The principal activities of the Company are investment holding and the provision of management services.

Transcription

1 Financial Statements 66 Directors Report 72 Statements of Comprehensive Income 74 Statements of Financial Position 76 Consolidated Statement of Changes in Equity 78 Company Statement of Changes in Equity 79 Statements of Cash Flows 82 Notes to the Financial Statements 177 Statement by Directors 177 Statutory Declaration 178 Independent Auditors Report

2 Directors Report The Directors hereby submit their report with the audited financial statements of the and Company for the financial year ended 31 December PRINCIPAL ACTIVITIES The principal activities of the Company are investment holding and the provision of management services. The principal activities of the consist of the provision of integrated drilling fluids and drilling waste management solutions, production chemicals, design and manufacture of monorail, transportation infrastructure systems equipment and services, commercial coaches and special purpose vehicles and rail solutions; and the provision of marine vessel transportation service. There were no significant changes in the nature of these activities during the financial year. pg 66 FINANCIAL RESULTS RM 000 Company RM 000 Loss for the financial year (296,531) (168,727) Attributable to: Owners of the Company (232,332) (168,727) Non-controlling interests (64,199) DIVIDENDS No dividend has been paid or proposed by the Company since the end of the Company s previous financial year. The Directors do not recommend any dividend for the financial year ended 31 December RESERVES AND PROVISIONS Material transfers to or from reserves or provisions during the financial year are as disclosed in the financial statements. ISSUE OF SHARES During the financial year, 5,029,875 new ordinary shares of RM0.10 each were issued by the Company by way of: (a) (b) Issuance of 3,904,875 new ordinary shares of RM0.10 each pursuant to the conversion of Irredeemable Convertible Secured Loan Stocks ( ICSLS ); and Issuance of 1,125,000 new ordinary shares of RM0.10 each pursuant to the exercise of share options under the Company s Employees Share Options Scheme ( ESOS ) at an option price of RM0.17 per share; and The newly issued shares ranked pari passu in all respects with the existing ordinary shares of the Company. Details of movements in share capital are disclosed in Note 34(a) to the financial statements.

3 TREASURY SHARES There was no purchase of Treasury shares during the financial year. Details of the Treasury shares are set out in Note 34(b) to the financial statements. EMPLOYEES SHARE OPTION SCHEME The Company implemented an Employees Share Option Scheme ( ESOS ) on 28 April 2003 for a period of 10 years. The ESOS is governed by the By-Laws which were approved by the shareholders on 28 March Details of the ESOS are set out in Note 34(c) to the financial statements. The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose in this report, the names of options holders who were granted less than 2,000,000 options under the ESOS during the financial year. This information has been separately filed with the Companies Commission of Malaysia. The option holders who have been granted ESOS during the financial year is as follows: Exercise price Name of option holders Granted RM/share Hilmy Zaini Zainal 2,000, Rohaida ali Badaruddin 2,000, Loong Chun Nee 2,000, Wan Ruzlan Iskandar Wan Salaidin 2,000, Ngu Hew Tak 2,000, Sharifah Norizan Shahabudin 2,000, Kanesan Veluppillai 2,000, Dinesh Chelvathurai 2,000, pg 67 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR Significant events during the financial year are disclosed in Note 43 to the financial statements. SIGNIFICANT EVENTS SUBSEQUENT TO THE DATE OF THE STATEMENT OF FINANCIAL POSITION Significant events subsequent to the date of the statement of financial position are disclosed in Note 44 to the financial statements. DIRECTORS The Directors who have held office during the period since the date of the last report are as follows: Tan Sri Asmat bin Kamaludin Tan Sri Nik Mohamed bin Nik Yaacob Datuk Haron bin Siraj Datuk Mohamed Azman bin Yahya Dato Mohammed Azlan bin Hashim Dato Abdul Rahim bin Abu Bakar Dato Sreesanthan a/l Eliathamby Foong Choong Hong Shah Shahzanim bin Zain

4 Directors Report DIRECTORS INTERESTS According to the Register of Directors Shareholdings, particulars of interests of Directors who held office at the end of the financial year in shares, options over shares, Irredeemable Convertible Secured Loan Stocks, Irredeemable Convertible Unsecured Loan Stocks and warrants in the Company and its subsidiary were as follows: Number of ordinary shares of RM0.10 each in the Company At At Bought Sold Direct interest in the Company * Tan Sri Asmat bin Kamaludin Datuk Haron bin Siraj Foong Choong Hong > Shah Shahzanim bin Zain 529 2,250 2,779 pg 68 Indirect interest in the Company + Datuk Mohamed Azman bin Yahya 10,000 10,000 # Shah Shahzanim bin Zain 172, ,275 Number of ordinary shares of RM1.00 each in a subsidiary At At Bought Sold Direct interest in Scomi Engineering Bhd Dato Abdul Rahim bin Abu Bakar > Shah Shahzanim bin Zain Number of ordinary shares of RM1.00 each in a subsidiary At At Bought Sold Indirect interest in Scomi Engineering Bhd ^ Tan Sri Asmat bin Kamaludin 20 (8) 12 Shah Shahzanim bin Zain 192, ,568 Number of options over ordinary shares of RM0.10 each in the Company Exercise At At price Forfeited Exercised RM/share Direct interest in the Company Tan Sri Asmat bin Kamaludin Tan Sri Nik Mohamed bin Nik Yaacob Datuk Haron bin Siraj Datuk Mohamed Azman bin Yahya Dato Mohammed Azlan bin Hashim Dato Sreesanthan a/l Eliathamby Foong Choong Hong Shah Shahzanim bin Zain ,357 1, ,000 6,000 Indirect interest in the Tan Sri Asmat bin Kamaludin (140)

5 DIRECTORS INTERESTS (CONTINUED) ~Number of options over ordinary shares of RM1.00 each in a subsidiary Exercise At At price Forfeited Exercised RM/share Direct interest in Scomi Engineering Bhd Shah Shahzanim bin Zain ,500 1,500 Dato Abdul Rahim bin Abu Bakar ~ The options held over ordinary shares in Scomi Engineering Bhd were granted pursuant to Scomi Engineering Bhd s Employees Share Option Scheme, which was implemented on 26 January Irredeemable Convertible Secured Loan Stocks ( ICSLS ) in the Company At At Bought Sold Direct interest in the Company * Tan Sri Asmat bin Kamaludin Indirect interest in the Company + Datuk Mohamed Azman bin Yahya 15,000 15,000 Warrants in the Company At At Bought Sold Direct Interest in the Company * Tan Sri Asmat bin Kamaludin Indirect interest in the Company + Datuk Mohamed Azman bin Yahya 2,000 2,000 pg 69 Irredeemable Convertible Unsecured Loan Stocks ( ICULS ) in a subsidiary At At Bought Sold Indirect interest in Scomi Engineering Bhd Shah Shahzanim bin Zain 54,782 54,782 * Deemed interested by virtue of Section 6A(2) of the Companies Act, 1965 through Tan Sri Asmat bin Kamaludin s direct interest in Bi-Bot Holdings Sdn Bhd, whereby 215,000 shares, 322,500 ICSLS and 43,000 warrants are held through CIMSEC Nominees (Tempatan) Sdn Bhd. ^ Deemed interested by virtue of Section 134(12)(c) of the Companies Act, 1965 through Tan Sri Asmat bin Kamaludin s children s direct shareholding in Scomi Engineering Deemed interested by virtue of Section 134(12)(c) of the Companies Act, 1965 through the options granted to Tan Sri Asmat bin Kamaludin s daughter, Sarah binti Asmat pursuant to the Company s ESOS to subscribe for ordinary shares in SGB.

6 Directors Report DIRECTORS INTERESTS (CONTINUED) + Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through Datuk Mohamed Azman bin Yahya and his spouse s direct shareholdings in Gajahrimau Capital Sdn Bhd, whereby all 10,000,000 shares, 15,000,000 ICSLS and 2,000,000 warrants, are held through ABB Nominees (Tempatan) Sdn Bhd. > 2,250,000 shares held through BHLB Trustee Berhad (PCM for Shah Shahzanim bin Zain). # Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965 through Shah Shahzanim bin Zain s shareholding in Kaspadu Sdn Bhd. By virtue of his interests in the shares and options in the Company as disclosed above, Shah Shahzanim bin Zain is deemed to have an interest in the shares of all its subsidiaries. Other than as disclosed above, according to the Register of Directors Shareholdings, the Directors in office at the end of the financial year did not hold any interest in the shares, options over shares, ICSLS and warrants in the Company or shares, options over shares, ICULS and debentures of its related corporations during the financial year. pg 70 DIRECTORS BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, except for options over shares granted by the Company and a subsidiary, Scomi Engineering Bhd, to eligible employees including certain Directors of the Company pursuant to the Company s and Scomi Engineering Bhd s respective Employees Share Option Schemes, ICSLS and warrants granted by the Company and ICULS granted by a subsidiary, Scomi Engineering Bhd. Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than Directors remuneration as disclosed in Note 9 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in Note 40 to the financial statements. STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS Before the financial statements were made out, the Directors took reasonable steps: (a) (b) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business their values as shown in the accounting records of the and Company had 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: (a) (b) (c) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the and Company inadequate to any substantial extent; or which would render the values attributed to current assets in the financial statements of the and Company misleading; or which have arisen which render adherence to the existing method of valuation of assets or liabilities of the and Company misleading or inappropriate. No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the or Company to meet their obligations when they fall due.

7 STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (CONTINUED) At the date of this report, there does not exist: (a) (b) any charge on the assets of the or Company which has arisen since the end of the financial year which secures the liability of any other person; or any contingent liability of the or Company which has arisen since the end of the financial year. At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading. In the opinion of the Directors: (a) other than as disclosed in Note 43, the results of the operations of the and Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and (b) other than as disclosed in Note 44, 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 which is likely to affect substantially the results of the operations of the or Company for the financial year in which this report is made. AUDITORS The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office. Signed on behalf of the Board of Directors in accordance with their resolution dated 30 April TAN SRI ASMAT BIN KAMALUDIN Chairman SHAH SHAHZANIM BIN ZAIN Chief Executive Officer pg 71

8 STATEMENTS OF COMPREHENSIVE INCOME for the financial year ended 31 December 2011 Company Note RM 000 RM 000 RM 000 RM 000 (Restated) Continuing operations Revenue 4 1,383,737 1,521,935 4,167 72,234 Cost of sales (1,080,616) (1,171,646) Gross profit 303, ,289 4,167 72,234 Other operating income 19,269 34,041 9,443 8,581 Administrative expenses (81,144) (214,395) (12,575) (15,068) Selling and distribution expenses (77,186) (96,599) Other operating expenses (184,482) (90,426) (152,400) Finance costs 6 (50,789) (64,355) (16,696) (17,422) Share of results of an associate (48,536) (87,225) Share of results of jointly controlled entities (439) (739) pg 72 (Loss)/profit before taxation 5 (120,186) (169,409) (168,061) 48,325 Taxation expense 7 (48,692) (20,209) (666) (1,100) (Loss)/profit from continuing operations (168,878) (189,618) (168,727) 47,225 Discontinued operations Loss from discontinued operations, net of tax 8 (127,653) (3,269) (Loss)/profit for the year (296,531) (192,887) (168,727) 47,225 (Loss)/profit attributable to: Owners of the Company (232,332) (172,906) (168,727) 47,225 Non-controlling interests (64,199) (19,981) (Loss)/profit for the financial year (296,531) (192,887) (168,727) 47,225 Sen Sen Loss per share attributable to owners of the Company: 10 basic (16.69) (12.61) diluted (16.66) (12.46)

9 Company Note RM 000 RM 000 RM 000 RM 000 (Restated) Other comprehensive (loss)/income: Currency translation differences (5,971) (5,153) Available-for-sale financial assets 2,467 (80) Cash flow hedges 11,816 (2,589) Share of other comprehensive profit/(loss) of an associate 4,480 (21,028) Other comprehensive loss for the financial year, net of tax 12,792 (28,850) Total comprehensive (loss)/income for the financial year (283,739) (221,737) (168,727) 47,225 Total comprehensive (loss)/income attributable to: Owners of the Company (220,658) (203,727) (168,727) 47,225 Non-controlling interests (63,081) (18,010) Total comprehensive (loss)/income for the financial year (283,739) (221,737) (168,727) 47,225 pg 73 The notes set out on pages 82 to 176 form an integral part of, and should be read in conjunction with, these financial statements.

10 STATEMENTS OF FINANCIAL POSITION as at 31 December 2011 Company Note RM 000 RM 000 RM 000 RM 000 RM 000 (Restated) (Restated) NON-CURRENT ASSETS Property, plant and equipment , , ,146 1,631 2,447 Intangible assets , , ,112 Investment properties 14 1,559 1,213 1,361 4,584 4,678 Prepaid land lease payments ,787 2,248 Investments in subsidiaries , ,419 Investments in an associate , , , , ,124 Investments in jointly controlled entities ,422 Other financial receivable 19 17,636 Available-for-sale financial assets 20 1,516 1,516 1,112 Deferred tax assets 38 46,634 78,724 78, ,674 Derivative financial assets 21 24,465 6,835 pg ,828 1,172,875 1,617, ,913 1,023,978 CURRENT ASSETS Inventories , , ,529 Receivables, deposits and prepayments , , ,131 64, ,961 Tax recoverable 34,006 41,004 33,290 2,294 2,765 Derivative financial assets 21 7,691 1,577 Short-term deposits, cash and bank balances , , ,123 13,082 9,334 1,316,836 1,288,851 1,475,650 79, ,060 Non-current asset classified as held for sale 25 4,663 1,316,836 1,293,514 1,475,650 79, ,060 LESS: CURRENT LIABILITIES Payables , , ,165 11,568 16,572 Borrowings , , , , ,698 Provisions 29 2,267 5,235 8,929 Derivative financial liabilities Current tax liabilities 32,815 24,743 35,485 Deferred government grant 30 2,155 1, Irredeemable convertible secured loan stocks 31 3,188 3,382 5,254 3,188 3,382 Irredeemable convertible unsecured loan stocks Provision for retirement benefits ,325, ,625 1,178, , ,652 NET CURRENT (LIABILITIES)/ ASSETS (9,114) 317, ,838 (157,129) (26,592) 915,714 1,490,764 1,914, , ,386

11 Company Note RM 000 RM 000 RM 000 RM 000 RM 000 (Restated) (Restated) CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital 34(a) 118, , , , ,266 Share premium , , , , ,926 Treasury shares 34(b) (18,696) (18,696) (18,696) (18,696) (18,696) Other reserves 36 (246,095) (251,592) (205,282) 98, ,739 Retained earnings 378, , , , ,696 Equity and reserves attributable to owners of the Company 509, , , , ,931 Non-controlling interests 71, , ,814 TOTAL EQUITY AND RESERVES 581, ,161 1,093, , ,931 NON-CURRENT LIABILITIES Payables 27 5,629 5, Borrowings , , ,525 2, ,380 Deferred government grant 30 1,439 Derivative financial liabilities 21 4,919 3,129 Provision for retirement benefits 37 4,762 4,358 4,182 Deferred tax liabilities 38 3,285 2,786 4,836 Irredeemable convertible secured loan stocks 31 3,815 10,063 3,815 Irredeemable convertible unsecured loan stocks pg , , ,174 2, , ,714 1,490,764 1,914, , ,386 The notes set out on pages 82 to 176 form an integral part of, and should be read in conjunction with, these financial statements.

12 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the financial year ended 31 December 2011 pg 76 Attributable to owners of the Company Non- Share Share Treasury Other Retained controlling Total Note capital premium shares reserves earnings Total interests equity RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 At 1 January 2011 as previously stated 118, ,926 (18,696) 6, , , , ,817 prior year adjustments 47 (258,286) 125,630 (132,656) (132,656) At 1 January 2011, as restated 118, ,926 (18,696) (251,592) 602, , , ,161 Loss for the financial year (232,332) (232,332) (64,199) (296,531) Other comprehensive (loss)/income: Currency translation differences (3,515) (3,515) (2,456) (5,971) Available-for-sale financial assets 1,719 1, ,467 Cash flow hedges 8,990 8,990 2,826 11,816 Share of other comprehensive loss of associate 4,480 4,480 4,480 Total other comprehensive (loss)/income 11,674 11,674 1,118 12,792 Total comprehensive loss 11,674 (232,332) (220,658) (63,081) (283,739) Share of reserves in subsidiaries and associates (138) (138) Share options: proceeds from shares issued 34(a), value of employee services 36 2,516 2,516 2,516 transfer upon exercise 36 value of options lapsed/forfeited 36 (8,241) 8,241 Conversion of ICULS (69) (69) (69) Conversion of ICSLS 34(a),35, (222) Dilution of interest in subsidiaries Disposal of jointly controlled entity 36,41(b) (23) Dividend paid to non-controlling interests of a subsidiary (247) (247) At 31 December , ,793 (18,696) (246,095) 378, ,362 71, ,193

13 Attributable to owners of the Company Non- Share Share Treasury Other Retained controlling Total Note capital premium shares reserves earnings Total interests equity RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 At 1 January 2010 as previously stated 108, ,641 (18,696) 53, ,994 1,064, ,814 1,237,437 effect of adopting FRS 139 (3,809) 8,906 5,097 (146) 4,951 prior year adjustments 47 (258,286) 113,900 (144,386) (144,386) At 1 January 2010, as restated 108, ,641 (18,696) (209,091) 787, , ,668 1,098,002 Loss for the financial year (172,906) (172,906) (19,981) (192,887) Other comprehensive (loss)/income: Currency translation differences (7,769) (7,769) 2,616 (5,153) Available-for-sale financial assets (54) (54) (26) (80) Cash flow hedges (1,970) (1,970) (619) (2,589) Share of other comprehensive loss of associate (21,028) (21,028) (21,028) Total other comprehensive (loss)/income (30,821) (30,821) 1,971 (28,850) Total comprehensive loss (30,821) (172,906) (203,727) (18,010) (221,737) Share of reserves in subsidiaries and associates (234) (221) Share options: proceeds from shares issued 34(a), value of employee services 36 2,116 2,116 2,116 transfer upon exercise 36 (910) (910) 910 Issue of ICULS 36 6,020 6,020 6,020 Conversion of ICULS (4,803) (4,803) (4,803) Conversion of ICSLS 34(a),35,36 9,450 19,190 (26,363) 2,277 2,277 Dilution of interest in subsidiaries 9,787 9,787 Disposal of subsidiaries 12,247 (12,247) (251) (251) Dividend (30,260) (30,260) At 31 December , ,926 (18,696) (251,592) 602, , , ,161 The notes set out on pages 82 to 176 form an integral part of, and should be read in conjunction with, these financial statements. pg 77

14 COMPANY STATEMENT OF CHANGES IN EQUITY for the financial year ended 31 December 2011 Non-distributable Distributable Share Share Treasury Other Retained Note capital premium shares reserves earnings Total RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Company At 1 January , ,926 (18,696) 111, , ,931 Loss for the financial year (168,727) (168,727) Share options: proceeds from shares issued 34(a), value of employees services 36 1,191 1,191 Transferred to subsidiaries (11,066) 11,066 value of options lapsed/forfeited (2,744) 2,744 pg 78 Conversion of ICSLS 34(a),35, (222) 956 At 31 December , ,793 (18,696) 98, , ,543 Company At 1 January 2010 as previously stated 108, ,641 (18,696) 136, , ,793 effect of adopting FRS 139 3,286 3,286 At 1 January 2010, as restated 108, ,641 (18,696) 136, , ,079 Profit for the financial year 47,225 47,225 Share options: proceeds from shares issued 34(a), value of employees services 36 1,119 1,119 Conversion of ICSLS 34(a),35,36 9,450 19,190 (26,363) 2,277 At 31 December , ,926 (18,696) 111, , ,931 The notes set out on pages 82 to 176 form an integral part of, and should be read in conjunction with, these financial statements.

15 STATEMENTS OF CASH FLOWS for the financial year ended 31 December 2011 Company RM 000 RM 000 RM 000 RM 000 (Restated) CASH FLOWS FROM OPERATING ACTIVITES (Loss)/profit before taxation from: continuing operation (120,186) (169,409) (168,061) 48,325 discontinued operation (105,068) (5,432) Adjustments for: Depreciation property, plant and equipment 51,959 66, investment properties Amortisation intangible assets 2,161 1,773 prepaid land lease payment 1,460 1,083 Impairment losses property, plant and equipment 3,628 8,298 intangible assets 6,313 6,282 receivables 11,665 17,928 investment properties 455 available-for-sale investments 2,467 amount due from subsidiaries 7,807 Impairment on investment in a subsidiary 600 Impairment on investment in associate 8, ,992 Allowance for obsolete stocks 2,972 5,575 Write back of government grant (1,439) Inventories written down 957 3,894 Unrealised loss/(gain) on foreign exchange 22,858 14,296 (344) (1,669) Monetary adjustments (2,417) 9,236 Hyperinflation adjustments 3,218 8,227 Provision for tax penalties 872 1,551 Gain on disposal of property, plant and equipment (1,202) (49) (60) (12) Property, plant and equipment written off 361 1, Bad debts written off/(recovered) 2,085 1,336 Fair value gain on financial instrument derivatives (556) (1,220) (Gain)/loss on disposal of/dilution of interest in subsidiary companies (19,677) Loss on discontinued operations 103,495 (Gain)/loss in disposal of jointly-controlled entity (4,548) 35 Provision for retirement benefits 735 1,584 Share of results in an associate 48,536 87,225 Share of results jointly controlled entities Share option expense 2,516 2,116 1, Financing costs 50,789 66,144 16,696 17,422 Interest income (2,860) (3,895) (6,303) (4,957) Dividend income (66,436) pg 79 Operating cash flows before working capital changes 91, ,763 (3,637) (5,797)

16 STATEMENTS OF CASH FLOWS for the financial year ended 31 December 2011 Company Note RM 000 RM 000 RM 000 RM 000 (Restated) CASH FLOWS FROM OPERATING ACTIVITIES (CONTINUED) Changes in working capital: Inventories (32,964) 47,687 Receivables (89,544) (87,843) 51,025 (5,998) Payables 83,294 (153,084) (7,177) (16,073) Cash (used in)/generated from operations 52,661 (88,477) 40,211 (27,868) Net tax (paid)/refund (23,458) (26,010) 471 Redundancy paid (587) Retirement benefits paid (89) (416) Tax penalties (3,848) pg 80 Net cash generated from/(used in) operating activities 25,266 (115,490) 40,682 (27,868) CASH FLOWS FROM INVESTING ACTIVITIES Additional investment in subsidiaries (117) Net cash inflow/(outflow) from disposal/ dilution of interest in subsidiaries 300,092 Net cash inflow from disposal of jointly-controlled entity 9,096 Disposal of discontinued operations 89,668 Purchase of property, plant and equipment (50,823) (28,985) (15) (1,319) Purchase of investment property (945) (1,522) Investment in ICULS (54,782) Proceeds from disposal of property, plant and equipment 10,553 7, (Purchase of)/proceeds from sales of available-for-sales investments (847) Additions to other intangible assets (41,474) (12,657) Repayment of other payables (7,720) (7,720) Government grant received 587 1,137 Dividend received 63,547 Interest received 2,860 3,895 2,487 2,070 Prepayment of land lease (832) Net cash generated from investing activities 19, ,761 2,

17 Company Note RM 000 RM 000 RM 000 RM 000 (Restated) CASH FLOWS FROM FINANCING ACTIVITIES Issue of share capital arising from the exercise of ESOS Subsidiary s issuance of share capital from the exercise of ESOS 4,544 Proceeds from issuance of ICULS 6,570 Proceeds from bank borrowings 480,079 57,284 Repayment of bank borrowings (510,583) (254,021) (20,316) (50,423) Interest paid on borrowings (49,659) (62,157) (19,347) (23,486) Decrease/(increase) in short-term deposits pledged as security (14,204) 15, ,665 Dividend paid to non-controlling interests in subsidiaries (30,260) Net cash (used in) financing activities (94,175) (262,566) (39,014) (71,013) NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (49,388) (116,295) 4,205 (98,701) CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 26, ,121 1, ,597 CURRENCY TRANSLATION DIFFERENCES 989 (14,643) CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR (22,216) 26,183 6,101 1,896 pg 81 CASH AND CASH EQUIVALENTS COMPRISE: Short-term deposits with licensed banks 24 35,176 52,410 6,981 7,438 Cash and bank balances , ,978 6,101 1,896 Bank overdrafts 28 (129,360) (114,106) 28,087 62,282 13,082 9,334 Less: Short-term deposits pledged as security 24 (50,303) (36,099) (6,981) (7,438) (22,216) 26,183 6,101 1,896 The notes set out on pages 82 to 176 form an integral part of, and should be read in conjunction with, these financial statements.

18 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December GENERAL INFORMATION The principal activities of the Company are investment holding and the provision of management services. The principal activities of the consist of the provision of integrated drilling fluids and drilling waste management solutions, machine shop services, production chemicals, design and manufacture of monorail, transportation infrastructure systems equipment and services, commercial coaches and special purpose vehicles and the provision of marine vessel transportation service. There were no significant changes in the nature of these activities during the financial year. The Company is a public limited liability company, incorporated and domiciled in Malaysia. The Company is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office and principal place of business address of the Company is Level 17, 1 First Avenue, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan. pg 82 2 BASIS OF PREPARATION The financial statements of the and Company have been prepared in accordance with the provisions of the Companies Act 1965 and Financial Reporting Standards, the MASB Approved Accounting Standards in Malaysia for Entities Other than Private Entities. The preparation of financial statements in compliance with Financial Reporting Standards requires the Directors to use certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the financial year. It also requires Directors to exercise their judgement in the process of applying the s accounting policies. Although these estimates and judgement are based on the Directors best knowledge of current events and actions, actual results may differ. As at 31 December 2011, the and Company had incurred losses of RM296.5 million and RM168.7 million respectively. At that date, the and Company had net current liabilities of RM9.1 million and RM157.1 million respectively. The has presented to the bondholders, banks and other lenders its plan to raise funds which includes the disposal of certain assets of the to enable settlement of the s and Company s financial liabilities as and when they fall due. As at the date of the report, the : (a) (b) completed the disposal of the Drilling Waste Management business by SOINC and SMEX for a total consideration of USD35.0 million (approximately RM million) in November A portion of the proceeds were utilised to repay the KMCOB Murabahah Bonds. completed the issuance of a RM342.6 million Sukuk Murabahah in December The proceeds were utilised for early redemption of the outstanding amount of the KMCOB Murabahah Bonds.

19 2 BASIS OF PREPARATION (CONTINUED) (c) obtained indulgences from the Company s bondholders: (i) for the RM100 million principal repayment which was due in September 2011 to be paid in September 2012; (ii) deferment of maintaining the DSRA which was due in March 2012; and (iii) waiver of the net debt to equity and annual debt service cover ratios up to 28 September (d) announced that the Company had entered into a Heads of Agreement ( HOA ) with its associated company, Scomi Marine Bhd ( SMB ) as disclosed in Note 44. The HOA includes the proposed acquisition of the entire interest in Scomi Oilfield Limited ( SOL ), a 76.08% owned subsidiary of the Company by a Newco from the Company, SCPEL and FII (after completion of the Proposed SOL Reorganisation). (e) obtained indulgence from the bankers for certain breaches of loan covenants as disclosed in Note 28. The Directors are of the opinion, taking into consideration the action plans undertaken and to be undertaken, that the basis of preparation of the financial statements on a going concern basis is appropriate. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 46 to the financial statements. During the financial year, the Directors of the adopted the following Financial Reporting Standards ( FRS ) issued by the MASB: (a) Standards, amendments to published standards and interpretations that are applicable to the and are effective The new accounting standards, amendments and improvements to published standards and interpretations that are effective for the and Company s financial year beginning on or after 1 January 2011 are as follows: pg 83 FRS 1 (revised) First-time Adoption of Financial Reporting Standards FRS 3 (revised) Business combinations FRS 127 (revised) Consolidated and separate financial statements Amendments to FRS 2 Share-based payment: cash-settled share-based payment transactions Amendments to FRS 7 Financial instruments: Disclosures improving disclosures about financial instruments Amendments to FRS 1 First-time adoption of financial reporting standards Amendments to FRS 132 Financial instruments: Presentation Classification of rights issues IC Interpretation 4 Determining whether an arrangement contains a lease IC Interpretation 16 Hedges of a net investment in a foreign operation IC Interpretation 17 Distribution of non-cash assets to owners IC Interpretation 18 Transfers of assets from customers Improvements to FRSs (2010) The adoption of the above standards, amendments to published standards and interpretations to existing standards does not have a significant financial impact to the and Company, other than for the disclosures under the Amendments to FRS 7.

20 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December BASIS OF PREPARATION (CONTINUED) (a) Standards, amendments to published standards and interpretations that are applicable to the and are effective Amendments to FRS 7: Improving Disclosures about Financial Instruments Amendments to FRS 7 require enhanced disclosures about fair value measurements in which a three-level fair value hierarchy was introduced. Each class of financial instrument is to be classified in accordance to this hierarchy which reflects the inputs used in making the fair value measurement. It also reinforces the existing principles for disclosures on liquidity and credit risks. The new requirement on the three-level fair value hierarchy has been applied prospectively in accordance with the transitional provision of the FRS 7 Amendments. The enhanced disclosures are included in Note 45(c). The adoption of this amendment did not have any financial impact to the and Company, other than additional disclosures. pg 84 (b) Standards, amendments to published standards and interpretations to existing standards that are applicable to the but not yet effective and have not been early adopted On 19 November 2011, the Malaysian Accounting Standards Board ( MASB ) issued a new MASB approved accounting framework, the MFRS Framework. The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture ( MFRS 141 ) and IC Interpretation 15 Agreements for Construction of Real Estate ( IC 15 ), including its parent, significant investor and venturer. The and Company will be required to prepare financial statements using the MFRS Framework in its first MFRS financial statements for the year ending 31 December In presenting its first MFRS financial statement, the and Company will be required to restate the financial position as at 1 January 2012 to amounts reflecting the application of MFRS Framework. The and Company have started a preliminary assessment of the differences between FRS and the accounting standards under MFRS Framework and are in the process of assessing the financial effects of the differences. Accordingly, the financial performance and financial position as disclosed in these financial statements for the year ended 31 December 2011 could be different if prepared under the MFRS Framework. The and Company expects to be in a position to fully comply with the requirements of the MFRS Framework for the financial year ending 31 December MFRS 1 First-time adoption of MFRS provides for certain optional exemptions and certain mandatory exceptions for first-time MFRS adopters. The will apply the new standards, amendments to standards and interpretations in the following period: (i) Financial year beginning on/after 1 January 2012 The revised MFRS 124 Related party disclosures (effective from 1 January 2012) removes the exemption to disclose transactions between government-related entities and the government, and all other governmentrelated entities. The following new disclosures are now required for government related entities: The name of the government and the nature of their relationship; The nature and amount of each individually significant transactions; and The extent of any collectively significant transactions, qualitatively or quantitatively.

21 2 BASIS OF PREPARATION (CONTINUED) (b) Standards, amendments to published standards and interpretations to existing standards that are applicable to the but not yet effective and have not been early adopted (continued) (i) Financial year beginning on/after 1 January 2012 (continued) Amendment to MFRS 112 Income taxes (effective from 1 January 2012) introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. MFRS 112 currently requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in MFRS 140 Investment property. As a result of the amendments, IC Interpretation 121 Income taxes recovery of revalued non-depreciable assets will no longer apply to investment properties carried at fair value. The amendments also incorporate into MFRS 112 the remaining guidance previously contained in IC Interpretation 121 which is withdrawn. IC Interpretation 19 Extinguishing financial liabilities with equity instruments (effective from 1 July 2011) provides clarification when an entity renegotiates the terms of a financial liability with its creditor and the creditor agrees to accept the entity s shares or other equity instruments to settle the financial liability fully or partially. A gain or loss, being the difference between the carrying value of the financial liability and the fair value of the equity instruments issued, shall be recognised in the income statement. Entities are no longer permitted to reclassify the carrying value of the existing financial liability into equity with no gain or loss recognised in the income statement. Amendments to IC Interpretation 14 MFRS 119 The limit on a defined benefit assets, minimum funding requirements and their interaction (effective from 1 July 2011) permits an entity to recognise the prepayments of contributions as an asset, rather than an expense in circumstances when the entity is subject to a minimum funding requirement and makes an early payment of contributions to meet those requirements. Amendment to MFRS 1 First time adoption on fixed dates and hyperinflation (effective from 1 January 2012) includes two changes to MFRS 1. The first replaces references to a fixed date of 1 January 2004 with the date of transition to MFRSs, thus eliminating the need for entities adopting MFRSs for the first time to restate de-recognition transactions that occurred before the date of transition to MFRSs. The second amendment provides guidance on how an entity should resume presenting financial statements in accordance with MFRSs after a period when the entity was unable to comply with MFRSs because its functional currency was subject to severe hyperinflation. pg 85 Amendment to MFRS 7 Financial instruments: Disclosures on transfers of financial assets (effective from 1 January 2012) promotes transparency in the reporting of transfer transactions and improve users understanding of the risk exposures relating to transfers of financial assets and the effect of those risks on an entity s financial position, particularly those involving securitisation of financial assets. The initial applications of these standards, amendments to published standards and interpretations to existing standards that are applicable to the but not yet effective and have not been early adopted are not expected to have material impact on the financial statements of the and Company.

22 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December BASIS OF PREPARATION (CONTINUED) (b) Standards, amendments to published standards and interpretations to existing standards that are applicable to the but not yet effective and have not been early adopted (continued) (ii) Financial year beginning on/after 1 January 2013 MFRS 10 Consolidated financial statements (effective from 1 January 2013) changes the definition of control. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. It establishes control as the basis for determining which entities are consolidated in the consolidated financial statements and sets out the accounting requirements for the preparation of consolidated financial statements. It replaces all the guidance on control and consolidation in MFRS 127 Consolidated and separate financial statements and IC Interpretation 112 Consolidation special purpose entities. pg 86 MFRS 11 Joint arrangements (effective from 1 January 2013) requires a party to a joint arrangement to determine the type of joint arrangement in which it is involved by assessing its rights and obligations arising from the arrangement, rather than its legal form. There are two types of joint arrangement: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed. MFRS 12 Disclosures of interests in other entities (effective from 1 January 2013) sets out the required disclosures for entities reporting under the two new standards, MFRS 10 and MFRS 11, and replaces the disclosure requirements currently found in MFRS 128 Investments in associates. It requires entities to disclose information that helps financial statement readers to evaluate the nature, risks and financial effects associated with the entity s interests in subsidiaries, associates, joint arrangements and unconsolidated structured entities. MFRS 13 Fair value measurement (effective from 1 January 2013) aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across MFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards. The enhanced disclosure requirements are similar to those in MFRS 7 Financial instruments: Disclosures, but apply to all assets and liabilities measured at fair value, not just financial ones. The revised MFRS 127 Separate financial statements (effective from 1 January 2013) includes the provisions on separate financial statements that are left after the control provisions of MFRS 127 have been included in the new MFRS 10. The revised MFRS 128 Investments in associates and joint ventures (effective from 1 January 2013) includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of MFRS 11. Amendment to MFRS 101 Presentation of items of other comprehensive income (effective from 1 July 2012) requires entities to separate items presented in other comprehensive income (OCI) in the statement of comprehensive income into two groups, based on whether or not they may be recycled to profit or loss in the future. The amendments do not address which items are presented in OCI.

23 2 BASIS OF PREPARATION (CONTINUED) (b) Standards, amendments to published standards and interpretations to existing standards that are applicable to the but not yet effective and have not been early adopted (continued) (ii) Financial year beginning on/after 1 January 2013 (continued) Amendment to MFRS 119 Employee benefits (effective from 1 January 2013) makes significant changes to the recognition and measurement of defined benefit pension expense and termination benefits, and to the disclosures for all employee benefits. Actuarial gains and losses will no longer be deferred using the corridor approach. MFRS 119 shall be withdrawn on application of this amendment. The is accessing the impact of the new Standards, amendments to published standards and interpretations to existing standards that are applicable to the but not yet effective and have not been early adopted to the and Company. (iii) Financial year beginning on/after 1 January 2015 MFRS 9 Financial instruments classification and measurement of financial assets and financial liabilities (effective from 1 January 2015) replaces the multiple classification and measurement models in MFRS 139 with a single model that has only two classification categories: amortised cost and fair value. The basis of classification depends on the entity s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. The accounting and presentation for financial liabilities and for de-recognising financial instruments has been relocated from MFRS 139, without change, except for financial liabilities that are designated at fair value through profit or loss ( FVTPL ). Entities with financial liabilities designated at FVTPL recognise changes in the fair value due to changes in the liability s credit risk directly in other comprehensive income (OCI). There is no subsequent recycling of the amounts in OCI to profit or loss, but accumulated gains or losses may be transferred within equity. The guidance in MFRS 139 on impairment of financial assets and hedge accounting continues to apply. MFRS 7 requires disclosures on transition from MFRS 139 to MFRS 9. pg 87 The is accessing the impact of the new Standards, amendments to published standards and interpretations to existing standards that are applicable to the but not yet effective and have not been early adopted to the and Company. 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unless otherwise stated, the following accounting policies have been used consistently in dealing with items that are considered material in relation to the financial statements. 3.1 Basis of consolidation The consolidated financial statements incorporate the audited financial statements of the Company and its subsidiaries made up to the end of the financial year. Subsidiaries are those entities (including special purpose entities) in which the has power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the controls another entity.

24 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.1 Basis of consolidation (continued) Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of accounting, subsidiaries are fully consolidated from the date on which control is transferred to the and are de-consolidated from the date that control ceases. The consideration transferred for acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interests. In a business combination achieved in stages, the previously held equity interest in the acquiree is re-measured at its acquisition date fair value and the resulting gain or loss is recognised in profit or loss. The excess of the cost of acquisition over the fair value of the s share of the identifiable net assets required is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in profit or loss. See accounting policy Note 3.10(iii) on goodwill on consolidation. pg 88 Non-controlling interest is the equity in a subsidiary not attributable, directly or indirectly, to a parent. On an acquisition-by-acquisition basis, the measures any non-controlling interest in the acquiree at fair value. At the end of reporting period, non-controlling interest consists of amount calculated on the date of combinations and its share of changes in the subsidiary s equity since the date of combination. All earnings and losses of the subsidiary are attributed to the parent and the non-controlling interest, even if the attribution of losses to the non-controlling interest results in a debit balance in the shareholders equity. Profit or loss attribution to non-controlling interests for prior years is not restated. Change in accounting policy The has changed its accounting policy on business combinations and accounting for non-controlling interest when it adopted the revised FRS 3 Business combinations and FRS 127 Consolidated and separate financial statements. Previously, contingent consideration in a business combination was recognised when it is probable that payment will be made. Acquisition-related costs were included as part of the cost of business combination. Any noncontrolling interest in the acquiree was measured at the non-controlling interest s proportionate share of the acquiree s identifiable net assets. Any adjustment to the fair values of the subsidiary s identifiable assets, liabilities and contingent liabilities relating to previously held interests of the was accounted for as a revaluation. The has applied the new policies prospectively to transactions occurring on or after 1 January As a consequence, no adjustments were necessary to any of the amounts previously recognised in the financial statements. Under the merger method of accounting, the results of entities or businesses under common control are presented as if the merger had been effected throughout the current and previous financial years or from the date when these entities came under the control of the common controlling party (if shorter). The assets and liabilities combined are accounted for based on the carrying amounts from the perspective of the common control shareholder at the date of transfer. On consolidation, the difference between the carrying value of the investment in the subsidiaries over the nominal value of the share acquired is taken to merger reserve and regarded as a non-distributable reserve, which is then set off against suitable reserves on the consolidated financial statements.