing a conducive and caring working environment for the employees. Various trainings are provided to motivate the employees and to upgrade their skills.

To reward and bond our employees closer together, Dayang held its annual dinner on 17 January 2009 and on 13 March 2009 in Miri and Kuala Lumpur respectively. We also had a Family Day fi lled with activities with the staff and their family members which was held at Park City Everly Hotel,Miri on 3 October 2009.

In addition, we hosted a team building exercise at the Borneo Tropical Rainforest Resort Miri for all the employees of Miri Offi ce on 4 July 2009 and one was held at Dusun Eco Resort on the 25 July 2009 for our Kuala Lumpur offi ce personnel to provide an opportunity for employees to foster better ties and share knowledge.



Corporate Social Responsibility (Continued)

Dayang continues to address the needs and concerns of our communities through continuous fi nancial contributions and in kind to communities, associations and clubs needing sponsorship and assistance within the country. These included the following:

1. A contribution towards Miri Natural Disaster Relief Fund2. Donation to Yayasan Tun Ahmad Shah, a charity organization that conducts welfare activities for the less fortunate members

of the society including single mothers on a regular basis as well as motivational camps for needy students preparing for national examinations to give them an opportunity to succeed and change the fortune of their families.

3. Donation to Yayasan Amal Malaysia4. Donation to Miri Basketball Association5. Donation for sponsorship of research to improve the electrocardiogram (ECG) design and increase its accuracy to a 3rd year

engineering student of Curtin University of Technology, Miri Sarawak Campus.6. Donation of wheelchair and ripple mattress & pump to Iktan Megah Medik7. Donation to Pertubuhan Al-Khaadem an NGO providing assistance to orphans, the needy and less fortunate.8. Donation to Persatuan Masyarakat Prihatin Malaysia.

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



Corporate Social Responsibility (Continued)

During the year under review, the Group has participated in a Career Fair which was organized by Sarawak United Peoples’ Party. This participation was aimed at attracting new talents as well as to build up Dayang’s employer brand.

We have also provided practical training to 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 fulfi ll their university requirements.

The health and safety of our employees and their workplace environment is important to the Group. Effort is made to inculcate knowledge and values that are vital to healthy and safe working conditions for all our employees. In order to provide a work environment that is safe and occupational illness free, the Health, Safety and Environment Department has established an effective safety framework which is supported by various health and safety programmes. These programmes include :

a. Developing HSE procedures and guidelinesb. Cascading critical roles and responsibilities during crew change pre-mob safety briefi ngc. HSE Training (both in-house and external)d. Conducting Planned General Inspectione. Conducting monthly safety meetingsf. Carrying out HSE Road Show and Campaigng. Organising Management Inspection Visit or Management Site Visith. Conducting pre-mob briefi ng and toolbox meetingi. Organising Specifi c Instructions for Simultaneous Operations (SISO).

In recognizing the importance of maintaining workplace safety and health, Dayang has implemented various Policies on Health and Safety at Work. These policies generally prescribes guidelines on the following:- Promoting employees health and safety through provision of suitable protective equipment and appliances for employees’

use at their respective workplace and - Requiring contractors to abide to health and safety rules either on its premises or performing work on our behalf.

Towards this end, we have conducted fi re drill involving all employees at our corporate offi ce in Miri, at our offi ce in Kota Kinabalu as well as at our warehouse in Labuan. Our objective is to ensure that we are HSE compliant and support our enhanced safety policy and comply with all laws.

The Company enforces HSE Policies under the supervision of the HSE Manager, Mr Nicholas Ubong Luang and guidance of our Managing Director, Tengku Yusof Bin Tengku Ahmad Shahruddin. As a result of our rigorously enforced policies, the Company has achieved 15.00 Million Manhours Without Lost Time Injury as at 01 November 2009.

Dayang remains committed to maintaining our high standards in the areas of HSE.



Audit Committee Report

MEMBERS OF THE AUDIT COMMITTEE

The members of the Audit Committee are as follows:

YB 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)

COMPOSITION AND TERMS OF REFERENCE

The Terms of Reference of the Audit Committee (“Terms of Reference”) outline and incorporate 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 Goverance (“the Code”).

The Audit Committee comprises at least three members, all of whom are Independent Directors of the Company.

The Committee members are appointed by the Board of Directors, which in its opinion would exercise independent judgement 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 specifi ed in Part 1 of the 1st Schedule of the Accountants Act 1967 or is a member of one the associations specifi ed 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 fi nalization of the fi nancial 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 2009

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

Name of Directors Attendance*

YB Chia Chu Fatt 7/7

Polit Bin Hamzah 7/7

Tuan Haji Abdul Aziz Bin Ishak 7/7

*Number of meetings attended/Number of meetings held

REPORTING LINE OF THE AUDIT COMMITTEE

The Audit Committee reports directly to the Board of Directors.



THE RESPONSIBILITIES OF THE AUDIT COMMITTEE

The Audit Committee is responsible for the following:

• To examine the manner in which management ensures and monitors the adequacy of the nature, extent and effectiveness of accounting and internal control systems;

• To examine and review the adequacy and effectiveness of management and operations;• To review the statutory accounts and other published fi nancial statements and information;• To monitor relationship with external auditors, to ensure that there are no restrictions on the scope of the statutory audit; to

make recommendations on the auditors’ appointment, remuneration and dismissal; and to review the activities, fi ndings, conclusions and recommendations of the external auditors; and

• To review arrangements established by management for compliance with regulatory and fi nancial reporting requirements.

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The following activities were performed by the Audit Committee during the fi nancial year ended 31 December 2009:

1) Reviewed the unaudited quarterly report and annual fi nancial 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 recommend to the Board of Directors that the quarterly unaudited fi nancial statements and annual fi nancial statements be approved for announcement to Bursa Malaysia Securities.

3) Reviewed related party transactions on a quarterly basis. Where commercial relationship exist between each director, major shareholders and persons connected to Dayang Group and its subsidiaries, the Audit Committee and the Board will ensure that such transactions are on normal commercial terms that are 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.5) Reviewed and evaluated with external auditor 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 fi t. 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 fi nancial year ended 31 December 2009 amounted to approximately RM50, 000.00.

Audit Committee Report (Continued)



Statement on Internal Control

INTRODUCTION

This statement is in line with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad on the Group’s compliance with the Principles and Best Practices relating to internal control as stipulated in the Malaysian Code on Corporate Governance.

RESPONSIBILITY

The Board acknowledges its responsibility for the Group’s system of internal control which includes the establishment of appropriate control and framework as well as reviewing the adequacy and integrity of these systems. The Board is committed to maintaining a sound system of internal control to safeguard the shareholders’ investment and the Group’s assets.

It should be noted that the system of internal control is designed to manage rather than 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’s responsibility for internal control does not cover the Company’s associate which is separately managed.

Risk Management

Acknowledging that it is its responsibility to identify principal risks and ensuring the implementation of proper and appropriate systems to manage these risks, the Board has set up the Risk Management Committee to, “inter alia”, facilitate the documentation and formalization of the risk profi le and risk management system of the Group. The Risk Management Committee intends to outsource the documentation and formalization exercise and towards this end is obtaining quotations from external consultants. The Committee hopes to complete this exercise in 2010.

Nevertheless, the Board is of the view that the signifi cant risks affecting the achievement of the Group’s business objectives have been properly managed throughout the period up to the date of approval of the annual report.

Key Elements of Internal Control

Internal controls essential to the Group’s operations include the following:

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

• The internal audit function provides an assurance of the effectiveness of the system of internal controls within the Group. Regular internal audit reviews on the effectiveness of the control procedures are conducted and reports submitted to the Audit Committee.

• The Audit Committee reviews the quarterly reports and annual fi nancial statements as well as related party transactions. The internal audit reports are deliberated by the Audit Committee and are subsequently presented to the Board.

Board Conclusion

The Board is satisfi ed that, during the year under review, the existing system of internal controls is sound and adequate to safeguard the Group’s assets. In striving for continuous improvement, the Board will continue to take appropriate action plans to further enhance the Group’s system of internal control.

This statement is made in accordance with a resolution of the Board of Directors dated 23 April 2010.



Statement of Corporate Governance

(Pursuant to Paragraph 15.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

The Board is pleased to report to the shareholders herein, that Dayang has applied the principles of the Corporate Governance of Part 1 of the Malaysian Code of Corporate Governance (“The Code’) and adopted the best practices as laid down in the Part 2 of the Code.

DIRECTORS

Board Composition

The Board is collectively responsible for setting policies which promote the success of the Group. The Board currently has 10 members, comprising 7 Executive Directors and 3 Independent Non-Executive Directors. As such, 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 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. A brief profi le and status of each Director is presented on pages 7 to 11.

Board Duties and Responsibilities

In addition to the statutory and fi duciary duties, the Board has the overall responsibility for corporate governance, strategic direction and overseeing the investment and business of the Group. The Board’s other primary duties are to conduct regular review of the Group’s business operations and performances and to ensure that effective controls and systems exist to measure and manage business risks.

The Board also has the overall obligation to act in the best interests of the shareholders and to protect the shareholders’ investments, whilst at the same time taking into account the interests of other stakeholders in a fair and ethical manner.

Board Meetings

The Board has met seven (7) times during the fi nancial year ended 31 December 2009 where it deliberated and considered a variety of matters affecting the Group’s operations including the Group’s fi nancial results, business plan and the direction of the Group.

The details of attendance of each director are as follows:-

Name of Director Designation No of Attendance and Meetings held

Datuk Hasmi Bin Hasnan Executive Chairman 5/7

Ling Suk Kiong Executive Deputy Chairman 7/7

Tengku Yusof Bin Tengku Ahmad Shahruddin Executive Managing Director 7/7

Joe Ling Siew Loung @ Lin Shou Long Executive Deputy Managing Director 5/7

Harry Bin Bujang Executive Director 4/7

Gordon Kab @ Gudan Bin Kab Executive Director 7/7

Sulaihah Binti Maimunni (*) Executive Director -

Dr Sharifuddin Bin Abdul Wahab (**) Executive Director 3/7

Tuan Haji Abdul Aziz Bin Ishak Independent Non-Executive Director 7/7

Polit Bin Hamzah Independent Non-Executive Director 7/7

YB Chia Chu Fatt Independent Non-Executive Director 7/7

(*) – Appointed Executive Director on 1 February 2010.(**) – Resigned on 31 January 2010.



Statement of Corporate Governance (Continued)

Supply of Information

The Board of Directors recognizes that the decision making process is highly dependent on the quality of information furnished. Therefore, the Company ensures that all the directors have full and timely access to information.

Each Board member receives an agenda and board papers containing information on major fi nancial, operational and corporate matters of the Group at least one (1) week ahead of each Board meeting. This is issued in suffi cient time to enable the directors to obtain further explanations, where necessary before the meeting and also to give the directors time to deliberate on the issues to be raised at the meeting.

Directors also have direct access to the advise and services of the Company Secretaries and may seek independent professional advice if deemed reasonable and necessary.

Board Committees

In discharging its duties, the Board is assisted by Board Committees, 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 plays an active role in assisting the Board in discharging its governance responsibilities. The composition of the Audit Committee is in compliance with relevant regulatory requirements. The terms of reference for the Audit Committee are spelt out under the Audit Committee Report.

2. Nomination & Remuneration Committee

- To develop the Group’s remuneration policy for Executive Directors to the Board; - To recommend the remuneration packages and terms of employment of Executive Directors to the Board; - To recommend to the Board candidates for appointment as new Directors and members of Board Committees; - To assess the effectiveness of the Board and Board Committees and - To arrange orientation programs for new directors.

One meeting was held during the fi nancial year to review whether the present remuneration package for the company’s directors are in line with the market norm.

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

Name Position Attendance

Polit Bin Hamzah Chairman 1/1

Tuan Haji Abdul Aziz Bin Ishak Member 1/1

YB Chia Chu Fatt Member 1/1

3. Corporate Social Responsibility Committee

- To develop and implement the Group’s Corporate Social Responsibility framework; - To incorporate environmentally friendly practices whilst carrying out our operations; - To establish culture socially responsible behaviors among management and employees; - 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 Yusof Bin Tengku Ahmad Shahruddin Chairman

YB Chia Chu Fatt Member

Gordon Kab @ Gudan Bin Kab Member




4. Risk Management Committee

- To establish the risk policies and risk frameworks; - To identify, evaluate and monitor the risks portfolio, - To formulate mitigation strategies/action plans to manage the overall risk associated with our activities; - 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.

The members of the Risk Management Committee are as follows:

Name Position

Gordon Kab @ Gudan Bin Kab Chairman

Ling Suk Kiong Member

Tengku Yusof Bin Tengku Ahmad Shahruddin Member

Joe Ling Siew Loung @ Lin Shou Long Member

Dr Sharifuddin Bin Abdul Wahab (Resigned on 31 January 2010) Member

Polit Bin Hamzah ( Appointed on 23 April 2010) Member

Appointment and Retirement of Directors

The appointment of Directors is the responsibility of the whole Board.

In 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 offi ce at each Annual General Meeting.. Provided always that all Directors shall retire from offi ce once at least in each three(3) years, but shall be eligible for re-election.

Directors’ Training

All the directors of the Company have completed their Mandatory Accreditation Programme in compliance with the Listing Requirement. The company acknowledges that continuous education is essential for the directors to keep abreast with the dynamic environment in which the Group operates. The directors will continue to undergo other relevant training programmes to further enhance their skills and knowledge in discharging their duties.

Trainings attended by the Directors during the fi nancial year ended 31 December 2009 are set out as follows:

Date

10 August 2009

10 August 2009

10 August 2009

12 August 2009

20 August 2009

11 February 200911 June 20094 & 5 August 200912 August 2009

5 October 2009

5 November 2009

10 August 2009

Description of Training

Corporate Governance Guide – Towards Boardroom Excellence





International Affi liations (Practitioners) ShowcaseLatest Risk Faced by Audit CommitteeNational Tax Conference 2009Corporate Governance Guide – Towards Boardroom ExcellenceForum on FRS 139 Financial Instruments : Recognition and MeasurementNational Seminar on Taxation 2009


Name

Ling Suk Kiong

Joe Ling Siew Loung@ Lin Shou Long

Harry Bin Bujang

Gordon Kab @ Gudan Bin Kab

Tuan Haji Abdul Aziz Bin Ishak

YB Chia Chu Fatt

Polit Bin Hamzah


Annual Report 200924 DAYANG ENTERPRISE HOLDINGS BHD (712243-U)

Annual Report 2009


Directors’ Remuneration

The remuneration framework for executive directors has an underlying objective of attracting and retaining directors needed to run the Company successfully.

Remuneration packages of executive directors are structured to commensurate with corporate and individual’s performance taking into consideration the prevailing market rates.

On the other hand, the level of remuneration for the Non-Executive Directors refl ects the level of responsibilities undertaken and the contribution to the Group of Companies.

The determination of remuneration packages of Directors is a matter for the Board as a whole and individuals are required to abstain from discussion of their own remuneration.

Details of the remuneration of the Directors of Dayang for the fi nancial year ended 31 December 2009 are as follows :

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

Fees 2,112,,000 279,000 2,391,000

Salary 1,205,149 - 1,205,149

Bonus 1,744,945 - 1,744,945

Other emoluments 196,052 - 196,052

Allowances 18,000 13,500 31,500

Total 5,276,146 292,500 5,568,646

The number of Directors in each remuneration band is as follows :-

RANGE OF REMUNERATION NUMBER OF NUMBER OF EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS

RM50,001 – RM100,000 1 3

RM100,001 – RM150,000 2

RM600,001 – RM650,000 1

RM1,200,001 – RM1,250,000 1

RM1,450,001 – RM1,500,000 2

Details of the Directors’ remuneration are set out in applicable bands of RM50,000 which comply with the Main Market of Bursa Malaysia Listing Requirements. Whilst the Code prescribed for individual disclosure of directors’ remuneration packages, the Board is of the view that transparency and accountability aspects of Corporate Governance in respect of the 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 Investors

1. Dayang values good communications with shareholders and investors and the importance of accountability to them. 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.

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


Annual Report 2009DAYANG ENTERPRISE HOLDINGS BHD (712243-U)


Accountability and Audit

1. Financial Reporting The Board of Directors is responsible for ensuring the proper maintenance of accounting records of the Group and takes due

care for presenting a balanced and understandable assessment of the Group’s operations each time it releases its Quarterly and Annual Financial Statements to shareholders and the general public.

The Audit Committee assists the Board in reviewing the Quarterly Report to Bursa Malaysia and the Annual Report to shareholders to ensure its accuracy, adequacy and completeness.

2. Internal Controls The Board of Directors acknowledges its responsibility for the Group’s systems of internal control and risk management and

for reviewing the effectiveness and adequacy of those systems.

The Board of Directors also recognizes that these systems of internal control are designed to manage rather than eliminate the risk of failure to achieve business objectives. Accordingly, the systems of internal control can only provide a reasonable but not absolute assurance against material misstatement, loss or fraud.

The Director’s Statement on Internal Control as set out on page 20 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 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.

The Audit Committee met with the external auditors to discuss their audit plan, audit fi ndings and the fi nancial statements.

Directors’ Responsibility StatementThe provisions of the Companies Act, 1965 requires the directors to be responsible in preparing the fi nancial statements for each fi nancial year which gives a true and fair view of the state of affairs of the Group and the Company at the end of the fi nancial year then ended.

In preparing the fi nancial statements for the fi nancial year ended 31 December 2009, the directors have :-· adopted the appropriate accounting policies and applied them consistently;· ensured that all applicable accounting standards have been followed;· made judgments and estimates that are prudent and reasonable; and· ensured the fi nancial statements have been prepared on a going concern basis.

The Directors are responsible for ensuring that proper accounting records are maintained by the Group and the Company which disclose reasonable accuracy the fi nancial position of the Group and Company, and which will enable them to ensure the fi nancial statements have complied with the provisions of the Companies Act, 1965 and the applicable approved accounting standards in Malaysia.

In addition, the Directors are also responsible for safeguarding the assets of the Company by taking reasonable steps to prevent and detect fraud and other irregularities.

Compliance StatementThe Board is pleased to confi rm that the Company has complied with the principles and best practices as set out in Part1 and 2 respectively of the Malaysian Code on Corporate Governance.




ADDITIONAL COMPLIANCE INFORMATION

The following information is provided in accordance with Paragraph 9.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad as set out in Appendix 9C thereto.

1. Utilisation of Proceeds from Corporate Exercise

(a) Utilisation of Rights Issue & IPO Proceeds


Purpose

Full Redemption of Islamic Medium Term Notes

Part fi nance the construction of marine vessels and/or acquisition of equipment & machineries

Working Capital

Listing Expenses

Total

Proposed Utilisation

RM’000

60,000

51,450

28,767

4,600

144,817

Actual Utilisation31.12.2009

RM’000

60,000

47,870

22,420

4,659

134,949

Balance

RM’000

0

3,580

6,347

(59)

9,868

The excess actual utilization of listing expenses over the proposed utilization will be deducted from the Utilisation of Working Capital.

The intended time frame for full utilization of the proceeds is 24 months from date of Prospectus dated 31 March 2008.

2. Share Buy-back There were no share buy-back arrangements during the fi nancial year ended 31 December 2009.

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

4. American Depository Receipt (“ADR”) / Global Depository Receipt (“GDR”) The Company did not sponsor any ADR or GDR programmes during the fi nancial year.

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 fi nancial year ended 31 December 2009.

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

fi nancial year ended 31 December 2009 amounted to RM17,078.

7. Variation in Results There were no material variances between the audited results of the fi nancial year ended 31 December 2009 and the

announced unaudited results.

8. Profi t Guarantee During the fi nancial year, there were no profi t guarantees given by the Company or its subsidiaries.

9. Material Contracts There were no material contracts entered into by the Company and/or its subsidiaries during the fi nancial year ended 31

December 2009 which involves the interests of the Directors and major shareholders.

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

11. Related Party Transactions The related party transactions are disclosed on pages 64 to 65 of the Annual Report.

Director’s Report 28 - 30

Statement by Directors 31

Statutory Declaration 31

Independent Auditors’ Report to the Members 32 - 33

Balance Sheets 34

Income Statements 35

Statements of Changes in Equity 36

Cash Flow Statements 37 - 38

Notes to the Financial Statements 39 - 66

Financial Statements

Corporate Governance



The Directors have pleasure in submitting their report and the audited fi nancial statements of the Group and of the Company for the year ended 31 December 2009.

Principal activities

The Company is principally engaged in investment holding while the principal activities of the subsidiaries are stated in Note 4 to the fi nancial statements.

There have been no signifi cant changes in the nature of these activities during the fi nancial year.

Results Group Company RM RM

Profi t attributable to equity holders of the Company 44,785,090 37,044,801

Dividends

Since the end of the previous fi nancial year, the Company paid:

(i) a second interim dividend of RM0.07 per ordinary share of RM0.50 each less tax at 25% (equivalent to RM0.05 net per share) totalling RM18,480,000 in respect of the year ended 31 December 2008 on 27 March 2009; and

(ii) a fi rst interim tax exempt dividend of RM0.05 per ordinary share of RM0.50 each totalling RM17,600,000 in respect of the year ended 31 December 2009 on 21 December 2009.

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

Reserves and provisions

There were no material transfers to or from reserves and provisions during the year under review.

Directors of the Company

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

Datuk Hasmi Bin HasnanTengku Yusof Bin Tengku Ahmad ShahruddinLing Suk KiongJoe Ling Siew Loung @ Lin Shou LongHarry Bin BujangGordon Kab @ Gudan Bin KabYB Chia Chu FattPolit Bin HamzahTuan Haji Abdul Aziz Bin IshakSulaihah Binti Maimunni (appointed on 1.2.2010)Dr. Sharifuddin Bin Abdul Wahab (resigned on 31.1.2010)

Directors’ report for the year ended 31 December 2009



Directors of the Company (continued)

The interests and deemed interests of the Directors holding offi ce at year end 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 each At At 1.1.2009 Bought Sold 31.12.2009

Direct interests in the Company

Datuk Hasmi Bin Hasnan 410,000 - - 410,000Tengku Yusof Bin Tengku Ahmad Shahruddin 48,048,448 - (4,000,000) 44,048,448 Ling Suk Kiong 35,136,092 - - 35,136,092 Joe Ling Siew Loung @ Lin Shou Long 1,100,000 - - 1,100,000Harry Bin Bujang 140,000 - (140,000) - Gordon Kab @ Gudan Bin Kab 115,000 - - 115,000YB Chia Chu Fatt 135,000 - - 135,000Tuan Haji Abdul Aziz Bin Ishak 115,000 - - 115,000Polit Bin Hamzah 115,000 - - 115,000 Dr. Sharifuddin Bin Abdul Wahab 210,000 - - 210,000

Deemed interests in the Company

Datuk Hasmi Bin Hasnan 126,686,700 - - 126,686,700Harry Bin Bujang 55,059,760 - (2,500,000) 52,559,760

Directors’ benefi ts

Since the end of the previous fi nancial year, no Director of the Company has received nor become entitled to receive any benefi t (other than a benefi t included in the aggregate amount of key management personnel compensations received or due and receivable by the Directors shown in the fi nancial statements of related companies) by reason of a contract made by the Company or a related corporation with the Director or with a fi rm of which the Director is a member, or with a company in which the Director has a substantial fi nancial interest other than certain directors who have or are deemed to have signifi cant fi nancial interests in companies which traded with the Company and certain of its related corporations in the ordinary course of business (see also Note 28 to the fi nancial statements).

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

Issue of shares

There were no changes in the authorised, issued and paid-up capital of the Company during the fi nancial year.

Options granted over unissued shares

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

Other statutory information

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

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

ii) all current assets have been stated at the lower of cost and net realisable value.





Other statutory information (continued)

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 Group and in the Company fi nancial statements 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 fi nancial statements, that would render any amount stated in the fi nancial 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 fi nancial 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 fi nancial 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 fi nancial 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, the results of the operations of the Group and of the Company for the fi nancial year ended 31 December 2009 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 the fi nancial year and the date of this report.

Signifi cant event during the year

The Company acquired on 31 December 2009 a 40% equity interest in Syarikat Borcos Shipping Sdn. Bhd. for a total consideration of RM135,008,200 (see also Note 5 to the fi nancial statements).

Auditors

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

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

………………………………………..........…….. Tengku Yusof Bin Tengku Ahmad Shahruddin

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

Miri,

Date: 26 April 2010




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

In the opinion of the Directors, the fi nancial statements set out on pages 34 to 66 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, so as to give a true and fair view of the fi nancial position of the Group and of the Company at 31 December 2009 and of their fi nancial performance and cash fl ows for the year then ended.

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

………………………………………….........….. Tengku Yusof Bin Tengku Ahmad Shahruddin

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

Miri,

Date: 26 April 2010

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

I, Ling Suk Kiong, the director primarily responsible for the fi nancial management of Dayang Enterprise Holdings Bhd., do solemnly and sincerely declare that the fi nancial statements set out on pages 34 to 66 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 abovenamed in Miri in the State of Sarawak

on 26 April 2010 .......………………………..... Ling Suk Kiong

Before me:

Statement by Directors/ Statutory declaration




Report on the Financial Statements

We have audited the fi nancial statements of Dayang Enterprise Holdings Bhd., which comprise the balance sheets as at 31 December 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash fl ow statements of the Group and of the Company for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 34 to 66.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation and fair presentation of these fi nancial statements in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the fi nancial statements 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 Company’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 fi nancial statements.

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

Opinion

In our opinion, the fi nancial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the fi nancial position of the Group and of the Company as of 31 December 2009 and of their fi nancial performance and cash fl ows for the year then ended.

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 satisfi ed that the accounts of the subsidiaries that have been consolidated with the Company’s fi nancial statements are in form and content appropriate and proper for the purposes of the preparation of the fi nancial 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 qualifi cation or any adverse comment made under Section 174(3) of the Act.

Report of the auditors to the members of Dayang Enterprise Holdings Bhd.



Other Matters

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.

The previous year’s fi nancial statements were audited by another fi rm of Chartered Accountant.

KPMG Chin Chee KongFirm Number: AF 0758 Approval Number: 1481/1/11 (J)

Chartered Accountants Chartered Accountant

Kuching

Date: 26 April 2010

Report of the auditors to the members of Dayang Enterprise Holdings Bhd.




Group Company 2009 2008 2009 2008 Note RM RM RM RM

Assets

Property, plant and equipment 3 190,448,881 161,983,196 2,439 2,744Investment in subsidiaries 4 - - 122,913,259 122,913,259Investment in an associate 5 135,008,200 - 135,008,200 -Other investment 6 - 10,177,023 - 10,177,023Deferred tax assets 7 34,200 34,200 - -Amount due from a subsidiary 10 - - 70,000,000 -

Total non-current assets 325,491,281 172,194,419 327,923,898 133,093,026

Inventories 8 1,611,246 1,818,011 - -Trade and other receivables 9 76,706,248 106,416,749 203,700 4,500Amount due from subsidiaries 10 - - 31,239,367 103,955,931Current tax recoverable 1,553,233 - 25,000 -Cash and cash equivalents 11 57,230,487 97,158,350 15,317,669 28,059,126

Total current assets 137,101,214 205,393,110 46,785,736 132,019,557

Total assets 462,592,495 377,587,529 374,709,634 265,112,583

Equity

Share capital 12 176,000,000 176,000,000 176,000,000 176,000,000Reserves 12 147,742,646 140,275,914 88,358,175 88,631,732

Total equity attributable to equity holders 323,742,646 316,275,914 264,358,175 264,631,732

Liabilities

Borrowings 13 100,000,000 62,700 100,000,000 -Deferred tax liabilities 7 2,046,000 3,716,990 - -

Total non-current liabilities 102,046,000 3,779,690 100,000,000 -

Trade and other payables 14 25,895,205 50,746,704 351,459 183,626Borrowings 13 10,066,200 87,270 10,000,000 -Current tax payable 842,444 6,697,951 - 297,225

Total current liabilities 36,803,849 57,531,925 10,351,459 480,851

Total liabilities 138,849,849 61,311,615 110,351,459 480,851

Total equity and liabilities 462,592,495 377,587,529 374,709,634 265,112,583

The notes set out on pages 39 to 66 form an integral part of, and should be read in conjunction with, these fi nancial statements.

Balance sheets at 31 December 2009



_______Group_______ _____Company_____ 1.1.2009 - 1.10.2007 - 1.1.2009 - 1.10.2007 - 31.12.2009 31.12.2008 31.12.2009 31.12.2008 Note RM RM RM RM

Revenue 15 (a) 196,953,850 181,127,586 51,560,000 26,500,000

Cost of sales 15 (b) (111,161,032) (90,305,829) - -

Gross profi t 85,792,818 90,821,757 51,560,000 26,500,000

Administrative expenses (34,772,577) (23,685,319) (2,432,382) (1,788,219)Other operating expenses (163,023) (142,564) - -Other operating income 1,861,051 26,387,588 629,962 2,085,419

Results from operating activities 17 52,718,269 93,381,462 49,757,580 26,797,200

Interest expense 16 (317,331) (4,622,113) (306,713) -

Profi t before tax 52,400,938 88,759,349 49,450,867 26,797,200

Tax expense 19 (7,615,848) (17,314,967) (12,406,066) (6,997,000)

Profi t for the year attributable to equity holders 44,785,090 71,444,382 37,044,801 19,800,200

Basic/Diluted earnings per ordinary share (sen) 20 12.72 31.48 - -

Dividend per ordinary share (sen) 21 5.00 10.50 - -


Income statements for the year ended 31 December 2009




Distributable (Accumulated Share Non-distributable losses)/Retained Total capital Share premium earnings equityGroup RM RM RM RM

At 1 October 2007 1 - (6,196) (6,195)

Issuance of shares 175,999,999 91,730,560 - 267,730,559

Expenses recognised directly in equity - (4,659,232) - (4,659,232) - shares issue expenses Profi t for the period - - 71,444,382 71,444,382

- (4,659,232) 71,444,382 66,785,150

Dividends (Note 21) - - (18,233,600) (18,233,600)

At 31 December 2008 176,000,000 87,071,328 53,204,586 316,275,914

Profi t for the year - - 44,785,090 44,785,090

Dividends (Note 21) - - (36,080,000) (36,080,000)Section 108 credit shortfall - - (1,238,358) (1,238,358)

- - (37,318,358) (37,318,358)

At 31 December 2009 176,000,000 87,071,328 60,671,318 323,742,646

(Note 12) (Note 12)

Company

At 1 October 2007 1 - (6,196) (6,195)

Issuance of shares 175,999,999 91,730,560 - 267,730,559

Expenses recognised directly in equity - shares issue expenses - (4,659,232) - (4,659,232)Profi t for the period - - 19,800,200 19,800,200 - (4,659,232) 19,800,200 15,140,968Dividends (Note 21) - - (18,233,600) (18,233,600)

At 31 December 2008 176,000,000 87,071,328 1,560,404 264,631,732Profi t for the year - - 37,044,801 37,044,801

Dividend paid (Note 21) - - (36,080,000) (36,080,000)Section 108 credit shortfall - - (1,238,358) (1,238,358) - - (37,318,358) (37,318,358)

At 31 December 2009 176,000,000 87,071,328 1,286,847 264,358,175

(Note 12) (Note 12)


Statements of changes in equity for the year ended 31 December 2009



_______Group_______ _____Company_____ 1.1.2009 - 1.10.2007 - 1.1.2009 - 1.10.2007 - 31.12.2009 31.12.2008 31.12.2009 31.12.2008 RM RM RM RMCash fl ows from operating activities

Profi t before tax 52,400,938 88,759,349 49,450,867 26,797,200

Adjustments for:Depreciation of property, plant and equipment (Note 3) 10,764,529 5,886,921 305 305Dividend income - - (49,400,000) (24,700,000) Excess of fair value over acquisition cost of subsidiaries - (22,536,312) - -Interest expense 317,331 4,470,126 306,713 -Interest income (1,789,810) (3,851,269) (629,962) (2,085,419)(Gain)/Loss on disposal of property, plant and equipment (35,241) 187 - -Property, plant and equipment written off 14,784 1,980 - -

Operating profi t/(loss) before working capital changes 61,672,531 72,730,982 (272,077) 12,086

Changes in working capital:Inventories 206,765 1,449,661 - - Trade and other receivables 29,710,501 (46,715,468) (199,200) (4,500)Amount due from/to subsidiaries - - 2,716,565 (103,955,931) Trade and other payables (25,158,212) 23,417,457 (138,881) 177,430

Cash generated from/ (used in) operations 66,431,585 50,882,632 2,106,407 (103,770,915)Interest paid (2,125) (4,449,624) - - Interest received 1,789,810 3,851,269 629,962 2,085,419 Tax paid (17,933,936) (14,170,829) (1,616,649) (277,775)

Net cash from/(used in) operating activities 50,285,334 36,113,448 1,119,720 (101,963,271)

Cash fl ows from investing activities

Acquisition of an associate (135,008,200) - (135,008,200) - Purchase of property, plant and equipment (39,255,413) ( 37,701,317) - (3,049) Purchase of other investment - (10,177,023) - (10,177,023)Proceeds from disposal of property, plant and equipment 45,656 3,945 - -Proceeds from disposal of other investment 10,177,023 25,000,000 10,177,023 -Effect of acquisition of subsidiaries, net of cash acquired (Note 29) - 42,079,748 - -Dividends received - - 37,050,000 18,278,000

Net cash (used in)/from investing activities (164,040,934) 19,205,353 (87,781,177) 8,097,928

Cash fl ow statements for the year ended 31 December 2009




_______Group_______ _____Company_____ 1.1.2009 - 1.10.2007 - 1.1.2009 - 1.10.2007 - 31.12.2009 31.12.2008 31.12.2009 31.12.2008 RM RM RM RMCash fl ows from fi nancing activities

Dividends paid (36,080,000) (18,233,600) (36,080,000) (18,233,600) Proceeds from issuance of shares - 144,817,300 - 144,817,300 Repayment of loans - (60,000,000) - -Repayment of fi nance leases (86,343) (66,578) - -Share issue expenses paid - (4,659,232) - (4,659,232)Finance leases interest paid (8,493) (20,502) - -Draw-down/(Repayment) of revolving credits 10,000,000 (20,000,000) 10,000,000 -Draw-down of term loan 100,000,000 - 100,000,000 -

Net cash from fi nancing activities 73,825,164 41,837,388 73,920,000 121,924,468

Net (decrease)/increase in cash and cash equivalents (39,930,436) 97,156,189 (12,741,457) 28,059,125Cash and cash equivalents at beginning of year 97,156,190 1 28,059,126 1

Cash and cash equivalents at end of year 57,225,754 97,156,190 15,317,669 28,059,126

Notes

Cash and cash equivalents

Cash and cash equivalents included in the cash fl ow statement comprise the following balance sheet amounts:

_______Group_______ _____Company_____ 2009 2008 2009 2008 RM RM RM RM

Cash and bank balances 9,942,422 28,943,115 1,913,149 1,083,457Fixed deposits with licensed banks (excluding fi xed deposits pledged) 47,288,065 68,215,235 13,404,520 26,975,669Bank overdrafts (4,733) (2,160) - -

57,225,754 97,156,190 15,317,669 28,059,126


Cash fl ow statements for the year ended 31 December 2009



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 (“Bursa Malaysia”). The address of its registered offi ce and principal place of business is Sublot 5-10, Lot 46, Block 10, Jalan Taman Raja, MLCD, 98000 Miri, Sarawak.

The consolidated fi nancial statements of the Company as at and for the year ended 31 December 2009 comprise the fi nancial statement of the Company and its subsidiaries (together referred to as the Group) and the Group’s interests in an associate.

The Company is principally engaged in investment holding while the principal activities of the subsidiaries are stated in Note 4 to the fi nancial statements.

The fi nancial statements were approved by the Board of Directors on 26 April 2010.

1. Basis of preparation

(a) Statement of compliance

The fi nancial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards, generally accepted accounting principles and the Companies Act, 1965 in Malaysia.

The Group and the Company have not applied the following accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board but are only effective for annual periods beginning on or after the respective dates indicated herein:

Standard / Amendment / Interpretation Effective date

FRS 8, Operating Segments 1 July 2009Amendments to FRS 1, First-time Adoption of Financial Reporting Standards 1 January 2010Amendments to FRS 2, Share-based Payment: Vesting Conditions and Cancellations 1 January 2010Amendments to FRS 127, Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate 1 January 2010FRS 4, Insurance Contracts 1 January 2010FRS 7, Financial Instruments: Disclosures 1 January 2010FRS 101, Presentation of Financial Statements(revised) 1 January 2010FRS 123, Borrowing Costs (revised) 1 January 2010Amendments to FRS 132, Financial Instruments: Presentation 1 January 2010- Puttable Financial Instruments and Obligations Arising on Liquidation- Separation of Compound InstrumentsFRS 139, Financial Instruments: Recognition and Measurement 1 January 2010Amendments to FRS 101, Presentation of Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation 1 January 2010Amendments to FRS 139, Financial Instruments: Recognition and Measurement 1 January 2010- Reclassifi cation of Financial Assets- Collective Assessment of Impairment for Banking Institutions Improvements to FRSs (2009) 1 January 2010IC Interpretation 9, Reassessment of Embedded Derivatives 1 January 2010IC Interpretation 10, Interim Financial Reporting and Impairment 1 January 2010IC Interpretation 11, FRS 2 - Group and Treasury Share Transactions 1 January 2010IC Interpretation 13, Customer Loyalty Programmes 1 January 2010IC Interpretation 14, FRS 119 - The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and Their Interaction 1 January 2010Amendments to FRS 132, Financial Instruments: Presentation - Classifi cation of Rights Issues 1 March 2010FRS 1, First-time Adoption of Financial Reporting Standards (revised) 1 July 2010FRS 3, Business Combinations (revised) 1 July 2010FRS 127, Consolidated and Separate Financial Statements (revised) 1 July 2010

Notes to the fi nancial statements




1. Basis of preparation (continued)

(a) Statement of compliance (continued)

Standard / Amendment / Interpretation Effective date

Amendments to FRS 2, Share-based Payment 1 July 2010Amendments to FRS 5, Non-current Assets Held for Sale and Discontinued Operations 1 July 2010Amendments to FRS 138, Intangible Assets 1 July 2010Amendments to IC Interpretation 9, Reassessment of Embedded Derivatives 1 July 2010IC Interpretation 12, Service Concession Agreements 1 July 2010IC Interpretation 15, Agreements for the Construction of Real Estate 1 July 2010IC Interpretation 16, Hedges of a Net Investment in a Foreign Operation 1 July 2010IC Interpretation 17, Distribution of Non-cash Assets to Owners 1 July 2010Amendment to FRS 1, Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters 1 January 2011Amendments to FRS 7, Improving Disclosures about Financial Instruments 1 January 2011

The Group plans to apply:

• from the annual period beginning on 1 January 2010 those standards, amendments and interpretations as listed above that are effective for annual periods beginning on or before 1 January 2010, other than Amendments to FRS 2, Amendments to FRS 132, FRS 4, and IC Interpretations (ICI) 9, ICI 11, ICI 13 and ICI 14 which are not applicable to the Group; and

• from the annual period beginning on 1 January 2011 those standards, amendments and interpretations as listed above that are effective for annual periods beginning on or after 1 March 2010, other than FRS 1 (revised), Amendments to FRS 2, Amendments to FRS 5, ICI 12, ICI 15 and ICI 17 which are not applicable to the Group.

The initial application of a standard, an amendment or an interpretation, which is to be applied prospectively, is not expected to have any fi nancial impacts to the fi nancial statements for the current and prior periods upon their fi rst adoption.

The impact of applying FRS 7 and FRS 139 on the fi nancial statements upon fi rst adoption as required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors, is not disclosed by virtue of the exemption given in the respective FRSs.

FRS 8, which replaces FRS 114, Segment Reporting, requires the identifi cation and reporting of operating segments based on internal reports that are regularly reviewed by an entity’s chief operating decision maker in order to allocate resources to the segment and to assess its performance. As the Group’s operating segments are the same as the business segments on which the Group currently presents segment information (see Note 22), the adoption of FRS 8 is not expected to have a material impact to the Group.

FRS 101 aims to improve user’s ability to analyse and compare the information given in fi nancial statements. It requires information in fi nancial statements to be aggregated on the basis of shared characteristics to enable readers to analyse transactions between a company and its shareholders separately from transactions with external parties. FRS 101 also changes the titles of the fi nancial statements to refl ect their functions more clearly, for example, balance sheet is renamed as statement of fi nancial position, amongst others.

FRS 123 (revised) requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset and removes the option of immediately recognising the borrowing costs as an expense. As the Group’s current capitalisation policy for borrowing costs is consistent with FRS 123 (revised), the adoption thereof is not expected to have a material impact to the Group.





(a) Statement of compliance (continued)

IC Interpretation 10 prohibits the reversal of an impairment loss recognised in an interim period during the fi nancial year in respect of goodwill, an investment in an equity instrument or a fi nancial asset carried at cost. IC interpretation 10 applies prospectively from the date the measurement criteria of FRS 136, Impairment of Assets and FRS 139 respectively were fi rst applied. As there has been no reversal of impairment loss in respect of goodwill, an investment in an equity instrument or a fi nancial asset carried at cost by the Group, the adoption of IC Interpretation 10 does not have a material impact to the Group.

FRS 3 (revised), which is to be applied prospectively, incorporates the following changes to the existing FRS 3:

• The defi nition of a business has been broadened, which is likely to result in more acquisitions being treated as business combinations.

• Contingent consideration will be measured at fair value, with subsequent changes therein recognised in profi t or loss.

• Transaction costs, other than share and debts issue costs, will be expensed as incurred. • Any pre-existing interest in the acquiree will be measured at fair value with the gain or loss recognised in profi t or

loss. • Any minority (will be known as non-controlling) interest will be measured at either fair value, or at its proportionate

interest in the identifi able assets and liabilities of the acquiree, on a transaction-by-transaction basis.

The amendments to FRS 127 require changes in group composition to be accounted for as equity transactions between the group and its minority (will be known as non-controlling) interest holders. The amendments to FRS 127 further require all losses attributable to minority interest to be absorbed by the minority interest i.e., the excess and any further losses exceeding the minority interest in the equity of a subsidiary are no longer charged against the Group’s interest.

The above changes in FRS 127 are not expected to have material impacts to the Group.

Improvements to FRSs (2009) contain various amendments that result in changes in respect of presentation, recognition, measurement and/or disclosure. These amendments are not expected to have a material impact to the Group.

Financial Reporting Standards will be fully converged with International Financial Reporting Standards by 1 January 2012. The fi nancial impact and effects on disclosures and measurement consequent on such convergence are dependent on the issuance of such new or revised standards, amendments and interpretations by the Malaysian Accounting Standards Board as are necessary to effectuate the full convergence.

(b) Basis of measurement

The fi nancial statements have been prepared on the historical cost basis.

(c) Functional and presentation currency

The fi nancial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency.

(d) Use of estimates and judgements

The preparation of fi nancial statements 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 estimate is revised and in any future periods affected thereby.






(d) Use of estimates and judgements (continued)

There are no signifi cant areas of estimation uncertainty and critical judgements in the applying accounting policies that have a signifi cant effect on the amounts recognised in the fi nancial statements, other than that described below:

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. Signifi cant 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.

2. Signifi cant accounting policies

The following are the signifi cant accounting policies of the Group, which have been applied consistently to the periods presented in these fi nancial statements.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

The fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that control effectively commences until the date that control ceases.

Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses, unless the investment is classifi ed as held for sale.

(ii) Associates

Associates are entities, including unincorporated entities, in which the Group has signifi cant infl uence, but not control, over the fi nancial and operating policies.

Associates are accounted for in the consolidated fi nancial statements using the equity method, unless it is classifi ed as held for sale (or included in a disposal group that is classifi ed as held for sale). The consolidated fi nancial statements include the Group’s share of the income and expenses of the equity accounted associates, after adjustments to align the accounting policies with those of the Group, from the date that signifi cant infl uence commences until the date that signifi cant infl uence ceases.

When the Group’s share of losses exceeds its interest in an equity accounted associate, the carrying amount of that interest (including any long-term investments) is reduced to nil 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 investee.

Investments in associates are stated in the Company’s balance sheet at cost less impairment losses, unless the investment is classifi ed as held for sale (or included in a disposal group that is classifi ed as held for sale).




2. Signifi cant accounting policies (continued)

(a) Basis of consolidation (continued)

(iii) Transactions eliminated on consolidation

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

Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. 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) Property, plant and equipment

(i) Recognition and measurement

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

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.

When signifi cant 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.

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 the item and are recognised net within “other operating income” or “administrative expenses” respectively in the income statement.

(ii) Subsequent costs

The cost of replacing part 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 benefi ts embodied within the part will fl ow to the Group and the Company and its cost can be measured reliably. The carrying amount of those parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

(iii) Depreciation

Depreciation is recognised in the income statement on a straight-line basis over the estimated useful life of each part of an item of property, plant and equipment.

Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.






(b) 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 Marine vessels 25 years Onboard equipment 10 years Offshore equipment 5 years Containers 10 years Furniture and fi ttings 10 years Offi ce equipment 2.5 – 10 years Motor vehicles 5 years

Depreciation methods, useful lives and residual values are reassessed at the balance sheet date.

(c) Leased assets (i) Finance lease

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classifi ed as fi nance lease. Upon initial recognition, the 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 (b)].

Minimum lease payments made under fi nance lease are apportioned between the fi nance expense and the reduction of the outstanding liability. The fi nance 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.

(ii) Operating lease

Leases in terms of which the Group does not assume substantially all the risks and rewards of ownership are classifi ed operating leases and the leased assets are not recognised on the Group’s balance sheet.

Payments made under operating leases are recognised in the income statements on a straight-line basis over the term of the lease.

(d) Investment in equity securities

Investments in non-current equity securities are recognised initially at cost plus attributable transaction costs.

Subsequent to initial recognition, investments in non-current equity securities are stated at cost less allowance for diminution in value.

Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current equity securities, an allowance for the diminution in value is recognised as an expense in the fi nancial year in which the decline is identifi ed.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statement.





(e) Inventories

(i) Material supplies and consumables

Material supplies and consumables are stated at the lower of cost and net realisable value with fi rst-in-fi rst-out cost being the basis for cost. Cost consists of all direct and indirect expenditure incurred in bringing the inventories to their present location and condition.

(ii) Net realised value

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.

(f) Receivables

Receivables are initially recognised at their cost when the contractual right to receive cash or other fi nancial asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

Receivables are not held for the purpose of trading.

(g) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignifi cant risk of changes in value. For the purpose of the cash fl ow statement, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.

(h) Impairment

The carrying amount of the assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

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

An impairment loss is recognised if the carrying amount of an asset or the cash generating unit exceeds its recoverable amount. A cash generating unit is the smallest identifi able asset group that generate cash fl ows that largely are independent from other assets and groups. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated fi rst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis to reduce the carrying amount of the assets in the unit (groups of units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the losses have decreased or no longer exist. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. 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 the income statement in the year in which the reversals are recognised.

(i) Payables

Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or other fi nancial asset to another entity.

(j) Loan and borrowings

Loan and borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the loans and borrowings using the effective interest method.






(k) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation. Provisions are determined by discounting the expected future cash fl ows at a pre-tax rate that refl ects current market assessments of the time value of money and the risks specifi c to the liability.

Contingent liabilities

Where it is not probable that an outfl ow of economic benefi ts will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outfl ow of economic benefi ts is remote. Possible obligations, whose existence will only be confi rmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outfl ow of economic benefi ts is remote.

Where the Company enters into fi nancial guarantee contracts to guarantee the indebtedness of other companies within its group, the Company considers these to be insurance arrangements, and accounts for them as such. In this respect, the Company treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee.

(l) Foreign currency transactions

Transactions in foreign currencies are translated to Ringgit Malaysia at the exchange rates at the transaction dates.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to Ringgit Malaysia at the exchange rates at that date. Non-monetary assets and liabilities denominated in foreign currencies, other than those measured at fair value, are translated to Ringgit Malaysia at the exchange rates at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to Ringgit Malaysia at the exchange rates at the date that the fair value was determined. Foreign exchange differences arising on translation are recognised in the income statement.

(m) Employee benefi ts

Short-term employee benefi t 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 provision is recognised for the amount expected to be paid under short-term cash bonus or profi t-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 employees and the obligation can be estimated reliably.

Contributions to statutory pension funds are charged to the income statements in the year to which they relate. Once the contributions have been paid, the Group has no further payment obligations.

(n) Tax expense

Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the initial recognition of goodwill and the recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profi t (or tax 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 balance sheet date.

Deferred tax liability is recognised for all taxable temporary differences.





(n) Tax expense (continued)

A deferred tax asset is recognised to the extent that it is probable that future taxable profi ts will be available against which temporary differences can be utilised. Deferred assets are reviewed at each reporting date and are reduced by the extent that it is no longer probable that the related tax benefi t will be realised.

(o) Revenue recognition

(i) Services

Revenue from services rendered is recognised in the income statement in proportion to the stage of completion of the transaction at the balance sheet date. The stage of completion 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 the income statement.

(ii) Rental income

Equipment rental income is recognised in the income statement on the accrual basis, based on rates contracted with customers.

(iii) Dividend income

Dividend income is recognised when the rights to receive payment is established.

(iv) Management fees

Management fees are charged monthly by the company to its subsidiaries based on services rendered.

(p) Interest income and borrowings costs

Interest income is recognised as it accrues, using the effective interest method.

All borrowing costs are recognised in the income statement using the effective interest method, in the period in which they are incurred except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use.

The 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.

(q) Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profi t or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

(r) Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.






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3. Property, plant and equipment (continued) Company RM

Furniture and fi tting

Cost At 1 October 2007 - Addition 3,049

At 31 December 2008/ 1 January 2009, at 31 December 2009 3,049

Accumulated depreciation At 1 October 2007 - Depreciation for the period 305

At 31 December 2008/ 1 January 2009 305 Depreciation for the year 305

At 31 December 2009 610

Carrying amounts

At 1 October 2007 - At 31 December 2008/ 1 January 2009 2,744

At 31 December 2009 2,439

4. Investment in subsidiaries - Company 2009 2008 RM RM Unquoted shares at cost 122,913,259 122,913,259

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

Effective Name of Company Principal ownership activities interest % % 2009 2008

Dayang Enterprise Sdn. Bhd. Provision of offshore topside maintenance services, 100 100 minor fabrication works and offshore hook-up and commissioning services

DESB Marine Services Sdn. Bhd. Chartering of marine vessels 100 100 Fortune Triumph Sdn. Bhd. Equipment hire 100 100





5. Investment in an associate Group Company 2009 2008 2009 2008 RM RM RM RM

Unquoted shares at cost 135,008,200 - 135,008,200 -

Particulars of the associate are as follows: Effective ownership interest Principal Country of % % Accounting Name of Company activities incorporation 2009 2008 year end

Syarikat Borcos Shipping Sdn. Bhd. Provision of marine Malaysia 40 - 31 December transportation and support services

Summary fi nancial information on associates Profi t Total Total Revenue after tax assets liabilities 100% 100% 100% 100% RM RM RM RM

2009

Syarikat Borcos Shipping Sdn. Bhd. 182,578,328 21,004,120 645,487,015 444,571,805

The results of the associate has not been equity accounted for in the consolidated fi nancial statements for the year ended 31 December 2009 as the acquisition of the associate was only completed on 31 December 2009.

6. Other investment – Group and Company 2009 2008 RM RM

At cost,Unquoted unit trust fund in Malaysia - 10,177,023

This comprised investment in a principal guaranteed unit trust fund which was disposed off during the year.

7. Deferred tax assets and liabilities

7.1 Recognised deferred tax assets and liabilities

Deferred taxation is attributable to the following:

Group ________Assets________ ______Liabilities______ __ _______Net_________ 2009 2008 2009 2008 2009 2008 RM RM RM RM RM RM

Property, plant and equipment 34,200 34,200 (1,604,000) (3,921,490) (1,569,800) (3,887,290) Capital allowance carry-forwards - - - 204,500 - 204,500 Revaluation reserves - - (442,000) - (442,000) -

Tax assets/(liabilities) 34,200 34,200 (2,046,000) (3,716,990) (2,011,800) (3,682,790)




7. Deferred tax assets and liabilities (continued)

7.2 Recognised deferred tax assets and liabilities – net movements during the year Acquisition Recognised At Recognised At of in income 31.12.2008/ in income At 1.10.2007 subsidiaries statement 1.1.2009 statement 31.12.2009 Group RM RM RM RM RM RM

Property, plant and equipment - 1,507,500 1,916,400 3,423,900 (1,854,100) 1,569,800 Capital allowance carry-forwards - - (204,500) (204,500) 204,500 - Revaluation reserves - 463,390 - 463,390 (21,390) 442,000 Total - 1,970,890 1,711,900 3,682,790 (1,670,990) 2,011,800

(Note 19) (Note 19)

8. Inventories - Group 2009 2008 RM RM At cost: Material and consumables 1,611,246 1,818,011

9. Trade and other receivables

Group Company 2009 2008 2009 2008 RM RM RM RM

Trade Trade receivables 42,549,289 53,448,227 - - Accrued revenue 32,182,082 51,075,270 - -

74,731,371 104,523,497 - -

Non-trade Other receivables 392,899 668,725 179,200 - Deposits 713,419 721,092 4,500 4,500 Prepayments 868,559 503,435 20,000 -

1,974,877 1,893,252 203,700 4,500

76,706,248 106,416,749 203,700 4,500

10. Amount due from subsidiaries - Company

The amount due from subsidiaries is unsecured and interest free.





11. Cash and cash equivalents Group Company 2009 2008 2009 2008 RM RM RM RM

Fixed deposits with licensed bank 47,288,065 68,215,235 13,404,520 26,975,669 Cash and bank balances 9,942,422 28,943,115 1,913,149 1,083,457

57,230,487 97,158,350 15,317,669 28,059,126

12. Capital and reserves

Share capital – Group and Company ______2009______ ______2008______ Amount Number Amount Number RM of shares RM of shares Ordinary shares of RM0.50 each Authorised: Opening and closing balance 500,000,000 1,000,000,000 500,000,000 1,000,000,000 Issued and fully paid: Opening balance 176,000,000 352,000,000 1 2 Issuance of shares for acquisition of subsidiaries - - 122,912,999 245,825,998 Rights issue - - 10,150,000 20,300,000 Public issue - - 42,937,000 85,874,000

Closing balance 176,000,000 352,000,000 176,000,000 352,000,000

Retained earnings - Company

The retained earnings of the Company, which has migrated to the single-tier company income tax system, are distributable in full as single-tier exempt dividends.

13. Borrowings Group Company 2009 2008 2009 2008 RM RM RM RM Current: Finance lease liabilities - secured 61,467 85,110 - - Revolving credits - secured 10,000,000 - 10,000,000 - Bank overdrafts - unsecured 4,733 2,160 - -

10,066,200 87,270 10,000,000 - Non-current: Finance lease liabilities - secured - 62,700 - - Term loan - secured 100,000,000 - 100,000,000 -

100,000,000 62,700 100,000,000 -

110,066,200 149,970 110,000,000 -




13. Borrowings (continued)

Terms and debt repayment schedule

Secured term loan and revolving credits

The term loan and revolving credits are secured by way of a fi rst fi xed charge together with a duly executed and perfected Deed of Covenant over all the marine vessels of the Group.

Debts repayment schedule

Carrying Under 1 1-2 2-5 Year of amount year years years Group Maturity RM RM RM RM

2009

Finance lease liabilities - interest fi xed at 4.30% fl at per annum 2010 61,467 61,467 - -

Bank overdraft - interest variable at 1.50% per annum above the lender bank’s base lending rate (BLR) 2010 4,733 4,733 - -

Revolving credits - interest variable at 1.00% per annum above lender bank’s cost of fund 2010 10,000,000 10,000,000 - -

Term loan - interest fi xed at 5.55% fl at per annum 2014 100,000,000 - 16,000,000 84,000,000

110,066,200 10,066,200 16,000,000 84,000,000

2008

Finance lease liabilities - interest fi xed at 4.30% fl at per annum 2010 147,810 85,110 62,700 -

Bank overdraft - interest variable at 1.50% per annum above BLR 2008 2,160 2,160 - -

149,970 87,270 62,700 -





13. Borrowings (continued)

Debts repayment schedule (continued)

Carrying Under 1 1-2 2-5 Year of amount year years years Company Maturity RM RM RM RM

2009

Revolving credits - interest variable at 1.00% per annum above lender bank’s cost of fund 2010 10,000,000 10,000,000 - -

Term loan - interest fi xed at 5.55% fl at per annum 2014 100,000,000 - 16,000,000 84,000,000

110,000,000 10,000,000 16,000,000 84,000,000

Finance lease liabilities are payable as follows:

____________ 2009 ____________ ____________ 2008 ___________ Minimum Minimum lease lease payments Interest Principal payments Interest Principal Group RM RM RM RM RM RM

Less than one year 63,224 1,757 61,467 94,282 9,172 85,110 Between one and fi ve years - - - 63,224 524 62,700

63,224 1,757 61,467 157,506 9,696 147,810

14. Trade and other payables Group Company 2009 2008 2009 2008 RM RM RM RM Trade Trade payables 19,215,821 44,733,437 - -

Non-trade Other payables 513,587 1,548,446 30,495 21,626 Accrued expenses 6,165,797 4,464,821 320,964 162,000

6,679,384 6,013,267 351,459 183,626

25,895,205 50,746,704 351,459 183,626

At the year end, trade payables denominated in Singapore Dollar, US Dollar and Brunei Dollar amounted to RM30,101 (2008: RM331,492), RM53,967 (2008: RM6,148,635) and RM 10,120 (2008: RM1,518) respectively.




15. Revenue/Direct operating costs

Group Company 1.1.2009 - 1.10.2007 - 1.1.2009 - 1.10.2007 - 31.12.2009 31.12.2008 31.12.2009 31.12.2008 RM RM RM RM

(a) Revenue

Income from services rendered 196,345,437 180,168,656 - -

Equipment hire income 608,413 958,930 - -

Dividend income - - 49,400,000 24,700,000

Management fees - - 2,160,000 1,800,000

196,953,850 181,127,586 51,560,000 26,500,000

(b) Direct operating cost

Cost of services rendered 111,009,613 90,122,505 - -

Direct costs associated with

equipment hire operation 151,419 183,324 - -

111,161,032 90,305,829 - -

16. Interest expenses


Bank overdraft 2,125 45,563 - -

Revolving credits 23,014 - 23,014 -

Finance lease 8,493 20,502 - -

Loan interest 283,699 4,556,048 283,699 -

317,331 4,622,113 306,713 -





17. Results from operating activities

Group Company 1.1.2009 - 1.10.2007 - 1.1.2009 - 1.10.2007 - 31.12.2009 31.12.2008 31.12.2009 31.12.2008 Note RM RM RM RM

Results from operating activities is arrived at after charging:

Depreciation of property,

plant and equipment 3 10,764,529 5,886,921 305 305

Directors’ remuneration

- fees 2,391,000 1,900,000 1,851,000 1,460,000

- other emoluments 3,177,646 1,480,253 13,500 8,000

Loss from disposal

of property, plant

and equipment - 187 - -

Operating lease rental 1,091,078 437,786 - -

Personnel expenses:

- contributions to

the Employees

Provident Fund 4,347,245 2,464,243 16,991 1,978

- wages, salaries

and others 61,621,252 35,196,589 136,516 25,772

Property, plant and

equipment written off 14,784 1,980 - -

Rental of premises 2,094,864 1,045,924 - -

Rental of equipment,

motor vehicle and

marine vessels 11,647,161 11,985,608 - -

Statutory audit fee 100,000 98,000 15,000 12,000

and after crediting:

Gain on disposal of

property plant and

equipment 35,241 - - -

Negative goodwill

recognised 29 - 22,536,312 - -

Interest income 1,795,810 3,851,269 629,962 2,085,419




18. Compensations to key management personnel

Compensations to key management personnel are as follows:


Directors - Fees 2,391,000 1,910,000 1,851,000 1,460,000 - Remuneration 3,177,646 1,480,253 13,500 8,000 - Other short term employee benefi ts (including estimated monetary value of benefi t-in-kind) - 23,327 - -

5,568,646 3,413,580 1,864,500 1,468,000

Other key management personnel - Short term employee benefi ts (including estimated benefi ts-in-kind) 388,004 394,054 24,000 20,000

5,956,650 3,807,634 1,888,500 1,488,000

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

19. Tax expense


Current tax expense: Malaysian - current year 9,413,000 15,602,397 12,409,000 6,997,000 - prior year (126,162) 670 (2,934) -

9,286,838 15,603,067 12,406,066 6,997,000

Deferred tax expense (Note 7): - current year (470,300) 1,718,300 - - - prior year (1,200,690) (6,400) - -

(1,670,990) 1,711,900 - -

Tax expense 7,615,848 17,314,967 12,406,066 6,997,000





19. Tax expense (continued) Group Company 1.1.2009 - 1.10.2007 - 1.1.2009 - 1.10.2007 - 31.12.2009 31.12.2008 31.12.2009 31.12.2008 RM RM RM RM Reconciliation of effective tax charge

Profi t for the year 44,785,090 71,444,382 37,044,801 19,800,200Total tax expense 7,615,848 17,314,967 12,406,066 6,997,000

Profi t excluding tax 52,400,938 88,759,349 49,450,867 26,797,200

Tax calculated using Malaysian tax rate of 25% (2008: 26%) 13,101,000 23,077,430 12,363,000 6,967,300 Effect of lower tax rate for certain subsidiaries - (30,000) - -Non-deductible expenses 5,238,440 2,157,000 105,740 29,700Income exempted from tax under Section 54A of Income Tax Act, 1967 (9,337,000) (2,024,250) - -Other non-taxable income (59,740) (5,859,483) (59,740) -

8,942,700 17,320,697 12,409,000 6,997,000

Under-provision in prior years (1,326,852) (5,730) (2,934) -

Total tax expense 7,615,848 17,314,967 12,406,066 6,997,000

20. Earnings per ordinary share – Group

Basic/Diluted earnings per ordinary share

The calculation of basic/diluted earnings per ordinary share was based on the profi t attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding calculated as follows:

2009 2008 RM RM Profi t attributable to equity holders of the Company 44,785,090 71,444,382

Weighted average number of ordinary shares 2009 2008 RM RM At beginning of the year/period 352,000,000 2 Acquisition of subsidiaries - 164,778,562 Rights issue - 13,607,205 Public issue - 48,561,934

Weighted average number of ordinary shares at end of the year/period 352,000,000 226,947,703

2009 2008 Sen Sen

Basic/Diluted earnings per ordinary share 12.72 31.48




21. Dividends

RM per share (net of tax) Date of Sen RM payment Group and Company 2009 Second interim 2008 ordinary (franked) 5.25 18,480,000 27 March 2009 First interim 2009 ordinary (tax exempt) 5.00 17,600,000 21 December 2009

36,080,000

2008 First interim 2008 dividend (franked) 5.25 18,233,600 1 September 2008

The Directors do not recommend any fi nal dividends to be paid for the year under review.

The dividend per ordinary share as disclosed in the income statements relates to the total dividends declared or proposed for the fi nancial year.

22. Segmental information

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.

Segment results, assets and liabilities include items directly attributable to a segment as well as those can be allocated on a reasonable basis. Unallocated items mainly comprise corporate expenses/income and corporate taxes.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment other than goodwill.

Business segments

The Group’s business segments mainly comprise the following four major business segments:-

i) Topside maintenance

Provision of offshore topside maintenance services, minor fabrication works and offshore hook-up and commissioning services for oil and gas industry.

ii) Marine charter

Chartering of marine vessels and provision of related support services.

iii) Equipment hire

Equipment hire operation.






22.

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23. Capital commitments Group Company 2009 2008 2009 2008 RM RM RM RM Property, plant and equipment Authorised and contracted for - 32,271,000 - -

24. Contingent liabilities - Company

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 sacrifi ce of economic benefi ts will be required:

2009 2008 RM RM Unsecured Corporate guarantees favouring banks for facilities granted to subsidiaries 53,585,000 -

25. Financial instruments

The Group and the Company ensure that adequate fi nancial resources are properly utilised for their businesses while managing their credit risk, interest rate risk, foreign exchange risk and liquidity risk.

Credit risk

The principal customers of the Group are major oil and gas companies based in Malaysia. The management reviews the credit worthiness of all major counter parties prior to entering into any contract or transaction with them.

Cash and cash equivalent are only placed with licensed banks.

At the balance sheet date, there were no signifi cant concentrations of credit risk other than the following:

Group Company 2009 2008 2009 2008 RM RM RM RM

Trade and other receivables 64,808,525 102,047,676 - - Amount due from subsidiaries - - 101,239,367 103,955,931

64,808,525 102,047,676 101,239,367 103,955,931

The maximum exposure to credit risk is represented by the carrying amount of each fi nancial asset in the balance sheets.

Foreign currency risk

The Group is exposed to foreign currency risk on transactions that are denominated in currencies other than Ringgit Malaysia. The currency giving rise to this risk is primarily US Dollar. As it is not possible to predict the movements of exchange rates with certainty, the Group manages its foreign currency risk on an on-going basis. The Group presently does not hedge its exposure to foreign currency risk but may do so in future if expedient.

Liquidity risk

The Group and the Company monitor and maintain suffi cient cash and cash equivalents and banking facilities to enable them to meet their short-term and long-term cash fl ow requirements.





25. Financial instruments (continued)

Interest rate risk

The Group fi nances its operations through a mixture of internally generated funds and bank borrowings.

The primary interest rate risk relates to interest bearing debts. The investment in interest-bearing assets is mainly short-term in nature and they are not held for speculative purposes but have been mostly placed as term deposits. Interest-bearing fi nancial instruments are negotiated and monitored according to changes in the interest rate regime to ensure the Group is exposed to minimal interest rate risk.

The world economy is gradually recovering from the worldwide economic and fi nancial crisis started in September 2008, exerting an upwards pressure on interest rates. The Group is expected to earn/pay interest at higher rates on fi xed deposits/borrowings going forward.

Effective interest rate repricing analysis

In respect of interest-bearing fi nancial instruments, the following table indicates their effective interest rates at the balance sheet date and the periods in which they reprice or mature, whichever is earlier.

Effective Less than 1 – 2 2 – 3 3 – 4 4 - 5 interest rate Total 1 year years years years years Group % RM RM RM RM RM RM

2009 Fixed rate instruments Finance lease liabilities 8.05 (61,467) (61,467) - - - - Secured term loan 5.55 (100,000,000) - (16,000,000) (16,000,000) (28,000,000) (40,000,000)

(100,061,467) (61,467) (16,000,000) (16,000,000) (28,000,000) (40,000,000)

Floating rate instruments Fixed deposits 2.00 47,288,065 47,288,065 - - - - Secured revolving credits 3.05 (10,000,000) (10,000,000) - - - - Unsecured bank overdrafts 8.00 – 8.25 (4,733) (4,733) - - - -

37,283,332 37,283,332 - - - - 2008

Fixed rate instruments Finance leases liabilities 8.05 (147,810) (85,110) (62,700) - - -

Floating rate instruments Fixed deposits 3.00 - 3.50 68,215,235 68,215,235 - - - - Unsecured bank overdrafts 8.00 - 8.25 (2,160) (2,160) - - - -

68,213,075 68,213,075 - - - -




25. Financial instruments (continued)

Effective Less than 1 – 2 2 – 3 3 – 4 4 - 5 interest rate Total 1 year years years years years Company % RM RM RM RM RM RM

2009

Fixed rate instruments Secured term loan 5.55 (100,000,000) - (16,000,000) (16,000,000) (28,000,000) (40,000,000) Floating rate instruments Fixed deposits 2.00 13,404,520 13,404,520 - - - - Secured revolving credits 3.05 (10,000,000) (10,000,000) - - - -

3,404,520 3,404,520 - - - -

2008

Floating rate instruments Fixed deposits 3.00 - 3.50 26,975,669 26,975,669 - - - -

Fair values

Recognised fi nancial instruments

The carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables and short-term borrowings approximate fair values due to the relatively short-term nature of these fi nancial instruments. The long-term portion of the term loan, which bears interest at variable rate, also approximates fair value.

The fair value of the contingent asset as disclosed in Note 26 cannot presently be determined due to the uncertainty as to the quantum and timing of the reward the Group might ultimately receive upon the conclusion of the suit.

Unrecognised fi nancial instruments

There were no unrecognised fi nancial instruments at 31 December 2009 and 31 December 2008 except for the contingent asset as disclosed in Note 26.

26. Contingent asset – unsecured

The Group has instituted legal action against two of its clients for unlawful termination of a contract and accordingly is seeking damages in the sum of RM10,160,445 together with interest thereon. The respondents have, through their solicitors, offered a sum of RM700,000 as fi nal settlement of all claims. The said offer has been rejected by the Group. At the date of this report, the outcome of the legal proceedings cannot be ascertained.

27. Operating lease commitment - Group

The Group entered into non-cancellable operating leases for the use of offshore equipment. The tenure of these leases is between 3 to 5 years with an option to renew on the expiry of the leases.





27. Operating lease commitment – Group (continued)

The future aggregate minimum lease payments under the non-cancellable operating leases contracted for as at the balance sheet date but not recognised as liabilities are as follows:

2009 2008 RM RM

Future minimum rental payments: Payable within 1 year 1,114,128 494,460 Payable after 1 year but not later than 5 years 745,805 452,876 Payable after 5 years - 64,140

1,859,933 1,011,476

28. Related parties

Identity of related parties

For the purposes of the fi nancial statements, parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control the parties or exercise signifi cant infl uence over the parties in making fi nancial and operating decisions, or vice versa, or where the Company and the parties are subject to common control or common signifi cant infl uence. Related parties may be individuals or other entities.

Key management personnel are defi ned as those persons having authority and responsibility for planning, directing and controlling the activities of the Group and the Company either directly or indirectly. The key management personnel of the Group and the Company includes all its Directors.

The Company has a related party relationship with:

i) its subsidiaries as disclosed in Note 4;ii) its associate as disclosed in Note 5; iii) key management personnel; andiv) companies connected to certain Directors of the Company.

Signifi cant related party transactions, other than compensations to key management personnel (see Note 18) and those disclosed elsewhere in the fi nancial statement, are as follows:

Company 1.1.2009 - 1.10.2007 - 31.12.2009 31.12.2008 RM RMTransactions with subsidiaries

Gross dividends received (49,400,000) (24,700,000) Management fees (2,160,000) (1,800,000)




28. Related parties (continued)

Transactions with companies connected to certain Directors and close members of their families:

Transaction value Group Company 1.1.2009 - 1.10.2007 - 1.1.2009 - 1.10.2007 - 31.12.2009 31.12.2008 31.12.2009 31.12.2008 RM RM RM RM

Equipment rental - - - - Purchase of equipment - 495,000 - - Rental of premises 1,179,660 605,800 451,200 -

The amounts due from subsidiaries are disclosed in the balance sheet as well as Note 10 to the fi nancial statements. There are no outstanding balances with other related parties as at the year/period end.

Related party transactions are based on negotiated terms.

29. Investments in an associate and subsidiaries

Year ended 31 December 2009

Acquisition of an associate The Company acquired on 31 December 2009 a 40% equity interest in Syarikat Brocos Shipping Sdn. Bhd. for a total consideration of RM135,008,200 (see Note 5).

Period ended 31 December 2008

Acquisition of new subsidiaries The Company acquired the following subsidiaries during the period ended 31 December 2008:

% of Purchase equity Date of considerationSubsidiary acquired acquisition RM Dayang Enterprise Sdn. Bhd. 100 29.2.2008 62,503,443DESB Marine Services Sdn. Bhd. 100 29.2.2008 55,871,579Fortune Triumph Sdn. Bhd. 100 29.2.2008 4,538,237

122,913,259





29. Investments in an associate and subsidiaries (continued)

The acquisition had the following effect on the Group’s assets and liabilities on the acquisition date:

Pre-acquisition Recognised carrying Fair value consideration amounts adjustments acquisition Note RM RM RM

Property, plant and equipment 3 130,174,912 - 130,174,912 Other investment 25,000,000 - 25,000,000 Current assets 105,048,703 - 105,048,703 Current liabilities (32,588,766) - (32,588,766)

Loans and borrowings (80,214,388) - (80,214,388)Deferred tax liabilities (1,970,890) - (1,970,890)

Net identifi able assets and liabilities 145,449,571 - 145,449,571

Negative goodwill 17 (22,536,312)

Purchase consideration 122,913,259Cash acquired (42,079,748)

80,833,511Satisfi ed by issuance of shares (122,913,259)

Net cash outfl ow (42,079,748)

30. Comparatives

The Company changed its accounting date from 30 September to 31 December in the last fi nancial period. The comparatives for the Income Statement, Statement of Changes in Equity and Cash Flow Statement as well as the comparatives in the notes to the Financial Statements relating to the Income Statement for the previous fi fteen months ended 31 December 2008 are hence not comparable to that for the current twelve months ended 31 December 2009.




Authorised Share Capital : RM500,000,000Issued and Fully Paid-Up Capital : RM176,000,000Class 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 4 0.17 200 0.00100 – 1,000 341 14.71 303,000 0.081001 – 10,000 1,425 61.45 7,276,900 2.0710,001 – 100,000 395 17.03 13,229,500 3.76100,001 – 17,599,999 150 6.47 77,759,400 22.0917,600,000 and above 4 0.17 253,431,000 72.00

TOTAL 2,319 100.00 352,000,000 100.00

2. DIRECTORS’ SHAREHOLDINGS

The Directors’ Shareholdings of Dayang Enterprise Holdings Bhd based on the Register of Directors’ Shareholdings are as follows:- No. of Ordinary shares heldNo Direct % Indirect %

1. Tengku Yusof Bin Tengku 44,048,448 12.51 - - Ahmad Shahruddin2. Ling Suk Kiong 35,136,092 9.98 - -3. Joe Ling Siew Loung @ 1,100,000 0.31 - - Lin Shou Long4. Datuk Hasmi Bin Hasnan 410,000 0.12 126,686,700(1) 35.995. Sulaihah Binti Maimunni - - - - (Appointed on 01/02/2010) 6. Harry Bin Bujang - - 47,559,760(2) 13.517. YB Chia Chu Fatt 135,000 0.04 - -8. Gordon Kab@ Gudan Bin Kab 115,000 0.03 - -9. Abdul Aziz Bin Ishak 115,000 0.03 - -10. Polit Bin Hamzah 115,000 0.03 - -

Notes:(1) Deemed interest through Naim Holdings Berhad.

(2) Deemed interest through Vogue Empire Sdn Bhd.

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 and their respective shareholdings are as follows :- No of Ordinary Shares HeldNo. Names Direct % Indirect %

1. Naim Holdings Bhd 126,686,700 35.99 0 02. Vogue Empire Sdn Bhd 47,559,760 13.51 0 03. Tengku Yusof Bin Tengku 44,048,448 12.51 0 0 Ahmad Shahruddin4. Ling Suk Kiong 35,136,092 9.98 0 0

Analysis of shareholders as at 30 April 2010




4. LIST OF TOP THIRTY SHAREHOLDERS

No Names Shareholdings %

1. Naim Holdings Berhad 126,686,700 35.992. Vogue Empire Sdn Bhd 47,559,760 13.513. Tengku Yusof Bin Tengku Ahmad Shahruddin 44,048,448 12.514. Ling Suk Kiong 35,136,092 9.985. Burhanuddin Bin Md Radzi 5,000,000 1.426. Amanahraya Trustees Berhad 3,660,000 1.04 Public Islamic Opportunities Fund7. Mayban Nominees (Tempatan) Sdn Bhd 2,800,000 0.80 Mayban Life Assurance Berhad (Non-Par Fund)8. Amanahraya Trustees Berhad 2,187,900 0.62 Public Islamic Select Treasures Fund9. Cheng Ah Teck @ Cheng Yik Lai 2,070,000 0.5910. Mayban Nominees (Tempatan) Sdn Bhd 2,069,000 0.59 ETIQA Insurance Berhad (Sharehldr’s Fd)11. Malaysia Nominees (Tempatan) Sendirian Berhad 1,841,600 0.52 Great Eastern Life Assurance (Malaysia) Berhad (LPF)12. Tee Soon Ming 1,707,000 0.4813. HSBC Nominees (Tempatan) Sdn Bhd 1,660,000 0.47 HSBC (M) Trustee Bhd for MAAKL AL-FAID (4389)14. AMSEC Nominees (Tempatan) Sdn Bhd 1,573,000 0.45 AmTrustee Berhad for Pacifi c Pearl Fund (UT-PM-PPF)15. Mayban Nominees (Tempatan) Sdn Bhd 1,533,000 0.43 ETIQA Insurance Berhad (Life Par Fund)16. CIMB Group Nominees (Tempatan) Sdn Bhd 1,518,400 0.43 AmTrustee Berhad for CIMB Islamic Dali Equity Theme Fund17. Hong Leong Assurance Berhad 1,500,000 0.43 AS Benefi cial Owner (Unitlinked GF)18. Mayban Nominees (Tempatan) Sdn Bhd 1,405,300 0.40 Mayban Life Assurance Berhad (Par Fund)19. Malaysia Nominees (Tempatan) Sendirian Berhad 1,219,800 0.35 Great Eastern Life Assurance (Malaysia) Berhad(DR)20. Malaysia Nominees (Tempatan) Sendirian Berhad 1,172,800 0.33 Great Eastern Life Assurance (Malaysia) Berhad (LGF)21. Mayban Nominees (Tempatan) Sdn Bhd 1,170,000 0.33 ETIQA Insurance Berhad (Life Non-Par FD)22. BHLB Trustee Berhad 1,136,200 0.32 TA Dana Optimix23. TA Nominees (Tempatan) Sdn Bhd 1,110,000 0.32 Pledged Securities account for Gan Choo Huat24. Joe Ling Siew Loung @ Lin Shou Long 1,100,000 0.3125. Mayban Nominees (Tempatan) Sdn Bhd 1,100,000 0.31 Exempt An For Mayban Investment Management Sdn Bhd (Resident)26. Mayban Nominees (Tempatan) Sdn Bhd 1,067,500 0.30 Mayban Trustees Berhad for MAAKL Value Fund (950290)27. HSBC Nominees (Tempatan) Sdn Bhd 1,027,000 0.29 HSBC (M) Trustee Bhd For MAAKL AL-FAUZAN (5170)28. Mayban Nominees (Tempatan) Sdn Bhd 1,000,000 0.29 Mayban Life Assurance Berhad (Shareholders FD)29. Mayban Nominees (Tempatan) Sdn Bhd 1,000,000 0.29 ETIQA Insurance Berhad (General Fund)30. RHB Nominees (Tempatan) Sdn Bhd 1.000,000 0.29 RHB Investment Management Sdn Bhd for Kumpulan Wang Persaraan (Diperbadankan) 297,059,500 84.39

Analysis of shareholders as at 30 April 2010



NOTICE IS HEREBY GIVEN THAT the 4th Annual General Meeting of the Company will be held at Imperial Hotel, Jalan Pos, 98000 Miri, Sarawak on Monday, 14th June 2010 at 11.30 a m to transact the following purposes:-

AGENDAORDINARY BUSINESS

1. Adoption of Audited Financial Statements To receive and adopt the Report of the Directors and the Audited Accounts for the fi nancial year ended 31st December 2009

together with the Report of the Auditors thereon. Ordinary Resolution 1

2. Approval of Directors’ Fees To approve Directors’ Fees in respect of the fi nancial year ended 31st December 2009. 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:-

Gordon Kab@ Gudan Bin Kab Ordinary Resolution 3 YB Chia Chu Fatt Ordinary Resolution 4 Polit Bin Hamzah Ordinary Resolution 5

To re-elect the following director who retire in accordance with Article 93 of the Company’s Articles of Association:-Sulaihah Binti Maimunni Ordinary Resolution 6

4. Appointment of Auditors To re-appoint Messrs KPMG as Auditors of the Company for the fi nancial year ending 31 December 2010 and to authorize the

Board of Directors to fi x their remuneration. Ordinary Resolution 7

SPECIAL BUSINESSES To consider and to pass, if thought fi t, the following as Ordinary/Special Resolutions:

5. Ordinary Resolution 8 - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT) of a Revenue or Trading Nature

“THAT pursuant to Paragraph 10.09 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 2010 with the specifi c 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 8

Notice of Annual General Meeting




6. Ordinary Resolution 9 - Proposed Renewal of Authority To Purchase Own Shares “THAT, subject always to 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 fi t, 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 profi ts and share premium account of the Company. As of 31 December 2009, the audited retained profi ts and share premium account of the Company were RM1.78 million and RM87.07 million respectively.

(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 Malaysia 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 fi nalize and give full effect to the Proposed Share Buy-Back.

AND THAT such authority conferred by this resolution will 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.”


7. Ordinary Resolution 10 - 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 fi t, 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 AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” Ordinary Resolution 10

8. Special Resolution 1 - Proposed Amendment to the Articles of Association of the Company “THAT the existing Article 149 be deleted in its entirety and be replaced by the following Article to read:-

Article 149

Any dividend, interest or other money payable in cash in respect of shares may be paid by cheque or warrant and sent through post direct to the registered address of the holder or to such person and to such address as the holder may in writing direct or electronic transfer or remittance to such account as designated by such holder or the person entitled to such payment. Every such cheque or warrant or electronic transfer or remittance shall be made payable to the order of the person to whom it is sent and the payment of any such cheque or warrant or electronic transfer or remittance shall operate as a good and full discharge to the Company in respect of the payment represented thereby. Every such cheque or warrant or electronic transfer or remittance shall be sent at the risk of the person entitled to the money thereby represented. No unpaid dividend or interest shall bear interest as against the Company”. Special Resolution 1

9. 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 BOARDBONG SIU LIAN (MAICSA 702221)BAILEY KHO CHUNG SIANG (LS000578)Company Secretaries

Miri, SarawakDated this 21 May 2010




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 Offi ce of the Company 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 specifi es 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 offi cer or attorney

duly authorized.6. 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’ Ratifi cation and Proposed Shareholders’ Mandate.

Explanatory Notes on Special Businesses(a) Ordinary resolution 8 – 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 2010 for further information.

(b) Ordinary resolution 9 – 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 2010 for further information.

(c) Ordinary resolution 10 – 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.

(d) Special Resolution 1- -Proposed Amendment to the Articles of Association of the Company The proposed special resolution 1 is to amend the Company’s Articles of Association in line with the amendments to the Main

Market Listing Requirements of Bursa Malaysia Securities Berhad in relation to e- Dividend.

Statement accompanying Notice of Annual General MeetingThere is no person seeking election as Directors of the Company at this Annual General Meeting.


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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 abovenamed 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 4th Annual General Meeting of the Company to be held at Imperial Hotel, Jalan Pos, 98000 Miri, Sarawak on Monday, 14 June 2010 at 11.30 a.m. or any adjournment thereof, in the manner indicated below:-

CDS account no. of authorized nominee No. of shares held

Resolutions









Ordinary Resolution 9 Ordinary Resolution 10

Special Resolution 1

Adoption of the Audited Financial Statements and Reports thereto

Approval of Directors’ Fees

Re-election of Director: Encik Gordon Kab @ Gudan Bin Kab

Re-election of Director: YB Chia Chu Fatt

Re-election of Director: Polit Bin Hamzah

Re-election of Director – Sulaihah Binti Maimunni

Reappointment of Auditors : Messrs KPMG as Auditors and authorizing the Directors to fi x their remuneration

Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a revenue or trading nature

Proposed Renewal of authority to purchase own shares

Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965

Proposed Amendment to the Articles of Association of the Company

FOR AGAINST

(Please indicate with an “X” in the spaces above how you wish your votes to be casted on the resolution specifi ed in the Notice of Meeting. If no specifi c direction as to the voting is indicated, the proxy/proxies will vote or abstain from voting as he/she/they think(s) fi t.)

Dated this …………….. day of …………………………………… 2010

………………………………………………..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 Offi ce 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 specifi es 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 offi cer or attorney duly authorised.6. 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’ Ratifi cation and Proposed Shareholders’ Mandate..

The Company SecretaryDayang Enterprise Holdings BhdSublot 5 – 10, Lot 46, Block 10,Jalan Taman Raja,98000 Miri, Sarawak.

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Documents

Dayang Enterprise Holdings Bhd DAYANG …dayang.listedcompany.com/misc/AR2009.pdfDayang Enterprise Holdings Bhd (712243-U) Annual Report 2009 DAYANG ENTERPRISE HOLDINGS BHD (712243-U)