SCOMI ENGINEERING BHD (111633-M) Suite 5.03, 5th Floor, Wisma Chase Perdana, Off Jalan Semantan, Damansara Heights, 50490 Kuala Lumpur, Malaysia Tel : 60-3-2080 6222 • Fax : 60-3-2080 6333 2005 Annual Report SCOMI ENGINEERING BHD (111633-M) this is the company... www.scomiengineering.com.my 2005 Annual Report
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SCOMI ENGINEERING BHD (111633-M)
Suite 5.03, 5th Floor, Wisma Chase Perdana, Off Jalan Semantan, Damansara Heights, 50490 Kuala Lumpur, Malaysia
Tel : 60-3-2080 6222 • Fax : 60-3-2080 6333
2005 A
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2005 Annual Report
that harnesses technological innovations...
Submerged arc welding – 20” JV-LW connector
API rotary shoulder connection under repair Logistics Engineering – design process Logistics Engineering
and utilises engineering expertise...
Logistics Engineering – Pressure Gauge
Welding of parts Fabrication development Fabrication works
to build the foundations of strength...
20” JV-LW blanked connector forging
this is us. This is
Fabrication development Pipe spinning lathe churn Premium tubing crossover subs
Industry Council and National Committee on Business
Competitiveness Council. YBhg Datuk Zainun also sits on
various Committees/ Authorities at National level, including
being a member of the National Committee on Business
Competitiveness, a member of Malaysia Incorporated and
the National Project for Majlis Penyelarasan Perindustrian
(ICC). Other Malaysian public companies in which she is a
director are Malayan Banking Berhad and Chairman of
Dunham-Bush (Malaysia) Berhad. YBhg Datuk Zainun is a
member of, and chairs both the Remuneration Committee
and Nomination Committee of the Board. There was no
board meeting held in the year ended 31 December 2005
since her appointment.
page22Scomi Engineer ing Bhd Annual Report 2005
directors’ profile (cont’d.)
Dato’ Abdul Rahim Bin Abu Bakar
YBhg Dato’ Rahim, 60, a Malaysian, is an Independent Non-
Executive Director of Scomi Engineering Bhd and was
appointed to the Board on 15 December 2005. YBhg Dato’
Rahim graduated from the Brighton College of Technology,
United Kingdom with B.Sc (Hon) Electrical Engineering in
1969. YBhg Dato’ Rahim is a member of the Institute of
Engineers Malaysia (MIEM) and the Institute of Electrical
Engineers, United Kingdom (MIEE). He is associated with
several professional bodies namely Professional Engineer,
Malaysia (P.Eng) and Chartered Engineer UK (C.Eng). He
also holds the Electrical Engineer Certificate of Competency
Grade 1. YBhg Dato’ Rahim began his career in 1969 with
the then National Electricity Board. He was attached to the
organisation for 10 years in various technical and
engineering positions before he moved on to the private
sector. From 1979 to 1983, he served with Pernas Charter
Management Sdn Bhd, a management company for the tin
mining industry.
Then, from late 1983 to 1991, he was attached to Malaysia
Mining Corporation Berhad (MMC) in various senior positions.
Later from 1991 to 1995, he moved on to MMC Engineering
Services Sdn Bhd and subsequently to MMC Engineering
Group Berhad as the Managing Director. In May 1995, he
joined Petronas to assume the position of Managing Director
of Petronas Gas Berhad (PGB) and subsequently moved on
to Petronas as its Vice President, in charge of the
Petrochemical Business in 1999. He retired from Petronas on
31 August 2002. Other Malaysian public companies in which
he is a director are TIME dotcom Berhad and Bank
Pembangunan Berhad. YBhg Dato’ Rahim is a member of
Nomination Committee and Remuneration Committee, and
chairs the Risk Management Committee of the Board. There
was no board meeting held in the year ended 31
December 2005 since his appointment.
page23Scomi Engineer ing Bhd Annual Report 2005
Edlin Bin Ghazaly
Encik Edlin, 41, a Malaysian, is an Independent Non-
Executive Director of Scomi Engineering Bhd and was
appointed to the Board on 20 December 2004. Encik Edlin
read law at the International Is lamic University (I IU),
graduating in 1989, and was admitted to the Malaysian Bar
in 1990. Over the past 16 years, he has established a
notable career in the legal profession and set up his own
practise in 1994. He is a member, and chairs the Options
Committee of the Board. He is also a member of the Audit
Committee and Risk Management Committee of the Board.
He attended all of the 9 Board Meetings held in the year
ended 31 December 2005.
Gregory Jerome Gerald Fernandes
Mr Fernandes, 51, a Malaysian, is an Independent Non-
Executive Director of Scomi Engineering Bhd and
was appointed to the Board on 20 December 2004.
Mr Fernandes is a member of the Institute of Chartered
Accountants in England and Wales and a member of the
Malaysian Institute of Accountants. He has 24 years of work
experience with one of the largest international accounting
firms and served in both the London and Kuala Lumpur
offices. Mr Fernandes is the Chairman of the Audit
Committee and a member of the Options Committee of the
Board. He attended all of the 9 Board Meetings held in the
year ended 31 December 2005.
page24Scomi Engineer ing Bhd Annual Report 2005
directors’ profile (cont’d.)
Fad’l bin Mohamed
Encik Fad’l, 39, a Malaysian, is an Independent Non-
Executive Director of Scomi Engineering Bhd and was
appointed to the Board on 15 December 2005. En Fad’l
holds an Honours Degree in Law from University of London,
and a Certified Diploma in Accounting and Finance
(Association of Chartered Certified Accountants). He started
his career as a lawyer in Messrs. Rashid & Lee in 1991. He
then joined the Securities Commission in 1993 to serve in the
Take-overs and Mergers Department and subsequently in
the Product Development Department. Between 1996 to
1999, he was attached to the Kuala Lumpur offices of
Dresdner Kleinwort Benson, a global investment bank. From
2000 to 2003, he was the Joint-Chief Operating Officer of
Kuala Lumpur Industries Holdings Berhad and was involved in
its debt and corporate restructuring exercise. He then set up
Maestro Capital Sdn Bhd, a licenced Investment Adviser and
is currently providing advisory services in the areas of
mergers and acquisitions and capital raising.
He is also an independent investment committee member
of CIMB-Principal Asset Management Berhad and also
serves as a director of Realmild (M) Sdn Bhd. Encik Fad’l is
a member of the Audit Committee and Risk Management
Committee of the Board. There was no board meeting
held in the year ended 31 December 2005 since his
appointment.
Shah Hakim Bin Zain
Encik Shah Hakim, 41, a Malaysian, is the Non-Independent
Executive Director and Chief Executive Officer of Scomi
Engineering Bhd and was appointed to the Board on 15
December 2005. Encik Shah Hakim started his career as an
auditor with Ernst & Young and was subsequently promoted
as Consulting Manager, responsible for servicing large
corporations such as Renong Berhad (now known as UEM
Land Sdn Bhd). He went on to be appointed as Executive
Director of a regional packaging manufacturer in 1992, with
direct operational responsibility. He currently sits on the
Board of Sapura Industrial Berhad, Scomi Group Bhd and
Scomi Marine Bhd. (formerly known as Habib Corporation
Berhad). There was no board meeting held in the year
ended 31 December 2005 since his appointment.
Note: None of the Directors have any family relationship with any other Director and/or major shareholder of Scomi Engineering Bhd.
With the exception of the disclosure in page 37 none of the Directors are involved in any conflict of interest, or any personal interest inany business arrangement, involving Scomi Engineering Bhd.
None of the Directors have been convicted for offences within the past ten years (other than traffic offences, if any).
page25Scomi Engineer ing Bhd Annual Report 2005
management team
1st row from left to right:
• Hilmy Zaini Zainal Senior Vice President • Raymond Leong General Manager – Fleet Management
• Mansor Tahir Head – Rail Business • Wan Zakaria Wan Taib General Manager – Business Development
• Don Wong Kok Wong Head – Fleet Management
2nd row from left to right:
• Michael Khoo General Manager - Finance • Rohaida Ali Badaruddin Head – Group Strategic Communications &
CEO’s Office • Tony Woods Head – Machine Shops • Jessie Chan Senior Manager – Investor Relations
• Wan Marzimin Wan Muhammad Company Secretary/VP – Legal & Secretarial
page26Scomi Engineer ing Bhd Annual Report 2005
The Board of Scomi Engineering Bhd (“the Board”) is
supportive of the adoption of the principles and best
practices of the Malaysian Code on Corporate Governance
(“Code”) for Scomi Engineering Bhd (“the Company”). It
recognises that the adoption of good governance is critical
for the protection and enhancement of stakeholders’ value
and the overall performance of the Company.
A major corporate restructuring exercise was undertaken
during the financial year ended 31st December 2005,
resulting in a significant change in the business of the
Company as well as appointment of a substantially new
Board of Directors.
The following statement details the Board’s commitment and
sets out the practices that the Company has taken with
respect to each of the key principles and the extent of its
compliance with the best practices of the Code.
■ DIRECTORS
The Board and Board Balance l The principal role
of the Board is to protect and enhance shareholder value
through strategic supervision of the Company and its wholly
owned subsidiaries. In view of that, the Board sets clear
goals relating to shareholder value and its growth. It
provides direction and exercises appropriate control to
ensure that the Company is managed in a manner that
fulfils shareholder aspirations and societal expectation.
The Company has adopted a number of processes to
ensure the effectiveness of the Board in discharging its
duties and responsibilities. The Board is of the opinion that its
current composition and size constitutes an effective Board
to the Company. As at the date of this Annual Report, the
Board is comprised of six (6) Directors, of which five (5) are
Independent Non-Executive, with diverse backgrounds, skills
and experiences in the areas of business, economics, legal,
finance, general management and strategy that is vital to
the successful direction of the Company.
GOOD CORPORATE GOVERNANCE PROMOTESTRANSPARENCY, ACCOUNTABILITY, INTEGRITY ANDOVERALL CORPORATE PERFORMANCE
CorporateGovernance
Statement
page27Scomi Engineer ing Bhd Annual Report 2005
The profiles of the members of the Board are set out on pages 21 to 24 of this Annual Report.
There is a clear division of roles and responsibilities between the Chairman of the Board and the Executive Director/Chief
Executive Officer (“CEO”). The Chairman is responsible for ensuring the Board’s effectiveness whilst the CEO is responsible for
operational and business units, organisational effectiveness and implementation of directives, strategies and decisions.
The Board and its Committees l The Board has delegated specific responsibilities to five (5) committees of the board
(Audit, Nomination, Remuneration, Options and Risk Management Committee). Composition of the Board and its committees are:
CHAIRMAN
Datuk Zainun Aishah binti Ahmad C – 1C 1C – –Independent Non-Executive Director(appointed on 15th December 2005)
Dato’ Abdul Rahman bin Mohammed C – – 2M – –Non-Independent Non-Executive Director(resigned on 15th December 2005)
INDEPENDENT NON-EXECUTIVE DIRECTORS
Mr. Gregory Jerome Gerald Fernades M C 2M 2C 1M –
Encik Edlin bin Ghazaly M M 2C 2M 1C 1M
Dato’ Abdul Rahim bin Abu Bakar M – 1M 1M – 1C(appointed on 15th December 2005)
Encik Fad’l bin Mohamed M M – – – 1M(appointed on 15th December 2005)
NON-INDEPENDENT EXECUTIVE DIRECTORS
Encik Shah Hakim bin Zain M – 1M 1M 1M –(appointed on 15th December 2005)
Mr. Ho Yew Hong M M – – – –(resigned on 15th December 2005)
Mr. James Khong Poh Wah M – – – – –(resigned on 15th December 2005)
C-Chairman M-Member
1 The Nomination, Remuneration, Options and Risk Management Committee comprising their respective members were appointed on 25thJanuary 2006
2 The Nomination and Remuneration Committee members for the financial year ended 2005 whom subsequently resigned from the committees.No Nomination Committee meeting was held for financial year ended 2005
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page28Scomi Engineer ing Bhd Annual Report 2005
Board Meetings and Supply of Information l During the financial year ended 31st December 2005, nine (9) Board
Meetings were held. The attendance record of the Directors are:
Datuk Zainun Aishah binti Ahmad - - - - - -(appointed on 15th December 2005)
Dato’ Abdul Rahman bin Mohammed 8/9 - - 1/1 - -(resigned on 15th December 2005)
Net loss for the financial year (47,700) (24,459) 12,311 (59,848)
As at 31 December 2004Net assetsSegment assets 4,270 2,231 826 7,327
Segment liabilities 29,321 9,090 (20) 38,391
Other informationDepreciation 322 118 – 440
Capital expenditure 26 6 – 32
Other non-cash expenses 38,260 11,989 – 50,249
* Company’s home country
notes to the financial statements (cont’d.)
page89Scomi Engineer ing Bhd Annual Report 2005
28 SEGMENTAL REPORTING (CONT’D.)
In determining the geographical segments of the Group, sales are based on the country in which the customers are
based. Total assets and capital expenditure are determined based on where the assets are located.
Capital expenditure comprises additions to property, plant and equipment (Note 13) and goodwill on consolidation
(Note 16) including additions resulting from the Acquisition through business combinations (Note 4(a)).
(b) Secondary reporting format – business segment
Segmental reporting by business segment was not prepared as the Group was principally engaged in the supply and
installation of sound and communication system only during the financial year.
29 COMMITMENTS
(a) Capital commitments
Capital expenditure for plant and equipment not provided for in the financial statements are as follows:
Group
2005 2004
RM’000 RM’000
Approved and contracted for 15,804 –
Approved but not contracted for 18,142 –
33,946 –
(b) Non-cancellable operating lease payments
The Group has entered into non-cancellable operating lease agreements for property, plant and equipment.
Commitments for future minimum lease payments are as follows:
Group
2005 2004
RM’000 RM’000
Later than 1 year 803 –
Later than 1 year and not later than 5 years 2,308 –
Later than 5 years 3,169 –
6,280 –
page90Scomi Engineer ing Bhd Annual Report 2005
30 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
I. On 28 February 2005, the Company announced that it was an affected listed issuer under Practice Note (“PN”)
17/2005 as the Company had a deficit in its consolidated shareholders’ equity based on its consolidated results for
financial year ended 31 December 2004.
II. In an effort to turnaround the Company as well as to obtain new and viable businesses for the Company, the
shareholders of the Company have, at an Extraordinary General Meeting held on 10 November 2005, approved the
following corporate exercise to be undertaken by the Company:
(a) Renounceable rights issue of 57,552,000 shares of RM1.00 each in the Company at an indicative issue price of
RM1.20 per rights share on the basis of three (3) rights shares for every one (1) existing ordinary share held on an
entitlement date to be determined later (known hereafter as “the Rights Issue”);
(b) Acquisitions by the Company of the entire equity interest in OMS Oilfield Holdings (Malaysia) Sdn Bhd (formerly
known as Oiltools Holdings (Malaysia) Sdn Bhd), OMS Oilfield Services Pte Ltd (formerly known as Oiltools Pte Ltd),
Scomi Transportation Solutions Sdn Bhd and Scomi Sdn Bhd for a total purchase consideration of RM285,000,000
to be satisfied by the issuance of 192,567,567 new ordinary shares in the Company at an issue price of RM1.48
per share (known hereafter as “the Acquisition”);
(c) Exemption to the vendors and parties acting in concert with them from having to undertake a mandatory
general offer for the remaining shares in the Company not already owned by them pursuant to the Malaysian
Code on Take-Overs and Mergers;
(d) Transfer of the Company’s undertaking and property (as defined in Section 178(5) of the Companies Act, 1965)
to Atlas Jade Sdn Bhd (“Atlas Jade”), a special purpose vehicle incorporated pursuant to the Composite Scheme
of Arrangement, as described in paragraph (IV) below (known hereafter as “the Transfer of Undertaking and
Property”);
(e) Establishment of an Employee Share Option Scheme of up to 15% of the enlarged issued and paid-up share
capital of the Company pursuant to the Rights Issue and Acquisition for the eligible employees and non-
executive Directors of the Company;
(f) Increase in the authorised share capital of the Company from RM100,000,000 comprising 100,000,000 ordinary
shares of RM1.00 each to RM400,000,000 comprising 400,000,000 ordinary shares of RM1.00 each in the Company;
and
(g) Amendments to the Articles of Association of the Company
(collectively referred to as the “Restructuring Scheme”).
notes to the financial statements (cont’d.)
page91Scomi Engineer ing Bhd Annual Report 2005
30 SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT’D.)
III. On 15 December 2005, the Company completed the Acquisition which resulted in a reverse take-over of the
Company by the major shareholder and a significant change in the business direction of the Company (known
hereafter as the “Date of Disposal”).
IV. As part of the conditions precedent to the sale and purchase agreements entered into between the Company and
the respective vendors, the Company is obliged to carry out a scheme of arrangement pursuant to Section 176 of
the Companies Act, 1965 (known hereafter as “the Composite Scheme of Arrangement”) on or prior to the
completion of the sale and purchase agreements.
As part of the Composite Scheme of Arrangement and pursuant to Section 178 of the Companies Act, 1965, all
undertakings, properties and assets (as defined in Section 178(5) of the Companies Act, 1965) of the Company will
be transferred to and vested in Atlas Jade. There is no consideration to be received or paid by the Company for the
Transfer of Undertaking and Property. All liabilities and obligations of the Company including all pending legal
proceedings by or against the Company (save and except for those which are to be settled under the Composite
Scheme of Arrangement) are to be assumed and continued by or against Atlas Jade respectively from the date of
the Court’s order. The cut-off date for all debts was fixed on 31 December 2004, such that all known and admitted
debts outstanding as at this date was included in the Composite Scheme of Arrangement. Any subsequent charges,
interests and penalty charges in relation to the known and admitted debts arising after 31 December 2004 that had
not been included in the Composite Scheme of Arrangement shall be completely waived.
On 1 September 2005, the Court had approved the Composite Scheme of Arrangement between the Company and
the Scheme Creditors as stated in the Explanatory Statement dated 24 May 2005 pursuant to Section 176(3) of the
Companies Act, 1965. Upon the completion of the Transfer of Undertaking and Property pursuant to the Composite
Scheme of Arrangement, the Company waived debts amounting to RM14,194,000 which have been recognised in
the income statement for the financial year ended 2005. The Transfer of Undertaking and Property also resulted in the
Company recognising gain on disposals of subsidiaries and loss on disposals of assets amounting to RM11,186,000 and
RM2,744,000 respectively in the income statement for the financial year ended 31 December 2005.
31 SIGNIFICANT POST BALANCE SHEET EVENTS
(a) On 20 January 2006, the Company allotted and issued 57,552,000 new ordinary shares of RM1.00 each at an issue
price of RM1.20 per share pursuant to the Rights Issue. Consequently, the issued and paid-up share capital of the
Company increased from RM211,751,000 comprising 211,751,000 ordinary shares of RM1.00 each to RM269,303,000
comprising 269,303,000 ordinary shares of RM1.00 each. The Rights Issue raised cash proceeds of approximately
RM69,062,000 which will be utilised for the settlement pursuant to the Composite Scheme of Arrangement, expenses
in relation to the Restructuring Scheme and working capital for future business expansion purposes.
(b) Following the completion of the Restructuring Scheme as described in Note 30 to the financial statements, the
Company has regularised its financial condition and consequently, its status as an affected listed issuer under
PN17/2005 was uplifted and the trading of the shares of the Company in Bursa Malaysia Securities Berhad
recommenced on 26 January 2006.
page92Scomi Engineer ing Bhd Annual Report 2005
32 FAIR VALUES
The carrying amount of financial assets and liabilities of the Group and Company at the balance sheet date approximate
their fair values except as set out below:
Group
Carrying
amount Fair value
RM’000 RM’000
Finance lease and hire purchase liabilities:
31 December 2005 10,862 9,525
31 December 2004 37 35
The Group’s non-current bank borrowings comprised floating rate loans for which the carrying amounts approximated their
fair values at the balance sheet date as the effective interest rates were not expected to differ from the prevailing market
rates.
33 APPROVAL OF FINANCIAL STATEMENTS
The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on
12 April 2006.
notes to the financial statements (cont’d.)
page93Scomi Engineer ing Bhd Annual Report 2005
statutory declaration
PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965
statement by directors
PUSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965
We, Shah Hakim @ Shahzanim bin Zain and Datuk Zainun Aishah binti Ahmad, two of the Directors of Scomi Engineering Bhd
(formerly known as Bell & Order Berhad), state that, in the opinion of the Directors, the financial statements set out on pages 47 to
92 are drawn up so as to give a true and fair view of the state of affairs of the Group and Company as at
31 December 2005 and of the results and cash flows of the Group and Company for the financial year ended on that date in
accordance with the provisions of the Companies Act, 1965 and MASB approved accounting standards in Malaysia.
Signed on behalf of the Board of Directors in accordance with their resolution dated 12 April 2006.
SHAH HAKIM @ SHAHZANIM BIN ZAINDirector
DATUK ZAINUN AISHAH BINTI AHMADDirector
Kuala Lumpur
12 April 2006
I, Hilmy Zaini bin Zainal, the officer primarily responsible for the financial management of Scomi Engineering Bhd (formerly known
as Bell & Order Berhad), do solemnly and sincerely declare that the financial statements set out on pages 47 to 92 are, in my
opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions
of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared )
by the abovenamed Hilmy Zaini bin Zainal ) HILMY ZAINI BIN ZAINALat Kuala Lumpur on 12 April 2006, )
Before me.
No. W315
SOH AH KAU, AMN
Commissioner for Oaths
page94Scomi Engineer ing Bhd Annual Report 2005
1. We have audited the financial statements set out on pages 47 to 92. These financial statements are the responsibility of
the Company’s Directors. It is our responsibility to form an independent opinion, based on our audit, on these financial
statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and
for no other purpose. We do not assume responsibility to any other person for the content of this report.
2. We conducted our audit in accordance with approved auditing standards in Malaysia. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the
Directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. In our opinion:
(a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and
MASB approved accounting standards in Malaysia so as to give a true and fair view of:
(i) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and
(ii) the state of affairs of the Group and Company as at 31 December 2005 and of the results and cash flows of
the Group and Company for the financial year ended on that date;
and
(b) the accounting and other records and the registers required by the Act to be kept by the Company and the
subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
4. The names of the subsidiaries of which we have not acted as auditors are indicated in Note 14 to the financial statements.
Except for the financial statements of Bell & Order Engineering Pte Ltd which were not audited due to the circumstances
as explained in Note 2(a) to the financial statements, we have considered the audited financial statements of the other
subsidiaries and the auditors’ reports thereon.
5. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial
statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated
financial statements and we have received satisfactory information and explanations required by us for those purposes.
6. The auditors’ report on the financial statements of the subsidiaries were not subject to any qualification and did not include
any comment made under subsection (3) of Section 174 of the Act.
PRICEWATERHOUSECOOPERS JAYARAJAN A/L U. RATHINASAMYNo. AF: 1146 No. 2059/06/06 (J)
Chartered Accountants Partner of the firm
Kuala Lumpur
12 April 2006
TO THE MEMBERS OF SCOMI ENGINEERING BHD(formerly known as Bell & Order Berhad)Company No: 111633-M(Incorporated in Malaysia)
report of the auditors
page95Scomi Engineer ing Bhd Annual Report 2005
analysis of shareholdings
Authorised share capital : RM400,000,000 divided into 400,000,000 shares of RM1.00 each
Issued and paid-up capital : RM269,903,567 divided into 269,903,567 of RM1.00 each
Types of shares : Ordinary shares of RM1.00 each
Voting Rights : One vote per ordinary share
Shareholders Shareholding
Size of Shareholdings No. of Holders % of Holders No. of Shares % of Shares
Less than 100 35 2.12 147 0.00
100 to 1,000 700 42.40 396,100 0.15
1,001 to 10,000 607 36.77 2,664,656 0.99
10,001 to 100,000 236 14.29 8,539,259 3.16
100,001 to less than 5% of issued shares 72 4.36 82,358,238 30.51
5% and above of issued shares 1 0.06 175,945,167 65.19
Total 1,651 100.00 269,303,567 100.00
As at 11th May 2006 the foreign shareholdings stood at 8.38%.
as at 11th May 2006
page96Scomi Engineer ing Bhd Annual Report 2005
Thirty Largest Registered Shareholders as at 11th May 2006
No. Registered Shareholders No. of % of
Shares Shares
1 Scomi Group Bhd 175,945,167 65.19
2 A.A. Assets Nominees (Tempatan) Sdn Bhd 16,628,800 6.16
3 HSBC Nominees (Asing) Sdn Bhd 12,040,000 4.46
4 Bara Aktif Sdn Bhd 8,949,000 3.32
5 Eagletron Venture Corp. 8,529,000 3.16
6 HSBC Nominees (Tempatan) Sdn Bhd 6,767,500 2.51
7 Nik Awang @ Wan Azmi bin Wan Hamzah 5,075,714 1.88
8 Cimsec Nominees (Tempatan) Sdn Bhd 4,698,600 1.74
9 AMMB Nominees (Tempatan) Sdn Bhd 3,371,500 1.25
10 Mayban Nominees (Tempatan) Sdn Bhd 3,186,500 1.18
11 Malaysia Nominees (Tempatan) Sendirian Berhad 3,007,800 1.11
12 Alliancegroup Nominees (Tempatan) Sdn Bhd 1,374,000 0.51
13 HLG Nominee (Tempatan) Sdn Bhd 919,000 0.34
14 Cheong Siew Yoong 734,400 0.27
15 Cimsec Nominee (Asing) Sdn Bhd 727,700 0.27
16 Wong Chock Faa 672,839 0.25
17 Southern Nominees (Tempatan) Sdn Bhd 653,000 0.24
18 Foong Seng 620,662 0.23
19 RHB Nominees (Tempatan) Sdn Bhd 580,000 0.21
20 Kenanga Nominees (Tempatan) Sdn Bhd 564,200 0.21
21 Tiong Young Kong 502,000 0.19
22 Ee Bee Pheng 500,000 0.19
23 RHB Merchant Nominees (Tempatan) Sdn Bhd 480,000 0.18
24 PB Securities Nominees (Tempatan) Sdn Bhd 370,500 0.14
25 Bimsec Nominees (Tempatan) Sdn Bhd 360,400 0.13
26 Amanah Raya Nominees (Tempatan) Sdn Bhd 344,000 0.13
27 Balakrisnen A/L Subban 300,000 0.11
28 Muhd Mawardi bin Hasan 297,500 0.11
29 Si Tho Yoke Meng 264,000 0.10
30 Lim Siew Lian 260,000 0.10
page97Scomi Engineer ing Bhd Annual Report 2005
Substantial Shareholders as at 11th May 2006
Direct Shareholding Indirect Shareholding
Name of Shareholders No. of Shares Held % No. of Shares Held %
Scomi Group Bhd 192,567,567 71.35 — —
Kaspadu Sdn Bhd -— — (1)192,567,567 71.35
Shah Hakim @ Shahzanim bin Zain — — (2)192,567,567 71.35
Dato’ Kamaluddin bin Abdullah — — (2)192,567,567 71.35
Notes:-1 Deemed interested by virtue of Section 6A (4) of the Act through its interest in Scomi Group Bhd, which in turn is a substantial shareholder
of Scomi Engineering Bhd.2 Deemed interested by virtue of Section 6A (4) of the Act through his legal/beneficial shareholding in Kaspadu Sdn Bhd, which in turn is
deemed interested in Scomi Engineering Bhd.
Directors’ Shareholdings as at 11th May 2006
The Directors of Scomi Engineering and their respective shareholdings in Scomi Engineering as at 11th May 2006 according to
the Register of Directors’ Shareholdings are as follows:
Direct Indirect
Directors Designation No. of Shares % No. of Shares %
Datuk Zainun Aishah binti Ahmad Independent — — — —
Non-Executive Chairman
Dato’ Abdul Rahim bin Abu Bakar Independent — — — —
Non-Executive Director
Shah Hakim @ Shahzanim bin Zain Executive Director/CEO — — (1)192,567,567 71.35
Notes:-(1) Deemed interested by virtue of Section 6A (4) of the Act through his legal and/or beneficial shareholdings in Kaspadu Sdn Bhd which in
turn is deemed interested in Scomi Engineering.
page98Scomi Engineer ing Bhd Annual Report 2005
Tenure of land: Audited net ie. freehold or Approximate book value as
Registered Description/ Leasehold (years)/ Land area/ age of at 31.12.2004Owner Location Address Existing Use Date of Acquisition Built-up area building (RM'000)
Scomi Sdn Bhd Title: Two-storey office Leasehold for Land area: 12 years Land:Land held under building and 99 years 86,600 sq ft (since 1992) 3,021H.S.(D) No 98470 No PT a factory (until 2073)Tapak Perusahaan Shah Alam Built-up area: Building:Bandar Shah Alam 30,435 sq ft 1,037Negeri Selangor 04.09.1991
Postal address:Lot 25, Persiaran SelangorSeksyen 15Shah Alam Selangor Darul Ehsan
Oiltools Pte Ltd 48 Gul Circle Singapore 629581 Workshop/Office Leasehold (remaining Land area: 17 years Building: 13 years 7 months, until 150,388 sq ft 2,162 2018) 01.01.1978 Built-up area: Land: -
28,772 sq ft
Oiltools Holdings Vacant industrial land sub-let Leasehold for 999 years 1,821.09 N/A Land: 293 (Malaysia) Jalan Arsat Federal (until 2868) sq metresSdn Bhd Territory of Labuan 28.06.1984
Oiltools Services Vacant industrial land sub-let Leasehold for 999 years 2,023.4 20 years Land: 327 (Malaysia) Jalan Arsat Federal (until 2868) sq metresSdn Bhd Territory of Labuan 27.06.1984
PT Inti Jatam Pura Land Jl. Workshop and Leasehold for 30 years 7,550 sq metres N/A Land: 752 Mulawarman, Kelurahan Office (until 2026) Sepinggan, Kecamatan 24.09.1996 Balikpapan Selatan, Kalimantan, Indonesia
PT Inti Jatam Pura Building Jl. Workshop and 1998 2,291 sq metres 7 years Building: 224Mulawarman, Kelurahan OfficeSepinggan, Kecamatan Balikpapan Selatan, Kalimantan, Indonesia
Otto Wardhana Land Jl. Residential Leasehold for 20 years 2,430 sq metres N/A Land: 163Mulawarman, RT 022 RW 07, (until 2012) Sepinggan Balikpapan Selatan, 30.09.1991Kalimantan, Indonesia
Otto Wardhana Building Jl. Residential 30.09.1991 343 sq metres 22 years –Mulawarman, RT 022 RW 07, Sepinggan Balikpapan Selatan, Kalimantan, Indonesia
list of properties
as at 31st December 2005
page99Scomi Engineer ing Bhd Annual Report 2005
corporate directory
SCOMI SDN BHDLot 519 Jalan TUDMKg Baru Subang40000 Shah AlamSelangor Darul EhsanMalaysiaTel : 6 (03) 7846-4516Fax : 6 (03) 7846-4521
AS ORDINARY BUSINESS:To consider, and if thought fit, to pass the following as Ordinary Resolutions:
1. To receive and adopt the Financial Statements for the financial year ended 31st December
2005 and the Reports of the Directors and Auditors thereon.
2. To re-elect the following Director who is retiring under Article 80 and Article 81 of the Articles
of Association of the Company and being eligible, offers himself for re-election:
(i) Mr Gregory Jerome Gerald Fernandes
3. To re-elect the following Directors who are retiring under Article 87 of the Articles of Association
of the Company and being eligible, offer themselves for re-election:
(i) Datuk Zainun Aishah binti Ahmad
(ii) Dato’ Abdul Rahim bin Abu Bakar
(iii) Encik Fad’l bin Mohamed
(iv) Encik Shah Hakim @ Shahzanim bin Zain
4. To approve the payment of Directors’ remuneration for the financial year ended 31st
December 2005.
5. To re-appoint Messrs PricewaterhouseCoopers as Auditors of the Company for the ensuing year
and to authorise the Directors to fix their remuneration.
6. To transact any other ordinary business of the Company for which due notice shall have been
given.
RESOLUTION 1
RESOLUTION 2
RESOLUTION 3
RESOLUTION 4
RESOLUTION 5
RESOLUTION 6
RESOLUTION 7
RESOLUTION 8
RESOLUTION 9
NOTICE IS HEREBY GIVEN that the 22nd Annual General Meeting of SCOMI
ENGINEERING BHD. (formerly known as Bell & Order Berhad) (the “Company”)
will be held at Nirwana Ballroom 2, Crowne Plaza Mutiara Hotel, Jalan Sultan
Ismail, 50718 Kuala Lumpur, Malaysia on 26th June 2006 at 10.00 a.m. for the
following purposes:-
notice of annual general meeting
page101Scomi Engineer ing Bhd Annual Report 2005
AS SPECIAL BUSINESS:To consider and, if thought fit, to pass the following as Ordinary Resolutions:
7. Authority to Allot and Issue Shares Pursuant to Section 132D of the Companies Act, 1965
“THAT, subject to the Companies Act, 1965, the Articles of Association of the Company andthe approvals of the relevant governmental and/or regulatory authorities where necessary, theDirectors be and are hereby authorised, pursuant to Section 132D of the Companies Act, 1965,to allot and issue shares in the Company, at any time and upon such terms and conditionsand for such purposes as the Directors may in their absolute discretion deem fit, provided thatthe aggregate number of shares issued pursuant to this resolution in any one year does notexceed ten percent (10%) of the issued and paid-up share capital of the Company at anytime and that the Directors be and are hereby further authorised to obtain approval for thelisting of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhadand that such authority shall continue in force until the conclusion of the next Annual GeneralMeeting of the Company.”
8. Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions of ARevenue or Trading Nature
"THAT approval be and is hereby given to the Company to enter into and to give effect tothe Recurrent Related Party Transactions of a Revenue or Trading Nature as stated in Section2 of the Circular to Shareholders dated 2 June 2006 (“Circular”) with the specified classes ofRelated Parties as stated in Section 2.3 of the Circular which are necessary for the Company’sday-to-day operations subject to the following:-
(i) the transactions are in the ordinary course of business and are on terms not morefavourable to the Related Parties than those generally available to the public and arenot to the detriment of the minority shareholders; and
(ii) the aggregate value of such transactions conducted pursuant to the Shareholders’Mandate during the financial year will be disclosed in the Annual Report for the saidfinancial year;
AND THAT such approval shall continue to be in force until:
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company at whichtime it will lapse, unless by a resolution passed at the meeting, the authority is renewed; or
(b) the expiration of the period within which the next AGM of the Company subsequent tothe date it is required to be held pursuant to Section 143(1) of the Malaysian CompaniesAct, 1965 (“the Act”) (but shall not extend to such extension as may be allowed pursuantto Section 143(2) of the Act); or
(c) revoked or varied by resolution passed by the shareholders in a general meeting;whichever is earlier.
AND THAT the Directors of the Company be and are hereby authorised to complete and doall such acts and things as they may consider expedient or necessary in the best interest ofthe Company (including executing all such documents as may be required) to give effect tothe transactions contemplated and/or authorised by this Ordinary Resolution.”
RESOLUTION 10
RESOLUTION 11
page102Scomi Engineer ing Bhd Annual Report 2005
To consider and, if thought fit, to pass the following as a Special Resolution:
9. Proposed Amendments to Memorandum of Association
“THAT the alterations, modifications and additions to the Memorandum of Association of the
Company as set out below be and are hereby approved and that the Directors be and are
hereby authorised to take steps as may be necessary to give full effect to the said alterations,
modifications and additions to the Memorandum of Association:-
The existing Clause 3 be altered by the deletion of sub-clauses (1) to (8) of Clause 3 thereof
and substituting therefor with the following eight new sub-clauses:-
Clause 3(1)
To hold shares or invest in, and to acquire, lease promote or sell, and to manage, conduct or
undertake the business of management or otherwise howsoever direct the operations of any
other business, company, corporation, firm of any other enterprise, undertaking or venture, and
generally to undertake any of the business of a holding, or management company.
Clause 3(2)
To purchase or otherwise acquire for investment lands, houses, buildings, plantations and other
property of any tenure and any interest therein and any movable property of any description
or any interest therein and to create and sell freehold and leasehold ground rents and to
make advances upon the security of land or house, or other property or any interest therein
and generally to sell, lease or exchange land and house, property and any other property
whether real or personal and whether for valuable consideration or not.
Clause 3(3)
To carry on the business of and to act as agents, investors, merchants, traders, franchisors
carriers and shipowners or in any other capacity whatsoever in Malaysia or elsewhere and to
import, export, buy, sell, barter, exchange, pledge, made advances upon or otherwise deal in
goods, products, articles and merchandise of all kinds.
The word “company” in this clause except where used in reference to this Company, shall be
deemed to include any partnership or other body of persons whether incorporated or
unincorporated, and whether domiciled in Malaysia or elsewhere, and that the objects
specified in each paragraph of this clauses shall be regarded as independent objects and
accordingly shall, except where otherwise expressed in any paragraph, be in nowise limited or
restricted by reference to, or inference from the terms of any other paragraph or the name
of the Company but may be carried out in as full and ample a manner and construed just
as wide a sense as if the said paragraph defined the objects of a separate distinct and
independent company.
Clause 3(4)
To carry on all or any of the trades or businesses of manufacturers, assemblers, dealers, hirers,
stockists, importers, exporters, repairers, modifiers, designers of equipment, machinery, designs
tools, parts and articles of all kinds and descriptions required or used in the exploration for and
production of oil, petroleum, petroleum products and other minerals whether on land or sea
and other general services related thereto.
RESOLUTION 12
page103Scomi Engineer ing Bhd Annual Report 2005
Clause 3(5)
To manufacture, produce, trade and deal in all machinery, plant, articles, appliances and things of
all descriptions capable of being used in petroleum, refineries and business generally related thereto.
Clause 3(6)
To tender for and enter into contracts for the engineering and design, onshore fabrication,
platform installation, pipe laying, production facility hook-up, platform maintenance and all
other general onshore contracting related services.
Clause 3(7)
To carry on the business of manufacturers and merchants of motor vehicles, and generally of all
kinds of omnibus and vehicles for the transport of persons and goods, whether propelled or moved
by electricity, steam, oil, gas, vapour, atomic energy or other motive or mechanical power.
Clause 3(8)
To carry on the business of manufacturers and merchants of trailers, semi trailers, tankers,
caravans and superstructures and bodies of commercial vehicles of all kinds and uses and to
engage in designing and engineering works.”
By Order of the Board
WAN MARZIMIN BIN WAN MUHAMMAD (LS 0009013)
CHONG MEI YAN (MAICSA 7047707)Company Secretaries
Kuala Lumpur
Date : 2 June 2006
NOTES:Note 1 : Appointment of Proxy(i) A member of the Company entitled to attend and vote at the
meeting may appoint a proxy or proxies (but not more than two)to attend and vote on his/her behalf. A proxy may but need notbe a member of the Company.
(ii) Where a member appoints two proxies, the appointments shall beinvalid unless he/she specifies the proportion of his/her holding to berepresented by each proxy.
(iii) The instrument appointing a proxy, in the case of an individualshall be signed by the appointer or his/her attorney dulyauthorised in writing and in the case of a corporation, eitherunder seal or under the hand of an officer duly authorised. If noname is inserted in the space for the name of your proxy, theChairman of the meeting will act as your proxy.
(iv) The instrument appointing a proxy must be completed anddeposited at the office of the Share Registrar of the Company,Symphony Share Registrars Sdn Bhd (formerly known as MalaysianShare Registration Services Sdn Bhd) at Level 26, Menara MultiPurpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala
Lumpur, not less than forty-eight (48) hours before the timeappointed for holding the Annual General Meeting or anyadjournment thereof.
Note 2 : Explanatory Note on Item 7 of the Agenda (Resolution 10)The ordinary resolution under Item 7 above is proposed pursuant toSection 132D of the Companies Act, 1965, and if passed, will give theDirectors of the Company from the date of the above Annual GeneralMeeting, authority to issue and allot shares from the unissued sharecapital of the Company for such purposes as the Directors deem fit andin the interest of the Company. This authority, unless revoked or varied ata general meeting, will expire at the conclusion of the next AnnualGeneral Meeting of the Company.
Note 3 : Explanatory Note on Item 8 of the Agenda (Resolution 11)Please refer to Circular to Shareholders dated 2 June 2006.
Note 4: Explanatory Note on Item 9 of the Agenda (Resolution 12)Please refer to Circular to Shareholders dated 2 June 2006.
page104Scomi Engineer ing Bhd Annual Report 2005
statement accompanying notice oftwenty-second annual general meeting
1. DIRECTORS STANDING FOR RE-ELECTION AT THE TWENTY-SECOND ANNUAL GENERAL MEETING OF THE COMPANYDetails of Directors standing for re-election are as follows:
Name of Director Director’s Profile
(page number in this Annual Report)
Gregory Jerome Gerald Fernandes please refer to pages 23 and 97
Datuk Zainun Aishah binti Ahmad please refer to pages 21 and 97
Dato’ Abdul Rahim bin Abu Bakar please refer to pages 22 and 97
Fad’l bin Mohamed please refer to pages 24 and 97
Shah Hakim @ Shahzanim bin Zain please refer to pages 24 and 97
2. DETAILS OF DIRECTORS’ ATTENDANCE AT BOARD MEETINGSA total of nine (9) Board Meetings were held during the financial year ended 31 December 2005.
Name of Director No. of Meetings Attended
Datuk Zainun Aishah binti Ahmad (appointed on 15 December 2005) -
Dato’ Abdul Rahim bin Abu Bakar (appointed on 15 December 2005) -
Gregory Jerome Gerald Fernandes 9/9
Edlin bin Ghazaly 9/9
Fad’l bin Mohamed (appointed on 15 December 2005) -
Shah Hakim @ Shahzanim bin Zain (appointed on 15 December 2005) -
Dato’ Abdul Rahman bin Mohammed Hashim (resigned on 15 December 2005) 8/9
Ho Yew Hong (resigned on 15 December 2005) 9/9
James Khong Poh Wah (resigned on 15 December 2005) 8/9
3. DETAILS OF DATE, TIME AND PLACE OF TWENTY-SECOND ANNUAL GENERAL MEETINGThe Twenty-Second Annual General Meeting of Scomi Engineering Bhd (formerly known as Bell & Order Berhad) will be
held as follows:
Date : 26th June 2006
Time : 10:00 a.m.
Place : Nirwana Ballroom 2, Crowne Plaza Mutiara Hotel, Jalan Sultan Ismail, 50718 Kuala Lumpur, Malaysia
being a member/members of Scomi Engineering Bhd., hereby appoint .....................................................................................................(Full name and NRIC / passport no.)
or failing him/her.......................................................................................................................................................................................................(Full name)
or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the 22nd Annual GeneralMeeting (“AGM”) of Scomi Engineering Bhd (formerly known as Bell & Order Berhad) (the “Company”) to be held at NirwanaBallroom 2, Crowne Plaza Mutiara Hotel, Jalan Sultan Ismail, 50718 Kuala Lumpur, Malaysia on 26th June 2006 at 10.00 a.m., orany adjournment thereof.
Ordinary Business For Against
Resolution 1 To receive and adopt the Financial Statements for the financial year ended 31st December 2005 and the Reports of the Directors and Auditors thereon.
To re-elect the following Director who is retiring under Article 80 and Article 81of the Articles of Association of the Company and being eligible, offers himself for re-election:
To re-elect the following Directors who are retiring under Article 87 of the Articles of Association of the Company and being eligible, offer themselves for re-election:
Resolution 3 (i) Datuk Zainun Aishah binti Ahmad
Resolution 4 (ii) Dato’ Abdul Rahim bin Abu Bakar
Resolution 5 (iii) Encik Fad’l bin Mohamed
Resolution 6 (iv) Encik Shah Hakim @ Shahzanim bin Zain
Resolution 7 To approve the payment of Directors’ remuneration for the financial year ended 31st December 2005.
Resolution 8 To re-appoint Messrs PricewaterhouseCoopers as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration.
Resolution 9 To transact any other ordinary business of the Company for which due notice shall have been given.
Special Business For Against
Resolution 10 Authority to Allot and Issue Shares Pursuant to Section 132D of the Companies Act, 1965.
Resolution 11 Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions of A Revenue or Trading Nature.
Resolution 12 Proposed Amendments to Memorandum of Association.(Special Resolution)
Please indicate with a check mark ("✓ ") in the space provided to show how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will
Notes:(i) A member of the Company entitled to attend and vote at the meeting may appoint a proxy or proxies (but not more than two) to attend and vote on his/her
behalf. A proxy may but need not be a member of the Company.(ii) Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her holding to be represented by each proxy.(iii) The instrument appointing a proxy, in the case of an individual shall be signed by the appointer or his/her attorney duly authorised in writing and in the case of a
corporation, either under seal or under the hand of an officer duly authorised. If no name is inserted in the space for the name of your proxy, the Chairman of theMeeting will act as your proxy.
(iv) The instrument appointing a proxy must be completed and deposited at the office of the Share Registrar of the Company, Symphony Share Registrars Sdn Bhd atLevel 26, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur, not less than forty-eight (48) hours before the time appointed forholding the Annual General Meeting or any adjournment thereof.
fold here
fold here
The Registrar of Scomi Engineering Bhd.(formerly known as Bell & Order Berhad)Symphony Share Registrars Sdn. Bhd.