dayang enterprise holdings bhd

Dayang Enterprise H

oldings Bhd (712243-U

)A

nnual Report 2010

Focus Towards ExcellenceFocus Towards Excellence

DAYANG ENTERPRISE HOLDINGS BHD(712243-U)


Head Office

Sublot 5-10, Lot 46, Block 10,Jalan Taman Raja,Miri Concession Land District,P.O. Box 1134, 98000 Miri,Sarawak, Malaysia.

Tel : 085-420185Fax : 085-421654 Email : [email protected] Website : www.desb.net

Annual Report 2010Annual Report 2010

2 DAYANG ENTERPRISE HOLDINGS BHD (712243-U) • Annual Report 2010

Cautionary Statement Regarding Forward-Looking Statements

This Annual Report contains some forward-looking statements

in respect to the Dayang Group’s fi nancial condition, results of

operations and business. These forward-looking statements

represent Dayang Group’s expectations or beliefs concerning

future events and involve known and unknown risks and

uncertainties that could cause actual results, performance or

events to differ materially from those expressed or implied in

such statements. Readers are hereby cautioned that a number

of factors could cause actual results to differ, in some instances

materially, from those anticipated or implied in any forward-

looking statement. In this respect readers must therefore not

rely solely on these statements in making investment decisions

regarding the Dayang Group. The Board and the Dayang Group

shall not be responsible for any investment decisions made by

the readers in reliance on those forward-looking statements.

Forward-looking statements speak only as of the date they are

made, and it should not be assumed that they have been reviewed

or updated in the light of new information or future events that

would arise in the interim of the publication of this Annual Report

and the time of reading this Annual Report.

DAYANG ENTERPRISE HOLDINGS BHD (712243-U) • Annual Report 2010 1

C O N T E N T S 2 Corporate Information

3 Corporate Structure

4 Corporate Key Achievements / Awards

6 5 Years Financial Highlights

7 Financial Calendar

8 Profi le of Directors

13 Message To Our Shareholders

17 Corporate Social Responsibility

21 Audit Committee Report

23 Statement on Internal Control

24 Statement of Corporate Governance

30 Financial Statements

78 Analysis of Shareholdings

80 Notice of Annual General Meeting

Form of Proxy

2010 At A Glance

Financial PerformanceRevenue (RM’000) 255,385

Profi t Before Tax (RM’000) 83,059

Net Profi t (RM’000) 67,731

Total Assets (RM’000) 547,086

Shareholders’ Equity (RM’000) 372,705

Earnings Per Share (Sen) 19.24

NTA per share (Sen) 105.88

Return On Equity (%) 18.17

Gross Dividend (Sen) 5.0

Gross Dividend Yield (%) 1.75



Corporate Information

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

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

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

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

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

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

United Overseas Bank BerhadNo 108 & 110 Jalan Bendahara98000 Miri.

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

Location of Business

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

INCORPORATION10 October 2005Under the Companies Act 1965

BOARD OF DIRECTORS

Datuk Hasmi Bin Hasnan Chairman

Ling Suk Kiong Deputy Chairman

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin Managing Director

Joe Ling Siew Loung @ Lin Shou Long Deputy Managing Director

Sulaihah Binti Maimunni (Appointed on 01.02.10) Executive Director

Harry Bin Bujang Executive Director

Gordon Kab @ Gudan Bin Kab Executive Director

Chia Chu Fatt Independent Non-Executive Director

Polit Bin Hamzah Independent Non-Executive Director

Tuan Haji Abdul Aziz Bin Ishak Independent Non-Executive Director

GROUP OPERATION

Head Offi ce

Branch Offi ce

Miri Warehouse

Labuan warehouse

Labuan Fabrication Yard

Administrative offi ce

Bintulu Warehouse/Fabrication Yard

DESB Kemaman Yard

LOCATION OF FACILITY

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

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

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

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

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

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

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

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


Corporate Structure

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

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

Dayang Enterprise Holdings Bhd (‘DEHB”)

100%DAYANG ENTERPRISE SDN BHD

• Offshore Topside Maintenance Services• Minor Fabrication Operations• Offshire Hook-up and Commissioning

100%FORTUNE TRIUMPH SDN BHD

• Provision of Rental Equipment

50%ALPHA DAYANG (B) SDN BHD

• Dormant

100%DESB MARINE SERVICES SDN BHD• Owner and Charther of Marine Vessels

40%SYARIKAT BROCOS SHIPPING SDN BHD

• Provision of Marine Transportation and Support Services as well as integrated land-logistics services

Note: On 8 December 2010, the Company entered into a Conditional Share Sale Agreement with AWH Equity Holdings Sdn Bhd for the disposal of 1,800,000 ordinary shares of RM1.00 each, representing 40% equity interest in Syarikat Borcos Shipping Sdn Bhd for a total cash consideration of RM135 million. The proposed disposal had been completed on 18 April 2011.


Corporate Key Achievements / Awards

YEAR

2010

2010

2010

2010

2009/2010

2009

2009

2009

TYPE OF AWARD

Certifi cation

Certifi cation

Certifi cation

Certifi cation

Certifi cation

Certifi cation

Certifi cation

Certifi cation

AWARDED BY

Sarawak Chief Minister’s Offi ce

Murphy Oil & Gas

Shell Malaysia

Petronas Carigali

Petronas Carigali

Petronas Carigali(SBO)

Murphy Sarawak Oil Co. Ltd

Petronas Carigali

AWARDED BY

Sarawak Chief Minister’s Environmental Award (CMEA) 2010- large Enterprise Category (Oil & Gas)

Excellent HSE Performance which resulted in 2 years Loss Time Injury (LTI) Free operation for KIKE, Malaysia

SSB/SSPC : Celebrating 3 years Goal Zero

Recognition of excellent performance for services successfully rendered to Petronas Carigali – SBO in Samarang/Sumandak Intergrated Shutdown 2010 with early completion of All Shutdown Activities by 1 day and LTI Free safety record (40,044 manhours and 124 UAUC)

Recognition of excellent performance for services rendered to Petronas Carigali – SBO in EWG-A Blasting/Painting and Structural/Piping Replacement activities (2009-2010) with LTI Free safety record (70,752 manhours and 474 UAUC)

Appreciation for Active UAUC Reporting (1st, 2nd, 3rd & 4th QTR 2010).

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

Certifi cation of Appreciation In Recognition of Excellent Performance for Services Successfully Rendered to PETRONAS Carigali-SBO in SMG-A Blasting /Painting and Structural/Piping Replacement Activities (2009) with LTI Free safety Record(209,417 manhours 1,266 UAUC)

Gas Compressor pulsation bottles repair and maintenance works at Murhpy’s Bintulu Onshore Receiving Facilities (BORF).

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

Notes : -PMO = Peninsular Malaysia OperationTRCF = Total recordable injury case frequencyLTI = Loss Time InjuryUAUC = Unsafe Act & Unsafe condition


Corporate Key Achievements / Awards (Continued)

YEAR

2007/2008

2008/2009

2008

2008

2008

2008

2008

TYPE OF AWARD

Awards

Certifi cate of Appreciation

Certifi cate of Appreciation

PETRONAS Group HSE Awards 2007/2008

Petronas Awards

Petronas Awards

Petronas Awards

AWARDED BY

Petronas



PETRONAS Carigali

Petronas Carigali Sdn Bhd

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

HSE Department PCSB Sarawak Operations

AWARDED BY

Major Contractor Catergory Merit Award In recognition of Provision of Providing Offshore Integrated Topside Maintenance (Including Hook-Up and Commissioning) for Oil and Gas Industry.

Excellent Performance for Surface Preparation Works for Samarang-F (SMJT-F) Workover Campaign in 2008 & 2009 with LTI Free Safety Record (102,514 safety manhours and 294 UAUC)

Recognition of Excellent Performance for services rendered to PCSB SBO in Semarang –F Workover Preparation Activities Phase 1 with LTI Free Safety Record (84,480 mhrs & 274 UA/UC)

Recognition of an Excellent Achievement

SBO-Contractor Senior Management HSE Meeting

April – September 2008 ( Active UAUC Reporting )

PCSB HSE Interactive Quiz for Contractor

Notes : -PMO = Peninsular Malaysia OperationTRCF = Total recordable injury case frequencyLTI = Loss Time InjuryUAUC = Unsafe Act & Unsafe condition


5 Years Financial Highlights

Note: The fi nancial highlights for years 2006 to 2007 are presented on a proforma basis as if the subsidiaries were part of Dayang Enterprise Holdings Bhd Group and are for illustrative purposes only.

2008 * Results is for 15 months period.

Year 2006 2007 2008 * 2009 2010

Revenue 108,906 127,134 181,128 196,954 255,385

Gross Profi t 47,992 59,599 90,822 85,793 129,742

PBT 31,191 39,233 88,759 52,401 83,059

PAT 22,697 28,852 71,444 44,785 67,731

GP Margin 44.1% 46.9% 50.1% 43.6% 50.8%

PBT Margin 28.6% 30.9% 49.0% 26.6% 32.5%

ROE 29.5% 28.3% 22.6% 13.8% 18.2%

Revenue (RM’000,000)

2006 2007 2008* 2009 2010

108,906127,134

181,128196,954

255,385

PAT (RM’000,000)

PBT (RM’000,000)

2006 2007 2008* 2009 2010

31,19139,233

88,759

52,401

83,059

Gross Profi t (RM’000)

2006 2007 2008* 2009 2010

47,992

59,599

90,82285,793

129,742

2006 2007 2008* 2009 2010

22,69728,852

71,444

44,785

67,731

PBT Margin (%)

2006 2007 2008* 2009 2010

28.6%

30.9%

49.0%

26.6%

32.5%

GP Margin (%)

2006 2007 2008* 2009 2010

44.1%

46.9%

50.1%

43.6%

50.8%

ROE (%)

2006 2007 2008* 2009 2010

29.5%28.3%

22.6%

13.8%

18.2%


Financial Calendar

FINANCIAL YEAR END 31 DECEMBER 2010

ANNOUNCEMENT OF RESULTS

FIRST QUARTER 26 May 2010

SECOND QUARER 23 August 2010

THIRD QUARTER 08 November 2010

FOURTH QUARTER 23 February 2011

PUBLISHED ANNUAL REPORT AND FINANCIAL STATEMENTS

NOTICE OF ANNUAL GENERAL MEETING 24 May 2011

5TH ANNUAL GENERAL MEETING 15 June 2011

DIVIDENDInterim

Announcement 23 August 2010

Entitlement date 17 September 2010

Payment Date 30 September 2010


Profi le of Directors

Datuk Hasmi Bin Hasnan, aged 58, was appointed Non-Independent Executive Chairman of Dayang Enterprise Holdings Bhd on 29 February 2008.

He graduated with a BSc in Estate Management from the London South Bank University, UK in 1978. He is a Senior Certifi ed Valuer with International Real Estate Institute, USA and a member of FIABCI.

He began his career in 1979 as a valuer in the Land and Survey Department of Sarawak. Since 1982, he has been involved in a wide range of businesses, including valuation, project management, property development and management, construction, timber, manufacturing, trading and publishing. In June 1993, he became the Managing Director of Naim Cendera Sdn Bhd and has since been the main driving force behind the company’s growth and expansion.

He was awarded the Property Man of the Year for 2008 by the International Real Estate Federation (FIABCI) in Kuala Lumpur.He is Managing Director of Naim Holdings Berhad, a company listed on the Main Board of Bursa Malaysia Securities and director of Naim Incorporated Berhad, a non-listed public company.

Ling Suk Kiong, aged 65 is the founder of Dayang Group of Companies. He established Dayang Enterprise Sdn Bhd in 1980. He was appointed Deputy Chairman of Dayang Enterprise Holdings Bhd on 29 February 2008. He has been instrumental in the growth and development of our Group. He brings with him approximately thirty (30) years of experience in the Oil and Gas Industry and is mainly responsible for the overall strategic business direction of our Group.

He was awarded the Sarawak State Entrepreneur Of The Year Award 2009 in Kuching representing the Sarawak Chinese Chamber of Commerce and Industry category.

He is also a director of S.K Ling & Sons Sdn Bhd, Jasa Oilfi elds Supply Sdn Bhd and Kunci Prima Sdn Bhd.

Datuk Hasmi Bin HasnanChairman

Ling Suk KiongDeputy ChairmanMember – Risk Management Committee


Profi le of Directors (Continued)

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin, aged 48, was appointed Managing Director of Dayang Enterprise Holdings Bhd on 29 February 2008. He graduated in 1984 from the University of Toledo in the United States of America with a Bachelor of Science Degree majoring in Civil Engineering.

Upon his graduation, he joined Leonhardt, Kerps and Lefevre Structural Engineering as a Structural Engineer in 1984. In 1985, he joined Modal Bina Sdn Bhd as a Project Engineer. Subsequently in 1988, he took up the position as Sales Engineer with Mobil Oil Malaysia Sdn Bhd. In 1991, he established Hexamas Sdn Bhd.

He was appointed Director of Dayang Enterprise Sdn Bhd in 1993. He also holds directorship in Fortune Triumph Sdn Bhd and DESB Marine Services Sdn Bhd. He holds several directorships in other private limited companies in Malaysia, including Hexamas Sdn Bhd, Hexamas Oilfi eld Services Sdn Bhd, Sierra Mal Sdn Bhd and Kunci Prima Sdn Bhd.

Joe Ling Siew Loung @ Lin Shou Long, aged 38, was appointed Non-Independent Deputy Managing Director on 29 February 2008. He graduated from University of Western Australia in 1993 with a Bachelor of Engineering Degree. In 1999, he obtained a Master of Business Administration degree from the same university.

He began his career in 1994 when he joined Sarawak Shell and Sabah Shell as a Trainee Engineer. In 1995, he joined POG. EP. Fochi Joint Venture as an Offi ce Engineer. Subsequently in 1995, he joined Daiken Sarawak Sdn Bhd as a Production Engineer.

He joined Dayang Enterprise Sdn Bhd in 1997 as a Project Engineer. In 2004, he was appointed Assistant to the General Manager. In 2008, he was promoted to the role of Deputy Managing Director. He is currently responsible for overseeing and monitoring the management and operations of Dayang Group.

Tengku Dato’ Yusof Bin Tengku Ahmad ShahruddinManaging DirectorChairman – Corporate Social Responsibility CommitteeMember – Risk Management Committee

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



Harry Bin Bujang, aged 54, was appointed as Non-Independent Executive Director of Dayang Enterprise Holdings Bhd on 29 February 2008. He joined Dayang Enterprise Sdn Bhd in 1981 and was appointed director in 1989. He is also a Director in Fortune Truimph Sdn Bhd and DESB Marine Services Sdn Bhd.

He brings with him extensive experience in the Oil and Gas Industry as a result of over twenty-nine (29) years of direct working experience in the industry. He currently oversees the operations and human resources for the offshore operations. He is also a director in Jasa Oilfi elds Supply Sdn Bhd.

Ms Sulaihah Binti Maimunni aged 54 was appointed Non-Independent Executive Director of Dayang Enterprise Holdings Bhd on 1 February 2010.

Ms Sulaihah, a civil engineering graduate from Swansea University, United Kingdom has more than 27 years of engineering & project management experience and is one of the highest profi le women in the regional construction sector. She started her career with consulting fi rm, Minconsult Sdn Bhd and then moved to UEM Group where she rose through management ranks to become Executive Director/Chief Executive Offi cer of UEM Construction Sdn Bhd.

She also spent two years as the Managing Director of Sarawak Hydro Sdn Bhd, developer of the Bakun Hydro project, on secondment from UEM. Along with her career achievements, Ms Sulaihah also has vast overseas experience in countries like Vietnam, Indonesia, Qatar, UAE and India.

She is an Executive Director of Naim Holdings Berhad, a company listed on the Main Board of Bursa Malaysia Securities.

Harry Bin BujangExecutive Director

Sulaihah Binti MaimunniExecutive Director



Gordon Kab @ Gudan Bin Kab, aged 55, was appointed as our Non-Independent Executive Director on 29 February 2008. He graduated from Loughborough University of Technology, England United Kingdom, with a B.Sc (Hon.) degree in Civil Engineering.

He has over thirty (30) years of working experience in both Oil and Gas and the Construction industries. He gained extensive experience with Sarawak Shell Berhad for fi fteen (15) years and Sime Darby Berhad’s Oil and Gas Engineering Division, Esteem Century Sdn Bhd.

In mid May 2000, he was engaged by Cahya Mata Sarawak Berhad as a Senior Project Manager (Central Procurement Unit) and then as Senior Project Manager for PPES Works (Sarawak) Sdn Bhd (Northern Region Operation). He then moved on to PPES Marine Resources Sdn Bhd as an Operations Manager in the Deep Sea Fishing Division in charge of vessels management and support.

He was engaged by Naim Group of Companies from 2006 to 2009.He was appointed as a Senior Head of Construction, in charge of the operation and execution of major infrastructure, engineering projects and building/institutuional complexes. He was later appointed as Vice President for the Oil & Gas Division.

Chia Chu Fatt, aged 57, was appointed as our Independent Non-Executive Director on 29 February 2008. He is an accountant by profession and is the proprietor of Andy Chia & Co. He is a Fellow member of the Association of Chartered Certifi ed Accountants (UK), a Chartered Accountant of the Malaysian Institute of Accountants and an Associate member of the Chartered Tax Institute of Malaysia. He has over thirty (30) years of working experience in Chartered Accountants fi rms, of which approximately four (4) years were in a medium size fi rm in London.

He is a Board member of Sarawak Land Development Board. He was a Sarawak State Legislative Council Assemblyman from 2006 to April 2011 and was a Councillor of Miri Municipal Council from 1988 to 1999.

He is an Independent Non-Executive Director of Ta Ann Holdings Berhad.

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

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



Polit Bin Hamzah, aged 61, was appointed as our Independent Non-Executive Director on 29 February 2008. He graduated with BSc (Hons) in Geology from University of Malaya in 1975. He worked for twenty (20) years (1975 – 1996) in the oil and gas exploration and production company (Petronas Carigali) in various technical and management positions with the last position being the General Manager in-charge of the Sabah Operations.

From 1997 – 2001, he headed the Land Custody and Development Authority, a body responsible for planning and development of lands for large scale commercial agriculture (oil palm, sago) plantations and property development throughout the state of Sarawak through partnerships with listed and private companies.

In 2002 - 2003, he took up the position as the General Manager of the Sarawak Economic Development Corporation. From 2003 , till to date, he continues to get involved in the Boards of various government and private owned companies in Sarawak and at the Federal level. He was a member of the Board of Lembaga Pergalakan Pelancongan Malaysia (Tourism Malaysia) a body corporate under the Ministry of Tourism, Malaysia, from 2003 – 2008.

He is an Independent Non-Executive Director of Sarawak Plantation Berhad.

Tuan Haji Abdul Aziz Bin Ishak, aged 59, was appointed as our Independent Non-Executive Director on 29 February 2008. A Naval Architect by profession, Tuan Haji Abdul Aziz Bin Ishak completed his secondary education at the Malay College, Kuala Kangsar in 1970 and later obtained an Ordinary National Certifi cate in Nautical Science from the Riversdale College of Technology, Liverpool, United Kingdom in 1974 and a Bachelor of Science in Naval Architecture and Ocean Engineering from the University of Glasgow, Scotland, United Kingdom in 1981. He later attended an Advanced Management Program at the Smeal Business School from the Pennsylvania State University in the United States of America.

He has over thirty (30) years of experience in the Oil and Gas and marine industry having started his careers as a Cadet and Deck Navigating Offi cer with Blue Funnel Line in Liverpool in 1971 and later joined Orient Lloyd (M) Sdn Bhd as Shipping Operations Executive in 1975. From 1981 to 1983, he was attached to Penang Port Commission as Naval Architect/Planning Engineer before joining PETRONAS, Marine Department in 1983 as Section Head. He was later promoted to Senior Manager, Technical Services of PETRONAS Tankers Sdn Bhd in 1990 and was posted to France and Japan before returning to Malaysia in 1996 as General Manager, Fleet Operations. In 1999, he was promoted to the position of Chief Executive Offi cer and Managing Director until his retirement in 2007.

Concurrently between 1999 – 2001, he was also the Senior General Manager for Fleet Management Division and Senior General Manager, LNG Shipping Business Division of MISC Berhad.

Polit Bin HamzahIndependent Non-Executive DirectorChairman – Joint Remuneration and Nomination CommitteeMember – Audit Committee

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

ADDITIONAL INFORMATION ON THE BOARD OF DIRECTORS

1. Family relationships with any director and major shareholders - Save for Joe Ling Siew Loung @ Lin Shou Long who is the son of Ling Suk Kiong, there are no other family relationship with the Directors and/or major shareholders of the Company.

2. Nationality - All Directors of the Company are Malaysians.

3. Any confl ict of interest with the Company or its subsidiaries - None of the Directors have any confl ict of interest with the Company or its subsidiries.

4. Convictions of offences (within the past 10 years, other than traffi c offences) - None of the Directors have been convicted for any offences.

5 Attendance of Board Meetings - The details of Directors’ Board Meetings during the fi nancial year are set in the Statement of Corporate Governance.


Message To Our Shareholders

Our dear shareholders, it gives us great pleasure to present to you this Annual Report for FY2010 for your company, Dayang Enterprise Holdings Bhd (“Dayang”). The year 2010 was an eventful and memorable one with our company soaring to new heights, and making its presence felt among the elites in the oil and gas fraternity in Malaysia.

We achieved many milestones during the year in review and we hope to maintain this performance in the years to come. We also take this opportunity at the outset of this address to thank the company’s management for a job well done, and for soldiering on despite the many diffi culties which sprouted up during the past year. However, despite the many challenges and the road being fraught with trials and tribulations in 2010, we are happy to say we weathered the storm and are now in a better position, thanks to the perseverance and effort of our team at Dayang.

2010 was a challenging year, but we soldiered on….In the fi rst quarter of 2010, oil and gas players over the world were grappling with the blow out of the British Petroleum Macondo oil fi eld, in the Gulf of Mexico. This mishap led to a standstill of drilling works in deepwater wells in that region. Other than the Macondo mishap, the low utilization rate of offshore support vessels, in turn led to low charter rates. This proved to be a bane to the industry to some extent. Also, the nagging effects of the subprime and the fi nancial crisis which started in September 2008 were still lingering which dampened the operating environment.

In mid 2010, fears were rife of a double-dip recession taking place in Europe and the United States. This would surely have had a domino effect and adversely impacted us as well, resulting in activities in the industry slowing down. Such fears of a double dip recession however were short lived and subsided by the second half of 2010. Back home in Malaysia, the sentiment was jittery to say the least. In 2009 we saw a recession, a fi rst in 11 years. Nevertheless, the Malaysian economy showed its resilience in 2010 with a growth of 7.2% for the year, putting to rest our worst fears.

From news reports and discussions with authorities, we gauge that the Malaysian economy is fi rmly on the recovery path and should perform well with many stringent measures proactively taken by the Government and the private sectors. Among the measures worth noting include the various stimulus plans, the New Economic Model and 10th Malaysia Plan with a whole host of other schemes to lift economic activities. Despite these challenges, we must add that Dayang, with great perseverance, ended the year on a high with many achievements. Like they say, with ordinary talent and extraordinary perseverance, all things are attainable! Much of the investor optimism in Dayang is apparent in its strengthening share price.


Message To Our Shareholders (Continued)

Performance Review…During the year, Dayang’s share price gained about 65% (up from RM1.73 in January 2010 to close at RM2.85 at end of December 2010), indicating the confi dence the investing fraternity has in our company. For FY2010, Dayang’s share price outperformed the overall oil and gas sector by as much as 27%. Investor faith in Dayang is not without merits. In FY 2010, Dayang’s order book strengthened to RM952 million, with the company bagging some RM678 million worth of jobs. (Details of these are contained in later part of this Statement.) Our dear shareholders, we are happy to say that our company made its mark among the elite in the publicly traded oil and gas sector, with its market capitalization breaching the RM1 billion mark. This feat was achieved at the end of October 2010. There are several reasons for this surge in our company’s share price.

A sterling fi nancial performance….The increasing investor confi dence was buoyed by a sterling fi nancial performance, where Dayang posted a net profi t of almost RM68 million on the back of RM255.39 million in revenue. For FY2010, Dayang’s earnings per share stood at 19.24 sen. In contrast to a year earlier, net profi ts surged by 51%, whilst revenue gained in excess of 29%. Net tangible assets stood at RM1.06 in contrast to 92 sen at end of 2009. To put things in perspective, our fourth quarter net profi ts of RM17.9 million marked a 178% increase year on year.

It is not just one sterling fi nancial result that has propelled our company to its current highs. Dayang’s compounded annual growth rate or CAGR for revenue and earnings from 2009 onwards has been in excess of 20%, which is a rarity in the industry. In line with the strong fi nancials, shareholders were rewarded with a fi ve sen interim dividend payout, amounting to a total payout of RM17.6 million. While we have yet to formulate a dividend policy, we hope to keep rewarding shareholders who have placed their faith in the company.

Other than the sterling fi nancials, our fi nancial position strength also generated considerable interest among the investing fraternity. We ended the year with shareholders funds of almost RM373 million, up 15% from 2009. We are proud to say that we have managed our fi nances prudently, which has resulted in the company’s funds swelling. As at end of December 2010, our cash and bank balances swelled to almost RM69 million while trade receivables stood at RM123 million. The company also has RM134.9 million worth of investments held for sale (40% investment in associate company, Syarikat Borcos Shipping Sdn Bhd), which has substantially boosted our cash pile when the disposal was concluded on 18 April 2011.

On the other side of the fi nancial position, Dayang’s short term debt commitments amounted to RM26.72 million while long-term borrowings stood at RM84 million. Cash fl ows from operations for the year amounted to a strong RM80.68 million. This strong balance sheet and cash fl ow leaves our company in a good position to acquire choice assets, if the need arises, and in the event that such opportunities present themselves. For the long term sustenance of Dayang, there is defi nitely a need to increase and acquire more quality assets for it to

generate more revenue which should translate to more profi ts over the coming years.

Our endeavours to further strengthening the company’s cash and bank balances have been on-going. We proposed a renounceable rights issue of 110 million shares on the basis of one rights share for every four existing shares held. In January 2011, the issue price of the rights shares were fi xed at RM1.10 a share. This has raised some RM121 million for our company in March 2011, which rest assured, will be put to good use.

Dayang also made a bonus issue of 88 million new shares in February 2011 on the basis of one new share for every four existing shares owned. This is to reward the shareholders for their continuous support and has substantially increased the liquidity of Dayang shares.



Jobs secured in 2010, a promising year ahead….Despite the many challenges faced, there was plenty of reasons to cheer. Our company bagged a signifi cant number of jobs in competitive bidding. Among the highlights of 2010, the company secured a RM400 million top side maintenance services contract with Sarawak Shell Bhd, spanning a fi ve year period in early April 2010. In May 2010, the company secured hook up and commissioning jobs for the Resak Host tie in for the Tangga Barat Development Project, Duyong Revisit project and top side maintenance for Petronas Carigali Sdn Bhd spanning between six to twelve months worth RM150.87 million. In July 2010, Dayang bagged two hook up and commissioning jobs, courtesy of state controlled oil major Petroliam Nasional Bhd (Petronas)’s unit Petronas Carigali Sdn Bhd. The total value of these two jobs amounted to RM48.71 million and involved works on the Tangga Barat Central Processing Platform and Bokor Development Project. These two jobs were for a one year duration. Also, in January 2010, Brunei Shell Petroleum Co Sdn Bhd awarded a RM70 million, three year contract chartering our company’s workboat, Dayang Zamrud. This charter which commenced in March 2010 marks our entry into the regional market for the fi rst time. This contract also came on the back of Dayang inking an equal partnership joint venture agreement with Alphaone Engineering Sdn Bhd to co-operate in the preparation of technical and maintenance services contracts in the growing oil and gas industry in Brunei. While many jobs were secured, in August 2010, the company also expanded on its fl eet with a shipbuilding contract signed with Shin Yang Shipyard Sdn Bhd for the construction of an offshore accommodation workboat (much bigger in capacity than the current workboats that we have) for a sum of RM63.74 million.

As we continue to grow and expand, we are also vigilantly renewing our focus on talent development and management to meet changing skill sets. Undeniably, the challenges of the next decade calls for a more collaborative approach for Dayang to strengthen and develop the human resources at all the different levels of workforce in the organization.

The begining of FY2011 started out looking even more promising. A feather in our cap has been the RM802 million-contract secured in February 2011 for the provision of topside maintenance services to Petronas Carigali Sdn Bhd, for the oil and gas rich state of Sarawak. The gargantuan contract that we clinched was for a fi ve year period and stands your company in good stead to bag more jobs in the future, and more importantly this should exhibit an even better set of

fi nancials for us in the current fi nancial year. With this contract, our order book increased signifi cantly to RM1.6 billion, giving us among the strongest order books in this business segment locally. Thus the outlook for the current year and the years ahead seems promising.

It gives us great pride to say that despite the competitive conditions, we have done extremely well and we hope to keep the positive momentum going. Our optimism on our prospects stems from the many initiatives taken by the Federal Government and our fi rm belief in the capability of the management of Dayang, to capitalize on any opportunity that presents itself.

The reasons for our positive outlook are aplenty. Under the Federal Government’s Economic Transformation Programme, the oil and gas sector was identifi ed as a key sector and one of the high growth areas under the National Key Economic Areas. Oil major Petronas has also been keeping busy. Petronas’ focus is likely to be on brown-fi eld services, marginal fi eld development, downstream engineering, procurement, construction and commissioning (EPCC) which should augur well for us.

To date there have been two marginal fi eld awards by Petronas, namely the Sepat and Berantai fi elds. There should be more such awards in the pipeline which will generate interest and provide opportunities for us. It is said that there are a huge number of jobs available in brown fi eld services which could test the RM10 billion mark in total. Recent discoveries of deep water wells in Sarawak, namely NC-3 and Spaoh-1, could also spur interest and translate to more jobs for the oil and gas players. Other than the above, oil major Petronas has also stated its intention to spend some RM40 billion in FY2011, which should prove to be a boon for all the players. It is also noteworthy that our company’s spread of services, namely provision of topside maintenance, minor fabrication works, hook up and commissioning works and the charter of marine vessels can benefi t at various levels of the oil and gas exploration, development and production phases.

With the bright outlook, Dayang’s stock price hit its record high of RM2.46 (after bonus and rights issue price) on 9 February 2011, buoyed by the looming possibilities. Considering our company’s initial public offering was priced at RM1.45 per ordinary share of RM0.50 each in April 2008, we dare say we have come a long way. We fi rmly believe that there should be more in store for our company to achieve in the years to come.



High oil prices to stay?With oil prices trending northwards, our prospects without a doubt seem brighter. The uncertainties in North Africa, especially Libya, have nudged the price of oil to above US$100 per barrel (at the time of this statement it is hovering around the US$108 per barrel mark), and is likely to have a positive bearing on the company, and other oil and gas players in the country. With high oil prices, oil majors are likely to heighten oil exploration works and fast track on-going developments to capitalize on the high prices. This could benefi t the company like other players in the industry. Even if oil prices do taper off, it is likely that it will maintain at a respectable level, between US$80 to US$90 per barrel which should still augur well for the oil and gas industry. Taking a cue from the European Union’s energy commissioner, Guenther Oettinger, we believe that high prices of oil at above US$80 per barrel is a likelihood. High oil prices and heightened work also make up for losses from the weakening US Dollar. The greenback has slipped against most currencies, the Ringgit included, and is at about RM3.03 to the Dollar. The Ringgit had hit a 13 year high in late March this year against the greenback.

Heartfelt appreciation….We would like to take this opportunity to thank all our employees at Dayang who have toiled and helped make this company what it is today. We believe we will keep working together to grow this company of ours to new heights, and through unchartered waters. We would also like to thank the Board of Directors for their assistance and wisdom in running this growing company, and hopefully we will see yet another bountiful year in 2011. We are determined to grow further and we will capture all the opportunities and address the challenges ahead of us. We strongly believe that in the current business environment, the most effi cient will prosper and by adhering to doing the little things well, we will be prosperous in the years to come.

As David Everett of The Colombian Orator wrote, so aptly some 300 years ago, “Large streams from little fountains fl ow, Tall oaks from little acorns grow.”

Thank you

Datuk Hasmi Bin HasnanExecutive Chairman

Tengku Dato’ Yusof Bin Tengku Ahmad ShahruddinManaging Director


Corporate Social Responsibility

The Group acknowledges that under the current operating environment, Corporate Social Responsibility has become an important aspect of the business framework. The Company is committed to promote corporate social responsibilities as an integral part of the Group whilst pursuing business growth to enhance shareholders and stakeholders value.

WORKPLACE

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

The Company believe that good relationships can be fostered through sports and other activities. Therefore, in appreciation of the staff and to bond our employees closer together, the Company organised a Family Day fi lled with activities with the staff and their family members which was held at Piasau Boat Club, Miri on 23 October 2010. The Group held its Annual Dinner on 9th January 2010 at Imperial Hotel in Miri and also one at Crown Plaza Mutiara Kuala Lumpur on 9th July 2010.

In August 2010, the Company organised Buffet Ramadan held at Teluk Batik Resort Lumut, Felda D’ Saji KL, Arwana Kijal, Kemaman and Eastwood Valley Golf & Country Club Miri as a gesture of appreciation to the staff, family, clients & contractors.

A team building exercise and Away Day were organised and attended by key personnel of Dayang and its clients at the Eagle Ranch Resort, Port Dickson and Bukit Tinggi Resort, Genting Highlands in October and November 2010 to enhance cooperation and teamwork. In addition, the Company also hosted a team building exercise at the Borneo Tropical Rainforest Resort Miri for all the employees of Miri Offi ce on 4th- 5th December 2010 to provide an opportunity for employees to foster better ties and share knowledge.


Corporate Social Responsibility (Continued)

COMMUNITY

Dayang Group knows the impact of charity and caring needs on the less fortunate. We believe that charity starts by reaching out to the community around us. In collaboration with Petronas Carigali Sdn Bhd, the Company treated orphans of Rumah Anak-anak Yatim Tunas Harapan (RAYTH) of Darul Hilmi, Kuala Terengganu with meals and goodies on 24th December 2010. The company also handed out cash contribution to the management of RAYTH.

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

1. A contribution towards Kuching Autistic Association2. Donation to Miri Autistic Association3. Donation to Miri City Council for Miri City Day Celebration

and Miri City Fest4. Donation to Honeybees Softball Team, a Miri softball

team to participate in national tournaments to expose and upgrade the skills of the Miri ladies softballers

5. Donation to Malaysian Red Crescent (MRC), Miri Branch in conjunction with the launch of a donation drive for a new van needed for the Mobile Unit of MRC Miri to ensure supply of blood is at adequate levels to meet emergency cases in Miri

6. Donation to Pertubuhan Penderma Darah Sarawak to promote blood donation activities as well as foster

goodwill among blood donors in Miri7. Donation to Persatuan Warga Cinta Negara 8. Donation to Malay Mail Care Fund Charity Golf for

fi nancial aid to Malaysians who are sick, recovering from life threatening illness, handicapped or requiring medical treatment.

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

In conjunction with the Company’s Quality, Health, Safety and Environment (QHSE) Campaign, the Company organised a Blood Donation Drive at its Miri Head Offi ce on the 13th October 2010 and successfully collected 57 pints of blood.

During the year under review, the Company has also participated in a Career Fair in Miri on 14th – 15th May 2010 which was organised by Sarawak United Peoples’ Party. This participation was aimed at attracting new talents as well as to build up Dayang’s employer brand. The Company also presented a career talk to approximately 200 students at SMK Permaisuri Nur Zahirah Besut Terengganu (SMK PNZ) on career opportunities in the Oil & Gas industry. Games and a telematch were also conducted with the students and the locals there.

We have also provided practical training to undergraduates where opportunities of employment are given to them upon completion of their degree programmes. The training provided them with valuable experiences and knowledge besides the opportunity to fulfi ll their university requirements.



Donation to fi re victim

Sponsorship for Miri Festival 2010

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

These programmes include:

a. Developing HSE-MS, HSE procedures and guidelinesb. To cascade critical roles and responsibilities during pre-mob safety briefi ng for every crew changec. HSE Training (both in-house and external)d. Conduct Planned General Inspection at every location/sitee. Conduct monthly Occupational Safety & Health Committee meetingsf. To carry out HSE Road Show and Campaign for all branch offi ces and locationsg. Organise Management Inspection Visit or Management Site Visith. Conduct pre-mob briefi ng and toolbox meetingi. Organise Specifi c Instructions for Simultaneous Operations (SISO)

Donation to Red Crescent Miri on 22 Sept 2010



To ensure the safety of our employees, various programmes and campaigns have also been organised during the year as follows:

1. Quarterly BMI checking done for all crews to ensure the required healthy level of BMI is maintained by all crews2. A blood pressure mini campaign was conducted to increase awareness on the importance of maintaining a healthy lifestyle.

Free blood pressure and consultation was given during the campaign period3. A fi nger injury prevention campaign was launched to increase awareness on fi nger injuries prevention measures4. A fi re prevention campaign was launched to increase safety awareness on fi re prevention measures5. A trip and fall campaign was launched to increase safety awareness

In recognising the importance of maintaining workplace safety and health, Dayang has implemented various Policies on Health and Safety at Work. These policies generally prescribes guidelines on the following:

- Promote employees health and safety through provision of suitable protective equipment and appliances for employees’ use at their respective workplace and

- Requiring contractors to abide to health and safety rules either on its premises or performing work on our behalf. The year under review saw us continuing to implement a host of proactive Health, Safety and Environmental (HSE) measures

to ensure workplace safety and health and the preservation of our surroundings. As a result of our rigorously enforced policies, the Company has achieved twenty (20) Million Manhours Without Loss Time Injury on 10th February 2011.

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

The Group will continue to identify and undertake more related events to fulfi ll its corporate social responsibility in any way and would contribute to preserving the values of society.


Audit Committee Report

MEMBERS OF THE AUDIT COMMITTEE

The members of the Audit Committee are as follows:

Chia Chu Fatt Chairman (Independent Non-Executive Director)Polit Bin Hamzah Member (Independent Non-Executive Director)Tuan Haji Abdul Aziz Bin Ishak Member (Independent Non-Executive Director)

COMPOSITION AND TERMS OF REFERENCE

The Terms of Reference of the Audit Committee (“Terms of Reference”) outlines and incorporates the roles and responsibilities of the Audit Committee as prescribed under the Listing Requirement (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and the Malaysia Code on Corporate Goverance (“the Code”).

The Audit Committee comprises at least three members of the Board of Directors and all the Committee members are Independent Non-Executive 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 Committee shall include at least one (1) person who is a member of the Malaysian Institute of Accountant or alternatively a person who must have at least 3 years’ working experience and have passed the examinations specifi ed in Part 1 of the 1st Schedule of the Accountants Act 1967 or is a member of one the associations specifi ed in Part II of the said Schedule.

The Secretary to the Board of Directors shall also be secretary of this Committee.

MEETINGS OF THE AUDIT COMMITTEE

The Audit Committee meets at least four times a year to discuss and approve the fi nancial accounts of the Group for 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 Audit Committee meetings or for selected agenda items. The representatives of the external auditors may also be invited to attend the meetings.

AUDIT COMMITTEE MEETINGS HELD DURING THE FINANCIAL YEAR 2010

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

Name of Directors Attendance*

Chia Chu Fatt 7/7

Polit Bin Hamzah 7/7

Tuan Haji Abdul Aziz Bin Ishak 5/7

* Number of meetings attended/Number of meetings held Note: Two of the Audit Committee meetings were held with the External Auditors, KPMG without the presence of management.

REPORTING LINE OF THE AUDIT COMMITTEE

The Audit Committee reports directly to the Board of Directors.


THE RESPONSIBILITIES OF THE AUDIT COMMITTEE

The Audit Committee is responsible for the following:

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

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

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

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

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The following activities were performed by the Audit Committee during the fi nancial year ended 31 December 2010:

1) Reviewed the unaudited quarterly reports and annual fi nancial statements of the Group and its subsidiaries with management and external auditor to ensure compliance with the generally accepted accounting principles and Financial Reporting Standards.

2) Based on the satisfactory review and discussion above, the Audit Committee recommend to the Board of Directors that the quarterly unaudited fi nancial information and annual fi nancial statements be approved for announcement to Bursa Malaysia Securities.

3) Reviewed related party transactions on a quarterly basis. Where commercial relationship exists between each director, major shareholders and persons connected to Dayang Group and its subsidiaries, the Audit Committee and the Board will ensure that such transactions are on normal commercial terms that are not more favourable to the related parties than those generally available to the public.

4) Reviewed, evaluated and discussed the internal audit plan, scope of work and reports.5) Reviewed and evaluated with external auditors in their audit plan, scope of work as well as the audit procedures to be

utilized.6) Reviewed the external auditors’ fees and services.

OVERSEEING THE INTERNAL AUDIT FUNCTION

The Committee shall oversee all internal audit functions and is authorized to commission investigations to be conducted by internal audit as it deems fi t. The internal auditor shall report directly to the Committee and shall have direct access to the Chairman of the Committee.

All proposals by management regarding the appointment, transfer or dismissal of the internal auditor shall require the prior approval of the Committee.

The total cost incurred for the Group Internal Audit function in respect of the fi nancial year ended 31 December 2010 amounted to approximately RM85,000.00.

Audit Committee Report (Continued)


Statement on Internal Control

INTRODUCTION

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

RESPONSIBILITY

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

It should be noted that the system of internal control is designed to manage rather than eliminate risks of failure in achieving business objectives, and that they can only provide reasonable and not absolute assurance against material misstatement or loss or the occurrence of unforeseeable circumstances.

The Board’s responsibility for internal control does not cover associate companies which are separately managed.

Risk Management

Acknowledging that it is its responsibility to identify principal risks and ensuring the implementation of proper and appropriate systems to manage these risks, the Board has set up the Risk Management Committee to, “inter alia”, facilitate the documentation and formalization of the risk profi le and risk management system of the Group. The Risk Management Committee intends to outsource the documentation and formalization exercise and towards this end is obtaining quotations from external consultants. The Committee hopes to fi nalize the quotations and exercise it in 2011.

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

Key Elements of Internal Control Environment

Internal control is embedded in the Group’s operations as follows:

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

• The internal audit function provides assurance of the effectiveness of the system of internal control within the Group. Regular internal audit visits are conducted to review the effectiveness of the control procedures and ensure accurate and timely fi nancial management reporting.

• The Audit Committee reviews quarterly fi nancial information and annual fi nancial statements and also reviews any related party transaction and confl ict of interest situation. Internal audit reports are deliberated by the Audit Committee, before they are presented to the Board on a quarterly basis.

Effectiveness of Internal Control

The Board is satisfi ed that, during the year under review, the existing system of internal control is sound and adequate to safeguard the Group’s assets at the existing level of operations. Recognizing that the enhancement of internal control system is an ongoing process and, in striving for continuous improvement, the Board will continue to take appropriate action plans to further strengthen the Group’s system of internal control.

The statement is made in accordance with a resolution of the Board of Directors dated 25 April 2011.


Statement of Corporate Governance

The Board of Directors (“The Board’) recognizes the importance of good corporate governance to ensure that all policies and operations within the Company are implemented to enhance corporate accountability to safeguard the interests of all stakeholders.

The Board is pleased to report to the shareholders herein the manner in which the Company has applied the principles set out in the Malaysian Code on Corporate Governance (“the Code”) and generally complied with the best practices as laid down in the Code.

DIRECTORS

Board Composition

The Board is collectively responsible for setting policies which promote the success of the Group. The Board currently has 10 members, comprising 7 Executive Directors and 3 Independent Non-Executive Directors. As such, at least one third of the Board are Independent Directors who are independent of management and are free from any businesses or other relationships that could materially interfere with the exercise of independent judgment. This board composition is in compliance with the Bursa Malaysia Securities Main Market Listing Requirements.

The Board continually evaluates its requirements as to the appropriate mix of skills and experience required to ensure that its composition remains optimal for the effective discharge of its responsibilities. Their expertise and know-how have been gained through their years of involvement as players in their respective fi elds. A brief profi le and status of each Director is presented on pages 8 to 12.

Board Duties and Responsibilities

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

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

Board Meetings

All Board meetings are set before the beginning of the year with fi rm dates which enable the directors to plan their schedule to ensure full attendance of the meetings. Additional meetings may be convened when necessary should major issues arise that need to be resolved.

The Board has met six (6) times during the fi nancial year ended 31 December 2010 where it deliberated and considered a variety of matters affecting the Group’s operations including the Group’s fi nancial results, business plan and the direction of the Group. All proceedings at the Board meetings are minuted and recorded including the issues discussed and decisions arrived at.

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

Name of Director Designation No of Attendance and Meetings held

Datuk Hasmi Bin Hasnan Executive Chairman 4/6

Ling Suk Kiong Executive Deputy Chairman 5/6

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin Executive Managing Director 5/6

Joe Ling Siew Loung @ Lin Shou Long Executive Deputy Managing Director 6/6

Harry Bin Bujang Executive Director 5/6

Gordon Kab @ Gudan Bin Kab Executive Director 4/6

Sulaihah Binti Maimunni Executive Director 6/6

Tuan Haji Abdul Aziz Bin Ishak Independent Non-Executive Director 5/6

Polit Bin Hamzah Independent Non-Executive Director 6/6

Chia Chu Fatt Independent Non-Executive Director 5/6


Statement of Corporate Governance (Continued)

Supply of Information

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

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

Directors also have direct access to the advise and services of the Company Secretaries on compliance issues and ensure that the Company’s policies and procedures are followed. The Board may seek independent professional advice if deemed reasonable and necessary.

Board Committees

In discharging its duties, the Board is assisted by Board Committees, namely the Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Risk Management Committee. Each committee have been given clear terms of reference which have been approved by the Board to operate and deliberate on issues before putting up for recommendation to the Board.

1. Audit Committee

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

2. Nomination & Remuneration Committee

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

The Remuneration & Nomination Committee consists of three (3) non-executive independent directors. During the year under review the Nomination & Remuneration Committee met once to carry out its responsibilities.

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

Name Position Attendance

Polit Bin Hamzah Chairman 1/1

Tuan Haji Abdul Aziz Bin Ishak Member 1/1

Chia Chu Fatt Member 1/1

3. Corporate Social Responsibility Committee

- To develop and implement the Group’s Corporate Social Responsibility framework; - To incorporate environmentally friendly practices whilst carrying out our operations; - To establish culture socially responsible behaviors among management and employees; - To create opportunities for the Group to participate in the development of a caring and harmonious community and - Benchmarking corporate governance to best practices to look after the interests of minority shareholders.

The members of the Corporate Social Responsibility Committee are as follows:

Name Position

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin Chairman

Chia Chu Fatt Member

Gordon Kab @ Gudan Bin Kab Member



4. Risk Management Committee

- To establish the risk policies and risk frameworks; - To identify, evaluate and monitor the risks portfolio, - To formulate mitigation strategies/action plans to manage the overall risk associated with our activities; - To recommend appropriate risk management policies and procedures which shall be reviewed regularly to ensure that

they are both appropriate and adequate for the long term viability of the Group and - To ensure a proper balance between risk incurred and potential returns to our shareholders.

During the year, the Risk Management Committee met once to discuss on the implementation of the Risk Management plans and policies to be adopted.

The members of the Risk Management Committee are as follows:

Name Position

Gordon Kab @ Gudan Bin Kab Chairman

Ling Suk Kiong Member

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin Member

Joe Ling Siew Loung @ Lin Shou Long Member

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

Polit Bin Hamzah ( Appointed on 23 April 2010) Member

Appointment and Retirement of Directors

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

In accordance with Article 86 of the Company’s Articles of Association, at least one-third (1/3) of the Directors for the time being, or the number nearest to one-third (1/3) shall retire from offi ce at each Annual General Meeting. Provided always that all Directors shall retire from offi ce once at least in each three(3) years, but shall be eligible for re-election.

Directors’ Training

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

Trainings Programmes, Conferences and Seminars attended by certain Directors during the fi nancial year ended 31 December 2010 are as follows:

• Securities Commission & Bursa Malaysia -Corporate Governance Week 2010 – Towards Corporate Governance Excellence

• 6th Asia Pacifi c Audit & Governance Summit 2010• KPMG – Audit Committee Roundtable Discussion titled “ Going Forward: Risks & Reform – Implication for Audit Committee

Oversight• CIDB - Project Risk Management• MSWG – Investigative Audit & Forensic Accounting• IROU – seminar Percukaian Kebangsaan • LHDN-CTIM – National Tax Conferemce• CPA Australia – Real Property Gains Tax – Implications & Exemptions



Directors’ Remuneration

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

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

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

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

Details of the remuneration of the Directors of Dayang for the fi nancial year ended 31 December 2010 are as follows :

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

Fees 2,068,000 234,000 2,302,000

Salary 2,690,952 - 2,690,952

Bonus 3,174,138 - 3,174,138

Other emoluments 326,716 - 326,716

Allowances 138,000 11,000 149,000

Total 8,397,805 245,000 8,642,806

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

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

RM50,001 – RM100,000 2 3

RM100,001 – RM150,000 1 -

RM950,001 – RM1,000,000 1 -

RM2,250,001 – RM2,300,000 1 -

RM2,350,001 – RM2,400,000 2 -

Details of the Directors’ remuneration are set out in applicable bands of RM50,000 which comply with the Main Market of Bursa Malaysia Listing Requirements. Whilst the Code prescribed for individual disclosure of directors’ remuneration packages, the Board is of the view Directors’ remuneration are appropriately and adequately addressed by the band disclosure method adopted by the Board.

There is no service contract made between any Director and the Company or its subsidiary companies.

Relations with Shareholders and Investors

1. Dayang values good communications with shareholders and investors and the importance of accountability to them. As such, the Board disseminates proper, timely and adequate information to the investors and shareholders through annual report, announcements, circulars to shareholders and press releases. As the Company is a member of Share Investor, the Company’s press releases and Company announcements will also be disseminated to those registered for this service.

2. The Group Managing Director and the Head of Corporate Affairs arrange regular briefi ngs and discussion with analyst and investors to provide information on developments on matters relating to their interest.

3. The Company’s Annual General Meeting (“AGM”) is the principal avenue for dialogue and interaction with the shareholders of the Company. The Board encourages shareholders’ active participation at the Company’s AGM and ensure that all Board Members and Senior Management staff are available to respond to shareholders’ enquiries during the meeting. Resolutions tabled and passed at the Meeting are released to Bursa Malaysia on the same day to enable the public to know the outcome.

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


Accountability and Audit

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

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

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

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

for reviewing the effectiveness and adequacy of those systems.

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

The Director’s Statement on Internal Control as set out on page 23 of this Annual Report provides an overview of the Company’s approach in maintaining a sound system of internal control to safeguard shareholders’ interests and the Company’s assets.

3. Relationship with Auditors The Board via the Audit Committee maintains a formal and transparent professional relationship with the Group’s auditors

in seeking professional advice and ensuring the compliance with the appropriate accounting standards and statutory requirements.

During the year, the Audit Committee met with the external auditors twice to discuss their audit plan and audit fi ndings and the Group’s fi nancial statements.

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

In preparing the fi nancial statements for the fi nancial year ended 31 December 2010, the directors have :-· adopted the appropriate accounting policies and applied them consistently;· ensured that all applicable accounting standards have been followed;· made judgments and estimates that are prudent and reasonable; and· ensured the fi nancial statements have been prepared on a going concern basis.

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

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

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



ADDITIONAL COMPLIANCE INFORMATION

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

1. Utilisation of Proceeds from Corporate Exercise During the fi nancial year ended 31 December 2008, total gross proceeds of RM144.817 million was raised from the rights

issue consisting of the issuance of 20.3 million new ordinary shares of RM0.50 each at an issue price of RM1.00 per ordinary share and the public issue consisting of the issuance of 85.874 million new ordinary shares of RM0.50 each in the Company at an issuance price of RM1.45 per ordinary share in conjunction with the listing of the Company on the Main Board of Bursa Securities on 24 April 2008.

The status of the utilization of proceeds as at 31 December 2010 is shown below : RM’000 Gross proceeds received from Rights Issue & IPO 144,817 Less utilization for : Full redemption of Islamic Medium term Loan 60,000 Capital Expenditure 47,870 Working Capital 22,420 Listing Expenses 4,659

Unutilised balance as at 31 December 2010 9,868

By the date of this Statement, the remainder of the proceeds have been fully utilized.

2. Share Buy-back There were no share buy-back arrangements during the fi nancial year ended 31 December 2010.

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

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

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

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

7. Imposition of Sanctions and / or Penalties There were no sanctions and/or penalties imposed on the Company or its subsidiaries, directors or management by the

relevant regulatory bodies during the fi nancial year ended 31 December 2010.

8. Non-Audit Fees The non-audit fees incurred for services rendered to the Company and its subsidiaries by the Company’s auditors for the

fi nancial year ended 31 December 2010 amounted to RM102,800.

9. Variation in Results There were no material variances between the audited results of the fi nancial year ended 31 December 2010 and the

announced unaudited results.

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

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

December 2010 which involves the interests of the Directors and major shareholders.

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

13. Related Party Transactions The related party transactions are disclosed on pages 74 to 75 of the Annual Report.


Director’s Report 31 - 34

Statement by Directors 35

Statutory Declaration 35

Independent Auditors’ Report to the Members 36 - 37

Statements of Financial Position 38

Statements of Comprehensive Income 39

Consolidated Statement of Changes in Equity 40

Statements of Cash Flows 41 - 42

Notes to the Financial Statements 43 - 77

Financial Statements


Directors’ report for the year ended 31 December 2010

The Directors have pleasure in submitting their report and the audited fi nancial statements of the Group and of the Company for the year ended 31 December 2010.

Principal activities

The Company is principally engaged in investment holding, whilst the principal activities of the subsidiaries are as stated in Note 4 to the fi nancial statements. There has been no signifi cant change in the nature of these activities during the fi nancial year.

Results

Group Company RM RM

Profi t for the year attributable to owners of the Company 67,731,015 21,799,420

Reserves and provisions

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

Dividends

Since the end of the previous fi nancial year, the Company paid an interim tax exempt dividend of RM0.05 per ordinary share of RM0.50 each totalling RM17,600,000 in respect of the year ended 31 December 2010 on 30 September 2010.

The Directors do not recommend any fi nal dividend to be paid for the year ended 31 December 2010.

Directors of the Company

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

Datuk Hasmi Bin Hasnan

Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

Ling Suk Kiong

Joe Ling Siew Loung @ Lin Shou Long

Harry Bin Bujang

Gordon Kab @ Gudan Bin Kab

Chia Chu Fatt

Polit Bin Hamzah

Tuan Haji Abdul Aziz Bin Ishak

Sulaihah Binti Maimunni



Directors’ interest in shares

The interests of the Directors in the shares of the Company and of its related corporations (other than wholly-owned subsidiaries) as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM0.50 each At At 1.1.2010 Bought Sold 31.12.2010

Direct interests in the Company

Datuk Hasmi Bin Hasnan 410,000 - - 410,000Tengku Dato’Yusof Bin Tengku Ahmad Shahruddin 44,048,448 - 500,000 43,548,448Ling Suk Kiong 35,136,092 439,000 - 35,575,092Joe Ling Siew Loung @ Lin Shou Long 1,100,000 17,600,000 - 18,700,000Gordon Kab @ Gudan Bin Kab 115,000 - 115,000 -Chia Chu Fatt 135,000 - - 135,000Polit Bin Hamzah 115,000 - - 115,000Tuan Haji Abdul Aziz Bin Ishak 115,000 - - 115,000

Deemed interests in the Company

Datuk Hasmi Bin Hasnan 126,686,700 - - 126,686,700Ling Suk Kiong - 29,959,760 - 29,959,760Harry Bin Bujang 52,559,760 - 52,559,760 -

Directors’ benefi ts

Since the end of the previous fi nancial year, no Director of the Company has received nor become entitled to receive any benefi t (other than a benefi t included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the fi nancial statements of the Company and of its related companies) by reason of a contract made by the Company or a related corporation with the Director or with a fi rm of which the Director is a member, or with a company in which the Director has a substantial fi nancial interest, other than certain Directors who have signifi cant fi nancial interests in companies which traded with certain companies in the Group in the ordinary course of business (see also Note 27 to the fi nancial statements).

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

Issue of shares and debentures

There were no changes in the authorised, issued and paid-up capital of the Company, nor issuance of debentures by the Company, during the year.

Options granted over unissued shares

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

Other statutory information

Before the statements of comprehensive income and statements of fi nancial position of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

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

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.



Other statutory information (continued)

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

i) that would render it necessary to write off any bad debts or provide for any doubtful debts, or

ii) that would render the value attributed to the current assets in the fi nancial statements of the Group and of the Company misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the fi nancial statements, that would render any amount stated in the fi nancial statements of the Group and of the Company misleading.

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

i) any charge on the assets of the Group or of the Company that has arisen since the end of the fi nancial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the fi nancial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the fi nancial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, the fi nancial performance of the Group and of the Company for the year ended 31 December 2010 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that fi nancial year and the date of this report.

Signifi cant events during and after the fi nancial year

(i) On 8 December 2010, the Company entered a share sale agreement to dispose of its entire equity holding constituting 40% of the total issued and paid-up capital in Syarikat Borcos Shipping Sdn. Bhd. for a total consideration of RM135,000,000. The disposal was approved by shareholders at an extraordinary general meeting held on 10 January 2011 and was completed on 18 April 2011.

(ii) The Company has effected:

a) on 10 February 2011, a bonus issue of 88 million ordinary shares of RM0.50 each [“Bonus Share(s)”] on the basis of one (1) Bonus Share for every four (4) existing ordinary shares of RM0.50 each held in the Company by way of capitalisation of RM44 million from the Company’s share premium account (“the Bonus Issue”); and

b) a renounceable rights issue of 110 million ordinary shares of RM0.50 each [“Rights Shares(s)”] on the basis of one (1) Rights Share for every four (4) existing ordinary shares of RM0.50 each held in the Company after the Bonus Issue, at an exercise price of RM1.10 per Right Share (“the Right Issue”). The Rights Issue, the closing date for subscription thereof being 28 February 2011, was fully subscribed for.



Auditors

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

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

………………………………………..........…..........….. Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

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

Miri,

Date: 25 April 2011



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

In the opinion of the Directors, the fi nancial statements set out on pages 38 to 76 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, so as to give a true and fair view of the fi nancial position of the Group and of the Company at 31 December 2010 and of their fi nancial performance and cash fl ows for the year then ended.

In the opinion of the Directors, the information set out in Note 31 on page 77 to the fi nancial statements has been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

………………………………………….........….. Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

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

Miri,

Date: 25 April 2011

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

I, Ling Suk Kiong, the director primarily responsible for the fi nancial management of Dayang Enterprise Holdings Bhd., do solemnly and sincerely declare that the fi nancial statements set out on pages 38 to 77 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed in Miri in the State of Sarawak

on 25 April 2011 .......………………………..... Ling Suk Kiong

Before me:

Statement by Directors/ Statutory declaration


Report on the Financial Statements

We have audited the fi nancial statements of Dayang Enterprise Holdings Bhd., which comprise the statements of fi nancial position as at 31 December 2010 of the Group and of the Company, and statements of comprehensive income, changes in equity and cash fl ows of the Group and of the Company for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 38 to 76.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of fi nancial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine is necessary to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of fi nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the fi nancial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the fi nancial position of the Group and of the Company as of 31 December 2010 and of their fi nancial performance and cash fl ows for the year then ended.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

b) We are satisfi ed that the accounts of the subsidiaries that have been consolidated with the Company’s fi nancial statements are in form and content appropriate and proper for the purposes of the preparation of the fi nancial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

c) The audit reports on the accounts of the subsidiaries did not contain any qualifi cation or any adverse comment made under Section 174(3) of the Act.

Independent Auditors’ Report to the Members of Dayang Enterprise Holdings Bhd.


Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the fi nancial statements taken as a whole. The information set out in Note 31 on page 77 to the fi nancial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is not part of the fi nancial statements. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose.

We do not assume responsibility to any other person for the content of this report.

KPMG Firm Number: AF 0758 Chartered Accountants

Chin Chee KongApproval Number: 1481/1/13 (J)Chartered Accountant

Kuching,

Date: 25 April 2011

Independent Auditors’ Report to the Members of Dayang Enterprise Holdings Bhd.


Group Company 2010 2009 2010 2009 Note RM RM RM RM

AssetsProperty, plant and equipment 3 216,015,861 190,448,881 2,611 2,439Investment in subsidiaries 4 - - 122,913,259 122,913,259Investment in an associate 5 2 135,008,200 2 135,008,200Deferred tax assets 6 - 34,200 - -Trade and other receivables 7 - - 106,477,340 70,000,000

Total non-current assets 216,015,863 325,491,281 229,393,212 327,923,898

Inventories 8 1,298,102 1,611,246 - -Trade and other receivables 7 123,154,518 75,124,270 323,456 31,418,567Investment in an associate held for sale 5 134,900,000 - 134,900,000 -Prepayments and other assets 2,026,281 1,581,978 371,100 24,500Current tax assets 727,789 1,553,233 104,820 25,000Cash and cash equivalents 9 68,963,823 57,230,487 12,770,910 15,317,669

Total current assets 331,070,513 137,101,214 148,470,286 46,785,736

Total assets 547,086,376 462,592,495 377,863,498 374,709,634

EquityShare capital 176,000,000 176,000,000 176,000,000 176,000,000Share premium 87,071,328 87,071,328 87,071,328 87,071,328Retained earnings 109,633,781 60,671,318 4,317,715 1,286,847

Total equity attributable to owners of the Company 10 372,705,109 323,742,646 267,389,043 264,358,175

LiabilitiesLoan and borrowings 11 84,000,000 100,000,000 84,000,000 100,000,000Deferred tax liabilities 6 1,115,000 2,046,000 - -

Total non-current liabilities 85,115,000 102,046,000 84,000,000 100,000,000

Loan and borrowings 11 26,719,873 10,066,200 26,000,000 10,000,000Trade and other payables 12 57,409,916 25,895,205 474,455 351,459Current tax liabilities 5,136,478 842,444 - -

Total current liabilities 89,266,267 36,803,849 26,474,455 10,351,459

Total liabilities 174,381,267 138,849,849 110,474,455 110,351,459

Total equity and liabilities 547,086,376 462,592,495 377,863,498 374,709,634

The notes on pages 43 to 77 are an integral part of these fi nancial statements.

Statements of fi nancial position as at 31 December 2010


___________ Group ___________ __________ Company __________ 2010 2009 2010 2009 Note RM RM RM RM

Revenue 13 255,385,211 196,953,850 32,443,333 51,560,000

Cost of sales (125,643,451) (111,161,032) - -

Gross profi t 129,741,760 85,792,818 32,443,333 51,560,000

Other income 939,183 65,241 1,500 -Administrative expenses ( 47,248,909) ( 34,772,577) ( 3,085,679) ( 2,432,382)Other expenses ( 177,918) ( 163,023) - -

Results from operating activities 14 83,254,116 50,922,459 29,359,154 49,127,618

Finance costs 16 ( 6,049,544) ( 317,331) ( 5,945,451) ( 306,713)Finance income 17 1,763,250 1,795,810 5,861,830 629,962

Net fi nance (costs)/income ( 4,286,294) 1,478,479 ( 83,621) 323,249

Share of profi ts of equity accounted investees, net of tax 5 4,091,409 - - -

Profi t before tax 83,059,231 52,400,938 29,275,533 49,450,867

Income tax expense 18 ( 15,328,216) ( 7,615,848) ( 7,476,113) ( 12,406,066)

Profi t/Total comprehensive income for the year 67,731,015 44,785,090 21,799,420 37,044,801

Basic/Diluted earnings per ordinary share (sen) 19 19.24 12.72


Statements of comprehensive income for the year ended 31 December 2010


______Non-distributable ______ Distributable Share Share Retained Total capital premium earnings equityGroup Note RM RM RM RM

At 1 January 2009 176,000,000 87,071,328 53,204,586 316,275,914

Total comprehensive income for the year - - 44,785,090 44,785,090

Dividends to owners of the Company 20 - - ( 36,080,000) ( 36,080,000)Section 108 credit shortfall - - ( 1,238,358) ( 1,238,358) - - ( 37,318,358) ( 37,318,358)

At 31 December 2009/1 January 2010 176,000,000 87,071,328 60,671,318 323,742,646


Dividend to owners of the Company 20 - - ( 17,600,000) ( 17,600,000)Section 108 credit shortfall - - ( 1,168,552) ( 1,168,552) - - ( 18,768,552) ( 18,768,552)

At 31 December 2010 176,000,000 87,071,328 109,633,781 372,705,109

(Note 10)

Company

At 1 January 2009 176,000,000 87,071,328 1,560,404 264,631,732


Dividends to owners of the Company 20 - - ( 36,080,000) ( 36,080,000)Section 108 credit shortfall - - ( 1,238,358) ( 1,238,358)

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

At 31 December 2009/1 January 2010 176,000,000 87,071,328 1,286,847 264,358,175


Dividend to owners of the Company 20 - - ( 17,600,000) ( 17,600,000)Section 108 credit shortfall - - ( 1,168,552) ( 1,168,552)

- - ( 18,768,552) ( 18,768,552)

At 31 December 2010 176,000,000 87,071,328 4,317,715 267,389,043

(Note 10) (Note 10)


Consolidated statement of changes in equity for the year ended 31 December 2010



Cash fl ows from operating activities

Profi t before tax 83,059,231 52,400,938 29,275,533 49,450,867

Adjustments for:Depreciation of property, plant and equipment 3 14,376,050 10,764,529 358 305Dividend income - - (30,033,333) ( 49,400,000)Impairment loss on investment in an associate 5 199,609 - 108,200 -Gain on disposal of property, plant and equipment ( 163,090) ( 35,241) - -Property, plant and equipment written off 18,412 14,784 - -Finance income 17 ( 1,763,250) ( 1,795,810) ( 5,861,830) ( 629,962)Finance costs 16 6,049,544 317,331 5,945,451 306,713Share of profi t of equity accounted investees, net of tax 5 ( 4,091,409) - - -

Operating profi t/(loss) before changes in working capital 97,685,097 61,666,531 ( 565,621) ( 272,077)

Changes in working capital:Inventories 313,144 206,765 - -Trade and other payables 31,154,272 (25,158,212) ( 237,442) ( 138,881)Trade and other receivables, prepayments and other assets (48,474,551) 29,710,501 ( 191,726) 2,517,365

Cash generated from/(used in) operations 80,677,962 66,425,585 ( 994,789) 2,106,407 Interest received 1,763,250 1,795,810 324,727 629,962Interest paid ( 386,746) ( 2,125) ( 384,739) -Income tax paid (12,274,090) (17,933,936) ( 1,216,152) ( 1,616,649)

Net cash from/(used in) operating activities 69,780,376 50,285,334 ( 2,270,953) 1,119,720

Cash fl ows from investing activities

Acquisition of an associate ( 2) (135,008,200) ( 2) (135,008,200)Acquisition of property, plant and equipment ii ( 38,250,541) ( 39,255,413) ( 530) -Proceeds from disposal of property, plant and equipment 183,500 45,656 - -Proceeds from disposal of other investment - 10,177,023 - 10,177,023Dividend received 4,000,000 - 22,525,000 37,050,000

Net cash (used in)/from investing activities ( 34,067,043) (164,040,934) 22,524,468 ( 87,781,177)

Statements of cash fl ows for the year ended 31 December 2010



Cash fl ows from fi nancing activities

Dividends paid to owners of the Company ( 17,600,000) ( 36,080,000) ( 17,600,000) ( 36,080,000)Repayment of fi nance lease liabilities ( 1,075,266) ( 86,343) - -Finance lease interest paid ( 102,086) ( 8,493) - -Term loan interest paid ( 5,200,274) - ( 5,200,274) -Draw-down of revolving credits - 10,000,000 - 10,000,000Draw-down of term loan - 100,000,000 - 100,000,000

Net cash (used in)/from fi nancing activities ( 23,977,626) 73,825,164 ( 22,800,274) 73,920,000

Net increase/(decrease) in cash and cash equivalents 11,735,707 ( 39,930,436) ( 2,546,759) ( 12,741,457)Cash and cash equivalents at 1 January 57,225,754 97,156,190 15,317,669 28,059,126

Cash and cash equivalents at 31 December i 68,961,461 57,225,754 12,770,910 15,317,669

Notes

i) Cash and cash equivalents

Cash and cash equivalents included in the statements of cash fl ows comprise the following statements of fi nancial position amounts:

___________ Group ___________ __________ Company __________ 2010 2009 2010 2009 RM RM RM RM

Fixed deposits with licensed banks 57,322,085 47,288,065 10,670,473 13,404,520 Cash and bank balances 11,641,738 9,942,422 2,100,437 1,913,149 Bank overdrafts ( 2,362) ( 4,733) - -

68,961,461 57,225,754 12,770,910 15,317,669

ii) Acquisition of property, plant and equipment

During the fi nancial year, the Group acquired property, plant and equipment with an aggregate cost of RM39,981,852 (2009: RM39,255,413), of which RM1,731,311 (2009: nil) was in the form of fi nance lease assets.


Statements of cash fl ows for the year ended 31 December 2010


Dayang Enterprise Holdings Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”). The address of its registered offi ce and principal place of business is Sublot 5-10, Lot 46, Block 10, Jalan Taman Raja, Miri Concession Land District, 98000 Miri, Sarawak.

The consolidated fi nancial statements of the Company as at and for the year ended 31 December 2010 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s interest in associates. The fi nancial statements of the Company as at and for the year ended 31 December 2010 do not include other entities.

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

These fi nancial statements were authorised for issue by the Board of Directors on 25 April 2011.

1. Basis of preparation

(a) Statement of compliance

These fi nancial statements have been prepared in accordance with Financial Reporting Standards (FRS), generally accepted accounting principles and the Companies Act, 1965 in Malaysia.

The Group and the Company have not applied the following accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the Group and the Company.

Standard / Amendment / Interpretation Effective date

Amendments to FRS132, Financial Instruments: Presentation – Classifi cation of Rights Issues 1 March 2010FRS 1, First-time Adoption of Financial Reporting Standards (revised) 1 July 2010FRS 3, Business Combinations (revised) 1 July 2010FRS 127, Consolidated and Separate Financial Statements (revised) 1 July 2010Amendments to FRS 2, Share-based Payment 1 July 2010Amendments to FRS 5, Non-current Assets Held for Sale and Discontinued Operations 1 July 2010Amendments to FRS 138, Intangible Assets 1 July 2010IC Interpretation 12, Service Concession Agreements 1 July 2010IC Interpretation 16, Hedges of a Net Investment in a Foreign Operation 1 July 2010IC Interpretation 17, Distributions of Non-cash Assets to Owners 1 July 2010Amendments to IC Interpretation 9, Reassessment of Embedded Derivatives 1 July 2010Amendments to FRS 1, First-time Adoption of Financial Reporting Standards - Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters - Additional Exemptions for First-time Adopters 1 January 2011Amendments to FRS 2, Group Cash-settled Share-Based Payment Transactions 1 January 2011Amendments to FRS 7, Financial Instruments: Disclosures – Improving Disclosures about Financial Instruments 1 January 2011IC Interpretation 4, Determining whether an Arrangement contains a Lease 1 January 2011IC Interpretation 18, Transfers of Assets from Customers 1 January 2011Improvements to FRSs (2010) 1 January 2011IC Interpretation 19, Extinguishing Financial Liabilities with Equity Instruments 1 July 2011Amendments to IC Interpretation 14, Prepayment of a Minimum Funding Requirement 1 July 2011FRS 124, Related Party Disclosures (revised) 1 January 2012IC Interpretation 15, Agreements for the Construction of Real Estate 1 January 2012

Notes to the fi nancial statements


1. Basis of preparation (continued)

(a) Statement of compliance (continued)

The Group and the Company plan to apply from the annual periods:

• beginning 1 January 2011 the standards, amendments and interpretations that are effective for annual periods beginning on or before 1 January 2011; and

• beginning 1 January 2012 the standards, amendments and interpretations that are effective for annual periods beginning after 1 January 2011,

except those assessed as presently not applicable to them. The latter includes Amendments to FRS 132, FRS 1 (revised), Amendments to FRS 2, Amendments to FRS 5, Amendments to FRS 138, Amendments to IC Interpretation (ICI) 9, Amendments to ICI 14, ICI 12, ICI 15, ICI 16, ICI 17 and ICI 18.

The initial application of a standard, an amendment or an interpretation, which is to be applied prospectively or which requires extended disclosures, is not expected to have any fi nancial impact to the fi nancial statements of the Group and the Company for the current and prior periods upon its fi rst adoption.

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

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

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

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

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

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

The amendments to FRS 127 require changes in group composition to be accounted for as equity transactions between the group and its minority (will be known as non-controlling) interest holders.

The amendments to FRS 127 further require all losses attributable to the minority interest to be absorbed by the minority interest i.e., the excess and any further losses exceeding the minority interest in the equity of a subsidiary are no longer charged against the Group’s interest.

The amendments to FRS 127 are not expected to have material impacts to the Group.

Improvements to FRSs (2010) contain amendments to ten FRSs and one Interpretation, to provide clarifi cation or guidance thereon or to correct for relatively minor unintended consequences, confl icts or oversights.

IC Interpretation 4, which is to be applied retrospectively, provides guidance for determining whether certain arrangements are, or contain, leases that are required to be accounted for in accordance with FRS 117, Leases. Where an arrangement is within the scope of FRS 117, the Company applies FRS 117 in determining whether the arrangement is a fi nance or an operating lease. The adoption of ICI 4 is not expected to have a material impact to the Company.

IC Interpretation 19 provides guidance on accounting for debt for equity swaps. Equity instruments issued to a creditor to extinguish all or a part of a fi nancial liability would be “consideration paid” in accordance with paragraph 41 of FRS 139. The equity instruments would be measured initially at the fair value of those equity instruments unless that fair value cannot be reliably measured, in which case the equity instruments should be measured to refl ect the fair value of the fi nancial liability extinguished. Any difference between the carrying amount of the fi nancial liability and the initial measurement of the equity instruments would be recognised as a gain or loss in profi t or loss.

The adoption of IC Interpretation 19 will result in a change in accounting policy which will be applied retrospectively in accordance with FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors.



1. Basis of preparation (continued)

(a) Statement of compliance (continued)

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

(b) Basis of measurement

These fi nancial statements have been prepared on the historical cost basis, other than as disclosed in Note 2.

(c) Functional and presentation currency

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

(d) Use of estimates and judgements

The preparation of the fi nancial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate are revised and in any future periods affected.

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

Revenue from service contracts

The Group recognises revenue from service contracts based on the stage of completion method, measured by reference to survey of works performed. Signifi cant judgement is required in determining the stage of completion of service contracts, accruing for revenue in respect of work performed which has yet to be billed as well as assessing the recoverability of the accrued revenue. The Group relies, inter alia, on the assessment of its experienced project managers when making the judgement.

2. Signifi cant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these fi nancial statements, and have been applied consistently by the Group and the Company, other than disclosed in the following notes:

• Note 2(c) - Financial instruments• Note 2(i)(i) - Impairment of fi nancial assets• Note 2(n) - Borrowing costs

(a) Basis of consolidation

(i) Subsidiaries

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

Under the purchase method of accounting, the fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that control commences until the date that control ceases.

Investments in subsidiaries are measured in the Company’s statement of fi nancial position at cost less impairment losses, unless the investment is classifi ed as held for sale.



2. Signifi cant accounting policies (continued)

(a) Basis of consolidation (continued)

(ii) Associates

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

Investment in associates are accounted for in the consolidated fi nancial statements using the equity method less any impairment losses, unless it is classifi ed as held for sale (or included in a disposal group that is classifi ed as held for sale). The cost of the investment includes transaction costs. The consolidated fi nancial statements include the Group’s share of the profi t or loss and other comprehensive income of the equity accounted associates, after adjustments, if any, to align the accounting policies with those of the Group, from the date that signifi cant infl uence commences until the date that signifi cant infl uence ceases.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest (including any long-term investments) is reduced to zero and the recognition of further losses is discontinued except to the extent that the Group has an obligation, or has made payments on behalf of the investee.

Investments in associates are stated in the Company’s statement of fi nancial position at cost less any impairment losses, unless the investment is classifi ed as held for sale. The cost of investment includes transaction costs.

(iii) Transactions eliminated on consolidation

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

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

Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment to the underlying assets.

(b) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the transaction dates.

Monetary assets and liabilities denominated in foreign currencies at the reporting period are retranslated to the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date except for those that are measured at fair value, which are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profi t or loss, except for the differences arising on the retranslation of available-for-sale equity instruments or a fi nancial instrument designated as a cash fl ow hedge of currency risk, which are recognised in other comprehensive income.

(c) Financial instruments

Arising from the adoption of FRS 139, Financial Instruments: Recognition and Measurement, with effect from 1 January 2010, fi nancial instruments are categorised and measured using the accounting policies as mentioned below. Before 1 January 2010, different accounting policies were applied. Signifi cant changes to the accounting policies are disclosed in Note 28.




(c) Financial instruments (continued)

(i) Initial recognition and measurement

A fi nancial instrument is recognised in the fi nancial statements when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A fi nancial instrument is recognised initially at its fair value plus, in the case of a fi nancial instrument not at fair value through profi t or loss, transaction costs that are directly attributable to the acquisition or issue of the fi nancial instrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profi t or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with the policy applicable to the nature of the host contract.

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise fi nancial instruments as follows:

Financial assets

(a) Financial assets at fair value through profi t or loss

Fair value through profi t or loss category comprises fi nancial assets that are held for trading, including derivatives (except for a derivative that is a designated and effective hedging instrument) or fi nancial assets that are specifi cally designated into this category upon initial recognition. Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.

Other fi nancial assets categorised as fair value through profi t or loss are subsequently measured at their fair values with the gain or loss recognised in profi t or loss.

(b) Held-to-maturity investments

Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group or the Company has the positive intention and ability to hold to maturity.

Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method.

(c) Loans and receivables

Loans and receivables category comprises debt instruments that are not quoted in an active market.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.

(d) Available-for-sale fi nancial assets

Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other fi nancial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profi t or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassifi ed from equity into profi t or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profi t or loss.

All fi nancial assets, except for those measured at fair value through profi t or loss, are subject to review for impairment [see Note 2(i)(i)].




(c) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement (continued)

Financial liabilities

All fi nancial liabilities are subsequently measured at amortised cost, other than those categorised as fair value through profi t or loss.

Fair value through profi t or loss category comprises fi nancial liabilities that are held for trading, derivatives (except for a derivative that is a fi nancial guarantee contract or a designated and effective hedging instrument) or fi nancial liabilities that are specifi cally designated into this category upon initial recognition.

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.

Other fi nancial liabilities categorised as fair value through profi t or loss are subsequently measured at their fair values with the gain or loss recognised in profi t or loss.

(iii) Financial guarantee contracts

A fi nancial guarantee contract is a contract that requires the issuer to make specifi ed payments to reimburse the holder for a loss it incurs because a specifi ed debtor fails to make payment when due in accordance with the original or modifi ed terms of a debt instrument.

Financial guarantee contracts are classifi ed as deferred income and are amortised to profi t or loss using a straight-line method over the contractual period or, when there is no specifi ed contractual period, recognised in profi t or loss upon discharge of the guarantee. When settlement of a fi nancial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the fi nancial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.

(iv) Regular way purchase or sale of fi nancial assets

A regular way purchase or sale is a purchase or sale of a fi nancial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of fi nancial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to:

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and

(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.

(v) Derecognition

A fi nancial asset or a part thereof it is derecognised when, and only when the contractual rights to the cash fl ows from the fi nancial asset expire or the fi nancial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a fi nancial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profi t or loss.

A fi nancial liability or a part thereof it is derecognised when, and only when, the obligation specifi ed in the contract is discharged or cancelled or expires. On derecognition of a fi nancial liability, the difference between the carrying amount of the fi nancial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the profi t or loss.




(d) Property, plant and equipment

(i) Recognition and measurement

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

Cost includes expenditures that are directly attributable to the acquisition of the assets and any other costs directly attributable to bringing the assets to working condition for their intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials, direct labour and for qualifying assets, borrowing costs capitalised in accordance with the accounting policy on borrowing costs [see Note 2(n)].

Cost also may include transfers from equity of any gain or loss on qualifying cash fl ow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When signifi cant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within “other income” or “other expenses” respectively in profi t or loss.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefi ts embodied within the part will fl ow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised to profi t or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in the profi t or loss as incurred.

(iii) Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

Depreciation is recognised in profi t or loss on a straight-line basis over the estimated useful life of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

The estimated useful lives for the current and comparative periods are as follows:

Long term leasehold land 843 years Buildings 20 years Marine vessels 25 years Onboard equipment 10 years Offshore equipment 1 - 5 years Containers 10 years Furniture and fi ttings 10 years Offi ce equipment 2.5 - 10 years Motor vehicles 5 years

Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate at the end of the reporting period.




(e) Leased assets (i) Finance lease

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classifi ed as fi nance lease. On initial recognition, a leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset [see Note 2 (d)].

Minimum lease payments made under fi nance lease are apportioned between the fi nance expense and the reduction of the outstanding liability. The fi nance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confi rmed.

(ii) Operating lease

Leases, where the Group does not assume substantially all the risks and rewards of ownership are classifi ed as operating leases and the leased assets are not recognised in the statement of fi nancial position.

Payments made under operating leases are recognised in profi t or loss on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefi ts from the leased asset are consumed. Lease incentives received are recognised in profi t or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profi t or loss in the reporting period in which they are incurred.

(f) Inventories

Inventories are measured at the lower of cost and net realisable value.

Cost of inventories is measured based on the weighted average cost formula and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

(g) Receivables

Prior to 1 January 2010, receivables were initially recognised at their costs and subsequently measured at cost less allowance for doubtful debts.

Following the adoption of FRS 139, trade and other receivables are categorised and measured as loans and receivables in accordance with Note 2(c).

(h) Cash and cash equivalents

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

Cash and cash equivalents (other than bank overdrafts) are categorised and measured as loans and receivables in accordance with policy Note 2(c).




(i) Impairment

(i) Financial assets

All fi nancial assets are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash fl ows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an equity instrument, a signifi cant or prolonged decline in the fair value below its cost is an objective evidence of impairment.

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profi t or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of available-for-sale fi nancial assets is recognised in profi t or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale fi nancial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassifi ed from equity and recognised to profi t or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profi t or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the current market rate of return for a similar fi nancial asset.

Impairment losses recognised in profi t or loss for an investment in an equity instrument is not reversed through profi t or loss.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profi t or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profi t or loss.

(ii) Non-fi nancial assets

The carrying amounts of non-fi nancial assets (except for inventories) are reviewed at the end of each reporting period to determine whether there is any indication of impairment.

If any such indication exists, then the asset’s recoverable amount is estimated. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash infl ows from continuing use that are largely independent of the cash infl ows of other assets or groups of assets (the “cash-generating unit”).

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

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.

Impairment losses are recognised in profi t or loss. Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount of the assets in the unit (groups of units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profi t or loss in the year in which the reversals are recognised.




(j) Equity instruments Instrument classifi ed as equity are measured at cost on initial recognition and are not re-measured subsequently.

(i) Issue expenses

Costs directly attributable to the issue of equity instruments are recognised as a deduction from equity.

(ii) Repurchase of share capital

When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity and is not re-valued for subsequent changes in the fair value or market price of the shares. Repurchased shares are classifi ed as treasury shares and are presented as a deduction from total equity.

When treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the share premium account or distributable reserves, or both.

When treasury shares are reissued by re-sale in the open market, the difference between the sales consideration net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity.

(k) Employee benefi ts

(i) Short term employee benefi ts

Short-term employee benefi t obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profi t-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) State plans

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

(l) Provisions

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

Onerous contracts

A provision for onerous contracts is recognised when the expected benefi ts to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.




(m) Revenue and other income

(i) Services

Revenue from services rendered is recognised in the profi t or loss in proportion to the stage of completion of the transaction at the balance sheet date. The stage of completion is assessed by reference to survey of works performed. When the outcome of a service contract cannot be estimated reliably, revenue is recognised only to the extent of the expenses incurred that are recoverable. An expected loss on a service contract is recognised immediately in the income statement.

(ii) Rental income

Equipment rental income is recognised in the profi t or loss on the accrual basis, based on the rates contracted with customers.

(iii) Dividend income

Dividend income is recognised in profi t or loss on the date that the Group’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

(iv) Management fees

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

(v) Interest income

Interest income is recognised as it accrues using the effective interest method in profi t or loss except for interest income arising from temporary investment of borrowings taken specifi cally for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.

(n) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profi t or loss using the effective interest method.

Before 1 January 2010, all borrowing costs were recognised in profi t or loss using the effective interest method in the period in which they are incurred.

Following the adoption of revised FRS 123, Borrowing Costs, borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.

Investment income earned on the temporary investment of specifi c borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

(o) Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profi t or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous years.




(o) Income tax (continued)

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of fi nancial position and their tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill and the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profi t or loss. Deferred tax is measured at the tax rates that are expected to apply to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

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

A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in profi t or loss as and when it is granted and claimed. Any unutilised portion of the tax incentive is recognised as a deferred tax asset to the extent that it is probable that future taxable profi ts will be available against which the unutilised tax incentive can be utilised.

(p) Earnings per ordinary share

The Group presents basic and diluted earnings per share data for its ordinary shares (EPS).

Basic EPS is calculated by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.

Diluted EPS is determined by adjusting the profi t or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

(q) Operating segments

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

Following the adoption of FRS 8, Operating Segments, an operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case is the Managing Director of the Group, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete fi nancial information is available.




3.

Pro

pert

y, p

lant

and

equ

ipm

ent

Mar

ine

Mar

ine

vess

els

Long

-ter

m

ve

ssel

s an

d

O

ffsho

re e

quip

men

t

M

otor

veh

icle

s

and

build

ing

leas

ehol

d

onbo

ard

O

utrig

ht

Fina

nce

Furn

iture

O

ffi ce

O

utrig

ht

Fina

nce

unde

r

la

nd

Bui

ldin

g eq

uipm

ent

Con

tain

ers

purc

hase

le

ases

an

d fi t

ting

equi

pmen

t pu

rcha

se

leas

es

cons

truc

tion

Tota

l

Gro

up

RM

R

M

RM

R

M

RM

R

M

RM

R

M

RM

R

M

RM

R

M

C

ost

A

t 1 J

anua

ry 2

009

2,43

3,62

3 -

136,

627,

807

2,07

3,55

2 7,

720,

727

- 2,

889,

472

2,44

2,92

5 3,

931,

533

280,

000

21,6

26,5

95

180,

026,

234

A

dditi

ons

- -

34,0

66,0

11

12,4

00

252,

290

- 2,

650,

547

439,

934

240,

162

- 1,

594,

069

39,2

55,4

13

Dis

posa

ls

- -

- -

- -

(

42,

692)

(

2

5,50

4)

(

223,

213)

-

- (

2

91,4

09)

Tr

ansf

er

- -

20,8

77,8

75

- -

- -

- -

- ( 2

0,87

7,87

5)

-

A

t 31

Dec

embe

r 200

9/

1 J

anua

ry 2

010

2,43

3,62

3 -

191,

571,

693

2,08

5,95

2 7,

973,

017

- 5,

497,

327

2,85

7,35

5 3,

948,

482

280,

000

2,34

2,78

9 21

8,99

0,23

8

Add

ition

s -

- 81

1,29

1 59

,620

9,

268,

893

1,73

1,31

1 27

3,79

8 55

0,92

6 1,

040,

710

- 26

,245

,303

39

,981

,852

D

ispo

sals

/Writ

e of

fs

- -

- -

(

76,

300)

-

(

77,

290)

(

41

,445

) (1

65,5

98)

- -

(

360

,633

)

Tran

sfer

-

2,68

2,39

2 -

- -

- -

- -

- (

2,68

2,39

2)

-

A

t 31

Dec

embe

r 201

0 2,

433,

623

2,68

2,39

2 19

2,38

2,98

4 2,

145,

572

17,1

65,6

10

1,73

1,31

1 5,

693,

835

3,36

6,83

6 4,

823,

594

280,

000

25,9

05,7

00

258,

611,

457

D

epre

ciat

ion

A

t 1 J

anua

ry 2

009

- -

6,35

8,26

7 1,

700,

137

5,66

7,00

5 -

1,44

6,07

1 1,

099,

889

1,68

4,79

2 86

,877

-

18,0

43,0

38

Dep

reci

atio

n fo

r the

yea

r

(N

ote

14)

2,88

7 -

8,18

9,56

8 18

5,28

3 59

8,21

3 -

448,

432

735,

050

549,

096

56,0

00

- 10

,764

,529

D

ispo

sals

-

- -

- -

- (

3

2,28

2)

(

10,

720)

(

22

3,20

8)

- -

(

266

,210

)

A

t 31

Dec

embe

r 200

9/

1 J

anua

ry 2

010

2,88

7 -

14,5

47,8

35

1,88

5,42

0 6,

265,

218

- 1,

862,

221

1,82

4,21

9 2,

010,

680

142,

877

- 28

,541

,357

D

epre

ciat

ion

for t

he y

ear

(

Not

e 14

) 2,

887

113,

910

9,71

9,04

6 14

3,76

3 1,

539,

921

1,01

3,79

9 51

0,07

9 64

5,88

8 63

0,75

7 56

,000

-

14,3

76,0

50

Dis

posa

ls/W

rite

offs

-

- -

- (

5

7,59

2)

- (

7

1,03

2)

(

27,

593)

(

16

5,59

4)

- -

(

321

,811

)

A

t 31

Dec

embe

r 201

0 5,

774

113,

910

24,2

66,8

81

2,02

9,18

3 7,

747,

547

1,01

3,79

9 2,

301,

268

2,44

2,51

4 2,

475,

843

198,

877

- 42

,595

,596

C

arry

ing

am

oun

ts

At 1

Jan

uary

200

9 2,

433,

623

- 13

0,26

9,54

0 37

3,41

5 2,

053,

722

- 1,

443,

401

1,34

3,03

6 2,

246,

741

193,

123

21,6

26,5

95

161,

983,

196

A

t 31

Dec

embe

r 200

9/

1 J

anua

ry 2

010

2,43

0,73

6 -

177,

023,

858

200,

532

1,70

7,79

9 -

3,63

5,10

6 1,

033,

136

1,93

7,80

2 13

7,12

3 2,

342,

789

190,

448,

881

A

t 31

Dec

embe

r 201

0 2,

427,

849

2,56

8,48

2 16

8,11

6,10

3 11

6,38

9 9,

418,

063

717,

512

3,39

2,56

7 92

4,32

2 2,

347,

751

81,1

23

25,9

05,7

00

216,

015,

861

Th

e le

ase

term

of t

he le

aseh

old

land

will

expi

re o

n 2

Apr

il 28

51.

M

arin

e ve

ssel

s w

ith a

tota

l net

boo

k va

lue

of R

M16

8,11

6,10

3 (2

009:

RM

177,

023,

859)

are

ple

dged

to a

lice

nsed

ban

k fo

r cer

tain

ban

king

faci

litie

s (s

ee N

ote

11).


3. Property, plant and equipment (continued) Furniture and fi tting Company RM Cost At 1 January 2009, 31 December 2009/1 January 2010 3,049 Addition 530

At 31 December 2010 3,579

Accumulated depreciation At 1 January 2009 305 Depreciation for the year (Note 14) 305

At 31 December 2009/ 1 January 2010 610 Depreciation for the year (Note 14) 358

At 31 December 2010 968 Carrying amounts At 1 January 2009 2,744

At 31 December 2009/1 January 2010 2,439

At 31 December 2010 2,611

4. Investment in subsidiaries Company 2010 2009 RM RM Unquoted shares at cost 122,913,259 122,913,259

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

Effective Name of Company Principal ownership activities interest % % 2010 2009

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

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



5. Investment in an associate Group Company 2010 2009 2010 2009 RM RM RM RM

Non-current Unquoted shares at cost 2 135,008,200 2 135,008,200

CurrentUnquoted shares at cost 135,008,200 - 135,008,200 -Share of post acquisition reserves 4,091,409 - - -

Less: - Dividend received ( 4,000,000) - - -

- Accumulated impairment losses ( 199,609) - ( 108,200) -

134,900,000 - 134,900,000 -

134,900,002 135,008,200 134,900,002 135,008,200

Particulars of the associates are as follows: Effective ownership interest Principal Country of % % Accounting Name of Company activities incorporation 2010 2009 year end

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

Alpha Dayang (B) Sdn. Bhd.** Dormant Brunei 50 - 31 December

* On 8 December 2010, the Company entered a share sale agreement to dispose of its entire equity holding constituting 40% of the total issued and paid-up capital in Syarikat Borcos Shipping Sdn. Bhd. for a total consideration of RM135,000,000. The disposal was approved by shareholders at an extraordinary general meeting held on 10 January 2011 and was completed on 18 April 2011. The investment in the associate has been reclassifi ed as held for sale as at 31 December 2010.

** The associate is presently dormant and has not made up its management accounts to date. A company incorporated in Brunei need not submit audited fi nancial statements during the period of dormancy. As a consequence, the fi nancial information on the associate is not presented.

Summary fi nancial information on associates Profi t Total Total Revenue after tax assets liabilities 100% 100% 100% 100% RM RM RM RM2010

Syarikat Borcos Shipping Sdn. Bhd. 159,576,480 10,239,427 767,219,485 568,336,107

2009

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

The Company equity accounted for results of Syarikat Borcos Shipping Sdn. Bhd. for the period 1 January 2010 to 30 November 2010 in its consolidated fi nancial statements for the year ended 31 December 2010. The results of Syarikat Borcos Shipping Sdn. Bhd. was not equity accounted for in the consolidated fi nancial statements for the year ended 31 December 2009 as the acquisition of the associate was only completed on 31 December 2009.



6. Deferred tax assets and liabilities

6.1 Recognised deferred tax assets/(liabilities)

Deferred tax assets and liabilities is attributable to the following: ________Assets________ ______Liabilities______ __ _______Net_________ 2010 2009 2010 2009 2010 2009 Group RM RM RM RM RM RM

Property, plant and equipment - 34,200 ( 1,913,000) ( 2,046,000) ( 1,913,000) ( 2,011,800) Capital allowance carry-forwards - - 798,000 - 798,000 -

Tax assets/(liabilities) - 34,200 ( 1,115,000) ( 2,046,000) ( 1,115,000) ( 2,011,800)

6.2 Movements in temporary differences during the year

Recognised At Recognised At in profi t 31.12.2009/ in profi t At 1.1.2009 or loss 1.1.2010 or loss 31.12.2010 Group RM RM RM RM RM

Property, plant and equipment ( 3,887,290) 1,875,490 ( 2,011,800) 98,800 ( 1,913,000) Capital allowance carry-forwards 204,500 ( 204,500) - 798,000 798,000

Total ( 3,682,790) 1,670,990 ( 2,011,800) 896,800 ( 1,115,000)

(Note 18) (Note 18)

7. Trade and other receivables Group Company 2010 2009 2010 2009 RM RM RM RM Non-current Non-trade Loan to a subsidiary - - 106,477,340 70,000,000

Current Trade Trade receivables 38,948,691 42,549,289 - - Accrued revenue 83,874,467 32,182,082 - -

122,823,158 74,731,371 - -

Non-trade Amount due from subsidiaries - - 311,038 31,239,367 Other receivables 331,360 392,899 12,418 179,200

331,360 392,899 323,456 31,418,567

Current total 123,154,518 75,124,270 323,456 31,418,567

Total 123,154,518 75,124,270 106,800,796 101,418,567

The loan to subsidiary is unsecured and bears interest at 5.55% (2009: nil) per annum.



8. Inventories - Group 2010 2009 RM RM

Material and consumables 1,298,102 1,611,246

Recognised in profi t or loss: Inventories recognised as part of cost of sales 14,693,724 10,003,555

9. Cash and cash equivalents Group Company 2010 2009 2010 2009 RM RM RM RM

Deposits placed with licensed banks 57,322,085 47,288,065 10,670,473 13,404,520 Cash and bank balances 11,641,738 9,942,422 2,100,437 1,913,149

68,963,823 57,230,487 12,770,910 15,317,669

10. Capital and reserves

Share capital _____________ Group and Company _____________ _________2010_________ _________2009_________ Amount Number Amount Number RM of shares RM of shares Ordinary shares of RM0.50 each Authorised: Opening and closing balance 500,000,000 1,000,000,000 500,000,000 1,000,000,000

Issued and fully paid: Opening and closing balance 176,000,000 352,000,000 176,000,000 352,000,000

Retained earnings - Company

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

11. Loans and borrowings Group Company 2010 2009 2010 2009 RM RM RM RM

Non-currentTerm loan - secured 84,000,000 100,000,000 84,000,000 100,000,000

Current Finance lease liabilities - secured 717,511 61,467 - - Revolving credits - secured 10,000,000 10,000,000 10,000,000 10,000,000 Bank overdrafts - unsecured 2,362 4,733 - - Term loan - secured 16,000,000 - 16,000,000 -

26,719,873 10,066,200 26,000,000 10,000,000 Total 110,719,873 110,066,200 110,000,000 110,000,000



11. Loans and borrowings (continued)

11.1 Security - Secured term loan and revolving credits

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

11.2 Debts repayment schedule

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

2010 Finance lease liabilities - interest fi xed at 7.57% - 8.36% per annum 2011 717,511 717,511 - -

Bank overdraft - interest variable at 1.50% per annum above lender bank’s base lending rate (BLR) 2011 2,362 2,362 - -

Revolving credits - interest variable at 1.00% per annum above lender bank’s cost of fund 2011 10,000,000 10,000,000 - -

Term loan - interest fi xed at 5.55% fl at per annum 2014 100,000,000 16,000,000 16,000,000 68,000,000

110,719,873 26,719,873 16,000,000 68,000,000

2009 Finance lease liabilities - interest fi xed at 8.05% per annum 2010 61,467 61,467 - -

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

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

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

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



11. Borrowings (continued)

11.2 Debts repayment schedule (continued)

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

2010 Revolving credits - interest variable at 1.00% per annum above lender bank’s cost of funds 2011 10,000,000 10,000,000 - -

Term loan - interest fi xed at 5.55% fl at per annum 2014 100,000,000 16,000,000 16,000,000 68,000,000

110,000,000 26,000,000 16,000,000 68,000,000

2009 Revolving credits - interest variable at 1.00% per annum above lender bank’s cost of funds 2010 10,000,000 10,000,000 - -

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

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

11.3 Finance lease liabilities

Finance lease liabilities are payable as follows:

______________ 2010 ______________ _ _____________ 2009 _______________ Present Present Future value of Future value of minimum minimum minimum minimum lease lease lease lease payments Interest payments payments Interest payments Group RM RM RM RM RM RM

Less than one year 745,805 28,294 717,511 63,224 1,757 61,467



12. Trade and other payables Group Company 2010 2009 2010 2009 RM RM RM RM Trade Trade payables 42,092,117 19,215,821 - -

Non-trade Other payables 2,970,948 513,587 59,232 30,495 Accrued expenses 12,346,851 6,165,797 415,223 320,964

15,317,799 6,679,384 474,455 351,459

57,409,916 25,895,205 474,455 351,459

Trade and other payables denominated in currencies other than the functional currency comprise the following:

2010 2009 RM RM

Singapore Dollar (SGD) 21,225 30,101 United State Dollar (USD) - 53,967 Brunei Dollar (BND) - 10,120

21,225 94,188

13. Revenue 2010 2009 RM RM Group Services 238,567,835 196,345,437 Marine charter 16,795,431 - Rental income from equipment 21,945 608,413

255,385,211 196,953,850

Company Gross dividends received for subsidiaries and associate 30,033,333 49,400,000 Management fees 2,410,000 2,160,000

32,443,333 51,560,000

14. Result from operating activities Group Company 2010 2009 2010 2009 Note RM RM RM RM

Result from operating activities is arrived at after charging:

Depreciation of property, plant and equipment 3 14,376,050 10,764,529 358 305 Impairment loss on investment in an associate 199,609 - 108,200 - Operating lease rental - 1,091,078 - - Personnel expenses: - contributions to the Employees Provident Fund 4,989,974 4,347,245 34,593 16,991 - wages, salaries and others 69,769,275 61,621,252 325,157 156,516



14. Result from operating activities (continued)

Group Company 2010 2009 2010 2009 Note RM RM RM RM

Result from operating activities is arrived at after charging (continued):

Property, plant and equipment written off 18,412 14,784 - - Rental of premises 2,471,968 2,094,864 - - Rental of equipment, motor vehicle and marine vessels 10,231,520 11,647,161 - - Auditors’ remuneration: - statutory audit - KPMG 120,000 100,000 18,000 15,000 - other services - KPMG 54,000 - 54,000 - - Affi liates of KPMG 39,600 - 6,400 - - other auditors 9,200 - 3,500 -

and after crediting:

Gain on disposal of property, plant and equipment 163,090 35,241 - -

15. Compensations to key management personnel

Compensations to key management personnel are as follows:

Group Company 2010 2009 2010 2009 RM RM RM RM

Directors: - Fees 2,302,000 2,391,000 1,762,000 1,851,000 - Remuneration 6,340,806 3,177,646 11,000 13,500

8,642,806 5,568,646 1,773,000 1,864,500

Other key management personnel: - Short term employee benefi ts 444,846 388,004 24,000 24,000

9,087,652 5,956,650 1,797,000 1,888,500

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



16. Finance costs

Group Company 2010 2009 2010 2009 RM RM RM RM Interest expense of fi nancial liabilities that are not at fair value through profi t or loss: - bank overdraft 1,582 2,125 - - - fi nance leases 102,086 8,493 - - - revolving credits 410,657 23,014 410,657 23,014 - term loan 5,534,794 283,699 5,534,794 283,699 - others 425 - - -

6,049,544 317,331 5,945,451 306,713

17. Finance income Group Company 2010 2009 2010 2009 RM RM RM RM Interest income of fi nancial assets that are not at fair value through profi t or loss: - fi xed deposits 1,763,250 1,795,810 324,727 629,962 - amount due from a subsidiary - - 5,537,103 -

1,763,250 1,795,810 5,861,830 629,962

18. Income tax expense Group Company 2010 2009 2010 2009 RM RM RM RM

Current tax expense Malaysian - current year 14,923,000 9,413,000 7,512,000 12,409,000 - prior year 1,302,016 ( 126,162) ( 35,887) ( 2,934)

16,225,016 9,286,838 7,476,113 12,406,066

Deferred tax income (Note 6) - current year 395,200 ( 470,300) - - - prior year ( 1,292,000) ( 1,200,690) - -

( 896,800) ( 1,670,990) - -

Total tax expense in profi t or loss 15,328,216 7,615,848 7,476,113 12,406,066

Share of tax of equity accounted associates ( 609,982) - - -

Total income tax expense 14,718,234 7,615,848 7,476,113 12,406,066



18. Income tax expense (continued)

Reconciliation of effective tax expense

Group Company 2010 2009 2010 2009 RM RM RM RM

Profi t for the year 67,731,015 44,785,090 21,799,420 37,044,801Total income tax expense 14,718,234 7,615,848 7,476,113 12,406,066

Profi t excluding tax 82,449,249 52,400,938 29,275,533 49,450,867

Tax calculated using Malaysian tax rate of 25% (2009: 25%) 20,612,000 13,101,000 7,319,000 12,363,000Non-deductible expenses 1,095,200 5,238,440 193,000 105,740Income exempted from tax under Section 54A of Income Tax Act, 1967 ( 5,366,000) ( 9,337,000) - -Other non-taxable income ( 1,023,000) ( 59,740) - ( 59,740)

15,318,200 8,942,700 7,512,000 12,409,000

Under/(Over) provision in prior years 10,016 ( 1,326,852) ( 35,887) ( 2,934)

15,328,216 7,615,848 7,476,113 12,406,066 Share of tax of equity accounted associates ( 609,982) - - -

Total income tax expense 14,718,234 7,615,848 7,476,113 12,406,066

19. Earnings per ordinary share

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

Group 2010 2009 RM RM Profi t attributable to owners of the Company 67,731,015 44,785,090

Weighted average number of ordinary shares

Group 2010 2009

Weighted average number of ordinary shares at 1 January/31 December 352,000,000 352,000,000

2010 2009 Sen Sen

Basic/Diluted earnings per ordinary share 19.24 12.72



20. Dividends

20.1 Dividends per ordinary share Group and Company 2010 2009 Sen Sen

Net dividends per ordinary shares 5.00 5.00

20.2 Dividends paid during the year comprise:

Sen per share Total Date of (net of tax) RM payment Group and Company

2010 First interim 2010 ordinary (tax exempt) 5.00 17,600,000 30 September 2010

2009 Second interim 2008 ordinary (franked) 5.25 18,480,000 27 March 2009 First interim 2009 ordinary (tax exempt) 5.00 17,600,000 21 December 2009

36,080,000

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

The dividend per ordinary share relates to the total dividends declared or proposed for the fi nancial year.

21. Operating segments

Segment information is presented in respect of the Group’s business segments. As the Group operates within one geographical segment, geographical segment analysis is not applicable.

Performance is measured based on segment profi t before tax as included in the internal management reports that are reviewed by the Managing Director (the chief operating decision maker). Segment profi t is used to measure performance as management believe that such information is the most relevant in evaluating results of certain segments relative to other entities that operate within these industries.

Business segments

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

i) Investment holding Provision of management and secretarial services.

ii) Topside maintenance

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

iii) Marine charter

Chartering of marine vessels and provision of related support services.

iv) Equipment hire

Equipment hire operation.



21. Operating segments (continued)

Business Segments

Topside Investment maintenance Marine Equipment holding services charter rental Total Elimination Consolidated 2010 RM RM RM RM RM RM RM

Revenue External revenue - 238,567,835 16,795,431 21,945 255,385,211 - 255,385,211 Inter-segment revenue 32,443,333 - 50,783,121 4,079,455 87,305,909 ( 87,305,909) -

Total segment revenue 32,443,333 238,567,835 67,578,552 4,101,400 342,691,120 ( 87,305,909) 255,385,211

Results Segment results 29,359,154 54,650,796 28,508,638 861,203 113,379,791 ( 30,125,675) 83,254,116 Finance costs ( 5,945,451) ( 103,668) ( 5,537,528) - ( 11,586,647) 5,537,103 ( 6,049,544) Finance income 5,861,830 1,236,888 43,295 158,340 7,300,353 ( 5,537,103) 1,763,250 Share of result of equity accounted associate - - - - - - 4,091,409 Tax expense - - - - - - ( 15,328,216)

Profi t for the year 29,275,533 55,784,016 23,014,405 1,019,543 109,093,497 ( 30,125,675) 67,731,015

2009

Revenue External revenue - 196,345,437 - 608,413 196,953,850 - 196,953,850 Inter-segment revenue 51,560,000 - 62,668,186 3,551,046 117,779,232 (117,779,232) -

Total segment revenue 51,560,000 196,345,437 62,668,186 4,159,459 314,733,082 (117,779,232) 196,953,850

Results Segment results 49,127,618 29,255,114 19,257,930 2,680,864 100,321,526 ( 49,399,067) 50,922,459 Finance costs ( 306,713) ( 10,618) - - ( 317,331) - ( 317,331) Finance income 629,962 1,049,098 36,879 79,871 1,795,810 - 1,795,810 Tax expense ( 12,406,066) ( 7,675,767) 817,490 ( 701,505) ( 19,965,848) 12,350,000 ( 7,615,848) Profi t for the year 37,044,801 22,617,827 20,112,299 2,059,230 81,834,157 ( 37,049,067) 44,785,090



22. Financial instruments

Certain comparative fi gures have not been presented for 31 December 2009 by virtue of the exemption given in paragraph 44AA of FRS 7, which is effective for annual periods beginning on and after 1 January 2010.

22.1 Categories of fi nancial instruments

The table below provides an analysis of fi nancial instruments categorised as follows:

(a) Loans and receivables (L&R); (b) Other fi nancial liabilities measured at amortised cost (OL). Carrying amount L&R Note RM RM

2010Financial assetsGroupTrade and other receivables 7 123,154,518 123,154,518Cash and cash equivalents 9 68,963,823 68,963,823

192,118,341 192,118,341 CompanyTrade and other receivables 7 106,800,796 106,800,796Cash and cash equivalents 9 12,770,910 12,770,910

119,571,706 119,571,706

Carrying amount OL Note RM RM2010Financial liabilitiesGroup

Loans and borrowings 11 110,719,873 110,719,873 Trade and other payables 12 57,409,916 57,409,916

168,129,789 168,129,789

Company Loans and borrowings 11 110,000,000 110,000,000 Trade and other payables 12 474,455 474,455

110,474,455 110,474,455

22.2 Net gains and losses arising from fi nancial instruments

Group Company 2010 2010 RM RM Net gains/(losses) arising on: Loans and receivables 1,763,250 5,861,830 Financial liabilities measured at amortised cost (6,049,544) (5,945,451)

(4,286,294) ( 83,261)



22. Financial instruments (continued)

22.3 Financial risk management

The Group has exposure to the following risks from its use of fi nancial instruments:

• Credit risk• Liquidity risk• Market risk

22.4 Credit risk

Credit risk is the risk of a fi nancial loss to the Group if a customer or counterparty to a fi nancial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers and investment securities. The Company’s exposure to credit risk arises principally from loans and advances to subsidiaries and fi nancial guarantees given to banks for credit facilities granted to subsidiaries. Receivables from external parties

Risk management objectives, policies and process for managing the risk

The principal customers of the Group are major oil and gas companies based in Malaysia. The management reviews the credit worthiness of all major counterparties prior to entering into any contract or transaction with them, to ensure the Group is not exposed to undue credit risk.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by their carrying amounts in the statement of fi nancial position.

Ageing analysis

The ageing of trade receivables as at the reporting period was:

___________ Group ___________ __________ Company __________ 2010 2009 2010 2009 Age of debts RM RM RM RM

Not past due 31,755,288 38,770,508 - - Past due more 0-30 days 5,270,367 1,080,242 - - Past due more 31-90 days 1,452,650 2,528,421 - - Past due more 91-120 days 470,386 170,118 - -

38,948,691 42,549,289 - -

Management does not expect any counterparty to fail to meet its obligation due to its strong credit standing. No impairment loss is provided against trade receivables as at the end of the reporting period.

Intercompany balances

Risk management objectives, policies and processes for managing the risk

The Company provides advances to a subsidiary and monitors the results thereof regularly. The subsidiary has been reporting strong fi nancial performance and is able to repay the advances in due course.


As at the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount of the receivable due from subsidiary in the statement of fi nancial position.




22.4 Credit risk (continued)

Intercompany balances (continued)

Impairment losses

As at the end of the reporting period, there was no indication that the advances to the subsidiary are not recoverable in full and as such no impairment loss has been made there-against.

Financial guarantees

Risk management objectives, policies and processes for managing the risk

The Company provides unsecured fi nancial guarantees to banks in respect of banking facilities granted to a subsidiary. The Company monitors on an ongoing basis the fi nancial performance of the subsidiary to ensure the latter is able to discharge its obligations when due.


The maximum exposure to credit risk arising from the fi nancial guarantees amounts to RM719,873 (2009: RM66,200) representing the outstanding banking facilities of the subsidiary as at the end of the reporting period. There was no indication as at that date that the subsidiary would default on repayments.

The fi nancial guarantees have not been recognised since their fair value on initial recognition was not material.

22.5 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its fi nancial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables and borrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as for as possible, that it will have suffi cient liquidity to meet its liabilities when they fall due.

Maturity analysis

The table below summarises the maturity profi le of the Group and the Company’s fi nancial liabilities as at the end of the reporting period based on undiscounted contractual payments:

Contractual Carrying interest rate/ Contractual Under 1 - 2 2 - 3 More than amount coupon cash fl ows 1 year years years 3 years

Group RM % RM RM RM RM RM

2010 Secured term loan (100,000,000) 5.55 (114,124,218) ( 21,214,871) ( 20,339,644) ( 31,187,525) ( 41,382,178) Secured revolving credits ( 10,000,000) 4.30 ( 10,000,000) ( 10,000,000) - - - Finance lease liabilities ( 717,511) 7.57 - 8.36 ( 745,805) ( 745,805) - - - Unsecured bank overdraft ( 2,362) 7.80 ( 2,362) ( 2,362) - - -

(110,719,873) (124,872,385) ( 31,963,038) ( 20,339,644) ( 31,187,525) ( 41,382,178)

Company

2010 Secured term loan (100,000,000) 5.55 ( 114,124,218) ( 21,214,871) ( 20,339,644) ( 31,187,525) ( 41,382,178) Secured revolving credits ( 10,000,000) 4.00 ( 10,000,000) ( 10,000,000) - - -

(110,000,000) ( 124,124,218) ( 31,214,871) ( 20,339,644) ( 31,187,525) ( 41,382,178)




22.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will affect the Group’s fi nancial position or cash fl ows.

22.6.1 Currency risk

The Group is exposed to foreign currency risk on purchases that are denominated in a currency other than the respective functional currencies of group entities. The currencies giving rise to this risk are primarily U.S. Dollar (USD), Singapore Dollar (SGD) and Brunei Dollar (BND).

Exposure to foreign currency risk

The Group’s exposure to foreign currency (a currency which is other than the functional currency of group entities) risk, based on the carrying amounts as at the end of the reporting period was:

Denominated in USD SGD BND RM RM RM2010Trade payables - 21,225 -

2009Trade payables 53,967 30,101 10,120

The exposure to currency risk is immaterial and hence sensitivity analysis is not presented.

22.6.2 Interest rate risk

The Group’s investments in fi xed rate borrowings is exposed to a risk of change in their fair value due to changes in interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash fl ows due to changes in interest rates. Investments in equity securities and short term receivables and payables are not signifi cantly exposed to interest rate risk.

Exposure to interest rate risk

The interest rate profi le of the Group and the Company’s signifi cant interest-bearing fi nancial instruments, based on the carrying amounts as at the end of the reporting period was:

___________ Group ___________ __________ Company __________ 2010 2009 2010 2009 RM RM RM RM

Fixed rate instrumentsFinancial assets 57,322,085 47,288,065 117,147,813 13,404,520Financial liabilities (100,715,711) (100,061,467) (100,000,000) (100,000,000)

( 43,393,626) ( 52,773,402) 17,147,813 ( 86,595,480)

Floating rate instrumentsFinancial liabilities ( 10,002,362) ( 10,004,733) ( 10,000,000) ( 10,000,000)




22.6 Market risk (continued)

22.6.2 Interest rate risk (continued)

Interest rate risk sensitivity analysis

Fair value sensitivity analysis for fi xed rate instruments

The Group does not account for any fi xed rate fi nancial assets and liabilities at fair value through profi t or loss and does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profi t or loss.

Cash fl ow sensitivity analysis for variable rate instruments

A change of 100 basis points (bp) in interest rates at the end of the reporting period would have increased (decreased) post-tax profi t or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

2010 2009 Profi t or loss Profi t or loss 100bp 100bp 100bp 100bp increase decrease increase decreaseGroup RM RM RM RM

Floating rate instruments 100,024 ( 100,024) 100,047 ( 100,047)

Company

Floating rate instruments 100,000 ( 100,000) 100,000 ( 100,000)

22.7 Fair value of fi nancial instruments

The carrying amounts of cash and cash equivalents, investment in an associate held for sale, short-term receivables and payables and short term borrowings approximate fair value due to the relatively short term nature of these fi nancial instruments.

The fair values of other fi nancial assets and liabilities, together with the carrying amounts shown in the statement of fi nancial position, are as follows:

_____ 2010 _____ ____ 2009 ____ Carrying Fair Carrying Fair amount value amount valueGroup RM RM RM RM

Term loan (non-current) ( 84,000,000) ( 84,000,000) (100,000,000) (100,000,000)

Company

Loan to a subsidiary 106,477,340 106,477,340 70,000,000 70,000,000Term loan (non-current) ( 84,000,000) ( 84,000,000) (100,000,000) (100,000,000)

Non-derivative fi nancial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash fl ows, discounted at the market rate of interest at the end of the reporting period




22.7 Fair value of fi nancial instruments (continued)

Interest rates used to determine fair value

The interest rates used to discount estimated cash fl ows, when applicable, are as follows:

2010 2009

Secured term loan 5.55% 5.55%

23. Capital management

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain the confi dence investors, creditors and markets and to sustain the future development of its business. The Directors monitor and determine to maintain an optimal debt-to-equity ratio for the Group that complies with debt covenants and regulatory requirements.

During 2010, the Group’s strategy, which was unchanged from 2009, was to maintain a debt-to-equity ratio of not more than 1.0 time. The debt-to-equity ratios at 31 December 2010 and at 31 December 2009 were as follows:

Group 2010 2009 RM RM Total borrowings (Note 11) 110,719,873 110,066,200 Less: Cash and cash equivalents (Note 9) ( 68,963,823) ( 57,230,487)

Net debts 41,756,050 52,835,713

Total equity 372,705,109 323,742,646

Debt-to-equity ratio 0.11 0.16

There were no changes in the Group’s approach to capital management during the fi nancial year.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

The Group is also required to maintain a maximum debt-to-equity ratio of 1.0 to comply with a bank covenant, failing which, the bank may call an event of default. The Group has complied with this covenant.

24. Capital commitments

Group Company 2010 2009 2010 2009 RM RM RM RM Property, plant and equipment Authorised and contracted for 70,241,000 - - -



25. Contingencies

The Directors are of the opinion that provision is not required in respect of the following corporate guarantees, as it is not probable that a future sacrifi ce of economic benefi ts will be required: Company

2010 2009 RM RM

Contingent liabilities not considered remote Corporate guarantees favouring banks for facilities granted to subsidiaries 53,585,000 53,585,000

26. Contingent asset – unsecured

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

27. Related parties

Identity of related parties

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

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

The Company has a related party relationship with:

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

Signifi cant related party transactions, other than compensations to key management personnel (see Note 15) and those disclosed elsewhere in the fi nancial statement, are as follows:

Amount Gross balance Allowance Net balance Impairment loss transacted outstanding impairment outstanding recognised RM RM RM RM RM 2010

Subsidiaries - 106,788,378 - 106,788,378 - Dividend income ( 24,700,000) - - - - Interest income ( 5,537,103) - - - - Management fees ( 2,410,000) - - - -

Associates Dividend income ( 5,333,333) - - - -

Company/Organisation in which certain Directors and close members of their families have or are deemed to have substantial interests Rental of premises 1,446,760 - - - -



27. Related parties (continued)

Amount Gross balance Allowance Net balance Impairment loss transacted outstanding impairment outstanding recognised RM RM RM RM RM 2009

Subsidiaries - 101,239,367 - 101,239,367 - Dividend income ( 49,400,000) - - - - Management fees ( 2,160,000) - - - -

Company/Organisation in which certain Directors and close members of their families have or are deemed to have substantial interests Rental of premises 1,179,660 - - - -

Related party transactions are based on negotiated terms. All the amounts outstanding are unsecured and expected to settle in cash.

28. Signifi cant changes in accounting policies

28.1 FRS 139, Financial Instruments: Recognition and Measurement

The adoption of FRS 139 has resulted in several changes to accounting policies relating to recognition and measurement of fi nancial instruments. Signifi cant changes in accounting policies are as follows:

Receivables

Prior to 1 January 2010, receivables were initially recognised at their costs and subsequently stated at costs less allowance for doubtful debts.

With the adoption of FRS 139, receivables that are fi nancial assets are now recognised initially at fair values and subsequently measured at amortised cost using the effective interest rate method with the interest income recognised in profi t or loss.

Inter-company loans Prior to the adoption of FRS 139, inter-company loans were recorded at cost. With the adoption of FRS 139, inter-company loans are now recognised initially at their fair values, which are estimated by discounting the expected cash fl ows using the current market interest rate of a loan with similar risk and tenure. Finance income and costs are recognised in profi t or loss using the effective interest method.

Impairment of trade and other receivables Prior to the adoption of FRS 139, an allowance for doubtful debts was made when a receivable is considered irrecoverable by the management.

With the adoption of FRS 139, an impairment loss, if any, is recognised for trade and other receivables and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the asset’s original effective interest rate.

Payables

Prior to 1 January 2010, payables were measured initially and subsequently stated at cost.

With the adoption of FRS 139, payables that are fi nancial liabilities are now recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method with interest expenses recognised in profi t or loss.



28. Signifi cant changes in accounting policies (continued)

28.2 FRS 8, Operating Segments

As of 1 January 2010, the Group determines and presents operating segments based on the information that internally is provided to the Managing Director, who is the Group’s chief operating decision maker. This change in accounting policy is due to the adoption of FRS 8. Previously operating segments were determined and presented in accordance with FRS 1142004, Segment Reporting.

As the Group’s operating segments are the same as the business segments on which the Group previously presented segment information, the adoption of FRS 8 does not have a material impact to the Group.

28.3 FRS 101, Presentation of Financial Statements (revised)

The Group applies FRS 101 (revised) which became effective as of 1 January 2010.

Comparative information has been re-presented so that it is in conformity with the revised standard. Since the change only affects presentation aspects, there is no impact on earnings per share.

29. Signifi cant subsequent events

The Company has effected:

a) on 10 February 2011, a bonus issue of 88 million ordinary shares of RM0.50 each [“Bonus Share(s)”] on the basis of one (1) Bonus Share for every four (4) existing ordinary shares of RM0.50 each held in the Company by way of capitalisation of RM44 million from the Company’s share premium account (“the Bonus Issue”); and

b) a renounceable rights issue of 110 million ordinary shares of RM0.50 each [“Rights Shares(s)”] on the basis of one (1) Rights Share for every four (4) existing ordinary shares of RM0.50 each held in the Company after the Bonus Issue, at an exercise price of RM1.10 per Rights Share (“the Rights Issue”). The Rights Issue, the closing date for subscription thereof being 28 February 2011, was fully subscribed for.

30. Comparative fi gures

FRS 101, Presentation of Financial Statements (revised)

Arising from the adoption of FRS 101 (revised), income statements for the year ended 31 December 2009 have been re-presented as statement of comprehensive income. All non-owner changes in equity that were presented in the statement of changes in equity are now included in the statement of comprehensive income as other comprehensive income. Consequently, components of comprehensive income are not presented in the statement of changes in equity.



31. Supplementary fi nancial information

Breakdown of realised and unrealised profi t or losses

On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Recruitments. The directive requires all listed issuers to disclose the breakdown of the unapproriated profi ts or accumulated losses as at the end of the reporting period, into realised and unrealised profi ts or losses.

On 20 December 2010, Bursa Malaysia further issued another directive on the disclosure and the prescribed format of presentation.

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2010, into realised and unrealised profi ts, pursuant to the directive, is as follows:

Group Company 2010 2010 RM RM Retained earnings of the Company and its subsidiaries - realised 187,164,720 4,317,715 - unrealised ( 1,115,000) -

186,049,720 4,317,715

Share of retained earnings from associated companies: - realised 4,091,409 -

190,141,129 4,317,715Less: Consolidation adjustments ( 80,507,348) -

Total retained earnings as per consolidated accounts 109,633,781 4,317,715

The determination of realised and unrealised profi ts is based on the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.



Authorised Share Capital : RM500,000,000Issued and Fully Paid-Up Capital : RM275,000,000Class of Shares : Ordinary Shares of RM0.50 eachVoting Rights : One vote per ordinary share

1. DISTRIBUTION OF SHAREHOLDERS

Size of Holdings No of Holders % No of Shares %

1 – 99 36 0.97 1,248 0.00100 – 1,000 367 9.93 254,125 0.051001 – 10,000 2,277 61.61 10,666,684 1.9410,001 – 100,000 818 22.13 24,022,298 4.37100,001 – 17,599,999 194 5.25 240,021,590 43.6417,600,000 and above 4 0.11 275,034,055 50.00

TOTAL 3,696 100.00 550,000,000 100.00

2. DIRECTORS’ SHAREHOLDINGS

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

1. Tengku Dato’ Yusof Bin Tengku 68,044,450 12.37 - - Ahmad Shahruddin2. Ling Suk Kiong 55,586,087 10.11 46,812,125(1) 8.513. Joe Ling Siew Loung @ 29,218,750 5.31 - - Lin Shou Long4. Datuk Hasmi Bin Hasnan 640,625 0.12 187,947,968(2) 34.175. Sulaihah Binti Maimunni - - - - (Appointed on 01/02/2010) 6. Harry Bin Bujang - - - -7. YB Chia Chu Fatt 210,937 0.04 - -8. Gordon Kab@ Gudan Bin Kab - - - -9. Abdul Aziz Bin Ishak 179,687 0.03 - -10. Polit Bin Hamzah 179,687 0.03 - -

Notes:(1) Deemed interest through Vogue Empire Sdn Bhd.(2) Deemed interest through Naim Holdings Berhad.

3. LIST OF SUBSTANTIAL SHAREHOLDERS

The list of Substantial Shareholders of Dayang Enterprise Holdings Bhd based on the Register of Substantial Shareholders of the Company and their respective shareholdings are as follows :- No of Ordinary Shares HeldNo. Names Direct % Indirect %

1. Naim Holdings Bhd 187,947,968 34.17 0 02. Vogue Empire Sdn Bhd 46,812,125 8.51 0 03. Tengku Dato’ Yusof Bin Tengku 68,044,450 12.37 0 0 Ahmad Shahruddin4. Ling Suk Kiong 55,586,087 10.11 46,812,125 8.515. Joe Ling Siew Loung @ 29,218,750 5.31 0 0 Lin Shou Long

Analysis of shareholders as at 30 April 2011


4. LIST OF TOP THIRTY SHAREHOLDERS

No Names Shareholdings %

1. Naim Holdings Berhad 142,947,968 25.992. Tengku Yusof Bin Tengku Ahmad Shahruddin 56,500,000 10.273. Naim Holdings Berhad 45,000,000 8.184. Ling Suk Kiong 30,586,087 5.565. Vogue Empire Sdn Bhd 21,812,125 3.976. Ling Suk Kiong 17,000,000 3.097. Vogue Empire Sdn Bhd 17,000,000 3.098. Joe Ling Siew Loung@ Lin Shou Long 11,875,000 2.169. OSK Nominees (Tempatan) Sdn Berhad 11,544,450 2.10 Pledged Securities Account For Tengku Yusof Bin Tengku Ahmad Shahruddin10. Joe Ling Siew Loung@ Lin Shou Long 10,625,000 1.9311. Lembaga Tabung Haji 9,786,900 1.7812. CitiGroup Nominees (Tempatan) Sdn Bhd 9,581,250 1.74 Employees Provident Fund Board (Nomura)13. Burhanuddin Bin Md Radzi 8,082,187 1.4714. OSK Nominees (Tempatan) Sdn Berhad 8,000,000 1.46 Pledged Securities Account For Ling Suk Kiong15. OSK Nominees (Tempatan) Sdn Berhad 8,000,000 1.46 Pledged Securities Account For Vogue Empire Sdn Bhd16. Amanahraya Trustees Berhad 5,078,750 0.92 Public Islamic Opportunities Fund17. OSK Nominees (Tempatan) Sdn Berhad 5,000,000 0.91 Pledged Securities Account For Joe Ling Siew Loung@ Lin Shou Long18. Amanahraya Trustees Berhad 4,486,875 0.81 Public Islamic Select Treasures Fund19. Hong Leong Assurance Berhad 3,906,250 0.71 AS Benefi cial Owner (Unitlinked GF)20. Mayban Nominees (Tempatan) Sdn Bhd 3,741,718 0.68 ETIQA Insurance Berhad (Non-Par Fund 2)21. Malayisa Nominees (Tempatan) Sendirian Berhad 2,877,500 0.52 Great Eastern Life Insurance (Malaysia) Berhad (LPF)22. Mayban Nominees (Tempatan) Sdn Bhd 2,873,437 0.52 ETIQA Insurance Berhad (Shareholders’ FD)23. Cheng Ah Teck@ Cheng Yik Lai 2,587,500 0.4724. Mayban Nominees (Tempatan) Sdn Bhd 2,400,000 0.44 Mayban Trustees Bhd for Amanah Saham Wanita (N14011980040)25. Mayban Nominees (Tempatan) Sdn Bhd 2,395,312 0.44 ETIQA Insurance Berhad (Life Par Fund)26. HSBC Nominees (Tempatan) Sdn Bhd 2,145,937 0.39 HSBC (M) Trustee Bhd For MAAKL AL-FAID(4389)27. HLG Nominee (Tempatan) Sdn Bhd 1,892,500 0.35 PB Trustee Services Berhad For Hong Leong Growth Fund28. HSBC Nominees (Tempatan) Sdn Bhd 1,784,375 0.33 HSBC (M) Trustee Bhd For MAAKL AL-FAUZAN (5170)29. Tee Soon Ming 1,729,687 0.3130. Joe Ling Siew Loung @ Lin Shou Long 1,718,750 0.31 452,959,558 82.36

Analysis of shareholders as at 30 April 2011


NOTICE IS HEREBY GIVEN THAT the 5th Annual General Meeting of the Company will be held at Imperial Hotel, Jalan Pos, 98000 Miri, Sarawak on Wednesday, 15th June 2011 at 11.30 a m to transact the following purposes:-

AGENDAORDINARY BUSINESS

1. Adoption of Audited Financial Statements To receive and adopt the Report of the Directors and the Audited Accounts for the fi nancial year ended 31st December 2010

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

2. Approval of Directors’ Fees To approve Directors’ Fees in respect of the fi nancial year ended 31st December 2010. Ordinary Resolution 2

3 Re-Election of Directors To re-elect the following directors who retire in accordance with Article 86(a) of the Company’s Articles of Association:-

Ling Suk Kiong Ordinary Resolution 3 Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin Ordinary Resolution 4 Tuan Haji Abdul Aziz Bin Ishak Ordinary Resolution 5

4. Appointment of Auditors To re-appoint Messrs KPMG as Auditors of the Company for the fi nancial year ending 31 December 2011 and to authorize the

Board of Directors to fi x their remuneration. Ordinary Resolution 6

SPECIAL BUSINESSESTo consider and to pass, if thought fi t, the following as Ordinary Resolutions:

5. Ordinary Resolution 7 - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT) of a Revenue or Trading Nature

“THAT pursuant to Paragraph 10.09(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), approval be and is hereby given to the Company and/or its subsidiaries to enter into RRPT of a Revenue or Trading Nature as set out in Section 2.4 of the Circular to Shareholders dated 24 May 2011 with the specifi c related parties mentioned therein which are necessary for the Group’s day to day operations, subject to the following:

(a) That the RRPT of a revenue or trading nature entered into are in the ordinary course of business, they are at arm’s length basis and on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company; and

(b) That the proposals are subject to annual renewal and that such approval shall continue to be in force until:-

1. The conclusion of the next Annual General Meeting (“AGM”) of the Company;

2. The expiration of the period within the next AGM of the Company subsequent to the date it is required to be held pursuant to Section 143(1) of the Companies Act 1965 (“the Act”) (but shall not extend to such extension as may be allowed pursuant to section 143(2) of the Act; or

3. Revoked or varied by resolution passed by the shareholders in general meeting;

whichever is the earlier;

(c) AND THAT the Directors of the Company be authorized to complete and do all such acts and things as they may consider expedient or necessary to give effect to the RRPTs contemplated and/or authorized by this Ordinary Resolution.”

Ordinary Resolution 7

Notice of Annual General Meeting


6. Ordinary Resolution 8 - Proposed Renewal of Authority To Purchase Own Shares “THAT, subject always to the Companies Act 1965, and all applicable laws, guidelines, rules and regulations, the Directors of

the Company be and are hereby authorized to purchase such amount of ordinary shares of RM0.50 each in the Company as determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad upon such terms and conditions as the Directors may deem fi t, necessary and expedient in the interests of the Company provided THAT :-

(1) The aggregate number of shares to be purchased and/or held pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up ordinary share capital of the Company;

(2) The amount of fund to be allocated by the Company for the purpose of purchasing the Shares shall not exceed the aggregate of the retained profi ts and/or share premium account of the Company at the time of purchase of Dayang shares,

(3) The Directors of the Company may decide in their discretion to retain the shares purchased as treasury shares and/or distribute them as dividends and/or resell them on the market of Bursa Securities and/or subsequently cancel all or part of them

AND THAT authority be and is hereby given to the Directors of the Company to act and to take all such steps as are necessary or expedient to implement and fi nalize and give full effect to the Proposed Share Buy-Back.

AND THAT such authority conferred by this resolution shall commence immediately and shall continue to be in force until the conclusion of the next Annual General Meeting of the Company following the passing of this ordinary resolution unless earlier revoked or varied by an ordinary resolution of the shareholders of the Company in a general meeting.”


7. Ordinary Resolution 9 - Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965

“THAT pursuant to Section 132D of the Companies Act 1965 (“the Act”) and subject always to the approval of the relevant authorities, the Directors be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fi t, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of the issued share capital of the Company for the time being AND THAT the Directors be and are hereby empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” Ordinary Resolution 9

8. To transact any other ordinary business that may be transacted at an Annual General Meeting, of which due notice shall have been given.

BY ORDER OF THE BOARDBONG SIU LIAN (MAICSA 702221)BAILEY KHO CHUNG SIANG (LS0000578)Company Secretaries

Miri, SarawakDated this 24 May 2011



Notes:-

1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.

2. To be valid, this form, duly completed must be deposited at the Offi ce of the Company not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the Act are complied with.

4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifi es the proportions of his holdings to be represented by each proxy.

5. If the appointer is a corporation this form must be executed under its common seal or under the hand of an offi cer or attorney duly authorized.

6. Please take note that interested directors, interested major shareholders or interested persons connected with a director or major shareholder, and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote in respect of their direct and/or indirect shareholdings on the resolution approving the Proposed Shareholders’ Mandate.

Explanatory Notes on Special Businesses

(a) Ordinary resolution 7 – Proposed Renewal of Shareholders’ Mandate for RRPT of a Revenue or Trading Nature

The proposal, if passed, will empower the Company and its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature with the mandated related parties for a period from this Annual General Meeting till the next Annual General Meeting.

Please refer to the Circular to Shareholders for further information.

(b) Ordinary resolution 8 – Proposed Renewal of Authority to Purchase Own Shares

This proposed ordinary resolution, if passed, will empower the Directors of the Company to purchase up to ten percent (10%) of the total issued and paid-up share capital of the Company from the date of this Annual General Meeting. This authority unless revoked or varied by the Company at a General Meeting will expire at the next Annual General Meeting.

Please refer to the Statement on Share Buy-Back for further information.

(c) Ordinary resolution 9 – Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965

This ordinary resolution, if passed, will empower the Directors of the Company from the date of this Annual General Meeting, authority to issue and allot Ordinary Shares from the unissued capital of the Company up to an aggregate of ten percent (10%) of the issued and paid-up share capital of the Company for the time being, for such purposes as the Directors consider in their absolute discretion to be in the interest of the Company. This authority will, unless revoked or varied by the Company in a General Meeting, expire at the next Annual General Meeting of the Company.

The general mandate sought for issue of shares is a renewal of the mandate that was approved by shareholders on 14 June 2010. The Company did not utilise the mandate that was approved last year. The purpose of the renewal of the general mandate is to provide fl exibility to the Company for any possible fund-raising exercises, including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital and/or acquisitions.

Statement accompanying Notice of Annual General Meeting

There is no person seeking election as Directors of the Company at this Annual General Meeting.


DAYANG ENTERPRISE HOLDINGS BHD(Company No. 712243-U)(Incorporated in Malaysia)

FORM OF PROXY

I/We …………………………………………………………………………………………………………………………………………………….……....

IC No/ID No/Company no………………………………………………………………………………………………………………………………...…..

of …………………………………………………………………………………………….………………..……………….……………….…... being a

member of/members of the abovenamed Company hereby appoint *the Chairman of the Meeting or …………………………………………………

……………………………………………. of ………………………………………………………………………………………………… or failing him,

……………………………………………………………….….……of ………….…….…………………………………………………………………...as my/our proxy/proxies to vote for me/us on my/our behalf at the 5th Annual General Meeting of the Company to be held at Imperial Hotel, Jalan Pos, 98000 Miri, Sarawak on Wednesday, 15 June 2011 at 11.30 a.m. or any adjournment thereof, in the manner indicated below:-

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

Resolutions










Adoption of the Audited Financial Statements and Reports thereto

Approval of Directors’ Fees

Re-election of Director: Mr Ling Suk Kiong

Re-election of Director: Tengku Dato’ Yusof Bin Tengku Ahmad Shahruddin

Re-election of Director: Tuan Haji Abdul Aziz Bin Ishak

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

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

Proposed Renewal of authority to purchase own shares

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

FOR AGAINST

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

Dated this …………….. day of …………………………………… 2011

………………………………………………..Signature of Shareholder(s)/Common Seal

Notes:-1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the

Company.2. To be valid this form duly completed must be deposited at the Registered Offi ce of the Company at Sublot 5-10, Lot 46, Block 10, Jalan

Taman Raja, 98000 Miri, Sarawak not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.

3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the Act are complied with.

4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifi es the proportions of his holdings to be represented by each proxy.

5. If the appointer is a corporation, this form must be executed under its common seal or under the hand of an offi cer or attorney duly authorised.

6. Please take note that interested directors, interested major shareholders or interested persons connected with a director or major shareholder, and where it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote in respect of their direct and/or indirect shareholdings on the resolution approving the Proposed Shareholders’ Mandate..

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

FOLD HERE

FOLD HERE

FOLD THIS FLAP FOR SEALING

Affi xstamp

dayang enterprise holdings bhd

Documents