SCOMI ENGINEERING BHD this is the...

SCOMI ENGINEERING BHD (111633-M)

Suite 5.03, 5th Floor, Wisma Chase Perdana, Off Jalan Semantan, Damansara Heights, 50490 Kuala Lumpur, Malaysia

Tel : 60-3-2080 6222 • Fax : 60-3-2080 6333

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2005 Annual Report

that harnesses technological innovations...

Submerged arc welding – 20” JV-LW connector

API rotary shoulder connection under repair Logistics Engineering – design process Logistics Engineering

and utilises engineering expertise...

Logistics Engineering – Pressure Gauge

Welding of parts Fabrication development Fabrication works

to build the foundations of strength...

20” JV-LW blanked connector forging

this is us. This is

Fabrication development Pipe spinning lathe churn Premium tubing crossover subs

22ndAGM 26th June 2006 Monday

Engineering

contents• Key Developments 01 Key Financial Indicators 02 Key Financial Highlights 03 Corporate Structure

04 Message from the Chairman 10 An Interview with the Senior Vice President 20 Corporate Information

21 Directors’ Profile 25 Management Team 26 Corporate Governance Statement 32 Internal Control Statement

34 Audit Committee Report 37 Additional Information 38 Statement of Directors’ Responsibility

39 Financial Statements 95 Analysis of Shareholdings 98 List of Properties 99 Corporate Directory

100 Notice of Annual General Meeting 104 Statement Accompanying Notice of Twenty-Second Annual General Meeting

• Form of Proxy

1. Announcement of proposed corporate exercise to acquire the engineering

businesses of Scomi Group Bhd comprising of machine shops, logistics engineering

and fleet management.

2. Extraordinary General Meeting to obtain shareholders’ approval for the company’s

proposed acquisition of the engineering businesses of Scomi Group Bhd and the

proposed change of name of the company to Scomi Engineering Bhd.

3. Relisting of company on the 2nd Board of Bursa Malaysia Securities Bhd as Scomi

Engineering Bhd.

key developments

10:00 a.m. Nirwana Ballroom 2, Crowne Plaza Mutiara Hotel, KL

key financial indicators

RM500.7 millionTOTAL ASSETS

RM59.3 millionNET TANGIBLE ASSETS (NTA)

RM266.8 millionSHAREHOLDERS’ FUNDS

0.28 sen (211.7 million shares)NTA / SHARE#

as at 31st December 2005

Notes: The above indicators are unaudited proforma numbers for the existing Scomi Engineering Bhd businesses.# Based on issued number of shares

Scomi Engineer ing Bhd Annual Report 2005

key financial highlights

Turnover (RM Million)

0 45 90 135 180 225

2005

2004

208.7

136.3

Net Profit (RM Million)

0 6 12 18 24 30

2005

2004

25.1

16.0

Note: The above highlights are unaudited pro forma numbers of the existing Scomi Engineering Bhd business.

for the year ended 31st December


Scomi Engineering Bhd(formerly known as Bell & Order Berhad)

SCOMISDN BHD

SCOMITRANSPORTATION

SOLUTIONSSDN BHD

OMS OILFIELDHOLDINGS

(MALAYSIA) SDN BHD

OMS OILFIELDSERVICES PTE LTD

(formerly known asOiltools Pte Ltd)

(SINGAPORE)

SCOMITRADING SDN BHD

ASIAN RENT-A-CAR SDN BHD

OMS OILFIELDSERVICES

(MALAYSIA)SDN BHD


(THAILAND) LTD LIMITED

(THAILAND)


(AUSTRALIA) PTY LTD

(AUSTRALIA)

PT OMS OILFIELDSERVICES

(INDONESIA)

95% 100% 100%100%100%100%

100% 100% 100% 100%

corporate structure

as at 11th May 2006

Note: This Group Structure does not include the 5 subsidiaries of Scomi Engineering Bhd which are in the process of being transferred

to Atlas Jade Sdn Bhd pursuant to the Scheme of Arrangement under Section 176 of the Companies Act 1965. The 5 subsidiaries are:

i. Bell & Order Engineering Pte Ltd

ii. Amity Power Sdn Bhd

iii. Ratus Aliran Sdn Bhd

iv. Ratus Daratan Sdn Bhd

v. Soundex Engineering Sdn Bhd


ChairmanDatuk Zainun Aishah binti Ahmad


Dear Stakeholders,Our efforts during the year under review to regularise our financial condition and acquire

new core business activities has allowed the company to retain its listing on the Second

Board of Bursa Malaysia Securities Berhad. During the year under review, we entered into

a corporate exercise with Scomi Group Bhd (“Scomi”) to acquire Scomi’s engineering

businesses. The acquisition provided us with not only new and viable businesses but also

new sources of income, and I am pleased to report that Scomi Engineering Bhd (formerly

known as Bell & Order Berhad, “Scomi Engineering” or “Company”) was relisted on the

Second Board of Bursa Malaysia Securities Bhd on 26th January 2006.

Message from theChairman

With the completion of the acquisition of the engineering

businesses of Scomi on 15th December 2005, the newly

relisted entity has been transformed into an Energy and

Logistics Engineering company.

For the Energy Division, Scomi Engineering is involved in the

Machine Shops business, providing Oil Country Tubular

Goods services to the oil & gas industry with facilities in

six (6) countries. As for the Logistics Engineering Division,

Scomi Engineering’s core business is in the fabrication

of special purpose vehicles for the commercial sectors

including defence, health and road transportation, for the

local market as well as export markets such as Vietnam,

Phil ippines, Thailand, Taiwan, Japan, Seychelles and

Indonesia. Its non-core business is in fleet management,

focusing on corporate clients.

On behalf of the Board of Directors, I am pleased to

present the Annual Report and Audited Financial

Statements of Scomi Engineering Bhd for the financial year

ended 31st December 2005. In addition, with the business

transformation of Scomi Engineering, I will also present the

financial performance of the transformed Scomi Engineering,

on proforma basis, to provide you, as stakeholders, a

perspective of the current businesses’ performance in 2005

and a fair view of your Company’s anticipated performance

in its new business of energy and logistics engineering.


message from the chairman (cont’d.)

■ THE FORMER BELL & ORDER BERHAD

Financial Per formance l The statutory financial

statements on pages 40 to pages 94 refer to the principal

activities of Scomi Engineering for the financial year 2005,

during which the company was primarily involved in its

previous business in the design, manufacture, supply and

installation of sound and communication systems. However

the Company had been suffering significant losses in recent

years due to stiff competition and weak market demand for

its initial product portfolio. Hence during the year under

review the Company ceased providing the above services

following the cessation of the business operations of its

subsidiary in Singapore.

On 28th February 2005, the Company announced that it

was an affected listed issuer under Practice Note (“PN”)

17/2005 due to a deficit in its consolidated shareholders’

equity based on its consolidated results for financial year

ended 31st December 2004.

For the financial year ended 31st December 2005, the

Company posted a net profit of RM16.7 million. This was a

result of revenue derived from the remaining construction

and maintenance contracts prior to the cessation of its

business operations. Also reflected in its net profit is the gain

received from the disposal of subsidiaries and waiver of

debts pursuant to the Composite Scheme of Arrangement,

which is explained further below.

Corporate Restructuring Exercise l As part of the

corporate restructuring exercise to turnaround the

Company, Bell & Order Berhad (“B&O”) undertook various

corporate exercises which included a rights issues (“Rights

Issue”), an acquisition of Scomi’s engineering businesses and

a transfer of undertaking and property.

On 7th January 2005, B&O entered into a conditional Sale

and Purchase Agreement with Scomi to acquire its machine

shops for RM237.5 million and its logistics engineering

business for RM47.5 million. The transaction involved our

acquisit ion of Scomi’s entire equity interest in these

businesses, to be satisfied by way of issuance to Scomi a

total of 192,567,567 new ordinary shares of RM1.00 each

of the Company at an issue price of RM1.48 per share

(“Acquisition”). The enlarged issued shares of the Company

became 211,751,567 ordinary shares of RM1.00 each.

On 17th June 2005, B&O was granted with a court order

to undertake the Composite Scheme of Arrangement

(“Scheme”) with the objective of restructuring its liabilities

amounting to RM38,505,970. Pursuant to the Scheme, all

of B&O’s undertakings, properties and assets as at 1st

September 2005 were transferred to a special purpose

vehicle, Atlas Jade Sdn Bhd. On 8th March 2006, B&O

announced that the Company had fully settled all liabilities

as per the Scheme.

The Acquisition was completed on 15th December 2005 and

Bell & Order Berhad’s name was subsequently changed to

“Scomi Engineering Bhd” on 9th January 2006. The relisting of

Scomi Engineering’s shares on the Second Board of Bursa

Malaysia Securities Berhad took place on 26th January 2006.

With the successful completion of the exercise, Scomi

Engineering is now a subsidiary of Scomi by virtue of its

71.35% interest in Scomi Engineering.

The last corporate exercise was the Rights Issue which was

completed on 20th January 2006. The Rights Issue involved

the issuance of 57,552,000 shares of RM1.00 each which was

issued at an issue price of RM1.20 per share on the basis of

three (3) rights shares for every one (1) existing ordinary

Scomi Engineering share held. The Rights Issue was offered

to the shareholders of Scomi Engineering as per the Record

of Depositors on the entitlement date of 1st December 2005.

A total of RM69 million was raised from this exercise,

which was utilised for expenses relating to the corporate

restructuring exercise, settlement of the Composite Scheme

of Arrangement and working capital for business expansion.


■ THE TRANSFORMED ENTITY

Financial Performance(Note: All numbers in this section are unaudited and

presented on proforma basis) l For the financial year ended

31st December 2005, the transformed entity of Scomi

Engineering which is involved in the Energy and Logistics

Engineering businesses, registered RM208.7 mil l ion

in revenue, a 54% increase over its 2004’s revenue of

RM136.3 million. The Energy Engineering Division contributed

approximately 74% of the overall revenue, while the

Logistics Engineering Division contributed 25%, and the

remainder came from its non-core business of Fleet

Management.

On proforma basis, the net profit of the transformed entity

of Scomi Engineering for the financial year 2005 was RM25.1

million, a 57% increase over the financial year 2004’s net

profit of RM16 million.

Geographically, our domestic business accounted for 32%

of revenue while our international businesses contributed

the remaining 68%. Of the latter, Singapore with its high-end

value added products contributed to approximately 56% of

revenue, while Indonesia, Brunei, Thailand and Australia

together generated the remaining 12%.

Much of this year’s admirable performance was attributable

to our machine shops operations. Located in Malaysia,

Singapore, Indonesia, Australia, Brunei and Thailand, these

machine shops provide Oil Country Tubular Goods (“OCTG”)

repair, manufacture, and recertification to the oil and gas

industry.

■ EXPANSION OF THE TRANSFORMEDENTITY

Machine Shop Investments l With seven (7) machine

shops in six (6) locations throughout Asia Pacific, your

Company undoubtedly has the most extensive machine

shops facilities under one umbrella in this region. Currently

90% of our machine shops business revenue is generated

from our international locations.

Our main strategy for the expansion of our machine shops

business is to increase the capacity of the existing facilities.

In line with this, we have commenced on the expansion of

our Labuan facility by developing a new facility on a seven

acre land which is expected to be ready by the second

half of 2006. With the new facility, we will also be investing

in new equipment which will increase our capacity and

capability to handle greater volume of work. In Brunei, we

will be moving to a new two acre site as well as investing

in new lathe machines thus continuing to build a reputation

as a preferred machine shop for this market.

These expansions are in line with rising demand for our

products and services within the oil and gas industry,

particularly for deep water drilling activities, which are

expected to increase significantly in the future. We have

now started work on fabricating deepwater downhole

accessories in Songkhla, Thailand.

For geographical expansion, we are also exploring

opportunities to penetrate into territories that currently do

not have or have insufficient machine shop facilities, such

as Sakhalin Island, Irian Jaya and Saudi Arabia.


message from the chairman (cont’d.)

Logistics Engineering Opportunities lRailway as a new addition

The year also saw us adding a railway capability to our

Logistics Engineering’s business. To support this business we

have established a dedicated facility that enables us to

undertake wagon maintenance and overhauling works as

well as the supply of parts for rolling stocks. Our wagon

maintenance facility is located on a five acre plot in Klang

and is equipped with comprehensive blasting, painting and

washing facilities as well as specialised equipment for brake

and spring testing.

Strategic Collaborations for Defence

We are also taking initiatives to increase our involvement in

the defence sector. In Apri l 2006 we entered into a

collaboration arrangement with Doosan Infracore Co., Ltd

(“Doosan”) and Giat Industries (“Giat Industries”) of Korea

and France respectively to share their technologies. These

collaborations will enhance our capabilities in the design

and fabrication of armoured military vehicles as well as in

content and product localisation. Whilst initially we plan to

offer the products to the local market, our long term plan is

to export the locally manufactured products.

Acquisition of Fabrication Technology

In April 2006, we announced the proposed acquisition of a

51% equity interest in MTrans Transportation Systems Sdn Bhd

(“MTrans”), a group of companies specialising in the design

and manufacture of buses and monorail transportation

systems. The proposed acquisition is intended to increase our

portfolio to offer a more diverse range of products, in addition

to our existing product lines. The proposed acquisition is

expected to provide us with improved fabrication technology

that can complement and enhance our existing fabrication

capabilities. It will also position Scomi Engineering as a key

player in the fast-growing urban transportation systems sector

with capabilities in the fabrication, assembly and fitting of

Special Purpose Vehicles, particularly buses. MTrans is also one

of the few companies globally involved in urban monorail

manufacturing, with its own proven technology that can be

offered internationally. Whilst its buses have penetrated the

overseas market such as Hong Kong and Bangladesh, its

monorail business is actively bidding for projects in various

countries in this region as well as in the Middle East.

■ ECONOMIC OUTLOOK

Bank Negara Malaysia forecasts that global economic

expansion in 2006 will remain firm at 4.3%, while the growth

in world trade is projected to expand at a stronger rate of

7.4%. The Malaysian economy is expected to strengthen

further in 2006 in an environment of more favourable global

conditions. Real GDP is projected to grow at a faster rate of

6%, driven by strengthening export performance and resilient

domestic demand. Private investment is expected to

expand particularly in the manufacturing sector and the oil

and gas industry, spurred by the favourable demand

conditions. On the supply side, the manufacturing sector is

projected to grow stronger, while the services sector is

expected to sustain its strong performance supported by

higher trade-related activities and continued increases in

consumption and business activities.

■ PROSPECTS

The anticipated increase in global oil and gas exploration,

development and production activities will have a positive

impact on demand for our machine shop services. In 2006,

the international rig count (excluding the US, Canada, the

former Soviet Union and China) is expected to increase

by 7%. The Middle East will lead the way in 2006 with a 19%

gain in activity, followed by Europe (+11%), Africa (+7%), the

Far East (+5%), and Central and South America (+2%). Total

spending in these markets to drill and complete new wells

is expected to reach USD71.3 billion in 2006, up by 21%.

(Source: Drilling & Production Outlook – December 2005, Spears &

Associates, Inc.).


Moreover, with the anticipated exploration and development

activities on the rise in deepwater and ultra deepwater

activities over the next few years, we are confident of the

demand for our machine shops services.

The Ninth Malaysia Plan (“9MP”) challenges the manufacturing

sector to upgrade itself towards higher value added activities

and capacity in providing services. In the move towards a

knowledge-based economy, organisations are urged to

garner greater innovation capability and capacity to

augment productivity and competitiveness. Technology and

innovation driven strategies should be formulated to promote

greater industrial integration and international collaboration

so that the manufacturing companies can further benefit

from international businesses. The 9MP forecasts an average

annual growth rate of 6.7% for the manufacturing industry as

a whole with a 7.8% average annual growth rate specific for

the transport equipment industry.

In view of these encouraging prospects, we have continued

with our focus on expansion, be it capacity, technology

or knowledge. Our strategy is to acquire the relevant

knowledge and technologies that can enhance our

capabilities and offerings as well as to penetrate new

markets that will give us a competitive advantage against

our competitors. Moving into 2006 and beyond, our overall

business plan will be to focus on growing through organic

expansion and focusing on niche sectors and markets.

As we work to become a trusted energy and logistics

engineering solutions provider, technology, innovation, and

astute financial performance will drive our business.

■ APPRECIATION

On behalf of the Board of Directors of Scomi Engineering, I

would like to convey my heartfelt appreciation to all our

shareholders and our customers for your loyal support of

Scomi Engineering. Your Company remains committed to

delivering value to you.

To our business partners and contractors, my sincere thanks

for your patience, perseverance and continued support. As

a newly transformed entity, Scomi Engineering looks forward

to your continued commitment as we move forward in our

endeavours.

Our appreciation goes to our management and employees

for your dedication, service and valued contributions to

Scomi Engineering. Keep up the good work.

I welcome on board my fellow directors, YBhg Dato’

Abdul Rahim bin Abu Bakar, En Fad’l bin Mohamed and

En Shah Hakim bin Zain who have joined the Board on 15th

December 2005 following the resignation of YBhg Dato’

Abdul Rahman bin Mohammed Hashim, Mr Ho Yew Hong

and Mr James Khong Poh Wah.

I look forward to the counsel and expert guidance of my

fellow directors as we work together to build this Company

into a key global Energy and Logistics Engineering player.

Sincerely,

Datuk Zainun Aishah binti AhmadChairman

Scomi Engineering Bhd


An Interview with theSenior

VicePresident■ What is the relationship between Scomi Engineering Bhd and Scomi

Group Bhd?

Scomi Engineering Bhd (“Scomi Engineering”) is a subsidiary of Scomi Group Bhd (“the Group” or “Scomi”) with 71.35%

shareholding. Scomi Engineering is a result of the consolidation of Scomi Group’s engineering businesses under one entity.

■ What are the core activities of Scomi Engineering?

Scomi Engineering is involved in the Energy and Logistics Engineering business. For the Energy Engineering business, our

activity is in machine shops services providing large diameter casing connectors, casing and tubular accessories,

downhole tools and accessories, welding and repair services, drill pipe hardbanding and tubular inspection services for

the oil & gas industry. For the Logistics Engineering business, our activity is in the design and fabrication of special purpose

vehicles such as aircraft refuellers, hydrant dispensers, refuse compactors, aluminium tankers, vacuum tanks and

ambulances, for sectors such as defence, health, commercial, transportation and aviation.

■ Where are the facilities and markets of Scomi Engineering?

For the Energy Engineering business, Scomi Engineering has seven (7) facilities in six (6) countries namely Malaysia,

Singapore, Indonesia, Australia, Brunei and Thailand. It provides services to its customers in the Asia Pacific region as well

as the Middle East.

For the Logistics Engineering business, Scomi Engineering has its design and manufacturing facilities in Malaysia and

supplies its products to the local market as well overseas, to Singapore, Taiwan, China, Hong Kong, Sri Lanka, Brunei,

Thailand, the Philippines and Indonesia.


SENIOR VICE PRESIDENT

Hilmy Zaini Zainal


■ What are the activities of

Energy Engineering business?

The Energy Engineering business entails the provision of

machine shops services, providing premium threading

services on Oil Country Tubular Goods (“OCTG”) over

the last 25 years. OCTG are the steel pipes and

accessories used in the oil and gas industry for the

construction of wells. Our machine shops primarily

undertake threading services of the OCTG, to ensure

that the steel pipes and parts are well connected to

withstand pressure, temperature, bending and loads

during the various stages of drilling.

■ What competitive

advantages does the

Energy Engineering business have?

Our seven machine shops are located in six countries

throughout the Asia Pacific region which makes us the

only company in the region with multiple strategic

locations to undertake the provision of repairs, as well

as the manufacture and certification of OCTG.

We are independent and not aligned to any mills and

we also hold multiple licenses for various premium

patented threads. In this region, our facilities have

the most comprehensive threading licenses from

renowned patent owners such as VAM, Hydril, NSCT,

Fox, Hunting, Grant PrideCo and Tenaris to enable us

to carry out high-end threading activities to meet the

stringent demands of the oil and gas industry. These

licences are renewable by the patent owners where

our facilities and processes are subjected to regular

audits to ensure adherence to their standards.

On top of this, we have established a reputation for

high quality precision engineering. We also possess an

excellent track record, all of which have helped us

retain long-term repeat clients.

■ What are the activities of your

Logistics Engineering business?

Our Logistics Engineering business has over 15 years of

experience and expertise in the design, fabrication

and manufacture of special-purpose vehicles such as

road trailers, tankers, truck mounted equipment and

airport ground support equipment. These are for use

by industries such as aviation, health, defence,

commercial, rescue services and transportation. We are

recognised internationally for our high quality,

sophisticated, reliable and cost effective manufacturing

solutions.

In 2005 we expanded our fabrication offering to the

railway sector, to undertake wagon maintenance,

overhauling works and the supply of parts for rolling

stocks. We are also expanding our goods and service

to the defence sector, which we have been involved

in for more than 10 years through the provision of

aircraft refuellers, command and control centres,

rescue and respond utility vehicles as well as mobile

control posts. With a strategy to tap foreign

technologies for the design and fabrication of

armoured mil itary vehicles, we recently formed

collaborative arrangements with Doosan Infracore Ltd

(“Doosan”) and Giat Industries of Korea and

France respectively. The collaboration involves the

development and marketing of armoured vehicles,

as well as the move into a content and product

localisation programme.

an interview with the senior vice president (cont’d.)


■ What competitive

advantages does your

Logistics Engineering business have?

Our established track record for producing special-

purpose vehicles such as aircraft refuellers and

aluminium pressure vessels for multiple markets, holds

us in good stead. On top of this, our continuous R & D

efforts, which we are now looking to expand via

foreign expertise and a transfer of technology, keep

us at the forefront of this business. Our strategic

acquisition of MTrans is also expected to offer a more

diverse range of products. The deal also positions us as

a key player in the fast-growing urban transportation

systems sector with capabilities in the fabrication,

assembly and fitting of special-purpose vehicles

particularly buses.

With the addition of MTrans’ 22-acre factory in the

Rawang Industrial Zone to Scomi Engineering’s stable

of facilities, we would have access to additional

infrastructure that will enhance our manufacturing

capabil it ies. On top of this, MTrans has proven

technology in cost-effective fuel emission systems,

particularly for urban bus projects. MTrans has already

established a presence in Hong Kong and Bangladesh

and is exploring opportunities in other Asian countries

and Middle Eastern markets.

■ What about your non-core fleetmanagement business? What is its

scope of business?

The non-core Fleet Management business is a pioneer

of fleet management services in Malaysia with over 20

years of experience to its name. We provide clients

with an engineered solution that offers hassle-free

operation of f leet vehicles. We can take over

ownership, maintenance and even fabrication of the

vehicles. Today we are managing over 500 fleet

vehicles for several corporate customers in Malaysia.

We also provide transient vehicle rental services, either

directly to clients or in partnership with players in the

hospitality industry.

■ What are the aspirations of

Scomi Engineering?

Scomi Engineering will focus on becoming a trusted

Energy and Logistics Engineering solutions partner

with technology, innovation and astute financial

performance driving our business. We are also keen to

develop our engineering business in the energy and

energy-related sectors.

To achieve our goals, we will harness the synergies

between our businesses. Where possible, we shall

leverage on the global infrastructures, relationships

and networks that Scomi has, in our pursuit to gain

new markets and customers. With our businesses

already complementing Scomi’s upstream oil and gas

services and falling in line with Scomi’s vision to be a

global player, we believe the fundamentals are in

place for solid growth. To maintain our competitive

edge, we wil l continue to focus on technology

acquisitions and collaboration.

■ What were Scomi Engineering’s EPS,

GP margins and country

contributions?Earnings per share (“EPS”) rose from 7.55 sen in 2004 to

12.94 sen in 2005. Overall, the company charted a

higher gross profit (“GP”) margin of 28% in the final

quarter of 2005 due to increased contributions from all

business divisions. The Energy Engineering’s GP margin

improvement came on the back of increased revenue

and Logistics Engineering’s higher GP margin was

due to a higher number of projects allowing for

improvements via economies of scale.

Singapore, with its line-up of higher value-added

products generated 56% of our revenue; Malaysia

came in second with a 32% contribution; and Indonesia,

Brunei, Thailand and Australia brought in 12% in total.

(Note: All the numbers above are un-audited and

presented on a proforma basis.)


■ How did the Energy Engineering

business fare in 2005?

For the financial year 2005, our Energy Engineering

business recorded a revenue of RM154.4 million, a

71.5% growth over 2004’s revenue.

The Singapore machine shop produced a sterling

per formance with a turnover of approximately

RM115.8 million. Part of the contribution came from

orders originating from our client in Saudi Arabia for

large diameter conductor and connectors. We have

over 10 years of market presence in Saudi Arabia. This

order reflects the success of our strategy to increase

market share and to enhance the presence of our

machine shops worldwide.

2005 saw us investing in new pipe inspection machines

as well as enhancing our capacity in other areas.

Overall, 90% of our machine shop business revenue

was generated outside Malaysia.

During 2005, we were also preoccupied with several

internal restructuring moves as part of the listing

exercise. This involved setting up new legal entities to

separate our machine shop assets and liabilities from

Scomi’s core business, refinancing of our term loan

and the reorganisation and realignment of resources.

■ How did the Logistics Engineering

business fare in 2005?

In 2005, our logistics engineering business posted a

revenue of RM52.3 million, a 20% growth over 2004’s

figure. The exponential growth was attributable to an

increase in exports.

Approximately 40% of our business in 2005 came from

products that we exported to the Phil ippines,

Indonesia and Brunei which included desludging

tankers, vacuum tankers and refuellers. On the

domestic front, we fabricated and supplied refuellers

and aluminium tankers to local oil and gas companies

and refuse compactors to local councils.

In 2005 we penetrated the railway business, being

awarded our first contract for overhauling wagons and

for the supply of couplers and class locomotives.

■ What growth initiatives will you

undertake in the coming year to

stay on course?

Our strategic business plan calls for us to be a

specialised global Energy and Logistics Engineering

company. Our strategic direction will be to focus on

balance sheet management, placing a higher

emphasis on managing our cash flow, working capital,

gearing and returns. We will also focus on growing

through organic expansion and focusing on niche

sectors and markets.

On the business front, the Energy Engineering business

will expand its existing capacity and explore new

areas and territories both in the domestic and foreign

arenas. The Logistics Engineering business will look

into investments to enhance its R&D efforts as well

as explore developing its own design and ideas

especially in the area of outsourcing components

fabrication. We will also target higher returns by

looking into niche sectors such as that of commercial

vehicles, railways and defence.



■ What are the prospects for

the Energy Engineering business

over 2006?

Our machine shops are strategically located in the

region to serve drilling contractors as well as oil and

gas operators. In addition, our products and services

are required in all three phases of oil and gas offshore

upstream activities i.e. the exploration, development

and production phases.

The increase in regional oil and gas drilling activities

bodes well for our machine shop business, where we

anticipate an increase in the demand for machine

shop repair and threading services as well as the

demand for manufacturing and fabrication of OCTG.

We have started expanding our existing facilities in

Labuan and Brunei as the growth outlook is positive for

these markets. Our expansion programme into Labuan

will see us increasing our capacity to include plain-end

threading at 5,000 joints per month in addition to

our existing business. On the cards is the possible

expansion into territories that do not have or only have

insufficient machine shops facilities, such as Sakhalin

Island, Irian Jaya and Saudi Arabia.

■ What is the outlook for the

Logistics Engineering business over

2006?

On the Logistics Engineering front, we see the

transport industry becoming more competitive with the

reduction of tariffs and duties of fabrication material

and automotive parts.

In response to the changing environment, we will focus

on increasing business margins by servicing niche

sectors and markets. The sectors and business segments

that we are looking to focus our efforts on are the

commercial, railways and defence sectors. We will also

work to enhance our R&D capability to develop our

own designs and intellectual property, as well as work

on collaborative arrangements with established

international players like Giat Industries and Doosan.

■ What are other key

supporting factors that

would contribute towards Scomi

Engineering’s success?

People & Processes. Ensuring we have the right people

doing the right job is important. We want to nurture

smart, articulate and knowledgeable employees who

would be able to positively contribute towards building

a quality organisation. We also must ensure that

processes are in place to meet the growth rate. The

back-end support, be it IT infrastructure, finance or

logistics, is a critical element in the smooth operations

of the Company so that we can proactively meet the

requirements of the clients.



■ In the question of the People

factor, what HR initiativeshave been undertaken?

We want to train and retain employees. We also want

to ensure happy employees to keep employee

turnover to a minimum. Hence with the consolidation

of the businesses, we have implemented a structured

grading system across the board for everyone.

We have restructured and introduced a new

organisation structure so that the people know exactly

how the business is being strategised to move forward.

We have also introduced the per formance

management tool, Balanced Scorecard. The Balanced

Scorecard, is basically a tool that aligns the targets of

employees to the strategies of the Company. Thus,

each employee will be aware of his / her role in

supporting the progression of the Company, which in

turn allows the Company to evaluate competencies

and performance.

■ In the question of Processes, what

do you envisage for the

transformed entity?

We will be enhancing our current processes to ensure

we meet global standards, especially for our Logistics

Engineering. With the proposed collaborations for the

defence sector, we must ensure the processes are in

place to exceed the expectations of the export

markets, particularly as we are exploring options of

content localisation for the defence portfolio.

We will also ride on the processes set by our parent

company, Scomi, for our support systems to ensure

business units and support units are working in tandem

to achieve the goals we have set. Risk management

would be emphasised as part of decision making.

■ How are Scomi Engineering’s

strategies aligned to its

parent company, Scomi?

Scomi Engineering’s support services are centralised

to its parent company, Scomi. We subscribe to a

centralised administration support, human resource,

legal services, communications and information

communication technology. By using the centralised

support we are able to standardise practices.

Furthermore, the centralised support services will be

able to identify discrepancies and thus realign to the

parent company. Through centralisation, we should

also be able to enjoy cost and process efficiencies.

Scomi Engineering is currently formulating its 5 year

strategic plan and via the valuable input from the

organisational development support service of Scomi,

we can develop a plan that is in l ine with the

strategies of Scomi. Hence our 5-year strategic plan

will also take on the foci of Scomi which is in Balance

Sheet Management, Technology Development,

Organic Growth and Human Resource Development.


■ What are the challenges that Scomi Engineering faces?

We address different challenges with different demographic groups. With customers it is the introduction of the Scomi

Engineering group, with the investing community it is understanding the business and prospects and with our internal

stakeholders, i.e. our staff, it is getting their support for our growth.

Whilst customers are familiar with our businesses as individual units, introducing the group to them is a major challenge.

Today we want them to see the business as a group, and to realise the value that we could provide to them.

The investing community is important to us as a listed entity. The challenge has been introducing ourselves as a new

engineering group, making them understand our new strategies and the vast prospects that are available to us.

Finally a crucial element of success is with our internal stakeholders, our staff. They are responsible for the deliverables and

therefore we must have their commitment and motivation to take the Company to the next level. Making them realise

the personal development potential that the Company offers is of essence.

■ How do you see ScomiEngineering as a whole,

faring over 2006?

The listing has provided us with the opportunity to re-

align our resources, streamline our balance sheet and

re-organise our operations and we can now focus our

efforts on developing Scomi Engineering into a trusted

energy and logistics engineering solutions Company.

While our efforts will take some time to bear fruit, we

are confident that as we continue to tap innovation,

technology and sound management to drive our

business and take advantage of the opportunities

before us, we will achieve our goals in due course.

Hilmy Zaini ZainalSenior Vice President

Scomi Engineering


AUDIT COMMITTEE

Gregory Jerome GeraldFernandes (Chairman)

Edlin bin Ghazaly

Fad’l bin Mohamed

RISK MANAGEMENTCOMMITTEE

Dato’ Abdul Rahimbin Abu Bakar (Chairman)

Edlin bin Ghazaly

Fad’l bin Mohamed

OPTIONS COMMITTEE

Edlin bin Ghazaly (Chairman)

Gregory Jerome GeraldFernandes

Shah Hakim bin Zain

REMUNERATION COMMITTEE

Datuk Zainun Aishah binti Ahmad (Chairman)

Dato’ Abdul Rahim bin Abu Bakar

Shah Hakim bin Zain

NOMINATION COMMITTEE

Datuk Zainun Aishah binti Ahmad (Chairman)

Dato’ Abdul Rahim bin Abu Bakar

Shah Hakim bin Zain

REGISTERED OFFICE

Suite 5.03, 5th FloorWisma Chase PerdanaOff Jalan SemantanDamansara Heights50490 Kuala LumpurMalaysiaTel : 60-3-2080 6222Fax : 60-3-2080 6333

ADMINISTRATIVE ANDCORRESPONDENCE ADDRESS

5th FloorWisma Chase PerdanaOff Jalan SemantanDamansara Heights50490 Kuala LumpurMalaysiaTel : 60-3-2080 6222Fax : 60-3-2080 6333Website :www.scomiengineering.com.myEmail :[email protected]

REGISTRAR

Symphony Share RegistrarsSdn BhdLevel 26, Menara Multi-PurposeCapital SquareNo 8 Jalan Munshi Abdullah50100 Kuala LumpurMalaysiaTel : 60-3-2721 2222Fax : 60-3-2721 2530 / 31

ADVOCATES & SOLICITORS

Lee Hishammuddin Allen& GledhillAdvocates & SolicitorsLevel 16, Menara Asia Life189, Jalan Tun RazakP.O. Box 1121550738 Kuala LumpurMalaysia

COMPANY SECRETARIES

Wan Marzimin bin WanMuhammad(LS 0009013)

Chong Mei Yan (MAICSA 7047707)

AUDITORS

PricewaterhouseCoopers(AF: 1146)Chartered Accountants11th Floor, Wisma Sime DarbyJalan Raja LautP.O. Box 1019250706 Kuala LumpurMalaysia

PRINCIPAL BANKERS

United Overseas Bank (Malaysia) BerhadMenara UOB, Jalan Raja LautP.O. Box 1121250738 Kuala LumpurMalaysia

STOCK EXCHANGE LISTING

Second Board of Bursa Malaysia Securities BerhadStock Name : ScomienStock Code : 7366

CURRENCY

Ringgit Malaysia (RM)

DIRECTORS

Datuk Zainun Aishah bintiAhmad (since 15th December 2005)

(Chairman)

Dato’ Abdul Rahim binAbu Bakar (since 15th December 2005)

Gregory Jerome GeraldFernandes

Edlin bin Ghazaly

Fad’l bin Mohamed (since 15th December 2005)

Shah Hakim @ Shahzanimbin Zain (since 15th December 2005)

Dato’ Abdul Rahman binMohammed Hashim(resigned 15th December 2005)

Ho Yew Hong (resigned 15th December 2005)

James Khong Poh Wah(resigned 15th December 2005)

corporate information


directors’ profile

YBhg Datuk Zainun Aishah binti Ahmad

YBhg Datuk Zainun, 60, a Malaysian, is an Independent Non-

Executive Director and the Chairman of Scomi Engineering

Bhd. She was appointed to the Board on 15 December

2005. YBhg Datuk Zainun graduated from University of

Malaya with an Honours Degree in Economics. YBhg Datuk

Zainun began her career with Malaysian Industrial

Development Authority (“MIDA”), the Malaysian

government’s principal agency for the promotion and

coordination of industrial development in the country as an

Economist where she worked for 35 years. In her years of

service, she held various key positions in MIDA as well as in

some of the country’s strategic councils, notably her pivotal

role as National Project Director in the formulation of

Malaysia’s first Industrial Master Plan and as a member of

the Industrial Coordination Council in the implementation of

the Second Industrial Master Plan. She was the Director-

General of MIDA for 9 years and Deputy Director-General for

11 years. She was appointed as an Independent Non-

Executive Director to the board of Tenaga Nasional Berhad

in 1995 and resigned in June 2004. She was also a Director

of Kulim Hi-Tech Park and Kelantan Industrial Development

Authority. Whilst in MIDA, she was also a member of the

Industrial Coordination Act Advisory Council, Defence

Industry Council and National Committee on Business

Competitiveness Council. YBhg Datuk Zainun also sits on

various Committees/ Authorities at National level, including

being a member of the National Committee on Business

Competitiveness, a member of Malaysia Incorporated and

the National Project for Majlis Penyelarasan Perindustrian

(ICC). Other Malaysian public companies in which she is a

director are Malayan Banking Berhad and Chairman of

Dunham-Bush (Malaysia) Berhad. YBhg Datuk Zainun is a

member of, and chairs both the Remuneration Committee

and Nomination Committee of the Board. There was no

board meeting held in the year ended 31 December 2005

since her appointment.


directors’ profile (cont’d.)

Dato’ Abdul Rahim Bin Abu Bakar

YBhg Dato’ Rahim, 60, a Malaysian, is an Independent Non-

Executive Director of Scomi Engineering Bhd and was

appointed to the Board on 15 December 2005. YBhg Dato’

Rahim graduated from the Brighton College of Technology,

United Kingdom with B.Sc (Hon) Electrical Engineering in

1969. YBhg Dato’ Rahim is a member of the Institute of

Engineers Malaysia (MIEM) and the Institute of Electrical

Engineers, United Kingdom (MIEE). He is associated with

several professional bodies namely Professional Engineer,

Malaysia (P.Eng) and Chartered Engineer UK (C.Eng). He

also holds the Electrical Engineer Certificate of Competency

Grade 1. YBhg Dato’ Rahim began his career in 1969 with

the then National Electricity Board. He was attached to the

organisation for 10 years in various technical and

engineering positions before he moved on to the private

sector. From 1979 to 1983, he served with Pernas Charter

Management Sdn Bhd, a management company for the tin

mining industry.

Then, from late 1983 to 1991, he was attached to Malaysia

Mining Corporation Berhad (MMC) in various senior positions.

Later from 1991 to 1995, he moved on to MMC Engineering

Services Sdn Bhd and subsequently to MMC Engineering

Group Berhad as the Managing Director. In May 1995, he

joined Petronas to assume the position of Managing Director

of Petronas Gas Berhad (PGB) and subsequently moved on

to Petronas as its Vice President, in charge of the

Petrochemical Business in 1999. He retired from Petronas on

31 August 2002. Other Malaysian public companies in which

he is a director are TIME dotcom Berhad and Bank

Pembangunan Berhad. YBhg Dato’ Rahim is a member of

Nomination Committee and Remuneration Committee, and

chairs the Risk Management Committee of the Board. There

was no board meeting held in the year ended 31

December 2005 since his appointment.


Edlin Bin Ghazaly

Encik Edlin, 41, a Malaysian, is an Independent Non-


appointed to the Board on 20 December 2004. Encik Edlin

read law at the International Is lamic University (I IU),

graduating in 1989, and was admitted to the Malaysian Bar

in 1990. Over the past 16 years, he has established a

notable career in the legal profession and set up his own

practise in 1994. He is a member, and chairs the Options

Committee of the Board. He is also a member of the Audit

Committee and Risk Management Committee of the Board.

He attended all of the 9 Board Meetings held in the year

ended 31 December 2005.

Gregory Jerome Gerald Fernandes

Mr Fernandes, 51, a Malaysian, is an Independent Non-

Executive Director of Scomi Engineering Bhd and

was appointed to the Board on 20 December 2004.

Mr Fernandes is a member of the Institute of Chartered

Accountants in England and Wales and a member of the

Malaysian Institute of Accountants. He has 24 years of work

experience with one of the largest international accounting

firms and served in both the London and Kuala Lumpur

offices. Mr Fernandes is the Chairman of the Audit

Committee and a member of the Options Committee of the

Board. He attended all of the 9 Board Meetings held in the

year ended 31 December 2005.


directors’ profile (cont’d.)

Fad’l bin Mohamed

Encik Fad’l, 39, a Malaysian, is an Independent Non-


appointed to the Board on 15 December 2005. En Fad’l

holds an Honours Degree in Law from University of London,

and a Certified Diploma in Accounting and Finance

(Association of Chartered Certified Accountants). He started

his career as a lawyer in Messrs. Rashid & Lee in 1991. He

then joined the Securities Commission in 1993 to serve in the

Take-overs and Mergers Department and subsequently in

the Product Development Department. Between 1996 to

1999, he was attached to the Kuala Lumpur offices of

Dresdner Kleinwort Benson, a global investment bank. From

2000 to 2003, he was the Joint-Chief Operating Officer of

Kuala Lumpur Industries Holdings Berhad and was involved in

its debt and corporate restructuring exercise. He then set up

Maestro Capital Sdn Bhd, a licenced Investment Adviser and

is currently providing advisory services in the areas of

mergers and acquisitions and capital raising.

He is also an independent investment committee member

of CIMB-Principal Asset Management Berhad and also

serves as a director of Realmild (M) Sdn Bhd. Encik Fad’l is

a member of the Audit Committee and Risk Management

Committee of the Board. There was no board meeting

held in the year ended 31 December 2005 since his

appointment.

Shah Hakim Bin Zain

Encik Shah Hakim, 41, a Malaysian, is the Non-Independent

Executive Director and Chief Executive Officer of Scomi

Engineering Bhd and was appointed to the Board on 15

December 2005. Encik Shah Hakim started his career as an

auditor with Ernst & Young and was subsequently promoted

as Consulting Manager, responsible for servicing large

corporations such as Renong Berhad (now known as UEM

Land Sdn Bhd). He went on to be appointed as Executive

Director of a regional packaging manufacturer in 1992, with

direct operational responsibility. He currently sits on the

Board of Sapura Industrial Berhad, Scomi Group Bhd and

Scomi Marine Bhd. (formerly known as Habib Corporation

Berhad). There was no board meeting held in the year

ended 31 December 2005 since his appointment.

Note: None of the Directors have any family relationship with any other Director and/or major shareholder of Scomi Engineering Bhd.

With the exception of the disclosure in page 37 none of the Directors are involved in any conflict of interest, or any personal interest inany business arrangement, involving Scomi Engineering Bhd.

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


management team

1st row from left to right:

• Hilmy Zaini Zainal Senior Vice President • Raymond Leong General Manager – Fleet Management

• Mansor Tahir Head – Rail Business • Wan Zakaria Wan Taib General Manager – Business Development

• Don Wong Kok Wong Head – Fleet Management

2nd row from left to right:

• Michael Khoo General Manager - Finance • Rohaida Ali Badaruddin Head – Group Strategic Communications &

CEO’s Office • Tony Woods Head – Machine Shops • Jessie Chan Senior Manager – Investor Relations

• Wan Marzimin Wan Muhammad Company Secretary/VP – Legal & Secretarial


The Board of Scomi Engineering Bhd (“the Board”) is

supportive of the adoption of the principles and best

practices of the Malaysian Code on Corporate Governance

(“Code”) for Scomi Engineering Bhd (“the Company”). It

recognises that the adoption of good governance is critical

for the protection and enhancement of stakeholders’ value

and the overall performance of the Company.

A major corporate restructuring exercise was undertaken

during the financial year ended 31st December 2005,

resulting in a significant change in the business of the

Company as well as appointment of a substantially new

Board of Directors.

The following statement details the Board’s commitment and

sets out the practices that the Company has taken with

respect to each of the key principles and the extent of its

compliance with the best practices of the Code.

■ DIRECTORS

The Board and Board Balance l The principal role

of the Board is to protect and enhance shareholder value

through strategic supervision of the Company and its wholly

owned subsidiaries. In view of that, the Board sets clear

goals relating to shareholder value and its growth. It

provides direction and exercises appropriate control to

ensure that the Company is managed in a manner that

fulfils shareholder aspirations and societal expectation.

The Company has adopted a number of processes to

ensure the effectiveness of the Board in discharging its

duties and responsibilities. The Board is of the opinion that its

current composition and size constitutes an effective Board

to the Company. As at the date of this Annual Report, the

Board is comprised of six (6) Directors, of which five (5) are

Independent Non-Executive, with diverse backgrounds, skills

and experiences in the areas of business, economics, legal,

finance, general management and strategy that is vital to

the successful direction of the Company.

GOOD CORPORATE GOVERNANCE PROMOTESTRANSPARENCY, ACCOUNTABILITY, INTEGRITY ANDOVERALL CORPORATE PERFORMANCE

CorporateGovernance

Statement


The profiles of the members of the Board are set out on pages 21 to 24 of this Annual Report.

There is a clear division of roles and responsibilities between the Chairman of the Board and the Executive Director/Chief

Executive Officer (“CEO”). The Chairman is responsible for ensuring the Board’s effectiveness whilst the CEO is responsible for

operational and business units, organisational effectiveness and implementation of directives, strategies and decisions.

The Board and its Committees l The Board has delegated specific responsibilities to five (5) committees of the board

(Audit, Nomination, Remuneration, Options and Risk Management Committee). Composition of the Board and its committees are:

CHAIRMAN

Datuk Zainun Aishah binti Ahmad C – 1C 1C – –Independent Non-Executive Director(appointed on 15th December 2005)

Dato’ Abdul Rahman bin Mohammed C – – 2M – –Non-Independent Non-Executive Director(resigned on 15th December 2005)

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Gregory Jerome Gerald Fernades M C 2M 2C 1M –

Encik Edlin bin Ghazaly M M 2C 2M 1C 1M

Dato’ Abdul Rahim bin Abu Bakar M – 1M 1M – 1C(appointed on 15th December 2005)

Encik Fad’l bin Mohamed M M – – – 1M(appointed on 15th December 2005)

NON-INDEPENDENT EXECUTIVE DIRECTORS

Encik Shah Hakim bin Zain M – 1M 1M 1M –(appointed on 15th December 2005)

Mr. Ho Yew Hong M M – – – –(resigned on 15th December 2005)

Mr. James Khong Poh Wah M – – – – –(resigned on 15th December 2005)

C-Chairman M-Member

1 The Nomination, Remuneration, Options and Risk Management Committee comprising their respective members were appointed on 25thJanuary 2006

2 The Nomination and Remuneration Committee members for the financial year ended 2005 whom subsequently resigned from the committees.No Nomination Committee meeting was held for financial year ended 2005

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Board Meetings and Supply of Information l During the financial year ended 31st December 2005, nine (9) Board

Meetings were held. The attendance record of the Directors are:

Datuk Zainun Aishah binti Ahmad - - - - - -(appointed on 15th December 2005)

Dato’ Abdul Rahman bin Mohammed 8/9 - - 1/1 - -(resigned on 15th December 2005)

Mr. Gregory Jerome Gerald Fernades 9/9 6/6 - 1/1 - -

Encik Edlin bin Ghazaly 9/9 6/6 - 1/1 - -

Dato’ Abdul Rahim bin Abu Bakar - - - - - -(appointed on 15th December 2005)

Encik Fad’l bin Mohamed - - - - - -(appointed on 15th December 2005)

Encik Shah Hakim bin Zain - - - - - -(appointed on 15th December 2005)

Mr. Ho Yew Hong 9/9 6/6 - - - -(resigned on 15th December 2005)

Mr. James Khong Poh Wah 8/9 - - - - -(resigned on 15th December 2005)

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The Board is provided with timely information which allows

them to discharge their responsibilities effectively and

efficiently. Prior to each Board or Committee meeting, each

Director is supplied with an agenda together with a set of

relevant documents and papers, in sufficient time, to enable

the Directors to review the matters to be deliberated and

discussed during the meeting.

Appointment of Directors l The Nomination

Committee is responsible for the appointment of new

Directors to the Board. The proposed appointment of new

Directors and the proposed re-election of existing Directors

are reviewed and assessed by the Nomination Committee.

The Nomination Committee submits its recommendation on

the proposed appointment or re-election of Directors to the

Board for approval.

corporate governance statement (cont’d.)


The Nomination Committee ensures an effective process for

the selection of new Directors and the assessment of the

Board and individual Directors towards ensuring the optimum

mix of skills, experience and responsibilities being present in

the Board.

During the financial year under review, there were four (4)

new appointments to f i l l the vacancies created by

the resignation of Dato’ Abdul Rahman bin Mohammed,

Mr. Ho Yew Hong and Mr. James Khong Poh Wah. The

following Directors were appointed on 15th December 2005:

• Datuk Zainun Aishah binti Ahmad

• Dato’ Abdul Rahim bin Abu Bakar

• Encik Fad’l bin Mohamed

• Encik Shah Hakim bin Zain

Re-election of Directors l The current Nomination

Committee comprises a majority of Independent Non-

Executive Directors as highlighted in the table on page 27 of

this Annual Report. The Nomination Committee meets as

and when required, and at least once during the financial

year as stipulated in their terms of reference.

In accordance with the Articles of Association, one-third of

the Directors shall retire from office and are eligible for re-

election on a rotation basis each year at the Annual

General Meeting (“AGM”). In addition, all Directors who

were appointed by the Board are subject to re-election by

shareholders at the first opportunity after their appointment.

All Directors are required to retire from office at least once

in three (3) years but shall be eligible for re-election.

Committees of the Board l The Board delegates

certain responsibilities to Committees, namely the Audit,

Nomination, Remuneration, Options and Risk Management

Committees. All committees are guided by their respective

terms of references which specifically outl ine their

objectives, duties and responsibilities.

• Audit Committee

The Audit Committee was established with the

primary objective of assisting the Board to review the

adequacy and integrity of the Company’s internal

control and management information systems,

including systems for compliance with applicable laws,

regulations, rules, directives and guidelines.

The current Audit Committee consists of three (3)

Independent Non-Executive Directors. There were six (6)

Audit Committee meetings held during the year

under review which was attended by all members as

set out on page 28. The terms of reference for the

Audit Committee are highlighted in the Audit

Committee Report as set out on pages 34 to 36 of this

Annual Report.

• Options Committee

The Options Committee was established in January

2006 with authority delegated by the Board to

administer the Company’s Employee Share Options

Scheme (“ESOS”) in accordance with the Bye-Laws.

The current Options Committee consists of a majority

Independent Non-Executive Directors as set out on

page 27. The Options Committee shall meet as and

when required, and at least once during the financial

year as stipulated in their terms of reference.

• Risk Management Committee

The Risk Management Committee was established in

January 2006 with the primary objective of ensuring risk

management practices are consistently adopted within

the Company and is within the parameters established

by the Board. The Committee is additionally entrusted

with ensuring compliance with regulatory requirements.

The current Risk Management Committee consists of

three (3) Independent Non-Executive Directors as set

out on page 27. The Risk Management Committee shall

meet as and when required, and at least once every

half year as stipulated in their terms of reference.


■ DIRECTORS’ REMUNERATION

The Remuneration Committee is responsible for carrying out a review of the overall remuneration policy of the Directors,

recommendations are submitted to the Board for approval.

The existing Remuneration Committee comprises a majority of Independent Non-Executive Directors. The Remuneration

Committee meets as and when required, and at least once every financial year. There was one (1) Remuneration

Committee meeting held during the year under review which was attended by all members as set out on page 28 of this

Annual Report.

The aggregate of remuneration paid to the Directors of the Company who served during the financial year, and the bands

are:

Executive Non-Executive Total

Directors Directors

(RM’000) (RM’000) (RM’000)

Salaries 1153,000 - 153,000

Fees - 100,000 100,000

Allowances - - -

Bonuses - - -

Estimated value of benefit-in-kind - - -

Total 153,000 100,000 253,000

Note: The remuneration relates to services rendered during the financial year ended 2005

The aggregate remuneration above is broadly categorised into the following bands:

Executive Non-Executive Total

Directors Directors

Up to RM50,000 - 2 2

RM50,001 to RM100,000 - - -

RM100,001 to RM200,000 1 - 1

RM400,001 to RM600,000 - - -

1 This amount was paid to the previous Executive Director

corporate governance statement (cont’d.)


■ COMMUNICATION WITHSHAREHOLDERS AND INVESTORS

The Board is committed to ensuring high quality, relevant

information are made available to the shareholders and

investors in a timely manner to keep them abreast of all

material business matters affecting the Company.

Moving forward the Directors recognise the importance of an

effective and efficient mode of communication with

shareholders and investors. Regulatory Announcements, Annual

Reports, Quarterly Financial Results and other relevant

information are accessible via the internet and/or the Scomi

Group Bhd’s website at www.scomigroup.com.my. In addition,

any person wishing to receive email alerts or make any request

for documents is able to do so via submissions to the website.

The AGM serves as a platform for shareholders to have

direct access to the Board and shareholders are given the

opportunity to actively participate. At the AGM, the

Chairman of the Board addresses the shareholders and

provides a review of the Company’s operations for the

financial year and the Company’s prospects for the next

financial year.

■ ACCOUNTABILITY AND AUDIT

FINANCIAL REPORTING

The Board is committed in providing and presenting a

balanced and meaningful assessment of the Company’s

financial performance and prospects at the end of each

financial year, primarily through annual financial statements

and quarterly announcements of results to the shareholders.

The Board is assisted by the Audit Committee to oversee the

Company’s financial reporting processes and the quality of

its financial reporting.

The Statement of Responsibility by Directors in respect of the

preparation of the annual audited financial statements for

the financial year under review is set out on page 38 of this

Annual Report.

Internal Control l The Board acknowledges its overall

responsibility for maintaining a sound system of internal

control to safeguard shareholders’ investment and the

Company’s assets. This principle is further elaborated under

the Statement of Internal Control as set out on pages 32 to

33 of this Annual Report.

Relationship with Auditors l The Company maintains

a formal and transparent relationship with the external

auditors. The Audit Committee also meets with the external

auditors to further discuss the Company’s audit plans, audit

findings, financial statements as well as to seek their

professional advice on other related matters.

The roles of the Audit Committee in relation to both the

internal and external auditors are described in the Audit

Committee Report as set out on pages 34 to 36 of this

Annual Report.


■ INTRODUCTION

Paragraph 15.27 (b) of the Bursa Malaysia Securities Berhad

(‘BMSB’) Listing Requirements requires the Board of Directors

of a listed entity to include a statement on internal controls

in the Annual Report. The Malaysian Code on Corporate

Governance provides that listed entities should maintain a

sound system of internal controls to safeguard shareholders’

investments and the Group’s assets.

The Board acknowledges its responsibility for ensuring the

existence of sound and effective internal controls and risk

management practices. However it should be noted that

any system of internal controls can only provide

reasonable and not absolute assurance against material

misstatement or loss.

■ SIGNIFICANT EVENTS

During the year under review there was a corporate

restructuring exercise by the Group, resulting in a significant

change in the business of the Group and the appointment

of a substantially new Board of Directors. The Group,

formerly principally involved in the design, manufacture,

supply and installation of sound and communication

systems, ceased business operations in October 2004.

The injection of Scomi Group Bhd’s engineering assets and

the divestment of the Group’s previous business was

completed on 15th December 2005. The Group changed its

name from Bell & Order Berhad to Scomi Engineering Bhd

on 9th January 2006. The Group completed its restructuring

scheme on 25th January 2006 and settled all default

payments under the Practice Note 1/2001 of the Listing

Requirements on 8th March 2006 to regularise its financial

condition.

InternalControl

Statement


■ INTERNAL CONTROL SYSTEMS

During the year under review, the Audit Committee was

primarily involved with reviewing the various quarterly

financial reports. Due to the various initiatives being

undertaken to financially restructure the company and the

disposal of the previous business, no init iatives were

undertaken to review and enhance Bell & Order Berhad’s

internal control systems.

At the business of the engineering division of Scomi Group

Bhd, the following internal control mechanisms were in place;

• Clearly defined and distinguished authorities and

delegation of duties and responsibilities between the

Executive Director and senior management;

• Policies, Procedures and Work Instructions that were

adopted by management to regulate the Group’s

functional processes;

• Regular and comprehensive information provided

to Directors, covering key business, operations and

financial performance issues;

• Close monitoring of monthly results against budget and

forecasts;

• Compliance and Progress audits undertaken and

reported to the Audit Committee on a quarterly basis;

• Risk assessment updates were reported to the Risk

Management Committee of Scomi Group Bhd under a

risk management framework established by Scomi

Group Bhd, covering the Transportation Engineering

and Fleet Management Services;

• Licensor Audits;

• ISO accreditation for the Transportation Engineering

operations and certif ications by the American

Petroleum Institute for the Group’s Machine Shop

operations in respect of Quality Management Systems.

• Appointment of the Group QHSE Manager to provide

group-wide support in the areas of quality, health,

safety and environment; and

• Material Safety Data Sheet (MSDS) for risk assessment

and management mechanism to achieve “Zero”

Accident and an Incident-free environment.

Going Forward l The Board continues to take

appropriate steps to strengthen the transparency and

efficiency of its operations. It is the intention of the Board

and its management to undertake a comprehensive review

on the governance and internal control framework.

Emphasis will be given by the Board to enhance and refine

the risk management framework within the Group for

purposes of ensuring that a culture for ownership,

management and accountability for risk exist throughout

the group. This wil l be supported by an assessment

independent of operations on the adequacy and integrity

of the controls through internal audit engagements

undertaken by the Holding Company’s internal audit

function. Other init iatives deemed necessary wil l be

considered from time to time in order to ensure that the

control environment remains reasonably secure.


The Board of Directors (“the Board”) of Scomi Engineering

Bhd (“the Company” or “SEB”) is pleased to present the

Report on the Audit Committee for the financial year under

review.

■ TERMS OF REFERENCE

The Audit Committee was established on 15th April 1996 to

act as a Committee of the Board to fulfil its fiduciary

responsibilities relating primarily to business ethics, policies

and practices and financial management and controls.

■ COMPOSITION

The Composition of the Committee is as follows:-

• no less than three members;

• majority of Committee members are independent

directors as defined under the Bursa Malaysia Securities

Berhad (“BMSB”) Listing Requirements;

• at least one Committee member is a member of the

Malaysian Institute of Accountants.

The Chairman of the Committee is an independent director

as defined under the BMSB Listing Requirements.

■ AUTHORITY

The Committee is authorised by the Board to investigate any

matter within its terms of reference. It is authorised to seek

any information it requires from any employee and all

employees are directed to cooperate with any request

made by the Committee.

The Committee has unlimited access to all information and

documents relevant to its activities, to the internal and

external auditors and senior management of the Company

and its subsidiaries.

The Committee can obtain external legal or other

independent professional advice if it considers this

necessary.

The Secretary to the Audit Committee is the Company

Secretary. The Chairman reports to the Board.

■ FUNCTIONS

■ To review with the external auditors on:-

• the audit plan;

• their evaluation of the system of internal controls;

• their audit reports and ensuring that their

recommendations regarding major weaknesses of

the management are implemented;

Audit Committee

Report• Mr Gregory Jerome Gerald Fernandez – Chairman

• Encik Edlin Bin Ghazali

• Encik Fad’l Bin Mohamed

• Mr. Ho Yew Hong


• the annual financial statements, together with the

Chief Financial Officer and recommend acceptance

to the Board;

• audit fees;

■ To consider the need for internal audit, and, if required,

to review with the internal auditors:

• the Group’s internal control procedures, including

organisational and operational control;

• the internal auditor’s scope of work and functions;

• the results of internal audit procedures and relevant

reports;

• the Group’s accounting policies;

• any related party transactions that may arise within

the Company or Group;

• regular management information and ensuring that

audit recommendations regarding major weaknesses

of management are implemented;

■ To recommend to the Board the appointment of the

external auditors;

■ To monitor related party transactions entered into by

the Company and the Group and to ensure that the

Directors report such transactions annually to the

shareholders via the annual report;

■ To evaluate the Company’s exposure to fraud;

■ To take an active interest in ethical considerations

regarding the Company’s and Group’s policies and

practices;

■ To monitor the standard of corporate conduct in

areas such as arm’s-length dealings and likely conflicts

of interest;

■ To require reports from management, internal auditors

and external auditors on any significant proposed

regulatory accounting or reporting issues to assess the

potential impact upon the Company and the Group’s

financial reporting process;

■ To identify and direct any special projects or

investigations deemed necessary;

■ Any other functions as may be agreed to by the Audit

Committee and the Board of Directors.

■ QUORUM

There was full attendance at each of the meetings of the

Committee and a majority of the members present were

independent directors.


3. Reviewed the quarterly results of the Group and Company;

and

4. Reviewed the extent of the internal audit processes.

■ INTERNAL AUDIT FUNCTION

The Committee acknowledges the need for an effective

system of internal controls covering all aspects of activities

including the mapping and management of risk which the

Group maybe exposed to.

The Committee also recognises the need to have these

processes and controls audited internally to ensure the

adequacy and integrity of the Group‘s internal control

systems. In the absence of an internal audit function,

the Board monitored the effects of change on the

organisation’s risk exposures and related controls through

regular discussion with Management and reports on follow-

up actions.

The need for independence in the review and audit process

was recognised. The Group’s internal audit function is out

sourced to its holding company (Scomi Group Bhd).

■ MEMBERSHIP AND MEETINGS

The members of the Audit Committee during the said period

comprised of the following Board Members:

NAME AUDIT DESIGNATION

COMMITTEE

Mr Gregory Jerome Chairman Independent

Gerald Fernandes Non-Executive Director

Encik Edlin Member Independent

Bin Ghazaly Non-Executive Director

Encik Fad’l Member Independent

Bin Mohamed Non-Executive Director

(appointed on 25th January 2006)

Mr. Ho Yew Hong Member Independent

Non-Executive Director

(resigned on 15th December 2005)

During the financial year under review, the Audit Committee

convened six (6) meetings and all six (6) meetings had full

attendance by the Audit Committee members. Meetings

were held on 15th February 2005, 28th February 2005, 28th

April 2005, 31st May 2005, 29th August 2005 and 22nd

November 2005 respectively.

■ ACTIVITIES DURING THE YEAR

In line with the terms of reference of the Audit Committee,

the following activities were carried out by the Audit

Committee during the financial year under review in

accordance with its functions and duties:

1. Reviewed with the external auditor on their audit plan,

results of their audit and their audit report;

2. Reviewed the financial statements and compliance

issues in the preparation of the financial statements;

audit committee report (cont’d.)


■ SANCTIONS AND/OR PENALTIES

For the financial year under review, there were no sanctions

and/or penalties imposed on the company, its Directors or

Management.

■ MATERIAL CONTRACTSINVOLVING DIRECTORS’ ANDMAJOR SHAREHOLDERS’ INTEREST

There were no material contracts, including contracts

relating to loans (not being in the ordinary course of

business) of the company, involving Directors’ and major

shareholders’ interests, either still subsisting at the end of the

financial year or, if not then subsisting, entered into since

the end of the previous financial year.

■ DISCLOSURE OF RELATED PARTYTRANSACTIONS

In relation to Related Party Transactions of a revenue or

trading nature which are necessary for the Group’s day-to-

day operations and transacted in the ordinary course of

business with related parties, the Company will make an

immediate notification or announcement to Bursa Malaysia

where appropriate and required.

There were no significant Related Party Transactions for the

financial year under review.

AdditionalInformation

■ OTHER DISCLOSURES

(i) Director’s Conflict of Interest

Apart from disclosed below, the Directors do not have

any existing conflicts of interest or any interest in any

business arrangement involving Scomi Engineering Bhd

and its subsidiaries:

DIRECTOR NATURE OF EXISTING TRANSACTION

CONFLICT OF INTEREST (IF ANY)

Shah Hakim

bin Zain

(ii) Status of Utilisation of Private Placement Proceeds

Proceeds from the Rights Issue are to be utilised for

year 2006.

(iii) Variation in Results

There were no significant variations between the

audited results for the financial year and the unaudited

results previously announced.

En Shah Hakim is a

director and

substantial shareholder

of Scomi Group; and

his sister Mazlina binti

Zain is a person

connected and holds

substantial interest in

Lintas Flywell Travel &

Tours Sdn Bhd (“LFT”)

Provision by LFT

of airline

reservation and

ticket purchasing

services to Scomi

Engineering Bhd


The financial statements of the Company and the Group for the financial year ended 31st

December 2005 are set out on page 40 to 94 of this annual report.

It is the responsibility of the Directors to take reasonable steps to ensure that the

consolidated balance sheet gives a true and fair view of the state of affairs of the Group

at the end of the financial year to which it relates and the consolidated income statement

gives a true and fair view of the results of the Group for the financial year to which it relates

and to ensure that the financial statements are made out in accordance with applicable

approved accounting standards and the provisions of the Act.

The Directors have relied on the system of internal controls of the Group to provide them

with reasonable grounds to believe that the accounting and other records maintained by

the Group sufficiently explain the transactions and financial position of the Group and

enable a true and fair consolidated balance sheet and a true and fair consolidated

income statement for the Group and the documents required by the Act to be attached

thereto to be prepared for the financial year to which these financial statements relate.

The Directors have the responsibility of ensuring that the Group keeps proper accounting

and other records which accurately disclose the financial position of the Group and which

enable them to ensure that the financial statements comply with the Act.

The Directors are required by the Companies Act, 1965 (“the Act”) to lay before the Company

(“Scomi Engineering Bhd”) at its Annual General Meeting, financial statements (which include the

consolidated balance sheet and the consolidated income statement of Scomi Engineering Bhd and

its subsidiaries (“the Group”) for each financial year, made out in accordance with the applicable

approved accounting standards and the provisions of the Act.

Statement ofDirectors’ Responsibility


40 Directors’ Report 47 Income Statements 48 Balance Sheets

50 Consolidated Statement of Changes in Equity 51 Company Statement of Changes in Equity

52 Cash Flow Statements 54 Notes to the Financial Statements 93 Statement by Directors

93 Statutory Declaration 94 Report of the Auditors 95 Analysis of Shareholdings

98 List of Properties 99 Corporate Directory 100 Notice of Annual General Meeting

104 Statement Accompanying Notice of Twenty-Second Annual General Meeting • Form of Proxy

FinancialStatements


The Directors are pleased to submit their report to the members together with the audited financial statements of the Group

and Company for the financial year ended 31 December 2005.

PRINCIPAL ACTIVITIES

The Group was principally a service provider in the design, manufacture, supply and installation of sound and communication

systems during the financial year. The Company was dormant since it ceased operations in the previous financial year.

There were no changes in the principal activities of the Group and Company during the financial year except that the Group

ceased providing services in the design, manufacture, supply and installation of sound and communication systems following

the cessation of the business operations of its subsidiary in Singapore during the financial year. Following the completion of the

restructuring exercise undertaken by the Company on 15 December 2005, as described in Note 30 to the financial statements,

the Company became an investment holding company and the principal activities of the Group now comprise the provision

of machine shop services to tools and equipment used in the petroleum industry, fleet management services and transport

engineering business.

CHANGE OF NAME

The Company changed its name from Bell & Order Berhad to Scomi Engineering Bhd with effect from 9 January 2006 following

the completion of the restructuring exercise as mentioned in the preceding paragraph, which resulted in a change in the

majority shareholders of the Company.

FINANCIAL RESULTS

Group Company

RM’000 RM’000

Net profit for the financial year 16,701 8,417

DIVIDEND

No dividend has been paid, declared or proposed since the end of the Company’s previous financial year. The Directors do

not recommend any dividend for the financial year ended 31 December 2005.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the

financial statements.

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2005

directors’ report


ISSUE OF SHARES

During the financial year, the authorised share capital of the Company increased from RM100,000,000 comprising 100,000,000

ordinary shares of RM1.00 each to RM400,000,000 comprising 400,000,000 ordinary shares of RM1.00 each by the creation of an

additional 300,000,000 ordinary shares of RM1.00 each.

On 27 December 2005, the Company allotted and issued 192,567,567 new ordinary shares of RM1.00 each at an issue price of

RM1.48 per share as purchase consideration for the acquisitions of the entire equity interest in OMS Oilfield Holdings (Malaysia)

Sdn Bhd (formerly known as Oiltools Holdings (Malaysia) Sdn Bhd), OMS Oilfield Services Pte Ltd (formerly known as Oiltools Pte

Ltd), Scomi Transportation Solutions Sdn Bhd and Scomi Sdn Bhd during the financial year.

The new ordinary shares issued during the financial year ranked pari passu in all respects with the existing ordinary shares of the

Company.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

I. On 28 February 2005, the Company announced that it was an affected listed issuer under Practice Note (“PN”) 17/2005

as the Company had a deficit in its consolidated shareholders’ equity based on its consolidated results for financial year

ended 31 December 2004.

II. In an effort to turnaround the Company as well as to obtain new and viable businesses for the Company, the shareholders

of the Company have, at an Extraordinary General Meeting held on 10 November 2005, approved the following corporate

exercise to be undertaken by the Company:

(a) Renounceable rights issue of 57,552,000 shares of RM1.00 each in the Company at an indicative issue price of RM1.20

per share on the basis of three (3) rights shares for every one (1) existing ordinary share held on an entitlement date

to be determined later (known hereafter as “the Rights Issue”);

(b) Acquisitions by the Company of the entire equity interest in OMS Oilfield Holdings (Malaysia) Sdn Bhd (formerly known

as Oiltools Holdings (Malaysia) Sdn Bhd), OMS Oilfield Services Pte Ltd (formerly known as Oiltools Pte Ltd), Scomi

Transportation Solutions Sdn Bhd and Scomi Sdn Bhd for a total purchase consideration of RM285,000,000 to be

satisfied by the issuance of 192,567,567 new ordinary shares of RM1.00 each in the Company at an issue price of

RM1.48 per share (known hereafter as “the Acquisition”);

(c) Exemption to the vendors and parties acting in concert with them from having to undertake a mandatory general

offer for the remaining shares in the Company not already owned by them pursuant to the Malaysian Code on Take-

Overs and Mergers;

(d) Transfer of the Company’s undertaking and property (as defined in Section 178(5) of the Companies Act, 1965 (“the

Act”)) to Atlas Jade Sdn Bhd (“Atlas Jade”), a special purpose vehicle incorporated pursuant to the Composite

Scheme of Arrangement, as described in paragraph (IV) below (known hereafter as “the Transfer of Undertaking and

Property”);


SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT’D.)

(e) Establishment of an Employee Share Option Scheme of up to 15% of the enlarged issued and paid-up share capital

of the Company pursuant to the Rights Issue and Acquisition for the eligible employees and non-executive Directors

of the Company;

(f) Increase in the authorised share capital of the Company from RM100,000,000 comprising 100,000,000 ordinary shares

of RM1.00 each to RM400,000,000 comprising 400,000,000 ordinary shares of RM1.00 each in the Company; and

(g) Amendments to the Articles of Association of the Company (collectively referred to as the “Restructuring Scheme”).

III. On 15 December 2005, the Company completed the Acquisition which resulted in a reverse take-over of the Company

by the major shareholder and a significant change in the business direction of the Company (known hereafter as the

“Date of Disposal”).

IV. As part of the conditions precedent to the sale and purchase agreements entered into between the Company and the

respective vendors, the Company is obliged to carry out a scheme of arrangement pursuant to Section 176 of the Act

(known hereafter as “the Composite Scheme of Arrangement”) on or prior to the completion of the sale and purchase

agreements.

As part of the Composite Scheme of Arrangement and pursuant to Section 178 of the Act, all undertakings, properties and

assets (as defined in Section 178(5) of the Act) of the Company will be transferred to and vested in Atlas Jade. There is

no consideration to be received or paid by the Company for the Transfer of Undertaking and Property. All liabilities and

obligations of the Company including all pending legal proceedings by or against the Company (save and except for

those which are to be settled under the Composite Scheme of Arrangement) are to be assumed and continued by or

against Atlas Jade respectively from the date of the Court’s order. The cut-off date for all debts was fixed on 31 December

2004, such that all known and admitted debts outstanding as at this date was included in the Composite Scheme of

Arrangement. Any subsequent charges, interests and penalty charges in relation to the known and admitted debts arising

after 31 December 2004 that had not been included in the Composite Scheme of Arrangement shall be completely

waived.

On 1 September 2005, the Court had approved the Composite Scheme of Arrangement between the Company and the

Scheme Creditors as stated in the Explanatory Statement dated 24 May 2005 pursuant to Section 176(3) of the Act. Upon

the completion of the Transfer of Undertaking and Property pursuant to the Composite Scheme of Arrangement, the

Company waived debts amounting to RM14,194,000 which have been recognised in the income statement for the

financial year ended 2005. The Transfer of Undertaking and Property also resulted in the Company recognising gain on

disposals of subsidiaries and loss on disposals of assets amounting to RM11,186,000 and RM2,744,000 respectively in the

income statement for the financial year ended 31 December 2005.

directors’ report (cont’d.)


DIRECTORS

The Directors who have held office during the period since the date of the last report are as follows:


Edlin bin Ghazaly

Datuk Zainun Aishah binti Ahmad (appointed on 15 December 2005)

Shah Hakim @ Shahzanim bin Zain (appointed on 15 December 2005)

Dato’ Abdul Rahim bin Abu Bakar (appointed on 15 December 2005)

Fad’l bin Mohamed (appointed on 15 December 2005)

Ho Yew Hong (resigned on 15 December 2005)

Dato’ Abdul Rahman bin Mohammed Hashim (resigned on 15 December 2005)

James Khong Poh Wah (resigned on 15 December 2005)

DIRECTORS’ INTERESTS IN SHARES

According to the register of Directors’ shareholdings, particulars of interests of Directors who held office at the end of the

financial year in shares in the Company, and shares and options over shares in its related corporations during the financial year

are as follows:

Number of ordinary shares of RM0.10 each

At

date of At

appointment Acquired Disposed 31.12.2005

’000 ’000 ’000 ’000

Ultimate holding company

- Scomi Group Bhd

Direct interest:

Shah Hakim @ Shahzanim bin Zain 1,100 310 (450) 960#

@ Indirect interest:

Shah Hakim @ Shahzanim bin Zain 364,937 – (19,600) 345,337

@ Deemed interested by virtue of Section 6A(4) of the Act through his legal and/or beneficial shareholding in Kaspadu Sdn

Bhd.

# This figure does not include the 1,729,000 share options which were exercised on 28 December 2005.


DIRECTORS’ INTERESTS IN SHARES (CONT’D.)

*Number of options over ordinary shares of RM0.10 each

Exercise Atprice date of At

RM/share appointment Granted Exercised 31.12.2005’000 ’000 ’000 ’000

Ultimate holding company- Scomi Group BhdShah Hakim @ Shahzanim bin Zain 0.17 3,086 – (1,729)** 1,357

1.12 6,000 – – 6,000

* The options held over ordinary shares in Scomi Group Bhd were granted pursuant to the Scomi Group Bhd’s Employee

Share Option Scheme, which was implemented on 28 April 2003.

** The options were exercised on 28 December 2005 and shares were allotted on 6 January 2006.

Other than disclosed above, according to the register of Directors’ shareholdings, none of the other Directors in office at the

end of the financial year held any interest in shares in the Company, or shares in and debentures of its related corporations

during the financial year.

DIRECTORS’ BENEFITS

During and at the end of the financial year ended 31 December 2005, no arrangements subsisted to which the Company is a

party, being arrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of

the acquisition of shares in, or debentures of, the Company or any other body corporate except for the options over shares

granted by the ultimate holding company, Scomi Group Bhd, to eligible employees including certain Directors of the Company

pursuant to the Scomi Group Bhd’s Employee Share Option Scheme.

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than Directors’

remuneration as disclosed in Note 9 to the financial statements) by reason of a contract made by the Company or a related

corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial

interest except that certain Directors received remuneration as directors of its ultimate holding company.

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

Before the income statements and balance sheets were made out, the Directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance

for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance

had been made for doubtful debts; and

(b) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business their

values as shown in the accounting records of the Group and Company had been written down to an amount which they

might be expected so to realise.



STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (CONT’D.)

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

(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the

financial statements of the Group and Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and Company

misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and

Company misleading or inappropriate.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months

after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group or Company

to meet their obligations when they fall due.

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

(a) any charge on the assets of the Group or Company which has arisen since the end of the financial year which secures

the liability of any other person; or

(b) any contingent liability of the Group or Company which has arisen since the end of the financial year.

At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the

financial statements which would render any amount stated in the financial statements misleading.

In the opinion of the Directors:

(a) the results of the operations of the Group and Company during the financial year were not substantially affected by any

item, transaction or event of a material and unusual nature except for the waiver of debts pursuant to the Composite

Scheme of Arrangement as disclosed in the income statements; and

(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction

or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or

Company for the financial year in which this report is made.


ULTIMATE HOLDING COMPANY

The Directors regard Scomi Group Bhd, a company incorporated in Malaysia, as the ultimate holding company.

AUDITORS

The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with their resolution dated 12 April 2006.

SHAH HAKIM @ SHAHZANIM BIN ZAIN

Director

GREGORY JEROME GERALD FERNANDES

Director




income statements

Group CompanyNote 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Revenue 5 918 5,031 – 913

Cost of sales 6 (191) (8,506) – (3,610)

Gross profit/(loss) 727 (3,475) – (2,697)

Other operating income

- gain on disposals of subsidiaries pursuant to the

Composite Scheme of Arrangement 4(b) 11,186 – – –

- waiver of debts pursuant to the

Composite Scheme of Arrangement 30 14,194 – 14,194 –

- other income 102 1,062 100 590

25,482 1,062 14,294 590

Administrative expenses (3,136) (4,382) (1,962) (2,357)

Selling and distribution expenses – (13) – (13)

Other operating expenses

- loss on disposals of assets pursuant to the

Composite Scheme of Arrangement 30 (2,744) – (2,744) –

- development costs written off – (5,507) – (5,507)

- inventories written off (265) (10,498) – (4,082)

- impairment loss on investments in subsidiaries 14 – – – (3,200)

- allowance for doubtful debts – (14,588) – (23,625)

- bad debts written off (946) (18,369) (129) (3,759)

- compensation for claim on variation order – (1,287) – (1,287)

- other expenses (974) (1,385) – (1,257)

(4,929) (51,634) (2,873) (42,717)

Profit/(loss) from operations 7 18,144 (58,442) 9,459 (47,194)

Finance costs 10 (1,443) (1,662) (1,042) (1,076)

Profit/(loss) from ordinary activities before tax 16,701 (60,104) 8,417 (48,270)

Tax credit/(expense)

- the Company – 570 – 570

- subsidiaries – (314) – –

11 – 256 - 570

Net profit/(loss) for the financial year 16,701 (59,848) 8,417 (47,700)

Earnings/(loss) per share (sen)

- basic 12 76.53 (311.97)

- diluted 12 76.53 (311.97)


balance sheets

AS AT 31 DECEMBER 2005

Group Company

Note 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Non-current assets

Property, plant and equipment 13 47,836 3,923 – 2,677

Investments in subsidiaries 14 – – 298,538 –

Other investments 15 542 – – –

Goodwill on consolidation 16 207,487 – – –

255,865 3,923 298,538 2,677

Current assets

Inventories 17 42,995 280 – 15

Receivables, deposits and prepayments 18 55,053 2,443 141 1,428

Amounts due from related corporations 19 124,051 – – 13

Tax recoverable 2,205 90 – 90

Deposits with licensed banks 20 991 454 – –

Cash and bank balances 20 19,519 137 10 47

244,814 3,404 151 1,593

Less: Current liabilities

Payables 21 64,434 11,445 18,525 8,704

Finance lease and hire purchase liabilities 22 3,489 19 – –

Amount due to ultimate holding company 23 898 – 898 –

Amounts due to subsidiaries 14 – – 13,547 –

Amounts due to related corporations 19 96,775 – – –

Amounts due to Directors 24 75 49 75 48

Borrowings (interest bearing) 25

- bank overdrafts 4,058 1,228 – 98

- others 27,206 19,894 – 14,752

Current tax liabilities 6,583 – – –

203,518 32,635 33,045 23,602

Net current assets/(liabilities) 41,296 (29,231) (32,894) (22,009)


Group Company

Note 2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Less: Non-current liabilities

Finance lease and hire purchase liabilities 22 10,862 37 – –

Borrowings (interest bearing) 25 19,539 5,719 – 5,719

Deferred tax liabilities 26 1,116 – – –

31,517 5,756 – 5,719

265,644 (31,064) 265,644 (25,051)

Capital and reserves

Share capital 27 211,751 19,184 211,751 19,184

Share premium 68,516 65 68,516 65

Merger relief reserve 21,260 – 21,260 –

Currency exchange reserve – 2,271 – -

Accumulated loss (35,883) (52,584) (35,883) (44,300)

Surplus/(deficit) in shareholders’ equity 265,644 (31,064) 265,644 (25,051)



consolidated statement of changes in equity

Non-distributable

Retained

Merger Currency earnings/

Share Share relief exchange (accumulated

Note capital premium reserve reserve loss) Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2004 19,184 65 – 1,902 7,264 28,415

Currency translation differences

- arising in the financial year – – – 369 – 369

Net loss for the financial year – – – – (59,848) (59,848)

At 31 December 2004 19,184 65 – 2,271 (52,584) (31,064)

At 1 January 2005 19,184 65 – 2,271 (52,584) (31,064)

Issue of shares

- acquisitions of subsidiaries 27 192,567 71,173 21,260 – – 285,000

- share issue cost – (2,722) – – – (2,722)

Currency translation differences

of a subsidiary disposed of – – – (2,271) – (2,271)

Net profit for the financial year – – – – 16,701 16,701

At 31 December 2005 211,751 68,516 21,260 – (35,883) 265,644



company statement of changes in equity

Non-distributable

Retained

Merger earnings/

Share Share relief (accumulated

Note capital premium reserve loss) Total

RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2004 19,184 65 – 3,400 22,649

Net loss for the financial year – – – (47,700) (47,700)

At 31 December 2004 19,184 65 – (44,300) (25,051)

At 1 January 2005 19,184 65 – (44,300) (25,051)

Issue of shares

- acquisitions of subsidiaries 27 192,567 71,173 21,260 – 285,000

- share issues costs – (2,722) – – (2,722)

Net profit for the financial year – – – 8,417 8,417

At 31 December 2005 211,751 68,516 21,260 (35,883) 265,644



cash flow statements

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Cash flow from/(used in) operating activities

Net profit/(loss) for the financial year 16,701 (59,848) 8,417 (47,700)

Adjustments for:

Unrealised exchange gains – (228) – –

Depreciation of property, plant and equipment 124 440 37 322

Gain on disposals of property, plant and equipment (16) (247) (16) (15)

Property, plant and equipment written off 160 882 – 882

Allowance for diminution in value of

investment in unquoted shares – 30 – 30

Impairment loss on investment in subsidiaries – – – 3,200

Inventories written off 265 10,498 – 4,082

Development cost written off – 5,507 – 5,507

Allowance for doubtful debts – 14,588 – 23,625

Allowance for doubtful debts written back – (546) – (546)

Bad debts written off 946 18,369 129 3,759

Compensation for claim on variation order – 1,287 – 1,287

Interest income – (10) – –

Gain on disposals of subsidiaries pursuant

to the Composite Scheme of Arrangement (11,186) – – –

Waiver of debts pursuant to the Composite

Scheme of Arrangement (14,194) – (14,194) –

Interest expense 1,443 1,662 1,042 1,076

Loss on disposals of assets pursuant to the

Composite Scheme of Arrangement 2,744 – 2,744 –

Tax credit – (256) – (570)

Operating loss before working capital changes (3,013) (7,872) (1,841) (5,061)

Movements in working capital

Inventories 280 (509) 15 (246)

Receivables, deposits and prepayments 2,173 4,114 1,158 2,359

Payables 13,259 3,103 13,835 1,849

Intercompany balances 898 – 14,458 –


Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Cash flow from/(used in) operations 13,597 (1,164) (45) (1,099)

Tax refund 90 75 90 389

Interest received – 10 – –

Net cash flow from/(used in) operating activities 13,687 (1,079) 45 (710)

Cash flow from/(used in) investing activities

Acquisition of property, plant and equipment 20(b) – (32) – (26)

Proceeds from disposal of property, plant

and equipment 16 500 16 219

Acquisitions of subsidiaries 4(a) 2,904 – – –

Disposals of subsidiaries 4(b) 832 – – –

Net cash flow from investing activities 3,752 468 16 193

Cash flow from/(used in) financing activities

Proceeds from borrowings – 998 – 999

Repayments of borrowings – (1,283) – (906)

Hire purchase principal repayments – (278) – (243)

Short-term deposits (pledged)/released as

securities for bank facilities (991) 433 – –

Net cash flow used in financing activities (991) (130) – (150)

Net increase/(decrease) in cash and cash

equivalents during the financial year 16,448 (741) 61 (667)

Currency translation differences – (3) – –

Cash and cash equivalents at beginning

of financial year (987) (242) (51) 616

Cash and cash equivalents at end of

financial year 20 15,461 (986) 10 (51)


1 GENERAL INFORMATION

The Group was principally a service provider in the design, manufacture, supply and installation of sound and

communication systems during the financial year. The Company was dormant since it ceased operations in the previous

financial year.

There were no changes in the principal activities of the Group and Company during the financial year except that the

Group ceased providing services in the design, manufacture, supply and installation of sound and communication systems

following the cessation of the business operations of its subsidiary in Singapore during the financial year. Following the

completion of the restructuring exercise undertaken by the Company on 15 December 2005, as described in Note 30 to

the financial statements, the Company became an investment holding company and the principal activities of the Group

now comprise the provision of machine shop services to tools and equipment used in the petroleum industry, fleet

management services and transport engineering business.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Second

Board of Bursa Malaysia Securities Berhad.

The Directors regard Scomi Group Bhd, a company incorporated in Malaysia, as the ultimate holding company.

As from 1 April 2006, the registered office of the Company has been changed from Level 17, Menara Milenium, Jalan

Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur to Suite 5.03, 5th Floor, Wisma Chase Perdana, Off Jalan

Semantan, 50490 Kuala Lumpur.

The address of the principal place of business of the Company is as follows:

Suite 3A.01, Level 3A

Wisma Chase Perdana

Off Jalan Semantan

50490 Kuala Lumpur

The number of employees in the Group at the end of the financial year was 229 (2004: 16). The Company has no

employees (2004: 3) at the end of the financial year.

2 SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise stated, the following accounting policies have been used consistently in dealing with items which are

considered material in relation to the financial statements.

(a) Basis of preparationThe financial statements Group and Company have been prepared under the historical cost convention except as

disclosed in this summary of significant accounting policies.


notes to the financial statements


2 SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)

(a) Basis of preparation (cont’d.)

The financial statements of the Group and Company comply with the provisions of the Companies Act, 1965 and

MASB approved accounting standards in Malaysia. The Group and Company adopted FRS 127 (revised 2005)

“Consolidated and Separate Financial Statements” in these financial statements which is only effective for accounting

periods beginning on or after 1 January 2006. The adoption of FRS 127 (revised 2005) has no material impact on the

net profit or shareholders’ equity of the Group and Company.

The net losses of Bell & Order Engineering Pte Ltd (“BOE”), a subsidiary in Singapore, for both current and prior years

were consolidated based on the unaudited management accounts of the subsidiary due to circumstances relating to

the management of this subsidiary. However, as the operations of this subsidiary have scaled down significantly, the

Directors confirm that these management accounts provided the financial information which fairly represent the financial

position and results of the subsidiary for consolidation purposes. The subsidiary was disposed of during the financial year

as part of the Restructuring Scheme and accordingly, there will not be any impact to the Group in future years.

The preparation of financial statements in conformity with the provisions of the Companies Act, 1965 and MASB

approved accounting standards in Malaysia requires the use of estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements,

and the reported amounts of revenues and expenses during the reported financial year. Although these estimates are

based on the Directors’ best knowledge of current events and actions, actual results may differ from those estimates.

(b) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and all of its subsidiaries made

up to the end of the financial year.

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of

accounting, subsidiaries are consolidated from the date on which control is transferred to the Group and are no

longer consolidated from the date that control ceases. The cost of an acquisition is the amount of cash paid and

the fair value at the date of acquisition of other purchase consideration given by the acquirer, together with directly

attributable expenses of the acquisition (other than costs of issuing shares and other capital instruments).

At the date of acquisition, the fair values of the subsidiaries’ net assets are determined and these values are reflected

in the consolidated financial statements. The difference between the acquisition cost and the Group’s share of the

fair values of the identifiable net assets of the subsidiary acquired at the date of acquisition is reflected as goodwill

on consolidation or negative goodwill. See accounting policy Note (e) on goodwill on consolidation.

Intra-group transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also

eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of

subsidiaries to ensure consistency of accounting policies with those of the Group.

The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’s share of

its net assets.



(c) Subsidiaries

Subsidiaries are all entities including special purpose entities over which the Group has the power to govern the

financial and operating policies generally accompanying a shareholder of more than one half of the voting rights.

The existence and effects of potential voting rights that are currently exercisable or convertible are considered when

assessing whether the Group controls another entity.

Investments in subsidiaries are shown at cost less impairment losses. Where an indication of impairment exists, the

carrying amount of the investment is assessed and written down immediately to its recoverable amount. See

accounting policy Note (g) on impairment of assets.

(d) Other investments

Investments in other non-current investments are shown at cost and an allowance for diminution in value is made

where, in the opinion of the Directors, there is a decline other than temporary in the value of such investments. Where

there has been a decline other than temporary in the value of an investment, such a decline is recognised as an

expense in the financial year in which the decline is identified.

(e) Goodwill on consolidation

Goodwill represents the excess of the cost of acquisition of subsidiaries over the Group’s share of the fair values of

their identifiable net assets at the date of acquisition.

At each balance sheet date, the Group assesses whether there is any indication of impairment. If such indications

exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down

is made if the carrying amount exceeds the recoverable amount. See accounting policy Note (g) on impairment of

assets.

(f) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Freehold land is not depreciated as it has an infinite life. Leasehold land is amortised in equal instalments over the

period of the respective leases that range from 7 to 999 years. Depreciation of other property, plant and equipment

is calculated on a straight line basis so as to write off the cost of each asset to its residual value over its estimated

useful life. The principal annual depreciation rates are:

Freehold buildings 2%

Leasehold buildings 2 – 33 1/3%

Furniture, fixtures and equipment 10 – 33 1/3%

Motor vehicles 15 – 20%

Plant and machinery 8 1/3 – 20%

Renovations 10%

Rental equipment 12 1/2%

notes to the financial statements (cont’d.)



(f) Property, plant and equipment (cont’d.)

At each balance sheet date, the Group assesses whether there is any indication of impairment. Where an indication

of impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverable

amount. See accounting policy Note (g) on impairment of assets.

Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in the

profit/(loss) from operations.

Repairs and maintenance are charged to the income statement during the financial year in which they are incurred.

(g) Impairment of assets

Property, plant and equipment, goodwill on consolidation and investments in subsidiaries are reviewed for impairment

losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable

amount. The recoverable amount is the higher of an asset’s net selling price and value in use. For the purposes of

assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows.

Impairment loss is charged to the income statement. Any subsequent increase in recoverable amount is recognised

in the income statement. The increased carrying amount of the asset does not exceed the carrying amount that

would have been determined (net of depreciation), had impairment loss not been recognised for the asset in prior

years.

(h) Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined on a weighted average or

“first-in, first out” basis. The cost of finished goods and work in progress comprises raw materials, direct labour, other

direct cost and an appropriate proportion of production overheads. Net realisable value is the estimated selling price

in the ordinary course of business, less the costs of completion and selling expenses.

(i) Trade receivables

Trade receivables are carried at invoiced amount less an allowance made for doubtful debts. Allowance for doubtful

debts is made for any debts considered to be doubtful in collection based on a review of outstanding amounts at

balance sheet date. Bad debts are written off in the financial year in which they are identified.

(j) Cash and cash equivalents

For purposes of the cash flow statements, cash and cash equivalents comprise cash in hand, bank balances, deposits

held at call with banks excluding deposits which are pledged for banking facilities, bank overdrafts and short-term,

highly liquid investments that are readily convertible to known amounts of cash and which are subject to an

insignificant risk of changes in value. Bank overdrafts are included within borrowings in current liabilities on the balance

sheet.



(k) Employment benefits

(i) Short-term employee benefits

Wages, salaries, bonuses, and non-monetary benefits are accrued in the period in which the associated services

are rendered by employees of the Group.

(ii) Post-employment benefits

Defined contribution plan

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate

entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not

hold sufficient assets to pay all employee benefits relating to employee service in the current and prior years.

Post-employment benefits include the Group’s fixed contributions into the nation’s defined contribution plan, the

Employees’ Provident Fund (“EPF”), every month. The Group’s contributions to EPF are charged to the income

statement in the financial year to which they relate. Once the contributions have been paid, the Group has no

further payment obligations.

(l) Assets acquired under finance leases and hire purchase arrangements

Leases of property, plant and equipment where the Group assumes substantially all the benefits and risks of ownership

are classified as finance leases.

Property, plant and equipment acquired under finance lease and hire purchase agreements are included in property,

plant and equipment. Finance leases and hire purchases are capitalised at inception at the lower of fair value of the

asset acquired under finance lease and hire purchase arrangements, and present value of the minimum lease

payments. Each lease payment and hire purchase rental is allocated between the liability and finance charges so as

to achieve a periodic constant rate of interest on the balance outstanding. The interest element of the finance

charge is charged to the income statement over the period of the respective lease and hire purchase agreements.

Property, plant and equipment acquired under finance lease and hire purchase arrangements are depreciated over

the shorter of the estimated useful lives of the assets and the term of the respective lease and hire purchase

agreements.

(m) Income taxes

Current tax expense is determined according to the tax laws of each jurisdiction in which the Group operates and

includes all taxes based upon the taxable profits, including withholding taxes payable by foreign subsidiaries on

distributions of retained earnings to companies in the Group and real property gains taxes payable on disposal of

properties.

Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts

attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements.




(m) Income taxes (cont’d.)

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which

the deductible temporary differences or unused tax losses can be utilised.

Deferred tax is recognised on temporary differences arising on investments in subsidiaries except where the timing of

the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not

reverse in the foreseeable future.

Tax rates enacted or substantively enacted by the balance sheet date are used to determine deferred tax.

(n) Share capital

(i) Classification

Ordinary shares with discretionary dividends are classified as equity.

(ii) Share issue costs

Incremental external costs directly attributable to the issue of new shares are shown as a deduction, net of tax,

in equity from the proceeds.

(iii) Dividends to shareholders of the Company

Dividends on ordinary shares are recognised as liabilities when proposed or declared before the balance sheet

date. Proposed final dividends are accrued as liabilities only after approval by the shareholders.

(o) Merger relief reserve

Merger relief reserve represents the excess over the nominal value of the shares issued as consideration in an

acquisition which meets the requirements of sub-section (4) of Section 60 of the Companies Act, 1965.

(p) Construction contracts

A construction contract is a contract specifically negotiated for the construction of an asset or a combination of

assets that are closely interrelated or interdependent in terms of their design, technology and functions or their

ultimate purpose or use.

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are

recognised by using the stage of completion method. The stage of completion is measured by reference to the

proportion that contract costs incurred for work performed to date bear to the estimated total cost for the contract.

When the outcome of the construction contract cannot be estimated reliably, contract revenue is recognised only to

the extent of contract costs incurred that is probable will be recoverable; contract cost are recognised when incurred.

Irrespective whether the outcome of a construction contract can be estimated reliably, when it is probable that total

contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.



(p) Construction contracts (cont’d.)

The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress

billings up to the period end. Where costs incurred and recognised profits (less recognised losses) exceed progress

billings, the balance is shown as amounts due from customers on construction contracts under receivables, deposits

and prepayments (within current assets). Where progress billings exceed costs incurred plus recognised profits (less

recognised losses), the balance is shown as amounts due to customers on construction contracts under payables

(within current liabilities).

(q) Revenue recognition

Revenue from sale of goods is recognised when significant risks and rewards of ownership of the goods are transferred

to the buyer.

Revenue from construction contracts is recognised on the percentage of completion method by reference to the

completion of a physical proportion of the contract work to date.

Rental income is recognised on an accrual basis in accordance with the substance of the relevant agreements.

(r) Foreign currencies

(i) Reporting currency

The financial statements are presented in Ringgit Malaysia.

(ii) Foreign entities

The Group’s foreign entities are those operations that are not an integral part of the operations of the Company.

Income statements of foreign entities are translated into Ringgit Malaysia at average exchange rates for the

financial year and the balance sheets are translated at exchange rates approximating those ruling at the

balance sheet date. Exchange differences arising from the retranslation of the net investment in foreign entities

and of borrowings that hedge such investments are taken to ‘Currency Exchange Reserve’ in shareholders’

equity. On disposal of the foreign entity, such translation differences are recognised in the income statement as

part of the gain or loss on disposal.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and

liabilities of the Company and are translated accordingly at the exchange rate ruling at the date of the

transaction.

(iii) Foreign currency transactions and balances

Foreign currency transactions in Group companies are accounted for at exchange rates prevailing at the

transaction dates, whereas foreign currency monetary assets and liabilities are translated at exchange rates ruling

at the balance sheet date. Exchange differences arising from the settlement of foreign currency transactions and

from the translation of foreign currency monetary assets and liabilities are included in the income statement.




(r) Foreign currencies (cont’d.)

(iv) Closing rates

The principal closing rates used in translation of foreign currency amounts are as follows:

Foreign currency 2005 2004

RM RM

1 Singapore Dollar 2.27 2.33

1 US Dollar 3.78 N/A

1 Sterling Pound 6.51 N/A

(s) Borrowings

Borrowings are initially recognised based on the proceeds received, net of transaction cost incurred. In subsequent

periods, borrowings are stated at amortised cost using the effective yield method; any difference between proceeds

(net of transaction costs) and the redemption value is recognised in the income statement over the period of the

borrowings.

(t) Financial instruments

(i) Description

A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial

liability or equity instrument of another enterprise.

A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from

another enterprise, a contractual right to exchange financial instruments with another enterprise under conditions

that are potentially favourable, or an equity instrument of another enterprise.

A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to

another enterprise, or to exchange financial instruments with another enterprise under conditions that are

potentially unfavourable.

(ii) Financial instruments recognised on the balance sheet

The particular recognition method adopted for financial instruments recognised on the balance sheet is disclosed

in the individual policy statements associated with each item.

(iii) Fair value estimation for disclosure purposes

The fair value of financial liabilities is estimated by discounting the future contractual cash flows at the current

market interest rate available to the Group for similar instruments.

The carrying amounts of the financial assets (less any estimated credit adjustments) and financial liabilities with

a maturity period of less than one year are assumed to approximate their fair values.



(u) Segment reporting

Segment reporting is presented for enhanced assessment of the Group’s risks and returns. Geographical segments

provide products or services within a particular economic environment that is subject to risks and returns that are

different from those components operating in other economic environment.

Segment revenue, expenses, assets and liabilities are those amounts resulting from the operating activities of a

segment that are directly attributable to the segment and the relevant portion that can be allocated on a

reasonable basis to the segment. Segment revenue, expenses, assets and liabilities are determined before intra-group

balances and intra-group transactions are eliminated as part of the consolidation process, except to the extent that

such intra-group balances and transactions are between group enterprises within a single segment.

3 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s activities expose it to a variety of financial risk in the normal course of business. The Group’s risk management

seeks to minimise the potential adverse effects of these exposure.

The Group’s overall financial risk management programme focuses on the unpredictability of financial markets and seeks

to minimise potential adverse effects on the financial performance of the Group. Financial risk management is carried out

through risk reviews, internal control systems, a global insurance programme and adherence to Group financial risk

management policies. The Board regularly reviews these risks and approves the treasury policies which cover the

management of these risks.

The Group does not trade in financial instruments.

(i) Foreign currency exchange risk

The Group is exposed to currency risk as a result of the foreign currency transactions entered into by companies in

currencies other than their functional currency. The Group has a natural hedge to the extent that payments for foreign

currency payables are matched against receivables denominated in the same foreign currency or whenever possible,

by intra-group arrangements and settlements.

(ii) Interest rate risk

Interest rate price risk

The Group is exposed to interest rate price risk through the impact of changes in market interest rates on interest

bearing assets and liabilities. The Group monitors the interest rate on borrowings closely to ensure that the borrowings

are maintained at favourable rates.

Interest rate cash flow risk

The Group’s income and operating cash flows are substantially independent of changes in market interest rates.

Interest rate exposure arises from the Group’s borrowings and deposits, and is managed through the use of floating

rate debts.



3 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)

(iii) Credit risk

Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and

monitoring procedures. Credit risk is minimised and monitored by limiting the Group’s associations to business partners

with high creditworthiness. Trade receivables are monitored on an ongoing basis via Group management reporting

procedures.

The Group does not have any significant exposure to any individual customer or counterparty nor does it have any

major concentration of credit risk related to any financial instruments.

(iv) Liquidity risk

The Group reviews its cash flow position regularly to manage its exposure to fluctuations in future cash flows associated

with its monetary financial instruments. Prudent liquidity risk management implies maintaining sufficient cash and the

availability of funding through an adequate amount of committed credit facilities and the ability to close out market

positions.

4 SIGNIFICANT ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES

(a) Acquisitions of subsidiaries

On 15 December 2005, the Company acquired the entire equity interest in OMS Oilfield Holdings (Malaysia) Sdn Bhd

(formerly known as Oiltools Holdings (Malaysia) Sdn Bhd), OMS Oilfield Services Pte Ltd (formerly known as Oiltools Pte

Ltd), Scomi Transportation Solutions Sdn Bhd and Scomi Sdn Bhd (known collectively as “the Acquisition”).

The purchase consideration for the Acquisition of RM285,000,000 was settled via the issuance of 192,567,567 ordinary

shares of RM1.00 per share of the Company at an issue price of RM1.48 per share. The purchase consideration was

further adjusted to RM298,538,000 to fulfil a condition to procure additional banking facilities to repay the vendors as

stipulated in the conditional sale and purchase agreements entered into between the Company and the respective

vendors.

The Acquisition has no significant effect on the financial results of the Group during the financial year.

The effects of the Acquisition on the Group’s financial position at the end of the financial year were as follows:

31.12.2005

RM’000

Non-current assets (including goodwill on consolidation) 255,865

Current assets 258,210

Current liabilities (184,020)

Non-current liabilities (31,517)

Increase in Group’s net assets 298,538


4 SIGNIFICANT ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES (CONT’D.)

(a) Acquisitions of subsidiaries (cont’d.)

Details of net asset acquired, goodwill and cash flows arising from the Acquisition were as follows:

At date of

acquisition

RM’000

Property, plant and equipment (Note 13) 47,836

Goodwill (Note 16) 1,624

Other investments 542

Inventories 42,995

Trade and other receivables 192,510

Cash and bank balances 20,500

Tax recoverable 2,205

Trade and other payables (142,684)

Bank overdrafts (4,058)

Borrowings (61,096)

Current tax liabilities (6,583)

Deferred tax liabilities (Note 26) (1,116)

Fair values of total net assets 92,675

Goodwill on consolidation (Note 16) 205,863

Cost of acquisition 298,538

Total purchase consideration 298,538

Purchase consideration discharged by shares issued (Note 20(b)) (285,000)

Purchase consideration discharged by cash 13,538

Less: Cash and cash equivalents of subsidiaries acquired (net) (16,442)

Cash inflow of the Group on acquisition (2,904)

(b) Disposals of subsidiaries

Pursuant to the Transfer of Undertaking and Property as described in Note 30 to the financial statements, all

undertakings, properties and assets of the Company were transferred to Atlas Jade, and accordingly, all business

operations prior to the Acquisition of the Group were discontinued. As a result of this transfer, the Company’s

investment in BOE, a subsidiary in Singapore, was disposed of and the Group recognised a gain of RM11,186,000

arising from this disposal in its income statement during the financial year.




(b) Disposals of subsidiaries (cont’d.)The effect of the disposal on the Group’s results for the financial year was as follows:

2005 2004

RM’000 RM’000

Revenue 918 4,118

Expenses excluding finance cost and tax (3,419) (27,678)

Gain on disposals of subsidiaries 11,186 –

Profit/(loss) from operations 8,685 (23,560)

Finance cost (401) (585)

Tax expense – (314)

Profit/(loss) after tax 8,284 (24,459)

The effect of the disposal on the financial position of the Group was as follows:

At date ofdisposalRM’000

Property, plant and equipment (Note 13) 999Payables (2,933)Bank overdrafts (832)Bank borrowings (6,149)

Net liabilities (8,915)Realisation of currency exchange reserve (2,271)Net disposal proceeds –

Gain on disposals of subsidiaries (11,186)

Non-current assets 923

Current liabilities (9,801)Non-current liabilities (37)

Total liabilities (9,838)

Net liabilities (8,915)




(b) Disposals of subsidiaries (cont’d.)The net cash flow on disposal is determined as follows:

At date ofdisposalRM’000

Proceeds from disposals –Cash and cash equivalents of subsidiaries disposed of 832

Net cash inflow on disposals 832

The cash flows attributable to the subsidiaries disposed of during the financial year are as follows:

2005 2004

RM’000 RM’000

Operating activities 832 (379)

Investing activities – 285

Financing activities – 21

Net cash inflow on disposals 832 –

Total cash flows 832 (73)

5 REVENUE

Revenue of the Group and Company represents income from construction contracts and the invoiced value of goods sold

and services rendered, net of sales taxes and discounts. Revenue of the Group and Company can be analysed as follows:

Group Company2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Discontinued operationConstruction contracts 918 3,601 – 668

Sale of goods – 1,430 – 245

918 5,031 – 913

Revenue of the Group is wholly in respect of the discontinued operation following the cessation of all business operations

prior to the Acquisition and disposal of subsidiaries as mentioned in Note 4(b) to the financial statements during the

financial year.


6 COST OF SALES

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Cost of inventories sold – 7,861 – 3,410

Construction contract costs 191 645 – 200

191 8,506 – 3,610

7 PROFIT/(LOSS) FROM OPERATIONS

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Profit/(loss) from operations is stated

after charging:

Auditors’ remuneration (Note 8):

Statutory audit fee

- current financial year 28 37 28 23

- over accrual in prior year – (1) – –

28 36 28 23

Rental of premises – 116 – –

Rental of equipment 10 – – –

Staff costs (including remuneration of

Executive Directors):

- wages, salaries and bonuses 702 2,285 174 1,604

- defined contribution plan 108 279 22 194

- other employment benefits 3 4 3 47

813 2,613 199 1,845

Depreciation of property, plant and equipment

(Note 13) 124 440 37 322

Property, plant and equipment written off

(Note 13) 160 882 – 882

Allowance for diminution in value of

investment in unquoted shares – 30 – 30



7 PROFIT/(LOSS) FROM OPERATIONS (CONT’D.)

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

and crediting:

Gain on disposals of property, plant and equipment 16 247 16 15

Allowance for doubtful debts written back – 546 – 546

Interest income – 10 – –

Unrealised exchange gains (net) – 228 – –

Rental income 84 24 84 24

Included in the results of the Group for the financial year ended 31 December 2005 were charges relating to underprovision

of liabilities in respect of prior year and assets of BOE written off during the financial year amounting to RM2,056,000.

8 AUDITORS’ REMUNERATION

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Statutory audit (Note 7)

- PricewaterhouseCoopers Malaysia 28 – 28 –

- Other external auditors – 37 – 23

28 37 28 23

Review of profit and cash flow forecasts and

projections 470* – 470* –

Total remuneration 498 37 498 23

* accounted for in Share Premium Account upon issuance of shares.


9 DIRECTORS’ REMUNERATION

The Directors who held office during the financial year were as follows:

Executive Directors

Shah Hakim @ Shahzanim bin Zain (appointed on 15 December 2005)

James Khong Poh Wah (resigned on 15 December 2005)

Ho Yew Hong (resigned on 15 December 2005)

Non-executive Directors


Edlin bin Ghazaly

Datuk Zainun Aishah binti Ahmad (appointed on 15 December 2005)

Dato’ Abdul Rahim bin Abu Bakar (appointed on 15 December 2005)

Fad’l bin Mohamed (appointed on 15 December 2005)

Dato’ Abdul Rahman bin Mohammed Hashim (resigned on 15 December 2005)

The aggregate amount of emoluments receivable by Directors of the Company during the financial year were as follows:

Group Company2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Executive Directors

- basic salaries and bonus 153 684 153 366

- other employee benefits 77 – 77 –

230 684 230 366

Non-executive Directors

- fees 100 4 100 4

330 688 330 370

10 FINANCE COSTSGroup Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Interest expense

- bank overdraft 14 355 14 185

- other bank borrowings 1,429 1,307 1,028 891

1,443 1,662 1,042 1,076



11 TAX EXPENSE/(CREDIT)

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Current tax

- Malaysian income tax – 34 – 34

- Foreign tax – 314 – –

– 348 – 34

Deferred tax (Note 26)

- Malaysia – (604) – (604)

– (256) – (570)

Current tax

Current year – – – –

Under accrual in prior years – 348 – 34

– 348 – 34

Deferred tax

Reversal and origination of temporary differences – (604) – (604)

– (256) – (570)

A reconciliation of income tax expense applicable to profit/(loss) from ordinary activities before tax at the statutory tax

rate to income tax expense at the effective income tax rate of the Group and Company is as follows:


11 TAX EXPENSE/(CREDIT) (CONT’D.)

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Profit/(loss) from ordinary activities before tax 16,701 (60,104) 8,417 (48,270)

Tax calculated at the Malaysian tax rate of

28% (2004: 28%) 4,676 (16,829) 2,356 (13,515)

Tax effects of:

- current year’s tax loss not recognised 236 1,524 – 1,524

- expenses not deductible for tax purposes 1,642 15,470 1,642 12,156

- previously unrecognised tax losses (3,738) (604) (3,738) (604)

- previously unrecognised capital allowances (228) – (228) –

- income not subject to tax (2,556) (165) – (165)

- others (32) – (32) –

Under accrual in prior years – 348 – 34

– (256) – (570)

12 EARNINGS/(LOSS) PER SHARE

Basic and diluted earnings/(loss) per share of the Group are calculated by dividing the Group’s net profit/(loss) for the

financial year by the weighted average number of ordinary shares in issue during the financial year.

Group

2005 2004

RM’000 RM’000

Net profit/(loss) for the financial year 16,701 (59,848)

Weighted average number of ordinary shares in issue 21,822 19,184

Basic earnings/(loss) per share (sen) 76.53 (311.97)

Diluted earnings/(loss) per share (sen) 76.53 (311.97)



13 PROPERTY, PLANT AND EQUIPMENT

Long term Short-term Furniture,

Freehold Freehold leasehold leasehold Leasehold Rental fixtures and Motor Plant and

land buildings land land buildings equipment equipment vehicles machinery Renovations Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

2005

Cost

At 1 January 2005 1,366 3,003 – – – – 903 218 – 445 5,935Additions 366 – – – – – – – – – 366Disposals (1,732) (1,502) – – – – – (113) – – (3,347)Write-offs – – – – – – (152) – – (445) (597)Disposals of

subsidiaries

(Note 4(b)) – (1,501) – – – – (751) (105) – – (2,357)Acquisitions of

subsidiaries

(Note 4(a)) – – 1,520 6,469 3,200 3,791 3,799 16,717 36,110 – 71,606

At 31 December 2005 – – 1,520 6,469 3,200 3,791 3,799 16,717 36,110 – 71,606

Accumulated

depreciation

At 1 January 2005 – 650 – – – – 855 176 – 331 2,012Charge during

the year (Note 7) – 40 – – – – 24 30 – 30 124Disposals – (228) – – – – – (113) – – (341)Write-offs – – – – – – (76) – – (361) (437)Disposals of

subsidiaries

(Note 4(b)) – (462) – – – – (803) (93) – – (1,358)Acquisitions of

subsidiaries

(Note 4(a)) – – 314 869 1,655 138 2,801 4,079 13,914 – 23,770

At 31 December 2005 – – 314 869 1,655 138 2,801 4,079 13,914 – 23,770

Net book value

At 31 December 2005 – – 1,206 5,600 1,545 3,653 998 12,638 22,196 – 47,836

At 31 December 2004 1,366 2,353 – – – – 48 42 – 114 3,923


13 PROPERTY, PLANT AND EQUIPMENT (CONT’D.)

Freehold Freehold Motor

land buildings vehicles Total

RM’000 RM’000 RM’000 RM’000

Company

2005

Cost

At 1 January 2005 1,366 1,502 113 2,981

Additions 366 – – 366

Disposals (1,732) (1,502) (113) (3,347)

At 31 December 2005 – – – –

Accumulated depreciation

At 1 January 2005 – 200 104 304

Charge during the year (Note 7) – 28 9 37

Disposals – (228) (113) (341)

At 31 December 2005 – – – –

Net book value

At 31 December 2005 – – – –

At 31 December 2004 1,366 1,302 9 2,677

The net book value of property, plant and equipment acquired under finance leases and hire purchase arrangements by

the Group at the balance sheet date was RM1,015,000 (2004: Nil).



14 SUBSIDIARIES

Company

2005 2004

RM’000 RM’000

Non-current assets

Investment in subsidiaries

Unquoted shares, at cost 298,538 3,200

Accumulated impairment losses – (3,200)

298,538 –

Current liabilities

Amounts due to subsidiaries 13,547 –

The currency exposure profile of amounts due to subsidiaries is as follows:

- Ringgit Malaysia 9 –

- US Dollar 13,538 –

13,547 –

Amounts due to subsidiaries are interest free, unsecured and have no fixed terms of repayment.

(b) The details of the subsidiaries are as follows:

Group’s effective

equity interest

Name Country of 2005 2004

incorporation % % Principal activities

α* Bell & Order Engineering Pte. Ltd. Singapore – 100 Supply of professional sound and

communication system.

α* Amity Power Sdn. Bhd. Malaysia – 100 Dormant

α* Ratus Aliran Sdn. Bhd. Malaysia – 100 Dormant

α* Ratus Daratan Sdn. Bhd. Malaysia – 100 Dormant


14 SUBSIDIARIES (CONT’D.)

(b) The details of the subsidiaries are as follows: (cont’d.)

Group’s effective

equity interest



α* Soundex Engineering Sdn. Bhd. Malaysia – 100 Dormant.

OMS Oilfield Holdings (Malaysia) Malaysia 100 – Investment holding.

Sdn. Bhd. (formerly known as

Oiltools Holdings (Malaysia)

Sdn. Bhd.

@ OMS Oilfiled Services Pte. Ltd. Singapore 100 – Provision of machine shop services.

(formerly known as Oiltools

Pte. Ltd.)

* Scomi Sdn. Bhd. Malaysia 100 – Manufacture and fabrication of

road transport equipment,

material handling equipment

and provision of related

engineering support services.

* Scomi Transportation Solutions Malaysia 100 – Provision of motor vehicles on

Sdn. Bhd. ‘hire and drive’ basis.

Subsidiary of OMS Oilfield Holdings

(Malaysia) Sdn. Bhd.

OMS Oilfield Services (Malaysia) Malaysia 100 – Provision of machine shop

Sdn. Bhd. (formerly known as services to tools and equipment

Oiltools Services Malaysia used in the petroleum industry.

Sdn. Bhd.)

Subsidiaries of OMS Oilfield

Services Pte Ltd

@ PT OMS Oilfield Services Indonesia 95 – Provision of machine shop

(formerly known as services to tools and equipment

PT Oiltools Indonesia) used in the petroleum industry.

OMS Oilfield Services (Australia) Australia 100 – Provision of machine shop

Pty. Ltd. services to tools and equipment

used in the petroleum industry.



14 SUBSIDIARIES (CONT’D.)

Group’s effective

equity interest



@ OMS Oilfied Services (Thailand) Ltd. Thailand 100 – Provision of machine shop

(formerly known as Siam-KMC services to tools and equipment

Co. Ltd.) used in the petroleum industry.

Subsidiary of Scomi Sdn Bhd

* Scomi Trading Sdn. Bhd. Malaysia 100 – Marketing agent for road

transport equipment and related

products.

Subsidiary of Scomi Transportation

Solutions Sdn. Bhd.

* Asian Rent-A-Car Sdn. Bhd. Malaysia 100 – Provision of motor vehicles on

‘hire and drive’ basis.

* Not audited by PricewaterhouseCoopers.

α Disposal to Atlas Jade deemed completed on 15 December 2005 by virtue of a Trust Agreement entered into between

the Company and Atlas Jade.

@ Audited by a member firm of PricewaterhouseCoopers International Limited which is a separate and independent legal

entity firm from PricewaterhouseCoopers Malaysia.

15 OTHER INVESTMENTS

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Unquoted investments, at cost 542 30 – 30

Allowance for diminution in value – (30) – (30)

542 – – –


16 GOODWILL ON CONSOLIDATION

Group

2005 2004

RM’000 RM’000

At 1 January – –

Acquisitions of subsidiaries (Note 4(a)) 207,487* –

At 31 December 207,487 –

* Comprised goodwill of RM1,624,000 (Note 4(a)) which was included in the balance sheet of a subsidiary that was

acquired during the financial year and goodwill arising on the Acquisition by the Group amounting to RM205,863,000

(Note 4(a)).

17 INVENTORIES

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

At cost

Raw materials 11,172 – – –

Work-in-progress 29,870 – – –

Finished goods 872 – – –

Consumables 1,081 – – –

42,995 – – –

At net realisable value

Finished goods – 280 – 15

Total 42,995 280 – 15



18 RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Trade receivables 47,422 33,549 – 18,636

Allowance for doubtful debts (669) (32,221) – (17,611)

46,753 1,328 – 1,025

Other receivables 2,306 2,024 141 1,316

Allowance for doubtful debts – (11) – (11)

Compensation for claim on variation order – (1,287) – (1,287)

2,306 726 141 18

Deposits 4,226 384 – 380

Prepayments 1,768 5 – 5

55,053 2,443 141 1,428

The currency exposure profile of receivables,

deposits and prepayments is as follows:

- Ringgit Malaysia 23,710 1,428 141 1,428

- US Dollar 27,831 – – –

- Singapore Dollar 1,799 1,015 – –

- others 1,713 – – –

55,053 2,443 141 1,428

Credit terms of trade receivables range from 30 days to 90 days (2004: 30 days to 90 days).

The Group’s historical experience in collection of accounts receivable falls within the recorded allowances. Due to this

factor, management believes that no additional credit risk beyond amounts provided for collection losses is inherent in the

Group’s receivables.


19 AMOUNTS DUE FROM/(TO) RELATED CORPORATIONS

Amounts due from/(to) related corporations are interest free, unsecured and have no fixed terms of repayment.

Group

2005 2004

RM’000 RM’000

The currency exposure profile of amounts due from

related corporations is as follows:

- Ringgit Malaysia 16,974 –

- US Dollar 107,077 –

124,051 –

The currency exposure profile of amounts due to related

corporations is as follows:

- Ringgit Malaysia 21,683 –

- US Dollar 75,092 –

96,775 –

20 CASH AND CASH EQUIVALENTS

(a) Cash and cash equivalents included in the cash flow statements comprise the following:

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Deposits with licensed banks 991 454 – –

Cash and bank balances 19,519 137 10 47

20,510 591 10 47

Bank overdrafts (Note 25) (4,058) (1,228) – (98)

16,452 (637) 10 (51)

Deposits with licensed bank pledged as security

for bank guarantee facilities (991) (349) – –

15,461 (986) 10 (51)



20 CASH AND CASH EQUIVALENTS (CONT’D.)

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

The currency exposure profile of deposits,

cash and bank balances is as follows:

- Ringgit Malaysia 2,094 47 10 47

- US Dollar 16,964 – – –

- Singapore Dollar 629 544 – –

- Others 823 – – –

20,510 591 10 47

The range of interest rates per annum of deposits that was effective at balance sheet date for the Group is as follows:

Group

2005 2004

% %

Deposits with licensed banks 2.90 – 3.70 0.25 – 3.20

Deposits with licensed banks of the Group have a maturity period ranging from 30 to 455 days (2004: 30 to 365 days). Bank

balances are deposits held at call with banks.

(b) Non-cash transactions

The principal non-cash transactions during the financial year are the issue of shares by the Group and Company for

RM285,000,000 as partial discharge of purchase consideration (Note 4(a)) for the Acquisition as described in Note 30

below, the waiver of debts pursuant to the Scheme of Arrangement amounting to RM14,194,000 and the acquisition

of freehold land amounting to RM366,000 via a swap agreement with the property developer as full compensation

for the 10% deposit paid by the Company for 6 acres of freehold industrial land in a property development project

that was terminated in prior years.


21 PAYABLES

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Trade payables 23,137 6,443 – 3,952

Scheme Creditors 15,073 – 15,073 –

Other payables 26,224 5,002 3,452 4,752

64,434 11,445 18,525 8,704

The currency exposure profile of

payables is as follows:

- Ringgit Malaysia 37,506 8,704 18,525 8,704

- US Dollar 14,730 – – –

- Singapore Dollar 3,364 2,741 – –

- Sterling Pound 8,239 – – –

- others 595 – – –

64,434 11,445 18,525 8,704

Scheme Creditors represent amounts payable to the creditors of the Company which have been identified in the

Composite Scheme of Arrangement as described in Note 30 to the financial statements. The repayments to Scheme

Creditors are made on the basis of full settlement for the first RM1,000 of unsecured debt or proportion thereof, and RM0.40

bullet cash payment for each RM1.00 of unsecured debt for the balance debt exceeding RM1,000.

Credit terms of trade and other payables granted to the Group and Company vary from no credit to 60 days

(2004: no credit to 60 days).



22 FINANCE LEASE AND HIRE PURCHASE LIABILITIES

Group

2005 2004

RM’000 RM’000

Minimum lease payments:

- not later than 1 year 4,197 17

- later than 1 year and not later than 5 years 12,219 51

16,416 68

Future finance charges (2,065) (12)

Present value of finance lease and hire purchase liabilities 14,351 56

Present value of finance lease and hire purchase liabilities:

- not later than 1 year 3,489 19

- later than 1 year and not later than 5 years 10,862 37

14,351 56

Finance lease and hire purchase liabilities were effectively secured as the rights to those assets held under finance lease

and hire purchase arrangements revert to the lessors in the event of default.

The effective interest rates applicable for finance lease and hire purchase liabilities range between 4% to 12% (2004: 6%

to 11%) per annum.

23 AMOUNT DUE TO ULTIMATE HOLDING COMPANY

Amount due to ultimate holding company is interest free, unsecured and has no fixed terms of repayment.

The amount due to its ultimate holding company is denominated in Ringgit Malaysia.


24 AMOUNTS DUE TO DIRECTORS

Amounts due to Directors are interest free, unsecured and have no fixed terms of repayment.

Group Company2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

The currency exposure profile of amounts due to Directors is as follows:

- Ringgit Malaysia 75 48 75 48

- Singapore Dollar – 1 – –

75 49 75 48

25 BORROWINGS (INTEREST BEARING)

Borrowings of the Group and Company comprise the following:

Group Company2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

CurrentSecured

Bank overdrafts 4,058 1,130 – –

Term loans 19,503 3,506 – 3,506

Bankers’ acceptances 7,703 – – –

31,264 4,636 – 3,506

Unsecured

Bank overdrafts – 98 – 98

Term loans – 238 – 238

Bills payable – 16,150 – 11,008

– 16,486 – 11,344

Non-currentSecured

Term loans 19,539 – – –

Unsecured

Term loans – 5,719 – 5,719



25 BORROWINGS (INTEREST BEARING) (CONT’D.)

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Total

Current

Bank overdrafts 4,058 1,228 – 98

Other bank borrowings

- term loans 19,503 3,744 – 3,744

- bankers’ acceptances 7,703 – – –

- bills payable – 16,150 – 11,008

27,206 19,894 – 14,752

31,264 21,122 – 14,850

Non-current

Term loans 19,539 5,719 – 5,719

Total borrowings 50,803 26,841 – 20,569

Currency exposure profile:

- Ringgit Malaysia 13,736 20,512 – 20,569

- US Dollar 37,067 6,329 – –

50,803 26,841 – 20,569

Maturity of borrowings:

- not later than 1 year 31,264 21,122 – 14,850

- later than 1 year and not later than 5 years 19,539 5,719 – 5,719

50,803 26,841 – 20,569


25 BORROWINGS (INTEREST BEARING) (CONT’D.)

The effective interest rates for borrowings as at balance sheet date are as follows:

Group Company2005 2004 2005 2004

% per % per % per % per

annum annum annum annum

Bank overdrafts 5.00 – 6.00 6.50 – 8.90 – 8.00 – 8.90

Bills payable – 6.50 – 7.65 – 3.98 – 7.65

Revolving credit – 5.25 – 8.90 – 5.25 – 8.90

Term loans 5.00 – 6.25 7.00 – 8.15 – 7.25 – 8.15

Bankers acceptances 3.80 – 4.20 – – –

Bank overdrafts and bankers’ acceptances of the Group are secured by way of:

(i) a corporate guarantee from its ultimate holding company; and negative pledge over the present and future fixed

and floating assets of a subsidiary.

The Group’s term loans and certain bankers’ acceptances in respect of two contracts of a subsidiary are secured by way

of Irrevocable Letter of Undertaking from third parties. In the prior year, the Group’s borrowings were secured by fixed

deposits placed with the licensed banks and were guaranteed by the Company.

26 DEFERRED TAX

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against

current tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined after

appropriate offsetting, are shown in the balance sheet:

Group Company2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Deferred tax liabilities- subject to income tax 1,116 – – –

At 1 January – 604 – 604

Credited to income statement (Note 11)

- property, plant and equipment – (248) – (248)

- tax losses and capital allowances – 1,004 – 1,004

- development costs – (1,542) – (1,542)

- others – 182 – 182

– (604) – (604)



26 DEFERRED TAX (CONT’D.)

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Acquisitions of subsidiaries (Note 4(a))

- property, plant and equipment 1,171 – – –

- tax losses (55) – – –

At 31 December 1,116 – – –

Subject to income tax

Deferred tax assets (before offsetting)

Property, plant and equipment 424 – – –

Tax losses 55 – – –

479 – – –

Offsetting (479) – – –

Deferred tax assets (after offsetting) – – – –

Deferred tax liabilities (before offsetting)

Property, plant and equipment 1,595 – – –

Offsetting (479) – – –

Deferred tax liabilities (after offsetting) 1,116 – – –

The amount of unused tax losses and capital allowances (both of which have no expiry date) for which no deferred tax

asset is recognised in the balance sheet is as follows:

Group Company

2005 2004 2005 2004

RM’000 RM’000 RM’000 RM’000

Unutilised capital allowances – 815 – 815

Unused tax losses 26,210 39,560 26,210 39,560


27 SHARE CAPITAL

Group and Company

2005 2004

Number Nominal Number Nominal

of shares value of shares value

‘000 RM’000 ‘000 RM’000

Authorised ordinary shares of RM1.00 each:

At 1 January 100,000 100,000 100,000 100,000

Created during the financial year 300,000 300,000 – –

At 31 December 400,000 400,000 100,000 100,000

Issued and fully paid ordinary shares

of RM1.00 each:

At 1 January 19,184 19,184 19,184 19,184

Issued during the financial year

- acquisitions of subsidiaries 192,567 192,567 – –

At 31 December 211,751 211,751 19,184 19,184

28 SEGMENTAL REPORTING

(a) Financial reporting format – geographical segment by location

Malaysia* Singapore Elimination Group

RM’000 RM’000 RM’000 RM’000

Financial year ended 31 December 2005

Revenue

External – 918 – 918

Results

Segment results 9,459 (2,501) – 6,958

Gain on disposals of subsidiaries (Note 4(b)) 11,186

Finance cost (1,042) (401) – (1,443)

Net profit/(loss) for the financial year 8,417 (2,902) – 16,701


28 SEGMENTAL REPORTING (CONT’D.)

Malaysia* Singapore Elimination GroupRM’000 RM’000 RM’000 RM’000

As at 31 December 2005Net assetsSegment assets 404,017 281,968 (185,306) 500,679

Segment liabilities 101,596 227,756 (94,317) 233,035

Other informationDepreciation 37 87 – 124Capital expenditure 211,551 44,138 – 255,689Other non-cash expenses 3,857 1,242 – 4,099Waiver of debts pursuant to the

Composite Scheme of Arrangement 14,194 – – 14,194

* Company’s home country

Financial year ended 31 December 2004RevenueExternal 913 4,118 – 5,031

ResultsSegment results (47,194) (23,559) 12,311 (58,442)

Finance cost (1,076) (586) – (1,662)

Tax credit/(expense) 570 (314) – 256

Net loss for the financial year (47,700) (24,459) 12,311 (59,848)

As at 31 December 2004Net assetsSegment assets 4,270 2,231 826 7,327

Segment liabilities 29,321 9,090 (20) 38,391

Other informationDepreciation 322 118 – 440

Capital expenditure 26 6 – 32

Other non-cash expenses 38,260 11,989 – 50,249

* Company’s home country



28 SEGMENTAL REPORTING (CONT’D.)

In determining the geographical segments of the Group, sales are based on the country in which the customers are

based. Total assets and capital expenditure are determined based on where the assets are located.

Capital expenditure comprises additions to property, plant and equipment (Note 13) and goodwill on consolidation

(Note 16) including additions resulting from the Acquisition through business combinations (Note 4(a)).

(b) Secondary reporting format – business segment

Segmental reporting by business segment was not prepared as the Group was principally engaged in the supply and

installation of sound and communication system only during the financial year.

29 COMMITMENTS

(a) Capital commitments

Capital expenditure for plant and equipment not provided for in the financial statements are as follows:

Group

2005 2004

RM’000 RM’000

Approved and contracted for 15,804 –

Approved but not contracted for 18,142 –

33,946 –

(b) Non-cancellable operating lease payments

The Group has entered into non-cancellable operating lease agreements for property, plant and equipment.

Commitments for future minimum lease payments are as follows:

Group

2005 2004

RM’000 RM’000

Later than 1 year 803 –

Later than 1 year and not later than 5 years 2,308 –

Later than 5 years 3,169 –

6,280 –


30 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

I. On 28 February 2005, the Company announced that it was an affected listed issuer under Practice Note (“PN”)

17/2005 as the Company had a deficit in its consolidated shareholders’ equity based on its consolidated results for

financial year ended 31 December 2004.

II. In an effort to turnaround the Company as well as to obtain new and viable businesses for the Company, the

shareholders of the Company have, at an Extraordinary General Meeting held on 10 November 2005, approved the

following corporate exercise to be undertaken by the Company:

(a) Renounceable rights issue of 57,552,000 shares of RM1.00 each in the Company at an indicative issue price of

RM1.20 per rights share on the basis of three (3) rights shares for every one (1) existing ordinary share held on an

entitlement date to be determined later (known hereafter as “the Rights Issue”);

(b) Acquisitions by the Company of the entire equity interest in OMS Oilfield Holdings (Malaysia) Sdn Bhd (formerly

known as Oiltools Holdings (Malaysia) Sdn Bhd), OMS Oilfield Services Pte Ltd (formerly known as Oiltools Pte Ltd),

Scomi Transportation Solutions Sdn Bhd and Scomi Sdn Bhd for a total purchase consideration of RM285,000,000

to be satisfied by the issuance of 192,567,567 new ordinary shares in the Company at an issue price of RM1.48

per share (known hereafter as “the Acquisition”);

(c) Exemption to the vendors and parties acting in concert with them from having to undertake a mandatory

general offer for the remaining shares in the Company not already owned by them pursuant to the Malaysian

Code on Take-Overs and Mergers;

(d) Transfer of the Company’s undertaking and property (as defined in Section 178(5) of the Companies Act, 1965)

to Atlas Jade Sdn Bhd (“Atlas Jade”), a special purpose vehicle incorporated pursuant to the Composite Scheme

of Arrangement, as described in paragraph (IV) below (known hereafter as “the Transfer of Undertaking and

Property”);

(e) Establishment of an Employee Share Option Scheme of up to 15% of the enlarged issued and paid-up share

capital of the Company pursuant to the Rights Issue and Acquisition for the eligible employees and non-

executive Directors of the Company;

(f) Increase in the authorised share capital of the Company from RM100,000,000 comprising 100,000,000 ordinary

shares of RM1.00 each to RM400,000,000 comprising 400,000,000 ordinary shares of RM1.00 each in the Company;

and

(g) Amendments to the Articles of Association of the Company

(collectively referred to as the “Restructuring Scheme”).



30 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT’D.)

III. On 15 December 2005, the Company completed the Acquisition which resulted in a reverse take-over of the

Company by the major shareholder and a significant change in the business direction of the Company (known

hereafter as the “Date of Disposal”).

IV. As part of the conditions precedent to the sale and purchase agreements entered into between the Company and

the respective vendors, the Company is obliged to carry out a scheme of arrangement pursuant to Section 176 of

the Companies Act, 1965 (known hereafter as “the Composite Scheme of Arrangement”) on or prior to the

completion of the sale and purchase agreements.

As part of the Composite Scheme of Arrangement and pursuant to Section 178 of the Companies Act, 1965, all

undertakings, properties and assets (as defined in Section 178(5) of the Companies Act, 1965) of the Company will

be transferred to and vested in Atlas Jade. There is no consideration to be received or paid by the Company for the

Transfer of Undertaking and Property. All liabilities and obligations of the Company including all pending legal

proceedings by or against the Company (save and except for those which are to be settled under the Composite

Scheme of Arrangement) are to be assumed and continued by or against Atlas Jade respectively from the date of

the Court’s order. The cut-off date for all debts was fixed on 31 December 2004, such that all known and admitted

debts outstanding as at this date was included in the Composite Scheme of Arrangement. Any subsequent charges,

interests and penalty charges in relation to the known and admitted debts arising after 31 December 2004 that had

not been included in the Composite Scheme of Arrangement shall be completely waived.

On 1 September 2005, the Court had approved the Composite Scheme of Arrangement between the Company and

the Scheme Creditors as stated in the Explanatory Statement dated 24 May 2005 pursuant to Section 176(3) of the

Companies Act, 1965. Upon the completion of the Transfer of Undertaking and Property pursuant to the Composite

Scheme of Arrangement, the Company waived debts amounting to RM14,194,000 which have been recognised in

the income statement for the financial year ended 2005. The Transfer of Undertaking and Property also resulted in the

Company recognising gain on disposals of subsidiaries and loss on disposals of assets amounting to RM11,186,000 and

RM2,744,000 respectively in the income statement for the financial year ended 31 December 2005.

31 SIGNIFICANT POST BALANCE SHEET EVENTS

(a) On 20 January 2006, the Company allotted and issued 57,552,000 new ordinary shares of RM1.00 each at an issue

price of RM1.20 per share pursuant to the Rights Issue. Consequently, the issued and paid-up share capital of the

Company increased from RM211,751,000 comprising 211,751,000 ordinary shares of RM1.00 each to RM269,303,000

comprising 269,303,000 ordinary shares of RM1.00 each. The Rights Issue raised cash proceeds of approximately

RM69,062,000 which will be utilised for the settlement pursuant to the Composite Scheme of Arrangement, expenses

in relation to the Restructuring Scheme and working capital for future business expansion purposes.

(b) Following the completion of the Restructuring Scheme as described in Note 30 to the financial statements, the

Company has regularised its financial condition and consequently, its status as an affected listed issuer under

PN17/2005 was uplifted and the trading of the shares of the Company in Bursa Malaysia Securities Berhad

recommenced on 26 January 2006.


32 FAIR VALUES

The carrying amount of financial assets and liabilities of the Group and Company at the balance sheet date approximate

their fair values except as set out below:

Group

Carrying

amount Fair value

RM’000 RM’000

Finance lease and hire purchase liabilities:

31 December 2005 10,862 9,525

31 December 2004 37 35

The Group’s non-current bank borrowings comprised floating rate loans for which the carrying amounts approximated their

fair values at the balance sheet date as the effective interest rates were not expected to differ from the prevailing market

rates.

33 APPROVAL OF FINANCIAL STATEMENTS

The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on

12 April 2006.



statutory declaration

PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

statement by directors

PUSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

We, Shah Hakim @ Shahzanim bin Zain and Datuk Zainun Aishah binti Ahmad, two of the Directors of Scomi Engineering Bhd

(formerly known as Bell & Order Berhad), state that, in the opinion of the Directors, the financial statements set out on pages 47 to

92 are drawn up so as to give a true and fair view of the state of affairs of the Group and Company as at

31 December 2005 and of the results and cash flows of the Group and Company for the financial year ended on that date in

accordance with the provisions of the Companies Act, 1965 and MASB approved accounting standards in Malaysia.

Signed on behalf of the Board of Directors in accordance with their resolution dated 12 April 2006.

SHAH HAKIM @ SHAHZANIM BIN ZAINDirector

DATUK ZAINUN AISHAH BINTI AHMADDirector

Kuala Lumpur

12 April 2006

I, Hilmy Zaini bin Zainal, the officer primarily responsible for the financial management of Scomi Engineering Bhd (formerly known

as Bell & Order Berhad), do solemnly and sincerely declare that the financial statements set out on pages 47 to 92 are, in my

opinion, 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 Hilmy Zaini bin Zainal ) HILMY ZAINI BIN ZAINALat Kuala Lumpur on 12 April 2006, )

Before me.

No. W315

SOH AH KAU, AMN

Commissioner for Oaths


1. We have audited the financial statements set out on pages 47 to 92. These financial statements are the responsibility of

the Company’s Directors. It is our responsibility to form an independent opinion, based on our audit, on these financial

statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and

for no other purpose. We do not assume responsibility to any other person for the content of this report.

2. We conducted our audit in accordance with approved auditing standards in Malaysia. Those standards require that we

plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the

Directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. In our opinion:

(a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and

MASB approved accounting standards in Malaysia so as to give a true and fair view of:

(i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and

(ii) the state of affairs of the Group and Company as at 31 December 2005 and of the results and cash flows of

the Group and Company for the financial year ended on that date;

and

(b) the accounting and other records and the registers required by the Act to be kept by the Company and the

subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

4. The names of the subsidiaries of which we have not acted as auditors are indicated in Note 14 to the financial statements.

Except for the financial statements of Bell & Order Engineering Pte Ltd which were not audited due to the circumstances

as explained in Note 2(a) to the financial statements, we have considered the audited financial statements of the other

subsidiaries and the auditors’ reports thereon.

5. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial

statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated

financial statements and we have received satisfactory information and explanations required by us for those purposes.

6. The auditors’ report on the financial statements of the subsidiaries were not subject to any qualification and did not include

any comment made under subsection (3) of Section 174 of the Act.

PRICEWATERHOUSECOOPERS JAYARAJAN A/L U. RATHINASAMYNo. AF: 1146 No. 2059/06/06 (J)

Chartered Accountants Partner of the firm

Kuala Lumpur

12 April 2006

TO THE MEMBERS OF SCOMI ENGINEERING BHD(formerly known as Bell & Order Berhad)Company No: 111633-M(Incorporated in Malaysia)

report of the auditors


analysis of shareholdings

Authorised share capital : RM400,000,000 divided into 400,000,000 shares of RM1.00 each

Issued and paid-up capital : RM269,903,567 divided into 269,903,567 of RM1.00 each

Types of shares : Ordinary shares of RM1.00 each

Voting Rights : One vote per ordinary share

Shareholders Shareholding

Size of Shareholdings No. of Holders % of Holders No. of Shares % of Shares

Less than 100 35 2.12 147 0.00

100 to 1,000 700 42.40 396,100 0.15

1,001 to 10,000 607 36.77 2,664,656 0.99

10,001 to 100,000 236 14.29 8,539,259 3.16

100,001 to less than 5% of issued shares 72 4.36 82,358,238 30.51

5% and above of issued shares 1 0.06 175,945,167 65.19

Total 1,651 100.00 269,303,567 100.00

As at 11th May 2006 the foreign shareholdings stood at 8.38%.

as at 11th May 2006


Thirty Largest Registered Shareholders as at 11th May 2006

No. Registered Shareholders No. of % of

Shares Shares

1 Scomi Group Bhd 175,945,167 65.19

2 A.A. Assets Nominees (Tempatan) Sdn Bhd 16,628,800 6.16

3 HSBC Nominees (Asing) Sdn Bhd 12,040,000 4.46

4 Bara Aktif Sdn Bhd 8,949,000 3.32

5 Eagletron Venture Corp. 8,529,000 3.16

6 HSBC Nominees (Tempatan) Sdn Bhd 6,767,500 2.51

7 Nik Awang @ Wan Azmi bin Wan Hamzah 5,075,714 1.88

8 Cimsec Nominees (Tempatan) Sdn Bhd 4,698,600 1.74

9 AMMB Nominees (Tempatan) Sdn Bhd 3,371,500 1.25

10 Mayban Nominees (Tempatan) Sdn Bhd 3,186,500 1.18

11 Malaysia Nominees (Tempatan) Sendirian Berhad 3,007,800 1.11

12 Alliancegroup Nominees (Tempatan) Sdn Bhd 1,374,000 0.51

13 HLG Nominee (Tempatan) Sdn Bhd 919,000 0.34

14 Cheong Siew Yoong 734,400 0.27

15 Cimsec Nominee (Asing) Sdn Bhd 727,700 0.27

16 Wong Chock Faa 672,839 0.25

17 Southern Nominees (Tempatan) Sdn Bhd 653,000 0.24

18 Foong Seng 620,662 0.23

19 RHB Nominees (Tempatan) Sdn Bhd 580,000 0.21

20 Kenanga Nominees (Tempatan) Sdn Bhd 564,200 0.21

21 Tiong Young Kong 502,000 0.19

22 Ee Bee Pheng 500,000 0.19

23 RHB Merchant Nominees (Tempatan) Sdn Bhd 480,000 0.18

24 PB Securities Nominees (Tempatan) Sdn Bhd 370,500 0.14

25 Bimsec Nominees (Tempatan) Sdn Bhd 360,400 0.13

26 Amanah Raya Nominees (Tempatan) Sdn Bhd 344,000 0.13

27 Balakrisnen A/L Subban 300,000 0.11

28 Muhd Mawardi bin Hasan 297,500 0.11

29 Si Tho Yoke Meng 264,000 0.10

30 Lim Siew Lian 260,000 0.10


Substantial Shareholders as at 11th May 2006

Direct Shareholding Indirect Shareholding

Name of Shareholders No. of Shares Held % No. of Shares Held %

Scomi Group Bhd 192,567,567 71.35 — —

Kaspadu Sdn Bhd -— — (1)192,567,567 71.35

Shah Hakim @ Shahzanim bin Zain — — (2)192,567,567 71.35

Dato’ Kamaluddin bin Abdullah — — (2)192,567,567 71.35

Notes:-1 Deemed interested by virtue of Section 6A (4) of the Act through its interest in Scomi Group Bhd, which in turn is a substantial shareholder

of Scomi Engineering Bhd.2 Deemed interested by virtue of Section 6A (4) of the Act through his legal/beneficial shareholding in Kaspadu Sdn Bhd, which in turn is

deemed interested in Scomi Engineering Bhd.

Directors’ Shareholdings as at 11th May 2006

The Directors of Scomi Engineering and their respective shareholdings in Scomi Engineering as at 11th May 2006 according to

the Register of Directors’ Shareholdings are as follows:

Direct Indirect

Directors Designation No. of Shares % No. of Shares %

Datuk Zainun Aishah binti Ahmad Independent — — — —

Non-Executive Chairman

Dato’ Abdul Rahim bin Abu Bakar Independent — — — —


Shah Hakim @ Shahzanim bin Zain Executive Director/CEO — — (1)192,567,567 71.35

Gregory Jerome Gerald Fernandes Independent — — — —


Edlin bin Ghazaly Independent — — — —


Fad’l bin Mohamed Independent — — — —


Notes:-(1) Deemed interested by virtue of Section 6A (4) of the Act through his legal and/or beneficial shareholdings in Kaspadu Sdn Bhd which in

turn is deemed interested in Scomi Engineering.


Tenure of land: Audited net ie. freehold or Approximate book value as

Registered Description/ Leasehold (years)/ Land area/ age of at 31.12.2004Owner Location Address Existing Use Date of Acquisition Built-up area building (RM'000)

Scomi Sdn Bhd Title: Two-storey office Leasehold for Land area: 12 years Land:Land held under building and 99 years 86,600 sq ft (since 1992) 3,021H.S.(D) No 98470 No PT a factory (until 2073)Tapak Perusahaan Shah Alam Built-up area: Building:Bandar Shah Alam 30,435 sq ft 1,037Negeri Selangor 04.09.1991

Postal address:Lot 25, Persiaran SelangorSeksyen 15Shah Alam Selangor Darul Ehsan

Oiltools Pte Ltd 48 Gul Circle Singapore 629581 Workshop/Office Leasehold (remaining Land area: 17 years Building: 13 years 7 months, until 150,388 sq ft 2,162 2018) 01.01.1978 Built-up area: Land: -

28,772 sq ft

Oiltools Holdings Vacant industrial land sub-let Leasehold for 999 years 1,821.09 N/A Land: 293 (Malaysia) Jalan Arsat Federal (until 2868) sq metresSdn Bhd Territory of Labuan 28.06.1984

Oiltools Services Vacant industrial land sub-let Leasehold for 999 years 2,023.4 20 years Land: 327 (Malaysia) Jalan Arsat Federal (until 2868) sq metresSdn Bhd Territory of Labuan 27.06.1984

PT Inti Jatam Pura Land Jl. Workshop and Leasehold for 30 years 7,550 sq metres N/A Land: 752 Mulawarman, Kelurahan Office (until 2026) Sepinggan, Kecamatan 24.09.1996 Balikpapan Selatan, Kalimantan, Indonesia

PT Inti Jatam Pura Building Jl. Workshop and 1998 2,291 sq metres 7 years Building: 224Mulawarman, Kelurahan OfficeSepinggan, Kecamatan Balikpapan Selatan, Kalimantan, Indonesia

Otto Wardhana Land Jl. Residential Leasehold for 20 years 2,430 sq metres N/A Land: 163Mulawarman, RT 022 RW 07, (until 2012) Sepinggan Balikpapan Selatan, 30.09.1991Kalimantan, Indonesia

Otto Wardhana Building Jl. Residential 30.09.1991 343 sq metres 22 years –Mulawarman, RT 022 RW 07, Sepinggan Balikpapan Selatan, Kalimantan, Indonesia

list of properties

as at 31st December 2005


corporate directory

SCOMI SDN BHDLot 519 Jalan TUDMKg Baru Subang40000 Shah AlamSelangor Darul EhsanMalaysiaTel : 6 (03) 7846-4516Fax : 6 (03) 7846-4521

SCOMI TRANSPORTATION SOLUTIONSSDN BHDAsian Rent-A-Car

Main Rental OfficeNo 1-1 Block C1Dataran PrimaJalan PJU 1/4147301 Petaling JayaSelangor Darul EhsanMalaysiaTel : 6 (03) 7494-9802Fax : 6 (03) 7494-9801

Kuala Lumpur Airport Rental OfficeCounter B11, Arrival HallKL International Airport43900 SepangMalaysiaTel : 6 (03) 8787-6688Fax : 6 (03) 8787-4168

Penang Rental OfficeArrival Hall, Airport TerminalBayan Lepas11900 Pulau PinangMalaysiaTel : 6 (04) 6452-288Fax : 6 (04) 6440-076

Kuantan Rental OfficeLot 8, Public ConcourseSultan Ahmad Shah AirportKuantanPahang Darul MakmurMalaysiaTel : 6 (09) 5398-641Fax : 6 (09) 5398-096

Senai Rental OfficePublic ConcourseSenai Airport81250, Johor Bahru Johor Darul Takzim MalaysiaTel : 07-5990-453Fax : 07-5980-453

MACHINE SHOP LOCATIONS

CorporateOMS Oilfield Services(Malaysia) Sdn BhdSuite No. 3A.1, 3A FloorWisma Chase PerdanaOff Jalan SemantanDamansara Heights50490 Kuala LumpurMalaysiaTel : 6 (03) 2094-8566Fax : 6 (03) 2080-6333Email: [email protected]

Australia (Darwin)OMS Oilfield Services(Australia) Pty LtdP.O. Box 3600 Palmerston1702 McKinnon RoadPinelandsBerrimah 0829Northern TerritoryAustraliaTel : 6 (18) 8939-0900Fax : 6 (18) 8932-3738Email: [email protected]

Brunei DarussalamPY Oiltools Sdn BhdLot 3866Jalan Sungai PandanKuala Belait KA 1931Brunei DarussalamTel : 6 (73) 3-333-976Fax : 6 (73) 3-333-160Email: [email protected]

Indonesia (Balikpapan)P.T. OMS Oilfield ServicesJalan MulawarmanRt. 23 Rw. 08 No.115Balikpapan 76115East KalimantanIndonesiaTel : 6 (2) 542-770-082Fax : 6 (2) 542-770-084Email: [email protected]

Malaysia (Kemaman)OMS Oilfield Services(Malaysia) Sdn BhdWarehouse 14, Door No. 1Kemaman Supply Base24007 KemamanTerengganuMalaysiaTel : 6 (09) 863-1948Fax : 6 (09) 863-1830Email: [email protected]

Malaysia (Labuan)OMS Oilfield Services(Malaysia) Sdn BhdAsian Supply BaseRanca-Ranca Industrial EstateP.O. Box 8082387018 Labuan F.T.MalaysiaTel : 6 (087) 413-923Fax : 6 (087) 416-281Email: [email protected]

Thailand (Songkhla)OMS Oilfield Services(Thailand) Ltd428 Kho Yor RoadTambol PhawongAmphur MuangSongkhla 90100ThailandTel : 6 (674) 333-882Fax : 6 (674) 333-421Email: [email protected]

SingaporeOMS Oilfield Services Pte LtdNo. 48 Gul CircleJurong, Singapore 629581Republic of SingaporeTel : 6 (5) 6861-2677Fax: 6 (5) 6862-2719Email: [email protected]


AS ORDINARY BUSINESS:To consider, and if thought fit, to pass the following as Ordinary Resolutions:

1. To receive and adopt the Financial Statements for the financial year ended 31st December

2005 and the Reports of the Directors and Auditors thereon.

2. To re-elect the following Director who is retiring under Article 80 and Article 81 of the Articles

of Association of the Company and being eligible, offers himself for re-election:

(i) Mr Gregory Jerome Gerald Fernandes

3. To re-elect the following Directors who are retiring under Article 87 of the Articles of Association

of the Company and being eligible, offer themselves for re-election:

(i) Datuk Zainun Aishah binti Ahmad

(ii) Dato’ Abdul Rahim bin Abu Bakar

(iii) Encik Fad’l bin Mohamed

(iv) Encik Shah Hakim @ Shahzanim bin Zain

4. To approve the payment of Directors’ remuneration for the financial year ended 31st

December 2005.

5. To re-appoint Messrs PricewaterhouseCoopers as Auditors of the Company for the ensuing year

and to authorise the Directors to fix their remuneration.

6. To transact any other ordinary business of the Company for which due notice shall have been

given.

RESOLUTION 1

RESOLUTION 2

RESOLUTION 3

RESOLUTION 4

RESOLUTION 5

RESOLUTION 6

RESOLUTION 7

RESOLUTION 8

RESOLUTION 9

NOTICE IS HEREBY GIVEN that the 22nd Annual General Meeting of SCOMI

ENGINEERING BHD. (formerly known as Bell & Order Berhad) (the “Company”)

will be held at Nirwana Ballroom 2, Crowne Plaza Mutiara Hotel, Jalan Sultan

Ismail, 50718 Kuala Lumpur, Malaysia on 26th June 2006 at 10.00 a.m. for the

following purposes:-

notice of annual general meeting


AS SPECIAL BUSINESS:To consider and, if thought fit, to pass the following as Ordinary Resolutions:

7. Authority to Allot and Issue Shares Pursuant to Section 132D of the Companies Act, 1965

“THAT, subject to the Companies Act, 1965, the Articles of Association of the Company andthe approvals of the relevant governmental and/or regulatory authorities where necessary, theDirectors be and are hereby authorised, pursuant to Section 132D of the Companies Act, 1965,to allot and issue shares in the Company, at any time and upon such terms and conditionsand for such purposes as the Directors may in their absolute discretion deem fit, provided thatthe aggregate number of shares issued pursuant to this resolution in any one year does notexceed ten percent (10%) of the issued and paid-up share capital of the Company at anytime and that the Directors be and are hereby further authorised to obtain approval for thelisting of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhadand that such authority shall continue in force until the conclusion of the next Annual GeneralMeeting of the Company.”

8. Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions of ARevenue or Trading Nature

"THAT approval be and is hereby given to the Company to enter into and to give effect tothe Recurrent Related Party Transactions of a Revenue or Trading Nature as stated in Section2 of the Circular to Shareholders dated 2 June 2006 (“Circular”) with the specified classes ofRelated Parties as stated in Section 2.3 of the Circular which are necessary for the Company’sday-to-day operations subject to the following:-

(i) the transactions are in the ordinary course of business and are on terms not morefavourable to the Related Parties than those generally available to the public and arenot to the detriment of the minority shareholders; and

(ii) the aggregate value of such transactions conducted pursuant to the Shareholders’Mandate during the financial year will be disclosed in the Annual Report for the saidfinancial year;

AND THAT such approval shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company at whichtime it will lapse, unless by a resolution passed at the meeting, the authority is renewed; or

(b) the expiration of the period within which the next AGM of the Company subsequent tothe date it is required to be held pursuant to Section 143(1) of the Malaysian CompaniesAct, 1965 (“the Act”) (but shall not extend to such extension as may be allowed pursuantto Section 143(2) of the Act); or

(c) revoked or varied by resolution passed by the shareholders in a general meeting;whichever is earlier.

AND THAT the Directors of the Company be and are hereby authorised to complete and doall such acts and things as they may consider expedient or necessary in the best interest ofthe Company (including executing all such documents as may be required) to give effect tothe transactions contemplated and/or authorised by this Ordinary Resolution.”

RESOLUTION 10

RESOLUTION 11


To consider and, if thought fit, to pass the following as a Special Resolution:

9. Proposed Amendments to Memorandum of Association

“THAT the alterations, modifications and additions to the Memorandum of Association of the

Company as set out below be and are hereby approved and that the Directors be and are

hereby authorised to take steps as may be necessary to give full effect to the said alterations,

modifications and additions to the Memorandum of Association:-

The existing Clause 3 be altered by the deletion of sub-clauses (1) to (8) of Clause 3 thereof

and substituting therefor with the following eight new sub-clauses:-

Clause 3(1)

To hold shares or invest in, and to acquire, lease promote or sell, and to manage, conduct or

undertake the business of management or otherwise howsoever direct the operations of any

other business, company, corporation, firm of any other enterprise, undertaking or venture, and

generally to undertake any of the business of a holding, or management company.

Clause 3(2)

To purchase or otherwise acquire for investment lands, houses, buildings, plantations and other

property of any tenure and any interest therein and any movable property of any description

or any interest therein and to create and sell freehold and leasehold ground rents and to

make advances upon the security of land or house, or other property or any interest therein

and generally to sell, lease or exchange land and house, property and any other property

whether real or personal and whether for valuable consideration or not.

Clause 3(3)

To carry on the business of and to act as agents, investors, merchants, traders, franchisors

carriers and shipowners or in any other capacity whatsoever in Malaysia or elsewhere and to

import, export, buy, sell, barter, exchange, pledge, made advances upon or otherwise deal in

goods, products, articles and merchandise of all kinds.

The word “company” in this clause except where used in reference to this Company, shall be

deemed to include any partnership or other body of persons whether incorporated or

unincorporated, and whether domiciled in Malaysia or elsewhere, and that the objects

specified in each paragraph of this clauses shall be regarded as independent objects and

accordingly shall, except where otherwise expressed in any paragraph, be in nowise limited or

restricted by reference to, or inference from the terms of any other paragraph or the name

of the Company but may be carried out in as full and ample a manner and construed just

as wide a sense as if the said paragraph defined the objects of a separate distinct and

independent company.

Clause 3(4)

To carry on all or any of the trades or businesses of manufacturers, assemblers, dealers, hirers,

stockists, importers, exporters, repairers, modifiers, designers of equipment, machinery, designs

tools, parts and articles of all kinds and descriptions required or used in the exploration for and

production of oil, petroleum, petroleum products and other minerals whether on land or sea

and other general services related thereto.

RESOLUTION 12


Clause 3(5)

To manufacture, produce, trade and deal in all machinery, plant, articles, appliances and things of

all descriptions capable of being used in petroleum, refineries and business generally related thereto.

Clause 3(6)

To tender for and enter into contracts for the engineering and design, onshore fabrication,

platform installation, pipe laying, production facility hook-up, platform maintenance and all

other general onshore contracting related services.

Clause 3(7)

To carry on the business of manufacturers and merchants of motor vehicles, and generally of all

kinds of omnibus and vehicles for the transport of persons and goods, whether propelled or moved

by electricity, steam, oil, gas, vapour, atomic energy or other motive or mechanical power.

Clause 3(8)

To carry on the business of manufacturers and merchants of trailers, semi trailers, tankers,

caravans and superstructures and bodies of commercial vehicles of all kinds and uses and to

engage in designing and engineering works.”

By Order of the Board

WAN MARZIMIN BIN WAN MUHAMMAD (LS 0009013)

CHONG MEI YAN (MAICSA 7047707)Company Secretaries

Kuala Lumpur

Date : 2 June 2006

NOTES:Note 1 : Appointment of Proxy(i) A member of the Company entitled to attend and vote at the

meeting may appoint a proxy or proxies (but not more than two)to attend and vote on his/her behalf. A proxy may but need notbe a member of the Company.

(ii) Where a member appoints two proxies, the appointments shall beinvalid unless he/she specifies the proportion of his/her holding to berepresented by each proxy.

(iii) The instrument appointing a proxy, in the case of an individualshall be signed by the appointer or his/her attorney dulyauthorised in writing and in the case of a corporation, eitherunder seal or under the hand of an officer duly authorised. If noname is inserted in the space for the name of your proxy, theChairman of the meeting will act as your proxy.

(iv) The instrument appointing a proxy must be completed anddeposited at the office of the Share Registrar of the Company,Symphony Share Registrars Sdn Bhd (formerly known as MalaysianShare Registration Services Sdn Bhd) at Level 26, Menara MultiPurpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala

Lumpur, not less than forty-eight (48) hours before the timeappointed for holding the Annual General Meeting or anyadjournment thereof.

Note 2 : Explanatory Note on Item 7 of the Agenda (Resolution 10)The ordinary resolution under Item 7 above is proposed pursuant toSection 132D of the Companies Act, 1965, and if passed, will give theDirectors of the Company from the date of the above Annual GeneralMeeting, authority to issue and allot shares from the unissued sharecapital of the Company for such purposes as the Directors deem fit andin the interest of the Company. This authority, unless revoked or varied ata general meeting, will expire at the conclusion of the next AnnualGeneral Meeting of the Company.

Note 3 : Explanatory Note on Item 8 of the Agenda (Resolution 11)Please refer to Circular to Shareholders dated 2 June 2006.

Note 4: Explanatory Note on Item 9 of the Agenda (Resolution 12)Please refer to Circular to Shareholders dated 2 June 2006.


statement accompanying notice oftwenty-second annual general meeting

1. DIRECTORS STANDING FOR RE-ELECTION AT THE TWENTY-SECOND ANNUAL GENERAL MEETING OF THE COMPANYDetails of Directors standing for re-election are as follows:

Name of Director Director’s Profile

(page number in this Annual Report)

Gregory Jerome Gerald Fernandes please refer to pages 23 and 97

Datuk Zainun Aishah binti Ahmad please refer to pages 21 and 97

Dato’ Abdul Rahim bin Abu Bakar please refer to pages 22 and 97

Fad’l bin Mohamed please refer to pages 24 and 97

Shah Hakim @ Shahzanim bin Zain please refer to pages 24 and 97

2. DETAILS OF DIRECTORS’ ATTENDANCE AT BOARD MEETINGSA total of nine (9) Board Meetings were held during the financial year ended 31 December 2005.

Name of Director No. of Meetings Attended

Datuk Zainun Aishah binti Ahmad (appointed on 15 December 2005) -

Dato’ Abdul Rahim bin Abu Bakar (appointed on 15 December 2005) -

Gregory Jerome Gerald Fernandes 9/9

Edlin bin Ghazaly 9/9

Fad’l bin Mohamed (appointed on 15 December 2005) -

Shah Hakim @ Shahzanim bin Zain (appointed on 15 December 2005) -

Dato’ Abdul Rahman bin Mohammed Hashim (resigned on 15 December 2005) 8/9

Ho Yew Hong (resigned on 15 December 2005) 9/9

James Khong Poh Wah (resigned on 15 December 2005) 8/9

3. DETAILS OF DATE, TIME AND PLACE OF TWENTY-SECOND ANNUAL GENERAL MEETINGThe Twenty-Second Annual General Meeting of Scomi Engineering Bhd (formerly known as Bell & Order Berhad) will be

held as follows:

Date : 26th June 2006

Time : 10:00 a.m.

Place : Nirwana Ballroom 2, Crowne Plaza Mutiara Hotel, Jalan Sultan Ismail, 50718 Kuala Lumpur, Malaysia

form of proxyNo. of Ordinary Shares Held

I/We ......................................................................................................................................... NRIC/Passport No...................................................(Full name)

of..................................................................................................................................................................................................................................(Full address)

being a member/members of Scomi Engineering Bhd., hereby appoint .....................................................................................................(Full name and NRIC / passport no.)

of..................................................................................................................................................................................................................................(Full address)

or failing him/her.......................................................................................................................................................................................................(Full name)

of..................................................................................................................................................................................................................................(Full address)

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the 22nd Annual GeneralMeeting (“AGM”) of Scomi Engineering Bhd (formerly known as Bell & Order Berhad) (the “Company”) to be held at NirwanaBallroom 2, Crowne Plaza Mutiara Hotel, Jalan Sultan Ismail, 50718 Kuala Lumpur, Malaysia on 26th June 2006 at 10.00 a.m., orany adjournment thereof.

Ordinary Business For Against

Resolution 1 To receive and adopt the Financial Statements for the financial year ended 31st December 2005 and the Reports of the Directors and Auditors thereon.

To re-elect the following Director who is retiring under Article 80 and Article 81of the Articles of Association of the Company and being eligible, offers himself for re-election:

Resolution 2 (i) Mr Gregory Jerome Gerald Fernandes

To re-elect the following Directors who are retiring under Article 87 of the Articles of Association of the Company and being eligible, offer themselves for re-election:

Resolution 3 (i) Datuk Zainun Aishah binti Ahmad

Resolution 4 (ii) Dato’ Abdul Rahim bin Abu Bakar

Resolution 5 (iii) Encik Fad’l bin Mohamed

Resolution 6 (iv) Encik Shah Hakim @ Shahzanim bin Zain

Resolution 7 To approve the payment of Directors’ remuneration for the financial year ended 31st December 2005.

Resolution 8 To re-appoint Messrs PricewaterhouseCoopers as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration.

Resolution 9 To transact any other ordinary business of the Company for which due notice shall have been given.

Special Business For Against

Resolution 10 Authority to Allot and Issue Shares Pursuant to Section 132D of the Companies Act, 1965.

Resolution 11 Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions of A Revenue or Trading Nature.

Resolution 12 Proposed Amendments to Memorandum of Association.(Special Resolution)

Please indicate with a check mark ("✓ ") in the space provided to show how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will

vote or abstain at his/her discretion.

Dated this................day of.......................................2006 Signature/Seal...............................................................

Notes:(i) A member of the Company entitled to attend and vote at the meeting may appoint a proxy or proxies (but not more than two) to attend and vote on his/her

behalf. A proxy may but need not be a member of the Company.(ii) Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her holding to be represented by each proxy.(iii) The instrument appointing a proxy, in the case of an individual shall be signed by the appointer or his/her attorney duly authorised in writing and in the case of a

corporation, either under seal or under the hand of an officer duly authorised. If no name is inserted in the space for the name of your proxy, the Chairman of theMeeting will act as your proxy.

(iv) The instrument appointing a proxy must be completed and deposited at the office of the Share Registrar of the Company, Symphony Share Registrars Sdn Bhd atLevel 26, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur, not less than forty-eight (48) hours before the time appointed forholding the Annual General Meeting or any adjournment thereof.

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The Registrar of Scomi Engineering Bhd.(formerly known as Bell & Order Berhad)Symphony Share Registrars Sdn. Bhd.

Level 26, Menara Multi Purpose

Capital Square

No. 8, Jalan Munshi Abdullah

50100 Kuala Lumpur

AFFIX

STAMP

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