TANJUNG OFFSHORE BERHAD
TANJUNG OFFSHORE BERHAD
TANJUNG OFFSHORE BERHAD
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No. 8-3, Jalan Puncak Setiawangsa 4, Taman Setiawangsa, 54200 Kuala Lumpur.<br />
Tel: +60-3-4252 3888 Fax: +60-3-4252 2202<br />
www.tanjungoffshore.com.my<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U) Annual Report 2009<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
(662315-U)<br />
a n n u a l r e p o r t<br />
Enhancing Value 2009
2 CORPORATE INFORMATION<br />
6 CORPORATE STRUCTURE<br />
8 <strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
10 <strong>TANJUNG</strong> <strong>OFFSHORE</strong> SERVICES SDN BHD<br />
11 <strong>TANJUNG</strong> KAPAL SERVICES SDN BHD<br />
12 <strong>TANJUNG</strong> MAINTENANCE SERVICES SDN BHD<br />
13 <strong>TANJUNG</strong> NEWENERGY SERVICES SDN BHD<br />
14 <strong>TANJUNG</strong> PETROCONSULT SDN BHD<br />
15 <strong>TANJUNG</strong> CSI SDN BHD<br />
16 PT <strong>TANJUNG</strong> <strong>OFFSHORE</strong> NUSANTARA<br />
17 HERCULES <strong>TANJUNG</strong> ASIA SDN BHD<br />
18 CENDOR MOPU PRODUCER LIMITED<br />
19 <strong>TANJUNG</strong> CITECH UK LIMITED<br />
CITECH ENERGY RECOVERY SYSTEMS UK LIMITED<br />
<strong>TANJUNG</strong> CITECH SDN BHD<br />
20 GAS GENERATORS (M) SDN BHD<br />
UNIVERSAL GAS GENERATORS SDN BHD<br />
22 CORPORATE HISTORY AND MILESTONES<br />
24 FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS<br />
26 NOTICE OF ANNUAL GENERAL MEETING<br />
28 DIRECTORS’ PROFILE<br />
34 CHAIRMAN’S STATEMENT<br />
40 MANAGING DIRECTOR’S REVIEW<br />
45 AUDIT COMMITTEE REPORT<br />
48 STATEMENT ON INTERNAL CONTROL<br />
49 STATEMENT OF CORPORATE GOVERNANCE<br />
54 OTHER DISCLOSURE REQUIREMENTS<br />
56 FINANCIAL STATEMENTS<br />
106 LIST OF PROPERTIES OWNED BY THE GROUP<br />
108 ANALYSIS OF SHAREHOLDINGS / WARRANTHOLDINGS<br />
FORM OF PROXY<br />
1<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
C o n t e n t s
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
CORPORATE INFORMATION<br />
BOARD OF DIRECTORS<br />
Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee (Independent Non-Executive Chairman)<br />
Haji Omar Bin Khalid (Managing Director)<br />
Haji Hamidon Bin Md Khayon (Executive Director)<br />
Za’aba bin Sedek (Executive Director)<br />
Dato’ Ab Wahab Bin Haji Ibrahim (Independent Non-Executive Director)<br />
Edwanee Cheah Bin Abdullah (Independent Non-Executive Director)<br />
George William Warren Jr (Independent Non-Executive Director)<br />
2
CORPORATE INFORMATION<br />
AUDIT COMMITTEE<br />
Chairman<br />
Dato’ Ab Wahab Bin Haji Ibrahim<br />
(Independent Non-Executive Director)<br />
Member<br />
Datuk Wira Syed Ali<br />
Bin Tan Sri Syed Abbas Alhabshee<br />
(Independent Non-Executive Chairman)<br />
Edwanee Cheah Bin Abdullah<br />
(Independent Non-Executive Director)<br />
George William Warren Jr<br />
(Independent Non-Executive Director)<br />
COMPANY SECRETARIES<br />
Kang Shew Meng (MAICSA 0778565)<br />
Seow Fei San (MAICSA 7009732)<br />
312, 3rd Floor, Block C<br />
Kelana Square, 17 Jalan SS7/26<br />
47301 Petaling Jaya<br />
Selangor Darul Ehsan<br />
REGISTERED OFFICE<br />
312, 3rd Floor, Block C<br />
Kelana Square, 17 Jalan SS7/26<br />
47301 Petaling Jaya<br />
Selangor Darul Ehsan<br />
Tel : 03-7803 1126<br />
Fax : 03-7806 1387<br />
HEAD/ MANAGEMENT OFFICE<br />
No. 8-3, Jalan Puncak Setiawangsa 4<br />
Taman Setiawangsa<br />
54200 Kuala Lumpur<br />
Tel : 03-4252 3888<br />
Website : http://www.tanjungoffshore.com.my<br />
AUDITORS /<br />
REPORTING ACCOUNTANTS<br />
AljeffriDean (Firm No.: AF 1366)<br />
Chartered Accountant<br />
2-5-13, 5th Floor, Menara KLH<br />
(Business Centre)<br />
No. 2, Jalan Kasipillay<br />
51200 Kuala Lumpur<br />
Tel : 03-2381 1170<br />
LEGAL ADVISORS<br />
Shearn Delamore & Co<br />
7th Floor, Wisma Hamzah-Kwong Hing<br />
No. 1, Leboh Ampang<br />
50100 Kuala Lumpur<br />
Tel: 03-2070 0644<br />
Nashir, Johal & Co.<br />
A-901-3, Level 9, Kelana Brem Tower 1<br />
Jalan SS7/15 (Jalan Stadium)<br />
47301 Kelana Jaya<br />
Selangor<br />
Tel: 03-7492 0766<br />
Masturah & Co<br />
Suite 1B-2, First Floor<br />
Wisma Dang Wangi<br />
No. 38, Jalan Dang Wangi<br />
50100 Kuala Lumpur<br />
Tel: 03-2694 5671<br />
Mah – Kamariyah & Philip Koh<br />
No. 3, Persiaran Hampshire<br />
Off Jalan Ampang<br />
50450 Kuala Lumpur<br />
Tel: 03-2163 0208<br />
PRINCIPAL BANKERS<br />
Standard Chartered Bank Malaysia Berhad<br />
(Company No. 115793-P)<br />
Level 13, Menara Standard Chartered<br />
30 Jalan Sultan Ismail<br />
50250 Kuala Lumpur<br />
Tel: 03-2117 7810<br />
AmInvestment Bank Berhad<br />
(Company No. 23742-V)<br />
Level 15, Bangunan AmBank Group<br />
55 Jalan Raja Chulan<br />
50200 Kuala Lumpur<br />
Tel: 03-2078 2633<br />
Malayan Banking Berhad<br />
(Company No. 3813-K)<br />
Setapak Business Centre<br />
2nd Floor, Maybank Setapak<br />
343 Jalan Pahang<br />
53000 Kuala Lumpur<br />
Tel : 03-4022 0784<br />
HSBC Bank Malaysia Berhad<br />
(Company No. 127776-V)<br />
10th Floor, Bangunan HSBC<br />
2 Leboh Ampang<br />
50100 Kuala Lumpur<br />
Tel: 03-2070 0744<br />
3<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
PRINCIPAL BANKERS<br />
Kuwait Finance House (Malaysia) Berhad<br />
(Company No. 672174-T)<br />
Level 18, Tower 2, MNI Twins<br />
11 Jalan Pinang<br />
P.O. Box: 10103<br />
50704 Kuala Lumpur<br />
Tel: 03-2055 7777<br />
AmIslamic Bank Berhad<br />
(Company No. 295576-U)<br />
Level 16, Menara Dion<br />
Jalan Sultan Ismail<br />
50250 Kuala Lumpur<br />
Tel: 03-2026 3939<br />
Bank Pembangunan Malaysia Berhad<br />
(Company No. 16562-K)<br />
Bandar Wawasan, 1016<br />
Jalan Sultan Ismail<br />
Peti Surat 10788<br />
50724<br />
Kuala Lumpur<br />
Tel: 03-2611 3888<br />
REGISTRAR<br />
Tricor Investor Services Sdn. Bhd.<br />
(Company No. 118401-V)<br />
Level 17, The Gardens North Tower<br />
Mid Valley City<br />
Lingkaran Syed Putra<br />
59200 Kuala Lumpur<br />
Tel : 03-2264 3883<br />
Fax: 03-2282 1886<br />
STOCK EXCHANGE LISTING<br />
Main Market of<br />
Bursa Malaysia Securities Berhad<br />
STOCK INFORMATION<br />
Stock Name:<br />
TGOFFS, TGOFFS-WA, TGOFFS-WB<br />
Stock Code:<br />
7228, 7228-WA, 7228-WB<br />
Bloomberg Code: TOFF MK
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
CORPORATE INFORMATION<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> SERVICES SDN BHD<br />
<strong>TANJUNG</strong> KAPAL SERVICES SDN BHD<br />
<strong>TANJUNG</strong> PETROCONSULT SDN BHD<br />
<strong>TANJUNG</strong> NEWENERGY SERVICES SDN BHD<br />
<strong>TANJUNG</strong> CITECH SDN BHD<br />
Kuala Lumpur (Head Offi ce)<br />
No. 8, Jalan Puncak Setiawangsa 4<br />
Taman Setiawangsa, 54200 Kuala Lumpur<br />
Tel : +603 4252 3888, Fax : +603 4252 1805<br />
www.tanjungoffshore.com.my<br />
<strong>TANJUNG</strong> CSI SDN BHD<br />
Kuala Lumpur (Operation Centre)<br />
No. 9-8 Jalan 15/155B,<br />
Esplanade Commercial Park,<br />
Bukit Jalil, 57000 Kuala Lumpur.<br />
Tel : +603 8994 9330<br />
Fax : +603 8994 9959 (Sales & Engineering Division)<br />
Fax : +603 8994 9969 (Contracts & Administration Division)<br />
Email : tcsisales@tanjungoffshore.com.my<br />
<strong>TANJUNG</strong> MAINTENANCE SERVICES SDN BHD<br />
Kemaman (Operation/Maintenance Centre)<br />
Lot D1 & D2, Kawasan MIEL Teluk Kalung,<br />
24007 Kemaman,Terengganu Darul Iman,Malaysia.<br />
Tel : +609 863 5390 Fax : +609 863 5387<br />
Email: tmskemaman@tanjungoffshore.com.my<br />
Website : www.tanjungmaintenance.com.my<br />
<strong>TANJUNG</strong> MAINTENANCE SERVICES SDN BHD<br />
Kemaman Supply Base Centre<br />
Warehouse No 3, Door 1,2,3,7 & 8,<br />
Kemaman Supply Base, Phase 1,<br />
24007 Kemaman, Terengganu Darul Iman, Malaysia.<br />
Tel : +609 862 3360/ 62<br />
Fax : +609 862 3361<br />
Email : tmsksb@tanjungoffshore.com.my<br />
<strong>TANJUNG</strong> MAINTENANCE SERVICES SDN BHD<br />
Lot 1591, Block 26 (P.O. Box 107)<br />
Kidurong Light Estate,<br />
Jalan Tanjung Kidurong,<br />
97000 Bintulu, Sarawak, Malaysia.<br />
Tel : +6086 255 103<br />
Fax : +6086 254 103<br />
HERCULES <strong>TANJUNG</strong> ASIA SDN BHD<br />
Unit 10.01 Level 10, Menara TA One,<br />
22, Jalan P.Ramlee,<br />
50250 Kuala Lumpur, Malaysia.<br />
Tel : +603 2166 6616<br />
Fax : +603 2166 6617<br />
Email : jcrisp@herculesoffshore.com.my<br />
Website : www.herculesoffshore.com<br />
GAS GENERATORS (M) SDN BHD<br />
Lot 5189, Unit 2, Sg Ramal,<br />
Off Tanming Jaya,<br />
43300 Balakong,<br />
Selangor, Malaysia.<br />
Tel : +603 8961 3390<br />
Fax : +603 8962 3390<br />
Email : eric@gastec.com.my<br />
www.gastec.com.my<br />
4<br />
<strong>TANJUNG</strong> KAPAL SERVICES SDN BHD<br />
Kemaman Offi ce<br />
Lot 13837, Jalan Penghiburan,<br />
24000 Kemaman,Terengganu Darul Iman,Malaysia.<br />
Tel : +609 850 2744 Fax : +609 850 2744<br />
Email: tkskemaman@tanjungoffshore.com.my<br />
Labuan Offi ce<br />
4th Floor, Room 02,<br />
Public Bank Building,<br />
Jalan Merdeka,<br />
87000 Wilayah Persekutuan Labuan.<br />
Tel : +6087 410 387 Fax : +6087 410 424<br />
Email: tkslabuan@tanjungoffshore.com.my<br />
<strong>TANJUNG</strong> MAINTENANCE SERVICES SDN BHD<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> SERVICES SDN BHD<br />
Miri (Operation/Maintenance Center)<br />
Lot MCLD, 1315, Jalan Primula,<br />
Piasau Industrial Estate,<br />
Miri, Sarawak, Malaysia.<br />
Tel : +6085 661 330<br />
Fax : +6085 661 320<br />
email :tmsmiri@tanjungoffshore.com.my<br />
email :tosmiri@tanjungoffshore.com.my<br />
<strong>TANJUNG</strong> MAINTENANCE SERVICES SDN BHD (TMS)<br />
Labuan (Operation/Maintenance Centre)<br />
SK 0467, Kampung Sungai Kling,<br />
Off Jalan Rancha Rancha,<br />
87008 Wilayah Persekutuan Labuan.<br />
(TMS) Tel : +6087 414 481 Fax : +6087 413 234<br />
Email: tmslabuan@tanjungoffshore.com.my<br />
<strong>TANJUNG</strong> NEWENERGY SERVICES SDN BHD<br />
Perak-Manjung (Operation Offi ce)<br />
No 150-150A Jalan PM/2,<br />
Pusat Bandar Sri Manjung,<br />
32040 Sri Manjung, Perak Darul Ridzuan.<br />
Tel : +605 669 8494 Fax : +605 668 1360<br />
Email : tnemanjung@tanjungoffshore.com.my<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> SERVICES SDN BHD<br />
Pasir Gudang (Operation Offi ce)<br />
No 38A, Jalan 9/17 Perjiranan 9,<br />
81700, Pasir Gudang, Johor Darul Takzim.<br />
Tel : +607 255 2886<br />
Fax : +607 255 2986<br />
Email : tospg@tanjungoffshore.com.my<br />
PT <strong>TANJUNG</strong> <strong>OFFSHORE</strong> NUSANTARA<br />
No. 214, Outer Ring Road, Bogor Utara,<br />
Taman Yasmin, Sektor - 6,<br />
Kota Bogor,<br />
16132 Indonesia.<br />
Tel : +62-251-754-2333<br />
Fax : +62-251-754-2555<br />
Email : nursaleh@tgoffshore-nusantara.com<br />
<strong>TANJUNG</strong> CITECH UK LIMITED<br />
CITECH ENERGY RECOVERY SYSTEMS UK LIMITED<br />
Ground Floor, Salisbury House,<br />
Saxon Way, Priory Park West,<br />
Hessle HU139PB,<br />
United Kingdom.<br />
Tel : + 44 (0) 14 8271 9746<br />
Fax : + 44 (0) 14 8262 9742<br />
Email: zaaba.sedek@citech.co.uk
CORPORATE INFORMATION<br />
UNITED<br />
KINGDOM<br />
Manjung<br />
Kuala Lumpur<br />
Kemaman<br />
P. Gudang<br />
5<br />
Miri<br />
Bintulu<br />
INDONESIA<br />
Labuan<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
MALAYSIA
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
CORPORATE STRUCTURE<br />
51%<br />
GASTEC<br />
51%<br />
UGG<br />
20%<br />
CMPL<br />
80%<br />
PTTON<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
50%<br />
HTA<br />
100%<br />
TOMS<br />
100%<br />
TPC<br />
100%<br />
TOS<br />
6<br />
100%<br />
TMS<br />
100%<br />
TOS: Tanjung Offshore Services Sdn Bhd<br />
TPC: Tanjung Petroconsult Sdn Bhd<br />
TCSI<br />
TMS: Tanjung Maintenance Services Sdn Bhd<br />
TNE: Tanjung NewEnergy Services Sdn Bhd<br />
TKS: Tanjung Kapal Services Sdn Bhd<br />
TOMS: Tanjung Offshore Marine Services Sdn Bhd<br />
TCSI: Tanjung CSI Sdn Bhd<br />
GASTEC: Gas Generators (Malaysia) Sdn Bhd<br />
UGG: Universal Gas Generators Sdn. Bhd.<br />
TCSB: Tanjung Citech Sdn Bhd<br />
TC-UK: Tanjung Citech UK Limited<br />
CERS-UK: Citech Energy Recovery Systems Ltd<br />
PTTON: PT Tanjung Offshore Nusantara<br />
CMPL: Cendor Mopu Producer Ltd<br />
HTA: Hercules Tanjung Asia Sdn Bhd<br />
92.86%<br />
TNE<br />
100%<br />
TKS<br />
100%<br />
TCSB<br />
100%<br />
TC-UK<br />
100%<br />
CERS-UK
CORPORATE STRUCTURE<br />
The details of the subsidiaries and associated company of Tanjung as at 28 April 2010 are as follows: -<br />
Company<br />
TOS<br />
TPC<br />
TMS<br />
TNE<br />
TKS<br />
TOMS<br />
TCSI<br />
TCSB<br />
GASTEC<br />
UGG<br />
United Kingdom<br />
TC-UK<br />
CERS-UK<br />
Indonesia<br />
PTTON<br />
CMPL<br />
HTA<br />
Date And<br />
Place Of<br />
Incorporation/<br />
Acquisition<br />
28.04.1983<br />
Malaysia<br />
17.10.1991<br />
Malaysia<br />
24.05.1996<br />
Malaysia<br />
07.03.1997<br />
Malaysia<br />
17.09.1994<br />
Malaysia<br />
01.11.2006<br />
Malaysia<br />
03.11.2006<br />
Malaysia<br />
06.03.2009<br />
Malaysia<br />
Associated Companies<br />
05.01.2009<br />
05.01.2009<br />
22.08.2008<br />
22.08.2008<br />
16.01.2008<br />
07.11.2005<br />
Malaysia<br />
24.01.2008<br />
Malaysia<br />
Issued And<br />
Fully Paid-Up<br />
Share Capital<br />
(RM)<br />
7,500,000<br />
4,200,000<br />
4,000,000<br />
350,000<br />
10,000,000<br />
2<br />
4,000,000<br />
RM2<br />
RM4,791,437<br />
RM2,000,000<br />
£4,500,000.0<br />
£4,500,000.0<br />
USD150,000.0<br />
USD1,960,000<br />
RM2<br />
Effective<br />
Equity<br />
Interest<br />
(%)<br />
100<br />
100<br />
100<br />
92.86<br />
100<br />
100<br />
100<br />
100<br />
51<br />
51<br />
100<br />
100<br />
80<br />
20<br />
50<br />
7<br />
Principal Activity<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Integrated service provider to the oil and gas and related<br />
industries.<br />
Provision of engineering and professional manpower<br />
services to the oil and gas and related industries.<br />
Provision of maintenance services to the oil and gas and<br />
related industries.<br />
Provision of project management services to the<br />
engineering and energy industries.<br />
Ownership of vessel and provision of ship management<br />
services to the oil and gas and related industries<br />
Ownership and leasing offshore vessels to local and<br />
international oil industry majors.<br />
Design, Engineering, Training, Installation and<br />
Commissioning for Plant Automation & Safety<br />
System, Flow Metering Solutions, Control Valves, Field<br />
Instrumentations, Control Solutions for Turbines &<br />
Compressors and After-Sales Activities for Onshore and<br />
Offshore Services.<br />
Manufacturing and marketing of waste heat recovery<br />
units for the offshore oil and gas industry.<br />
Manufacturing and supply of gas generators to both<br />
industrial and oil and gas industry.<br />
Selling and letting of gas generators.<br />
Ownership of “CiBAS Technology patent and all<br />
Intellectual Property Rights.<br />
Manufacture of waste heat recovery units for the oil and<br />
gas industry.<br />
Integrated service provider to the oil and gas and related<br />
industries in Indonesia.<br />
To own, lease, sub-lease, maintain, operate, manage<br />
the Mobile Offshore Production Unit to carry out oil and<br />
gas operations.<br />
Provision of drilling services.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
8
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
Tanjung Offshore Berhad (Tanjung) was incorporated in<br />
Malaysia on 11 August 2004 and its shares are currently listed<br />
on the Main Market of Bursa Malaysia Securities Berhad.<br />
Tanjung is principally an investment holding company, whilst its<br />
subsidiaries and associated companies are principally involved<br />
in the provision of engineering equipment, shipowning, ship<br />
management and chartering services, equipment maintenance<br />
services, drilling and production platform services to the oil and<br />
gas and related industries in Malaysia and the region.<br />
Tanjung’s main operating subsidiary, Tanjung Offshore Services<br />
Sdn Bhd (TOS) commenced operations in March 1990. TOS<br />
is involved in providing comprehensive services to the oil and<br />
gas industry and holds various exclusive agencies for a wide<br />
range of engineering equipment and parts in Malaysia.<br />
Tanjung commenced its marine support services in 1994 via<br />
the setting up of a Marine Vessel Department within TOS and<br />
the formation of Tanjung Kapal Services Sdn Bhd (TKS), a ship<br />
ownership and management company.<br />
In May 1996, Tanjung Maintenance Services Sdn Bhd (TMS)<br />
was incorporated to provide complete maintenance support<br />
services to the oil and gas industry such as manpower,<br />
maintenance and repair works for offshore oil and gas platforms<br />
and onshore plants.<br />
Thereafter, various other subsidiaries and associated companies<br />
were set up and acquired to further enhance the provision of<br />
integrated support services to the oil majors such as Tanjung<br />
NewEnergy Services Sdn Bhd (TNE), Tanjung Petroconsult Sdn<br />
Bhd (TPC), Tanjung CSI Sdn Bhd, Tanjung Citech UK Limited,<br />
Citech Energy Recovery Systems UK Limited, Tanjung Citech<br />
Sdn Bhd, PT Tanjung Offshore Nusantara, Gas Generators<br />
(Malaysia) Sdn Bhd and Cendor Mopu Producer Limited.<br />
9<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
As of todate, the Tanjung Group is a reputable integrated oil and<br />
gas service provider within the Malaysian oil and gas industry<br />
and has been expanding its services within the domestic and<br />
international markets. Tanjung Group is actively involved in<br />
both the upstream and downstream markets within the oil and<br />
gas industry and participates in all stages of the life cycle of the<br />
Production Sharing Contracts as follows:-<br />
EXPLORATION<br />
Surface Geochemistry<br />
Seismic activities<br />
Vessel services<br />
Drilling services<br />
DEVELOPMENT<br />
Hookup & commissioning<br />
Drilling services<br />
Structure & construction<br />
Vessel services<br />
Engineering Equipment<br />
PRODUCTION<br />
Flow of oil & gas to onshore plants<br />
Power generation<br />
Systems application<br />
Vessel services<br />
Engineering equipment<br />
Maintenance services<br />
MAINTENANCE<br />
Retrofi tting<br />
Structural strength & corrosion assessment<br />
Vessel services<br />
Engineering equipment maintenance<br />
ABANDONMENT<br />
Dismantling of structures<br />
Decommissioning of machinery & equipment<br />
Transportation of physical parts and equipment<br />
Pollution control exercise and assessment<br />
Vessel services
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> SERVICES SDN BHD<br />
Platform services<br />
Engineering equipment<br />
Maintenance services<br />
<strong>TANJUNG</strong> Offshore Services Sdn Bhd (TOS) is a wholly owned subsidiary of<br />
Tanjung Offshore Berhad (Tanjung). TOS commenced business in mid 1990s and<br />
has since grown into a reputable integrated service provider for the oil and gas<br />
industry. With years of experience in the oil & gas industry, TOS offers services<br />
such as customised engineered equipment, offshore support vessel services,<br />
drilling services, project management of contracts, spares and parts for equipment<br />
and other related services. TOS is one of the main operating companies within<br />
the Tanjung Group of companies which offers a diverse range of product and<br />
services to the oil majors.<br />
Having obtained various Petronas licences for various categories of products and<br />
services, TOS is also the exclusive agent in Malaysia for various world-renowned<br />
Original Equipment Manufacturers (OEM) such as centrifugal pumps, control<br />
systems, switchgears, instrumentations and control valves that are widely used<br />
in the upstream and downstream activities of the oil and gas industry.<br />
TOS has a full package of supplies and services which entails the initial engineering<br />
design layout, project management & planning, implementation, installation,<br />
commissioning followed by scheduled maintenance, troubleshooting and reliable<br />
after-sales services. TOS identifi es the requirement of each client, and assist in<br />
the front-end engineering design (FEED). Throughout this phase, constant and<br />
comprehensive technical discussions with our prospective clients as part of our<br />
value added services in developing innovative ideas in the exploration, production,<br />
maintenance and abandonment stages of fi elds’ development.<br />
Together with our clients, we continue to closely monitor the progress of projects<br />
undertaken to ensure various process methods are in compliance to the approved<br />
design and specifi cations. TOS is continuously increasing its range of products<br />
and services to meet the stringent requirements of the industry.<br />
Drilling services Well intervention services Offshore support vessels<br />
10
<strong>TANJUNG</strong> KAPAL SERVICES SDN BHD<br />
Tanjung Kapal Services Sdn. Bhd. (TKS) a wholly-owned subsidiary of Tanjung<br />
Offshore Berhad (Tanjung) was incorporated on 17 September 1994. Its principal<br />
activity is to provide offshore support vessels and related marine services to the<br />
oil and gas industry.<br />
Its business activities can be categorised as follows :<br />
1. Vessel ownership;<br />
2. Vessel management/operator;<br />
3. Vessel agency and forwarding activities;<br />
4. Vessel brokering; and<br />
5. Marine services consultancy.<br />
TKS developed its International Safety Management (ISM) certifi cation and its<br />
personnel are also involved in overseaing the construction and commissioning of<br />
Tanjung Group’s vessels at various shipyards in Malaysia.<br />
In accordance with ISM requirements, TKS obtained its full Document of<br />
Compliance from the Malaysian Marine Department in 2006. At the same time,<br />
TKS also obtained the Safety Management Certifi cate (SMC) for its vessels from<br />
American Bureau of Shipping (ABS).<br />
As of May 2010, TKS owns and operate thirteen (13) offshore support vessels<br />
which consist of eight (8) units of Anchor Handling Tug Supply vessels (AHTS),<br />
four (4) units of Straight Supply vessels (SSV) and one (1) unit of Tug Utility Vessel<br />
(TUV). Apart from that, TKS also manages three (3) units of vessels owned by<br />
Tanjung Offshore Services Sdn. Bhd.<br />
TKS organizational structure consists of Six Departments namely :<br />
1. Marine Operations;<br />
2. Technical Services;<br />
3. Health, Safety, Security and Environment;<br />
4. Support Services<br />
5. Vessel Agency and Forwarding; and<br />
6. Finance and Accounts.<br />
TKS has its headquarters at Tanjung Group’s main offi ce in Kuala Lumpur. TKS<br />
also have operation branches and support offi ces at Kemaman in Terengganu as<br />
well as in Labuan.<br />
11<br />
MV Tanjung Pinang 1<br />
MV Tanjung Biru 1<br />
MV Tanjung Dahan 1<br />
MV Tanjung Dawai MV Tanjung Puteri 2 MV Tanjung Pinang 1<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
<strong>TANJUNG</strong> MAINTENANCE SERVICES SDN BHD<br />
Overhaul & machining services<br />
Valve on-site services<br />
Gear box services<br />
Tanjung Maintenance Service Sdn Bhd (TMS) was incorporated on 24 May<br />
1996 to provide complete maintenance services to the oil and gas operators<br />
in Malaysia and the region. As of todate, TMS is operating from fi ve (5) main<br />
workshop/maintenance centres situated in Teluk Kalung and Kemaman Supply<br />
Base (both in Terengganu), Labuan, Miri and Bintulu. TMS currently employ 220<br />
staff of various experiences and expertise. Our maintenance centres provide a<br />
“one stop” maintenance services to various upstream oil and gas operators such<br />
as Petronas Carigali Sdn Bhd, Sarawak Shell Berhad, Exxon Mobil Exploration<br />
and Production Malaysia Inc.,Talisman Malaysia Limited, Nippon Oil Ltd and<br />
Newfi eld Sarawak Malaysia Inc. and others.<br />
Our maintenance workshops also provide various maintenance services to<br />
downstream petrochemical and power plants situated In Paka and Gebeng<br />
in Terengganu and Bintulu in Sarawak such as Petronas Dagangan Sdn Bhd,<br />
Petronas Penapisan (Terengganu) Sdn Bhd, Petronas Gas Berhad, BASF<br />
Petronas Chemicals Sdn Bhd, Petlin Malaysia Sdn Bhd and BP Chemical (M)<br />
Sdn Bhd.<br />
Our complete maintenance services at our maintenance workshops<br />
include:-<br />
• Services, repair, overhaul & test various types of rotating equipment;<br />
• Services, repair, retrofi t & test all types of valves;<br />
• Fabrication of parts and machining;<br />
• Metal coating or metal spray,<br />
• Specialised High Velocity Oxy Fuel (HVOF) and other types of coating;<br />
• Rotor dynamic balancing;<br />
• On-line greasing or lubrication;<br />
• Condition Based Monitoring (CBM) such as vibration monitoring;<br />
• Schedule oil sampling (SOS) and thermography;<br />
• Service, repair, overhaul and test of internal combustion for engineering<br />
equipment; and<br />
• Pump testing facilities.<br />
We are one of the few local service providers which have set up complete<br />
workshops in all the main oil and gas hubs in both Peninsular and East Malaysia.<br />
We are also ISO 9001 certifi ed and have trained our human capital and invested<br />
in the latest technologies to enable us to move towards niche and knowledge<br />
based maintenance technologies. In doing so, we aim to be at the forefront of<br />
the total solutions provider concept for maintenance services in the Malaysia and<br />
the region.<br />
Gas turbine overhauling Repair of pump casing Welding & cutting services<br />
12
<strong>TANJUNG</strong> NEWENERGY SERVICES SDN BHD<br />
Tanjung NewEnergy Services Sdn Bhd (TNE) was established on 7 March<br />
1997 to provide a wide range of energy related products and services which<br />
are cost effi cient solutions to the oil majors. Our power generation systems are<br />
also environmentally friendly through better use and management of energy<br />
resources.<br />
Our main engineering products are as follows:-<br />
• CENTRIFUGAL PUMPS;<br />
• NITROGEN GAS GENERATOR;<br />
• DYNAMIC POSITION SYSTEM;<br />
• CCTV SURVEILLANCE SYSTEM FOR OIL AND GAS;<br />
• UMBILICAL SUBSEA CABLES;<br />
• SOLAR POWER PANELS; and<br />
• SELF PRIMING MARINE PUMPS.<br />
TNE has a total commitment to engineering excellence, fi tness for purpose,<br />
design and an uncompromising approach to quality. TNE recognizes the benefi ts<br />
of an effective quality assurance programme in promoting and achieving high<br />
standards of service and minimizing costs and delay to project programmes.<br />
13<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
<strong>TANJUNG</strong> PETROCONSULT SDN BHD<br />
<strong>TANJUNG</strong> PETROCONSULT Sdn Bhd (TPC), which is a subsidiary of Tanjung<br />
Offshore Services Sdn Bhd known as one of the major Malaysian Contractor,<br />
has been providing its varied expertise in engineering, procurement and<br />
construction/commissioning for offshore and onshore oil & gas processing and<br />
production systems for major local oil & gas clients including PETRONAS, SHELL,<br />
EXXONMOBIL, MURPHY OIL and etc.<br />
TPC has since 2003 established its core competency through its proven project<br />
management methodology and professional and qualifi ed manpower. TPC<br />
methodology encompasses its effective project management system covering<br />
key areas such as Planning & Control, Construction & Commissioning, Quality<br />
Assurance and HSE requirements which is the backbone of the delivery process<br />
in meeting the expectations of its clients.<br />
As one of the <strong>TANJUNG</strong> group of companies, it will be capable of executing the<br />
other multi functional requirements in respect of procurement, including logistic<br />
support, supply chain management and project fi nancing.<br />
Throughout the participation in varied projects, TPC has established the value<br />
added network connections capable of market penetration in the oil & gas sectors<br />
worldwide, assuring clients of meeting the required level of supply of resources<br />
and materials & equipment. It has established the recognition of its global<br />
capabilities in providing procurement scope services that has involved suppliers<br />
networks from China, India, Australia, Europe and UK. It has nurtured its strength<br />
in project alliance for the international oil & gas sector through its global reputation<br />
on ventures with known international Companies from UK, France and Australia.<br />
TPC approach from the onset of its projects execution has relied on the principles<br />
of Total Quality Management through rigorous induction program and subsequent<br />
close monitoring of its performances in compliances with the QA/QC requirements.<br />
As for TPC’s ongoing commitment for quality, TPC is confi dent of attaining the ISO<br />
9001:2008 Certifi cation.<br />
TPC core business activities are:<br />
EPC Division<br />
• Project Management Scope<br />
• Detailed engineering for both onshore and offshore plant/facilities<br />
• Plant Design and Management system (PDMS), BOCAD and As-Built<br />
• Procurement management scope<br />
• Construction engineering (fabrication requirements) including generation of<br />
shop and construction drawing<br />
• Fabrication / Construction<br />
• Process equipment skids design and supply<br />
• Hook-up and Commissioning (HUC)<br />
• Plant/Facilities Modifi cation/Revamp/Retrofi t<br />
Environmental & Positional Survey Division<br />
• 3D laser scanning and transportation of scanned data into 3D basic<br />
infrastructure<br />
• 3D As Built for onshore and offshore<br />
• Dimensional Control for onshore and offshore<br />
• Conversion of scanned data into 3D Modeling<br />
• Remodeling of facilities data into 3D CAD format into PDMS and PDS<br />
• Remodeling or modeling of existing data for CAD<br />
14
<strong>TANJUNG</strong> CSI SDN BHD<br />
<strong>TANJUNG</strong> CSI Sdn Bhd (Tanjung CSI) is a wholly-owned subsidiary of Tanjung Offshore Berhad.<br />
A spin-off from the Control & Instrumentation Department (CID) of Tanjung Offshore Services Sdn Bhd<br />
(TOS), Tanjung CSI began operations as a full company beginning January 1, 2008.<br />
Tanjung CSI’s core activities are in providing Instrumentation, Detectors, Valves, Analyzers, Metering<br />
Systems, Process Control & Safety integrated system solutions and services, primarily to the Oil & Gas<br />
sector.<br />
Our customers include leaders in the Malaysian Oil & Gas Industry, with Petronas being our key client as<br />
well as international players with projects in countries such as Vietnam, Indonesia, North Africa, Nigeria,<br />
Qatar, China and Turkmenistan.<br />
In the area of industrial fi eld instrumentation and automation, Tanjung CSI represents, among<br />
others :<br />
• ABB – process & safety automation, measurement, analytical, actuation instrumentations and wet<br />
gas metering system;<br />
• Autronica – fi re & gas integrated security systems and fi eld detectors;<br />
• SpectraSensors – gas analyzers for moisture, H2S and CO measurements;<br />
• Severn Glocon – control valves;<br />
• Severn Unival – choke valves;<br />
• Swinton Technology – liquid & gas metering solutions for custody transfer/allocation and pipe line<br />
detection system or PLDS;<br />
• PQE – power quality consultancy services;<br />
• Brodie – PD meters, variable area fl ow meters and a full range of fl ow accessories;<br />
• Pietro Fiorentini – Multiphase Flow Metering Solutions; and<br />
• Trisen – Rotating machineries engineering solutions focuses on supplying high quality and innovative<br />
control solutions for turbines and compressors.<br />
Tanjung CSI is also a certifi ed system integrator for ABB Control & Safety systems, such as the Industrial<br />
IT 800 xA, Freelance, PlantguardTM and TriguardTM system product lines. Complementing ABB in the<br />
area of Fire and Gas system solution is Autronica Fire & Safety, which produce industry renowned SIL2<br />
Addressable Fire and Gas systems and fi eld devices. Our scope of capabilities include the full suite of<br />
engineering services, beginning from design, system confi guration, system integration, testing, staging,<br />
training all the way up to system commissioning at site, as well providing post implementation services.<br />
Our range of capabilities also extends to include fi eld instrumentation, and associated services, such as<br />
calibration, repair services, valves and positioned assembly works, as well as hybrid and gas analyzer<br />
sampling system design and fabrication.<br />
Tanjung CSI also extends its services in the area of electrical power distribution and stability by performing<br />
and providing quality control and consultation to ensure that the electrical power supply of a site is<br />
regulated appropriately.<br />
Tanjung CSI’s goal is to be recognized as a premier industrial control, safety and instrumentation solution<br />
provider for the Malaysian Oil & Gas industry.<br />
15<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
PT <strong>TANJUNG</strong> <strong>OFFSHORE</strong> NUSANTARA<br />
PT Tanjung Offshore Nusantara (PTTON) was incorporated in Indonesia on 16<br />
January 2008. Tanjung Offshore Berhad (Tanjung) holds 80% in the equity of<br />
PTTON while the remaining 20% equity is held by PT Expet Kontrol Nusantara.<br />
PTTON commenced full operations in February 2008. Tanjung hopes to penetrate<br />
into the vast oil and gas industry in Indonesia which offer vast potential for our<br />
integrated services. Through PTTON, we hope to replicate our “one stop”<br />
solution service provider business model in Indonesia.<br />
PTTON’s core business activities include:-<br />
• Provision of Engineering Equipment and Services;<br />
• Provision of Offshore Support Vessels Services.<br />
• Provision of Drilling and Production Platform Services.<br />
• Provision of Maintenance Services.<br />
• Provision of Engineering and Professional Manpower services.<br />
16
HERCULES <strong>TANJUNG</strong> ASIA SDN BHD<br />
Hercules Tanjung Asia (HTA) was incorporated in early 2008 as an associate<br />
company of Tanjung Offshore Berhad. HTA is mainly focused in the provision of<br />
drilling rig services to the exploration and development of oil and gas fi elds in the<br />
ASEAN region with emphasis on the Malaysian waters.<br />
The formation of HTA is the result of Tanjung Group’s collaboration with Hercules<br />
Offshore Ltd, a renowned oil and gas drilling contractor worldwide in penetrating<br />
the promising outlook of the oil and gas industry in the ASEAN region.<br />
HTA lends its support to the oil majors’ exploration and development activities<br />
through its range of complete drilling solutions. These include the provision of:-<br />
• Complete range of drilling rigs and lift boats for both shallow and deep<br />
waters; and<br />
• Complete range of marine support activities and manpower expertise.<br />
All activities performed by HTA are in compliance to the Health, Safety and<br />
Environmental regulations at all times.<br />
Based on the support of Hercules’ fl eet size of forty (40) offshore drilling units<br />
and Tanjung Group’s vessel fl eet size of sixteen (16) offshore support vessels, we<br />
believe HTA will be a leading provider of one stop solution for drilling services in<br />
this region.<br />
17<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
CENDOR MOPU PRODUCER LIMITED<br />
Cendor MOPU Producer Limited (CMPL) was incorporated on 7 November<br />
2005. Tanjung Offshore Berhad (Tanjung) owns a 20% equity in CMPL while<br />
the remaining 80% equity is held by Global Process Systems Sdn Bhd. CMPL’s<br />
principal activity is to own, lease, sub-lease, maintain, operate, manage the<br />
Mobile Offshore Production Unit (MOPU) to perform production operations within<br />
Malaysian waters.<br />
CMPL is the fi rst Malaysian company that introduced the concept and viability of<br />
MOPU in extracting oil from marginal fi elds in Malaysian waters. The MOPU is a<br />
jack up drilling rig which has been converted into an oil production platform which<br />
is designed to operate on a stand alone basis at a designated location.<br />
Since its inception, CMPL has been managing one (1) unit of MOPU which<br />
is currently contracted to Petrofac (Malaysia PM-304) Limited. As of to date,<br />
the MOPU is operating at Cendor oilfi eld which is situated off the coast of<br />
Terengganu.<br />
Given the successful launch of the MOPU, Tanjung will continue to explore new<br />
ideas and concepts that facilitate the extraction of oil from fi elds in Malaysia and<br />
the region.<br />
18
<strong>TANJUNG</strong> CITECH UK LIMITED<br />
CITECH ENERGY RECOVERY SYSTEMS UK LIMITED<br />
<strong>TANJUNG</strong> CITECH SDN BHD<br />
Tanjung Citech UK Limited<br />
Tanjung Citech UK Limited (TCUK) was incorporated on 22<br />
August 2008 as a wholly owned subsidiary of Tanjung Offshore<br />
Berhad. TCUK owns all intellectual property rights and patent<br />
for the “CiBAS Technology” in the manufacturing of Waste Heat<br />
Recovery Units (WHRU) for the oil and gas industry for the next<br />
thirteen (13) years.<br />
The revolutionary CiBAS Technology design ensures maximum<br />
effi ciency in heat transfer, maximizing cost savings and<br />
minimized emissions in compliance with the Kyoto Protocol.<br />
The new WHRUs have less space requirements and are also<br />
lighter in weight.<br />
Citech Energy Recovery Systems UK Limited<br />
Citech Energy Recovery Systems UK Limited (CERS) was<br />
incorporated on 22 August 2008 as a subsidiary of TCUK.<br />
CERS is the operating company that manufactures the WHRUs<br />
commonly used at the offshore platforms to reclaim heat from<br />
the exhaust of gas turbines which provide the power / electricity<br />
required to operate the platforms.<br />
CERS is currently operating from Hull, United Kingdom and we<br />
have a range of international clients in the United States, Russia<br />
and the European region.<br />
Tanjung Citech Sdn Bhd<br />
Tanjung Citech Sdn Bhd (TCSB) was incorporated on 6 March<br />
2009 as a subsidiary of Tanjung Offshore Berhad. TCSB is<br />
principally in the manufacturing and marketing of waste heat<br />
recovery units for the oil and gas industry in the Asia Pacifi c<br />
region.<br />
TCSB is based in Kuala Lumpur, Malaysia and is actively<br />
pursuing new markets within the Asia Pacifi c region with<br />
technical support from CERS in Hull, United Kingdom.<br />
19<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
GAS GENERATORS (M) SDN BHD<br />
UNIVERSAL GAS GENERATORS SDN BHD<br />
On 05 January 2009, Tanjung Offshore Berhad acquired as a 51% equity interest<br />
in Gas Generators ( Malaysia) Sdn Bhd (Gastec) and its subsidiaries (Gastec<br />
Group). Gastec Group is principally involved in the manufacturing and marketing<br />
of gas generators in both the industrial and offshore oil and gas markets.<br />
Nitrogen is an inert gas used primarily for purging of tanks and pipelines to<br />
enhance overall plant safety. The generator produces nitrogen from compressed<br />
air thereby eliminating the cost and hazard associated with transporting of<br />
nitrogen gas cylinders offshore.<br />
Gastec Group has operations in the ASEAN region with active presence in Kuala<br />
Lumpur, Bangkok, Jakarta and Manila.<br />
The Gastec Group also design and manufactures nitrogen gas generators for on-<br />
site gas production facilities on long term “built, operate and transfer” and “built,<br />
operate and own” contracts to both industrial and oil and gas industries.<br />
20
21<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
OUR VISION<br />
To be the preferred integrated service provider<br />
to the oil majors in Malaysia and the region.<br />
MISSION AND PHILOSOPHY<br />
To support the oil and gas industry as a “one stop solutions provider” through:-<br />
• Providing Quality Products & Services;<br />
• Optimising Resources;<br />
• New Technologies;<br />
• Enhancing Technical Competencies; and<br />
• Full Compliance to Health, Safety and Environmental regulations.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
CORPORATE HISTORY AND MILESTONES<br />
IPO on Bursa Malaysia Delivery of fi rst AHTS vessel,<br />
MV Tanjung Huma<br />
22<br />
MOPU on location at Cendor fi eld The ‘208’ Jack up rig<br />
1990 First commenced drilling operations, on exclusive agency agreement with the incorporation of<br />
Tanjung Offshore Services Sdn Bhd (“TOS”).<br />
1991 Tanjung Petroconsult Sdn Bhd was incorporated to provide engineering and professional<br />
manpower services in Pasir Gudang, Johor.<br />
1993 TOS secured various exclusive agencies for engineering equipment such as gas turbines, gas<br />
compressors, control valves and pumps for offshore platforms.<br />
1994 Tanjung Kapal Services Sdn Bhd (“TKS”) was incorporated to provide ship management services<br />
for leased vessels from third parties.<br />
1996 Tanjung Maintenance Services Sdn Bhd (“TMS”) was set up to provide complete maintenance<br />
services to both offshore and onshore oil and gas operators through its operation centre in<br />
Kemaman, Terengganu.<br />
2004 Tanjung NewEnergy Services Sdn Bhd commenced business to provide project management<br />
services to the engineering and energy industries in Manjung, Perak.<br />
27 May 2005 The entire 84 million ordinary shares of RM0.50 each in Tanjung Offshore Berhad (Tanjung) were<br />
listed on the Second Board of Bursa Malaysia Securities Berhad (“Bursa Malaysia”).<br />
June 2005 TOS secured the fi rst Mobile Offshore Production Unit contract from Petrofac (Malaysia PM-304)<br />
Limited for the development of Cendor oilfi eld off the coast of Terengganu.<br />
December 2005 TOS took delivery of an Anchor Handling Tug and Supply vessel (AHTS), MV Tanjung Huma and<br />
a Utility Vessel, MV Tanjung Manis<br />
January 2006 TMS secured a long term contract from Petronas Carigali Sdn Bhd (PCSB) for the provision of<br />
maintenance services for mechanical rotating equipment at all offshore platforms operated by<br />
PCSB in East Malaysia for total contract value of RM80 million for a period of fi ve (5) years.<br />
January 2006 A private placement of new ordinary shares of RM0.50 each of up to ten percent (10%) of the<br />
issued and paid-up share capital of Tanjung was completed.<br />
July 2006 TKS took delivery of two (2) units of straight supply vessels, MV Tanjung Pinang 1 and MV<br />
Tanjung Pinang 2.<br />
August 2006 The issuance of new shares and ten (10) year warrants 2006/2016 (“Warrants”) arising from the<br />
Bonus Issue on the basis of one (1) new ordinary share for every two (2) existing ordinary shares<br />
held were completed and listed on Bursa Malaysia.<br />
8 September 2006 The listing and quotation of the entire enlarged issued and paid-up share capital and outstanding<br />
Warrants of Tanjung were transferred from the Second Board to the Main Market of Bursa<br />
Malaysia.<br />
March 2007 TOS secured a contract from Murphy Sarawak Oil Co. Ltd. (“Murphy Oil”) for the provision<br />
of a jack-up drilling rig, namely “THE 208” for Murphy Oil’s 2007/2010 development drilling<br />
programmes in Malaysian waters.<br />
March 2007 TKS took delivery of another two (2) units of straight supply vessels, MV Tanjung Pinang 3 and<br />
MV Tanjung Pinang 4.<br />
June 2007 The issuance of new shares and ten (10) year warrants 2006/2016 (“Warrants”) arising from the<br />
Bonus Issue on the basis of two (2) new ordinary share for every fi ve (5) existing ordinary shares<br />
held were completed and listed on the Main Market of Bursa Malaysia.
CORPORATE HISTORY AND MILESTONES<br />
Waste heat recovery units at Citech MV Tanjung Gaya,<br />
Tanjung’s fi rst well testing vessel<br />
23<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Launch of MV Tanjung Biru 1 Launch of MV Tanjung Dahan 1<br />
July 2007 TOS secured a contract from Murphy Oil for the provision of a Self Elevating Relocatable Facility<br />
for the SK309/311 Phase One Gas Development Project for a duration of two (2) primary<br />
years.<br />
August 2007 TKS took delivery of one (1) unit of AHTS, MV Tanjung Dawai.<br />
September 2007 TOS secured its fi rst well testing vessel contract from Carigali-PTTEPI Operating Company Sdn<br />
Bhd (CPOC).<br />
October 2007 TOS secured its maiden contract from Truong San Joint Operating Company, Vietnam for the<br />
provision of a straight supply vessel, MV Tanjung Pinang 3.<br />
January 2008 PT. Tanjung Offshore Nusantara was incorporated as a subsidiary of Tanjung Offshore Berhad to<br />
provide integrated support services to the oil and gas and related industries in Indonesia.<br />
July 2008 TKS took delivery of Tanjung’s eighth (8th) vessel, namely MV Tanjung Puteri 1, an AHTS<br />
vessel.<br />
August 2008 Tanjung Offshore Berhad acquired the business and assets of Citech Limited and Citech Energy<br />
Systems Limited. The acquisition was completed via the incorporation of two new subsidiaries,<br />
namely Tanjung Citech UK Limited (TCUK) and Citech Energy Recovery Systems UK Limited<br />
(CERS). TCUK holds all patents and Intellectual Property Rights associated with the revolutionary<br />
“CiBAS Technology” in the manufacturing of Waste Heat Recovery Units (WHRUs) for the<br />
oil and gas and related industries. CERS is the operating subsidiary which is involved in the<br />
manufacturing and marketing the WHRUs in Hull, United Kingdom.<br />
September 2008 TKS took delivery of Tanjung’s ninth (9th) vessel, namely MV Tanjung Puteri 2, an AHTS vessel.<br />
October 2008 Tanjung Offshore Berhad completed the renounceable Rights Issue with free new Warrants<br />
exercise that raised approximately RM62.0 million which will be utilised for future expansions in<br />
marine assets and offshore support vessels in the oil and gas industry.<br />
December 2008 TKS took delivery of Tanjung’s tenth (10th) vessel, namely MV Tanjung Gaya, a Tug & Utility<br />
vessel.<br />
Jan 2009 Tanjung Offshore Berhad acquired a 51% equity interest in Gas Generators (M) Sdn Berhad<br />
(GASTEC), which is principally involved in the manufacturing and marketing of gas generators in<br />
both the industrial and offshore oil and gas market.<br />
February 2009 TOS took delivery of Tanjung’s eleventh (11th) vessel, MV Tanjung Gelang, a well testing vessel<br />
which has been contracted to Carigali-PTTEPI Operating Company Sdn Bhd.<br />
October 2009 TKS took delivery of Tanjung’s twelveth (12th) vessel, MV Tanjung Biru 1, an AHTS vessel which<br />
has since been contracted to Petronas Carigali Sdn Bhd on long term charter.<br />
November 2009 TKS took delivery of Tanjung’s thirteenth (13th) vessel, MV Tanjung Sari, an AHTS vessel which<br />
has since been contracted to Petronas Carigali Sdn Bhd on long term charter.<br />
December 2009 TKS took delivery of Tanjung’s fourteenth (14th) vessel, MV Tanjung Biru 2, an AHTS vessel<br />
which has since been contracted to Petronas Carigali Sdn Bhd on long term charter.<br />
March 2010 TKS took delivery of Tanjung’s fi fteenth (15th) vessel, MV Tanjung Dahan 1, an AHTS vessel<br />
which has since been contracted to Petronas Carigali Sdn Bhd on long term charter.<br />
May 2010 TKS took delivery of Tanjung’s sixteenth (16th) vessel, MV Tanjung Dahan 2, an AHTS vessel<br />
which has since been contracted to Petronas Carigali Sdn Bhd on long term charter.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS<br />
2005 2006 2007 2008 2009<br />
RM’000 RM’000 RM’000 RM’000 RM’000<br />
Revenue 205,455 293,254 422,871 574,273 649,656<br />
EBITDA 13,062 23,015 44,457 47,438 21,510<br />
Net Profi t before tax 11,601 17,510 24,305 34,225 4,774<br />
Net Profi t after tax 16,051 18,280 23,229 31,448 3,616<br />
Pre - tax Margin 5.65 5.97 5.75 5.95 0.73<br />
Net Margin 7.81 6.23 5.49 5.47 0.56<br />
Net Earnings per share (sen) 26.6 13.12 11.49 14.63 1.25<br />
Revenue (RM’000) Net Profi t After Tax (RM’000)<br />
650,000 -<br />
600,000 -<br />
550,000 -<br />
500,000 -<br />
450,000 -<br />
400,000 -<br />
350,000 -<br />
300,000 -<br />
250,000 -<br />
205,455<br />
200,000 -<br />
150,000 -<br />
100,000 -<br />
0 -<br />
293,254<br />
422,871<br />
574,273<br />
649,656<br />
2005 2006 2007 2008 2009<br />
24<br />
35,000 -<br />
30,000 -<br />
25,000 -<br />
20,000 -<br />
15,000 -<br />
10,000 -<br />
5,000 -<br />
0 -<br />
16,051<br />
18,280<br />
23,229<br />
31,448<br />
3,616<br />
2005 2006 2007 2008 2009
FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS<br />
Revenue Breakdown for the year ended 2009<br />
30.14%<br />
195.77m<br />
24.67%<br />
160.27m<br />
38.30%<br />
248.85m<br />
6.89%<br />
44.76m<br />
Shareholders’ funds<br />
2005 = 72,589,574<br />
2006 = 112,672,715<br />
2007 = 136,636,881<br />
2008 = 322,265,051<br />
2009 = 322,083,452<br />
1.8<br />
1.6<br />
1.4<br />
1.2<br />
1<br />
0.8<br />
0.6<br />
Drilling and Production<br />
Platform Services<br />
Engineering Equipment<br />
Services<br />
Maintenance Services<br />
Offshore Support Vessel<br />
Services<br />
2009<br />
2008<br />
2007<br />
2006<br />
2005<br />
(million)<br />
0 -<br />
50 -<br />
25<br />
37.42%<br />
214.83m<br />
14.31%<br />
82.19m<br />
35.52%<br />
204.0m<br />
12.75%<br />
73.25m<br />
Tanjung Offshore KLCI<br />
Jan-00 Jun-09 Aug-09 Oct-09 Jan-10 Mar-10<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Revenue Breakdown for the year ended 2008<br />
72,589,574<br />
100 -<br />
136,636,881<br />
112,672,715<br />
Drilling and Production<br />
Platform Services<br />
Engineering Equipment<br />
Services<br />
Maintenance Services<br />
Offshore Support Vessel<br />
Services<br />
Share price performance of Tanjung versus the KLCI between 15 April 2005 and 15 April 2010.<br />
150 -<br />
200 -<br />
250 -<br />
300 -<br />
322,083,452<br />
322,265,051<br />
350 -<br />
1400<br />
1200<br />
1000<br />
800
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTICE OF ANNUAL GENERAL MEETING<br />
NOTICE IS HEREBY GIVEN THAT the Sixth Annual General Meeting of the Company will be held at Kenanga Room, Kelab<br />
Darul Ehsan, Taman Tun Abdul Razak, Jalan Kerja Air Lama, 68000 Ampang Jaya, Selangor Darul Ehsan on Monday, 31 May<br />
2010 at 10:00 a.m. to transact the following businesses: -<br />
AGENDA<br />
1. To receive the Audited Financial Statements for the fi nancial year ended 31 December 2009 and the<br />
Reports of Directors and Auditors thereon.<br />
2. To re-elect the following Directors retiring in accordance with Article 103 of the Company’s Articles of<br />
Association:-<br />
(i) Dato’ Ab Wahab Bin Haji Ibrahim<br />
(ii) Haji Hamidon bin Md Khayon<br />
3. To re-appoint Messrs. AljeffriDean as Auditors of the Company and authorise the Directors to determine<br />
their remuneration.<br />
4. As Special Business to consider and if thought fi t, to pass the following Ordinary Resolutions, with or<br />
without modifi cations:-<br />
ORDINARY RESOLUTION I<br />
AUTHORITY TO ISSUE SHARES<br />
“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised<br />
to issue shares in the Company at any time until the conclusion of the next Annual General Meeting and<br />
under such terms and conditions and for such purposes as the Directors may, in their absolute discretion,<br />
deem fi t provided that the aggregate number of shares to be issued does not exceed 10 per centum of<br />
the issue share capital of the Company for the time being, subject always to the approval of all relevant<br />
regulatory bodies being obtained for such issue and allotment.”<br />
ORDINARY RESOLUTION II<br />
RENEWAL OF SHAREHOLDER’S MANDATE FOR SHARE BUY-BACK<br />
“THAT subject to the Companies Act, 1965 (“Act”), provisions of the Company’s Memorandum and<br />
Articles of Association and the requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and<br />
any other relevant authorities, and other relevant approvals, the Directors of the Company be and are<br />
hereby authorised to purchase the Company’s ordinary shares of RM0.50 each (“Shares”) through Bursa<br />
Securities, subject to the following:-<br />
(a) The maximum number of Shares which may be purchased by the Company shall not exceed ten<br />
per centum (10%) of the issued and paid-up ordinary share capital of the Company at any point in<br />
time;<br />
(b) The maximum fund to be allocated by the Company for the purpose of purchasing its shares shall<br />
not exceed the retained profi ts and share premium accounts of the Company;<br />
c) The authority conferred by this resolution will be effective upon passing of this resolution and will<br />
continue in force until:-<br />
(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the AGM,<br />
at which this resolution was passed, at which time the said authority will lapse, unless by an<br />
ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or<br />
subject to conditions; or<br />
(ii) the expiration of the period within which the next AGM of the Company after that date is required<br />
to be held pursuant to Section 143(1) of the Act (but shall not extend to such extensions as may<br />
be allowed pursuant to Section 143(2) of the Act); or<br />
(iii) revoked or varied by an ordinary resolution passed by the shareholders in a general meeting;<br />
whichever occurs fi rst;<br />
26<br />
Resolution 1<br />
Resolution 2<br />
Resolution 3<br />
Resolution 4<br />
Resolution 5<br />
Resolution 6
NOTICE OF ANNUAL GENERAL MEETING<br />
(d) Upon completion of the purchase(s) of the Shares by the Company, the Shares shall be dealt with in<br />
the following manner:-<br />
(i) cancel the Shares so purchased;<br />
(ii) retain the Shares so purchased as Treasury Shares;<br />
(iii) distribute the Treasury Shares as dividends to shareholders;<br />
(iv) resell the Treasury Shares on Bursa Securities in accordance with the relevant rules of Bursa<br />
Securities; and<br />
(v) any combination of the above (i), (ii), (iii) and (iv).<br />
THAT the Directors of the Company be and are hereby authorised to take all such steps and enter into all<br />
agreements, arrangements and guarantees with any party or parties as are necessary to implement, fi nalise<br />
and give full effect to the aforesaid purchase with full powers to assent to any conditions, modifi cations,<br />
revaluations, variations and/or amendments (if any) as may be imposed by the relevant authorities from<br />
time to time to implement or to effect the purchase of its own shares.”<br />
5. To transact any other business of which due notice shall have been given.<br />
BY ORDER OF THE BOARD<br />
SEOW FEI SAN<br />
KANG SHEW MENG<br />
Secretaries<br />
Petaling Jaya<br />
7 May 2010<br />
NOTES:<br />
27<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
1. A member entitled to attend and vote at the meeting shall not be entitled to appoint more than two (2) proxies to attend and vote in his/her<br />
stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall<br />
not apply.<br />
2. Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifi es the proportions of his/her shareholding<br />
to be represented by each proxy.<br />
3. Where a Member is an authorised nominee as defi ned under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least<br />
one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities<br />
Account.<br />
4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing or, if<br />
the appointer is a corporation, either under its Common Seal or under the hand of its offi cer or attorney duly authorised.<br />
5. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially certifi ed copy<br />
thereof, must be deposited at the Registered Offi ce of the Company at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301<br />
Petaling Jaya, Selangor Darul Ehsan not less than forty eight hours (48) hours before the time appointed for holding the Sixth Annual General<br />
Meeting or any adjournment thereof.<br />
Explanatory notes on Special Business:<br />
Resolution 5- Authority to Issue Shares<br />
The proposed Resolution 5, if passed, will give the Directors of the Company, from the date of the above Annual General Meeting, authority<br />
to issue and allot shares from the unissued capital of the Company for such purposes as the Directors may deem fi t and in the interest of the<br />
Company. The authority, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General<br />
Meeting of the Company.<br />
As at the date of this notice, no new shares in the Company were issued pursuant to the authority granted to the Directors at the Fifth Annual<br />
General Meeting held on 26 May 2009 and which will lapse at the conclusion of the Sixth Annual General Meeting.<br />
The authority will provide fl exibility to the Company for any possible fund raising activities, including but not limited to further placing of shares for<br />
purpose of funding future investment project(s), working capital and/or acquisitions.<br />
Ordinary Resolution 6 – Renewal of Shareholder’s Mandate for Share Buy-Back<br />
The proposed Ordinary Resolution 6, if passed, will empower the Directors of the Company to continue to purchase the Company’s shares up<br />
to ten percent (10%) of the issued and paid-up share capital of the Company (“Share Buy-Back Mandate”) by utilizing the funds allocated which<br />
shall not exceed the total retained earnings and share premium account of the Company. Further information on the Share Buy-Back Mandate is<br />
set out in the Statement to Shareholders dated 7 May 2010, which is despatched together with Company’s Annual Report 2009.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
DIRECTORS’ PROFILE<br />
Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee<br />
Independent Non-Executive Chairman<br />
A Malaysian, aged 48, is the Independent Non-Executive Chairman of Tanjung Offshore Berhad (“Tanjung”). He was appointed to<br />
the Board of Directors of Tanjung on 9 March 2005. He was awarded a Professional Diploma in Leadership and Management by<br />
the New Zealand Institute of Management, New Zealand in 2003.<br />
He ventured into business in the early 1980s and held directorships in several private and public corporations involved in a<br />
diverse range of businesses. He is also the Independent Non-Executive Chairman of UZMA Berhad and holds directorship in C.I.<br />
Holdings Berhad. He is also the Chairman of Composites Technology Research Malaysia Sdn Bhd, a company which is controlled<br />
by the Ministry of Finance and Yayasan Pendidikan Cheras, Kuala Lumpur.<br />
Datuk Wira Syed Ali also serves as the Chairman of the Nomination Committee (“NC”) and Remuneration Committee (“RC”) as<br />
well as a member of the Audit Committee (“AC”) of Tanjung. He attended six out of seven Board meetings which were held in the<br />
fi nancial year ended 31 December 2009.<br />
28
DIRECTORS’ PROFILE<br />
Haji Omar Bin Khalid<br />
Managing Director<br />
29<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
A Malaysian, aged 55, is the Managing Director of Tanjung and he is one of the co-founders of Tanjung since its inception in 1990.<br />
He obtained a Diploma in Accountancy from Institut Teknologi Mara (now known as Universiti Teknologi Mara) and thereafter<br />
joined Arthur Young & Co. as an Auditor in 1975. He obtained a Bachelor of Business Administration (Finance) from Eastern<br />
Michigan University, USA in 1984. He later moved on to Kompleks Kewangan (M) Berhad where he was a Finance Manager until<br />
1990.<br />
Through the support of his associates in the oil and gas industry and his knowledge of the maritime industry, Haji Omar cofounded<br />
the Tanjung Group in early 1990. It also marks his successful venture into the Malaysian oil and gas support service<br />
industry. Through his experience and his commitment in the operations of the Group, he is able to maintain a close rapport<br />
with the suppliers/principals as well as having a sound understanding of the requirements and regulations set by the relevant<br />
authorities and PETRONAS.<br />
Under his stewardship in the early 1990s, the Tanjung Group together with Odjfell Drilling & Consulting Co. secured the Group’s<br />
maiden drilling contract for exploratory and development of oilfi elds in East Malaysia. In mid 1990s, he assisted the Tanjung<br />
Group in procuring various exclusive agencies for a range of engineering equipment from principals worldwide which translated<br />
into larger contracts from the oil and gas majors. Since then, the Tanjung Group has grown organically from an agency based<br />
drilling company into an integrated service provider within the industry, focusing in the provision of engineering equipment,<br />
offshore support vessels, drilling and platform services and maintenance services in the region and internationally. Through his<br />
active and prudent leadership, the Tanjung Group has won numerous awards and accreditations for various safety and growth<br />
achievements.<br />
He led the Tanjung Group for an Initial Public Offering (IPO) which shares were successfully listed on Bursa Malaysia Securities<br />
Berhad on 27 May 2005. In 2009, he was also awarded the prestigious “Masterclass SME CEO of the Year 2009” of Malaysia<br />
Business Leadership Awards by the Kuala Lumpur Malays Chamber of Commerce.<br />
Haji Omar is a trustee member of the Yayasan Pendidikan Cheras, Kuala Lumpur. He also serves as the Chairman of the<br />
Employees’ Share Option Scheme (“ESOS”) Committee and a member of the RC of Tanjung. He attended all of the Board<br />
meetings which were held in the fi nancial year ended 31 December 2009.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
DIRECTORS’ PROFILE<br />
Haji Hamidon Bin Md Khayon<br />
Business Development Director<br />
A Malaysian, aged 41, is the Business<br />
Development Director of Tanjung and<br />
has been with Tanjung Group since<br />
1995. He was appointed as Executive<br />
Director of Tanjung on 9 March 2005.<br />
He also sits on the Board of Directors of<br />
various subsidiaries within the Tanjung<br />
Group to oversee various project<br />
proposals and execution of contracts<br />
within the Group. He maintains a close<br />
rapport with the oil majors to propose<br />
new ideas and projects that meet the<br />
requirements and regulations of the<br />
industry.<br />
Haji Hamidon started his career as<br />
a Drilling Fluid Engineer in 1993 with<br />
BW Promud Sdn Bhd, for area of<br />
operations predominantly in Malaysia.<br />
Later he joined Antah Baroid Sdn Bhd<br />
as a Drilling Fluids Specialist Sales and<br />
Services in 1994 for area operations<br />
within ASEAN countries. He joined<br />
Tanjung in April 1995 as a Project<br />
Sales Engineer to oversee marketing<br />
strategies and various projects and<br />
was subsequently promoted to lead the<br />
Business Development Section in 1997.<br />
He is a graduate from Colorado School<br />
of Mines, USA and holds a Bachelor<br />
Degree of Engineering in Petroleum<br />
Engineering. He is currently a member<br />
of Malaysia Oil and Gas Engineering<br />
Consultants.<br />
Haji Hamidon also serves as a member<br />
of the ESOS Committee of Tanjung.<br />
He attended all of the Board meetings<br />
which were held in the fi nancial year<br />
ended 31 December 2009.<br />
Za’aba Bin Sedek<br />
Executive Director<br />
A Malaysian, aged 46, is the Director<br />
of Operations of Tanjung. He was<br />
appointed as Executive Director of<br />
Tanjung on 1 October 2008. He also<br />
sits on the Board of Directors of various<br />
subsidiaries within the Tanjung Group.<br />
In December 2009, he was appointed<br />
as the Chief Executive Offi cer of our<br />
subsidiary in the United Kingdom,<br />
Citech Energy Recovery Systems UK<br />
Limited (CERS UK). He is involved in the<br />
overall strategic planning of the direction<br />
of CERS UK as well as handling the day<br />
to day technical and commercial matters<br />
of various contracts within CERS UK.<br />
He joined Tanjung in 1990 and<br />
assumed various positions within the<br />
Tanjung Group throughout the years.<br />
He is also an executive member of<br />
the Management Committee and the<br />
Chairman of the bi-annual Oil and<br />
Gas Asia exhibition team for Tanjung<br />
Group. He is also the management<br />
representative for Occupational,<br />
Health & Safety Assessment Series<br />
(OHSAS) and ISO 9001:2008 for Quality<br />
Management Systems implemented<br />
within the Tanjung Group.<br />
He attended all of the Board meetings<br />
which were held in the fi nancial year<br />
ended 31 December 2009.<br />
30<br />
Dato’ Ab Wahab<br />
Bin Haji Ibrahim<br />
Independent Non-Executive Director<br />
A Malaysian, aged 58, is an Independent<br />
Non-Executive Director and the<br />
Chairman of the Audit Committee of<br />
Tanjung. He was appointed to the Board<br />
of Directors of Tanjung on 9 March 2005.<br />
He is a Chartered Accountant and also<br />
a member of the Malaysian Institute<br />
of Accountants. He holds a Diploma<br />
and Advanced Diploma in Accounting<br />
from University Technology Mara and<br />
his experience spans over 27 years<br />
in the area of fi nance and accounting.<br />
He began his career in the Corporate<br />
Finance Division at PETRONAS in 1978<br />
and later assumed the role of Finance<br />
Manager for Petronas Gas Berhad<br />
(“PGB”), a subsidiary of PETRONAS. He<br />
was also appointed as Joint Company<br />
Secretary and was a member of the<br />
Management Committee for PGB.<br />
Following the successful implementation<br />
of the listing of Petronas Gas Berhad, he<br />
was further reassigned as Head of the<br />
Finance and IT Division of Oil, Gas and<br />
Petrochemical Technical Services Sdn<br />
Bhd, another subsidiary of PETRONAS<br />
in 1996, a position he held until 2004.<br />
Dato’ Ab Wahab is also an Independent-<br />
Non Executive Director of Alam Maritim<br />
Resources Berhad and also serves as<br />
the Chairman of its audit committee.<br />
Dato’ Ab Wahab also serves as a<br />
member of the NC and RC of Tanjung.<br />
He attended six out of seven Board<br />
meetings which were held in the fi nancial<br />
year ended 31 December 2009.
DIRECTORS’ PROFILE<br />
Edwanee Cheah bin Abdullah<br />
Independent Non-Executive Director<br />
A Malaysian, aged 59, is the Independent Non-Executive<br />
Director of Tanjung. He was appointed to the Board of Directors<br />
of Tanjung on 9 March 2005. He holds a Masters in Business<br />
and Administration (Technology) from Deakin University and is a<br />
Member of the Association of Professional Engineers, Scientists<br />
and Managers, Australia. His strong technical background is<br />
complemented by a wide and diverse business experience.<br />
He has over 30 years of international experience in the energy<br />
sector and has served various business units of the Royal Dutch<br />
Shell Group (Shell Group) in Europe, USA, Africa, Middle East<br />
and Asia and has a good standing on the international projects<br />
community. Through his exposure and knowledge in energy<br />
sector he is now a professional in managing large oil and gas<br />
development projects and has successfully delivered several<br />
projects of value over USD1 billion. His area of expertise is<br />
in strategic planning, commercial deal making, and in leading<br />
large groups of technical and commercial resources. As of<br />
todate, he is still an active oil and gas consultant for the Shell<br />
Group, Sinopec Group and other multinational corporations.<br />
Mr Edwanee also serves as a member of the AC, NC and RC<br />
of Tanjung. He attended all the Board meetings which were<br />
held in the fi nancial year ended 31 December 2009.<br />
Confl ict of interest<br />
None of the Directors has any confl ict of interest with the Company.<br />
31<br />
George William Warren Jr<br />
Independent Non-Executive Director<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
An American, aged 40, was appointed as Independent Non-<br />
Executive Director of Tanjung on 28 August 2007. He holds a<br />
Bachelor of Science Degree in Accounting (Graduating with<br />
Beta Alpha Psi Accounting Honours) from the Louisiana State<br />
University, United States. In 1993, after graduation, he joined<br />
Wegmann Dazet & Co., a professional corporation of certifi ed<br />
public accountants in New Orleans, Los Angeles, where he<br />
was both a Senior Auditor and a Forensic Auditor. In 1997,<br />
he was appointed as the Managing Director of BWB Controls,<br />
Inc., Los Angeles, a worldwide manufacturer of pneumatic,<br />
hydraulic and electric surface safety equipment engineered<br />
specifi cally for the oil and gas industry. In 2006, he became<br />
a Director in Mezco Fabrication, L.L.C., at Carencro, Los<br />
Angeles, a manufacturer of precision sheet metal parts utilising<br />
laser cutting technology for the oil and gas industry, a position<br />
he holds until present day.<br />
Mr Warren also serves as a member of the AC of Tanjung. He<br />
attended fi ve out of seven Board meetings which were held in<br />
the fi nancial year ended 31 December 2009.<br />
Conviction of Offence<br />
None of the Directors has been convicted of any offence within the past ten (10) years other than traffi c offences.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Continuous<br />
Growth<br />
32
As long as we continuously<br />
33<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
innovate and strive to meet the<br />
oil majors’ demands and requirements,<br />
we believe that we can capitalise<br />
on many opportunities<br />
within the industry<br />
for continuous growth<br />
in the years to come
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
CHAIRMAN’S STATEMENT<br />
Dear Shareholders,<br />
On behalf of the Board of Directors<br />
of Tanjung Offshore Berhad (“Board”)<br />
(“Tanjung” or “Company”) and its<br />
subsidiaries (“Tanjung Group” or<br />
“Group”), I hereby present to our<br />
valued shareholders, Tanjung’s annual<br />
report and the audited fi nancial<br />
statements of Tanjung Group for the<br />
fi nancial year ended (FYE) 2009.<br />
DATUK WIRA SYED ALI BIN<br />
TAN SRI SYED ABBAS ALHABSHEE<br />
Independent Non-Executive Chairman<br />
34
CHAIRMAN’S STATEMENT<br />
35<br />
Financial Performance<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
For the FYE 2009, Tanjung registered a total revenue of<br />
RM649.50 million and profi t after taxation of RM3.62 million<br />
respectively. Overall revenue in FYE 2009 experienced an<br />
increase of 13.13% as compared to FYE 2008 which registered<br />
total revenue of RM574.27 million. During the fi nancial year<br />
under review, total profi t after taxation reduced by 88% to<br />
RM3.62 million as compared to RM31.45 million in FYE 2008.<br />
The increase in revenue is mainly attributed by the Group’s<br />
ability to capitalise on niche markets within the oil and gas<br />
industry through the provision of offshore vessel services,<br />
engineering equipment sales, maintenance services as well<br />
as drilling and production platform services. However, the<br />
reduction in the profi tability levels are mainly due to losses<br />
incurred at our subsidiary in the UK, Citech Energy Recovery<br />
Systems UK Limited (CERS UK).<br />
205,455<br />
293,254<br />
422,871<br />
574,273<br />
649,656<br />
2005 2006 2007 2008 2009<br />
16,051<br />
18,280<br />
23,229<br />
31,448<br />
2005 2006 2007 2008 2009<br />
Revenue (RM’000) Profi t After Tax (RM’000)<br />
3,616<br />
Despite the challenging business environment in FYE 2009<br />
and the volatile oil prices affecting the oil and gas industry, the<br />
Group registered a higher revenue of RM649.66 million. This is<br />
attributed to the growth in all four (4) business divisions such<br />
as engineering equipment services, maintenance services,<br />
offshore support vessel services and drilling and production<br />
platform services.<br />
Notwithstanding this, the Group’s profi tability levels were<br />
lower and affected by operational losses at our subsidiary in<br />
the United Kingdom, Citech Energy Recovery Systems in FYE<br />
2009. In this regard, we have immediately restructured our<br />
operations and implemented management and production<br />
changes at CERS UK so as to streamline the manufacturing of<br />
waste heat recovery units more effectively and effi ciently.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
CHAIRMAN’S STATEMENT<br />
MV Tanjung Gelang<br />
Financial Performance (cont’d)<br />
We are confi dent that the turnaround plan which has been<br />
executed at CERS UK will start to bear results in FYE 2010.<br />
As at 31 December 2009, the Group’s shareholders funds<br />
stood at RM322.08 million as compared to RM322.27 million<br />
as at FYE 2008.<br />
Outlook for the Oil and Gas Industry<br />
We believe that oil fundamentals remain intact and offshore<br />
sentiments are increasingly positive on the back of stabilising<br />
oil prices which are currently hovering at between USD 70-80<br />
per barrel. With the easing credit markets, expected economic<br />
recovery and continuing demand for oil worldwide, we expect<br />
the oil majors to continue to enhance their exploration,<br />
development, production and maintenance activities within<br />
the industry.<br />
On the domestic front, in light of continuing assurances and<br />
commitments from our national oil company, PETRONAS, we<br />
trust that the industry will remain robust and continue to spur<br />
growth in the local upstream and downstream activities within<br />
the industry.<br />
Against this backdrop, we will continue to innovate by<br />
adopting new ideas and approaches in delivering our products<br />
and services within the industry. Through our core business<br />
divisions, we will actively penetrate new niche markets<br />
through the introduction of new technologies, active regional<br />
networking and effective execution of strategic plans. Given<br />
the challenges that we have experienced in the past year, we<br />
remain confi dent and optimistic in the long term fundamentals<br />
of Tanjung within the industry.<br />
THE “208” jack up drilling rig being towed upon completion of upgrading works<br />
36<br />
Corporate Social Responsibility<br />
During the year we continued with our corporate social<br />
responsibility programmes to promote:<br />
• Awareness of Health, Safety and Environmental (HSE)<br />
performances;<br />
• Development of Staff; and<br />
• Community Services.<br />
We always ensure that all staff within the Tanjung Group are<br />
aware and perform their tasks in accordance to health, safety<br />
and environmental requirements. We continue to eliminate<br />
any potential risks of injury or hazards at our workplaces and<br />
offi ces through various seminars conducted by professionals<br />
to promote HSE work ethics at all times. Various operational<br />
processes are reviewed and updated regularly so as to ensure<br />
the safety of personnel at all levels of operations in our core<br />
business divisions. All HSE regulations and procedures have<br />
been communicated to all staff, business associates and<br />
visitors to all our offi ces, workshops, operation centres and<br />
vessels. Todate, we have achieved numerous HSE awards<br />
and it further reinforced our commitment to HSE policies and<br />
practices.<br />
Throughout the year, we have organised various in-house<br />
training as well as technical courses to promote staff<br />
development. We believe in growing our own talent and<br />
continuously upgrading our talent pool of workforce. Our<br />
aim is to attract, train and retain the right people so that they<br />
have the ability and drive to deliver competitive advantage and<br />
superior competence.
CHAIRMAN’S STATEMENT<br />
Launch of “D’Puncak Gotong Royong” at our head offi ce at Puncak<br />
Setiawangsa by Y.B. Datuk Raja Nong Chik<br />
Corporate Social Responsibility (cont’d)<br />
The Tanjung Group has also supported various community<br />
services and activities at “Yayasan Pendidikan Cheras” which<br />
was established to support the education needs of children<br />
from low income groups in Kuala Lumpur. We have provided<br />
various scholarships, incentives and support programmes<br />
to reward and support able students from the lower income<br />
group to further their studies at higher institutions of learning.<br />
We have also sponsored practical training courses as part of<br />
the overall graduate programmes at local universities such<br />
as Universiti Teknologi Mara, International Islamic University<br />
Malaysia, Universiti Kuala Lumpur, Universiti Malaya, Universiti<br />
Utara Malaysia, Universiti Tenaga Nasional, TATI University<br />
College and Universiti Teknologi Petronas. These practical<br />
training programmes involved hands-on training at our<br />
maintenance workshops and formal seminars and discussions<br />
at our offi ces for various engineering disciplines within the oil<br />
and gas industry.<br />
Through these practical training programmes, we are also<br />
able to offer employment to local graduates who have passed<br />
our formal selection criteria. We believe in supporting these<br />
programmes which will be provide mutual benefi ts to the<br />
career developments of local graduates and Tanjung Group<br />
on a long term basis.<br />
In January this year, we have successfully organised a<br />
“D’Puncak Gotong-Royong” at our corporate head offi ce at<br />
Puncak Setiawangsa, Kuala Lumpur. The programme was<br />
aimed at preserving cleanliness in the vicinity of our corporate<br />
offi ce and also forging closer ties between our staff and the<br />
residents within the neighbourhood. We also invited our<br />
Federal Territories and Urban Well-Being Minister, Y.B. Dato’<br />
Raja Nong Chik to launch the programme. At the same event,<br />
Tanjung donated RM10,000.00 to “Tabung Bencana Wilayah<br />
Persekutuan” held under the ministry.<br />
37<br />
Dividends<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Tanjung Group’s employees participating in the “Gotong Royong”<br />
During the fi nancial year ended 31 December 2009, the<br />
Company had paid an interim dividend of 8% or RM0.04 sen<br />
per share of RM0.50 (less 25% taxation) on 2 April 2009. The<br />
Board of Directors has decided to retain the remaining profi ts<br />
earned during the year under review and no further dividend<br />
is recommended for the fi nancial year ended 31 December<br />
2009.<br />
Corporate Governance<br />
The Board believes in the maintenance of the highest standards<br />
of corporate governance practices within the Group as a<br />
fundamental part of discharging our responsibilities to protect<br />
and maximize shareholders’ value and enhancing the continued<br />
business prosperity of the Group. The measures implemented<br />
have been highlighted in the Corporate Governance Report in<br />
this annual report.<br />
Tanjung Group’s employees cleaning up the neigbourhood with the<br />
residents of Puncak Setiawangsa, Kuala Lumpur
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
CHAIRMAN’S STATEMENT<br />
Our booth at the Oil, Gas & Petrochemical Engineering Exhibition (OGA 2009)<br />
Tun Dr Mahathir Mohamad visiting our booth at the OGA 2009<br />
Investor Relations<br />
During the year, we have organised various site visits to our<br />
workshops, new vessel launches and analysts briefi ngs<br />
as well as participating in investor road shows. This is to<br />
establish proactive and timely communication linkages with<br />
the investment community such as institutional investors, fund<br />
managers, analysts and media on our fi nancial performance<br />
and business operations. Our Company’s website is also<br />
updated on a regular basis to refl ect the latest developments<br />
and improving public awareness of the Group at the same<br />
time.<br />
In June 2009, we have also participated in the 13th Asian<br />
Oil, Gas & Petrochemical Engineering Exhibition (OGA 2009)<br />
which was held in Kuala Lumpur. The participation was to<br />
further promote our Group’s range of products and services<br />
for the industry.<br />
38<br />
Our staff explaining our products and services to visitors<br />
at our booth at the OGA 2009.<br />
Appreciation<br />
On behalf of the Board of Directors of Tanjung, I wish to extend<br />
our sincere appreciation and gratitude to our Finance Director,<br />
Haji Abdullah Bin Hashim who has announced his retirement<br />
effective 31 March 2010.<br />
I also wish to extend my gratitude and appreciation to our<br />
management and staff for their continuous commitment and<br />
dedication in reinforcing our position as one of the leading oil<br />
and gas service providers in Malaysia.<br />
We would also like to take this opportunity to thank our valued<br />
institutional and individual shareholders for your confi dence<br />
and believe in the long term prospects of the Group, the oil<br />
majors, in particular PETRONAS, for their continuous support<br />
over the years, our business associates and principals for the<br />
successful collaboration in various business operations, our<br />
bankers and government authorities for their vital role in our<br />
strategic planning and execution of projects.<br />
Lastly, my special thanks also to my colleagues on the Board of<br />
Tanjung for their invaluable support and guidance throughout<br />
the year.<br />
.....................................................................<br />
DATUK WIRA SYED ALI<br />
BIN TAN SRI SYED ABBAS ALHABSHEE<br />
Independent Non-Executive Chairman<br />
30 April 2010
HEALTH,SAFETY<br />
&<br />
It is the policy of Tanjung Offshore Berhad and<br />
its subsidiaries (Tanjung Group) that all our work<br />
activities shall be conducted in a manner which<br />
safeguards the Health, Safety and Welfare of all<br />
persons and preserves the natural Environment,<br />
as far as it is practicable.<br />
Our Health, Safety and Environment (HSE)<br />
objectives shall bear equal importance with our<br />
fundamental business objectives.<br />
Every employee of Tanjung Group is obligated to<br />
work safely, to cooperate and act responsibly in<br />
preventing injury to him/her and to others.<br />
In pursuance of this policy and in adherence to<br />
all legislative and other requirements with the<br />
commitment to achieve continuous improvement,<br />
Tanjung Group shall endeavor to :-<br />
• Prevent all accidents, occupational diseases<br />
and fi res<br />
• Prevent damage to equipment, items, plant<br />
and property<br />
• Protect and preserve the environment<br />
• Implement safe system of work<br />
• Safeguards the interest of the general public<br />
and surrounding community<br />
• Promote safety awareness and provide<br />
training to Tanjung Group’s employees to<br />
achieve our HSE objectives<br />
• Provide forum and platform to employees,<br />
customers and contractors to actively<br />
participate in our HSE programme<br />
39<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
ENVIRONMENT<br />
POLICY
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
MANAGING DIRECTOR’S REVIEW<br />
On behalf of the Board of Directors (“Board”)<br />
of Tanjung Offshore Berhad (“Tanjung” or<br />
“Company”) and its subsidiaries (“Tanjung<br />
Group” or “Group”), I am pleased that the<br />
Group’s performance has remain resilient<br />
in a challenging fi nancial year. The price<br />
volatility of oil has created uncertainties<br />
in the industry which resulted in oil<br />
majors reassessing their investments and<br />
spending in exploration, development<br />
and production activities. Despite this<br />
challenging environment, we continue<br />
to experience revenue growth and<br />
maintaining profi tability during the year<br />
under review.<br />
During the FYE 2009, the Group registered<br />
total revenue of RM649.65 million which<br />
represented an increase of 13.13% as<br />
compared to that recorded in the previous<br />
FYE 2008 of RM574.27 million. During the<br />
fi nancial year under review, total profi t<br />
after taxation reduced by 88% to RM3.62<br />
million as compared to RM31.45 million in<br />
FYE 2008.<br />
HAJI OMAR BIN KHALID<br />
Managing Director<br />
40
MANAGING DIRECTOR’S REVIEW<br />
41<br />
Engineering Equipment Services<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Waste heat recovery units manufactured at CERS, United Kingdom<br />
The Group recorded a reduction in profi t after tax in the current<br />
fi nancial year under review due to operational losses at our<br />
subsidiary in the United Kingdom, Citech Energy Recovery<br />
Systems (CERS UK) in FYE 2009. In this regard, we have already<br />
restructured our operations and implemented management<br />
and production changes at CERS UK so as to streamline the<br />
manufacturing of waste heat recovery units more effectively<br />
and effi ciently. We are confi dent that the turnaround plan<br />
which has already been executed at CERS UK will start to<br />
bear results in FYE 2010.<br />
In FYE 2009, the engineering equipment division has continued<br />
to register growth due to our excellent technical collaboration<br />
with various principal and aggressive marketing to the oil<br />
majors.<br />
Overall revenue for engineering equipment in FYE 2009 totalled<br />
RM248.85 million which represented an increase of 22.0% as<br />
compared to RM204.0 million registered in FYE 2008. The<br />
contracts are mainly glycol regeneration packages, waste<br />
heat recovery packages, produced water system packages,<br />
chemical injection, switchgear packages and nitrogen<br />
generators. Most of these contracts are secured from various<br />
oil majors operating in Malaysia and international markets for<br />
development, production, maintenance and rejuvenation of<br />
the oil and gas fi elds.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
MANAGING DIRECTOR’S REVIEW<br />
Maintenance services at our workshop in Kemaman<br />
Maintenance services<br />
Tanjung Maintenance Services Sdn Bhd (TMS), a subsidiary<br />
of Tanjung provides complete maintenance services for a<br />
full range of engineering equipment in both the upstream<br />
and downstream sector of the oil and gas industry. Full<br />
maintenance services which involves general services and<br />
repair, overhaul and test for rotating equipment, fabrication of<br />
parts and machining, metal coating, rotor dynamic balancing,<br />
condition based monitoring and testing facilities for various<br />
types of engineering equipment. As of todate, TMS is<br />
operating from fi ve (5) main workshops of which two (2) are<br />
located in Kemaman, Terengganu, one (1) each in Miri, Bintulu<br />
and Labuan. We currently employ approximately 220 staff<br />
of various experiences and expertise. We also provide both<br />
in-house training and external training with our foreign based<br />
principals.<br />
In FYE 2009, the Group registered a revenue of RM44.76<br />
million as compared to RM73.35 million in FYE 2008. We aim<br />
to increase our market share in this sector of the industry and<br />
have been networking with new and existing clients in both<br />
Peninsular and East Malaysia such as Petronas Dagangan Sdn<br />
Bhd, Petronas (Penapisan) Terengganu Sdn Bhd, Petronas Gas<br />
Berhad, BASF Petronas Chemicals Sdn Bhd, BP Chemical<br />
Sdn Bhd, ExxonMobil Exploration and Production Malaysia<br />
Inc, Bhd, Petlin Malaysia Sdn Bhd, Nippon Oil Exploration<br />
Malaysia Ltd and and Murphy Sarawak Oil Co.<br />
We are one of the few local service providers which have set<br />
up complete workshops in all the main oil and gas hubs in both<br />
Peninsular and East Malaysia. We have trained our human<br />
capital and invested in the latest technologies to enable us<br />
to move towards niche and knowledge based maintenance<br />
technologies. In doing so, we aim to be at the forefront of the<br />
total solutions provider concept for maintenance services in<br />
Malaysia and the region.<br />
42<br />
MV Tanjung Gelang on location<br />
Drilling and Production Platform Services<br />
As of todate, we are operating the jack-up drilling rig, “THE<br />
208” with Hercules Offshore Inc, which has since been<br />
deployed to location and currently chartered to Murphy Oil on<br />
a long term contract.<br />
We are also operating the Mobile Offshore Production Unit<br />
(“MOPU”) at the Cendor oilfi eld for Petrofac (Malaysia PM-304)<br />
Limited on long term basis since 2006. The MOPU is currently<br />
used for production of oil from Cendor fi eld on a long term<br />
contract.<br />
In FYE 2009, drilling and production platform services<br />
generated approximately RM195.77 million in revenue as<br />
compared to RM214.83 million registered in FYE 2008.<br />
Offshore Support Vessels Services<br />
In FYE 2009, the offshore support vessels services division<br />
contributed a total revenue of RM160.27 million which<br />
represented an increase of 95% as compared to RM82.19<br />
million recorded in FYE 2008. We managed to secure the<br />
relevant fi nancing for the fi ve (5) new AHTS vessels in the<br />
midst of a global fi nancial crisis. We are also grateful that our<br />
principal bankers were supportive of our operations which<br />
enabled us to complete our fl eet expansion exercise. During<br />
the FYE 2009, the Group successfully launched and took<br />
delivery of an additional four (4) units of Anchor Handling Tug &<br />
Supply (AHTS) vessels, namely, MV Tanjung Sari, MV Tanjung<br />
Biru 1, MV Tanjung Biru 2, MV Tanjung Dahan 1 and one (1)<br />
unit of Well Testing and Servicing Vessel (WTSV), MV Tanjung<br />
Gelang. The Group is also expected to take delivery of an<br />
AHTS vessel, MV Tanjung Dahan 2 in May 2010. We have<br />
also recently secured the relevant long term charters for the<br />
aforesaid fi ve (5) new AHTS vessels.
MANAGING<br />
DIRECTOR’S REVIEW<br />
MV Tanjung Gelang performing well testing activities for Carigali PTTEPI Operating Company (CPOC)<br />
Offshore Support Vessels Services (cont’d)<br />
As of May 2010, the Group will be operating sixteen (16)<br />
wholly owned offshore support vessels which are chartered<br />
out to oil majors operating in Malaysian waters. Save for<br />
two (2) offshore support vessels, MV Tanjung Manis and MV<br />
Tanjung Gaya which are on spot charters, all our vessels<br />
are on secured long term charters up to FYE 2016 and we<br />
are confi dent that the demand for these vessels will remain<br />
robust given the continuous development and production of<br />
new and existing development programmes for various oil<br />
and gas Production Sharing Contracts (PSCs), spearheaded<br />
by PETRONAS together with other oil majors operating in this<br />
region.<br />
Our People<br />
As of todate, the Group employs a total of 550 employees<br />
comprising senior management, corporate executives,<br />
professional engineers and marine offi cers at all levels of<br />
responsibilities within the Group. Apart from various capital<br />
investments in offshore support vessels, maintenance<br />
workshops and facilities, the Group has also invested<br />
substantially in human capital, which is also one of the<br />
important aspects of the Group. In line with our expansions<br />
and growth in business operations, we have also recruited<br />
and provided various training programmes at all levels within<br />
the Group. During the year, we have sent various engineering<br />
teams for complete technical training at our principals’ centres,<br />
both local and overseas for in-depth exposures on the latest<br />
technological advances in the oil and gas industry.<br />
We have also sponsored various batches of students at<br />
Akademi Laut Malaysia (ALAM) where successful marine<br />
students are offered employment with Tanjung Group. Through<br />
these sponsorship programmes, we are able to attract local<br />
marine talents and providing a qualifi ed workforce for Tanjung<br />
Group’s future marine expansions.<br />
43<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Equipped with the latest technical knowledge and hands on<br />
experiences, our engineers of multiple disciplines would be<br />
able to offer their services to the oil majors, in the shortest time<br />
frame at their locations especially for urgent projects or during<br />
unforeseen emergencies.<br />
Outlook for the Future<br />
Despite the reduction in overall profi tability of the Group in FYE<br />
2009, we are still upbeat on the prospects of both the upstream<br />
and downstream sectors of the oil and gas industry in Malaysia.<br />
We take cognizance of the operational losses at our subsidiary<br />
CERS UK and have also implemented a turnaround plan for<br />
immediate cost reduction measures and restructuring of the<br />
production processes for the manufacturing of waste heat<br />
recovery units for the international markets. On the back of a<br />
new contract secured from the U.S. recently, we are confi dent<br />
that CERS UK will turnaround and deliver better results in the<br />
year ahead.<br />
In the past twelve (12) months, we have witnessed oil<br />
prices treading at lows of USD35 per barrel which has since<br />
recovered and stabilised at between USD70 - USD80 per<br />
barrel in recent months. As such, we remain positive on the<br />
long term opportunities within the industry based on our capital<br />
investments in recent years, in particular, the offshore support<br />
vessels, equipment facilities and the continuous development<br />
of our human capital. In the long term, we believe that most oil<br />
majors including PETRONAS will continue to spur exploration,<br />
development, production and maintenance activities. This<br />
is evident from the recent engineering equipment contracts<br />
and the award of long term charters for all fi ve (5) new AHTS<br />
vessels which were launched and delivered to the Group in<br />
late FYE 2009 and early FYE 2010.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
MANAGING DIRECTOR’S REVIEW<br />
CERS UK’s manufacturing plant in Hull, UK Casing division at CERS, UK Coiling division at CERS, UK<br />
Most oil majors have also implemented various rejuvenation programmes to enhance the oil and gas recovery rates at existing and<br />
matured production sharing contracts (PSC). Based on these developments, we believe that there are various niche opportunities<br />
for Tanjung Group to participate in these support services. We have invested in the development of our technical manpower,<br />
offshore support vessels and maintenance facilities at our workshops so as to provide our range of integrated services to the oil<br />
majors on a long term basis.<br />
Despite the tough operating environment and challenges in the fi nancial markets in FYE 2009, we have remained resilient and<br />
have capitalised on our available resources to further enhance our product offerings and actively promote our products and<br />
services to new and existing customers both locally and abroad. We believe that this will result in achieving better effi ciencies that<br />
translate into further optimisation of production at the lowest costs for the oil majors.<br />
Overall, we foresee another fruitful year ahead for the Group on the back of foreseeable growth in demand for our integrated<br />
services and our turnaround plan at CERS UK. We have to continue to position ourselves and remain resilient in the midst of a<br />
fast changing business environment. We will remain focused in the oil and gas industry and maintain our relevance in becoming<br />
the preferred integrated oil and gas service provider in Malaysia and the region.<br />
.....................................................................<br />
HAJI OMAR BIN KHALID<br />
Managing Director<br />
30 April 2010<br />
44
AUDIT COMMITTEE REPORT<br />
45<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
The primary objective of the Audit Committee is to assist the Board of Directors in discharging its statutory duties and responsibilities<br />
relating to accounting and reporting practices and to ensure the adequacy and effectiveness of the Group’s internal control<br />
measures.<br />
COMPOSITION OF THE AUDIT COMMITTEE<br />
The members of the Audit Committee and their respective designations who have served during the fi nancial year ended 31<br />
December 2009 are as follows:-<br />
Member Designation<br />
Dato’ Ab Wahab bin Haji Ibrahim Chairman (Independent Non-Executive Director)<br />
Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee Member (Independent Non-Executive Chairman)<br />
Edwanee Cheah Bin Abdullah Member (Independent Non-Executive Director)<br />
George William Warren Jr Member (Independent Non-Executive Director)<br />
TERMS OF REFERENCE<br />
• Membership<br />
The Committee shall be appointed by the Directors from among themselves and shall consist of not less than three (3) in<br />
numbers of whom a majority shall not be:-<br />
(a) Executive Directors of the Company or any relevant corporation.<br />
(b) Spouse, parent, brother, sister, son or adopted son, daughter or adopted daughter of an executive director of the<br />
Company or of any related corporation; or<br />
(c) Spouse of brother, sister, son or adopted son, daughter or adopted daughter of an executive director or of any related<br />
corporation, or<br />
(d) Any person having a relationship which, in the opinion of the Board of Directors, would interfere with the exercise of the<br />
independent judgement in carrying out the functions of the committee.<br />
The members of the Committee shall elect a Chairman from among their number who is not an executive director or<br />
employee of the Company or any related corporation. If a member of the Committee resigns, dies or for any other reason<br />
ceases to be a member with the result that the number of members is reduced to two (2), the Board of Directors shall within<br />
three (3) months of that event, appoint such number of new members as may be required to make up the minimum number<br />
of three (3) members.<br />
• Authority<br />
The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek<br />
any information it requires from any employees and all employees are directed to co-operate with any request made by the<br />
Committee. The Committee shall also have the authority to consult independent experts where they consider it necessary to<br />
carry out their duties.<br />
• Meetings<br />
The Committee shall meet at least four (4) times a year and such meetings as the Chairman shall decide in order to fulfi l its<br />
duties. The Secretary of the Committee shall be responsible, in conjunction with the Chairman, for drawing up the agenda<br />
and circulating to the Committee prior to each meeting.<br />
The Secretary will also be responsible for keeping the minutes of the meetings of the Committee, and circulating them to<br />
committee members and to other members of the Board of Directors.<br />
• Quorum<br />
The quorum for an Audit Committee meeting shall consist of two (2) members and a majority of the members present shall<br />
be independent directors.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
AUDIT COMMITTEE REPORT<br />
Functions<br />
The following are the main functions of the Audit Committee collectively:-<br />
1. Review the audit plan with the external auditors;<br />
2. Review with the external auditors his evaluation of the system of internal controls;<br />
3. Review the audit report with the external auditors;<br />
4. Review the assistance given by the company’s offi cer to the auditors;<br />
5. Review the scope and result of the internal procedures;<br />
6. Review the balance sheet and profi t and loss account;<br />
7. Review any related party transactions that may arise within the Company or the Group;<br />
8. To consider the nomination of a person or person as auditors; and<br />
9. To perform any other work that is required or empowered to do so by statutory legislation or guidelines as<br />
prepared by the relevant Government authorities.<br />
During the fi nancial year ended 31 December 2009, the Audit Committee held a total of six (6) meetings, the details<br />
of attendance of which are as follows:-<br />
Member No. of meetings attended<br />
Dato’ Ab Wahab bin Haji Ibrahim 6 of 6<br />
Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee 5 of 6<br />
Edwanee Cheah Bin Abdullah 6 of 6<br />
George William Warren Jr 5 of 6<br />
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE<br />
During the fi nancial year ended 31 December 2009, the activities of the Audit Committee included the following:-<br />
Reviewing of the external auditors’ scope of work and their audit plan.<br />
Reviewing with the external auditors on the results of their audit, the audit report and internal control<br />
recommendations in respect of improvements in internal control procedures noted in the course of their audit.<br />
Reviewed with the internal auditors their internal audit review and fi ndings and the Management’s response and<br />
action taken.<br />
Reviewing the annual report and the audited fi nancial statements of the Company and the Group prior to<br />
submission to the Board for their consideration and approval. The review was to ensure that the audited fi nancial<br />
statements were drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable<br />
approved accounting standards issued by the Malaysian Accounting Standards Board (“MASB”).<br />
Reviewing the Company’s compliance with the Main Market Listing Requirements of the Bursa Malaysia Securities<br />
Berhad (“Bursa Securities”) and the applicable approved accounting standards issued by MASB.<br />
Reviewing of the quarterly unaudited fi nancial statements and its explanatory notes thereon and recommending<br />
to the Board for Directors’ approval.<br />
Reviewing of the Company’s status of compliance with the Malaysian Code on Corporate Governance for the<br />
purpose of issuing of a Corporate Governance Statement pursuant to the requirement of paragraph 15.26 of the<br />
Listing Requirements of Bursa Securities.<br />
Reviewed the Group’s key operational and business risks area and the policies in place to address and minimize<br />
such risks.<br />
ALLOCATION OF EMPLOYEES’ SHARE OPTION SCHEME OPTIONS<br />
The Audit Committee had reviewed and verifi ed that the allocation of options during the year under the Company’s<br />
ESOS is in compliance with the allocation criteria determined by the ESOS Committee and in accordance with the<br />
Bye-Laws of the ESOS.<br />
46
AUDIT COMMITTEE REPORT<br />
INTERNAL AUDIT FUNCTION<br />
47<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
The Audit Committee is aware of the importance of independent and adequately resourced internal audit function for<br />
the effectiveness of internal control system. The principal responsibilities of the internal audit function are as follows:-<br />
Evaluate the effectiveness of the internal control systems so as to provide reasonable assurance that such<br />
systems continue to operate in compliance with the existing control and risk assurance systems effectively.<br />
Review, appraise and to ensure compliance with the Group’s established policies and procedures as well as the<br />
relevant statutory requirements.<br />
Highlight major weakness in control procedures and make recommendation for improvements to the Audit<br />
Committee.<br />
The internal audit function of the Group adopts a risk based approach to monitor and implement an effective internal<br />
control system for the Group. The monitoring process forms the basis for continuous improvement to the risk<br />
management process of the Group in meeting its overall objectives.<br />
The Group had outsourced its internal audit function to a professional services fi rm, which was tasked with the aim of<br />
assisting the Committee to discharge its duties and responsibilities. The cost incurred in relation to the internal audit<br />
function during the fi nancial year was RM37,200.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
STATEMENT ON INTERNAL CONTROL<br />
Introduction<br />
Paragraph 15.27(b) of Listing Requirements of Bursa Securities requires the Board of Directors of public listed companies to<br />
include a statement in the Annual Report on the state of internal controls in the Company as a Group. The Board is pleased to<br />
provide the following statement on internal control of the Group for the fi nancial year under review prepared in accordance with<br />
the “Statement on Internal Control - Guidance for Directors of Public Listed Companies” issued by the Institute of Internal Auditors<br />
Malaysia and adopted by Bursa Securities.<br />
Board Responsibilities<br />
The Board of Directors recognises the importance of sound internal controls and risk management practices in the maintenance<br />
of good corporate governance. The system of internal control is designed to identify and manage the principal risks facing the<br />
Group in pursuit of its objectives. The system covers control relating to fi nancial, operational, risk management and compliance<br />
with applicable rules and regulations.<br />
The responsibilities of the Board in relation to the system extend to all subsidiaries of the Group. In view of the limitations<br />
inherent in any system of internal control, the Group’s system of internal control can only manage rather than eliminate the risk<br />
of failure to achieve corporate objectives and therefore can only provide reasonable and not absolute assurance against material<br />
misstatement, loss and fraud.<br />
The Group continues to take measures of the adequacy and integrity of the system of internal control. The ongoing process of<br />
identifi cation, evaluation and management of signifi cant risk has been in place during the fi nancial year under review. This process<br />
is reviewed on a regular basis by the Audit Committee and the Board of Directors. The key features of the internal control system<br />
are outlined below.<br />
Systems of Internal Control<br />
The Group maintains a system of internal control that serves to safeguard its assets; identify and manage risk; ensure compliance<br />
with statutory and regulatory requirements; and to ensure operational results are closely monitored and substantial variances are<br />
promptly explained.<br />
The salient features of the Group’s system of internal control include, inter alia :-<br />
An organisational structure with clearly defi ned lines of responsibility and relevant authority has been set up for the Group.<br />
The Group’s management with the assistance of a centralised human resource function sets the policies for recruitment,<br />
training and appraisal of the employees within the Group.<br />
Policies and procedures which sets out the compliance standards for daily operations for the respective business units of<br />
the Group;<br />
The Board of Directors evaluates risks involved and seeks appropriate experts’ advice in considering business proposals and<br />
operational issues so as to make an effective decision in the best interest of the Group.<br />
The Group’s management sets clearly defi ned authorisation procedures which are clearly documented and implemented so<br />
as to exercise strict control on compliance therewith by all levels of employees.<br />
The Group’s management meets monthly to review the operational and fi nancial performance of the businesses in the Group<br />
and its subsidiaries, and to discuss key business, operational and management issues.<br />
The Board of Directors receives and reviews quarterly performance reports on the Group and its subsidiaries from the<br />
management, and discuss on signifi cant business and risk issues.<br />
The Group’s management and internal auditors have conducted reviews on the system of internal control to ensure compliance<br />
with the established policies and procedures of the Group. Weaknesses are properly communicated to management and<br />
prompt corrective actions have been taken.<br />
Established system of performance appraisal to monitor and maintain good performance standards from employees.<br />
Conclusion<br />
The Board is of the view that the system of internal control that had been implemented within the Group is sound and effective.<br />
The internal control procedures will be reviewed continuously in order to improve and strengthen the system to ensure ongoing<br />
adequacy, integrity and effectiveness so as to safeguard the Group’s assets and shareholders’ investments.<br />
This statement is made in accordance with a resolution of the Board of Directors dated 28 April 2010.<br />
48
STATEMENT OF CORPORATE GOVERNANCE<br />
49<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
The Board of Directors (“the Board”) recognises the importance of good corporate governance and is committed to<br />
the establishment and implementation of a proper framework and controls that are in line with the principles and best<br />
practices as recommended by the Malaysian Code of Corporate Governance (“the Code”).<br />
The Board will continuously evaluate the status of the Group’s corporate governance practices and procedures<br />
with a view to adopt and implement the Best Practices of the Code wherever applicable in the best interests of the<br />
shareholders of the Company. The Board has generally applied the Principles and Best Practices of the Code.<br />
The Board is pleased to report herein the manner in which the Company has applied the Principles of the Code and<br />
the extent to which it has complied with the Best Practices of the Code.<br />
DIRECTORS<br />
1. Board Responsibilities<br />
The Board is fully aware of its role and has adopted the specifi c responsibilities that are listed in the Code, which<br />
facilitates the discharge of the Board’s stewardship responsibilities.<br />
a. Board Balance<br />
The Board of Directors consists of seven (7) members comprising three (3) executive directors, and four<br />
(4) non-executive directors. Four (4) of the seven (7) Directors are independent Directors. The Board has<br />
complied with Paragraph 15.02 of the Listing Requirements of Bursa Malaysia Securities Berhad that at least<br />
two or one-third of the Board, whichever is the higher are independent directors. The Board considers its<br />
current size adequate given the existing scope and nature of the Group’s business operations.<br />
The Board is responsible for implementing the policies and decisions of the Board, overseeing the operations<br />
and developing the business and corporate strategies of the Group. The Board also monitors the performance<br />
of the Group and ensures that a proper internal control system is in place. The presence of independent<br />
non-executive directors is to provide independent and unbiased views of fi nancial and business inputs for<br />
the interest of the Group.<br />
b. Board Committees<br />
The Board has established board committees to assist the Board in discharging their duties. These<br />
committees are as follows:-<br />
Audit Committee<br />
Nomination Committee<br />
Remuneration Committee<br />
ESOS Committee<br />
Audit Committee<br />
The composition of the Audit Committee is in compliance with relevant regulatory requirements. The report of the<br />
Audit Committee is on pages 45 to 47.<br />
Nomination Committee<br />
The Nomination Committee is responsible for reviewing the Board composition and balance as well as considering<br />
the Board’s succession planning, making recommendation for new appointment of Directors. The Nomination<br />
Committee meets as and when required. The decision on new appointment shall be the responsibility of the<br />
Board after considering the recommendation of the Nomination Committee.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
STATEMENT OF CORPORATE GOVERNANCE<br />
The members of the Nomination Committee are as follows:-<br />
Member Designation<br />
Datuk Wira Syed Ali<br />
Bin Tan Sri Syed Abbas Alhabshee Chairman (Independent Non-Executive Chairman)<br />
Dato’ Ab Wahab bin Haji Ibrahim Member (Independent Non-Executive Director)<br />
Edwanee Cheah Bin Abdullah Member (Independent Non-Executive Director)<br />
The Board considers that the current mix of skills and experience of its members are suffi cient for the discharge of its duties<br />
and responsibilities effectively.<br />
Remuneration Committee<br />
The Remuneration Committee recommends to the Board the levels and elements of remuneration of Directors with executive<br />
functions and the senior management. The Board as a whole determines the allowances of the Non-Executive Directors<br />
and the Non-Executive Chairman after considering the recommendation of Remuneration Committee. The Remuneration<br />
Committee meets as and when required.<br />
The members of Remuneration Committee are as follows:-<br />
Member Designation<br />
Datuk Wira Syed Ali<br />
Bin Tan Sri Syed Abbas Alhabshee Chairman (Independent Non-Executive Chairman)<br />
Haji Omar Bin Khalid Member (Managing Director)<br />
Dato’ Ab Wahab bin Haji Ibrahim Member (Independent Non-Executive Director)<br />
Edwanee Cheah Bin Abdullah Member (Independent Non-Executive Director)<br />
Employees Share Option Scheme Committee<br />
The ESOS Committee was established on 2 August 2005. The ESOS Committee comprises one (1) Executive Director and<br />
the Managing Director. The members of the ESOS Committee are :-<br />
Haji Omar Bin Khalid Chairman (Managing Director)<br />
Haji Hamidon bin Md Khayon Member (Executive Director)<br />
The ESOS Committee shall be vested with such powers and duties as are conferred upon it by the Board including the<br />
powers:-<br />
to administer the ESOS and to grant Options in accordance with the Bye-Laws;<br />
to recommend to the Board to establish, amend, and revoke Bye-Laws, rules and regulations to facilitate the<br />
implementation of the Scheme;<br />
to construe and interpret the provisions hereof in the best interest of the Company; and<br />
generally, to exercise such powers and perform such acts as are deemed necessary or expedient to promote the best<br />
interest of the Company.<br />
Subject to the foregoing, the ESOS Committee shall exercise its discretion in such manner as it deems fi t.<br />
As at the fi nancial year ended 31 December 2009, a total of 14,075,900 ESOS options allocated to the employees of the<br />
Group remains unexercised. None of the allocation of ESOS options was made available to the Non-Executive Directors of<br />
the Group.<br />
50
STATEMENT OF CORPORATE GOVERNANCE<br />
c. Board Meetings<br />
51<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
The Board meets at least four (4) times a year with additional meetings held as and when urgent issues warrant matters<br />
to be attended.<br />
The Directors are provided before each Board Meeting, with the appropriate information relating to the matters to be<br />
discussed and where necessary, additional information is provided during the Board meeting on signifi cant issues that<br />
arise or when specifi cally requested by a Director. The Directors whether as a full board or in their individual capacity<br />
also have access to the services of the Company Secretary and management staff. Where considered necessary, the<br />
Board may also engage the services of professionals on specialized issues and furtherance of their duties.<br />
During the fi nancial year under review, seven (7) Board Meetings were held and the Directors’ attendances at the Board<br />
Meetings were as follows:-<br />
Attendance<br />
Datuk Wira Syed Ali Bin Tan Sri Syed Abbas Alhabshee 6/7<br />
(Chairman, Non-Independent Non-Executive Director)<br />
Haji Omar Bin Khalid 7/7<br />
(Managing Director)<br />
Dato’ Ab Wahab bin Ibrahim 6/7<br />
(Independent Non-Executive Director)<br />
Haji Hamidon Bin Md Khayon 7/7<br />
(Executive Director)<br />
Za’aba bin Sedek 7/7<br />
(Executive Director)<br />
Edwanee Cheah Bin Abdullah 7/7<br />
(Independent Non-Executive Director)<br />
George William Warren Jr. 5/7<br />
(Independent Non-Executive Director)<br />
Haji Abdullah Bin Hashim ** 7/7<br />
(Executive Director)<br />
** Haji Abdullah Bin Hashim resigned as Director of the Company with effect from 31 March 2010.<br />
Supply of Information<br />
The Board recognises that the decision making process is highly dependent on the quality of information furnished. As such, the<br />
Board members have full and unrestricted access to all information concerning the Group’s affairs. Prior to the Board meetings,<br />
all Board members are provided with the agenda and board papers containing information relevant to the business of the meeting<br />
to enable them to obtain further explanations, where necessary, in order to be properly briefed before the meetings. The Board<br />
papers including information on major fi nancial, operational and corporate matters of the Group. The Board members also<br />
have access to the advice and services of the Company Secretary, senior management and independent professional advisers<br />
including the external auditors.<br />
Appointment and Re-election<br />
In accordance with Article 103 of the Company’s Articles of Association, at least one-third of the Directors for the time being shall<br />
retire from offi ce and be subject to retirement by rotation at each Annual General Meeting (“AGM”). The article also provides that<br />
all Directors shall retire once in every three (3) years in compliance with the Code. Directors who are appointed before the next<br />
AGM will retire and be subject to re-election by shareholders at the next AGM.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
STATEMENT OF CORPORATE GOVERNANCE<br />
Directors’ Training<br />
All Directors have attended and successfully completed the Mandatory Accreditation Programme conducted by Bursatra Sdn Bhd<br />
within the stipulated timeframe required in the Main Market Listing Requirements of Bursa Securities. The Board of Directors are<br />
mindful that they should receive appropriate continuous training and during the fi nancial year, they have attended presentations<br />
and briefi ngs in order to keep abreast with developments in the industry, market place and with new statutory and regulatory<br />
requirements.<br />
During the fi nancial year ended 31 December 2009, the Directors attended in house training programs on “Financial Reporting<br />
Standards 139” conducted by the Company’s external auditors. The Directors are also briefed and updated at the scheduled<br />
quarterly meetings with any relevant amendments to the Main Market Listing Requirements received from Bursa Securities and<br />
other relevant topics which are useful to them in discharging their duties effectively.<br />
The Group will evaluate and determine the training needs of its Directors on a continuous basis.<br />
DIRECTORS’ REMUNERATION<br />
The determination of remuneration packages of the Directors are matters for the Board as a whole. The remuneration of the<br />
Directors is structured to attract, retain and motivate them in order to run the Group successfully.<br />
The Board reviews the remuneration of the Directors annually whereby the respective Executive Directors have abstained from<br />
discussions and decisions on their own remuneration.<br />
The aggregate remuneration of the Directors for the fi nancial year ended 31 December 2009 is as follows :-<br />
Executive Directors Non-Executive Directors Total (RM)<br />
Basic salary RM1,270,068 Nil RM1,270,068<br />
Bonuses Nil Nil Nil<br />
Fees<br />
Total<br />
Nil RM76,000 RM76,000<br />
Remuneration Band (RM) Executive Directors Non-Executive Directors<br />
0 - 50,000 - 4<br />
50,001 - 100,000 - -<br />
100,001 - 150,000 1 -<br />
150,001 – 200,000 - -<br />
200,001 – 250,000 3 -<br />
52
STATEMENT OF CORPORATE GOVERNANCE<br />
RELATIONSHIP WITH SHAREHOLDERS<br />
53<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
The Group recognises the importance of effective communication with its shareholders and investors to keep them<br />
informed of the major development of the Group. Such information is disseminated through the following channels :-<br />
Annual Report;<br />
Circulars to shareholders;<br />
Various disclosures and announcements to Bursa Securities; and<br />
Company’s website at www.tanjungoffshore.com.<br />
The main forum for dialogue with shareholders remains at the Annual General Meeting which encourages the<br />
shareholders to raise questions pertaining to the operations and fi nancials of the Group.<br />
ACCOUNTABILITY AND AUDIT<br />
1. Financial Reporting<br />
The Board is responsible to present a balanced, clear and comprehensive assessment of the Group’s fi nancial<br />
performance and prospects through the quarterly and annual fi nancial statements to shareholders. The Board<br />
and the Audit Committee have to ensure that the fi nancial statements are drawn up in accordance with the<br />
provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia. In presenting<br />
the fi nancial statements, the Board has reviewed and ensuring that appropriate accounting policies have been<br />
used, consistently applied and supported by reasonable judgments and estimates.<br />
2. Internal Control<br />
The Board has overall responsibility for maintaining a sound and effective system of internal control of the Group,<br />
covering not only fi nancial controls but also controls relating to operations, compliance and risk management<br />
to safeguard shareholders investments and the Group’s assets. The Board also recognises that the system of<br />
internal control has inherent limitations and is aware that such a system can only provide reasonable and not<br />
absolute assurance against material misstatements, loss or fraud.<br />
The internal control system of the Group is supported by an established organisational structure with well-defi ned<br />
authority and responsibility lines, and which comprises of appropriate fi nancial, operational and compliance<br />
controls.<br />
3. Relationship with Auditors<br />
The Board, via the Audit Committee, has established a formal and transparent arrangement for maintaining an<br />
appropriate relationship with its auditors, both external and internal.<br />
4. Statement of Directors’ Responsibility<br />
The Directors are required by the Companies Act, 1965 to prepare fi nancial statements for each fi nancial year,<br />
which give a true and fair view of the state of affairs of the Group and the Company and of the results and cash<br />
fl ow of the Group and the Company for the fi nancial year then ended.<br />
In preparing the fi nancial statements for the fi nancial year ended 31 December 2009, the Directors have:adopted<br />
the appropriate accounting policies and applied them consistently;<br />
made judgments and estimates that are reasonable and prudent;<br />
ensure applicable approved accounting standards have been followed, and any material departures have<br />
been disclosed and explained in the fi nancial statements; and<br />
ensure the fi nancial statements have been prepared on a going concern basis.<br />
The Directors are responsible for keeping proper accounting records of the Group and Company, which disclose<br />
with reasonable accuracy the fi nancial position of the Group and the Company, and which will enable them to<br />
ensure the fi nancial statements have complied with the provisions of the Companies Act, 1965 and the applicable<br />
approved accounting standards in Malaysia.<br />
The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard<br />
the assets of the Group and to prevent and detect fraud and other irregularities.<br />
5. Compliance Statement<br />
Throughout 2009, the Group has complied with all the Best Practices of Corporate Governance set out in Part 2<br />
of the Malaysian Code on Corporate Governance.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
OTHER DISCLOSURE REQUIREMENTS<br />
a) Share Buybacks<br />
The Company had at its Fifth Annual General Meeting held on 26 May 2009, obtained approval of the Shareholders in<br />
relation to the share buy-back authority, whereby the Directors are authorised to purchase and/or hold at any point in time<br />
up to 10% of the issued and paid up share capital of Tanjung.<br />
The breakdown of purchases made under the share buy-back exercise during the year 2009 is as follows:-<br />
Month No of shares Highest Lowest Average Total<br />
purchased price paid price paid price paid consideration<br />
(RM) (RM) (RM) paid (RM)<br />
January 5,200 0.84 0.705 0.773 3,968.00<br />
February 30,700 1.00 0.76 0.88 24,506.50<br />
March 16,100 0.99 0.785 0.888 13,798.50<br />
September 100 1.27 1.27 1.27 127.00<br />
Total 52,100 0.86 * 45,190.00 *<br />
* Including transaction cost<br />
As at 31 December 2009, all the purchased shares were retained as Treasury shares and there was no resale or cancellation<br />
of these purchased shares.<br />
b) Options, Warrants or Convertible Securities<br />
The details of the movement of ESOS Options for the fi nancial year ended 31 December 2009 are as follows:-<br />
No of ESOS Options ESOS Options ESOS Options No of ESOS Options<br />
granted as at Exercised Cancelled outstanding as at<br />
31 Dec 2009 31 Dec 2009<br />
24,876,390 9,804,290 996,200 14,075,900<br />
The abovementioned ESOS Scheme will expire on 1 August 2010.<br />
As at 31 December 2009, the number of outstanding Warrants are as follows:-<br />
Conversion price Outstanding as at<br />
31 Dec 2009<br />
Expiry Date<br />
Warrants A RM0.55 35,884,053 7 July 2016<br />
Warrants B RM1.20 40,977,929 11 October 2013<br />
54
OTHER DISCLOSURE REQUIREMENTS<br />
c) American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme.<br />
During the fi nancial year under review, the Company did not sponsor any ADR or GDR Programme.<br />
d) Imposition of Sanctions/Penalties<br />
55<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
There were no public sanctions and/or penalties imposed on the Company or its subsidiaries, Directors or management by<br />
the relevant regulatory bodies during the fi nancial year under review.<br />
e) Non-Audit Fees<br />
There were no non-audit fees paid to the external auditors during the fi nancial year under review.<br />
f) Variation in Results<br />
There was a negative variance in the Group’s audited results for the fi nancial year ended 31 December 2009 and unaudited<br />
results for the same period which was announced on 23 February 2010.<br />
The variance was mainly due to the reversal of income recognised from claims made by our associate company, Cendor<br />
Mopu Producer Ltd (CMPL) from the Insurer of Mobile Offshore Production Unit (MOPU) for additional fabrication and rework<br />
costs on the MOPU during its mobilisation from United States of America to Malaysia. The reversal of amount claimed by<br />
CMPL from the insurer was made pending the completion of the arbitration procedures on the aforesaid claim. The total<br />
amount of claims that was reversed from the Company accounts for the year ended 31 December 2009 was RM3.42 million.<br />
The Company holds a 20% equity stake in CMPL.<br />
g) Material Contracts<br />
To the best of the Board’s knowledge, there are no material contracts involving the Group with any of the major shareholders<br />
or Directors in offi ce during the year under review.<br />
h) Contracts Relating to Loans<br />
No contract relating to loans was executed by the Company during the year under review.<br />
i) Revaluation of Landed Properties<br />
No revaluation was performed on any of the Group’s landed properties during the year under review.<br />
j) Profi t guarantees<br />
No profi t guarantees were provided by the Company or its subsidiaries during the year under review.<br />
k) Recurrent Related Party Transactions (“RRPT”)<br />
No RRPT were transacted during the year under review.
Financial<br />
Statements<br />
57 Directors’ report<br />
63 Statement by Directors<br />
64 Statutory declaration<br />
65 Report of the auditors<br />
67 Balance sheet<br />
68 Income statement<br />
69 Statement of changes in equity<br />
71 Cash fl ow statement<br />
73 Notes to the fi nancial statements
DIRECTORS’ REPORT<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
57<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
The directors are pleased to submit their report and the audited fi nancial statements of Tanjung Offshore Berhad (“Tanjung” or<br />
“Company”) and its subsidiaries (“Tanjung Group” or “Group”) for the fi nancial year ended 31 December 2009.<br />
PRINCIPAL ACTIVITIES<br />
The Company is principally engaged in investment holding. The principal activities of the subsidiary and associate companies are set<br />
out in Notes 7 and 8 to the fi nancial statements respectively. There have been no signifi cant changes in the nature of these principal<br />
activities of the Group and of the Company during the current fi nancial year.<br />
RESULTS<br />
GROUP COMPANY<br />
RM RM<br />
Net profi t for the year 3,616,414 12,554,652<br />
RESERVES AND PROVISIONS<br />
All material transfer to or from reserves and provisions during the current fi nancial year have been disclosed in the statement of<br />
changes in equity.<br />
DIVIDEND<br />
Since the end of the previous fi nancial year, the Company paid:<br />
RM<br />
a) a fi nal dividend of 4% or RM0.02 per ordinary share of RM0.50 less 25% income tax for the fi nancial year<br />
ended 31 December 2008 on 02 June 2009 3,663,302<br />
b) an interim dividend of 8% or RM0.04 per ordinary share of RM0.50 less 25% income tax for the<br />
fi nancial year ended 31 December 2009 on 08 April 2009 7,326,606<br />
The directors do not recommend any fi nal dividend in respect of the current fi nancial year.<br />
TREASURY SHARES<br />
10,989,908<br />
During the current fi nancial year, the Company purchased 52,100 of its issued ordinary shares from the open market at an average<br />
price of RM0.86 per share. The total consideration paid for the purchase was RM45,190 including transaction costs. The shares<br />
purchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.<br />
BAD AND DOUBTFUL DEBTS<br />
Before the income statements and the balance sheets of the Group and of the Company were made out, the directors took<br />
reasonable steps to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision<br />
for doubtful debts and satisfi ed themselves that all known bad debts had been written off and that no provision for doubtful debts<br />
was necessary.<br />
At the date of this report, the directors are not aware of any circumstances which would render it necessary to write off any bad debts<br />
or to make any provision for doubtful debts in respect of the fi nancial statements of the Group and of the Company.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
DIRECTORS’ REPORT<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
ITEMS OF A MATERIAL AND UNUSUAL NATURE<br />
The results of the operations of the Group and of the Company for the fi nancial year ended 31 December 2009 were not, in the<br />
opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.<br />
There has not arisen in the interval between the end of the fi nancial year and the date of this report any item, transaction or event of<br />
a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group<br />
and of the Company for the current fi nancial year.<br />
CURRENT ASSETS<br />
Before the income statement and the balance sheet of the Group and of the Company were made out, the directors have taken<br />
reasonable steps to ensure that any current assets which were unlikely to realise in the ordinary course of business their values<br />
as shown in the accounting records of the Group and of the Company had been written down to an amount which they might be<br />
expected to realise.<br />
At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current<br />
assets in the fi nancial statements of the Group and of the Company misleading.<br />
VALUATION OF ASSETS AND LIABILITIES<br />
As at the date of this report, the directors are not aware of any circumstances, which have arisen which render adherence to the<br />
existing methods of valuation of assets and liabilities of the Group and of the Company misleading or inappropriate.<br />
CONTINGENT AND OTHER LIABILITIES<br />
At the date of this report, there does not exist:<br />
i) any charge on the assets of the Company which has arisen since the end of the fi nancial year which secures the liabilities of<br />
any other person; or<br />
ii) any contingent liabilities in respect of the Company which has arisen since the end of the fi nancial year, other than as disclosed<br />
in Note 31 to the fi nancial statements.<br />
No contingent or other liabilities has become enforceable, or is likely to become enforceable within the period of twelve months after<br />
the end of the fi nancial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the<br />
Company to meet their obligations as and when they fall due.<br />
DIRECTORS AND THEIR SHAREHOLDINGS<br />
The directors in offi ce since the date of the last report and at the date of this report are as follows:<br />
Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee<br />
Haji Omar bin Khalid<br />
Haji Hamidon bin Md Khayon<br />
Dato’ Ab Wahab bin Haji Ibrahim<br />
Edwanee Cheah bin Abdullah<br />
George William Warren Jr.<br />
Za’aba bin Sedek<br />
Haji Abdullah bin Hashim (Resigned w.e.f. 31 March 2010)<br />
58
DIRECTORS’ REPORT<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
59<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
In accordance with the Register of Directors’ Shareholding, the interests of directors in offi ce at the end of the fi nancial year in shares,<br />
options and warrants over ordinary shares in the Company were as follows:-<br />
Direct Interest:<br />
Number of Ordinary Shares of RM0.50 each<br />
Balance as at Balance as at<br />
01.01.2009 Acquired Sold 31.12.2009<br />
Datuk Wira Syed Ali bin Tan Sri Syed<br />
Abbas Alhabshee 420,000 - - 420,000<br />
Haji Omar bin Khalid 102,190,422 383,900 - 102,574,322<br />
Haji Hamidon bin Md Khayon 47,000 - - 47,000<br />
Dato’ Ab Wahab bin Haji Ibrahim 128,100 - - 128,100<br />
Edwanee Cheah bin Abdullah 1,280,124 500,000 (613,400) 1,166,724<br />
George William Warren Jr 879,480 - - 879,480<br />
Za’aba bin Sedek 3,870 279,000 (235,000) 47,870<br />
Indirect Interest:<br />
Haji Omar bin Khalid *100,800 - - 100,800<br />
Direct Interest:<br />
Number of ESOS Options over Ordinary Shares of RM0.50 each<br />
Balance as at Balance as at<br />
01.01.2009 Acquired Exercise 31.12.2009<br />
Haji Omar bin Khalid 1,791,400 - - 1,791,400<br />
Haji Hamidon bin Md Khayon 1,344,000 - - 1,344,000<br />
Za’aba bin Sedek 307,800 723,200 (279,000) 752,000<br />
Indirect Interest:<br />
Haji Omar bin Khalid *67,000 - - 67,000<br />
Direct Interest:<br />
Number of Warrants over Ordinary Shares of RM0.50 each<br />
Balance as at Balance as at<br />
01.01.2009 Acquired Sold 31.12.2009<br />
Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee 89,599 - - 89,599<br />
Haji Omar bin Khalid 35,466,007 - - 35,466,007<br />
Edwanee Cheah bin Abdullah 399,769 - (36,000) 363,769<br />
George William Warren Jr 303,379 - - 303,379<br />
Indirect Interest:<br />
Haji Omar bin Khalid *34,719 - - 34,719<br />
* Deemed interest by virtue of Section 134 of the Companies Act, 1965.<br />
By virtue of his interest in the shares of the Company, Haji Omar bin Khalid is also deemed to have interest in the shares of the<br />
subsidiary companies to the extent that the Company has an interest during the current fi nancial year.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
DIRECTORS’ REPORT<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
DIRECTORS AND THEIR SHAREHOLDINGS (continued)<br />
Dato’ AbWahab bin Haji Ibrahim and Haji Hamidon bin Md Khayon are the directors who will retire in accordance with Article 103 of<br />
the Company’s Articles of Association and being eligible to offer themselves for re-election.<br />
DIRECTORS’ BENEFITS<br />
Since the end of the previous fi nancial year, none of the directors of the Company has received or become entitled to receive any<br />
benefi t (other than a benefi t included in the aggregate amount of emoluments received or due and receivable by directors as shown<br />
in Note 32 fi nancial statements) by reason of a contract made by the Company or a related corporation with any director or with a<br />
fi rm of which the director is a member, or with a company in which the director has a substantial fi nancial interest.<br />
Neither at the end of the fi nancial year, nor at any time during the current fi nancial year, did there subsist any arrangement to which<br />
the Company was a party, whereby the directors might acquire benefi ts by means of the acquisition of shares in or debentures of the<br />
Company or any other body corporate, other than those arising from the share options granted under the Employees’ Share Option<br />
Scheme (“ESOS Scheme”).<br />
ISSUANCE OF NEW ORDINARY SHARES<br />
The Company has increased its issued and paid-up share capital from RM123,294,789 to RM125,650,347 pursuant to the following<br />
corporate exercises:<br />
i) Issuance of new ordinary shares arising from the exercise of ESOS options amounting to 4,693,196 new ordinary shares of<br />
RM0.50 each at exercise prices ranging from RM0.68 to RM2.35 per share.<br />
ii) Issuance of additional 17,919 units of new ordinary shares of RM0.50 each arising from the exercise of warrants at exercise<br />
prices of RM0.55 per share.<br />
The new ordinary shares issued during the current fi nancial year rank pari passu in all respects with the existing ordinary shares<br />
held in the Company, other than those disclosed in the following section on unexercised options granted to executive directors and<br />
employees of the Company.<br />
UNEXERCISED OPTIONS GRANTED<br />
i) Employees’ Share Option Scheme (“ESOS”)<br />
The Company’s Employees’ Share Option Scheme is governed by the Bye-Law approved by the shareholders at an Extraordinary<br />
General Meeting held on 2 August 2005 and is to be in force for a period of fi ve (5) years until 1 August 2010. The ESOS was<br />
effective since 2 August 2005.<br />
The principal features of the Bye-Law of ESOS are as follows:<br />
a) The maximum number of options which may be allotted pursuant to the ESOS (“Options”) as approved by the Securities<br />
Commission (“SC”) shall not exceed ten percent (10%) of the total issued and paid-up share capital of the Company at<br />
any point in time during the duration of the ESOS.<br />
b) Executive directors and employees of the Group and of the Company will be eligible to participate in the ESOS provided<br />
that they fulfi ll the conditions for eligibility stipulated in the rules, terms and conditions contained in the Bye-Law (“Eligible<br />
Employees”).<br />
60
DIRECTORS’ REPORT<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
UNEXERCISED OPTIONS GRANTED (continued)<br />
i) Employees’ Share Option Scheme (“ESOS”) (continued)<br />
61<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
c) The maximum number of new shares that may be offered and allotted to an Eligible Employee shall be determined by the<br />
ESOS Committee taking into consideration inter-alia, the Eligible Employee’s designation, job description, responsibilities<br />
and seniority.<br />
d) The subscription price of the options issued pursuant to ESOS shall be the higher of the following:<br />
i) at a discount of not more than ten percent (10%) from the weighted average market price of the shares as shown<br />
in the daily offi cial list issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) for the fi ve (5) market days<br />
immediately preceding the date of offer; or<br />
ii) the par value of the shares.<br />
e) The new shares to be allotted and issued upon any exercise of the options will, upon such allotment and issuance, rank<br />
pari passu in all respects with the existing and issued shares except that the new shares so issued will not be entitled<br />
to any dividends, rights, allotments and/or any other distributions which may be declared, made or paid to shareholders<br />
prior to the date of allotment of the new shares. The new shares will be subjected to all provisions of the Articles in<br />
relation to their transfer, transmission or otherwise. The options shall not carry any right to vote at a general meeting of the<br />
Company.<br />
As at 31 December 2009, there were 14,075,900 (2008:14,691,000) unissued ordinary shares pursuant to the ESOS options<br />
granted under the ESOS Scheme, at between RM0.68 to RM2.35 (2008: RM0.68 to RM2.35 per share) respectively.<br />
According to Section 169(11) of the Companies Act, 1965, the Company is required to disclose the name of persons to whom<br />
any option has been granted during the current fi nancial year. Pursuant to Section 169A of the Companies Act, 1965, the<br />
Company has applied and has been granted exemption by the Companies Commission of Malaysia from having to disclose the<br />
name of employees who have been granted options to subscribe for less than 500,000 ordinary shares of RM0.50 each.<br />
During the current fi nancial year, none of the employees of the Company has been granted ESOS options above 500,000<br />
ordinary shares of RM0.50 each.<br />
Details of the share options granted to directors are disclosed in the section on Directors and their shareholdings in this<br />
report.<br />
Details of the share option granted and exercised under the ESOS during the current fi nancial year are set out in Note 17 to<br />
the fi nancial statements.<br />
ii) Warrants from issuance of Bonds<br />
On 30 November 2005, the Company issued a RM150,000,000 nominal value up to eight (8) years 4.5% per annum serial fi xed<br />
rate bonds with detachable warrants to the primary subscribers.<br />
On 3 March 2006, the primary subscribers were allotted a total of 18,514,600 warrants to the shareholders at an offer price of<br />
RM0.24 per warrant on the basis of one (1) warrant for every fi ve (5) ordinary shares held on entitlement date.<br />
On 29 August 2006, the Company completed the listing of an additional 9,257,000 warrants arising from the bonus issue<br />
exercise which was implemented in accordance to the Deed Poll dated 13 January 2006 on the basis of one (1) new warrant<br />
for every two (2) warrants held on entitlement date.<br />
On 13 June 2007, the Company completed the listing of an additional 10,095,104 warrants arising from the bonus issue<br />
exercise on the basis of two (2) new warrants for every fi ve (5) existing warrants.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
DIRECTORS’ REPORT<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
UNEXERCISED OPTIONS GRANTED (continued)<br />
ii) Warrants from issuance of Bonds (continued)<br />
During the fi nancial year ended 31 December 2009, the Company issued an additional 17,919 units of new ordinary shares of<br />
RM0.50 each arising from the exercise of warrants at an exercise price of RM0.55 per share.<br />
As at 31 December 2009, there is a total of 35,884,053 outstanding Warrant A 2006/2016 warrants.<br />
As at 31 December 2009, there is a total of 40,977,929 outstanding Warrant B 2008/2013 warrants.<br />
SIGNIFICANT AND SUBSEQUENT EVENTS<br />
Details of the signifi cant and subsequent events are set out in Note 35 and 36 to the fi nancial statements respectively.<br />
CHANGE OF CIRCUMSTANCES<br />
At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the fi nancial<br />
statements of the Group and of the Company that would render any amount stated in the respective fi nancial statements<br />
misleading.<br />
AUDITORS<br />
The auditors, AljeffriDean, have indicated their willingness to continue in offi ce.<br />
Signed on behalf of the Board of Directors in accordance with a resolution of the directors,<br />
.….……………………..…………<br />
Datuk Wira Syed Ali bin<br />
Tan Sri Syed Abbas Alhabshee<br />
Independent Non-Executive Chairman<br />
.….……………………..…………<br />
Haji Omar bin Khalid<br />
Managing Director<br />
28 April 2010<br />
62
STATEMENT BY DIRECTORS<br />
PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965<br />
63<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
We, Datuk Wira Syed Ali bin Tan Sri Syed Abbas Alhabshee and Haji Omar bin Khalid, being the directors of Tanjung<br />
Offshore Berhad, state that in our opinion the fi nancial statements set out on pages 67 to 105 are properly drawn up in accordance<br />
with the applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting<br />
Standards Board and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group<br />
and of the Company as at 31 December 2009 and of the results and the cash fl ows for the fi nancial year ended on that date.<br />
Signed on behalf of the Board of Directors in accordance with a resolution of the directors,<br />
..………..........................................<br />
Datuk Wira Syed Ali bin<br />
Tan Sri Syed Abbas Alhabshee<br />
Independent Non-Executive Chairman<br />
..………..........................................<br />
Haji Omar bin Khalid<br />
Managing Director<br />
Kuala Lumpur,<br />
28 April 2010
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
STATUTORY DECLARATION<br />
PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965<br />
I, Haji Omar bin Khalid being the director primarily responsible for the fi nancial management of Tanjung Offshore Berhad, do<br />
solemnly and sincerely declare that the fi nancial statements set out on pages 67 to 105 are to the best of my knowledge and belief<br />
correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the<br />
Statutory Declarations Act, 1960.<br />
Subscribed and solemnly declared )<br />
by Haji Omar bin Khalid )<br />
at Wilayah Persekutuan Kuala Lumpur )<br />
on this day of 28 April 2010 ) .….……………………..…………<br />
Before me,<br />
…………………….…….<br />
Agong Sia (W460)<br />
Commissioner for Oaths<br />
64
INDEPENDENT AUDITORS’ REPORT<br />
TO THE MEMBERS OF <strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
Report on the Financial Statements<br />
65<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
We have audited the fi nancial statements of Tanjung Offshore Berhad which comprise the balance sheets of the Group and of the<br />
Company as at 31 December 2009, and the income statements, statement of changes in equity and cash fl ow statements for the<br />
year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 67 to 105.<br />
Directors’ Responsibility for the Financial Statements<br />
The directors of the Company are responsible for the preparation and fair presentation of these fi nancial statements in accordance<br />
with the applicable approved accounting standards for entities other than private entities and the Companies Act, 1965 in Malaysia.<br />
This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation<br />
of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate<br />
accounting policies; and making accounting estimates that are reasonable in the circumstances.<br />
Auditors’ Responsibility<br />
Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance<br />
with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and<br />
perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.<br />
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The<br />
procedures selected depend on our judgment, including the assessment of risks of material misstatement of the fi nancial statements,<br />
whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation<br />
and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but<br />
not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating<br />
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as<br />
evaluating the overall presentation of the fi nancial statements.<br />
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.<br />
Opinion<br />
In our opinion, the fi nancial statements have been properly drawn up in accordance with the applicable approved accounting<br />
standards for entities other than private entities and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the<br />
fi nancial position of the Group and of the Company as of 31 December 2009 and of its fi nancial performance and cash fl ows for the<br />
year then ended.<br />
Report on Other Legal and Regulatory Requirements<br />
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:<br />
a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its<br />
subsidiaries have been properly kept in accordance with the provisions of the Act.<br />
b) We have considered the fi nancial statements and the auditors’ reports of all the subsidiaries of which we have not acted as<br />
auditors, which are indicated in Note 7 to the fi nancial statements.<br />
c) We are satisfi ed that the fi nancial statements of the subsidiaries that have been consolidated with the Company’s fi nancial<br />
statements are in form and content appropriate and proper for the purposes of the preparation of the fi nancial statements of<br />
the Group and we have received satisfactory information and explanations required by us for those purposes.<br />
d) The audit reports on the fi nancial statements of the subsidiaries did not contain any qualifi cation or any adverse comment made<br />
under Section 174(3) of the Act.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
INDEPENDENT AUDITORS’ REPORT<br />
TO THE MEMBERS OF <strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
Other Matters<br />
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965<br />
in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.<br />
AljeffriDean Mohd Neezal Noordin<br />
AF 1366 No.: 2162/06/11(J)<br />
Chartered Accountants (Malaysia)<br />
Kuala Lumpur,<br />
Date: 28 April 2010<br />
66
BALANCE SHEETS<br />
AS AT 31 DECEMBER 2009<br />
NON-CURRENT ASSETS<br />
67<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
GROUP COMPANY<br />
NOTE 2009 2008 2009 2008<br />
RM RM RM RM<br />
Property, plant and equipment 5 765,020,390 588,797,158 - -<br />
Intangible assets 6 10,741,672 7,092,484 - -<br />
Subsidiary companies 7 - - 48,961,560 31,590,308<br />
Amount owing by subsidiary companies 7 - - 152,721,989 267,084,833<br />
Associate companies 8 3,565,139 1,337,921 1,419,334 1,419,334<br />
Deferred tax assets 9 8,170,175 6,607,227 - -<br />
CURRENT ASSETS<br />
Inventories 10 9,351,170 18,246,340 - -<br />
Trade receivables 11 215,819,589 238,446,962 - -<br />
Other receivables, deposits and prepayments 12 37,670,112 26,656,729 3,778,271 3,792,036<br />
Amount owing by subsidiary companies 7 - - 191,722,140 73,956,692<br />
Cash and cash equivalents 13 38,269,363 76,692,918 26,521,210 59,943,757<br />
CURRENT LIABILITIES<br />
301,110,234 360,042,949 222,021,621 137,692,485<br />
Trade payables 14 126,829,282 148,830,872 - -<br />
Other payables and accruals 15 32,068,677 28,635,850 10,430,116 7,723,506<br />
Short term borrowings 16 104,396,265 87,000,630 20,000,000 20,000,000<br />
Provision for taxation 807,564 2,009,639 4,000 125,885<br />
264,101,788 266,476,991 30,434,116 27,849,391<br />
NET CURRENT ASSETS 37,008,446 93,565,958 191,587,505 109,843,094<br />
EQUITY ATTRIBUTABLE TO EQUITY<br />
HOLDERS OF THE PARENT<br />
824,505,822 697,400,748 394,690,388 409,937,569<br />
Share capital 17 125,650,347 123,294,789 125,650,347 123,294,789<br />
Treasury shares 18 (4,395,831) (4,350,641) (4,395,831) (4,350,641)<br />
Reserves 19 195,588,996 203,005,930 47,809,539 45,367,088<br />
316,843,512 321,950,078 169,064,055 164,311,236<br />
Minority interest 5,239,940 314,973 - -<br />
TOTAL EQUITY 322,083,452 322,265,051 169,064,055 164,311,236<br />
NON-CURRENT LIABILITIES<br />
Deferred tax liabilities 9 86,435 - - -<br />
Long term borrowings 20 396,738,435 249,538,197 120,028,833 120,028,833<br />
Serial fi xed rate bond 21 105,597,500 125,597,500 105,597,500 125,597,500<br />
See accompanying notes to the fi nancial statements.<br />
502,422,370 375,135,697 225,626,333 245,626,333<br />
824,505,822 697,400,748 394,690,388 409,937,569
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
INCOME STATEMENTS<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
GROUP COMPANY<br />
NOTE 2009 2008 2009 2008<br />
RM RM RM RM<br />
Revenue 3(n) 649,656,702 574,273,012 14,105,791 6,479,640<br />
Cost of sales (533,358,085) (461,246,689) - -<br />
Gross profi t 116,298,617 113,026,323 14,105,791 6,479,640<br />
Other income 2,172,174 1,576,183 - -<br />
Operating expenses (96,960,386) (67,164,773) (1,203,274) (1,088,445)<br />
Profi t from operations 22 21,510,405 47,437,733 12,902,517 5,391,195<br />
Finance costs 23 (19,433,768) (12,883,431) (201,942) (201,942)<br />
Share of profi t/(loss) of associate 2,697,947 (328,860) - -<br />
Profi t before taxation 4,774,584 34,225,442 12,700,575 5,189,253<br />
Taxation 24 (1,158,170) (2,777,014) (145,923) (300,000)<br />
Net profi t for the year 3,616,414 31,448,428 12,554,652 4,889,253<br />
Attributable to:<br />
Equity holders of the parent 3,075,694 31,378,546 12,554,652 4,889,253<br />
Minority interest 540,720 69,882 - -<br />
Earning per share<br />
- Basic 25(a) 1.25 14.63<br />
- Diluted 25(b) 1.23 13.36<br />
See accompanying notes to the fi nancial statements.<br />
3,616,414 31,448,428 12,554,652 4,889,253<br />
68
STATEMENT OF CHANGES IN EQUITY<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
GROUP Attributable to Equity Holders of the Parent<br />
Non Distributable Distributable<br />
Foreign<br />
Employee Currency<br />
Share Treasury Share Capital Share Option Translation Revaluation Accumulated Minority Total<br />
NOTE Capital Shares Premium Reserves Reserves Reserve Reserve Profi t Total Interest Equity<br />
RM RM RM RM RM RM RM RM RM RM RM<br />
Balance as at 01.01.2008 101,482,824 - 124,591 3,738,279 1,153,768 - - 29,989,738 136,489,200 147,681 136,636,881<br />
ESOS shares subscription<br />
during the year 17 687,830 - 435,356 - - - - - 1,123,186 - 1,123,186<br />
Rights issue exercise 17 20,488,965 - 40,977,929 - - - - - 61,466,894 - 61,466,894<br />
Warrants exercise during<br />
the year 17 635,170 - 457,507 (304,882) - - - - 787,795 - 787,795<br />
Currency translation<br />
differences - - - - - (3,843,731) - - (3,843,731) - (3,843,731)<br />
Recognition of equity - settled<br />
employee share option - - - - 210,516 - - - 210,516 - 210,516<br />
Repurchase of shares 18 - (4,350,641) - - - - - (4,350,641) - (4,350,641)<br />
Acquisition of shares in<br />
foreign entity - - - - - - - - - 97,410 97,410<br />
Revaluation surplus - - - - - - 105,154,426 - 105,154,426 - 105,154,426<br />
Realisation of<br />
revaluation reserve - - - - - - (2,896,131) 2,896,131 - - -<br />
Expenses incurred on<br />
corporate exercises - - (1,925,613) - - - - - (1,925,613) - (1,925,613)<br />
Net profi t for the year - - - - - - - 31,378,546 31,378,546 69,882 31,448,428<br />
Dividend paid to shareholder 26 - - - - - - - (4,540,500) (4,540,500) - (4,540,500)<br />
69<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Balance as at 31.12.2008 123,294,789 (4,350,641) 40,069,770 3,433,397 1,364,284 (3,843,731) 102,258,295 59,723,915 321,950,078 314,973 322,265,051<br />
ESOS shares subscription<br />
during the year 17 2,346,598 - 913,523 - - - - - 3,260,121 - 3,260,121<br />
Warrants exercise during<br />
the year 17 8,960 - 5,196 (4,300) - - - - 9,856 - 9,856<br />
Currency translation<br />
differences - - - - - (380,427) - - (380,427) - (380,427)<br />
Recognition of equity - settled<br />
employee share option - - - - 247,311 - - - 247,311 - 247,311<br />
Repurchase of shares 18 - (45,190) - - - - - - (45,190) - (45,190)<br />
Acquisition of shares in<br />
subsidiary - - - - - - - - - 4,563,065 4,563,065<br />
Acquisition of shares from<br />
minority interest - - - - - - - - - (178,818) (178,818)<br />
Realisation of revaluation<br />
reserve - - - - - - (5,792,256) 5,792,256 - - -<br />
Expenses incurred on<br />
corporate exercises - - (284,023) - - - - - (284,023) - (284,023)<br />
Net profi t for the year - - - - - - - 3,075,694 3,075,694 540,720 3,616,414<br />
Dividend paid to shareholder 26 - - - - - - - (10,989,908) (10,989,908) - (10,989,908)<br />
Balance as at 31.12.2009 125,650,347 (4,395,831) 40,704,466 3,429,097 1,611,595 (4,224,158) 96,466,039 57,601,957 316,843,512 5,239,940 322,083,452<br />
See accompanying notes to the fi nancial statements.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
STATEMENT OF CHANGES IN EQUITY<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
COMPANY Non Distributable Distributable<br />
Employee<br />
Share Treasury Share Capital Share Option Accumulated Total<br />
NOTE Capital Shares Premium Reserves Reserves Profi t Equity<br />
RM RM RM RM RM RM RM<br />
Balance as at 101.01.2008<br />
ESOS shares subscription<br />
101,482,824 - 124,591 3,738,279 411,544 893,108 106,650,346<br />
during the year 17 687,830 - 435,356 - - - 1,123,186<br />
Rights issue exercise 17 20,488,965 - 40,977,929 - - - 61,466,894<br />
Warrants exercise during the year<br />
Recognition of equity - settled<br />
17 635,170 - 457,507 (304,882) - - 787,795<br />
employee share option - - - - 210,516 - 210,516<br />
Repurchase of shares<br />
Expenses incurred on<br />
18 - (4,350,641) - - - - (4,350,641)<br />
corporate exercises - - (1,925,613) - - - (1,925,613)<br />
Net profi t for the year - - - - - 4,889,253 4,889,253<br />
Dividend paid to shareholder 26 - - - - - (4,540,500) (4,540,500)<br />
Balance as at 31.12.2008<br />
ESOS shares subscription<br />
123,294,789 (4,350,641) 40,069,770 3,433,397 622,060 1,241,861 164,311,236<br />
during the year 17 2,346,598 - 913,523 - - - 3,260,121<br />
Warrants exercise during the year<br />
Recognition of equity - settled<br />
17 8,960 - 5,196 (4,300) - - 9,856<br />
employee share option - - - - 247,311 - 247,311<br />
Repurchase of shares<br />
Expenses incurred on<br />
18 - (45,190) - - - - (45,190)<br />
corporate exercises - - (284,023) - - - (284,023)<br />
Net profi t for the year - - - - - 12,554,652 12,554,652<br />
Dividend paid to shareholder 26 - - - - - (10,989,908) (10,989,908)<br />
Balance as at 31.12.2009 125,650,347 (4,395,831) 40,704,466 3,429,097 869,371 2,806,605 169,064,055<br />
See accompanying notes to the fi nancial statements.<br />
70
CASH FLOW STATEMENTS<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
CASH FLOW FROM<br />
OPERATING ACTIVITIES<br />
71<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
GROUP COMPANY<br />
NOTE 2009 2008 2009 2008<br />
RM RM RM RM<br />
Profi t before taxation 4,774,584 34,225,442 12,700,575 5,189,253<br />
Adjustments for:<br />
Amortisation of Bonds issuance cost 201,942 201,942 201,942 201,942<br />
Amortisation of intangible assets 660,800 247,598 - -<br />
Bad debt written off 5,336 - - -<br />
Dividend from subsidiary company - - (13,675,000) (5,250,000)<br />
Depreciation of property,<br />
plant and equipment 26,663,160 18,395,357 - -<br />
Loss on disposal of property,<br />
plant and equipment 26,519 - - -<br />
Gain on disposal of property,<br />
plant and equipment (109,178) (36,282) - -<br />
Property, plant and equipment<br />
written off - 364,277 - -<br />
Loss on foreign exchange 714,977 2,590,922 - -<br />
Gain on foreign exchange (686,045) - - -<br />
ESOS expenses 247,311 210,516 247,311 210,516<br />
Share of loss/(profi t) of<br />
associated company (2,697,947) 328,860 - -<br />
Interest expense 19,222,826 12,681,489 - -<br />
Interest income (439,736) (1,279,382) (430,791) (1,229,590)<br />
Operating profi t/(loss) before<br />
changes in working capital 48,584,549 67,930,739 (955,963) (877,879)<br />
Decrease/(Increase) in inventories 8,945,422 (15,671,483) - -<br />
Decrease/(Increase) in receivables 13,084,164 (150,036,862) 13,765 (54,110)<br />
Balances with subsidiary companies - - 21,347,846 (125,716,873)<br />
(Decrease)/Increase in payables (19,840,357) 102,118,940 2,555,168 3,213,273<br />
Cash generated from/(used in) operations 50,773,778 4,341,334 22,960,816 (123,435,589)<br />
Tax paid (3,368,427) (817,720) (318,309) (134,000)<br />
Net cash generated from/(used in)<br />
operating activities 47,405,351 3,523,614 22,642,507 (123,569,589)<br />
See accompanying notes to the fi nancial statements.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
CASH FLOW STATEMENTS<br />
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009<br />
CASH FLOWS FROM<br />
INVESTING ACTIVITIES<br />
GROUP COMPANY<br />
NOTE 2009 2008 2009 2008<br />
RM RM RM RM<br />
Purchase of property, plant<br />
and equipment 27 (195,008,725) (189,902,955) - -<br />
Proceeds from disposal of property,<br />
plant and equipment 127,173 323,645 - -<br />
Investment in associated company - (127,450) - -<br />
Investment in subsidiary companies 37 (3,375,523) - (42,121,702) (3,378,836)<br />
Purchase of intangible assets 6 (86,988) (7,308,588) - -<br />
Dividend from subsidiary company - - 13,675,000 5,250,000<br />
Interest received 439,736 1,279,382 430,791 1,229,590<br />
Net cash (used in)/generated from<br />
investing activities (197,904,327) (195,735,966) (28,015,911) 3,100,754<br />
CASH FLOW FROM<br />
FINANCING ACTIVITIES<br />
Issuance of shares 3,269,978 63,377,875 3,269,978 63,377,875<br />
Repurchase of shares 18 (45,190) (4,350,641) (45,190) (4,350,641)<br />
Expenses incurred on<br />
corporate exercise (284,023) (1,925,613) (284,023) (1,925,613)<br />
Proceeds from borrowings 152,392,071 188,979,918 - 120,028,833<br />
Repayment of hire purchase and<br />
fi nance lease (1,092,085) (863,010) - -<br />
Repayment of serial fi xed rate bond (20,000,000) - (20,000,000) -<br />
Repayment of term loan - (3,955,780) - -<br />
Interest paid (19,222,826) (12,681,489) - -<br />
Decrease/(Increase) in fi xed deposits<br />
pledged as security 5,280,921 (6,222,368) 2,891,152 (5,325,105)<br />
Dividend paid 26 (10,989,908) (4,540,500) (10,989,908) (4,540,500)<br />
Net cash generated from/(used in) fi nancing<br />
activities 109,308,938 217,818,392 (25,157,991) 167,264,849<br />
Net (decrease)/increase in cash and<br />
cash equivalents (41,190,038) 25,606,040 (30,531,395) 46,796,014<br />
Cash and cash equivalents at<br />
beginning of the year 32,984,982 7,378,942 54,618,652 7,822,638<br />
Effects on exchange rate changes on cash<br />
and cash equivalents (1,188,074) - - -<br />
Cash and cash equivalents at<br />
end of the year 28 (9,393,130) 32,984,982 24,087,257 54,618,652<br />
See accompanying notes to the fi nancial statements.<br />
72
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
1. CORPORATE INFORMATION<br />
73<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of<br />
Bursa Malaysia Securities Berhad. The registered offi ce of the Company is located at 312, 3rd Floor, Block C, Kelana Square,<br />
17, Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan.<br />
The Company is principally engaged in investment holding. The principal activities of the subsidiaries and associated company<br />
are set out in Notes 7 and 8 to the fi nancial statements respectively. There have been no signifi cant changes in the nature of<br />
these principal activities of the Group and of the Company during the current fi nancial year.<br />
The fi nancial statements were authorised for issuance by the Board of Directors of the Company on 28 April 2010.<br />
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS<br />
The fi nancial statements of the Group and of the Company have been prepared on a historical cost convention unless otherwise<br />
indicated in the other section of accounting policies, are drawn up in accordance with the applicable Malaysian Accounting<br />
Standards Board (“MASB”) approved accounting standards for entities other than private entities in Malaysia and in compliance<br />
with the provisions of the Companies Act, 1965.<br />
3. SIGNIFICANT ACCOUNTING POLICIES<br />
The accounting policies have been consistently applied by the Group and by the Company and are consistent with those used<br />
in the previous fi nancial years.<br />
a) New/Revised FRSs and Interpretations Not Yet Effective<br />
The Group and the Company has not applied the following new/revised FRSs and Interpretations that are relevant to its<br />
operations which have been issued but are not effective:<br />
FRSs, Amendments to FRSs and Interpretations Effective date<br />
FRS 7: Financial Instruments: Disclosures 1 January 2010<br />
FRS 8: Operating Segments 1 January 2010<br />
FRS 101: Presentation of Financial Statements (Revised 2009) 1 January 2010<br />
FRS 123: Borrowing Costs 1 January 2010<br />
FRS 127: Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, 1 January 2010<br />
Jointly Controlled Entity or Associate<br />
FRS 139: Financial Instruments: Recognition and Measurement 1 January 2010<br />
Amendments to FRS 1: First-time Adoption of Financial Reporting Standards 1 January 2010<br />
Amendments to FRS 2: Share-based Payment - Vesting Conditions and Cancellations 1 January 2010<br />
Amendments to FRS 132: Financial Instruments: Presentation 1 January 2010<br />
Amendments to FRS 139: Financial Instruments: Recognition and Measurement 1 January 2010<br />
IC Interpretation 9: Reassessment of Embedded Derivatives 1 January 2010<br />
IC Interpretation 10: Interim Financial Reporting and Impairment 1 January 2010<br />
IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions 1 January 2010<br />
FRS 1: First-time Adoption of Financial Reporting Standards (Revised 2010) 1 July 2010<br />
FRS 3: Business Combinations (Revised 2010) 1 July 2010<br />
FRS 127: Consolidated and Separate Financial Statements (Revised 2010) 1 July 2010<br />
Amendments to FRS 2: Share-based Payment 1 July 2010<br />
Amendments to FRS 138: Intangible Assets 1 July 2010<br />
The Group and the Company plan to adopt the above pronouncements when they become effective in the respective<br />
fi nancial period. Unless otherwise described below, these pronouncements are expected to have no signifi cant impact to<br />
the fi nancial statements of the Group and the Company upon their initial application:
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
3. SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
a) New/Revised FRSs and Interpretations Not Yet Effective (continued)<br />
FRS 101: Presentation of Financial Statements<br />
The revised FRS 101 separates owner and non-owner changes in equity. Therefore, the consolidated statement of<br />
changes in equity will now include only details of transactions with owners. All non-owner changes in equity are presented<br />
as a single line labelled as total comprehensive income.<br />
The Standard also introduces the statement of comprehensive income: presenting all items of income and expense<br />
recognised in the income statement, together with all other items of recognised income and expense, either in one single<br />
statement, or in two linked statements.<br />
In addition, a statement of fi nancial position is required at the beginning of the earliest comparative period following a<br />
change in the accounting policy, the correction of an error or the reclassifi cation of items in the fi nancial statements. This<br />
revised FRS does not have any impact on the fi nancial position and results of the Group and the Company.<br />
FRS 123: Borrowing Costs<br />
This Standard supersedes the old FRS 123 that removes the option of expensing borrowing costs and requires capitalisation<br />
of such costs that are directly attributable to the acquisition, construction or production of a qualifying asset as part of<br />
the cost of that asset. Other borrowing costs are recognised as an expense. The Group’s current accounting policy is<br />
to expense the borrowing costs in the period which they are incurred. In accordance with the transitional provisions of<br />
the Standard, the Group will apply the change in accounting policy prospectively for which the commencement date for<br />
capitalisation of borrowing cost on qualifying assets is on or after the fi nancial period 01 January 2010.<br />
b) Functional and Presentation Currency<br />
The individual fi nancial statements of each entity in the Group are measured using the currency of the primary economic<br />
environment in which the entity operates (“the functional currency”). The consolidated fi nancial statements are presented<br />
in Ringgit Malaysia (RM), which is also the Company’s functional currency.<br />
c) Basis of Consolidation<br />
The consolidated fi nancial statements include the audited fi nancial statements of the Company and all of its subsidiary<br />
companies made up to the end of the fi nancial year. The results of the subsidiary companies acquired are included in the<br />
consolidated fi nancial statements from the date of acquisition. All signifi cant inter-company transactions and balances are<br />
eliminated on consolidation.<br />
Subsidiary companies are consolidated using the acquisition method of accounting from the date control is transferred to<br />
the Group and are no longer consolidated from the date control ceases.<br />
Minority interests are measured at their shares of the net assets of the subsidiary companies.<br />
Goodwill on acquisition, being the difference between the cost of acquisition and the underlying net asset value of the<br />
subsidiary companies at the date of acquisition.<br />
Goodwill is stated at cost less impairment losses. The policy for the recognition and measurement of impairment losses<br />
are in accordance with Note 3(i) to the fi nancial statements.<br />
Negative goodwill represents the excess of the Group’s interest in the fair value of the identifi able assets and liabilities<br />
of a subsidiary at the date of acquisition over the cost of acquisition. Negative goodwill is recognised immediately in the<br />
income statement.<br />
d) Subsidiary Companies<br />
Subsidiary companies are those companies in which the Group has long term equity interest of more than 50% or has<br />
power to exercise control over the fi nancial and operating policies as to obtain benefi t from its activities.<br />
74
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
3. SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
d) Subsidiary Companies (continued)<br />
75<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Investment in subsidiary companies which is eliminated on consolidation is stated in the Company’s fi nancial statements<br />
at cost less impairment losses. The policy for the recognition and measurement of impairment losses are in accordance<br />
with Note 3(h) to the fi nancial statements.<br />
e) Associate Company<br />
An associate company is defi ned as an investment where the Group holds for long-term purposes between 20% to 50%<br />
of the issued equity share capital of the investee’s company, and exercises signifi cant infl uence but not control, over the<br />
investee’s company management.<br />
Investment in associate company is accounted for in the consolidated fi nancial statements using the equity method of<br />
accounting based on the management fi nancial statements of the investee’s company made up to the end of the fi nancial<br />
year.<br />
f) Property, Plant and Equipment<br />
All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s<br />
carrying amount or recognised as a separate asset, as appropriate, only when it is probably that future economic benefi ts<br />
associated with the item will fl ow to the Group and the Company and the cost of the item can be measured reliably.<br />
The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income<br />
statement during the current fi nancial year in which they are incurred.<br />
Subsequent to recognition, property, plant and equipment are stated at cost or valuation less accumulated depreciation<br />
and any accumulated impairment losses.<br />
Revaluations are made at least once in every fi ve years based on a valuation by an independent valuer on an open market<br />
value basis. Any revaluation increase is credited to equity as revaluation surplus, except to the extent that it reverses a<br />
revaluation decrease for the same asset previously recognised as an expense, in which case the increase is recognised<br />
in the income statement to the extent of the decrease previously recognised. A revaluation decrease is fi rst offset against<br />
unutilised previously recognised revaluation surplus in respect of the same asset and the balance thereafter recognised<br />
as an expense.<br />
Depreciation of property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to<br />
its residual value over the estimated useful life as follows:<br />
%<br />
Vessels 5<br />
Freehold land and building 2<br />
Leasehold land and building Over 80 months or 50 years<br />
Furniture and fi ttings 10<br />
Renovation 10<br />
Workshop tools 20<br />
Offi ce equipment 10 – 33 1/3<br />
Motor vehicles 20 – 25<br />
Machinery 10 – 33 1/3<br />
Depreciation of vessels and equipment under commissioning commences when the vessels and equipment are delivered<br />
and ready for their intended use.<br />
The residual values, useful life and depreciation method are reviewed at each fi nancial year end to ensure that the amount,<br />
method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of<br />
the future economic benefi ts embodied in the items of property, plant and equipment.<br />
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefi ts are<br />
expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount<br />
is recognised in the income statement and the unutilised portion of the revaluation surplus on that item is take directly to<br />
accumulated profi t.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
3. SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
g) Intangible Assets<br />
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets required in<br />
a business combination as their fair values as at the date of acquisition. Following initial recognition, intangible assets are<br />
carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful life of intangible<br />
assets is assessed to be either fi nite or indefi nite. Intangible assets with fi nite lives are amortised on straight-line basis<br />
over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible<br />
assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a fi nite useful<br />
life are reviewed at least at each balance sheet date.<br />
Intangible assets with indefi nite useful lives are not amortised but tested for impairment annually or more frequently if<br />
the events or changes in circumstances indicate that the carrying amount may be impaired either individually or at the<br />
cash-generating unit level. The useful life of an intangible asset with an indefi nite life is also reviewed annually to determine<br />
whether the useful life assessment continues to be supportable.<br />
h) Impairment of Assets<br />
At each balance sheet date, the Group and the Company reviews the carrying amounts of its assets to determine whether<br />
there is any indication of impairment. If any such indication exists, impairment is measured by comparing the carrying<br />
amount of the assets with their recoverable amounts. Recoverable amounts are the higher of net selling price and value<br />
in use, which is measured by reference to discounted future cash fl ows.<br />
An impairment loss is recognised as an expense in the income statement immediately, unless the assets are carried at<br />
a revalued amount. Any impairment losses of revalued assets are treated as a revaluation decrease to the extent of any<br />
unutilised previously recognised revaluation surplus for the same assets. Reversal of impairment losses recognised in prior<br />
years are recorded when the impairment losses recognised for the assets no longer exist or have decreased.<br />
i) Plant and Equipment Acquired Under Hire Purchase Arrangements<br />
Plant and equipment acquired under hire purchase arrangements are being capitalised and the corresponding obligations<br />
treated as liabilities in the fi nancial statements.<br />
Finance costs are allocated to the income statement to give a constant periodic rate of interest on the remaining hire<br />
purchase payables.<br />
Plant and equipment acquired under hire purchase arrangements are depreciated over their expected useful lives on the<br />
same basis as owned assets.<br />
j) Leased Assets<br />
Leased of assets where substantially all the risks and benefi ts incidental to the ownership of the asset, but not the legal<br />
ownership, are transferred to the Group are classifi ed as fi nance leases. Finance leases are capitalised, recording an asset<br />
and liability equal to the present value of the minimum lease payments, including any guaranteed residual values.<br />
Leased of assets are depreciated on straight-line basis over the term of the lease estimated useful lives where it is likely<br />
that the Group will obtain ownership of the asset. Lease payment is allocated between the reduction of the lease liability<br />
and the lease interest expense for the year.<br />
Leased payments for operating leases, where substantially all the risks and benefi ts remain with the lessor, are charged<br />
as an expense in the year in which they are incurred.<br />
76
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
3. SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
k) Employee Benefi ts<br />
i) Short term benefi ts<br />
77<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Salaries, wages, bonuses, paid annual leave, allowances and social security contributions are recognised as<br />
an expense in the year in which the associated services are rendered by employees of the Group and of the<br />
Company.<br />
ii) Defi ned contribution plans<br />
The Group and the Company makes statutory contributions to the Employee Provident Fund (“EPF”), a defi ned<br />
contribution plan. Obligations for contributions to defi ned contribution plan are recognised as an expense in the<br />
income statement as incurred.<br />
iii) Employee Share Option Scheme<br />
For the equity-settled share-based compensation transactions, the fair value of the employee services received in<br />
exchange for the grant of the options is recognised as an expense. The total amount to be expensed on a straightline<br />
basis over the vesting period is determined by reference to the fair value of the options granted excluding<br />
the effect of non-market vesting conditions. Non-market vesting conditions are included in assumptions about<br />
the number of options that are expected to become exercisable. Fair value is measured using the Black-Scholes<br />
pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for<br />
the effects of non-transferability, exercise restrictions and behavioural considerations. At each balance sheet date,<br />
the Group revises its estimates of the numbers of options that are expected to become exercisable. It recognised<br />
the impact of the revision of original estimates, if any, in the income statement, with a corresponding adjustment to<br />
equity. The proceeds received net of any directly attributable transaction costs are credited to share capital when<br />
the options are exercised.<br />
l) Financial Instruments<br />
i) Cash and cash equivalents<br />
Cash and cash equivalents comprise of cash in hand and bank balances, demand deposits and deposits with<br />
licensed bank, which are readily convertible to known amounts of cash and subject to insignifi cant risk of change in<br />
value.<br />
ii) Trade and other receivables<br />
Trade and other receivables are carried at anticipated realisable value. Bad debts are written off in the year in which<br />
they are identifi ed. An allowance is made for doubtful debts based on a review of all outstanding amounts at the<br />
balance sheet date.<br />
iii) Financial liabilities<br />
Financial liabilities are recognised when the Group and the Company becomes a party to the contractual agreements<br />
of the instrument.<br />
The particular recognition methods adopted on each of the item in the fi nancial liabilities are set out below:<br />
a) Trade and other payables<br />
Trade and other payables are stated at cost which is the fair value of the consideration to be paid in the future<br />
for goods and services received.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
3. SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
l) Financial Instruments (continued)<br />
iii) Financial liabilities (continued)<br />
b) Borrowing costs<br />
Borrowing costs incurred that are directly attributable to the construction of property, plant and equipment are<br />
recognised as part of the cost of those assets during the period of time that is required to complete and prepare<br />
the assets for their intended use.<br />
All other borrowing costs are recognised as an expense in the year in which they are incurred.<br />
c) Serial payment bond<br />
The Company issued RM150,000,000 nominal value of up to 8 years serial fi xed rate bonds with up to<br />
18,514,600 detachable warrants in the fi nancial year ended 2006. The Company recognised separately the<br />
component of a liability and equity instruments as disclosed in Note 21 to the fi nancial statements.<br />
iv) Equity instruments<br />
Ordinary shares are classifi ed as equity. Dividend on ordinary shares is recognised in equity in the year in which they<br />
are declared.<br />
m) Treasury Shares<br />
A purchase by the Company of its own equity shares is accounted for under the treasury stock method. Under this<br />
method, the shares repurchased and held as treasury shares is measured and carried at the cost of repurchase (including<br />
any directly attributable incremental external costs, net of tax) on initial recognition and subsequently. On presentation in<br />
the balance sheet, the carrying amount of the treasury shares is offset against equity.<br />
Where treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the<br />
share premium account or the distributable reserves, or both. Where treasury shares are reissued by re-sale in the open<br />
market, the difference between the sales consideration and the carrying amount of the treasury shares is shown as the<br />
movement in equity. As treasury shares, the rights attached as to voting, dividends and participation in other distribution<br />
are suspended.<br />
n) Revenue Recognition<br />
i) Income from contracts/projects<br />
Income from contracts/projects of the Group and of the Company is recognised in the income statement on<br />
percentage of completion method.<br />
ii) Income from chartering and hiring of vessels<br />
Income from chartering and hiring of vessels is accrued by reference to the agreement entered into.<br />
iii) Income from service charges<br />
Income from service charges is recognised on an accrual basis.<br />
iv) Income from selling of trading equipment<br />
Income from selling of trading equipment is recognised upon delivery of goods and customers’ acceptance.<br />
v) Income from interests<br />
Income from interests is recognised on an accrual basis.<br />
78
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
3. SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
n) Revenue Recognition (continued)<br />
vi) Dividend income<br />
o) Taxation<br />
Dividend income is recognised when the right to receive payment is established.<br />
79<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Income tax on the profi t or loss comprises current and deferred tax. Current tax is the expected amount of income taxes<br />
payable in respect of the taxable profi t for the year and is measured using the enacted tax rates relevant to the fi nancial<br />
year.<br />
Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the<br />
tax bases of assets and liabilities and their carrying amounts in the fi nancial statements. In principle, deferred tax liabilities<br />
are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary<br />
differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profi t will be<br />
available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.<br />
p) Inventories<br />
Inventories comprising turbine compressor spare parts, work-in-progress and long term contract balances which is stated<br />
at the lower of cost (fi rst-in, fi rst-out basis) and net realisable value.<br />
Cost of turbine compressor spare parts comprises the original cost of purchase plus cost of bringing the inventories to<br />
its location.<br />
Cost of work-in-progress long term contract balances includes direct materials, direct labour and an appropriate portion<br />
of fi xed and variable overheads.<br />
q) Provisions for Liabilities<br />
Provisions are recognised when the Group and the Company have a present legal or constructive obligation as a result of<br />
past events, it is probable that the Group and the Company will be required to settle the obligation, and a reliable estimate<br />
of the amount can be made. Provisions are measured at the directors’ best estimate of the expenditure required to settle<br />
the obligation at the balance sheet date.<br />
r) Development Costs<br />
Development costs incurred for the development of gas generators are capitalised and are subject to an ongoing<br />
assessments of recoverability based on anticipated future revenues and changes in technologies. The cost that are<br />
capitalised included purchase price, direct labour and related overhead. Development costs initially recognised as an<br />
expense are not recognised as an asset in the subsequent period.<br />
Development costs are set off in accordance to the policy on the government grants. Where the development cost are not<br />
fully recovered from the grant, the excess of the cost are written off immediately to the income statements.<br />
s) Foreign Currency<br />
i) Foreign currency transactions<br />
In preparing the fi nancial statements of the individual entities, transaction in currencies other than the entity’s<br />
functional currency are recorded in the functional currencies using the exchange rates prevailing at the dates of the<br />
transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the<br />
rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign<br />
currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary<br />
items that are measured in terms of historical cost in a foreign currency are not retranslated.<br />
Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are<br />
included in the income statement for the period except for exchange differences arising on monetary items that form<br />
part of the Group’s net investment in foreign operation are initially taken directly to the foreign currency translation<br />
reserve within equity until the disposal of the foreign operations, at which time they are recognised in the income<br />
statement.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
3. SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
s) Foreign Currency (continued)<br />
i) Foreign currency transactions (continued)<br />
Exchange differences arising on monetary items that form part of the Company’s net investment in foreign operation,<br />
regardless of the currency of the monetary item, are recognised in income statement in the Company’s fi nancial<br />
statements or individual fi nancial statements of the foreign operation, as appropriate.<br />
ii) Foreign operations<br />
The results and fi nancial position of foreign operations that have a functional currency different from the presentation<br />
currency of the consolidated fi nancial statements are translated into Ringgit Malaysia as follows:<br />
i) Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance<br />
sheet date;<br />
ii) Income and expenses for each income statement are translated at average exchange rates for the year, which<br />
approximates the exchange rates at the dates of transactions; and<br />
iii) All resulting exchange differences are taken to the foreign currency translation reserve within equity.<br />
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities<br />
of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the<br />
closing rate at the balance sheet date.<br />
The principal closing rates used in the translation of foreign currency amounts are as follows:<br />
80<br />
31.12.2009 31.12.2008<br />
RM RM<br />
1 United States Dollar (USD) 3.4245 3.4675<br />
1 Great Britain Pounds (GBP) 5.5311 5.0118<br />
1 Rupiah (Rp) 0.0003 0.0003<br />
t) Signifi cant Accounting Estimates and Judgements<br />
The signifi cant accounting estimates and judgements that have a signifi cant risk of causing a material adjustment to the<br />
carrying amounts of assets and liabilities within the next fi nancial year are discussed below.<br />
Useful lives and residual value of property, plant and equipment<br />
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives after deducting<br />
its residual value. The management exercises their judgement in estimating the useful lives and the residual value of the<br />
depreciable assets. The Group and the Company assesses annually the residual value and the useful lives of the property,<br />
plant and equipment and if the expectation differs from the original estimate, such difference will impact the depreciation<br />
in the period in which such estimate has been charged.<br />
Deferred tax assets<br />
Deferred tax assets are recognised for all unabsorbed capital allowances to the extent that it is probable that future taxable<br />
profi ts will be available against which the capital allowances can be utilised. Signifi cant management judgment is required<br />
to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future<br />
taxable profi ts together with future tax planning strategies. The total carrying amounts of unabsorbed capital allowances<br />
are disclosed in Note 9 to the fi nancial statements.
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
3. SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
t) Signifi cant Accounting Estimates and Judgements (continued)<br />
Share-based payments to employees<br />
81<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
The cost of providing the share-based payments to the employees is charged to the income statement over the vesting<br />
period. The cost is based on the fair value of the options and the number of the options expected to vest. The fair value<br />
of the options is determined using Black Scholes pricing model.<br />
Amortisation of intangible assets<br />
The goodwill of patent and purchases are amortised on a straight line basis over their useful lives over 17 years and 10<br />
years respectively. The Group assesses annually the useful lives of the intangible assets and if the expectation differs from<br />
the original estimate, such difference will impact the amortisation expenses in the period in which such estimate has been<br />
charged.<br />
4. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES<br />
The operation of the Group and the Company is subject to a variety of fi nancial risks. The Group’s and the Company’s overall<br />
fi nancial risk management objective is to ensure that the Group and the Company creates value for its shareholders.<br />
The main areas of fi nancial risks faced by the Group and the Company are as follows:<br />
i) Credit risk<br />
The Group’s main exposure to credit risk is in respect of its trade and other receivables. The Group manages the exposure<br />
to credit risk by performing credit evaluation on the major customers and outstanding debts are being monitored and<br />
pursued for full recovery.<br />
ii) Liquidity and cash fl ow risk<br />
The Group and the Company actively manages its debts maturity profi le, operating cash fl ows and availability of funding<br />
so as to ensure that all repayment and funding needs are met.<br />
iii) Interest rate risk<br />
The Group and the Company have cash and bank balances and deposits placed with licensed banks. The Group and the<br />
Company manages its interest rate risks by placing such balances on varying maturities and interest rate terms.<br />
The Group and the Company are also exposed to interest rate risk through the impact of rate charges on its borrowings.<br />
To mitigate the interest rate risk, the management of the Group and the Company consistently monitors the interest rate<br />
exposure against the existing/potential income from operations.<br />
iv) Foreign currency exchange risk<br />
The Group and the Company imports a wide range of engineering equipment and spare parts for its business operations<br />
from various countries, subjecting its purchase costs to foreign exchange fl uctuations. In this aspect, the Group and<br />
the Company mitigates its exposure to foreign exchange fl uctuations through back-to-back purchase and selling<br />
arrangements between its customers and the foreign suppliers. As a result, the Group’s and the Company’s purchase<br />
costs and currencies transacted are matched to the revenues generated from the sale of the Group’s products, thus<br />
forming a natural hedge.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
5. PROPERTY, PLANT AND EQUIPMENT<br />
Blasting and Equipment<br />
Vessels under Freehold land Leasehold land Furniture and Workshop Offi ce Motor painting under<br />
Vessels commissioning and building and building fi ttings Renovation tools equipments vehicles equipment commissioning Machinery Total<br />
RM RM RM RM RM RM RM RM RM RM RM RM RM<br />
At 31 December 2009<br />
Cost or valuation<br />
Beginning of the year<br />
At cost 95,007,328 137,924,264 5,079,768 2,514,706 2,328,632 6,813,087 691,530 9,744,917 3,860,042 - - 8,027,323 271,991,596<br />
At valuation 334,950,000 - - - - - - - - - - - 334,950,000<br />
Acquisition of a subsidiary<br />
company - - - - 79,704 38,738 - 118,531 423,997 - - 10,477,093 11,138,063<br />
Addition 21,671,760 164,527,026 874,454 549,487 212,796 993,012 197,082 957,970 403,740 943,641 2,927,202 1,130,458 195,388,628<br />
Disposal/Writte off - - - - (109) (3,917) (794) (22,747) (11,847) - - (5,100) (44,514)<br />
Transfer (to)/from 209,752,312 (209,752,312) - - - - (59,000) - - - - 59,000 -<br />
Effects on the currency<br />
translation - - - 3,804 - - - 3,676 - - - 84,323 91,803<br />
End of the year 661,381,400 92,698,978 5,954,222 3,067,997 2,621,023 7,840,920 828,818 10,802,347 4,675,932 943,641 2,927,202 19,773,097 813,515,576<br />
Representing:<br />
At cost 326,431,400 92,698,978 5,954,222 3,067,997 2,621,023 7,840,920 828,818 10,802,347 4,675,932 943,641 2,927,202 19,773,097 478,565,576<br />
At valuation 334,950,000 - - - - - - - - - - - 334,950,000<br />
82<br />
661,381,400 92,698,978 5,954,222 3,067,997 2,621,023 7,840,920 828,818 10,802,347 4,675,932 943,641 2,927,202 19,773,097 813,515,576<br />
Accumulated depreciation<br />
Beginning of the year 8,771,469 - 416,969 185,304 631,622 1,847,416 99,001 1,709,036 2,015,667 - - 2,467,954 18,144,438<br />
Charge for the year 21,568,497 - 131,780 112,765 238,046 729,293 156,619 1,576,407 955,142 136,702 - 1,057,909 26,663,160<br />
Acquisition of a subsidiary<br />
company - - - - 46,050 - - 85,187 213,777 - - 3,335,428 3,680,442<br />
Effects on the currency<br />
translation - - - 145 - - - - - - - 7,001 7,146<br />
End of the year 30,339,966 - 548,749 298,214 915,718 2,576,709 255,620 3,370,630 3,184,586 136,702 - 6,868,292 48,495,186<br />
Net Book Value<br />
At cost 320,103,809 92,698,978 5,405,473 2,769,783 1,705,305 5,264,211 573,198 7,431,717 1,491,346 806,939 2,927,202 12,904,805 454,082,765<br />
At valuation 310,937,625 - - - - - - - - - - - 310,937,625<br />
631,041,434 92,698,978 5,405,473 2,769,783 1,705,305 5,264,211 573,198 7,431,717 1,491,345 806,939 2,927,202 12,904,805 765,020,390<br />
See accompanying notes to the fi nancial statements.
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
5. PROPERTY, PLANT AND EQUIPMENT (continued)<br />
83<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
GROUP Freehold Leasehold<br />
Vessels under land land Furniture and Workshop Offi ce Motor<br />
Vessels commissioning and building and building fi ttings Renovation tools equipments vehicles Machinery Total<br />
RM RM RM RM RM RM RM RM RM RM RM<br />
At 31 December 2008<br />
Cost or Valuation<br />
Beginning of the year<br />
At cost 249,102,595 54,191,553 4,041,366 2,478,000 1,319,023 5,124,191 400,234 4,392,920 2,958,403 6,636,120 330,644,405<br />
Addition 1,350,000 177,390,040 1,038,402 36,706 1,009,609 2,156,884 291,296 5,425,597 967,821 1,445,065 191,111,420<br />
Revaluation 85,847,404 - - - - - - - - - 85,847,404<br />
Disposal - - - - - (9,420) - (73,600) (66,183) (53,862) (203,065)<br />
Write off - - - - - (458,568) - - - - (458,568)<br />
Tranfer (to)/from 93,657,329 (93,657,329) - - - - - - - - -<br />
End of the year 429,957,328 137,924,264 5,079,768 2,514,706 2,328,632 6,813,087 691,530 9,744,917 3,860,041 8,027,323 606,941,596<br />
Representing:<br />
At cost 95,007,328 137,924,264 5,079,768 2,514,706 2,328,632 6,813,087 691,530 9,744,917 3,860,041 8,027,323 271,991,596<br />
At valuation 334,950,000 - - - - - - - - - 334,950,000<br />
Accumulated<br />
Depreciation<br />
429,957,328 137,924,264 5,079,768 2,514,706 2,328,632 6,813,087 691,530 9,744,917 3,860,041 8,027,323 606,941,596<br />
Beginning of the year 13,079,455 - 317,127 133,533 451,941 1,336,219 42,798 935,183 1,185,214 1,759,516 19,240,986<br />
Reversal of depreciation<br />
due to revaluation (19,307,020) - - - - - - - - - (19,307,020)<br />
Charge for the year 14,999,034 - 99,842 51,771 179,681 605,488 56,203 801,069 835,209 767,060 18,395,357<br />
Effects of movements in<br />
exchange rates - - - - - - - (1,604) - (10,242) (11,846)<br />
Disposal - - - - - - - (25,612) (4,756) (48,380) (78,748)<br />
Write off - - - - - (94,291) - - - - (94,291)<br />
End of the year 8,771,469 - 416,969 185,304 631,622 1,847,416 99,001 1,709,036 2,015,667 2,467,954 18,144,438<br />
Net Book Value<br />
At cost 92,252,277 137,924,264 4,662,799 2,329,402 1,697,010 4,965,671 592,529 8,035,881 1,844,374 5,559,369 259,863,576<br />
At valuation 328,933,582 - - - - - - - - - 328,933,582<br />
421,185,859 137,924,264 4,662,799 2,329,402 1,697,010 4,965,671 592,529 8,035,881 1,844,374 5,559,369 588,797,158<br />
a) Included in the property, plant and equipment are motor vehicles and offi ce equipment which is acquired by means of hire<br />
purchase and lease arrangements with a net book value of RM854,809 (2008: RM1,424,833) and RM840,445 (2008:<br />
RM1,103,348) respectively.<br />
b) Borrowing costs amounting to RM3,515,940 (2008: RM6,859,487) from various fi nancier entered into for new vessels<br />
under construction and commissioning were capitalised.<br />
c) Freehold and leasehold land and building have been pledged to secure the Group’s bank overdraft as disclosed in Note<br />
16 to the fi nancial statements.<br />
d) Certain vessels have been pledged to secure the relevant borrowings from the banks and Bonds Programme as disclosed<br />
in Notes 20 and 21 to the fi nancial statements respectively.<br />
e) On 17 July 2008, an independent professional valuer, Matthews Daniel International Pte. Ltd. has revalued seven (7)<br />
vessels within the Group on an open market value basis. Had the revalued vessels been carried at historical cost, the net<br />
book value of the vessels that would have been included in the fi nancial statements of the Group as at 31 December 2009<br />
would have been recorded as follows:<br />
2009 2008<br />
RM RM<br />
Vessels 211,697,376 224,151,005
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
6. INTANGIBLE ASSETS<br />
GROUP Goodwill<br />
patent and Development Goodwill on<br />
purchases Costs Consolidation Total<br />
RM RM RM RM<br />
Cost<br />
Beginning of the year 7,308,588 - - 7,308,588<br />
Additions - 86,988 350,688 437,676<br />
Acquisition of a subsidiary company - 3,149,314 - 3,149,314<br />
Effect on movements in exchange rates 757,282 - - 757,282<br />
8,065,870 3,236,302 350,688 11,652,860<br />
Accumulated Amortisation<br />
Beginning of the year 216,104 - - 216,104<br />
Amortised during the year 660,800 - - 660,800<br />
Effect on movements in exchange rates 34,284 - - 34,284<br />
End of the year 911,188 - - 911,188<br />
Net book value<br />
As at 31 December 2009 7,154,682 3,236,302 350,688 10,741,672<br />
As at 31 December 2008 7,092,484 - - 7,092,484<br />
i) The goodwill of patent and purchases are amortised on a straight line basis over their useful lives over 17 years and 10<br />
years respectively.<br />
ii) Goodwill is allocated to the Group’s cash-generating units (“CGU”) identifi ed according to business segment. The<br />
recoverable amount of a CGU is determined based on value in use and was determined by discounting the future cash<br />
fl ows generated from the continuing use of the unit and was based on the following key assumptions:<br />
a) The cash fl ow projections were approved by the management covering a seven year period.<br />
b) The subsidiary will continue its operation indefi nitely.<br />
c) The gross profi t margin was based on past performance and its expectations of market development.<br />
d) The growth rate used is based on expected growth rates for sales.<br />
e) The discount rate used is pretax and refl ect specifi c risks relating to the relevant segments.<br />
There is no impairment loss for the fi nancial year recognised because the value in use exceeded the carrying amount (including<br />
the goodwill allocated) of each CGU at balance sheets date.<br />
84
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
85<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
7. SUBSIDIARY COMPANIES<br />
COMPANY<br />
2009 2008<br />
RM RM<br />
Unquoted shares, at cost 48,961,560 31,590,308<br />
The details of the subsidiary companies are as follows:<br />
Group Country of<br />
Subsidiary Companies Effective Interest Incorporation Principal Activities<br />
2009 2008<br />
% %<br />
Held by the Company:<br />
Tanjung Offshore Services Sdn. Bhd. 100.00 100.00 Malaysia Integrated service provider to the oil<br />
and gas and related industries.<br />
Tanjung Kapal Services Sdn. Bhd. 100.00 100.00 Malaysia Ownership of vessel and provision of<br />
ship management services to the oil<br />
and gas related industries.<br />
Tanjung Offshore Marine Services Sdn. Bhd. 100.00 100.00 Malaysia Ownership and leasing offshore<br />
vessels to local and international oil<br />
industry major.<br />
Tanjung CSI Sdn. Bhd. 100.00 100.00 Malaysia Design, Engineering, Training, Installation<br />
and Commissioning for Plant<br />
Automation & Safety System, Flow<br />
Metering Solutions, Control Valves,<br />
Field Instrumentations, Control<br />
Solutions for Turbines & Compressors<br />
and After Sales Activities for Onshore<br />
and Offshore Services.<br />
* PT Tanjung Offshore Nusantara 80.00 80.00 Indonesia Integrated service provider to the oil<br />
and gas and related industries in<br />
Indonesia.<br />
* Tanjung Citech UK Limited 100.00 100.00 England Ownership of CiBAS technology patent<br />
and Wales and intellectual property rights.<br />
Gas Generators (Malaysia) Sdn. Bhd. 51 - Malaysia Manufacturing and supply of gas<br />
generators to both industrial and oil<br />
and gas industry.<br />
Tanjung Citech Sdn. Bhd. 100 - Malaysia Manufacturing and marketing of waste<br />
heat recovery units for the offshore<br />
oil and gas industry.<br />
Held by Tanjung Offshore Services Sdn. Bhd.:<br />
Tanjung Maintenance Services Sdn. Bhd. 100.00 98.75 Malaysia Provision of maintenance services to<br />
the oil and gas and related industries.<br />
Tanjung PetroConsult Sdn. Bhd. 100.00 100.00 Malaysia Provision of engineering and professional<br />
manpower services to the oil and<br />
gas and related industries.<br />
Tanjung NewEnergy Services Sdn. Bhd.<br />
Held by Tanjung Citech UK Limited:<br />
92.86 92.86 Malaysia Provision of project management<br />
services to the engineering and<br />
energy industries.<br />
* Citech Energy Recovery Systems UK 100.00 100.00 England Manufacture of waste heat recovery<br />
Limited and Wales units for the oil and gas industry.<br />
Held by Gas Generators (Malaysia) Sdn. Bhd.<br />
Universal Gas Generators (M) Sdn. Bhd. 100.00 - Malaysia Selling and letting of gas generator<br />
equipment.<br />
* The fi nancial statements of these companies are not audited by AljeffriDean.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
7. SUBSIDIARY COMPANIES (continued)<br />
a) Amount Owing By Subsidiary Companies<br />
COMPANY 2009 2008<br />
RM RM<br />
Non-current assets<br />
Amount owing by subsidiary companies (Note i) 152,721,989 267,084,833<br />
Current assets<br />
Amount owing by subsidiary companies (Note ii) 191,722,140 73,956,692<br />
Note i:<br />
The amount owing by subsidiary companies are unsecured, subject to interest at 4.50% - 6.35% (2008: 4.50%-6.35%)<br />
per annum and are repayable after twelve (12) months.<br />
Note ii:<br />
The amount owing by subsidiary companies are unsecured, interest free and repayable on demand.<br />
8. ASSOCIATE COMPANIES<br />
86<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Unquoted shares, at cost 1,546,784 1,546,784 1,419,334 1,419,334<br />
Share of attributable post<br />
acquisition (loss)/profi t after taxation 2,018,355 (208,863) - -<br />
3,565,139 1,337,921 1,419,334 1,419,334<br />
Represented by:<br />
Share of net tangible assets 3,565,139 1,337,921 1,419,334 1,419,334<br />
The details of the associate companies are as follows:<br />
Group Country of<br />
Associate Companies Effective Interest Incorporation Principal Activities<br />
2009 2008<br />
% %<br />
Held by the Company:<br />
* Cendor Mopu Producer Ltd 20 20 Malaysia To own, lease, sub-lease, maintain,<br />
(Wilayah operate and manage the Mobile<br />
Persekutuan, Offshore Production Unit to carry<br />
Labuan) out oil and gas operations.
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
8. ASSOCIATE COMPANIES (continued)<br />
The details of the associate companies are as follows:<br />
87<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Group Country of<br />
Associate Companies Effective Interest Incorporation Principal Activities<br />
2009 2008<br />
% %<br />
Held by Tanjung Offshore<br />
Services Sdn. Bhd.:<br />
* Hercules Tanjung Asia Sdn. Bhd. 50 50 Malaysia Provision of drilling services<br />
(Wilayah<br />
Persekutuan,<br />
Labuan)<br />
Held by Gas Generators (M) Sdn. Bhd.:<br />
* Universal Hydrogen Generators (M) Sdn. Bhd. 49.50 49.50 Malaysia Commission agent for the fabrication<br />
and supply of industrial equipment.<br />
* PT. Gas Generators Indonesia 35 35 Indonesia Commission agent for the fabrication<br />
and supply of industrial equipment.<br />
* Universal Gas Generators (Thailand) Limited 35 35 Thailand Commission agent for the fabrication<br />
and supply of industrial equipment.<br />
* Gas Generators Philippines Inc. 35 35 Philippines Commission agent for the fabrication<br />
and supply of industrial equipment.<br />
* The fi nancial statements of these companies are not audited by AljeffriDean.<br />
The Group’s share of revenue and profi t/(loss) of associates is as follows:<br />
2009 2008<br />
RM RM<br />
Revenue 42,028,686 74,326,957<br />
Net profi t/(loss) for the year 2,109,257 (942,610)<br />
The Group’s share of assets and liabilities of associates is as follows:<br />
2009 2008<br />
RM RM<br />
Non-current assets 180,784,831 39,941,881<br />
Current assets 33,002,060 64,266,978<br />
Current liabilities (210,221,752) (97,142,490)<br />
Non-current liabilities - (5,776,335)<br />
Currency translation differences - 47,887<br />
Net tangible assets 3,565,139 1,337,921
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
9. DEFERRED TAXATION<br />
GROUP 2009 2008<br />
RM RM<br />
Property, plant and equipment:<br />
Beginning of the year 6,607,227 5,886,227<br />
Acquisition of subsidiary company 71,600 -<br />
Recognised in the income statement (Note 24) 1,404,913 721,000<br />
End of the year 8,083,740 6,607,227<br />
The deferred tax, determined before appropriate offsetting as follows:<br />
88<br />
2009 2008<br />
RM RM<br />
Deferred tax assets 8,170,175 6,607,227<br />
Deferred tax liabilities (86,435) -<br />
The deferred tax assets, determined after appropriate offsetting as follows:<br />
8,083,740 6,607,227<br />
2009 2008<br />
RM RM<br />
Unabsorbed capital allowances 24,442,136 37,016,062<br />
Accelerated capital allowances (17,205,850) (31,256,289)<br />
Exercise of options pursuant to Employee Share Option Scheme 847,454 847,454<br />
10. INVENTORIES<br />
8,083,740 6,607,227<br />
GROUP 2009 2008<br />
RM RM<br />
At cost:<br />
Turbine compressor spare parts 1,532,082 1,036,369<br />
Work-in-progress 2,890,524 5,188,718<br />
Raw material 442,076 -<br />
Finished goods 513,643 -<br />
Long term contract balances 3,972,845 12,021,253<br />
11. TRADE RECEIVABLES<br />
The currency exposure profi le of trade receivables are as follows:-<br />
9,351,170 18,246,340<br />
GROUP 2009 2008<br />
RM RM<br />
Ringgit Malaysia 197,086,884 174,080,088<br />
Other foreign currencies 18,732,705 64,366,874<br />
End of the year 215,819,589 238,446,962<br />
The credit term of trade receivables are ranging from 30 to 120 days.
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS<br />
89<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Deposits 1,620,546 1,279,827 - -<br />
Prepayments 23,191,575 15,720,141 - -<br />
Others 12,857,991 9,656,761 3,778,271 3,792,036<br />
End of the year 37,670,112 26,656,729 3,778,271 3,792,036<br />
13. CASH AND CASH EQUIVALENTS<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Cash and cash balances 31,293,432 19,819,930 23,077,860 5,522,323<br />
Fixed deposits with licensed banks 6,975,931 56,872,988 3,443,350 54,421,434<br />
38,269,363 76,692,918 26,521,210 59,943,757<br />
Included in the Group and the Company’s fi xed deposits with licensed banks amounting to RM6,975,931 (2008: RM49,096,329),<br />
the use of which is restricted for the purpose of fi nancing the capital expenditure.<br />
Included also in the Group and the Company’s fi xed deposits with licensed banks amounting to RM2,433,953 (2008:<br />
RM7,714,874) and RM2,433,953 (2008: RM5,325,105) respectively are pledged as security for the other banking facilities.<br />
14. TRADE PAYABLES<br />
The currency exposure profi le of trade payables are as follows:-<br />
GROUP 2009 2008<br />
RM RM<br />
Ringgit Malaysia 120,590,543 125,434,700<br />
Other foreign currency 6,238,739 23,396,172<br />
End of the year 126,829,282 148,830,872<br />
The credit term of trade payables are ranging from 30 to 45 days.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
15. OTHER PAYABLES AND ACCRUALS<br />
90<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Other payables 13,914,204 12,377,109 6,714,965 6,913,722<br />
Provision 2,975,634 819,476 311,223 66,250<br />
Accruals 15,178,839 15,439,265 3,403,928 743,534<br />
End of the year 32,068,677 28,635,850 10,430,116 7,723,506<br />
16. SHORT TERM BORROWINGS<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Short term loan (Note 20) 20,019,585 10,585,000 - -<br />
Revolving credit 17,024,106 19,553,044 - -<br />
Bank overdraft 45,228,540 35,993,062 - -<br />
Hire and fi nance lease payables (Note 29) 2,124,034 869,524 - -<br />
Serial fi xed rate bond (Note 21) 20,000,000 20,000,000 20,000,000 20,000,000<br />
Revolving Credit<br />
104,396,265 87,000,630 20,000,000 20,000,000<br />
Revolving credit known as Murabahah Tawarruq is payable to Kuwait Finance House (Malaysia) Berhad (“KFHMB”) and was<br />
obtained for Group’s working capital requirement in purchasing of equipment, payment for salary and general working capital.<br />
The Murabahah Tawarruq profi t margin is at 0.85% + KFHMB’s Cost of Fund at the date of each drawdown and is repayable within<br />
three (3), six (6) and twelve (12) months from drawdown. Interest incurred during the current fi nancial year was RM1,280,559<br />
(2008 : RM1,089,215). The said facility is secured by corporate guarantee from the Company for RM25,000,000.<br />
Bank Overdraft<br />
The bank overdraft of the Group is secured by the freehold and leasehold land and building of the subsidiary companies (Note<br />
5), pledged of fi xed deposits (Note 13) and corporate guarantee by the Company for RM13,650,000.<br />
The effective interest rate is at 8.75% (2008: 8.75%) per annum and the Islamic overdraft profi t rate is at 3.00% - 7.75% (2008:<br />
3.00% - 7.75%) per annum.
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
17. SHARE CAPITAL<br />
GROUP AND COMPANY<br />
Ordinary shares of RM0.50 each<br />
91<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
2009 2008<br />
RM RM<br />
Authorised:<br />
Beginning of the year 200,000,000 200,000,000<br />
End of the year 200,000,000 200,000,000<br />
Issued and fully paid-up:<br />
Beginning of the year 123,294,789 101,482,824<br />
ESOS shares subscription during the year (Note i) 2,346,598 687,830<br />
Right issue exercise (Note ii) - 20,488,965<br />
Warrants exercise during the year (Note iii) 8,960 635,170<br />
End of the year 125,650,347 123,294,789<br />
Note i:<br />
The Company’s ESOS came into effect on 02 August 2005. The ESOS shall be in force for a period of 5 years until 01 August<br />
2010.<br />
The principal features of the Bye-Law of ESOS are as follows:<br />
a) The maximum number of options which may be allotted pursuant to the ESOS (“Options”) as approved by the Securities<br />
Commission (“SC”) shall not exceed ten percent (10%) of the total issued and paid-up share capital of the Company at<br />
any point in time during the duration of the ESOS.<br />
b) Executive directors and employees of the Group and of the Company will be eligible to participate in the ESOS provided<br />
that they fulfi ll the conditions for eligibility stipulated in the rules, terms and conditions contained in the Bye-Law (“Eligible<br />
Employees”).<br />
c) The maximum number of new shares that may be offered and allotted to an Eligible Employee shall be determined by the<br />
ESOS Committee taking into consideration inter-alia, the Eligible Employee’s designation, job description, responsibilities<br />
and seniority.<br />
d) The subscription price of the options issued pursuant to ESOS shall be the higher of the following:<br />
i) at a discount of not more than ten percent (10%) from the weighted average market price of the shares as shown<br />
in the daily offi cial list issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) for the fi ve (5) market days<br />
immediately preceding the date of offer; or<br />
iii) the par value of the shares.<br />
e) The new shares to be allotted and issued upon any exercise of the options will, upon such allotment and issuance, rank<br />
pari passu in all respects with the existing and issued shares except that the new shares so issued will not be entitled<br />
to any dividends, rights, allotments and/or any other distributions which may be declared, made or paid to shareholders<br />
prior to the date of allotment of the new shares. The new shares will be subjected to all provisions of the Articles in<br />
relation to their transfer, transmission or otherwise. The options shall not carry any right to vote at a general meeting of the<br />
Company.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
17. SHARE CAPITAL (continued)<br />
f) Options are exercisable, in whole or in part (provided that an option is exercised in part in respect of 1,000 shares or any<br />
multiple thereof) as follows:<br />
Note ii<br />
Percentage of Options Exercisable<br />
Number of Options from Acceptance Date<br />
Granted 1st year 2nd year 3rd year 4th year 5th year<br />
20,000 and below 50% 50% - - -<br />
20,001 to 50,000 20% 20% 20% 20% 20%<br />
Above 50,000 10% 15% 20% 25% 30%<br />
Details of the options granted under the scheme to take up unissued ordinary shares of the Group are as follows:<br />
Number of ESOS<br />
Commencement of Options Outstanding at Exercise Price (s) per<br />
ESOS 31.12.2009 Share Expiry Date<br />
2 August 2005 14,075,900 Range from RM0.68 to RM2.35 01 August 2010<br />
The fair values of the options are estimates on the date of grant using the Black Scholes option pricing model with the<br />
following assumption used for grants:<br />
Weighted average share price RM1.85<br />
Weighted average exercise price RM1.62<br />
Dividend yield expected 6.00%<br />
Risk-free annual interest rate 3.37%<br />
Volatility expected 8.23%<br />
Expected life of option 5 years<br />
On 10 October 2008, the Company completed its right issue of 40,977,929 new ordinary shares of RM0.50 each in the<br />
Company together with 40,977,929 free new detachable warrants on the basis of one (1) Rights Share together with one (1)<br />
free Warrant for every fi ve (5) existing ordinary shares of RM0.50 each.<br />
Note iii:<br />
Warrants from issuance of Bonds<br />
On 30 November 2005, the Company issued a RM150,000,000 nominal value up to eight (8) years 4.5% per annum serial fi xed<br />
rate bonds with detachable warrants to the primary subscribers.<br />
On 3 March 2006, the primary subscribers were allotted a total of 18,514,600 warrants to the shareholders at an offer price of<br />
RM0.24 per warrant on the basis of one (1) warrant for every fi ve (5) ordinary shares held on entitlement date.<br />
On 29 August 2006, the Company completed the listing of an additional 9,257,000 warrants arising from the bonus issue<br />
exercise which was implemented in accordance to the Deed Poll dated 13 January 2006 on the basis of one (1) new warrant<br />
for every two (2) warrants held on entitlement date.<br />
On 13 June 2007, the Company completed the listing of an additional 10,095,104 warrants arising from the bonus issue<br />
exercise on the basis of two (2) new warrants for every fi ve (5) existing warrants.<br />
92
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
17. SHARE CAPITAL (continued)<br />
Note iii: (continued)<br />
Warrants from issuance of Bonds (continued)<br />
93<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
During the fi nancial year ended 31 December 2009, the Company issued an additional 17,919 units of new ordinary shares of<br />
RM0.50 each arising from the exercise of warrants at an exercise price of RM0.55 per share.<br />
As at 31 December 2009, there is a total of 35,884,053 outstanding Warrant A 2006/2016 warrants.<br />
18. TREASURY SHARES<br />
During the current fi nancial year, the Company had repurchased a total of 52,100 ordinary shares of RM0.50 each of its issued<br />
share capital from the open market at an average price of RM0.86. The total consideration paid for the repurchase, including<br />
transaction costs, was RM45,190. The repurchased shares are held as treasury shares in accordance with the requirements of<br />
Section 67A (as amended) of the Companies Act, 1965.<br />
As at 31 December 2009, the number of outstanding ordinary shares in issue after taking the treasury shares into consideration<br />
is 248,832,694 ordinary shares of RM0.50 each.<br />
Details relating to the repurchase during the current fi nancial year are as follows:<br />
Total shares repurchased (units) 52,100<br />
Total consideration (RM) 45,190<br />
Highest price (RM) 1.27<br />
Lowest price (RM) 0.705<br />
Average price (RM) 0.86<br />
19. RESERVES<br />
Non-distributable:<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Share premium 40,704,466 40,069,770 40,704,466 40,069,770<br />
Capital reserves 3,429,097 3,433,397 3,429,097 3,433,397<br />
Employee Share Option Reserves 1,611,595 1,364,284 869,371 622,060<br />
Foreign currency translation reserve (4,224,158) (3,843,731) - -<br />
Revaluation reserve 96,466,039 102,258,295 - -<br />
Distributable:<br />
137,987,039 143,282,015 45,002,934 44,125,227<br />
Accumulated profi t 57,601,957 59,723,915 2,806,605 1,241,861<br />
195,588,996 203,005,930 47,809,539 45,367,088
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
19. RESERVES (continued)<br />
i) Share Premium<br />
The share premium represents premiums received on the initial issuing of the share capital. Any transaction costs<br />
associated with the issuing of the shares are deducted from the share premium.<br />
ii) Capital Reserves<br />
Capital reserves represent the value of warrants capitalised for the issuance of serial payment bond with detachable<br />
warrants (Note 21) and value of warrants arising from the rights issue on the basis of one (1) rights share together with one<br />
(1) free warrant for every fi ve (5) existing ordinary shares. Upon the exercise of the warrants, the value of these warrants<br />
will be credited to share premium.<br />
iii) Employee Share Option Reserve<br />
The Employee Share Option Reserve represents the value of services provided under share-based payments.<br />
iv) Foreign Currency Translation Reserve<br />
The foreign currency translation reserve is used to record exchange differences arising from the translation of the fi nancial<br />
statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.<br />
It is also used to record the exchange differences arising from monetary items which part of the Group’s net investment<br />
in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or<br />
the foreign operation.<br />
v) Revaluation Reserve<br />
The revaluation reserve relates to the revaluation on the seven (7) units of Group’s vessels.<br />
20. LONG TERM BORROWINGS<br />
94<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Term Financing - 1 (Note i) 34,391,049 36,701,732 - -<br />
Bai Istisna’ (BIS 1) (Note ii) 30,800,346 20,380,000 - -<br />
Bai Istina’ (BIS 2) (Note iii) 38,340,326 41,200,000 - -<br />
Bai Istina’ (BIS 3) (Note iv) 37,784,848 38,930,000 - -<br />
Term loan (Note v) 1,124,916 634,300 - -<br />
Islamic Medium Term Notes<br />
Programme (“IMTN”) (Note vi) 120,603,000 120,028,833 120,028,833 120,028,833<br />
Ijarah (IJA 1) 40,212,000 - - -<br />
Ijarah (IJA 2) 40,212,000 - - -<br />
Ijarah (IJA 3) 30,500,000 - - -<br />
Ijarah (IJA 4) 38,000,000 - - -<br />
Total 411,968,485 257,874,865 120,028,833 120,028,833<br />
Less: Repayable within 12 months (Note 16) (20,019,585) (10,585,000) - -<br />
391,948,900 247,289,865 120,028,833 120,028,833<br />
Hire purchase and fi nance lease payable (Note 29) 4,789,535 2,248,332 - -<br />
396,738,435 249,538,197 120,028,833 120,028,833
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
20. LONG TERM BORROWINGS (continued)<br />
Note i - Term Financing - i<br />
95<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
The purpose of this term loan is to fi nance the construction of one (1) unit Anchor Handling Tug Supply Vessel (AHTS) or known<br />
as MV Tanjung Dawai for total consideration of RM45,750,000. The loan is repayable within eight (8) years with the profi t rate<br />
of 3.00% per annum.<br />
Note ii - Bai Istisna’ (BIS 1)<br />
The purpose of this term loan is to fi nance the construction cost of one (1) new unit of 60-M Anchor Handling Tug Supply Vessel<br />
or known as MV Tanjung Sari. The loan is repayable by 114 monthly installments with the profi t rate of 4.75% per annum.<br />
Note iii - Bai Istisna’ (BIS 2)<br />
The purpose of this term loan is to fi nance the construction cost of one (1) new unit of 60-M Anchor Handling Tug Supply Vessel<br />
or known as MV Tanjung Puteri 1. The loan is repayable by 114 monthly installments with the profi t rate of 4.75% per annum.<br />
Note iv - Bai Istisna’ (BIS 3)<br />
The term loan which consist two (2) funds are to fi nance the construction costs of one (1) new unit of 60-M Anchor Handling<br />
Tug Supply Vessel or known as MV Tanjung Puteri 2. The loan is repayable by 114 monthly installments with profi t rate of 4.75%<br />
and 7.75% per annum respectively.<br />
All the facilities mentioned in Note i to iv are secured by the respective vessels under fi nancing, corporate guarantees of the<br />
Company, assignment of shipbuilding contracts and future earnings of the respective vessels.<br />
Note v – Term Loan<br />
The term loan is to fi nance the property held under PN 4125, Lot No. 3801, Mukim Teluk Kalong, District of Kemaman,<br />
Terengganu Darul Iman.<br />
The term loan interest rate for the fi rst 12 months is 3.28% per annum and repayable within ten (10) years. The said facility is<br />
secured by letter of undertaking, notice of assignment, fi xed deposit and corporate guarantee from the Company.<br />
Note vi - IMTN<br />
On 12 December 2007, the Company has announced its proposed issue of, offer for subscription or purchase of, or invitation<br />
to subscribe for or purchase of up to RM400,000,000 nominal value IMTN. On 16 June 2009, the Company obtained the<br />
consent from its bondholders to reduce the existing IMTN Programme from RM400.0 million to RM200.0 million. As at to date,<br />
the Company has issued RM120,028,833 of IMTN.<br />
The IMTN shall be utilised by the Company’s to fi nance the acquisition and/or construction of offshore support vessels,<br />
production platforms, lift barges and oil rigs.<br />
The IMTN has tenure of up to fi fteen (15) years from the date of the fi rst issuance of the IMTN. Notwithstanding the tenure of the<br />
IMTN, the Company may only request for issuances of the IMTN within the period commencing from the date of the fi nancial<br />
close of the IMTN until the 5th anniversary from the date of the fi rst issuance of the IMTN.<br />
The repayment of IMTN with profi t rate is payable semi annually in arrears with the fi rst profi t payment commencing six (6)<br />
months from the issue date of the respective IMTN and with the last profi t payment of the respective IMTN to be made on the<br />
respective maturity date.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
20. LONG TERM BORROWINGS (continued)<br />
Note vi - IMTN (continued)<br />
The IMTN is secured by:<br />
i) Charge and assignment over the designated accounts;<br />
ii) Assignment of rights, title and interest in all the construction contracts of the new vessels which are to be commissioned<br />
for construction from the proceeds of the IMTN;<br />
iii) Assignment of residual rights (if any) pursuant to the construction contracts after the completion of the new vessels;<br />
iv) Assignment of all insurances and charter contracts in respect of the new vessels; and<br />
v) Charge over the new vessels.<br />
On 16 June 2009, the Company obtained the consent from its bondholders to reduce the existing IMTN Programme from<br />
RM400.0 million to RM200.0 million.<br />
Note vii - Ijarah (IJA 1)<br />
The purpose of this term loan is to fi nance the construction cost of one new unit of 60-M Anchor Handling Tug Supply Vessel<br />
or known as MV Tanjung Biru 1. The loan is repayable by 96 monthly installments with the profi t rate of 3.70% per annum.<br />
Note viii - Ijarah (IJA 2)<br />
The purpose of this term loan is to fi nance the construction cost of one new unit of 60-M Anchor Handling Tug Supply Vessel<br />
or known as MV Tanjung Biru 2. The loan is repayable by 96 monthly installments with the profi t rate of 3.70% per annum.<br />
Note ix - Ijarah (IJA 3)<br />
The purpose of this term loan is to fi nance the construction cost of one new unit of 60-M Anchor Handling Tug Supply Vessel or<br />
known as MV Tanjung Dahan 1. The loan is repayable by 108 monthly installments with the profi t rate of 3.70% per annum.<br />
Note x - Ijarah (IJA 4)<br />
The purpose of this term loan is to fi nance eighty two percent of the construction cost of one new unit of 60-M Anchor Handling<br />
Tug Supply Vessel or known as MV Tanjung Dahan 2. The loan is repayable by 108 monthly installments with the profi t rate of<br />
36.70% per annum.<br />
All the facilities mentioned in Note vii to x are secured by the respective vessels under fi nancing, corporate guarantees of the<br />
Company, assignment of shipbuilding contracts and future earnings of the respective vessels.<br />
96
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
21. SERIAL FIXED RATE BOND<br />
97<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
2009 2008<br />
RM RM<br />
Nominal value of the Bonds issue 150,000,000 150,000,000<br />
Equity instrument - detachable warrants (4,402,500) (4,402,500)<br />
Proceeds of the bond issue 145,597,500 145,597,500<br />
Less : Repayment (20,000,000) -<br />
Less: Repayable within 12 months (Note 16) (20,000,000) (20,000,000)<br />
105,597,500 125,597,500<br />
On 25 January 2006, the Company issued RM150,000,000 nominal value of up to 8 years 4.5% per annum serial fi xed rate<br />
Bonds (“the Bonds”) with 18,514,600 detachable Warrants (“the Warrants”) to the Primary Subscriber structured on a “Bought<br />
Deal” basis, which was constituted by a Trust Deed dated 13 January 2006, comprising 6 series as follows:<br />
Series No. Nominal Values Tenure<br />
(RM) (from Issue Date)<br />
1 20,000,000 3 years<br />
2 20,000,000 4 years<br />
3 25,000,000 5 years<br />
4 25,000,000 6 years<br />
5 30,000,000 7 years<br />
6 30,000,000 8 years<br />
The Bonds are secured by, inter alia, a fi rst party legal charge over the escrow account and the debt service reserve account<br />
and a third party fi rst fi xed charge over the three (3) new Straight Supply Vessels namely MV Tanjung Pinang 1, MV Tanjung<br />
Pinang 2 and MV Tanjung Pinang 3.<br />
The principal terms of the Warrants are as follows:<br />
a) 18,514,600 detachable Warrants at an issue price of RM0.24 each. As at 31 December 2009, there are a total of<br />
35,884,053 outstanding warrants after taking into account the bonus issue exercises and various conversions into shares<br />
of the Company;<br />
b) During the fi nancial year ended 31 December 2008, the exercise price has been adjusted to RM0.55 pursuant to the<br />
Company’s rights issue with detachable warrants which is payable in full in respect of each share upon exercise of the<br />
Warrants or any such price adjusted in accordance with the terms and conditions set out in the Deed Poll governing the<br />
Warrants; and<br />
c) The Warrants may be exercised in ten (10) years from the date of issue of the Warrants. Unexercised Warrants after the<br />
exercised year will thereafter lapse and cease to be valid.
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
22. PROFIT FROM OPERATIONS<br />
Profi t from operations is arrived at:<br />
After charging:<br />
98<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Executive directors’<br />
remuneration (Note 32) 3,753,500 3,029,600 1,346,068 905,992<br />
Statutory audit<br />
- current year 133,518 106,680 15,000 18,000<br />
- under provision in previous year 6,000 - - -<br />
- audit related services 22,175 - 22,175 -<br />
Amortisation of intangible assets 660,800 247,598 - -<br />
Bad debt written off 5,336 - - -<br />
Depreciation of property,<br />
plant and equipment 26,663,160 18,395,357 - -<br />
Property, plant and equipment written off - 364,277 - -<br />
Loss on disposal of property, plant and equipment 26,519 - - -<br />
Loss on foreign exchange 714,977 2,590,922 - -<br />
Offi ce rental 2,701,614 1,508,736 - -<br />
Staff costs: - -<br />
- Short term benefi ts 24,866,159 24,391,497 - -<br />
- EPF contributions 2,757,365 2,013,290 - -<br />
- ESOS expenses 247,311 210,516 247,311 210,516<br />
And crediting:<br />
Gain on disposal of property, plant and equipment 109,178 36,282 - -<br />
Gain on foreign exchange 686,045 - - -<br />
Rental income 727,736 - - -<br />
Interest income received 439,736 1,279,382 430,791 1,229,590<br />
23. FINANCE COSTS<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Hire purchase payable 252,055 90,226 - -<br />
Leasing interest 84,730 79,488 - -<br />
Overdraft interest 1,176,716 1,153,466 - -<br />
Term loan interest 7,527,692 3,141,250 - -<br />
Interest on Bonds 8,806,273 7,002,792 - -<br />
Interest on bill payable 17,596 - - -<br />
Revolving credit interest 1,280,558 1,214,267 - -<br />
Commitment fee 86,206 - - -<br />
Amortisation of Bonds issuance cost 210,942 201,942 201,942 201,942<br />
19,433,768 12,883,431 201,942 201,942
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
24. TAXATION<br />
99<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Current year provision 1,386,453 2,976,000 145,923 300,000<br />
Under/(Over) provision in previous year 587,940 (91,288) - -<br />
1,974,393 2,884,712 145,923 300,000<br />
Deferred tax relating to the origination and<br />
reversal of temporary differences (Note 9) (1,404,913) (721,000) - -<br />
569,480 2,163,712 145,923 300,000<br />
Share of taxation of associate company 588,690 613,302 - -<br />
Tax expense for the year 1,158,170 2,777,014 145,923 300,000<br />
A reconciliation of income tax expense applicable to profi t before taxation at the statutory income tax rate to income tax<br />
expense at the effective income tax rate of the Group and of the Company is as follow:<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Profi t before taxation 4,774,584 34,225,442 12,700,575 5,189,253<br />
Taxation at Malaysian statutory tax rate<br />
of 25% (2008: 26%) 1,193,646 8,898,615 3,175,144 1,349,206<br />
Tax effect on expenses that are not<br />
deductible for tax purposes 15,128,016 8,450,798 389,529 315,794<br />
Utilisation of capital allowances (11,516,459) (13,008,413) - -<br />
Recognition of deferred tax assets (1,404,913) (721,000) - -<br />
Income not subject to tax (3,418,750) (1,365,000) (3,418,750) (1,365,000)<br />
Under/(Over) provision in previous year 587,940 (91,288) - -<br />
569,480 2,163,712 145,923 300,000<br />
Share of taxation of associate company 588,690 613,302 - -<br />
Income tax expense for the year 1,158,170 2,777,014 145,923 300,000
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
25. EARNINGS PER SHARE<br />
a) Basic<br />
The basic earnings per share is calculated by dividing the Group’s net profi t attributable to ordinary equity holders of the<br />
parent by the weighted average number of ordinary shares in issue during the current fi nancial year, excluding ordinary<br />
shares purchased by the Company and held as treasury shares.<br />
2009 2008<br />
RM RM<br />
Net profi t attributable to ordinary equity holders of the parent 3,075,694 31,378,546<br />
Weighted average number of ordinary shares (unit) 245,525,478 214,419,864<br />
100<br />
CENT CENT<br />
Basic earnings per share 1.25 14.63<br />
b) Diluted<br />
For the diluted earnings per share calculation, the weighted average numbers of ordinary shares in issue during the current<br />
fi nancial year have been adjusted for the dilutive effects of potential ordinary shares in respect of warrants and share<br />
options granted to the employees.<br />
2009 2008<br />
RM RM<br />
Net profi t attributable to ordinary equity holders of the parent 3,075,694 31,378,546<br />
Weighted average number of ordinary shares (unit) 245,525,478 214,419,864<br />
ESOS:<br />
Number of unissued shares (unit)* - 14,691,000<br />
Warrants:<br />
Number of unexercised warrants (unit) 35,884,000 76,879,901<br />
Diluted weighted average number of ordinary shares (unit) 250,082,000 234,829,714<br />
CENT CENT<br />
Dilluted earnings per share 1.23 13.36<br />
* The diluted earnings per ordinary share is not presented as the computation would result in anti-dilutive earnings per<br />
ordinary share.<br />
26. DIVIDEND<br />
2009 2008<br />
Gross Gross<br />
dividend Dividend net dividend Dividend net<br />
per share of tax per share of tax<br />
RM RM RM RM<br />
Final dividend in respect of the fi nancial<br />
year ended 31 December 2007<br />
Final dividend in respect of the fi nancial year<br />
- - 0.03 4,540,500<br />
ended 31 December 2008 0.02 3,663,302 - -<br />
Interim dividend in respect of the fi nancial<br />
year ended 31 December 2009 0.04 7,326,606 - -<br />
The directors do not recommend any fi nal dividend in respect of the current fi nancial year.<br />
10,989,908 4,540,500
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
27. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT<br />
101<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
During the current fi nancial year, the Group made the following cash payments to purchase property, plant and equipment:<br />
GROUP 2009 2008<br />
RM RM<br />
Construction and commissioning of new vessels 21,671,760 177,390,040<br />
Purchase of other property, plant and equipment 173,716,868 13,721,380<br />
Financed by hire purchase arrangement (379,903) (1,208,465)<br />
Cash payments on purchase of property, plant and equipment 195,008,725 189,902,955<br />
28. CASH FLOW STATEMENT – CASH AND CASH EQUIVALENTS<br />
Cash and cash equivalents included in the cash fl ow statement comprises the following balance sheet amounts:<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Cash and cash equivalents (Note 13) 38,269,363 76,692,918 26,521,210 59,943,757<br />
Bank overdraft (Note 16) (45,228,540) (35,993,062) - -<br />
(6,959,177) 40,699,856 26,521,210 59,943,757<br />
Fixed deposits pledged as security (Note 13) (2,433,953) (7,714,874) (2,433,953) (5,325,105)<br />
29. HIRE PURCHASE AND FINANCE LEASE PAYABLES<br />
(9,393,130) 32,984,982 24,087,257 54,618,652<br />
GROUP 2009 2008<br />
RM RM<br />
Minimum payment:<br />
- Not later than 1 year 2,475,585 1,097,399<br />
- Later than 1 year and not later than 5 years 5,721,113 2,852,677<br />
8,196,698 3,950,076<br />
Future fi nance charges (1,283,129) (832,220)<br />
Principal portion payables:<br />
6,913,569 3,117,856<br />
- Not later than 1 year (Note 16) 2,124,034 869,524<br />
- Later than 1 year and not later than 5 years (Note 20) 4,789,535 2,248,332<br />
6,913,569 3,117,856<br />
Effective interest rate 2.78% - 9.79% 2.78% - 9.79%<br />
30. CAPITAL COMMITMENTS<br />
GROUP<br />
As at 31 December 2009, the Group has the following capital commitments:<br />
Approved and contracted for:<br />
2009 2008<br />
RM RM<br />
Commissioning of three (3) units of Offshore Support Vessels (2008: seven (7) units) 19,080,000 192,889,600
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
31. CONTINGENT LIABILITIES<br />
COMPANY<br />
As at 31 December 2009, the Company has the contingent liabilities as follows:<br />
102<br />
2009 2008<br />
RM RM<br />
Aggregate of corporate guarantees pursuant to banking facilities granted<br />
by a fi nancial institutions to the Group 258,000,000 397,048,000<br />
32. DIRECTORS’ REMUNERATION<br />
The directors’ remuneration during the current fi nancial year is as follows:<br />
GROUP COMPANY<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Non-Executive<br />
- Fee 76,000 60,000 76,000 60,000<br />
- Other emoluments - 11,992 - 11,992<br />
76,000 71,992 76,000 71,992<br />
Executive<br />
- Other emoluments 3,677,500 2,957,608 1,270,068 834,000<br />
3,677,500 2,957,608 1,270,068 834,000<br />
Total directors’ remuneration 3,753,500 3,029,600 1,346,068 905,992<br />
Remuneration band:<br />
COMPANY<br />
Number of Directors<br />
2009 2008<br />
RM RM<br />
Non-Executive Directors:<br />
Below RM50,000 4 4<br />
Exeutive Directors:<br />
RM100,001 - RM200,000 1 3<br />
RM200,001 - RM250,000 3 1<br />
Above RM250,000 - -
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
33. FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES<br />
103<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
Method and assumption used by the management to determine fair values of each class of fi nancial instruments for which it is<br />
practicable to estimate that value are as follows:<br />
i) Cash and cash equivalents and short term borrowings<br />
The carrying amounts approximate fair values due to the relatively short-term maturity of these fi nancial instruments.<br />
ii) Receivables and payables, including balances with related parties<br />
The carrying amounts of trade and other receivables, trade and other payables approximate their respective fair values<br />
because these are subject to normal trade credit terms and/or are repayable on demand.<br />
iii) Non-current amount owing by subsidiary company<br />
No disclosure of fair values are made for amount owing by subsidiary company as it is not practicable to determine their<br />
fair value with suffi cient reliability since these balances has no fi xed repayment terms.<br />
iv) IMTN, Term loan and hire purchase payables<br />
The carrying amounts as disclosed in Note 20 to the fi nancial statements approximate the fair values, which is determined<br />
using discounted cash fl ow analysis.<br />
v) Serial payment bond<br />
The fair value of the serial payment bond has been determined using discounted estimated cash fl ow.<br />
GROUP COMPANY<br />
Carrying amount Fair value<br />
2009 2008 2009 2008<br />
RM RM RM RM<br />
Serial payment bond 125,597,500 145,597,500 125,435,561 145,435,561<br />
34. SEGMENTAL REPORTING<br />
i) Business Segment<br />
The segmental information is not presented by business segment as there are no other signifi cant business segments<br />
other than the provision of integrated services to the oil and gas related industries.<br />
ii) Geographical Segment<br />
The segment results for the fi nancial year ended 31 December 2009 are as follows:
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
34. SEGMENTAL REPORTING (continued)<br />
ii) Geographical Segment (continued)<br />
Malaysia Indonesia<br />
United<br />
Kingdom Elimination Total<br />
RM RM RM RM RM<br />
Revenue 779,185,526 1,009,422 53,530,760 (184,069,006) 649,656,702<br />
Results<br />
Segment result 32,826,261 (875,084) (29,874,540) - 2,076,637<br />
Share of profi t from associate 2,697,947<br />
Taxation (1,158,170)<br />
Net profi t/(loss) for the year 3,616,414<br />
Minority interest (540,720)<br />
Profi t attributable to equity<br />
holders of the parent 3,075,694<br />
35. SIGNIFICANT EVENTS<br />
i) On 06 March 2009, the Company has incorporated a wholly owned subsidiary, Tanjung Citech Sdn. Bhd. The current<br />
authorised and paid up share capital of Tanjung Citech Sdn. Bhd. are RM100,000 and RM2 respectively. The intended<br />
business activity of Tanjung Citech Sdn. Bhd. is manufacturing and marketing of waste heat recovery units for the offshore<br />
oil and gas industry.<br />
ii) On 04 September 2009, Tanjung Offshore Services Sdn. Bhd. (“TOS”) a wholly owned subsidiary of the Company<br />
has received a Letter of Award dated 3 September 2009 from Talisman Malaysia Limited for the provision of rigless<br />
abandonment equipment and services for a contract value of approximately RM15,000,000.<br />
iii) On 13 May 2009, TOS has on 13 May 2009 taken delivery of eleventh (11th) offshore support vessel, MV Tanjung Gelang<br />
which has been awarded a letter of award from Carigali-PTTEPI Operating Company Sdn. Bhd. for the provision of well<br />
testing and intervention services for total charter rates of approximately RM30,000,000.<br />
iv) On 16 November 2009,Tanjung CSI Sdn. Bhd. (“TCSI”) a wholly owned subsidiary of the Company has received Letters<br />
of Award from PETRONAS for the provision of various engineering equipment packages such as Metering System and<br />
Fire Alarm System for a combined value of approximately RM7,000,000.<br />
36. SUBSEQUENT EVENTS AFTER BALANCE SHEET DATE<br />
i) On 05 January 2010, Tanjung Maintenance Services Sdn Bhd (“TMS”) a wholly owned subsidiary of the Company has on<br />
5 January 2010 been approved by Petronas Carigali Sdn Bhd (“Petronas”) to provide wellhead maintenance services for<br />
Sabah, Sarawak and Peninsular Malaysia operations for total contract value of up to RM70,000,000.<br />
ii) On 06 January 2010, Tanjung Kapal Services Sdn. Bhd. (“TKS”), a wholly owned subsidiary of the Company has taken<br />
delivery of three (3) new units of AHTS vessels namely, MV Tanjung Biru 1, MV Tanjung Biru 2 and MV Tanjung Sari. With<br />
these new vessels deliveries, Tanjung will be operating fourteen (14) offshore support vessels effective March 2010. TKS<br />
also been awarded long term contracts from Petronas Carigali Sdn Bhd (“Petronas”) for the abovementioned AHTS vessels<br />
for tenures of between three (3) years and six (6) years. These contracts are estimated to be valued at approximately<br />
RM150,000,000 and are expected to commence between March and May 2010.<br />
104
NOTES TO THE FINANCIAL STATEMENTS<br />
31 DECEMBER 2009<br />
35. SIGNIFICANT EVENTS (continued)<br />
105<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
iii) On 11 January 2010, TOS a wholly owned subsidiary of the Company has been received a purchase order dated 11<br />
November 2009 from Petronas Carigali Sdn. Bhd. (“Petronas”) for the provision of glycol dehydration packages for<br />
Kinabalu fi eld for contract value approximately RM25,000,000.<br />
iv) On 13 January 2010, Tanjung NewEnergy Services Sdn Bhd (“TNE”) a wholly owned subsidiary of the Company has<br />
received a Letter of Award dated 11 January 2010 from Murphy Sarawak Oil Co Ltd for the supply of operation spare parts<br />
for gas engine generator package for SK309/311 production operations. The spare parts for the gas engine generator<br />
package are valued at approximately RM4,000,000.<br />
37. ACQUISITION OF A SUBSIDIARY COMPANY<br />
On 06 January 2009, the Company has entered into a share sale agreement to acquire a 51% equity interest in Gas Generators<br />
(Malaysia) Sdn Bhd (“Gastec”) comprising 2,443,633 ordinary shares of RM1 for a total cash consideration of RM5,100,000.<br />
On 04 May 2009, the Company has completed the acquisition and all terms as stipulated in the sale agreement entered into<br />
on 06 January 2009 has been satisfi ed and fulfi lled.<br />
Details of net assets acquired are as follows:<br />
Acquiree’s<br />
carrying amounts Fair value<br />
RM RM<br />
Property, plant and equipments 7,457,621 7,457,621<br />
Intangible assets 3,149,314 3,149,314<br />
Other assets 1,935,456 1,935,456<br />
Cash and bank balances 1,724,477 1,724,477<br />
Current liabilities (1,202,393) (1,202,393)<br />
Non-current liabities (3,752,098) (3,752,098)<br />
Identifi able net assets acquired 9,312,377 9,312,377<br />
Minoritiy interest (4,563,065)<br />
Goodwill (Note 6) 350,688<br />
Purchase consideration 5,100,000<br />
Details of the cash fl ows arising from the acquisition are as follows:<br />
Total purchase consideration 5,100,000<br />
Less : Cash and bank balances acquired (1,724,477)<br />
Net cash outfl ow to the Group 3,375,523<br />
The subsidiary company acquired during the current fi nancial year contributed profi t after tax of RM782,862 to the Group for<br />
the period from 4 May 2009 to 31 December 2009.<br />
Had the subsidiary company which was acquired during the current fi nancial year occurred on 01 January 2009, the profi t after<br />
tax attributable to the Group would have been RM2,015,534.<br />
38. KEY MANAGEMENT PERSONNEL<br />
Key management personnel are defi ned as those persons having authority and responsibility for planning, directing and<br />
controlling the activities of the Company directly or indirectly, including any director of the Company. There are no other key<br />
management personnel except for the directors of the Company whose remuneration is disclosed in Note 32 to the fi nancial<br />
statements.<br />
RM
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
LIST OF PROPERTIES OWNED BY THE GROUP<br />
As at 31 December 2009, a summary of the land and buildings owned by Tanjung Offshore Services Sdn Bhd (“TOS”),<br />
Tanjung Maintenance Services Sdn Bhd (“TMS”) and Tanjung Kapal Services Sdn Bhd (“TKS”) is set out below:-<br />
No<br />
1.<br />
2.<br />
Title Identifi cation /<br />
Postal Address<br />
GRN 38601 Lot No. 25929<br />
Mukim of Setapak, District<br />
and State of Wilayah<br />
Persekutuan /<br />
No. 8-3, Jalan Puncak<br />
Setiawangsa 4,<br />
54200 Kuala Lumpur; and<br />
GRN 38600 Lot No. 25930<br />
Mukim of Setapak, District<br />
and State of Wilayah<br />
Persekutuan /<br />
No. 10, Jalan Puncak<br />
Setiawangsa 4, Taman<br />
Setiawangsa, 54200 Kuala<br />
Lumpur<br />
GRN 38599 Lot No. 25931<br />
Mukim of Setapak, District<br />
and State of Wilayah<br />
Persekutuan /<br />
No. 12, Jalan Puncak<br />
Setiawangsa 4,<br />
54200 Kuala Lumpur; and<br />
GRN 38598 Lot No. 25932<br />
Mukim of Setapak, District<br />
and State of Wilayah<br />
Persekutuan /<br />
No. 14, Jalan Puncak<br />
Setiawangsa 4, Taman<br />
Setiawangsa, 54200 Kuala<br />
Lumpur<br />
GRN 38602 Lot No. 25928<br />
Mukim of Setapak, District<br />
and State of Wilayah<br />
Persekutuan /<br />
No. 6, Jalan Puncak<br />
Setiawangsa 4, Taman<br />
Setiawangsa, 54200 Kuala<br />
Lumpur<br />
PN 4114, Lot No. 3790<br />
(formerly known as HS(D)<br />
2670, PT 4199), Mukim<br />
of Teluk Kalung, District<br />
of Kemaman, State of<br />
Terengganu /<br />
Lot D1 Kawasan MIEL<br />
Teluk Kalung<br />
24007 Kemaman<br />
Terengganu Darul Iman<br />
Description And<br />
Existing Use /<br />
Ownership<br />
3-storey<br />
shopoffi ces used<br />
as the head offi ce<br />
for Tanjung Group /<br />
Owned by TOS<br />
A factory lot used<br />
as the Group’s<br />
Kemaman<br />
Operation Centre<br />
providing complete<br />
maintenance<br />
services /<br />
Owned by TOS<br />
106<br />
Approximate<br />
Age of Building /<br />
Tenure / Date of<br />
Expiry of Lease<br />
Age of building :<br />
approximately 10<br />
years / Tenure :<br />
Freehold<br />
Age of building :<br />
approximately 10<br />
years / Tenure :<br />
Freehold<br />
Age of building :<br />
approximately 10<br />
years / Tenure :<br />
Freehold<br />
Age of building :<br />
approximately 10<br />
years / Tenure :<br />
Freehold<br />
Age of building :<br />
approximately 10<br />
years / Tenure :<br />
Freehold<br />
Age of building :<br />
approximately<br />
2 years /<br />
Tenure :60-year<br />
leasehold expiring<br />
22.8.2057<br />
Land Area /<br />
(Built-Up Area)<br />
(sq. ft.)<br />
1,760 / (4,634)<br />
1,760 / (4,634)<br />
1,760 / (4,634)<br />
1,760 / (4,634)<br />
1,760 / (4,634)<br />
21,427 / (8,626)<br />
Net Book<br />
Value As At<br />
31.12.2009<br />
455,814.85<br />
672,000<br />
1,158,204.38<br />
1,140,000<br />
998,619.99<br />
804,685.89
LIST OF PROPERTIES OWNED BY THE GROUP<br />
107<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
As at 31 December 2009, a summary of the land and buildings owned by Tanjung Offshore Services Sdn Bhd (“TOS”),<br />
Tanjung Maintenance Services Sdn Bhd (“TMS”) and Tanjung Kapal Services Sdn Bhd (“TKS”) is set out below:-<br />
No<br />
3.<br />
4.<br />
5.<br />
Title Identifi cation /<br />
Postal Address<br />
PN 4115, Lot No. 3791<br />
(formerly known as HS(D)<br />
2671, PT 4200), Mukim<br />
of Teluk Kalung, District<br />
of Kemaman, State of<br />
Terengganu /<br />
Lot D2 Kawasan MIEL<br />
Teluk Kalung<br />
24007 Kemaman<br />
Terengganu Darul Iman<br />
PN 4125, Lot No 3801<br />
(Formerly known as HSD)<br />
2681, PT 4200),<br />
Mukim of Teluk Kalong<br />
District of Kemaman, State<br />
of Terengganu.<br />
Lot D12, Kawasan MIEL,<br />
Teluk Kalung,<br />
24007 Kemaman,<br />
Terengganu.<br />
GM 9928 Lot 13837<br />
(Formerly known as HS (M)<br />
12316 PT 13837)<br />
Mukim of Cukai, District<br />
of Kemaman, State of<br />
Terengganu.<br />
Lot 07730, Taman<br />
Greenlast, Jalan<br />
Penghiburan, Cukai,<br />
Kemaman, Terengganu<br />
Description And<br />
Existing Use /<br />
Ownership<br />
A factory lot used<br />
as the Group’s<br />
Kemaman<br />
Operation Centre<br />
providing complete<br />
maintenance<br />
services. /<br />
Owned by TOS<br />
A factory lot used<br />
as the Group’s<br />
Kemaman<br />
Operation Centre<br />
providing complete<br />
maintenance<br />
services. /<br />
Owned by TMS<br />
3-storey shopoffi ce<br />
used as offi ce/<br />
branch for marine<br />
operations in<br />
Kemaman.<br />
Owned by TKS<br />
Approximate<br />
Age of Building /<br />
Tenure / Date of<br />
Expiry of Lease<br />
Age of building :<br />
approximately<br />
1.5 years /<br />
Tenure : 60-year<br />
leasehold expiring<br />
22.8.2057<br />
Age of building :<br />
Aproximately 3 yrs<br />
10 mths.<br />
Tenure : 60 years<br />
leasehold<br />
Expiring :<br />
23.08.2057<br />
Age of building :<br />
1 year Tenure :<br />
Freehold<br />
Land Area /<br />
(Built-Up Area)<br />
(sq. ft.)<br />
16,017 /<br />
(8,626)<br />
20,355/<br />
(8,626)<br />
2,335<br />
(7,008)<br />
Net Book<br />
Value As At<br />
31.12.2009<br />
759,981.11<br />
680,680<br />
842,186.19
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
ANALYSIS OF SHAREHOLDINGS<br />
ANALYSIS OF SHAREHOLDINGS AS AT 20 APRIL 2010<br />
Authorised Share Capital - RM200,000,000.00<br />
Issued and Paid-up Share Capital - RM126,859,847.00<br />
Class of Shares - Ordinary Share of RM0.50 each<br />
Voting Rights - One vote per share<br />
ANALYSIS BY SIZE OF SHAREHOLDINGS AS AT 20 APRIL 2010<br />
NO.OF NO. OF<br />
SIZE OF SHAREHOLDINGS SHAREHOLDERS % SHARES %<br />
1 - 99 88 2.31 2,597 0.00<br />
100 - 1000 482 12.64 407,834 0.16<br />
1,001 - 10,000 2,428 63.69 11,378,988 4.53<br />
10,001 - 100,000 701 18.39 20,095,044 8.00<br />
100,001 - 12,562,123 110 2.89 78,298,310 31.16<br />
12,562,124 AND ABOVE 3 0.08 141,059,721 56.14<br />
T O T A L 3,812 100.00 251,242,494 100.00<br />
REGISTER OF SUBSTANTIAL SHAREHOLDERS AS AT 20 APRIL 2010 SHARES HELD PERCENTAGE<br />
1 HAJI OMAR BIN KHALID 97,074,322 38.64<br />
2 AMSEC NOMINEES (TEMPATAN) SDN BHD QUALIFIER: 31,823,810 12.67<br />
AMBANK (M) <strong>BERHAD</strong> FOR HAJI ABDULLAH BIN HASHIM<br />
4 LEMBAGA TABUNG HAJI 19,910,200 7.92<br />
TOTAL ISSUED SHARES AS AT 20/04/2010 : 253,719,694<br />
TREASURY SHARES AS PER ROD DATED 20/04/2010 : 2,477,200<br />
‘ADJUSTED’ CAPITAL AFTER NETTING TREASURY SHARES AS AT 20/04/2010 : 251,242,494<br />
108<br />
148,808,332 59.23
ANALYSIS OF SHAREHOLDINGS<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
LIST OF DIRECTORS’ HOLDINGS AS AT 20 APRIL 2010<br />
109<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
No. of Shares No. of Warrants A No. of Warrants B<br />
Name of Director Direct % Indirect % Direct % Indirect % Direct % Indirect %<br />
1 Datuk Wira Syed Ali 420,000 0.17 - - 89,599 0.25 - - - - - -<br />
Bin Tan Sri Syed Abbas<br />
Alhabshee<br />
2 Haji Omar Bin Khalid 97,074,322 38.64 100,800 0.04 18,435,270 51.37 17,919 0.05 17,031,737 41.56 16,800 0.05<br />
3 Haji Hamidon 47,000 0.01 - - - - - - - - - -<br />
Bin Md Khayon<br />
4 Dato’ Ab Wahab 128,100 0.05 - - - - - - - - - -<br />
Bin Haji Ibrahim<br />
5 Edwanee Cheah 946,724 0.38 - - 136,415 0.38 - - 227,354 0.55 - -<br />
Bin Abdullah<br />
6 George William 879,480 0.35 - - 156,799 0.44 - - 146,580 0.36 - -<br />
Warren Jr.<br />
7 Za’aba Bin Sedek 10,870 0.00 - - - - - - - - - -<br />
Total 99,506,496 39.60 100,800 0.04 18,818,083 52.44 17,919 0.05 17,405,671 42.47 16,800 0.05
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
ANALYSIS OF SHAREHOLDINGS<br />
THE 30 LARGEST SECURITIES ACCOUNT HOLDERS AS AT 20 APRIL 2010<br />
HOLDER NAME SHARES HELD PERCENTAGE<br />
1 AMSEC NOMINEES (TEMPATAN) SDN BHD 95,803,521 38.13<br />
QUALIFIER:AMBANK (M) <strong>BERHAD</strong> FOR OMAR BIN KHALID<br />
2 AMSEC NOMINEES (TEMPATAN) SDN BHD 25,346,000 10.09<br />
QUALIFIER:AMBANK (M) <strong>BERHAD</strong> FOR ABDULLAH BIN HASHIM<br />
3 LEMBAGA TABUNG HAJI 19,910,200 7.92<br />
4 ABDUL RASHID HUSSAIN 10,130,000 4.03<br />
5 CIMSEC NOMINEES (ASING) SDN BHD 7,560,000 3.01<br />
QUALIFIER:ALIZA ABDUL RAHIM NEE LUM KOK CHUN<br />
6 RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN 5,633,120 2.24<br />
7 AMANAHRAYA TRUSTEES <strong>BERHAD</strong> 4,973,376 1.98<br />
QUALIFIER:AMANAH SAHAM MALAYSIA<br />
8 ABDULLAH BIN HASHIM 4,794,410 1.91<br />
9 AMANAHRAYA TRUSTEES <strong>BERHAD</strong> 4,144,344 1.65<br />
QUALIFIER:PUBLIC ISLAMIC OPPORTUNITIES FUND<br />
10 MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN <strong>BERHAD</strong> 2,967,527 1.18<br />
QUALIFIER:GREAT EASTERN LIFE ASSURANCE (MALAYSIA) <strong>BERHAD</strong><br />
11 YANG KIM MOI 2,698,500 1.07<br />
12 KOPERASI PERMODALAN FELDA <strong>BERHAD</strong> 2,500,000 1.00<br />
13 MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN <strong>BERHAD</strong> 2,139,504 0.85<br />
QUALIFIER:GREAT EASTERN LIFE ASSURANCE (MALAYSIA) <strong>BERHAD</strong><br />
14 EB NOMINEES (TEMPATAN) SENDIRIAN <strong>BERHAD</strong> 1,863,400 0.74<br />
QUALIFIER:PLEDGED SECURITIES ACCOUNT<br />
FOR ABDULLAH BIN HASHIM<br />
15 SYED ELYAS BIN SYED ABDILLAH 1,245,800 0.50<br />
16 MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN <strong>BERHAD</strong> 1,116,492 0.44<br />
QUALIFIER:GREAT EASTERN LIFE ASSURANCE<br />
(MALAYSIA) <strong>BERHAD</strong><br />
17 WARREN STEPHEN ORLANDO JR 1,003,200 0.40<br />
110
ANALYSIS OF SHAREHOLDINGS<br />
THE 30 LARGEST SECURITIES ACCOUNT HOLDERS AS AT 20 APRIL 2010 (continued)<br />
111<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
HOLDER NAME SHARES HELD PERCENTAGE<br />
18 EDWANEE CHEAH BIN ABDULLAH 946,724 0.38<br />
19 AMANAHRAYA TRUSTEES <strong>BERHAD</strong> 940,440 0.37<br />
QUALIFIER:PB ISLAMIC ASIA STRATEGIC SECTOR FUND<br />
20 OMAR BIN KHALID 886,901 0.35<br />
21 GEORGE WILLIAM WARREN JR 879,480 0.35<br />
22 SYED ISMAIL BIN SYED ABDILLAH 814,200 0.32<br />
23 NOORSIAH BINTI MOHAMED SHAMSUDDIN 732,000 0.29<br />
24 MAYBAN NOMINEES (TEMPATAN) SDN BHD 711,000 0.28<br />
QUALIFIER:AVENUE INVEST <strong>BERHAD</strong> FOR LAM SOO HENG @<br />
LAM SEO HAN<br />
25 SYED HASSAN BIN SYED ALWI 578,000 0.23<br />
26 AMANAHRAYA TRUSTEES <strong>BERHAD</strong> 569,480 0.23<br />
QUALIFIER:PUBLIC ISLAMIC ASIA BALANCED FUND<br />
27 HUI SIEW MAY 531,972 0.21<br />
28 MOHD SHAZLI BIN MOHAMED 501,640 0.20<br />
29 CIMB TRUSTEE <strong>BERHAD</strong> 500,000 0.20<br />
QUALIFIER:AMANAH SAHAM DARUL IMAN<br />
30 LOH KIAN CHONG 460,000 0.18<br />
TOTAL ISSUED SHARES AS AT 20/04/2010 : 253,719,694<br />
TREASURY SHARES AS PER ROD DATED 20/04/2010 : 2,477,200<br />
‘ADJUSTED’ CAPITAL AFTER NETTING TREASURY SHARES AS AT 20/04/2010 : 251,242,494<br />
202,881,231 80.75
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
ANALYSIS OF WARRANTHOLDINGS (WARRANT A 2006/2016)<br />
ANALYSIS BY SIZE OF WARRANTHOLDINGS (WARRANT A 2006/2016) AS AT 20 APRIL 2010<br />
NO.OF NO. OF<br />
SIZE OF WARRANTHOLDINGS WARRANTHOLDERS % WARRANT %<br />
1 - 99 45 8.75 2,261 0.01<br />
100 - 1000 114 22.18 62,330 0.17<br />
1,001 - 10,000 243 47.28 1,078,858 3.01<br />
10,001 - 100,000 96 18.68 2,732,823 7.62<br />
100,001 - 1,794,201 13 2.53 5,743,324 16.01<br />
1,794,202 AND ABOVE 3 0.58 26,264,457 73.19<br />
T O T A L 514 100.00 35,884,053 100.00<br />
WARRANTHOLDINGS WITH 5.0 % AND ABOVE<br />
HOLDER NAME SHARES HELD PERCENTAGE<br />
1 OMAR BIN KHALID 18,435,270 51.37<br />
2 ABDULLAH BIN HASHIM 5,909,508 16.47<br />
3 CIMSEC NOMINEES (ASING) SDN BHD 1,919,679 5.35<br />
QUALIFIER:ALIZA ABDUL RAHIM NEE LUM KOK CHUN<br />
112<br />
26,264,457 73.19
113<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
ANALYSIS OF WARRANTHOLDINGS (WARRANT A 2006/2016)<br />
THE 30 LARGEST WARRANTHOLDERS AS AT 20 APRIL 2010<br />
HOLDER NAME WARRANT HELD PERCENTAGE<br />
1 OMAR BIN KHALID 18,435,270 51.37<br />
2 ABDULLAH BIN HASHIM 5,909,508 16.47<br />
3 CIMSEC NOMINEES (ASING) SDN BHD 1,919,679 5.35<br />
QUALIFIER:ALIZA ABDUL RAHIM NEE LUM KOK CHUN<br />
4 ABDUL RASHID HUSSAIN 1,791,999 4.99<br />
5 RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN 999,039 2.78<br />
6 CIMSEC NOMINEES (TEMPATAN) SDN BHD 800,000 2.23<br />
QUALIFIER:CIMB BANK FOR LIM CHA BOH @ LIM LAI YOKE<br />
7 SYED ELYAS BIN SYED ABDILLAH 750,399 2.09<br />
8 CIMSEC NOMINEES (TEMPATAN) SDN BHD 308,116 0.86<br />
QUALIFIER:CIMB BANK FOR TEH SWEE HENG<br />
9 SYED HASSAN BIN SYED ALWI 179,199 0.50<br />
10 NG KEK CHONG 159,999 0.45<br />
11 GEORGE WILLIAM WARREN JR 156,799 0.44<br />
12 PEH AH CHUAN 140,009 0.39<br />
13 EDWANEE CHEAH BIN ABDULLAH 136,415 0.38<br />
14 CHEN BOON HEOW 111,999 0.31<br />
15 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 109,000 0.30<br />
QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR LEE POH KWEE<br />
16 MOHD SHAZLI BIN MOHAMED 100,351 0.28<br />
17 MAYBAN NOMINEES (TEMPATAN) SDN BHD 100,000 0.28<br />
QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR LIM GIM LEONG<br />
18 LEE ME LAY 98,858 0.28<br />
19 MAYBAN NOMINEES (TEMPATAN) SDN BHD 95,000 0.26<br />
QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR CH’NG GIM CHEW<br />
20 LIM CHA BOH @ LIM LAI YOKE 91,009 0.25<br />
21 NGIENG PING KWONG 90,000 0.25
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
ANALYSIS OF WARRANTHOLDINGS (WARRANT A 2006/2016)<br />
THE 30 LARGEST WARRANTHOLDERS AS AT 20 APRIL 2010 (continued)<br />
HOLDER NAME WARRANT HELD PERCENTAGE<br />
22 SYED ALI BIN ABBAS ALHABSHEE 89,599 0.25<br />
23 JENNY LIM SIEW KIAN 80,000 0.22<br />
24 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 74,000 0.21<br />
QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR TAN KENG AIK<br />
25 EVELYN LAU SIE JIONG 57,663 0.16<br />
26 CHEN KIM FAH 50,866 0.14<br />
27 ECML NOMINEES (ASING) SDN. BHD. 50,559 0.14<br />
QUALIFIER:ALIZA ABDUL RAHIM NEE LUM KOK CHUN<br />
28 PUBLIC NOMINEES (TEMPATAN) SDN BHD 49,000 0.14<br />
QUALIFIER:PLEDGED SECURITIES ACCOUNT FOR LIM GIM LEONG<br />
29 YEO SIANG LIAN 46,400 0.13<br />
30 CHIN HOOI LING 45,000 0.13<br />
114<br />
33,025,735 92.03
115<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
ANALYSIS OF WARRANTHOLDINGS (WARRANT B 2008/2013)<br />
ANALYSIS BY SIZE OF WARRANTHOLDINGS AS AT 20 APRIL 2010<br />
NO.OF NO. OF<br />
SIZE OF WARRANTHOLDINGS WARRANTHOLDERS % WARRANT %<br />
1 - 99 20 2.406 437 0.001<br />
100 - 1000 283 34.055 161,998 0.395<br />
1,001 - 10,000 302 36.341 1,428,362 3.485<br />
10,001 - 100,000 192 23.104 6,791,126 16.572<br />
100,001 - 2,048,895 32 3.850 11,100,034 27.087<br />
2,048,896 AND ABOVE 2 0.240 21,495,972 52.457<br />
T O T A L 831 100.000 40,977,929 100.000<br />
WARRANTHOLDERS WITH HOLDINGS 5.0 % AND ABOVE<br />
HOLDER NAME SHARES HELD PERCENTAGE<br />
1 OMAR BIN KHALID 17,031,737 41.56<br />
2 ABDULLAH BIN HASHIM 4,464,235 10.894
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
ANALYSIS OF WARRANTHOLDINGS (WARRANT B 2008/2013)<br />
THE 30 LARGEST WARRANTHOLDERS AS AT 20 APRIL 2010<br />
HOLDER NAME WARRANT HELD PERCENTAGE<br />
1 OMAR BIN KHALID 17,031,737 41.56<br />
2 ABDULLAH BIN HASHIM 4,464,235 10.89<br />
3 ABDUL RASHID HUSSAIN 1,680,000 4.09<br />
4 CIMSEC NOMINEES (ASING) SDN BHD 1,260,000 3.07<br />
ALIZA ABDUL RAHIM NEE LUM KOK CHUN<br />
5 LIM SERN PAUL 914,500 2.23<br />
6 RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN 890,320 2.17<br />
7 LIM CHA BOH @ LIM LAI YOKE 627,800 1.53<br />
8 MAYBAN NOMINEES (TEMPATAN) SDN BHD 530,600 1.29<br />
PLEDGED SECURITIES ACCOUNT FOR KEK LIAN LYE<br />
9 CIMSEC NOMINEES (TEMPATAN) SDN BHD 500,000 1.22<br />
CIMB BANK FOR LIM SERN PAUL<br />
10 CHAN HUASHENG 441,100 1.07<br />
11 EE LI CHEN 378,000 0.92<br />
12 EB NOMINEES (TEMPATAN) SENDIRIAN <strong>BERHAD</strong> 311,400 0.75<br />
PLEDGED SECURITIES ACCOUNT FOR ABDULLAH BIN HASHIM<br />
13 HENG POH SUAN 296,500 0.72<br />
14 MAYBAN NOMINEES (TEMPATAN) SDN BHD 291,600 0.71<br />
PLEDGED SECURITIES ACCOUNT FOR CHONG SOO LIM<br />
15 TANG BOON HENG 278,500 0.67<br />
16 EDWANEE CHEAH BIN ABDULLAH 227,354 0.55<br />
17 PUBLIC NOMINEES (TEMPATAN) SDN BHD 192,000 0.46<br />
PLEDGED SECURITIES ACCOUNT FOR SENSION CORPORATION SDN BHD<br />
18 CHAN HING 169,000 0.41<br />
19 LEE YEW HIN 168,700 0.41<br />
20 WARREN STEPHEN ORLANDO JR 167,200 0.40<br />
116
117<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
ANNUAL REPORT 2009<br />
ANALYSIS OF WARRANTHOLDINGS (WARRANT B 2008/2013)<br />
THE 30 LARGEST WARRANTHOLDERS AS AT 20 APRIL 2010 (continued)<br />
HOLDER NAME WARRANT HELD PERCENTAGE<br />
21 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 164,300 0.40<br />
PLEDGED SECURITIES ACCOUNT FOR NG KONG TECK<br />
22 MOEY BEE KIN 162,400 0.39<br />
23 GEORGE WILLIAM WARREN JR 146,580 0.35<br />
24 OSK NOMINEES (ASING) SDN <strong>BERHAD</strong> 140,000 0.34<br />
DMG & PARTNERS SECURITIES PTE LTD FOR GAN HEE ANN<br />
25 LIM KONG YOW 135,000 0.32<br />
26 TOH BOK PIEW 127,000 0.30<br />
27 SYED ELYAS BIN SYED ABDILLAH 125,640 0.30<br />
28 MAYBAN NOMINEES (TEMPATAN) SDN BHD 123,700 0.30<br />
PLEDGED SECURITIES ACCOUNT FOR LIM GIM LEONG<br />
29 NOORSIAH BINTI MOHAMED SHAMSUDDIN 122,000 0.29<br />
30 LIEW YOKE LING 113,700 0.27<br />
32,180,866 78.53
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I/We ................................................................................................................................................................................<br />
NRIC No./Company No.................................................................. of ..................................................................................<br />
........................................................................................................ being a Member/Members of Tanjung Offshore Berhad<br />
(“the Company”), hereby appoint ..........................................................................................................................................<br />
of ............................................................................................................................................................................ or failing<br />
him/her ....................................................................................... of ....................................................................................<br />
..........................................................................................as my/our proxy to vote for me/us and on my/our behalf at the<br />
Sixth Annual General Meeting of the Company to be held at Kenanga Room, Kelab Darul Ehsan, Taman Tun Abdul Razak,<br />
Jalan Kerja Air Lama, 68000 Ampang Jaya, Selangor Darul Ehsan on Monday, 31 May 2010 at 10:00 a.m. and at any<br />
adjournment thereof in the manner as indicated below:-<br />
NO.<br />
1.<br />
2.<br />
3.<br />
4.<br />
5.<br />
6.<br />
(Please indicate with an “X” in the spaces provided on how you wish your vote to be cast. In the absence of specifi c direction,<br />
your proxy will vote or abstain as he / she thinks fi t)<br />
Signed this day of 2010.<br />
....................................................................<br />
Signature of Shareholder or Common Seal<br />
Notes:-<br />
RESOLUTION<br />
Resolution No. 1<br />
Resolution No. 2<br />
Resolution No. 3<br />
Resolution No. 4<br />
Resolution No. 5<br />
Resolution No. 6<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong> (662315-U)<br />
(Incorporated in Malaysia under the Companies Act, 1965)<br />
FORM OF PROXY<br />
FOR AGAINST<br />
No. of Shares Held<br />
1. A member entitled to attend and vote at the meeting shall not be entitled to appoint more than two (2) proxies to attend and vote in<br />
his/her stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act,<br />
1965 shall not apply.<br />
2. Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifi es the proportions of his/her<br />
shareholding to be represented by each proxy.<br />
3. Where a Member is an authorised nominee as defi ned under the Securities Industry (Central Depositories) Act, 1991, it may appoint<br />
at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the<br />
said Securities Account.<br />
4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing<br />
or, if the appointer is a corporation, either under its Common Seal or under the hand of its offi cer or attorney duly authorised.<br />
5. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially certifi ed<br />
copy thereof, must be deposited at the Registered Offi ce of the Company at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26,<br />
47301 Petaling Jaya, Selangor Darul Ehsan not less than forty eight hours (48) hours before the time appointed for holding the Third<br />
Annual General Meeting or any adjournment thereof.
FOLD THIS FLAP FOR SEALING<br />
FOLD HERE<br />
FOLD HERE<br />
<strong>TANJUNG</strong> <strong>OFFSHORE</strong> <strong>BERHAD</strong><br />
(Company No.: 662315-U)<br />
312, 3rd Floor, Block C<br />
Kelana Square, 17 Jalan SS7/26<br />
47301 Petaling Jaya<br />
Selangor Darul Ehsan<br />
STAMP
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