Scomi Group Bhd Annual Report 2014

Transcription

Scomi Group Bhd
Realising Potential
Annual Report 2014
The Art of
Technology
Realising Potential through
the Ar t of Technolo gy
ar t 1
/ɑːt/
An expression or activity that needs special skills,
knowledge or imagination
When scientific knowledge is expressed with skill and imagination,
and judiciously applied to improve lives and the world we live in,
technology is elevated to an art form.
Scomi, a Global Technology Enterprise, continuously strives to
break boundaries to realise the potential technology brings. Through our
Energy Services and Transport Solutions, we aim to continue providing
innovative and integrated solutions for Malaysia and the world.
p1
S com i G roup Bhd An n u al R ep o r t 2014
Contents
Key Financial Indicators
p 3 Key Financial Highlights
p 4 Corporate Structure
p 6 Corporate Statement
p2
Corporate Information
p 8 Board of Directors
p 1 0 Profile of Directors
p 1 6 Management Team
p 20 Chairman’s Statement
p 28 Management Review of Operations
p 40 Corporate Social Responsibility
p 44 Human Capital Development
p 48 Statement on Corporate Governance
p 60 Statement on Risk Management and Internal Control
p 66 Audit and Risk Management Committee Report
p 69 Additional Information
p 71 Statement of Directors’ Responsibility
p 74 Financial Statements
p 189 Analysis of Shareholdings
p1 9 3 List of Properties
p 19 6 Corporate Directory
p 199 Notice of Annual General Meeting
Form of Proxy
p7
p2
S com i G roup Bhd An n u al R epo r t 2014
Key Financ ial I ndic ato r s
20142013201120102009
RM’000RM’000RM’000RM’000RM’000
Continuing operations
Turnover
1,653,059
1,922,368 1,402,566 1,931,036
2,419,781
EBITDA
209,668
255,118
305
(148,563)
(192,953) Depreciation
89,775
104,343 119,156 138,420 139,247 Finance costs
38,834
129,678 48,856 98,857
106,719 Share of profit in
associated companies
(247)
133 (2,978)
6,157
43,577 Share of profit from
joint-ventures
5,310
6,568 3,754 415
3,596
81,059
(50,113)
21,097 (27,557)
(167,707)
(19,298)
(276,980)
(27,081)
(951) (31,092)
30,946
(9,258)
(6,460)
(62,989)
(187,005)
(170,156)
(304,061)
(3,269)
(32,043) –
21,688
(16,732)
(69,449)
2,616 (357,161)
133,456 (307,330)
134,424
(32,043) 21,179
4,956
(66,833)
(223,705)
(172,906)
1,568,6371,564,540 1,187,688 1,182,658 1,086,801 1,554,210 1,285,589
1,391,731
1,371,255 1,025,795 1,903,083
1,638,733 1,394,528 1,387,259 1,053,648
Basic - Net EPS (sen)**
0.31
(5.20)
(16.07)
(12.61)
0.96
Fully diluted - Net EPS (sen)@
0.26
(4.07)
(16.04)
(12.46)
0.94
Profit/(loss) before tax
Taxation
Profit/(loss) from continuing operations
Loss from discontinued operations
Profit/(loss) for the year
Non-controlling interest
Profit/(loss) attributed to
owners of the Company
Numbers of shares in issue (‘000)
Weighted average number
of shares assumed in issue (‘000)
Weighted average number of shares used
to compute diluted earnings per share (‘000) 9,875
Notes
** Based on profit/(loss) attributed to owner of the Company and the weighted average number of shares assumed to be in issue in the respective
period/year.
@ Based on profit/(loss) attributed to owner of the Company and the weighted average number of shares assumed to be in issue in the respective
period/year after taking into consideration the dilutive effect of unexercised ESOS. 2009 – 2011
The financial highlights on pages 2 and 3 reflect the audited results of Scomi Group Bhd, with certain numbers restated to reflect retrospective
effects as a result of adoption of new or revised Financial Reporting Standards in the respective years. p3
12 months
2014
1,653
15 months
2013
1,922
12 months
2011
1,402
12 months
2010
1,931
12 months
2009
2,419
Key Financ ial H ighlight s
12 months
2014
1,653
Turnover
(RM Million)
12 months
2014
81
12 months
2014
1,653
15 months
2013
1,922
12 months
2011
1,402
12 months
2010
1,931
12 months
2009
2,419
12 months
2011
1,402
12 months
2010
1,931
12 months
2009
2,419
12 months
2011
(168)
12 months
2010
(277)
12 months
2009
(951)
Profit/(Loss) Before Tax
(RM Million)
15 months
2013
21
12 months 12 months
12 months
Profit/(Loss) Attributed
to Owners
2011
2010
2009
of the Company
(168)
(277)
(951)
(RM Million)
12 months
2014
5
12 months
2014
81
15 months
2013
1,922
12 months
2014
81
15 months
2013
21
12 months
2009
10
15 months
2013
21
15 months
2013
(66)
Total Assets (RM12Million)
months 12 months
RM2,713
2011
(168)
2010
(277)
12 months
2011
(224)
12 months
2010
(173)
12 months
2014
5
12 months
2009
(951)
12 months
2009
10
RM2,675
Earning Per Share (Basic)
0.31 sen
15 months
2013
(66)
12 months
2011
(224)
12 months
(5.20)
sen
2010
(173)
Net Tangible Assets (RM Million)
RM316
RM441
12 months
2014
5
12 months
Shareholders’ Fund (RM Million) 2009
10
RM608
RM559
Net Assets Per Share (Attributable to owners of the Company)
15 months
39.0 sen
2013
(66)
12 months
2011
(224)
38 sen
12 months
2010
(173)
2014 (As at 31.03.2014)
2013 (As at 31.03.2013)
p4
Corp orate St ruc t ure
a s a t 31 July 2014
SCOMI GROUP BHD1
65.65%2
Scomi Oiltools
Bermuda Limited
(Bermuda)
Scomi OBM
Terminal
Sdn Bhd
Scomi International
Private Limited
(Singapore)
Scomi Oiltools
(Shetland) Limited
(Scotland)
Scomi Solutions
Sdn Bhd
Scomi Oiltools
(Europe) Ltd
(Scotland)
Scomi Ecosolve
Limited (BVI)
Scomi Energy
Services Bhd1
51%
Gemini Sprint
Sdn Bhd
49%
Emerald Logistics
Sdn Bhd
50%
Transenergy
Shipping Pte. Ltd.
(Labuan)
51%
KMC All Star
Chemical Sdn
Bhd
51%
Trans Advantage
Sdn Bhd
Marineco Limited
(Labuan)
21.08%
Southern Petroleum
Transportation Joint
Stock Company
(Vietnam)
19%
KMC Oiltools
Algerie EURL
(Algeria)
Scomi Oiltools Inc
(Texas, USA)
Augean North
Sea Services
Limited (Scotland)
Scomi Oiltools
Egypt SAE3,4
(Egypt)
Scomi Oiltools de
Mexico S de RL de
CV5 (Mexico)
Scomi Chemicals
Sdn Bhd
Scomi Oiltools
Overseas (M)
Limited (Mauritius)
Oilfield Services de
Mexico S de RL
de CV5 (Mexico)
Scomi Capital
Limited (Labuan)
48%
Scomi Marine
Services Pte Ltd
(Singapore)
Scomi D & P
Sdn Bhd
4%
Scomi KMC
Sdn Bhd
30%
Goldship Pte Ltd
(Singapore)
Ophir Production
Sdn Bhd
Scomi Equipment
Inc.
(Texas, USA)
80.54%
Global Learning
and Development
Sdn Bhd
PT Rig Tenders
Indonesia Tbk6
(Indonesia)
95%
Scomi Sosma
Sdn Bhd
49%
King Bridge
Enterprises Limited
(BVI)
Scomi Anticor
S.A.S7
(France)
Scomi Energy
Sdn Bhd
50%
Scomi Enviro
Sdn Bhd
PT Scomi Oiltools
(Indonesia)
Sosma (B) Sdn Bhd
(Brunei)
95%
PT Inti Jatam Pura
(Indonesia)
Scomi Oiltools
(RUS) LLC
(Russia)
p5
72.33%
Scomi Engineering
Bhd1
50%
Transenergy
Shipping
Management
Sdn Bhd
Scomi Oiltools
Sdn Bhd
Scomi Oilfield
Limited
(Bermuda)
Scomi Oiltools
Pty Ltd
(Australia)
KMCOB Capital
Berhad
Scomi Oiltools
(Thailand) Ltd8
(Thailand)
Scomi Oiltools
Oman LLC
(Oman)
Scomi OMS
Oilfield Services Ltd
(BVI)
Scomi Transit
Projects Sdn Bhd
Scomi Transit
Projects Brazil
Sdn Bhd
Scomi Transit
Projects Brazil (Sao
Paulo) Sdn Bhd
Urban Transit
Servicos Do Brasil
LTDA10 (Brazil)
Urban Transit
Private Limited11
(India)
Scomi
Transportation
Systems Sdn Bhd
Scomi Special
Vehicles Sdn Bhd
Scomi Oiltools Ltd
(Cayman Islands)
50%
51%
Scomi Platinum
Sdn Bhd
Scomi Oiltools
(Cayman) Ltd
(Cayman Islands)
50%
Scomi Oiltools (S)
Pte Ltd
(Singapore)
Scomi Oiltools
(Africa) Limited
(Cayman Islands)
KMC Oiltools BV
(Netherlands)
Vibratherm Limited
(England & Wales)
60%
KMC Oiltools India
Pte Ltd9
(India)
95%
PT Multi Jaya
Persada
(Indonesia)
Scomi Rail
Bhd
Wasco Oil Service
Company Nigeria
Limited (Nigeria)
Scomi Trading
Sdn Bhd
96%
Scomi Coach
Sdn Bhd
Oiltools Gabon SA
(Gabon)
Scomi Coach
Marketing Sdn Bhd
Key:
1. Listed on the Bursa Malaysia Securities Berhad (Kuala Lumpur Stock Exchange).
2. Includes 0.01% held by Scomi Energy Sdn Bhd.
Oilfield Services (Western) Division
3. Scomi Oiltools Bermuda Limited holds on trust for Scomi Oilfield Limited pursuant to a trust deed dated 8 March 2013.
4. Includes 1 share each held by Scomi Oiltools Ltd and Scomi Oiltools (Cayman) Ltd.
5. Includes 1 share held by an individual.
Energy Services Division
6. Listed on the Jakarta Stock Exchange.
7. Includes 1 Preferential Share each held by 2 different individuals.
8. Includes 1 Class A share each held by Scomi Oiltools Ltd and Scomi Oiltools (Cayman) Ltd.
9. Includes 1 share held by Scomi Oiltools Ltd.
Transport Solutions Division
10. Includes 1 share held by Scomi Rail Bhd.
11. Includes 0.0004% held by Scomi Rail Bhd.
Notes:
• This corporate structure does not include the subsidiaries/associated companies of PT Rig Tenders Indonesia Tbk.
• Except as otherwise expressly stated, all companies in this corporate structure are incorporated in Malaysia.
• Except as otherwise expressly stated, all companies in this corporate structure are wholly owned by their respective holding companies.
p6
Corp o rate St atement
Wi t h a p resence in 48 loc ations ac ros s
2 2 cou nt ri es, t he S comi group of companies
i s a gl o b a l tec hn olog y enter pr is e in th e
energy an d logis tic s indus tr ies.
We are a global technology
enterprise.
Our global reach, capabilities and talent
provide us with the necessary resources
to develop and own new technology in
all areas of our business.
We focus on Energy & Logistics.
All our businesses are focused on the
Energy and/or Logistics sectors with the
ability to compete globally. All of us in the
Scomi family should remember that any
new initiatives we undertake will focus
on these areas of business.
We provide innovative solutions.
We innovate to respond to an
evolving environment. Our products
and operations meet today’s needs
while anticipating tomorrow’s. We are
committed to developing competitive
and innovative solutions to create
efficiency, add value and grow with
our customers to shape our future.
We aim to realise potential for our stakeholders.
Our customers:
We will develop and offer customers
innovative and competitive products
and services that help them grow their
business.
Our shareholders:
We are committed to providing
long-term superior returns to our
shareholders.
Our people:
We aim to provide our employees with
developmental opportunities so they can
succeed on personal and professional
levels.
Our suppliers:
We will treat our suppliers as our
partners in the mutual interest of
business growth.
Our society / environment:
As a good corporate citizen, we will give
back to the communities we operate in
worldwide.
p7
Corp o rate I nfor mat ion
Board of Directors
Dato’ Mohammed Azlan Bin Hashim
Independent Non-Executive Chairman
Tan Sri Nik Mohamed Bin Nik Yaacob
Independent Non-Executive Director
Tan Sri Mohamed Azman Bin Yahya
Dato’ Sreesanthan A/L Eliathamby
Dato’ Abdul Rahim Bin Abu Bakar
Administrative and Correspondence
Address
Level 17, 1 First Avenue
Bandar Utama
47800 Petaling Jaya
Selangor Darul Ehsan
Malaysia
Tel : 03-7717 3000
Fax : 03-7728 5258
Website : www.scomigroup.com.my
Email : [email protected]
Dato’ Teh Kean Ming
Non-Independent Non-Executive Director
Foong Choong Hong
Abdul Hamid Bin Sh Mohamed
Shah Hakim @ Shahzanim Bin Zain
Chief Executive Officer/
Non-Independent Executive Director
Lee Chun Fai
Alternate Director to Dato’ Teh Kean Ming
Audit and Risk Management
Committee
(Chairman)
Nomination and Remuneration
Committee
(Chairman)
Registered Office
Bandar Utama
47800 Petaling Jaya
Malaysia
Tel : 03-7717 3000
Fax : 03-7728 5853
Registrar
Symphony Share Registrars Sdn Bhd
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Malaysia
Tel : 03-7841 8000
Helpdesk : 03-7849 0777
Fax : 03-7841 8008
Advocates & Solicitors
Albar & Partners
Advocates & Solicitors
6th Floor, Faber Imperial Court
Jalan Sultan Ismail
50250 Kuala Lumpur
Malaysia
Kadir Andri & Partners
Level 10, Menara BRDB
285 Jalan Maarof
Bukit Bandaraya
59000 Kuala Lumpur
Malaysia
Company Secretaries
Ong Wei Leng (MAICSA 7053539)
Chong Mei Yan (MAICSA 7047707)
Auditors
KPMG (Firm No.: AF 0758)
Chartered Accountants
Level 10, KPMG Tower
8, First Avenue, Bandar Utama
47800 Petaling Jaya
Malaysia
Principal Bankers
CIMB Bank Berhad
18th Floor, Menara CIMB
Jalan Stesen Sentral 2
Kuala Lumpur Sentral
50470 Kuala Lumpur
Malaysia
OCBC Bank (Malaysia) Bhd
18th Floor, Menara OCBC
18 Jalan Tun Perak
50050 Kuala Lumpur
Malaysia
Stock Exchange Listing
Main Market of Bursa Malaysia Securities
Berhad
Stock Name: Scomi
Stock Code: 7158
p8
B oard of D irec tor s
Dato’ M ohammed Azlan Bin Hashim
Chairman, Independent Non-Executive Director
Tan Sri M ohamed Azman
Bin Yahya
Dato’ Sreesanthan A/L
E liathamby
Ab dul Hamid Bin Sh M ohamed
Lee Chun Fai
p9
Tan Sri N ik M ohamed Bin
N ik Yaacob
Dato’ Ab dul R ahim Bin Abu B ak ar
Dato’ Teh Kean M ing
Fo ong Cho ong Hong
Shah Hak im @ Shahzanim Bin Z ain
Chief Executive Officer /
p10
Pro f ile o f D i rec to r s
Dato’ M ohammed Azlan Bin Hashim
Tan Sri Asmat Bin Kamaludin
(Resigned on 31 October 2013)
Dato’ Azlan, aged 57, Malaysian, is an Independent
Non-Executive Director and the Chairman of the
Company. He was appointed to the Board on 13 July
2004.
Dato’ Azlan graduated with a Bachelor of Economics from
Monash University and qualified as a Chartered Accountant
in Australia. He is a fellow member of the Institute of
Chartered Accountants Australia, Malaysian Institute of
Directors, Malaysia Institute of Chartered Secretaries and
Administrators, a honorary member of the Institute of
Internal Auditors, Malaysia and a member of the Malaysian
Institute of Accountants.
He has extensive experience in the corporate sector. Dato’
Azlan is the Chairman of D&O Green Technologies Berhad
and SILK Holdings Berhad. He also serves as a Non-Executive
Director of Khazanah Nasional Berhad, IHH Healthcare
Berhad, Labuan Financial Services Authority and is a member
of the Investment Panel of the Employees’ Provident Fund
and Retirement Fund Incorporated. During his career, he
served in various capacities in the financial services industry
and investment holding companies, including as Chief
Executive of Bumiputra Merchant Bankers Berhad, Group
Managing Director of Amanah Capital Malaysia Berhad and
Executive Chairman of Bursa Malaysia Berhad Group.
Dato’ Azlan is a member of, and the Chairman of the
Nomination and Remuneration Committee of the Board.
He attended all of the 8 Board Meetings held during the
financial year ended 31 March 2014.
Tan Sri Asmat, 70, a Malaysian, was an Independent
Non-Executive Director and the Chairman of the
Company. He was appointed to the Board on 3 March
2003 and resigned on 31 October 2013.
Tan Sri Asmat holds a Bachelor of Arts (Honours) degree in
Economics from the University of Malaya, and he also holds
a Diploma in European Economic Integration from the
University of Amsterdam.
Tan Sri Asmat has vast experience in various capacities in
the public service and his last position was as the SecretaryGeneral of the Ministry of International Trade and Industry,
Malaysia (MITI), a position he held from 1992 to 2001.
Between1973 and 1976, he has served as Senior Economic
Counsellor for Malaysia in Brussels and has worked with
several international bodies such as Association of SouthEast Asian Nations (ASEAN), World Trade Organisation (WTO)
and the Asia-Pacific Economic Cooperation, representing
Malaysia in relevant negotiations and agreements. Tan Sri
Asmat has also been actively involved in several national
organisations such as Johor Corporation, the Small and
Medium Scale Industries Corporation (SMIDEC) and
the Malaysia External Trade Development Corporation
(MATRADE) while in the Malaysian Government service. In
2008, Tan Sri Asmat was appointed by MITI to represent
Malaysia as Governor on the Governing Board of the
Economic Research Institute for Asean and East Asia (ERIA).
Other Malaysian public companies in which he is a director
are Permodalan Nasional Bhd, UMW Holdings Berhad, YTL
Cement Berhad, Panasonic Manufacturing Malaysia Berhad,
Compugates Holdings Berhad, The Royal Bank of Scotland
Berhad, UMW Oil & Gas Corporation Berhad and AirAsia X
Berhad. He also serves on the Board of JACTIM Foundation.
Tan Sri Asmat was a member of, and chairs the Nomination
and Remuneration Committee and the Options Committee
of the Board. Tan Sri Asmat attended all the 4 Board
Meetings held during the financial year ended 31 March
2014, before his resignation on 31 October 2013.
Tan Sri N ik M ohamed Bin N ik Yaacob
Tan Sri M ohamed Azman Bin Yahya
Tan Sri Nik Mohamed, 65, a Malaysian, is an
Independent Non-Executive Director of the Company
and was appointed to the Board on 13 July 2004.
YBhg Tan Sri Mohamed Azman Bin Yahya, a Malaysian,
aged 50, is a Independent Non-Executive Director of
the Company and was appointed to the Board on 17
March 2003.
Tan Sri Nik Mohamed holds a Diploma in Mechanical
Engineering, a Bachelor of Engineering (Hons) from Monash
University, Australia and a Masters in Business Management
from the Asian Institute of Management, Philippines. He
also completed the Advanced Management Programme at
Harvard University in the United States.
He served as the Group Chief Executive of Sime Darby
Berhad from 1993 until his retirement in June 2004 and
during this period, he also served on the Boards of many
of the Sime Darby group companies. He was Sime Darby
Berhad’s Director of Operations in Malaysia prior to his
appointment as the Group Chief Executive in 1993. He
was also the Chairman of the Advisory Council of National
Science Centre and Chairman of the Board of Universiti
Teknologi MARA (UITM) and served as a member of the
INSEAD East Asian Council, National Council for Scientific
Research and Development, Co-ordinating Council for the
Public-Private Sectors in the Agricultural Sector, National
Coordinating Committee on emerging Multilateral Trade
Issues and the Industrial Coordinating Council. He was a
representative for Malaysia in the APEC Business Advisory
Council and the Asia-Europe Business Forum. Other
Malaysian public companies in which he is a director are
GuocoLand (Malaysia) Berhad, Symphony Life Berhad and
Scomi Energy Services Bhd. Tan Sri Nik Mohamed is also the
Executive Director of Yayasan Kepimpinan Perdana (Perdana
Leadership Foundation).
Tan Sri Nik Mohamed is the Chairman of the Audit and Risk
Management Committee of the Board. Tan Sri Nik Mohamed
attended all of the 8 Board Meetings held during the
Tan Sri Azman is the acting Chairman and Group Chief
Executive of Symphony House Berhad, a listed business
process outsourcing group and the Executive Chairman of
Symphony Life Berhad, a listed property group. He holds a
first class honours degree in Economics from the London
School of Economics and Political Science and is a member
of the Institute of Chartered Accountants in England and
Wales and the Malaysian Institute of Accountants and a
fellow member of the Malaysian Institute of Banks.
During the Asian Financial Crisis in 1998, Tan Sri Azman was
appointed by the Malaysian Government to set-up and
head Danaharta, the national asset management company
and subsequently became its chairman until 2003. He was
also the Chairman of the Corporate Debt Restructuring
Committee (CDRC) which was set-up by Bank Negara
Malaysia to mediate and assist in the debt restructuring
of viable companies until its closure in 2002. His previous
career appointments include auditing with KPMG in London,
finance with the Island & Peninsular Group and investment
banking with Bumiputra Merchant Bankers and Amanah
Merchant Bank, the latter as Chief Executive.
In 2003, he returned to the private sector and founded
Symphony House Berhad. Outside his professional
engagements, Tan Sri Azman is active in public service
and sits on the boards of Khazanah Nasional Berhad and
Ekuiti Nasional Berhad (EKUINAS), the investment arm
and the private equity arm of the Malaysian Government
respectively.
Tan Sri Azman is a member of several national agencies
including the Capital Market Advisory Group of the Securities
Commission and the Financial Reporting Foundation. He
is also a Director of Sepang International Circuit and the
Chairman of Motorsports Association of Malaysia.
Tan Sri Azman is a member of the Nomination and
Remuneration Committee of the Board. He attended 7 out
of the 8 Board Meetings held during the financial year ended
31 March 2014.
p11
p12
Datuk Haron Bin Siraj
Dato’ Sreesanthan A/L E liathamby
(Resigned on 11 July 2014)
Datuk Haron, 69, a Malaysian, was an Independent
Non-Executive Director of the Company and was
appointed to the Board on 17 March 2003 and resigned
on 11 July 2014.
Datuk Haron graduated from the University of Manchester,
United Kingdom, with a Bachelor of Arts with Honours in
Economics, and also holds a Masters Degree in Development
Economics from Williams College, United States of America.
Datuk Haron started his career as an Assistant Controller with
the Ministry of Commerce and Industry. He subsequently
served as the Principal Assistant Secretary, and later as
the Under Secretary, in the Ministry of Primary Industries
until 1980. From August 1980, he served as the Minister
Counsellor (Economic Affairs) of the Permanent Mission of
Malaysia in Geneva, Switzerland, and returned to Malaysia
in 1985 to join the Ministry of International Trade and
Industry, holding various directorship positions, and was
later appointed as Deputy Secretary-General (Trade) in 1990.
Datuk Haron was appointed as Ambassador, Permanent
Representative of Malaysia to the United Nations and other
International Organisations (including the GATT and the
WTO) and Specialised Agencies in Geneva, Switzerland from
September 1992 to December 1996.
On his return, he became the Secretary-General of the
Ministry of Primary Industries where he served until end
of 2000. He was appointed Chief Executive Officer of the
Malaysian Palm Oil Promotion Council from January 2001
until his retirement in January 2006. Other Malaysian public
company in which he is a director is Kulim (Malaysia) Berhad.
Datuk Haron was a member of the Audit and Risk
Management Committee and the Options Committee of
the Board. He attended 7 out of the 8 Board Meetings held
during the financial year ended 31 March 2014.
Dato’ Sreesanthan, aged 53, a Malaysian, is an
Independent Non-Executive Director of the Company
and was appointed to the Board on 18 April 2006.
Dato’ Sreesanthan, is an Advocate & Solicitor and a
Consultant with the legal firm of Messrs Logan Sabapathy
& Co.
Dato’ Sreesanthan obtained his undergraduate law degree
from the University of Malaya and his post graduate degree
in law from the University of Oxford, United Kingdom.
He was formerly a Partner with the legal firm of Messrs Zain
& Co, Messrs Zul Rafique & Partners and Messrs Kadir Andri &
Partners. Dato’ Sreesanthan is on the Disciplinary Committee
Panel of the Advocates and Solicitors’ Disciplinary Board.
Dato’ Sreesanthan is a member of the Audit and
Risk Management Committee and Nomination and
Remuneration Committee of the Board. He attended 7 out
of the 8 Board Meetings held during the financial year ended
31 March 2014.
Dato’ Ab dul R ahim Bin Abu B ak ar
Dato’ Teh Kean M ing
Dato’ Rahim, aged 68, a Malaysian, is an Independent
Non-Executive Director of the Company and was
appointed to the Board on 7 October 2010.
Dato’ Teh, aged 59, Malaysian, is a Non-Independent
Non-Executive Director of the Company. He was
appointed to the Board on 22 October 2012.
Dato’ Rahim graduated from the Brighton College of
Technology, United Kingdom with a Bachelor of Science
(Hons) in Electrical Engineering in 1969. He is a member
of the Institute of Engineers Malaysia (MIEM) and is a
Professional Engineer, Malaysia (P.Eng). He also holds the
Electrical Engineer Certificate of Competency Grade 1.
He graduated with a Bachelor of Engineering degree from
University of New South Wales, Australia in 1981.
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 Petroliam Nasional Berhad (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. Dato’
Rahim’s other directorships in public companies are Scomi
Engineering Bhd, Telekom Malaysia Berhad, Global Maritime
Ventures Berhad and Westports Holdings Berhad (formerly
known as Westports Holdings Sdn Bhd).
Dato’ Rahim is a member of the Audit and Risk Management
Committee of the Board. He attended 6 out of the 8 Board
Meetings held during the financial year ended 31 March
2014.
He was a Resident Civil & Structural Engineer of Dayabumi
Phase 3 Project (1981-1983) and Menara Maybank (19831987) and Area Engineer of Antah Biwater J.V. Sdn Bhd (19871989) prior to joining IJM Construction Sdn Bhd as Project
Manager (1989-1993), Senior Manager (Project) (1994-1997)
and Project Director (1998-2001). He was the Group General
Manager of IJM Corporation Berhad (“IJM”) from 1 April 2001
to 31 December 2004. He was also the head of the Property
Division of IJM from 2001 to 2008 and the Managing Director
of IJM Properties Sdn Bhd from 1 January 2005 to 10 June
2009. He was the Deputy Chief Executive Officer & Deputy
Managing Director of IJM from 1 July 2008 to 31 December
2010 prior to his present appointment as the Chief Executive
Officer & Managing Director on 1 January 2011.
His directorships in other public companies include IJM, IJM
Land Berhad, IJM Plantations Berhad, ERMS Berhad and Road
Builder (M) Holdings Bhd.
He attended 7 out of the 8 Board Meetings held during the
p13
p14
Fo ong Cho ong Hong
Ab dul Hamid Bin Sh M ohamed
Mr Foong, 53, a Malaysian, is a Non-Independent NonExecutive Director of the Company and was appointed
to the Board on 17 March 2003.
Encik Hamid, aged 49, a Malaysian, was appointed
as an Independent Non-Executive Director on 8 May
2014.
Mr Foong holds a post-graduate degree in Management
Studies majoring in Finance, from Middlesex University,
United Kingdom.
Encik Hamid is a Fellow of the Association of Chartered
Certified Accountants. He started his career in the
accounting firm Messrs Lim Ali & Co / Arthur Young, before
moving on to merchant banking with Bumiputra Merchant
Bankers Berhad. He later moved on to the Amanah Capital
Malaysia Berhad Group, an investment banking and finance
group, where he led the corporate planning and finance
functions until 1998 when he joined the Kuala Lumpur Stock
Exchange (KLSE), now known as Bursa Malaysia Berhad. He
joined the KLSE in 1998 as Senior Vice President in charge
of the Strategic Planning & International Affairs Division
and was promoted to Deputy President (Strategy and
Development) in 2002.
Mr Foong started his career with Robert Fleming Merchant
Bank in the United Kingdom as a Economist responsible for
South-East Asian markets and as an adviser for European
and British pension funds and insurance companies on
investments in South-East Asia and the Far East. Mr Foong
returned to Malaysia to develop a joint venture company
with Powers Supermarkets (UK), a then wholly-owned unit of
Associated British Foods public listed company, to develop a
Far Eastern sourcing and trading house based in Malaysia.
Mr Foong is a Certified Financial Planner and also a Fellow of
the Chartered Management Institute (UK). He also plays an
advisory role in the Investment Committee of several multinational companies for the identification of investments
and development of business opportunities. He is currently
the Managing Director of Asian Asset Group Sdn Bhd and a
director of Asian Asset Management Sdn Bhd.
He was re-designated as Chief Financial Officer in 2003.
During his five years with the KLSE Group, he held diverse
roles and had experience in strategy, corporate finance,
business transformation, finance and administration,
treasury, external affairs and public relations. He led KLSE’s
acquisitions of the Kuala Lumpur Options and Financial
Futures Exchange (KLOFFE) and the Commodity and
Monetary Exchange of Malaysia (COMMEX) and their merger
to form the Malaysia Derivatives Exchange (MDEX), and the
acquisition of the Malaysian Exchange of Securities Dealing
and Automated Quotation (MESDAQ). He also led KLSE’s
demutualisation exercise. He is currently the Executive
Director of Symphony House Berhad since 3 December 2003.
His directorships in other public companies include Pos
Malaysia Berhad, SILK Holdings Berhad, MMC Corporation
Berhad and Kuwait Finance House (Labuan) Berhad.
Encik Hamid is a member of the Audit and Risk Management
Committee of the Board.
Shah Hak im @ Shahzanim Bin Z ain
Lee Chun Fai
Chief Executive Officer/Non-Independent Executive Director
Encik Shah Hakim, 49, a Malaysian, is the Chief
Executive Officer/ Non-Independent Executive Director
of the Company and was appointed to the Board on 3
March 2003.
Mr Lee Chun Fai, a Malaysian, aged 43, was appointed
as an Alternate Director to Dato’ Teh Kean Ming on 22
May 2013.
Encik Shah Hakim started his career as an auditor with Ernst
& Young and was subsequently promoted as Consulting
Manager, responsible for servicing large corporations. 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 Scomi Energy
Services Bhd, Scomi Engineering Bhd and KMCOB Capital
Berhad.
He graduated with a Bachelor of Accountancy (Honours)
degree from University Utara Malaysia in 1995. He obtained
a Master of Business Administration from Northwestern
University (Kellogg) and The Hong Kong University of
Science & Technology in 2012.
He started his career with a public accounting firm. In
October 1995, he joined Road Builder (M) Holdings Bhd
(“RBH Group”) and was the Head of Corporate Services
Division of RBH Group prior to the acquisition of RBH Group
by IJM Corporation Berhad (“IJM”) in 2007. He was the
Deputy Chief Financial Officer for the IJM Group before being
appointed as the Head of Corporate Strategy & Investment
on 1 July 2012.
His directorships in other public companies include Road
Builder (M) Holdings Bhd (Alternate Director to Datuk Lee
Teck Yuen), Scomi Engineering Bhd, Scomi Energy Services
Bhd and Kumpulan Europlus Berhad.
NOTES
None of the Directors have any family relationship with any other Director and/or major shareholder of Scomi Group Bhd.
With the exception of the disclosure on page 70 , none of the Directors are involved in any conflict of interest, or any personal
interest in any business arrangement, involving Scomi Group Bhd.
None of the Directors have been convicted for offences within the past ten years (other than traffic offences, if any).
p15
p16
M anagement Team
Lo ong Chun Nee
Chief Investment & Performance Officer
Shah Hak im Z ain
Group Chief Executive Officer
Z aharoff Abu B ak ar
Chief Financial Officer
Steve Bracker
Chief Safety Officer
p17
D inesh Chelvathurai
Chief Human Resource & Learning Officer
Rohaida Ali B adaruddin
Chief of Staff
Zubaidi Harun
Vice President - Business Development &
Communications
Sharifah Norizan Shahabudin
Chief Legal & Governance Officer
H ilmy Z aini Z ainal
Country President - Brazil
The Ar t of
Management
The success of any business depends
on the effectiveness of its managers. At
Scomi, our managers apply their skills and
years of experience to seize oppor tunities
that could push our business for ward and
realise potential for our stakeholders.
p2 0
Chairman
p21
Ch ai rman’s St atement
D e ar Stakeho lders,
Th e f i na nci a l yea r ended 31 M arc h 2014 was s ignific ant
fo r S com i G ro u p Bhd (“SGB ” or “ the G roup”). Des pite a
ch a l l e ngi ng env i ro nm ent, our core bus in es s es an d es pec ia l l y
O i l fi el d S er v i ces p er for med well, allowing us to s us tain
h ea l t hy revenu e growth. O ur con s c ientious effor ts to
i m p rove execu t i on a nd deliver y h ave en abled us to deli ve r
a com m end a b l e set of res ults in s pite of th e c h alleng e s
f a ce d. The f i na nci a l year als o s aw us make n otable progre ss
i n d evel op i ng nex t- g en eration produc ts and s er vices
v i a co nti nu ed i nvestment in tec h n olog y, whic h h as bee n
re s p onsi b l e fo r m u ch of th e G roup’s s ucces s es to date.
Overview
Along with a strengthening global
economy, the business landscape in
general in the financial year under review
was conducive to our core businesses of
Oilfield Services and Transport Solutions.
The year under review was very positive
especially for our Oilfield Services unit,
which saw higher revenue and profit in
the 12-month period compared to the
previous 15-month financial year (when
we changed our financial year end from
December to March). This was aided
by strong growth in our key Eastern
Hemisphere market, which more than
compensated for a lower than expected
rig count in other markets.
In Transport Solutions, we continued
to make significant progress and
achieved several key milestones for our
monorail projects in Brazil, India and
Malaysia although unavoidable delays
hampered the attainment of a few
project milestones. Besides its focus on
project execution, the division has also
implemented measures to minimise the
impact of foreign exchange movements
and we are confident of managing
currency fluctuations better as they
occur.
Financial Review
Oilfield Services (“OFS”) benefitted from
a robust price of oil and active drilling
in most of our key markets – namely
Indonesia, Myanmar, Russia, Thailand
and West Africa. The division recorded
an annualised 34 per cent increase in
revenue from the previous 15-month
financial year to RM1.24 billion for the
financial year under review. Combined
with more streamlined operations and
tighter control on expenses, the division
saw an annualised 65.2 per cent increase
in pre-tax profit to RM126.8 million.
Although the Group’s revenue was
affected by a 29.5 per cent decrease in
contribution from Marine Services to
RM179.4 million and a 34.2 per cent drop
in Transport Solutions’ contribution to
RM236.9 million, on an annualised basis,
SGB managed to record a 7.5% increase
in total revenue to RM1.65 billion. The
Group posted a Profit Before Tax (“PBT”)
of RM81.1 million, which represents
an annualised 380.3 per cent growth
compared to our previous financial
period.
Our healthy profit margin was largely
due to enhanced financial management.
Reduced borrowings led to a 62.6 per
cent decrease in interest expenses,
while stringent cost-cutting measures
lowered operating costs as a percentage
of revenue from 15.3 per cent in the
previous period to 15 per cent.
p2 2
Ch airm an’s St atem ent
Delivering Shareholder Value
The Board of SGB is conscious of its duty
to our stakeholders, and especially our
shareholders, thus ensuring the Group’s
major decisions and strategic direction
are guided by our ultimate objective
of enhancing shareholder value. The
corporate restructuring that consolidated
the Oilfield and Marine Services divisions,
completed in March 2013, was one such
initiative. It was driven to streamline
operations, create greater operational
and cost efficiencies as well as to
present a stronger value proposition to
our oil and gas clients. Oilfield Services’
performance during the financial year
has validated this strategic decision,
and given current oil and gas activity
in our core markets combined with the
intention of governments in most of
these markets to increase production
over the next few years, we are confident
of deriving greater value from this more
integrated income stream.
We are currently also restructuring and
resizing our Marine Services fleet to focus
on meeting the needs of offshore oil
and gas operators, as this would further
strengthen our service offerings to the
offshore industry.
Our strategy in the financial year under
review and moving forward is to grow
our core business, expand our products
and strengthen our service integration
capabilities. It gives me pleasure to
note that we have already made firm
steps forward in each strategic area. A
major highlight of the financial year was
the launch of Phase 1 of the Mumbai
Monorail on 2 February 2014. While this
event in itself was cause for celebration,
we were particularly pleased by being
appointed, along with our partner Larsen
& Toubro, to operate the monorail. To our
knowledge, no other monorail system
provider in the world has been accorded
such a privilege. This is representative
of the manner in which we intend
to provide our customers with more
integrated service.
A key highlight within the Oilfield
Services division post the financial
year end was our entry into the
development of marginal fields. In June
2014, PETRONAS awarded a risk service
contract (“RSC”) to Ophir Production
Sdn Bhd, a joint venture company
comprising Octanex Pte Ltd, Scomi D
& P Sdn Bhd (a subsidiary of SESB) and
Vestigo Petroleum Sdn Bhd. The sevenyear contract is for the development of
Ophir oilfield, located off the coast of
east Peninsular Malaysia. This milestone
RSC was a significant win following our
efforts to build integration capability and
increase our service offerings.
At the same time, enhanced insight into
our customers’ needs is helping us to
shape research and development (“R
& D”) efforts to enhance our customer
service delivery. The Group has three R
& D centres across the world – in Shah
Alam, Malaysia; Houston, USA; and
Peyruis, France – where our scientists are
developing increasingly more effective
and environment-friendly products and
solutions. Over the past few months,
we have been collaborating with
Platinum NanoChem Sdn Bhd (Platinum
Nanochem), a wholly-owned subsidiary
of Graphene NanoChem PLC, to develop
a series of green performance enhanced
drilling fluids. Motivated by some early
successes, in November 2013 we entered
into an exclusive product formulation
and marketing agreement with Platinum
NanoChem. This collaboration effectively
combines our drilling fluids formulation
expertise and global market reach with
Platinum NanoChem’s research-backed
knowledge of graphene, a wonder nanocarbon material with properties that
make it ideal for harsh offshore drilling
environments.
Within Transport Solutions, research on
the Scomi Urban Transit Rail Application
(“SUTRA”) technology is conducted at the
Engineering, Technology and Innovation
Centre (“ETIC”) in our North Kuala Lumpur
Facility (“NKLF”). Since this state-ofthe-art centre was set up in 2008, our
dedicated team has been focusing on
increasing the energy efficiency of the
SUTRA prototype, reducing its operating
costs and optimising space for greater
passenger capacity. As a result of five
years of intense research, they have
evolved SUTRA from a two-car train with
a capacity of 107 passengers per car to a
Generation 3 (“Gen 3”) model based on
five or six-car trains, each with a capacity
of 150 passengers per car. A significant
first for the Gen 3 trains is their design
which does away with drivers, bringing
added cost efficiencies to customers.
While developing our own products
and technology in-house, we also form
partnerships with other technologydriven companies to combine
knowledge and skills so as to create
greater synergies. During the financial
year, our partnership network was
expanded by forming an alliance with
crane specialist Handal Resources Berhad
to supply rigs and cranes and to provide
maintenance, repair and operations
services to oilfields in Africa and Middle
East. We feel especially proud of this
venture which is geared to take made-inMalaysia products and expertise further
into the international space.
Developing Our People
As we invest in technology, we have
an even stronger imperative to invest
in our people, without whom no
technology, no matter how advanced
or sophisticated, can come to any good.
Hence, we have in place a robust human
capital development framework that
seeks, firstly, to attract the best talent
into the company and, secondly, to
nurture talent in order to enable them to
realise their full potential. This is achieved
via formal training and development
programmes and succession planning as
well as the creation of a generally vibrant
and stimulating work environment that
encourages the sharing of knowledge
and ideas among all employees.
As a results-oriented organisation, we
value all efforts made by our people and
reward them accordingly. The diversity
of our operations – both in terms of
the kind of business we are in as well
as the geographical locations of our
operating companies – throws open vast
opportunity for holistic and international
career progression. At Scomi, we truly
bring fresh meaning to presenting our
employees with ‘a world of opportunities’.
Engaging With Our Stakeholders
As Scomi has grown over the years, we
have continuously maintained a high
degree of openness and transparency by
engaging actively with our stakeholders
and making available all relevant
information about our operations and
achievements through press releases,
Bursa Malaysia announcements and
Letters to Shareholders, all of which
are readily accessible on our corporate
website.
Other than our shareholders and
investors, we also maintain a close
relationship with the communities in
which we have a presence, not just in
Malaysia but in each of the 23 countries
where we operate. Firm in our conviction
that all organisations have a duty to give
back to society, we have a tradition of
corporate social responsibility (“CSR”)
initiatives that involves our management
and people lending a helping
hand to marginalised or otherwise
underprivileged communities. During
the year under review, we launched a
global CSR initiative themed ‘HeartBeAT:
Showing your Heart by Being A Team’
– targeting mainly children, which saw
employees in all our country operations
plan and execute various heartwarming
projects that brought cheer to orphans
and homeless children, as well as
children with special needs and those
with terminal diseases. To promote a
spirit of volunteerism, every member of
staff is encouraged to take part in at least
two days of CSR activity a year. Often,
they far exceed this requirement, driven
by personal conviction of the value of the
initiatives being undertaken.
We also believe in playing our part
in global efforts to reverse or at least
ameliorate the effects of climate change,
and practise the 3Rs of reusing, reducing
and recycling in our headquarters to
minimise our environmental footprint.
This is over and above our investments in
R&D geared towards developing cleaner
and greener technologies for the benefit
not only of our clients but to the world
in which we currently live and that our
future generations will inherit.
Growing The Scomi Brand
While Scomi has already made its mark
in various countries across the globe,
we continuously look at ways to create
greater visibility of our capabilities, and
this financial year saw us take part in
the leading oil and gas exhibition in
the world, the Offshore Technology
Conference (“OTC”) 2013, held from
6-9 May in Houston. This represented
an excellent platform to exhibit our
latest solids control and drilling waste
management technology, which
garnered much interest from the
more than 80,000 oil, gas and energy
professionals who had converged from
more than 110 countries. We also took
part in two other exhibitions held in
Kuala Lumpur – the 14th Asian Oil,
Gas and Petrochemical Engineering
Exhibition (“OGA”) held from 5-7 June
2013 and the inaugural Offshore
Technology Conference Asia (“OTC Asia”)
organised from 25-28 March 2014 while
our Gulf team took part in the Abu Dhabi
International Petroleum Exhibition and
Conference (“ADIPEC”) 2013 held from
10-13 November 2013 in Abu Dhabi.
To showcase our monorail capabilities
to a wider audience, we participated
in Showcase Malaysia 2013 organised
by the Malaysian External Trade
Development Corporation (“MATRADE”)
from 20-22 June in Chennai. We were
also an active party at the Rail Business
Asia Conference & Exhibition from 1012 September 2013, held at the Kuala
Lumpur Convention Centre.
Changes To The Board
On behalf of the Board of Directors, I
would like to take this opportunity to
thank Tan Sri Asmat Bin Kamaludin, who
resigned as our Chairman effective from
31 October 2013, after having served
more than 10 years at the helm of the
Group. His unwavering commitment and
guidance has contributed significantly to
the growth of SGB. With Tan Sri Asmat’s
departure, I have been re-designated
as Chairman of the Board as of 20
November 2013.
I would also like to express my
appreciation to Datuk Haron Bin Siraj
who resigned from the Board on 11 July
2014 after more than 11 years of service.
At this year’s Annual General Meeting,
Dato’ Abdul Rahim Bin Abu Bakar will
retire from the Board on 24 September
2014. Both Datuk Haron and Dato’ Abdul
Rahim have been instrumental in driving
the Group’s business growth forward
throughout their tenure.
At the same time, it gives me great
pleasure to announce the appointment
of Encik Abdul Hamid bin Sh Mohamed
as Non-Executive Director for SGB
effective 8 May 2014. We look forward to
his contribution and guidance in driving
the Group forward.
p2 3
p24
Prospects
From all indications, the calendar year
2014 will see the global economy
continue to gain momentum on its
path of recovery. The implications are
that, barring unforeseen circumstances,
the macro-environment should be
conducive for further growth of our
Oilfield Services and Transport Solutions
businesses. Since our restructuring
in 2012, the ‘new Scomi’ has further
consolidated its strengths and, driven
by a three-pronged strategy to further
accelerate growth, we are confident of
steadily improving performance across
the board in the current financial year
ending 31 March 2015.
Since the beginning of the new financial
year, we have already made firm steps
towards further expansion in both core
businesses. Within Oilfield Services, we
have set up an office in Gabon, which
marks the beginning of more ambitious
plans to venture into the Frenchspeaking West African region as a whole
where there is much potential for the
technology and range of services we
have to offer. Meanwhile, our Transport
Solutions team has been busy submitting
proposals for more monorail projects in
the countries we are in as well as in new
markets such as Thailand and Turkey, and
we hope to announce some exciting
wins in the near future.
and wise counsel which has helped
to keep the Group on an even keel
especially as we charted our way through
various challenging moments over the
past couple of years.
Indeed the future of Scomi promises to
be exciting, and I look forward to sharing
more milestone developments with you,
our stakeholders, in the course of the
next 12 months.
Most importantly, I speak for the entire
Board when I express my heartfelt
gratitude to the management and every
single employee of Scomi Group for your
hard work, commitment and dedication
to this Group which has been responsible
for all our successes to date, and which
will keep us achieving milestone after
milestone as we journey towards
becoming a stronger global technology
enterprise.
Acknowledgements
On behalf of the Board of Directors
of Scomi Group, I would like to
acknowledge the various parties
who have contributed in one way or
another towards strengthening Scomi
and enabling us to achieve the many
successes to date, and especially during
the year under review. The list includes
our valued customers, business partners,
financiers and shareholders, as well as the
governments and regulatory bodies of
each country in which we operate.
On a personal note, I would like to
acknowledge the immense and
invaluable contributions of my fellow
Directors – thank you for your constant
To everyone, once again, thank you.
Chairman
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p2 6
p27
O ur s ucces s comes from the
dedic ation of our people. Throu g h
th eir s k ills and commitment, we
h ave been able to develop, proc u re
an d manag e in n ovations that c re ate
better effic ienc y and add valu e
to the growth of our par tn ers’
bus ines s es as well as our ow n .
p2 8
Prof i l e of D i re c tors
Shah Hakim Zain
M an age m e nt R ev iew of O p erat i o ns
M an ag ement Review of O p erat ions
D e ar Stakeho lders,
As we focu s o n tak ing th e S comi bran d wider
a nd f u r t her a f i eld, building on th e key as s ets
of o u r p eo p l e, tec hn olog y and g lobal reac h ,
we sco red a number of n otable s ucces s es in
t he f i na nci a l year ended 31 M arc h 2014. O ur
O i l f i el d S er v i ces divis ion (“O F S”) per for med
excep ti o na l l y well wh ile in Trans por t S olutions,
we m a d e a si gni fic ant tran s ition into an en d-to end m o no ra i l solutions provider. Tog ether with
ou r consor t i u m par tn er, we were appointed to
op erate a nd m aintain Phas e 1 of th e M umbai
M ono ra i l whi ch was completed and launc h ed in
ea r ly Febr uar y 2014.
Overview
An overall improvement on the
economic front had a positive impact on
the oil and gas industry, in which Scomi
Group Bhd (“Scomi” or “the Group”) has
a global presence. This allowed us to
better support growth within countries
where we operate. Similarly, it also
benefitted countries where we have
ongoing monorail projects, namely
Brazil, India and our home base, Malaysia.
Demand for fuel is inextricably linked
with economic growth, hence the
financial year under review saw more
active exploration and production
(“E&P”) activity. This was confirmed
by a report by France-based public
sector research and training centre,
IFP Energies Nouvelles (“IFPEN”). It
observed that global investment in E&P
increased uniformly across all regions,
from a total of USD623 billion in 2012 to
USD694 billion in 2013. In Asia-Pacific,
investments increased from USD156
billion to USD183 billion; in the Middle
East from USD40 billion to USD48
billion; and in Africa from USD66 billion
to USD71 billion. Along with increased
investment, rig count increased by an
estimated 10 per cent globally.
Our Transport Solutions business
however, was affected by a drop in
value of the Brazilian Real and Indian
Rupee against the US Dollar, leading to
significant foreign exchange losses. In
addition, we were impacted by project
implementation delays beyond our
control, which curtailed the Group’s
revenue and profit margin. While we
achieved key milestones during the
year in our Transport Solutions business
leading to the launch of Phase 1 of the
Mumbai Monorail, growth was restrained
and we did not realise the true potential
of all four ongoing monorail projects.
On the other hand, the increase in
exploration and production activity in
the oil and gas industry, coupled with
robust oil prices which maintained
its sway above USD100 per barrel,
contributed to a conducive environment
for drilling. This, in turn, created a healthy
demand for our Oilfield Services and
led to an encouraging performance in
this division. Overall, it has been a year
of many achievements, speckled with
few setbacks. Yet, with strengthened
fundamentals, we believe the challenges
we currently face can be overcome and
the Group will be on track for healthier
growth.
p2 9
p3 0
Financial Performance
The Group changed its financial year end
from 31 December to 31 March in 2013.
As such, this financial year’s performance
– from 1 April 2013 to 31 March 2014 – is
compared against the previous year’s
annualised results which was over a
15-month period.
The Group’s revenue increased by 7.5 per
cent on an annualised basis to RM1.65
billion. On the back of this revenue,
it achieved a Profit Before Tax (“PBT”)
of RM81.1 million, which represents a
380.3% growth on an annualised basis
compared to its previous financial
period.
The Group’s Oilfield Services’ revenue
increased to RM 1.24 billion – up 34 per
cent over that of the previous year on
an annualised basis, while pre-tax profit
improved by 65.2 per cent to RM126.8
million. Both revenue and profitability
in the reporting 12-month were higher
than those of the previous 15-month
period. However, the division’s stellar
performance was offset by a 29.5 per
cent decrease in contribution from
Marine Services to RM179.4 million,
and a 34.2 per cent drop in Transport
Solutions’ revenue to RM236.9 million on
the same annualised basis.
In Marine Services, the coal segment
was adversely affected by the full-year
impact of the expiry of a major contract
in Indonesia in mid-2012. Although this
was slightly mitigated by a new bulk coal
affreightment contract that commenced
in the December 2013 quarter, we still
experienced a continued slowdown in
the coal industry. Revenue was further
impacted by the scheduled docking for
maintenance and refurbishment of two
offshore accommodation work barges.
Within Transport Solutions, the Rail
segment contributed RM196.4 million
to the total revenue of the business,
while the Coach and Special Purpose
Vehicles (“SPV”) segment contributed
the remaining RM40.5 million. Transport
Solutions recorded a pre-tax loss of
RM34.6 million for the year due to a forex
loss of RM13.6 million and project delays
leading to additional costs to complete.
Our subsidiary, Scomi Engineering Bhd
was awarded extensions of time (“EOTs”)
by our clients in acknowledgement that
the delays were beyond our control.
Meanwhile, the Group’s interest
expense dropped by a substantial
62.6 per cent over that of the previous
15-month period annualised. We have
continuously reduced our borrowings
as well as restructured existing debts
into more manageable and lowerinterest arrangements. Operating costs
(“Opex”) continued to be well managed
with Opex as a percentage of revenue
remaining stable at 15 per cent and
lower than 15.3 per cent in the previous
period due to cost management
measures both at country operations
and corporate levels.
A New Strategic Direction
In the last annual report, we indicated a
corporate restructuring that saw Scomi
Energy Services Bhd (“SESB”) acquiring
the Oilfield Services Eastern Hemisphere
entities from Scomi Group. This subsidiary
provides Oilfield Services which includes
integrated drilling fluids, drilling waste
management solutions and production
enhancement technologies while Marine
Services offers transport for the coal
industry and provides offshore support
vessels services to the oil and gas
industry. This restructured SESB Group
is beginning to provide turnkey drilling
services to the industry as well.
The restructuring was undertaken to
provide greater cost efficiencies and
growth potential from more streamlined
marketing operations, lower debts and
enhanced cost management. Upon its
completion in March 2013, we have
embarked on a seven-year Group-wide
plan to take both our Energy Services as
well as Transport Solutions (represented
by Scomi Engineering) forward by
focusing on three main thrusts: 1)
growing our core business; 2) expanding
our products; and 3) providing integrated
service offerings.
In essence, this involves nurturing better
relationships with our customers. By
understanding their needs, we look
to align our product development
accordingly and increase the volume
as well as value of business from each
customer. Towards this end, we have
embarked on targeted Key Account
Management efforts in each country
operation, with dedicated teams focused
on providing enhanced services to major
customers. We believe there is much
potential to be tapped by growing our
accounts with existing customers via
more extensive and integrated service
offerings. This is beginning to bear fruit
in both our Energy Services as well as
Transport Solutions.
In Energy Services, we have been growing
our product lines with more cost-efficient
and environment-friendly offerings. This
is to serve the increasingly demanding
needs of oil and gas operators in harsh
and challenging offshore and onshore
environments. In Transport Solutions,
meanwhile, we have transited from
being a manufacturer of monorail
systems to becoming an end-to-end
monorail solutions provider that includes
operations and maintenance capability.
While growing our business with existing
clients we are aware of the potential to
acquire new clients both in areas where
we already have a presence as well as in
new markets.
As we surge ahead with our new plan,
we are also placing greater emphasis on
streamlining our operations to ensure the
optimal use of resources. As a result of
very focused efforts to create greater cost
efficiencies, we were able to reduce our
Opex as a percentage of revenue from
15.9 per cent in the last financial period,
to 15.4 per cent in the financial year under
review. While this in itself is encouraging,
we believe it is possible to create even
greater operational and cost efficiencies
and we are constantly looking at more
initiatives to achieve these.
Energy Services
Energy Services has been the main driver
of the Group’s revenue over the past few
years, with operations in 42 locations in
21 countries, staffed by approximately
2,000 employees. Our drilling fluids and
drilling waste management services, in
particular, have been growing in strength,
supported by strong research and
development (“R&D”) capabilities at three
centres across the globe.
Along with increasing oil and gas activity
globally, supplemented by investments
and incentives by local governments
to enhance production, this sector
continued to be vibrant. The financial year
2014 was marked by especially strong
performances in key growth markets such
as Indonesia, Myanmar, Russia, Thailand,
Turkmenistan and West Africa, which
more than compensated for slightly
dampened performances in Malaysia,
Egypt and India where drilling activity was
constrained.
In Indonesia, we almost doubled our
revenue from new contracts secured
from Total E&P Indonesie (“TEPI”), Virginia
Indonesia Company (“VICO”) and
Chevron. In Myanmar, we have been
able to successfully leverage on the
government’s opening in 2011 of its oil
and gas industry to international players
for the exploration and development of
48 blocks offshore and onshore. We have
since increased our revenue from this
market 10-fold compared to the previous
financial period. In Turkmenistan, our
business was boosted by a drilling fluids
contract beginning in January 2013 for a
period of two years.
Meanwhile, our Russia operations
continued to post gains from high margin
drilling waste management business from
RN-Burenie. Via this drilling arm of OAO
Rosneft, the country’s largest oil company,
our business covers equipment utilised
on over a dozen high-specification drilling
rigs in Western Siberia. We are also very
pleased with our performance in West
Africa, where new contracts in Congo
and Nigeria have propelled revenues and
profits to new heights.
Although Malaysia did not live up to
expectations for the financial year in
terms of drilling activity, our longstanding client TNB Fuel Services Sdn
Bhd (“TNBF”), a wholly-owned subsidiary
of Tenaga National Bhd, provided a
boost to our Marine Services with a
two-year contract, with the option of a
year’s extension, for freight carriage of
bulk coal. The contract, commencing
on 1 September 2013, is valued at
approximately RM158.7 million for the full
duration. It stood out in Marine Services’
order book in a year marked by depressed
coal mining activity, hence a much
reduced demand for transport of the fuel
commodity.
Another significant contract for Marine
Services was from Thailand’s Coastal
Energy Company (“CEC”), for the
provision of a 60 MT bollard pull anchor
handling tug supply (“AHTS”) vessel. The
contract is for a period of one year which
commenced at end June 2013, with an
option for a year’s extension, and is valued
at approximately RM22 million for the
entire two-year duration.
To further market our technology
and service offerings, Energy Services
continued to take part in local and
international exhibitions. The financial
year was particularly exciting in this
regard as we took part in four major
events – the Offshore Technology
Conference (“OTC”) held in Houston
in May 2013, the Asian Oil, Gas and
Petrochemical Engineering Exhibition
(“OGA”) 2013 held in Kuala Lumpur in
June 2013, the Abu Dhabi International
Petroleum Exhibition and Conference
(“ADIPEC”) 2013 held in Abu Dhabi in
November 2013 and the inaugural
Offshore Technology Conference Asia
(“OTC Asia”) organised in Kuala Lumpur in
March 2014.
Transport Solutions
Throughout the world, and especially
in rapidly developing nations, there is
an urgent need for effective transport
solutions to address the phenomenon
of urbanisation and the parallel issues
of over-population, road congestion
as well as noise and environmental
pollution from traffic. The Group, via
Scomi Engineering Bhd (“SEB”), has
been providing an effective mass transit
solution to governments of such markets
in the form of monorail system known
as Scomi Urban Transit Rail Application
(“SUTRA”), which is now in its third
generation model. In addition, we are
also involved in the manufacture, leasing
and maintenance of coaches and special
purpose vehicles.
In India, together with our consortium
partner Larsen & Toubro, we were
awarded the country’s first monorail
project – to build a 19.7km line complete
with 17 stations and a central depot
as well as 15 four-car train sets – for
the commercial centre of Mumbai.
We celebrated a veritable milestone
in February 2014 when Phase 1 of the
project comprising an 8.9km line from
Chembur to Wadala was completed and
launched – and SEB / Larsen & Toubro
were awarded a three-year contract to
operate and maintain the system. This
contract effectively added monorail
operation and maintenance to our
service offerings and transformed us
into an end-to-end transport solutions
provider.
In Brazil, we were awarded two monorail
projects in 2011 – for the Line 17-Gold in
São Paulo and the Manaus Monorail. We
won the São Paulo project as part of a
consortium involving Andrade Gutierrez
S.A, CR Almeida S.A and Montagens e
Projetos Especiais S.A (“MPE”). Initially
requiring 24 trains of three cars each,
during the financial year, we obtained
approval from our client, the São Paulo
Metropolitan Company to change the
train configuration to 14 five-car train
sets.
To achieve greater delivery efficiency for
our projects in Brazil, we formed a joint
venture company, Quark Fabricacao de
Equipamentos Ferroviarios e Servicos
de Engenharia (“Quark”), LTDA with MPE
and a third Brazilian party, Brasell Gestao
Empresarial, LTDA to manufacture the
rolling stock and provide all required
rail-related engineering services. During
the financial year, 10 car bodies were
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fabricated at the new plant in Palmares,
Rio de Janeiro. Meanwhile, the second
phase of System Integration is in its final
stage and interfaces documents were
delivered in June 2014. In addition, the
first 10 sets of bogies will be shipped
from our factory in the North Kuala
Lumpur Facility (“NKLF”) to Rio de Janeiro
in November 2014.
In Manaus, we are again part of a
consortium, this time involving CR
Almeida S.A, Mendes Junior Trading E
Engharia S.A, Serveng-Civilsan S.A and
our joint venture Quark. Our role within
the consortium is to design and deliver
the rolling stock and depot equipment,
track switches, maintenance vehicles and
system integration, as well as acting as
project manager.
SEB’s project in Malaysia, the Kuala
Lumpur Monorail Fleet Expansion
project, is with Prasarana Malaysia Berhad
(“Prasarana”). Under the contract, we are
to provide 12 four-car trains, civil work for
the depot, replace the signalling system,
install new power supply and distribution
and the communications system and
upgrade the stations. During the financial
year, we delivered two sets of trains,
completed the new depot, the new
stabling lines and the platform extension,
as well as installed the electrical and
mechanical (“E&M”) systems for various
components. We also obtained the
Taking Over Certificate (“TOC”) for Civil
and E&M System Works. In April 2014, we
successfully completed the Signalling
Trial-Ops Migration.
Within the Coach and SPV segment, we
delivered 40 coaches to the Malacca
State Government under a seven-year
leasing and maintenance contract.
This marked our first foray into the
downstream sector of this business, an
area we are keen to develop. Accordingly,
our team has submitted various
proposals to other state governments
for similar leasing arrangements while
also focusing on the manufacture and
marketing of SPVs including aircraft
refuellers, ambulances and garbage
trucks.
As at the end of the financial year 2014,
our Transport Solutions’ order book
stood at RM749.0 million, up from
RM715 million at the end of the previous
financial period.
Technology & Innovation
A key differentiator of Scomi is the
emphasis we place on R&D which is
subsequently reflected in our product
innovation. Both our core businesses of
Energy Services and Transport Solutions
are technology intensive, hence requiring
our investments in R&D.
For Energy Services, we have three R&D
centres across the globe. The Global
Research and Technology Centre in
Shah Alam, Malaysia focuses on highperformance drilling fluids suitable for
various environments including the most
harsh and exacting drilling locations. It
is here that we train our engineers as
well as clients’ personnel on the use of
specialised drilling fluids systems. The
Scomi Anticor laboratory in Peyruis,
France concentrates on production
enhancement chemicals; while the
facility in Houston, USA invests in the
continuous enhancement of drilling
waste management products and
technology. Together, we have over 40
engineers and research scientists working
in these centres, constantly innovating
on existing technology to develop
increasingly targeted, more efficient and
environment-friendly solutions.
Over the last few years, our team in
Malaysia has been collaborating with
another home-grown, green technology
enterprise, Platinum NanoChem Sdn
Bhd to develop a range of grapheneenhanced green nanofluids that offer
superior drilling performance. These
biodegradeable fluids are of better
lubricity and load bearing capacity. It
also offers higher viscosity and greatly
reduces the need for costly treatment of
waste cuttings. Some ‘early win’ products
from this collaboration have already been
marketed in Malaysia and Thailand, and
we look forward to the introduction of
the full suite of products designed to
cater to the differing needs of clients in
different markets.
Our monorail trains, meanwhile,
are designed and developed at the
Engineering, Technology and Innovation
Centre (“ETIC”) in our state-of-the-art
NKLF, where we have a 1km test track.
During the financial year under review,
our team achieved several improvements
for our monorail technology including
the development of a new bogie
and propulsion and driveline system.
These contributed to enable higher
commuter capacity, reduce weight and
noise vibration, while lowering cost of
ownership. Furthermore, advancements
in our vehicle architecture, vehicle
management and control systems
enhance safety, reliability and provides
for driverless integration. With the
mentioned improvements, our monorail
systems now have the capacity to carry
as many as 36,000 people per hour per
direction with either a five or six-car train
configuration.
Our People
We are acutely aware of the importance
of having the right people for the right
jobs. This is reflected in the efforts
made to recruit the most suitable talent
and then to encourage outstanding
performance through a comprehensive
reward system. Not only do we offer
attractive, competitive remuneration
and rewards, we also provide ample
opportunities for our employees to
further develop their potential via
technical and soft skills training. Each
employee at the executive level is
required to undertake at least 40 hours
of training a year while non-executives
must complete 20 hours of annual
training. Courses are conducted by our
own Global Learning and Development
(“GLaD”) team as well as by third parties.
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Over and above formal training, we
encourage open discussion and the
free flow of ideas through active
employee engagement. Just as we
believe in maximising the potential of
each employee, we believe that each
employee has the potential to unlock
the true value of the Group. Our diverse
workforce, of over 35 nationalities,
lends us great strength, especially in
the development and expansion of our
international businesses.
Quality Operations & Service
The Group strives constantly to enhance
our systems and operations to achieve
optimum efficiency thus provide
the best service to our customers. In
recent years, this has seen our country
operations globally work towards
achieving Integrated Management
System (“IMS”) certification. As a result
of concerted and conscientious efforts
towards this end, our Malaysia and
Indonesia operations have acquired
ISO 9001, ISO 14001 and OHSAS 18001
certifications for quality management,
environmental practice and health,
safety and environment (“HSE”)
respectively, while the other operations
are following suit.
Safety is given top priority, and various
trainings as well as safety drills are
conducted at regular intervals to
inculcate a safety-conscious mindset
among all employees, especially those in
high-risk work environments. As a result
of our efforts, at the beginning of the
financial year, our drilling fluids team in
Labuan, Malaysia reached a significant
milestone by achieving one million man-
hours without any lost time injury (“LTI”).
By the end of April 2013, the team had
garnered a total of 1,004,754 man-hours
LTI free.
Outlook
Most indications point to continued
recovery of the global economy in 2014,
which will positively impact business.
One of the advantages of being
globally diversified is the spread of our
geopolitical risk, which has worked to
our benefit in the past and will continue
to strengthen our performance as we
move into the future.
Ever since embarking on our
transformation initiative post
restructuring, we have become a leaner,
more cost-effective organisation. While
encouraged by our successes to date,
we believe there is always potential
to do things better. We have made it
our mission to keep looking for more
effective and efficient ways to run our
global business.
In terms of business expansion, we have
integrated our products and services
into more comprehensive packages,
and we will continue to pursue greater
volume of business from both existing
and new clients. We made an excellent
start in the financial year 2015 when
our joint venture company – Ophir
Production Sdn Bhd – was awarded a
seven-year risk service contract (“RSC”)
from PETRONAS to develop and produce
petroleum from the Ophir field, offshore
Malaysia. This marked a milestone in our
journey to become an integrated oil and
gas company.
We are also venturing into new markets,
spurred by our successes in Congo and
Nigeria. As of the new financial year, the
Oilfield Services division have put this
plan into action and have made inroads
into Gabon, while vying for contracts
in the neighbouring countries of Chad,
Cameroon, Ivory Coast and Benin.
As for Transport Solutions, we are
confident of making good progress in
our ongoing projects. Simultaneously,
we have been busy submitting proposals
for more monorail projects – two more
in India and Brazil respectively where
our current projects lend our bids
strength; two lines in Bangkok, Thailand
and one in Istanbul, Turkey.
With these positive factors propelling
us forward, we believe the financial year
2015 carries much promise. We enter the
year to build on the momentum we have
created to unleash more of our inherent
potential while we deliver added value
to our stakeholders.
Shah Hakim Zain
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The Ar t of
Caring
As a good corporate citizen, we firmly believe
in leveraging our skills and knowledge to help
realise potential for the global communities in
which we operate.
p3 8
Thro u gh a wo rk c ulture
that u nd erscores people
a nd ta l ent d evel opment,
we seek to m a ke a pos itive
a nd m ea ni ng f u l i mpac t in
t he gl o b a l com mun ities
in whi ch we a re pres ent.
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Corp orate S o c ial Resp onsibilit y
We at S com i G roup Bh d (“SGB ” or “ t h e G roup”)
b e l i eve we have a re spon sibilit y to maint ain
t he u t m o s t i nte gr it y in our de alin g s w it h
a ll s t a ke h old e r s, w h ile cont r ibut in g to t h e
d eve lop m e nt o f commun it ie s w h e re we ope rate.
We t a ke t hi s co rporate, social an d e nviron me nt al
re s p on s i b i l i t y s e riously as it n ot on ly e n r ich e s t h e
e cos ys te m b ut a l so e n h an ce s our re put at ion an d
va lue as an org an isat ion .
We are guided by our Board of Directors
in upholding the highest level of
corporate governance encompassing
transparency and ethics. Led by the
management team, our people are
empowered to realise their potential
at work while contributing to society
via organised community outreach
programmes. We also invest in research
and development targeting greener,
more energy-efficient products and
technologies in the realisation that
a healthy environment is key to our
own sustainability and that of our
environment.
Corporate social responsibility (“CSR”)
is part of our very DNA and permeates
our every action and decision, guiding
our strategies and targeted outcomes.
It represents an ongoing mission
at SGB as we continue to abide by
international best practice to enhance
the efficacy and impact of our efforts.
For the purpose of this annual report,
we have adopted the Global Reporting
Initiative (“GRI”) standard of classifying
and reporting our initiatives under the
four broad categories of the Marketplace,
Workplace, Environment and the
Community.
The Marketplace
As a responsible organisation, we
ensure that we maintain utmost
integrity in our dealings with our
key stakeholders in the marketplace,
namely our customers, investors and
business partners, while also ensuring
knowledge and technology transfer in
our overseas operations and creating job
opportunities for local communities.
We are driven to provide our customers
with quality service and products, and
even to training their personnel to
use our products optimally. Across the
Group, each company undertakes Key
Account Management (“KAM”) through
which we develop a closer relationship
with our customers by understanding
their needs and offering solutions that
satisfy these needs. Our close working
relationship with customers allow us
to develop products that are geared
to their specific market environment
and requirements. For drilling fluids
and waste management, this means
offering differentiated products suited
to different geological locations in
order to deliver enhanced operational
efficiencies and optimal cost savings to
our customers.
We conduct technical training for
our customers at the Global Research
and Technology Centre (“GRTC”) in
Shah Alam, Malaysia as well as on site,
according to our customers’ convenience
and requirements. GRTC has extensive
facilities including computer training
and a dedicated training laboratory
with all the equipment a drilling fluid
technologist may encounter in any
offshore or onshore job. We have trained
numerous chemists, technologists and
engineers from over 20 countries to
the API 13L standard for drilling fluid
technologists at this centre. In addition,
we have conducted advanced seminars,
software training and drilling fluids
operations management training for
hundreds of personnel.
The effectiveness of our training
modules is reflected by requests from
clients for additional training. During the
financial year under review, for example,
we conducted a two-week course on
drilling fluids, completion fluids as well
as solids control and waste management
combining classroom theory and
laboratory exercises for a second
batch of 200 PETRONAS Carigali Sdn
Bhd engineers, following an inaugural
training in 2012.
Co rp o rate S o c ial R e s p o ns i b i l i t y
Taking our initiatives one step further,
we are exploring the possibility of
conducting soft skills training for
customers’ technical and non-technical
personnel under our established Global
Learning and Development (“GLaD”)
unit, which currently manages the
training and personal development
needs of the Group.
We keep our investors informed of
corporate updates via an active investor
relations programme that includes
regular briefings and meetings. These are
complemented by timely Bursa Malaysia
announcements on material activities
and events, the distribution of quarterly
Letters to Shareholders on our financial
and operational performance along with
media releases, all of which are readily
accessible on our company website.
We believe in nurturing mutually
beneficial partnerships with key
business associates, and readily share
our knowledge as well as expertise in
joint ventures. For our monorail projects
in Brazil, we are contributing our Scomi
Urban Transit Rail Application (“SUTRA”)
technology to our joint venture partners
who are manufacturing monorail trains
at a plant in Rio de Janeiro. At the
same time, we are creating many job
opportunities for the local communities
in São Paulo and Manaus, as well as in
Mumbai, India where we have employed
296 locals to provide the manpower
needs to operate the recently completed
Phase 1 of the monorail system.
Sharing our expertise with a wider
audience, we regularly participate
in local, regional and international
energy and transportation exhibitions,
conference and fora worldwide. We also
host government and trade delegations
(both local and foreign) at our North
Kuala Lumpur Facility in Malaysia.
The Workplace
We recognise that our employees are
our greatest asset, and strive to provide
a work environment that is both
nurturing as well as challenging so as
to encourage and empower our people
to realise their true potential. Towards
the achievement of Scomi’s goals, we
endeavour to instil in each employee
the Company’s values, namely: New
Ideas, Working Together, Goal Oriented
and Customer Responsible. Every new
recruit undergoes a two-day induction
programme that exposes them to the
culture at SGB, our business, philosophy
and the way we do things.
We encourage free and open dialogue
among employees at all levels to
stimulate creativity and promote a
spirit of innovation. We believe it is
critical to keep our employees updated
on Group events, performance and
strategies in order to create a true sense
of belonging and connection. Hence
various engagement activities are
planned throughout the year, from staff
townhalls to regular communiques in
the form of our newsletter, Focus, as well
as email blasts to all staff globally on any
pertinent developments.
Fun social activities, such as the
Scomi Trivia Night, Scomi World Cup
Celebration and Scomi Treasure Hunt
were also organised in addition to
celebrating festive occasions to promote
a spirit of camaraderie and togetherness
among our growing Team Scomi.
In line with our brand vision of
‘Realising Potential’, we provide a
structured framework for the training
and development of all employees.
Our dedicated GLaD team monitors
the Group’s training needs and creates
modules to fill in any functional gaps
that may exist. At the same time, the
team ensures all employees are provided
the opportunity to enhance their
professional knowledge and skills hence
advance their careers.
An Executive Management Programme
is offered to mid-level management from
our global operations to fine-tune their
leadership. Also, one-on-one coaching
and mentoring is provided to selected
managers who exhibit the potential to
take on positions of greater responsibility
within the organisation. These form part
of SGB’s succession planning to develop
staff who will eventually become the
leaders of Scomi. In essence, we operate
on the credo: ‘You provide the Talent, we
provide Career Development’. For more
details on our training and development
programmes, refer to ‘People At The
Heart’ on pages 44 to 47 of this annual
report.
We acknowledge that it is important
for our staff to enjoy a healthy
work-life balance and have begun
to offer flexi working hours at our
global headquarters to enable staff
to better plan their daily schedules.
This is beneficial for employees to
accommodate personal and family
commitments especially staff who have
to juggle childcare needs with their work
demands.
Our efforts to be an employer of choice
have not gone unnoticed. In September
2013, Scomi was ranked among the
top five employers in Labuan, Malaysia,
edging out over 2,000 other companies
in the Malaysian Employees Provident
Fund (“EPF”) Best Employers Award 2013.
Recently in August 2014, Scomi’s Global
Learning and Development (“GLaD”)
team was awarded for excellence in
training at the 5th Asia Best Employer
Brand Award 2014.
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The Environment
In light of global climate change
issues, we believe it is the duty of every
organisation to implement measures to
reduce their impact on the environment.
Towards this end, we have been focusing
intently on creating a greener portfolio
of products in both our core businesses
of Oilfield Services and Transport
Solutions.
Within the oilfield sector, we have been
focusing on lighter, more durable and
effective drilling waste management
equipment while increasing the
biodegradability of our drilling fluids for
various drilling environments.
In recent months, through our joint
venture with Platinum NanoChem
Sdn Bhd, we have been developing
progressively ‘greener’ base oils for our
drilling fluids. We are also at an advanced
stage of combining these green-based
drilling oils with graphene to create
drilling solutions that have 86 per
cent greenhouse gas (“GHG”) savings
compared to conventional fossil-based
solutions. Our product, Plat Drill R, is one
of the few drilling fluids that comply
with US-based Environment Protection
Agency (“EPA”) standards. It has further
been independently audited by a
UK-based firm and certified under the
International Sustainability and Carbon
Certification (“ISCC”) scheme while also
complying with the requirements of
the European Union Renewable Energy
Directive (“EURED”).
Meanwhile, monorail systems are
inherently environment-friendly as they
run on electricity hence do not release
any carbon emissions. Additionally,
serving as public transport, they reduce
the number of private vehicles on the
road which, again, minimises carbon
emission to the environment. Over and
above these environmental benefits,
we have been focusing on further
improving the energy-efficiency of our
monorail trains by, for example, making
them lighter hence requiring less power
to propel them, and improving the
efficiency of the engines.
In addition to our green products,
we are based in one of the first green
buildings in the Klang Valley. At our
global headquarters in 1 First Avenue,
sensor-controlled lights and taps
prevent energy and water wastage; the
chilled water storage air-conditioning
system utilises off-peak idling electricity
supply that reduces electricity peak
demand by 35 per cent; and rainwater is
harvested to minimise the use of treated
chlorinated water.
Our staff also contribute to greening
efforts by embracing the 3R philosophy
of reducing, reusing and recycling,
and are constantly reminded of
environment-friendly habits via internal
announcements and signage around the
office. During a recent office clean-up at
our headquarters, a special recycling area
was set up for the collection of reusable
items which were subsequently donated
to charitable organisations.
The Community
Our community-centric efforts are
undertaken by our foundation, Yayasan
Scomi, which was established in 2005, as
well as directly by our employees.
Every year, Yayasan Scomi gives out
scholarships to deserving students for
tertiary education in Malaysia while
also providing funds to underprivileged
families to help pay for their children’s
education. In addition, the foundation
contributes to charities and provides
welfare support in response to requests
from the public.
Apart from Yayasan Scomi’s work,
each country operation is responsible
for outlining community outreach
programmes to be undertaken in any
given financial year. In Malaysia, a team
of 40 volunteers carry out fortnightly
community programmes and every
employee is required to take part in at
least two projects a year to fulfil their CSR
key performance indicators (“KPIs”).
For the financial year under review,
all global Scomi community projects
focused around children, based on the
theme: HeartBeAT: Showing your Heart
by Being A Team. In Malaysia, groups of
volunteers took children from homes
and orphanages shopping, treated
them to breaking of fast and organised
fun and educational treasure hunts.
Employees also joined forces to donate
books and clean up charitable homes
while others volunteered to visit hospital
wards to bring cheer to the children. In
total, their efforts brightened up the lives
of more than 450 children in the Klang
Valley. Over in Kemaman, Terengganu,
our colleagues organised an excursion
for 30 orphans to enjoy a fun day at the
Cherating Beach.
In Bangkok, 25 staff cooked a special
lunch for 50 special needs children from
Sataban Saeng Sawang Foundation
while in France, staff collaborated
with charitable organisation Reves to
bring cheer to the children. Our staff in
Australia organised various fund-raising
activities for the Princess Margaret
Children’s Hospital Foundation. In Russia,
our staff visited a centre for autistic
children and a home for homeless,
abused or neglected children where they
helped to clean up the homes, donated
clothes, blankets and other necessities
and engaged the children in various
activities. In Dubai, the team ran various
activities with a home for children with
special needs as well as with labourers. In
Brazil, the team targeted underprivileged
children as well as children with special
needs.
We feel privileged to be able to play our
part in supporting the marginalised,
and are keen to increase our ‘heartprint’
in local communities around the world
as our business grows and brings us
into contact with a wider group of
stakeholders.
p 43
p44
H uman Capit al Develo pment
P E O PLE AT THE HEART
At t h e co re of a ny org an isat ion are it s pe ople.
Th ey form t h e h e ar t of t h e org an isat ion ,
e n e rgi s i ng i t s p roce sse s to fr uit ion ; as we ll as t h e
o rg a n i s at i o n’s s o ul, e mbodyin g t h e value s t h at
d e f i ne i t. At S comi, we e n sure we n ur t ure our
‘ h e a r t ’ a n d ‘s o u l ’ be cause we re cogn ise t h at, in
d o i n g s o, we a re dr ivin g in n ovat ion an d cre at in g
gre ate r value for our st ake h olde r s.
As a global multicultural organisation,
Scomi provides our people with a
wide range of international experience
and exposure, as well as unique
opportunities for growth. At the same
time, we are a lean organisation, hence
the performance of each individual
counts and our people can easily create
their own legacy to leave a lasting
footprint. Further, as we encourage every
member to contribute and to have his
or her voice heard through informal and
open communication, there is extensive
engagement across the board which
create strong relationships. This has
helped to build Team Scomi.
For this team, Scomi’s value proposition
is, simply: “You provide the talent, we
provide career development”. Towards
this end various development channels
have been created specifically to nurture
our talents, linked by one underlying
theme: Scomi’s Values of New Ideas,
Working Together, Goal Oriented and
Customer Responsible. These values
in turn support our Brand Vision of
Realising Potential.
Learning & Development
The Management Trainee Programme
We have a dedicated Group Learning
and Development (“GLaD”) team that
conducts training programmes for staff
across our international operations.
GLaD is responsible for identifying and
addressing skills and knowledge gaps,
as well as for managing the Group’s
comprehensive talent development
programme. During the financial period,
GLaD carried out its strategic objectives
via the following initiatives:
This 18-month programme exposes fresh
graduates who are recruited into Scomi
to all facets of the Group’s operations,
from the technical to managerial. During
this time, the trainees are attached to
different departments to enable them
to pick up relevant skills that will set
them on the right track for further
development in Scomi.
Core Values, Functional Skills and
Managerial Skills Programmes
Work @ Scomi & Induction Programme
This two-day training is mandatory for
all new employees, introducing them to
the Scomi business, culture and brand.
It offers our recruits an insight into
what Scomi stands for, what we expect
from our employees and, conversely,
what employees can expect from the
Company.
These programmes were held in several
of our global locations including Kuala
Lumpur, Labuan and Kemaman in
Malaysia; Jakarta, Banjarmasin and
Balikpapan in Indonesia; Bangkok,
Thailand; Dubai, the UAE; Perth, Australia;
Mumbai, India; and Turkmenbashy and
Ashgabat in Turkmenistan. The intention
was to reach out to employees and make
it easier for global employees to attend
our in-house training. Over 12,000 hours
of training was conducted during the
year, attended by over 1,000 employees.
Hum an Capit al Devel o p m ent
The Executive Management Programme
This programme brings together midlevel management from our global
operations, and is geared towards
enhancing their leadership skills while
allowing them to meet and network
among each other. In 2013, the Executive
Management Programme was held in
Kuala Lumpur, drawing the participation
of 40 managers worldwide.
Mentoring & Coaching Programme
One-to-one mentoring is offered to
managers who have demonstrated
leadership potential, to help them deal
with challenges and issues as they move
up the leadership ladder. It is geared
towards ensuring a secure leadership
pipeline and forms part of Scomi’s
succession plan.
Technical Training
As a technology-based company,
technical training forms an important
component of our human capital
development.
A significant technological backbone of
the Group is our drilling fluids, for which
Scomi has acquired renown. We not only
train our own personnel in technical and
non-technical drilling fluids operations,
drilling operations, wellbore control
and drilling engineering software, but
also provide training to our clients.
Such training is conducted mainly at
our Global Research and Technology
Centre (“GRTC”) in Shah Alam. However,
our trainers also make the exception
to travel to clients’ premises at special
request to conduct similar programmes.
For drilling waste management, training
is conducted at our regional location
in Dubai, while on-the-job training is
undertaken at individual business units
globally. Within Transport Solutions,
training is conducted at our Engineering,
Technology and Innovation Centre at
the North Kuala Lumpur Facility (NKLF)
in Malaysia and also at our facility in
Mumbai.
As part of our technical expertise
development, we ensure that local
employees at every location that we
operate in are given equal opportunity
to grow and develop their technical
skills. Hence intensive on-the-job
training is conducted to allow them to
upskill themselves.
In addition, the Transport Solutions
business division has been involved
in technology transfer in its operating
locations. In Mumbai, the pace picked
up exponentially in preparation for
the launch of the monorail in February
2014 and to equip our local staff with
the skills to operate and maintain the
system. A large team of local talent
has been mobilised with production,
operational and maintenance input
from our Malaysian technical experts.
The same applied in Brazil where we
are collaborating with our partners who
have set up a manufacturing facility.
This facility was designed with technical
expertise from Malaysia, while operations
are carried out by the Brazilians. The
facility is expected to create over 500
jobs with technology being transferred
by our Malaysian team of experts.
Our training and development
programmes have created global
diversity within our organisation with
different nationalities working across the
globe united under the one brand of
Scomi and as part of Team Scomi.
Performance Management
To inculcate a high performance culture,
Scomi uses the Performance Assessment
& Capability Enhancement (“PACE”)
management tool to assess employees
on three leadership capabilities, namely
People Leadership, Personal Leadership
and Business Leadership. PACE was
conceptualised to evaluate individuals’
performance and map out a career
plan that will allow them to realise their
potential. Employees are engaged in a
discussion to explore their strengths and
agree on improvement areas. Using this
tool, the management is also able to
identify employees with high potential
who are subsequently presented with
opportunities to fast-track their careers.
Competency Mapping
Having a talented and resourceful team
is critical for our business continuity,
hence place great focus on talent
management and recently rolled out
an extensive competency mapping
programme for the technical line. This
allows all technical employees to chart
a clear career path for themselves.
Through this, we believe we will be able
to develop an engaged team that will
translate into continued growth results
for us.
p45
p46
Succession Planning
Safety at Work
Team Scomi
Scomi’s succession plan involves
nurturing and developing employees
from within the organisation. Our
efforts are always forward-looking,
taking into account future needs based
on strategic plans, goals, objectives,
priority programmes and projects. Via
our succession plan, we fill in gaps
that arise when individuals in key
positions leave or are promoted to
ensure smooth transition and continuity
at the workplace. Our plans mostly
involve a combination of training and
development programmes organised for
existing staff as well as new recruits.
Scomi places great emphasis on
maintaining best practices in Quality,
Health, Safety and Environment (“QHSE”)
at all levels in our workplaces. All our
business units throughout the Group
have QHSE teams whose main focus is
to communicate our QHSE policies and
safeguard our stakeholders including
personnel, contractors and suppliers.
With all these initiatives being built brick
by brick into the structure of Scomi,
we wish to evolve Team Scomi into a
diverse group of individuals who are
qualified yet street-smart, disciplined
yet flexible and adaptable, goal oriented
yet unconventional and team players
yet self-starters. Such a team would
place us in the best position to achieve
our shared vision and deliver enhanced
stakeholder value.
Career Planning Discussions
Our Group Chief Executive Officer,
together with the Chief of Staff and
Chief Learning Officer, conducts
sessions with selected employees to
discuss their individual development
plans and career goals. Developmental
interventions in terms of experience,
exposure and training needs are then
planned so that the Organisation can
provide our employees with every
opportunity to ensure their career goals
are met, in line with our philosophy of
‘realising potential’.
To cultivate the right attitude towards
QHSE, the QHSE teams across all our
locations globally organise a number
of programmes including safety
briefings, toolbox talks specific to
operations, fire safety briefings and
demonstrations and various campaigns
communicated internally. In addition,
the Management has taken a step
further to ensure employees practise
good QHSE standards by including
QHSE requirements in performance
appraisals.
Our drive to maintain best practices in
QHSE has earned us commendations
from many clients in various parts of
the world including Australia, Indonesia,
Malaysia and the United Arab Emirates
in the form of certificates and awards for
exemplary QHSE standards.
p 47
p48
Statement o n Cor p orate G over nance
Corp orate g over n an ce is t h e syste m by w h ich
com p a ni e s are dire c te d an d cont rolle d.
Co rp o rate g ove r n an ce is t h e re fore an inte rcon n e c te d s ys tem of policie s, framewor k s an d
p ro ce s s e s i nte n d e d to provide a solid foun dat ion
fo r a com p a ny to ach ieve sust ain able grow t h as
we l l a s e n g e n d e r t r ust an d in fuse con fide n ce
a m o ng i t s s ha re holde r s an d ot h e r st ake h olde r s.
An e f fe c t i ve cor porate g ove r n an ce st r uc t ure
e ncoura g e s compan ie s to cre ate value an d
p rov ide s account abilit y.
Strong leadership from the Board of
Directors is fundamental to achieve high
standards of corporate governance. As
such, the Board of Directors (the “Board”)
of Scomi Group Bhd (the “Company”)
remains committed towards governing,
guiding and monitoring the direction
of the Company with the objective of
enhancing long term sustainable value
creation aligned to our aim of realising
potential for our shareholders and other
stakeholders. Observance of good
corporate governance is also critical to
safeguard against unethical conduct,
mismanagement and fraudulent
activities. Towards this end, the Board
strives to ensure that the highest
standards of corporate governance are
practiced by the Company and its group
of companies (the “Group”) and views
this as a fundamental part of discharging
its roles and responsibilities.
This statement sets out the extent
of how the Group has applied and
complied with the principles and
recommendations as set out in
the Malaysian Code on Corporate
Governance 2012 (the “Code”) and the
Main Market Listing Requirement of
Bursa Malaysia Securities Berhad (“Bursa
Malaysia”) (“Listing Requirements”) for
the financial year ended 31 March 2014.
•
Principle 1 – Establish Clear Roles
And Responsibilities
•
The Board’s role is to govern and set
the strategic direction of the Company,
whilst the Management manages
the Company and the Group in
accordance with the strategic direction
and delegations of the Board. The
responsibility of the Board is to oversee
the activities of the Management in
carrying out these delegated duties.
The Group is led and controlled by
an effective Board where it assumes,
amongst others, the following principal
responsibilities in discharging its
stewardship role and fiduciary and
leadership functions:
•
•
•
reviewing and adopting a
strategic plan for the Company
and the Group, and subsequently
monitoring the implementation
of the strategic plan by the
Management to ensure sustainable
growth of and optimisation of
returns for the Company and the
Group;
overseeing and evaluating the
conduct and performance of the
Company and the Group’s business;
evaluating principal risks of the
Company and the Group and
ensuring the implementation of
appropriate risk management and
internal controls system to manage
these risks;
reviewing the adequacy and the
integrity of the Company and the
Group’s risk management and
internal controls system;
overseeing management
performance and ensure a sound
succession plan for key positions
with the Company;
St ate m e nt o n Co rp o rate G overna nce
•
•
providing input and overseeing the
development and implementation
of the investor relations and
shareholder communications
policy for the Company and the
Group; and
reviewing the adequacy and the
integrity of the management
information of the Company and
the Group.
To enhance the Board and the
Management’s accountability to the
Company and its shareholders, the
Board has established clear functions
reserved for the Board and those
delegated to the Management. The
Board has a Board Charter and Board
Policy Manual, which establishes a formal
schedule of matters and outlines the
types of information required for the
Board’s attention and deliberation at
the Board meetings. The Board Charter
is available on the Company’s website
at www.scomigroup.com.my. To
facilitate efficient management, the
Board’s approving authority for certain
specified activities is delegated to
the Management through a clear and
formally defined Delegated Authority
Limits (“DAL”), which is the primary
instrument that governs and manages
the business decision process in the
Group. Whilst the objective of the DAL
is to empower Management, the key
principle adhered to in its formulation
is to ensure that a system of internal
controls and checks and balances
are incorporated therein. The DAL is
implemented in accordance with the
Group’s policies and procedures and in
compliance with the applicable statutory
and regulatory requirements. The DAL
is continuously reviewed and updated
to ensure relevance to the Group’s
operations.
The Board has established and delegated
specific responsibilities to three (3)
committees of the Board, which
operate within clearly defined written terms of reference available for reference
at the Company’s website at www.scomigroup.com.my. The Board reviews the
Board Committees’ authority and terms of reference from time to time to ensure their
relevance. The Board Committees deliberate the issues on a broad and in-depth basis
before putting up any recommendation to the Board for decision. Notwithstanding
the existence of the Board Committees and the relevant authorities granted to a
committee under its terms of reference, ultimate responsibility for the affairs of the
Company and decision-making lies with the Board.
The Board Committees are:
•
•
•
the Audit and Risk Management Committee (“ARMC”);
the Nomination and Remuneration Committee (“NRC”); and
the Options Committee (“OC”).
With the exception of the OC, none of these Board Committees have the power to
act on behalf of the Board and are required to provide their recommendations to the
Board arising from the Board Committees’ review and evaluation of particular issues.
The minutes of the Board Committees’ meetings and circular resolutions passed
are presented to the Board for information. The Chairman of the relevant Board
Committees will also report to the Board on the significant matters and resolutions
deliberated by the Board Committees at the immediate subsequent Board meeting.
The composition of the Board and its Committees are as follow:
Board Committees
ARMCNRC OC
Chairman/Independent
Non-Executive Director
Tan Sri Asmat Bin Kamaludin(1)
- CC
Dato’ Mohammed Azlan Bin Hashim(2)(3)
MC Independent Non-Executive Directors
Tan Sri Nik Mohamed Bin Nik Yaacob(4)
C- Tan Sri Mohamed Azman Bin Yahya(5)
-MDatuk Haron Bin Siraj(6)
M-M
Dato’ Sreesanthan A/L Eliathamby(7)
MM Dato’ Abdul Rahim Bin Abu Bakar(8)
M- Abdul Hamid Bin Sh Mohamed(9)
M- Non-Independent Non-Executive Directors
Mr Foong Choong Hong(10)
- -M
Dato’ Teh Kean Ming(10)
- -M
Group Chief Executive Officer (“GCEO”)/
Encik Shah Hakim @ Shahzanim Bin Zain(11)
--
Alternate Director
Mr Lee Chun Fai(12)
--
p49
p50
Notes:
C - Chairman
M – Member
(1) Resigned as an Independent Non-Executive
Director on 31 October 2013 and ceased to be the
Chairman of the Board, the NRC and the OC on
the same day.
(2) Re-designated as the Chairman of the Board on 20
November 2013.
(3) Resigned as a member of the ARMC on 8 May
2014.
(4) Re-designated from a member of the ARMC to the
Chairman of the ARMC on 20 November 2013.
(5) Re-designated from a Non-Independent NonExecutive Director to an Independent NonExecutive Director on 1 October 2013.
(6) Resigned as an Independent Non-Executive
Director on 11 July 2014 and ceased to be a
member of the ARMC on the same day.
(7) Appointed as a member of the ARMC and the NRC
on 31 October 2013.
(8) Re-designated from the Chairman of the ARMC to
a member of the ARMC on 20 November 2013.
(9) Appointed as an Independent Non-Executive
Director and as a member of the ARMC on 8 May
2014.
(10) Appointed as members of the OC on 31 October
2013.
(11) Resigned as a member of the OC on 31 October
2013.
(12) Appointed as an Alternate Director to Dato’ Teh
Kean Ming on 22 May 2013.
The OC is entrusted with the
responsibility of overseeing the
administration of the Company’s
Employees’ Share Option Scheme
(“ESOS”) in accordance with the ESOS
By-Laws (“By-Laws”). The OC comprises
one (1) Independent Non-Executive
Director and two (2) Non-Independent
Non-Executive Directors. The Options
Committee meets as and when required,
and at least once during the financial
year.
The salient Terms of Reference of the OC
are as follows:
•
•
to determine participation
eligibility and to decide on the
number of options to be offered to
eligible employees and/or Persons
as stipulated in the By-Laws,
throughout the duration of the
scheme;
to ensure that the maximum
number of new options that may
be offered to eligible employees
and/or persons shall not exceed
the limits set against their
respective categories and comply
•
•
•
with the criteria for allocation as set
out in the By-Laws;
to evaluate and decide on the
eligible employees’ and/or eligible
persons’ periodic entitlement to
exercise their options as stipulated
in the By-Laws;
to make offers to eligible
employees and/or persons who
are entitled to participate in
the scheme, after taking into
consideration the performance,
seniority, number of years in
service, employee grading and/or
the potential contribution of the
eligible employees and/or persons;
and
to recommend to the Board,
when necessary, any amendments
to be made to all or any of the
provisions of the scheme, subject
to the approvals of the relevant
authorities and the Company’s
shareholders at a general meeting.
The ten (10)-year ESOS implemented
by the Company on 28 April 2003 has
expired on 27 April 2013. As there is no
share option scheme for the employees
of the Company at this juncture, the OC
was dissolved on 22 May 2014.
The Board, through the NRC, develops
and agrees the GCEO’s balanced
scorecard (“BSC”) with the GCEO based
on the strategic objectives, measures
and targets of the Group which are
aligned to the Group’s corporate goal
and strategic business plan set by the
Board.
Following the determination of the
measures and targets for the GCEO,
the same will be cascaded down to his
direct reports. The GCEO reviews the
progress of achievements in targeted
key result areas or initiatives as set out
in the Balanced Scorecards of his direct
reports on a monthly basis, allowing for
timely response and correction action to
be taken to catch up with their targeted
plan.
The NRC is also tasked by the Board to
evaluate the performance of the GCEO
against the targeted key result areas or
initiatives as set out in the BSC of the
GCEO at the end of each financial year.
Subsequently, the NRC provides the
Board with its recommendation for the
performance of the GCEO at the end of
the financial year, for decision.
In discharging its duties and
responsibilities, the Board is guided by
the Code of Conduct of the Group which
provides the framework to ensure that
the Group conduct itself in compliance
with laws and ethical values. The Board
and all employees of the Company and
the Group are committed to adhering to
best practices in corporate governance
and observing the highest standards of
integrity and behaviour in all activities
conducted by the Company and the
Group, including the interaction with
its customers, suppliers, shareholders,
employees and business partners, and
within the community and environment
in which the Company and the Group
operate. The Board ensures that
compliance is monitored through a
Confirmation of Compliance declaration
process where all employees of the
Group of grades 15 and above are
required to confirm their receipt and
understanding of the Code of Conduct
and further to certify their continued
compliance with the Code of Conduct
on an annual basis. The Code of
Conduct is available on the Company’s
website at www.scomigroup.com.my.
The Group is also committed to
openness, probity and accountability.
An important aspect of accountability
and transparency is the existence of
a mechanism to enable employees of
the Group to voice their concerns in a
responsible and effective manner. It is
a fundamental term of every contract
of employment that an employee will
faithfully serve his employer and not
disclose confidential information about
the employers’ affairs. Nevertheless,
where an individual discovers
information which he believes shows
serious malpractice or wrongdoing
within the organisation, there should
be internal mechanisms to enable
him to safely report, in good faith, on
any suspected breaches of the law or
company procedure that has come to
his notice.
To address this concern, the Group
has formalised and established a
Whistleblower Framework and Policy,
to provide an avenue for employees
to raise genuine concerns internally or
report any breach or suspected breach
of any law or regulation, including
the Group’s policies and procedures,
to the Disclosure Officer in a safe
and confidential manner, thereby
ensuring that employees may raise
concerns without fear of reprisals. The
Whistleblower Framework and Policy
is subject to periodic assessment and
review to ensure that it remains relevant
to the Group’s changing business
circumstances. The Whistleblower
Framework and Policy is available on
the Company’s website at
www.scomigroup.com.my.
The Board is cognisant of the importance
of business sustainability and, in
managing the Group’s business, take
into consideration its impact on the
environment and society in general.
Balancing the environment, social and
governance aspects with the interest
of various stakeholders is essential to
enhancing investor and public trust.
We acknowledge our responsibility to
all the lives we touch either directly
or indirectly, and are committed
to making a positive impact in the
many communities where we have a
presence while further strengthening
our corporate reputation via upholding
a culture of integrity and transparency.
Over the years, our approach towards
corporate social responsibility (“CSR”)
has become progressively more
holistic, evolving from individual acts
of philanthropy to becoming a mindset
that influences business decision
and strategy. We further ensure that
this mindset is shared among all our
employees by reinforcing the principles
of integrity and corporate citizenry in our
training and internal communication,
and encouraging a spirit of volunteerism
across our operations globally. Apart
from the Code of Conduct, the Group
has in place other internal policies
and procedures to address corporate
sustainability. We also realise that,
given the nature of the businesses we
are involved in, we can make a positive
impact on the environment. Hence,
we invest significantly in research and
development to develop ‘green’ products
that are efficient, cost-effective and, most
importantly, environmentally friendly.
Every Director has full, free and
unrestricted access to information
within the Group. Where required, the
Board and its Committees are provided
with independent professional advice
or other advice in furtherance of their
duties, the cost of which is borne by
the Company. The Board may also
seek advice from the Management or
request further explanation, information
or update on any aspect of the Group’s
operations or business concerns. The
Board is supplied with quality and timely
information, which allows it to discharge
its responsibilities effectively and
efficiently. The agenda for each meeting
together with a set of comprehensive
Board Papers for each agenda item are
delivered to each Director in advance
of meetings, to enable the Board
sufficient time to review the matters to
be deliberated for effective discussion
and decision making during the
meeting, and where necessary, to obtain
supplementary information before the
meeting.
In addition, the Directors have full and
unrestricted access to the advice and
dedicated support services of the two
(2) company secretaries appointed by
the Board. The Company Secretaries,
who are qualified, experienced and
competent, advise the Board on
procedural and regulatory requirements
to ensure that the Board adheres to
the board policies, procedures and
regulatory requirements in carrying out
its roles and responsibilities effectively.
Principle 2 – Strengthen
Composition
The success of the Board in fulfilling its
oversight responsibility depends on
its size, composition and leadership
qualities.
The Articles of Association of the
Company provides for a minimum of
two (2) directors and a maximum of
12 directors. At any one time, at least
two (2) Directors or one-third (1/3) of
the Board, whichever is higher, shall
be Independent Directors, who are
to provide independent judgment,
experience and objectivity to the Board
deliberations so that the interests of all
shareholders are taken into account by
the Board. The Directors shall elect a
Chairman among themselves who shall
be a Non-Executive Director.
the Board consisted of ten (10) members,
comprising one (1) Executive Director
and nine (9) Non-Executive Directors
(including the Chairman) of whom
seven (7) are independent as defined
by the Listing Requirements. The
Independent Directors make up 70% of
the composition of the Board. Hence,
the composition of the Board fulfils the
prescribed requirement for one-third
(1/3) of the Board to be Independent
Directors. The appointment of
Independent Directors is to ensure that
the Board includes directors who can
effectively exercise their best judgment
objectively for the exclusive benefit of
the Company and the Group.
The composition of the Board reflects
a diversity of backgrounds, skills and
experiences in the areas of business,
economics, finance, legal, general
management and strategy that
contributes effectively in leading
and directing the management and
affairs of the Group. Given the calibre
and integrity of its members and the
objectivity and independent judgment
brought by the Independent Directors,
the Board is of the opinion that its
current size and composition contribute
to an effective Board.
The Company has also appointed an
Independent Non-Executive Director of
the Company as the Senior Independent
Director of the Company. The main
duties and responsibilities of the Senior
Independent Director of the Company
are to serve as the point of contact
p 51
p 52
between the Independent Directors
and the Chairman on sensitive issues
and to act as a designated contact to
whom shareholders’ concerns or queries
may be raised, as an alternative to the
formal channel of communication
with shareholders. For any concerns
or queries regarding the Group, the
shareholders may convey to the Senior
Independent Director of the Company
via the following channels:
Mail
: SCOMI GROUP BHD
Bandar Utama
47800 Petaling Jaya
Malaysia
Attention : Tan Sri Nik Mohamed
Bin Nik Yaacob, Senior
Independent Director
Fax
: +603 7728 5853
Email
:[email protected]
A brief description of the background
of each Director is presented within the
Profile of Directors section as set out on
pages 10 to 15 of this Annual Report.
The NRC established by the Board is
tasked to:
•
•
•
ensure an effective process for
selection of new directors and
assessment of the effectiveness of
the Board and Board Committees
and the performance of individual
directors which will result in the
required mix of skills, experience
and responsibilities being present
on the Board;
establish, review and report to the
Board on a formal and transparent
policy on Executive Directors’
remuneration; and
review and recommend to the
board the remuneration of the
Executive Directors in all its forms
with the aim of attracting, retaining
and motivating individuals of the
highest quality needed to run the
Company successfully.
The members of the NRC are
appointed by the Board based on
recommendations from the NRC and
comprise at least three (3) members
who are all non-executive, a majority
of whom are independent directors.
Members of the NRC elect a Chairman
from among themselves who is an
Independent Non-Executive Director.
All members of the NRC, including
the Chairman, shall hold office only so
long as they serve as Directors of the
Company. Members of the NRC may
relinquish their membership in the
NRC with prior written notice to the
Company Secretary. The NRC reports
its recommendations back to the Board
for its consideration and approval. In
the event of any vacancies arising in
the NRC resulting in the number of
members of the NRC falling below three
(3), the vacancy should be filled within
three months of it arising. The NRC
meets at least once during a financial
year. In the interim period between
meetings, if the need arises, issues shall
be resolved through circular resolution. A
circular resolution in writing, stating the
reason(s) to arrive at a recommendation
or resolution, signed by a majority of the
members, shall be valid and effective as
if it had been passed at a meeting duly
convened and constituted.
The duties and responsibilities of
the NRC are set out in the Terms of
Reference of the NRC which is available
at the Company’s website at
and any gaps that exist in the optimum
mix of skills required for the Board.
When it is determined that a new
director is necessary to complement
existing Directors, the Board first
determines the target knowledge, skills
and personal characteristics sought.
Such criteria ensures that all candidates
are fairly and equitably considered
and evaluated irrespective of, amongst
others, sex, race, sexual orientation, age,
disability, and religion or ethnic origin in
compliance with the Company’s Code of
Conduct.
The NRC is then tasked with the
responsibility of searching for and
making a recommendation in relation
to the appointment of a director. It
goes about this task in one of two
ways. It may use the wide network
of people known to its members
to identify possible candidates or it
may brief a search consultant on the
target knowledge, skills and personal
characteristics sought then obtain a
‘short list’ of candidates. The Chairman of
the NRC then interviews such shortlisted
candidates.
The Chairman of the NRC shall make
a recommendation to the NRC, which
in turn shall make a recommendation
to the Board. In making these
recommendations, the NRC shall ensure
an effective process for the selection of
new directors to the Board.
The appointment of directors is a vital
process as it determines the composition
and quality of the Board’s mix of skills
and competencies. The nomination
and appointment of new directors takes
place within the parameters set out in
the Terms of Reference of the NRC and
the Board Composition Policy.
Based on the recommendations of
the NRC, the Board shall have power
at any time and from time to time, to
appoint any person to be a director
of the Company, either to fill a casual
vacancy or as an addition to the existing
Board but so the total number of
directors shall not at any time exceed the
maximum number fixed in the Articles of
Association of the Company.
The Board, through the NRC undertakes
an annual assessment of the Board as
a whole and each individual Directors’
performance. This includes a review
of the desirable mix of competencies,
qualification, knowledge, skills, expertise
and personal characteristics of Directors
Any newly appointed directors shall
hold office until the next following
Annual General Meeting (“AGM”) of the
Company, and shall then be eligible for
re-election.
In accordance with the Company’s
Articles of Association and Paragraph
7.26(2) of the Listing Requirements,
at least one-third (1/3) of the Board is
subject to retirement by rotation at each
AGM and a retiring director shall retain
office until the close of the AGM of the
Company at which he retires. Pursuant
to:
(a) Article 82 of the Articles of
Association of the Company, Tan
Sri Nik Mohamed Bin Nik Yaacob,
Datuk Haron Bin Siraj and Dato’
Mohammed Azlan Bin Hashim
retired from the Board and were
re-elected at the 11th AGM held on
26 September 2013; and
(b) Article 89 of the Articles of
Association of the Company, Dato’
Teh Kean Ming who was appointed
to the Board on 22 October 2012
hold office until the next following
AGM of the Company, and was reelected at the 11th AGM held on 26
September 2013.
Based on the chronology of the Directors’
appointment to the Board, the following
directors retire in accordance with Article
82 of the Articles of Association of the
Company:
(a) Dato’ Sreesanthan A/L Eliathamby;
(b) Dato’ Abdul Rahim Bin Abu Bakar;
and
(c) Encik Shah Hakim @ Shahzanim
Bin Zain.
Upon the recommendation by the NRC,
the Board has pleasure in proposing the
re-election of the following directors
who being eligible, offer themselves for
re-election at the forthcoming AGM of
the Company:
(a) Dato’ Sreesanthan A/L Eliathamby;
and
(b) Encik Shah Hakim @ Shahzanim
Bin Zain.
has informed the Board that he does
not wish to seek re-election at the
forthcoming AGM of the Company. The
Board notes that Dato’ Abdul Rahim Bin
Abu Bakar has served on the Board for 4
years and thanks him for his invaluable
contribution to the Board as a Director
and as a member of the ARMC.
In accordance with Article 89, Encik
Abdul Hamid Bin Sh Mohamed, who
was appointed Director to the Board
on 8 May 2014, shall hold office until
the forthcoming AGM of the Company,
and shall then be eligible for re-election
thereat.
The NRC is also responsible for reviewing
candidates for appointment to the Board
Committees and makes appropriate
recommendations thereon to the Board
for approval.
It is tasked with assessing the
effectiveness of the Board and Board
Committees and the performance of
individual directors in order to ensure
that the required mix of skills and
experience are present on the Board. In
the course of assessing the effectiveness
of the Board and the Board Committees
and the contributions of each individual
director, the NRC also evaluates and
determines the training needs for each
of the Directors in order to enhance the
skills of the directors and aid them in the
discharge of their duties as directors.
The NRC together with the GCEO,
representing the Management,
collectively conducted the assessments
of the effectiveness of the Board and
its Committees and the performance
of each individual Director, which
considered the qualification,
contribution and performance of
Directors taking into account their
competencies, character, commitment,
integrity, experience and time expended
in meeting the needs of the Group. The
Chairman of the NRC will discuss the
NRC’s assessment of the performance
of each individual Director with
the Directors concerned on a oneon-one basis. All assessments and
evaluations carried out by the NRC in the
discharge of its functions are properly
documented, summarised and reported
to the Board.
the NRC consisted of three (3) members
who are all independent and nonexecutive. In accordance with the
approved Terms of Reference of the
NRC, the NRC carried out the following
activities during the financial year ended
31 March 2014:
•
assessed the annual performance
of each individual Director;
•
assessed the independence of each
Independent Director;
•
reviewed the skills, experience and
competencies of each individual
Director and based thereupon,
assessed the training needs of each
individual Director;
•
assessed the effectiveness of
the Board, the ARMC and other
Committees of the Board;
•
reviewed the skills, experience and
competencies of the non-executive
Directors;
•
assessed the adequacy of the size
and composition of the Board;
•
reviewed the proposed
remuneration for the NonExecutive Directors of the
Company;
•
reviewed the retirement and reelection of the Directors pursuant
to the Articles of Association of the
Company;
•
evaluated and recommended to
the Board the GCEO’s Balanced
Scorecard for the financial year
under review;
•
reviewed and recommended to
the Board the GCEO’s Balanced
Scorecard for the new financial
year;
•
reviewed and recommended to the
Board the remuneration package
for the GCEO;
•
reviewed the developments
relating to legal proceedings taken
by the authorities against one
of the Directors and provided its
recommendation to the Board on
this matter; and
•
reviewed and recommended to the
Board the appointment of a new
Director.
p 53
p54
The NRC is also responsible for the review of the overall remuneration policy for the
Directors and the GCEO whereupon recommendations are submitted to the Board for
approval. The NRC advocates a fair and transparent remuneration policy framework
such that the Group may attract, retain and motivate high quality Directors. Besides the
remuneration practices and trends by other similar players in the market, the level of
Directors’ remuneration is also attributed to a few key factors, amongst them, qualification,
experience and responsibilities of the Directors to the Board and Board Committees.
The Non-Executive Directors are paid by way of fees for their services, as from time
to time determined by the Company in AGM and are not compensated based on
the Company’s (Group’s) performance and results as this may impair the Directors’
objectivity and independence, particularly when asked to endorse risky business
decisions that may have a vast upside potential. The Non-Executive Directors are
reimbursed for all their travelling, hotel and other expense properly and necessarily
expended by them in and about the business of the Company including their
travelling and other expenses incurred in attending the meetings of the Board or any
Board Committees of the Company.
The remuneration of the GCEO comprises principally salary and other benefits, taking
into consideration market rates and practices.
All Directors who served during the financial year ended 31 March 2014 are to be paid
an annual Directors’ fee subject to the shareholders’ approval at the forthcoming AGM
of the Company. The aggregate remuneration paid to the Directors of the Group who
served during the financial year, and the bands, are as follows:
ExecutiveNon-Executive
Director
DirectorsTotal
(RM’000)
(RM’000)(RM’000)
GroupCompany GroupCompany
Salaries and bonuses
Defined contribution plan
2,664
1,957
-
-
2,664
403
284
-
-
403
Fees
-
- 900*599*900*
Allowances
-
- 175150175
Estimated value of
benefit-in-kind
Total:
*
162
162
-
-
162
3,2292,403 1,075 749 4,304
The proposed Annual Directors’ Fees are subject to the shareholders’ approval at the forthcoming AGM of the
Company or respective subsidiaries companies.
The aggregate remuneration above is categorised into the following bands:
Executive Non-Executive
DirectorDirectors
Total
RM50,000 to RM100,000
-
6
6
RM101,000 to RM150,000
-
3
3
RM151,001 to RM200,000
-
-
-
RM200,001 to RM250,000
-
1
1
Up to RM3,300,000
1
-
1
Principle 3 – Reinforce Independence
The roles of the Chairman of the Board
(the “Chairman”) and the GCEO are
distinct and separate with each having a
clear scope of duties and responsibilities
to ensure there is a balance of power
and authority. The division of the
responsibilities of the Chairman and the
GCEO has been clearly defined in the
Board Charter of the Company.
The Chairman is responsible for the
leadership, effectiveness, conduct and
governance of the Board, while the
GCEO has overall responsibility, with
the support of the Key Management
Team, as set out on pages 16 to 17
of this Annual Report, for the day-today management of the business and
implementation of the Board’s policies,
directives, strategies and decisions. This
crucial partnership dictates the long
term success of the Company and the
Group.
In general, the tenure of an Independent
Director shall not exceed a cumulative
term of nine (9) years. However,
pursuant to our Board Composition
Policy, it has been determined that this
general rule shall not be applicable
to any Independent Director, who is
holding office as the chairman of the
Company or any subsidiary that is listed
on any securities exchange. In such case,
the Director concerned shall be deemed
an Independent Director provided:
(a) he fulfils the criteria set out in the
definition of “Independent Director”
set out in the Listing Requirements
or the relevant regulations
governing entities listed on such
other securities exchange; and
(b) he provides confirmation in writing
that he is independent of the
Management, the Board and major
shareholders and is free from any
business or other relationship
which could interfere with the
exercise of independent judgment
or the ability to act in the best
interests of the Company and the
Group.
The Board, through the NRC, has
assessed the independence of each
Independent Director annually. Taking
into consideration interests disclosed by
each Independent Director and having
regard to the criteria for assessing the
independence of Directors under the
annual Board assessment and the Listing
Requirements, the NRC is of the opinion
that the Independent Directors continue
to remains objective and independent
in expressing their respective views and
in participating in deliberations and
decision-making of the Board and the
Board Committees. The NRC is further
of the view that the length of service of
the Independent Directors on the Board
do not in any way interfere with their
independent judgment and ability to act
in the best interest of the Group.
Following an assessment conducted
by the NRC and based on the
recommendation by the NRC, the Board
recommends that the Independent
Directors continue to be designated as
Independent Directors of the Company.
Principle 4 – Foster Commitment
The Board meets a minimum of six (6)
times a year, with special meetings
convened as and when necessary.
The Board is responsible for setting
the corporate goals of the Group and
in mapping medium and long term
strategic plans, which are reviewed
on a regular basis. Regular periodic
review of the Group’s performance and
implementation of the management’s
action plans are conducted by the Board
to assess the progress made towards
achieving the overall goals of the Group.
The schedule of meetings of the Board
and its Committees as well as the AGM
is prepared and circulated to the Board
before the beginning of the year to
facilitate the Directors in planning ahead.
Special meetings of the Board and its
Committees are convened between
the scheduled meetings as and when
urgent and important direction from
and/or decisions of the Board and/or its
Committees are required.
During the financial year ended 31 March 2014, eight (8) Board Meetings were
held. The attendance record of the Directors at the meetings of the Board and its
Committees is as follows:
MEETING ATTENDANCE
(attended/held)
BOARDARMC NRC
OC
Chairman/Independent
Non-Executive Director
Tan Sri Asmat Bin Kamaludin(1)
4/4 - 2/21/1
Dato’ Mohammed Azlan Bin Hashim(2)(3)8/8 9/9 4/4
Independent Non-Executive
Directors
Tan Sri Nik Mohamed Bin Nik Yaacob(4)8/8 9/9 -
Tan Sri Mohamed Azman Bin Yahya(5)7/8 - 4/4 Datuk Haron Bin Siraj(6)
7/89/9 - 1/1
Dato’ Sreesanthan A/L Eliathamby(7) 7/8 4/42/2 Dato’ Abdul Rahim Bin Abu Bakar(8) 6/87/9 - Abdul Hamid Bin Sh Mohamed(9) - --Non-Independent Non-Executive
Directors
Mr Foong Choong Hong(10)
8/8- - Dato’ Teh Kean Ming(10)
7/8- - GCEO/Non-Independent
Executive Director
Encik Shah Hakim @ Shahzanim
Bin Zain(11)
8/8 - -1/1
Alternate Director
Mr Lee Chun Fai(12)
- --
Notes:
C - Chairman
M – Member
(1) Resigned as an Independent Non-Executive Director on 31 October 2013 and ceased to be the Chairman of the
Board, the NRC and the OC on the same day.
(2) Re-designated as the Chairman of the Board on 20 November 2013.
(3) Resigned as a member of the ARMC on 8 May 2014.
(4) Re-designated from a member of the ARMC to the Chairman of the ARMC on 20 November 2013.
(5) Re-designated from a Non-Independent Non-Executive Director to an Independent Non-Executive Director on 1
October 2013.
(6) Resigned as an Independent Non-Executive Director on 11 July 2014 and ceased to be a member of the ARMC on
the same day.
(7) Appointed as a member of the ARMC and the NRC on 31 October 2013.
(8) Re-designated from the Chairman of the ARMC to a member of the ARMC on 20 November 2013.
(9) Appointed as an Independent Non-Executive Director and as a member of the ARMC on 8 May 2014.
(10) Appointed as members of the OC on 31 October 2013. No OC meeting held since their appointment.
(11) Resigned as a member of the OC on 31 October 2013.
(12) Appointed as an Alternate Director to Dato’ Teh Kean Ming on 22 May 2013.
p 55
p56
The Board are supplied with quality and
timely information, which allows them to
discharge their responsibilities effectively
and efficiently. The meeting agenda
together with a set of comprehensive
Board Papers for each agenda item are
delivered to each Director in advance
of meetings, to enable the Board
sufficient time to review the matters to
be deliberated and to allow for effective
discussion and decision making during
the meeting, and where necessary,
to obtain supplementary information
before the meeting. At the Board
meeting, the Chairman encourages
constructive, open and healthy debate
and ensures that resolutions are
circulated and deliberated so that all
Board decisions reflect the collective
view of the Board. Directors are given
the chance to freely express their views
or share information with their peers in
the course of deliberation at the Board.
Any Director who has a direct and/or
indirect interest in the subject matter
to be deliberated will abstain from
deliberation and voting on the same
during the meeting. All deliberations
at the meetings of the Board and its
Committees in arriving at the decisions
and conclusions are properly recorded
by the Company Secretary by way of
minutes of meetings.
All Board members are obliged to
notify the Chairman of the Board before
accepting any new directorship. The
notification shall include an indication
of time that will be spent on the new
appointment. The Chairman shall also
notify the Board if he has any new
directorship or significant commitments
outside the Company.
The Directors are also in compliance
with Paragraph 15.06 of the Listing
Requirements on the restriction on
the number of directorships in listed
companies held by the Directors. The
Company Secretary monitors the
number of directorships held by each
Director to ensure compliance at all
times. The list of directorships of each
Director is updated regularly and is
tabled for the notation of the Board on
a quarterly basis. The Board is satisfied
that the external directorships of the
Board members have not impaired
their ability to devote sufficient
time in discharging their roles and
responsibilities effectively.
All Directors have attended the
Mandatory Accreditation Programme as
required under the Listing Requirements.
To remain relevant in the rapidly
changing and complex modern
business environment, our Directors
are committed to continuing education
and lifelong learning to fulfil their
responsibilities to the Company and
enhance their contributions to board
deliberations.
For this purpose, a dedicated training
budget for the Directors’ continuing
education is provided each year by
the Company. In addition to the NRC’s
evaluation and determination of the
training needs for each of the Directors,
the Directors may also request to attend
training courses according to their
needs as a Director or member of the
respective Board Committees on which
they serve. Throughout the period
under review, the Directors were also
invited to attend a series of talks on
Corporate Governance organised by
Bursa Malaysia together with various
professional associations and regulatory
bodies.
An appropriate induction has been
provided to the newly appointed
Director in order for him to familiarise
himself with the Group’s organisational
structure, strategic plans, significant
financial, accounting and risk issues and
other important matters and become
effective in his role within the shortest
practicable time.
During the financial year ended
31 March 2014, all members of the
Board attended various training
programmes, conferences, seminars
and courses organised by the
relevant regulatory authorities and
professional bodies on areas relevant
to the Group’s business, Directors’ roles,
responsibilities, effectiveness and/or
corporate governance issues. Training
programmes, conferences, seminars and
courses attended by Directors during the
year under review are as follows:
Corporate Governance
•
Advocacy Session on Corporate
Disclosure for Directors of Listed
Issuers
•
Corporate Governance Symposium
2013 – Corporate Governance in
Vogue
•
Directors’ Training: “Enterprise Risk
Management”
•
International Corporate
Governance Seminar 2013
•
Malaysia Code on Corporate
Governance
•
Nominating Committee Program
•
Related Party Transaction – From
Governance Challenges to
Impactful Results
Business Management, Economics,
Finance, Legal and Industry Update
•
4th Kuala Lumpur International
Automotive Conference
•
Abu Dhabi International Petroleum
Exhibition and conference
•
ASEAN Wealth Management
Summit 2013
•
Briefing on Government Service Tax
Malaysia (“GST”)
•
Briefing on Personal Data
Protection Act 2010 (“PDPA”)
•
CEO Forum titled “Better Times
Ahead for Malaysia? Trends,
Predictions and Outlook for 2013 –
2020”
•
Dialogue on Asia Pacific
Infrastructure Advisory Panel
•
Directors Training – “Update on
Legislations relating to Strata
Development & Management of
Common Property”
•
Directors’ In-House Training – Oil &
Gas Industry Overview, QHSE and
PDPA Compliance
•
Engagement Session on the TransPacific Partnership (TPP)
•
Forensic Accounting
•
Global Asset Management
Landscape: New & Future Trends
(Where are the Opportunities?)
•
Group Strategic Gap Analysis
•
IJM Budget Talk 2014 by
PricewaterhouseCoopers
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
IJM Senior Management Forum
Indonesian Wealth management
Forum 2013
Innovation Award 2013
International Petroleum Technology
Conference 2013 (Beijing, China)
International Roundtable “Surviving
the Next Global Financial Crisis”
Invest Malaysia 2013
Johor Corporation’s Directors
Conference 2013
Khazanah Mid Year Retreat 2013
& Khazanah’s Strategic Planning
Group, titled “19 Going On 20, What
kind of Khazanah is requires to
reach 2020?”
Luncheon Talk by Tan Sri Andrew
Sheng on Global Economic Outlook
Perdana Discourse Series 16 on
“Malaysia’s Higher Education: In
Need of Radical Transformation?”
Perdana Discourse Series 17 on
“Current Political Trends and Their
Impact on the Economic and Social
Direction of Malaysia
Perdana Leadership Foundation
CEO Forum 2013
Perdana Leadership Foundation
Roundtable “Surviving the Next
Global Financial Crisis” chaired by
Tun Dr Mahathir Mohamad
Price Action Analysis, Trading
Psychology and Position Sizing
Round Table Meeting with
International Criminal Court/
International Court of Justice/
Permanent Court of Arbitration/
Hague Conference on Private
International Law
Round Table on the Outcome &
Implications of the 13th General
Election
Seminar on Disclosure
Requirements for Companies
Listed on the Main Market of Bursa
Malaysia
South East Asian Motorsports
Business Forum 2013
Special Dialogue & Presentation
Session on ASEAN Scorecard 2013
Specialised Marketing Mission in Oil
& Gas to Myanmar
Talk on the Impact of GST in
Property Developers
•
•
•
•
•
•
•
•
Talk on the Implementation and
Impact of the PDPA
The 10th ASEAN Leadership Forum
The 16th Malaysian Strategic
Outlook Conference 2014
The 17th Annual Credit Suisse Asian
Investment Conference
The 18th Malaysia Capital Market
Summit
Westports Sdn Bhd Management
Development Lecture Series
World Capital Market Symposium
2013
World Economic Forum 2013
Apart from attending the training
programmes, conferences and seminars
organised by the relevant regulatory
authorities and professional bodies, the
Directors continuously received briefings
and updates on regulatory and industry
development, including information on
the Group’s businesses and operations,
risk management activities and other
initiatives undertaken by the Group.
Principle 5 – Uphold Integrity In
Financial Reporting
The Board is committed to provide a
balanced and true view of the Group’s
financial performance and prospects
in all its reports to shareholders,
stakeholders and regulatory authorities.
Prompt release of announcements
of the quarterly financial statements
and press releases reflect the Board’s
commitment to provide timely
and transparent disclosures of the
performance of the Group. This is also
channelled through the audited financial
statements, quarterly announcements
of the Group’s unaudited results as well
as the Chairman’s Statement and the
Management Review of Operations in
the Annual Report.
The Statement of Directors’
Responsibility in respect of the
preparation of the annual audited
financial statements for the financial year
under review is set out on page 71 of
this Annual Report.
In discharging its fiduciary responsibility,
the Board is assisted by the ARMC to
oversee the financial reporting processes
and the quality of the Group’s financial
statements.
The primary objective of the ARMC is to
assist the Board to review the adequacy
and integrity of the Group’s financial
administration and reporting, internal
control and risk management systems,
including the management information
system and systems for compliance
with applicable laws, regulations, rules,
directives and guidelines.
The Board, through the ARMC, maintains
an appropriate, formal and transparent
relationship with the Group’s internal
and external auditors. The ARMC is
guided by the Group’s policies and
procedures in accessing the suitability
and independence of the external
auditors, which also includes the
provision of non-audit services by the
external auditors to the Group and the
Company to ensure their independence
is not comprised. Those policies and
procedures are to be read in conjunction
with the Terms of Reference of the
ARMC, which outlines the duties and
responsibilities of the ARMC relating
to the appointment of the external
auditors.
The ARMC has explicit authority to
communicate directly with the Group’s
internal and external auditors and vice
versa the Group’s internal and external
auditors also have direct access to
the ARMC to highlight any issues of
concern at any time. Further, the ARMC
meets the external auditors without the
presence of Executive Directors or the
Management whenever necessary, but
no less than twice a year. Meetings with
the external auditors are held to further
discuss the Group’s audit plans, audit
findings, financial statements, as well as
to seek their professional advice on other
related matters.
p 57
p58
The ARMC is also tasked by the Board
to consider the appointment of the
external auditor, the audit fee and any
questions relating to the resignation
or dismissal as well as all non-audit
services to be provided by the external
auditors to the Company with a view
to auditor independence and to
provide its recommendations thereon
to the Board. The ARMC has received
confirmation from the external auditors
that for the audit of the financial
statements of the Group and Company
for the financial year ended 31 March
2014, they have maintained their
independence in accordance with their
firm’s requirements and with the terms
of relevant professional and regulatory
requirements and they have reviewed
the non-audit services provided to
the Group during the financial year in
accordance with the independence
requirements and are not aware of
any non-audit services that have
compromised their independence as
external auditors of the Group. The
external auditors also reaffirmed their
independence at the completion of the
audit.
The ARMC Report, enumerating its
membership, Terms of Reference, its roles
and relationship with both the internal
and external auditors and activities
during the financial year ended 31 March
2014 is set out on pages 66 to 68 of this
Annual Report.
Principle 6 – Recognise And Manage
Risks
The Board firmly believes in maintaining
a sound risk management framework
and internal controls system with a view
to safeguard shareholders’ investment
and the assets of the Group. The size
and geographical spread of the Group
involve exposure to a wide variety of
risks, where the nature of these risks
means that events may occur which
could give rise to unanticipated or
unavoidable losses.
In establishing and reviewing the risk
management and internal controls
system, the Board recognises that such
systems can provide only reasonable,
but not absolute, assurance against the
occurrence of any material misstatement
or loss.
The ARMC meets on a regular basis to
ensure that there is clear accountability
for managing significant identified risks
and that identified risks are satisfactorily
addressed on an ongoing basis. In
addition, the adequacy and effectiveness
of the risk management and internal
controls system is also periodically
reviewed by the ARMC.
Regular assessments on the adequacy
and integrity of the internal controls
and monitoring of compliance with
policies and procedures are also carried
out through internal audits. Besides
having the internal Group Internal
Audit Department, the Group has also
outsourced certain of the activities
and function of the internal audit to
a professional service provider who
reports directly to the ARMC. The risk
based internal audit plan that covers
internal audit coverage and scope of
work is presented to the ARMC and the
Board for their respective consideration
and approval annually. Internal audit
reports encompassing the audit findings
together with recommendations thereon
are presented to the ARMC during its
quarterly meetings. The Group Internal
Audit Department, senior and functional
line management are tasked to ensure
management action plans are carried
out effectively and regular follow-up
audits are performed to monitor the
continued compliance.
The Statement on Risk Management and
Internal Control is set out on pages 60 to
65 of this Annual Report.
Principle 7 – Ensure Timely And High
Quality Disclosure
The Board recognises the importance
of maintaining transparency and
accountability to its shareholders. The
Board ensures that all the shareholders of
the Company are treated equitably and
the rights of all investors are protected.
The Board provides its shareholders and
investors with comprehensive, accurate
and quality information on a timely basis
and non-selective basis, in order to keep
them abreast of all material business
matters affecting the Company and the
Group.
Timely disclosure of material information is
critical towards building and maintaining
corporate creditability and investor
confidence. Recognising the importance
of accurate and timely public disclosures
of corporate information in order for the
shareholders to exercise their ownership
rights on an informed basis, the Board
has established a Group Communication
Policy with the following intention:
•
to provide guidance and structure
in disseminating corporate
information to, and in dealing
with investors, analysts, media
representatives, employees and the
public;
•
to raise management and
employees’ awareness on the
disclosure requirements and
practices;
•
to ensure compliance with legal
and regulatory requirements on
disclosure; and
•
to protect the brand equity of
the Group by managing the risk
associated with the brand i.e.
exposures to the brand that can
undermine its ability to maintain
its desired differentiation and
competitive advantage.
The Group Communication Policy
outlines how the Group identifies and
distributes information in a timely
manner to all shareholders. It also
reinforces the Group’s commitment to
the continuous disclosure obligations
imposed by law, and describes the
procedures implemented to ensure
compliance.
The Board through the Management
oversees the Group’s corporate
disclosure practices and ensures
implementation and adherence to the
policy. The Board has authorised the
GCEO as the primary spokesperson
responsible for communicating
information to all stakeholders including
the public.
The Group also maintains a corporate
website, www.scomigroup.com.my
to disseminate information and
enhance its investor relations. All
disclosures, material information and
announcements made to Bursa Malaysia
are published on the website shortly
after the same is released by the news
wire service or the relevant authorities.
Supplemental, non-material information
will be posted on the website as soon as
practicable after it is available.
The Group recognises the need for
due diligence in maintaining, updating
and clearly identifying the accuracy,
veracity and relevance of information
on the website. All timely disclosure
and material information will be clearly
date-identified and retained on the
website as part of the public disclosure
record for a minimum period of 2 years.
The Group Communications division has
ongoing responsibility for ensuring that
information in the website is up-to-date.
In addition, the email address, name
and contact number of the Company’s
designated person is listed in the
website to enable the public to forward
queries to the Company.
Besides that, the Company will also
organise separate quarterly briefings for
fund managers, institutional investors
and investment analyst as well as
the media, not only to promote the
dissemination of the financial results of
the Company and the Group but also to
keep them updated on the progress and
development of the Group’s business
and prospect.
Principle 8 – Strengthen Relationship
Between Company And Shareholders
Shareholders are encouraged to attend
the AGM and any general meetings of
the shareholders which is the principal
forum for dialogue between the Board
and the shareholders and provides
shareholders the opportunity to raise
questions or concerns with regards to
the Group as a whole.
The Company at all times dispatched
its notices of the AGM and any
general meetings of the shareholders,
Annual Report and related circular to
shareholders at least twenty one (21)
days before the AGM and any general
meetings of the shareholders, unless
otherwise required by laws, in order to
provide sufficient time to shareholders
to understand and evaluate the matters
involved as well as to make necessary
arrangements to attend, participate
and vote either in person, by corporate
representative, by proxy or by attorney,
to exercise their ownership rights on an
informed basis during the AGM and any
general meetings of the shareholders.
Where special business items are to be
transacted, a full explanation is provided
in the notice of the AGM and any general
meetings of the shareholders or the
related circular to shareholders in order
to assist the shareholders’ understanding
of matters and the implication of their
decision in voting for or against a
resolution.
All the resolutions set out in the notices
of the AGM and any general meetings
of the shareholders are put to vote
by show of hands, unless otherwise
required by shareholders or by law.
The Board encourages and facilitates
poll voting where the Chairman of the
AGM and any general meeting of the
shareholders will inform shareholders of
their right to demand a poll vote at the
commencement of the AGM and any
general meetings of the shareholders.
The outcome of the AGM and any
general meetings of the shareholders
is announced to Bursa Malaysia on the
same day the meeting is held.
The Board, the Management Team,
both Internal and External Auditors
of the Company and if required, the
Advisers, are present at the AGM and any
general meetings of the shareholders to
answer questions or concerns raised by
shareholders.
Before the commencement of the
AGM and any general meetings of
the shareholders, the Directors and
the Management Team will take the
opportunity to engage directly with
the shareholders to account for their
stewardship of the Company. Direct
engagement with shareholders provides
the shareholders a better appreciation of
the Company’s objectives, quality of its
management and the challenges faced,
while also making the Company aware
of the expectations and concerns of its
shareholders.
During the AGM and any general
meetings of the shareholders, there is
always a presentation by the GCEO or
the Chief Investment and Performance
Officer on the Group’s strategy, the
operations and financial performance of
the Company, the major developments
and the prospects of the Group and
the subject matters tabled for decision.
Besides that, the Chairman of the
AGM and any general meetings of the
shareholders will invite the shareholders
to raise questions pertaining to the
Company’s financial performance
and other items for adoption at the
meeting, before putting a resolution
to vote. The Chairman of the AGM
and any general meetings of the
shareholders will also share with the
shareholders the Company’s responses
to questions submitted in advance of
the AGM and any general meetings
of the shareholders by the Minority
Shareholder Watchdog Group.
This Statement is made in accordance
with the resolution of the Board dated 18
August 2014.
p 59
p60
Statement on R isk M anagement And
I nter nal Cont rol
Purs u a nt to t he M ain M ar ke t L ist in g R e quire me nt s
of B u rs a M a laysia S e cur it ie s B e r h ad (“Bur sa
M a lays i a” ) ( “ L i s t i n g R e quire me nt s”), Prac t ice Note
9 i s s u e d by B ur sa M alaysia an d t h e pr in ciple s
s e t out i n t he M alaysian Code on Cor porate
G ove rn a n ce 2 0 12 (t h e “Code”), t h e B oard of
D i re c to rs of S co mi G roup Bh d (t h e “Company ”)
( t he “ B oa rd ” ) i s commit te d to maint ain a soun d
ri s k m a na g e m e nt framewor k an d inte r n al cont rols
s ys te m to s a fe g uard sh are h olde r s’ inve st me nt
a n d t he a s s e t s o f t h e Company an d it s group of
com pan ie s (t h e “G roup”).
Introduction
The Board is guided by the Statement
on Risk Management & Internal Control Guidelines for Directors of Listed Issuers
in making disclosures concerning the
main features of the risk management
framework and internal controls system
of the Group pursuant to the Paragraph
15.26(b) of the Listing Requirements. Set
out below is the Group’s Statement on
Risk Management and Internal Control
for the financial year ended 31 March
2014. This Statement covers all of the
Group’s operations, save for Scomi
Engineering Bhd and Scomi Energy
Services Bhd, both being subsidiaries of
the Company listed on Bursa Malaysia.
Board Responsibility
The Board is fully committed to
ensure the existence of an effective
risk management and internal
controls system within the Group, and
continuously reviews and evaluates the
adequacy and integrity of these systems.
However, the Board recognises that
such systems are designed to manage
and reduce, rather than eliminate,
the risks identified to acceptable
levels. Therefore, the internal controls
implemented can only provide
reasonable and not absolute assurance
against the occurrence of any material
misstatement or loss.
Whilst the Board has overall
responsibility for the Group’s risk
system, it has delegated the
implementation of these internal
controls system to the Management,
who regularly report to the Audit and
Risk Management Committee of the
Board (the “ARMC”) on risks identified
and actions taken to mitigate and/or
minimise the risks. The risk management
and internal controls system is subject
to the Board’s regular review with a
view towards appraising the adequacy,
effectiveness and efficiency of such
system within the Group and also to
ensure that these systems are viable and
robust.
The Board has received assurance
from the Group Chief Executive Officer
(“GCEO”) and the Group Financial
Controller that the Group’s risk
system is operating adequately and
effectively, in all material aspects.
Taking into consideration the assurance
from the Management Team and input
from the relevant assurance providers,
the Board is of the view that the risk
systems of the Group is satisfactory and
adequate to safeguard shareholders’
investment and the assets of the
Group. The Group will continue to
take measures to strengthen the risk
system of the Group.
St ate m e nt o n R isk M an age m e nt An d I nte rna l Co nt ro l
Risk Management Framework
With the increasingly complex and
dynamic business environment,
proactive management of the overall
business risks is a prerequisite in
ensuring that the organisation achieves
its strategic objectives. The Group is
committed to ensuring that it plans
and executes activities to ensure that
the risks inherent in its business are
identified and effectively managed.
Risk management activities are to be
regarded an integral part of the Group’s
philosophy and business practices and
not in isolation. The management of
risks is aimed at achieving an appropriate
balance between realising opportunities
for gains while minimising losses to the
Group.
The Group has established an Enterprise
Risk Management Framework
(“Framework”) which serves to inform
and provide guidance to Directors,
senior management, functional line
management and staff in managing risks
affecting the businesses and operations
of the Group.
The Framework is summarised in the
diagram below, which sets out:
•
•
•
•
the fundamentals and principles
of risk and risk management that
is to be applied in all situations
and throughout all levels of the
organisation;
the process for identifying,
assessing, responding, monitoring
and reporting of risks and controls;
the roles and responsibilities of
each level of management in the
Group; and
the mechanisms, tools and
techniques for managing risks in
the Group.
Policy
Repo
Risk
Management
Process
atm
Tre
t
en
M
on
ito
r
ing
Risk Reporting Structure
Infrastructure
nt
Strategic
Operational
Reporting
Compliance
e
Assessm
Objective
rting
Identification
Area
Corporate
Business Unit
Market Unit
Product
Project
p 61
p62
St ate m e nt o n R isk M an age m e nt An d I nterna l Co nt ro l
The risk management process is an ongoing process commencing from the
beginning of any major new project, venture or change in operational environment.
The process includes the systematic application of management policies, procedures
and practices to the activities of risk identification, assessment, treatment, monitoring
and reporting. A quarterly review of risks is undertaken to ensure that the risk profile
is kept up to date. This risk management process is applied to all levels of activity
in the Group, with the objective of establishing accountability for both risks and
ensuring mitigation at the source of the risk.
The level of risk tolerance of the Group is expressed through the use of a risk impact
and likelihood matrix. Once the risk level is determined, the risk owner is obliged to
deal with the relevant risks by adhering to the Group’s risk treatment guidance on
the actions to be taken and target timeline for implementation of the action plan.
The Group will only accept a commercial level of risk that will provide reasonable
assurance on the long term profitability and survival of the Group.
Every individual in the Group plays an integral role in the effective management of
its risks. The risk management reporting structure adopted by the Group to assign
responsibility for risk management and facilitate the process for assessing and
communicating risk issues from transactional levels to the Board is summarised as
follows:
Ad-hoc Risk Management
Working Committee
The Management reports to the ARMC
on a quarterly basis on high risks areas
faced by the Group and the adequacy
and effectiveness of the internal controls
system adopted throughout the Group.
The ARMC will report to the Board
on all significant risk related matters
deliberated at its meetings.
Further information on the Group’s risk
management and internal audit activities
is highlighted in the ARMC Report on
pages 66 to 68 of this Annual Report.
Internal Controls System
The internal controls system of
the Group covers governance, risk
management, organizational, financial,
strategy, business and operations, and
regulatory and compliance control
matters.
Board of Directors
Audit and Risk
Management
Committee
The Framework will be reviewed
periodically by the Management and the
Board to ensure its continued application
and relevance.
Internal Audit
Risk Management
Working Committee
The Group’s internal controls system
comprises amongst others various
policies, procedures and frameworks,
which includes:
Clear and Structured Organisational
Reporting Lines
The Group has a well defined
organisation structure that is aligned to
its business requirements and also to
ensure that checks and balances exist
throughout the Organisation.
Enterprise Assurance
Department
Clear reporting lines and authority limits,
driven by delegated authority limits
set by the Board, govern the Group’s
decision making and approval process.
Business Units
Corporate Functions
The Framework implemented within the Group ensures that the key business and
operational risks faced by all business operating units within the Group are continually
defined, highlighted, reported and managed. Monitoring of the management action
plans during the year under review was performed by the Management, the progress
of which was reported to the ARMC on a quarterly basis.
In addition, the Group employs the
Balanced Scorecard framework that
implements and measures the goals
and targets for individual employees in
alignment with the business objectives
and strategies of the Group.
At the Board level, all strategic, business
and investment plans are approved
and monitored by the Board. The
Board is supported by three (3) Board
committees which provide focus and
counsel in the areas of:
The Group’s annual strategic business
plan and budget is reviewed, deliberated
and approved by the Board. The
expectations of the Board are clearly
discussed with, and understood by, the
Management.
1.
2.
The Board is also responsible for
monitoring the implementation of the
strategic business plan and for assessing
the actual performance of the Group
against the annual strategic business
plan and budget as well as to provide
guidance to the Management.
3.
Audit and Risk Management;
Employees’ Share Option Scheme;
and
Nomination and Remuneration of
Directors.
Certain Board responsibilities are
delegated to the Board Committees
through clearly defined Terms of
Reference, which are reviewed from time
to time.
Further details of the Board Committees
are contained in the Statement on
Corporate Governance on pages 48 to
59 of this Annual Report.
The Board has a Board Policy Manual and
Board Charter which establishes a formal
schedule of matters and outlines types
of information required for the Board’s
attention and deliberation at Board
meetings.
Comprehensive Board papers, which
include financial and non-financial
matters such as quarterly results,
business strategies, explanation of the
performance of the Group and individual
business divisions, key operational issues,
corporate activities and exercises of the
Group, etc are escalated to the Board for
deliberation and approval.
Strategic Business Plan and Annual
Budget
The Board constructively challenges
and contributes to the development
of the Group’s strategic directions
and annually reviews the Group’s
strategic business plan. The Board
probes the Management to ensure
the Management has taken into
consideration the varying opportunities
and risks whilst developing the strategic
business plan.
On a quarterly basis, the GCEO reviews
the Group’s key financial performance
metrics with the ARMC and the Board
and highlights any concerns and issues,
if any. The actual performance of the
Group is assessed against the approved
budget on a quarterly basis where
explanations, clarifications and corrective
action taken for significant variances
are reported by the Management to the
ARMC and the Board.
Balanced Scorecard (“BSC”)
The execution strategy towards
achieving the corporate goal and
targets in alignment with the business
objectives and strategies of the Group is
set out in the BSCs of employees.
The GCEO’s BSC is developed based on
the strategic objectives, measures and
targets of the Group which are aligned
to the Group’s corporate goal.
The Nomination and Remuneration
Committee of the Board (the “NRC”)
is tasked by the Board to review the
proposed initiatives, measures and
targets to be included in the BSC of the
GCEO and evaluate the performance
of the GCEO against the targeted key
result areas or initiatives as set out
in the BSC of the GCEO at the end of
each financial year end. Subsequently,
the NRC provides the Board with its
recommendations with regards to the
proposed BSC for the GCEO for each
financial year and the results of the
evaluation of the performance of the
GCEO at the end of the financial year
end.
Following the determination of the
measures and targets for the GCEO, the
same will be cascaded down to his direct
reports. The GCEO reviews the progress
of achievements in targeted key results
areas or initiatives as set out in the
Balanced Scorecards of his direct reports
on a monthly basis, allowing for timely
response and corrective action to be
taken to catch up to their targeted plan.
Business Evaluation Committee
(“BEC”)
The BEC which comprises cross
functional representatives has been
established to review all critical decisions
involving investments, disposals, tenders,
joint ventures, capital expenditures and
award of contracts. The BEC will assist
in evaluating risks associated with those
critical decisions and the reasonableness
of the associated mitigating factors.
The BEC aims to assist the GCEO and
respective business units to:
(i) review the long and short term
economic, commercial, operational,
risk, strategy and other relevant
factors considered by the business
units in preparing bids and/or
submission for tenders;
(ii) ensure the adherence to
implemented decision making
processes when selecting suppliers,
contractors and/or customers for
goods and services on a tender
basis;
(iii) strengthen the Group’s business
position, by aligning the process of
reviewing contracts, partnerships
and supplies/services; and
(iv) leverage on the opportunities that
the Group’s overall infrastructure
may present, that can benefit the
individual business unit.
The BEC is not an approving body but
provides an independent assessment
to the respective business units on
critical decisions drawing upon the
expertise of its members and makes
recommendations to the GCEO prior
to approval by the relevant approving
authorities as set out in the delegated
authority limits approved by the Board.
p63
p64
St ate m e nt o n R isk M an age m e nt An d I nterna l Co nt ro l
Delegated Authority Limits (“DAL”)
•
The Board’s approving authority on
certain specified activities is delegated
to the Management through a clearly
and formally defined DAL which is
the primary instrument that governs
and manages the business decision
making process in the Group. Whilst
the objective of the DAL is to empower
Management, the key principle adhered
to in its formulation is to ensure that a
system of internal controls, and checks
and balances are incorporated therein.
•
The DAL is implemented in accordance
with the Group’s policies and procedures
and in compliance with the applicable
statutory and regulatory requirements.
The DAL is continuously reviewed and
updated to ensure its relevance to the
Group’s operations.
Code of Conduct
The Board and employees of the Group
are committed to adhering to the best
practices in corporate governance and
observing the highest standards of
integrity and behaviour in all activities
conducted by the Group, including the
interaction with its customers, suppliers,
shareholders, employees and business
partners, and within the community
and environment in which the Group
operates.
The Board and employees of the Group
play an important role in establishing,
maintaining and enhancing the
reputation, image and brand of the
Group and ensuring the observance to
and compliance with the standards of
integrity and behaviour that the Group is
committed to.
All employees of the Group of grades
15 and above are required to confirm
their receipt and understanding of the
Code of Conduct and further required to
certify their continued compliance with
the Code of Conduct on an annual basis.
The Group has also established a
Suppliers Code of Conduct, pursuant to
which its supply chain are required to
adhere to the following:
•
that it operates within safe working
conditions,
that its workers are treated with
dignity and respect, and
that environmentally responsible
manufacturing processes are
implemented and adhered to.
In addition to these commitments, the
Group requires its suppliers (“Suppliers”)
to adhere, in all of their activities, to
the laws, rules and regulations of the
countries in which they operate.
In furtherance of these commitments
and towards the advancement of social
and environmental responsibility,
the Group requires its Suppliers to
implement the Suppliers Code of
Conduct which shall be read together
with the contract/agreement between
the Group and the Supplier. The Group
expects the Supplier to abide by the
Suppliers Code of Conduct when
conducting business with or for the
Group. It is the responsibility of every
Supplier to comply with the principles
of the Suppliers Code of Conduct, as
amended from time to time.
The breach of the Suppliers Code of
Conduct may lead to formal warnings,
disclosure of the nature of breach to all
employees of the Group, removal from
the Group’s preferred vendor list and/
or immediate termination as the Group’s
Supplier subject to terms of contract/
agreement, depending on the severity of
the situation.
Policies and Procedures
Clear, formalised and documented
internal policies and procedures are
in place to ensure compliance with
internal controls and relevant rules
and regulations. Regular reviews are
performed to ensure that the policies
and procedures remain current and
relevant.
The Group’s policies are available on the
Company’s intranet for easy access by
the employees.
Standard Operating Procedures,
Processes and Systems
There are documented standard
operating procedures and guidelines
that have been adopted by the
Management to regulate the Group’s
functional processes.
The Group had successfully
implemented SAP across 17 countries.
The implementation of SAP marks a
significant milestone in the roll-out of
Project BEST which is a global initiative
to establish best practice processes
across key functions promoting greater
visibility, transparency and efficiency
across the Group.
Information and Communication
Following from a clear organisational
reporting structure, information is
communicated and disseminated to all
employees in all locations within the
Group.
To ensure compliance to Chapter 14 of
the Listing Requirements, the Board and
the Principal Officers of the Company
are informed in advance before the
commencement of each closed
period, during which time they are to
comply with the additional disclosure
requirements related to their dealings
as set out in the Listing Requirements.
They are also reminded that they are not
allowed to deal in the listed securities
of the Company as long as they are
in possession of material and pricesensitive information relating to the
Company in order to avoid any insider
trading.
The Group also has in place a
Whistleblower Framework and Policy,
to provide an avenue for employees
to raise genuine concerns internally or
report any breach or suspected breach
of any law or regulation, including
the Group’s policies and procedures,
to the Disclosure Officer in a safe
and confidential manner, ensuring
employees can raise concerns without
fear of reprisals. These disclosures are
investigated, pursuant to which remedial
and/or disciplinary actions may be taken,
if warranted. These disclosures and the
results of the investigations undertaken
are reported to the Board on a quarterly
basis.
Competency and Talent Management
To enhance the competencies of the
Group’s talent pool and establish a
culture of continuous learning, Global
Learning and Development Sdn Bhd,
a wholly owned subsidiary of the
Company runs a series of training and
development programmes based
on the Learning and Development
(“LEaD”) Framework that defines training
based on technical and non-technical
programmes. This LEaD Framework
forms part of the Group’s human
capital skills enhancement programme
known as our Organisational Plan for Us
(“OPUS”). This ensures that employees
are kept up-to-date with the required
competencies to carry out their
duties and responsibilities towards
achieving the Group’s objectives. A
key performance indicator on average
learning hours per employee is in place
to encourage employees’ learning,
growth and knowledge-sharing.
The Group also conducts staff
performance appraisals semi-annually
in order to enhance the level of staff
competency in carrying out their duties
and responsibilities towards achieving
the Group’s objectives.
Independent Assurance Mechanism
Regular assessments on the adequacy
and integrity of the internal controls
and monitoring of compliance with
policies and procedures are carried out
through internal audits. Besides having
the Group Internal Audit Department,
the Group also outsourced certain of the
activities and function of the internal
audit to a professional service provider.
The internal audit plan that sets out
the internal audit coverage and scope
of work is presented for ARMC and the
Board’s consideration and approval
annually before its implementation.
Internal audit reports, which
encompass audit findings together
with recommendations thereon, are
presented to the ARMC during its
quarterly meetings. The Group Internal
Audit Department, senior and functional
line management are tasked to ensure
management action plans are carried
out effectively and regular followup audits are performed to monitor
continued compliance.
In addition to this internal assurance
mechanism, the Group also received
extensive and detailed ARMC reports
and the management letter from its
External Auditors that primarily focuses
on financial controls. The ARMC reports
and the management letter were also
presented to the ARMC for deliberations.
In the event of any non-compliance,
appropriate corrective actions have been
taken in addition to amendments to the
relevant procedures, if required.
Besides that, the ARMC also conducted
at least two private meetings with the
External Auditors, to give opportunity to
the External Auditors to raise any matters
without executive board members or the
Management present.
Quality, Health, Safety and
Environment (“QHSE”)
A clear, formalised and documented
Global QHSE manual is in place
to outline employees’ roles and
responsibilities towards the prevention
of accidents, the elimination of
hazards and in ensuring a safe working
environment. The Group adopts strict
standards and controls to continuously
improve the application and
performance of the safety management
systems as a safe working environment
is fundamental to the Group’s success in
business operations.
Review of this Statement
The External Auditors have reviewed
this Statement on Risk Management
and Internal Control pursuant to the
scope set out in Recommended Practice
Guide 5 (Revised), Guidance for Auditors
on Engagements to Report on the
Statement on Risk Management and
Internal Control included in the Annual
Report (“RPG 5”) issued by the Malaysian
Institute of Accountants (“MIA”) for
inclusion in the annual report of the
Group for the financial year ended 31
March 2014, and reported to the Board
that nothing has come to their attention
that cause them to believe that the
Internal Control, in all material respects,
has not been prepared in accordance
with the disclosures required by
paragraphs 41 and 42 of the Statement
on Risk Management and Internal
Control: Guidelines for Directors of Listed
Issuers, or is factually inaccurate.
RPG 5 does not require the External
Auditors to consider whether the
Internal Control covers all risks and
controls, or to form an opinion on
the adequacy and effectiveness of
the Group’s risk management and
internal controls system including
the assessment and opinion by the
Board and Management thereon. The
External Auditors are also not required
to consider whether the processes
described to deal with material internal
control aspects of any significant
problems disclosed in the annual report
will, in fact, remedy the problems.
Additionally, the Internal Auditors
have also reviewed this Statement and
reported to the ARMC that, save for
its presentation to the ARMC of the
individual lapses in internal controls
during the course of its internal audit
assignments for the financial year, it has
not identified any other circumstances,
with its scope of work, which suggest
any fundamental deficiencies in the
system of internal controls of the Group.
with the resolution of the Board dated 18
August 2014.
p65
p66
Audi t and R isk M anagement
Commit tee Rep o r t
The B o a rd o f D ire c tor s of S comi G roup Bh d
( t he “Com p a ny ” or “SGB ”) (t h e “B oard ”) is
p le a s e d to p re s ent t h e R e por t of t h e Audit an d
R i s k M a n a g e m e nt Commit te e (t h e “ARM C ” or
“Co m m i t te e” ) for t h e fin an cial ye ar e n de d 31
M arch 2014.
Terms of Reference
The details of the Terms of Reference
of the ARMC are available for reference
on the Company’s website at
Membership and Meetings
During the year under review, the ARMC
comprised five (5) members, all of
whom are Independent Non-Executive
Directors. The composition of the ARMC
complies with paragraph 15.09 of the
Main Market Listing Requirements of
Bursa Malaysia Securities Berhad.
Based on the profiles of the ARMC
members as set out on pages 11 to
14 of this Annual Report, at least one
member of the Committee fulfils the
financial expertise requirement of the
Main Market Listing Requirements
of Bursa Malaysia Securities Berhad
and the majority of the members of
the Committee are financially literate
with sufficient financial experience
and ability to assist in discharging the
Board’s fiduciary duties with respect
to its responsibility for overseeing the
following:
(i)
the financial administration and reporting process and ensuring that the
financial results of the Group and the Company are truly and fairly presented in
its financial statements;
(ii) the adequacy and effectiveness of the risk management and internal control
systems;
(iii) the performance of the external and internal audit functions; and
(iv) the fairness and reasonableness of the related party transactions (“RPTs”) entered
into by the Group with related parties.
A total of nine (9) ARMC meetings were held during the year under review, which
were on 22 May 2013, 8 July 2013, 22 July 2013, 22 August 2013, 24 September 2013,
20 November 2013, 8 January 2014, 20 February 2014 and 20 March 2014. A quorum,
established by the presence of a majority of members who are Independent Directors,
was always met.
The members of the ARMC and their attendance are as follows:
Name
ArmcDesignation Attendance
(attended/held)
Tan Sri Nik Mohamed Bin Chairman Independent NonNik Yaacob*
Executive Director
9/9
Dato’ Abdul Rahim Bin Member
Abu Bakar#
Independent Non-
Executive Director
7/9
Member
Datuk Haron Bin Siraj<
Independent Non-
Executive Director
9/9
Dato’ Mohammed Azlan Bin Member
Hashim>
Dato’ Sreesanthan A/L Member
Eliathamby@
Abdul Hamid Bin
Member
Sh Mohamed^
Independent Non-
Executive Director
9/9
Independent Non-
Executive Director
4/4
Independent Non-
Executive Director
–
Audit an d R isk M an age m e nt Co m mi t tee R ep o r t
Notes:
*
#
<
>
@
^
Re-designated from a member of the ARMC to the
Chairman of the ARMC on 20 November 2013.
Re-designated from the Chairman of the ARMC to
a member of the ARMC on 20 November 2013.
Resigned as a member of the ARMC on 11 July
2014.
Resigned as a member of the ARMC on 8 May
2014.
Appointed as a member of the ARMC on 31
October 2013.
Appointed as a member of the ARMC on 8 May
2014.
The Board, through its Nomination and
Remuneration Committee, has reviewed
the performance of the ARMC and the
skills, experience and competencies
possessed by the members of the ARMC
through an annual ARMC effectiveness
assessment. The Board is satisfied with
the performance of the ARMC and
its members where they have carried
out their duties and responsibilities in
accordance with the Terms of Reference
of the ARMC.
Summary of Activities for the
Financial Year
In accordance with the approved Terms
of Reference of the ARMC, the ARMC
carried out the following activities
during the financial year ended 31 March
2014:
1.
reviewed the quarterly and annual
financial reports of the Group and
the Company prior to submission
to the Board for consideration and
approval;
2.
reviewed the financial performance
of major contributing subsidiaries;
3.
reviewed and recommended to
the Board the appointment of the
external auditors and the audit fee;
4.
reviewed and discussed with the
external auditor the nature and
scope of their audit and ensure that
the audit is comprehensive;
5.
reviewed the external auditor’s
ARMC report, management letter
and management’s response
thereto;
6.
considered the major findings
by the external auditors and
management’s responses thereto;
7.
reviewed the performance and
effectiveness of the external auditor
for the statutory audit services
provided;
8.
reviewed the independence and
objectivity of the external auditors;
9.
reviewed the policy on the
selection of the external auditors,
including the review of the
provision of non-audit services
provided or to be provided by the
external auditors and the total fees
paid or to be paid;
10. conducted private meetings
with the external auditors, to
give opportunity to the external
auditors to raise any matters
without the presence of the
executive board members and
management;
11. reviewed the annual internal
audit plan and scope of work for
the Group and the Company to
ensure adequacy of resources
and competencies to carry out
the internal audit functions on all
significant businesses and support
functions based on identification
and evaluation of the respective
risks and control environment;
12. reviewed the internal audit
reports comprising audit
findings, recommendations and
management responses for the
Group and the Company by
the external service provider for
internal audit services and the
Group Internal Audit Department;
13. reviewed the performance of
internal audit services provided;
14. reviewed and recommended to
the Board the appointment of
internal audit services and the audit
fee;
15. reviewed the Group and each
business divisions’ risk profiles
and actions plan taken by the
Management to control and
mitigate the risks;
16. reviewed the transactions to
be entered into by the Group
with related parties and provide
recommendations on the same to
the Board;
17. reviewed the existing transactions
involving related parties and/or
conflicts of interest entered into by
the Group with related parties on a
quarterly basis;
18. reviewed and verified that the
allocation of options pursuant to
the Company’s ESOS, which has
expired on 27 April 2013, was in
compliance with the criteria for
allocation of options as disclosed to
employees of the Company;
p 67
p68
Audit an d R isk M an age m e nt Co m mi t tee R ep o r t
19. reviewed the Group’s risk
system and practices for the
identification and management
of risks and also to ensure that
the Group’s internal compliance
and controls system established
by the Management is operating
adequately and effectively;
20. reviewed and evaluated risk
considerations in relation to
the amendments made to the
delegated authority limits of the
Company;
21. reviewed and evaluated risk
considerations in relation to
major business investment and/
or divestment proposals, corporate
exercises and adequacy of action
plans taken by the Management to
mitigate risks identified;
22. reviewed the Minutes of the ARMC
meetings of major contributing
subsidiaries;
23. reviewed the annual Statements
on Corporate Governance, Internal
Control and ARMC report to be
published in the Annual Report;
24. reviewed the investment into the
financial and accounting systems to
support the financial administration
and reporting process;
25. reviewed the Terms of Reference of
the ARMC;
26. tabled the approved Minutes of the
ARMC meetings to the Board for
notation on a quarterly basis; and
27. reported to the Board on significant
matters and resolutions deliberated
by the ARMC at each Board
meeting.
Internal Audit Function
The Group established an in-house
Internal Audit Department at the end of
the financial year. Prior to this and for
the financial year ended 31 March 2014,
the internal audit function of the Group
was outsourced to an external service
provider of internal audit services, which
is independent of management and
operations (the “Internal Auditors”).
The Head of the Group Internal Audit
Department reports directly to the
ARMC and administratively to the Group
CEO during the financial year under
review. Both the Group Internal Audit
and Internal Auditors carried out their
functions according to the standards set
by recognized professional bodies.
The Internal Auditors provide
independent and objective assessment
on the adequacy and effectiveness
of the governance, risk management
and internal control processes within
the Group. Through the internal audit
function, the Company undertakes
regular and systematic reviews of the
risk management and internal controls
system so as to provide reasonable
assurance that such internal controls
system continue to operate adequately
and effectively in the Group.
The Internal Auditors report directly to
the ARMC to ensure impartiality and
independence. The ARMC reviews the
risk based internal audit plans and scope
of work for the year for the Group and
the Company as well as the performance
of the Internal Auditors in undertaking
their internal audit function. The ARMC
has direct communication channels with,
and full access to, the Internal Auditors
for all internal audit reports prepared.
the Internal Auditors conducted
various internal audit engagements in
accordance with the approved risk-based
internal audit plans that are consistent
with the corporate goal of the Group.
Details of the internal audit activities
carried out by the Internal Auditors are
as follows:
1.
prepared and presented the riskbased audit plan, audit strategy,
scope of work and resource
requirements to the ARMC and
the Board for deliberation and
approval;
2.
evaluated and appraised the
soundness, adequacy and
application of accounting, financial
and other controls and promoting
effective controls in the Group and
the Company at reasonable cost;
3.
ascertained the level of operational
and business compliance with
established policies, procedures
and statutory requirements;
4.
ascertained the extent to which the
Group’s and the Company’s assets
are accounted for, verification of
their existence and safeguarding
assets from losses;
5.
appraised the reliability and
usefulness of information
developed within the Group and
the Company for management;
6.
identified and recommended
opportunities for improvements
to the existing system of internal
control, operations and processes
in the Group and the Company;
and
7.
reviewed the annual Statement on
Internal Control and ARMC report
to be published in the Annual
Report.
The total costs incurred by the Group
(excluding Scomi Engineering Bhd
Group and Scomi Energy Services Bhd
Group) for the internal audit function for
the financial year ended 31 March 2014
was approximately RM227,196.
with the resolution of the Board dated
18 August 2014.
p69
Addi t io nal I nfor mat ion
1.
Material Contracts of the Company and its Subsidiaries, involving Directors’ and Major Shareholders’ Interests
There are no material contracts involving Directors’ and Major Shareholders’ Interest, either still subsisting at the end of the
financial period or, entered into since the end of the previous financial period.
2.
Non-Audit Fees
Fees incurred in respect of non-audit services during the financial year under review ended 31 March 2014 amounted to
RM285,000.00 and is disclosed in Note 27 to the financial statement.
3.
Share Buy-back
There was no share buy-back during the financial year under review ended 31 March 2014. As disclosed in Note 17, all
shares bought back previously have been maintained as treasury shares and there has not been any resale of the Company’s
treasury shares.
Details of the treasury shares are as tabulated below.
Average
No. of
Lowest Highest
purchase
Total
share
purchase purchase
price of
purchase
bought back
price
price
shares
price
RM RM RMRM
Balance as at
1 Apr 2013 / 31 Mar 2014
14,427,200
0.406
1.479
1.296
18,695,745.96
The purchase price tabulated above includes incidental costs and is the average price for all the shares purchased in a
calendar month.
4.
Options, Warrants and Convertible Securities
During the financial year, 4,097,000 new ordinary shares of RM0.10 each were issued by the Company by way of:
(i)
1,597,000 new ordinary shares of RM0.10 each pursuant to the exercise of options granted under the Company’s
Employees’ Share Options Scheme (“ESOS”) at an option price of 0.17 per share; and
(ii) 2,500,000 new ordinary shares of RM0.10 each pursuant to the exercise of options under the Company’s ESOS at an
option price of 0.24 per share.
There was no other issuance during the year.
p70
Addit io n al Info rm at i o n
5.
Director’s Conflict of Interest
Save as disclosed below and the disclosures in the Notes to the Financial Statements, the Directors do not have any existing
conflicts of interest or any personal interest in any business arrangement involving Scomi Group Bhd (“SGB” or the “Company”):
Director
Nature of existing conflict of
interest
Transaction
Tan Sri Mohamed Azman Bin Yahya is an
Independent Non-Executive Director of
the Company; and the acting Chairman
and Group Chief Executive, Director
and Major Shareholder of Symphony
House Berhad, the holding company of
Symphony Share Registrars Sdn Bhd and
Symphony Corporatehouse Sdn Bhd.
Provisions of share registrar services
and human resources services to the
Company and its group of companies
by Symphony Share Registrars Sdn Bhd
and Symphony Corporatehouse Sdn
Bhd respectively.
Mazlina Binti Zain, a person connected
to Shah Hakim @ Shahzanim Bin Zain, is
the owner of Lintas Travel Services (M)
Sdn Bhd (“LTS”).
Provision of airline ticketing reservation
and ticket purchasing services by
LTS to the Company and its group of
companies.
is the Chief Executive Officer/ NonIndependent Executive Director of the
Company; and a substantial shareholder
of Suria Business Solutions Sdn Bhd
(“Suria”).
(i)
Leasing Agreement with Orix
Rentec (Malaysia) Sdn Bhd for the
leasing of personal computers,
which are supplied to them by a
related party, Suria;
(ii)
Provision of maintenance services
by Suria for Scomi’s UCIPT (Unified
Communications based on IP
Telephony); and
(iii)
Provision of maintenance and
support services by Suria for
Scomi’s VMWare (Virtual Machine)
Server for a term of 2 years.
In each of the transactions listed above, the relevant Director concerned had declared the nature of his conflict of interest
and had abstained from deliberating and voting on the relevant resolutions.
p71
Statem ent of D irec tor s’
Resp onsibilit y
Th e D i re c to rs a re re quire d by t h e Compan ie s Ac t,
1 9 6 5 ( t h e “Ac t ” ) to pre pare t h e fin an cial st ate me nt s
o f S com i G roup Bh d (t h e “Company ”) an d it s
s u b s i d i a ri e s ( t h e “G roup”) for e ach fin an cial ye ar
w hi c h h ave b e e n made out in accordan ce w it h t h e
p rov i s i on s of t h e Ac t, applicable M alaysian Fin an cial
R e p o r t i n g St a nd ards, t h e I nte r n at ion al Fin an cial
R e p o r t i n g St a nd ards, an d t h e M ain M ar ke t L ist in g
R e q ui re m e nt s o f Bur sa M alaysia S e cur it ie s B e r h ad
a n d to p re s e nt i t be fore t h e Company at it s an n ual
g e n e ral me e t in g.
The Directors are responsible to ensure
that the financial statements give a true
and fair view of the state of affairs of the
Group and the Company as at 31 March
2014 and of the results and cash flows
of the Group and the Company for the
In preparing the financial statements,
the Directors have:
•
adopted appropriate accounting
policies and applied them
consistently;
•
made judgments and estimates
that are reasonable and prudent;
and
•
prepared the financial statements
on a going concern basis.
The Directors are responsible to ensure
that the Group and the Company keep
accounting records which disclose
with reasonable accuracy the financial
position of the Group and the Company
which enable them to ensure that the
financial statements comply with the
Act.
The Directors are also responsible for
taking such steps as are reasonably
open to them to preserve the interests
of stakeholders and to safeguard the
assets of the Group and to detect and
prevent fraud and other irregularities.
The financial statements of the
Company and the Group for the
financial year ended 31 March 2014
are set out on pages 75 to 188 of this
Annual Report.
The Ar t of
Accountability
Accountability is about being honest and
responsible. At Scomi, accountability and
integrity work hand-in-hand in ensuring
that each of us plays our par t in realising
potential for our stakeholders.
p75
Statements of Financial Position
Statements of Profit or Loss and Other Comprehensive Income
p 85 Consolidated Statement of Changes in Equity
p 87 statement of changes in equity
p 88 Statements of cash flows
p 92 Notes to the financial statements
p 184 Supplementary financial information
p 185 Statement by directors
p 186 Statutory declaration
p 187 Independent auditors’ report
p 81
p 83
Directors’ Report
p75
D i rec to r s’ Rep o r t
fo r th e yea r ended 31 M a rc h 2014
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the
Principal activities
The Company is principally engaged in investment holding activities, whilst the principal activities of the significant subsidiaries are as
stated in Note 6 to the financial statements. There has been no significant change in the nature of these activities during the financial
year.
Results
Group
RM’000
Company
RM’000
Profit/(Loss) for the year 21,688
(9,000)
Attributable to:
Owners of the Company
Non-controlling interests
4,956
16,732
(9,000)
-
21,688(9,000)
Reserves and provisions
There were no material transfers to or from reserves and provisions during the financial year under review except as disclosed in the
financial statements.
Dividends
No dividend was paid during the financial year and the Directors do not recommend any dividend to be paid for the financial year under
review.
Consolidation of subsidiaries with different financial year end
The Companies Commission of Malaysia had granted an order pursuant to Section 168(8) of the Companies Act, 1965 approving the
application by the Company to allow the following subsidiaries of the Company to continue to have or to adopt a financial year which
does not coincide with the Company in relation to the financial year ended 31 March 2014, subject to the following conditions:
(i)
the Company is required to report this approval in its Directors’ Report; and
(ii) the Company is to ensure compliance with the Ninth Schedule of the Companies Act, 1965 and the approved accounting
standards pertaining to the preparation of consolidated accounts.
p76
D ire c to r s’ R ep o r t
Consolidation of subsidiaries with different financial year end (continued)
Subsidiaries of the Company are as follows:
(a)
(b)
(c)
(d)
(e)
(f)
Scomi Oiltools (Europe) Limited;
Scomi Oiltools (Shetland) Limited;
Scomi Oiltools Inc;
KMC Oiltools Algeria EURL;
Scomi Oiltools de Mexico S de RL de CV; and
Oilfield Services de Mexico S de RL de CV.
Directors of the Company
Directors who served since the date of the last report are:
Dato’ Mohammed Azlan bin Hashim
Tan Sri Asmat bin Kamaludin (resigned on 31 October 2013)
Tan Sri Nik Mohamed bin Nik Yaacob
Tan Sri Mohamed Azman bin Yahya
Datuk Haron bin Siraj (resigned on 11 July 2014)
Dato’ Sreesanthan a/l Eliathamby
Dato’ Abdul Rahim bin Abu Bakar
Foong Choong Hong
Abdul Hamid bin Sh Mohamed (appointed on 8 May 2014)
Shah Hakim @ Shahzanim bin Zain
Lee Chun Fai (Alternate Director to Dato’ Teh Kean Ming)
Directors’ interests in shares
The interests and deemed interests in the shares and options over shares of the Company and of its related corporations (other than
wholly-owned subsidiaries) of those who were Directors at financial year end (including the interests of the spouses or children of the
Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:
Number of ordinary shares of RM0.10 each
At At
1.4.2013 Bought
Sold31.3.2014
’000’000’000’000
The Company
Direct interests Datuk Haron bin Siraj
120
-
-
120
Foong Choong Hong
410
-
-
410
1
2
8,8155,035
-
13,850
Indirect interests 3
3
13,750--
13,750
4
5
172,2753,642
-
175,917
p7 7
Directors’ interests in shares (continued)
Number of ordinary shares of RM0.10 each
At At
1.4.2013 Bought
Sold31.3.2014
’000’000’000’000
Subsidiaries
Scomi Engineering Bhd
Direct interests Dato’ Abdul Rahim bin Abu Bakar
220
-
-
220
6
6
623--
623
Indirect interest 7
-
282
-
282
Scomi Energy Services Bhd
Direct interest
8
8
2,108--
2,108
Indirect interest 7
-
5,057
(5,000)
57
1 8,286,000 shares held through Maybank Securities Nominees (Tempatan) Sdn. Bhd. pledged Securities Account for Shah Hakim
@ Shahzanim bin Zain (Margin) and Maybank Nominees (Tempatan) Sdn. Bhd. pledged Securities Account for Shah Hakim @
Shahzanim bin Zain.
2 13,321,000 shares held through Maybank Securities Nominees (Tempatan) Sdn. Bhd. pledged Securities Account for Shah Hakim
@ Shahzanim bin Zain (Margin) and Maybank Nominees (Tempatan) Sdn. Bhd. pledged Securities Account for Shah Hakim @
Shahzanim bin Zain.
3 Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through Tan Sri Mohamed Azman bin Yahya and his
spouse’s direct shareholdings in Gajahrimau Capital Sdn. Bhd.; whereby all the 13,750,000 shares are held through ABB Nominee
(Tempatan) Sdn. Bhd.
4 Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through Shah Hakim @ Shahzanim bin Zain’s shareholding
in Kaspadu Sdn. Bhd.
in Kaspadu Sdn. Bhd. and Rentak Rimbun Sdn. Bhd.
6 123,000 shares held through Maybank Securities Nominees (Tempatan) Sdn. Bhd. pledged Securities Account for Shah Hakim @
Shahzanim bin Zain (Margin).
in Rentak Rimbun Sdn. Bhd.
8 Held through Maybank Securities Nominees (Tempatan) Sdn. Bhd. pledged Securities Account for Shah Hakim @ Shahzanim bin
Zain (Margin).
p78
Directors’ interests in shares (continued)
* Number of options over ordinary shares of RM0.10 each
ExerciseAtAt
price 1.4.2013 Exercised Expired31.3.2014
RM/Share’000’000’000’000
Company
Direct interests
Tan Sri Nik Mohamed bin Nik Yaacob
1.34
600
-
(600)
1.24
600
-
(600)
Datuk Haron bin Siraj
1.24
600
-
(600)
1.34
600
-
(600)
Dato’ Sreesanthan a/l Eliathamby
1.21
420
-
(420)
Foong Choong Hong
1.24
350
-
(350)
1.12
6,000
-
(6,000)
* The options held over ordinary shares in Scomi Group Bhd were granted pursuant to Scomi Group Bhd’s Employees’ Share Option
Scheme, which was implemented on 28 April 2003 and expired on 27 April 2013.
~ Number of options over ordinary shares of RM1.00 each
ExerciseAtAt
price 1.4.2013 Exercised Expired31.3.2014
RM/Share’000’000’000’000
Subsidiary
Direct interests
Dato’ Abdul Rahim bin Abu Bakar
1.00
300
-
-
300
1.00
1,500
-
-
1,500
~
The options held over ordinary shares in Scomi Engineering Bhd were granted pursuant to Scomi Engineering Bhd’s Employees’
Share Option Scheme, which was implemented on 26 January 2006.
None of the other Directors holding office at 31 March 2014 had any interest in the shares and options over shares of the Company and
of its related corporations during the financial year.
Directors’ benefits
Since the end of the previous financial period, no Director of the Company has received nor become entitled to receive any benefit
(other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the
financial statements or the fixed salary of a full time employee of the Company or of related corporations) by reason of a contract made
by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which
the Director has a substantial financial interest other than those disclosed in Note 36 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to
acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate other than options
over shares granted by the Company and its subsidiary, Scomi Engineering Bhd to eligible employees including certain Directors of the
Company pursuant to the Company’s and Scomi Engineering Bhd’s respective Employees’ Share Option Schemes (“ESOS”).
Issue of shares and debentures
During the financial year, the Company issued:
a)
1,597,000 new ordinary shares of RM0.10 each pursuant to the exercise of options granted under the Company’s ESOS at the
option price of RM0.17 per ordinary share; and
b)
2,500,000 new ordinary shares of RM0.10 each pursuant to the exercise of options granted under the Company’s ESOS at the
option price of RM0.24 per ordinary share.
The newly issued shares ranked pari passu in all aspects with the existing shares of the Company.
Details of movements in share capital are disclosed in Note 15 to the financial statements.
There were no others changes in the authorised, issued and paid up capital of the Company during financial year. There were no
debentures issued during the financial year.
Treasury shares
There was no repurchase of the Company’s shares during the financial year under review. Details of the treasury shares are set out in
Note 17 to the financial statements.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the financial year apart from the issue of
options pursuant to the Employees’ Share Option Scheme (“ESOS”).
The Company implemented the ESOS on 28 April 2003 for a period of 10 years. The ESOS is governed by the By-Laws which were
approved by the shareholders on 28 March 2003. The ESOS expired on 27 April 2013.
Significant event
Details of the significant event during the year are disclosed in Note 38 to the financial statements.
Subsequent events
Details of the subsequent event are disclosed in Note 39 to the financial statements.
p7 9
p80
Other statutory information
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:
i)
all known bad debts have been written off and adequate provision made for doubtful debts, and
ii)
any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount
which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
i)
that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the
Company inadequate to any substantial extent, or
ii)
that would render the value attributed to the current assets in the financial statements of the Group and of the Company
misleading, or
iii)
which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the
Company misleading or inappropriate, or
iv)
not otherwise dealt with in this report or the financial statements that would render any amount stated in the financial statements
of the Group and of the Company misleading.
At the date of this report, there does not exist:
i)
any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the
liabilities of any other person, or
ii)
any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within
the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the
ability of the Group and of the Company to meet their obligations as and when they fall due.
In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 31 March
2014 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item,
transaction or event occurred in the interval between the end of that financial year and the date of this report.
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Petaling Jaya
Date: 25 July 2014
p 81
Statements o f Financ ial Posit io n
a s a t 31 M a rc h 2014
GroupCompany
2014201320142013
NoteRM’000RM’000RM’000RM’000
Assets
Property, plant and equipment
3
646,220607,898 970818
Investment properties
4
2,5161,3824,4694,520
Intangible assets
5
292,033290,880
- Investments in subsidiaries
6
--
1,219,6031,219,303
Investments in associates
7
124403 - Investments in joint ventures
8
54,93555,495
- Deferred tax assets
9
32,75941,308
- Trade and other receivables
10
-29,20952,76233,348
Available-for-sale financial assets
11
104104 -Total non-current assets
1,028,6911,026,679
1,277,8041,257,989
Inventories
12
Current tax assets
Trade and other receivables
10
Cash and cash equivalents
13
227,286213,397
-15,45718,206
-1,148,8101,058,806 59,73647,387
229,882249,331 12722,459
Assets classified as held for sale
14
1,621,4351,539,740 59,86369,846
63,222108,112
--
Total current assets
1,684,6571,647,852 59,86369,846
Total assets
2,713,3482,674,531
1,337,6671,327,835
Equity
Share capital
15
156,864156,454156,864156,454
Share premium
16
352,379351,916352,379351,916
Treasury shares
17
(18,696)(18,696)(18,696)(18,696)
Convertible bond reserve
18
106,471106,471106,471
106,471
Other reserves
19
(96,648)(85,810)
-4,235
Retained earnings
107,37988,309
636,502641,267
Total equity attributable to owners
of the Company
607,749598,644
1,233,5201,241,647
6(a)
504,534484,489
-Total equity
1,112,2831,083,133
1,233,5201,241,647
p82
St ate m e nt s o f Fin an c i a l Po s i t i o n
GroupCompany
2014201320142013
Liabilities
Trade and other payables
20
2,96920,230
-19,037
Loans and borrowings
21
261,583300,092 1,2081,293
Provision for retirement benefits
22
5,9526,744
- Derivative financial liabilities
2323,7156,166
- Deferred tax liabilities
9
6,4693,510
-Total non-current liabilities
300,688336,742 1,20820,330
Derivative financial liabilities
Current tax liabilities
Deferred government grant
20
507,246465,202102,33465,281
21
709,522675,452 605577
23
5,378489 -21,43018,469
-24
1,3471,706
--
Liabilities classified as held for sale
14
1,244,9231,161,318 102,93965,858
55,45493,338
--
Total current liabilities
1,300,3771,254,656 102,93965,858
Total liabilities
1,601,0651,591,398 104,14786,188
Total equity and liabilities
2,713,3482,674,5311,337,6671,327,835
The notes on pages 92 to 183 are an integral part of these financial statements.
p83
Statements o f Profit o r Lo ss and O t her
Comprehensive I ncome
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
Revenue25
1,653,0591,922,368
3131,006
Cost of sales/services
(1,305,211)(1,515,797)
-Gross profit
347,848406,571 3131,006
Other income
11,29442,057 5,286565,152
Selling and distribution expenses
(77,729)(79,484)
-Administrative expenses
(170,128)(215,001)(15,213)(14,449)
Other expenses
(214)(11,530)
(2)(156,679)
Results from operating activities
111,071142,613 (9,616)395,030
Finance costs
26
(38,834)(129,678) (388)(16,349)
Finance income
3,7591,4611,0045,087
Share of (loss)/profit of equity-accounted
associates, net of tax
7
(247)133 -Share of profit of equity-accounted
joint ventures, net of tax
85,3106,568
-Profit/(Loss) before tax2781,05921,097(9,000)
383,768
Tax expense
28
(50,113)(27,557)
-2,236
Profit/(Loss) from continuing
operations
30,946(6,460)
(9,000)386,004
Discontinued operations
Loss from discontinued operations,
net of tax 29
(9,258)(62,989)
-Profit/(Loss) for the year/period
21,688(69,449)(9,000)386,004
Other comprehensive
income, net of tax
Items that are or may be reclassified
subsequently to profit or loss
Cash flow hedges
(6,338)(10,532)
Foreign currency translation differences
for foreign operations
13,849(6,375)
---
p84
St ate m e nt s o f Pro f it o r Lo ss an d O t h e r Co m pre h e n s i ve Inco m e
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
Other comprehensive income/(loss)
for the year/period, net of tax
7,511(16,907)
Total comprehensive income/(loss)
for the year/period
--
29,199(86,356)(9,000)386,004
Profit/(Loss) attributable to:
4,956(66,833)(9,000)386,004
6(a)
16,732(2,616)
-Profit/(Loss) for the year/period
21,688(69,449)(9,000)386,004
attributable to:
4,683(69,300)(9,000)386,004
24,516(17,056)
-Total comprehensive income/(loss)
for the year/period
29,199(86,356)(9,000)386,004
Group
Year ended
1.1.2012 to
Note31.3.201431.3.2013
Basic earnings/(loss) per ordinary
share (sen):
- from continuing operations
- from discontinued operations
30
0.91(0.30)
(0.60)(4.90)
0.31
(5.20)
Diluted earnings/(loss) per ordinary
share (sen):
- from continuing operations
0.75(0.23)
- from discontinued operations
(0.49)(3.84)
30
0.26
(4.07)
p85
Co n soli dated Statement o f Changes in Equit y
< -------------------------------------- Attributable to owners of the Company --------------------------------------->
<------------------------------- Non-distributable -----------------------------------> Distributable
Non
Share
Share Treasury
OtherConvertible Retained controlling
Total
Group
capitalpremium shares reserves bonds earnings Total interests equity
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
At 1 January 2012
118,769276,793 (18,696)(247,305)
-310,698440,259489,884930,143
Foreign currency translation
differences for foreign operations
-
-
-
4,554
-
-
4,554
(10,929)
(6,375)
Cash flow hedges
---
(7,021)--
(7,021)
(3,511)
(10,532)
Total other comprehensive loss
for the period
-
-
-
(2,467)
-
-
(2,467)
(14,440)
(16,907)
Loss for the period
-----
(66,833)
(66,833)
(2,616)
(69,449)
Total comprehensive loss for
the period
-
-
- (2,467)
- (66,833)(69,300)(17,056)(86,356)
Contributions by and distributions to
Share options:
- proceeds from shares issued
1,890
2,408
-
-
-
-
4,298
-
4,298
- value of employee services
-
-
-
3,986
-
-
3,986
-
3,986
- value of options terminated
-
-
-
(3,613)
-
3,613
-
-
Conversion of ICSLS
21,877
36,443
-
(61,899)
-
-
(3,579)
-
(3,579)
Conversion of ICULS
---
(1,148)--
(1,148)
1,148Warrants
- exercise of warrants
2,007
9,231
-
(3,211)
-
-
8,027
-
8,027
- lapse of unexercised warrants
-
-
-
(29,126)
-
29,126
-
-
Issuance of convertible bonds, net ----
106,471-
106,471-
106,471
Issuance of shares, net
11,911
27,041----
38,952-
38,952
Accretion/dilution of interest in
subsidiaries, net
-
-
-
-
-
(110,669)
(110,669)
88,207
(22,462)
Capital repayment by a subsidiary -------
(77,694)
(77,694)
Put option adjustment upon expiry
-
-
-
258,286
-
(77,626)
180,660
-
180,660
Disposal of subsidiary
---
687--
687-
687
Total transactions with owners of
the Company 37,685 75,123
-163,962106,471(155,556)227,685 11,661239,346
At 31 March 2013
156,454351,916 (18,696)(85,810)106,471 88,309598,644484,4891,083,133
Note 15
Note 16
Note 17
Note 19
Note 18
Note 6(a)
p86
Co n so lidate d St ate m e nt o f Ch an g es i n Eq u i t y
< -------------------------------------- Attributable to owners of the Company --------------------------------------->
<------------------------------- Non-distributable -----------------------------------> Distributable
Non
Share
Share Treasury
OtherConvertible Retained controlling
Total
Group
capitalpremium shares reserves bonds earnings Total interests equity
At 1 April 2013
156,454351,916 (18,696)(85,810)106,471 88,309598,644484,4891,083,133
Foreign currency translation
differences for foreign operations
-
-
-
3,888
-
-
3,888
9,961
13,849
Cash flow hedges
---
(4,161)--
(4,161)
(2,177)
(6,338)
Total other comprehensive
(loss)/income for the year
-
-
-
(273)
-
-
(273)
7,784
7,511
Profit for the year
-----
4,956
4,956
16,732
21,688
Total comprehensive income
for the year
-
-
- (273)
- 4,956 4,68324,51629,199
Share options:
410
463
-
-
-
-
873
-
873
-
-
-
(10,565)
-
14,114
3,549
(3,549)
Dividend paid by subsidiary to
non-controlling interest
-------
(922)
(922)
Total transactions with owners of the Company
At 31 March 2014
410 463
-(10,565)
- 14,114 4,422 (4,471) (49)
156,864352,379 (18,696)(96,648)106,471107,379607,749504,534
1,112,283
Note 15
Note 16
Note 17
Note 19
Note 18
Note 6(a)
p 87
Statement of Changes in Equit y
<------------------------------------- Non-distributable ---------------------------------------> Distributable
Share
Share Treasury OtherConvertible Retained
Total
capitalpremium shares reserves
bonds earnings equity
Company
RM’000RM’000RM’000RM’000 RM’000RM’000RM’000
At 1 January 2012
Profit for the period
118,769276,793 (18,696) 98,898
-
-
-
-
-224,779700,543
-
386,004
386,004
Total comprehensive income for
the period
---- -
386,004
386,004
Contributions by and distributions to owners of the Company
Share options:
1,890
2,408
-
-
-
-
4,298
- value of employees services
-
-
-
888
-
-
888
-
-
-
(1,358)
-
1,358
- transferred to subsidiaries
-
-
-
43
-
-
43
1,8902,408 - (427)
-1,3585,229
Conversion of ICSLS
21,877
36,443
-
(61,899)
-
-
(3,579)
Warrants
2,007
9,231
-
(3,211)
-
-
8,027
- expiry of warrants
-
-
-
(29,126)
-
29,126
Issuance of convertible bonds, net
-
-
-
-
106,471
-
106,471
11,911
27,041
-
-
-
-
38,952
At 31 March 2013
156,454351,916 (18,696) 4,235 106,471641,267
1,241,647
Note 15
At 1 April 2013
156,454351,916 (18,696) 4,235 106,471641,267
1,241,647
Loss for the year
-
Note 16
-
Note 17
-
Note 19
-
Note 18
-
(9,000)
(9,000)
Total comprehensive loss for
the year
---- -
(9,000)
(9,000)
Share options:
410
463
-
-
-
-
873
-
-
-
(4,235)
-
4,235
- transfer to share premium/
retained earnings
410
463
-
(4,235)
-
4,235
873
At 31 March 2014
156,864352,379 (18,696)
Note 15
Note 16
Note 17
- 106,471636,502
1,233,520
Note 19
Note 18
p88
Statem ent s o f Cash Flows
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
Cash flows from operating activities
Profit/(Loss) before tax from:
- continuing operations
81,05921,097(9,000)383,768
- discontinued operations
29
(9,258)(59,113)
-
71,801(38,016)(9,000)383,768
Adjustments for:
Depreciation
- property, plant and equipment
90,487104,166 445820
- investment properties
162177 5164
Amortisation
- intangible assets
1,9462,070
- - development costs
198-- Government grant
(359)(449) - Impairment losses
-10,207
- - intangible assets
-41,292
- - receivables
9,1044,104
- - available-for-sale investments
-24 - - amount due from subsidiaries
---23,892
Impairment on investment in subsidiary
---276,779
Write back of impairment on
investment in subsidiary
--
(300)(143,992)
Write back of impairment of receivables
(2,349)(6,622)
-(6,406)
Write back of impairment of inter
company receivables
--
(4,037) Allowance for obsolete inventories
9,2291,010
- Inventories written down
1,085--Inventories written back
(1,658)- - Unrealised (gain)/loss on
foreign exchange
(3,799)19,346 236(294)
Monetary adjustments
3,650(1,641)
- Hyperinflation adjustments
-4,804
-Provision for litigation
330--Provision for legal claim
24,460--Gain on disposal of assets held for sale
(1,211)- - Gain on disposal of property,
plant and equipment
(756)(5,389)
- Property, plant and equipment
written off
7-- Bad debts recovered
(4,443)(13,298)
- Fair value gain on remeasurement
of receivable
(17,164)- - Gain on disposal of/dilution
of interest in subsidiaries
-(21,118)
-(558,307)
St ate m e nt s o f Ca s h Fl ows
p89
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
Cash flows from operating activities
(continued)
Gain on disposal of/dilution
of interest in joint ventures
(218)- - Provision for retirement benefits
581,117
- Share of results in associates
247(133) - Share of results in joint ventures
(5,310)(6,568)
- Share option expense
-3,986
-888
Finance costs
70,565160,978 38816,349
Finance income
(3,759)(1,461)(1,004)(5,087)
Intangible assets written off
15--
Operating profit/(loss) before
changes in working capital
242,318258,586(13,221)(11,526)
Changes in working capital:
Inventories
1,495(19,908)
-Trade and other receivables
38,939(75,739)(10,525)(10,897)
(82,206) (71,619) 579(5,915)
Cash generated from/(used
in) operations
Net tax (paid)/refund
Retirement benefits paid
200,54691,320
(23,167)(28,338)
(27,854)(29,401)
-2,889
(1,773)(837) --
Net cash from/(used in)
operating activities
170,91961,082
(23,167)(25,449)
Cash flows from investing activities
Proceed from capital repayment
---57,913
Proceeds from disposal of subsidiaries
-106,826
-85,370
Purchase of property, plant and
equipment
(ii)(99,085)(95,013) (597)(7)
Proceeds from disposal of property,
plant and equipment
9,09131,271
- Proceeds from dilution of jointly
controlled entities
3,922-- Proceeds from disposal of assets
held for sale
2,000-- Development expenditure incurred
(1,738)(15,799)
- Interest received
3,7591,4611,0041,556
Advances to subsidiaries
---(28,674)
Net cash (used in)/from
investing activities
(82,051)28,746
407116,158
p90
St ate m e nt s of Ca s h Fl ows
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
Cash flows from financing activities
Issue of share capital arising
from the exercise of ESOS
Issuance of convertible bonds, net
Exercise of warrants
Proceeds from bank borrowings
Repayment of bank borrowings
Interest paid on borrowings
(Decrease)/Increase in short-term
deposits pledged as security
Dividend paid by subsidiary to
non-controlling interests
Capital repayment by subsidiary
Net cash (used in)/from financing
activities
8734,298 8734,298
-38,952
-38,952
-106,471
-106,471
-8,027
-8,027
377,675464,241
-118,000
(501,085)(522,609)
(57)(339,128)
(66,560)(68,618) (388)(17,952)
(48,506)19,506
-6,981
(922)- --(77,949)
-(238,525)(27,681)
428(74,351)
Net (decrease)/increase in cash
and cash equivalents
(149,657)62,147(22,332)
16,358
Effect of exchange rate
fluctuations on cash held
8,095(2,292)
-
Cash and cash equivalents at
1April/1 January
114,17854,32322,4596,101
Cash and cash equivalents at
31 March(i)
(27,384)114,178
12722,459
St ate m e nt s o f Ca s h Fl ows
(i)
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position
amounts:
GroupCompany
2014201320142013
Deposits placed with licensed banks
Less: Pledged deposits
13
13
106,91982,406
(81,498)(32,992)
---
25,42149,414
-Cash and bank balances
13
122,963166,925 12722,459
Cash classified as held for sale
14
2,6072,977
-Bank overdrafts
21
(178,375)(105,138)
-
(27,384)114,178
12722,459
(ii) Purchase of property, plant and equipment
During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM110,798,000 (2013:
RM102,068,000), of which RM11,713,000 (2013: RM6,655,000) were acquired by means of finance leases.
p 91
p 92
Notes to the Financ ial St atement s
Scomi Group Bhd is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa
Malaysia Securities Berhad. The address of the principal place of business and registered office of the Company is as follows:
Bandar Utama
47800 Petaling Jaya
The consolidated financial statements of the Company as at and for the financial year ended 31 March 2014 comprise the Company and
its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s interests in associates
and joint ventures. The financial statements of the Company as at and for the financial year ended 31 March 2014 also include joint
operations.
The Company principally engaged in investment holding activities, whilst the principal activities of the significant subsidiaries are stated
in Note 6 to the financial statements.
These financial statements were authorised for issue by the Board of Directors on 25 July 2014.
1.
Basis of preparation
(a) Statement of compliance
The financial statements of the Group and the Company have been prepared in accordance with Malaysian Financial
Reporting Standards (“MFRS”), International Financial Reporting Standards and the requirements of the Companies Act, 1965
in Malaysia.
The following are accounting standards, amendments and interpretations that have been issued by the Malaysian
Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2014
•
Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities
•
Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities
•
Amendments to MFRS 127, Separate Financial Statements (2011): Investment Entities
•
Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities
•
Amendments to MFRS 136, Impairment of Assets – Recoverable Amount Disclosures for Non-Financial Assets
•
Amendments to MFRS 139, Financial Instruments: Recognition and Measurement – Novation of Derivatives and
Continuation of Hedge Accounting
•
IC Interpretation 21, Levies
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2014
•
Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2011-2013
Cycle)
•
Amendments to MFRS 2, Share-based Payment (Annual Improvements 2010-2012 Cycle)
•
Amendments to MFRS 3, Business Combinations (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)
•
Amendments to MFRS 8, Operating Segments (Annual Improvements 2010-2012 Cycle)
•
Amendments to MFRS 13, Fair Value Measurement (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)
•
Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2010-2012 Cycle)
•
Amendments to MFRS 119, Employee Benefits – Defined Benefit Plans: Employee Contributions
•
Amendments to MFRS 124, Related Party Disclosures (Annual Improvements 2010-2012 Cycle)
•
Amendments to MFRS 138, Intangible Assets (Annual Improvements 2010-2012 Cycle)
•
Amendments to MFRS 140, Investment Property (Annual Improvements 2011-2013 Cycle)
1.
Basis of preparation (continued)
(a) Statement of compliance (continued)
No te s to t h e Fin an c ial St atem ent s
MFRSs, Interpretations and amendments effective for annual periods beginning on or after January 2016
•
MFRS 14, Regulatory Deferral Accounts
•
Amendments to MFRS 116 and MFRS 138, Clarication of Acceptable Methods of Depreciation and Amortisation
•
Amendments to MFRS 11, Accounting for Acquisitions of Interests in Joint Operations
MFRSs, Interpretations and amendments effective for a date yet to be confirmed
•
MFRS 9, Financial Instruments (2009)
•
MFRS 9, Financial Instruments (2010)
•
MFRS 9, Financial Instruments – Hedge Accounting and Amendments to MFRS 9, MFRS 7 and MFRS 139
•
Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of MFRS 9 and Transition Disclosures
The Group and the Company plan to apply the abovementioned accounting standards, amendments and interpretations:
•
from the annual period beginning on 1 April 2014 for those accounting standards, amendments or interpretations
that are effective for annual periods beginning on or after 1 January 2014, except for IC Interpretation 21 which is not
applicable to the Group and the Company.
•
from the annual period beginning on 1 April 2015 for those accounting standards, amendments or interpretations that
are effective for annual periods beginning on or after 1 July 2014.
•
from the annual period beginning on 1 April 2016 for those accounting standards, amendments or interpretations that
are effective for annual periods beginning on or after 1 January 2016.
The initial application of the abovementioned accounting standards, amendments and interpretations are not expected
to have any material financial impacts to the current period and prior period financial statements of the Group and of the
Company except as mentioned below:
MFRS 9, Financial Instruments
MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and
measurement of financial assets and financial liabilities, and on hedge accounting.
The Group is currently assessing the financial impact that may arise from the adoption of MFRS 9.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial
information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.
p 93
p94
1.
(d) Critical accounting estimates and judgements
Estimates and judgements are continually evaluated by the Directors and are based on historical experience, Directors’ best
knowledge of current events and actions, and other factors, including expectations of future events that are believed to be
reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions involving a higher degree of judgement or
complexity, or area where estimates and assumptions have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are addressed below.
(i)Assessment of penalties payable by Scomi Engineering Bhd (“SEB”)
(a) On 7 November 2008, the Mumbai Metropolitan Region Development Authority (“MMRDA”) of India awarded a
contract for the Design, Development and Construction of a Monorail System (“the Project” or “ the Contract”)
for a lump sum amount of Rs 2460 crores (RM1.7 billion) to the unincorporated consortium of Larsen & Toubro
Ltd and Scomi Engineering Bhd (“the Consortium”), for which Scomi Engineering Bhd’s (“SEB”) share of the
value of the Contract is Rs 1097 crores (RM720 million) based on its scope of works. The design, development,
construction/manufacture/supply, testing and commissioning of the system including safety certification for
commercial operations are to be completed within 30 months from the award of the Contract.
The Consortium has continuously appraised MMRDA of the status of the project and sought extensions of
time as allowed under the Contract terms. Following discussions, MMRDA had on 31 May 2011 granted the
Consortium with an Extension of Time (“EOT”) for each of the Phase 1 and Phase 2 works completion key-dates to
31 December 2011 and 22 November 2012 respectively.
As the Project encountered further delays, certain Phase 1 key milestones stated in the Contract were not met
as at 31 December 2011. The Consortium has requested for a further EOT for Phase 1 up to 14 July 2012 vide its
letter dated 30 December 2011 and the Company engaged specialist advisors to assist in the assessment of delay
events, submission of claims for extension of time and assessing the Consortium’s contractual obligations.
Based on the specialist advisors assessment, the Consortium vide its letter dated 9 November 2012 requested for
a further EOT for Phase 1 and Phase 2 until 26 July 2014. Subsequent to the above submissions, MMRDA vide a
letter dated 4 December 2012 had granted the Consortium a further EOT of up to 31 March 2013 for Phase 1 and
up to 31 December 2013 for Phase 2.
A specialist adviser via an EOT claim report dated 8 November 2012 has stated that the Consortium has grounds
to apply for a further extension of time for both Phase I and Phase II up to July 2014.
Subsequent to the submissions for a further EOT by the Consortium vide its letter dated 20 November 2013,
MMRDA vide a letter dated 13 December 2013 had granted the Consortium a further EOT of up to 30 June
2014 for the project and vide a letter dated 17 April 2014, had further granted the Consortium a EOT of up to 26
September 2015 for the project.
The EOT granted by MMRDA is notwithstanding its rights to recover liquidity damages, if any at the end of the
project.
In reliance of the EOT granted by MMRDA on 17 April 2014 and the advice received from the specialist advisor,
the Directors are of the opinion that no provision for potential penalties is required as at 31 March 2014 as the
likelihood of any penalties to be borne by the Company is remote.
On 1 February 2014, Phase 1 has been officially commissioned.
1.
(d) Critical accounting estimates and judgements (continued)
(i)Assessment of penalties payable by Scomi Engineering Bhd (“SEB”) (continued)
(b) On 10 December 2010, Scomi Transit Projects Sdn. Bhd., a wholly owned subsidiary of SEB, was awarded a
monorail expansion contract for RM494 million (“the Project”). The Project is to be completed on 31 July 2013. Due
to various circumstances, the Project has encountered delays and certain key milestones stated in the contract
have not been met as at 31 March 2014.
The subsidiary has continuously appraised the customer of the status of the project and sought extension of time
as allowed under the Contract terms. Following discussions, the customer had on 19 December 2012 granted
the subsidiary with an Extension of Time (“EOT”) for the first four key milestones to 30 April 2013 but the overall
completion date remained at 31 July 2013. This has led to further claim submissions by the subsidiary.
Subsequent to the submissions, the customer vide a letter dated 2 October 2013 had granted the subsidiary a
further EOT of up to 27 December 2013. As the Project encountered further delays, the customer vide a letter
dated 14 March 2014 had granted the subsidiary a further EOT of up to 25 April 2014.
The Project activities and work continue normally with the customer approving claims, billings and making
payments accordingly.
A specialist adviser via an EOT claim report dated 22 May 2014 has stated that the subsidiary has grounds to apply
for a further extension of time up to 18 September 2015.
In reliance of the EOT granted by the customer on 14 March 2014 and the advice received from the specialist
advisor, the Directors are of the opinion that no provision for potential penalties is required as at 31 March 2014
as the likelihood of any penalties to be borne by the Company is remote.
(c) On 30 July 2011, the Metro Company of Sao Paulo awarded a contract for the implementation of a monorail
system, including design, civil works, manufacture, supply of systems and rolling stock material, including a fleet
of 24 trains (3 cars per train) for the Line 17 - Gold - of Metro Sao Paulo for a lump sum amount of BRL1,396 million
(RM2,380 million) to the Monotrilho Integracao Consortium, for which SEB’s share of the value of the Contract is
BRL132 million (RM226 million) based on its scope of works. The Project is to be completed by January 2015.
Due to changes in the scope of work from the initial 24 trains (3 cars per train) to 18 trains (5 cars per train), the
Project had encountered delays. The Consortium has continuously appraised Metro Company of the status of
the project and sought extensions of time as allowed under the Contract terms. Following discussions, Metro
Company had on 30 August 2013 granted the Consortium with an Extension of Time (“EOT”) to 28 September
2015.
In reliance of the EOT granted by Metro Company on 30 August 2013, the Directors are of the opinion that no
provision for potential penalties is required as at 31 March 2014 as the likelihood of any penalties to be borne by
the Company is remote.
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1.
(i)Assessment of penalties payable by Scomi Engineering Bhd (“SEB”) (continued)
(d) On the 18 October 2011, Scomi Rail Bhd (“SRB”), was awarded a contract for the design, manufacture, supply, build
up, installation, testing and certify works of 52 units new bogie frame for existing KL Monorail’s Revenue Service
Vehicle for RM14 million.
Due to various circumstances, the Project had encountered delays. The subsidiary has made several applications
for extension of time as allowable under the terms of the contract. Following discussions, the customer had
agreed to extend the time of commission to 30 August 2014.
In reliance of the EOT granted by the customer, the Directors are of the opinion that no provision for potential
penalties is required as at 31 March 2014 as the likelihood of any penalties to be borne by the Company is remote.
(e) Certain subsidiaries of the Group could be subject to penalties arising from delays in delivering coaches and
special purpose vehicles. The Directors are of the opinion, based on internal delay assessments, that no material
penalties are contractually claimable as the delays were primarily due to uncertain political situation in the
country of origin of the vehicles which resulted in the delay of the special purpose vehicles.
(ii)Assessment of indirect taxes payable in Scomi Engineering Bhd
During the course of execution of the Project described in Note 1(d)(i)(a) above, SEB and its wholly-owned subsidiary,
Scomi Rail Bhd (“SRB”), will supply goods and services which would typically attract various indirect taxes in India. The
tax consultants of the Company have assessed the potential indirect taxes payable to the Central Government, State
Government and Local Municipality of that country and are of the view that:
(a) There are certain legislations empowering the Central Government, State Government and Local Authority to
grant exemptions/concessions in cases where the respective Governments and authorities are satisfied that the
project is in the interest of the public;
(b) Past precedents indicated that the respective Governments and Authorities have exercised their discretionary
powers to grant exemptions/concessions for specific projects in the interest of the public; and
(c)
Given the legal provisions, and past precedents, a reasonable case for tax exemptions/concessions can be made,
subject to discretions of the respective Governments and Authorities.
Applications and representations have been made by management to the respective Governments and Authorities
and the matter is under consideration at the respective authorities.
Following the Central Government of India budget in March 2012, the custom duty rates have been reduced. As a
result, the total imputed value of custom duties based on delivery of 15 trains and applying the revised applicable tax
rates have reduced indirect taxes by RM13.1 million (Rs 22 crores). In the recent Central Government of India Budget
announced in March 2013, the custom duty rates have been reduced further from 16% to 13% which have reduced
indirect taxes exposure by RM2.8 million (Rs 5 crores). In addition, with effect from 1 January 2014, under the India
Malaysia Comprehensive Economic Cooperation Agreement, the basic custom duties for rolling stocks will be reduced
to 0%, which will further reduce the exposure by RM1.0 million (Rs 2 crores). Based on the above, there is no residual
financial exposure on the indirect taxes payable, as the impact of any remaining indirect taxes payable can be offset
against the maximum amount contractually reimbursable by MMRDA.
The Company has also issued a writ of summons against the Local Authority to recover indirect taxes paid to date and
is confident of a successful outcome based on past legal precedents.
1.
(ii)Assessment of indirect taxes payable in Scomi Engineering Bhd (continued)
Based on the above, the Directors are of the opinion that:
(a)
There is a reasonable case for claim of tax exemptions/concessions;
(b) A reasonable estimate of the likely outcome of additional indirect taxes payable, if any, cannot be ascertained at
this stage; and
(c) The full recovery of indirect taxes paid in advance amounting to RM39 million as disclosed in Note 10 is expected.
(iii) Estimated impairment of goodwill and amortisation of intangible assets
The Group tests goodwill for impairment annually in accordance with its accounting policy. More regular reviews are
performed if events indicate that this is necessary.
Determining whether goodwill is impaired requires an estimation of the value in use and fair value less costs of
disposals of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the
entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in
order to calculate present value. Fair value less costs of disposals is determined based on indicative values on a willing
buyer willing seller basis, as provided by an independent valuer. The recoverable amounts of goodwill have been
determined based on the higher of fair value less costs of disposals and value in use calculations, which resulted in no
impairment loss during the year.
(i) The Group tests goodwill and capitalised development costs work-in-progress for impairment annually and has
also tested capitalised development costs for impairment due to certain impairment indicators. The recoverable
amounts of cash-generating units (“CGUs”) were determined based on the value in use calculations. The
calculations require the use of estimates and assumptions as set out in Note 5 to the financial statements, which
resulted in no impairment arising.
(ii) Capitalised development expenditure is recognised when the criteria for recognition is met. Significant
judgement is required in estimating the estimated sales units, which is based on technological obsolescence,
secured contracts, projects tendered and expectations of market growth, which determine the amount of
amortisation recognised.
The Directors are of the opinion that any reasonably expected change in the key assumptions used to determine the
recoverable amounts of the CGUs, would not result in any impairment.
The carrying amount of goodwill and estimates used in the calculation are disclosed in Note 5 to the financial
statements.
(iv)
Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining
recoverability of withholding and income taxes worldwide provision for income taxes, including determination of
taxable income, capital allowances and deductibility of certain expenses during the estimation of the provision for
income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain
during the ordinary course of business.
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1.
(iv) Income taxes (continued)
The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will
be due. The Group has made assumptions and judgements in relation to provision for tax disputes based on, among
others, historical experience with local tax authorities in the relevant countries and timing of the potential liabilities.
These assumptions and judgements are made in consultation with and according to the advice from local independent
tax professionals. Any changes to these assumptions and judgements will impact the carrying amount of the potential
liabilities.
Where the final tax outcome of these matters is different from the amounts that were initially recorded, such as if the
actual future taxable profits, or if the amounts of carry forward tax losses, unutilised tax incentives and capital allowances
that are approved by the tax authorities differ from those currently estimated by the Group, such differences will impact
the income tax and deferred income tax provisions in the period in which such determination is made.
(i) Tax recoverable – Oilfield Services
As disclosed in the Statement of Financial Position, the Group has carried forward certain tax recoverable related
to certain subsidiaries. The Directors and local independent tax professionals believe that the amount can be set
off against future tax payables.
Tax recoverable includes value added tax (VAT) that is related to a subsidiary in Indonesia and an amount
pertaining to tax recoverable for the years from 1991 to 2012 that is related to a subsidiary in Pakistan, which are
pending approval by the local tax authorities. The Directors and local independent tax professionals are confident
that the amount can be recovered.
Deferred taxes
(ii)
The Group has significant unrecognised tax losses, unutilised tax incentives and capital allowances as disclosed in
Note 9. In the current financial year, the Group has recognised deferred tax assets amounting to RM32.8 million
(2013: RM41.3 million) in relation to significant unrecognised tax losses, unutilised tax incentives and capital
allowances. In addition, two subsidiaries of Scomi Engineering Bhd have recognised deferred tax assets on tax
losses, unabsorbed capital allowances and double deduction on research and development expenditure incurred
amounting to approximately RM4.7 million (2013: RM4.2 million) and RM23.4 million (2013: RM59.1 million)
respectively based on projections of future taxable income and the non-commencement of pioneer status.
The deferred tax assets were recognised based on budgeted future taxable profits as the Directors are of the
opinion that it is probable that the future taxable profits will be achieved within those entities.
(v) Construction contracts profits
The Group recognises contract profits based on the percentage of completion method. The percentage of completion
of a construction contract is determined based on the proportion that the contract costs incurred for work performed
to-date bear to the estimated total costs for the contract. When it is probable that the estimated total contract costs of
a contract will exceed the total contract revenue of the contract, the expected loss of the contract is recognised as an
expense immediately.
Significant judgement is required in the estimation of total contract costs. Where the actual total contract costs is
different from the estimated total contract costs, such differences will impact the contract profits recognised.
1.
(vi) Construction contract revenue
The Group has estimated total contract revenue based on the initial amount of revenue agreed in the contract,
variations in the contract work and claims that can be measured reliably based on the latest available information and
past experience and reliance on work of specialist. During the financial year, variation orders were recognised based
on percentage of completion less related costs in respect of additional work scope instructions by the customers and
additional interest costs and overheads incurred due to delays, which have been granted EOTs or based on external
delay assessments by specialist advisors.
Where the actual approved variations and claims differ from the estimates, such difference will impact the contract
profit/(losses) recognised.
(vii) Litigations
The Group operates across many countries and is required to comply with all applicable laws and regulations of the
countries in which the Group operates. Significant judgement is required to determine the likelihood of the obligation
and the estimation of amounts to be recognised in respect of legal matters, subject to uncertain future events. The legal
cases may extend over several years and the amount or timing may differ from current assumptions.
Based on legal advice, the Group has recognised RM3.0 million and RM24.4 million as provisions as disclosed in Note 20
and 14(d) respectively. Contingent liabilities of RM1.6 million (2013: RM6.59 million) are as disclosed in Note 35.
(viii)Impairment of receivables
The Group makes allowance for doubtful debts on an assessment of the recoverability of receivables. Allowances
are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be
recoverable. The Group specifically analyses historical bad debts, customer concentration, customer creditworthiness,
current economic trends and changes in customer payment terms when making a judgement to evaluate the
adequacy of the allowance for doubtful debts. Where the expectations differ from the original estimates, the differences
will impact the carrying value of receivables as disclosed in Note 10.
(ix) Impairment of property, plant and equipment – marine vessels
The recoverable amounts of marine vessels have been determined based on the higher of fair value less costs of
disposals and value in use calculations as disclosed in Note 3. Based on this assessment, there was an impairment
charge of Nil (2013: RM4,176,000) recognised in profit or loss for the financial year ended 31 March 2014.
(x) Impairment of investments in subsidiaries
The Company assesses the impairment of investments in subsidiaries when there is an indication of impairment. The
carrying amounts are disclosed in Note 6. Based on this assessment, the Company recognised impairment loss of Nil
(2013: RM281 million) for investment in a subsidiary in the profit or loss for the financial year ended 31 March 2014. The
recoverable amount of investment in subsidiary was determined based on the value in use calculation as disclosed in
Note 5.
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2.
Significant accounting policies
The accounting policies set out below have been applied consistently to the periods presented in these financial statements and
have been applied consistently by Group entities, unless otherwise stated.
(a) Basis of consolidation
(i)
Subsidiaries
Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of
subsidiaries are included in the consolidated financial statements from the date that control commences until the date
that control ceases.
Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity. Potential voting rights are considered when
assessing control only when such rights are substantive. The Group considers it has de facto power over an investee
when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee
that significantly affect the investee’s return.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment
losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction
costs.
(ii)
Business combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on
which control is transferred to the Group.
For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:
•
the fair value of the consideration transferred; plus
•
the recognised amount of any non-controlling interests in the acquiree; plus
•
if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
•
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree
either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in
connection with a business combination are expensed as incurred.
(iii)Acquisitions of non-controlling interests
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity
transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of
net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.
(iv)Acquisitions from entities under common controls
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that
controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative
period presented or, if later, at the date that common control was established; for this purpose, comparatives are
restated. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the Group
controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities are
added to the same components within Group equity and any resulting gain/loss is recognised directly in equity.
2.
Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(v) Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any
non-controlling interests and the other components of equity related to the former subsidiary from the consolidated
statement of financal position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the
Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control
is lost. Subsequently, it is accounted for as an equity accounted investee or as an available-for-sale financial asset
depending on the level of influence retained.
(vi)Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control,
over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method less any
impairment losses, unless it is classified as held for sale or distribution. The cost of the investments includes transaction
costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive
income of the associates, after adjustments if any, to align the accounting policies with those of the Group, from the
date that significant influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any
long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent
that the Group has an obligation or has made payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, any retained interest in the former associate at
the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying
amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the
interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is
recognised in the profit or loss.
When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained
interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in the profit or loss. Any
gains or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit
or loss if that gain or loss would be required to be reclassified to the profit or loss on the disposal of the related assets
or liabilities.
Investments in associates are measured in the Company’s statement of financial position at cost less any impairment
losses, unless the investment is classified as held for sale or distribution. The cost of the investments includes transaction
costs.
(vii)
Joint arrangements
Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring
unanimous consent for decisions about the activities that significantly affect the arrangements’ returns.
Joint arrangements are classified and accounted for as follows:
•
A joint arrangement is classified as “joint operation” when the Group or the Company has rights to the assets and
obligations for the liabilities relating to an arrangement. The Group account for each of its share of the assets,
liabilities and transactions, including its share of those held or incurred jointly with the other investors, in relation
to the joint operation.
•
A joint arrangement is classified as “joint venture” when the Group has rights only to the net assets of the
arrangements. The Group accounts for its interest in the joint venture using the equity method.
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2.
(a) Basis of consolidation (continued)
(viii)
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly
or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position
and statement of changes in equity within equity, separately from equity attributable to the owners of the Company.
Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and
other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between
non-controlling interests and owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if
doing so causes the non-controlling interests to have a deficit balance.
(ix) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted associates and joint ventures are eliminated against
the investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent that there is no evidence of impairment.
(b) Foreign currency
(i)
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange
rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to
the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting
date, except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at
the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the
retranslation of available-for-sale equity instruments or a financial instrument designated as a hedge of currency risk,
which are recognised in other comprehensive income.
(ii) Operations denominated in functional currencies other than Ringgit Malaysia (“RM”)
The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill and
fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting period.
The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are
translated to RM at exchange rates at the dates of the transactions.
The income and expenses of foreign operations in hyperinflationary economies are translated to RM at the
exchange rate at the end of the reporting period. Prior to translating the financial statements of foreign operations in
hyperinflationary economies, their financial statements for the current period are restated to account for changes in
the general purchasing power of the local currency. The restatement is based on relevant price indices at the end of
the reporting period.
2.
(b) Foreign currency (continued)
(ii) Operations denominated in functional currencies other than Ringgit Malaysia (“RM”) (continued)
Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign currency
translation reserve (“FCTR”) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant
proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation
is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related
to that foreign operation is reclassified to profit or loss as part of the profit or loss on disposal.
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant
proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part
of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence
or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign
operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such
a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other
comprehensive income, and are presented in the FCTR in equity.
(c) Financial instruments
(i)
Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the
Group or the Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial
instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only
if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not
categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised
separately, is accounted for in accordance with policy applicable to the nature of the host contract.
(ii) Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a) Financial assets at fair value through profit or loss
Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives
(except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or
financial assets that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values
cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values
with the gain or loss recognised in profit or loss.
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2.
(c) Financial instruments (continued)
(ii) Financial instrument categories and subsequent measurement (continued)
Financial assets (continued)
(b)
Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an active market.
Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the
effective interest method.
(c)
Available-for-sale category comprises investment in equity and debt securities instruments that are not held for
trading.
Investments in equity instruments that do not have a quoted market price in an active market and whose fair
value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale
are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income,
except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and
losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On
derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity
into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in
profit or loss.
All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment
(see Note 2(l)(i)).
Financial liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through
profit or loss.
Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative
that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are
specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments that do not have a quoted
price in an active market for identical instruments whose fair values cannot be reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values
with the gain or loss recognised in profit or loss.
(iii) Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original
or modified terms of a debt instrument.
Fair value arising from financial guarantee contracts are classified as deferred income and are amortised to profit or loss
using a straight-line method over the contractual period or, when there is no specified contractual period, recognised
in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable,
an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the
obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.
2.
(iv) Regular way purchase or sale of financial assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery
of the asset within the time frame established generally by regulation or convention in the marketplace concerned.
A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date
accounting. Trade date accounting refers to:
(a)
the recognition of an asset to be received and the liability to pay for it on the trade date; and
(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a
receivable from the buyer for payment on the trade date.
(v)
Hedge accounting
Fair value hedge
A fair value hedge is a hedge of the exposure to changes in fair value of a recognised asset or liability or an unrecognised
firm commitment, or an identified portion of such an asset, liability or firm commitment, that is attributable to a
particular risk and could affect the profit or loss.
In a fair value hedge, the gain or loss from remeasuring the hedging instrument at fair value or the foreign currency
component of its carrying amount translated at the exchange rate prevailing at the end of the reporting period is
recognised in profit or loss. The gain or loss on the hedged item, except for hedge item categorised as available-for-sale,
attributable to the hedged risk is adjusted to the carrying amount of the hedged item and recognised in profit or loss.
For a hedge item categorised as available-for-sale, the fair value gain or loss attributable to the hedge risk is recognised
in profit or loss.
Fair value hedge accounting is discontinued prospectively when the hedging instrument expires or is sold, terminated
or exercised, the hedge is no longer highly effective or the hedge designation is revoked.
Cash flow hedge
A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated
with a recognised asset or liability or a highly probable forecast transaction and could affect the profit or loss. In a cash
flow hedge, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is
recognised in other comprehensive income and the ineffective portion is recognised in profit or loss.
Subsequently, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into
profit or loss in the same period or periods during which the hedged forecast cash flows affect profit or loss. If the
hedge item is a non-financial asset or liability, the associated gain or loss recognised in other comprehensive income
is removed from equity and included in the initial amount of the asset or liability. However, loss recognised in other
comprehensive income that will not be recovered in one or more future periods is reclassified from equity into profit
or loss.
Cash flow hedge accounting is discontinued prospectively when the hedging instrument expires or is sold, terminated
or exercised, the hedge is no longer highly effective, the forecast transaction is no longer expected to occur or the
hedge designation is revoked. If the hedge is for a forecast transaction, the cumulative gain or loss on the hedging
instrument remains in equity until the forecast transaction occurs. When the forecast transaction is no longer expected
to occur, any related cumulative gain or loss recognised in other comprehensive income on the hedging instrument is
reclassified from equity into profit or loss.
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2.
(vi)
Derecognition
A financial asset or a part of it is derecognised when, and only when the contractual rights to the cash flows from the
financial asset expire or the financial asset is transferred to another party without retaining control or substantially
all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount
and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any
cumulative gain or loss that had been recognised in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is
discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount
of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in profit or loss.
(d) Property, plant and equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at cost less any accumulated depreciation and any accumulated
impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly
attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing
the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost
of materials and direct labour. Cost also may include transfers from equity of any gain or loss on qualifying cash flow
hedges of foreign currency purchases of property, plant and equipment.
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at
acquisition date. The fair value of property is the estimated amount for which a property could be exchanged between
knowledgeable willing parties in an arm’s length transaction after proper marketing wherein the parties had each acted
knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on
the quoted market prices for similar items when available and replacement cost when appropriate.
When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for
as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and is recognised net within “other income”
and “other expenses” respectively in profit or loss.
(ii)
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits embodied within the component will flow to the Group or
the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised
to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss
as incurred.
2.
(d) Property, plant and equipment (continued)
(iii)
Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed, and if a component has a useful life that is different from the remainder of that asset, then that component
is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component
of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their
useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold
land is not depreciated. Capital work-in-progress are not depreciated until the assets are ready for their intended use.
The estimated useful lives for the current and comparative periods are as follows:
•
•
•
•
•
•
•
•
Freehold buildings
Leasehold buildings
Marine vessels
Drydocking (included within vessels)
Tools, plant and machinery
Renovation, office equipment, fittings and computers
Motor vehicles
Monorail test track
2 - 20%
2 - 331/3%
4%
20 - 40%
81/3 - 331/3%
10 - 331/3%
15 - 331/3%
3%
Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period, and adjusted
as appropriate.
(e) Leased assets
(i)
Finance leases
Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are
classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower
of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is
accounted for in accordance with the accounting policy applicable to that asset.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction
of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for
by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.
(ii)
Operating leases
Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are
classified as operating leases and, except for property interest held under operating lease, the leased assets are not
recognised on the statement of financial position. Property interest held under an operating lease, which is held to earn
rental income or for capital appreciation or both, is classified as investment property and measured using fair value
model.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of
the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.
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2.
(f)
Intangible assets
(i)
Goodwill
Goodwill arises on business combinations is measured at cost less any accumulated impairment losses. In respect of
equity-accounted associates and joint ventures, the carrying amount of goodwill is included in the carrying amount of
the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that
forms part of the carrying amount of the equity-accounted associates and joint venture.
(ii) Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognised in profit or loss as incurred.
Expenditure on development activities, whereby the application of research findings are applied to a plan or design
for the production of new or substantially improved products and processes, is capitalised only if development costs
can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are
probable and the Group intends to and has sufficient resources to complete development and to use or sell the asset.
The expenditure capitalised includes the cost of materials, direct labour and overheads costs that are directly attributable
to preparing the asset for its intended use. For qualifying assets, borrowing costs are capitalised in accordance with the
accounting policy on borrowing costs. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less any accumulated amortisation and any accumulated
impairment losses.
(iii) Other intangible assets
Intangible assets, other than goodwill, that are acquired by the Group, which have finite useful lives, are measured at
cost less any accumulated amortisation and any accumulated impairment losses.
(iv)
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is
recognised in profit or loss as incurred.
(v)Amortisation
Amortisation is based on the cost of an asset less its residual value.
Goodwill and intangible assets with indefinite useful lives are not amortised but are tested for impairment annually and
whenever there is an indication that they may be impaired.
Other intangible assets are amortised from the date that they are available for use.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets
from the date that they are available for use.
2.
(f)
Intangible assets (continued)
(v)Amortisation (continued)
The estimated useful lives for the current and comparative periods are as follows:
20142013
•
patents rights
4 years
5 years
•
capitalised development costs:
- Drilling waste equipment and EMS engineering package
13 years
14 years
- Bus
5 years
5 years
Development cost work-in-progress are not amortised based on the expected production unit of 750.
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted,
if appropriate.
(g) Investment properties
(i)
Investment properties carried at cost
Investment properties are properties which are owned to earn rental income or for capital appreciation or for both, but
not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative
purposes. These include land (other than leasehold land) held for a currently undetermined future use. Properties
that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment
properties.
Investment properties are stated at cost less any accumulated depreciation and any accumulated impairment losses,
consistent with the accounting policy for property, plant and equipment as stated in accounting policy Note 2(d).
Depreciation is charged to the profit or loss on a straight-line basis over the estimated useful lives of 20 to 50 years for
buildings. Freehold land is not depreciated.
An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no future
economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying
amount is recognised in the income statement in the period in which the item is derecognised.
(ii) Reclassification to/from investment property
When an item of property, plant and equipment is transferred to investment property following a change in its use, any
difference arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its
fair value is recognised directly in equity as a revaluation of property, plant and equipment. However, if a fair value gain
reverses a previous impairment loss, the gain is recognised in profit or loss. Upon disposal of an investment property,
any surplus previously recorded in equity is transferred to retained earnings; the transfer is not made through profit or
loss.
When the use of a property changes such that it is reclassified as property, plant and equipment or inventories, its fair
value at the date of reclassification becomes its cost for subsequent accounting.
(iii) Determination of fair value
The fair values are based on market values, being the estimated amount for which a property could be exchanged
on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper
marketing wherein the parties had each acted knowledgeably.
In the absence of current prices in an active market, the valuations are prepared by considering the aggregate of the
estimated cash flows expected to be received from renting out the property. A yield that reflects the specific risks
inherent in the net cash flows is then applied to the net annual cash flows to arrive at the property valuation.
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2.
(h)Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is measured based on weighted average cost formula, and includes expenditure incurred in acquiring
the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and
condition. In the case of work-in-progress and finished goods, cost includes an appropriate share of production overheads
based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and the estimated costs necessary to make the sale.
(i)
Non-current assets held for sale or distribution to owners
Non-current assets, or disposal group comprising assets and liabilities, that are expected to be recovered primarily through
sale or distribution to owners rather than through continuing use, are classified as held for sale or distribution.
Immediately before classification as held for sale or distribution, the assets, or components of a disposal group, are
remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets, or disposal group, are
measured at the lower of their carrying amount and fair value less costs of disposal.
Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on pro
rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets and
investment property, which continue to be measured in accordance with the Group’s accounting policies. Impairment
losses on initial classification as held for sale or distribution and subsequent gains or losses on remeasurement are recognised
in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.
Intangible assets and property, plant and equipment once classified as held for sale or distribution are not amortised or
depreciated. In addition, equity accounting of equity-accounted associates and joint ventures ceases once classified as held
for sale or distribution.
(j)
Construction work-in-progress
Construction work-in-progress represents the gross unbilled amount expected to be collected from customers for contract
work performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised losses.
Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in
the Group’s contract activities based on normal operating capacity.
Construction work-in-progress is presented as part of trade and other receivables as amount due from contract customers in
the statement of financial position for all contracts in which costs incurred plus recognised profits exceed progress billings.
If progress billings exceed costs incurred plus recognised profits, then the difference is presented as amount due to contract
customers which is part of the deferred income in the statement of financial position.
(k) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which
have an insignificant risk of changes in fair value with original maturities of three months or less, and are used by the Group
and the Company in the management of their short term commitments. For the purpose of the statement of cash flows,
cash and cash equivalents are presented net of bank overdrafts and pledged deposits.
2.
(l)Impairment
(i)
Financial assets
All financial assets (except for financial assets categorised as fair value through profit or loss, investments in subsidiaries,
associates and joint ventures) are assessed at each reporting date whether there is any objective evidence of
impairment as a result of one or more events having an impact on the estimated future cash flows of the asset.
Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity
instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If
any such objective evidence exists, then the financial asset’s recoverable amount is estimated.
An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss
and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash
flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the
use of an allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the
difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current
fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale
financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive
income is reclassified from equity to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and
is measured as the difference between the financial asset’s carrying amount and the present value of estimated future
cash flows discounted at the current market rate of return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale
is not reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an
event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent
that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment
not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.
(ii)
Other assets
The carrying amounts of other assets (except for inventories, amount due from contract customers, deferred tax assets
and non-current assets (or disposal groups) classified as held for sale) are reviewed at the end of each reporting period
to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable
amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for
use, the recoverable amount is estimated each period at the same time.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating
units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating
units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed
reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a
business combination, for the purpose of impairment testing, is allocated to group of cash-generating units that are
expected to benefit from the synergies of the combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs
of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
or cash-generating unit.
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2.
(l)
Impairment (continued)
(ii) Other assets (continued)
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its
estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units
are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cashgenerating units) and then to reduce the carrying amounts of the other assets in the cash-generating unit (groups of
cash-generating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised
in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or
no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the
recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to
profit or loss in the financial year in which the reversals are recognised.
(m) Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.
(i)
Issue expenses
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from equity.
(ii)
Ordinary shares
Ordinary shares are classified as equity.
(iii) Repurchase, disposal and reissue of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly
attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares that are not
subsequently cancelled are classified as treasury shares in the statement of changes in equity.
Where treasury shares are sold or reissued subsequently, the difference between the sales consideration net of directly
attributable costs and the carrying amount of the treasury shares is recognised in equity.
(n) Compound financial instruments
A compound financial instrument is a non-derivative financial instrument that contains both a liability and an equity
component.
Compound financial instruments issued by the Group comprise convertible notes that can be converted to share capital at
the option of the holder, when the number of shares to be issued does not vary with changes in their fair value.
The liability component of a compound financial instrument is recognised initially at fair value of a similar liability that does
not have an equity conversion option. The equity component is recognised initially at the difference between the fair value
of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable
transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.
2.
(n) Compound financial instruments (continued)
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised
cost using the effective interest method. The equity component of a compound financial instrument is not remeasured
subsequent to initial recognition.
Interest and losses and gains relating to the financial liability are recognised in profit or loss. On conversion, the financial
liability is reclassified to equity; no gain or loss is recognised on conversion.
(o) Employee benefits
(i)
Short-term employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are
measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short term cash bonus or profit-sharing plans if
the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
(ii)
State plans
The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to which they
relate. Once the contributions have been paid, the Group has no further payment obligations.
(iii) Defined benefit plans
The Group’s net obligation in respect of defined benefit retirement plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in return for their service in the current and prior
periods, discounting that amount.
The calculation of defined benefits obligations is performed annually by a qualified actuary using the projected unit
credit method. When the calculation results in a potential asset to the Group, the recognised asset is limited to the
present value of economic benefits available in the form of any future refunds from the plan or reductions in future
contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable
minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan
assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in
other comprehensive income. The Group determines the net interest expense or income on the net defined liability or
asset for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of
the annual period to the then net defined benefit liability or asset, taking into account any changes in the net defined
benefit liability or asset during the period as a result of contributions and benefit payments.
Net interest expense and other expenses relating to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past
service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognises gain and
losses on the settlement of a defined benefit plan when the settlement occurs.
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2.
(o) Employee benefits (continued)
(iv) Share-based payment transactions
The grant date fair value of share-based payment granted to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards.
The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and
non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is
based on the number of awards that meet the related service and non-market performance conditions at the vesting
date.
For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is
measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
The fair value of employee share options is measured using a binomial lattice model. Measurement inputs include
share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average
historic volatility adjusted for changes expected due to publicly available information), weighted average expected life
of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the
risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the
transactions are not taken into account in determining fair value.
(v)
Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits
and when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12
months of the end of the reporting period, then they are discounted.
(p)Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
(i)
Warranties
A provision for warranties is recognised when the underlying products or services are sold. The provision is based on
historical warranty data and a weighting of all possible outcomes against their associated probabilities.
(q) Revenue and other income
(i)
Goods sold
Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration
received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue is recognised when
persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards
of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs
and possible return of goods can be estimated reliably, and there is no continuing management involvement with the
goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the
amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
2.
(q) Revenue and other income (continued)
(ii)
Services
Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction
at the end of the reporting period. The stage of completion is assessed by reference to surveys of work performed.
(iii)
Construction contracts
Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and
incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably. As
soon as the outcome of a construction contract can be estimated reliably, contract revenue and contract cost are
recognised in profit or loss in proportion to the stage of completion of the contract. Contract expenses are recognised
as incurred unless they create an asset related to future contract activity.
The stage of completion is assessed by reference to the proportion that contract costs incurred for work performed
to-date bear to the estimated total contract costs.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to
the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is recognised
immediately in profit or loss.
(iv)
Commissions
When the Group acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognised is
the net amount of commission made by the Group.
(v)
Rental income
Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Rental
income from subleased property is recognised as other income.
(vi) Government grants
Government grants that compensate the Group for the cost of an asset are recognised initially as deferred income
at fair value when there is reasonable assurance that they will be received and that the Group will comply with the
conditions associated with the grant and are then recognised in profit or loss as other income on a systematic basis
over the useful life of the asset.
Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a
systematic basis in the same periods in which the expenses are recognised.
(vii)
Interest income
Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest
income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying
asset which is accounted for in accordance with the accounting policy on borrowing costs.
(viii)Charter hire income
Revenue from charter hire is recognised on an accrual basis but is deferred when the terms of billings have not been
agreed by third parties or when certain conditions necessary for realisation have yet to be fulfilled.
(ix) Management and agency fees
Management and agency fees are recognised on an accrual basis by reference to completion of the specific transaction,
assessed on the basis of the actual services provided as a proportion of the total services to be provided.
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2.
(r) Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are
recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of
those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is
being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use
or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary
to prepare the qualifying asset for its intended use or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalisation.
(s) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except
to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial
years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of
assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following
temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is
not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the
tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the
temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced
to the extent that it is no longer probable that the related tax benefit will be realised.
(t)
A discontinued operation is a component of the Group’s business that represents a separate major line of business or
geographical area of operations that has been disposed of or is held for sale or distribution, or is a subsidiary acquired
exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation
meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation,
the comparative statement of profit or loss and other comprehensive income is re-presented as if the operation had been
discontinued from the start of the comparative period.
2.
(u) Earnings per ordinary share
The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the period, adjusted for own shares held.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding adjusted for own shares held for the effects of all dilutive potential ordinary shares,
which comprise convertible notes and share options granted to employees.
(v) Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.
An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case is
the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and to assess its
performance, and for which discrete financial information is available.
(w)Contingencies
(i)
Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability,
unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be
confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities
unless the probability of outflow of economic benefits is remote.
(ii)
Contingent assets
Where it is not probable that there is an inflow of economic benefits, or the amount cannot be estimated reliably,
the asset is not recognised in the statements of financial position and is disclosed as a contingent asset, unless the
probability of inflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by
the occurrence or non-occurrence of one or more future events, are also disclosed as contingent assets unless the
probability of inflow of economic benefits is remote.
(x) Fair value measurements
Fair value of an asset or a liability, except for share-based payment and lease transactions, is determined as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either
in the principal market or in the absence of a principal market, in the most advantageous market.
For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset
in its highest and best use.
In accordance with the transitional provision of MFRS 13, the Group applied the new fair value measurement guidance
prospectively, and has not provided any comparative fair value information for new disclosures. The adoption of MFRS 13 has
not significantly affected the measurements of the Group’s assets or liabilities other than the additional disclosures.
p117
p118
3.
Renovation,
office
Tools,
equipment,
Capital
Freehold Freehold Leasehold Marine plant and fitting and
Motor Monorail work-in-
landbuildingsbuildings vesselsmachinerycomputers vehiclestest track progress Total
Group
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Cost
At 1 January 2012
20,07658,78326,165776,080607,57166,86014,31914,795 2,058
1,586,707
Additions
- -1,28028,71362,2631,926 620 -7,266
102,068
Disposals
(89) (159) (1,398)(71,740)(10,255) (1,556) (659)
-
- (85,856)
Write-off
----
(400)
(118)---
(518)
Reclassification
---
2,0136(6)--
(2,013)Disposal of subsidiaries -
-
(5,228)
-
(21,435)
(19)
-
-
-
(26,682)
Transfer to assets held for sale
(8,613)
(16,717)
(5,940)
-
(191,334)
(6,229)
(5,296)
-
-
(234,129)
Effect of movements in exchange rates (313)
(372)
(156)
(14,612)
1,129
(419)
29
-
(19)
(14,733)
At 31 March 2013/1 April 2013
11,061
41,535
14,723
720,454
447,545
60,439
9,013
14,795
7,292 1,326,857
Additions
-
- 54717,93456,666 3,00711,983
-20,661110,798
Transfer to investment properties
(1,275)--------
(1,275)
Disposals
-
- (327)(29,421)(5,451)(1,226) (355) -
-(36,780)
Write-off
-----
(4,724)---
(4,724)
Reclassification -
(1,021) -5,034665176180 -
(5,034) Effect of movements in
exchange rates
90
180
181
48,173
18,537
(922)
922
-
1,161
68,322
At 31 March 2014
9,87640,69415,124762,174517,96256,75021,74314,79524,080
1,463,198
Depreciation and impairment
At 1 January 2012
Accumulated depreciation
-
16,781
12,532
310,360
380,077
40,713
11,325
2,819
-
774,607
Accumulated impairment losses ---
95,219
3,628----
98,847
-16,78112,532405,579383,70540,71311,325 2,819
-873,454
Depreciation for the period
-
1,043
821
45,467
44,755
10,623
840
617
-
104,166
Capitalised under development
costs
----78-
207--
285
Disposals
- (207)(1,324)(47,303)(7,009)(1,514) (646) -
-(58,003)
Impairment losses
--
500
4,176
6,131----
10,807
Disposal of subsidiaries
- -(1,188) -(6,801) (16) - - -(8,005)
-
(11,137)
-
-
(169,606)
(8,758)
(4,785)
-
-
(194,286)
Effect of movements in exchange rates
-
(50)
198
(7,545)
(1,652)
(346)
(64)
-
-
(9,459)
Accumulated depeciation
-
6,430
11,039
300,979
239,842
40,702
6,877
3,436
-
609,305
Accumulated impairment losses -
-
500
99,395
9,759
-
-
-
-
109,654
- 6,430 11,539400,374249,601 40,702 6,877 3,436
-718,959
3.
Property, plant and equipment (continued)
Renovation,
office
Tools,
equipment,
Capital
Freehold Freehold Leasehold Marine plant and fitting and
Motor Monorail work-in-
landbuildingsbuildings vesselsmachinerycomputers vehiclestest track progress Total
Group
Depreciation and impairment
(continued)
Depreciation for the year
-
1,005
1,105
37,629
39,463
7,725
2,193
493
-
89,613
Disposals
- - (327)
(22,968)(308)(672)(226) - -
(24,501)
Write-off
-----
(4,717)---
(4,717)
Effect of movements in
exchange rates
-
(924)
(19)
27,456
10,964
(172)
319
-
-
37,624
At 31 March 2014
Accumulated depeciation
- 6,511 11,798343,096289,961 42,866 9,163 3,929
-707,324
Accumulated impairment losses --
500
99,395
9,759----
109,654
- 6,511 12,298442,491299,720 42,866 9,163 3,929
-816,978
Carrying amounts
11,061
35,105
3,184
320,080
197,944
19,737
2,136
11,359
7,292
607,898
At 31 March 2014
9,87634,183 2,826319,683218,24213,88412,58010,86624,080646,220
Office
Motorequipment
vehicles
and fittings
Renovation
Total
RM’000RM’000RM’000RM’000
Company
Cost
At 1 January 2012
1,479
3,655
741
5,875
Additions -7 -7
1,479
3,662
741
5,882
Additions596 - -596
At 31 March 2014
2,0753,662 7416,478
At 1 January 2012
1,304
2,692
248
4,244
Depreciation for the period168344308820
Depreciation for the year
At 31 March 2014
1,472
58
3,036
201
556
185
1,5303,237 7415,508
Carrying amounts
7
626
185
At 31 March 2014
5,064
444
545425
818
-970
p119
p12 0
3.
Property, plant and equipment (continued)
(a) Impairment loss
In the previous period, management performed an impairment assessment on certain vessels to assess the carrying amounts
of these vessels due to loss of a major customer in the Marine Services segment. Arising from this assessment, the Group
recognised an impairment charge of RM4,176,000, which represented the write-down of certain vessels to their recoverable
amounts. The recoverable amount was based on the higher of fair value less cost of disposal and value in use calculation,
with all tug and barges being regarded as a cash-generating unit. The recoverable amounts of the vessels were determined
based on fair value (based on independent third party valuation reports) less costs of disposal, which is the indicative values
of the vessels on a willing buyer willing seller basis.
In the current year, no impairment loss has been recognised. The recoverable amounts of the vessels were determined based
on value in use calculation. Key assumptions used in the value in use calculation and sensitivity analysis are as disclosed in
Note 5(a).
(b) Leased plant and equipment
The net carrying amounts of property, plant and equipment acquired under finance lease arrangements as at the end of the
reporting period are as follows :
Group
20142013
RM’000RM’000
Motor vehicles
Tools, plant and machinery
12,5804,961
1841,227
12,7646,188
Company
20142013
RM’000RM’000
Motor vehicles
5457
(c)Security
The net carrying amounts of property, plant and equipment of the Group charged as security for banking facilities granted
to the Group (see Note 21) are as follows:
Group
20142013
RM’000RM’000
Marine vessels
Freehold land and buildings
147,046152,860
21,54323,047
168,589175,907
4.
p121
Investment properties
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Cost
At 1 April/1 January
3,8343,8344,6784,678
Reclassified from property, plant and
equipment
1,275--At 31 March
5,1093,8344,6784,678
2,4522,275 15894
Depreciation for the year/period
162177 5164
Effect of movements in exchange rates
(21)- -At 31 March
2,5932,452 209158
Carrying amount
At 31 March
2,5161,3824,4694,520
Fair value at 31 March
6,4723,7906,2005,300
The following is recognised in profit or loss in respect of investment properties:
GroupCompany
Rental income
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
171133442476
There were no direct operating expenses arising from investment property that generated rental income during the year as all
expenses were incurred by the tenant.
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Freehold land
700700 -5,7723,0906,2005,300
6,4723,7906,2005,300
(a)Security
Investment properties of the Company are charged as security for banking facilities granted to the Company (see Note 21).
p12 2
4.
Investment properties (continued)
(b) Fair value information
Fair value of investment properties are categorised as follows:
2014
Level 1
Level 2
Level 3
Total
GroupRM’000RM’000RM’000RM’000
Freehold land
-700
-5,772
-6,472
-700
-5,772
-6,472
2014
Level 1
Level 2
Level 3
Total
CompanyRM’000RM’000RM’000RM’000
-6,200
-6,200
omparative figures have not been analysed by levels, by virtue of transitional provision given in Appendix C2 of MFRS 13.
C
Level 1 fair value
L evel 1 fair value is derived from quoted price (unadjusted) in active markets for identical investment properties that the
entity can access at the measurement d
ate.
Level 2 fair value
Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the
investment property, either directly or indirectly.
Level 2 fair values of land and buildings is determined by external, independent property valuers. The fair values of land
and buildings have been generally derived using the comparison method. In this approach, sales and listing of comparable
properties recorded within the same location are compiled. Sales price of comparable properties in close proximity are
adjusted for differences in attributes to arrive at a comparison.
Level 3 fair value
Level 3 fair value is estimated using unobservable inputs for the investment property.
5.
Intangible assets
Development
< --- Capitalised development costs ---> <-costs work-in-progress->
Drilling
Mass rapid
EMS
waste
transit/
engineering Goodwill Patents Monorail
BusequipmentPropulsion package
Total
Group
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Cost
At 1 January 2012
248,03713,056
114,4181,0165,7992,5582,499
387,383
Additions
----
20
15,779-
15,799
(9,900)
(557)
-
-
-
-
-
(10,457)
exchange rates
(44)
(50)
-
-
(121)
-
-
(215)
238,093
12,449
114,418
1,016
5,698
18,337
2,499
392,510
Additions
--
2,529--
188-
2,717
Write-off
--
(15)----
(15)
exchange rates
198
60
-
-
191
-
168
617
At 31 March 2014
238,29112,509
116,9321,0165,88918,5252,667
395,829
Amortisation and
impairment losses
At 1 January 2012
Accumulated amortisation
-
12,487
3,432
168
2,981
-
-
19,068
Accumulated impairment losses
39,602------
39,602
39,60212,487 3,432 168 2,981
-
-58,670
Amortisation for the period
-
62
2,008----
2,070
-
(547)
-
-
199
-
-
(348)
Impairment loss
41,292------
41,292
exchange rates
(58)
(49)
-
-
53
-
-
(54)
-
11,953
5,440
168
3,233
-
-
20,794
80,836------
80,836
80,83611,9535,440 1683,233 - -
101,630
Amortisation for the year
-
50
1,740
188
166
-
-
2,144
exchange rates
-
28
-
-
(6)
-
-
22
At 31 March 2014
-
12,031
7,180
356
3,393
-
-
22,960
80,836------
80,836
80,83612,0317,180 3563,393 - -
103,796
Carrying amounts
157,257
496
108,978
848
2,465
18,337
2,499
290,880
At 31 March 2014
157,455
478109,752
660 2,496 18,525 2,667292,033
p12 3
p124
5.
(a)Amortisation
The amortisation of patents and capitalised development costs is allocated to the cost of inventory and is recognised in cost
of sales as inventory is sold.
The remaining useful lives of the patents and capitalised development costs are 4 years and 13 years respectively (2013: 5
years and 14 years respectively).
(b)Impairment
(i)
Impairment testing for cash-generating units containing goodwill
The carrying amounts of goodwill allocated to the Group’s cash-generating units (“CGUs”) are as follows:
Group
20142013
RM’000
RM’000
Oilfield services
Marine services
Transport solutions
101,772101,574
7,0147,014
48,66948,669
157,455157,257
The recoverable amount of the CGU in the current financial year is determined based on value in use calculations for
oilfield services, transport solutions and marine services.
The value in use calculations use pre-tax cash flow projections based on approved financial budgets. The projections
were based on an approved business plan and reflect the expectation of usage, revenue growth, operating costs,
technological obsolescence and margins based on past experience and current assessment of market share,
expectations of market growth and industry growth.
Goodwill allocated to Marine Services - Indonesia
Goodwill allocated to Marine Services – Indonesia CGU arose from the Marine Logistics Business acquired from Chuan
Hup Holdings Limited on 30 September 2005.
During the year, the CGU with the allocated goodwill was reviewed for impairment using the value in use calculations.
The value in use calculations use pre-tax cash flow projections based on financial budgets approved by the Board
covering a five-year period. Based on the calculations, no impairment has been recognised in the current financial year.
The key assumptions used in the value in use calculation in the current financial year is as follows:
Revenue growth rate in the first 5 years
Discount rate
Terminal growth rate
2014
%
2013
%
(1.9)-18.116.41.0-
5.
(b) Impairment (continued)
(i)
p12 5
Impairment testing for cash-generating units containing goodwill (continued)
The projections over these periods were based on an approved business plan and reflect the expectation of usage,
revenue growth, operating costs and margins based on past experience and current assessment of market share,
expectations of market growth and industry growth. The discount rate used is pre-tax and reflect specific risk relating
to the Marine Services industry in Indonesia. The terminal growth rate is based on long term growth rate of the Marine
Services industry.
Goodwill allocated to Oilfield Services
The recoverable amount of the CGU in the current period is determined based on value in use calculations.
The value in use calculations use pre-tax cash flow projections based on financial budgets approved by the Board
covering a five-year period. The key assumptions used in the value in use calculations of CGUs are as follows:
Revenue growth rates in the first 5 years
Discount rates
2014
%
5.0 – 55.0
9.0 – 20.0
1.0
2013
%
6.0 – 30.0
9.0 – 23.0
3.0 – 8.0
expectations of market growth and industry growth. The discount rates used are pre-tax and reflect specific risk relating
to individual countries in which the Group operates in. The terminal growth rates are based on long term growth rates
relating to the individual countries.
Rail Operations
The recoverable amounts of Rail Operations goodwill have been based on value in use calculations.
expectations of market growth and industry growth.
The key assumptions used in the value in use calculations for the Rail Operations CGU are as follows:
Value in use basis
Pre-taxTerminal
discount rate
growth rate
2014
Rail operations
Existing secured projects and anticipated 10%
Not applicable
projects over the remaining useful life of
the current monorail technology
2013
Rail operations
Not applicable
the current monorail technology
p12 6
5.
(b) Impairment (continued)
(ii) Capitalised development costs work-in-progress
Oilfield Services - EMS engineering package
The capitalised development costs work-in-progress relating to the EMS engineering package was tested for
impairment based in the following assumptions:
Revenue growth rate in the first 5 years
Discount rates
31.3.2014
%
31.3.2013
%
No growth
No growth
23.0
9.0 - 23.0
NilNil
The projections over these periods reflect the expectation of usage, revenue growth, operating costs and margins
based on current assessment of market share, expectations of market growth and industry growth. The discount rates
used are pre-tax and reflect specific risk relating to individual countries where this technology is expected to be used.
The EMS engineering package is expected to commence commercial production in 2014.
(iii) Development costs work-in-progress
Transport Solutions
Development costs work-in-progress has been tested for impairment based on expectations of market growth and
industry growth.
Value in use basis
Pre-taxTerminal
discount rate
growth rate
2014
Mass rapid transit (MRT)
Anticipated projects over the expected 10%
Not applicable
useful life of the current MRT technology
Propulsion
Not applicable
the current propulsion technology
2013
Mass rapid transit (MRT)
Anticipated projects over the expected 10%
Not applicable
useful life of the current MRT technology
Propulsion
Not applicable
the current propulsion technology
A reasonable possible change in the assumptions used will not result in any change to the impairment conclusion.
6.
p127
Investments in subsidiaries
Company
20142013
RM’000RM’000
At cost
Quoted shares in Malaysia
1,219,0261,219,026
Unquoted shares
282,001282,001
1,501,0271,501,027
Less: Impairment loss
(281,424)(281,724)
1,219,6031,219,303
At market value:
Quoted shares in Malaysia
1,644,041721,158
Details of the significant subsidiaries are as follows:
Principal place
of business/
Effective ownership
Country of
interest
Name of entity
incorporation
2014
2013
%%
Significant subsidiaries of Scomi Group Bhd Scomi Energy Services Bhd
Malaysia
Investment holding
65.665.6
(“SESB”)
Scomi Engineering Bhd (“SEB”)
Malaysia
Investment holding, provision of 72.372.3
management services to subsidiaries
and the design, manufacture and supply
of monorail trains and related services.
Significant subsidiaries of SESB
Scomi Marine Services Singapore
Investment holding
65.665.6
Pte. Ltd. #
Scomi Oilfield Limited (“SOL”)~
Malaysia/
Investment holding
65.665.6
Bermuda
Trans Advantage Sdn. Bhd.
Malaysia
Provision of marine transportation services65.665.6
Scomi KMC Sdn. Bhd. Malaysia
Provision of engineering services, sales
34.134.1
(including 4% held by
of a wide range of specialised chemicals
Scomi Oiltools Sdn. Bhd.)
and support services to the oil and gas
industry
Scomi Sosma Sdn. Bhd.
Malaysia
Distribution of chemical products and 65.665.6
services
p12 8
6.
Investments in subsidiaries (continued)
Details of the significant subsidiaries are as follows: (continued)
Principal place
of business/
Effective ownership
Country of
interest
Name of entity
incorporation
2014
2013
%%
Significant subsidiary of Scomi Marine Services Pte. Ltd.
PT Rig Tenders Indonesia
Indonesia
Provision of ship owning and
52.8
52.8
Tbk #
chartering
Significant subsidiaries of PT Rig Tenders Indonesia, Tbk
Rig Tenders Marine Pte. Ltd. #
Singapore
Ship chartering
52.852.8
CH Logistic Pte. Ltd. #
Singapore
Investment holding
52.852.8
CH Ship Management Singapore
Provision of management services
52.852.8
Pte. Ltd. #
Grundtvig Marine Pte. Ltd. #
Singapore
Investment holding
52.852.8
Subsidiary of Grundtvig Marine Pte. Ltd.
PT Batuah Abadi Lines #
Indonesia
Ship owning and chartering
40.440.4
Significant subsidiary of Scomi Sosma Sdn. Bhd.
Scomi Anticor S.A.S. α
France
Research, development and trading of 65.665.6
new products for processing crude or
refined oil
Significant subsidiaries of SOL
Scomi Oiltools Sdn. Bhd. Malaysia
Supplies a wide range of specialised 65.665.6
chemicals and support services to the
oil and gas industry Scomi Oiltools (Cayman)
Qatar & Provision of oilfield equipment, supplies
65.665.6
Ltd. #
United Arab Emirates/ and services
Cayman Islands
Scomi Oiltools Ltd. #
Pakistan & Myanmar/ Provision of oilfield equipment, supplies
65.665.6
Cayman Islands
and services
Scomi Oiltools (Africa)
Congo & Nigeria/
Investment holding and provision of
65.665.6
Limited
Cayman Islands
oilfield equipment supplies and services
Scomi Oiltools (Thailand)
Thailand
Provision of oilfield equipment, supplies
65.665.6
Limited #
and services
6.
p12 9
Principal place
of business/
Effective ownership
Country of
interest
Name of entity
incorporation
2014
2013
%%
Significant subsidiaries of SOL (continued)
Scomi Oiltools Egypt Egypt
65.665.6
SAE # (1)
and services
Scomi Oiltools Pty. Ltd. #
Australia
65.665.6
and services
Scomi Oiltools (S) Pte. Ltd. α
Singapore
Investment holding and provision of oilfield
65.665.6
equipment, supplies and services
KMCOB Capital Berhad Malaysia
Undertake the issuance of private debt
65.6
65.6
securities and refinancing exercise
Scomi Oiltools Oman LLC #
Oman
33.433.4
and services
KMC Oiltools BV @
Netherlands
Intellectual property holder and co-ordinator 65.665.6
Significant subsidiaries of Scomi Oiltools (S) Pte. Ltd.
KMC Oiltools India Pte. Ltd. #
India
Provision of oilfield equipment, supplies 65.665.6
and services
PT Scomi Oiltools #
Indonesia
65.665.6
and services
Scomi Oiltools Russia LLC #
Russia
65.665.6
and services
Significant subsidiaries of Scomi Engineering Bhd
Urban Transit Private Limited #
India
Supply of transportation infrastructure 72.372.3
system, equipment and services
Urban Transit Servicos
Brazil
Supply of transportation infrastructure
72.372.3
Do Brasil LTDA #
systems, equipment and services
Scomi Special Vehicles Sdn. Bhd. Malaysia
Manufacture and fabrication of road 72.372.3
transport equipment, material handling
equipment and in the provision of related
engineering services
Scomi Transportation Systems Malaysia
Investment holding
72.372.3
Sdn. Bhd. Scomi Transit Projects
Malaysia
Development, manufacture and supply
72.372.3
(Sao Paulo) Sdn. Bhd. of monorail transportation, infrastructure
systems, equipment and services
p13 0
6.
Principal place
of business/
Effective ownership
Country of
interest
Name of entity
incorporation
2014
2013
%%
Significant subsidiary of Scomi Special Vehicles Sdn. Bhd.
Scomi Trading Sdn. Bhd. Malaysia
Marketing agent for road transport
72.372.3
equipment and related product
Significant subsidiaries of Scomi Transportation Systems Sdn. Bhd.
Scomi Rail Bhd
Malaysia
Design, manufacture, and supply of 72.372.3
monorail trains and related services
Scomi Coach Sdn. Bhd.
Malaysia
Manufacturing, fabrication and 72.372.3
assembly of commercial coaches
and truck vehicle bodies
#
α
~
Audited by other member firms of KPMG International
Not audited by member firms of KPMG International
Scomi Oilfield Limited (“SOL”), a subsidiary of the Group entered into a Letter of Variation to defer the transfer of shares
of Scomi Oiltools Egypt SAE (“SOES”) from Scomi Oiltools Bermuda Limited (“SOBL”), a subsidiary of the ultimate holding
company, to SOL to a date to be mutually agreed later and until such time, SOBL will continue to hold the SOES shares in its
name as trustee for SOL’s sole and exclusive benefit as the beneficiary, based on the terms of a trust deed entered into by
SOBL and SOL. As a result thereof, SOES has been consolidated as a subsidiary.
(1) The shareholdings in Scomi Oiltools Egypt SAE are currently registered in the name of Scomi Oiltools Bermuda Limited and,
pursuant to a trust deed dated 8 March 2013, are held in trust for Scomi Oilfield Limited.
@ Not required to be audited.
(a) Non-controlling interest in subsidiaries
The Group’s subsidiaries that have material non-controlling interests (“NCI”) are Scomi Energy Services Bhd (“SESB”) and
Scomi Engineering Bhd (“SEB”) as follows:
2014
SESB
SEB
Total
RM’000RM’000RM’000
NCI percentage of ownership and voting interest
34.35%27.67%
Net assets attributable to NCI
436,402 68,132504,534
Profit/(Loss) attributable to NCI
27,180(10,448)16,732
6.
p131
(a) Non-controlling interest in subsidiaries (continued)
Summarised financial information before intra-group elimination
As at 31 March 2014
SESB
RM’000
742,962264,323
919,134698,463
(294,379)(615,599)
(625,872)(76,896)
Non-current assets
Current assets
Non-current liabilities
Current liabilities
741,845270,291
SEB
RM’000
Year ended
31.3.2014
RM’000RM’000
1,415,994
80,931
135,790
Revenue
Profit/(Loss) for the year
Cashflows from operating activities
Cashflows from investing activities
Cashflows from financing activities
Net decrease in cash and cash equivalents
236,898
(37,758)
(38,235)
186,927
(89,281)
(120,894)
7,343
(12,101)
(96,294)
(23,248)
(101,052)
-
Dividends paid to NCI
2013
Other
subsidiaries
with
immaterial
SESB
SEB
NCI Total
RM’000RM’000RM’000RM’000
NCI percentage of ownership and
voting interest
34.35%
27.67%
Net assets attributable to NCI
401,269
83,220
-
484,489
Profit/(Loss) attributable to NCI
30,948
(6,883)
(26,681)
(2,616)
p132
6.
(a) Non-controlling interest in subsidiaries (continued)
Summarised financial information before intra-group elimination (continued)
As at 31 March 2013
SESB
RM’000
SEB
RM’000
Non-current assets
Current assets
Current liabilities
714,508
776,555
(312,334)
(543,655)
258,021
740,039
(50,791)
(638,743)
635,074308,526
Revenue
Profit/(Loss) for the period
Cashflows from operating activities
Cashflows from investing activities
Cashflows from financing activities
Net increase in cash and cash equivalents
Dividends paid to NCI
7.
1.1.2012 to
31.3.2013
RM’000RM’000
1,471,693450,271
97,092
(21,082)
73,567
(22,603)
279,679
(69,290)
(205,642)
(144,882)
(22,705)
195,470
4,747
27,883
-
-
Group
20142013
RM’000RM’000
Share of net assets
124403
7.
p133
Investments in associates (continued)
Details of the associates are as follows:
Principal place
of business/
Effective ownership
Country of
interest
Name of entity
incorporation
2014
2013
%%
Held by Scomi Energy Services Bhd
Southern Petroleum Vietnam
Owner and operator of tankers
13.113.1
Transportation Joint Stock Company
Emerald Logistics Sdn. Bhd.
Malaysia
Ship chartering and management
32.232.2
Held by Scomi Marine Services Pte. Ltd.
King Bridge Enterprise Ltd
British Virgin
Investment holding
32.232.2
Islands
(a)The summarised financial information of the associates are as follows:
20142013
RM’000RM’000
Revenue
Loss for the year/period
Group’s share of results for the year/period
Total assets
Total liabilities
18,59021,708
(445)(5,244)
(247)133
13,83143,942
(13,586)(43,152)
Net assets
245790
Group’s share of net assets
124403
Dividends received by the Group
--
(i) Impairment assessment for investments in associates
Investments in associates are assessed at each reporting period for indication t hat the investments may be impaired.
Where such indication exists, the r ecoverable amount of the identified cost of investment is determined based o
n the
higher of value in use calculation and fair value less costs to sell.
p13 4
8.
Investments in joint ventures and joint operations
Group
20142013
RM’000RM’000
Share of net assets
54,93555,495
Details of the joint ventures and joint operations are as follows:
Principal place
of business/
Effective ownership
Country of
interest
Name of entity
incorporation
2014
2013
%%
Joint ventures under Scomi Energy Services Bhd
MarineCo Limited Malaysia
Leasing of marine vessels and the 33.533.5
provision of marine vessels transportation
services
Gemini Sprint Sdn. Bhd.
Malaysia
Chartering of marine vessels, manage 33.533.5
the maintenance of marine vessels and
provision of offshore marine services
Rig Tenders Offshore Pte Ltd
Singapore
Ship owning and chartering
46.046.0
Joint venture under Scomi Sosma Sdn. Bhd.
Sosma (B) Sdn. Bhd.
Brunei
Dormant
32.832.8
Joint venture under Scomi Oilfield Limited
Vibratherm Limited
England and
Manufucture and/or assembly of
32.832.8
Wales
equipment for drilling waste treatment
Joint venture under Scomi Engineering Bhd
Quark Fabbicacoes Vagoes E. Brazil
Dormant
27.227.2
Servicos De Engenharia LTDA
Joint operations under Scomi Engineering Bhd
Larsen & Toubro and India
Design, civil construction, manufacture
36.136.1
Scomi Engineering Bhd and supply of monorail trains and
(unincorporated consortium)
provision of related engineering
support services and engineering works S com i G roup Bhd An n u al R ep o r t 2014
8.
Investments in joint ventures and joint operations (continued)
(a)
The summarised financial information of the joint ventures are as follows :
20142013
Year ended
1.1.2012 to
31.3.201431.3.2013
RM’000RM’000
Revenue
Profit for the year/period
Group’s share of results for the year/period
18,99422,921
5,3436,539
5,3106,568
20142013
RM’000
RM’000
Total assets
Total liabilities
64,18775,832
(26,159)(38,949)
Net assets
Capital contribution
38,02836,883
15,71818,612
Group’s share of net assets
53,74655,495
Dividends received by the Group
--
(b) The summarised financial information of the joint operations are as follows :
20142013
Year ended
1.1.2012 to
31.3.201431.3.2013
RM’000RM’000
Revenue
Cost of sales
4,1352,159
(9,784)(2,015)
Gross (loss)/profit
(5,649)144
20142013
RM’000
RM’000
Receivables
Payables
6,0651,430
(6,164)(584)
p135
p13 6
9.
Deferred tax assets/(liabilities)
Recognised deferred tax assets/(liabilities)
Deferred tax assets and liabilities are attributable to the following:
AssetsLiabilities Net
201420132014201320142013
Group
RM’000RM’000RM’000RM’000RM’000RM’000
Tax losses, capital allowances
and tax incentives
25,59835,560
--
25,59835,560
Provisions
1,7383,541
--
1,7383,541
Property, plant and
equipment
--
(2,267)(2,837)(2,267)(2,837)
Deductible/(Taxable)
temporary differences
5,4232,207
(4,202)(673)
1,2211,534
Tax assets/(liabilities)
32,75941,308(6,469)(3,510)26,29037,798
Set off
-----
Net tax assets/(liabilities)
32,75941,308(6,469)(3,510)
26,29037,798
Company
and tax incentives
-177 ---177
Property, plant and equipment---(177) -(177)
Tax assets/(liabilities)
-177 -(177) -Set off
-(177) -177 -
Net tax assets/(liabilities)
-----
9.
Deferred tax assets/(liabilities) (continued)
Movement in temporary differences during the year/period
Movements in deferred tax assets and liabilities during the year/period are as follows:
Discontinued
operations/
disposal of a Effect of
Recognised subsidiary/movements Recognised Effect of
in profit Transfer disposal inAt in profitmovements
At
or loss from/(to) group held exchange 31.3.2013/
or lossin exchangeAt
1.1.2012 (Note 28)
equity
for sale
rates 1.4.2013 (Note 28)
rates 31.3.2014
Group
and tax incentives
41,170
(3,956)
-
(1,654)
-
35,560
(8,042)
(1,920)
25,598
Provisions
1,086 (2) 1522,305 -3,541(1,803) -1,738
Property, plant and equipment (2,766) 71
-(1,183)1,041(2,837)(1,015)1,585(2,267)
Irredeemable convertible secured
loan stocks (“ICSLS”)
833
(827)
(6)-----Irredeemable convertible unsecured
loan stocks (“ICULS”)
4
(2)
(2)
-
-
-
-
-
Deductible temporary differences
2,586
(248)
(2,458)
1,654
-
1,534
(1,169)
856
1,221
42,913 (4,964)(2,314) 1,122 1,04137,798(12,029) 52126,290
Discontinued
operations/
disposal of a
Recognised subsidiary/ Recognised
in profit
Transfer
disposal At
in profit
At
or loss
from/(to) group held 31.3.2013/
or lossAt
1.1.2012
(Note 28)
equity
for sale
1.4.2013
(Note 28) 31.3.2014
RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Company
Tax losses, capital
allowances and
tax incentives
-
-
177
-
177
(177)
(161)
-
(831)
815
(177)
177
ICSLS
833
827
(1,660)---
672
827
(2,314)
815--
p137
p13 8
9.
Deferred tax assets/(liabilities) (continued)
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Deductible temporary differences
Unutilised tax losses and tax incentives
207,13932,474 6,60910,225
25,961123,43851,66937,364
233,100155,91258,27847,589
eferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be
D
available against which the Group and the Company can utilise the benefits there from.
10. Trade and other receivable
GroupCompany
2014201320142013
Non-current
Amount due from subsidiary
(a)
--
52,76228,771
Retention sum
(b)
-
4,577
-4,577
Other receivables
-24,632
-
-29,20952,76233,348
Current
Trade receivables
(c)474,755415,871
-Less: Allowance for impairment loss
(41,944)(37,769)
-432,811378,102
459,839499,350
---
892,650877,452
--
Trade receivables - net
Amount due from contract customers (d)
Amount due from subsidiaries
(e)
--
49,52641,331
Amount due from joint ventures
(e)
-21 -Amount due from associates
(e)
712,167
-Advances to staff
(e)
22-
2294
Deposits
44,56626,702 267392
Prepayments(f)
38,30629,906
2324
Other receivables
(g)
174,487133,400 9,8985,546
Less: Allowance for impairment loss
(1,228)(20,842)
-
256,160181,35459,73647,387
1,148,8101,058,806 59,73647,387
1,148,8101,088,015 112,49880,735
10. Trade and other receivable (continued)
(a) The amount is in respect of advances to Scomi Engineering Bhd which is not expected to be repaid within a period of 12
months from the date of the statements of financial position.
(b) In the previous period, this relates to the non-current portion of the retention sum receivable in October 2014. The amount
is held in escrow arising from the disposal of a subsidiary, Scomi Nigeria Pte Ltd, which was completed on 17 October 2012.
In the current year, the amount is classified as current as disclosed in Note 10(g).
(c)
Trade receivables are non-interest bearing and credit terms for trade receivables range from 30 to 120 days (2013: 30 to 120
days). They are recognised at their original invoice amounts which represent their fair values on initial recognition.
(d) Amount due from contract customers
Construction contract costs incurred to date and attributable profits
Less: Progress billings
Amount due from contract customer
20142013
RM’000
RM’000
1,384,3561,188,184
(924,517)(688,834)
459,839499,350
Retention receivable on contract, included in trade receivables
12,1527,904
Advance received on contract, included under other payables
(11,225)(3,585)
Amounts due from customers on contracts have been collateralised for borrowings. In the event of defaults under the
loan agreements by a subsidiary, the banks have the right to receive the cash flows from these amounts. Without default, a
subsidiary will bill and collect these amounts and allocate new amounts as collateral.
(e) Related party balances receivable of the Group and the Company
-
Amount due from subsidiaries is unsecured and non-interest bearing except for certain advances which bear interest
at 6.00% (2013: 6.00%) per annum and are repayable within the next 12 months.
-
Amounts due from joint ventures and associates are unsecured, interest free and repayable upon demand.
-
Advances to staff are unsecured, interest free and repayable within 30 days.
(f)
Included in prepayments are amounts of RM Nil (2013: RM3.6 million), RM3.1 million (2013: RM4.9 million) and RM4.0 million
(2013: RM4.9 million) relating to advances to suppliers in respect of the propulsion technology development work-inprogress, an operation and maintenance contract and advances for purchases of oil and bunker respectively.
(g) Included in other receivables of the Group and Company is a retention sum of RM4.5 million (2013: RM Nil) held in escrow by
an agent in relation to the disposal of Scomi Nigeria Pte Ltd.
p139
p14 0
11.Available-for-sale financial assets
Group
20142013
RM’000RM’000
At fair value
Shares quoted in Malaysia
104104
Available-for-sale financial assets are denominated in Ringgit Malaysia.
12.Inventories
Group
20142013
RM’000RM’000
At cost
Consumables
18,58516,936
Raw materials
23,41222,781
Work-in-progress
7,5778,148
Finished goods
177,712165,532
227,286213,397
The cost of inventories recognised as expense and included in cost of sales amounted to RM698.2 million (2013: RM474.6 million).
13. Cash and cash equivalents
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Short term deposits placed with licensed banks
Cash and bank balances
106,91982,406
-122,963166,925 12722,459
229,882249,331
12722,459
Short term deposits of certain subsidiaries amounting to RM81,498,000 (2013: RM32,992,000) have been pledged to licensed banks
for banking facilities granted to the Group as disclosed in Note 21 to the financial statements.
14. Disposal group held for sale
The Group undertook a corporate exercise which involved the internal restructuring of its Oilfield Services business into Eastern
and Western Hemisphere entities and subsequently, the disposal by the Company of its interest in the Eastern Hemisphere entities,
Scomi Sosma Sdn. Bhd. and Scomi KMC Sdn. Bhd. to Scomi Energy Services Bhd (“SESB”).
F ollowing the completion of the corporate exercise on 12 March 2013, the Oilfield Services Eastern Hemisphere entities are held
under SESB and the Oilfield Services Western Hemisphere entities are held directly under Scomi Oiltools Bermuda Limited (“SOBL”),
a wholly-owned subsidiary of the Company. The significant entities within the SOBL Group are classified as held for sale and the
effective interest to the Group are disclosed below.
T he Company had, vide a letter of undertaking dated 24 July 2012, irrevocably undertaken and confirmed to SESB that it will
gradually exit from the drilling fluids and drilling waste management businesses in the Western Hemisphere. The said undertaking
is binding and valid unless and until:
(i)
The Company exits from the drilling fluids and drilling waste management businesses in the Western Hemisphere; or
(ii) Scomi Energy Services Bhd releases the Company from the said undertaking.
The assets and liabilities of the disposal group are as follows:
Group
20142013
NoteRM’000RM’000
Assets
(a)
9621,514
Inventories(b)
3774,540
(c)
56,47396,901
2,6072,977
Investments in joint ventures
2,565879
Deferred tax assets
2381,301
63,222108,112
Liabilities
(d)
49,23586,429
Current tax liabilities
4,6024,277
Borrowings
1,3721,322
Other liabilities
2451,310
55,45493,338
p141
p142
14. Disposal group held for sale (continued)
(a)The carrying amount of property, plant and equipment of the disposal group is the same as its carrying amount before it was
being reclassified to current assets. Property, plant and equipment comprise the following:
Group
20142013
RM’000RM’000
Cost
8,58237,647
(7,620)(36,133)
9621,514
(b) The inventories comprise finished goods and are carried at cost.
(c) Trade and other receivables are carried at cost.
(d) Included in trade and other payables are provision for litigation in Europe of RM24.4 million as disclosed in Note 29, which
was provided based on management’s estimates and legal advice.
Details of the significant companies in the disposal group are as follows:
Group’s effective
Country of
equity interest
Name of entity
incorporation
2014
2013
%%
Scomi Oiltools Bermuda Bermuda
Investment holding
100.0100.0
Limited (“SOBL”) Significant subsidiaries of Scomi Oiltools Bermuda Limited
Scomi Oiltools South British Virgin
Investment holding
100.0100.0
America Ltd *
Islands
Scomi Ecosolve Limited
British Virgin
Dormant
100.0100.0
Islands
Significant other investment company of Scomi Ecosolve Limited
Augean North Sea
Scotland
Provision of drilling waste 19.030.0
Services Ltd
management services
*Scomi Oiltools South America Limited was disposed of subsequent to the financial year end on 10 June 2014.
p143
15. Share capital
Group and Company
20142013
Number Number
of sharesAmount
of sharesAmount
’000RM’000 ’000RM’000
Authorised:
Ordinary shares of RM0.10 each
At 1 January/1 April/31 March
3,000,000300,0003,000,000 300,000
Issued and fully paid:
Ordinary shares of RM0.10 each:
1,564,540156,4541,187,688 118,769
Issued during the financial year/period
- conversion of irredeemable convertible
secured loan stocks (“ICSLS”)
--218,770 21,877
--20,068 2,007
- exercise of ESOS
4,09741018,904 1,890
- private placement
--119,110 11,911
At 31 March
1,568,637156,8641,564,540 156,454
16. Share premium
Group and Company
20142013
RM’000RM’000
At beginning of financial year/period
351,916276,793
Additions arising from:
- conversion of irredeemable convertible secured loan stocks(“ICSLS”), net
-36,443
- exercise of ESOS
4632,408
-9,231
- private placement, net -27,041
At end of financial year/period
352,379351,916
Share premium comprises the premium paid on subscription of shares in the Company over and above the par value of the shares.
p14 4
17. Treasury shares
The shareholders of the Company, by an ordinary resolution passed in an Annual General Meeting held on 26 September 2013,
renewed their approval for the Company to repurchase its own shares. The Directors of the Company are committed to enhancing
the value of the Company to its shareholders and believe that the repurchase plan can be applied in the best interests of the
Company and its shareholders.
There was no repurchase of the Company’s shares during the financial year. As treasury shares, the rights attached as to voting,
dividends and participation in other distribution are suspended. None of the treasury shares repurchased has been sold as at 31
March 2014.
At the date of the reporting period, 14,427,200 (2013: 14,427,200) ordinary shares are held as treasury shares at a carrying amount
of RM18,695,746 (2013: RM18,695,746), and the number of outstanding shares in issue after setting off against treasury shares is
1,554,209,654 (2013: 1,550,112,654).
18. Convertible bonds reserve
Group and Company
20142013
RM’000RM’000
At beginning of the financial year/period
Proceeds from issuance of convertible bonds
Directly attributable issuance costs
106,471-110,000
-(3,529)
At end of the financial year/period
106,471106,471
The Company issued 110.0 million zero coupon Convertible Redeemable Secured Bonds at its nominal value of RM1.00 each share
to IJM Corporation Berhad (“IJM”) for cash on 8 February 2013 (“Issue Date”). The salient features of the Convertible Bonds are as
follows:
(i)
The Convertible Bonds are secured vide a first party legal charge over 313,043,478 ordinary shares of RM0.45 each in Scomi
Energy Services Berhad held by the Company (“Charged SESB Shares”).
(ii) The Charged SESB Shares will be proportionately discharged upon redemption/conversion of the Convertible Bonds (as the
case may be).
(iii) IJM has the option to convert all or any part of the Convertible Bonds into fully paid SGB Shares at any time on or before 5
February 2016.
(iv) For the purposes of conversion, the Convertible Bonds will carry a yield of 5% per annum calculated daily.
All outstanding Convertible Bonds will automatically be converted into SGB Shares upon maturity.
(v)
The conversion price is at RM0.33.
p14 5
18. Convertible bonds reserve (continued)
(vi) The Company has the option to redeem all or any part of the outstanding Convertible Bonds in cash at each anniversary of
the Issue Date, subject to the following terms :
(a) the redemption price will be the nominal value of the Convertible Bonds plus 10% yield for each full year that the
Convertible Bonds remain outstanding; and,
(b) consent is obtained from IJM in respect of the redemption on the 1st and 2nd anniversary from the Issue Date unless:
(i)
the Group Shares have been traded at a price of not less than RM0.50 (based on daily volume weighted average
market price) for 90 days consecutively prior to the respective 1st and 2nd anniversary of the Issue Date; and
(ii)
SGB has recorded profit after taxation and minority interest (consolidated basis) for the latest 2 quarters prior to
the redemption.
All Convertible Bonds redeemed by SGB shall be cancelled and cannot be resold.
19. Other reserves
Share
Translation Hedge Put option
Warrants
option
ICSLS
ICULS
reservereservereservereservereservereservereserve Total
Group
At 1 January 2012
(98,527)
311
(258,286)
32,337
13,813
61,899
1,148
(247,305)
Other comprehensive
income /(loss)
- Currency translation differences
4,554------
4,554
- Change in fair value of cash flow hedge of CCIRS
-
(311)
-
-
-
-
-
(311)
- Transfer to profit or loss
-
(6,710)
-
-
-
-
-
(6,710)
income/(loss)
4,554
(7,021)-----
(2,467)
Value of share option
- recognised in:
- Company
-
-
-
-
888
-
-
888
- subsidiaries
-
-
-
-
3,098
-
-
3,098
- expired
----
(3,613)--
(3,613)
----
373--
373
Put option extinguishment
--
258,286----
258,286
Conversion of ICSLS
-----
(61,899)-
(61,899)
Conversion of ICULS
------
(1,148)
(1,148)
Warrants - exercised
---
(3,211)---
(3,211)
- lapsed
---
(29,126)---
(29,126)
Disposal of subsidiary
687------
687
At 31 March 2013
(93,286)
(6,710)
-
-
14,186
-
-
(85,810)
p14 6
19. Other reserves (continued)
Share
Translation Hedge Put option
Warrants
option
ICSLS
ICULS
reservereservereservereservereservereservereserve Total
Group
At 1 April 2013
(93,286)
(6,710)
-
-
14,186
-
-
(85,810)
Other comprehensive income/
(loss)
- Currency translation differences
3,888------
3,888
- Transfer to profit & loss
-
(4,161)
-
-
-
-
-
(4,161)
income/(loss)
3,888
(4,161)-----
(273)
Value of share option:
- expired
----
(10,565)--
(10,565)
At 31 March 2014
(89,398)
(10,871)
-
-
3,621
-
-
(96,648)
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign
operations, as well as from the translation of liabilities that hedge the Company’s net investment in a foreign operation.
Hedge reserve
The hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedges related to
hedged transactions that have not yet occurred.
Share
Warrants option
ICSLS
reservereservereserve Total
Company
RM’000RM’000RM’000RM’000
At 1 January 2012
Share option expense
Transferred to subsidiaries
Value of share options expired
Conversion of ICSLS
Exercise of warrants
Expiry of warrants
32,337
-
-
-
-
(3,211)
(29,126)
4,662
888
43
(1,358)
-
-
-
61,899
-
-
-
(61,899)
-
-
98,898
888
43
(1,358)
(61,899)
(3,211)
(29,126)
At 31 March 2013/1April 2013
Value of share options expired
-
-
4,235
(4,235)
-
-
4,235
(4,235)
At 31 March 2014
----
Share option reserve
The share option reserve comprises the cumulative value of employee services received for the issue of share options. When the
option is exercised, the amount from the share option reserve is transferred to share premium. When the share options expire, the
amount from the share option reserve is transferred to retained earnings.
The Group’s employee share option scheme expired on 27 April 2013.
p147
19. Other reserves (continued)
Irredeemable Convertible Secured Loan Stocks (“ICSLS”)
The ICSLS were issued by the Company on 14 December 2009 and have matured on 14 December 2012. All outstanding ICSLS as
at that date were converted to ordinary shares of the Company on the basis of every 4 ICSLS being converted into 1 ordinary share.
Irredeemable Convertible Unsecured Loan Stocks (“ICULS”)
The ICULS were issued by Scomi Engineering Bhd (“SEB”), a subsidiary of the Company, on 23 March 2013 and have matured on
19 March 2013. All outstanding ICULS as at that date were converted to ordinary share of SEB on the basis of 1 ICULS to 1 ordinary
share.
20. Trade and other payables
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Non-current Other payables
(a)
2,96920,230
-19,037
2,96920,230
-19,037
Current
Trade payables
(b)
294,277297,920
-Amount due to subsidiaries
(c)
--
76,82559,624
Amount due to associate
(c)
63502 -Amount due to joint venture
(c)
5,835--Accruals
139,004156,687 3,4275,593
Provisions(d)
3,2404,231-Other payables
(a)
64,8275,86222,08264
507,246465,202102,33465,281
510,215
485,432
102,334
84,318
(a) Other payables
In previous financial period, included in non-current liabilities of the Group and the Company as at 31 March 2013 is an
amount of RM19.04 million owing to Standard Chartered Private Equity Limited and Fuji Investment I arising from the
acquisition of a 23.9% equity interest in Scomi Oiltools Bermuda Limited.
As at 31 March 2014, this amount is classified as current liabilities.
(b) Trade payables
Trade payables are non-interest bearing and credit terms for trade payables range from cash term to 120 days (2013: cash
term to 120 days).
p14 8
20. Trade and other payables (continued)
(c)Amounts due to subsidiaries, associate and joint venture
Amounts due to subsidiaries, an associate and joint venture are unsecured, non-interest bearing and repayable on demand.
(d)Provisions
Included in provisions is an amount of RM3.0 million (2013 : RM3.0 million) for certain legal claims brought against a
subsidiary of the Group arising from the ordinary course of business. Management is uncertain of the expected utilisation of
the balance provided as at 31 March 2014, but are of the view that the outcome of these legal claims will not give rise to any
significant loss beyond the amount provided as at 31 March 2014.
21. Loans and borrowings
GroupCompany
2014201320142013
Non-current Guaranteed Serial Bonds/Sukuk - secured
(a)
206,530257,258
-Term loans (secured)
(b)
30,86239,887 8411,204
Bank borrowings
(b)14,357--Finance lease liabilities
(c)
9,8342,947 36789
261,583300,092 1,2081,293
Current
Guaranteed Serial Bonds/Sukuk - secured
(a)
88,51750,243
-Term loans (secured)
(b)
37,411173,039 439439
Bank overdrafts
(b)
178,375
105,138
-Bank borrowings
(b)
402,854346,311
-Finance lease liabilities
(c)
2,365721166138
709,522675,452
605577
971,105975,544 1,8131,870
(a) RM300.00 million Guaranteed Serial Bonds/RM342.55 million Sukuk Murabahah
On 6 December 2013, KMCOB Capital has issued Guaranteed Serial Bonds (“the Bonds”) of RM300 million in nominal value
with the tenure ranging from 1 to 5 years and profit rates ranging from 3.90% to 4.30% per annum. The proceeds raised
from the Bonds was utilised to, amongst others, refinance the outstanding amount under the existing Sukuk Murabahah.
Therefore, on 6 December 2013, the existing Sukuk Murabahah was fully paid and redeemed.
T he Bonds are secured by an irrevocable and unconditional financial guaranteed insurance policy issued by Danajamin
Nasional Berhad pursuant to a financial guarantee insurance facility of an aggregate principal amount of RM300 million and
such amount equivalent to 1 coupon payment obligation of the Bonds.
21. Loans and borrowings (continued)
(b) Term loans, bank overdrafts and bank borrowings
The term loans, bank overdrafts and bank borrowings of the Group are secured by:
(i)
Legal charge over certain landed properties and vessels of certain subsidiaries;
(ii)
Negative pledge over the present and future, fixed and floating assets of certain subsidiaries;
(iii) Assignment of contract proceeds, insurance policies and performance bond;
(iv) Standby Letter of Credit (“SBLC”) facility secured by corporate guarantee provided by certain subsidiaries;
(v)
(vi)A charge over the 3-month interest of the Facility Limit placed upfront (“Upfront Deposit”) in a debt service reserve
account (“DSRA”); and
(vii)Corporate Guarantees from certain entities.
Change over shares and/or acceptable stocks in subsidiaries of the Company;
In the previous period, a subsidiary company did not fulfil one of its covenants in relation to its bank loan. Accordingly, the bank
was contractually entitled to request for immediate repayment of the outstanding balance of RM9.9 million as at 31 March 2013. At
the end of the previous reporting period, the carrying amount of RM9.9 million has been included within bank borrowings under
current liabilities. Subsequent to the end of the previous reporting period, approval for a waiver from the bank in respect of the
covenant was received.
(c) Finance lease liabilities
20142013
Present
Present
Future
value of
Future
value of
minimumminimumminimumminimum
leaseleaseleaselease
payments Interestpaymentspayments Interestpayments
Group
RM’000RM’000RM’000RM’000RM’000RM’000
3,209 8442,365
1,057336721
Less than one year
Between one and
five years
More than five years
11,1331,2999,8343,560 6132,947
------
14,342 2,14312,1994,617 9493,668
Company
Less than one year
190 24166 162 24138
Between one and
five years
411 443671051689
-----
601 68533267 40227
p14 9
p15 0
22. Provision for retirement benefits
The Group operates an unfunded defined benefits plan for qualifying employees and vessel crew of its subsidiaries in Indonesia.
Under the plan, the employees and vessel crew are entitled to retirement benefits as defined in Indonesian Labour Laws and
government regulations regarding maritime.
The amounts recognised in the statement of financial position are determined as follows:
Group
20142013
RM’000RM’000
Non-current
Present value of unfunded obligations
6,0727,513
Unrecognised actuarial loss
(120)(769)
5,9526,744
The amounts recognised in the profit or loss are as follows :
Group
Year ended
1.1.2012 to
31.3.201431.3.2013
RM’000RM’000
Current service costs
7701,332
Interest cost
200397
Others
(132)(417)
Amortisation of actuarial gain/(loss)
8381,312
38(195)
8761,117
The movements in the retirement benefit liability recognised in the statement of financial position are as follows:
Group
20142013
RM’000RM’000
At beginning of financial year/period
6,7446,957
Total expense charged to profit or loss
8761,117
Benefit payments made during the year/period
(1,774)(837)
Currency translation differences
106(493)
At end of financial year/period
5,9526,744
22. Provision for retirement benefits (continued)
The principal actuarial assumptions used were as follows:
Group
20142013
Discount rates (per annum) (%)
Expected rates of salary increases (per annum) (%)
Normal retirement age (years)
7.8% - 9%4%-11%
0.0% to 8%
5.0% to 10%
45 - 55
45 – 60
The most recent actuarial valuation was carried out as at 10 June 2014 by independent professional actuaries using the projected
unit credit method.
23. Derivative financial liabilities
Nominal value
Liabilities Nominal value
Liabilities
2014201420132013
RM’000RM’000RM’000RM’000
Derivative held for trading at fair value
through profit or loss
Forward foreign exchange contracts
-- (15)(15)
Cash flow hedges Cross currency interest rate swaps
(29,093)(29,093)(6,640)(6,640)
(29,093)(29,093)(6,655)(6,655)
Included in:
(23,715)(6,166)
Current liabilities
(5,378)(489)
(29,093)(6,655)
(a) Forward foreign exchange contracts
At the date of the statement of financial position, the total notional amount of outstanding currency forward contracts of the
Group was Nil (2013: RM2.5 million).
(b) Cross currency interest rate swap contracts (“CCIRS”)
The notional principal amount of the outstanding CCIRSs at 31 March 2014 were RM270.0 million (2013: RM199.5 million).
The Group had entered into CCIRS during 2012 and 2013, that were designated as cash flow hedges to hedge the Group’s
exposure to foreign exchange risk on its Guaranteed Serial Bonds. These contracts entitle the Group to receive principal and
fixed interest amounts in RM and obliged the Group to pay principal and fixed interest amounts in USD and the CCIRSs reflect
the timing of these cash flows. These CCIRSs contracts have maturities of up to 4 years from 31 March 2014. Subsequently,
the Group issued Guaranteed Serial Bonds to fully repay and redeem the Sukuk Murabahah. The Group has assessed and
continued to apply the same cashflow hedges to hedge the newly issued Guaranteed Serial Bonds.
p151
p152
23. Derivative financial liabilities (continued)
(b) Cross currency interest rate swap contracts (“CCIRS”) (continued)
As at 31 March 2014, the Group had hedged approximately 90% of the RM denominated Guaranteed Serial Bonds. The USD
interest rates on the CCIRS contracts designated as hedging instruments in the cash flow hedges ranged from 3.68% to 7.62%
per annum (2013: 6.16% to 7.82% per annum) and the interest rates in RM ranged from 4.10% to 7.20% per annum (2013:
6.25% to 7.20% per annum). Gains and losses recognised in the hedging reserve in equity on the CCIRSs as of 31 March 2014
will be continuously released to the profit or loss within finance cost until the full repayment of the Guaranteed Serial Bonds
or the Sukuk Murabahah.
24. Deferred government grant
Group
20142013
RM’000RM’000
Deferred government grant
1,3471,706
The Group received approval for a government grant of RM2,155,000 in 2008 to execute and develop new technology for
a monorail bogie design and development program with improvement to the design of the current monorail bogie and
development of a commercially ready prototype bogie.
Amortisation over the expected life of the related assets commenced in the current financial year to mirror the pattern of
consumption of the related intangible assets which is estimated to be 5 years (2013: 5 years).
25.Revenue
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
Sales of goods
783,412663,301
-Rental/charter hire income
406,874680,915
-Rendering of services
287,168178,349
-Construction contract income
172,876397,794
-Management fee
2901,946 3131,006
Commission income
1,86163 -Other
578--
1,653,0591,922,368
3131,006
Sales of goods
90327,205
-Rental/charter hire income
21,06021,814
-Rendering of services
18,316104,917
-
40,279153,936
1,693,3382,076,304
-3131,006
p153
26. Finance costs
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
Interest expense on borrowings,
finance leases, ICSLS and ICULS
36,95567,720 38816,349
Interest on CCIRS
1,879898 -
Currency exchange*
Fair value loss on put option
38,83468,618 38816,349
----61,060
--
38,834129,678
38816,349
Interest expense on borrowings
and finance leases
39431,300
-
39,228160,97838816,349
Group’s finance costs included under cost of sales for the financial year amounted to RM31,337,000 (2013: RM28,365,000).
*Included in currency exchange is a gain of RM2,027,000 (2013: gain of RM3,058,000) transferred from hedging reserve
which is offset by a corresponding exchange loss of the same amount arising from revaluation of the underlying hedged
borrowings.
27. Profit/(Loss) before tax
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
Profit/(Loss) before tax from continuing
operations is stated after charging/(crediting):
Depreciation of property,
plant and equipment
89,613104,166 444820
Depreciation of investment properties
162177 5164
Amortisation of intangible assets
2,1442,070
-Amortisation of government grant
(359)(449) -Property, plant and equipment written off
7--Gain on disposal of property, plant and equipment
(756)(5,389)
-Allowance for obsolete inventories
9,2291,010
-Inventories written down
1,085--Impairment losses :
- available-for-sales investment
-24 -- receivables
9,1044,104
-- amount due from subsidiaries
---23,892
-10,207
-- intangible assets
-41,292
-- investment in subsidiary
---276,779
p15 4
27. Profit/(Loss) before tax (continued)
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
(continued)
Write back of impairment losses :
- receivables
(2,349)(6,622)
-(6,406)
- amount due from subsidiaries
--
(4,037)- investment in subsidiary
--(300)(143,992)
Bad debts recovered
(4,443)(13,298)
-Inventory written back
(1,658)- -Intangible assets written off 15--Auditors’ remuneration:
KPMG / PWC Malaysian firm
Statutory audit
- current year
1,9642,119 260301
- (over)/under provision in prior year
-38 -Non-audit fees
- current year
2402,214 48587
Overseas affiliates of
KPMG / PWC Malaysian firm
Statutory audit
- current year
1,370 2,281
-- over provision in prior year
-(176) -Other external auditors
Statutory audit
- current year
60119 -- under provision in prior year
-102 -Non-audit fees
- current year
4599 -Net loss/(gain) on foreign exchange
- realised
7,573(13,616)(706)(101)
- unrealised
(3,799)19,346 236294
of interest in subsidiaries -(21,118)
-(558,307)
Provision for litigation
330--Interest income
(3,759)(1,461)(1,004)(5,087)
Rental income
(171)(133)(442)(476)
Lease rental expense
- plant and machinery
12,50919,928
-- property
2,1643,551
-Rental of land and premises
5,4524,3751,127591
Rental of equipment
39,38313,804
3835
Gain on disposal of assets held for sale
(1,211)- -Share option expense
-3,986-888
p155
27. Profit/(Loss) before tax (continued)
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
(continued)
Employee benefits costs (including
Executive Director):
Wages, salaries and bonuses
240,012250,997 7,9804,473
14,09210,727 1,118618
Defined benefit plan (Note 22)
8761,117
-Termination benefits
-2,258
-Share option expense (Note 19)
-3,986
-888
Employment costs
2367,042
-35
Other employee benefits
(including allowances)
31,02931,024 1,036515
286,245307,15110,1346,529
Included in the cost of sales of the Group are the cost of inventories and services of RM698,215,000 (2013: RM677,893,000) and
construction contract costs of RM156,946,000 (2013: RM317,872,000).
28. Tax expense
Recognised in profit or loss
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
Current tax
- Malaysian income tax
19,9316,498
-(1,409)
- Foreign income tax
18,15316,095
-
Deferred tax (Note 9)
38,08422,593
12,0294,964
-(1,409)
-(827)
50,11327,557
-(2,236)
Current tax
Current year
37,35517,799
-Under/(Over) provision in prior period/year
7294,794
-(1,409)
38,08422,593
-(1,409)
Deferred tax
Reversal and origination of temporary differences
12,0294,964
-(827)
Total tax expense from continuing operations
50,11327,557
-(2,236)
p15 6
28. Tax expense (continued)
Recognised in profit or loss (continued)
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
Current tax
- Foreign income tax
-4,998
-Deferred tax (Note 9)
-(1,122)
-
-3,876
--
Current tax
Current year
-4,998-
-4,998
--
Deferred tax
Reversal and origination of temporary differences
-(1,122)
-Total tax expense from discontinued operations
Total income tax expense
-3,876
50,11331,433
--(2,236)
Profit/(Loss) before tax
81,05921,097(9,000)383,768
Income tax calculated using Malaysia tax rate 25%
(2013: 25%) 20,2655,274
(2,250)95,942
Tax effects of:
- expenses not deductible for tax purposes
21,2933,797-92,104
- tax rates in other countries
(3,945)(2,110)-- income not subject to tax
(4,480)(1,055) (422)(190,282)
- deferred tax assets not recognised in respect of
current year/period’s tax losses and
unabsorbed capital allowances
19,29717,300 2,672- utilisation of previously unrecognised
deferred tax assets
(3,046)- -- under provision in prior year/period
7294,794
-- share of results of associates and joint
ventures
-(443) -
50,11327,557
-(2,236)
29. Discontinued operations
As disclosed in Note 14, the Oilfield Services Western Hemisphere entities within the SOBL Group are classified as disposal group
held for sale and discontinued operations.
Losses attributable to the discontinued operations were as follows:
Group
Year ended
1.1.2012 to
31.3.201431.3.2013
RM’000RM’000
Revenue
40,279153,936
Expenses
(49,537)(167,637)
Loss on disposal
-(45,412)
Loss before tax
(9,258)(59,113)
Tax expense (Note 28)
-(3,876)
Loss for the year/period
(9,258)(62,989)
Included in the results of operations:
Depreciation of property, plant and equipment
8742,984
Fair value gain of remeasurement of receivables
(17,164)Provision for legal claims
24,460Gain on dilution of interests in joint venture
218Monetary adjustment
3,650(1,641)
Hyper inflation adjustment
-4,804
The losses from discontinued operations of RM9,258,000 (2013: RM62,989,000) is attributable entirely to the owners of the
Company.
Group
Year ended
1.1.2012 to
31.3.201431.3.2013
RM’000RM’000
Net cash used in operating activities
(1,003)(38,199)
Net cash from investing activities
2,51333,994
Net cash used in financing activities
(313)(25,966)
Effect on cash flows
1,197(30,171)
p157
p15 8
30. Earnings/(Loss) per ordinary share
Basic earnings/(loss) per ordinary share
The calculation of basic earnings/(loss) per ordinary share at 31 March 2014 was based on the profit/(loss) attributable to ordinary
shareholders and a weighted average number of ordinary shares outstanding, calculated as follows:
Group
Year ended
1.1.2012 to
31.3.201431.3.2013
RM’000RM’000
Profit/(Loss) attributable to ordinary shareholders
14,214(3,844)
(9,258)(62,989)
4,956(66,833)
20142013
’000’000
Weighted average number of ordinary shares outstanding
Issued ordinary shares at 1 April/1 January
1,564,5401,187,688
Treasury shares
(14,427)(14,427)
Effect of ordinary shares issued during the year/period
4,097112,328
Weighted average number of shares (basic)
1,554,2101,285,589
20142013
sensen
Basic earnings/(loss) per ordinary share
From continuing operations
From discontinued operations
0.91(0.30)
(0.60)(4.90)
0.31(5.20)
The convertible redeemable Secured Bonds conversion is based on the assumption that the conversion takes place upon maturity.
30. Earnings/(Loss) per ordinary share (continued)
Diluted earnings/(loss) per ordinary share
The calculation of diluted earnings/(loss) per ordinary share at 31 March 2014 was based on profit/(loss) attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive
potential ordinary shares, calculated as follows:
Group
Year ended
1.1.2012 to
31.3.201431.3.2013
RM’000RM’000
Profit/(Loss) attributable to ordinary shareholders
14,214(3,844)
(9,258)(62,989)
4,956(66,833)
20142013
’000’000
Weighted average number of ordinary shares outstanding
Issued ordinary shares at 1 April/1 January
Effect of conversion of convertible Bonds
Effect of share option in issue
Weighted average number of ordinary shares at 31 March (diluted)
1,554,2101,285,589
348,873348,873
-4,271
1,903,0831,638,733
20142013
sensen
Diluted earnings/(loss) per ordinary share
From continuing operations
From discontinued operations
0.75(0.23)
(0.49)(3.84)
0.26(4.07)
p159
p16 0
31. Segment information
Management has determined the operating segments based on reports reviewed by the Chief Operating Decision Maker
(“CODM”) which are used for allocating resources and assessing performance of the operating segments.
The Chief Operating Decision Maker considers the business from the industry perspective and the service rendered. The following
reportable segments have been identified:
(i) Oilfield Services
- supply and manufacturing of equipment, supply of a wide range of specialised chemicals and
provision of services.
(ii) Transport solutions - development, design, manufacture and supply of monorail transportation infrastructure systems
equipments and services, and related engineering support services.
- manufacture, fabrication and assembly of commercial coaches, truck vehicle bodies and special
purpose vehicles.
(iii)
Marine Services
- provision of transportation of bulk aggregates for the coal industry.
Performance is measured based on segment profit before tax, interest, depreciation and amortisation, as included in the internal
management reports that are reviewed by the Group’s Chief Executive Officer. Segment profit is used to measure performance as
management believes that such information is the most relevant in evaluating the results of certain segments relative to other
entities that operate within these industries.
Unallocated costs represent corporate expenses. Segment assets consist of property, plant and equipment, intangible assets,
inventories, receivables and cash and cash equivalents, and mainly excludes investments, deferred tax assets and tax recoverable.
Segment liabilities comprise payables and exclude taxation and deferred tax liabilities.
Capital expenditure comprises additions to property, plant and equipment and intangible assets.
Segment assets
The total of segment assets is measured based on all assets (including goodwill) of a segment, as included in the internal
management reports that are reviewed by the Group’s Chief Executive Officer. The total of segment assets is used to measure the
return of assets of each segment.
Segment liabilities
Segment liabilities information is neither included in the internal management reports nor provided regularly to the Group’s Chief
Executive Officer. Hence, no disclosure is made on segment liability.
Segment capital expenditure
Segment capital expenditure is the total costs incurred during the financial year to acquire property, plant and equipment, and
intangible assets other than goodwill.
p161
31. Segment information (continued)
Year ended 31 March 2014
Inter-
Externalsegment
Total
RM’000RM’000RM’000
Revenue
Oilfield services
1,236,547
-1,236,547
Transport solutions
236,898
-236,898
Marine services
179,447
-179,447
Reconciliation
167 -167
1,653,059
-1,653,059
Oilfield services
40,279
-40,279
1,693,338
-1,693,338
15 month period ended 31 March 2013
Inter-
Externalsegment
Total
RM’000RM’000RM’000
Revenue
Oilfield services
1,153,394
-
Transport solutions
450,271
-
Marine services
318,299
-
Reconciliation
404
5
Inter-segment revenue
-
(5)
1,153,394
450,271
318,299
409
(5)
1,922,368
-
Oilfield services
153,936
-
1,922,368
2,076,304
2,076,304
-
153,936
p16 2
<------- Continuing operations ------->
Elimination/
Oilfield Transport
MarineDiscontinued Unallocated
services
solutions
servicesTotal
operations costTotal
2014
RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Segment results
Profit/(Loss) from operations
156,827 (28,101) (535)128,191 (8,864) (13,361)105,966
Finance costs
(29,991)(6,541)(3,445)(39,977) (394) 1,143(39,228)
Share of results in associates
- -(247)(247) - -(247)
Share of results in joint ventures
-
-5,3105,310
-
-5,310
126,836(34,642) 1,083 93,277 (9,258)(12,218)71,801
Tax expense(50,113)
Profit for the year
21,688
Segment assets
Assets employed in operations 502,170 962,7861,104,8672,569,823 60,657
5,2442,635,724
- -124124 - -124
26
-54,90954,935 2,565
-57,500
Total assets employed
502,196 962,7861,159,9002,624,882 63,222
5,2442,693,348
Other information
Depreciation and amortisation 43,143 8,54638,59390,282 874 49691,652
Reversal of impairment of
property, plant and equipment
- -(38)(38) - -(38)
Additions to non-current assets
other than financial instruments
and deferred tax assets
9,15628,295
137,452
- 59738,049
<------- Continuing operations ------->
Elimination/
Oilfield Transport
MarineDiscontinued Unallocated
services
solutions
servicesTotal
operations costTotal
2013
RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Segment results
Profit/(Loss) from operations133,941 (9,367)35,416159,990(48,931)(15,916)95,143
of interest in subsidiaries
-
-
-
-
21,118
-
21,118
Finance costs
(37,969)(11,714) (3,387)(53,070)(31,300)(76,608)(160,978)
Share of results in associates
-
-
133
133
-
-
133
Share of results in joint ventures
-
-
6,568
6,568
-
-
6,568
95,972(21,081)38,730113,621(59,113)(92,524)(38,016)
Tax expense
(31,433)
Profit for the period
(69,449)
Segment assets
Assets employed in operations
887,989962,786464,358
2,315,133108,112195,388
2,618,633
- -380380 - 23403
23
-
51,701
51,724
-
3,771
55,495
Total assets employed
888,012962,786516,439
2,367,237108,112199,182
2,674,531
Other information
Depreciation and amortisation 42,948
10,073
46,538
99,559
5,753
884
106,196
Impairment of property,
plant and equipment
2,808
-
4,176
6,984
-
3,823
10,807
Impairment of intangible assets
----
41,292-
41,292
Reversal of impairment of
property, plant and equipment
-
-
(216)
(216)
-
-
(216)
Additions to non-current assets
other than financial instruments
and deferred tax assets
72,028
22,705
28,713
123,446
-
(5,579)
117,867
p16 3
p16 4
32. Financial instruments
(a) Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(i)
(ii)
(iii)
(iv)
Loans and receivables (“L&R”);
Fair value through profit or loss (“FVTPL”);
Available-for-sale financial assets (“AFS”);
Financial liabilities measured at amortised cost (“FL”).
Carrying
AmountL&RAFS
RM’000RM’000RM’000
Financial assets
31 March 2014
Group
Trade and other receivables*
104 -104
1,110,5041,110,504
229,882229,882
1,340,4901,340,386
104
Company
112,475112,475
127127 112,602112,602
-
31 March 2013
Group
104
-
104
1,058,109
1,058,109
249,331
249,331
Company
*
Excluding prepayments
1,307,5441,307,440
80,711
22,459
80,711
22,459
103,170103,170
104
-
p16 5
32. Financial instruments (continued)
(a) Categories of financial instruments (continued)
Carrying
Amount
FLFVTPL
RM’000RM’000RM’000
31 March 2014
Group
971,105971,105
510,215510,215
29,093
-29,093
1,510,4131,481,320
Company
1,813
102,334
29,093
1,813
102,334
104,147104,147
-
31 March 2013
Group
975,544
975,544
485,432
485,432
6,655
-
6,655
1,467,6311,460,976
6,655
Company
1,870
1,870
84,318
84,318
86,18886,188
-
p16 6
(b) Net gains and losses arising from financial instruments
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
Net gain/(loss) on :
Fair value through profit or loss
-10,532
-Loans and receivables
3,626
1,003
-Financial liabilities measured at
amortised cost*
(39,228)(160,978) (388)(16,349)
(35,602)(149,443)
*
(388)(16,349)
Being the finance costs incurred by the Group and the Company respectively.
(c) Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
•
Credit risk
•
Liquidity risk
•
Market risk
(d) Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers and
balances and deposits placed with licensed bank. The Company’s exposure to credit risk arises principally from loans and
advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries.
Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
The Group adopts the policy of dealing only with customers of appropriate credit history to mitigate credit risk. For other
financial assets, the Group adopts the policy of dealing with financial institutions and other counterparties that are regulated
and with sound credit rating.
Exposure to credit risk, credit quality and collateral
The Group and the Company do not hold any collateral from their customers.
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the
carrying amounts in the statement of financial position.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their
realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group.
The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances
past due more than 365 days, which are deemed to have higher credit risk, are monitored individually.
p167
(d) Credit risk (continued)
Receivables (continued)
The exposure of credit risk for receivables as at the end of the reporting period by geographic region was:
Group
20142013
RM’000RM’000
Malaysia
90,235106,265
India
31,13925,142
Other Asia and Africa
290,925229,041
Other countries
20,51217,654
432,811378,102
Impairment losses
T he Group maintains an ageing analysis in respect of trade receivables only. The ageing of trade receivables as at the end of
the reporting period was:
Individual
Grossimpairment
Net
Group
RM’000RM’000RM’000
31 March 2014
Not past due
181,170
-181,170
Past due 0 – 30 days
142,633
-142,633
Past due 31 – 120 days 71,195
-71,195
More than 120 days
79,757(41,944)37,813
474,755 (41,944)432,811
31 March 2013
Not past due
219,820
-
219,820
Past due 0 – 30 days
72,571
-
72,571
Past due 31 – 120 days 64,597
-
64,597
More than 120 days
58,883
(37,769)
21,114
415,871 (37,769)378,102
p16 8
Receivables (continued)
The movements in the allowance for impairment losses of trade receivables during the financial year were:
Group
20142013
RM’000RM’000
As at 1 April/1 January
Impairment loss recognised
Impairment loss reversed
Impairment loss written-off
Currency translation differences
37,76945,365
6,3574,101
-(3,365)
(2,199)(583)
-(9,490)
171,741
As at 31 March
41,944
37,769
The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group is satisfied that
recovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.
Investments and other financial assets
Investments are allowed only in short term deposits placed with licensed banks and only with counterparties that have a
credit rating equal to or better than the Group. Transactions involving derivative financial instruments are with approved
financial institutions.
As at the end of the reporting period, the Group has only invested in short term deposits placed with licensed banks. The
maximum exposure to credit risk is represented by the carrying amounts in the statement of financial position.
In view of the sound credit rating of counterparties, management does not expect any counterparty to fail to meet its
obligations.
The investments and other financial assets are unsecured.
Financial guarantees
The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries.
T he maximum exposure to credit risk amounts to RM64.3 million (2013: RM93.2 million) representing the outstanding
banking facilities of the subsidiaries as at end of the reporting period.
As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.
The financial guarantees have not been recognised since the fair value on initial recognition was not material.
Inter company loans and advances
The Company provides unsecured loans and advances to subsidiaries. The Company monitors the results of the subsidiaries
regularly.
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the
statement of financial position.
Impairment losses
As at the end of the reporting period, there was no indication that the loans and advances to the subsidiaries are not
recoverable. The Company does not specifically monitor the ageing of current advances to the subsidiaries. Nevertheless,
these advances have been overdue for less than a year. Non-current loans to subsidiaries are not overdue.
(e) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure
to liquidity risk arises principally from its various payables, loans and borrowings.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly
different amounts.
Maturity analysis
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the
reporting period based on undiscounted contractual payments:
Carrying
Contractual
Contractual
Under 1
1 - 2
2 – 5
More than
amount interest rate/
cash flows
year
years
years
5 years
Group
RM’000couponRM’000RM’000RM’000RM’000RM’000
31 March 2014
Non-derivative
financial liabilities
971,105
1.5%-14.9%
1,050,503724,937103,141222,425
Trade and other payables 510,215-
510,215
510,215--
1,481,3201,560,7181,235,152 103,141 222,425
Interest rate swaps:
- Outflow
29,093
3.68%-7.82%281,562 57,994 57,673165,895
- Inflow
-
4.10%-7.20%(270,000)(55,000)(55,000)(160,000)
1,510,4131,572,2801,238,146 105,814 228,320
p16 9
p170
(e) Liquidity risk (continued)
Maturity analysis (continued)
Carrying
Contractual
Contractual
Under 1
1 - 2
2 – 5
More than
cash flows
year
years
years
5 years
Company
31 March 2014
Non-derivative
Other payables
25,509-
25,509
25,509--Loans and borrowings
1,813
2.3%-3.1%
1,855605591659 Amount due to subsidiaries*
76,825-
76,825
76,825--
104,147104,189102,939 591 659
*
Amount due to subsidiaries consist of amount due to Scomi Oiltools Bermuda Limited (“SOBL”) for inter-company
balances. The amount is payable on demand and SOBL has the rights to call the loan. However, SOBL is a wholly owned
subsidiary of the Company and can offset the payable balance by paying dividend to the Company, capital repayment
and capital reduction which is estimated to be completed in the near future. The proposed plan was approved by the
Board of Directors on 22 May 2014.
Carrying
Contractual
Contractual
Under 1
1 - 2
2 – 5
More than
cash flows
year
years
years
5 years
Group
31 March 2013
Non-derivative
975,544
2.7%-14.5%
1,001,923
700,113
76,326
129,232
96,252
485,432
-
485,432
465,202
20,230
-
1,460,9761,487,3551,165,315 96,556 129,232 96,252
Net-settled – Forward foreign
exchange contract
15
-
15
15
-
-
Interest rate swaps:
- Outflow
6,405
6.16%-7.82%
230,483
57,450
53,847
119,186
- Inflow
-
6.25%-7.20%
(233,053)
(57,206)
(54,069)
(121,778)
1,467,3961,484,8001,165,574 96,334 126,640 96,252
p171
(e) Liquidity risk (continued)
Maturity analysis (continued)
Carrying
Contractual
Contractual
Under 1
1 - 2
2 – 5
More than
cash flows
year
years
years
5 years
Company
31 March 2013
Non-derivative
Other payables 24,694-
24,694
5,657
19,037-Loans and borrowings
1,870
2.3%-3.1%1,918577528813 -
Amount due to subsidiaries
59,624-
59,624
59,624--
86,18886,23665,85819,565 813
(f)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices that will
affect the Group’s financial position or cash flows.
(i)
Currency risk
The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency
other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily U.S.
Dollar (USD), Indian Rupee (INR) and Brazilian Real (BRL).
The Group maintains a natural hedge, whenever possible, by borrowing in currencies or entering into CCIRS that match
the future revenue stream to be generated from its investments. The Group also uses forward exchange contracts to
hedge its foreign currency risk. Most of the forward exchange contracts have maturities of less than one year after the
end of the reporting period. Where necessary, the forward exchange contracts are rolled over at maturity.
p17 2
(f)
Market risk (continued)
(i)
Currency risk (continued)
Exposure to foreign currency risk
The Group’s exposure to foreign currency (a currency which is other than the functional currency of the Group entities)
risk, based on carrying amounts as at the end of the reporting period was:
Group
Denominated in
USD INRBRL
RM’000RM’000RM’000
31 March 2014
Group
Trade receivables
Trade payables
277,50016,76019,311
148,348 34414,596
(163,355)(60,790)(48,568)
(110,678)(2,486) (18)
Net exposure
151,815 (46,172)(14,679)
Company
Other receivables
9,154-Cash and cash equivalents
55-Other payables
(19,037)- Intra-group balances
(18,512)- Net exposure
(28,340)- -
31 March 2013
Group
204,926
92,204
17,880
41,109
769
36,807
(134,598)
(21,044)
(568)
(349,115)
(60,574)
Net exposure
(237,678)
11,355
54,119
Company
Other receivables
9,154-Intra-group balances
(18,512)
-
Other payables
(19,037)
-
Cash and cash equivalents (928)
-
Net exposure
(29,323)
-
-
p17 3
(f)
(i)
Currency risk (continued)
Currency risk sensitivity analysis
A 5% (2013: 5%) strengthening of the RM against the following currencies at the end of the reporting period would
have increased post-tax profit or loss by the amounts shown below. This analysis is based on foreign currency exchange
rate variances that the Group considered to be reasonably possible at the end of the reporting period. This analysis
assumes that all other variables, in particular interest rates, remained constant.
Profit or loss
Year ended
1.1.2012 to
31.3.201431.3.2013
RM’000RM’000
Group
USD
5,6938,913
INR
1,732426
BRL
5502,029
Company
USD
1,0631,100
A 5% (2013: 5%) weakening of RM against the above currencies at the end of the reporting period would have had
equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables
remained constant.
(ii) Interest rate risk
The Group’s fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The
Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates.
The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings. The Group
reviews its debt portfolio, taking into account the investment holding period and nature of its assets. The Group also
uses hedging instruments such as cross currency interest rate swaps to minimise its exposure to interest rate volatility.
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments, based on
carrying amounts as at the end of the reporting period was:
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Fixed rate instruments
327,412325,622 1,8131,870
Floating rate instruments
643,693649,921
--
p174
(f)
(ii) Interest rate risk (continued)
Interest rate risk sensitivity analysis
(a) Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial liabilities at fair value through profit or loss, and the Group
does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a
change in interest rates at the end of the reporting period would not affect profit or loss.
(b) Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points (“bp”) in interest rates at the end of the reporting period would have increased
(decreased) equity and post-tax profit or loss by the amounts shown below. This analysis assumes that all other
variables, in particular foreign currency rates, remained constant.
Equity
Profit or Loss
100 bp
100 bp
100 bp
100 bp
increasedecrease increasedecrease
Group
RM’000RM’000RM’000RM’000
2014 Floating rate instruments
-
-(4,827)4,827
Interest rate swap
581(581) -
2013
Floating rate instruments
-
-
(4,874)
4,874
Interest rate swap 128
(128)
-
(g) Hedging activities
(i)
Cash flow hedge
The Group has entered into an interest rate swap to hedge the cash flow risk in relation to the fixed interest rate of
Guaranteed Serial Bonds of RM295,048,000 (2013: RM307,502,000). The interest rate swap has the same nominal value
of RM270,000,000 (2013: RM199,500,000) and is settled every six monthly, consistent with the interest repayment
schedule of the bond.
The following table indicates the periods in which the cash flows associated with the interest rate swap are expected to
occur and affect profit or loss:
Carrying
Expected
Under
1 – 2
2-5
amount
cash flows
1 year
years
years
Group
RM’mil RM’mil RM’mil RM’mil RM’mil
2014
Interest rate swap
29
12336
2013
Interest rate swap
6
(3)
-
-
(3)
During the financial year, a gain of RM7,230,000 (2013: RM9,678,000) was recognised in other comprehensive income.
Ineffective loss amounting to RM52,000 was recognised in profit or loss during the year in respect of the hedge.
(h) Fair value of information
The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowings
reasonably approximate fair values due to the relatively short term nature of these financial instruments.
The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is
disclosed, together with their fair values and carrying amounts shown in the statement of financial position.
Fair value of financial instruments carried at fair value
Fair value of financial instruments not
carried at fair value
Total fair Carrying
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
value
amount
Group
2014
Financial assets
Available –for-sale financial asset
104--
104----
104
104
104--
104----
104
104
Bonds (secured)
------
295,047
295,047
297,384
295,047
Cross currency interest rate swaps
-
29,093-
29,093----
29,093
29,093
Term loans (secured)
------
68,273
68,273
68,273
68,273
Bank borrowings
------
417,211
417,211
417,211
417,211
Finance lease liabilities
------
12,199
12,199
12,199
12,199
- 29,093
- 29,093
-
-792,730792,730824,160821,823
Company Financial liabilities
------
1,280
1,280
1,280
1,280
------
533
533
533
533
------
1,813
1,813
1,813
1,813
p175
p176
(h) Fair value of information(continued)
Fair value of financial instruments carried Fair value of financial
at fair value
instruments not
carried at fair value*
Level 1
Level 2
Level 3
Total
Total
Group
RM’000RM’000RM’000RM’000
RM’000
2013
Financial assets
Available –for-sale financial asset
104
104--
104
-
-
104
-
Total
Carrying
fair value
amount
RM’000 RM’000
104
104
- 104104
Bonds (secured)
---- 307,501307,501
307,501
Cross currency interest rate swaps
-
6,405
-
6,405
-
6,405
6,405
Forward currency exchange contract
-
-
-
-
15
15
15
---- 212,926212,926
212,926
Bank borrowings
---- 346,311346,311
346,311
----
3,668 3,6683,668
-6,405
-6,405
870,421 876,826 876,826
Company
----
1,643 1,6431,643
----
227 227227
*
----
1,870 1,8701,870
Comparative figures have not been analysed by levels, by virtue of transitional provision given in Appendix C2 of MFRS 13.
Policy on transfer between levels
The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances
that caused the transfer.
Level 1 fair value
Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilities that the
entity can access at the measurement date.
Level 2 fair value
Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the
financial assets or liabilities, either directly or indirectly.
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest at the end of the reporting period. For other borrowings, the
market rate of interest is determined by reference to similar borrowing arrangements.
p17 7
(h) Fair value of information(continued)
Transfers between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and 2 fair values during the financial year (2013: no transfer in either directions).
Level 3
Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.
Fair values of finance lease liabilities, borrowings, payables and amount due to ultimate holding company have been
generally derived using discounted cash flow approach.
33. Capital management
The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue
as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business.
The Directors monitor and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants and
regulatory requirements.
The net debt to equity ratio at 31 March 2014 and 31 March 2013 were as follows :
Group
20142013
RM’000RM’000
Total loans and borrowings (Note 21)
Less : Cash and cash equivalents
Net debt
971,105975,544
(229,882)(249,331)
741,223726,213
Total equity attributable to owners of the Company
607,749598,644
Net debt to equity ratio
1.221.21
Group
20142013
RM’000RM’000
Total loans and borrowings (Note 21)
971,105975,544
Total equity attributable to owners of the Company
Debt-to-equity ratio (times)
607,749598,644
1.601.63
There was no change in the Group’s approach to capital management during the financial year.
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated
shareholders’ equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares) and such
shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.
p178
34. Operating leases
Leases as lessee
Non-cancellable operating lease rentals are payable as follows:
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Less than one year
Between one and five years
7,39513,995 3,08310
11,1139,7305,58212
1,498597 --
20,00624,322 8,66522
The Group and the Company lease office space under operating leases. The leases typically run for a period of 3 years from date of
agreement, with an option to renew the leases after that date.
Office space has been sublet by the Company to its subsidiaries. The lease and sublease expire in December 2016.
Leases as lessor
The Group leases out their fleet of coaches under operating leases. The future minimum lease receivables under non-cancellable
leases are as follows:
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Less than one year
Between one and five years
5,026510
21,5542,760
5,9571,188
32,5374,458
-----
p17 9
35. Other commitments and contingent liabilities
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Authorised capital expenditure but not
recognised in the financial statements
Contracted
93,60420,752
Not contracted
110,199272,985
---
203,803293,737
--
Analysed as :
197,096109,883
-Development costs
2,15825,591
-Others
4,549158,263
-
203,803 293,737-Contingent liabilities
Claims by sub-contractors
-5,724
-Litigation
-95 -Taxation
1,600774 -The Directors are of the opinion that provisions are not required in respect of the contingent liabilities, as it is not probable that a
future sacrifice of economic benefits will be required.
36. Related parties
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company
has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making
financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control.
Related parties may be individuals or other entities.
Related parties also include key management personnel defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group either directly or indirectly. Key management personnel includes all the
Directors of the Group, and certain members of senior management of the Group.
The Group has related party relationship with subsidiaries, associates and key management personnel.
p18 0
36. Related parties (continued)
Significant related party transactions
Related party transactions have been entered into in the normal course of business under negotiated terms. The significant related
party transactions of the Group and the Company are shown below. The balances related to the transactions below are shown in
Notes 10 and 20.
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
A.
Subsidiaries
Interest income on advances
--
9944,901
Management fee receivable
--
3131,006
Rental income on investment properties
--
442476
B.
Related parties
Share registration fee paid to Symphony
182273101174
Human resources services fee paid to Symphony
357-
12
Airline ticketing services provided by Lintas
2,2113,219 9945
Advances to SEB
--
23,91624,000
Repayment of advances from SOL
--
(6,130)
Advances to SOL
---11,572
Reversal of impairment loss of inter-company
--
(4,073)
Impairment loss of inter-company receivables
---23,892
Symphony Share Registers Sdn. Bhd., Symphony Corporatehouse Sdn. Bhd. and Symphony BPO Solutions Sdn. Bhd. (collectively
known as “Symphony”) and Lintas Travel & Tours Sdn. Bhd. (“Lintas”) are companies connected to certain Directors.
The details of interest charged on advances provided to subsidiaries are disclosed in Note 25. The reversal of the inter-company
debt provision is in relation to advances to a subsidiary, Scomi Energy Sdn. Bhd. The impairment provision is in relation to advances
made to Scomi Ecosolve Limited.
C.
Key management personnel
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
Salaries and short-term employee benefits
Share-based payments
13,66818,200 3,8261,551
1,3701,499 509235
-925 --
15,03820,624 4,3351,786
p181
36. Related parties (continued)
Significant related party transactions (continued)
The Directors of the Group and the Company and other members of key management have been granted the following number
of options under the Employee Share Options Scheme (“ESOS”).
Group and Company
20142013
’000’000
At beginning of the financial year/period
28,25835,766
Granted-7,000
Expired
(28,258)Exercised-(14,508)
At end of the financial year/period
-28,258
Other key management personnel comprise persons other than the Directors of Group entities, having authority and responsibility
for planning, directing and controlling the activities of the Group entities either directly or indirectly.
Executive officers also participate in the Group’s share option programme. The Company’s employee share option scheme expired
on 27 April 2013.
37. Directors’ remuneration
The aggregate amount of emoluments received/receivable by Directors of the Company during the financial year is as follows:
GroupCompany
Year ended
1.1.2012 to
Year ended
1.1.2012 to
31.3.201431.3.201331.3.201431.3.2013
RM’000RM’000RM’000RM’000
Non-executive directors
Fees
900*995 599*729
Other emoluments
175203150171
1,0751,198 749900
Executive director
Salaries and bonus
2,6643,5851,9572,248
403452284279
Estimated monetary value of benefits-in-kind
162252162252
3,2294,2892,4032,779
4,3045,4873,1523,679
*
The Proposed Annual Directors’ Fees are subject to the shareholders approval at the forthcoming annual general meeting of
the Company or of the respective subsidiary.
p18 2
38. Significant event during the year
On 6 December 2013, KMCOB Capital issued a Guaranteed Serial Bonds of RM300 million (“Bonds”) in nominal value with the
tenure ranging from 1 to 5 years and profit rates ranging from 3.90% to 4.30% per annum. The proceeds raised from the Bonds was
utilised to, amongst others, refinance the outstanding amount under the existing Sukuk Murabahah. On 6 December 2013, the
existing Sukuk Murabahah was fully paid and redeemed.
The Bonds are secured by an irrevocable and unconditional financial guarantee insurance policy issued by Danajamin Nasional
Berhad pursuant to a financial guarantee insurance facility of an aggregate principal amount of RM300 million and such amount
equivalent to 1 coupon payment obligation of the Bonds.
39. Subsequent events after the financial year
(a) Subsequent to the financial year end, Scomi Oiltools Bermuda Limited, a wholly-owned subsidiary of the Company, has on
10 June 2014 disposed of one hundred (100) ordinary shares of USD1.00 each representing the entire issued share capital of
Scomi Oiltools South America Limited to Transporte El Trebol, Corp, for a total disposal consideration of USD1,600,000.
(b) On 11 June 2014, Ophir Production Sdn. Bhd. (“OPSB”), being a joint venture company in Scomi Energy Services Bhd (“SESB”)
in which the Group has, through SESB’s wholly-owned subsidiary, Scomi D & P Sdn. Bhd. (“SDP”), a 30% interest, signed
a seven (7) year Small Field Risk Service Contract (“SFRSC”) with Petroliam Nasional Berhad (“PETRONAS”) to develop and
produce petroleum from the Ophir field, offshore of Malaysia.
OPSB shall be responsible to implement the approved Field Development Plan (“FDP”) with planned development activities
which includes amongst others, the drilling of wells, the installation of a production platform and export and storage of oil
via a floating storage facility. The development phase is estimated to cost USD 135 million and first oil is expected to be
produced in 18 months.
The shareholders of OPSB are Octanex NL (Australia) (50%), SDP (30%) and Vestigo Petroleum Sdn. Bhd. (20%). The
shareholders of OPSB had entered into a Shareholders Agreement on 25 March 2014 for the purposes of carrying out the
obligations of the SFRSC and to regulate their respective rights and participation in OPSB.
p18 3
40. Comparative figures
The following has been reclassified to conform with the current year presentation:
2013
As
As
previously
restated stated
RM’000RM’000
Group
Statement of profit or loss and other comprehensive income
Administrative expenses
(215,001)
(59,208)
Other operating expenses
(11,530)
(167,323)
Finance income
1,461
Other income
42,057
43,518
(183,013)(183,013)
Company
Statement of profit or loss and other comprehensive income
Revenue
1,006Finance income
5,087
Other income
565,152
571,245
571,245571,245
Investments in subsidiaries
Unquoted shares
282,001
Impairment loss
(281,724)
5,224
(4,947)
277277
The above reclassification does not have any impact on the earnings of the Group and the Company.
The previous financial period is from 1 January 2012 to 31 March 2013, compared to a twelve months period for the current
financial year ended 31 March 2014. Therefore, the comparative amounts are not in respect of a comparable period for the
statements of profit or loss and other comprehensive income, changes in equity, cash flows and their related notes.
p18 4
41. Supplementary financial information on the breakdown of realised and unrealised profits or losses
The breakdown of the retained earnings of the Group and of the Company as at 31 March, into realised and unrealised profits,
pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as follows:
GroupCompany
2014201320142013
RM’000RM’000RM’000RM’000
Total retained earnings:
- realised
1,068,238909,196636,738640,973
- unrealised
(368,728)(369,657) (236)294
699,510539,539636,502641,267
Total share of accumulated losses from associate:
- realised
(16,733)40,031
-- unrealised
---
Total share of retained earnings from joint ventures:
- realised
23,34817,348
-- unrealised
---
Less: Consolidation adjustments
Total retained earnings
706,125596,918636,502641,267
(598,746)(508,609)
-107,37988,309
636,502
641,267
The determination of realised and unrealised profits is based on the Guidance of Special Matter No. 1, Determination of Realised and
Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the
Malaysian Institute of Accountants on 20 March 2010.
p18 5
Statem ent by D irec to r s
p ur suan t to S e c tio n 169(15) of the Com pa ni es Ac t, 1965
In the opinion of the Directors, the financial statements set out on pages 81 to 183 are drawn up in accordance with Malaysian Financial
Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so
as to give a true and fair view of the financial position of the Group and of the Company as of 31 March 2014 and of their financial
performance and cash flows for the financial year then ended.
In the opinion of the Directors, the information set out in Note 41 on page 184 to the financial statements has been compiled in
accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures
Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based
on the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Petaling Jaya
25 July 2014
p18 6
Statuto r y Dec larat ion
p ur suan t to S e c tio n 169(16) of the Com pa ni es Ac t, 1965
I, Abu Zaharoff bin Abu Bakar, the officer primarily responsible for the financial management of Scomi Group Bhd, do solemnly and
sincerely declare that the financial statements set out on pages 81 to 184 are, to the best of my knowledge and belief, correct and I make
this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act,
1960.
Subscribed and solemnly declared by the above named in Petaling Jaya, on 25 July 2014.
Abu Zaharoff bin Abu Bakar
Before me:
Commission for Oaths
p187
I n dep en d ent Auditor s’ Rep or t
to th e mem bers of S c om i Group Bhd
(I ncor porated in M alaysia)
(Company No. 571212-A)
Report on the Financial Statements
We have audited the financial statements of Scomi Group Bhd, which comprise the statements of financial position as at 31 March 2014
of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash
flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory
information, as set out on pages 81 to 183.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance
with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies
Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of
financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31
March 2014 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting
Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its
subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b) We have considered the accounts and auditors’ reports of all the subsidiaries of which we have not acted as auditors, which is
indicated in Note 6 to the financial statements.
(c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements are
in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we
have received satisfactory information and explanations required by us for those purposes.
(d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under
Section 174 (3) of the Act.
p18 8
I n de p e n de nt Audi to r s’ R ep o r t
Other Reporting Responsibilities
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note
41 on page 184 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad
Listing Requirements and is not required by the Malaysian Financial Reporting Standards or International Financial Reporting Standards.
We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information
has been properly compiled, in all material respects, in accordance with the Guidance on Special Matter No. 1, Determination of Realised
and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the
Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Other Matters
The financial statements of the Group and of the Company as at and for the year ended 31 March 2013 were audited by another auditor
who expressed an unmodified opinion on those statements on 31 July 2013.
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in
Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
KPMG Firm Number: AF 0758
Chartered Accountants
Petaling Jaya,
Date: 25 July 2014
Muhammad Azman bin Che Ani
Approval Number: 2922/04/16 (J)
Chartered Accountant
p18 9
An alysis o f Shareholdings
a s a t 31 July 2014
Share Capital
Authorised share capital
:
RM300,000,000.00 divided into 3,000,000,000 ordinary shares of RM0.10 each
Issued and paid-up capital
:
RM156,863,685.40 divided into 1,568,636,854 ordinary shares of RM0.10 each. This included
14,427,200 ordinary shares purchased by the Company under share buy-back scheme and retained
as treasury shares (“Treasury Shares”)
Types of shares
:
Ordinary shares of RM0.10 each
Voting rights
:
One vote per ordinary share
Distribution of shareholdings as at 31 July 2014
ShareholderShareholding
Size of Shareholding
No. of
Shareholders
%
Less than 100
100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to less than 5% of issued shares
5% and above of issued shares
Total:
237
1,867
9,588
6,926
1,000
3
1.21
9.51
48.87
35.30
5.10
0.01
No. of Shares
Held
%*
8,874
1,602,671
53,929,805
234,020,181
951,504,593
313,143,530
0.00
0.10
3.47
15.06
61.22
20.15
19,621100.00
1,554,209,654100.00
Note:
* The percentage shareholdings have been computed net of the Company’s Treasury Shares.
List of Top Thirty (30) Largest Shareholders as at 31 July 2014
No.
Name of Shareholder
No. of Shares Held
%*
1.
IJM Corporation Berhad
119,109,500
7.66
2.
UOBM Nominees (Asing) Sdn Bhd
TAEL One Partners Ltd for Amadia Investments Ltd
108,637,400
6.99
3.
Kaspadu Sdn Bhd
85,396,630
5.49
4.
HLIB Nominees (Asing) Sdn Bhd
Exempt An for UOB Kay Hian Pte Ltd (A/C Clients)
43,107,625
2.77
5.
CIMSEC Nominees (Tempatan) Sdn Bdn
CIMB for United Flagship Sdn Bhd (PB)
42,338,300
2.72
6.
UOB Kay Hian Nominees (Tempatan) Sdn Bhd
Multi-Purpose Credit Sdn Bhd for Kaspadu Sdn Bhd 33,053,055
2.13
7.
RHB Capital Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Kaspadu Sdn Bhd (SBSSB 1311005)
27,000,000
1.74
8.
EB Nominees (Tempatan) Sendirian Berhad
Pledged Securities Account for Kaspadu Sdn Bhd (SFC) 25,700,000
1.65
p19 0
An alysis o f Sh a reho l d i ng s
List of Top Thirty (30) Largest Shareholders as at 31 July 2014
No.
Name of Shareholder
No. of Shares Held
%*
9.
Citigroup Nominees (Asing) Sdn Bhd
CBNY for Dimensional Emerging Markets Value Fund
25,227,900
1.62
10.
Maybank Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Ang Piang Kok
22,848,000
1.47
11.
Kenanga Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Ong Tee Thong
20,975,200
1.35
12.
M&A Nominee (Tempatan) Sdn Bhd
Pledged Securities Account for Lau Joo Liang (M&A)
20,244,300
1.30
13.
JF Apex Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Abu Sahid Bin Mohamed (Margin)
20,117,100
1.29
14.
Citigroup Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Abu Sahid Bin Mohamed (000187773)
19,850,000
1.28
15.
CIMSEC Nominees (Tempatan) Sdn Bhd
CIMB Bank for Seow Lun Hoo @ Seow Wah Chong (PBCL-OG0014)
17,962,300
1.16
16.
HLB Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Abu Sahid Bin Mohamed
16,010,000
1.03
17.
Lim Fong Peng @ Lim Fung Feng
14,162,240
0.91
18.
HLIB Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Abu Sahid Bin Mohamed (MG0172-003)
13,867,600
0.89
19.
ABB Nominee (Tempatan) Sdn Bhd
Pledged Securities Account for Gajahrimau Capital Sdn Bhd
13,750,000
0.88
20.
CIMSEC Nominees (Tempatan) Sdn Bhd
CIMB for Siew Mun Chuang (PB)
12,474,800
0.80
21.
Maybank Securities Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Shah Hakim @ Shahzanim Bin Zain (Margin)
11,964,500
0.77
22.
AMSEC Nominees (Tempatan) Sdn Bhd
AMTrustee Berhad for Pacific Pearl Fund (UT-PM-PPF)
11,619,300
0.75
23.
Abu Sahid Bin Mohamed
10,787,800
0.69
24.
HSBC Nominees (Asing) Sdn Bhd
Exempt An for Credit Suisse (SG BR-TST-Asing)
10,358,800
0.67
25.
CBNY for DFA Emerging Markets Small Cap Series
10,047,900
0.65
26.
UOBM Nominees (Tempatan) Sdn Bhd
TOIC Investments Ltd for Zubaidi Bin Harun
9,970,000
0.64
27.
CBNY for Emerging Market Core Equity Portfolio DFA Investment Dimensions Group Inc
9,803,800
0.63
28.
M&A Nominee (Asing) Sdn Bhd
Exempt An for UOB Kay Hian Pte Ltd (A/C Clients)
9,260,625
0.60
29.
HSBC Nominees (Asing) Sdn Bhd
Exempt An for JPMorgan Chase Bank, National Association (U.S.A.)
8,641,700
0.56
30.
Tan Yu Yeh
6,500,000
0.42
Note:
Shareholdings of Substantial Shareholders as at 31 July 2014
Name of Shareholder
Kaspadu Sdn Bhd
Dato’ Kamaluddin Bin Abdullah
Amadia Investments Ltd
TAEL One Partners Ltd (acting in its capacity as the
general partner of The Asian Entrepreneur
Legacy One, L.P.) (the “Fund”)
United Overseas Bank Limited
IJM Corporation Berhad
DirectIndirect
No. of Shares
Held
%*
No. of Shares
Held
%*
171,149,685(1)
11.011,125,340(2)0.07
(3)
13,850,100 0.89175,917,025(4)11.32
-
-
172,275,025(5)11.08
151,637,400(6)
9.76--
-
119,109,500
-
-
7.66
151,637,400(7)9.76
151,637,400(8)9.76
-
-
Notes:
1 85,753,055 shares held through RHB Capital Nominees (Tempatan) Sdn Bhd, EB Nominees (Tempatan) Sdn Bhd and UOB Kay Hian Nominees (Tempatan) Sdn Bhd.
2 Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through its shareholding in Onstream Marine Sdn Bhd.
3 13,321,000 shares held through Maybank Securities Nominees (Tempatan) Sdn Bhd pledged Securities Account for Shah Hakim @ Shahzanim Bin Zain (Margin) and
Maybank Nominees (Tempatan) Sdn Bhd pledged Securities Account for Shah Hakim @ Shahzanim Bin Zain.
4 Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through his shareholding in Kaspadu Sdn Bhd and Rentak Rimbun Sdn Bhd.
5 Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through his shareholding in Kaspadu Sdn Bhd.
6 Held through UOBM Nominees (Asing) Sdn Bhd for TAEL One Partners Ltd for Amadia Investments Ltd and HLG Nominees (Asing) Sdn Bhd Exempt An for UOB Kay Hian
Pte Ltd (A/C Clients).
7 Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965. Amadia Investments Ltd is an investment vehicle of the Fund.
8 Deemed interested by virtue of its investment in the Fund.
Shareholdings of Directors as at 31 July 2014
Name of Director
Scomi Group Bhd
Foong Choong Hong
Lee Chun Fai (Alternate Director to
Dato’ Teh Kean Ming)
DirectIndirect
No. of Shares
Held
%*
-
-
-
-
-
-
410,000
-
13,850,100(2)
-
No. of Shares
Held
%*
-
-
-
-
-
13,750,000(1)0.88
-
-
-
-
-
-
0.03
-
-
-
-
0.89175,917,025(3)11.32
-
-
-
p191
p192
Related Companies
- Scomi Engineering Bhd (“SEB”)
DirectIndirect
Name of Director
No. of Shares
No. of
Held
%
Options
219,700
623,000(4)
No. of
Shares
Held
%
No. of
Options
0.06
300,000^--0.181,500,000^537,500(5)0.16 -
- Scomi Energy Services Bhd (“SES”)
Name of Director
DirectIndirect
No. of Shares
Held
%
2,108,000(6)
No. of Shares
Held
%
0.0956,900(5)#
Notes:
^ Options granted pursuant to SEB’s Employees’ Share Option Scheme to subscribe for ordinary shares in SEB.
#Negligible.
(1) Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through his and his wife’s direct shareholdings in Gajahrimau Capital Sdn Bhd, whereby all the
13,750,000 shares are held through ABB Nominee (Tempatan) Sdn Bhd.
(2) 13,321,000 shares held through Maybank Securities Nominees (Tempatan) Sdn Bhd pledged Securities Account for Shah Hakim @ Shahzanim Bin Zain (Margin) and
Maybank Nominees (Tempatan) Sdn Bhd pledged Securities Account for Shah Hakim @ Shahzanim Bin Zain.
(3) Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through his shareholding in Kaspadu Sdn Bhd and Rentak Rimbun Sdn Bhd.
(4) 123,000 shares held through Maybank Securities Nominees (Tempatan) Sdn Bhd pledged Securities Account for Shah Hakim @ Shahzanim Bin Zain (Margin).
(5) Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through his shareholding in Rentak Rimbun Sdn Bhd.
(6) All shares are held through Maybank Securities Nominees (Tempatan) Sdn Bhd pledged Securities Account for Shah Hakim @ Shahzanim Bin Zain (Margin).
p193
Li st o f Prop er t ies
a s a t 31 M a rc h 2014
No Registered Description / Existing Owner location address use of Tenure of land: freehold or leasehold Approximate (years)/date Land area/ age of acquisition Built-up area building 1
Scomi Coach Land and Building: Factory and Freehold / Sdn Bhd
EMR 2751 Lot 795 and Office 15.04.1996 Serendah, Daerah Hulu Selangor, Malaysia
2
Scomi Oiltools Sdn Bhd 4
Scomi Oiltools de Venezuela, S.A Land area: Building 1: 61,714 sq 4.75 years
meters Land: 8,020
Building 1:
12,778
Buildup areas: Building 2: 26,556 sq
17.25 years meters Building 2:
9,053
Master: Land held under Five-storey Freehold Built-up area: 17 years Geran 46494, Lot 42410 shop office 31.10.1999 11,755 sq ft Pekan Cempaka, Daerah Petaling,
Negeri Selangor, Malaysia
(formerly known
as PT 42410 H.S.(D)
135924 part of Geran
35997 Lot 102
Geran 40176
Lot 15386 and
Geran 43061 Lot 15386,
Mukim of Sungai Buloh
Daerah Petaling,
Negeri Selangor,
Malaysia)
3
Scomi Oiltools Kemaman Warehouse Sdn Bhd No. 24, Kemaman Supply Base, 24007 Kemaman, Terengganu, Malaysia Warehouse for office use, laboratory,
milling and
storage
activities
Not applicable 15.11.1991 Land and Building: PIMSA Freehold Via Los Pilones, Machine
1.10.2000 KM1 Anaco, Shop
Edo. Anzoategui, Venezuela 5 PT. Inti Jatam Jl. Raya Duri – Dumai, Office and Pura Km. 131 Duri, Riau 28884 workshop Indonesia Leasehold: 24.03.1992 – 24.03.2012 (21 years) Audited
net book
value as at
31.03.2014
RM ‘000
Built-up areas: 19,200 sq ft
23 years Land &
building:
746
Nil
Land area: 50 years
68,700 sq ft Structure:
22,200 sq ft
Land &
Building:
32
Land area: 23,865 m2
Building
area: 207.5 m2
Nil
24 years p19 4
List of Pro p er t i es
No Registered Description / Existing Owner location address use of Tenure of land: freehold or leasehold Approximate (years)/date Land area/ age of acquisition Built-up area building Audited
net book
value as at
31.03.2014
RM ‘000
6
Scomi Group Land and building: Office and Freehold: Bhd
Geran 58840 Lot 64254, warehouse 23.12.2009 Mukim of Damansara, District of Petaling, Selangor Darul Ehsan Land area:
9 years 1,575 sq metres Built-up
area: 1,795
sq metres
Land and
building:
4,469
7 Scomi Sosma Sdn Bhd
Land held under Land Freehold: Geran 250133, Lot 7627, 7.4.2011 Mukim of Sepang, Selangor Darul Ehsan
Land area: 0.7412
hectares
N/A 176
Land held under Land
Freehold:
Geran 250134, Lot 7628 7.4.2011 Mukim of Sepang, Selangor Darul Ehsan
Land area: 0.6229
hectares
N/A 148
Land held under Land Freehold: Geran 250135, Lot 7629 7.4.2011 Mukim of Sepang, Selangor Darul Ehsan
Land area: 0.6993
hectares
N/A 166
8
P.T. Rig Tenders Indonesia, Tbk Office building Office building Freehold/ Wisma Rig Tenders 29.07.1993 Jl. Dr Saharjo No.129 Jakarta 12860
Land area: n/a
Built- up area:
512 m2
14 years 13.5
9
P.T. Rig Tenders Indonesia, Land Tbk Jl. Dr Saharjo No.129 Jakarta 12860
Land for the Freehold/ building as 01.01.1997
mentioned in item 8 Land area: 490 m2
Built- up area:
n/a
n/a Nil
10 P.T. Rig Tenders Indonesia, Tbk Single storey house Staff Freehold
Simpang Gatot accommodation 01.10.1995 Subroto VIII Jl. Garuda no.8 Banjarmasin 70236
Land area: n/a
Built-up area:
371 m2
16 years
Nil
11 P.T. Rig Tenders Indonesia, Tbk Single storey house
Staff
Freehold Jl. Veteran Simpang accommodation 31.12.1996 SMP VII Rt.29 no. 66 Banjarmasin 70232 Land area:
n/a
Built-up area:
388 m2
17 years
3.4
List o f Pro p er t i es
No Registered Description / Existing Owner location address use of 12 P.T. Rig Tenders Indonesia, Tbk Land Jl Belitung Darat no. 88 Banjarmasin 70116 Tenure of land: freehold or leasehold Approximate (years)/date Land area/ age of acquisition Built-up area building Audited
net book
value as at
31.03.2014
RM ‘000
Land for Freehold the building 09.01.2003 as mentioned in item 13
Land area:
190 sq metres
Built-up area:
n/a
n/a
Nil
13 PT Rig Tenders Office building
Office building Freehold Indonesia, Tbk
Jl Belitung Darat no.88 06.05.1997
Banjarmasin 70116
Land area:
n/a
Built-up area:
972 sq metres
19 years
25.1
14 P.T. Rig Tenders Indonesia, Tbk Land area : n/a
Built-up area:
200 sq metres
21 years
25.9
Single storey house Staff Freehold Persada Mas Bumi accommodation 31.10.2000 Asri Barat Jl Ahmad Yani no. 8 Banjarmasin
p19 5
p19 6
Corp o rate D irec tor y
CORPORATE
Scomi Group Bhd
Bandar Utama
47800 Petaling Jaya
Malaysia
Tel: +603 7717 3000
Fax: +603 7725 5258
Bandar Utama
47800 Petaling Jaya
Malaysia
Tel: +603 7717 3000
Fax: +603 7727 7935
Scomi Rail Bhd
Bandar Utama
47800 Petaling Jaya
Malaysia
Tel: +603 7717 3000
Fax: +603 7727 7935
Scomi Energy Services Bhd
Bandar Utama
47800 Petaling Jaya
Malaysia
Tel: +603 7717 3000
Fax: +603 7725 9082
Scomi Oiltools Sdn Bhd
Bandar Utama
47800 Petaling Jaya
Malaysia
Tel: +603 7717 3000
Fax: +603 7728 5202
Scomi Sosma Sdn Bhd
Bandar Utama
47800 Petaling Jaya
Malaysia
Tel: +603 7717 3000
Fax: +603 7728 5202
Operating Locations
America (Texas)
Scomi Equipment Inc
6818 N. Sam Houston
Parkway West
Houston, Texas
77064 USA
China (Tanggu)
Scomi Oiltools (S) Pte Ltd
A1-704, Teda New Skyline
No. 12, Nan Hai Road
Teda Tianjin, 300457
P.R. China
Congo (Pointe Noir)
Scomi Oiltools Africa Limited
Zone Industrielle de la foire
Pointe-Noire, Congo
Egypt (Cairo)
Scomi Oiltools Egypt S A S
Km 10, Ain Sukhna Road
Kattamia, Oilfield Services Complex
Cairo, Egypt
Australia (Perth)
Scomi Oiltools Pty Ltd
15, Boulder Road
Malaga, Western Australia
6090 Australia
France
Scomi Anticor S A E
6 Avenue des Amandiers
Z.A. du Mardaric
04310 Peyruis
France
Brazil (São Paulo)
Urban Transit Servicos do Brasil Ltda
Berrini Trade Centre
Av. Engenheiro Luis Carlos Berrini, 1700
11° Andar, Brooklin 04571-000
São Paulo, Brazil
Gabon
Oiltools (Africa) Limited
BP 1493
Boulevard Leon Mba
Port-Gentil
Gabon Republic
China (Beijing)
Rm 1507, Tower B, Eagle Plaza
No. 26, Xiao Yun Road
Chaoyang District
Beijing 100027
P.R. China
India (Mumbai)
KMC Oiltools India Private Ltd
912-A, Building No. 9
Solitaire Corporate Park
Andheri-Ghatkopar Link Road
Chakala, Andheri (East)
Mumbai, 400093
India
China (Shekou)
Rm 23C Tower A
Neptunus Building
No. 2221, Nanhai Rd
Nanshan District
518054 Shenzhen
Guangdong Prov
P.R. China
Urban Transit Pvt Ltd
Mumbai Monorail Project Office
3rd Floor, Sona Building
Plot No. C/20
1st Road, Chembur (East)
Mumbai, 400071
India
Co rp o rate D i rec to r y
Indonesia (Balikpapan)
PT Scomi Oiltools
Jl. Mulawarman Rt 45
No. 2, Manggar
Balikpapan 76116
East Kalimantan, Indonesia
MarineCo Limited
Level 6 (D), Main Office Tower
Financial Park, Jalan Merdeka
P O Box 80887
87018 Labuan Federal Territory
Labuan, Malaysia
Indonesia (Banjarmasin)
PT Batuah Abadi Lines
Jl. Belitung Darat No. 88
Rt. 19 Banjarmasin
Kalimantan Selatan
Indonesia
Malaysia (Miri)
Lot 2164, 1st Floor
Saberkas Commercial Centre
Jalan Pujut-Lutong
98000 Miri
Sarawak, Malaysia
Indonesia (Duri)
PT Scomi Oiltools
Jl. Raya Duri Dumai Km 131
Duri, Pekanbaru
Sumatera 28884
Indonesia
Indonesia (Jakarta)
PT Scomi Oiltools
Gedung Tetra Pak
Suite 101/104/103
Jl. Buncit Raya Kav 100
Jakarta Selatan 12510
Indonesia
PT Rig Tenders Indonesia Tbk
Gedung Philips
Jl. Buncit Raya Kav. 100
Jakarta Selatan 12510
Indonesia
Malaysia (Kemaman)
Warehouse 24, Letterbox No. 72
Kemaman Supply Base
24007 Kemaman
Terengganu Darul Iman
Malaysia
Malaysia (Labuan)
Labuan Integrated Base
Lot 205331935, Jalan Kinabenua
Letter Box 82023,
87030 Labuan Federal Territory
Labuan, Malaysia
Scomi Sosma Sdn Bhd
Lot 7985
Senadin Enterprise Park (Phase 9)
Desa Senadin
Jalan Lutong-Kuala Baram
98000 Miri
Sarawak, Malaysia
Malaysia (Selangor)
Scomi Coach Sdn Bhd
Scomi Coach Marketing Sdn Bhd
Lot 795, Jalan Monorel
Sungai Choh
48000 Rawang
Malaysia
Scomi Special Vehicles Sdn Bhd
Lot 9683
Kawasan Perindustrian Desa Aman
Batu 11, Desa Aman
47000 Sungai Buloh
Malaysia
Global Research & Technology Centre
No. 9, Jalan Astaka U8/83
Seksyen U8
40150 Shah Alam
Malaysia
Myanmar
Scomi Oiltools (Thailand) Ltd
Unit #109, Building 1, Hotel Yangon
No. 91/93, Corner of Pyay Road and
Kabaraye Pagoda Road
8th Mile Junction
Mayangone Township
Yangon, Myanmar
Nigeria (Onne)
Wasco Oil Service Company Nigeria
Limited
#9 Wharf Road
Onne, Rivers State, Nigeria
Wasco Oil Service Company Nigeria
Limited
Onne Oil & Gas Free Zone Complex
Onne, Rivers State
Nigeria
Oman (Azaiba)
Scomi Oiltools Oman LLC
Building No. 272, Way No. 44803
Office No. 1104 (2nd Floor)
Azaiba
Sultanate of Oman
Pakistan (Islamabad)
Scomi Oiltools Ltd (Pakistan Branch)
Plot No. 212, Service Road
Industrial Area, I-10/3
Islamabad, Pakistan
Pakistan (Karachi)
Scomi Oiltools Ltd (Pakistan Branch)
B-31, Moghal Tobaco
Godown No 19-20
SITE, Karachi
Pakistan
Qatar
Scomi Oiltools (Cayman) Limited
940 Al-Khalidia Street, Zone No.26
Najma, Doha, Qatar
P.O. Box 2471
p197
p19 8
Co rp o rate D i rec to r y
Russia (Moscow)
Scomi Oiltools (Rus) LLC
3rd floor, bld.1 24/2, Sretenka Str
107045 Moscow
Russia
Turkmenistan (Balkanabat)
Scomi Oiltools Ltd
(Turkmenistan Branch)
Jebel Base #2, Jebel v. Balkanabat
Turkmenistan
Russia (Western Siberia)
Scomi Oiltools (Rus) LLC
16 bld. 7, Industrialnaya Str
628616 Nizhnevartovsk
Tyumen Region
Russia
Turkmenistan (Hazar)
Scomi Oiltools Ltd
High Road 9 kilometer
Hazar
Turkmenistan 745030
Saudi Arabia
Scomi Oiltools (Cayman) Limited
(Saudi Arabia Branch)
c/o Tanajib for General Contracting Est.
P O Box 30415, Salman A-farezi Street
Near Silver Tower
Behind Saudi Hollandi Bank
Al-Khobar 31952
Kingdom of Saudi Arabia
Turkmenistan (Turkmenbashy)
Scomi Oiltools Ltd
Shagadam Street 8, Turkmenbashy City
Turkmenistan, 745000
Thailand (Bangkok)
21st Floor, CTI Tower
191/77, Ratchadapisek Road
Kwaeng Klongtoey, Khet Klongtoey
Bangkok
10110 Thailand
Thailand (Lankrabue)
163, Moo 6 Tumbol Lankrabue
Amphur Lankrabue
Kamphaengphet
62170 Thailand
Thailand (Songkhla)
424/9 Moo 2
Songkhla – Koh Yor Road
Amphur Muang, Songkhla
90100 Thailand
Turkmenistan (Ashgabat)
Scomi Oiltools Ltd
Yimpash Business Centre
Office 101(A) Turkmenbashy Street
54 Ashgabat
Turkmenistan 744013
U.A.E. (Abu Dhabi)
Scomi Oiltools (Cayman) Ltd
Liwa Street/Liwa Tower
Mezzanine Floor, M02
P.O. Box 45333
Abu Dhabi
United Arab Emirates
U.A.E. (Dubai)
Scomi Oiltools (Cayman) Ltd
Oilfield Supply Centre
Building B-10, Jebel Ali
Free Zone, Dubai
United Arab Emirates
Vietnam
Scomi Oiltools Ltd
(Vietnam Branch)
c/o PTSC Supply Base
65A, 30/4 Road, Thang Nhat Ward
Vung Tau City
S R Vietnam
p19 9
Noti ce O f Annual G eneral M eet ing
NOTICE IS HEREBY GIVEN that the 12th Annual General Meeting of SCOMI GROUP BHD (the “Company”) will
be held at Ballroom 1, First Floor, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur,
Malaysia on 24 September 2014 at 2:30 pm to transact the following business:
As Ordinary Business:
To consider and, if thought fit, to pass the following as Ordinary Resolutions:
1.
2.
3.
4.
5.
To receive the Financial Statements for the financial year ended 31 March 2014 and the Reports of the
Directors and Auditors thereon.
To re-elect the following Directors who retire in accordance with Article 82 of the Articles of Association
of the Company and being eligible, offer themselves for re-election:
(i) Dato’ Sreesanthan A/L Eliathamby
(ii) Mr Shah Hakim @ Shahzanim Bin Zain
(Resolution 1)
(Resolution 2)
To re-elect Mr Abdul Hamid Bin Sh Mohamed as a Director of the Company, who retires under Article 89
of the Articles of Association of the Company and being eligible, offers himself for re-election.
(Resolution 3)
To approve the payment of Directors’ fees amounting to RM599,260.30 for Non-Executive Directors in
respect of the financial year ended 31 March 2014.
(Resolution 4)
To re-appoint Messrs KPMG as Auditors of the Company for the financial year ending 31 March 2015 and
to authorise the Directors to fix their remuneration.
(Resolution 5)
As Special Business:
To consider and, if thought fit, to pass the following as Ordinary Resolutions:
6. Authority to Issue and Allot Shares pursuant to Section 132D of the Companies Act, 1965
“THAT, subject to the Companies Act, 1965 (as may be amended, modified or re-enacted from time to
time)(the “Act”), the Articles of Association of the Company and the approvals of the relevant governmental
and/or regulatory authorities, where necessary, the Directors be and are hereby authorised, pursuant to
Section 132D of the Act, to issue and allot shares in the Company, at any time and upon such terms and
conditions and for such purposes as the Directors may in their absolute discretion deem fit, provided that
the aggregate number of shares to be issued pursuant to this resolution does not exceed ten percent
(10%) of the issued and paid-up share capital of the Company for the time being and that such authority
shall continue in force until the conclusion of the next Annual General Meeting of the Company.”
(Resolution 6)
p2 0 0
No t ice o f An n ual G e n era l Meet i ng
Proposed Renewal of Authority for the Purchase by the Company of its ordinary shares of up to
ten percent (10%) of the issued & paid-up share capital
“THAT, subject to the Act, the Memorandum and Articles of Association of the Company, the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“Listing Requirements”) and
the approval of the relevant authorities, approval be and is hereby given for the Company to purchase
from the market of Bursa Securities such number of ordinary shares of RM0.10 each in the Company
(“Share Buy-back”) as may be determined by the Directors of the Company from time to time, and upon
such terms and conditions as the Board of Directors may deem fit and expedient in the interest of the
Company PROVIDED THAT the aggregate number of ordinary shares purchased and/or held pursuant
to this resolution does not exceed ten percent (10%) of the total issued and paid-up share capital of the
Company at any point in time and an amount not exceeding the total retained earnings of approximately
RM636.50 million and/or share premium account of approximately RM352.38 million of the Company
based on the Audited Financial Statements for the financial year ended 31 March 2014 be allocated by
the Company for the Share Buy-back;
7.
THAT such authority shall commence immediately upon the passing of this resolution and shall continue
to be in force until:
(i)
(ii) the expiration of the period within which the next Annual General Meeting after that date is
required by law to be held; or
(iii) revoked or varied by an ordinary resolution of the shareholders of the Company in a general
meeting,
whichever occurs the earliest, but not so as to prejudice the completion of purchase(s) by the Company
before the aforesaid expiry date;
AND THAT the Directors of the Company be and are hereby authorised to take all such steps and do all
acts and deeds and to execute, sign and deliver on behalf of the Company all necessary documents to
give full effect to and for the purpose of completing or implementing the Share Buy-back in the manner
set out in the Statement, and that following completion of the Share Buy-back, the power to cancel
or retain as treasury shares, any or all of the Scomi Shares so purchased, resell on the market of Bursa
Securities or distribute as dividends to the Company’s shareholders or subsequently cancel, any or all of
the treasury shares, with full power to assent to any condition, revaluation, modification, variation and/or
amendment in any manner as may be required by any relevant authority or otherwise as they deem fit in
the best interests of the Company.”
8.
the conclusion of the next Annual General Meeting at which time the authority will lapse, unless by
an ordinary resolution passed at the next Annual General Meeting, the authority is renewed; or
To transact any other business of the Company for which due notice shall have been given.
By Order of the Board
ONG WEI LENG (MAICSA 7053539)
CHONG MEI YAN (MAICSA 7047707)
Company Secretaries
Petaling Jaya
Date: 29 August 2014
(Resolution 7)
Notes:
(1) Other than an exempt authorised nominee, 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.
(2) Where a member or an exempt authorised nominee appoints two proxies, the appointments shall be invalid unless he or it
specifies the proportion of his or its holding to be represented by each proxy.
(3) Where a member is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991,
who holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”),
there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus
account it holds with ordinary shares standing to the credit of the said omnibus account.
(4) The instrument for the appointment of 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 or
attorney duly authorised. If no name is inserted in the space for the name of your proxy, the Chairman of the meeting will
act as your proxy.
(5) The instrument for the appointment of a proxy must be completed and deposited at the office of the Share Registrar of the
Company, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301
Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than forty-eight (48) hours before the time appointed for holding the
12th Annual General Meeting or any adjournment thereof.
(6) The lodging of a completed Form of Proxy to the Share Registrar of the Company will not preclude you from attending and
voting in person at the meeting should you subsequently wish to do so. Should you subsequently decide to attend and vote
in person at the meeting, you are requested to rescind your earlier appointment of proxy(ies), and notify the Share Registrar
of the Company as soon as practicable.
(7) For the purpose of determining a member who shall be entitled to attend this 12th Annual General Meeting, the Company
shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance with Articles 57 and 58 of the Articles of Association of
the Company and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a General Meeting Record
of Depositors as at 19 September 2014. Only a depositor whose name appears on the General Meeting Record of Depositors
as at 19 September 2014 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his or its
behalf.
Financial Statements for the financial year ended 31 March 2014 and the Reports of the Directors and Auditors
thereon
(8) This agenda is tabled for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a
formal approval of the shareholders and hence is not put forward for voting.
Abstention from voting
(9) The interested Directors of the Company who are shareholders of the Company will abstain from voting on the relevant
resolutions in respect of their re-election as the Director of the Company at the 12th Annual General Meeting.
(10) All the Non-Executive Directors of the Company who are shareholders of the Company will abstain from voting on Ordinary
Resolution 4 concerning remuneration to Non-Executive Directors at the 12th Annual General Meeting.
p2 01
p2 02
Explanatory Notes on Special Business:
(11) Ordinary Resolution 6 - Proposed renewal of the authority for Directors to issue shares
The ordinary resolution 6 above is proposed for the purpose of granting a renewed general mandate for issuance of shares
by the Company under Section 132D of the Companies Act, 1965, and if passed, will give the Directors of the Company
authority, from the date of the above Annual General Meeting, to issue and allot shares in the Company at any time up to
an aggregate amount not exceeding ten percent (10%) of the issued and paid-up share capital of the Company for such
purposes as the Directors deem fit and in the interest of the Company (“Share Mandate”) without convening a General
Meeting.
The Company has not issued any new shares pursuant to Section 132D of the Companies Act, 1965 under the general
authority which was approved at the 11th Annual General Meeting held on 26 September 2013 and which will lapse at the
conclusion of the forthcoming 12th Annual General Meeting to be held on 24 September 2014.
This Share Mandate, unless revoked or varied at a General Meeting, will expire at the conclusion of the next Annual General
Meeting of the Company. With this Share Mandate, the Company will have the flexibility to undertake any possible fund
raising activities, including but not limited to further placing of shares, for the purpose of funding future investment
project(s), working capital and/or acquisition(s).
(12) Ordinary Resolution 7 - Proposed renewal of the authority to purchase own shares
The ordinary resolution 7 above, if passed, will empower the Directors to purchase up to ten percent (10%) of the issued
and paid-up share capital of the Company by utilising funds not exceeding the retained earnings and/or the share premium
account of the Company. This authority, unless revoked or varied at a general meeting, will expire at the earlier of either the
conclusion of the next Annual General Meeting of the Company or the expiry of the period within which the next Annual
General Meeting is required by law to be held.
The details relating to ordinary resolution 7 are set out in the Share Buy-back Statement dated 29 August 2014.
For m of Prox y
SCOMI GROUP BHD.
CDS Account No
(Company No: 571212-A)
(Incorporated in Malaysia under the Companies Act, 1965)
No. of Ordinary Shares Held
Registered Office: Level 17, 1 First Avenue, Bandar Utama
47800 Petaling Jaya, Selangor Darul Ehsan, Malaysia
I/We .............................................................................................................................................. NRIC No / Company No ....................................................................
(Full name as per NRIC/Certificate of Incorporation in capital letters)
of ..............................................................................................................................................................................................................................................................................
(Full address)
being a member/members of Scomi Group Bhd., hereby appoint .......................................................................................................................................
(Full name as per NRIC/Passport and NRIC/Passport No)
of ..............................................................................................................................................................................................................................................................................
(Full address)
or failing him/her .............................................................................................................................................................................................................................................
(Full name as per NRIC/Passport and NRIC/Passport No)
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 12th Annual General
Meeting of Scomi Group Bhd (the “Company”) to be held at Ballroom 1, First Floor, Sime Darby Convention Centre, 1A Jalan Bukit
Kiara 1, 60000 Kuala Lumpur, Malaysia on 24 September 2014 at 2:30 pm, or any adjournment thereof.
Ordinary Business
For
Against
For
Against
To re-elect the following Directors who retire in accordance with Article 82 of the
Articles of Association of the Company and being eligible, offer themselves for
re-election:
Resolution 1 (i) Dato’ Sreesanthan A/L Eliathamby
Resolution 2 (ii) Mr Shah Hakim @ Shahzanim Bin Zain
Resolution 3 To re-elect Mr Abdul Hamid Bin Sh Mohamed as a Director of the Company, who
retires under Article 89 of the Articles of Association of the Company and being
eligible, offers himself for re-election
Resolution 4 To approve the payment of Directors’ fees amounting to RM599,260.30 for Non
Executive Directors in respect of the financial year ended 31 March 2014
Resolution 5 To re-appoint Messrs KPMG as Auditors of the Company for the financial year
ending 31 March 2015 and to authorise the Directors to fix their remuneration
Special Business
Resolution 6 Authority to Issue and Allot Shares pursuant to Section 132D of the
Companies Act, 1965
Resolution 7 Proposed Renewal of Authority for the Purchase by the Company of its ordinary
shares of up to ten percent (10%) of the issued & paid-up share capital
Please indicate with a check mark (“3”) 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 ...................................2014
Signature/Seal ...................................................................................
Fold this flap for sealing
Notes:
(i) Other than an exempt authorised nominee, 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 or an exempt authorised nominee appoints two proxies, the appointments shall be invalid unless he or it specifies the proportion of his
or its holding to be represented by each proxy.
(iii) Where a member is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, who holds ordinary shares in
the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt
authorised nominee may appoint in respect of each omnibus account it holds with ordinary shares standing to the credit of the said omnibus account.
(iv) The instrument for the appointment of 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 or attorney duly authorised. If no name is inserted in the space for the
name of your proxy, the Chairman of the meeting will act as your proxy.
(v) The instrument for the appointment of a proxy must be completed and deposited at the office of the Share Registrar of the Company, Symphony Share
Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than
forty-eight (48) hours before the time appointed for holding the 12th Annual General Meeting or any adjournment thereof.
(vi) The lodging of a completed Form of Proxy to the Share Registrar of the Company will not preclude you from attending and voting in person at the meeting
should you subsequently wish to do so. Should you subsequently decide to attend and vote in person at the meeting, you are requested to rescind your
earlier appointment of proxy(ies), and notify the Share Registrar of the Company as soon as practicable.
(vii) For the purpose of determining a member who shall be entitled to attend this 12th Annual General Meeting, the Company shall be requesting Bursa
Malaysia Depository Sdn Bhd in accordance with Articles 57 and 58 of the Articles of Association of the Company and Section 34(1) of the Securities Industry
(Central Depositories) Act, 1991 to issue a General Meeting Record of Depositors as at 19 September 2014. Only a depositor whose name appears on the
General Meeting Record of Depositors as at 19 September 2014 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his
or its behalf.
Then fold here
Affix
Stamp
The Registrar of Scomi Group Bhd
Symphony Share Registrars Sdn Bhd
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46, 47301 Petaling Jaya
Selangor Darul Ehsan, Malaysia
1st fold here
Scomi Group Bhd (571212-A)
Bandar Utama
47800 Petaling Jaya
Malaysia
Tel: +603 7717 3000
Fax: +603 7728 5258
www.scomigroup.com.my

Scomi Group Bhd Annual Report 2014

Transcription

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