Strategy. A Winning. Strategi Kejayaan PETRA PERDANA BERHAD A PETRA PERDANA BERHAD. a n n u a l r e p o r t

Transcription

1 PETRA PERDANA BERHAD A 6-8, Jalan 3/3C, Batu 7 Jalan Ipoh, Kuala Lumpur, Malaysia. Tel: Fax: ppb.corporate@petra.com.my PETRA PERDANA BERHAD A annual report 2008 laporan tahunan A Winning Strategy Strategi Kejayaan a n n u a l r e p o r t l a p o r a n t a h u n a n PETRA PERDANA BERHAD A

2 Group vision Wawasan Kumpulan Petra Perdana Berhad, through sustainable development practices aspires to be the leading offshore marine services provider for the upstream oil and gas industry in the region Melalui amalan pembangunan mapan, Petra Perdana Berhad bertekad untuk menjadi penyedia perkhidmatan marin yang terkemuka kepada industri minyak dan gas huluan di peringkat serantau a winning strategy In the oil and gas industry, credibility is everything. And that s why our winning strategy stems from our on-going drive to be a cut above the rest, in resources, capabilities, deliverables and quality. It s a strategy that separates tomorrow s success story from today s competition and one that has certainly proven true for us at Petra Perdana Berhad strategi kejayaan Kebolehpercayaan adalah segala-galanya dalam industri minyak dan gas. Strategi kejayaan kami bermula daripada usaha gigih kami yang berterusan untuk menjadi yang terbaik dari segi sumber, keupayaan, penyediaan dan mutu. Strategi kami adalah yang membawa kemenangan hari esok dalam menghadapi persaingan hari ini. Inilah strategi kejayaan Petra Perdana Berhad.

3 Contents Kandungan Corporate Information 2 3 Maklumat Korporat 2 3 Board of Directors 4 Lembaga Pengarah 4 Directors Profile 5 9 Profil Para Pengarah 5 9 Board of Directors Statements Penyata Lembaga Pengarah Additional Disclosure Pendedahan Tambahan Business Overview Gambaran Keseluruhan Perniagaan Chairman s Statement Penyata Pengerusi Review of Operations Tinjauan Operasi Audit Committee Report Laporan Jawatankuasa Audit Statement of Internal Control 38 Penyata Kawalan Dalaman 39 Corporate Responsibility Tanggungjawab Korporat Financial Statements Penyata Kewangan List of Properties 166 Senarai Hartanah 166 Analysis of Shareholdings Analisis Pegangan Saham Proxy Form Borang Proksi 13 th Notice of Annual General Meeting Notis Mesyuarat Agung Tahunan

4 C O R P O R AT E I N F O R M AT I O N maklumat korporat BoArD of DireCtors LEMBAGA PENGARAH Y.M. Tengku Dato Ibrahim Petra bin Tengku Indra Petra Executive Chairman & Chief Executive Officer Pengerusi Eksekutif & Ketua Pegawai Eksekutif Datin Nariza Hajjar Hashim Executive Director Pengarah Eksekutif Ahmad bin Haji Mohd Sharkan Independent Non-Executive Director Pengarah Bebas Bukan Eksekutif Wong Fook Heng Independent Non-Executive Director Pengarah Bebas Bukan Eksekutif Tiong Young Kong (appointed/dilantik 3 December/Disember 2008) Independent Non-Executive Director Pengarah Bebas Bukan Eksekutif CoMpAnY secretary SETIAUSAHA SYARIKAT Teh Peng Peng (MAICSA No: ) AuDit CoMMittee JAWATANKUASA AUDIT Ahmad bin Haji Mohd Sharkan Chairman/Pengerusi Wong Fook Heng Member/Ahli Tiong Young Kong (appointed/dilantik 15 December/ Disember 2008) Member/Ahli AuDitors PARA JURUAUDIT Horwath (AF 1018) Chartered Accountants/ Akauntan Bertauliah Level 16, Tower C, Megan Avenue II 12, Jalan Yap Kwan Seng Kuala Lumpur HeADQuArters IBU PEJABAT No. 6-8, Jalan 3/3C, Batu 7 Jalan Ipoh, Kuala Lumpur Telephone : Facsimile : ppb.corporate@petra.com.my Website : registered office PEJABAT BERDAFTAR No. 6-8, Jalan 3/3C, Batu 7 Jalan Ipoh, Kuala Lumpur Telephone : Facsimile : regoff@petra.com.my share registrar PENDAFTAR SAHAM Symphony Share Registrars Sdn Bhd ( D) Level 26, Menara Multi-Purpose Capital Square No. 8, Jalan Munshi Abdullah Kuala Lumpur Telephone : Facsimile : petra perdana BerHAD ( A) annual report 2008 laporan tahunan

5 principal BAnKers BANK-BANK UTAMA United Overseas Bank (Malaysia) Berhad ( K) Hwang DBS Investment Bank Berhad (14389-U) EON Bank Berhad (92351-V) Alliance Bank Malaysia Berhad (88103-W) HSBC Bank Malaysia Berhad ( V) OCBC Bank (Malaysia) Berhad ( W) Malayan Banking Berhad (3813-K) solicitors PEGUAM-PEGUAM Messrs. Kamarudin & partners Suites 12A-06 & 12A-07 Level 12A, Heritage House No. 33, Jalan Yap Ah Shak Kuala Lumpur Messrs. raslan Loong SERLAH Level 3A Menara John Hancock No. 6, Jalan Gelenggang Damansara Heights Kuala Lumpur Messrs. Zul rafique & partners Suite 17.01, 17th Floor Menara PanGlobal No. 8, Lorong P. Ramlee Kuala Lumpur Messrs. Zaid ibrahim & Co. Lot 102 & 104, First Floor Wisma Bukit Mata Kuching Jalan Tuanku Abdul Rahman Kuching, Sarawak stock exchange ListinG PENYENARAIAN BURSA SAHAM Main Board of Bursa Malaysia Securities Berhad Papan Utama, Bursa Malaysia Securities Berhad Sector/Sektor Stock Code/ Kod Stok : 7108 Stock Name/ Nama Stok : Trading/Services Perniagaan/ Perkhidmatan : PETRA 3 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

6 B O A R D O F D I R E C T O R S lembaga pengarah Sitting from left to right/ Duduk dari kiri ke kanan DAtin nariza HAjjAr HAsHiM Executive Director Pengarah Eksekutif Y.M. tengku DAto ibrahim petra Bin tengku indra petra Executive Chairman & Chief Executive Officer Pengerusi Eksekutif & Ketua Pegawai Eksekutif Standing from left to right/ Berdiri dari kiri ke kanan tiong YounG KonG Independent Non-Executive Director Pengarah Bebas Bukan Eksekutif WonG FooK HenG Independent Non-Executive Director Pengarah Bebas Bukan Eksekutif AHMAD Bin HAji MoHD sharkan Independent Non-Executive Director Pengarah Bebas Bukan Eksekutif 4 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

7 D I R E C T O R S P R O F I L E profil para pengarah Y.M. tengku DAto ibrahim petra Bin tengku indra petra Executive Chairman & Chief Executive Officer/ Pengerusi Eksekutif & Ketua Pegawai Eksekutif Y.M. tengku Dato ibrahim petra bin tengku indra petra, a Malaysian citizen of age 53, was appointed to the Board in May 2000 as the Executive Chairman & Chief Executive Officer of Petra Perdana Berhad ( Petra Perdana ). He holds a Bachelor of Science (Marketing) Degree from the University of Oregon, USA. He began his career with PETRONAS in 1980, and two years later was appointed by the Ministry of Foreign Affairs, Malaysia as the Malaysian Consul General based in Los Angeles, USA. Upon his return in 1984, he assumed the position of Executive Chairman in Petra Finance Berhad until the company was sold in In 1988, while he was still with Petra Finance Berhad, he formed Petra Resources Sdn Bhd ( Petra Resources ), an oil and gas trading company. He was appointed its Non-Executive Chairman, and in 1998, became the Executive Chairman and Managing Director of Petra Resources. He was later appointed the Executive Chairman and Chief Executive Officer of Petra Perdana when Petra Resources was acquired by Petra Perdana in May Petra Resources is currently a whollyowned subsidiary of Petra Energy Berhad ( Petra Energy ), which in turn is a subsidiary of Petra Perdana. His primary role is to spearhead Petra Perdana in achieving its vision as the leading offshore marine services provider for the upstream oil and gas industry in the region. Currently, his other directorships in public companies are Petra Energy, which is listed on the Main Board of Bursa Malaysia Securities Berhad, and Intra Oil Services Berhad, a non-listed wholly-owned subsidiary company of Petra Perdana. He was President of the Malaysian Oil & Gas Services Council ( MOGSC ) for two consecutive terms since its inception in December His tenure as President, ended in April MOGSC is responsible for the development and promotion of the oil & gas services sector. He is a related party with interests in certain recurrent transactions involving the Petra Perdana Group of Companies. The details of the recurrent related party transactions are set out in page 47 of this Annual Report and in the Circular to Shareholders dated 3 June His wife, Datin Nariza Hajjar Hashim, is an Executive Director and a substantial shareholder of Petra Perdana. He has not been convicted of any offence within the past 10 years. Y.M. Tengku Dato Ibrahim Petra bin Tengku Indra Petra, warganegara Malaysia berusia 53 tahun, dilantik ke Lembaga Pengarah pada bulan Mei 2000 sebagai Pengerusi Eksekutif & Ketua Pegawai Eksekutif Petra Perdana Berhad ( Petra Perdana ). Beliau memiliki Ijazah Sarjana Muda Sains (Pemasaran) daripada Universiti Oregon, Amerika Syarikat. Beliau memulakan kerjayanya di PETRONAS pada tahun 1980 dan dua tahun kemudian, dilantik oleh Kementerian Luar Negara, Malaysia untuk memegang jawatan sebagai Ketua Konsul Malaysia di Los Angeles, Amerika Syarikat. Sekembalinya ke tanahair pada tahun 1984, beliau berkhidmat sebagai Pengerusi Eksekutif Petra Finance Berhad sehingga syarikat tersebut dijual pada tahun Pada tahun 1988, semasa masih lagi berkhidmat di Petra Finance Berhad, beliau telah menubuhkan Petra Resources Sdn Bhd ( Petra Resources ), sebuah syarikat perdagangan minyak dan gas. Beliau dilantik sebagai Pengerusi Bukan Eksekutif Petra Resources dan pada tahun 1998 dilantik sebagai Pengerusi Eksekutif dan Pengarah Urusan. Apabila Petra Resources diambilalih oleh Petra Perdana pada bulan Mei 2000, beliau kemudiannya dilantik sebagai Pengerusi Eksekutif dan Ketua Pegawai Eksekutif. Petra Resources kini merupakan sebuah syarikat subsidiari milik penuh Petra Energy Berhad ( Petra Energy ), yang sebaliknya merupakan sebuah syarikat subsidiari Petra Perdana. Peranan utama beliau adalah untuk menerajui Petra Perdana untuk mencapai visi sebagai pembekal perkhidmatan marin luar pesisir yang terkemuka bagi industri minyak dan gas huluan di rantau ini. Kini beliau turut berkhidmat sebagai pengarah di beberapa buah syarikat awam lain seperti Petra Energy yang tersenarai di Papan Utama Bursa Malaysia Securities Berhad, dan Intra Oil Services Berhad, sebuah syarikat subsidiari milik penuh Petra Perdana yang tidak tersenarai. Beliau pernah menjadi Presiden Majlis Perkhidmatan Minyak dan Gas Malaysia ( MOGSC ) selama dua penggal berturutturut sejak ianya ditubuhkan pada bulan Disember 2003 hingga bulan April MOGSC bertanggungjawab terhadap pembangunan dan promosi sektor perkhidmatan dalam industri minyak dan gas. Beliau merupakan pihak berkaitan yang mempunyai kepentingan dalam beberapa urusniaga tertentu yang berulangan yang melibatkan syarikat-syarikat dalam Kumpulan Petra Perdana. Keterangan terperinci mengenai urusniaga pihak berkaitan yang berulangan dibentangkan di muka surat 49 dalam Laporan Tahunan ini dan dalam Pekeliling kepada para Pemegang Saham bertarikh 3 Jun Isteri beliau, Datin Nariza Hajjar Hashim, adalah seorang Pengarah Eksekutif dan pemegang saham utama Petra Perdana. Beliau tidak dikenakan tindakan undangundang atas sebarang kesalahan sepanjang tempoh 10 tahun lepas. 5 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

8 D I R E C T O R S P R O F I L E profil para pengarah DAtin nariza HAjjAr HAsHiM Executive Director/Pengarah Eksekutif Datin nariza Hajjar Hashim, a Malaysian citizen of age 48, was appointed the Executive Director of Petra Perdana Berhad ( Petra Perdana ) in May She holds a Diploma in Business Studies from the London Polytechnic, United Kingdom. Prior to her appointment, she was attached to a number of organisations that included PERA-Leasing Sdn Bhd, Floline Sdn Bhd and The Star Publications (Malaysia) Berhad. In 1995, she was appointed to the Board of Petra Resources Sdn Bhd as Director of Public Affairs. She held this position until her appointment as Executive Director of Petra Perdana. She is the Chairman of the Committee for Corporate Social Responsibility, a management committee formed to undertake social and sustainable initiatives for the Group. She is a related party with interests in certain recurrent transactions involving the Petra Perdana Group of Companies. The details of the recurrent related party transactions are set out in page 47 of this Annual Report and in the Circular to Shareholders dated 3 June Her husband, Y.M. Tengku Dato Ibrahim Petra bin Tengku Indra Petra, is the Executive Chairman and Chief Executive Officer and a substantial shareholder of Petra Perdana. She has not been convicted of any offence within the past 10 years. Datin Nariza Hajjar Hashim, warganegara Malaysia berusia 48 tahun, dilantik sebagai Pengarah Eksekutif Petra Perdana Berhad ( Petra Perdana ) pada bulan Mei Beliau memiliki Diploma Pengajian Perniagaan daripada London Polytechnic, United Kingdom. Sebelum pelantikan tersebut, beliau pernah berkhidmat dengan beberapa organisasi yang meliputi PERA-Leasing Sdn Berhad, Floline Sdn Bhd dan The Star Publications (Malaysia) Berhad. Pada tahun 1995, beliau dilantik ke Lembaga Pengarah Petra Resources Sdn Bhd sebagai Pengarah Perhubungan Awam. Beliau memegang jawatan tersebut sehingga beliau dilantik sebagai Pengarah Eksekutif Petra Perdana. Beliau merupakan Pengerusi Jawatankuasa bagi Tanggungjawab Sosial Korporat, sebuah jawatankuasa pengurusan yang dibentuk untuk melaksanakan inisiatif kemampanan dan sosial Kumpulan. Beliau merupakan pihak berkaitan yang mempunyai kepentingan dalam beberapa urusniaga tertentu yang berulangan yang melibatkan syarikat-syarikat dalam Kumpulan Petra Perdana. Keterangan terperinci mengenai urusniaga pihak berkaitan yang berulangan dibentangkan di muka surat 49 dalam Laporan Tahunan ini dan dalam Pekeliling kepada para Pemegang Saham bertarikh 3 Jun Suami beliau, Y.M. Tengku Dato Ibrahim Petra bin Tengku Indra Petra, merupakan Pengerusi Eksekutif dan Ketua Pegawai Eksekutif serta pemegang saham utama Petra Perdana. Beliau tidak dikenakan tindakan undangundang atas sebarang kesalahan sepanjang tempoh 10 tahun lepas. 6 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

9 AHMAD Bin HAji MoHD sharkan Independent Non-Executive Director/ Pengarah Bebas Bukan Eksekutif Ahmad bin Haji Mohd sharkan, a Malaysian citizen of age 68, was appointed as an Independent Non- Executive Director of Petra Perdana Berhad ( Petra Perdana ) in June He holds a Masters degree in Business Administration (International Business & Finance) from the Catholic University at Leuven, Belgium; Bachelor of Arts (Hons- Econs) Degree from the University of Malaya; Certificate of Education from the Institute of Education, University of Birmingham, England and Diploma (Islamic Studies) from the International Islamic University, Kuala Lumpur. He served the Government of Malaysia from 1964 to 1995, initially as a teacher with the Education Department and later as an Economist with the Malaysian Industrial Development Authority (MIDA). Upon his retirement from government service, he became a consultant and was engaged by the Malaysian Institute of Economic Research (MIER) for Malaysia s Second Industrial Master Plan ( ), where he authored the section on Development of the Marine Transport Industry. He was also engaged as a consultant for special projects by the United Nations Industrial Development Organisation (UNIDO) in Vienna, Austria. Encik Ahmad has also written various articles, reports and case studies on industrial development for seminars, symposiums and publications. He is the Chairman of the Audit Committee of the Board of Directors of Petra Perdana. He does not have any family relationships with any member of the Board or substantial shareholder of Petra Perdana. He does not have any conflict of interest with Petra Perdana and neither has he been convicted of any offence within the past 10 years. Ahmad bin Haji Mohd Sharkan, warganegara Malaysia berusia 68 tahun, dilantik sebagai Pengarah Bebas Bukan Eksekutif Petra Perdana Berhad ( Petra Perdana ) pada bulan Jun Beliau memiliki Ijazah Sarjana Pentadbiran Perniagaan (Perdagangan & Kewangan Antarabangsa) daripada Catholic University di Leuven, Belgium; Ijazah Sarjana Muda Sastera (Ekonomi- Kepujian) daripada Universiti Malaya; Sijil Pendidikan daripada Institute of Education, University of Birmingham, England dan Diploma (Pengajian Islam) daripada Universiti Islam Antarabangsa, Kuala Lumpur. Beliau berkhidmat dengan Kerajaan Malaysia sejak tahun 1964 hingga 1995, bermula sebagai seorang guru di Jabatan Pendidikan dan kemudian sebagai Pakar Ekonomi di Lembaga Kemajuan Perindustrian Malaysia ( MIDA ). Selepas bersara daripada perkhidmatan kerajaan, beliau berkhidmat sebagai seorang juru perunding dan ditugaskan oleh Institut Penyelidikan Ekonomi Malaysia (MIER) untuk menjalankan kajian tentang Pelan Induk Perindustrian Kedua Malaysia ( ), di mana beliau telah menulis tentang Pembangunan Industri Pengangkutan Marin. Beliau turut diambil berkhidmat sebagai seorang juru perunding untuk beberapa projek khas Pertubuhan Pembangunan Perindustrian Bangsa-Bangsa Bersatu (UNIDO) di Vienna, Austria. Encik Ahmad juga pernah menulis pelbagai rencana, laporan dan kajian kes mengenai pembangunan perindustrian untuk pelbagai seminar, simposium dan penerbitan. Beliau adalah Pengerusi Jawatankuasa Audit Lembaga Pengarah Petra Perdana. Beliau tidak mempunyai sebarang hubungan kekeluargaan dengan sebarang ahli Lembaga Pengarah atau pemegang saham utama Petra Perdana. Beliau tidak mempunyai sebarang konflik kepentingan dengan Petra Perdana atau dikenakan tindakan undang-undang atas sebarang kesalahan sepanjang tempoh 10 tahun lepas. 7 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

10 D I R E C T O R S P R O F I L E profil para pengarah WonG FooK HenG Independent Non-Executive Director/ Pengarah Bebas Bukan Eksekutif Wong Fook Heng, a Malaysian citizen of age 53, was appointed as an Independent Non-Executive Director of Petra Perdana Berhad ( Petra Perdana ) in July He is an associate member of the Malaysian Institute of Accountants (MIA), Malaysian Institute of Certified Public Accountants (MICPA) and the Institute of Chartered Accountants in Australia (ICA- Australia), and has been a practising Chartered Accountant since He is a member of the Audit Committee of the Board of Directors of Petra Perdana. He does not have any family relationships with any member of the Board or substantial shareholder of Petra Perdana. He does not have any conflict of interest with Petra Perdana and neither has he been convicted of any offence within the past 10 years. Wong Fook Heng, warganegara Malaysia berusia 53 tahun, dilantik sebagai Pengarah Bebas Bukan Eksekutif Petra Perdana Berhad ( Petra Perdana ) pada bulan Julai Beliau adalah seorang ahli bersekutu Institut Akauntan Malaysia ( MIA ), Institut Akauntan Awam Bertauliah Malaysia ( MICPA ) dan Institute of Chartered Accountants in Australia ( ICA-Australia ), dan merupakan seorang Akauntan Bertauliah sejak tahun Beliau adalah seorang ahli Jawatankuasa Audit Lembaga Pengarah Petra Perdana. Beliau tidak mempunyai sebarang hubungan kekeluargaan dengan sebarang ahli Lembaga Pengarah atau pemegang saham utama Petra Perdana. Beliau tidak mempunyai sebarang konflik kepentingan dengan Petra Perdana atau dikenakan tindakan undang-undang atas sebarang kesalahan sepanjang tempoh 10 tahun lepas. 8 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

11 tiong YounG KonG Independent Non-Executive Director/ Pengarah Bebas Bukan Eksekutif tiong Young Kong, a Malaysian citizen of age 60, was appointed as an Independent Non-Executive Director of Petra Perdana Berhad ( Petra Perdana ) in December He holds a Bachelor of Science (Chemistry) Degree from the University of Malaya and a Master in Business Management from the Asian Institute of Management. He was with Malayan Banking Bhd in 1978 and later joined D & C Nomura Merchant Bank Bhd in 1980, both as Assistant Manager in the Loan Department. From 1981 to 1999, he was attached to PICA (M) Corporation Bhd, where he held the position of Executive Director. He is a member of the Audit Committee of the Board of Directors of Petra Perdana. He does not have any family relationships with any member of the Board or substantial shareholder of Petra Perdana. He does not have any conflict of interest with Petra Perdana and neither has he been convicted of any offence within the past 10 years. Tiong Young Kong, warganegara Malaysia berusia 60 tahun, dilantik sebagai Pengarah Bebas Bukan Eksekutif Petra Perdana Berhad ( Petra Perdana ) pada bulan Disember Beliau memiliki Ijazah Sarjana Muda Sains (Kimia) daripada Universiti Malaya dan Sarjana Pengurusan Perniagaan daripada Asian Institute of Management. Beliau menyertai Malayan Banking Bhd pada tahun 1978, dan kemudiannya menyertai D & C Nomura Merchant Bank Bhd pada tahun 1980, kedua-duanya sebagai Penolong Pengurus di Jabatan Pinjaman. Kemudian, dari 1981 hingga 1999 beliau memegang jawatan sebagai Pengarah Eksekutif PICA (M) Corporation Bhd. Beliau adalah seorang ahli Jawatankuasa Audit Lembaga Pengarah Petra Perdana. Beliau tidak mempunyai sebarang hubungan kekeluargaan dengan sebarang ahli Lembaga Pengarah atau pemegang saham utama Petra Perdana. Beliau tidak mempunyai sebarang konflik kepentingan dengan Petra Perdana atau dikenakan tindakan undang-undang atas sebarang kesalahan sepanjang tempoh 10 tahun lepas. 9 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

12 our employees single-handedly made us a trusted name in the industry Warga kerja menjadikan kami nama yang boleh dipercayai dalam industri

13 All employees, from top management to the newest hire, have a hand in strengthening our Seluruh warga kerja kami dari peringkat atasan sehingga kepada mereka yang baru berkhidmat memberi sumbangan masing-masing dalam mengukuhkan kedudukan kami sebagai syarikat yang boleh dipercayai industri minyak dan gas. Merekalah yang menjadi aset kami yang paling berharga. reputation as a trusted player and partner in the oil and gas industry. Hands down, they are and will always remain our most valuable asset.

14 B U S I N E S S O V E R V I E W kajian perniagaan Petra Perdana Berhad ( Petra Perdana or Group or Company ) is predominantly an offshore marine services provider for the upstream oil and gas ( O&G ) industry in the domestic and regional markets. With extensive experience in offshore marine services, the Group provides support services for drilling, platform & pipeline installation, production, operations, general & major maintenance activities in the green field and brown field belts of the industry. Core Business ACtivities In offshore marine services, we provide: Towing, mooring and anchoring of non-self propelled barges, rigs, floating, storage & off-loading (FSO) & floating production storage & offloading (FPSO); Transportation of drilling, production chemicals, materials, personnel & food supplies; related Business ACtivities The Company, via its 60% equity interest in public-listed Petra Energy Berhad, is also involved in integrated brown field services. The scope of services provided include: Top-side major maintenance hook-up commissioning & construction; Engineering, operations & maintenance; Equipment packaging & manufacturing; Oil field optimisation Design & fabrication of process equipment and boilers Petra Energy also provides specialist services for the petrochemical and general industries in the domestic, regional and global markets. On-board accommodation for offshore personnel; Engineering & workshop facilities on board vessels for general and major maintenance work, among others. The Group currently has a fleet of 18 marine vessels with 15 new vessels in the pipeline, to be delivered over the next one to two years. 12 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

15 Petra Perdana Berhad ( Petra Perdana atau Kumpulan atau Syarikat ) secara umumnya merupakan sebuah penyedia perkhidmatan marin luar pesisir untuk sektor huluan dalam industri minyak dan gas di kedua-dua pasaran domestik dan serantau. Dengan pengalaman meluas dalam perkhidmatan marin luar pesisir, Kumpulan menyediakan khidmat sokongan bagi penggerudian, pemasangan pelantar & saluran paip, pengeluaran, operasi, penyelenggaraan umum & utama di lingkaran green field dan brown field dalam industri. AKTIVITI PERNIAGAAN TERAS Dalam perkhidmatan marin luar pesisir, kami menyediakan perkhidmatan berikut: Penundaan, penambatan dan kemudahan sauh baj berkipas tidak berputar sendiri, rigs, apungan, simpanan & muat keluar (FSO) & simpanan pengeluaran apungan & muat keluar (FPSO); Pengangkutan gerudi, pengeluaran bahan kimia, kakitangan & bekalan makanan; Penginapan atas kapal bagi kakitangan luar pesisir; Kemudahan kejuruteraan & bengkel atas kapal bagi kerja penyelenggaraan umum dan utama, dan lain-lain lagi. Kini, Kumpulan memiliki 18 buah kapal marin dengan 15 kapal baru yang bakal diperoleh dan akan dihantar dalam tempoh satu hingga dua tahun. AKTIVITI PERNIAGAAN BERKAITAN Melalui kepentingan ekuitinya sebanyak 60% dalam syarikat senarai awam, Petra Energy Berhad, Syarikat turut terlibat dalam penyediaan perkhidmatan brown field bersepadu. Skop perkhidmatan yang disediakan meliputi: Penyelenggaraan penyambungan, pentauliahan & pembinaan utama bahagian atas; Kejuruteraan, operasi & penyelenggaraan; Penyediaan pakej dan pengilangan peralatan; Pengoptimuman medan minyak Rekabentuk & memasang siap peralatan proses dan dandang Petra Energy juga menyediakan perkhidmatan pakar untuk industri petrokimia dan am dalam pasaran domestik, serantau dan global. 13 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

16 G R O U P S T R U C T U R E struktur korporat PETRA PERDANA GROUP OF COMPANIES 60% PETRA PERDANA BERHAD A H 100% Intra Oil Services Berhad 100% Asiaway Sdn Bhd 100% Petra Resources Sdn Bhd 100% Perdana Marine Offshore Pte Ltd 100% Ampangship Marine Sdn Bhd 100% Osam Marine Sdn Bhd 100% Kovan Marine Sdn Bhd 100% Petra Fabricators Sdn Bhd 100% Petra Boilers Sdn Bhd 100% Odin Explorer Navigation Ltd 100% Perdana Jupiter Ltd 100% Malawi Marine Sdn Bhd 100% Petra Innotech Sdn Bhd 100% Petra Services Sdn Bhd 100% Perdana Mercury Ltd 100% Perdana Venus Ltd 100% Petra Asia Ltd 70% Jurutera Perunding Akal Sdn Bhd 51% Petra AWT Sdn Bhd (formerly known as Energy Link Systems Sdn Bhd) 100% Petra Offshore Ltd 100% Petra Teknik Sdn Bhd 55% Petra Marine Australia Pty Ltd 51% Geoseas Technologies Ltd 14 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

17 F I N A N C I A L H I G H L I G H T S maklumat-maklumat penting kewangan turnover (RM million) PERoLEHAN (RM juta) net profit (RM million) KEUNTUNGAN BERSIH (RM juta) shareholders FunD (RM million) DANA PEMEGANG SAHAM (RM juta) net Assets per share (RM) ASSET KETARA BERSIH SESAHAM (RM) 0.47* 0.60* 0.77* * Comparative figures are restated based on enlarged number of ordinary share of million. Angka berbandingan dinyatakan semula berdasarkan pertambahan bilangan saham biasa sebanyak juta. 15 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

18 a hands-on approach is the best approach Pendekatan Yang Aktif Adalah Pendekatan Terbaik

19 Our employees hands-on approach to delivering innovative solutions has proven to be the key to customers continued trust and confidence in us. But the main reason for our success is that our dedicated and hard-working employees know their tasks and are responsible enough to see them through. Pendekatan aktif oleh warga kerja kami dalam menyediakan penyelesaian yang inovatif terbukti menjadi punca kepada kepercayaan dan keyakinan pelanggan yang berterusan terhadap kami. Namun punca sebenar kejayaan kami ialah warga kerja kami yang berdedikasi dan gigih berusaha yang menyedari tugas mereka dan mempunyai rasa tanggungjawab untuk menyempurnakannya sebaik mungkin.

20 18 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

21 C H A I R M A N S S TAT E M E N T penyata pengerusi During the period under review, the Group, recognising the impact of the global economic crisis on the oil and gas industry, maintained a prudent business approach to ensure optimization of its business practices and assets portfolio. Semasa tempoh tinjauan, Kumpulan sedar akan krisis ekonomi global terhadap industri minyak dan gas, maka kami mengekalkan kaedah perniagaan berhemat untuk mengoptimumkan amalan dan portfolio aset. 19 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

22 On behalf of the Board of Directors of Petra Perdana Berhad ( Petra Perdana or Group or Company ), I am pleased to report that the Company performed satisfactorily for the financial year ended 31 December Profit after tax (PAT) attributable to shareholders was RM87.7 million or net earnings per share (EPS) of 29.5 sen for the financial year ended 31 December 2008 compared to RM155.7 million or EPS of 54.0 sen for the previous corresponding period. Based on the results, the Board is pleased to recommend a final dividend of 2 sen per ordinary share in respect of the financial year ended 31 December Bagi pihak Lembaga Pengarah Petra Perdana Berhad ( Petra Perdana atau Kumpulan atau Syarikat ), saya dengan sukacitanya melaporkan bahawa Kumpulan menampilkan prestasi yang memuaskan bagi tahun kewangan berakhir 31 Disember Keuntungan Selepas Cukai (PAT) milik pemegang saham berjumlah RM87.7 juta atau pendapatan bersih sesaham (EPS) bersamaan 29.5 sen bagi tahun kewangan berakhir 31 Disember 2008, berbanding RM155.7 juta atau EPS sebanyak 54.0 sen untuk tempoh yang sama sebelumnya. Berasaskan pencapaian keputusan ini, Lembaga Pengarah dengan sukacitanya mencadangkan pembayaran dividen akhir sebanyak 2.0 sen sesaham biasa berhubung tahun kewangan berakhir 31 Disember petra perdana BerHAD ( A) annual report 2008 laporan tahunan

23 FinAnCiAL review For the financial year ended 31 December 2008, the Group recorded a turnover of RM694.3million, and profit before tax (PBT) of RM119.5 million compared to a turnover of RM665.2 million and PBT of RM168.7 million respectively for the previous corresponding period. The net profit for the financial period ended 31 December 2008 was RM87.7 million compared to RM155.7 million in the previous corresponding period. The 44% reduction was mainly attributable to a number of factors. TINJAUAN KEWANGAN Bagi tahun kewangan berakhir 31 Disember 2008, Kumpulan mencatatkan perolehan sebanyak RM694.3 juta, dan keuntungan sebelum cukai (PBT) sebanyak RM119.5 juta berbanding perolehan masing-masing berjumlah RM665.2 juta dan PBT RM168.7 juta yang dicapai pada tempoh yang sama sebelumnya. Keuntungan bersih pada tahun kewangan berakhir 31 Disember 2008 berjumlah RM87.7 juta berbanding RM155.7 juta pada tempoh yang sama sebelumnya. Penurunan sebanyak 44% ini disebabkan oleh beberapa faktor. Ia termasuk: 1. Kemasukan ke limbungan kering yang berjadual dan semasa lima (5) daripada kapal marin luar pesisir kami semasa tempoh tinjauan. Ini telah menjejaskan perolehan kami di samping meningkatkan kos. 2. Pelupusan empat (4) buah kapal lama serta kelewatan menerima sembilan (9) buah kapal marin luar pesisir yang baru oleh syarikat pembinaan kapal luar negara. Ini telah menjejaskan potensi perolehan Syarikat pada tahun tersebut. 3. Kos kerahan yang tinggi yang oleh empat (4) buah kapal baru yang diterima pada tahun This included: 1. The scheduled and concurrent dry-docking of five (5) of our offshore marine vessels during the period under review. This affected our revenue, whilst increasing costs. 2. The disposal of four (4) older vessels coupled with the late deliveries of nine (9) new offshore marine vessels by foreign-based vessel construction companies. This affected our earnings potential. 3. High mobilization costs incurred by our four (4) new vessels delivered in Fluctuation and subsequent decline in charter rates (from 10 to 20%) for smaller and medium sized vessels due to market adversities arising from the global economic crisis. 5. Reduction in the contributions from Petra Energy Berhad for the financial year ended 31 December Petra Energy Berhad recorded lower profits due to an increase in operating costs and lower margin contributions of sales mix in the integrated Brown field activities. 4. Turun naik dan akhirnya penurunan kadar sewa (dari 10 hingga 20%) bagi kapal bersaiz kecil dan sederhana akibat kesan daripada krisis ekonomi global. 5. Penurunan dalam sumbangan daripada Petra Energy Berhad bagi tahun kewangan berakhir 31 Disember Petra Energy merekodkan keuntungan yang lebih rendah akibat kos operasi yang lebih tinggi dan margin sumbangan yang lebih kecil daripada pelbagai jualan dalam aktiviti brown field bersepadu. Kesusutan keuntungan Kumpulan juga disebabkan oleh termasukkan keuntungan bukan operasi pada tempoh berakhir 31 Disember Keuntungan daripada kecairan kepentingan ekuiti dalam Petra Energy Berhad 2. Keuntungan daripada pelupusan saham Petra Energy Berhad Dari sudut yang positif pula, saya berbesar hati memaklumkan bahawa penggadaran Petra Perdana kini dikurangkan kepada 1.2 kali bagi tahun kewangan berakhir 31 Disember 2008 berbanding 1.4 kali pada tempoh yang sama sebelumnya berikutan pembayaran pinjaman bank dan peningkatan dalam dana pemegang saham. 21 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

24 The Group s reduction in profits was also attributed to the inclusion of the following nonoperating profits in the previous corresponding period ended 31 December Gains on dilution of equity interest in Petra Energy Berhad 2. Gains on disposal of Petra Energy Berhad shares On the positive side, I am pleased to inform you that Petra Perdana s gearing was reduced to 1.2 times for the financial year ended 31 December 2008 compared to 1.4 times in the previous corresponding period following the repayment of bank borrowings and an improvement in shareholders funds. The Company also showed a healthier balance sheet with increased net assets of RM545.6 million as at 31 December 2008 compared to RM440.6 million in the previous corresponding date. The 23.8% growth in the Group s net assets was attributed to profits achieved for the financial year CorporAte DeveLopMent Syarikat juga menunjukkan kunci kira-kira yang baik dengan aset yang meningkat sebanyak RM545.6 juta pada 31 Disember 2008 berbanding RM440.6 juta pada tarikh yang sama tahun lalu. Pertumbuhan 23.8% dalam aset Kumpulan adalah hasil daripada keuntungan diperolehi pada tahun kewangan PERKEMBANGAN KoRPoRAT Semasa tempoh tinjauan, Kumpulan sedar akan krisis ekonomi global terhadap industri minyak dan gas, maka kami mengekalkan kaedah perniagaan berhemat untuk mengoptimumkan amalan dan portfolio aset. Kumpulan ada mencatatkan beberapa perkembangan penting semasa tempoh tinjauan. Antaranya termasuk: Pengambilalihan baki saham dalam Perdana Marine Offshore Pte. Ltd, Singapura Memeterai perjanjian penyewaan bot dedah dengan pilihan untuk membeli empat kapal AHTS baru Menerima kemudahan pembiayaan berjumlah RM100 juta sebagai modal kerja During the period under review, the Group, recognizing the impact of the global economic crisis on the oil and gas industry, maintained a prudent business approach to ensure optimization of its business practices and assets portfolio. There were a number of significant developments that took place during the period under review and initial months of the current year. These included: Acquisition of the remaining shares in Perdana Marine Offshore Pte. Ltd, Singapore Entering into bareboat charter agreements with an option to purchase four new AHTS vessels Acceptance of a RM100 million financing facility as working capital Proposed renewal of general mandate for the Company to divest up to 19.5 million ordinary shares of RM0.50 each representing 10% of the enlarged issued and paid up share capital of Petra Energy Bhd. Subsequent to the disposal of 9 million shares in December 2007, the balance of 10.5 million shares remain mandated for divestment. 22 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

25 Formation of a Joint-venture company, Petra Marine Australia Pte Ltd, with The Underwater Centre Fremantle Pte Ltd and CJES Trust to undertake offshore marine services in Australia. Entering into time charter agreements with Petra Resources Sdn Bhd, a wholly-owned subsidiary of Petra Energy Berhad for the provision of two AHTS vessels Acceptance of a RM150million syndicated transferable term loan facility to refinance an existing bridging loan Membentuk syarikat usaha sama, Petra Marine Australia Pte Ltd, bersama The Underwater Centre Fremantle Pte Ltd dan CJES Trust untuk menjalankan perkhidmatan marin luar pesisir di Australia. Cadangan memperbaharui mandat am kepada Syarikat untuk menjual 19.5 juta saham biasa bernilai RM0.50 sen sesaham yang mewakili 10% daripada modal saham terlibat dan berbayar Petra Energy Berhad. Selepas pelupusan saham sebanyak 9 juta pada Disember 2007, baki sebanyak 10.5 juta saham masih mempunyai mandat untuk dijual. Memeterai perjanjian penyewaan masa bersama Petra Resources Sdn Bhd, sebuah subsidiari milik penuh Petra Energy Berhad bagi peruntukan dua buah kapal AHTS Menerima kemudahan pinjaman berjangka boleh pindah bersindiket berjumlah RM150 juta bagi pembiayaan semula pinjaman penyambung sedia ada Di bawah program Pengembangan dan Pembaharuan Angkatan Kemudahannya, Syarikat mampu mengoptimumkan pulangan melalui pembelian dan pelupusan strategik beberapa buah kapal marin sejajar dengan keperluan industri marin luar pesisir dalam pasaran domestik dan serantau. Under its Fleet Expansion and Renewal programme, the Company was able to optimize returns through the strategic acquisition and disposal of several marine vessels in tandem with the needs of the offshore marine industry in the domestic and regional markets. The following marine vessels were acquired during the period under review: Petra Adventurer, Petra Traveller, Petra Horizon and Petra Frontier. Also, the following marine vessels were disposed during the period under review: IOS Panther, Topaz, IOS Andari 1, IOS Andari 2, IOS Comfort 1 and IOS Comfort 2. A more detailed description of the Company s announcements is contained in the financial section on pages of the annual report. Kapal-kapal marin berikut diperolehi semasa tempoh yang ditinjau, iaitu: Petra Adventurer, Petra Traveller, Petra Horizon dan Petra Frontier. Kapalkapal marin yang berikut pula adalah kapal yang dilupuskan semasa tempoh tinjauan: IOS Panther, Topaz, IOS Andari 1, IOS Andari 2, IOS Comfort 1 dan IOS Comfort 2. Keterangan lanjut mengenai pengumuman Syarikat boleh didapati di seksyen kewangan di muka surat 159 hingga 160 dalam laporan tahunan. ARAH ALIRAN & PERKEMBANGAN INDUSTRI Kenaikan harga minyak secara berterusan sehingga mencecah ke tahap tertinggi pada USD147 setong pada Julai 2008 adalah akibat permintaan yang meningkat daripada ekonomi dunia yang pesat berkembang, termasuklah daripada negara China dan India. Bahagian pengeluaran tidak mampu menampung permintaan tersebut dan mengakibatkan kenaikan harga. Selepas itu, harga minyak mula jatuh, secepat kenaikannya, dan menjunam ke paras terendah iaitu USD37 setong pada Disember Kesan kegawatan kewangan dan ekonomi global yang 23 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

26 industry trends & DeveLopMent The steady escalation of oil prices to unprecedented levels, peaking at USD147 per barrel in July 2008, stemmed from an increased demand from emerging economies worldwide, including China and India. Production was not able to cope with market demands and this resulted in higher oil prices. Just as fast as oil prices peaked, it began to tumble, plunging to a record low of USD37 per barrel in December The effects of the global economic and financial meltdown, which began affecting world economies since Q2, 2008, started taking its toll on all sectors of industry. Even the oil and gas industry was not spared. Various factors or a combination of factors led to the subsequent decline in oil prices. These included technology, adverse changes to the supply & demand chain, speculative trading and global politics. In the short term, oil & gas service companies were faced with daunting challenges of unprecedented proportions that could seriously impact their business. Given the tighter credit financing and accessibility, higher debts & financing costs, cancellation of orders, reduced charter rates (smaller horse-powered vessels) and declining share prices, it had a visible effect on most companies as business operations were being affected and margins were getting squeezed. With regard to business activities, service companies that are involved in upstream exploration and drilling activities (green field) are bracing themselves for tougher times following the delay or deferment of projects due to the reallocation of capital expenditure (CAPEX) by oil majors worldwide. It is likely that such deferment would continue until the economic situation improves. mula menjejaskan ekonomi dunia sejak suku ke-2, 2008, mula menampakkan kesannya terhadap semua sektor industri. Industri minyak dan gas juga tidak terkecuali. Pelbagai faktor dan gabungan faktor membawa kepada kejatuhan harta minyak. Ia termasuklah teknologi, perubahan negatif kepada rantaian bekalan & permintaan, spekulasi dagangan dan politik global. Dalam jangka pendek, syarikat minyak dan gas berhadapan dengan cabaran sengit yang belum pernah dialami sebelum ini yang dapat memberikan akibat buruk terhadap perniagaan mereka. Dengan pembiayaan kredit yang lebih ketat dan kos hutang & pembiayaan yang lebih tinggi, pembatalan tempahan, kadar sewa yang lebih rendah (kapal berkuasa kuda yang lebih rendah) dan kejatuhan harga saham, ia jelas menunjukkan kesan ke atas semua syarikat kerana operasi perniagaan terjejas dan margin semakin mengecil. Bagi aktiviti perniagaan, syarikat-syarikat perkhidmatan yang terlibat dalam eksplorasi huluan dan aktiviti penggerudian ( green field ) bersedia untuk menghadapi waktu-waktu sukar berikutan kelewatan atau penangguhan projek akibat penyusunan semula perbelanjaan modal (CAPEX) oleh syarikat-syarikat minyak utama di dunia. Besar kemungkinan penangguhan seperti ini akan berterusan sehingga keadaan bertambah baik. Pada masa yang sama, pembekal perkhidmatan brown field yang terlibat dalam aktiviti pengeluaran (bagi kemudahan minyak & gas daratan dan luar pesisir pantai sedia ada dan uzur 24 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

27 On the other hand, brown field service providers that are involved in production activities (of existing and ageing onshore and offshore oil & gas facilities) are likely to get through the global economic crisis relatively unscathed as contracts continue to be awarded. This is because the existing infrastructure (oil & gas facilities) must be well maintained to ensure optimum production output. As such, maintenance and integrated type contracts would continue to be awarded, even during crisis periods. Petra Energy s RM1.1billion Sarawak-Sabah Shell project secured in September 2008 is a case in point. These are indeed tough times. However, I believe companies that possess strong fundamentals including a healthy balance sheet and which are highly competent are well positioned to weather the storm that had precipitated by a global economic meltdown. Given that the Organisation of the Petroleum Exporting Companies (OPEC) has always played a crucial role in determining the global crude oil production, it is envisaged that oil prices would eventually stabilize. However, this could take up to two years until full economic recovery. atau kerja-kerja brown field ) dapat melalui krisis ekonomi global hampir tanpa sebarang kesan kerana kontrak terus diberikan. Ini adalah kerana infrastruktur sedia ada (kemudahan minyak & gas) hendaklah diselenggarakan bagi memastikan pengeluaran yang optimum. Maka, kontrak bagi penyelenggaraan dan bersepadu akan terus diberikan walaupun semasa tempoh krisis, sebagai contohnya, Projek Sarawak-Sabah Shell oleh Petra Energy bernilai RM1.1bilion diperolehi pada September Sememangnya sekarang ini merupakan waktu sukar. Walau bagaimanapun, saya percaya bagi syarikat yang mempunyai asas yang kukuh termasuk imbangan kira-kira yang mantap serta sangat berkebolehan mampu berhadapan dengan cabaran yang timbul akibat kegawatan ekonomi global ini. Memandangkan Pertubuhan Negara-negara Pengeluar Petroleum atau OPEC sering memainkan peranan penting dalam menentukan pengeluaran minyak mentah global, adalah dijangkakan harga minyak akan stabil akhirnya. Walau bagaimanapun, perkara ini mungkin akan mengambil masa sehingga dua tahun sehingga ekonomi pulih sepenuhnya. 25 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

28 some upsides to the negativity Despite the negative outlook, there are glimmers of hope given that there are several upsides to ensuring the continued sustainability of the oil & gas business. They include: Adequate built-in internal rates of return for oil majors if oil is priced above a threshold level of USD40 per barrel. Exploration & production (E&P) investments are expected to continue even if the oil prices dip below the USD40 per barrel in the immediate term (over the next one to two years). This is the long-term view in E&P assessments, as E&P spending is benchmarked against the life-cycle of contract agreements (which normally average some 20 years). For example, oil majors like Shell, PETRONAS and ExxonMobil are expected to continue their capital investments over the next couple of years, especially where decisions have been made. Oil prices are not expected to remain between the USD35 and USD45 per barrel band for extended periods, especially with periodic reduction in production output by OPEC, which controls about 40% of the world oil market. In the long term, charter rates for larger anchor handling tugs supply vessels are expected to be firmer due to vessel shortage in the industry. HARAPAN DI SEBALIK UNJURAN NEGATIF Walaupun unjuran dijangka negatif, terdapat beberapa kemajuan yang akan memastikan perniagaan minyak & gas terus mapan. Antaranya termasuk: Kadar pulangan dalaman yang mencukupi bagi syarikat minyak utama sekiranya harga minyak dalam lingkungan USD40 setong. Pelaburan eksplorasi & pengeluaran (E&P) dijangka akan berterusan walau pun harga minyak jatuh di bawah USD40 setong dalam tempoh masa terdekat (satu hingga dua tahun akan datang). Ini merupakan pandangan jangka panjang dalam penilaian E&P kerana perbelanjaan E&P diukur dengan pusingan hayat perjanjian kontrak (selalunya tempoh purata dalam masa 20 tahun). Sebagai contohnya, syarikat minyak utama seperti Shell, PETRONAS dan ExxonMobil dijangka akan meneruskan pelaburan modal mereka untuk beberapa tahun yang akan datang terutamanya jika keputusan telah pun dibuat. Harga minyak dijangka tidak akan kekal pada USD35 hingga USD45 setong untuk tempoh yang lama terutamanya dengan penurunan pengeluaran berjangka oleh OPEC, yang mengawal anggaran 40% pasaran minyak dunia. Dalam jangka panjang, kadar penyewaan bagi kapal bekalan tunda pengendalian sauh dijangka kukuh berikutan kekurangan kapal dalam industri. 26 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

29 prospects Looking ahead, our prospects remain encouraging due to a number of factors that bode well for the continued growth of the Group: 1. The delivery of more new vessels in 2009 will boost our existing fleet, thus enabling us to take advantage of the growing needs of the offshore market in the country and region 2. The Company s strong cash position will help facilitate funds needed for working capital, including financing of mobilization costs of new vessels 3. Singapore is now the Group s new regional hub for marine and logistics operations 4. Petra Energy Berhad s new RM1.1billion Sarawak-Sabah Shell contract, secured in September 2008, is expected to contribute positively to the Group s bottom-line in the current financial year and thereafter. Over the years, the Company, under its Fleet Expansion & Renewal programme has been acquiring new marine assets and disposing older vessels to meet the demands of the oil and gas industry. However, during the course of the programme, from Q2, 2008, foreign-based vessel construction companies and manufacturers of specialised equipment for installation on-board vessels were affected by the economic downturn, thus causing the non-delivery of five new offshore marine vessels in PRoSPEK Masa depan Syarikat dijangka kekal cerah kerana beberapa faktor yang dapat membantu dalam pertumbuhan berterusan Kumpulan: 1. Penghantaran lebih banyak kapal baru dalam 2009 akan mempertingkatkan angkatan kemudahan sedia ada, maka membolehkan kami mengambil peluang terhadap keperluan pasaran luar pesisir yang meningkat dalam negara dan serantau. 2. Kedudukan tunai Syarikat yang kukuh dapat membantu keperluan modal kerja, termasuklah pembiayaan kos mobilisasi kapal baru. 3. Singapura kini adalah hab serantau baru Kumpulan bagi operasi marin dan logistik. 4. Kontrak baru Sarawak-Sabah Shell yang diperolehi oleh Petra Energy Berhad pada September 2008, bernilai RM1.1 bilion dijangka akan member sumbangan positif kepada prestasi Kumpulan bagi tahun kewangan semasa dan seterusnya. Sejak beberapa tahun, Syarikat, dengan program Pengembangan & Pembaharuan Angkatan Kemudahannya, telah membeli aset marin yang baru dan melupuskan yang lama untuk memenuhi permintaan industri minyak & gas. Walau bagaimanapun, semasa program sedang dilaksanakan, dari suku tahun ke-2, 2008, syarikat pembinaan kapal asing dan pengeluar peralatan khusus bagi pemasangan dalam kapal terjejas akibat kemerosotan ekonomi, maka menyebabkan kelewatan dan menjejaskan jadual penerimaan lima kapal marin luar pesisir yang baru pada tahun Lima buah kapal ini, termasuk tujuh buah kapal baru (akan diterima pada 2009) menjadikan jumlah serahan baru sebanyak 12 semuanya dalam Dengan jangkaan bahawa kos kerahan kapal baru akan meningkat, Syarikat telah mengambil langkah-langkah untuk memastikan pembiayaan adalah mencukupi dalam memenuhi obligasinya melalui penyediaan dana dalaman dan cadangan penggunaan Dana Penggantian Angkatan Kemudahan seperti yang diluluskan oleh pemegang bon akhir tahun lalu. 27 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

30 Barring unforeseen circumstances, these five new vessels, coupled with seven new vessels (due in 2009), would result in 12 new deliveries in Given the anticipated higher mobilisation costs for the new vessels, the Company had taken steps to ensure sufficient funding to meet its obligations through the availability of internal funds and proposed utilisation of the Fleet Replacement Funds, as approved by the Bondholders late last year. Charter rates, although lower (approximately 10-20%) for smaller and medium sized vessels are not expected to adversely affect the Company s bottom-line. This is because the increase in our fleet size would cushion any reduction in charter revenue. Furthermore, our larger vessels (10,000BHP and more) are expected to command favourable rates due to continued demand in the offshore market. The Group has also made Singapore its regional hub for marine and logistics operations to leverage on new business opportunities. Its attractive tax incentives (for offshore marine), strategic location and networking capabilities make Singapore a critical hub for international marine business and providing support activities such as marketing of our vessels, dockyard services, vessel construction, acquisitions & disposals and others. Kadar sewa, walaupun lebih rendah (anggaran 10-20%) bagi kapal bersaiz kecil dan sederhana dijangka tidak akan menjejaskan prestasi Syarikat. Ini adalah kerana peningkatan saiz angkatan kemudahan akan menampung sebarang penurunan dalam perolehan sewa. Lagi pun, kapalkapal yang lebih besar (10,000BHP dan lebih) dijangka akan memberikan kadar yang lebih menarik kerana permintaan yang berterusan dalam pasaran luar pesisir. Kumpulan juga telah menjadikan Singapura sebagai hab serantau bagi operasi marin dan logistik untuk mengumpil peluang perniagaan baru. Galakan cukainya yang menarik (untuk marin pesisir pantai), lokasi yang strategik dan keupayaan rangkaian menjadikan Singapura hab yang penting untuk perniagaan marin antarabangsa dan menyediakan aktiviti sokongan seperti pemasaran kapal, khidmat limbungan, pembinaan kapal, pemerolehan & pelupusan dan lain-lain lagi. Dengan kelebihan ini, saya yakin kita mampu menempuh apa jua cabaran dalam kemerosotan ekonomi yang sedang dihadapi. Walau bagaimanapun, Syarikat juga mengambil langkah yang sewajarnya untuk lebih bersedia dengan 28 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

31 Given these positives, I am confident that we are well equipped to meet whatever challenges that may arise during the current economic downturn. However, the Company is also taking appropriate steps to be better prepared by implementing more prudent management practices. I remain optimistic that the Group will emerge much stronger when the economy improves, with enhanced growth performance in the medium- to long-term. DiviDenD The Board of Directors has recommended a final dividend of 2.0 sen, less taxation of 25% per share for the financial year ended 31 December ACKnoWLeDGeMent I would like to express my gratitude to all our stakeholders who have believed in us and supported us in our efforts to grow and sustain the business activities of the Group. I like to place on record my appreciation to all our employees, customers, vendors, principals, analysts, fund managers, bankers, associates and friends, including those abroad, for their continued support and participation in all our initiatives. I also take this opportunity to welcome our new Board member, Mr Tiong Young Kong, who joined the Company as an independent & non-executive director of the Company in December Mr Tiong has also been appointed as a member of the Audit Committee. Last but not least, I would like to thank my fellow Board members for their wise counsel and invaluable contributions. I look forward to their continued support as the Company braces for greater challenges ahead. melaksanakan amalan pengurusan yang lebih berhemat. Saya optimis bahawa Kumpulan akan muncul dengan lebih mantap dan bertenaga apabila keadaan ekonomi pulih dan meningkatkan lagi potensi pertumbuhan kami dalam jangka sederhana dan panjang. DIVIDEN Lembaga Pengarah mencadangkan pembayaran dividen akhir sebanyak 2.0 sen, ditolak 25% cukai sesaham bagi tahun kewangan berakhir 31 Disember PENGHARGAAN Saya ingin menyampaikan ucapan jutaan terima kasih kepada semua pemegang kepentingan yang mempunyai keyakinan dan telah memberikan sokongan kepada kami dalam usaha kami untuk berkembang dan kekal dalam aktiviti perniagaan Kumpulan. Saya juga ingin merakamkan penghargaan saya kepada seluruh kakitangan, pelanggan, vendor, prinsipal, penganalisis, pengurus dana, bank, rakan niaga dan rakan-rakan, termasuklah yang berada di luar negara, atas sokongan berterusan dan penglibatan mereka dalam semua inisiatif kami. Saya juga ingin mengambil peluang ini untuk mengalu-alukan kedatangan ahli Lembaga Pengarah yang baru, Mr Tiong Young Kong, yang menyertai Syarikat ini sebagai pengarah bebas bukan eksekutif Syarikat pada Disember Mr Tiong juga dilantik sebagai ahli Jawatankuasa Audit. Akhir sekali kepada rakan-rakan saya dalam Lembaga Pengarah, terima kasih saya ucapkan atas nasihat bijaksana dan sumbangan mereka yang tidak ternilai. Saya mengharapkan sokongan mereka yang berterusan memandangkan Syarikat akan berhadapan dengan cabaran yang lebih lagi di masa yang akan datang. Y. M. tengku DAto ibrahim petra Bin tengku indra petra Executive Chairman & Chief Executive Office Pengerusi Eksekutif & Ketua Pegawai Eksekutif 6 May/Mei petra perdana BerHAD ( A) annual report 2008 laporan tahunan

32 R E V I E W O F O P E R AT I O N S Tinjauan Operasi Petra Perdana s operations are classified into two categories. They are: A. Core Business Activity Offshore Marine Services B. Related Business Activities Integrated Brown Field Services Operasi Petra Perdana dikelaskan kepada dua kategori: A. Aktiviti Perniagaan Teras Perkhidmatan Marin Luar Pesisir B. Aktiviti Perniagaan Berkaitan Perkhidmatan Brown Field Bersepadu A. Core Business ACtivitY offshore Marine services Petra Perdana s fleet of offshore marine vessels provide services for the green field and brown field belts of the upstream O&G industry. Currently, the Group has a fleet of 18 marine vessels comprising eleven (11) anchor handling tug supply vessels, five (5) work barges, one (1) work boat and one (1) platform supply vessel. A. AKTIVITI PERNIAGAAN TERAS Perkhidmatan Marin Luar Pesisir Angkatan kapal marin luar pesisir Petra Perdana menyediakan pelbagai perkhidmatan untuk lingkaran brown field dan green field industri minyak dan gas industri huluan. Kini, Kumpulan mempunyai angkatan 18 kapal marin yang terdiri daripada sebelas (11) kapal bekalan tunda pengendalian sauh, lima (5) baj kerja, satu (1) bot kerja dan satu (1) kapal bekalan pelantar. Semasa tempoh tinjauan, kapal Kumpulan beroperasi di pasaran domestik dan serantau termasuk Malaysia, Indonesia, Vietnam, Thailand, Myanmar, Australia, Yemen, Sakhalin dan Mozambique. Para pelanggan kami antara lain, terdiri daripada Shell, PETRONAS Carigali, Exxonmobil, Petro Vietnam, British Petroleum, Total, Korea National Oil Company, Nippon Oil, Daewoo dan PTT Exploration and Production. Unit perniagaan ini menyumbang sebanyak RM219.5 juta atau 31.6% daripada perolehan Kumpulan pada tahun berakhir 31 Disember 2008 berbanding sebanyak RM184.3 juta atau 27.7% pada tempoh yang sama sebelumnya. 30 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

33 B. AKTIVITI PERNIAGAAN BERKAITAN Perkhidmatan Brown Field Bersepadu Syarikat melalui kepentingan ekuiti sebanyak 60% dalam Petra Energy, turut terlibat dalam perkhidmatan brown field bersepadu bagi industri minyak dan gas huluan. During the period under review, the Group s vessels operated in the domestic and regional markets that included Malaysia, Indonesia, Vietnam, Thailand, Myanmar, Australia, Yemen, Sakhalin and Mozambique. Our clients include Shell, PETRONAS Carigali, Exxonmobil, Petro Vietnam, British Petroleum, Total, Korea National Oil Company, Nippon Oil, Daewoo and PTT Exploration and Production, amongst others. This business unit contributed RM219.5 million or 31.6% of the Group s turnover for the year ended 31 December 2008 compared to RM184.3 million or 27.7% in the previous corresponding period. Sumbangan daripada unit perniagaan ini diperoleh daripada pelbagai jenis perkhidmatan yang meliputi penyelenggaraan, penyambungan, pentauliahan & pembinaan utama bahagian atas, kejuruteraan, operasi & penyelenggaraan, penyediaan pakej & pengilangan peralatan, pengoptimuman medan minyak dan rekabentuk & memasang siap peralatan proses dan dandang untuk industri minyak dan gas, petrokimia dan umum huluan. Unit perniagaan ini menyumbang sebanyak RM474.8 juta atau 68.4% daripada perolehan Kumpulan bagi tahun berakhir 31 Disember 2008 berbanding sebanyak RM480.9 juta atau 72.3% pada tempoh yang sama sebelumnya. B. related Business ACtivities integrated Brown Field services The Company, via its 60% equity interest in Petra Energy, is also involved in integrated brown field services of the upstream oil and gas industry. Contributions from this business unit is derived from a range of services that include top-side major maintenance hook-up commissioning & construction; engineering, operations & maintenance; equipment packaging & manufacturing; oil field optimisation and design & fabrication of process equipment and boilers for the upstream oil and gas, petrochemical and general industries. This business unit contributed RM474.8 million or 68.4% of the Group s turnover for the year ended 31 December 2008 compared to RM480.9 million or 72.3% in the previous corresponding period. 31 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

34 ApriL petra Adventurer 10,800 bhp AHTS vessel OUR NEW DELIVERIES Penyerahan kapal baru june petra traveller 10,800 bhp AHTS vessel 32 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

35 october petra Horizon 10,880 bhp AHTS vessel in 2008 tahun DeCeMBer petra Frontier 5,220 bhp AHTS vessel 33 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

36 A U D I T C O M M I T T E E R E P O R T MeMBers of the AuDit CoMMittee The members of the Audit Committee are as follows: 1. Ahmad bin Haji Mohd sharkan Chairman (Independent Non-Executive Director) 2. Wong Fook Heng Member (Independent Non-Executive Director) 3. Y.M. tengku Dato' ibrahim petra Member until 15 December 2008 (Executive Chairman & Chief Executive Officer) bin tengku indra petra 4. tiong Young Kong Member since 15 December 2008 (Independent Non-Executive Director) terms of reference of the AuDit CoMMittee The Audit Committee is a committee of the Board of Directors. The Committee does not have executive powers. 1. MeMBersHip of the AuDit CoMMittee The Audit Committee comprises at least three members of the Board of Directors of which at least two-thirds of the Committee members are Independent Directors. The members choose their chair from the Independent composition of the Committee. The Committee members are appointed by the Board of Directors, which in its opinion would exercise independent judgement based on the structure and composition of the Committee. The Secretary to the Board of Directors shall also be secretary of this Committee. 2. MeetinGs of the AuDit CoMMittee The Audit Committee meets at least four times a year during the finalisation of the financial accounts of the Company and the Group for the quarterly announcements to Bursa Malaysia Securities Berhad. The principal focus of any other meeting(s) will be on management control and internal audit. At the request of the Chair, the other Executive Directors and other executives (in particular the Head of Internal Audit) will be in attendance at Committee meetings or for selected agenda items. The representatives of the external auditors may also be invited to attend the meetings. The Audit Committee has the authority to convene meetings with the external auditors and/or the internal auditors without the presence of other Directors and employees of the Company, whenever deemed necessary. 3. reporting Line of the AuDit CoMMittee The Audit Committee reports directly to the Board of Directors. 4. responsibilities of the AuDit CoMMittee The Audit Committee is responsible for the following: To examine the manner in which management ensures and monitors the adequacy of the nature, extent and effectiveness of accounting and internal control systems; To examine and review the adequacy and effectiveness of management and operations; To review the statutory accounts and other published financial statements and information; To monitor relationships with external auditors, to ensure that there are no restrictions on the scope of the statutory audit; to make recommendations on the auditors' appointment, remuneration and dismissal; and to review the activities, findings, conclusions and recommendations of the external auditors; To review arrangements established by management for compliance with regulatory and financial reporting requirements; To approve the appointment or termination of the Head of Internal Audit who shall report directly to the Committee and have a right of direct access to the Chair of the Committee at all times; to review the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work; to receive and review reports from the Head of Internal Audit; and on occasion to commission audit engagements to be conducted on the Committee's behalf; and 34 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

37 To perform any other duties as required by Bursa Malaysia Securities Berhad or any other regulatory bodies. The purview of the Audit Committee extends to all the operations within the Company and the Group. AuDit CoMMittee MeetinGs HeLD DurinG the FinAnCiAL YeAr 2008 The Audit Committee held five meetings during the financial year under review with the following attendance record: names of Directors Attendance* Ahmad bin Haji Mohd Sharkan 5/5 Wong Fook Heng 5/5 Y.M. Tengku Dato Ibrahim Petra 5/5 bin Tengku Indra Petra (Resigned as member of Audit Committee on 15 December 2008) Tiong Young Kong 0/0 (Appointed as member of Audit Committee on 15 December 2008) * Number of meetings attended/number of meetings held during tenure summary of ACtivities of the AuDit CoMMittee In discharging its functions and duties, the following activities were undertaken by the Audit Committee during the financial year under review: 1. Reviewed the internal audit plan of the internal audit department to ensure adequacy in scope and coverage on the activities of the Group; 2. Reviewed the activities and internal audit reports of the internal audit department; 3. Reviewed the recurrent related party transactions of the Group; 4. Reviewed the unaudited quarterly financial reports and the audited annual financial report; 5. Reviewed the performance of the Company and the Group, and made recommendations for appropriate corrective measures to the Board of Directors; 6. Reviewed the status of material litigations of the Group; 7. Reviewed the external auditors fees for the Company and the Group in respect of the audit of financial statements for the financial year ended 31 December 2007, and recommended that of the Company to the Board for approval; 8. Reviewed the re-appointment of Messrs. Horwath as the external auditors of the Company; 9. Reviewed the relevant statements and disclosures for the 2007 Annual Report before production; 10. Reviewed the Audit Review Memorandum of the external auditors for the financial year ended 31 December 2007 and the Audit Planning Memorandum of the external auditors for the financial year ended 31 December internal AuDit FunCtion The Audit Committee obtains reasonable assurance on the effectiveness of the system of internal controls via the internal audit function, which shall be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control, and governance processes within the Company and the Group. The internal audit function is performed by the in-house internal audit department. The activities of the internal audit department during the financial year 2008 were as follows: 1. Reviewed the accounting and internal control systems of the Company and the Group. 2. Performed assurance engagements on major operations of the Group to ascertain adherence to management's policies on: Financial management Procurement management Warehouse and logistics management Recurrent related party transactions Human resource management 3. Conducted risk assessment on active operating units of the Group as part of the Group s continuous risk management initiative. statement on employees shares option scheme ( esos ) The ESOS approved by the shareholders of the Company at its Extraordinary General Meeting held on 31 January 2002 and the Bye-Laws of which was submitted to the Securities Commission vide a letter dated 12 March 2002, has not been carried out. 35 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

38 L A P O R A N J A W ATA N K U A S A A U D I T AHLI-AHLI JAWATANKUASA AUDIT Ahli-ahli Jawatankuasa Audit adalah seperti berikut: 1. Ahmad bin Haji Mohd Sharkan Pengerusi (Pengarah Bebas Bukan Eksekutif) 2. Wong Fook Heng Ahli (Pengarah Bebas Bukan Eksekutif) 3. Y.M. Tengku Dato Ibrahim Petra bin Ahli sehingga 15 Disember 2008 (Pengerusi Eksekutif & Ketua Pegawai Eksekutif) Tengku Indra Petra 4. Tiong Young Kong Ahli mulai 15 Disember 2008 (Pengarah Bebas Bukan Eksekutif) TERMA RUJUKAN JAWATANKUASA AUDIT Jawatankuasa Audit adalah sebuah Jawatankuasa Lembaga Pengarah. Jawatankuasa tersebut tidak mempunyai kuasa eksekutif. 1. Keahlian Jawatankuasa Jawatankuasa Audit terdiri daripada sekurang-kurangnya tiga orang ahli Lembaga Pengarah yang mana sekurangkurangnya dua pertiga daripada keahlian Jawatankuasa tersebut terdiri daripada para Pengarah Bebas. Ahli-ahli memilih pengerusi mereka daripada komposisi Bebas Jawatankuasa. Ahli Jawatankuasa dilantik oleh Lembaga Pengarah, yang mana pada pendapat mereka akan melaksanakan pertimbangan bebas berdasarkan kepada struktur dan komposisi Jawatankuasa. Setiausaha Lembaga Pengarah hendaklah turut menjadi setiausaha Jawatankuasa. 2. Mesyuarat Jawatankuasa Audit Jawatankuasa Audit bermesyuarat sekurang-kurangnya empat kali setahun semasa semakan akhir akaun kewangan Syarikat dan Kumpulan untuk pengumuman suku tahunan kepada Bursa Malaysia Securities Berhad. Fokus utama mesyuarat lain adalah terhadap kawalan pengurusan dan audit dalaman. Atas permintaan Pengerusi, para Pengarah Eksekutif dan eksekutif lain (khususnya Ketua Audit Dalaman) akan menghadiri mesyuarat Jawatankuasa atau untuk perkaraperkara tertentu dalam agenda. Wakil-wakil juruaudit luar juga boleh dijemput untuk menghadiri mesyuarat. Jawatankuasa Audit mempunyai kuasa untuk mengadakan mesyuarat dengan juruaudit luar dan/atau juruaudit dalaman tanpa kehadiran Pengarah dan kakitangan lain Syarikat, jika dianggap perlu. 3. Garis Laporan Jawatankuasa Audit Jawatankuasa Audit melapor secara langsung kepada Lembaga Pengarah. 4. Tanggungjawab Jawatankuasa Audit Jawatankuasa Audit bertanggungjawab ke atas perkaraperkara berikut: Untuk memeriksa cara pihak pengurusan memastikan dan memantau kecukupan bentuk, tahap dan keberkesanan sistem perakaunan dan kawalan dalaman; Untuk memeriksa dan mengkaji kecukupan dan keberkesanan pengurusan dan operasi; Untuk mengkaji akaun berkanun dan penyata serta maklumat kewangan lain yang disiarkan; Untuk memantau hubungan dengan juruaudit luar, bagi memastikan supaya tiada halangan ke atas skop audit berkanun; untuk mengesyorkan pelantikan, imbuhan dan penamatan perkhidmatan juruaudit; dan untuk mengkaji aktiviti, penemuan, kesimpulan dan syor-syor juruaudit luar; Untuk mengkaji pengaturan yang diwujudkan oleh pengurusan bagi pematuhan terhadap keperluan penguatkuasaan peraturan dan laporan kewangan; Untuk meluluskan pelantikan atau penamatan perkhidmatan Ketua Audit Dalaman yang akan melapor secara langsung kepada Jawatankuasa dan mempunyai hak secara langsung kepada Pengerusi Jawatankuasa pada bila-bila masa; untuk mengkaji kecukupan skop, fungsi, daya saing dan sumber fungsi audit dalaman dan bahawa ia mempunyai kuasa yang diperlukan untuk menjalankan kerjanya; untuk menerima dan mengkaji laporan daripada Ketua Audit Dalaman; dan untuk mentauliahkan penugasan audit untuk dijalankan bagi pihak Jawatankuasa; dan 36 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

39 Untuk melaksanakan sebarang tugas lain yang dikehendaki oleh Bursa Malaysia Securities Berhad atau sebarang badan penguatkuasa peraturan lain. Bidang kuasa Jawatankuasa Audit meliputi semua operasi dalam Syarikat dan Kumpulan. MESYUARAT JAWATANKUASA AUDIT YANG DIADAKAN PADA TAHUN KEWANGAN 2008 Jawatankuasa Audit telah mengadakan lima mesyuarat pada tahun kewangan yang ditinjau dengan rekod kehadiran seperti berikut: Nama Pengarah Kehadiran* Ahmad bin Haji Mohd Sharkan 5/5 Wong Fook Heng 5/5 Y.M. Tengku Dato IbrahimPetra 5/5 bin Tengku Indra Petra (Bersara sebagai ahli Jawatankuasa Audit pada 15 Disember 2008) Tiong Young Kong 0/0 (Dilantik sebagai ahli Jawatankuasa Audit pada 15 Disember 2008) * Bilangan mesyuarat yang dihadiri/bilangan mesyuarat yang diadakan sewaktu tempoh memegang jawatan RINGKASAN AKTIVITI JAWATANKUASA AUDIT Berikut adalah aktiviti yang telah dijalankan oleh Jawatankuasa Audit dalam melaksanakan fungsi dan tugasnya pada tahun yang ditinjau: 1. Mengkaji rancangan audit dalaman yang dirangka oleh jabatan audit dalaman bagi memastikan kecukupan skop dan liputan ke atas aktiviti Kumpulan; 2. Mengkaji aktiviti dan laporan audit dari jabatan audit dalaman; 3. Mengkaji urusniaga-urusniaga pihak berkaitan yang berulang dalam Kumpulan; 4. Mengkaji laporan kewangan suku tahunan yang belum diaudit dan laporan kewangan tahunan beraudit; 5. Mengkaji prestasi Syarikat dan Kumpulan, dan mengesyorkan langkah-langkah pembetulan yang wajar kepada Lembaga Pengarah; 6. Mengkaji status litigasi-litigasi penting Kumpulan; 7. Mengkaji yuran audit luaran bagi Syarikat dan Kumpulan berhubung audit penyata kewangan bagi tahun kewangan berakhir 31 Disember 2007, dan mengesyorkan yuran audit luaran bagi Syarikat kepada Lembaga untuk diluluskan; 8. Mengkaji pelantikan semula Tetuan Horwath sebagai juruaudit luar Syarikat; 9. Mengkaji penyata dan pendedahan yang berkaitan bagi Laporan Tahunan 2007 sebelum ia dikeluarkan; 10. Mengkaji Memorandum Pemeriksaan Audit oleh juruaudit luar bagi tahun kewangan berakhir 31 Disember 2007 dan Memorandum Perancangan Audit dari juruaudit luar bagi tahun kewangan berakhir 31 Disember FUNGSI AUDIT DALAMAN Jawatankuasa Audit mendapat jaminan yang sewajarnya berhubung keberkesanan sistem kawalan dalaman melalui fungsi audit dalaman yang akan bertanggungjawab menjalankan kajian secara kerap dan/atau taksiran keberkesanan pengurusan risiko, kawalan dalaman dan proses tadbir urus di dalam Syarikat dan Kumpulan. Fungsi audit dalaman dilaksanakan oleh Jabatan Audit Dalaman. Aktiviti jabatan audit dalaman pada tahun kewangan 2008 adalah seperti berikut: 1. Mengkaji sistem perakaunan dan kawalan dalaman Syarikat dan Kumpulan. 2. Menjalankan penugasan jaminan ke atas operasi utama Kumpulan untuk memastikan pematuhan kepada dasar pengurusan berhubung: Pengurusan Kewangan Pengurusan Pemerolehan Pengurusan Gudang dan Logistik Transaksi pihak berkaitan yang berulang Pengurusan Sumber Manusia Menjalankan penilaian risiko ke atas unit-unit operasi Kumpulan yang aktif sebagai sebahagian daripada inisiatif berterusan pengurusan risiko Kumpulan. PENYATA SKIM opsyen SAHAM KAKITANGAN ( ESoS ) ESOS yang diluluskan oleh para pemegang saham Syarikat pada Mesyuarat Agung Luar Biasa yang diadakan pada 31 Januari 2002 dan Undang-undang Kecil yang telah dikemukakan kepada Suruhanjaya Sekuriti melalui surat bertarikh 12 Mac 2002, tidak dilaksanakan. 37 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

40 S TAT E M E N T O F I N T E R N A L C O N T R O L responsibility The Board acknowledges its responsibility for maintaining sound internal control and risk management systems that would provide reasonable assurance in ensuring the effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations, to safeguard shareholders interest and the Group s asset. The system of internal control is designed to manage the Group s risk within acceptable risk profile, rather than eliminate the risk of failure to achieve Group s policies and business objectives, and provides reasonable assurance against material errors, misstatement or irregularities. FrAMeWorK of the system on internal ControLs The key elements of the Group's system of internal controls are as follows: Clear organisational structures with defined lines of responsibility and delegation of authority. Centralised control of key functions such as corporate affairs, finance, tax, legal, human resources and risk management. Participation of management in the identification and evaluation of significant risks relevant to their business areas, and the design and operation of suitable internal controls in managing these risks. The Audit Committee, through the Group Internal Audit Department of Petra Perdana Berhad, examines the effectiveness of the Group s system of internal control. The internal audit function adopts a risk-based approach in identifying areas of priority for assurance engagements. The financial performance of the Company for every quarter is subject to review by the Audit Committee and the annual financial statements by both the internal auditors and the external auditors. The Audit Committee then reports and makes recommendations to the Board of Directors. The Board and the management are committed to continuously enhance the Group's system of internal control to ensure its relevance, adequacy and integrity. risk MAnAGeMent There is ongoing risk management process to identify, assess, control, monitor and report significant risks that may affect the achievement of the Group s business objectives. This process involves conducting risk management workshops and subsequent development of Risk Management Schedule to capture and prioritise key risk profiles, delegate ownership of risks, attach timelines to management control and action plans, and, provide continuous monitoring and reporting of risks. The Board, working together with the management, continues to take measures to further strengthen the Group s risk management system as one of the means to achieve the Group s business objectives. review of statement BY external AuDitors The external auditors have reviewed this Statement on Internal Control for inclusion in the Annual Report of the Group for the financial year ended 31 December The external auditors reported to the Board that nothing has come to their attention that causes them to believe that the Statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal controls. This statement was approved by the Board of Directors on 28 April petra perdana BerHAD ( A) annual report 2008 laporan tahunan

41 P E N Y ATA K A W A L A N D A L A M A N TANGGUNGJAWAB Lembaga Pengarah mengakui tanggungjawabnya dalam mengekalkan sistem kawalan dalaman dan pengurusan risiko yang berwibawa yang boleh memberi jaminan munasabah dalam memastikan keberkesanan dan kecekapan operasi, kewibawaan laporan kewangan dan pematuhan terhadap undang-undang dan peraturan yang diterima pakai untuk melindungi kepentingan pemegang saham dan aset Kumpulan. Sistem kawalan dalaman dibentuk untuk mengurus risiko Kumpulan dalam lingkungan profil risiko yang boleh diterima dan bukan untuk menghapuskan risiko kegagalan dalam usaha mencapai dasar dan objektif perniagaan Kumpulan, serta menyediakan jaminan munasabah terhadap kesalahan, salah nyata atau perkara di luar kebiasaan yang ketara. RANGKA KERJA SISTEM KAWALAN DALAMAN Elemen-elemen penting sistem kawalan dalaman Kumpulan adalah seperti berikut: Struktur organisasi yang jelas dengan garis tanggungjawab dan pengagihan kuasa yang ditakrif. Kawalan berpusat bagi fungsi-fungsi penting seperti hal ehwal korporat, kewangan, cukai, undang-undang, sumber manusia dan pengurusan risiko. Penglibatan pengurusan dalam proses mengenal pasti dan menilai risiko penting berkaitan bidang perniagaan mereka dan bentuk serta operasi kawalan dalaman yang sesuai untuk menguruskan risiko-risiko tersebut. Jawatankuasa Audit, melalui Jabatan Audit Dalaman Petra Perdana Berhad, memeriksa keberkesanan sistem kawalan dalaman Kumpulan. Fungsi audit dalaman menerima pakai pendekatan berasaskan risiko dalam mengenal pasti bidang-bidang yang diberi keutamaan untuk penugasan jaminan. Prestasi kewangan Syarikat bagi setiap suku tahunan adalah tertakluk kepada penilaian oleh Jawatankuasa Audit dan penyata kewangan tahunan oleh juruaudit dalaman dan juruaudit luaran. Jawatankuasa Audit kemudian melapor dan mengesyorkannya kepada Lembaga Pengarah. Lembaga Pengarah dan pengurusan komited untuk mempertingkatkan secara berterusan sistem kawalan dalaman Kumpulan untuk memastikan agar ia sentiasa relevan, mencukupi dan berwibawa. PENGURUSAN RISIKo Terdapat proses pengurusan risiko berterusan untuk mengenal pasti, menilai, mengawal, memantau dan melaporkan risikorisiko penting yang mungkin menjejaskan pencapaian objektif perniagaan Kumpulan. Proses ini melibatkan pelaksanaan bengkel-bengkel pengurusan risiko dan kemudian pembentukan Jadual Pengurusan Risiko untuk meliputi dan menyusun profil-profil risiko penting menurut keutamaan, mengagihkan tanggungjawab terhadap risiko, menetapkan tempoh masa terhadap rancangan pengurusan kawalan dan tindakan, serta menyediakan pemantauan dan laporan risiko secara berterusan. Lembaga bekerjasama dengan pengurusan untuk terus mengambil langkah-langkah bagi mengukuhkan lagi sistem pengurusan risiko Kumpulan sebagai salah satu kaedah untuk mencapai objektif perniagaan Kumpulan. PENILAIAN oleh JURUAUDIT LUAR Juruaudit luar telah mengkaji Penyata Kawalan Dalaman ini untuk disertakan di dalam Laporan Tahunan Kumpulan bagi tahun berakhir 31 Disember Juruaudit luar telah melaporkan kepada Lembaga bahawa tiada sebarang perkara yang pada pemerhatian mereka boleh menyebabkan mereka berpendapat bahawa Penyata ini tidak konsisten dengan pemahaman mereka berhubung proses yang telah diterima pakai oleh Lembaga dalam mengkaji kecukupan dan kewibawaan sistem kawalan dalaman. Penyata ini telah diluluskan oleh Lembaga Pengarah pada 28 April petra perdana BerHAD ( A) annual report 2008 laporan tahunan

42 B O A R D O F D I R E C T O R S S TAT E M E N T S CorporAte GovernAnCe statement This statement, which is made pursuant to paragraph of the Listing Requirements of Bursa Malaysia, sets out the commitment of the Board of Directors ( the Board ) of Petra Perdana Berhad ( the Company ) towards good corporate governance principles and the extent to which it has complied with the best practices of the Malaysian Code on Corporate Governance ( the Code ) throughout the financial year. the BoArD of DireCtors The Group is led and controlled by the Board, which has the overall responsibility for corporate governance, strategic direction and overseeing the investments of the Group. These include adopting strategic plans, approving key business initiatives, major investments and funding decisions, reviewing financial performance, developing corporate objectives and implementing investor relations programme. It also determines succession plans for senior management and ensures adequate internal controls to identify and manage risks. The Board is well balanced with Executive and Independent Non-Executive Directors to meet the needs of the Group. For most of the financial year ended 31 December 2008, there were four members on the Board, comprising two Executive Directors and two Independent Non-Executive Directors, with an additional Independent Non-Executive Director on Board with effect from 3 December The roles of the Executive Chairman and the Chief Executive Officer ( CEO ) of the Group are combined because the Executive Chairman/CEO possesses the intimate knowledge and experience in the core business activities of the Group. These knowledge and experience are considered essential in the provision of effective leadership for an expanding Group. In spite of this, the functionality of the Board as a whole is not compromised, as the two Independent Non-Executive Directors on the Board for most of the financial year ended 31 December 2008 are respected professionals in their own rights who have demonstrated their continued professionalism in the discharge of their duties. In accordance with the requirements of the Code, Encik Ahmad bin Haji Mohd Sharkan acts as the Senior Independent Non-Executive Director dealing with concerns regarding the Company where it could be inappropriate for these to be dealt by the Executive Chairman/CEO or the management. During the financial year ended 31 December 2008, the Board met five times with the following attendance record: names of Directors Attendance* Y.M. Tengku Dato Ibrahim Petra bin Tengku Indra Petra 5/5 Datin Nariza Hajjar Hashim 4/5 Ahmad bin Haji Mohd Sharkan 5/5 Wong Fook Heng 5/5 Tiong Young Kong 0/0 * Number of meetings attended/number of meetings held during tenure The profile of each Director is listed in pages 5 to 9 of this Annual Report. In discharging its duties, the Board has unrestricted access to timely and accurate information, which is not only confined to quantitative but also other qualitative information as required. The Directors have access to all information within the Company whether as a full Board or in their individual capacity. They also have access to the advice and services of the senior management and the Company Secretary in their discharge of duties. In accordance with the Company's Articles of Association, at least one-third of the Directors will retire by rotation at each Annual General Meeting and all the Directors will retire from office at least once every three years. Directors scheduled for retirement by rotation shall be eligible for re-election. 40 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

43 nomination AnD AppointMent of DireCtors The Board is responsible for the appointments of Directors. As the number of Directors on the Board is small, every Director may propose new nominees, assess the contributions of other Directors and assess the overall effectiveness of the Board on an on-going basis. The Company Secretary ensures that any appointments to the Board are properly made and that the relevant documentation meets statutory obligations as well as obligations arising from the Listing Requirements of Bursa Malaysia Securities Berhad. DireCtors' training AnD education Throughout their tenure in office, the Directors are constantly updated on the Group's business, and the competitive and regulatory environment in which it operates. They are also advised of their obligations as Directors of a listed company. They are encouraged to attend training courses at the Group's expense to enhance their skills and knowledge, where relevant. During the financial year ended 31 December 2008, the following Directors attended the trainings as set out below: names of Directors trainings Attended Held on Y.M. Tengku Dato Ibrahim Training Programme entitled Improving Board Directors 31 July 2008 Petra bin Tengku Indra Petra Performance, Leadership & Governance Datin Nariza Hajjar Hashim Training Programme entitled Improving Board Directors 31 July 2008 Performance, Leadership & Governance Ahmad bin Haji Mohd Sharkan Conference entitled The Recent Changes In The Corporate Legal 28 & 29 Framework Towards Better Corporate Governance: January 2008 It s implications on Directors Duties CFO Conference 2008 entitled The Evolving Role and Challenges 19 & 20 For The Modern CFO In Implementing An Effective Finance Function November 2008 During Uncertain Times Mr. Wong Fook Heng did not attend any training programmes during the aforesaid financial year due to his tight schedule. The Directors will continue to participate in training programmes to equip themselves and to effectively discharge their duties as Directors as and when beneficial. The Directors have constantly kept themselves updated on both local or international affairs, and to changes in regulations affecting the Company through advisories from regulatory bodies, the management and through self-reading. DireCtors' remuneration The Board determines the remuneration of the Directors, and recommends the payment of Directors' fees to the shareholders for approval. Executive Directors' remuneration is based on corporate performance and individual responsibilities. All Directors are paid fixed annual fees and are also entitled to meeting allowances for their attendance at Board meetings. The details of Directors' remuneration received and/or receivable from the Company and its subsidiaries during the financial year ended 31 December 2008 are as follows: Aggregate remuneration categorised by type: type of remuneration executive Directors non-executive Directors rm rm Fees 114, , Salaries 1,100, Benefits-in-kind 116, petra perdana BerHAD ( A) annual report 2008 laporan tahunan

44 Number of Directors whose remuneration falls into the following bands: range of remuneration executive Directors non-executive Directors Below RM50,000 3 RM250,001 to RM300,000 1 RM1,050,001 to RM1,100,000 1 As the number of Directors on the Board is small, the Board as a whole conducts the evaluation and discussion of Directors' remuneration, with the individual Director abstaining from making the decision in respect of his/her remuneration. shareholders The Board values regular communications with shareholders. These include various announcements made during the year, the timely release of annual reports, circulars to shareholders, press releases and announcements on quarterly financial results, which provide shareholders with an overview of the Group s business and financial performances. The Company also conducts regular dialogues with its institutional shareholders and financial analysts. The Annual General Meeting is the principal forum for dialogue with shareholders. Shareholders are encouraged to participate in the proceedings and ask questions about the resolutions being proposed and the operations of the Group. The Group maintains a homepage at to allow shareholders, investors and members of the public to access information on the Group. The Board has nominated Encik Ahmad bin Haji Mohd Sharkan as the Senior Independent Non-Executive Director to whom stakeholders may convey their concerns on issues affecting the Group. ACCountABiLitY AnD AuDit The Board is responsible to ensure that the financial statements are prepared in accordance with the provisions of the Companies Act, 1965 ( the Act ) and the approved accounting standards in Malaysia ( the accounting standards ). The Board considers adherence to the Act and the accounting standards as sufficient to enable it to present a balanced and understandable assessment of the Company and the Group's positions and prospects. The Board has the overall responsibility to maintain a sound system of internal control to safeguard shareholders' investments and the Group's assets. Whilst the Board recognises that it is not realistic to expect complete elimination of all risks, it is confident that the system of internal controls within the structure of the Group is capable of mitigating these risks to an acceptable level. The inherent system of internal control is designed to provide reasonable assurance against the risk of material errors, misstatements or irregularities. The Board, through the Audit Committee, has established transparent arrangements for maintaining appropriate relationships with both the external and internal auditors of the Group. These arrangements are included in the Audit Committee's terms of reference. This statement was approved by the Board of Directors on 28 April statement of DireCtors' responsibility in the preparation of FinAnCiAL statements The Directors are required by the Companies Act, 1965 ( the Act ) to prepare financial statements for each financial year in accordance with approved accounting standards so as to give a true and fair view of the state of affairs of the Company and the Group at the end of the financial year, and of the results and cash flow of the Company and the Group for the financial year. In the preparation of the financial statements, the Directors have considered the following: Adoption of suitable accounting policies and its consistent application Prudence and reasonableness in judgement and estimates Adherence to approved accounting standards in Malaysia Appropriateness in the preparation of financial statements on a going concern basis. The Directors are responsible for ensuring that the Company and its subsidiaries maintain proper accounting records which disclose with reasonable accuracy the financial positions of the Company and the Group in compliance with the provisions of the Act and approved accounting standards in Malaysia. In addition, the Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group, and to prevent and detect fraud and other irregularities. This statement was approved by the Board of Directors on 28 April petra perdana BerHAD ( A) annual report 2008 laporan tahunan

45 P E N Y ATA L E M B A G A P E N G A R A H PENYATA TADBIR URUS KoRPoRAT Penyata yang disediakan menurut perenggan Keperluan Penyenaraian Bursa Malaysia ini menggariskan komitmen Lembaga Pengarah ( Lembaga ) Petra Perdana Berhad ( Syarikat ) terhadap prinsip-prinsip tadbir urus korporat yang baik dan tahap di mana ia telah mematuhi amalan terbaik Kod Tadbir Urus Korporat Malaysia ( Kod ) pada sepanjang tahun kewangan ini. LEMBAGA PENGARAH Kumpulan diterajui dan dikawal oleh Lembaga, yang bertanggungjawab secara keseluruhannya terhadap tadbir urus korporat, hala tuju strategik dan pengawasan pelaburan Kumpulan. Ini termasuk menerima pakai pelan strategik, meluluskan inisiatif perniagaan yang penting, pelaburan utama dan keputusan pembiayaan, mengkaji prestasi kewangan, membentuk objektif korporat dan melaksanakan program perhubungan pelabur. Ia juga menentukan pelan penggantian bagi pengurusan kanan dan memastikan kawalan dalaman yang mencukupi untuk mengenal pasti dan mengurus risiko. Lembaga mempunyai komposisi Pengarah Eksekutif dan Pengarah Bebas Bukan Eksekutif yang seimbang untuk memenuhi keperluan Kumpulan. Bagi kebanyakan masa tahun kewangan berakhir 31 Disember 2008, terdapat empat orang ahli Lembaga yang terdiri daripada dua orang Pengarah Eksekutif dan dua orang Pengarah Bebas Bukan Eksekutif, dengan tambahan seorang Pengarah Bebas Bukan Eksekutif bermula dari 3 Disember Peranan Pengerusi Eksekutif dan Ketua Pegawai Eksekutif ( CEO ) Kumpulan digabungkan kerana Pengerusi Eksekutif/CEO mempunyai pengetahuan dan pengalaman yang mendalam mengenai aktiviti perniagaan teras Kumpulan. Pengetahuan dan pengalaman ini dianggap penting dalam memberi kepimpinan yang berkesan bagi Kumpulan yang sedang berkembang. Walau bagaimanapun, peranan Lembaga secara keseluruhannya tidak diabaikan kerana dua orang Pengarah Bukan Eksekutif yang menganggotai Lembaga bagi kebanyakan masa tahun kewangan berakhir 31 Disember 2008 merupakan ahli profesional yang dihormati dalam bidang mereka yang telah menunjukkan profesionalisme berterusan dalam pelaksanaan tugas mereka. Selaras dengan keperluan Kod, Encik Ahmad bin Haji Mohd Sharkan bertindak sebagai Pengarah Kanan Bebas Bukan Eksekutif yang menangani hal ehwal berkaitan Syarikat yang tidak wajar ditangani oleh Pengerusi Eksekutif/CEO atau pengurusan. Pada tahun kewangan berakhir 31 Disember 2008, Lembaga telah bermesyuarat sebanyak lima kali dengan rekod kehadiran seperti berikut: Nama Pengarah Kehadiran* Y.M. Tengku Dato Ibrahim Petra 5/5 bin Tengku Indra Petra Datin Nariza Hajjar Hashim 4/5 Ahmad bin Haji Mohd Sharkan 5/5 Wong Fook Heng 5/5 Tiong Young Kong 0/0 * Bilangan mesyuarat dihadiri / Bilangan mesyuarat diadakan sewaktu tempoh memegang jawatan Profil setiap Pengarah dibentangkan pada muka surat 5 hingga 9 dalam Laporan Tahunan ini. Dalam melaksanakan tugasnya, Lembaga berhak mendapatkan maklumat yang sahih dan tepat pada masanya bukan hanya dalam bentuk kuantitatif malah maklumat berbentuk kualitatif lain seperti yang diperlukan. Pengarah juga berhak mendapatkan maklumat Syarikat, sama ada sebagai sebuah Lembaga atau orang perseorangan. Mereka juga berhak menerima khidmat nasihat dari pihak pengurusan kanan dan Setiausaha Syarikat dalam melaksanakan tugas mereka. Selaras dengan Tataurusan Pertubuhan Syarikat, sekurangkurangnya satu pertiga daripada Pengarah akan bersara mengikut giliran pada setiap Mesyuarat Agung Tahunan dan semua Pengarah akan bersara daripada jawatan sekurang-kurangnya sekali setiap tiga tahun. Pengarah yang dijadualkan bersara mengikut giliran boleh melayakkan diri untuk dipilih semula. 43 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

46 PENCALoNAN DAN PELANTIKAN PENGARAH Lembaga bertanggungjawab terhadap pelantikan Pengarah. Memandangkan bilangan Pengarah di dalam Lembaga adalah kecil, setiap Pengarah boleh mencadangkan calon-calon baru, menilai sumbangan Pengarah lain dan menilai keberkesanan keseluruhan Lembaga secara berterusan. Setiausaha Syarikat memastikan supaya sebarang pelantikan ke Lembaga dibuat dengan cara yang wajar dan supaya dokumentasi yang berkaitan memenuhi obligasi berkanun serta obligasi yang timbul daripada Keperluan Penyenaraian Bursa Malaysia Securities Berhad. LATIHAN DAN PENDIDIKAN PARA PENGARAH Sepanjang tempoh memegang jawatan, para Pengarah sering diberikan maklumat terkini mengenai perniagaan Kumpulan serta persaingan dan penguatkuasaan peraturan dalam persekitaran di mana ia beroperasi. Mereka juga diberikan nasihat mengenai tanggungjawab mereka sebagai Pengarah syarikat yang tersenarai. Mereka digalakkan menghadiri kursus-kursus latihan atas perbelanjaan Kumpulan untuk mempertingkatkan kemahiran dan pengetahuan mereka, apabila perlu. Pada tahun kewangan berakhir 31 Disember 2008, para Pengarah berikut telah menghadiri latihan yang disenaraikan di bawah: Nama Pengarah Latihan Yang Dihadiri Diadakan Pada Y.M. Tengku Dato Ibrahim Program Latihan bertajuk Meningkatkan Prestasi, 31 Julai 2008 Petra bin Tengku Indra Petra Kepimpinan & Tadbir Urus Para Pengarah Datin Nariza Hajjar Hashim Program Latihan bertajuk Meningkatkan Prestasi, 31 Julai 2008 Kepimpinan & Tadbir Urus Para Pengarah Ahmad bin Haji Mohd Sharkan Persidangan bertajuk Perubahan Terkini Rangka Kerja Perundangan 28 & 29 Januari 2008 Korporat Ke Arah Tadbir Urus Korporat Yang Lebih Baik: Implikasinya Terhadap Tugas Pengarah Persidangan CFO 2008 bertajuk Peranan dan Cabaran CFO Moden Yang Semakin Berubah dalam Melaksanakan Fungsi Kewangan Yang Berkesan Dalam Keadaan Yang Tidak Menentu 19&20November2008 Encik Wong Fook Heng tidak menghadiri sebarang program latihan pada tahun kewangan yang dinyatakan disebabkan jadual beliau yang ketat. Para Pengarah akan terus menyertai program-program latihan bagi melengkapkan diri mereka dan melaksanakan tugas dengan berkesan sebagai Pengarah, jika bersesuaian. Para Pengarah sentiasa mengemaskinikan diri mereka dengan hal ehwal tempatan dan antarabangsa serta kepada perubahan peraturan yang memberi kesan kepada Syarikat melalui khidmat nasihat daripada badan-badan penguatkuasa peraturan, pihak pengurusan serta melalui pembacaan. IMBUHAN PENGARAH Lembaga menentukan imbuhan para Pengarah, dan mencadangkan bayaran yuran para Pengarah kepada pemegang saham untuk diluluskan. Imbuhan para Pengarah Eksekutif adalah berdasarkan prestasi korporat dan tanggungjawab individu. Semua Pengarah dibayar yuran tahunan tetap dan turut mendapat elaun mesyuarat bagi kehadiran mereka dalam mesyuarat Lembaga. Butiran imbuhan Pengarah yang diterima dan/atau akan diterima daripada Syarikat dan syarikat-syarikat subsidiarinya pada tahun kewangan berakhir 31 Disember 2007 adalah seperti berikut: Imbuhan agregat dikategorikan mengikut jenis: Jenis Imbuhan Pengarah Eksekutif Pengarah Bukan Eksekutif RM RM Yuran 114, , Gaji 1,100, Manfaat seumpamanya 116, petra perdana BerHAD ( A) annual report 2008 laporan tahunan

47 Bilangan Pengarah dengan imbuhan di dalam lingkungan berikut: Lingkungan Imbuhan Pengarah Eksekutif Pengarah Bukan Eksekutif Di bawah RM50,000 3 RM250,001 hingga RM300,000 1 RM1,050,001 hingga RM1,100,000 1 Oleh kerana bilangan Pengarah dalam Lembaga adalah kecil, Lembaga secara keseluruhannya melaksanakan penilaian dan perbincangan tentang imbuhan para Pengarah, tanpa melibatkan Pengarah secara individu dalam membuat keputusan tentang imbuhan mereka sendiri. PEMEGANG SAHAM Lembaga menghargai komunikasi yang kerap dengan para pemegang saham. Ini termasuk pelbagai pengumuman yang dibuat pada tahun ini, pengeluaran laporan tahunan tepat pada masanya, pekeliling kepada pemegang saham, siaran akhbar dan pengumuman keputusan kewangan suku tahunan yang memberi gambaran menyeluruh kepada para pemegang saham berhubung prestasi perniagaan dan kewangan Kumpulan. Syarikat turut mengadakan dialog dari semasa ke semasa dengan pemegang saham institusinya dan para penganalisis kewangan. Mesyuarat Agung Tahunan adalah forum penting bagi dialog dengan para pemegang saham. Para pemegang saham digalakkan untuk mengambil bahagian dalam prosiding dan mengemukakan soalan mengenai resolusi yang dicadangkan dan operasi Kumpulan. Kumpulan mengekalkan laman web di untuk membolehkan para pemegang saham, pelabur-pelabur dan orang ramai mengakses maklumat Kumpulan. Lembaga telah melantik Encik Ahmad bin Haji Mohd Sharkan sebagai Pengarah Kanan Bebas Bukan Eksekutif di mana para pemegang kepentingan boleh menyuarakan pendapat mereka tentang isu-isu yang melibatkan Kumpulan. TANGGUNGJAWAB DAN AUDIT Lembaga bertanggungjawab memastikan penyata kewangan disediakan selaras dengan Akta Syarikat, 1965 ( Akta ) dan piawaian perakaunan yang diluluskan di Malaysia ( piawaian perakaunan ). Lembaga menganggap pematuhan terhadap Akta dan piawaian perakaunan tersebut sebagai memadai untuk membolehkannya membentangkan penilaian yang seimbang dan mudah difahami berkenaan kedudukan dan prospek Syarikat dan Kumpulan. Lembaga bertanggungjawab secara keseluruhan dalam mengekalkan sistem kawalan dalaman yang berwibawa untuk melindungi kepentingan pelaburan pemegang saham dan aset Kumpulan. Walaupun Lembaga mengakui penghapusan sepenuhnya segala risiko adalah sesuatu yang tidak mungkin dapat dilakukan, namun ia yakin bahawa sistem kawalan dalaman di dalam struktur Kumpulan mampu mengurangkan risiko ini ke tahap yang boleh diterima. Sistem kawalan dalaman seperti ini dibentuk untuk menyediakan jaminan yang berpatutan terhadap risiko kesilapan, salah nyata atau perkara luar biasa yang ketara. Melalui Jawatankuasa Audit, Lembaga telah membentuk pengaturan yang telus bagi mengekalkan perhubungan yang wajar dengan juruaudit luar dan juruaudit dalaman Kumpulan. Pengaturan ini disertakan di dalam terma rujukan Jawatankuasa Audit. Penyata ini telah diluluskan oleh Lembaga Pengarah pada 28 April PENYATA TANGGUNGJAWAB PENGARAH DALAM MENYEDIAKAN PENYATA KEWANGAN Para Pengarah dikehendaki oleh Akta Syarikat, 1965 ( Akta ) untuk menyediakan penyata kewangan bagi setiap tahun kewangan menurut piawaian perakaunan yang diluluskan untuk memberi gambaran yang benar dan saksama mengenai hal ehwal Syarikat dan Kumpulan pada akhir tahun kewangan, dan keputusan serta aliran tunai Syarikat dan Kumpulan bagi tahun kewangan tersebut. Dalam penyediaan penyata kewangan, para Pengarah telah mempertimbangkan perkara-perkara berikut: Menerima pakai polisi dan amalan perakaunan yang sesuai dan penggunaannya secara konsisten Pertimbangan dan anggaran yang berhemah dan munasabah Pematuhan terhadap piawaian perakaunan yang diluluskan di Malaysia Kesesuaian dalam penyediaan penyata kewangan berasaskan andaian perniagaan berterusan Para Pengarah bertanggungjawab memastikan supaya Syarikat dan syarikat-syarikat subsidiarinya menyimpan rekod perakaunan dengan sewajarnya yang mendedahkan dengan ketepatan munasabah tentang kedudukan kewangan Syarikat dan Kumpulan dalam mematuhi peruntukan Akta dan piawaian perakaunan yang diluluskan di Malaysia. Di samping itu, para Pengarah turut memikul tanggungjawab am untuk mengambil langkah-langkah yang tersedia dengan sewajarnya kepada mereka untuk melindungi aset Kumpulan, dan untuk mencegah serta mengesan penipuan dan perkaraperkara luar biasa lain. Penyata ini telah diluluskan oleh Lembaga Pengarah pada 28 April petra perdana BerHAD ( A) annual report 2008 laporan tahunan

48 A D D I T I O N A L D I S C LO S U R E S status of utilisation of proceeds raised FroM AnY CorporAte proposal General mandate to divest shares in petra energy Berhad ( peb ) At the Extraordinary General Meeting of Petra Perdana Berhad ( the Company or PPB ) held on 26 April 2007, the shareholders of the Company had given a general mandate for the Company to divest up to 19,500,000 ordinary shares of RM0.50 each in PEB representing 10% of the enlarged issued and paid-up share capital of PEB after its listing on the Main Board of Bursa Malaysia Securities Berhad, for cash through the open market and/or placement(s) at such time(s) as the Directors may in their discretion deem fit provided the price(s) was not to be more than 10% discount of the 5-day weighted average market price(s) of the ordinary shares of RM0.50 each in PEB ( PEB Shares ) preceding the relevant date(s) of the divestment(s) and was not to be lower than the issue price of the new PEB Shares issued under the public issue shares pursuant to the initial public offering of PEB Shares ( Public Issue Shares ), and in the event that the 5-day weighted average market price(s) of PEB Shares was not available, the divestment price(s) was not to be lower than the issue price of the Public Issue Shares ( Divestment Mandate ). The Divestment Mandate was renewed by the shareholders at the Annual General Meeting ( AGM ) of the Company held on 26 June 2008 whereby the divestment price(s) shall not be more than 10% discount of the 5-day weighted average market price(s) of PEB Shares preceding the relevant date(s) of the divestment(s). The funds raised or to be raised by the Company from the divestment(s) are to be utilised within 12 months from the proceeds of such divestment(s). On 10 December 2007, PPB disposed of 9,000,000 PEB Shares raising a gross proceeds of RM31,500,000. There was no further disposal thereafter. purpose proposed Balance utilisation unutilised (rm) (rm) Part repayment of the RM400 million nominal value secured serial bonds issued by the Company on 30 March ,500,000 0 Renewal of the Divestment Mandate to divest the balance of 10,500,000 PEB Shares will be sought at the forthcoming AGM of the Company. shares Buyback PPB did not propose any share buyback during the financial year. options, Warrants or Convertible securities exercised PPB did not issue any options, warrants or convertible securities during the financial year. The Employees Share Option Scheme, which was approved by the shareholders of the Company at its Extraordinary General Meeting held on 31 January 2002 and the Bye-Laws of which was submitted to the Securities Commission on 12 March 2002, has not been carried out. American Depository receipt ( ADr ) or Global Depository receipt ( GDr ) programme PPB did not sponsor any ADR or GDR programme during the financial year. sanction and/or penalty imposed There was no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies during the financial year ended 31 December non-audit Fees The amount of non-audit fees incurred for services rendered to the Company and its subsidiaries for the financial year ended 31 December 2008 by the Company s auditors, or a firm or company affiliated to the auditors firm, are as tax agent, tax and professional advisor totalling RM43,231. variance in results There was no profit estimate, forecast or projection made by the Company for the financial year ended 31 December There was no profit variance of 10% or more in the audited results from the unaudited results announced for the financial year ended 31 December revaluation policy on Landed properties PPB Group has not carried out any revaluation on its landed properties. profit Guarantees There is no subsisting profit guarantee received by PPB during the financial year ended 31 December Material Contracts involving Directors and Major shareholders Neither the Company nor any of its subsidiaries had entered into any material contracts (not being contracts entered into in the ordinary course of business) which involved Directors and/or major shareholders interests, either still subsisting at the end of the financial year 31 December 2008, or entered into since the end of the previous financial year. 46 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

49 recurrent related party transactions of revenue and trading nature The breakdown of the aggregate value of transactions conducted during the financial year ended 31 December 2008 pursuant to the shareholders general mandate obtained at the Annual General Meeting of the Company held on 26 June 2008: nature of transaction Actual value for the transacting the other related parties/ financial year ended ppb Group transacting nature and extent 31 December 2008 party of interest Chartering of vessels, which are Domestic vessels POL, IOS, PML PRSB TIP, NHH, TIE, owned by POL or leased from recharter income 1ST, CT / (a) PML / third parties and operated by to PRSB: IOS, to PRSB where PRSB recharters RM66,704,008 and earns a margin of 7.5% of the domestic vessels recharter income Charter fees paid and the balance thereof is remitted by PRSB to PPB Group: to PPB Group RM61,701,207 Net charter income of PRSB: RM5,002,801 Chartering of vessels, which are RM14,957,258 POL, IOS PRSB TIP, NHH, TIE, owned by POL or leased from 1ST, CT / (a) third party and operated by IOS, to PRSB for PRSB s own use Chartering of vessel, which is owned RM5,173,258 AMSB PRSB TIP, NHH, TIE, by AMSB, to PRSB for PRSB s own use 1ST, CT / (a) Sharing of support services fees RM1,620,000 PPB PEB TIP, NHH, TIE, between PPB and PEB 1ST, CT / (a) Rental of the entire 4½ storey RM180,000 PPB PEB TIP, NHH, TIE, shop lot located at No. 4, Jalan 3/3C, 1ST, CT / (a) Batu 7, Jalan Ipoh, Kuala Lumpur by PPB to PEB Legal services from ZICK, RM78,000 PPB ZICK GG, ZICK / (b) Kuching branch on a retainer basis Definitions: AMSB IOS PEB PML POL PPB PPB Group PRSB TIP NHH TIE 1ST CT ZICK GG Ampangship Marine Sdn Bhd Intra Oil Services Berhad Petra Energy Berhad Perdana Mercury Limited Petra Offshore Ltd Petra Perdana Berhad PPB and its subsidiary companies other than PEB and its subsidiary companies Petra Resources Sdn Bhd Y.M. Tengku Dato Ibrahim Petra bin Tengku Indra Petra Datin Nariza Hajjar Hashim TI Equity Sdn Bhd 1st Systems Technology Sdn Bhd Cosmos Time Sdn Bhd Zaid Ibrahim & Co., Kuching branch Gerawat Gala notes: nature and extent of interests of the related parties: (a) PRSB is a wholly-owned subsidiary of PEB, which in turn is a subsidiary of PPB. AMSB, PML, POL and IOS are all wholly-owned subsidiaries of PPB. TIP is the Executive Chairman of PEB. He is also a major shareholder of PEB, with direct interest and also, deemed interests via his interests in PPB, TIE, 1ST, CT and via the interest of his spouse, NHH pursuant to Section 6A of the Companies Act, 1965 ( the Act ). TIP is the Executive Chairman and Chief Executive Officer of PPB. He is also a major shareholder of PPB, with direct interest and also, deemed interests via his interests in TIE, 1ST, CT and via the interest of his spouse, NHH pursuant to Section 6A of the Act. NHH, who is the spouse of TIP, is a major shareholder of PEB, with direct interest and also, deemed interests via the interest of her spouse, TIP and via their interests in PPB, TIE, 1ST and CT pursuant to Section 6A of the Act. NHH is an Executive Director and a major shareholder of PPB, with direct interest and also, deemed interests via the interest of her spouse, TIP and via their interests in TIE, 1ST and CT pursuant to Section 6A of the Act. (Please refer to page 169 of this Annual Report for the interests in shares of TIP and NHH.) (b) GG is a partner of ZICK and is also an Independent Non-Executive Director of PEB. 47 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

50 P E N D E D A H A N TA M B A H A N STATUS PENGGUNAAN KUTIPAN DARIPADA SEBARANG CADANGAN KoRPoRAT Mandat Am untuk menjual saham dalam Petra Energy Berhad ( PEB ) Pada Mesyuarat Agung Luar Biasa Petra Perdana Berhad ( Syarikat atau PPB ) yang diadakan pada 26 April 2007, para pemegang saham Syarikat telah memberi mandat am untuk Syarikat menjual sehingga 19,500,000 saham biasa berharga RM0.50 sesaham di dalam PEB yang meliputi 10% daripada modal saham diterbitkan dan berbayar yang diperbesarkan selepas penyenaraiannya di Papan Utama Bursa Malaysia Securities Berhad, untuk wang tunai melalui pasaran terbuka dan/atau peletakan pada masa yang para Pengarah fikirkan sesuai, menurut budi bicara mereka, dengan syarat harga peletakan tersebut tidak melebihi diskaun sebanyak 10% daripada harga pasaran purata berwajaran 5 hari bagi saham biasa yang berharga RM0.50 sesaham dalam PEB ( Saham PEB ) sebelum tarikh berkaitan penjualan saham tersebut dan hendaklah tidak lebih rendah daripada harga terbitan Saham PEB baru yang akan diterbitkan di bawah saham terbitan awam yang menurut penawaran awam awal Saham PEB ( Saham Terbitan Awam ), dan jika harga pasaran purata berwajaran 5 hari bagi Saham PEB tersebut tidak boleh diperolehi, harga penjualan saham tersebut hendaklah tidak lebih rendah daripada harga terbitan Saham Terbitan Awam ( Mandat Penjualan Saham ). Mandat Penjualan Saham telah diperbaharui semula oleh pemegang saham pada Mesyuarat Agung Tahunan ( MAT ) Syarikat yang diadakan pada 26 Jun 2008 di mana harga penjualan tidak melebihi diskaun sebanyak 10% daripada harga pasaran purata berwajaran 5 hari bagi Saham PEB sebelum tarikh berkaitan penjualan saham. Dana terkumpul atau yang akan dikumpulkan oleh Syarikat daripada penjualan saham akan digunakan dalam tempoh 12 bulan daripada kutipan penjualan saham tersebut. Pada 10 Disember 2007, PPB telah menjual 9,000,000 Saham PEB dan mengumpul kutipan kasar berjumlah RM31,500,000. Tiada penjualan lain yang dilakukan selepas itu. Tujuan Cadangan Baki tidak penggunaan digunakan (RM) (RM) Pembayaran balik sebahagian daripada bon bersiri bercagar dengan nilai nominal RM400 juta yang diterbitkan oleh Syarikat pada 30 Mac ,500,000 Pembaharuan Mandat Penjualan Saham untuk menjual baki 10,500,000 Saham PEB akan diusul pada MAT Syarikat yang akan datang. Pembelian Balik Saham PPB tidak mencadangkan sebarang Pembelian Balik Saham pada tahun kewangan. opsyen, Waran Atau Sekuriti Boleh Ditukar Yang Telah Dilaksanakan PPB tidak menerbitkan sebarang opsyen, waran atau sekuriti boleh ditukar pada tahun kewangan. Skim Opsyen Saham Kakitangan, yang diluluskan oleh para pemegang saham Syarikat di Mesyuarat Agung Luar Biasa yang diadakan pada 31 Januari 2002 dan Undang-undang Kecil yang telah dikemukakan kepada Suruhanjaya Sekuriti pada 12 Mac 2002, telah tidak dilaksanakan. Program American Depository Receipt ( ADR ) Atau Global Depository Receipt ( GDR ) PPB tidak menaja sebarang program ADR atau GDR pada tahun kewangan. Sekatan Dan/Atau Denda Yang Dikenakan Tiada sebarang sekatan dan/atau denda yang dikenakan ke atas Syarikat dan syarikat-syarikat subsidiari, para Pengarah atau pengurusannya oleh badan-badan penguatkuasa peraturan yang berkaitan pada tahun kewangan berakhir 31 Disember Yuran Bukan Audit Jumlah yuran bukan audit yang dibelanjakan bagi perkhidmatan yang diberi kepada Syarikat dan syarikat-syarikat subsidiarinya bagi tahun kewangan berakhir 31 Disember 2008 oleh juruaudit Syarikat, atau firma atau syarikat yang tergabung dengan firma juruaudit, adalah sebagai agen cukai, penasihat cukai dan penasihat khidmat professional berjumlah RM43,231. Perbezaan Keputusan Tiada anggaran, ramalan atau unjuran keuntungan dilakukan oleh Syarikat bagi tahun kewangan berakhir 31 Disember Tiada perbezaan keuntungan yang berjumlah 10% atau lebih di dalam keputusan beraudit berbanding keputusan belum diaudit yang diumumkan bagi tahun kewangan berakhir 31 Disember Dasar Penilaian Semula Ke Atas Harta Tanah Kumpulan PPB tidak menjalankan sebarang penilaian semula ke atas harta tanahnya. Jaminan Keuntungan Tiada jaminan keuntungan pada masa ini yang diterima oleh PPB pada tahun kewangan berakhir 31 Disember Kontrak-Kontrak Penting Yang Melibatkan Pengarah Dan Pemegang Saham Utama Tiada sebarang kontrak penting telah dimeterai oleh Syarikat mahu pun mana-mana syarikat subsidiarinya (bukan sebagai kontrak yang dimeterai dalam perjalanan biasa perniagaan) yang melibatkan kepentingan para Pengarah dan/atau pemegang saham utama, sama ada yang masih wujud pada akhir tahun kewangan 31 Disember 2008, atau yang telah dimeterai sejak akhir tahun kewangan yang lepas. 48 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

51 Urusniaga Pihak Berkaitan Yang Berulangan Berbentuk Hasil Atau Perdagangan Pecahan nilai agregat urusniaga yang dijalankan pada tahun kewangan berakhir 31 Disember 2008 berdasarkan kelulusan pemegang saham yang diperolehi pada Mesyuarat Agung Tahunan Syarikat yang diadakan pada 26 Jun 2008: Bentuk urusniaga Nilai sebenar bagi tahun Urusniaga Pihak lain Pihak berkaitan/ kewangan berakhir Kumpulan PPB yang bentuk dan tahap 31 Disember 2008 berurusniaga kepentingan Menyewa kapal-kapal milik POL atau Pendapatan dari sewa POL, IOS, PML PRSB TIP, NHH, yang dipajak dari PML/pihak ketiga dan semula kapal domestik TIE, 1ST, CT/ (a) dioperasi oleh IOS, kepada PRSB di mana kepada PRSB: PRSB menyewa semula dan mendapat RM66,704,008 margin 7.5% daripada pendapatan sewa semula kapal domestik dan baki darinya Yuran sewa dibayar diremit kepada Kumpulan PPB. oleh PRSB kepada Kumpulan PPB: RM61,701,207 Pendapatan sewa bersih PRSB: RM5,002,801 Menyewa kapal-kapal milik POL atau RM14,957,258 POL, IOS PRSB TIP, NHH, yang dipajak dari pihak ketiga dan dioperasi TIE, 1ST, CT / (a) oleh IOS, kepada PRSB untuk kegunaan PRSB sendiri Sewa milik kapal, oleh AMSB, kepada RM5,173,258 AMSB PRSB TIP, NHH, PRSB untuk kegunaan PRSB sendiri TIE, 1ST, CT / (a) Perkongsian yuran perkhidmatan RM1,620,000 PPB PEB TIP, NHH, sokongan antara PEB dan PPB TIE, 1ST, CT / (a) Sewaan keseluruhan lot kedai 4 ½ RM180,000 PPB PEB TIP, NHH, tingkat terletak di No. 4 Jalan 3/3C, TIE, 1ST, CT / (a) Batu 7, Jalan Ipoh, Kuala Lumpur oleh PPB kepada PEB Perkhidmatan perundangan RM78,000 PPB ZICK GG, ZICK / (a) daripada ZICK, cawangan Kuching pada asas penyedia khidmat tetap Definisi: AMSB IOS PEB PML POL PPB Kumpulan PPB PRSB TIP NHH TIE 1ST CT ZICK GG Ampangship Marine Sdn Bhd Intra Oil Services Berhad Petra Energy Berhad Perdana Mercury Limited Petra Offshore Ltd Petra Perdana Berhad PPB dan syarikat-syarikat subsidiarinya selain daripada PEB dan syarikat-syarikat subsidiarinya Petra Resources Sdn Bhd Y.M. Tengku Dato Ibrahim Petra bin Tengku Indra Petra Datin Nariza Hajjar Hashim TI Equity Sdn Bhd 1st Systems Technology Sdn Bhd Cosmos Time Sdn Bhd Zaid Ibrahim & Co., cawangan Kuching Gerawat Gala Nota-nota: Bentuk dan tahap kepentingan pihak berkaitan: (a) PRSB adalah sebuah syarikat subsidiari milik penuh PEB, yang sebaliknya adalah syarikat subsidiari PPB. AMSB, PML, POL dan IOS adalah syarikat subsidiari milik penuh PPB. TIP adalah Pengerusi Eksekutif PEB. Beliau juga merupakan pemegang saham utama PEB, dengan kepentingan secara langsung dan juga dianggap berkepentingan secara langsung melalui kepentingan- kepentingan beliau dalam PPB, TIE, 1ST, CT dan melalui kepentingan isteri beliau, NHH menurut Seksyen 6A Akta Syarikat, 1965 ( Akta ). TIP adalah Pengerusi Eksekutif dan Ketua Pegawai Eksekutif PPB. Beliau juga merupakan pemegang saham utama PPB, dengan kepentingan secara langsung dan juga dianggap berkepentingan melalui kepentingan- kepentingan beliau dalam TIE, 1ST, CT dan melalui kepentingan isteri beliau, NHH menurut Seksyen 6A Akta. NHH yang merupakan isteri TIP, adalah pemegang saham utama PEB dengan kepentingan secara langsung dan turut dianggap berkepentingan melalui kepentingan suami beliau, TIP dan melalui kepentingan mereka dalam PPB, TIE, 1ST dan CT menurut Seksyen 6A Akta. NHH adalah Pengarah Eksekutif dan pemegang saham utama PPB, dengan kepentingan secara langsung dan juga dianggap berkepentingan secara langsung melalui kepentingan suami beliau, TIP dan melalui kepentingan mereka dalam TIE, 1ST dan CT menurut Seksyen 6A Akta. (b) (Sila rujuk muka surat 169 dalam Laporan Tahunan ini untuk kepentingankepentingan saham TIP dan NHH.) GG adalah rakan kongsi ZICK dan juga merupakan Pengarah Bebas Bukan Eksekutif PEB. 49 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

52 Lending a helping hand to our communities Membantu mereka yang memerlukan

53 From volunteering to making donations, we are committed to make a positive difference to Daripada melakukan kerja sukarela atau memberi sumbangan derma, kami komited untuk membawa kesan positif di dalam kehidupan insan yang memerlukan. Ini dapat dibuktikan dengan kejayaan inisiatif CSR kami yang diilhamkan oleh nilai teras kami. people s lives. Nowhere has that statement been truer than with the successes of our first CSR initiatives, which is driven primarily by our core values.

54 C O R P O R AT E R E S P O N S I B I L I T Y tanggungjawab korporat The Group has embraced international benchmarks on policies and practices to ensure the sustainability of its business. In doing so, it not only ensures compliance to regulatory requirements but also promotes transparency and corporate governance. At the corporate level, the Group has instituted, amongst others, board-level committees, accounting standards and risk management practices to safe-guard the interests of its shareholders. At the operations level, the Group s high-risk and hazardous work environment both on-shore and off-shore has warranted it to institute various policies on environment protection, air & oil pollution, health safety security & environment (HSSE) and quality assurance (QA). These policies and practices, which are designed to sustain the quality of services and products, protect the environment and safe-guard the interests of employees, clients and communities, form the basis of the Group s CR initiatives. Health safety security & environment (Hsse) Given the nature of the Group s business in the upstream oil & gas industry, HSSE forms an integral part of the Group s operating culture. It is a business process that has been adopted at all levels of operations to ensure the safety and wellbeing of personnel and customers, including assets, machinery and equipment. In ensuring compliance, the Group also undertakes periodic assessments of its policy standards and protocols to ensure relevance and sustainability. For its role in HSSE and QA, the Group has been accorded awards and accolades dating back our Cr initiatives The Group s CR initiatives are categorised into the following frameworks: Framework for Sustainability Framework for Philanthropy FrAMeWorK For sustainability The three (3) dimensions into which the Group s on-going CR initiatives are categorised, include: WorKpLACe environment CoMMunitY the Workplace Dimension Activities under the workplace dimension are further sub-categorised into the following: policy, practices & Accreditations employee initiatives & Benefits policy practices & Accreditations Health, Safety, Security & Environment (HSSE) policies are the main components embedded into the Company s core business practices. These policies & practices, are strictly enforced at all levels of business operations and accreditations have been accorded for compliance. policies & practices Marine operations Accreditations 1. Safety & Environmental Protection Policy* Certification of ISO 9001 : 2000 to Perdana Marine Offshore Pte Ltd 2. Drug Abuse & Alcohol Policy* (a wholly-owned subsidiary of Petra Perdana Berhad) 3. Stop Work Policy HSE Award for vessel IOS Castle for outstanding HSE Awareness * All policies and practices of the Group are in compliance with IMO Conventions such as SOLAS, MARPOL, STCW, ISM and ISPS. Performance achieving one year zero LTI HSE Award for vessel IOS Glory for outstanding HSE Awareness Performance achieving one year zero LTI IMO SOLAS MARPOL International Maritime Organisation International Convention for the Safety of Life at Sea International Convention for the Prevention of Pollution from Ships STCW ISM ISPS International Convention on Standards of Traning Certification & Watchkeeping for Seafarers International Safety Management Code International Ship & Port Facility Services Security Code 52 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

55 Kumpulan telah menggunakan tanda aras antarabangsa bagi dasar dan amalan untuk memastikan kemapanan perniagaan. Langkah ini bukan sahaja memastikan pematuhan keperluan kawal selia malah menggalakkan ketelusan dan tadbir urus korporat. Di peringkat korporat, Kumpulan telah mengadakan, selain daripada yang lain, jawatankuasa peringkat lembaga, piawaian perakaunan dan amalan pengurusan risiko untuk menjaga kepentingan para pemegang kepentingan. Di peringkat operasi, persekitaran kerja yang bahaya dan berisiko tinggi di daratan dan pesisir pantai memerlukan Kumpulan menetapkan pelbagai dasar perlindungan alam sekitar, pencemaran udara & minyak, kesihatan keselamatan sekuriti & alam sekitar (HSSE) dan jaminan mutu (QA). Dasar-dasar dan amalan ini yang direka untuk mengekalkan mutu produk & perkhidmatan dan produk, melindungi alam sekitar dan memastikan kesejahteraan para pekerja, pelanggan dan,masyarakat, juga menjadi asas kepada inisiatif CR Kumpulan. Kesihatan Keselamatan Sekuriti & Alam Sekitar (HSSE) Memandangkan ciri-ciri perniagaan Kumpulan dalam industri huluan, HSSE memainkan peranan penting dalam budaya operasi Kumpulan. Ia merupakan proses perniagaan yang telah diguna pakai di semua peringkat operasi untuk memastikan keselamatan dan kesejahteraan kakitangan dan pelanggan, termasuk aset, mesin dan peralatan. Dalam memastikan pematuhan, Kumpulan turut membuat penilaian piawaian dasar dan protokolnya secara berkala untuk memastikan ia relevan dan mapan. Kumpulan telah menerima pelbagai anugerah dan pengiktirafan atas peranannya dalam HSSE dan QA sejak tahun INISIATIF CR KUMPULAN Inisiatif CR Kumpulan dikategorikan mengikut rangka kerja berikut: Rangka Kerja Kemapanan Rangka Kerja Kedermawanan RANGKA KERJA KEMAPANAN Tiga (3) dimensi yang menjadi inisiatif CR semasa Kumpulan dikategorikan mengikut: TEMPAT KERJA ALAM SEKITAR MASYARAKAT Dimensi Tempat Kerja Aktiviti bawah dimensi tempat Kerja terbahagi kepada kategori berikut: Dasar, Amalan & Akreditasi Inisiatif & Faedah Pekerja Dasar, Amalan & Akreditasi Ini melibatkan dasar-dasar kesihatan, keselamatan, sekuriti & alam sekitar (HSSE) yang menjadi dasar utama yang ditanam dalam amalan perniagaan teras Syarikat. Dasar & amalan ini dikuatkuasakan dengan ketat di semua peringkat operasi perniagaan dan akreditasi diberikan mengikut pematuhan. Dasar & Amalan operasi marin Akreditasi 1. Dasar Perlindungan Keselamatan dan Alam Sekitar* Pensijilan ISO 9001 : 2000 kepada Perdana Marine Offshore Pte Ltd 2. Dasar Penyalahgunaan Dadah & Alkohol* (subsidiari milik penuh Petra Perdana Berhad) 3. Dasar Hentikan Kerja Anugerah HSE untuk kapal IOS Castle bagi Prestasi Kesedaran HSE * Semua polisi dan amalan Kumpulan adalah mengikut IMO Conventions seperti SOLAS, MARPOL, STCW, ISM dan ISPS. cemerlang mencapai satu tahun tanpa LTI Anugerah HSE untuk kapal IOS Glory bagi Prestasi Kesedaran HSE cemerlang mencapai satu tahun tanpa LTI IMO SOLAS MARPOL International Maritime Organisation International Convention for the Safety of Life at Sea International Convention for the Prevention of Pollutuion from Ships STCW ISM ISPS International Convention on Standards of Traning Certification & Watchkeeping for Seafarers International Safety Management Code International Ship & Port Facility Services Security Code 53 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

56 employee initiatives & Benefits The Group places strong emphasis on the well-being of its employees. Given the Group s de-centralised operations the scope of activities varies from one operation to the next. Among those implemented to improve the well-being of employees, promote bonding and family ties in the workplace include: Humanitarian Aid Group Life and Personal Accident Insurance Additional Medical, Hospitalisation and Surgical benefits Health Care Talks Sports & Recreational Activities Petra Kids Club the environment Dimension petra-undp Mangrove regeneration Community-led environment project The 2-year pilot project in collaboration with the United Nations Development Programme (UNDP), Terengganu State Government & University Malaysia Terengganu (UMT) involved the replanting of 10,000 mangrove saplings on 8-hectares in Setiu, Terrengganu. The Project aimed at enhancing the socioeconomic status of the local communities through economic activities, also served to enhance the bio-diversity of the eco-system. The activities, amongst others, included the replanting of mangrove saplings, formation of a co-operative for the community to enhance economic activity, eco-tourism activities and environmental awareness activities for school children in schools within the project vicinity. Today, the Mangrove Regeneration project is well on its way of becoming self-sufficient through the formation of a cooperative and eco-tourism initiatives. the Community Dimension Keeping Me safe pilot project The Keeping Me Safe Pilot Project involved the assessment of about 294 young school children (9 year olds) on their understanding of child sexual abuse as well as teaching of a six-part module in eight selected National schools in the Klang Valley. Essentially it increases children s knowledge and skills to protect against child sexual abuse (CSA) and increase awareness of CSA among parents/teachers. More than this, it is expected to result in the development of a new course curriculum to be proposed for all nine-year olds in national schools. FrAMeWorK For philanthropy Under the Philanthropic framework, oneoff contributions were made to deserving non-governmental (NGOs) and welfare organisations based on the criteria established by the CSR Committee. Besides this, the Group also donated funds to three philanthropic activities Petra-Shelter Break-Fast with women inmates (Kajang Prison), Petra-Yawa child sponsorship to UNEP Conference, Norway and St. John s Institution Alumni Adopt-A-Sports programme. For further information on our CR initiatives please access to our website 54 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

57 Inisiatif & Faedah Pekerja Kumpulan memberi keutamaan kepada para pekerja. Disebabkan operasi Kumpulan yang tidak berpusat, skop aktiviti berbeza mengikut operasi. Antara inisiatif yang telah dilaksanakan untuk meningkatkan kesejahteraan warga kerja, menggalakkan pertalian dan ikatan kekeluargaan di tempat kerja termasuklah: Bantuan Kemanusiaan Insurans Hayat Berkelompok dan Kemalangan Peribadi Faedah tambahan Perubatan, Kemasukan Hospital dan Pembedahan Ceramah Penjagaan Kesihatan Aktiviti Sukan & Rekreasi Kelab Kanak-kanak Petra Dimensi Alam Sekitar Projek Alam Sekitar Memulihkan Paya Bakau anjuran Masyarakat PETRA- UNDP Projek induk dua tahun dengan kerjasama Program Pembangunan Pertubuhan Bangsa-bangsa Bersatu (UNDP). Kerajaan Negeri Terengganu & Universiti Malaysia Terengganu (UMT) melibatkan penanaman semula 10,000 anak pokok bakau di kawasan seluas 8 hektar di Setiu, Terengganu. Projek ini bertujuan meningkatkan status sosio ekonomi masyarakat tempatan melalui aktiviti ekonomi dan juga menghasilkan penambahbaikan kepada kepelbagaian bio sistem ekologi. Selain daripada itu, aktiviti termasuk menanam semula anak pokok bakau, membentuk koperasi untuk masyarakat bagi menggalakkan peningkatan aktiviti ekonomi, eko-pelancongan aktiviti dan aktiviti alam sekitar/kesedaran kepada kanak-kanak sekolah di sekolah-sekolah yang berada dalam kawasan projek. Hari ini, projek Menanam Semula Paya Bakau sudah boleh berdikari melalui pembentukan koperasi dan inisiatif ekopelancongan. Dimensi Masyarakat Projek Induk Keeping Me Safe Projek induk Keeping Me Safe melibatkan penilaian 294 orang murid sekolah yang masih kecil berumur 9 tahun tentang pemahaman mereka terhadap gangguan seks kanak-kanak serta mengajar modul enam bahagian kepada lapan buah sekolah Kebangsaan yang terpilih di Lembah Kelang. Secara dasarnya projek ini meningkatkan pengetahuan dan kemahiran kanakkanak melindungi diri daripada gangguan seks kanak-kanak (CSA) dan meningkatkan kesedaran tentang CSA di kalangan ibu bapa/guru. Selain itu, projek ini juga akan mendorong kepada pembangunan kurikulum pelajaran baru yang akan dicadangkan kepada semua kanak-kanak sekolah berumur 9 tahun di sekolah-sekolah kebangsaan. RANGKA KERJA KEDERMAWANAN Di bawah rangka kerja Kedermawanan, sumbangan sekali gus telah dibuat kepada pertubuhan bukan kerajaan (NGO) dan kebajikan yang memerlukan berdasarkan kriteria yang ditentukan oleh Jawatankuasa CSR. Selain membuat sumbangan berkala, Kumpulan turut menyumbang sejumlah besar dana kepada tiga aktiviti derma Petra-Shelter Berbuka Puasa bersama penghuni wanita (penjara Kajang), penajaan kanak-kanak Petra-Tawa untuk persidangan UNEP, Norway, program Sukan Angkat Alumnist St. Johns institution. Untuk maklumat lanjut tentang inisiatif CSR kami, sila layari laman web kami 55 petra perdana BerHAD ( A) annual report 2008 laporan tahunan

58 financial statements Directors Report Statement by Directors 61 Statutory Declaration 61 Independent Auditors Report Balance Sheets Income Statements 66 Statement of Changes in Equity 67 Cash Flow Statements Notes to the Financial Statements

59 D I R E C T O R S R E P O R T The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December PRINCIPAL ACTIVITIES The Company is principally an investment holding company and is also engaged in the provision of administrative and management services to its subsidiaries. The principal activities of the subsidiaries are described in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. z RESULTS The Group RM'000 The Company RM'000 Profit after taxation attributable to equity holders of the Company 87,668 12,176 DIVIDENDS Since the end of the previous financial year, the Company paid a first and final dividend of 2.0 sen and a special dividend of 0.5 sen per ordinary share of RM0.50 each, less tax at 26% on 297,600,000 ordinary shares amounting to RM4,404,480 and RM1,101,120 respectively in respect of the financial year ended 31 December For the current financial year, the directors propose the payment of a final dividend of 2.0 sen per ordinary share of RM0.50 each, less tax at 25% amounting to RM4,464,000 to be approved by the shareholders at the forthcoming Annual General Meeting. RESERVES AND PROVISIONS All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements. ISSUES OF SHARES AND DEBENTURES During the financial year, (a) (b) there were no changes in the authorised, issued and paid-up share capital of the Company; and there were no issues of debentures by the Company. OPTIONS GRANTED OVER UNISSUED SHARES During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company. BAD AND DOUBTFUL DEBTS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts. At the date of this report, the directors are not aware of any circumstances that would further require the writing off of bad debts, or the additional allowance for doubtful debts in the financial statements of the Group and of the Company. 57 annual report 2008

60 CURRENT ASSETS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their values as shown in the accounting records of the Group and of the Company, 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 which would render the values attributed to the current assets in the financial statements misleading. VALUATION METHODS At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. CONTINGENT AND OTHER LIABILITIES The contingent liabilities are disclosed in Note 39 to the financial statements. At the date of this report, there does not exist: (a) (b) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability of the Group and of the Company which has arisen since the end of the financial year. No contingent or other liability of the Group and of the Company has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial period 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 when they fall due. CHANGE OF CIRCUMSTANCES At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. ITEMS OF AN UNUSUAL NATURE The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature. There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year. EMPLOYEES' SHARE OPTION SCHEME ("ESOS") The Group's ESOS was approved by the Securities Commission on 16 August 2001 and shall be in force for a period of 10 years commencing from 12 March The ESOS was approved by the shareholders at an Extraordinary General Meeting held on 31 January During the financial year, no options under the ESOS were granted. 58 annual report 2008

61 DIRECTORS The directors who served since the date of the last report are as follows: Y.M. Tengku Dato' Ibrahim Petra Bin Tengku Indra Petra Datin Nariza Hajjar Hashim Ahmad Bin Haji Mohd Sharkan Wong Fook Heng Tiong Young Kong (Appointed on ) DIRECTORS INTERESTS According to the register of directors shareholdings, the interests of directors holding office at the end of the financial year in shares in the Company during the financial year are as follows: Number Of Ordinary Shares of RM0.50 each At / Date of Transfer At Appointment Bought In/(Out) Sold The Company Direct Interests Y.M. Tengku Dato' Ibrahim Petra Bin Tengku Indra Petra 12,868,436 (7,500,000) 5,368,436 Datin Nariza Hajjar Hashim 108, ,016 Ahmad Bin Haji Mohd Sharkan 59,996 59,996 Wong Fook Heng 319, ,200 1,724,856 (216,932) 2,066,820 Tiong Young Kong 2,217,760 2,217,760 Deemed Interests Y.M. Tengku Dato' Ibrahim Petra Bin Tengku Indra Petra 44,347,004 (11,191,996) 33,155,008 Datin Nariza Hajjar Hashim 57,107,424 (18,691,996) 38,415,428 Wong Fook Heng 1,724,856 (1,724,856) Tiong Young Kong 468, ,000 By virtue of their direct and deemed interests in the Company, Y.M. Tengku Dato Ibrahim Petra Bin Tengku Indra Petra and Datin Nariza Hajjar Hashim are deemed to have interests in the shares of the related corporations of the Company to the extent the Company has interests pursuant to Section 6A of the Companies Act Number Of Ordinary Shares of RM0.50 each At / Date of Transfer At Appointment Bought In/(Out) Sold Petra Energy Berhad, a Subsidiary Direct Interests Y.M. Tengku Dato' Ibrahim Petra Bin Tengku Indra Petra 756,613 1,165,000 1,921,613 Datin Nariza Hajjar Hashim 4,050 4,050 Ahmad Bin Haji Mohd Sharkan 2,250 2,250 Wong Fook Heng 37, ,400 64, ,230 Tiong Young Kong 100, ,075 Deemed Interests Y.M. Tengku Dato' Ibrahim Petra Bin Tengku Indra Petra 118,663,008 (1,207,786) 117,455,222 Datin Nariza Hajjar Hashim 119,415,571 1,165,000 (1,207,786) 119,372,785 Wong Fook Heng 64,681 (64,681) 59 annual report 2008

62 DIRECTORS INTERESTS (CONT D) By virtue of their direct and deemed interests in Petra Energy Berhad, Y.M. Tengku Dato Ibrahim Petra Bin Tengku Indra Petra and Datin Nariza Hajjar Hashim are deemed to have interests in the shares in the related corporations of Petra Energy Berhad to the extent Petra Energy Berhad has interests pursuant to Section 6A of the Companies Act DIRECTORS BENEFITS Since the end of the previous financial year, no director has received or 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) 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 except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with related parties as disclosed in Note 37 to the financial statements. Neither during nor at the end of the financial year was the Company or its subsidiaries a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR The significant events during the financial year of the Group and of the Company are disclosed in Note 41 to the financial statements. SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE The significant events of the Group and of the Company subsequent to the balance sheet date are disclosed in Note 42 to the financial statements. AUDITORS The auditors, Messrs. Horwath, have expressed their willingness to continue in office. Signed in accordance with a resolution of the directors dated 28 April Y.M. Tengku Dato' Ibrahim Petra bin Tengku Indra Petra Ahmad bin Haji Mohd Sharkan 60 annual report 2008

63 S TAT E M E N T B Y D I R E C T O R S We, Y.M. Tengku Dato' Ibrahim Petra Bin Tengku Indra Petra and Ahmad Bin Haji Mohd Sharkan, being two of the directors of Petra Perdana Berhad, state that, in the opinion of the directors, the financial statements set out on pages 64 to 110 are drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 December 2008 and of their results and cash flows for the financial year ended on that date. Signed in accordance with a resolution of the directors dated 28 April Y.M. Tengku Dato' Ibrahim Petra bin Tengku Indra Petra Ahmad bin Haji Mohd Sharkan S TAT U T O R Y D E C L A R AT I O N I, Yap Choo Cheng, being the officer primarily responsible for the financial management of Petra Perdana Berhad, do solemnly and sincerely declare that the financial statements set out on pages 64 to 110 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 Subscribed and solemnly declared by ) Yap Choo Cheng, at Kuala Lumpur in ) the Federal Territory on this 28 April 2009 ) Yap Choo Cheng Before me, COMMISSIONER FOR OATHS KUALA LUMPUR 61 annual report 2008

64 I N D E P E N D E N T A U D I T O R S R E P O R T to the members of Petra Perdana Berhad Report on the Financial Statements We have audited the financial statements of Petra Perdana Berhad, which comprise the balance sheets as at 31 December 2008 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 64 to 110. Directors Responsibility for the Financial Statements The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the 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 have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2008 and of their financial performance and cash flows for the financial year then ended. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following: (a) (b) (c) (d) 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. We have considered the financial statements and the auditors reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 6 to the financial statements. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. 62 annual report 2008

65 Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Horwath Firm No : AF 1018 Chartered Accountants Lee Kok Wai Approval No : 2760/06/10 (J) Partner Kuala Lumpur 28 April annual report 2008

66 B A L A N C E S H E E T S as at 31 December 2008 ASSETS NON-CURRENT ASSETS The Group The Company Note RM 000 RM 000 RM 000 RM 000 Investment in subsidiaries 6 346, ,225 Property, plant and equipment 7 659, ,017 43,041 8,679 Prepaid lease payments 8 7,275 7,404 Amount owing by subsidiaries 9 353, ,850 Intangible assets 10 27,507 22,918 Deferred tax assets CURRENT ASSETS 693, , , ,800 Inventories 12 50,299 46,653 Receivables , ,539 32, ,241 Amount owing by contract customers 14 6,471 25,681 Amount owing by subsidiaries 9 10,008 32,731 Tax recoverable 7,145 7,817 4,482 4,147 Fixed deposits with licensed banks , , , ,817 Cash and bank balances 33,348 54, , , , ,543 Non-current asset classified as held for sale 16 4,501 TOTAL ASSETS 1,495,652 1,297,985 1,005, ,343 The annexed notes form an integral part of these financial statements. 64 annual report 2008

67 B A L A N C E S H E E T S as at 31 December 2008 (cont d) EQUITY AND LIABILITIES EQUITY The Group The Company Note RM 000 RM 000 RM 000 RM 000 Share capital , , , ,800 Reserves , , , ,154 SHAREHOLDERS EQUITY 545, , , ,954 MINORITY INTERESTS 118, ,091 TOTAL EQUITY 663, , , ,954 NON-CURRENT LIABILITIES Deferred taxation 19 30,908 25,519 Long-term borrowings , , , ,000 Retirement benefit obligations CURRENT LIABILITIES 326, , , ,167 Payables , ,800 15,336 8,401 Amount owing to subsidiaries 9 64,194 30,821 Amount owing to contract customers 14 9,625 7,690 Short-term borrowings , , , ,000 Provision for taxation 1,712 5, , , , ,222 TOTAL LIABILITIES 831, , , ,389 TOTAL EQUITY AND LIABILITIES 1,495,652 1,297,985 1,005, ,343 NET ASSETS PER ORDINARY SHARE (RM) The annexed notes form an integral part of these financial statements. 65 annual report 2008

68 I N C O M E S TAT E M E N T S for the financial year ended 31 December 2008 The Group The Company Note RM 000 RM 000 RM 000 RM 000 Revenue , ,183 40,535 29,913 Cost of sales (520,656) (475,695) Gross profit 173, ,488 40,535 29,913 Other income 37,204 36,326 25,413 51, , ,814 65,948 81,180 Selling and distribution costs (3,434) (1,713) Administrative expenses (47,694) (54,560) (8,934) (11,347) Other expenses (7,448) (4,482) (409) (226) (58,576) (60,755) (9,343) (11,573) Profit from operations 152, ,059 56,605 69,607 Finance costs (32,744) (30,502) (43,773) (28,776) 119, ,557 12,832 40,831 Gain on dilution of interest in a subsidiary 28(a) 34,126 Profit before taxation , ,683 12,832 40,831 Income tax expense 29 (14,903) (2,982) (656) (969) Profit after taxation 104, ,701 12,176 39,862 Attributable to: Equity holders of the Company 87, ,709 12,176 39,862 Minority interests 16,910 9, , ,701 12,176 39,862 Earnings per share basic (sen) diluted (sen) 30 Not Not applicable applicable The annexed notes form an integral part of these financial statements. 66 annual report 2008

69 S TAT E M E N T S O F C H A N G E S I N E Q U I T Y for the financial year ended 31 December 2008 The Group Non-distributable Distributable Attributable Capital to Equity Share Share Redemption Translation Retained Holders of Minority Total Capital Premium Reserve Reserve Profits the Company Interests Equity Note RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at 1 January ,300 (1,773) 96, ,584 15, ,215 Profit after taxation 155, ,709 9, ,701 Disposal of interest in a subsidiary 94,538 94,538 Acquisition of interest in a subsidiary (11,070) (11,070) Issuance of ordinary shares under private placement 13,500 60,750 74,250 74,250 Share issue expenses *(373) (373) (373) Currency translation difference *(14,183) (14,183) (14,183) Dividend 31 (4,345) (4,345) (4,345) Balance as at 31 December 2007/ 1 January ,800 60,377 (15,956) 247, , , ,733 Profit after taxation 87,668 87,668 16, ,578 Acquisition of interest in subsidiaries (3,815) (3,815) Redemption of Redeemable Non-Cumulative Non-Voting Preference Shares ( RNCPS ) *2,127 (2,127) Currency translation difference *22,816 22, ,881 Dividend 31 (5,506) (5,506) (4,089) (9,595) Balance as at 31 December ,800 60,377 2,127 6, , , , ,782 * Represent gains/(losses) not taken to income statements. Share Share Retained Capital Premium Profits Total The Company Note RM'000 RM'000 RM'000 RM'000 Balance as at 1 January ,300 16, ,560 Profit after taxation 39,862 39,862 Issuance of ordinary shares under private placement 13,500 60,750 74,250 Share issue expenses (373) (373) Dividend 31 (4,345) (4,345) Balance as at 31 December 2007/ 1 January ,800 60,377 51, ,954 Profit after taxation 12,176 12,176 Dividend 31 (5,506) (5,506) Balance as at 31 December ,800 60,377 58, ,624 The annexed notes form an integral part of these financial statements. 67 annual report 2008

70 C A S H F LO W S TAT E M E N T S for the financial year ended 31 December 2008 CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES The Group The Company Note RM 000 RM 000 RM 000 RM 000 Profit before taxation 119, ,683 12,832 40,831 Adjustments for: Allowance for doubtful debts 1,223 1,288 Amortisation of prepaid lease payments Bad debts written off Depreciation of property, plant and equipment 42,421 44, Intangible assets: effects of settlement arising from profit guarantee 2,541 Interest expense 30,765 28,739 42,797 27,930 Inventories written off Loss on members voluntary liquidation of a subsidiary 14 Provision for retirement benefits Property, plant and equipment written off 292 Unrealised loss on foreign exchange 1,781 2,936 Dividend from subsidiaries (38,577) (26,110) Gain on disposal of property, plant and equipment (25,053) (8,514) (1) Gain on disposal of non-current asset classified as held for sale (2,223) Interest income (8,218) (3,877) (23,665) (23,117) Gain on dilution of interest in a subsidiary (34,126) - Gain on disposal of interest in a subsidiary (19,352) (28,058) Operating profit/(loss) before working capital changes 163, ,407 (6,141) (8,131) Increase in inventories (3,704) (10,918) Decrease/(Increase) in amount owing by contract customers 19,210 (12,935) Increase in amount owing to contract customers 1, (Increase)/Decrease in trade and other receivables (70,616) (65,327) 46,020 (10,579) Increase/(Decrease) in trade and other payables 26,153 8,295 6,942 (1,345) CASH FROM/(FOR) OPERATIONS 136, ,848 46,821 (20,055) Interest paid (30,765) (28,739) (42,797) (27,930) Tax paid (12,648) (9,261) (991) (1,947) NET CASH FROM/(FOR) OPERATING ACTIVITIES 92,936 62,848 3,033 (49,932) The annexed notes form an integral part of these financial statements. 68 annual report 2008

71 C A S H F LO W S TAT E M E N T S for the financial year ended 31 December 2008 (cont d) CASH FLOWS FOR INVESTING ACTIVITIES The Group The Company Note RM 000 RM 000 RM 000 RM 000 Deposits paid for the purchase of plant and equipment (205,561) (25,451) Investment in a subsidiary (328) (3) Advances to subsidiaries (52,309) (68,215) Acquisition of additional interest in a subsidiary (8,721) (7,950) (8,721) (7,950) Minority interests (2,541) Net cash inflow from acquisition of subsidiaries 317 Proceeds from disposal of interest in a subsidiary 31,058 31,058 Dividend received from subsidiary 38,577 26,110 Proceeds from disposal of property, plant and equipment 211,392 16,756 1 Proceeds from disposal of non-current asset classified as held for sale 22,687 Payment of prepaid lease (186) Purchase of property, plant and equipment 33 (203,235) (28,420) (184) (6,858) Interest received 8,218 3,877 23,665 23,117 Placement of fixed deposit (55,430) (75,432) (55,666) (75,511) NET CASH FOR INVESTING ACTIVITIES (47,459) (245,712) (54,965) (103,703) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of shares 74,250 74,250 Share issue expenses (373) (373) Proceeds from issuance of shares by a subsidiary to minority interests 120,520 Listing expenses of a subsidiary (2,958) Drawdown of bank borrowings 100, , , ,000 Repayment of bank borrowings (48,216) (100,652) (32,000) (62,565) Repayment of hire purchase obligations (327) (288) Advances from subsidiaries 33,373 30,807 Dividend paid to minority shareholders by subsidiaries (4,089) (645) Dividend paid (5,514) (4,333) (5,514) (4,333) NET CASH FROM FINANCING ACTIVITIES 42, ,187 95, ,786 NET INCREASE IN CASH AND CASH EQUIVALENTS 87,598 87,323 43,927 24,151 EFFECTS OF FOREIGN EXCHANGE TRANSLATION (57) (464) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 135,817 48,958 27,174 3,023 CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR , ,817 71,101 27,174 The annexed notes form an integral part of these financial statements. 69 annual report 2008

72 N O T E S T O T H E F I N A N C I A L S TAT E M E N T S for the financial year ended 31 December GENERAL INFORMATION The Company is a public company limited by shares and is incorporated under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia. The registered office which is also the principal place of business, is at No. 6-8, Jalan 3/3C, Batu 7, Jalan Ipoh, Kuala Lumpur. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 28 April PRINCIPAL ACTIVITIES The Company is principally an investment holding company and is also engaged in the provision of administrative and management services to its subsidiaries. The principal activities of the subsidiaries are described in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. 3. FINANCIAL RISK MANAGEMENT POLICIES The Group s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group s business whilst managing its market, credit, liquidity and cash flow risks. The policies in respect of the major areas of treasury activity are as follows: (a) Market Risk (i) Foreign Currency Risk The Group is exposed to foreign exchange risk arising mainly from normal trading transactions that are denominated in foreign currencies. It manages its foreign exchange exposure by a policy of matching as far as possible receipts and payments in each individual currency. The Company s foreign currency transactions and balances are substantially denominated in United States (US) Dollar. Foreign currency risk is managed to an acceptable level. (ii) Interest Rate Risk The Group s exposure to interest rate risk arises mainly from bank borrowings and hire purchase facilities. Its policy is to obtain the most favourable interest rates available. The Group monitors the interest rate on borrowings closely to ensure that the borrowings are maintained at favourable rates. Any surplus funds of the Group will be placed with licensed financial institutions at the most favourable interest rate to generate interest income. (iii) Price Risk The Group s principal exposure to price risk arises mainly from changes in quoted securities prices. Price risk is monitored closely and managed to an acceptable level. 70 annual report 2008

73 3. FINANCIAL RISK MANAGEMENT POLICIES (CONT D) (b) Credit Risk The Group s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from receivables. The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the balance sheet reduced by the effects of any netting arrangements with counterparties. The Group s concentration of credit risks relates to the amount owing by a customer which constituted approximately 67% of its trade receivables at the balance sheet date. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. (c) Liquidity and Cash Flow Risks The Group's exposure to liquidity and cash flow risks arises mainly from general funding and business activities. The Group s policy on liquidity and cash flow risks management is to maintain sufficient cash and funding through adequate amounts of committed credit facilities and credit lines for working capital requirements. 4. BASIS OF PREPARATION The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Financial Reporting Standards ( FRS ) and the Companies Act 1965 in Malaysia. (a) During the current financial year, the Group has adopted the following: (i) FRSs issued and effective for financial periods beginning on or after 1 July 2007: FRS 107 FRS 111 FRS 112 FRS 118 FRS 120 FRS 134 FRS 137 Cash Flow Statements Construction Contracts Income Taxes Revenue Accounting for Government Grants and Disclosure of Government Assistance Interim Financial Reporting Provisions, Contingent Liabilities and Contingent Assets FRS 111 and FRS 120 are not relevant to the Group s operations. The adoption of the other standards did not have any material impact on the form and content of disclosures presented in the financial statements. (ii) Amendment to FRS 121 The Effects of Changes in Foreign Exchange Rates Net Investment in a Foreign Operation has been issued and is effective for financial periods beginning on or after 1 July This amendment results in exchange differences arising from a monetary item that forms part of the Group s net investment in a foreign operation to be recognised in equity irrespective of the currency in which the monetary item is denominated and whether the monetary item results from a transaction with the Company or any of its subsidiaries. Previously, exchange differences arising from such transactions between the Company and its subsidiaries would be accounted for in the income statement or in equity of the Group depending on the currency of the monetary item. 71 annual report 2008

74 4. BASIS OF PREPARATION (CONT D) (iii) IC Interpretations issued and effective for financial periods beginning on or after 1 July 2007: IC Interpretation 1 IC Interpretation 2 IC Interpretation 5 IC Interpretation 6 Changes in Existing Decommissioning, Restoration and Similar Liabilities Members Shares in Co-operative Entities and Similar Instruments Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds Liabilities arising from Participating in a Specific Market Waste Electrical and Electronic Equipment IC Interpretation 7 Applying the Restatement Approach under FRS Financial Reporting in Hyperinflationary Economies IC Interpretation 8 Scope of FRS 2 The above IC Interpretations are not relevant to the Group s operations except for IC Interpretation 8 the adoption of which did not have any material impact on the financial statements of the Group. (b) The Group has not adopted following FRSs and IC Interpretations that have been issued as at the date of authorisation of these financial statements but are not yet effective for the Group: (i) FRS issued and effective for financial periods beginning on or after 1 July 2009: FRS 8 Operating Segments FRS 8 replaces FRS Segment Reporting and requires a management approach, under which segment information is presented on the same basis as that used for internal reporting purposes. The adoption of this standard only impacts the form and content of disclosures presented in the financial statements of the Group. This FRS is expected to have no material impact on the financial statements of the Group upon its initial application. (ii) FRSs issued and effective for financial periods beginning on or after 1 January 2010: FRS 4 FRS 7 FRS 139 Insurance Contracts Financial Instruments: Disclosures Financial Instruments: Recognition and Measurement The Group considers financial guarantee contracts entered to be insurance arrangements and accounts for them under FRS 4. In this respect, the Group treats the guarantee contract as a contingent liability until such a time as it becomes probable that the Group will be required to make a payment under the guarantee. The adoption of FRS 4 is expected to have no material impact on the financial statements of the Group. The possible impacts of FRS 7 and FRS 139 on the financial statements upon their initial applications are not disclosed by virtue of the exemptions given in these standards. (iii) IC Interpretations issued and effective for financial periods beginning on or after 1 January 2010: IC Interpretation 9 IC Interpretation 10 Reassessment of Embedded Derivatives Interim Financial Reporting and Impairment IC Interpretation 9 is not relevant to the Group s operations. IC Interpretation 10 prohibits the impairment losses recognised in an interim period on goodwill and investments in equity instruments and in financial assets carried at cost to be reversed at a subsequent balance sheet date. This interpretation is expected to have no material impact on the financial statements of the Group upon its initial application. 72 annual report 2008

75 5. SIGNIFICANT ACCOUNTING POLICIES (a) Critical Accounting Estimates And Judgements Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below: (i) Depreciation of Property, Plant and Equipment The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment is based on commercial factors which could change significantly as a result of technical innovations and competitors actions in response to the market conditions. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (ii) Income Taxes There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made. (iii) Impairment of Assets When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the Group is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows. (iv) Contract Revenue Contract revenue accounting requires reliable estimation of the costs to complete the contract and reliable estimation of the stage of completion. (i) Contract Revenue Contract revenue accounting requires that variation claims and incentive payments only be recognised as contract revenue to the extent that it is probable that they will be accepted by the customers. As the approval process often takes some time, a judgement is required to be made of its probability and revenue recognised accordingly. (ii) Contract Costs Using experience gained on each particular contract and taking into account the expectations of the time and materials required to complete the contract, management estimates the profitability of the contract on an individual basis at any particular time. (v) Allowance for Doubtful Debts of Receivables The Group makes allowance for doubtful debts based 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. Management analyses historical bad debt, customer concentrations, 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 of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables. 73 annual report 2008

76 5. SIGNIFICANT ACCOUNTING POLICIES (CONT D) (a) Critical Accounting Estimates And Judgements (cont d) (vi) Allowance for Inventories Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories. (vii) Operating Lease The Group entered into a conditional Sale and Leaseback Agreement for the sale of a subsidiary s vessels with a third party. Subsequently, the vessels were leased back by a subsidiary from the third party for a lease period of ten (10) years commencing from the date of delivery of vessels with the option to buy back the vessels at the end of the primary lease term period should the third party decide to sell the vessels during the term of the lease. The directors are of the opinion that the lease arrangement should be treated as an operating lease as presently the management has no intention to buy back the vessels at the end of the primary lease term and the lease term does not constitute the major part of the economic life of the vessels. (b) Financial Instruments Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instruments. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously. Financial instruments recognised in the balance sheet are disclosed in the individual policy statement associated with each item. (c) Functional and Foreign Currency (i) Functional and Presentation Currency The functional currency of the Group s is measured using the currency of the primary economic environment in which the Group operates. The consolidated financial statements are presented in Ringgit Malaysia ( RM ) which is the parent s functional and presentation currency. (ii) Transactions and Balances Transactions in foreign currency are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the balance sheet date are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are taken to the income statement. 74 annual report 2008

77 5. SIGNIFICANT ACCOUNTING POLICIES (CONT D) (c) Functional and Foreign Currency (cont d) (iii) Foreign Operations The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency for consolidation purposes as follows: assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet; income and expenses for income statement are translated at the average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and all resulting exchange differences are recognised as a separate component of equity, as a foreign currency translation reserve. On disposal, accumulated translation differences are recognised in the consolidated income statements as part of the gain or loss on sale. When foreign operations are partially disposed of or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale. On disposal, accumulated translation differences are recognised in the consolidated income statements as part of the gain or loss on sale. (d) Basis of Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries for the financial year up to 31 December A subsidiary is defined as a company in which the parent company has the power, directly or indirectly, to exercise control over its financial and operating policies so as to obtain benefits from its activities. All subsidiaries are consolidated using the purchase method. Under the purchase method, the results of the subsidiaries acquired or disposed of are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries net assets are determined and these values are reflected in the consolidated financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group. Minority interests in the consolidated balance sheet consist of the minorities share of fair values of the identifiable assets and liabilities of the acquiree as at the date of acquisition and the minorities share of movements in the acquiree s equity. Minority interests are presented in the consolidated balance sheet of the Group within equity, separately from the Company s equity holders, and are separately disclosed in the consolidated income statement of the Group. (e) Goodwill on Consolidation Goodwill on consolidation represents the excess of the fair value of the purchase consideration over the Group s share of the fair values of the identifiable net assets of the subsidiaries at the date of acquisition. Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually. The impairment value of goodwill is recognised immediately in the consolidated income statement. An impairment loss recognised for goodwill is not reversed in a subsequent period. 75 annual report 2008

78 5. SIGNIFICANT ACCOUNTING POLICIES (CONT D) (e) Goodwill on Consolidation (cont d) If, after reassessment, the Group s interest in the fair values of the identifiable net assets of the subsidiaries exceeds the cost of the business combinations, the excess is recognised immediately in the consolidated income statement. (f) Investments in Subsidiaries Investments in subsidiaries are stated at cost in the balance sheet of the Company, and is reviewed for impairment at the end of the financial year if events or changes in circumstances indicate that their carrying values may not be recoverable. On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is taken to the income statement. (g) Property, Plant and Equipment Property, plant and equipment are stated at cost or revalued amount less accumulated depreciation or amortisation and impairment losses, if any. Depreciation or amortisation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are: Vessels 4% 20% Vessel equipment 4% 10% Leasehold buildings 2% Plant and machinery 10% Cabin, field and workshop equipment 10% 20% Motor vehicles 20% Office equipment, furniture and fittings 10% 20% Dry docking 5 years Others 10% 50% Capital work-in-progress is not depreciated. Capital work-in-progress represents assets under construction, and which are not ready for commercial use at the balance sheet date. Capital work-in-progress is stated at cost, and is transferred to the relevant category of assets and depreciated accordingly when the assets are completed and ready for commercial use. Cost of capital workin-progress includes direct costs, related expenditure and interest cost on borrowings taken to finance the construction or acquisition of the assets to the date that the assets are completed and put into use. The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each balance sheet date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is included in the income statement in the year the asset is derecognised. 76 annual report 2008

79 5. SIGNIFICANT ACCOUNTING POLICIES (CONT D) (h) Impairment of Assets The carrying values of assets, other than those to which FRS 136 Impairment of Assets does not apply, are reviewed at each balance sheet date for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets net selling price and their value-in-use, which is measured by reference to discounted future cash flow. An impairment loss is charged to the income statement immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset. In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to the revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognised as income in the income statement. (i) Prepaid Lease Payments Leases of land under which the lessor has not transferred all the risks and benefits of ownership are classified as operating leases. Lease prepayment for land use rights is stated at cost less accumulated amortisation and impairment losses, if any. Amortisation is charged to the income statement on a straight line basis over the terms of the leases of 42 to 66 years. (j) Operating Leases Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments are made under operating leases (net of any incentives received from the lessor) are charged to the income statement on the straight-line basis over the lease period. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. (k) Assets under Hire Purchase Plant and equipment acquired under hire purchase are capitalised in the financial statements and are depreciated in accordance with the policy set out in Note 5(g) above. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are allocated to the income statement over the periods of the respective hire purchase agreements. (l) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in-first-out basis, and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Cost of finished goods and work-in-progress includes cost of materials, labour and an appropriate proportion of production overheads. Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale. Where necessary, due allowance is made for all obsolete, damaged and slow-moving items. 77 annual report 2008

80 5. SIGNIFICANT ACCOUNTING POLICIES (CONT D) (m) Receivables Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date. (n) Amounts Owing By/To Contract Customers The amounts owing by/to contract customers are stated at cost plus profits attributable to contracts in progress less progress billings and allowance for foreseeable losses, if any. Cost includes direct materials, labour and applicable overheads. (o) Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. (p) Provisions Provisions are recognised when the Group has a present obligation as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation. (q) Cash and Cash Equivalents Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged to financial institutions, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. (r) Income Taxes Income taxes for the financial year comprise current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred taxation is provided in full, using the liability method, on all material temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the balance sheet date. 78 annual report 2008

81 5. SIGNIFICANT ACCOUNTING POLICIES (CONT D) (r) Income Taxes (cont d) Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly to equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the business combination costs. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised. (s) Interest-bearing Borrowings Interest-bearing borrowings are recorded at the amount of proceeds received, net of transaction costs. Borrowing costs, directly attributable to the acquisition and construction of property, plant and equipment are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted. All other borrowing costs are charged to the income statement as expenses in the period in which they are incurred. (t) Bonds Bonds issued by the Group are initially recognised based on proceeds received, net of issuance expenses incurred. The difference between the net amount and the face value of the bonds is amortised or accreted over the period of the bonds using the effective yield method. The premium amortised and/or discount accreted is recognised in the income statement. (u) Equity Instruments Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation. (v) Segmental Information Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of property, plant and equipment (net of accumulated depreciation, where applicable), intangible asset, inventories, receivables, and cash and bank balances. Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets and liabilities do not include income tax assets and liabilities respectively. Segment revenues, expenses and results include transfers between segments. The prices charged on intersegment transactions are based on normal commercial terms. These transfers are eliminated on consolidation. (w) Employee Benefits (i) Short-term Benefits Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group. 79 annual report 2008

82 5. SIGNIFICANT ACCOUNTING POLICIES (CONT D) (w) Employee Benefits (cont d) (ii) Defined Contribution Plans The Group s contributions to defined contribution plans are charged to the income statement in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans. The Group also operates an unfunded, non-contributory defined retirement benefit scheme for certain eligible employees. The retirement scheme contributions are estimated and provided for in the Financial Statements after taking into consideration the length of service and basic earnings of the eligible employees. The provisions are charged to the income statement in the period to which they relate, and represent the amount of contributions payable by the Group under the scheme. (x) Related Parties A party is related to an entity: (i) (ii) (iii) (iv) (v) (vi) (vii) directly, or indirectly through one or more intermediaries, the party: controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries); has an interest in the entity that gives it significant influence over the entity; or has joint control over the entity; the party is an associate of the entity; the party is a joint venture in which the entity is a venturer; the party is a member of the key management personnel of the entity or its parent; the party is a close member of the family of any individual referred to in (i) or (iv); the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity. Close members of the family of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity. (y) Contingent Liabilities A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably. A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision. (z) Revenue Recognition (i) Chartered Vessel Income Chartered vessel income is recognised upon rendering of services and when the outcome of the transaction can be estimated reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable. 80 annual report 2008

83 5. SIGNIFICANT ACCOUNTING POLICIES (CONT D) (z) Revenue Recognition (cont d) (ii) Services Revenue is recognised upon rendering of services and when the outcome of the transaction can be estimated reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable. (iii) Contract Revenue Revenue on contracts is recognised on the percentage of completion method unless the outcome of the contract cannot be reliably determined, in which case revenue on contracts is only recognised to the extent of contract costs incurred that are recoverable. Foreseeable losses, if any, are provided for in full as and when it can be reasonably ascertained that the contract will result in a loss. The stage of completion is determined based on the proportion that the contract costs incurred for work performed to date bear to the estimated total contract costs. (iv) Rental Income Rental income is recognised on an accrual basis. (v) Interest Income Interest income is recognised on an accrual basis, based on the effective yield on the investment. Interest income on late payment is recognised on a receipt basis. 6. INVESTMENT IN SUBSIDIARIES The Company RM 000 RM 000 Quoted shares in Malaysia, at cost 39,000 39,000 Unquoted shares, at cost: in Malaysia 285, ,781 outside Malaysia 21,503 12, , ,235 Less: Impairment loss (10) (10) 346, ,225 Market value of quoted shares in Malaysia 148, , annual report 2008

84 6. INVESTMENT IN SUBSIDIARIES (CONT D) The details of the subsidiaries are as follows: Country of Effective Equity Name of Company Incorporation Interest Principal Activities % % Petra Energy Berhad* Malaysia Investment holding. Odin Explorer Navigation Limited The British Provision of marine support services Virgin Islands for the oil and gas industry. Geoseas Technologies Limited The British Dormant. Virgin Islands Intra Oil Services Berhad Malaysia Provision of marine support services for the oil and gas industry. Ampangship Marine Sdn Bhd Malaysia Provision of marine support services for the oil and gas industry. Perdana Marine Offshore Pte Ltd* The Republic Provision of marine support services of Singapore for the oil and gas industry. Petra Offshore Limited Federal Territory Provision of offshore leasing of Labuan business. Perdana Mercury Limited The Republic of Provision of marine support services the Marshall for the oil and gas industry. Islands Petra Teknik Sdn Bhd Malaysia Dormant. Petra Asia Limited Federal Territory Dormant. of Labuan Perdana Venus Limited The Republic of Provision of marine support services the Marshall for the oil and gas industry. Islands Petra Marine Australia Pty Ltd The Commonwealth 55 Provision of marine support services of Australia for the oil and gas industry. Interest held through Petra Energy Berhad Petra Resources Sdn Bhd * Malaysia Provision of services in operations and maintenance, oil field optimisation, retrofits, domestic vessels recharter, geophysical, design and fabrication of process equipment and packaging and supply of engineered equipment for the oil and gas industry. 82 annual report 2008

85 6. INVESTMENT IN SUBSIDIARIES (CONT D) Country of Effective Equity Name of Company Incorporation Interest Principal Activities % % Interest held through Petra Energy Berhad Petra Fabricators Sdn Bhd * Malaysia Design, fabrication, supply and installation of pressure vessels, heat exchangers, skid packages and other process equipment primarily for the oil and gas and petrochemical industries. Petra Services Sdn Bhd * Malaysia 100 Equipment rental and related services in the oil and gas industry. Petra Innotech Sdn Bhd * Malaysia 100 Dormant. Petra AWT Sdn Bhd * Malaysia 51 Provision of complete field (formerly known as development and refurbishment Energy Link Systems Sdn Bhd) solutions by integrating all necessary project management, engineering and equipment services to deliver such solutions to oil and gas operators. Interest held through Petra Fabricators Sdn Bhd Petra Boilers Sdn Bhd * Malaysia Design, fabrication, supply and installation of industrial boilers and ancillary equipment primarily for the oil and gas and petrochemical industries. Interest held through Intra Oil Services Berhad Osam Marine Sdn Bhd Malaysia Dormant. Asiaway Sdn Bhd Malaysia Dormant. Interest held through Osam Marine Sdn Bhd Malawi Marine Sdn Bhd Malaysia Dormant. Kovan Marine Sdn Bhd Malaysia Dormant. * Not audited by Messrs. Horwath. 83 annual report 2008

86 7. PROPERTY, PLANT AND EQUIPMENT The Group Net Book Value Reclassified Transfer As Non- From Current At Deposits Written Assets Held Translation Depreciation At Additions Disposals (Note 13) Off For Sale Reserve Charge RM'000 RM'000 RM'000 RM'000 RM 000 RM 000 RM 000 RM 000 RM 000 Vessels 333, ,150 (176,797) (4,466) 7,794 (24,172) 303,632 Vessel equipment 11, (280) 11,325 Dry docking 26,844 19,143 (9,486) (169) (35) 2,022 (8,697) 29,622 Leasehold buildings 6, (214) 6,362 Plant and machinery 3, (898) 3,495 Cabin, field and workshop equipment 13, (5,740) 8,393 Motor vehicles 1, (27) (109) (2) (543) 1,650 Office equipment, furniture and fittings 1, (6) (7) 3 (523) 1,367 Work-in-progress 5, , ,899 Others 2,907 1,788 (23) (7) 12 (1,354) 3, , ,367 (186,339) 284,345 (292) (4,501) 9,892 (42,421) 659,068 The Group At Translation Depreciation At Additions Disposals Reclassifications Reserve Charge RM'000 RM'000 RM'000 RM 000 RM 000 RM 000 RM 000 Net Book Value Vessels 373,700 1,091 (3,833) (376) (11,877) (25,582) 333,123 Dry docking 27,444 15,580 (4,321) (807) (1,064) (9,988) 26,844 Leasehold buildings 4, ,672 (190) 6,268 Plant and machinery 2,907 1,674 1 (815) 3,767 Cabin, field and workshop equipment 18, (39) 385 (5,869) 13,904 Motor vehicles 1, (14) (515) 1,345 Office equipment, furniture and fittings 1, (47) (135) (401) 1,305 Work-in-progress 278 6,948 (1,672) 5,554 Others 1,281 1,761 (2) 930 (1) (1,062) 2, ,217 28,420 (8,242) (12,956) (44,422) 395, annual report 2008

87 7. PROPERTY, PLANT AND EQUIPMENT (CONT'D) The Group At Accumulated Net Book Cost Depreciation Value RM'000 RM'000 RM'000 At Vessels 388,937 (85,305) 303,632 Vessel equipment 11,609 (284) 11,325 Dry docking 45,536 (15,914) 29,622 Leasehold buildings 9,672 (3,310) 6,362 Plant and machinery 13,127 (9,632) 3,495 Cabin, field and workshop equipment 31,650 (23,257) 8,393 Motor vehicles 4,448 (2,798) 1,650 Office equipment, furniture and fittings 5,262 (3,895) 1,367 Work-in-progress 289, ,899 Others 12,372 (9,049) 3, ,512 (153,444) 659,068 At Vessels 413,941 (80,818) 333,123 Dry docking 47,634 (20,790) 26,844 Leasehold buildings 9,364 (3,096) 6,268 Plant and machinery 12,501 (8,734) 3,767 Cabin, field and workshop equipment 31,421 (17,517) 13,904 Motor vehicles 4,254 (2,909) 1,345 Office equipment, furniture and fittings 4,820 (3,515) 1,305 Work-in-progress 5,554 5,554 Others 10,706 (7,799) 2, ,195 (145,178) 395,017 The Company Transfer At From Deposits Depreciation At Additions (Note 13) Charge RM'000 RM'000 RM'000 RM'000 RM'000 Net Book Value Leasehold buildings 1,776 (37) 1,739 Furniture, fittings and office equipment (84) 267 Work-in-progress 5,554 34,587 40,141 Others 1, (288) 894 8, ,587 (409) 43, annual report 2008

88 7. PROPERTY, PLANT AND EQUIPMENT (CONT'D) The Company At Depreciation At Additions Charge RM'000 RM'000 RM'000 RM'000 Net Book Value Leasehold buildings 1,813 (37) 1,776 Furniture, fittings and office equipment (50) 282 Work-in-progress 5,554 5,554 Others 164 1,042 (139) 1,067 2,047 6,858 (226) 8,679 At Accumulated Net Book Cost Depreciation Value The Company RM'000 RM'000 RM'000 At Leasehold buildings 1,860 (121) 1,739 Furniture, fittings and office equipment 472 (205) 267 Work-in-progress 40,141 40,141 Others 1,634 (740) ,107 (1,066) 43,041 At Leasehold buildings 1,860 (84) 1,776 Furniture, fittings and office equipment 403 (121) 282 Work-in-progress 5,554 5,554 Others 1,523 (456) 1,067 9,340 (661) 8,679 Included in the net book value of property, plant and equipment of the Group at the balance sheet date are the following assets acquired under hire purchase terms: The Group RM 000 RM 000 Motor vehicles 725 1,005 The net book value of the vessels at the balance sheet date pledged as security for the issuance of bonds by the Group were as follows: The Group RM 000 RM 000 Vessels, including dry docking expenses capitalised 222, ,109 Included in capital work-in-progress is interest expense capitalised during the financial year of RM12,148,316 (2007 Nil). 86 annual report 2008

89 8. PREPAID LEASE PAYMENTS The Group RM 000 RM 000 Cost 7,908 7,908 Accumulated amortisation (633) (504) Net book value 7,275 7,404 Accumulated amortisation: At 1 January (504) (374) Amortisation for the financial year (129) (130) At 31 December (633) (504) 9. AMOUNTS OWING BY/(TO) SUBSIDIARIES The Company Interest- Interest- Interest- Interest- Bearing Free Total Bearing Free Total Note RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Amount owing by: Non-current without repayment terms (a) 260,044 41, , , , ,201 with repayment terms (b) 51,649 51,649 61,649 61, ,693 41, , , , ,850 Current repayable on demand (c) 5,009 5,009 8,852 9,632 18,484 with repayment terms (b) 10,000 10,000 19,248 19,248 10,000 5,009 15,009 28,100 9,632 37,732 Allowance for doubtful debts (5,001) (5,001) (5,001) (5,001) 10, ,008 28,100 4,631 32, ,693 41, , , , ,581 Amount owing to: Current repayable on demand (c) (64,194) (64,194) (30,821) (30,821) (a) The settlement of the non-current amount owing by subsidiaries is neither planned nor likely to occur in the foreseeable future. As this amount is, in substance, a part of the Company s net investment in the subsidiary, it is stated at cost less accumulated impairment losses. 87 annual report 2008

90 9. AMOUNTS OWING BY/(TO) SUBSIDIARIES (CONT D) (b) The amount outstanding of RM61,649,000 is repayable as follows: Repayment Amount Instalment No. Repayment Date RM September , March , September , March , September , March , September ,649 (c) (d) (e) The amounts owing by/(to) subsidiaries is repayable on demand. The amount is to be settled in cash. The interest-bearing amounts are subject to interest rates ranging from 4.9% to 7.5% ( % to 7.5%) per annum. The amounts owing by/(to) subsidiaries are non-trade in nature and unsecured. 10. INTANGIBLE ASSETS The Group RM 000 RM 000 Goodwill: At 1 January 22,918 25,459 Effects of settlement arising from profit guarantee (2,541) Acquisition of additional interest in a subsidiary 4,589 At 31 December 27,507 22,918 Goodwill has been allocated for impairment testing to the Group s cash-generating unit ( CGU ). During the financial year, the Group assessed the recoverable amount of the purchased goodwill, and determined that the goodwill is not impaired. The recoverable amount of a CGU is determined based on the value-in-use calculations. These calculations use post-tax cash flow projections based on financial budgets approved by management covering a period of five years. The key assumptions used for the value-in-use calculations are as follows: Gross margin 7% 36% Growth rate 1% 19% Discount rate 12% Management determined the budgeted gross margin based on past performance and its expectations of market development. The growth rate used is based on the past years achievement and the expected contracts to be secured. The discount rates used are pre-tax and reflect specific risks relating to the relevant segments. 88 annual report 2008

91 11. DEFERRED TAX ASSETS The Group The Company RM'000 RM'000 RM'000 RM'000 At 1 January Recognised in income statements (Note 29) 15 (5) At 31 December The deferred tax assets comprise: The Group The Company RM'000 RM'000 RM'000 RM'000 Excess of depreciation over capital allowances General provision INVENTORIES The Group RM'000 RM'000 At Cost: Raw materials Work-in-progress 30,602 22,028 Finished goods 3,492 3,690 Goods-in-transit 4,731 Consumable stores 15,726 15,747 50,299 46,653 None of the inventories is carried at net realisable value. 89 annual report 2008

92 13. RECEIVABLES The Group The Company RM'000 RM'000 RM'000 RM'000 Trade receivables 270, ,674 Allowance for doubtful debts At 1 January (8,609) (7,513) Addition during the financial year (1,161) (1,096) At 31 December (9,770) (8,609) Net trade receivables 260, ,065 Other receivables, deposits and prepayments 387, ,238 67, ,241 Transferred to property, plant and equipment (Note 7) (284,345) (34,587) 103, ,238 32, ,241 Allowance for doubtful debts At 1 January (1,764) (1,572) Addition during the financial year (62) (192) At 31 December (1,826) (1,764) Net other receivables, deposits and prepayments 101, ,474 32, ,241 Total receivables 362, ,539 32, ,241 In the previous financial year, included in other receivables, deposits and prepayments at the balance sheet date were deposits paid for the purchase of plant and equipment of the Group and of the Company which amounted to RM253,740,000 and RM73,630,000, respectively. The Group s normal trade credit terms range from 30 to 90 days. Other credit terms are assessed and approved on a case-by-case basis. The foreign currency exposure profile of the trade and other receivables are as follows: The Group RM'000 RM'000 United States Dollar 98, ,996 Singapore Dollar Sterling Pound 3, Euro 908 1,030 Australian Dollar 2,850 Others annual report 2008

93 14. AMOUNTS OWING BY/(TO) CONTRACT CUSTOMERS The Group RM'000 RM'000 Contract cost 31,502 59,016 Attributable profit 10,207 17,003 41,709 76,019 Progress billings (44,863) (58,028) Amounts owing (to)/by contract customers (3,154) 17,991 The net amount owing (to)/by contract customers comprises the following: The Group RM'000 RM'000 Amount owing by contract customers 6,471 25,681 Amount owing to contract customers (9,625) (7,690) (3,154) 17, FIXED DEPOSITS WITH LICENSED BANKS The fixed deposits are pledged to the bank for banking facilities granted to the subsidiaries as follows: The Group The Company RM'000 RM'000 RM'000 RM'000 Fixed deposits pledged as security 146,522 91, ,916 89,250 The effective interest rates of the fixed deposits at the balance sheet date were as follows: The Group The Company % % % % Fixed deposits with licensed banks 0.01 to to to to 4.00 The fixed deposits of the Group have maturity periods ranging from 1 day to 365 days ( day to 365 days). The foreign currency exposure profile of the fixed deposits is as follows: The Group The Company RM'000 RM'000 RM'000 RM'000 United States Dollar 16,870 44,510 4,171 32, annual report 2008

94 16. NON-CURRENT ASSET CLASSIFIED AS HELD FOR SALE On 12 February 2009, the Group entered into 2 separate Memoranda of Agreement with a third party to dispose of two of its vessels for a total consideration of RM7,385,438 (equivalent to USD2,125,000). This represents the carrying amount of the vessels at the balance sheet date. 17. SHARE CAPITAL The Group/The Company Number Of Shares RM'000 RM'000 Ordinary shares of RM0.50 each: '000 '000 Authorised 1,000,000 1,000, , ,000 Issued and fully paid-up At 1 January 297, , , ,300 Private placement 27,000 13,500 At 31 December 297, , , , RESERVES The Group The Company RM'000 RM'000 RM'000 RM'000 Distributable: Retained profits 327, ,421 58,447 51,777 Non-distributable: Share premium 60,377 60,377 60,377 60,377 Translation reserve 6,860 (15,956) Capital redemption reserve 2,127 69,364 44,421 60,377 60, , , , ,154 Subject to the agreement of the tax authorities, at the balance sheet date, the Company has: (a) (b) tax-exempt income of approximately RM17,916,374 (2007 RM17,916,374) available for the purpose of paying taxexempt dividends; and tax credits under Section 108 of the Income Tax Act, 1967 to frank the payment of dividends of approximately RM34,176,866 (2007 RM39,824,861) out of its retained profits. The balance of the retained profits, if distributed as dividends, will be taxed at the statutory tax rate. Effective from 1 January 2008, the Company is allowed an irrevocable option to elect for the single tier tax system or continue with the use of the tax credit balance for the purpose of dividend distribution. When the tax credit balance is fully utilised, or by 31 December 2013 at the latest, the Company will automatically move to the single tier tax system. The share premium is not distributable by way of cash dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act The capital redemption reserve represents the redemption of the redeemable non-cumulative non-voting preference shares by a subsidiary. 92 annual report 2008

95 19. DEFERRED TAXATION The Group RM'000 RM'000 At 1 January 25,519 36,746 Translation differences 75 (4) Recognised in income statements (Note 29) 5,314 (11,223) At 31 December 30,908 25,519 The deferred tax liabilities are attributable to the followings: The Group RM'000 RM'000 Accelerated capital allowances over depreciation 31,210 25,745 General provisions (406) (167) Others 104 (59) 30,908 25, LONG-TERM BORROWINGS The Group The Company RM'000 RM'000 RM'000 RM'000 Hire purchase payables (Note 21) Term loans (Note 22) 295, , , , , , , , HIRE PURCHASE PAYABLES The Group RM'000 RM'000 Minimum hire purchase payments: not later than one year later than one year and not later than five years Less: Future finance charges (83) (108) Present value of hire purchase payables The net hire purchase payables are repayable as follows: Current: not later than one year (Note 25) Non-current: later than one year and not later than five years (Note 20) The hire purchase payables at the balance sheet date bore effective interest rates ranging from 2.36% to 5.50% ( % to 8.4%) per annum. 93 annual report 2008

96 22. TERM LOANS The Group The Company RM'000 RM'000 RM'000 RM'000 Current portion: repayable within one year (Note 25) 155, ,000 Non-current portion: repayable between one to two years 95, ,000 95, ,000 repayable between two to five years 200, , , ,000 repayable after five years 35,000 35,000 Total non-current portion (Note 20) 295, , , , , , , ,000 On 30 March 2007, the Company issued RM400,000,000 nominal value secured serial bonds ("Bonds"). The Bonds were issued in 9 series, as follows: Series Nominal Value Maturity Date Coupon Rate RM 000 Per Annum A 120, March % B 35, September % C 35, March % D 35, September % E 35, March % F 35, September % G 35, March % H 35, September % I 35, March % The coupon payment is due semi-annually in arrears. On 3 November 2006, the Company issued RM50,000,000 nominal value medium term notes ("MTN"). The issuance of MTN was made in 4 series, as follows: Series Nominal Value Maturity Date Coupon Rate RM 000 Per Annum A 15,000 3 May % B 10,000 3 November % C 15,000 3 May % D 10,000 3 November % The coupon payment is due semi-annually in arrears. The Bonds and MTN are secured against a fixed charge over the shares of certain subsidiaries and an assignment over the revenue generated by certain of the Group s vessels and various undertakings by the Company. 94 annual report 2008

97 23. RETIREMENT BENEFIT OBLIGATIONS The Group operates an unfunded, non-contributory defined benefit retirement scheme ("the Scheme") for its eligible employees. Under the Scheme, eligible employees are entitled to top-up their EPF contribution by an additional 5% of basic salary. This benefit is transferable to the eligible employee's EPF if he/she has reached the retirement age of 55 years, or upon his/her resignation if he/she has served at least 5 years with the Company. The amount recognised in the balance sheet are determined as follows: The Group The Company RM'000 RM'000 RM'000 RM'000 Present value of unfunded defined benefit obligations Analysed as: The Group The Company RM'000 RM'000 RM'000 RM'000 Current portion: not later than one year Non-current portion: later than one year The amount recognised in the income statement are as follows: The Group The Company RM'000 RM'000 RM'000 RM'000 Provision of retirement benefits Movements in the net liability in the current year were as follows: The Group The Company RM'000 RM'000 RM'000 RM'000 At 1 January Recognised in the income statements: directors remuneration key management personnel At 31 December annual report 2008

98 24. PAYABLES The Group The Company RM'000 RM'000 RM'000 RM'000 Trade payables 84,960 65,062 Other payables and accruals Other payables 10,919 5,156 7, Accruals 31,920 30,562 7,820 7,882 Dividend payable Net other payables and accruals 42,851 35,738 15,336 8,401 Total payables 127, ,800 15,336 8,401 The normal trade credit terms granted to the Group range from 30 to 90 days. The foreign currency exposure profile of the trade and other payables is as follows: The Group RM'000 RM'000 United States Dollar 17,084 10,979 Singapore Dollar 7,320 4,117 Sterling Pound 3, Euro Australian Dollar 2,903 Others 708 1, SHORT-TERM BORROWINGS The Group The Company RM'000 RM'000 RM'000 RM'000 Bankers acceptances 1,897 5,316 Revolving credit 12,530 Bridging loan 208, , , ,000 Hire purchase payables (Note 21) Term loan (Note 22) 155, ,000 Bank overdrafts (Note 34) , , , ,000 The borrowings (other than the bridging loan) are secured by the Company's corporate guarantees. The bridging loan is secured by an assignment of the Company's rights under the charterer deposit agreements or lease agreements or memoranda of agreement or such other agreements (where applicable) in relation to the new vessels to be constructed. The bridging loan of the Company bears an interest rate of 1.00% to 1.25% ( %) per annum above the 1 month effective cost of funds ( month effective cost of funds), to be computed on 365 days ( days) basis and payable monthly (2007 monthly) in arrear. The bank borrowings (other than the bridging loan, term loan and hire purchase) bear effective interest rates ranging from 4.00% to 4.40% ( % to 5.03%) per annum. 96 annual report 2008

99 26. NET ASSETS PER ORDINARY SHARE The net assets per ordinary share is calculated based on the net assets value of RM545,620,000 (2007 RM440,642,000) divided by the number of ordinary shares in issue at the balance sheet date of 297,600,000 ( ,600,000 shares). 27. REVENUE The Group The Company RM'000 RM'000 RM'000 RM'000 Contract revenue 84,178 94,190 Sales of goods and services 610, ,993 Dividend income 38,577 26,110 Management fee 1,620 3,240 Rental income , ,183 40,535 29,913 Contract revenue represents the proportionate contract value attributable to work performed. Revenue from sale of goods and services represent the invoiced value of goods sold and services rendered less discounts and returns. 28. PROFIT BEFORE TAXATION Profit before taxation is arrived at after charging/(crediting): The Group The Company RM'000 RM'000 RM'000 RM'000 Audit fee: current underprovision in the previous financial year 2 1 Allowance for doubtful debts 1,223 1,288 Amortisation of prepaid lease payments Bad debts written off Bad debts recovered (27) Depreciation of property, plant and equipment 42,421 44, Directors' remuneration: fees other emoluments 1,051 1, benefits-in-kind retirement benefits Hire of equipment 17,348 12,411 1 Interest expense: bond and MTN 28,441 27,930 28,441 27,930 hire purchase bank borrowings 2, ,356 Intangible assets: effects of settlement arising from profit guarantee 2,541 Inventories written off Lease rental of vessels 27,992 1,928 Loss/(Gain) on foreign exchange: realised (769) 4,917 (1,462) 2,285 unrealised 1,781 2,936 Loss on members voluntary liquidation of a subsidiary 14 Preliminary expenses 2 97 annual report 2008

100 28. PROFIT BEFORE TAXATION (CONT D) Note The Group The Company RM'000 RM'000 RM'000 RM'000 Property, plant and equipment written off 292 Provision for retirement benefits Rental of premises 1,759 1, Staff costs 135, ,376 4,597 5,614 Gain on dilution of interest in a subsidiary (a) (34,126) Gain on disposal of interest in a subsidiary (b) (19,352) (28,058) Gain on disposal of property, plant and equipment (25,053) (8,514) (1) Gain on disposal of non-current asset classified as held for sale (2,223) Interest income from: fixed deposits (8,218) (3,877) (5,167) (2,305) subsidiaries (18,498) (20,812) (a) (b) Petra Energy Berhad ( PEB ) was a wholly-owned subsidiary of the Company. In the previous financial year, PEB was listed on the Main Board of Bursa Malaysia. As a result of the listing, PEB issued shares to the public and other investors, diluting the Company s equity interest in PEB from 100% to 64.62%. This dilution gave rise to a gain of RM34,126,000 to the Group. In the previous financial year, the Company disposed of 9,000,000 ordinary shares of RM0.50 each in PEB at RM3.50 per share via an off-market disposal, resulting in a gain of RM19,352,000 to the Group. As a result of the disposal, the Company s equity interest in PEB reduced from 64.62% to 60%. 29. INCOME TAX EXPENSE The Group The Company RM'000 RM'000 RM'000 RM'000 Current tax expense: Malaysian tax 8,749 12, Foreign tax 1,266 1,287 10,015 14, (over)/underprovision in the previous financial year (411) 75 (97) 9 9,604 14, Deferred tax assets (Note 11): relating to origination and recognition of temporary differences (15) 2 underprovision in the previous financial year 3 (15) 5 Deferred taxation (Note 19): relating to origination and recognition of temporary differences 5,067 (9,543) under/(over)provision in the previous financial year 247 (1,680) 5,314 (11,223) 14,903 2, annual report 2008

101 29. INCOME TAX EXPENSE (CONT'D) A reconciliation of the income tax expense applicable to the profit before taxation at the statutory tax rates to the income tax expense at the effective tax rate of the Group and the Company is as follows: The Group The Company RM'000 RM'000 RM'000 RM'000 Profit before taxation 119, ,683 12,832 40,831 Tax at the statutory tax rates of 26% ( %) 31,065 45,544 3,336 11,024 Tax effects of: Reversal of temporary differences (14,377) Non-taxable gains (26,363) (34,988) (7,838) (19,850) Non-deductible expenses 12,817 12,705 5,255 9,858 Utilisation of previously unrecognised deferred tax assets (1,747) (3,336) (72) (Over)/underprovision of current tax in the previous financial year (411) 75 (97) 9 Under/(over)provision of deferred tax in the previous financial year 247 (1,677) Changes in tax rates on opening balance of deferred tax (143) Differential in tax rates (562) (964) Tax for the financial year 14,903 2, EARNINGS PER SHARE The basic earnings per share ( EPS ) is arrived at by dividing the Group s profit attributable to the equity holders of the Company of RM87,668,000 (2007 RM155,709,000) by the number of ordinary shares in issue during the financial year of 297,600,000 (2007 weighted average of 288,279,452 ordinary shares). The diluted earnings per share were not applicable as there were no dilutive potential ordinary shares outstanding at the balance sheet date. 31. DIVIDENDS The Group/The Company RM'000 RM'000 First and final dividend of 2.0 sen ( sen) per ordinary share of RM0.50 each less tax of 26% ( %) in respect of the previous financial year 4,405 4,345 Special dividend of 0.5 sen (2007 Nil) per ordinary share of RM0.50 each less tax of 26% ( %) in respect of the previous financial year 1,101 5,506 4,345 At the forthcoming Annual General Meeting, a final dividend of 2.0 sen per ordinary share of RM0.50 each, less tax of 25% in respect of the financial year ended 31 December 2008 (2007 a final dividend of 2.0 sen and a special dividend of 0.5 sen per ordinary share of RM0.50 each less 26% tax) amounting to RM4,464,000 (2007 RM4,404,480 and RM1,101,120 respectively) will be proposed for shareholders approval. The financial statements do not reflect the final dividend which will be accrued as a liability only upon approval by the shareholders. 99 annual report 2008

102 32. ACQUISITION OF SUBSIDIARIES The subsidiaries acquired by the Group during the year ended 31 December 2008 are as follows: Group s Effective Acquisition Name of Subsidiaries Interest (%) Date Petra Marine Australia Pty Ltd June 2008 Interest held through Petra Energy Berhad Petra Innotech Sdn Bhd April 2008 Petra Services Sdn Bhd April 2008 Petra AWT Sdn Bhd (formerly known as Energy Link Systems Sdn Bhd) July PURCHASE OF PROPERTY, PLANT AND EQUIPMENT The Group The Company RM'000 RM'000 RM'000 RM'000 Cost of property, plant and equipment purchased 203,367 28, ,858 Amount financed through hire purchase (132) Cash disbursed for the purchase of property, plant and equipment 203,235 28, , CASH AND CASH EQUIVALENTS For the purpose of the cash flow statements, cash and cash equivalents comprise the following: The Group The Company RM'000 RM'000 RM'000 RM'000 Cash and bank balances 33,348 54, Fixed deposits with licensed banks 337, , , ,817 Bank overdrafts (Note 25) (891) 369, , , ,424 Less: Fixed deposits pledged as security (Note 15) (146,522) (91,092) (144,916) (89,250) 223, ,817 71,101 27,174 The foreign currency exposure profile of the cash and bank balances at the balance sheet date is as follows: The Group The Company RM'000 RM'000 RM'000 RM'000 United States Dollar 13,482 21, Singapore Dollar 2, Australian Dollar 1,668 Others annual report 2008

103 35. DIRECTORS REMUNERATION The aggregate amount of remuneration received and receivable from the Group by directors of the Company during the financial year are as follows: The Group The Company RM'000 RM'000 RM'000 RM'000 Executive Directors: fee non-fee emoluments 1,100 1, ,214 1, Independent Non-Executive Directors: fee Total directors remuneration 1,277 1, Estimated money value of benefits-in-kind Total directors remuneration including benefits-in-kind 1,394 1, The number of directors of the Company whose total remuneration received/receivable from the Group during the financial year fell within the following bands is analysed below: Number of Directors The Group The Company Executive Directors: Below RM50, RM200,001 RM250,000 1 RM250,001 RM300, RM500,001 RM550,000 1 RM950,001 RM1,000,000 1 RM1,050,000 RM1,100, Independent Non-Executive Directors: Below RM50, annual report 2008

104 36. SIGNIFICANT RELATED COMPANY TRANSACTIONS Significant transactions undertaken by the Company with its subsidiaries are as follows: The Company RM'000 RM'000 Dividend from subsidiaries 38,577 26,110 Interest and finance charges from subsidiaries 18,498 20,812 Rental income from subsidiaries Management fee from subsidiaries 1,620 3,240 Handling fee charged by a subsidiary RELATED PARTY DISCLOSURES The Group has related party relationships with: (a) (b) its subsidiaries, as disclosed in Note 6 to the financial statements; and key management personnel of the Group. In addition to the information detailed elsewhere in the financial statements, the Group carried out the following transactions with related parties during the financial year: Note The Group The Company RM'000 RM'000 RM'000 RM'000 Retainer fee paid to a related party (i) Key management personnel compensation short-term employee benefits 6,210 5,280 2,026 2,364 post employment benefits ,465 5,614 2,168 2,531 Note: (i) A company in which a director of a subsidiary has substantial financial interests. The details of the amounts owing by/to the subsidiaries are disclosed in Note 9 to the financial statements. The transactions with the related companies are disclosed in Note 36 to the financial statements. 38. CAPITAL COMMITMENT Approved and contracted for: The Group The Company RM'000 RM'000 RM'000 RM'000 Purchase of property, plant and equipment 791, ,629 24, , annual report 2008

105 39. CONTINGENT LIABILITIES Note The Group The Company RM'000 RM'000 RM'000 RM'000 Unsecured: Corporate guarantee given to licensed banks and financial institutions for credit facilities granted to subsidiaries 38, ,860 Performance guarantee extended by subsidiaries to third parties 48,922 Claim for goods and services rendered (a) 1,072 1,072 Claim for compensation (b) 2,710 2,710 49,994 3,782 38, ,570 (a) (b) A third party had filed a Writ of Summons and Statement of Claim for a total sum of RM1,071,899 against a subsidiary of the Company on 24 September 2003 for goods and services rendered. The subsidiary filed a Defence and Counter-claim for a sum amounting to approximately RM2,000,000 being the rectification cost incurred against the third party. The counter claim has been set for hearing on 11 and 12 May 2009 as well as 13 and 14 July Based on the legal advice, the Directors are of the opinion that the prospects of success in the defence and counter-claim is high. Accordingly, no provision is made for the rectification cost incurred amounting to RM1,694,239 included in trade and other receivables. On 2 July 2007, the Company and Intra Oil Services Berhad ( IOS ), were each served a Writ of Summon and Statement of Claim by Harisul Bin Hussain for compensation totalling RM2,710,479, which includes interest and costs, related to personal injury during his employment with IOS. The application by the Company and IOS to strike out the suit pursuant to O. 18 r. 19 of the Rules of the High Court 1980 were, on 15 June 2008, dismissed with costs. The application to appeal to the Judge In Chambers against the said decisions has been filed. The Kuala Terengganu High Court has, on 19 January 2009, given its decision that the appeal against the dismissal to strike out the above suit was allowed with costs. In addition, the above suits against IOS and the Company have been struck out. 40. LEASE COMMITMENTS The Group RM'000 RM'000 Lease rentals payable: Within one year 63,545 59,196 Within two to five years 296, ,686 Within six to ten years 320, , , ,258 The lease rental payable is in respect of lease agreements entered into by a subsidiary for lease of vessels for a period of 10 years and for office, warehouse and apartment rental. 103 annual report 2008

106 41. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR The details of the significant events during the financial year are as follows: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) On 16 January 2008, the Company entered into a Share Sale Agreement with Mr. Farid Khan Bin Kaim Khan to acquire the remaining 30% of the issued and paid-up ordinary shares at SGD2.80 each for a total consideration of SGD3.78 million in Perdana Marine Offshore Pte Ltd ( PMO ). Consequently, on 25 March 2008, PMO became a wholly-owned subsidiary of the Company. On 18 January 2008, Petra Offshore Limited ( POL ) increased its authorised share capital from USD10,000,000 to USD30,000,000 by the creation of 10,000,000 new ordinary shares of USD1.00 each and 100,000,000 redeemable non-cumulative non-voting preference shares of USD0.10 each. On the same date, it increased its issued and paid-up share capital from USD2,500,000 to USD8,471, by the allotment of 59,710,319 redeemable noncumulative non-voting preference shares of USD0.10 each. The shares were issued through the capitalisation of a loan from the Company. On 14 March 2008, Petra Resources Sdn Bhd ( PRSB ) was awarded a contract by Petronas Carigali Sdn Bhd ( PCSB ) to provide a full review and field development plan for the subsurface studies of the SIWA field situated at offshore Sarawak. The contract is estimated at RM12 million for the primary term of 19 months. On 17 March 2008, Perdana Venus Limited ("PVL"), entered into 2 separate Memoranda of Agreement with Nam Cheong International Ltd for the purchase of 2 units of 300-men accommodation/work barge, identified as SK 303 and SK 305, at the purchase price of RM85 million each. On 3 April 2008, Petra Innotech Sdn Bhd ( PISB ) was incorporated for the purpose of providing design and packaging of mechanical equipment for the oil and gas industry in the domestic and regional markets. PISB is a wholly-owned subsidiary of Petra Energy Berhad ( PEB ), with an authorised share capital of RM100,000 divided into 100,000 ordinary shares of RM1.00 each and an issued share capital of 100 ordinary shares of RM1.00 each. Presently, PISB has not commenced operations. On 10 April 2008, the Company obtained and accepted a short term financing facility of RM100 million for working capital purposes. On 14 April 2008, Petra Services Sdn Bhd ( PSSB ) was incorporated in Malaysia for the purpose of providing technical consultancy and manpower supply services for the oil and gas industry in the domestic and regional markets. PSSB is now a wholly-owned subsidiary of PEB with an authorised share capital of RM100,000 divided into 100,000 ordinary shares of RM1.00 each and an issued share capital of 100 ordinary shares of RM1.00 each. On 14 May 2008, Petra Boilers Sdn Bhd ( PBSB ) received an acceptance letter dated 13 May 2008 from Felda Palm Industries Sdn Bhd ( Felda ) to supply, deliver ex-site, install, commission and guarantee eight units of water tube boilers with various capacities to the palm oil mills of Felda in Malaysia ( the Contract ). The Contract is approximately RM50 million and is expected to cover the period from 2 June 2008 to 31 October On 20 May 2008, POL entered into a Memoranda of Agreement with A.J.Y. Sdn Bhd, a Brunei company to dispose of a vessel, namely IOS Panther for a consideration of USD4 million. The disposal was completed on 29 May On 16 June 2008, Ampangship Marine Sdn Bhd ( AMSB ) entered into a Memoranda of Agreement with PT Sumatra Wahana Perkasa to dispose of a vessel, namely Topaz for a consideration of USD2.1 million. The disposal was completed on 1 August On 1 July 2008, a Joint Venture Agreement was entered into between the Company, The Underwater Centre Fremantle Pty Ltd ( TUCF ), Siliqua Pty Ltd as trustee for CJES Trust ( CJES ) and Petra Marine Australia Pty Ltd ( PMA ). For the purpose of the above Joint Venture, PMA was incorporated pursuant to the Australian Corporation Act 2001 on 16 June 2008 as a proprietary company limited by shares with an issued capital of A$500,000 divided into 500,000 shares of A$1.00 each. The initial capital of PMA in the proportion for PPB, TUCF and CJES are 55%, 25% and 20% respectively. The main function of PMA is to market, manage and operate offshore support vessels for the oil and gas industry in Australia and New Zealand. 104 annual report 2008

107 41. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT'D) (xii) On 2 July 2008, Petra Resources Sdn Bhd ( PRSB ) received letters of award from Petronas Carigali Sdn Bhd ( PCSB ) for the provision of two Anchor Handling Tug Supply Vessels ( AHTS ) to PCSB for its domestic drilling operations. Each contract is for a primary duration of three years with an extension option of one year effective from 23 June 2008 and 15 August 2008 respectively. PRSB estimated the total value of the contracts to be approximately RM million over the period of four years. On 4 July 2008, Perdana Mercury Limited ( PML ) entered into two separate time charter agreements with PRSB for the provision of the aforesaid two AHTS, namely MV Petra Voyager and MV Petra Horizon, to PRSB for the contracts as defined above. (xiii) (xiv) (xv) (xvi) (xvii) On 9 July 2008, PRSB was awarded by Sarawak Shell Berhad ( SSB ) a contract for the provision of maintenance, overhaul and repair services for gas turbine in SSB s gas platform located in Sarawak waters ( the Contract ). The Contract is effective from 23 June 2008 for a duration of two years with an estimated value of RM40 million. On 17 July 2008, PEB acquired 51% of the equity interest in Petra AWT Sdn Bhd ( PAWT ). On 28 August 2008, POL entered into two separate Memoranda of Agreement with KBM Marine Services W.L.L., to dispose of two vessels, namely IOS Andari 1 and IOS Andari 2 for a consideration of USD4.1 million each. The disposals were completed on 10 October 2008 and 13 November 2008 respectively. On 28 August 2008, PEB has vide its letter of interest, expressed its interest in acquiring 70,000 ordinary shares of RM1.00 each representing 70% of the total issued and paid-up capital of Jurutera Perunding Akal Sdn Bhd for a consideration of RM2.7 million. Furthermore, PEB entered into a Sale and Purchase Agreement with the vendor on 19 December 2008 for the proposed acquisition. PEB and the vendor have mutually agreed in writing to extend the stipulated period, which had expired on 18 February 2009, for another three (3) months to 18 May 2009 to enable all the conditions precedent of the Sale and Purchase Agreement to be fulfilled and complied with. On 23 September 2008, PRSB was awarded by Sarawak Shell Berhad/Sabah Shell Petroleum Company Limited ( SHELL ) a contract for the provision of hook-up, commissioning and major maintenance to SHELL for its offshore oil and gas facilities located in Sarawak and Sabah waters under Work Package A and the provision of marine vessel for well services activities under Work Package C ( the Contract ). The Contract is valued at approximately RM1.1 billion over the primary period ending 31 December (xviii) On 12 October 2008, PMA signed its first contract, a time-charter contract with Murphy Australia Oil Pty Ltd for the provision of the vessel, namely Petra Pioneer to be hired for charter on 14 October SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE The details of the significant events subsequent to the balance sheet date are as follows: (i) (ii) On 10 February 2009, POL entered into two separate Memoranda of Agreement to dispose of two crew boats namely IOS Comfort 1 and IOS Comfort 2 for a consideration of USD1,125,000 and USD1,000,000 respectively. Both disposals were completed on 26 March On 27 February 2009 and 3 March 2009, the Company accepted Syndicated Transferable Term Loan Facilities of up to RM150 million for the purpose of refinancing the existing bridging loans of RM240 million. 105 annual report 2008

108 43. FOREIGN EXCHANGE RATES The applicable closing foreign exchange rates used (expressed on the basis of one unit of foreign currency to RM equivalent) for the translation of foreign currency balances at the balance sheet date are as follows: The Group/The Company RM'000 RM'000 United States Dollar Singapore Dollar Sterling Pound Euro Australian Dollar SEGMENTAL REPORTING (a) Primary Reporting Format Business Segment 2008 Integrated Brown Field Marine Engineering Offshore and Support Maintenance Investment Services Services Holding Elimination Group RM 000 RM 000 RM 000 RM 000 RM 000 REVENUE External revenue 219, , ,253 Inter-segment revenue 149, ,535 (190,314) 369, ,800 40,535 (190,314) 694,253 RESULTS Segment results 102,042 59,198 56,725 (65,740) 152,225 Finance costs (474) (6,995) (43,773) 18,498 (32,744) Profit before taxation 101,568 52,203 12,952 (47,242) 119,481 Income tax expense (14,903) Profit after taxation 104,578 ASSETS Segment assets 818, ,698 1,029,749 (860,914) 1,488,445 Unallocated corporate assets 7,207 Consolidated total assets 1,495,652 LIABILITIES Segment liabilities 412, , ,776 (561,701) 799,250 Unallocated corporate liabilities 32,620 Consolidated total liabilities 831,870 Capital expenditure Property, plant and equipment 199,578 3, ,367 Depreciation 26,969 15, ,421 Amortisation of prepaid lease payments annual report 2008

109 44. SEGMENTAL REPORTING (CONT D) (a) Primary Reporting Format Business Segment (cont d) 2007 Integrated (Restated) Brown Field Marine Engineering Offshore and Support Maintenance Investment Services Services Holding Elimination Group RM 000 RM 000 RM 000 RM 000 RM 000 REVENUE External revenue 184, , ,183 Inter-segment revenue 149,739 29,913 (179,652) 334, ,921 29,913 (179,652) 665,183 RESULTS Segment results 69,080 72,339 68,844 (11,078) 199,185 Finance costs (13,181) (9,356) (28,776) 20,811 (30,502) Profit before taxation 55,899 62,983 40,068 9, ,683 Income tax expense (2,982) Profit after taxation 165,701 ASSETS Segment assets 584, , ,794 (690,363) 1,290,121 Unallocated corporate assets 7,864 Consolidated total assets 1,297,985 LIABILITIES Segment liabilities 429, , ,518 (569,821) 717,380 Unallocated corporate liabilities 30,872 Consolidated total liabilities 748,252 Capital expenditure Property, plant and equipment 16,064 5,467 6,889 28,420 Prepayment of land lease Depreciation 29,582 14, ,422 Amortisation of prepaid lease payments annual report 2008

110 44. SEGMENTAL REPORTING (CONT D) (b) Secondary Reporting Format Geographical Segment Segment Revenue Total Assets Capital Expenditure (Restated) (Restated) RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Malaysia 605, ,716 1,119,719 1,074,339 27,437 28,253 Singapore 38,475 37,086 30,059 30,164 1, British Virgin Islands 53 19, ,372 Marshall Islands 41,881 4, , , ,396 Australia 8,529 4, , ,183 1,495,652 1,297, ,367 28, FAIR VALUES OF FINANCIAL INSTRUMENTS Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm s length transaction, other than in a forced sale or liquidation. The following methods and assumptions are used to estimate the fair value of each class of financial assets and liabilities of the Group: (a) Bank Balances, Other Liquid and Other Short-Term Receivables/Payables The carrying amounts approximated their fair values due to the relatively short-term maturity of these instruments. (b) Hire Purchase Payables The carrying amounts approximated the fair values of these instruments. The fair values of hire purchase payables are determined by discounting the relevant cash flows using the current interest rates at the balance sheet date. (c) Long-Term Receivables and Long-Term Borrowings The fair values of long-term receivables and long-term borrowings are determined by discounting the relevant cash flows using the current interest rates at the balance sheet date. 108 annual report 2008

111 45. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONT D) (d) Fair Values The carrying amounts of the financial assets and liabilities of the Group at the balance sheet date approximated their fair values except for the following: At 31 December 2008 The Group The Company Carrying Fair Carrying Fair Note Amount Value Amount Value RM 000 RM 000 RM 000 RM 000 Non-currrent Amount owing by a subsidiary: without repayment terms 9 301,495 * with repayment terms 9 51,649 50,513 Term loans , , , ,387 At 31 December 2007 Non-current Amount owing by a subsidiary: without repayment terms 9 391,201 * with repayment terms 9 61,649 58,509 Term loans , , , ,014 * It is not practicable to estimate the fair value of the amount owing by a subsidiary principally due to the lack of fixed repayment terms. However, the Company does not anticipate the carrying amount recorded at the balance sheet date to be significantly different from the value that would be eventually received. 109 annual report 2008

112 45. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONT D) (d) Fair Values (cont d) The notional amount and the net fair value of financial instruments not recognised in the balance sheets are as follows: The Group The Company Notional Fair Notional Fair Note Amount Value Amount Value RM 000 RM 000 RM 000 RM 000 At 31 December 2008 Corporate guarantee given to licensed banks and financial institutions for credit facilities granted to subsidiaries 39 38,985 * Performance guarantee extended by subsidiaries to third parties 39 48,922 * Claim for goods and services rendered 39 1,072 # Foreign currency forward contract At 31 December 2007 Corporate guarantee given to licensed banks and financial institutions for credit facilities granted to subsidiaries ,860 * Claim for goods and services rendered 39 1,072 # Claim for compensation 39 2,710 # 2,710 # * The fair value of the contingent liability is estimated to be minimal as the subsidiaries are expected to fulfill their obligations to repay their borrowings. # It is not practicable to estimate the fair value of the liability reliably due to uncertainties of timing, costs and eventual outcome. 46. COMPARATIVE FIGURES The following comparative figures have been reclassified to conform with the presentation of the current financial year: The Group The Company As As As Previously As Previously Restated Reported Restated Reported RM'000 RM'000 RM'000 RM'000 Balance Sheet (Extract): Non-Current Asset Amount owing by subsidiaries 452,850 Current Asset Amount owing by subsidiaries 32, , annual report 2008

113 penyata kewangan Laporan Para Pengarah Kenyataan oleh Para Pengarah 116 Perakuan Berkanun 116 Laporan Juruaudit Bebas Kunci Kira-Kira Penyata Pendapatan 121 Penyata Perubahan dalam Ekuiti 122 Penyata Aliran Tunai Nota-Nota kepada Penyata Kewangan laporan tahunan 2008