Professional Documents
Culture Documents
2011
CONTENTS
01 02 04 06 12 16 18 19 20 Corporate Profile Our Services Financial Highlights Chairmans Statement Operations Review Board of Directors Key Executives Corporate Structure Financial Contents
CORPORATE PROFILE
Technics Oil & Gas Limited (Technics or referred to collectively as the Group) is a leading full service integrator of compression systems and process modules for the global offshore oil and gas sector. Technics designs, concept engineers and fabricates process modules and equipment, including gas compression packages, which are integrated to form the operating system for production operations and storage applications in offshore and onshore oil and gas exploration and production activities (O&G). The Group also manufactures super-size gas compression systems, topsides and process modules of more than 500 MT each. Synonymous with safety, quality and reliability, Technics is an authorized integrator of gas compression systems for three world-leading USA gas compressor manufacturers, Ariel Inc., Cameron and Frick. Established in 1990 as a modest start-up with only 12 staff, Technics has grown from strength to strength and became a public-listed entity on Singapore Exchange SESDAQ in April 2003 and was upgraded to Mainboard of the Singapore Exchange in January 2008. Notably, Technics was also successfully listed on the Taiwans overthe-counter market, Gre Tai Securities Market via Taiwan Depository Receipts in February 2011, making it the debut SGX counter to be listed on GreTai Securities Market. Since its listings, Technics has embarked on an on-going, multipronged expansion programme to address the immense business potential in the oil and gas sector. In addition to its engineering and fabrication facilities, Technics operates two waterfront yards (total: 49,610 square metres) located in Singapore and Indonesias Batam Island. The construction of the jetty in the expanded Singapore yard has been completed since the end of 2009. The jetty is equipped with customised heavy-lift material handling facility for direct offloading of completed process modules weighing up to 1,000 tonnes from the shore onto a regular barge. With a current strength of 567 full-time employees including in-house design and engineering team, Technics is one of the leading premier supply vendors for gas compression systems and topside process modules and equipment for Floating Production, Storage and Offloading (FPSO) and Mobile Offshore Production Units (MOPUs), as well as fixed platforms, oil rigs and semi-submersibles. Other products include subsea high pressure manifolds, sub-sea protective structures and piping skids, as well as metering skids and mud-gas separators. Over the past years, Technics has made strategic business ventures to expand its service and product offerings so as to entrench itself in the growing O&G and marine market. Technics subsidiary, Norr Systems, provides electrical propulsion systems and ship-board automation systems, as well as dynamic positioning training for offshore vessels to operator teams under the Nautical Institute Scheme on Dynamic Positioning Vessel Control, using a L3-Communications NMS6000 Dynamic Positioning System. Technics has also incorporated a subsidiary, Technics Systems Solutions Pte Ltd , which will design, engineer, integrate, test and supply automation components for the O&G and Power industries. Meanwhile, the Groups subsidiary in Suzhou, China - M2E Corp (Suzhou) Co., Ltd, manufactures crankshafts for compressors and engines. In August 2009, it secured a S$15 million contract from a new customer Husky Injection Molding Systems Ltd to supply key machine building components for a period of three years, demonstrating its technical strength and capabilities to secure new orders and service top global customers. The Groups business coverage now encompasses Singapore, Indonesia, Malaysia, Thailand, Vietnam, USA, Middle East, Australia, Myanmar and Bangladesh, with offices in Singapore, Batam, Jakarta and Vietnam. Fuelled by a strong commitment to excel and backed by a network that includes some of the worlds leading multinational corporations, major equipment principals and strategic partners, Technics is poised to scale greater heights.
01
OUR SERVICES
Engineering, Procurement, Construction and Commissioning (EPCC)
Design, procure, fabricate, install and commission process modules and equipment for oil and gas exploration and production on a turnkey project basis. These modules and equipment will form the operating system of the production and storage facility for oil and gas.
Test Separator
02
Growing our
RETURNS
Our strong results were driven by higher contribution from subsidiaries as a result of our ongoing expansion programme to tap into the potential of the oil and gas sector. We continued to secure various contracts from existing and new clients including those from new target markets.
TECHNICS OIL & GAS LIMITED | Annual Report 2011 |
03
FINANCIAL HIGHLIGHTS
INCOME STATEMENT HIGHLIGHTS S$ million
Revenue Cost of Sales Gross Profit Net Profit after Tax before Non-Controlling Interests Total Assets Total Equity Total Cash and Equivalents
FY2010
103.6 (59.9) 43.7 16.4 112.0 23.6 45.3
FY2011
125.8 (78.9) 46.9 18.7 141.9 49.2 20.8
FY2011
37.3 14.9 9.71 25.21 0.42 13.2 36.0
REVENUE For the years ended 30 September S$ million 150 120 90 60 30 0 59.99 90.78 103.58 20 125.80
130.25
18.71
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
04
FINANCIAL HIGHLIGHTS
REVENUE BREAKDOWN BY BUSINESS SEGMENTS (%)
2% 26% 72%
2009
2% 35% 63%
Engineering Procurement Construction and Commissioning Contract Engineering Procurement and Other Services
2010
5% 36% 59%
2011
05
CHAIRMANS STATEMENT The successful listing on Taiwan grants the Group ready access to the different equity markets in the Asia Pacific region when the opportunity arises.
Dear Shareholders,
I am pleased to present to you our annual report for the financial year ended 30 September 2011 (FY2011). FY2011 has been an eventful year for the Group as we marked significant milestones in our corporate history. The most notable achievement will be the Groups market debut in Taiwan with its successful listing on the GreTai Securities Market, Taiwans over-the-counter stock exchange, on 25th February 2011. We were successfully dual-listed on the Taiwan Stock Exchange via our issuance of Taiwan Depository Receipts (TDR) in February 2011. Technics took the lead as the first Singapore listed company to be listed and traded on the Gretai Securities Market in the history. The Group has also dedicated great efforts to sustain the order winning momentum in FY2011. The Group roped in S$185.1 million worth of new contracts during the financial year under review and chalked up record-high outstanding order book of S$141.0 million as at 9th November 2011. Our fundamentals remain sound and balance sheet remains in very good health. Final phase of the expansion programme is expected to be completed by the end of the year 2011. Additional capacity from our new in-house facilities and
expanded yard space will allow us to cope with existing pipeline of projects and accommodate new projects. In terms of returning value to shareholders, Technics have been consistent in our dividend payout for the last few years. This year, with our record net profit attributable to equity holders and our solid cash position, the Board was pleased to propose our highest ever full year dividend of 12.0 Singapore cents per ordinary share. This represents an astounding dividend payout ratio of 124% in FY2011, highest in corporate history. Moving ahead, we will align our business focus to concentrate on engineering, procurement, construction and commissioning (EPCC) projects for onshore and offshore gas compression systems relating to booster and recovery applications. These EPCC projects allow Technics to leverage on strong technical expertise and capabilities by managing the projects on a turnkey basis. Margins are, therefore, relatively more attractive to that of Contract Engineering (CE) and Procurement and Other Services (PS) projects. Technics remains committed to expand our portfolio offerings and to entrench ourselves deeper into new markets like Australia, the Middle East and Russia in the coming year. I am pleased to share with you the key highlights of FY2011.
06
CHAIRMANS STATEMENT
FY2011 - A RECORD-SETTING YEAR First Singapore Listed Company to be listed on Taiwan GreTai Securities We are proud to update our shareholders that we are now dual-listed on GreTai Securities Market Taiwan, Taiwans over-the-counter market on 25th February 2011 via the issuance of Taiwan Depository Receipts (TDR). We have issued a total of 40 million shares of the Company, comprising of 13 million new shares (the New Shares) to be issued by the Company, and 27 million vendor shares (comprising shares held by the controlling shareholders). The shares are allotted on the basis of 2 TDR shares to 1 ordinary share and a net proceed of S$12.7 million was raised. The net proceeds were utilised towards repayment of bank borrowings to reduce interest payments and enhance gearing ratio of the Group. The successful listing on Taiwan grants the Group ready access to the different equity markets in the Asia Pacific region when the opportunity arises. At the same time, the two markets, Singapore and Taiwan, attract different investor profiles and will thereby widen the investor base of the Company and increase the liquidity of our shares. In particular, it enables the Company to benefit from its exposure to a wider range of private and institutional investors. Strong and Sustainable Profit Growth We concluded FY2011 with record setting revenue and net profit attributable to equity holders. The Groups revenue hit about S$125.8 million in FY2011, 21% year-on-year (y-o-y) increase from S$103.6 million in FY2010. Net profit attributable to shareholders rose by 14% y-o-y to S$18.7 million in FY2011. The increase in revenue was primarily attributed by higher revenue contributions from the relevant recognition of work-in-progress items carried out on CE and PS projects. However, more CE projects have also resulted in lower gross profit margins of 37% in FY2011 as compared to 42% in FY2010. Despite higher business volume and activities, the Group has managed to keep operating expenses (marketing and distribution costs and administrative expenses) under tight lid as operating expenses remained fairly consistent at 21% of the Groups revenue in FY2011. Our balance sheet remained rosy with solid cash and cash equivalent balance of S$20.7 million as at 30 September 2011. Gearing ratio improved to 0.84 as at 30 September 2011 as compared to 1.51 as at 30 September 2010 as a result of enlarged shareholding base due to issuance of new shares and conversion of warrants into ordinary shares during the year. Dividend With a view to rewarding shareholders for their continued support of Technics and the strength of the Groups ongoing financial position, the Board was pleased to propose a total dividend payout of 12.0 Singapore cents per share, amounting to S$24.3 million. This translates to a dividend payout ratio high of 124% in FY2011. A resolution has been passed and approved in December 2010 in relation to the Groups dividend policy. It was indicated in the resolution that the Group will propose and recommend an annual cash dividend of between 5% to 75% of the Groups distributable profits to be paid to shareholders as long as the Group remained listed on SGXMainboard and Taiwan Stock Exchange. The Group has repeatedly outdone itself in this aspect as the Groups dividend payout ratio was maintained above 50% for the past 3 years. Upholding Contract Winning Momentum Technics continue to reel in new orders in FY2011 and secured approximately S$185.1 million worth of new contracts during the year. Consequently, order book swelled to a record high of S$141.0 million as at 9 November 2011 with progressive delivery throughout FY2012. Technics clinched two CE contracts in the Russia Federation amounting to a total of S$28.9 million during the year. This is an important stepping
07
CHAIRMANS STATEMENT
stone for the Group as we marched into a new geographical market that has huge potential demand for the Groups service offerings. Technics will be responsible for supplying Oil & Gas Process Equipment for modification of Jack-up rig and an offshore Oil Wellhead Satellite platform in the Russia Federation. Apart from Russia Federation, the Group is targeting to move into Middle East as well. The Group was awarded a contract worth S$23.5 million from a Middle East Oil & Gas Company in January 2011 for EPCC of Process Equipment for Early Production Systems. With project duration of 8 months, the Group shall deliver Process Equipment for Early Production Systems consisting of Wellhead Manifolds, Test Separators, Three Phase Separators, Gas KO Drums, Flare KO Drums, Heater Treater, Scraper Traps, Corrugated Plate Separators, Hydrogen Sulfide Removal Module and Flare Stacks and Burners. Technics has also gained traction in Vietnam with yet another EPCC contract from JV Vietsovpetro (VSP) for the provisioning of the topside equipments for wellhead satellite platforms
named GT-1 for the White Bear and MT-1 for the White Cat oilfields in offshore Vietnam, worth an estimated S$32.0 million. These series of contracts awarded by VSP demonstrates the customers strong confidence in Technics technical and execution capabilities. Including this latest contract, Technics has been awarded a total of 15 wellhead satellite platform orders by VSP. To date, thirteen projects have been completed and delivered, including RC-6 and RC-7 which were delivered in June 2011. At our subsidiary level, the Group announced on both January 2011 and March 2011 that its 51% owned subsidiary, Norr Systems Pte Ltd (Norr Systems), had been awarded three turnkey construction and service contracts worth S$48.4 million for the design, engineering, procurement and manufacturing and supply of ship automation (Hydraulic and Electrical equipment). The supply of equipment also includes main engines and all auxiliary equipments on board vessel as well as provision of project management on site to deliver quality vessels to the owner. Norr Systems shall also provide the maintenance and servicing of the entire three vessels for the subsequent 7 years after completion of the turnkey contract.
08
CHAIRMANS STATEMENT
Our strategy of expanding existing portfolio offerings appears to be fruitful as Norr Systems continue to build track record to establish itself in the market. Expansion of portfolio offerings On 18 August 2011, Technics has incorporated a 51%-owned subsidiary, Technics Systems Solutions Pte Ltd, to design, engineer, integrate, test and supply integrated control & safety system, Pneumatic & Hydraulic Wellhead Control Panels and Turbo Machinery Control to Oil & Gas, Power and General Industries. This investment is consistent with the Groups strategy to expand portfolio offerings and to leverage on the growth opportunities present in the integrated automation market for the Oil & Gas and Power industries. BROAD PERSPECTIVES ON THE GLOBAL AND REGIONAL OIL & GAS SECTOR* (*Figures here variously derived from DNB Nor, Infield (the Energy Analysts) and various online sources ) Asias Increasing Dominance Asia continues to be Technics key market place. Overall, we expect the markets for offshore oil and gas in Asia to grow in tandem with the increasing intensity and complexity of oil exploration and production. In a report by Infield, the firm expects that regions expected recovery in offshore activity will continue to significantly drive up demand for fixed, floating and subsea units in the short term. The report forecast that surge in platform installations globally will continue steadily until 2012 and both Asia and the Middle East and Caspian will construct close to 43% and 37% of the fixed platforms in 2011 and 2012 respectively. Signs of Increasing Capital Equipment Spending in Offshore Sector We have witnessed series of rig order wins in the market and also improved activity in the Exploration and Production (E&P) operations. Analysts from DnB NOR believe that these factors will facilitate the market to absorb the enlarged Offshore Support Vessel (OSV) fleet by 2012. Furthermore, a relatively stable oil price will continue to spur demand for E&P activities and thereby stimulate demand for OSV new builds. STRATEGIC PLANS Building Up EPCC Growth Momentum As in the earlier years, the Group shall continue to build on its platform of core EPCC capabilities particularly in the FPSO conversion, fixed platforms as well as onshore and offshore gas compression systems and recovery applications. Our geographical focus can be categorised into two spheres prospective new markets and traditional markets. In prospective new markets such as Russia, Middle East and Australia, our strategy is to build up a network of strong and reliable partnerships that can bring us into deeper engagement with the key customers such as oil majors in their respective geographies. This will however take time to achieve. In our traditional markets such as Singapore, Vietnam, Malaysia, Indonesia and Thailand, we are constantly and actively engaged in bidding process across a wide spectrum of large scale projects. Whilst the prospective new markets present immense potential to leapfrog into new areas of growth, we will still require the traditional markets to continue to supply a stable base of projects which we can effectively rely on for the long term. Expansion of Portfolio Offerings With a recurring base of EPCC contracts from key customers in traditional markets, Technics have also been actively building up a wider range of engineering services in order to offer total engineering solutions to a variety of key customers. Our subsidiaries such as Norr Systems, M2E, Wecom, and newly-incorporated indirect subsidiaries, Norr Systems Hydraulics Pte Ltd and Bloomfoss Pte Ltd, provides a wide array of engineering services for us to synergistically cross market. In the long run, we believe the different
09
CHAIRMANS STATEMENT
clientele bases from various engineering services open new possibilities for unique marketing and solution offerings. Capacity Expansion With our fully functioning fabrication yard, waterfront space, jetty, warehousing and office facilities at our Loyang yard in Singapore, we have started to generate interests from customers and partners who are keen to tap on our onestop vendor services. Aside from being able to utilise our jetty and waterfront spaces for our internal loading and offloading activities for heavy process equipment and modules, Technics can offer repair, maintenance, fabrication and other auxiliary services to visiting vessels. Hence, we intend to position ourselves as a mini offshore supply base (OSB) as our Loyang yard is the only other alternative jetty and waterfront facilities along the Loyang Industrial Estate. The existing large scale Loyang OSB has already been operating at closed to full capacity. As OSBs are in short supply in Singapore, we intend to collaborate with a tenant partner who would like to utilise our base to service a wider range of customers. OUTLOOK As of 9 November 2011, the Group has a total outstanding order book of about $141.0 million for progressive delivery through to the end of FY2011. These project schedules are typically subject to changes that could be due to various factors, e.g. customers requesting variations to original project specifications, or adjustment to shipment schedules by overseas manufacturers of major equipment, notably premium-branded engines of non-standard specifications. Our customers, who are mainly, oil and gas majors, leading FPSO operators and end users, maintain longer term perspectives on their operation requirements that are not affected by the prevailing oil prices. Hence, they are continuing with the previously agreed schedules for the delivery of contracts awarded to us. The Group has already submitted proposals or is continuing to follow up with prospective customers for the projects in the regional markets. Indicative timelines remain ontrack. Nevertheless, given the extent of the global credit crunch that has impacted the worlds major economies; the Group remains alert on new challenges that may arise in its external environment. In view of the sizeable order book, current yard schedules and the expected completion of our expanded yard space and new in-house facilities in early next year, barring unforeseen circumstances the Group will remain profitable for FY2012. A WORD OF APPRECIATION On behalf of the Group, I would like to take this opportunity to express our heartfelt appreciation to our customers, business partners and associates for their ongoing support throughout this year. We could not have achieved the set of strong results in FY2011 without your confidence and trust. We certainly look forward to your continued support of Technics as we look towards the future to build a deeper and broader range of engineering solutions for the oil and gas markets. I would also like to put forward a special note of thanks to the Directors, management and staff of Technics whose commitment, diligence and integrity have raised our operational and financial performance towards a higher level every year. With your support, I am confident that we can continue to build upon the current momentum and achieve greater heights.
10
Growing our
PRESENCE
USA China Bangladesh Middle East Myanmar Thailand Vietnam Malaysia Singapore Indonesia Australia
The Group continues to make inroads into potential growth markets, strengthening our presence to build confidence in our capabilities and position us for long-term growth in these new markets.
11
OPERATIONS REVIEW
Technics has successfully clinched 5 new Contract Engineering (CE) contracts, including two contracts in the Russia Federation, amounting to a total of S$28.9 million in FY2011.
NEW DEVELOPMENTS Order winning momentum continues into the financial year ended 30 September 2011 (FY2011) as Technics chalked up about S$185.1 million worth of new contracts during the year. Consequently, order book swelled to a record high of S$141.0 million as at 9 November 2011 with progressive delivery throughout FY2012. Technics has successfully clinched 5 new Contract Engineering (CE) contracts, including two contracts in the Russia Federation, amounting to a total of S$28.9 million in FY2011. The order wins from Russia Federation represents a significant and important milestone for Technics as it marks the Groups first foray into a new geographical market, which is in line with the Groups growth strategies. Technics will be responsible for supplying Oil & Gas Process Equipment for modification of Jack-up rig and an offshore Oil Wellhead Satellite platform in the Russia Federation. This is a good opportunity for the Group to build up track record and exposure in the new market so as to leverage on the huge untapped market in Russia.
The Group has also made inroads in the Middle East market with a S$23.5 million contract win from a Middle East Oil & Gas Company in January 2011 for the engineering, procurement, construction and commissioning (EPCC) of Process Equipment for Early Production Systems. With project duration of 8 months, the Group shall deliver Process Equipment for Early Production Systems consisting of Wellhead Manifolds, Test Separators, Three Phase Separators, Gas KO Drums, Flare KO Drums, Heater Treater, Scraper Traps, Corrugated Plate Separators, Hydrogen Sulfide Removal Module and Flare Stacks and Burners. On 13 September 2011, Technics secured yet another EPCC contract from JV Vietsovpetro (VSP) for the provisioning of the topside equipments for wellhead satellite platforms named GT-1 for the White Bear and MT-1 for the White Cat oilfields in offshore Vietnam, worth an estimated S$32.0 million. These are scheduled for completion by June 2012. Technics will be responsible for the engineering, project management, procurement, fabrication, supervision of installation and hook up, onshore and offshore commissioning of topside modules
12
OPERATIONS REVIEW
for the two platforms. It will also supply the full package of equipment and systems, such as oil and gas processing equipment, power generation, electrical/control, accommodation modules, as well as other auxiliary equipments and systems. Including this latest contract, Technics has been awarded a total of 15 wellhead satellite platform orders by VSP. To date, thirteen projects have been completed and delivered, including RC-6 and RC-7 which were delivered in June 2011. VSPs vote of confidence is a strong testament to the Groups capabilities, quality and efficient services.
AT SUBSIDIARYS LEVEL The Groups 51% owned subsidiary, Norr Systems Pte Ltd (Norr Systems) has also gained traction in contract wins in FY2011 as it secured turnkey construction and service contracts worth S$74.0 million during the year. Norr Systems will design, engineer, procure and manufacture and supply ship automation (Hydraulic and Electrical equipment). Norr Systems will also supply equipment including main engines and all auxiliary equipments onboard vessel as well as provision of project management on site to deliver quality vessels to the owner. Furthermore, Norr Systems shall provide service contract for maintenance and servicing for the subsequent seven years after completion of the turnkey contracts.
13
OPERATIONS REVIEW
INCORPORATION OF NEW SUBSIDIARIES On 18 August 2011, Technics has incorporated a 51%-owned subsidiary, Technics Systems Solutions Pte Ltd, to design, engineer, integrate, test and supply integrated control & safety system, Pneumatic & Hydraulic Wellhead Control Panels and Turbo Machinery Control to Oil & Gas, Power and General Industries. This investment is consistent with the Groups strategy to expand portfolio offerings and to leverage on the growth opportunities present in the integrated automation market for the Oil & Gas and Power industries. Norr Systems has also incorporated 60%-owned subsidiary, Norr Systems Hydraulics Pte Ltd (Norr Hydraulics) and 100%-owned subsidiary, Bloomfoss Pte Ltd (Bloomfoss) in March 2011 and May 2011 respectively. Norr Hydraulics will manufacture Marine, Offshore, Oil & Gas hydraulics equipments while Bloomfoss will manufacture and repair pumps and hydraulics components. Technics, through its 51% equity interest in Norr Systems, will therefore holds 30.6% effective interest in Norr Hydraulics and 30.6% effective interest in Bloomfoss. MAJOR PROJECT MILESTONES During the period under review, the following project milestones had been completed or are scheduled for completion in the near term: EPCC contract for provisioning of topside equipments for wellhead satellite platforms GT-1 & MT-1 to VSP at the White Bear and White Cat oilfields are scheduled for completion in Q4FY2012 CE contract for fabrication Structural module for compressors for a Malaysian customer to be scheduled for completion in Q2FY2012 Contract Engineering (CE) contract for fabrication and supply of Gas Compressor Package for a Malaysian End-User to be completed in Q2FY2012 Major projects work in progress EPCC contract for supplying process Major projects completed Delivery of fast-tracked provision of topside equipments for wellhead satellite platforms RC-6 and RC-7 VSP at the Dragon oilfield in June 2011
equipment for Early Production Systems to a Middle East Oil & Gas company to be scheduled for completion in Q1FY2012
14
OPERATIONS REVIEW
SINGAPORE OPERATIONS The Group embarked on a multi-pronged expansion programme over the past years and Technics is proud to update that the final phase of improvement in the Singapore yard is expected to be completed by December 2011. PLACEMENT EXERCISE Pursuant to the Groups proposed issuance of Taiwan Depository Receipts (TDR), 13,000,000 Placement Shares have been allotted and issued at a share issue price of S$1.008 for each Placement Share on 22nd February 2011 to the custodian bank for the depository bank appointed by the Company for the Proposed TDR Issue. The Placement Shares were listed on Singapore Stock Exchange on 24 February 2011 and the net proceeds of S$12.7 million were fully utilized towards the partial repayment of the Groups bank borrowings.
CORPORATE DEVELOPMENT Technics has marked its debut on the Taiwan Stock Exchange as it was successfully listed via the issuance of TDR on 25th February 2011. Technics is the first Singapore listed company to be listed on the Taiwans over-the-counter market, the GreTai Securities Market. The Group has issued a total of 40 million shares, comprises of 13 million new ordinary shares (to be issued by the Company) and 27 million vendor shares (shares held by controlling shareholders), on a basis of 2 TDR shares for every 1 ordinary shares issued. The counter receives overwhelming subscription for the five consecutive trading days once the shares are officially traded on 25th February 2011. Net proceeds from the TDR exercise of S$12.7 million are fully utilized towards repayment of bank borrowings to reduce interest payments and enhance gearing ratio of the Group.
15
BOARD OF DIRECTORS
TING YEW SUE, ROBIN is our Executive Chairman and Group Managing Director. He is responsible for the general management and overall strategic planning and direction of our Group. He is also the Managing Director of the subsidiary, Technics Offshore Engineering Pte Ltd (TOE), overseeing the Singapore operations. Between 1990 and 1995, Mr Ting is the pioneer entrepreneur to set up and develop the market in Vietnam. Mr Ting has more than 38 years of experience in design, engineering and production of process modules and integrated system for the oil and gas industry. Prior to the founding of TOE in 1990, he was the Operations Manager in charge of the day-to-day management and operations of Hup Seng Offshore Engineering Pte Ltd, an engineering company servicing the oil and gas industry from 1968 to 1990.
TAY MIAN CHEO, DAVID is our Executive Director and a co-founder of Technics. He spearheads the Groups business development, sales and marketing initiatives to expand into new business segments and geographical markets in the Middle East, Asia-Pacific, India and Africa. Mr Tay also leads the forging of partnerships and alliances he was instrumental in the fostering of the Groups two recent agreements with Dubaibased Global Process Systems as well as our Joint Operations in Indonesia. He has more than ten years experience in business development and sales in the oil and gas industry, of which six years were spent in Vietnam. Prior to joining Technics, he was the sales and marketing manager of a precision engineering company, Ritz Precision Engineering Pte Ltd. TING TIONG CHING is our Executive Director. He joined the Group in 1998 as a Sales Engineer before being disrupted to further his studies in the United Kingdom. Armed with a Bachelor degree in mechanical and electrical engineering, Deren returned to the Group in 2002. He is currently responsible for the planning and implementation of the marketing strategy and sales performance of the commercial department.
16
BOARD OF DIRECTORS
ONG SIEW PENG is our Independent Director. He is an Executive Director and Corporate Mediator and Advisor with Corporate Brokers International Pte Ltd, a strategic investment search company focusing on small and medium enterprise. Since 2001, he is responsible for corporate mediation regarding mergers and acquisitions matters, providing financial and management advice, strategic business planning and strategic investor search advice. He is also an Executive Director of PowerSource International Pte Ltd, a local diesel engine distributor for the Asia Pacific region; as well as an Executive Director of Perfex International Pte Ltd, a local radiator and heat exchanger manufacturer. On 1 January 2005, he was appointed as an Independent Director and Audit Committee Chairman of NH Ceramics Ltd, a company listed on SGX SESDAQ.
DR LIEW JAT YUEN RICHARD is our Independent Director. He is currently a professor in the Department of Civil and Environmental Engineering at the National University of Singapore. He is also an independent director of Yongnam Holdings. He is a registered professional Engineer in Singapore, an ASEAN chartered professional engineer and a Chartered Engineer in U.K. He has extensive research and practical experience in building and offshore industries and has consulted on numerous construction and offshore engineering projects in Singapore and the region. An international renowned expert in steel and composite structures and fire safety engineering, he provides specialist advices to the design and construction of high-rise and large span steel structural systems and has been involved in many national and international committees on design standards, product specifications and constructional practices and safety and made significant contributions to numerous guidelines for practice.
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KEY EXECUTIVES
LAM MAY YIH is our Group Financial Controller and is responsible for the overall aspects of financial & strategic planning, budgeting and corporate matters of the Group. May Yih has been with the Group since 2001 as a Group Finance Manager and being promoted in December 2007. She is a graduate of the Association of Chartered Certified Accountants and is a Fellow Member of the Association as well as a Certified Public Accountant of Singapore. TAN KIA TECK is our Director, Sales and Marketing of Technics Offshore Engineering Pte Ltd and is responsible for managing & developing existing business as well as identifying and securing new business opportunities of the Group. Prior to joining the Group in 1993 during his University vacation as Assistant Design Engineer, he served 6 years as an Infantry Army Officer in the Singapore Arm Forces. He returned to the Group in 1994 as Proposal Engineer after achieving his Honor Degree in Mechanical Engineering at University of Glasgow, United Kingdom. Kia Teck has more than 17 years of experience in cost estimation, sales & marketing as well as project management in the oil and gas industry, he is also one of our longer serving staff in the Group. MURUGAIAN MOHAN RAJKUMAR is our Regional Manager of Technics Offshore Engineering Pte Ltd (Compression Division) and is responsible for the performance of the Compression Division. Mohan has been with the Group since August 2005 and he has more than 18 years of experience in handling rotating and allied equipment in the oil and gas industry. KIANG LONG HOON is our Managing Director of Wecom Engineering Pte Ltd and is responsible for the profitability, operations and management of the entire subsidiary. Prior to joining Wecom in 2010, he is our Sales and Marketing Director. He has centralised responsibility for the sales and marketing activities of the Group outside Vietnam. He is also in charge of project tender evaluation and negotiation for the Group outside Vietnam. Long Hoon has over 30 years of experience in cost estimation, project planning, sales and marketing in the oil & gas and shipbuilding industries. Prior to joining Technics in 1997, he spent 15 years as a Marketing Manager with Applied Engineering Pte Ltd, an engineering company providing design and fabrication service to chemical and petrochemical industries. His responsibilities then included cost estimation, sales and marketing. JOHN LIGHTBODY is our Director of Technics Engineering Australia Pty Ltd and is responsible for the profitability, operations and management of the entire subsidiary. John joined the Group in January 2006 and he brought with him more than 20 years of experience in the oil and gas, structural steel, mining and manufacturing industries. DR LEE YAK WAN is the General Manager for Petro Process System Pte Ltd, a subsidiary company for Technics Oil & Gas Limited. He is accountable for the performance of the teams sales and operations functions. He is also incharge of providing the engineering expertise and supporting in tendering of projects to all the other companies under Technics Oil & Gas Limited. Dr Lee Yak Wan has achieved his Doctorate Degree from Aston University in United Kingdom in the area of Engineering and Applied Science. He has 17 years of wide industry experience in engineering, operation, project management, sales and marketing, research, business development in many industries that include Oil & Gas and Marine industries. Prior joining Petro Process System Pte Ltd in 2009, he spent 5 years as a Assistant/ General Manager with Marshal Technology Mktg & Engrg Pte Ltd and Terasaki Electric Co. (F.E.) Pte Ltd, both are engineering companies that provide design, integration and fabrication products to the shipbuilding, ship repairing, oils gas industries, power generating plants, petrochemical plants and commercial construction industries. His responsibilities then included running the overall business operations and sales functions. LEE TONG HUA is the Senior General Manager for Norr Systems Pte Ltd and is responsible for the profitability, operations and management of the entire subsidiary. Kenneth has been working in Marine and Offshore industry for more than 14 year with vast experience in Management. Apart from Management skill, he is also experience in product designing and software programming. Some of the company marine control software is, in fact, written by him. In addition, he has good knowledge and working relationship in China Marine market.
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GROUP STRUCTURE
100% 100%
TECHNICS ENGINEERING AUSTRALIA PTY LTD (TEA) M2E CORPORATION (SUZHOU) CO., LTD 100%
51%
100%
TECHNICS OIL & GAS LIMITED (Parent Company) TECHNICS OFFSHORE INTERNATIONAL PTE LTD (TOI) 1% 100% NORR SYSTEMS 60% HYDRAULICS PTE LTD
51%
40% 51% NORR SYSTEMS PTE LTD (NORR) 100% PETRO PROCESS SYSTEM PTE LTD (PPS) WECOM 54.67% ENGINEERING PTE LTD 100% WECOM MARINE PTE LTD FIRST OIL PTE LTD
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FINANCIAL CONTENTS
21 29 32 33 35 36 37 Corporate Governance Directors Report Statement By Directors Independent Auditors Report Consolidated Statement of Comprehensive Income Statements of Financial Position Statements of Changes in Equity 39 41 92 93 95 Consolidated Statement of Cash Flows Notes to the Financial Statements Additional Information Required for Disclosures Shareholdings Statistics Notice of Annual General Meeting Proxy Form
The Board of Directors (the Board) of Technics Oil & Gas Limited is committed to achieving high standards of corporate governance to ensure investor condence in the Company as a trusted business enterprise. The Board and Management will continue to uphold good corporate governance practices to enhance long-term value and returns for shareholders and protect shareholders interests. This report describes the Companys corporate governance practices with reference made to the principles of the Code of Corporate Governance 2005 (the Code).
BOARD OF DIRECTORS
Principle 1: Boards Conduct of its Affairs
The Board provides leadership to the Group by setting the corporate policies and strategic aims. The main functions of the Board, apart from its statutory responsibilities, are to:
Review nancial performance of the Group; Approve major investment and funding decisions; Oversee the process for evaluating the adequacy of internal controls, risk assessment, nancial reporting and compliance; Evaluate the performance and determine the compensation of key management personnel; and Assume the responsibility for overall corporate governance of the Group.
The Board meets at least four times a year to review and approve, inter alia, the quarterly nancial results of the Company, including the half-year and year-end results. Apart from Board meetings, important matters are also put to the Board for approval by way of circulating resolutions in writing. The Board has established Committees to assist it in discharging its responsibilities. These Committees operate under clearly dened terms of reference. The three Committees are:
Audit Committee (the AC) Nominating Committee (the NC) Remuneration Committee (the RC)
The attendances of the Directors at meetings of the Board and Board Committees, as well as the frequency of such meetings during the nancial year are as follows: Attendance at Meetings Board Committees Audit Nominating 4 2 No. of Meetings Attended 2 4 4* 4 2 2*
No. of meetings held Board Members Ting Yew Sue Tay Mian Cheo Ting Tiong Ching Ong Siew Peng Dr Liew Jat Yuen Richard
* Chairman
Board 4 4 4 4 4 4
Remuneration 3
3 3 3*
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Certain matters specically reserved for decision by the Board are those related to approval of announcements of nancial results, approval of annual reports and nancial statements, convening of shareholders meeting, dividend payment, major contracts, material acquisitions and disposal of assets and corporate restructuring matters. New directors, when appointed, will be briefed on the Groups business and Corporate Governance policies. Familiarization visits, including overseas ofces, are organized, if necessary, to facilitate a better understanding of the Groups operations. Board members are encouraged to attend seminars and received training to improve themselves in the discharge of their duties as directors. The Company works closely with professionals to provide its directors with changes to relevant laws, regulations and accounting standards. Principle 2: Board Composition and Balance
The Board comprises three Executive Directors and two Independent Directors. This composition complies with the Codes requirement that at least one-third of the Board should be made up of Independent Directors. Each director has been appointed on the strength of his calibre, expertise and experience. The Board and management recognise the advantage of open and constructive debate. To facilitate this, Board members are supplied with relevant, complete and accurate information on a timely basis. The Independent Directors may challenge managements assumptions and also extend guidance to the management, in the best interest of the Company. The independence of each Director is reviewed annually by the NC based on the Codes denition of what constitutes an independent director. The NC is of the view that the current Board has an independent element ensuring objectivity in the exercise of judgment on corporate affairs independently from the management. The NC is also of the view that no individual or a small group of individuals dominates the Boards decision making process. The Board is of the opinion that it current board size of ve Directors is appropriate, taking into account, the nature and scope of the Companys operations. The Boards composition reects the broad range of experience, skills and knowledge necessary for the effective stewardship of the Group. Principle 3: Role of Chairman and Group Managing Director
The Chairman and the Group Managing Director of the Company is Mr Ting Yew Sue. The Board is of the view that, given the scope and nature of the operations of the Group and the strong element of independence of the Board, it is not necessary to separate the functions of Chairman and Managing Director. As Chairman, Mr Ting Yew Sue bears responsibility for the working of the Board and, together with the AC, ensures the integrity and effectiveness of the governance process of the Board. As Managing Director, Mr Ting Yew Sue bears the overall daily operational responsibility for the Groups business.
NOMINATING COMMITTEE
Principle 4: Board Membership
The NC comprises three directors, a majority of whom including the Chairman are independent. Chairman: Members: Dr Liew Jat Yuen Richard Ong Siew Peng Ting Yew Sue (Independent Director) (Independent Director) (Group Managing Director)
The main role of the NC is to make the process of Board appointments and re-appointments transparent and to assess the effectiveness of the Board as a whole and the contribution of individual Director to the effectiveness of the Board.
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When a vacancy arises under any circumstances, or where it is considered that the Board would benet from the services of a new director with a particular skill, the NC, in consultation with the Board, determines the selection criteria and selects the candidates with the appropriate expertise and experience for the position. The NC performs the following functions:
Recommend the appointment and re-appointment of Directors; Review annually the independence of each Director, and ensure that the Board comprises at least one-third Independent Directors; Decide, where a Director has multiple board representation, whether the Director is able to and adequately carries out his duties as Director of the Company; Decide how the Boards performance may be evaluated and propose objective performance criteria to assess effectiveness of the Board; and Perform assessment of the effectiveness of the Board as a whole and the contribution of individual Director.
The Articles of Association of the Company require one-third of the Directors to retire and subject themselves to re-election by the shareholders in every Annual General Meeting. In addition, all Directors of the Company shall retire from ofce at least once every three years. Key information regarding the directors can be found under the Board of Directors section of this annual report. Information on shareholdings in the Company held by each Director is set out in the Directors Report section of the Annual Report. Principle 5: Board Performance
The NC has established an appraisal process to assess the performance and effectiveness of the Board as a whole as well as to access the contribution of individual Director. The appraisal process focuses on a set of performance criteria which includes qualitative and quantitative factors such as principal functions, duciary duties, attendance record, level of participation at meetings, and guidance provided to the management. The NC is of the opinion that the Board and each member of the Board has been effective due to the active participation of every Board member during each meeting. Principle 6: Access to Information
The members of the Board in their individual capacity have access to complete information on a timely basis in the form and quality necessary for the discharge of their duties and responsibilities. Prior to each Board meeting, the members of the Board are each provided with the relevant documents and information to enable them to obtain a comprehensive understanding of the issues to be deliberated upon to enable them to arrive at an informed decision. The Directors have unrestricted access to the Companys senior management at all times. The Company Secretary attends Board meetings and is responsible for ensuring that the Board meeting procedures are followed and that applicable rules, acts and regulations are complied with. The appointment and removal of the Company Secretary is a matter for the Board as a whole. Each Director, whether individually or as a group, has the right to seek independent professional advice as and when necessary, in furtherance of their duties. The cost of such professional advice will be borne by the Company.
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REMUNERATION COMMITTEE
Principle 7: Procedures for Developing Remuneration Policies
The RC comprises two Independent Directors and an Executive Director. Dr Liew Jat Yuen Richard, an Independent Director is Chairman of the Remuneration Committee. Chairman: Members: Dr Liew Jat Yuen Richard Ong Siew Peng Tay Mian Cheo (Independent Director) (Independent Director) (Executive Director)
The Board believes that the current RC composition is considered adequate as the majority of the members including the Chairman, is Non-Executive and Independent. To minimize the risk of any potential conict of interest, each member of the RC shall abstain from voting on any resolution in respect of his remuneration package The Company may also engage an external consultant to advise on all remuneration and related matters of Directors and senior management, as and when circumstances require to ensure that the Directors remuneration is fair and reasonable and benchmarked against comparable companies. The Executive Directors remuneration packages are based on service agreement. These included a prot sharing scheme that is performance related to align their interests with those of the shareholders. Independent Directors are paid yearly Directors fees of an agreed amount and these fees are subject to shareholders approval at the Annual General Meeting. The terms of reference of the Committee are as follows:
Recommend to the Board a framework of remuneration for the Executive Directors and other key members of the executive management; Determine specic remuneration packages for each Executive Director; and Determine targets for any performance-related pay schemes operated by the Company.
The recommendations of the RC are submitted to the Board for endorsement. All aspects of remuneration, including but not limited to directors fees, salaries, allowances, bonuses, options and benets in kind are covered by the RC. The RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, the RC will take into consideration industry practices and norms in compensation in addition to the Companys relative performance to the industry and the performance of the individual Director. No individual Director is involved in deciding his own remuneration. Principle 8: Level and Mix of Remuneration
The remuneration package of the Executive Directors and key members of executive management generally comprises two components. One component is xed in the form of a base salary, car allowance and handphone allowance. The other component is variable consisting of incentive bonuses. The incentive bonuses are dependent on the nancial performance of the Company as the RC strongly supports and endorses the exible wage system as it gives the Company more exibility to ride through economic downturns. The RC has adopted set protability levels to be achieved before incentive bonuses are payable. The Independent Directors are paid Directors fees for their efforts and time spent, responsibilities and contributions to the Board, subject to the approval by shareholders at the Annual General Meeting.
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Principle 9:
Disclosure on Remuneration
The level and mix of remuneration (in percentage terms) for the Directors for the nancial year ended 30 September 2011 (FY2011) is as follows: Variable or Performance Related Income/ Bonus
Remuneration Band & Name of Director Above $500,000 Ting Yew Sue Tay Mian Cheo Ting Tiong Ching Below $250,000 Ong Siew Peng Dr Liew Jat Yuen Richard
Base/Fixed Salary
Directors Fees
Total
100% 100%
100% 100%
No option has been granted to the above Directors. The breakdown of remuneration of each key executive (who is not a Director) in percentage terms for the nancial year ended 30 September 2011 is as follows: Base/Fixed Salary Variable or Performance Related Income/Bonus
Remuneration Band & Name of Key Executive Below $250,000 Lam May Yih Tan Kia Teck Murugaian Mohan Kiang Long Hoon John Lightbody Dr Lee Yak Wan Lee Tong Hua No option has been granted to the above key executives.
Total
Based on the bands established above, the remuneration of each key executive who is not a Director is below S$250,000. There is no employee in the Group, being an immediate family member of a Director, whose remuneration exceeded S$150,000 during the year. The Circular to shareholders in relation to the proposed Technics Performance Share Plan had been approved by the shareholders during the Extraordinary General Meeting held on 17 November 2008. The members of the Committee administering the Plan are the Remuneration Committee members as stated above. As the Share Plan is designed as a compensation plan to motivate Group Executives, all employees who are Controlling Shareholders or their Associates will not be eligible to participate in the Share Plan. In addition, both Executive Directors and Non-Executive (including Independent Directors) are also not eligible to participate in the Share Plan. Employees of Associated Company will not be eligible to participate in the Share Plan. During the nancial year ended 30 September 2011, no awards have been granted to eligible participants under the Technics Performance Share Plan.
TECHNICS OIL & GAS LIMITED | Annual Report 2011 |
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AUDIT COMMITTEE
Principle 11: Audit Committee
The AC comprises three Directors, a majority of whom including the Chairman are Non-Executive Independent Directors Chairman: Members: Ong Siew Peng Dr Liew Jat Yuen Richard Tay Mian Cheo (Independent Director) (Independent Director) (Executive Director)
The proles of the members of the AC are set out in the Board of Directors section. The Board is of the view that the AC has the requisite nancial management expertise and experience to discharge its responsibilities properly. The terms of reference of the Committee are as follows:
Review the audit plans, the system of internal accounting controls and the audit report in conjunction with the external auditors; Review the assistance given by the Companys ofcers to the external auditors; Review the independence and objectivity of the external auditors annually; Nominate the external auditors for re-appointment; Review the quarterly nancial statements of the Company, including the half-year and full-year results and the respective announcements before submission to the Board of Directors; Give due consideration to the requirements of the Listing Rules of the Singapore Exchange Securities Trading Limited and Review interested person transactions.
The AC has direct access to and full co-operation of the Companys management. It has full discretion to invite any Director or executive ofcer to attend its meetings and is given reasonable resources to enable it to discharge its functions. During the nancial year, the AC met four times to review the announcements of its quarter, half-year and full-year results before being approved by the Board for release to SGXNET. The AC also met with the external auditors without the presence of the Companys management. The AC, having reviewed the amount of non audit related services to the Group and being satised that such services will not prejudice the nature and extent of independence and objectivity of the external auditors, have recommended to the Board the nomination of Messrs RSM Chio Lim LLP for re-appointment as external auditors of the Company. The Company has put in place a whistle-blowing framework, endorsed by the AC where the employees of the Company may, in condence, raise concerns about possible corporate improprieties in matters of nancial reporting or other matters. Details of the whistle-blowing policies and arrangements have been made available to all employees. Principle 12: Internal Controls
The Board acknowledges that it is responsible for maintaining a sound system of internal controls to safeguard shareholders interests and maintain accountability of its assets. While no cost-effective internal control system can provide absolute assurance against loss or misstatement, the Groups internal controls and systems have been designed to provide reasonable assurance that assets are safeguarded, operational controls are in place, business risks are suitably protected, proper accounting records are maintained and nancial information used within the business and for publication, are reasonable and accurate.
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Principle 13:
Internal Audits
The Company has outsourced and appointed Messrs Nexis TS Risk Advisory Pte Ltd as its internal auditors. The internal auditor reports directly to the AC, which assists the Board in monitoring and managing internal control and risks of the Group. The AC will approve the internal audit plan and ensure adequacy of resources for the internal auditors to perform its tasks.
The Board believes in timely communication of information to shareholders and public. It is the Companys policy that all shareholders and the public should be equally and timely informed of all major developments that impact the Company. Communication is made through:
Annual reports that are issued to all shareholders and non-shareholders. They may access the SGX-ST website for a soft copy of the annual report; Announcement of quarter, half-year and full-year results on the Singapore Exchange Securities Trading Limiteds SGXNET; Disclosure on the SGXNET; Press releases on major developments of the Company; and Companys website at www.technicsgrp.com from which shareholders can access information on the Company.
The Board supports the Codes principle to encourage shareholder participation. The Articles allow a shareholder to appoint one or two proxies to attend and vote instead of the shareholder. The Board takes note that there should be separate resolution at general meetings on each substantially separate issue and supports the Codes principle as regards to bundling of resolutions. Resolutions are as far as possible, structured separately and are voted on independently. All Directors including Chairpersons of the Board, AC, RC and NC and senior management are in attendance at the Annual General Meetings (AGMs) and Extraordinary General Meetings to allow shareholders the opportunity to air their views and ask Directors or management questions regarding the Company. The external auditors are also invited to attend the AGMs and are available to assist the Directors in addressing any relevant queries by the shareholders relating to the conduct of the audit, the preparation and contents of the auditors report.
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Name of interested person Hup Seng Offshore Engineering (Pte) Ltd Hyrax Pte Ltd
Aggregate value of all interested person transactions conducted under shareholders mandate pursuant to Rule 920 (excluding less than S$100,000)
The Company has established internal control policies to ensure that transactions with interested persons are properly reviewed and approved, and are conducted at an arms length basis.
SECURITIES TRANSACTION
The Company has issued a policy on dealings in the securities of the Company to its Directors and key employees (including employees with access to price-sensitive information to the Companys shares), setting out the implications of insider trading and guidance on such dealings. The Companys ofcers are not allowed to deal in the Companys shares during the period commencing two weeks before the announcement of the Companys nancial statements for each of the rst three quarters of its nancial year, or one month before the announcement of the Companys half-year and full-year results and ending on the date of the announcement of the relevant results. Directors and executives are also expected to observe insider trading laws at all times even when dealing with securities within the permitted trading period.
MATERIAL CONTRACTS
There was no material contracts entered into by the Company or any of its subsidiaries involving the interest of any Director or controlling shareholder in FY2011.
RISK MANAGEMENT
The Company regularly reviews and improves its business and operational activities to take into account the risk management perspective. The Company seeks to identify areas of signicant business risk as well as appropriate measures to control and mitigate these risks. The Company reviews all signicant control policies and procedures and highlights all signicant matters to the AC.
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Directors' Report
The directors of the company are pleased to present their report together with the audited nancial statements of the company and of the group for the reporting year ended 30 September 2011.
1.
2.
Arrangements to Enable Directors to Acquire Benets by Means of the Acquisition of Shares and Debentures
Neither at the end of the reporting year nor at any time during the reporting year did there subsist any arrangement whose object is to enable the directors of the company to acquire benets by means of the acquisition of shares or debentures in the company or any other body corporate.
3.
Number of shares of no par value 43,206,775 6,964,675 4,128,000 50,000 25,000 28,310,662 5,162,012 14,128,000 175,000 37,500 Deemed interest 28,310,662 5,162,012 14,128,000 175,000 37,500
5,000,000
5,000,000
5,000,000
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Directors' Report
4.
5.
6.
Options Exercised
During the reporting year, there were no shares of the company or any corporation in the group issued by virtue of the exercise of an option to take up unissued shares.
7.
8.
Audit Committee
The members of the audit committee at the date of this report are as follows: Ong Siew Peng (Chairman of the Audit Committee and Non-Executive Independent Director) Dr Liew Jat Yuen Richard (Non-Executive Independent Director) Tay Mian Cheo (Executive Director) The audit committee performs the functions specied by section 201B(5) of the Companies Act. Among other functions, it performed the following:
Reviewed with the independent external auditors their audit plan; Reviewed with the independent external auditors their evaluation of the companys internal accounting control, and their report on the nancial statements and the assistance given by the companys ofcers to them; Reviewed with the internal auditors the scope and results of the internal audit procedures; Reviewed the nancial statements of the group and the company prior to their submission to the directors of the company for adoption; and Reviewed the interested person transactions (as dened in Chapter 9 of the Listing Manual of SGX).
Other functions performed by the audit committee are described in the report on corporate governance included in the annual report. It also includes an explanation on how independent auditor objectivity and independence is safeguarded where the independent auditors provide non-audit services. The audit committee has recommended to the board of directors that the independent auditors, RSM Chio Lim LLP, be nominated for re-appointment as independent auditors at the next annual general meeting of the company.
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Directors' Report
9.
Independent Auditors
The independent auditors, RSM Chio Lim LLP, have expressed their willingness to accept re-appointment.
10.
Subsequent Developments
There are no signicant developments subsequent to the release of the groups and companys preliminary nancial statements, as announced on 10 November 2011, which would materially affect the groups and companys operating and nancial performance as of the date of this report.
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Statement by Directors
In the opinion of the directors, (a) the accompanying consolidated statement of comprehensive income, statements of nancial position, statements of changes in equity, consolidated statement of cash ows, and notes thereto are drawn up so as to give a true and fair view of the state of affairs of the company and of the group as at 30 September 2011 and of the results and cash ows of the group and changes in equity of the company and of the group for the reporting year then ended; and at the date of this statement there are reasonable grounds to believe that the company will be able to pay its debts as and when they fall due.
(b)
The board of directors approved and authorised these nancial statements for issue.
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Opinion
In our opinion, the consolidated nancial statements of the group and the statement of nancial position and statement of changes in equity of the company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the group and of the company as at 30 September 2011 and the results, changes in equity and cash ows of the group and the changes in equity of the company for the reporting year ended on that date.
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RSM Chio Lim LLP Public Accountants and Certied Public Accountants Singapore 20 December 2011 Partner-in-charge of audit: Derek How Beng Tiong Effective from year ended 30 September 2009
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Revenue Cost of Sales Gross Prot Other Items of Income Interest Income Other Credits Other Items of Expense Marketing and Distribution Costs Administrative Expenses Finance Costs Other Charges Share of Prot (Loss) from Equity-Accounted Associates Prot Before Tax from Continuing Operations Income Tax Expense Prot Net of Tax Other Comprehensive Income: Exchange Differences on Translating Foreign Operations, Net of Tax Total Comprehensive Income Prot Attributable to Owners of Parent, Net of Tax Loss Attributable to Non-Controlling Interests, Net of Tax Prot Net of Tax Total Comprehensive Income Attributable to Owners of the Parent Total Comprehensive Income Attributable to Non-Controlling Interests Total Comprehensive Income Earnings per Share Earnings per Share Currency Unit Basic Diluted
6 7 5
35
ASSETS Non-Current Assets Property, Plant and Equipment, Total Investments in Subsidiaries Investments in Associates Finance Lease Receivables, Non-Current Other Assets, Non-Current Total Non-Current Assets Current Assets Inventories Trade and Other Receivables, Current Finance Lease Receivables, Current Other Assets, Current Cash and Cash Equivalents Total Current Assets Total Assets EQUITY AND LIABILITIES Equity attributable to owners of the parent Share Capital Retained Earnings/(Accummulated Losses) Other Reserves, Total Equity, Attributable to Owners of the Parent, Total Non-Controlling Interests Total Equity Non-Current Liabilities Deferred Tax Liabilities Finance Leases, Non-Current Other Financial Liabilities, Non-Current Total Non-Current Liabilities Current Liabilities Income Tax Payable, Current Trade and Other Payables, Current Other Liabilities, Current Finance Leases, Current Other Financial Liabilities, Current Dividends Payable Total Current Liabilities Total Liabilities Total Equity and Liabilities
13 14 15 16 17
31,368 31,368
1 7,659 7,660
1 11,455 11,456
18 20 16 21 22
23 24
9 25 26
289 289
138 138
27 28 25 26 12
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Group:
Current Year: Opening Balance at 1 October 2010 Movements in Equity: Total Comprehensive Income for the Year Incorporation of Subsidiaries Liquidation of Subsidiary Exercise of Warrants (Note 23) Issue of Share Capital (Note 23) Purchase of Treasury Shares (Note 23) Dividend paid/ payable (Note 12) Closing Balance at 30 September 2011 Previous Year: Opening Balance at 1 October 2009 Adjustments to Beginning Balance Arising from Adoption of Revised FRS 27 (Note 38) Restated Opening Balance at 1 October 2009 Movements in Equity: Total Comprehensive Income for the Year Acquisition of Subsidiaries (Note 29) Purchase of Treasury Shares (Note 23) Dividends Payable (Note 12) Closing Balance at 30 September 2010
23,558
24,466
7,132
10,380
110
6,844
(908)
27 137
(6,844)
28,225
28,180
14,589
6,439
308
6,844
45
28,225
1,304 29,484
14,589
1,304 7,743
308
6,844
(1,304) (1,259)
(7,457) 7,132
(198) 110
6,844
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Company: Current Year: Opening Balance at 1 October 2010 Movements in Equity: Total Comprehensive Income for the Year Issue of Share Capital (Note 23) Exercise of Warrants (Note 23) Purchase of Treasury Shares (Note 23) Dividends Payable (Note 12) Closing Balance at 30 September 2011 Previous Year: Opening Balance at 1 October 2009 Movements in Equity: Total Comprehensive Income for the Year Purchase of Treasury Shares (Note 23) Dividends Paid (Note 12) Closing Balance at 30 September 2010
6,844 (6,844)
6,844 6,844
38
21,333 3,384 (1,908) 1,259 (16) (118) 124 24,058 692 (16,174) (20,661) 8,742 (3,492) (6,835) (3,578) (10,413)
19,401 2,404 (102) 1,353 941 (72) (6) 1,545 25,464 253 39,276 78 (8,862) (9,162) 47,047 (1,519) 45,528
39
2011 $000 Cash Flows From Financing Activities Dividend Paid to Equity Owners Issue of Shares Purchase of Treasury Shares Cash from Exercise of Warrants Decrease in Other Financial Liabilities, Non-Current Increase from New Borrowings Finance Lease Repayments Cash Restricted in Use Interest Paid Net Cash Flows From (Used in) Financing Activities Net (Decrease) Increase in Cash and Cash Equivalents Net Effect of Exchange Rate Changes Cash and Cash Equivalents, Statement of Cash Flows, Beginning Balance Cash and Cash Equivalents, Statement of Cash Flows, Ending Balance (Note 22A)
2010 $000
(31,844) 12,718 (8,055) 28,363 (56,869) 67,781 (90) 1,798 (1,259) 12,543 (16,761) (913) 26,074 8,400
(7,457) (18,694) 17,000 (30) (4,044) (1,353) (14,578) 18,339 (1,262) 8,997 26,074
40
2.
41
42
43
An asset is depreciated when it is available for use until it is derecognised even if during that period the item is idle. Fully depreciated assets still in use are retained in the nancial statements. Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost less any accumulated depreciation and any accumulated impairment losses. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item and is recognised in prot or loss. The residual value and the useful life of an asset is reviewed at least at each end of the reporting year and, if expectations differ signicantly from previous estimates, the changes are accounted for as a change in an accounting estimate, and the depreciation charge for the current and future periods are adjusted. Cost also includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing the asset or component to the location and condition necessary for it to be capable of operating in the manner intended by management. Subsequent costs are recognised as an asset only when it is probable that future economic benets associated with the item will ow to the entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to prot or loss when they are incurred. Segment Reporting The group discloses nancial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specied criteria. Operating segments are components about which separate nancial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Generally, nancial information is reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments.
44
45
46
47
2.
3.
4.
Cash and Cash Equivalents Cash and cash equivalents include bank and cash balances, on demand deposits and any highly liquid debt instruments purchased with an original maturity of three months or less. For the statement of cash ows the item includes cash and cash equivalents less cash subject to restriction and bank overdrafts payable on demand that form an integral part of cash management. Derivatives Derivatives: All derivatives are initially recognised and subsequently carried at fair value. Certain derivatives are entered into in order to hedge some transactions and all the strict hedging criteria prescribed by FRS 39 are not met. In those cases, even though the transaction has its economic and business rationale, hedge accounting cannot be applied. As a result, changes in the fair value of those derivatives are recognised directly in prot or loss and the hedged item follows normal accounting policies.
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2.
Financial Guarantees A nancial guarantee contract requires that the issuer makes specied payments to reimburse the holder for a loss when a specied debtor fails to make payment when due. Financial guarantee contracts are initially recognised at fair value and are subsequently measured at the greater of (a) the amount determined in accordance with FRS 37 and (b) the amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance with FRS18. Finance Leases of Lessor An amount due from a lessee is recognised as receivables at an amount equal to the net investment in the lease. The recognition of nance income is based on a pattern reecting a constant periodic rate of return on the lessors net investment outstanding in respect of the nance leases. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.
49
50
51
52
53
The above amounts are included under employee benets expense. Included in the above amounts are following items: Company 2011 $000 Directors prot share Remuneration of directors of the company Fees to directors of the company 1,950 843 186 2010 $000 1,646 727 80
Further information about the remuneration of individual directors is provided in the report on corporate governance. Key management personnel are directors and those persons having authority and responsibility for planning, directing and controlling the activities of the company, directly or indirectly. The above amounts for key management compensation are for all the directors of the company. 3.4 Other receivables from and other payables to related parties: The trade transactions and the trade receivables and payables balances arising from sales and purchases of goods and services are disclosed elsewhere in the notes to the nancial statements. The movements in other receivables from and other payables to related parties are as follows: Subsidiaries Company 2011 2010 $000 $000 Other receivables/(other payables): Balance at beginning of the year net debit Amount paid out and settlement of liabilities on behalf of another party Allowance for impairment Allowance for impairment - reversal Amount reclassied from investment in subsidiaries Balance at end of the year net debit 33,286 12,140 (2,500) 3,898 46,824 1,753 12,904 139 18,490 33,286
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35 5,624 5,659
2011 $000 Other receivables/(other payables): Balance at beginning of the year net credit Amount paid out and settlement of liabilities on behalf of another party Acquisition of subsidiary Balance at end of the year net credit
2010 $000
(400) 400
4.
Revenue
Group 2011 $000 Amount recognised from construction contracts Rendering of services Rental income 118,863 5,992 943 125,798 2010 $000 101,423 1,404 756 103,583
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6.
Administrative Expenses
The major components include the following: Group 2011 $000 Depreciation expense Employee benets expense 2,628 13,262 2010 $000 1,646 9,823
7.
Finance Costs
Group 2011 $000 Interest expense 1,259 2010 $000 1,353
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9.
9A.
Income Tax
Components of tax expense recognised in prot or loss include: Group 2011 $000 Current tax expense: Current tax expense Under adjustments to current tax in respect of prior periods Subtotal Deferred tax expense: Deferred tax expense Under adjustments to deferred tax in respect of prior periods Prior years tax loss carryforwards utilised Subtotal Total income tax expense 2010 $000
57
Income tax expense at the above rate Not deductible / (not liable to tax) items Tax exemptions Deferred tax assets not recognised Under adjustments to tax in respect of prior periods Effect of different tax rates in different countries Prior years unrecorded tax loss carryforwards utilised Change in tax rates Other minor items less than 3% each Total income tax expense There are no income tax consequences of dividends to owners of the company.
Temporary differences arising in connection with interests in subsidiaries and associates are insignicant. 9B. Deferred tax expense recognised in prot or loss include: Group 2011 $000 Excess of net book value of plant and equipment over tax values Deferred tax liabilities not recognised Tax loss carryforwards Provisions Deferred tax assets not recognised Other Total deferred tax expense recognised in prot or loss 96 (32) (845) (22) 860 151 208 2010 $000 395 398 (609) 25 625 138 972
58
Presented in the statement of nancial position as follows: Group 2011 $000 Deferred tax liabilities (1,200) 2010 $000 (1,005) Company 2011 2010 $000 $000 (289) (138)
It is impracticable to estimate the deferred tax amount expected to be settled or used within one year.
10.
E.
Basic earnings per share cents Diluted earnings per share cents
The weighted average number of equity shares refers to shares in circulation during the reporting period. The dilutive effect derives from share warrants issue.
TECHNICS OIL & GAS LIMITED | Annual Report 2011 |
59
The basic and diluted earnings per share for the year ended 30 September 2010 would have been 10.45 cents and 8.90 cents respectively had the Revised FRS 27 not been adopted.
11.
Liquidation of Subsidiary
During the reporting year 2009, the Groups subsidiary, Fraser Thermal Technology Pte. Ltd, commenced proceedings for incompulsory liquidation. The following table summarises the carrying value of the assets and liabilities of the subsidiary as at 30 September 2011: 2011 $000 Plant and equipment Cash and cash equivalents Trade and other payables Non-controlling interest Net assets disposed of Loss on liquidation of subsidiary Total consideration Net cash outow on disposal: Cash consideration Cash balance disposed of Net 1 161 (11) (69) 82 82 2010 $000 1 509 (274) 3
82 (161) (79)
12.
Dividends on Equity Shares Group 2011 $000 Interim tax exempt (one-tier) dividend paid of 6 cents (2010: Nil) per share and special interim tax exempt (one-tier) dividend paid of 3 cents (2010: Nil) per share Total dividends paid in the year Interim tax exempt (one-tier) dividend payable of 3 cents (2010: 10.5 cents) per share Total dividends payable in the year Total dividends paid and payable in the year 2010 $000 Company 2011 2010 $000 $000
60
Group
Total $000
Cost: At 1 October 2009 Foreign exchange adjustments Additions Arising from acquisition of subsidiaries Reclassications Disposals At 30 September 2010 Foreign exchange adjustments Additions Transfer to leasehold property and improvements Reclassications Liquidation of subsidiary Disposals At 30 September 2011 Accumulated depreciation: At 1 October 2009 Foreign exchange adjustments Depreciation for the year Disposals At 30 September 2010 Foreign exchange adjustments Depreciation for the year Liquidation of subsidiary Disposals At 30 September 2011 Net book value: At 1 October 2009 At 30 September 2010 At 30 September 2011
17,542 (682) 2,177 220 563 (46) 19,774 248 1,180 612 (4) (643) 21,167
26,572 (701) 11,408 1,971 (46) 39,204 248 6,185 (4) (643) 44,990
4,210 (113) 1,925 (31) 5,991 105 2,224 (3) (455) 7,862
5,576 (113) 2,404 (31) 7,836 105 3,384 (3) (455) 10,867
3,801 10,550
61
Company
Cost: At 1 October 2009 Additions At 30 September 2010 Additions At 30 September 2011 Accumulated Depreciation: At 1 October 2009 Depreciation for the year At 30 September 2010 Depreciation for the year At 30 September 2011 Net book value: At 1 October 2009 At 30 September 2010 At 30 September 2011 Certain items of plant and equipment are under nance lease agreements (see Note 25).
1 1 1
1 1 1
Leasehold property and improvements at a carrying value of $8,008,000 (2010: $7,035,000) are pledged as security for certain bank facilities (see Note 26). The depreciation expense is charged as follows: Group 2011 $000 Cost of sales Administrative expenses 756 2,628 3,384 2010 $000 758 1,646 2,404
62
@ This is interest free quasi-equity loan from the company to subsidiary, Petro Process System Pte. Ltd. During the year, management has reclassied $3,898,000 of such loans to trade and other receivables.
63
Principal activities
Held by the company #a Petro Process System Pte. Ltd. #a Technics Offshore Engineering Pte Ltd Technics Offshore International Pte. Ltd. Technics Systems Solutions Pte Ltd (incorporated on 18 August 2011) AMF Tech Asia Sdn. Bhd. (SQ Morison)
Engineering and design of process modules and equipment for oil and gas exploration and production Design, fabrication, installation and commissioning of process modules and equipment for oil and gas exploration and production Dormant
Singapore
100
100
92
92
Singapore
100
100
7,507
7,507
#a
Singapore
51
51
51
51
#c
Design, engineering, integration, testing and supply of turbo machinery control (TMC) for oil and gas, power and general industries
Singapore
51
102
#b
Dormant
Malaysia
100
100
Held through Technics Offshore Engineering Pte Ltd PT. Technics Fabrication and installation of process #b Offshore Jaya modules and equipment for oil and (KAP. Riyanto, gas exploration and production SE, Ak) Fraser Thermal Technology Pte. Ltd. Manufacturers, designers, engineers of thermal technology products in the marine, offshore, oil and gas, power, renery and other related industries Provide marketing, co-ordination and administrative support services
Indonesia
100
100
Singapore
51
#c
Australia
100
100
64
Principal activities
Held through Petro Process System Pte. Ltd. #a Norr Systems Manufacture of control systems and Pte. Ltd. solutions for marine, offshore, oil and gas, power, waterworks and general industries #a Wecom Manufacture and repair of marine Engineering and industrial mechanical parts and Pte Ltd engineering works, process industries construction and maintenance activities Held through Wecom Engineering Pte Ltd #a Wecom Marine Pte Ltd Repair tank cleaning and other ocean-going vessel, Non-building Construction NEC Held through Norr Systems Pte Ltd Investment holding and sales and #b M2E Corporation marketing support activities for PRC Ltd. (S. Y. Yang & operations Company) #a Norr Systems Manufacture of control systems and Hydraulics Pte Ltd solutions in marine, offshore, oil and (incorporated on gas, power, waterworks and related 18 March 2011) industries Held through Norr Systems Hydraulics Pte Ltd #a Bloomfoss Pte Ltd Manufacture and repair of pumps and (incorporated on hydraulic components 5 May 2011) Held through M2E Corporation Ltd #d M2E Corporation Oil gas supply, aerospace repair (Suzhou) Co., and OEM manufacturing, medical Limited equipment manufacturing, EMS for (RSM China Certied multi-national companies Public Accountants)
* #a #b #c #d
Singapore
51
51
Singapore
55
55
Singapore
55
55
Hong Kong
29
29
Singapore
31
Singapore
31
29
29
Amount is less than $500. Audited by RSM Chio Lim LLP. Other independent auditors. Audited by rms of accountants other than member rms of RSM International of which RSM Chio Lim LLP in Singapore is a member. Their names are indicated above. Not audited, as it is immaterial. Audited by member of RSM International of which RSM Chio Lim LLP in Singapore is a member.
65
Name of associates, country of incorporation, place of operations, principal activities and independent auditors
Held by the company #b Hyperbaric and Occupational Medicine Pte. Ltd. Singapore Hyperbaric related and occupational medical treatment Held through Hyperbaric and Occupational Medicine Pte. Ltd. #b Flinders Practice Pte. Ltd. Singapore Hyperbaric related and occupational medical treatment Held through Norr Systems Pte. Ltd. #a First Oil Pte Ltd Singapore Fuel/oil trading and ship bunkering services
#a #b Audited by RSM Chio Lim LLP. In the process of liquidation.
40
40
40
40
20
66
16.
Group
2011 Minimum lease payments payable: Due within one year Due within 2 to 5 years Due after 5 years Total
Presented in the statement of nancial position as: Finance lease receivables, current Finance lease receivables, non-current
There are nance leasing arrangements for certain tugboats and vessels during the year. The average term of nance leases entered into is 5 to 7 years. The interest rate inherent in the leases is xed at the contract date for the lease terms. The weighted average interest rate on nance lease receivables at end of the reporting year was 9.2% and 22.2%.
67
Deposits relate to down payment for purchase of shares in Control Precision Engineering Pte Ltd.
18.
Inventories
Group 2011 $000 Raw material and consumables Raw material and consumables used, included in cost of sales 8,690 2010 $000 9,325 Company 2011 2010 $000 $000
64,469
41,296
Inventories are stated after allowance. Movements in allowance: Balance at beginning of the year Charged to prot or loss included in other charges Balance at end of the year There are no inventories pledged as security for liabilities. 325 325
19.
Contracts Work-In-Progress
Group 2011 $000 Aggregate amount of costs incurred and recognised prots (less recognised losses) to date on uncompleted contracts Less progress payments received and receivable to date Net amount due from or (to) contract customers at end of the year Included in the accompanying statement of nancial position as follows: Under other assets, current (Note 21) Under other liabilities, current (Note 28) 201,367 (192,500) 8,867 2010 $000 228,788 (232,438) (3,650)
68
3 3
6 6
1,305
668
407
546
2,500 2,907
(139) 407
21.
Prepayments mainly consist of down payment for six vessels relating to shipbuilding construction contracts.
69
23.
Share Capital
Group and Company Number Share of shares capital $000 Ordinary shares of no par value: Balance at beginning of the year 1 October 2009 Treasury Shares Purchased #a Balance at end of the year 30 September 2010 Issue of shares #b Exercise of warrants Treasury Shares Purchased #a Balance at end of the year 30 September 2011
The ordinary shares of no par value which are fully paid carry no right to xed income. The company is not subject to any externally imposed capital requirements.
#a. As approved by the general shareholders meeting, 8,754,000 (2010: 11,122,000) treasury shares were acquired during the year on the Singapore Stock Exchange. As at the end of the reporting year they have a market value of $7,440,900 (2010: $10,510,000). During the year, the company issued 13,000,000 ordinary shares by way of listing on the GreTai Securities Market of Taiwan of no par value were issued at $1.008 each for a consideration of $13,104,000. In connection with the listing during the reporting year the independent auditors were paid fees totalling $88,000 for their services as reporting accountants. The share issue expense of $386,000 was charged to equity.
#b.
70
71
25.
Finance Leases
Group 2011 Minimum payments $000 Finance charges $000
Minimum lease payments payable: Due within one year Due within 2 to 5 years Due after 5 years Total Net book value of plant and equipment under nance leases
25 98 40 163
22 87 35 144 161
2010
Minimum lease payments payable: Due within one year Due within 2 to 5 years Total Net book value of plant and equipment under nance leases
46 51 97
40 43 83 89
It is the groups policy to lease certain of its plant and equipment under nance leases. The lease terms are 4 to 7 years. The rate of interest for nance lease is 1.9% (2010: 2.8% to 3.3%) per year. Interest rates are xed at the contract date. The lease is on a xed repayment basis and no arrangements have been entered into for contingent rental payments. The lease obligation is denominated in S$. The obligation under nance lease is secured by the lessors charge over the leased asset.
72
All the amounts are at oating interest rates except the following that are on xed interest rates: Group 2011 $000 Spring loan Bank loan II 2010 $000 4,375 1,962 6,337 Company 2011 2010 $000 $000
73
The range of xed rate interest rates paid were as follows: Group 2011 Bank loan II Spring loan 2010 5.00% to 5.50% 5.00% 2011 Company 2010
26A.
Bank Loans Bank loan I is repayable in 12 quarterly instalments from 21 February 2008. The loan was fully repaid during the year. Bank loan II is repayable within 2 to 4 years from 18 August 2010. The loan was fully repaid during the year. Bank loan III (secured) is repayable in 240 monthly instalments from 31 January 2001. The loan was secured by a rst legal mortgage of the groups leasehold property at 19 Tuas Street 1, Jurong Industrial Estate, Singapore 638066. Bank loan IV is repayable in 60 monthly instalments from 20 July 2011. Certain money market loans were secured by legal mortgage of the groups leasehold property at 72 Loyang Way, Singapore 508762 and margin deposit. Spring loan is repayable in 47 monthly instalments of $104,166 each and a nal repayment of $104,198, together with the monthly interest from 8 March 2010. Spring is a government agency. The loan was fully repaid during the year. The above bank loans and the short term borrowings (bank overdrafts, bills payable and money market loans) are covered by corporate guarantees by the company.
74
25,353
14,417
2,403
2,198
2,403
2,198
28.
29.
Acquisition of Subsidiaries
On 9 April 2010 the group acquired 54.67% of the share capital Wecom Engineering Pte Ltd (incorporated in Singapore) and Wecom Marine Pte Ltd (incorporated in Singapore) and from that date the group gained control. These companies became subsidiaries in the contract engineering segment specialising in marine industry. The transaction was accounted for by the acquisition method of accounting. The consideration transferred is as follows: 2010 $000 Consideration transferred: Cash Contingent consideration #a Total consideration transferred
The expenses of acquisition were $68,000 and were included under administrative expenses in prot or loss. #a. There is a contingent consideration arrangement with the vendor. Should the prots exceed $1,800,000 in nancial year 2010 the additional payment expected is 3.61 times of the exceeded amount. Similarly, should the prots fall below $1,800,000 in nancial year 2010 the refund amount expected is 3.61 times of the shortfall. The above amount recognised is the estimated fair value of this arrangement.
75
The leasehold property and improvement was valued by an independent professional valuer as at the acquisition date. 2010 $000 Cash paid Less cash taken over Net cash outow on acquisition The goodwill arising on acquisition is as follows: 2010 $000 Consideration transferred Non-controlling interests at fair value Fair value of identiable net assets acquired Negative goodwill arising on acquisition 2,500 2,133 (4,705) (72) 2,500 (1,174) 1,326
The non-controlling interests of 45.33% in the acquiree at the acquisition date was measured based on the noncontrolling interests proportionate share of the acquirees net identiable assets. The excess of S$72,000 of the acquirers interest in the net fair value of the identiable assets, liabilities and contingent liabilities over the cost of business combination has been recognised in the statement of comprehensive income. The negative goodwill arising on these acquisitions is not taxable for tax purposes.
76
30.
30A.
40 47,221 47,261
Further quantitative disclosures are included throughout these nancial statements. There are no signicant fair value measurements recognised in the statements of nancial position.
77
3. 4.
There has been no change to the exposures to risk; the objectives, policies and processes for managing the risk and the methods used to measure the risk. The group and company are exposed to currency and interest rate risks. There is no arrangement to reduce such risk exposures through derivatives and other hedging instruments. 30C. Fair Value of Financial Instruments Fair value of nancial instruments stated at amortised cost in the statement of nancial position The nancial assets and nancial liabilities at amortised cost are at a carrying amount that is a reasonable approximation of fair value. 30D. Credit Risk on Financial Assets Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties to discharge their obligations in full or in a timely manner consist principally of cash balances with banks, cash equivalents and receivables, and other nancial assets. The maximum exposure to credit risk is: the total of the fair value of the nancial instruments; the maximum amount the entity could have to pay if the guarantee is called on; and the full amount of any loan payable commitment at the end of the reporting year. Credit risk on cash balances with banks and any derivative nancial instruments is limited because the counter-parties are entities with acceptable credit ratings. Credit risk on other nancial assets is limited because the other parties are entities with acceptable credit ratings. For credit risk on receivables an ongoing credit evaluation is performed on the debtors nancial condition and a loss from impairment is recognised in prot or loss. The exposure to credit risk is controlled by setting limits on the exposure to individual customers and these are disseminated to the relevant persons concerned and compliance is monitored by management. There is no signicant concentration of credit risk, as the exposure is spread over a large number of counter-parties and customers unless otherwise disclosed in the notes to the nancial statements. Note 22 discloses the maturity of the cash and cash equivalents balances. As part of the process of setting customer credit limits, different credit terms are used. The average credit period generally granted to trade receivable customers is about 60 days (2010: 60 days). But some customers take a longer period to settle the amounts.
78
Ageing analysis as at the end of reporting year of trade receivable amounts that are impaired: Group 2011 $000 Trade receivables: Over 180 days 2010 $000 Company 2011 2010 $000 $000
190
657
Other receivables are normally with no xed terms and therefore there is no maturity. Concentration of trade and nance lease receivable customers as at the end of reporting year: Group 2011 $000 Top 1 customer Top 2 customers Top 3 customers 11,402 15,887 19,606 2010 $000 1,446 2,860 3,754 Company 2011 2010 $000 $000
79
Group
Total $000
Non-derivative nancial liabilities: 2011: Gross borrowings commitments Gross nance lease obligations Trade and other payables Dividends payable At end of the year 2010: Gross borrowings commitments Gross nance lease obligations Trade and other payables Dividends payable At end of the year Company Non-derivative nancial liabilities: 2011: Gross borrowings commitments Trade and other payables Dividends payable At end of the year 2010: Gross borrowings commitments Trade and other payables Dividends payable At end of the year
4,563 98 4,661
521 40 561
4,991 51 5,042
547 547
80
Company
Total $000
2011 Corporate guarantees in favour of nancial institutions for facilities extended to subsidiaries 2010 Corporate guarantees in favour of nancial institutions for facilities extended to subsidiaries 38,971 8,135 470 47,576 50,075 8,324 433 58,832
The company has undertaken to provide continued nancial support to its subsidiaries with net capital decits. The extent of the exposure is not determinable. The liquidity risk refers to the difculty in meeting obligations associated with nancial liabilities that are settled by delivering cash or another nancial asset. It is expected that all the liabilities will be paid at their contractual maturity. The average credit period taken to settle trade payables is about 90 days (2010: 90 days). The other payables are with short-term durations. The classication of the nancial assets is shown in the statement of nancial position as they may be available to meet liquidity needs and no further analysis is deemed necessary. In order to meet such cash commitments the operating activity is expected to generate sufcient cash inows. Group Bank facilities: Undrawn borrowing facilities 2011 $000 123,865 2010 $000 106,817 Company 2011 $000 2010 $000
The undrawn borrowing facilities are available for operating activities and to settle other commitments. Borrowing facilities are maintained to ensure funds are available for the operations. A monthly schedule showing the maturity of nancial liabilities and unused borrowing facilities is provided to management to assist them in monitoring the liquidity risk.
81
30G.
Foreign Currency Risks Analysis of amounts denominated in non-functional currency: Loan and other receivables $000
Group
Cash $000
Total $000
Financial assets: 2011: United States dollar Euro Australian dollar Singapore dollar At end of the year 2010: United States dollar Euro Hong Kong dollar Indonesian Rupiah Singapore dollar At end of the year
39,306 30 11 42 39,389
82
Group
Borrowings $000
Total $000
Financial liabilities: 2011: United States dollar Euro British Pound Singapore dollar At end of the year 2010: United States dollar Euro British Pound Indonesian Rupiah At end of the year
3,874 3,874
Company
Cash $000
Total $000
Financial assets: 2011: United States dollar At end of the year 2010: United States dollar At end of the year
30 30
395 395
425 425
33 33
33 33
83
Company
Borrowings $000
Total $000
Financial liabilities: 2011: United States dollar At end of the year 2010: United States dollar At end of the year
5,625 5,625
5,625 5,625
There is exposure to foreign currency risk as part of the Groups normal business. Sensitivity analysis: Group 2011 $000 A hypothetical 10% strengthening in the exchange rate of the functional currency $ against the United States $ with all other variables held constant would have an adverse effect on prot before tax of A hypothetical 10% strengthening in the exchange rate of the functional currency $ against the Australian $ with all other variables held constant would have an adverse effect on prot before tax of 2010 $000
(1,592)
(3,226)
(734)
The hypothetical changes in exchange rates are not based on observable market data (unobservable inputs). The sensitivity analysis is disclosed for each currency to which the entity has signicant exposure. For similar rate weakening of the functional currency against the relevant foreign currencies, there would be comparable impacts in the opposite direction on the prot or loss. The analysis above has been carried out on the basis that there are no hedged transactions. In managements opinion, the above sensitivity analysis is unrepresentative of the foreign currency risks as the historical exposure does not reect the exposure in future.
84
32.
Capital Commitments
Estimated amounts committed at the end of the reporting year for future capital expenditure but not recognised in the nancial statements are as follows: Group 2011 $000 Commitments to purchase of plant and equipment 1,743 2010 $000 2,090 Company 2011 $000 2010 $000
Subsequent to the end of the reporting year, the Group signed a lump sum contract of $3,500,000 in relation to leasehold improvement of the groups Singapore yard.
33.
85
(ii) b)
The lease from Mega Technologies (Suzhou) Co., Ltd is for the period of 5.5 years from 1 July 2011 and ending on 31 December 2016. The lease from PT. Sekupang Makmur Abadi (Indonesia) is for a period of 10 years from 12 July 2006, ending on 11 June 2016 with the option to extend for another 10 years. The lease from Winston Lim Pte Ltd is for a period of approximately three years from 15 April 2011 to 28 February 2014 with an option to renew for the further term of two years from the date of expiry of the agreement. The lease for certain of ofce premise of a subsidiary is for 1 to 3 years from 2011. The lease rental terms are negotiated for an average term of 3 years.
c)
d)
e)
34.
Operating lease income commitments are for rental for certain ofce premises. The lease rental income terms are negotiated for an average term of three years.
86
(b)
(c)
Inter-segment sales are measured on the basis that the entity actually used to price the transfers. Internal transfer pricing policies of the Group are as far as practicable based on market prices. The accounting policies of the operating segments are the same as those described in the summary of signicant accounting policies. The management reporting system evaluates performances based on a number of factors. However the primary protability measurement to evaluate segments operating results is the major nancial indicators: earnings from operations before depreciation, amortisation, interests and income taxes (called Recurring EBITDA). The following tables illustrate the information about the reportable segment prot or loss, assets and liabilities. The information on each product and service, or each group of similar products and services is not available and the cost to develop it would be excessive.
87
EPCC $000 External revenue Recurring EBITDA Depreciation ORBIT Unallocated interest income Unallocated nance costs Unallocated other credits Unallocated other charges Share of gain / (loss) of associates Prot before tax Income tax expense Prot from operations 35C. Assets and Reconciliations 44,909 12,047 (1,267) 10,780
Total $000 125,798 23,830 (3,384) 20,446 1,908 (1,259) 1,452 (1,230) 16 21,333 (4,541) 16,792
Total $000 103,583 26,311 (2,404) 23,907 102 (1,353) 755 (3,069) (941) 19,401 (4,833) 14,568
EPCC $000 Total assets for reportable segment Unallocated : Property, plant and equipment Investment in associate Cash and cash equivalents Inventories Other assets Finance lease receivables Other unallocated amounts Total group assets 3,606
88
35E.
Other Material Items 2011 $000 Unallocated capital expenditure 6,185 2010 $000 11,408
35F.
Geographical Information The following table provides an analysis of the revenue by geographical market, irrespective of the origin of the goods and services: 2011 Non-current Revenue assets $000 $000 Singapore Asean Ex Singapore Other 19,041 57,413 49,344 125,798 32,162 5,514 8,587 46,263 2010 Non-current Revenue assets $000 $000 16,027 64,975 22,581 103,583 20,090 1,738 9,540 31,368
Revenues are attributed to countries on the basis of the customers location. The non-current assets are analysed by the geographical area in which the assets are located. The non-current assets exclude any nancial instruments, deferred tax assets, post-employment benet assets, and rights arising under insurance contracts. Other comprises Australia, The Peoples Republic of China, Germany, Taiwan, United Kingdom, Sultanate of Oman and USA.
89
36.
37.
Contingent Liability
Included in other receivables is an amount of $420,000, owing from the vendor shareholder of Wecom Engineering Pte Ltd (Wecom). The Group through its subsidiary, Petro Process System Pte. Ltd. (PPS) has commenced litigation for partial refund of consideration paid of $3,252,500 as the prot target for FY2010 was not met. PPS is claiming a refund from the vendor shareholder of a sum of about $428,442 after offsetting certain receivables. The vendor shareholder in his defence and counterclaim has computed a different reduction of consideration and is claiming for a minimum of $258,981 from PPS instead. Management is of the view that the counterclaim from the vendor shareholder has no merit.
90
The revised FRS 27 Consolidated and Separate Financial Statements adapted in 2010 requires Total Comprehensive Income to be attributed to the owners of the parent and to the non-controlling interest even if this results in the non-controlling interest having a decit balance. Arising from the adoption of the revised FRS 27, non-controlling interests share of loss is no longer capped at its cost of investment. Loss of $1,814,000 in excess of non-controlling interests cost of investment was attributed to non-controlling interest for the nancial year ended 30 September 2010 and accumulated losses of $1,304,000 was adjusted to the beginning balance of the non-controlling interest from retained earnings.
39.
FRS No. FRS 1 FRS 107 FRS 107 FRS 12 FRS 24 FRS 27 FRS 34 INT FRS 113 INT FRS 114 INT FRS 115
Title Presentation of Financial Statements Disclosures (Amendments to) Financial Instruments: Disclosures (Amendments to) Financial Instruments: Disclosures (Amendments to) - Transfers of Financial Assets (*) Deferred Tax (Amendments to) Recovery of Underlying Assets (*) Related Party Disclosures (Revised) Consolidated and Separate Financial Statements (Amendments to) Interim Financial Reporting (Amendments to) Customer Loyalty Programmes (Amendments to) (*) Prepayments of a Minimum Funding Requirement (Revised) (*) Agreements for the Construction of Real Estate (*)
(*) Not relevant to the entity.
91
Description 3-storey ofce building Double-storey ofce building adjoining factory space 2 covered workshops Blasting & Painting Chamber Jetty capacity of 1,000 tons Dormitory capacity of 160 pax. Single-storey ofce building with adjoining factory space 2 covered workshops Jetty capacity of 1,000 tons Two-storey house
Tenure Leasehold 12 + 5 years from 23 October 2002 Further term 18 years 5 months 5 days from 16 October 2019
Sekupang Logistics Base Block G Jl. R. E. Martadinata Sekupang Batam 29422 Indonesia
22,500
Leasehold 10 years from 12 July 2006, ending on 11 June 2016 with the option to extend for another 10 years Leasehold 1 year from 1 October 2011 Leasehold 5.5 years from 1 July 2011 Leasehold 30 years from 1 February 2001 Leasehold from 15 April 2011 to 28 February 2014 with an option to renew for a further term of 2 years Leasehold 1 year from 1 April 2011
24A / 29D Le Phung Hieu Street, Ward 8, Vungtau City, Ba Ria Vung Tau Province, S.R. Vietnam 88 Ling Long Street Suzhou Industrial Park No. 19 Tuas South Street 1 Jurong Industrial Estate Singapore 638066 9A Lok Yang Way Singapore 628628
30
Ready-built factory Double-storey ofce building and production space Single-storey ofce building and production space
12,900 2,427
2,643
Ofce space
41
92
Shareholdings Statistics
as at 1 December 2011
Number of Issued Shares Number of Issued Shares (excluding Treasury Shares) Class of Shares Voting Rights 213,825,706 206,062,706 Ordinary Shares 1 vote per share
As at 1 December 2011, the total number of ordinary shares held in treasury is 7,763,000. The percentage of such holding against the total number of issued ordinary shares (excluding ordinary shares held in treasury) is 3.77%
DISTRIBUTION OF SHAREHOLDINGS
No. of Shares (excluding treasury shares) 10,342 8,911,094 42,556,172 154,585,098 206,062,706
Size of Shareholdings 1 - 999 1,000 - 10,000 10,001 - 1,000,000 1,000,001 and above Total :
93
Shareholdings Statistics
as at 1 December 2011
SHAREHOLDING HELD IN HANDS OF PUBLIC
As at 1 December 2011, approximately 68.71% of the issued ordinary shares of the Company is held by the public and therefore, Rule 723 of the Listing Manual is complied with.
The deemed interest of Mr Tay Mian Cheo arises from shares held by his spouse.
* Percentage is calculated based on the total number of issued shares, excluding treasury shares of the Company.
94
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at 72 Loyang Way, Singapore 508762 on Monday, 16 January 2012 at 10.00 a.m. to transact the following businesses:
ORDINARY BUSINESS:
1. To receive and consider the Directors Report and Audited Accounts for the nancial year ended 30 September 2011 and the Auditors Report thereon. To re-elect Mr Tay Mian Cheo, a Director retiring by rotation pursuant to Article 107 of the Articles of Association of the Company. To re-elect Dr Liew Jat Yuen Richard, a Director retiring by rotation pursuant to Article 107 of the Articles of Association of the Company. [Dr Liew Jat Yuen Richard will, upon re-election as a Director of the Company, remain as Chairman of the Nominating Committee and Remuneration Committee and as a member of the Audit Committee. He will be considered independent for the purpose of Rule 704(8) of the Listing Manual of The Singapore Exchange Securities Trading Limited.] 4. To approve the payment of Directors fees of S$96,000 for the nancial year ended 30 September 2011 (2010: S$90,000). To re-appoint Messrs RSM Chio Lim LLP as Auditors and to authorise the Directors to x their remuneration. To consider and, if thought t, to pass with or without any modications, the following resolutions as Ordinary Resolutions: Resolution 4 Resolution 1
2.
Resolution 2
3.
Resolution 3
5.
Resolution 5
SPECIAL BUSINESS :
6. General Share Issue Mandate That pursuant to Section 161 of the Companies Act, Cap. 50. and subject to Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (SGX-ST), authority be and is hereby given to the Directors of the Company to allot and issue shares and convertible securities in the capital of the Company (whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem t provided that:(i) the aggregate number of shares and convertible securities to be issued pursuant to this Resolution does not exceed 50 per cent (50%) of the total number of issued shares excluding treasury shares of the Company (as calculated in accordance with sub-paragraph (ii) below), of which the aggregate number of shares and convertible securities to be issued other than on a pro rata basis to existing shareholders of the Company does not exceed twenty per cent (20%) of the total number of issued shares excluding treasury shares of the Company (as calculated in accordance with sub-paragraph (ii) below); (subject to such manner of calculations as may be prescribed by the SGX-ST), for the purpose of determining the aggregate number of shares that may be issued under subparagraph (i) above, the total number of issued shares excluding treasury shares shall be based on the total number of issued shares excluding treasury shares of the Company at the time this Resolution is passed after adjusting for:(a) new shares arising from the conversion or exercise of any convertible securities; Resolution 6
(ii)
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(b)
new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time of the passing of the resolution approving the mandate, provided the options or awards were granted in compliance with Part VIII of Chapter 8 of the Listing Manual of SGX-ST; and any subsequent bonus issue, consolidation or sub-division of shares
(c) (iii)
unless revoked or varied by the Company in general meeting, the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.
[See Explanatory Note (i)] 7. Technics Performance Share Plan That approval be and is hereby given to the Directors of the Company to: (a) offer and grant awards in accordance with the provisions of the Technics Performance Share Plan (the Plan); and allot and issue from time to time such number of fully paid-up shares in the capital of the Company as may be required to be allotted and issued pursuant to the vesting of awards under the Plan provided that the aggregate number of shares to be allotted and issued pursuant to the Plan shall not exceed 15% of the total number of issued shares in the capital of the Company from time to time. Resolution 7
(b)
[See Explanatory Note (ii)] 8. To transact any other business which may be properly transacted at an Annual General Meeting.
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Explanatory Notes: (i) The proposed Resolution 6, if passed, will empower the Directors from the date of the above Meeting until the date of the next Annual General Meeting, to allot and issue shares and convertible securities in the Company. The number of shares and convertible securities, which the Directors may allot and issue under this Resolution shall not exceed 50% of the total number of issued shares excluding treasury shares of the Company at the time of passing this Resolution. For allotment and issue of shares and convertible securities other than on a pro-rata basis to all shareholders of the Company, the aggregate number of shares and convertible securities to be allotted and issued shall not exceed 20% of the total number of issued shares excluding treasury shares of the Company. This authority will, unless previously revoked or varied at a general meeting, expire at the next Annual General Meeting. The proposed Resolution 7, if passed, will empower the Directors of the Company to offer and grant awards and to issue and allot shares in the capital of the Company pursuant to the Technics Performance Share Plan (the Plan). The grant of awards under the Plan will be made in accordance with the provisions of the Plan. The aggregate number of shares which may be issued pursuant to the Plan is limited to 15% of the total number of issued shares in the capital of the Company.
(ii)
Proxies: 1. A member of the Company is entitled to attend and vote at the above Meeting and may appoint not more than two proxies to attend and vote instead of him. Where a member appoints two proxies, he shall specify the proportion of this shareholding to be represented by each proxy in the instrument appointing the proxies. A proxy need not be a member of the Company. If the member is a corporation, the instrument appointing the proxy must be under seal of the hand of an ofcer or attorney duly authorised. The instrument appointing a proxy must be deposited at the Registered Ofce of the Company at 8 Wilkie Road, #03-01 Wilkie Edge, Singapore 228095 not less than 48 hours before the time appointed for holding the above Meeting.
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IMPORTANT 1. For investors who have used their CPF monies to buy the Companys shares, this Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
2.
PROXY FORM
I/We* of being a member/members* of Technics Oil & Gas Limited (the Company) hereby appoint: Name Address NRIC/Passport Number Proportion of Shareholdings (%) (name) NRIC/Passport No. (address)
and/or (delete as appropriate) Name Address NRIC/Passport Number Proportion of Shareholdings (%)
or failing him/her/them, the Chairman of the Annual General Meeting or such other person the Chairman may designate, as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the Annual General Meeting of the Company to be held at 72 Loyang Way, Singapore 508762 on Monday, 16 January 2012 at 10.00 a.m. and at any adjournment thereof. (Please indicate with an X in the spaces provided whether you wish your vote(s) to be cast for or against the Resolutions as set out in the Notice of Annual General Meeting. In the absence of specic directions, the proxy/proxies will vote or abstain as he/they may think t, as he/they will on any other matter arising at the Annual General Meeting.) To be used on a show of hands To be used in the event of a poll Number of Votes For** Number of Votes Against**
No.
Resolutions
For
Against
ORDINARY BUSINESS 1 2 3 4 5 To receive and consider Directors and Auditors Reports and Audited Accounts To re-elect Mr Tay Mian Cheo (Retiring under Article 107) To re-elect Dr Liew Jat Yuen Richard (Retiring under Article 107) To approve payment of Directors fees To re-appoint Auditors
SPECIAL BUSINESS 6 7 To authorise the Directors to allot and issue shares To authorise the Directors to grant awards and to allot and issue shares in accordance with the provisions of the Technics Performance Share Plan
Delete Accordingly If you wish to exercise all your votes For or Aganist, please indicate an X within the box provided. Alternatively, please indicate the number of votes as appropriate.
* **
Dated this
day of
NOTES : 1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as dened in Section 130A of the Companies Act, Chapter 50), you should insert that number of shares. If you have shares registered in your name in the Register of Members, you should insert that number of shares. If you have shares entered against your name in the Depository Register and shares registered in your name in the Register of Members, you should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by you. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company. Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be represented by each proxy. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or duly authorised ofcer. A corporation which is a member of the Company may authorise by resolution of its directors or other governing body such person as it thinks t to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the Companies Act, Chapter 50. The instrument appointing a proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or notarially certied copy thereof, must be deposited at the registered ofce of the Company at 8 Wilkie Road, #03-01 Wilkie Edge, Singapore 228095 not less than 48 hours before the time appointed for the Annual General Meeting. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specied in the instrument appointing a proxy or proxies. In addition, in the case of members of the Company whose shares are entered against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against their names in the Depository Register at least 48 hours before the time appointed for holding the Annual General Meeting as certied by The Central Depository (Pte) Limited to the Company.
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CORPORATE INFORMATION
BOARD OF DIRECTORS Ting Yew Sue Executive Chairman and Group Managing Director Tay Mian Cheo Executive Director Ting Tiong Ching Executive Director Ong Siew Peng Independent Director Dr Liew Jat Yuen Richard Independent Director AUDIT COMMITTEE Ong Siew Peng (Chairman) Tay Mian Cheo Dr Liew Jat Yuen Richard NOMINATING COMMITTEE Dr Liew Jat Yuen Richard (Chairman) Ong Siew Peng Ting Yew Sue REMUNERATION COMMITTEE Dr Liew Jat Yuen Richard (Chairman) Ong Siew Peng Tay Mian Cheo COMPANY SECRETARY Seah Kim Swee, FCIS
REGISTERED OFFICE 8 Wilkie Road #03-01 Wilkie Edge Singapore 228095 Tel: (65) 6533 7600 Fax: (65) 6538 7600 SHARE REGISTRAR & SHARE TRANSFER OFFICE Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore 048623 Tel: (65) 6536 5355 AUDITORS RSM Chio Lim LLP Certified Public Accountants 8 Wilkie Road #04-08 Wilkie Edge Singapore 228095 Partner-in-charge: Derek How Beng Tiong PRINCIPAL BANKERS The Hongkong and Shanghai Banking Corporation Ltd 21 Collyer Quay Level 1 HSBC Building Singapore 049320 United Overseas Bank Limited 80 Raffles Place UOB Plaza Singapore 048624
Subsidiaries
AMF Tech Asia Sdn. Bhd. Bloomfoss Pte Ltd M2E Corporation Limited M2E Corp (Suzhou) Co., Ltd Norr Systems Pte. Ltd. Norr Systems Hydraulics Pte Ltd Petro Process System Pte. Ltd. PT Technics Offshore Jaya Technics Engineering Australia Pty Ltd Technics Offshore Engineering Pte. Ltd. Technics Offshore International Pte. Ltd. Technics Systems Solutions Pte Ltd Wecom Engineering Pte Ltd Wecom Marine Pte Ltd
Associate
First Oil Pte Ltd