ar2012

Annual Report

2012

IEV HOLDINGS LIMITED

This annual report has been prepared by the Company and its contents have been reviewed by the Company’s sponsor (“Sponsor”), Canaccord Genuity Singapore Pte. Ltd. for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (“SGX-ST”). Canaccord Genuity Singapore Pte. Ltd. has not independently verified the contents of this annual report. This annual report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this annual report, including the correctness of any of the statements or opinions made, or reports contained in this annual report.

The contact person for the Sponsor is Mr. Chia Beng Kwan, Director, Canaccord Genuity Singapore Pte. Ltd., at 77 Robinson Road #21-02 Singapore 068896, telephone (65) 6854-6160

IEV HOLDINGS LIMITED(Company Registration No.: 201117734D)

(Incorporated in the Republic of Singapore on 26 July 2011)

PRINCIPAL OFFICESuite 2.01, 2nd Floor

Dataran HamodalBlock B, Lot 4 Jalan 13/4

Petaling Jaya 46200Selangor Darul Ehsan, Malaysia

(with effect from 15 April 2013)Level 22 PJX-HM Shah Tower

No. 16A Persiaran Barat Petaling Jaya 46050

Selangor Darul Ehsan, Malaysia

Tel : +6 (03) 7960 9109 Fax : +6 (03) 7960 9108www.iev-group.com

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nnual Report 2012

making waves in the industry

OUR VISION

““we champion innovative solutionsto make energy affordable and

accessible to all

001IEV Holdings Limited | annual report 2012

002 - 005 Corporate Profile | 006 - 007 Corporate Information | 008 Corporate Structure

009 Corporate Milestone | 010 Board of Directors | 011 - 012 Directors’ Profile

013 Key Management | 014 Financial Highlights | 015 - 016 Chairman’s Statement

017 - 020 President & CEO’s Statement | 021 - 025 Operations and Financial Review

026 - 036 Report on Corporate Governance | 038 - 109 Financial Statements

110 - 111 Statistics of Shareholdings | 112 - 114 Notice of Annual General Meeting | Proxy Form

CONTENTS

IEV Holdings Limited | annual report 2012002

““

CORPORATE PROFILE


IEV Holdings Limited and its subsidiaries and associates (“IEV”) currently operate in the Offshore Engineering Sector and Petroleum Sector throughout the Asian region. The Group offers both specialist engineering technologies and turnkey services to construct, repair, maintain and remove offshore oil & gas production facilities. In the Petroleum Sector, the Group is also involved in the exploration and production (“E&P”) of hydrocarbons and distribution of natural gas via mobile natural gas (“MNG”) supply chains to customers without gas pipeline access.

25 YEARS IN THE OIL & GAS INDUSTRY

IEV celebrated its 25th anniversary in 2012. Its history started with the invention of the “ocean-powered” marine growth control (“MGC”) technology by its founder and current President & CEO, Christopher Do. In the next 25 years, the Group established its headquarters and manufacturing base in Malaysia, and its business grew from a single product line into a provider of offshore engineering and turnkey solutions to the oil and gas industry through its regional network across Asia.

In 2005, the Group launched its first business in the Petroleum Sector and developed two MNG supply chains in Indonesia and Vietnam. In 2012, the Group moved a step closer to becoming an integrated energy provider with the first award of a cooperation agreement (“KSO”) by PERTAMINA to carry out E&P activities in West Java, Indonesia.

Innovation is the cornerstone of the development of IEV’s business strategies


OFFSHORE ENGINEERING SECTOR

IEV provides a range of highly specialised technologies under its Integrated Engineering Solutions (“IES”) Division to address the engineering challenges of installing and operating subsea facilities of upstream assets. Such solutions support the installation of offshore platforms and pipelines, enhance and maintain their structural integrity, and decommission of ageing structures. The core competencies of the Group are in the fields of marine growth control, cold cutting, pile grouting, free span correction, concrete mattress and sleepers, installation aids, and decommissioning studies. Concurrently, as a main contractor, IEV offers solutions that address the “end-of-life” engineering needs through its “3-Re” value proposition, Rejuvenate, Remove and Reuse. These niche turnkey services help to extend life of ageing structures, decommission of assets that are no longer in service, and supply refurbished structures for marginal field development to reduce both project time and cost. The Group is also capable of managing large transportation and installation contracts for both shallow and deep water facilities.

Currently, IEV operates the Offshore Engineering businesses in three main operating centres in Malaysia, Indonesia and Vietnam. The Group also established a network of agents to distribute its products and services in India, China, Australia, America, Africa and the Middle East.

““

CORPORATE PROFILE

Jacket & PipelineInstallation Solutions

(JPIS) Structural Integrity

Solutions(SIS)

Life Extension Solutions

(LES) Inspection, Repair &

Maintenance Solutions

(IRMS)

Decommissioning Solutions

(DS)

Rejuvenate, Remove &

Reuse

Integrated Engineering Solutions (“IES”)

OFFSHORE ENGINEERING SECTOR (“OES”)

Turnkey Solutions - 3-Re

In the last 25 years IEV’s business grew from a single product line into a comprehensive range of offshore engineering and turnkey solutions



PETROLEUM SECTOR

The Group’s entry to E&P through the Pabuaran KSO in Indonesia with PERTAMINA is a significant step in implementing its strategic objective to operate as an integrated energy provider. The Group plans to produce natural gas from stranded gas wells and monetise it through Compressed Natural Gas (“CNG”) or small scale Liquefied Natural Gas (“LNG”) supply chains to supply energy to all sectors of the economy and help local governments implement their fuel switching programs and reduce fuel subsidies. IEV’s strategy in this area focuses on the utilisation of natural gas to replace oil as the primary source of fuel and the supply of mobile natural gas will help to accelerate the domestic distribution of natural gas, especially in areas where there is a shortage of pipeline network.

IEV currently operates a 4.5 million standard cubic feet per day (“mmscfd”) CNG supply chain in West Java and is the founder and major investor in CNG Vietnam Joint Stock Company, a public listed company on the Ho Chi Minh Stock Exchange, which operates a 7.5 mmscfd CNG supply chain in Phu My I Industrial Estate, South Vietnam. Both of these plants supply CNG to industrial customers within a 200km radius without pipeline access who are using CNG to replace more expensive fuels such as Liquefied Petroleum Gas or Marine Fuel Oil.

““

CORPORATE PROFILE

BUSINESS SECTORS

Offshore Engineering Sector(“OES”)

Integrated Engineering

Solutions (“IES”)

MobileNatural Gas

(“MNG”)

TurnkeySolutions

3-Re

Exploration & Production

(“E&P”)

Biomass

Petroleum Sector Renewable Energy Sector

The Pabuaran KSO is a significant step for IEV in implementing its strategic objective to operate as an integrated energy provider



“ “IEV’s entry into Renewable Energy Sector through biomass will enable the Group to convert agricultural waste into affordable energy

CORPORATE PROFILE

TODAY & BEYOND

IEV is going through a rapid growth curve in the past two years, transforming itself from a specialist engineering technology provider to a niche turnkey contractor in the Offshore Engineering Sector. While continuing to offer engineering technologies through IES, the Group is also building its capabilities in Engineering, Procurement, Construction, Installation and Commissioning (“EPCIC”) services to implement its 3-Re value proposition and continue on its focus on the “end-of-life” market segment. Platform reuse is now a proven concept in Asia and its application should be accelerated for marginal field developments. Many ageing facilities which are no longer useful will require decommissioning and the Group is well positioned to benefit from this new market segment.

IEV is establishing its Centre of Excellence in the Petroleum Sector in Indonesia, where it will merge the E&P and MNG business to optimise the deployment of funds and assets. Piped gas has become very expensive in Indonesia in recent years and the price of natural gas continues to increase as LNG is being imported to meet gas demand in Java, Indonesia. As a result, the price of CNG has also increased significantly in recent years. The Group will continue to look for strategic gas fields where its MNG supply chain can bring stranded gas to end users to save energy costs. IEV will also continue to negotiate and secure gas supply agreements from operators of onshore gas wells to further develop its MNG business.

In 2013, IEV is set to launch its Renewable Energy Sector through its first investment into a biomass plant in Vietnam, where it plans to produce high quality pellets from rice husk and supply them to international customers for power generation and industrial use. Biomass will complement petroleum energy and enable the Group to deliver energy to new markets and tap into the huge biomass potential from agricultural waste in Asia.

Fuelled by the three pillars of growth, Offshore Engineering, Petroleum and Renewable Energy, and the Group’s experience and unique capabilities in implementing blue-ocean strategies across Asia, IEV expects to continue on its expansion efforts sustainably. As a regional energy company, the Group strives to make valuable contribution to the oil and gas industry, support local government commitment to go green and reduce fuel subsidies by developing and operating natural gas and renewable energy supply chains.


TAN SRI DATO’ HARI N. GOVINDASAMYChairman and Non-Executive Director

CHRISTOPHER NGHIA DOPresident and Chief Executive Officer

REMUNERATION COMMITTEE

KESAVAN NAIRChairman

TAN SRI DATO’ HARI N. GOVINDASAMY

NG WENG SUI HARRY

CORPORATE INFORMATION

JOANNE BRUCEExecutive Director

VINH QUANG LEExecutive Director

AUDIT COMMITTEE

NG WENG SUI HARRYChairman


KESAVAN NAIR

NOMINATING COMMITTEE

KESAVAN NAIRChairman


NG WENG SUI HARRY

BOARD OF DIRECTORS

COMPANY SECRETARY

TEO MENG KEONG, ACIS

TAN SIEW HUA, ACIS

NG WENG SUI HARRYLead Independent Director

KESAVAN NAIRIndependent Director



Corporate Information

COMPANY REGISTRATION NUMBER 201117734D

REGISTERED OFFICE

80 Robinson Road #02-00 Singapore 068898 T: +65 6236 3333 F: +65 6236 4399

SHARE REGISTRAR AND SHARE TRANSFER OFFICE

Boardroom Corporate &Advisory Services Pte. Ltd.50 Raffles Place#32-01 Singapore Land TowerSingapore 048623

PRINCIPAL PLACE OF BUSINESS

Suite 2.01, 2nd FloorDataran HamodalBlock B, Lot 4 Jalan 13/4 Petaling Jaya 46200Selangor Darul Ehsan, Malaysia (with effect from 15 April 2013)Level 22 PJX-HM Shah TowerNo. 16A Persiaran Barat Petaling Jaya 46050Selangor Darul Ehsan, Malaysia

CONTINUING SPONSOR

Canaccord Genuity Singapore Pte. Ltd. 77 Robinson Road #21-02 Singapore 068896

PRINCIPAL BANKERSAmBank (M) BerhadLevel 24, Bangunan AmBank GroupNo. 55, Jalan Raja Chulan50200 Kuala Lumpur, Malaysia

The Hongkong and Shanghai Banking Corporation Limited21 Collyer Quay #06-01HSBC BuildingSingapore 049320


AUDITOR AND REPORTING ACCOUNTANT

Foo Kon Tan Grant Thornton LLPCertified Public Accountants47 Hill Street #05-01Singapore Chinese Chamberof Commerce & Industry BuildingSingapore 179365Partner-In-Charge: Yeo Boon Chye(Appointed on 6 October 2011)


CORPORATE STRUCTURE

* Associate Companies

PT IEV PABUARAN KSO(INDONESIA)

95%

IEV ENERGYINVESTMENT PTE LTD

(SINGAPORE)100%

IEV ENGINEERING SDN. BHD.

100%

IEV (MALAYSIA)SDN. BHD.*

49%

IEV ENERGY SDN. BHD.

100%

IEV MANUFACTURING SDN. BHD.

100%

IEV OIL AND GAS TECHNOLOGIES

CO.LTD (VIETNAM)

100%

PT IEV INDONESIA (INDONESIA)

95%

IEV INTERNATIONAL LIMITED

(HONG KONG)100%

PT IEV GAS(INDONESIA)

95%

CNG VIETNAMJOINT STOCK COMPANY*

(VIETNAM)20.16%

13% | 7.16%

IEV INTERNATIONAL PTY LTD (AUSTRALIA)

100%

IEV HOLDINGS LIMITED(SINGAPORE)

IEV GROUP SDN. BHD.(MALAYSIA)


CORPORATE MILESTONE

04 Jan 2012PT IEV Gas secured a further 24-month renewal of Gas Sales And Purchase Agreement with PT Indofood.

17 Feb 2012PT IEV Gas clinches its first oil and gas exploration and production project with the award of Oil & Gas Agreement by Indonesia’s Pertamina EP, an upstream sector subsidiary of PT. Pertamina (Persero), for the Pabuaran Block through the Kerjasama Operasi, also known as the “Operation Cooperation” program.

11 Apr 2012IEV received another 45% cash final dividend from associated company, CNG Vietnam Joint Stock Company for FY2011.

23 Apr 2012IEV held its first Annual General Meeting.

24 Apr 2012PT IEV Gas secured a two year major CNG supply contract from PT Unilever Indonesia Tbk to supply compressed natural gas of more than 350,000 million metric British thermal units (“mmbtu”).

09 May 2012IEV Malaysia completed its first turnkey decommissioning project of two structures worth RM27.0 million for Petronas Carigali ahead of schedule.

23 May 2012IEV Energy Investment Pte. Limited increased its issued and paid-up share capital from SGD100.00 to SGD800,000, comprising 800,000 ordinary shares.

18 Jun 2012IEV Malaysia completed fabrication and load-out of refurbished platform within six months from award.

13 Aug 2012IEV Energy Investment Pte. Limited increased its issued and paid-up share capital from SGD800,000 to SGD2,600,000, comprising 2,600,000 ordinary shares.

15 Aug 2012Incorporation of a subsidiary: PT. IEV Pabuaran KSO with an authorised share capital of IDR24,000,000,000 comprising 24,000 shares of IDR1,000,000 each.

03 Oct 2012IEV received 15% interim cash dividend from associated company, CNG Vietnam Joint Stock Company for FY2012.

09 Oct 2012IEV awarded Runner-Up in the ‘Most Transparent Company’ - Catalist Category at the SIAS 13th Investors Choice Awards.

15 Oct 2012IEV Malaysia Energy and Gas Malaysia signed Memorandum of Understanding to conduct feasibility study on liquefied natural gas distribution in Malaysia.

19 Dec 2012IEV Malaysia received Letter of Award to transport and install an integrated Tension Leg Platform from Sabah Shell Petroleum Company Limited in the Malikai fields offshore Sabah, Malaysia, which is valued at around USD100 million. The project commenced on 16 December and is expected to be executed over a period of three years.


Standing from left to right :Vinh Quang Le Kesavan Nair

Seated from left to right :Christopher Nghia Do Tan Sri Dato’ Hari N. Govindasamy Ng Weng Sui HarryJoanne Bruce

BOARDOF DIRECTORS



TAN SRI DATO’ HARI N. GOVINDASAMY Chairman and Non-Executive Director

Tan Sri Dato’ Hari was appointed Chairman of the Board on 29 September 2011. He has been a non-executive director of IEV Group (Malaysia) since 2004. He is a businessman by profession and is a member of the Institute of Engineers, Malaysia and a registered professional engineer with the Board of Engineers, Malaysia. Tan Sri Dato’ Hari is the deputy chairman of Emrail Sdn. Bhd. and is also a non-executive director of several public listed companies in Malaysia including Tenaga Nasional Berhad, S.P. Setia Berhad and Puncak Niaga Holdings Berhad. He also holds non-executive directorships on the Board of several private companies.

Tan Sri Dato’ Hari obtained a Bachelor Degree in Electrical & Electronic Engineering from the University of Northumbria, England in 1977.

CHRISTOPHER NGHIA DO President and Chief Executive Officer

Christopher Do is the Group’s founder, President and Chief Executive Officer (“CEO”) and was appointed to the Board on 26 July 2011. He established the business in 1986 to commercialise his invention, the “ocean-powered” Marine Growth Control (“MGC”) technology. With over 25 years of experience, he is responsible for the overall business performance, growth strategy and corporate planning of the Group. He is also actively involved in negotiating and acquiring new products and services, and is pivotal in the establishment of the Group’s strategic alliances with its business partners and principals.

Christopher Do spearheaded the transformation of the Group from a specialist subsea technology provider into a niche turnkey contractor and from a mobile natural gas supplier into an integrated energy provider with upstream, midstream and downstream activities in the natural gas business sector.

Christopher Do is the founder and chairman of the Sunshine Scholarship Foundation, a charitable organisation in Vietnam with a mission to help eradicate poverty through education.

Christopher Do graduated from the University of New South Wales, Australia in 1984 with a Bachelor Degree in Mechanical Engineering (First Class Honours).

JOANNE BRUCEExecutive Director Corporate Affairs and Compliance

Joanne Bruce was appointed to the Board on 29 September 2011 and has been with the Group as a senior executive member since 1988. As the Executive Director of Corporate Affairs and Compliance, she is currently responsible for all corporate finance, compliance and legal matters, including corporate negotiations and oversees the Group’s company secretarial matters. She also assists in the establishment of branch offices and subsidiaries and provides support in administrative and corporate matters of the Group. Prior to joining the Group, Joanne Bruce was the Dean of the New South Wales College of Natural Therapies.

Joanne Bruce graduated with a Diploma in Naturopathy and a Diploma of Botanic Medicine from the New South Wales College of Natural Therapies, Australia in 1985.

DIRECTORS’ PROFILE


DIRECTORS’ PROFILE

VINH QUANG LEExecutive Director Vice President of Sales & Marketing Country Head – Vietnam

Vinh Quang Le was appointed to the Board on 29 September 2011 and has been with the Group since 2007. He is currently in charge of sales and marketing activities of the Group. In this capacity, he is responsible to ensure that the revenues and profit objectives of the Group are met. He is also the country head for Vietnam, managing the business activities, formulating and monitoring the budget and direction of the Group’s Vietnam subsidiary. Prior to this appointment, Vinh Quang Le was also the managing director of CNG Vietnam until October 2008 where he oversaw the design and implementation of the first CNG Mother Station and three other Daughter Stations in Vietnam. Before joining the Group, Vinh Quang Le was the regional director at Harris Corporation, Microwave Communication Division.

Vinh Quang Le obtained a Bachelor of Science degree in Chemistry from Saigon University, South Vietnam in 1975 and graduated with a Bachelor of Science with Honours in Business Administration and International Business from the College of Notre Dame, Belmont, California, USA in 1996.

NG WENG SUI HARRYLead Independent Director

Harry Ng is the Lead Independent Director and was appointed to the Board on 26 July 2011. He is the Chairman of the Audit Committee and a member of the Nominating Committee and Remuneration Committee. Harry Ng is currently the Executive Director of HLM (International) Corporate Services Pte Ltd which provides business consultancy and corporate services. He has more than 30 years of experience in accountancy, finance and audit. He is an independent director of Artivision Technologies Ltd, Q&M Dental Group (Singapore) Limited and Oxley Holdings Limited, listed on the SGX-ST. He is also the chairman of the audit committee of Artivision Technologies Ltd and Oxley Holdings Limited. Harry Ng was the chief financial officer and executive director of Achieva Limited from 2008 to 2010. From 2004 to 2008 he was the chief financial officer of Sunmoon Food Company Limited. From 1999 to 2004, he was the chief financial officer of Eltech Electronics Limited (now known as GES Investment Pte Ltd) and head of group internal audit of GES International Limited. Both Eltech Electronics Limited and GES International Limited were previously listed on the SGX-ST.

Harry Ng is a Fellow member of the Institute of Certified Public Accountants of Singapore and a Fellow of the Association of Chartered Certified Accountants (UK). He obtained a Master of Business Administration (General Business Administration) from The University of Hull, UK.

KESAVAN NAIRIndependent Director

Kesavan Nair is the Independent Director and was appointed to the Board on 29 September 2011. He is a member of the Audit Committee, and the Chairman of the Nominating Committee and Remuneration Committee. He is a director of Genesis Law Corporation. He was previously a partner at David Lim & Partners from 2003 to 2008, and Harry Elias Partnership from 2000 to 2003. He was also a partner at M.P.D. Nair & Co. from 1992 to 2000. Kesavan Nair is an independent director of SGX-Catalist companies Kitchen Culture Holdings Ltd. and Elektromotive Group Ltd.

Kesavan Nair is a member of the Law Society of Singapore, the Singapore Academy of Law, the Honourable Society of The Middle Temple, the Singapore Institute of Arbitration, the Criminal Legal Aid Scheme and the Association of Criminal Lawyers in Singapore. He graduated from the University College Wales, Aberystwyth with a Bachelor of Laws (Honours) in 1988.


Juzer NomanbhoyManaging Director - IEV MalaysiaVice President - Strategic Planning and Business Development

Juzer Nomanbhoy is the Managing Director (IEV Malaysia) and Vice President of Strategic Planning and Business Development. He has been with the Group since 1992 and is responsible for the development of the offshore engineering services. He also oversees the day-to-day operations of the Group’s Malaysia operations and is responsible for the strategic planning and business development of the Group’s business. Before joining the Group in 1992, he was an employee at Dowell Schlumberger Asia Pte Ltd for a period of six years, where he was responsible for the day-to-day running of the base for the provision of well cementing services to various national oil companies in Mexico, Brunei, Korea, Japan and Taiwan. Before his stint with Dowell Schlumberger Asia Pte Ltd, he spent one year as an engineer on the Malaysia International Shipping Corporation vessels.

Juzer Nomanbhoy graduated with a Bachelor Degree with Honours from the University of New South Wales, Australia in Mechanical Engineering in 1982.

Justin YongVice President - Mobile Natural Gas

Justin Yong is the Vice President of the Group’s Mobile Natural Gas Sector. He has been with the Group since 2002 and has successfully spearheaded the development of the mobile natural gas sector in Indonesia since its inception in 2005. After serving six years as General Manager of PT IEV Gas, he returned to Malaysia to undertake the position of Vice President of Operations in the Offshore Engineering Sector in 2010. In January 2012, he has been reassigned to the new position as the Group embarked on major developments in its mobile natural gas sector. He is responsible for the management of the Group’s mobile natural gas business and its growth plans and strategies. Prior to joining the Group, he was the finance and administration manager at Stock Niaga Dotcom Sdn. Bhd. in 2000, and regional accountant at Cape East (M) Sdn. Bhd. from 1994 to 1998.

Justin Yong obtained both a diploma in Business Administration and a certificate from the Association of Chartered Certified Accountants (United Kingdom) in 2001.

KEY MANAGEMENTHew Shook MunFinancial Controller

Hew Shook Mun is the Financial Controller and has been with the Group since 2007. Her responsibilities include overseeing the overall performance of the finance department, including all dealings with the Group’s external auditors. Hew Shook Mun joined the Group in 2007 as Finance Manager and was later appointed as Group Corporate Finance and Commercial Manager in 2010. In June 2011, she was designated to the position of Financial Controller to oversee the management of the Group’s accounts, financial reporting matters and financial compliance of the Group. Prior to joining the Group, Hew Shook Mun was the manager of corporate planning in Brunsfield Property Holdings Sdn. Bhd. from 2001 to 2007, undertaking audit and business advisory projects and was responsible for the financial oversight of all process, and statutory and regulatory control. She was the finance manager at Consortio Sdn. Bhd. from 1996 to 2001, financial accountant for Ho Hup Construction Co Bhd. from 1994 to 1996, an audit senior in BDO Binder (Public Services) from 1989 to 1994 and an audit assistant in TH Liew & Co (Public Practices) from 1988 to 1989.

Hew Shook Mun graduated from the National Centre for Information Technology with a diploma in 1989. She is a chartered accountant of the Malaysia Institute of Accountants and a fellow member of the Association of Chartered Certified Accountants (UK).

Muniandy ThanimalaiVice President - Operations

Muniandy Thanimalai was appointed by the Group in January 2012 as the Vice President of Operations. He is responsible for the day-to-day management of the Operations Department in the Offshore Engineering Sector which includes all engineering, procurement and project management activities. Prior to joining the Group, Mr. Muniandy had 30 years of experience in the oil and gas industry, holding senior project management and advisory positions with Petronas Carigali Sdn. Bhd. and OGP Technical Services Sdn. Bhd. in Malaysia and overseas. He was involved in the design, construction, commissioning and maintenance of various upstream and downstream activities.

Muniandy Thannimalai graduated with a Diploma in Mechanical Engineering from the Federal Institute of Technology.


FINANCIAL HIGHLIGHTSFY2012 FY2011

INCOME STATEMENT RM’000 RM’000

Revenue 316,393 80,816

Gross profit 18,043 24,508

(Loss)/Earnings before interest, tax, depreciation and amortisation (735) 15,389

(Loss)/Profit attributable to owners of the parent (3,094) 11,151

(Loss)/Earnings per share (Malaysian sen per share)(1) (1.8) 7.7

Return on equity n.m. 15.0%

As at 31 December 2012

As at31 December 2011

BALANCE SHEET RM’000 RM’000

Property, plant and equipment 23,070 23,285

Associated companies 18,301 16,873

Other non-current assets 6,400 1,083

Current assets excluding cash and bank balances 93,002 38,668

Cash and bank balances 31,731 29,742

Total assets 172,504 109,651

Non-current liabilities (4,042) (1,632)

Current liabilities (100,526) (33,840)

67,936 74,179

Shareholders’ equity 67,982 74,278

Non-controlling interest (46) (99)

67,936 74,179

Gearing ratio (times) 0.52 0.06

Net asset value per share (Malaysian sen per share)(2) 39.5 43.2

FY2012 FY2011CASH FLOW STATEMENT RM’000 RM’000

Cash and cash equivalents as at 31 December 2012 26,613 28,157

Notes:(1) For comparative purposes, the earnings per share (on a fully diluted basis) for FY2011 have been computed based

on the Group’s profit attributable to owners of the parent and the weighted average number of ordinary shares in issue of 144,250,000.

(2) For comparative purposes, net asset value per share as at 31 December 2011 is calculated based on the aggregate number of ordinary shares in issue of 172,000,000.

(3) n.m. denotes not meaningful


CHAIRMAN’S STATEMENT

Dear valued shareholders,On behalf of the Board of Directors and Management of IEV Holdings Limited (“IEV”), I am pleased to present our Annual Report and Financial Statements for the financial year ended 31 December 2012 (“FY2012”).

Despite incurring a loss, FY2012 has been one of major and positive changes. The group successfully completed the first decommissioning project of two platforms for Petronas Carigali and achieve first oil within 12 months from the refurbished platform project. Towards the end of FY2012, IEV also received a major turnkey project for the transportation and installation of the first Tension Leg Platform in Malaysia. These achievements showcased IEV’s capabilities in developing its blue-ocean strategies and establishing its unique position in a very competitive and highly specialised industry dominated by service providers with much larger resources.

The performance of turnkey projects resulted in the increase of the Group’s annual turnover by 291.5%, from RM80.8 million in FY2011 to RM316.4 million in FY2012. The Group’s order book also strengthened from RM280.0 million in February 2012 to RM374.0 million February 2013 with contributions from both Offshore Engineering and Mobile Natural Gas (“MNG”) businesses. The MNG business has since been merged with the Exploration and Production business to form the Petroleum Sector.

The loss incurred in the Refurbished Platform project in FY2012 is mainly attributed to higher than anticipated costs associated with the additional works, standby time and material replacement costs which IEV values at RM33.0 million. IEV is pursuing a cost recovery exercise with the relevant parties, but there is no certainty that it will be successful.

In the Petroleum Sector, all efforts are being made by the Exploration and Production Division for the early production of hydrocarbon from the Pabuaran KSO block after the signing of the KSO agreement in 3Q2012. Barring any unforeseen circumstances, it is expected that income derived directly from the Pabuaran production and indirectly from the monetisation of gas produced from the Pabuaran KSO block if successful, should represent a major shift from the traditional income streams of the Group and is expected to significantly strengthen the cash flow and returns to shareholders. Concurrently, IEV continues to pursue other stranded gas opportunities and further develop its mobile natural gas supply chains in Indonesia.

“

“FY2012 marks a year of significant growth for IEV as we moved beyond a SME towards a larger corporation with annual sales turnover exceeding USD100 million and employee headcount reaching above 200 personnel for the first time in its 25-year history.

While delivering the first two turnkey projects, we made considerable advancement in the transformation of our expertise and operations to build a solid foundation for our future growth in all three business sectors - Offshore Engineering, Petroleum and Renewable Energy.


“ On behalf of the Board of Directors, I am confident that the transformation made this year would change the operating landscape and growth potential of the IEV Group. We are also proud to be awarded by Securities Investors Association (Singapore) as runner-up for the “Most Transparent Company” in the Catalist category during our first year as a public listed company. I would like to take this opportunity to extend my appreciation to the Board of Directors for their invaluable guidance and support and IEV management and employees for their relentless effort, loyalty and commitment to the Group.

I also wish to extend my heartfelt gratitude to our valued shareholders, customers, regulatory authorities, financiers and business associates for their strong confidence and steadfast support. I hope our valuable and mutually beneficial relationships will continue to flourish as we continue to travel together in this exciting journey with IEV Group towards its vision of making energy affordable and accessible to all by championing innovative solutions.

Thank you for your support.

Tan Sri Dato’ Hari N. Govindasamy Chairman and Non-Executive Director

CHAIRMAN’S STATEMENT

Pursuant to Rule 708 of the Catalist Rules, the Chairman’s statement represents collective view of the Board.

“

The Group is equally encouraged by opportunities in the Renewable Energy Sector and its potential growth. We expect that results from investment into this new business sector will provide another stable source of revenue and profits for IEV in the future.

The strategic move into the Renewable Energy Sector should allow the Group to source, produce and sell energy to countries and areas that could not be reached through its current mobile natural gas business and is therefore, complementary to the Petroleum Sector.



YEAR ENDED 31 DECEMBER

Financial Highlights

AuditedFY2012

(RM’000)

AuditedFY2011

(RM’000)%

Change

Revenue 316,393 80,816 291.5%

Gross Profit 18,043 24,507 (26.4%)

(Loss)/Profit Before Tax (3,045) 12,099 (125.2%)

(Loss)/Profit Attributable to Owners of the Parent (“PAT”) (3,094) 11,151 (127.7%)

For the financial year ended 31 December 2012, gross profit decreased by RM6.5 million or 26.4% from RM24.5 million in FY2011 to RM18.0 million in FY2012. The decrease was due mainly to a 29.8 percentage point reduction in the gross profit margin from 34.2% in FY2011 to 4.4% in FY2012 contributed by the OES; partially offset by a 3.0 percentage point increase in the gross profit margin from 18.3% in FY2011 to 21.3% in FY2012 from the MNG.

PRESIDENT & CEO’S STATEMENT

The Group’s revenue increased by 291.5% in the financial year 2012 (“FY2012”) and its order book also increased year-on-year from RM280.0 million in February 2012 to RM374.0 million in February 2013, with the award of the transportation and installation of the Malikai Tension Leg Platform (“TLP”) from Sabah Shell in December 2012 and renewal of the throughput and direct Compressed Natural Gas (“CNG”) sales contracts in Indonesia during 2012. The Pabuaran KSO award was signed with Pertamina E&P in 3Q2012 and the work program is being finalised by all relevant parties to commence production and exploration activities in 2013.

Review of FY2012

Revenue increased by RM235.6 million or 291.5%, from RM80.8 million in FY2011 to RM316.4 million in FY2012 due to an increase in revenue contribution of RM231.6 million from the Offshore Engineering Sector (“OES”), and an increase in revenue contribution of RM4.0 million from the Mobile Natural Gas Sector (“MNG”).

Revenue from OES increased by 378.0% due mainly to the contribution from the two turkey projects in Malaysia as the Group took on the main contracting role.

Revenue from the MNG increased by 20.5% due mainly to the increase in CNG sales volume by 6.9% in FY2012 .

Dear Shareholders,

The Group went through a significant transformation period during 2012, following its successful listing on Catalist of the Singapore Exchange Securities Trading Limited (“SGX-ST”) on 25 October 2011. Major efforts were focused on the execution of the Company’s two turnkey projects and IEV has successfully completed the first decommissioning project for Petronas Carigali Sdn. Bhd. in April 2012 and saw first oil delivered within schedule for the refurbished platform project in December 2012, despite facing some setbacks and challenges during the project. The experience in handling oil and gas turnkey projects will place the Group in a good position to benefit from the future growth of the oil and gas industry in the region.


The decrease in the gross profit margin from the OES was mainly due to the gross loss sustained by the Refurbished Platform Project. In the course of executing the Refurbished Platform Project, the Group carried out certain additional works which resulted in higher than anticipated costs. Due to the larger contract value which made up 82.8% of the sector’s revenue relative to other projects, overall gross profit margin for the OES decreased significantly. Comparatively, such turnkey services generate a lower gross profit margin compared to Integrated Engineering Solutions (“IES”), which are specialist products and services.

The Group is currently seeking cost recovery from relevant parties for up to RM33.0 million. The aforesaid cost recovery exercise is subject to negotiations between the parties and there is no certainty that it will be successful.

Gross profit margin from the MNG Sector increased due to the increase in the supply of CNG on a Take & Pay basis as opposed to a Throughput basis. As between the two, Take & Pay contributes a higher gross profit margin.


Revenue (RM Million)

67.7

FY09 FY10 FY11 FY12Year

28.7

80.8

316.

4

Gross Profit & PAT (RM Million)

PAT

Gross Profit

FY09 FY10 FY11 FY12Year

8.7

27.8

24.5

1.2

16.8

11.0

(3.0

)18

.0

The Group’s 20.16% owned associated company, CNG Vietnam Joint Stock Company (“CNGVN JSC”), contributed a profit after tax of RM4.7 million to the Group. The reduction of 35.6% in profit after tax contributed by CNGVN JSC as compared to FY2011 was due to dividend income from CNGVN JSC, which had been netted off against the Group’s share of CNGVN JSC’s results.

Strong Order Book

IEV’s order book has increased from RM280.0 million in February 2012 to RM374.0 million by February 2013. The Group secured a RM330.0 million transportation and installation contract via its 49% owned associated company, IEV Malaysia Sdn. Bhd., from Sabah Shell Petroleum Company Limited, which is scheduled for completion within three years from award. The Group had also secured several regional grouting, cutting and marine growth control contracts under our IES business.


PT IEV Gas (“PTIG”), our Indonesian subsidiary also successfully renewed our Throughput contract with PT Odira Energy Persada for a 12-month period starting September 2012. The Group has also successfully renegotiated a Gas Sales and Purchase Agreement with PT Indofood CBP Sukses Makmur Tbk to increase CNG sales price by 13.55% until November 2013. In FY2012, PTIG also secured a gas sales contract with PT Unilever Indonesia TBK to supply over 350,000 mmbtu for a 24-month period. With the increase in plant capacity in December 2011, CNG sales volume had increased by 6.9% in FY2012.



Looking Forward – 2013 and Beyond

Looking ahead, barring any unforeseen circumstances, the Group is optimistic of its performance in FY2013. The Group will have three independent profit centers, Offshore Engineering Sector, Petroleum Sector and Renewable Energy Sector spreading over Malaysia, Indonesia and Vietnam respectively.

In the Offshore Engineering Sector, besides the traditional IES products and services, IEV is in a position to capture income from the Malikai turnkey project and the balance of revenues from the Refurbished Platform project, as well as efforts made in seeking cost recovery from additional works carried out in FY2012 from this project. As oil prices are expected to remain stable and LNG prices are expected to strengthen in Asia, the number of new engineering, procurement, construction, installation and commissioning (“EPCIC”) awards in Asia Pacific, which offer opportunities to suppliers and contractors in the value chain, is expected to rank among the highest in the world(1).

IEV turnkey business strategy is centered on the end-of-life segment of offshore production facilities where the Group has offered its 3-Re value proposition, Rejuvenate, Remove and Reuse. IEV will offer services to the platform rejuvenation program and the construction of new facilities to support the Enhanced Oil Recovery (“EOR”) program in Malaysia in the next five years. The products and services from the Group’s Life Extension solutions and Jacket and Pipeline Engineering Solutions will be applied to this EOR program. We will also leverage our experience and first mover advantage in decommissioning solutions and platform reuse to capture opportunities in this emerging market segment.

IEV is implementing its plan to merge the MNG and Exploration & Production businesses under the Petroleum Sector which will focus on opportunities in Indonesia. The Group will be executing its work program in the Pabuaran KSO to start production of hydrocarbon in 1H2014.

This will be the start of a dynamic growth phase of the Petroleum Sector where IEV will operate as an integrated energy provider by completing the entire energy supply chain from production to delivery of energy to end users. We also plan to roll out new initiatives to reduce our dependence on piped gas, wherever opportunities arise. Further information will be disclosed to shareholders when such plans are finalised.

Following the Board’s approval to invest into the first biomass project in Vietnam, the Group will launch its Renewable Energy business sector in 2013. Barring any unforeseen circumstances, the engineering, procurement and construction program should be completed within 12 months and production of pellets from rice-husk for the international market is expected to commence in 1H2014. This is part of IEV’s strategy to build a premier biomass brand in Asia to supply low-cost energy to power plants and industrial end users, a step towards realizing its new corporate vision.

The financial year 2013 (“FY2013”) is an important transformation year to secure sustainable long term growth of IEV. Barring unforeseen circumstances, the business outlook for all three business sectors of the Group is expected to be positive.

I would like to take this opportunity to convey my sincere appreciation to all our employees, directors, strategic alliance partners, suppliers, customers, bankers and shareholders for your continuous support throughout 2012 and we look forward to sharing a promising journey with all of you in FY2013 and beyond.

Christopher DoCEO and President


(1) Infield data – Offshore Asia Pacific Oil & Gas Market Update Report to 2014.


OPERATIONS AND FINANCIAL REVIEW

IEV offers a range of integrated engineering solutions (“IES”) to support the needs for subsea construction, repair and maintenance services, and turnkey contracts to address of “end-of-life” engineering challenges facing offshore oil and gas facilities, predominantly in the Asia Pacific region. We remain one of the leading mobile natural gas providers to the industrial sectors in Indonesia and Vietnam since 2005.

Trend of Offshore Engineering Sector & Mobile Natural Gas SectorOffshore Engineering SectorThe offshore oil and gas capital expenditure in the Asia Pacific region was reported to expect to grow from USD19.9 billion in 2011 to USD30.4 billion in 2014(1)(2). Capital expenditure on pipelines and fixed platforms was expected to contribute to a significant portion of such capital expenditure in the Asia Pacific region(1)(2). Approximately USD44.9 billion, representing 47.0% of total capital expenditure by offshore oil and gas companies in the Asia Pacific region, was expected to be spent on pipelines over the period 2011 to 2014(1)(2), and capital expenditure on fixed platforms is expected to amount to approximately USD25.5 billion over the same period, with approximately 382 fixed platforms expected to be installed in Asia Pacific(1)(2). We believe the trend for the offshore oil and gas capital expenditure in the Asia Pacific region is likely to continue in that trend.

In December 2011, IEV secured the first platform reuse project in the Asia Pacific region of RM262.0 million and in the same month, a RM12.0 million decommissioning project was awarded by the same customer, Petronas Carigali Sdn. Bhd.

The marginal field development has been identified as one of the key drivers to slow down the production decline of oil and gas; and at the other end of the life cycle is decommissioning, which is the process of the physical removal and disposal of structures at the end of their working lives. Decommissioning and marginal field development by platform reuse (the “New Market Segments”) is a new concept in Asia Pacific. However, the New Market Segments are expected to gain popularity, with a significant number of the platforms within the Asia Pacific region being built more than 30 years ago, and are ageing and coming to the end of their service lives.

The emerging trend of platform rejuvenation, as part of the Enhanced Oil Recovery efforts in Malaysia to extract more hydrocarbon from existing oil and gas fields, has also been viewed as a growth area for service providers who could offer technologies to extend the lives of offshore production facilities.

Mobile Natural Gas SectorAccording to Indonesia’s Association of gas-using Industries (FPIB), industrial companies in Indonesia are experiencing an acute gas shortage as the government could only supply 538 million standard cubic feet per day (“mmscfd”) (or 538,000 million metric British thermal units (“mmbtu”) to industries, which contributes approximately to a third of their total needs(3). Further, there are few compressed natural gas (“CNG”) suppliers in Indonesia given the relatively high barriers to entry for this business. The Indonesian government is accelerating a liquefied natural gas (“LNG”) import program aimed at bringing in LNG to satisfy the power needs for Java Island by constructing a number of floating storage and regasification units (“FSRU”) throughout Java Island. Concurrently, the Indonesian government is also putting in all efforts to slow down the production decline by accelerating the exploration and production of both oil and gas marginal fields, as domestic gas prices have climbed rapidly to unprecedented levels of USD 10/mmbtu in 2012 and moved towards the LNG prices in the international market.

In Vietnam, domestic gas demand continues to rise but most industrial zones are not connected to the existing pipeline infrastructure. CNG is currently distributed by only two companies in Vietnam, namely CNG Vietnam Joint Stock Company (“CNGVN JSC”) and Petrovietnam Southern Gas Joint Stock Corporation (“PVGas-South”). PVGas-South is also the major shareholder of CNGVN JSC. The power sector has priority over utilisation of natural gas and currently, approximately 15 mmscfd of CNG are delivered daily by both companies collectively. Major offshore gas fields like Bien Dong and Block B are being developed in the South and Ham Rong field in the North are expected to increase the domestic gas supply in the coming years. Like its South East Asian neighbours, Vietnam is also planning the development of its own LNG receiving terminal to import natural gas due the forecasted shortage of gas in the future. Piped gas prices in Vietnam are also moving towards LNG prices as the local government is pushing its plan to import LNG forwards.

Given the above and the Group’s exposure in these countries, the Group believes that its ability to undertake commercial CNG and/or LNG projects in such areas will place the Group in a prime position to cater to customers across different sectors of the economy who have no pipeline access and are struggling with the high cost of liquid fuels.



Notes:

(1) Statistics obtained from a report issued in 2010 entitled “Regional Perspectives Offshore Asia Oil and Gas Market Update to 2014”.

(2) Statistics obtained from a report issued in 2010 entitled “Offshore Australasia Oil and Gas Market Update to 2014” conducted by Infield Systems Ltd, London.

(3) Statistics obtained from a report dated 24 February 2011 entitled “RI to import 4.5m tons of LNG starting in 2013” published in The Jakarta Post (http://www.thejakartapost.com/news/2011/02/24/ri-import-45m-tons-lng-starting-2013.html).

Overall Performance

For the financial year ended 31 December 2012 (“FY2012”), the Group registered a revenue of RM316.4 million and loss attributable to owners of the parent of RM3.1 million as compared to revenue of RM80.8 million and profit attributable to owners of the parent of RM11.2 million in the previous financial year. The revenue surge between the years by 291.5% was solely contributed by the single RM249.7 million turnkey contract for the Refurbished Platform Project known as the D21 Project (“the D21 Project”). The same project tipped the Group into a net loss position. On a basic and fully diluted basis, earnings per share (“EPS”) of the Group declined from 7.7 Malaysian sen in FY2011 to a loss per share of 1.8 Malaysian sen in FY2012. Net asset value per share of the Group declined from 43.2 Malaysian sen in FY2011 to 39.5 Malaysian sen in FY2012.

Building CapabilitiesOffshore Engineering SectorThe financial year ended 31 December 2012 had been eventful for the Group’s Offshore Engineering Sector. The sector successfully completed within budget, two of its highest value decommissioning projects in the entire Group’s history via turnkey, which comprised engineering, preparation, removal and disposal of two platforms and associated pipelines offshore Sarawak, Malaysia worth a total of RM27.0 million.

As at 31 December 2012, Petronas Carigali Sdn Bhd., an established oil and gas operator in Malaysia (“PCSB” or “Client”) approved completion of 93.09%, equivalent to RM232.4 million of contract works of the D21 Project. Despite the substantial milestone delivery as at the financial year end, net contribution of the project was depressed by the provisioning of additional costs on project fulfillment that the Group had to incur surpassed its contractual obligations.

Albeit the mixed results, the accomplishments of the above projects were a recognition of IEV’s capability and capacity to undertake turnkey contracts in decommissioning and marginal field development via platform reuse, in its provision of offshore engineering services to the oil and gas industry upstream developments. Fairly assessed, the Group has grown in stature. On December 16, 2012, IEV Malaysia Sdn. Bhd., a 49% associate company of the Group received a letter of award to install the first Integrated Tension Leg Platform (“TLP”) for Sabah Shell Petroleum Company Limited. Estimated at approximately USD100 million, this deep water facility will be transported and installed in the Malikai fields at a water depth of approximately 500 metres and is expected to be completed within three years.

This one time occurrence of the loss of the D21 Project is not expected to cause any material changes to the Group’s prospects for FY2013. The sector’s business is about scale, technology and commitment. The Group will accomplish its transition and the redirection of strategic priorities towards IEV’s strengths to take the business to the next level of growth.

Petroleum SectorThe Group will be merging its Mobile Natural Gas business and Exploration and Production businesses under the Petroleum Sector. The Group is submitting a work program for the Pabuaran KSO based on an early production scheme from the previous discoveries and expects to achieve first hydrocarbon production in 1Q, 2014. The Group will also continue to work towards securing its stranded gas sources to increase the sales volume of CNG and to boost the profitability of its Mobile Natural Gas business in West Java. Sales of CNG are expected to increase further due to higher demand from both existing and new customers.



Renewable Energy SectorThe Group intends to enter into the Renewable Energy Sector, through a biomass project in Vietnam. Further details will be provided to shareholders and further updates will be disclosed as and when there are material developments on this project.

Revenue and sales volume increasesRevenue from the Offshore Engineering Sector increased by 378.0% due mainly to the Group’s participation in turnkey oil and gas contracts and new oilfield development projects.

Revenue from the Mobile Natural Gas Sector increased by 20.5% due mainly to the higher volume of CNG supplied. The volume of CNG supplied increased by 6.9% in FY2012. Overall, revenue increased by RM235.6 million or 291.5%, from RM80.8 million in FY2011 to RM316.4 million in FY2012 due to an increase in revenue contribution of RM231.6 million and RM4.0 million from the Offshore Engineering Sector and the Mobile Natural Gas Sector respectively.

Revenue by geographical locations of our customersThe Group sells to customers in the following geographical locations:-

FY2012 FY2012 FY2011 FY2011

RM’000 % RM’000 %

Malaysia 263,149 83.2% 20,144 24.9%

Indonesia 27,648 8.7% 25,745 31.9%

Vietnam 3,927 1.2% 9,139 11.3%

Thailand 1,082 0.3% 4,121 5.1%

India 2,656 0.8% 12,567 15.6%

China 4,470 1.4% 5,598 6.9%

Others 13,461 4.3% 3,502 4.3%

Total 316,393 100.0% 80,816 100.0%

Operating margins across segments Gross profit margin from the Offshore Engineering Sector decreased during the financial year under review registering a reduction by 29.8 percentage point primarily due to the gross loss sustained by the D21 Project. In the course of executing the D21 Project, the Group carried out certain additional works which resulted in higher than anticipated costs. Due to the larger contract value which made up 82.8% of the sector’s revenue relative to other projects, overall gross profit margin for the Offshore Engineering Sector decreased significantly. The additional works which has reduced the project’s profitability is non-recurring in nature and we are cautiously optimistic of improved earnings in FY2013.

The Group is currently seeking cost recovery on the D21 project from the relevant parties for up to RM33 million. The aforesaid cost recovery exercise is subject to negotiations between the parties and there is no assurance that there will be material recovery of the costs. The Group will provide timely updates as and when there are further material developments and/or financial impact pursuant to the aforesaid cost recovery exercise.

Gross profit margin from the Mobile Natural Gas Sector increased by 3.0% due mainly to the supply of CNG on a Take & Pay basis as opposed to a Throughput basis. As between the two, Take & Pay contributes a higher gross profit margin. The availability of cheaper gas sources via monetisation of stranded gas is expected to further enhance contributions from the sector.


Overall, gross profit decreased by RM6.5 million or 26.4%, from RM24.5 million in FY2011 to RM18.0 million in FY2012. The decrease was due mainly to a 29.8 percentage point reduction in the gross profit margin from 34.2% in FY2011 to 4.4% in FY2012 contributed by the Offshore Engineering Sector; partially offset by a 3.0 percentage point increase in the gross profit margin from 18.3% in FY2011 to 21.3% in FY2012 from the Mobile Natural Gas Sector.

Strong Balance SheetDespite a reduction in Net Asset Value per share from 43.2 Malaysian sen in FY2011 to 39.5 Malaysian sen in FY2012, the Group’s balance sheet remains strong. Cash and bank balances as at 31 December 2012 stood at RM31.7 million. The Group intends to further supplement its cash reserves with borrowings to provide the Group with added financial and operational flexibility for growth. Gearing ratio increased from 0.06 in FY2011 to 0.52 in FY2012. The substantially higher gearing ratio is attributable to additional borrowings for the financing of the D21 project which is expected to reduce upon full settlement of such borrowings at the project’s completion scheduled in May 2013. Notwithstanding, the Group will maintain a healthy level of solvency and liquidity as and when it takes on additional debt.

Cash FlowThe cash generated from operating activities by the Group for the financial year ended 31 December 2012 was RM4.6 million despite a net loss before tax of RM3.0 million. This was mainly attributable to reduction of working capital by RM9.0 million.

Development subsequent to the release of the Company’s full year unaudited financial statements for FY2012 on 1 March 2013, which would materially affect the Group’s operating and financial performance Offshore Engineering Sector

The D21 Project has afforded the group an invaluable insight into the various dimensions of the tough conditions of lump sum oil and gas contracts in the marginal field development via platform reuse. Although loss-making as at the financial year ended 31 December 2012, the experience has allowed the Group greater participation in all parts of the life cycle of upstream activities, from installation to repair, maintenance and decommissioning. Moving forward, the Group strives to manage future projects more competitively and profitably. The Group is encouraged by the recent award on the installation of the first Integrated TLP for Sabah Shell Petroleum Company Limited. The Group will also be actively pursuing its cost recovery effort with PCSB on the D21 Project.

Petroleum Sector

The Group will be merging its Mobile Natural Gas business and Exploration and Production businesses under the Petroleum Sector which will focus on opportunities in Indonesia for more effective control and cost efficiency. On the two growth initiatives spelt out in in FY2012:-

i. Securing cheap sources of natural gas:- The Group is submitting a work program for the Pabuaran KSO based on an early production scheme from the

previous discoveries and on schedule to achieve first hydrocarbon production in 1Q, 2014.

ii. Active promotion of fuel switching strategy:- The Group continues to work towards securing its stranded gas sources to increase the sales volume of CNG and

the profitability of its Mobile Natural Gas business in West Java. Sales of CNG are expected to further increase due to higher demand from both existing and new customers.




Risk management policies and processes

The Group is continually reviewing and improving its business and operational activities to ensure there is proper risk management. Risk management procedures adopted by the Group includes reviewing management and manpower resources, risk identification and response, updating work flows, processes and procedures to meet the current and future market conditions. The Group has also considered the various financial risks, details of which are found on page 99-102 of this Annual Report.


The Board of Directors (the “Board”) of IEV Holdings Limited (the “Company” and together with its subsidiaries, the “Group”) is committed to maintaining a high standard of corporate governance to safeguard the interests of shareholders and to enhance corporate value and accountability. The Company believes that, the Code of Corporate Governance 2005 (the “Code”) serves as a practical guide in defining duties and responsibilities of the Board of Directors.

The Company will continue to enhance its corporate governance practices appropriate to the conduct and growth of its business and to review such practices from time to time to ensure compliance with the Listing Manual Section B: Rules of Catalist (the “Catalist Rules”) of the Singapore Exchange Securities Trading Limited (the “SGX-ST”).

BOARD MATTERSPrinciple 1: Effective Board to Lead and Control the Company

The Board is entrusted with the responsibility for the overall management of the Group with the primary function of protecting the interests of shareholders and to enhance long-term shareholder value. Besides carrying out its statutory duties and responsibilities, the Board reviews and advises on overall strategic plans and key operational initiatives, reviews management performance and assumes responsibility for overall corporate governance of the Group to ensure that the Group’s strategies are in the interests of the Group and its shareholders.

The principal functions of the Board are:

a. reviewing the financial results of the Group, internal controls, external audit reports and resource allocation;b. supervising and approving strategic directions of the Group;c. reviewing the business practices and risk management of the Group;d. approving the annual budgets and major funding proposals;e. approving and monitoring major investments, divestments, mergers and acquisitions;f. convening of shareholders’ meetings;g. the appointment of Directors and key executives; andh. assuming responsibility for corporate governance.

To facilitate effective management and to support the Board in its duties, certain functions of the Board have been delegated to various Board Committees, namely the Audit Committee, Nominating Committee and Remuneration Committee. These committees function within clearly defined terms of references and operating procedures, which will be reviewed on a regular basis. The effectiveness of each committee will also be constantly reviewed by the Board. In addition, in order to strengthen the independence of the Board, the Company has appointed Mr. Ng Weng Sui Harry as its Lead Independent Director. The Lead Independent Director is also available to shareholders where they have concerns and such concerns are not resolved by the normal contact channels with the management or where such contact channels are not appropriate.

The Board has scheduled to meet at least four times a year to coincide such meetings with the review and approval of the Group’s results announcements. The Board meets on a regular basis as and when necessary to address any specific significant matters that may arise. To ensure meetings are held regularly with maximum directors’ participation, the Company’s Articles of Association allows for the telephone and video-conferencing meetings.

Prior to their appointments, Directors are provided information on their duties as a director under the Singapore law. Directors are updated regularly on key accounting and regulatory changes. Where necessary, the Company arranges for presentations by external professionals, consultants and advisers on topics that would have an impact on the regulations and accounting standards, as well as the implications of certain regulatory changes affecting the responsibilities of the Directors.

REPORT ON CORPORATE GOVERNANCE


The number of Board meetings and Board Committee meetings held and attendance of each member of the Board at these meetings in the financial year ended 31 December 2012 are as follows:

Name Board Audit Committee NominatingCommittee

Remuneration Committee

Number of meetings held 5 3 3 3

Directors / Members No. of Meetings Attended

Tan Sri Dato’ Hari N. Govindasamy 5 3 3 3

Christopher Nghia Do 5 NA NA NA

Joanne Bruce 5 NA NA NA

Vinh Quang Le 4 NA NA NA

Ng Weng Sui Harry 5 3 3 3

Kesavan Nair 5 3 3 3

NA: Not Applicable

BOARD COMPOSITION AND BALANCEPrinciple 2: Strong and Independent Element on the Board

The Board of Directors comprises the following members:

1. Tan Sri Dato’ Hari N. Govindasamy Non-Executive Chairman

2. Christopher Nghia Do President and CEO

3. Joanne Rose Bruce Executive Director

4. Vinh Quang Le Executive Director

5. Ng Weng Sui Harry Lead Independent Director (Non-Executive)

6. Kesavan Nair Independent Director (Non-Executive)

Currently, the Board comprises 6 Directors, 2 of whom are Independent Directors. There is therefore a good balance between the Executive and Non-Executive Directors and a strong and independent element on the Board. The requirement of the Code that at least one-third of the Board consists of independent directors is satisfied.

The Board has the appropriate mix of expertise and experience, and collectively possesses the necessary core competencies for effective functioning and informed decision-making. Key information regarding the Directors is disclosed in the “Board of Directors” section of this annual report.

Given the nature and scope of the Company’s operations, the Board considers the present board size and number of committees appropriate to facilitate effective decision-making and that no individual or small group of individuals dominates the Board’s decision making process. The Nominating Committee is of the view that the current Board comprises persons who as a group provide capabilities required for the Board to be effective.

Ng Weng Sui Harry and Kesavan Nair have confirmed that they do not have any relationship with the Company or its related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors’ independent business judgment with a view to the best interests of the Company.



The independence of each Director is reviewed annually by the Nominating Committee. The Nominating Committee adopts the Code’s definition of what constitutes an Independent Director in its review. The Nominating Committee has reviewed and determined that the said Directors are independent.

Directors with no previous Board experience have to undergo an orientation and training programme to develop the requisite individual skills. They are also given training appropriate to the level of their previous experience and are provided with extensive background information about the Group’s history and core values, its strategic direction and corporate governance practices as well as industry-specific knowledge. Directors also have the opportunity to visit the Group’s operational facilities and meet with management to gain a better understanding of the Group’s business operation.

CHAIRMAN AND CHIEF EXECUTIVE OFFICERPrinciple 3: Clear Division of Responsibility at the Top of the Company

Tan Sri Dato’ Hari N. Govindasamy is the Non-Executive Chairman of the Company and Mr. Christopher Do assumes the role of Chief Executive Officer (“CEO”) of the Company.

The Chairman is responsible to lead the Board to ensure its effectiveness in all aspects of its role, ensuring that the Board receives accurate, timely and clear information, encouraging constructive relations among the Directors and their interactions with management; and to facilitate the effective contribution of the Non-Executive Directors.

At Annual General Meetings, the Chairman plays a pivotal role in fostering constructive dialogue between the shareholders, the Board and the Management.

The CEO is responsible for the Group’s day to day operations and leads the management in setting strategies, objectives and missions, translates the Board’s decisions and plans into execution action and drive the Group’s growth and development both locally and overseas.

The separation of the roles of the Chairman and CEO ensures an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making. The Chairman is not related to the CEO.

Non-Executive Directors have been actively participating in discussions and decision making at the Board and its committee levels and had open discussions with management.

BOARD MEMBERSHIPPrinciple 4: Formal and Transparent Process for Appointment of New Director

The Board has established a Nominating Committee (“NC”) which comprises 3 members, a majority of whom are Independent and Non-Executive Directors. The members of the NC are as follows:

1. Kesavan Nair (Chairman) Independent Non-Executive Director

2. Ng Weng Sui Harry (Member) Independent Non-Executive Director

3. Tan Sri Dato’ Hari N. Govindasamy (Member) Non-Executive Director

The NC meets at least once a year. The principal functions of the NC include, but are not limited to, the following:

a. reviewing and recommending the nomination or re-nomination of the directors having regard to the director’s contribution and performance;

b. determining on an annual basis whether or not a director is independent; c. deciding whether or not a director is able to and has been adequately carrying out his duties as a director;d. reviewing and approving any new employment of related persons and proposed terms of their employment. e. recommend to the Board the review of board succession plans for Directors, in particular, the Chairman and the CEO; andf. recommend the appointment of key management positions, reviewing succession plans for key positions within the

Group and overseeing the development of key executives and talented executives within the Group.




New Directors are appointed by way of Board resolutions after the NC has reviewed and nominated them taking into consideration the qualification and experience of each candidate, his/her ability to increase the effectiveness of the Board and to add value to the Group’s business and its strategic objectives.

The NC recommends all appointment and retirement of Directors. At each Annual General Meeting (“AGM”), at least one-third of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not less than one-third) are required to retire from office by rotation. All Directors are required to retire from office at least once in every three years and submit themselves for re-election by the shareholders at the next AGM.

The NC has recommended to the Board that Mr Christopher Nghia Do and Mr Kesavan Nair be nominated for re-election at the forthcoming AGM of the Company. In making the recommendation, the NC has considered the Directors’ overall contributions and performance. The Board recommends that the shareholders approve the appointment of the said Directors. The details of the proposed resolutions are stipulated in the Notice of AGM.

All newly appointed Directors during the year will hold office only until the next AGM following his appointment and will be eligible for re-election but shall not be taken into account in determining the number of Directors who are retiring by rotation at each financial year. In evaluating each Director’s contribution and performance for the purpose of re-nomination, factors such as attendance, preparedness, participation and candour are taken into consideration.

Each member of the NC shall abstain from voting on any resolutions and making any recommendation and/or participating in any deliberations in respect of matters in which he has an interest in.

Principle 5: Board Performance

Subject to the approval of the Board, the NC will decide on how the Board’s performance is to be evaluated and will propose objective performance criteria which will evaluate and address how the Board has enhanced long-term shareholders’ value. The Board has implemented a process to be carried out by the NC for assessing the effectiveness of the Board as a whole and for assessing the contribution of each individual Director to the effective functioning of the Board. Each member of the NC shall abstain from voting on any resolutions in respect of the assessment of his performance of re-nomination as director.

At the date of this annual report, the Board evaluation exercise is carried out by way of a board assessment checklist, which is circulated to the Board members for completion and thereafter for the NC to review and determine the actions required to improve the corporate governance of the Company and effectiveness of the Board as a whole.

The NC, having reviewed the overall performance of the Board in terms of its role and responsibilities and the conduct of its affairs as a whole for the financial period reported on, is of the view that the performance of the Board as a whole has been satisfactory. The NC is satisfied that sufficient time and attention has been given to the Group by the Directors. The NC is also satisfied that the current size and composition of the Board provides it with adequate ability to meet the existing scope of needs and the nature of operations of the Company. From time to time, the NC will review the appropriateness of the Board size, taking into consideration changes in the nature of the Group’s businesses, the scope of operations, as well as changing regulatory requirements.

ACCESS TO INFORMATIONPrinciple 6: Board Members to have Complete, Adequate and Timely Information

The Company’s management provides the Board with periodic updates covering operational performance and financial results, market and business development updates and other important and relevant information.

The Board is provided with the contact details of senior management and the Company Secretary, and will have separate and independent access to such persons.

The Company Secretary is always present at such meetings to record the proceedings, to ensure that all Board procedures are followed and to ensure good information flows within the Board and its committees and between senior management and Non-Executive Directors. The appointment and removal of the Company Secretary is a matter for consideration by the Board as a whole.



Together with other management staff of the Company, the Company Secretary ensures that the Company complies with the requirements of the Companies Act and other rules and regulations that are applicable to the Company.

The Company or the Board is entitled to seek the appropriate independent and professional advice at the expense of the Company, in furtherance of their duties.

REMUNERATION MATTERSPrinciple 7: Formal and Transparent Procedures for Developing Remuneration Policies

The Board has established a Remuneration Committee (“RC”) which comprises 3 members, a majority of whom are Independent and Non-Executive Directors. The members of the RC are as follows:

1. Kesavan Nair (Chairman) Independent Non-Executive Director

2. Ng Weng Sui Harry (Member) Independent Non-Executive Director


The RC will review and recommend to the Board a framework of remuneration for the Directors and key executives, and determine specific remuneration packages for each Director. The recommendations of the RC should be submitted for endorsement by the entire Board. All aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses and other benefits-in-kind shall be overseen by the RC. The RC will also review the remuneration received by senior management. Each member of the RC shall abstain from voting on any resolutions or making any recommendations and/or participating in the deliberations of the RC in respect of his remuneration package.

Principle 8: Level and Mix of Remuneration

In setting the remuneration packages of the Executive Directors, the Company takes into consideration the remuneration and employment conditions and makes a comparative study of the packages of Executive Directors in comparable companies/industries as well as the Group’s relative performance.

Non-Executive Directors are paid a basic fee and an additional fee for serving on any of the Board committees. The Chairman of each committee is compensated for his additional responsibilities. The RC recommends the payment of such fees in accordance with the contributions of the Non-Executive Directors, which will then be endorsed by the Board and subjected to approval by the shareholders of the Company at the AGM. Such fees are payable quarterly in arrears.

The Company had entered into separate service agreements with our Executive Directors, namely Christopher Do, Joanne Bruce and Vinh Quang Le on 6 October 2011 for an initial period of three years (the “Initial Term”). These service

agreements may be renewed at the end of the Initial Term, in accordance with the specific terms as set out in the respective service agreements.



Principle 9: Disclosure on Remuneration

(i) The breakdown of the level and mix of remuneration of the Directors for the financial year ended 31 December 2012 are as follows:

Name Salary

(%)Benefits

(%)Bonus

(%)Directors’ Fee# (%)

Total (%)

Directors

SGD500,000 to below SGD750,000

Christopher Do 74 9 12 5 100

SGD250,000 to below SGD500,000

– – – – – –

Below SGD250,000

Joanne Bruce 74 1 12 13 100

Vinh Quang Le 72 2 12 14 100

Tan Sri Dato Hari N. Govindasamy – – – 100 100

Ng Weng Sui, Harry – – – 100 100

Kesavan Nair – – – 100 100

# These fees are subject to the approval of the shareholders at the forthcoming AGM.

(ii) A breakdown of the level and mix of top key executives’ remuneration for the financial year ended 31 December 2012 are as follows:

Name Salary

(%)Benefits

(%)Bonus

(%)Total (%)

Key Executives

Below SGD250,000

Hew Shook Mun 75 14 11 100

Justin Yong 72 21 7 100

Juzer Nomanbhoy 64 11 25 100

Chan Ying Wei 84 16 – 100

Tito Setiawan 100 – – 100

Muniandy Thannimalai 94 6 – 100

Notes: 1. Chan Ying Wei ceased to be the Group’s Vice President – Treasury and Corporate Finance on 30 November

2012. The actual remuneration paid to him for the period of his service in FY2012 was SGD86,909. 2. Tito Setiawan ceased to be the General Manager of PT IEV Gas, Indonesia on 27 April 2012. The actual

remuneration paid to him for the period of his service in FY2012 was SGD29,375.

For the financial year ended 31 December 2012, none of the directors’ immediate family members are employees of the Company or any of its principal subsidiaries.



ACCOUNTABILITY AND AUDITPrinciple 10: Accountability of the Board and Management

In presenting the annual financial statements and announcements to the shareholders, it is the aim of the Board to provide the shareholders with a balanced and understandable assessment of the Group’s financial performance, financial position and business prospects. In respect of the annual budgets, any material variances between the projections and actual results are disclosed and explained to the Board by the management during the Board Meetings.

The financial performance and annual reports are announced or issued within the mandatory period and are available on the Company’s website.

Management provides the Board with periodic updates covering operational performance, financial results, marketing and business development efforts and other important and relevant information.

Other ways in which information is disseminated to shareholders are further disclosed under Principles 14 and 15.

AUDIT COMMITTEEPrinciple 11: Establishment of Audit Committee with Written Terms of Reference

The Audit Committee (“AC”) comprises 3 members, a majority of whom are Independent and Non-Executive Directors. The members of the AC are as follows:

1. Ng Weng Sui Harry (Chairman) Independent Non-Executive Director


3. Kesavan Nair (Member) Independent Non-Executive Director

The AC meets periodically to perform the following functions:

a. review with the external auditors, the audit plans, their evaluation of the system of internal controls, their audit report, their management letter and the management’s response;

b. review the internal controls and internal procedures and ensure coordination between the external auditors and the management, and review the assistance given by the management to the auditors, and discuss problems and concerns, if any, arising from the interim and final audits, and any matters which the auditors may wish to discuss (in the absence of the management where necessary);

c. review the external auditors’ reports;

d. review the co-operation given by the Company’s officers to the external auditors;

e. review the half yearly and annual, and quarterly if applicable, financial statements and results announcements before submission to the Board for approval, focusing in particular, on changes in accounting policies and practices, major risk areas, significant adjustments arising from the audit, going concern basis of the Company, compliance with accounting standards as well as compliance with the Catalist Rules and other relevant statutory/regulatory requirements;

f. review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on the Group’s operating results or financial position, and the management’s response;

g. consider the appointment or re-appointment of the external auditors and matters relating to resignation or dismissal of the auditors;



h. review transactions falling within the scope of Chapter 9 and Chapter 10 of the Catalist Rules (if any);

i. review potential conflicts of interest (if any) and to set out a framework to resolve or mitigate any potential conflicts of interests;

j. review the effectiveness and adequacy of the administrative, operating, internal accounting and financial control procedures;

k. review the key fi nancial risk areas, with a view to providing independent oversight on the Group’s fi nancial report-review the key financial risk areas, with a view to providing independent oversight on the Group’s financial report-ing, the outcome of such review to be disclosed in the annual reports or if the findings are material, immediately announced via SGXNET;

l. undertake such other reviews and projects as may be requested by the Board and report to the Board its findings from time to time on matters arising and requiring the attention of the AC;

m. generally to undertake such other functions and duties as may be required by statute or the Catalist Rules, and by such amendments made thereto from time to time;

n. review arrangements by which the staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting and to ensure that arrangements are in place for the independent investigations of such matter and for appropriate follow-up; and

o. review the Group’s compliance with such functions and duties as may be required under the relevant statutes or the Catalist Rules, including such amendments made thereto from time to time.

Apart from the duties listed above, the AC shall commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material impact on the Group’s operating results and/or financial position. Each member of the AC will abstain from voting in respect of matters in which he is interested.

The AC has reviewed the volume and nature of non-audit services to the Group by the external auditors (see below) and is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditor. Accordingly, the AC has recommended the re-appointment of Fon Kon Tan Grant Thorton LLP as external auditors of the Company at the forthcoming AGM.

The aggregate amount of audit fees paid and/or payable to the external auditors, Foo Kon Tan Grant Thornton LLP, for the financial year ended 31 December 2012 amounted to approximately SGD175,000.There are no non-audit fees paid to the external auditors, Foo Kon Tan Grant Thornton LLP, for the financial year ended 31 December 2012. The external auditors have unrestricted access to the AC.

The AC meets the external auditor once a year without the presence of management.

The AC is satisfied that the Company is in compliance with Rules 712 and 715 of the Catalist Rules

INTERNAL CONTROLSPrinciple 12: Sound System of Internal Controls to Safeguard the Shareholders’ Investments and the Group’s Assets

The Board recognises that no internal control system will preclude all errors and irregularities. The system is designed to manage rather than to eliminate the risk of failure to achieve business objectives. The controls are to provide reasonable, but not absolute, assurance to safeguard shareholders’ investments and the Group’s assets.

Based on the internal controls established and maintained by the Group, work performed by the internal and external auditors, and reviews performed by the management, the various Board committees and the Board, the AC and the Board are of the opinion that the Group’s internal controls, addressing financial, operational and compliance risks were adequate as at 31 December 2012.



INTERNAL AUDITPrinciple 13: Setting Up Independent Internal Audit Function

During the financial year ended 31 December 2012, the Company, through recommendation from the AC, has outsourced the internal audit function to a qualified public accounting firm, Crowe Horwath (“IA”) to undertake the following duties:

a) Review of Project Management Cycleb) Review of Contract Management, Purchase and Payment Cyclec) Review of Human Resources Management Cycle

The AC approves the hiring, removal, evaluation and compensation of the IA and the IA has unrestricted access to all the Company’s documents, records, properties and personnel, and reports directly to the AC on audit matters. The AC will also meet with the IA at least once a year without the presence of the management.

To ensure the adequacy and effectiveness of the internal audit function, the AC will review and approve the internal audit plan on an annual basis. During the year, the IA conducted its audit reviews based on the approved internal audit plan. The IA report detailing audit findings and recommendations are provided to the management who would respond on the actions to be taken. The IA would then submit a report on the status of audit plan, audit findings and actions taken by the Management on such findings. Any material non-compliance or lapses in the internal controls together with the corrective measures taken up by the management are highlighted to the AC during the AC meetings. The AC would monitor the timely and proper implementation of such corrective measures and will follow up on the required corrective, preventive or improvement measures undertaken or to be undertaken by the management.

The AC has reviewed the effectiveness of the IA and is satisfied that the IA is adequately resourced and has appropriate standing within the Group to fulfil its mandate. The AC will review annually the adequacy and effectiveness of the internal audit function.

The Company has in place a whistle-blowing policy which provides well-defined and accessible channels in the Group through which employees may raise concerns, in confidence, on improper conduct or other matters to the management and/or the AC, where applicable. The details of the policy have been disseminated and made available to all employees of the Group.

The AC overseas the administration of the policy and ensures that all concerns to be raised are independently investigated and appropriate follow up actions are carried out.

COMMUNICATIONS WITH SHAREHOLDERSPrinciple 14: Regular, Effective and Fair Communication with ShareholdersPrinciple 15: Greater Shareholder Participation at the AGM

The Company does not practise selective disclosure and price sensitive information is publicly released on an immediate basis where required under the Catalist Rules. Shareholders, investors and analysts are kept informed of the major developments of the Company on a timely basis through various means of communication as follows:

• Announcements and press releases via SGXNET• Annual reports and notice of AGM issued to all shareholders• Price sensitive information, significant transactions or matters are communicated to shareholders via SGXNET• Company’s annual general meeting.• Company’s website at www.iev-group.com



At the Company’s AGMs, shareholders are given the opportunity to voice their views and ask Directors or the management questions regarding the Company. In addition to Board Committees, the external auditors are also invited to attend the AGMs to assist the Directors in addressing shareholders’ queries about the conduct of audit and the preparation and contents of the auditors’ report.

The Company’s Articles of Association allows a shareholder of the Company to appoint one or two proxies to attend and vote on behalf of the shareholder. The Company has not amended its articles to provide for absentia voting methods. Voting in absentia and by electronic mail may only be possible following careful study to ensure that integrity of the information and authentication of the identity of the shareholders through the web is not compromised.

At AGMs, separate resolutions are set out on distinct issues, such as proposed Directors’ fees, for approval by shareholders. Besides the external auditors, the chairmen of all Board committees are normally present and available to address queries from shareholders.

INTERESTED PERSON TRANSACTIONS (“IPT”)The Audit Committee is satisfied that the review procedures for IPTs and the reviews to be made periodically by the Audit Committee in relation thereto are adequate to ensure that the IPTs will be transacted on normal commercial terms and will not be prejudicial to the interests of the Company and its minority shareholders. All interested person transactions are subject to review by the AC to ensure compliance with the established procedures.

In compliance with Chapter 9 of the Catalist Rules, the Group confirms that there were no interested person transactions entered into during the financial year, which exceeds SGD100,000 in value. The Group does not have a general mandate from shareholders for recurring interested person transactions pursuant to Rule 920(1)(a)(ii).

Mr Christopher Do, the President and CEO of the Company has provided personal guarantees amounting to SGD2.4 million to secure the Group’s obligations under certain credit facilities amounting to SGD2.0 million. As no fee was paid to Mr Christopher Do for the provision of these guarantees, these arrangements were not carried out on an arm’s length basis but are beneficial to the Group. The Company is in the process of requesting for the discharge of these personal guarantees and replacing them with corporate guarantees to be provided by the Group. The Directors do not expect any material change in the terms and conditions of the relevant credit facilities arising from the discharge of the personal guarantees. Nevertheless, Mr Christopher Do has given an undertaking that in the event that the relevant financial institution does not agree to release of his personal guarantees or to provide financing on comparable or better terms, he will not withdraw or revoke such guarantees and that such guarantees will remain in full force and effect. He has further confirmed that he will not receive any consideration (monetary or otherwise) for the provision of the above guarantees in the future.

In FY2012, the Group incurred and paid rental and related charges to PT Elang Sakti which amounted to approximately RM41,351 (FY2011: RM57,870) for the lease of the premises located at Menara Era Building, Jalan Senen Raya No. 12A-05, Jakarta, Indonesia. This property is used as the Group’s office in Indonesia. PT Elang Sakti is owned by the President and CEO, Christopher Nghia Do (50.0%), his wife, Tran Thi Mai Thao (45.0%) and an unrelated third party (5.0%).

DEALINGS IN SECURITIESIn line with Rule 1204(19) of the Catalist Rules on dealings in securities, the Company has in place a policy prohibiting share dealings by Directors and employees of the Company during the period commencing one month before the announcement of the Company’s half-year and full-year financial statements, as the case may be, and ending on the date of the announcement of the relevant results. This has been made known to Directors, officers and staff of the Company and the Group. They are also reminded to observe the insider trading laws at all times even when dealing in securities within permitted trading period. Directors and employees of the Company are also prohibited from dealing in the Company’s shares on short-term considerations or when they are in possession of unpublished price-sensitive information.



MATERIAL CONTRACTSSave as otherwise disclosed, there were no other material contracts or loans entered into by or taken up by the Group or its subsidiaries involving the interest of any Director or controlling shareholder which are either still subsisting as at the end of the financial year ended 31 December 2012 or if not then subsisting, entered into since the end of the previous financial year.

RISK MANAGEMENT POLICIES AND PROCESSES The management regularly reviews the Group’s business and operational activities to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks within the Group’s policies and strategies. The financial risk management objectives and policies are as disclosed in the notes to the audited financial statements.

UTILISATION OF PROCEEDS The Company had provided a status report of the utilisation of the initial public offering (“IPO”) proceeds in an announcement dated 1 March 2013. The details are as shown below.

The Company’s net proceeds from the IPO of approximately SGD8.7 million (after deducting listing expenses of approximately SGD2.3 million) were utilised as follows:

Use of Proceeds from the IPO

Amount allocated (as stated in the

Company’s Offer Document dated 12

October 2011)

Amount utilised as announced on 1 March

2013

Balance of net proceeds as at the date

of this annual report

SGD’000 SGD’000 SGD’000

(i) To fund the expansion plans of the Offshore Engineering Sector 1,500 (1,500) –

(ii) To fund the additional investments in the Mobile Natural Gas Sector 5,000 (4,661) 339

(iii) To fund the continued investments in product design and development 350 (100) 250

(iv) For general corporate and working capital requirements 1,800 (1, 800) –

Net proceeds from the IPO 8,650 (8,061) 589

The Company will make periodic announcements on the use of the balance net proceeds from the IPO as and when the funds are materially disbursed.

NON-SPONSORSHIP FEES In compliance with Rule 1204(21) of the Catalist Rules, there was no non-sponsor fee paid to the Sponsor, Cannacord Genuity Singapore Pte. Ltd, in FY2012.

38 Director’s Report

42 Statement by Directors

43 Independent Auditor’s Report

45 Statements of Financial Position

46 Consolidated Statement of Comprehensive Income

47 Consolidated Statement of Changes in Equity

48 Consolidated Statement of Cash Flows

51 Notes to Financial Statements

FINANCIAL STATEMENTS


Directors’ report for the financial year ended 31 December 2012

The directors submit this annual report to the members together with the audited consolidated financial statements of the Group and statement of financial position of the Company for the financial year ended 31 December 2012.

Names of directors

The directors of the Company in office at the date of this report are:

Tan Sri Dato’ Hari N. Govindasamy (Chairman and Non-Executive Director) Christopher Nghia DoJoanne BruceVinh Quang LeNg Weng Sui Harry (Independent Director)Kesavan Nair (Independent Director)

Arrangements to enable directors to acquire shares or debentures

During and at the end of the financial year, neither the Company nor any of its subsidiaries was a party to any arrangement of which the object was to enable the directors to acquire benefits through the acquisition of shares in or debentures of the Company or of any other corporate body.

Directors’ interest in shares or debentures

According to the Register of Directors’ Shareholdings kept by the Company under Section 164 of the Companies Act, Cap. 50, none of the directors who held office at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations, except as follows:

Holdings registered in the name of director

Holdings in which directoris deemed to have an interest

Name of directorAs at

1.1.2012

As at31.12.2012

and21.1.2013#

As at1.1.2012

As at31.12.2012

and21.1.2013#

Number of ordinary shares

The Company - IEV Holdings Limited

Tan Sri Dato’ Hari N. Govindasamy – – 31,071,000 32,471,000

Christopher Nghia Do 31,270,000 31,270,000 1,736,000 1,736,000

Joanne Bruce 2,025,000 2,025,000 – –

Vinh Quang Le 69,000 69,000 – –



Directors’ interest in shares or debentures (cont’d)

Holdings registered in the name of director

Holdings in which directoris deemed to have an interest

Name of directorAs at

1.1.2012

As at31.12.2012

and21.1.2013#

As at 1.1.2012

As at31.12.2012

As at21.1.2013

Number of ordinary shares

The subsidiaries - PT IEV Indonesia

Tan Sri Dato’ Hari N. Govindasamy – – 3,549 3,549 3,549

Christopher Nghia Do – – 4,301 4,301 4,301

PT IEV Gas

Tan Sri Dato’ Hari N. Govindasamy – – 6,262 6,262 119,115

Christopher Nghia Do – – 7,590 7,590 121,068

PT IEV Pabuaran KSO

Tan Sri Dato’ Hari N. Govindasamy – – – 2,059 2,152

Christopher Nghia Do – – – 2,188 2,188

Tan Sri Dato’ Hari N. Govindasamy and Christopher Nghia Do, by virtue of the provisions of Section 7 of the Companies Act, Cap. 50, are deemed to have an interest in the whole of the issued share capital of all the wholly-owned subsidiaries of IEV Holdings Limited.

# There are no changes to the above shareholdings as at 21 January 2013.

Directors’ benefits

Since the end of the previous financial year, no director has received or has become entitled to receive a benefit under a contract which is required to be disclosed under Section 201(8) of the Companies Act, Cap. 50, except as disclosed in the accompanying financial statements and in Note 21(d), Note 22 and Note 31 to the consolidated financial statements.

Share options

No options to take up unissued shares of the Company or any subsidiary have been granted during the financial year.

No shares were issued during the financial year to which this report relates by virtue of the exercise of options to take up unissued shares of the Company or any subsidiary.

There were no unissued shares of the Company or any subsidiary under option at 31 December 2012.


Audit Committee

The Audit Committee at the end of the financial year comprises the following members:

Ng Weng Sui Harry (Chairman)Tan Sri Dato’ Hari N. GovindasamyKesavan Nair

The audit committee performs the functions set out in Section 201B(5) of the Companies Act, Cap. 50, the Listing Manual of the Singapore Exchange and the Code of Corporate Governance. In performing those functions, the committee reviewed the following:

(i) overall scope of both the internal and external audits and the assistance given by the Company’s officers to the auditors. It met with the Company’s internal and external auditors to discuss the results of their respective examinations and their evaluation of the Company’s system of internal accounting controls;

(ii) the audit plan of the Company’s independent auditor and any recommendations on internal accounting controls arising from the statutory audit;

(iii) the half yearly financial information and the statement of financial position of the Company and the consolidated financial statements of the Group for the financial year ended 31 December 2012 as well as the independent auditor’s report thereon; and

(iv) interested person transactions (as defined in Chapter 9 of the Listing Manual of the Singapore Exchange [SGX-ST]).

The audit committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings. The audit committee also recommends the appointment of the external auditor and reviews the level of audit and non-audit fees.

The audit committee is satisfied with the independence and objectivity of the external auditor and has recommended to The Board of Directors that the auditor, Foo Kon Tan Grant Thornton LLP, be nominated for re-appointment as auditor at the forthcoming Annual General Meeting of the Company.

Independent auditor

The independent auditor, Foo Kon Tan Grant Thornton LLP, Certified Public Accountants, has expressed its willingness to accept re-appointment.

Other information required by the SGX-ST

Material information

Apart from the Service Agreements between the Executive Directors and the Company, there is no material contract to which the Company or any of its subsidiaries, is a party which involve directors’ interests subsisted or have been entered into during the financial year.



Other information required by the SGX-ST (Cont’d)

Interested person transactions

There was no interested person transaction as defined in Chapter 9 of the SGX-ST Listing Manual conducted during the financial year except as disclosed under “Interested Person Transactions” on “Corporate Governance” and on Note 27 to the consolidated financial statements.

On behalf of the Directors

.............................................................................CHRISTOPHER NGHIA DO

.............................................................................JOANNE BRUCE

Dated: 18 March 2013



In the opinion of the directors, the accompanying statements of financial position, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows, together with the notes thereon, are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2012 and of the results of the business, changes in equity and cash flows of the Group for the financial year ended on that date, and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Directors

.............................................................................CHRISTOPHER NGHIA DO

.............................................................................JOANNE BRUCE

Dated: 18 March 2013

Statement by directorsfor the financial year ended 31 December 2012


Report on the financial statements

We have audited the accompanying financial statements of IEV Holdings Limited (the “Company”) and its subsidiaries (the “Group”), which comprise the statements of financial position of the Group and the Company as at 31 December 2012, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss account and balance sheets and to maintain accountability of assets.

Auditor’s responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independent auditor’s reportto the members of IEV Holdings Limited


Opinion

In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2012, and the results, changes in equity and cash flows of the Group for the financial year ended on that date.

Report on other legal and regulatory requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary incorporated in Singapore of which we are the auditors, have been properly kept in accordance with the provisions of the Act.

Foo Kon Tan Grant Thornton LLPPublic Accountants andCertified Public Accountants

Yeo Boon ChyePartner-in-charge of the auditDate of appointment: 6 October 2011Singapore, 18 March 2013

Independent auditor’s report to the members of IEV Holdings Limited


The Company The Group31 December 31 December 31 December 31 December

2012 2011 2012 2011Note RM RM RM RM

ASSETSNon-Current AssetsIntangible assets 4 – – 5,272,058 1,008,871Property, plant and equipment 5 – – 23,070,014 23,285,149Subsidiaries 25 40,252,448 26,715,808 – –Associated companies 6 – – 18,300,913 16,872,786Prepayments 7 – – 907,687 –Deferred tax assets 8 – – 219,969 73,727

40,252,448 26,715,808 47,770,641 41,240,533

Current AssetsInventories 9(a) – – 1,278,429 911,696Work-in-progress 9(b) – – 97,810 605,387Trade and other receivables 10 – – 87,744,794 35,837,007Prepayments 7 53,279 17,093 3,834,242 1,253,470Fixed deposit 11 – – 47,049 60,560Cash and cash equivalents 12 2,436,840 19,884,186 31,730,584 29,741,592

2,490,119 19,901,279 124,732,908 68,409,712Total assets 42,742,567 46,617,087 172,503,549 109,650,245

EQUITY AND LIABILITIESCapital and ReservesShare capital 13 63,246,859 63,246,859 63,246,859 63,246,859Currency translation reserve 14 – – (2,225,370) (1,362,323)(Accumulated losses)/

retained earnings (21,076,958) (17,587,630) 6,960,508 12,393,50242,169,901 45,659,229 67,981,997 74,278,038

Non-controlling interests – – (46,174) (99,295)Total equity 42,169,901 45,659,229 67,935,823 74,178,743

Non-Current LiabilitiesBorrowings 15 – – 3,058,300 –Finance lease obligations 17 – – 135,032 161,981Deferred tax liabilities 18 – – 5,000 5,000Provision for post-employment

benefit obligations 19 – – 843,852 592,909Advances from a third party 19 – – – 871,800

– – 4,042,184 1,631,690

Current LiabilitiesTrade and other payables 19 572,666 957,858 86,052,130 27,439,529Progress billing 20 – – 58,947 126,535Borrowings 15 – – 13,745,751 5,178,268Finance lease obligations 17 – – 167,441 304,971Current tax payable – – 501,273 790,509

572,666 957,858 100,525,542 33,839,812Total equity and liabilities 42,742,567 46,617,087 172,503,549 109,650,245

The annexed notes form an integral part of and should be read in conjunction with these financial statements.

Statements of financial positionas at 31 December 2012


Consolidated statementof comprehensive incomefor the financial year ended 31 December 2012

Year ended Year ended

31 December 31 December

2012 2011

Note RM RM

Revenue 3 316,392,960 80,815,844

Cost of sales (298,350,093) (56,308,432)

Gross profit 18,042,867 24,507,412

Other operating income 21(a) 804,654 1,097,685

Exchange loss (3,699,736) (325,909)

Selling and distribution costs (1,819,936) (1,360,564)

Administrative expenses 21(b) (17,853,938) (15,533,086)

Other operating expenses (3,076,227) (2,720,039)

Share of associated companies’ results, net of tax 6 5,342,124 7,047,352

Finance costs 21(c) (784,426) (614,347)

(Loss)/profit before taxation 22 (3,044,618) 12,098,504

Taxation 23 (211,430) (1,052,768)

Total (loss)/profit for the year (3,256,048) 11,045,736

Other comprehensive (expense)/income after tax

- currency translation differences arising from consolidation 14 (845,497) 2,774,501

Total comprehensive (expense)/ income for the year, net of tax (4,101,545) 13,820,237

Total (loss)/profit attributable to:

Owners of the parent (3,093,794) 11,151,071

Non-controlling interests (162,254) (105,335)

(3,256,048) 11,045,736

Total comprehensive (expense)/income attributable to:

Owners of the parent (3,956,841) 13,928,673

Non-controlling interests (144,704) (108,436)

(4,101,545) 13,820,237

Earnings per share (Malaysian sen) 24

- basic (1.8) 7.7

- diluted (1.8) 7.7



Consolidated statementof changes in equityfor the financial year ended 31 December 2012

Sharecapital

Currencytranslation

reserve

Retainedearnings/

(accumulatedlosses)

Totalattributable

toequity

holdersof the parent

Non-controlling

interestsTotal

equity

RM RM RM RM RM RM

Balance as at 1 January 2011 25,880,102 (4,139,925) 1,242,431 22,982,608 2,141 22,984,749

Issue of ordinary shares 37,366,757 – – 37,366,757 – 37,366,757

Effect on acquisition of additional interest in a subsidiary – – – – 7,000 7,000

Total comprehensive income for the year – 2,777,602 11,151,071 13,928,673 (108,436) 13,820,237

Balance as at 31 December 2011 63,246,859 (1,362,323) 12,393,502 74,278,038 (99,295) 74,178,743

Effect on acquisition of additional interest in a subsidiary – – – – 197,825 197,825

2011 final tax-exempt (one-tier) dividend of 0.007 sen per share – – (1,204,000) (1,204,000) – (1,204,000)

2012 interim tax-exempt (one-tier) dividend of 0.006 sen per share – – (1,135,200) (1,135,200) – (1,135,200)

Total comprehensive expense for the year – (863,047) (3,093,794) (3,956,841) (144,704) (4,101,545)

Balance as at 31 December 2012 63,246,859 (2,225,370) 6,960,508 67,981,997 (46,174) 67,935,823



Consolidated statement of cash flowsfor the financial year ended 31 December 2012


31 December 2012 31 December 2011

RM RM

Cash Flows from Operating Activities(Loss)/profit before taxation (3,044,618) 12,098,504

Adjustments for:Amortisation of intangible assets 210,881 158,878

Depreciation of property, plant and equipment 2,784,524 2,517,095

Provision for post-employment benefits 366,458 312,519

(Gain)/loss on disposal of property, plant and equipment (87,727) 9,501

Property, plant and equipment written off 151,078 133,464

Inventories written off – 4,779

Share of associate’s results (5,342,124) (7,047,352)

Interest income (222,638) (638,507)

Interest expense 784,426 614,347

Operating (loss)/profit before working capital changes (4,399,740) 8,163,228

Increase in inventories (384,621) (303,953)

Decrease/(increase) in work-in-progress 507,577 (605,387)

Increase in operating receivables (50,944,899) (13,965,250)

Increase in operating payables 59,768,401 13,065,335

Increase in progress billing 58,947 126,535

Cash generated from operating activities 4,605,665 6,480,508

Interest received 222,638 194,527

Interest paid (784,426) (372,063)

Tax paid (4,044,327) (730,496)

Net cash (used)/generated from operating activities (450) 5,572,476

Cash Flows from Investing ActivitiesAcquisition of intangible assets (4,610,565) –

Acquisition of property, plant and equipment (Note A) (5,157,642) (5,398,253)

Investment in an associated company (792,562) (1,391,458)

Proceeds from disposal of property, plant and equipment 87,727 273,888

Payment for long term prepayment (907,687) –

Dividends income from associated company 4,706,559 1,055,578

Net cash used in investing activities (6,674,170) (5,460,245)


Consolidated statement of cash flowsfor the financial year ended 31 December 2012 (cont’d)



RM RM

Cash Flows from Financing ActivitiesRepayment of finance lease obligations (323,999) (304,340)

Bank borrowings obtained 18,388,876 –

Bank borrowings repaid (6,875,760) (2,830,389)

Repayment of advances to a third party (871,800) (1,149,220)

Increase in fixed deposits pledged (3,519,870) (1,303,776)

Proceeds from issuance of ordinary shares 197,825 26,487,399

Dividends paid (2,339,200) –

Capitalisation of IPO expenses – (2,113,642)

Net cash generated from financing activities 4,656,072 18,786,032

Net (decrease)/increase in cash and cash equivalents (2,018,548) 18,898,263

Cash and cash equivalents at beginning of year 28,157,467 9,001,393

Currency translation difference of cash and cash equivalents at beginning of year

474,159 257,811

Cash and cash equivalents at end of year 26,613,078 28,157,467

The cash and cash equivalents comprise:

Cash and bank balances (Note 12) 23,681,254 16,288,127

Fixed deposits (Note 12) 8,049,330 13,453,465

31,730,584 29,741,592

Fixed deposit (Note 11) 47,049 60,560

31,777,633 29,802,152

Less:

Pledged fixed deposit (Note 11) (47,049) (60,560)

Pledged fixed deposits (Note 12) (5,117,506) (1,584,125)

(5,164,555) (1,644,685)

26,613,078 28,157,467



A. Property, plant and equipment

During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM5,373,953 (2011 - RM5,701,005) of which RM216,311 (2011 - RM302,752) was acquired by means of finance leases. Cash payments of RM5,157,642 (2011 - RM5,398,253) were made to purchase property, plant and equipment.

B. Incorporation of new subsidiaries

The cash consideration for newly incorporated subsidiaries were RM10,374,936.

Consolidated statement of cash flowsfor the financial year ended 31 December 2012 (cont’d)


NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2012

1 General Information

The financial statements of the Company and of the Group for the financial year ended 31 December 2012 were authorised for issue in accordance with a resolution of the directors on the date of the Statement by Directors.

The Company was incorporated as a limited liability company and is domiciled in Singapore.

The registered office is located at 80 Robinson Road, #02-00, Singapore 068898.

The principal activity of the Company is that of an investment holding.

The principal activities of the subsidiaries are as disclosed in Note 25 to the consolidated financial statements.

2(a) Basis of preparation

The financial statements are prepared in accordance with Singapore Financial Reporting Standards (“FRS”) including related Interpretations promulgated by the Accounting Standards Council (“ASC”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.

The financial statements are prepared in Malaysia Ringgit which is the company’s functional currency. All financial information is presented in Malaysia Ringgit, unless otherwise stated.

Significant accounting estimates and judgements

The preparation of the consolidated financial statements in conformity with FRS requires the use of judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial year. Although these estimates are based on management’s best knowledge of current events and actions, actual results may differ from those estimates.

The critical accounting estimates and assumptions used and areas involving a high degree of judgement are described below:

Critical assumptions used and accounting estimates in applying accounting policies

Assumptions and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Depreciation of property, plant and equipment (Note 5) Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management

estimates the useful lives of these property, plant and equipment to be within 3 to 20 years. The carrying amount of the Group’s property, plant and equipment as at 31 December 2012 is RM23,070,014. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

Post-employment pension and other long-term employee obligations [Note 19(e)] The present value of the post-employment pension obligations depends on a number of factors that are determined

on an actuarial basis using a number of assumptions.

The assumptions used in determining the net cost/income for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations. The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and have a tenure approximating the tenure of the related pension liability. Other key assumptions for pension obligations are based in part on current market conditions.



2(a) Basis of preparation (cont’d)

Post-employment pension and other long-term employee obligations [Note 19(e)] (cont’d)

If the discount rate used differs by 1% from management’s estimates, the carrying amount of pension obligations will be lower or higher as follows:


RM RM

Discount rate +/- 1% +/-8,439 +/-5,929

Allowance for inventory obsolescence [Note 9(a)]The Group reviews the ageing analysis of inventories at each reporting date, and makes provision for obsolete and slow moving inventory items identified that are no longer suitable for sale. The net realisable value for such inventories are estimated based primarily on the latest invoice prices and current market conditions. Possible changes in these estimates could result in revisions to the valuation of inventories.

If the net realisable value of the inventories increase/decrease by 10% from management estimate, the Group’s profit will decrease/increase by RM128,000.

Allowance for bad and doubtful debts (Note 10)The Group makes allowances for bad and doubtful debts based on an assessment of the recoverability of trade and other receivables. Allowances are applied to trade and other receivables where events or changes in circumstances indicate that the balances may not be collectible. The identification of bad and doubtful debts requires the use of judgement and estimates. Where the expected outcome is different from the original estimate, such difference will impact carrying value of trade and other receivables and doubtful debt expenses in the period in which such estimate has been changed.

Income tax (Notes 8, 18 and 23)The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. When the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Impairment in investment in subsidiaries (Note 25)Determining whether investment in subsidiaries is impaired requires an estimation of the value-in-use of that investment. The value-in-use calculation requires the Group to estimate the future cash flows expected from the cash-generating units and an appropriate discount rate in order to calculate the present value of the future cash flows. Management has evaluated the recoverability of the investment based on such estimates.

2(b) Interpretations and amendments to published standards effective in 2012

On 1 January 2012, the Group adopted the amended FRS that are mandatory for application from that date. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS. The following are the new or amended FRS which are relevant to the Group:

Framework The Conceptual Framework for Financial Reporting 2010 (Chapters 1 and 3)

Amendments to FRS 1 Presentation of Items of Other Comprehensive Income

Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets

The adoption of these amended FRS or INT FRS did not result in any substantial changes to the Group’s and the Company’s accounting policies and had no material effect on the amounts reported for the current or prior financial years.



2(c) FRS and INT FRS issued but not yet effective

The following are the new or amended FRS issued in 2012 that are not yet effective but may be early adopted for the current financial year:

Reference Description

Effective date(Annual periods

beginning on or after)

FRS 1 Amendments to FRS 1 – Presentation of item of Other Comprehensive Income 1.7.2012

FRS 19 Employee Benefits 1.1.2013

FRS 27 Separate Financial Statements 1.1.2014

FRS 28 Investment in Associates and Joint Ventures 1.1.2014

FRS 32 Amendments to FRS 32: Offsetting of Financial Assets and Financial Liabilities 1.1.2014

FRS 101 Amendments to FRS 101 – Government Loans 1.1.2013

FRS 107 Amendments to FRS 107: Disclosures – Offsetting of Financial Assets and Financial Liabilities 1.1.2013

FRS 110 Consolidated Financial Statements 1.1.2014

FRS 110 Amendments to FRS 110, FRS 111 and FRS 112: Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance 1.1.2014

FRS 111 Joint Arrangements 1.1.2014

FRS 112 Disclosure of Interests in Other Entities 1.1.2014

FRS 113 Fair Value Measurements 1.1.2013

INT FRS 120 Stripping Costs in the Production Phase of a Surface Mine 1.1.2013

General amendments Improvements to FRSs 2012 1.1.2013

Except for the amendments to FRS 1, the directors do not anticipate that the adoption of the above FRS in future periods will have a material impact on the financial statements of the Group and the Company in the period of their initial adoption.

The nature of the impending changes in accounting policy on adoption of the amendments to FRS 1 is described below.

Amendments to FRS 1 Presentation of Items of Other Comprehensive Income The amendments to FRS 1 Presentation of Items of Other Comprehensive Income (“OCI”) are effective for financial

periods beginning on or after 1 July 2012.

The amendments to FRS 1 changes the grouping of items presented in OCI. Items that could be classified to income statements at a future point in time would be presented separately from items which will never be reclassified. As the amendments only affect the presentations of items that are already recognised in OCI, the Group and the Company do not expect any impact on its financial position or performance upon adoption of this standard.



2(d) Summary of significant accounting policies

Consolidation The financial statements of the Group include the financial statements of the Company and its subsidiaries made up

to the end of the financial year. Information on its subsidiaries is given in Note 25.

Subsidiaries are entities over which the Group has power to govern the financial and operating policies so as to obtain benefits from its activities generally accompanied by a shareholding giving rise to a majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests are the part of the net results of operations and of net assets of a subsidiary attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and balance sheet. Total comprehensive income is attributed to the non-controlling interests based on the respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance.

Common control business combination outside the scope of FRS 103 A business combination involving entities under common control is a business combination in which all the combining

entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. For such common control business combinations, the merger accounting principles are used to include the assets, liabilities, results, equity changes and cash flows of the combining entities in the consolidated financial statements.

In applying merger accounting, financial statement items of the combining entities or businesses for the reporting year in which the common control combination occurs, and for any comparative years disclosed, are included in the consolidated financial statements of the combined entity as if the combination had occurred from the date when the combining entities or businesses first came under the control of the controlling party or parties.

A single uniform set of accounting policies is adopted by the combined entity. Therefore, the combined entity recognised the assets, liabilities and equity of the combining entities or businesses at the carrying amounts in the consolidated financial statements of the controlling party or parties prior to the common control combination.

The carrying amounts are included as if such consolidated financial statements had been prepared by the controlling party, including adjustments required for conforming the combined entity’s accounting policies and applying those policies to all years presented. There is no recognition of any goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of the common control combination. The effects of all transactions between the combining entities or businesses, whether occurring before or after the combination, are eliminated in preparing the consolidated financial statements of the combined entity.

Non-controlling interests represent the portion of income statement and net assets in subsidiaries not held by the Group. They are presented in the consolidated statement of financial position within equity, separately from the parent shareholders’ equity, and are separately disclosed in the consolidated income statement.



2(d) Summary of significant accounting policies (cont’d)

Common control business combination outside the scope of FRS 103 (cont’d)

Acquisition of businesses Subsequent to the business combination adopted under common control, the acquisition method of accounting is

used to account for business combinations by the Group.

The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. Please refer to the paragraph “Intangible assets - Goodwill” for the subsequent accounting policy on goodwill.

Intangible assets Intangible assets are accounted for using the cost model. Capitalised costs are amortised on a straight-line basis

over their estimated useful lives for those considered as finite useful lives. After initial recognition, they are carried at cost less accumulated amortisation and accumulated impairment losses, if any. In addition, they are subject to annual impairment testing. Indefinite life intangibles are not amortised but are subject to annual impairment testing.

Intangible assets are written off where, in the opinion of the directors, no further future economic benefits are expected to arise.

Licenses Costs relating to licenses which are acquired are capitalised and amortised on straight-line basis over their useful life

of three to twenty years.

Computer software Costs relating to computer software acquired, which are not an integral part of related hardware, are capitalised and

amortised on a straight-line basis over their useful life of one to four years.




Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is computed utilising the straight-line method to write off the cost of the assets over their estimated useful lives as follows:

Leasehold factory building 20 years

Production equipment 5 years

Plant and machinery 5 to 16 years

Factory equipment 4 to 16 years

Computer equipment 3 to 5 years

Motor vehicles 4 to 8 years

Office renovation 5 years

Office equipment 3 to 5 years

Furniture and fittings 4 to 5 years

No depreciation has been provided for construction-in-progress.

The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the items. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent expenditure relating to property, plant and equipment that have been recognised is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of the standard of performance of the asset before the expenditure was made, will flow to the Group and the cost can be reliably measured. Other subsequent expenditure is recognised as an expense during the financial year in which it is incurred.

For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition and to the month before disposal respectively. Fully depreciated property, plant and equipment are retained in the books of accounts until they are no longer in use.

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date as a change in estimates.

Subsidiaries A subsidiary is an entity controlled by the Group. Control exists when the Group has the power to govern the financial

and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether there is control.

In the Company’s separate financial statements, shares in subsidiaries are stated at cost less allowance for any impairment losses on an individual subsidiary basis.

Associates An associated company is defined as a company, not being a subsidiary or jointly controlled entity, in which the

Group has significant influence, but not control, over its financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% to 50% of the voting power of another entity.

Investment in associates at company level are stated at cost. Allowance is made for any impairment losses on an individual company basis.




Associates (cont’d)

In applying the equity method of accounting, the Group’s share of the post-acquisition profit or loss of associates, based on the latest available audited financial statements, is included in the profit or loss and its shares of post-acquisition other comprehensive income is recognised in other comprehensive income. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

When the Group’s share of losses of an associate equals or exceeds the carrying amount of an investment, the Group ordinarily discontinues the inclusion of its share of further losses. The investment is reported at nil value. Additional losses are provided for to the extent that the Group has incurred obligations or made payments on behalf of the associate to satisfy obligations of the associate that the Group has guaranteed or otherwise committed, for example, in the forms of loans. When the associate subsequently reports profits, the Group resumes including its share of those profits only after its share of the profits equals the share of net losses recognised.

The Group’s share of the net assets and post-acquisition retained profits and reserves of associated companies are reflected in the book values of the investments in the consolidated statements of financial position.

Where the accounting policies of an associate do not conform with those of the Company, adjustments are made on consolidation when the amounts involved are considered significant to the Group.

On acquisition of the investment, any difference between the cost of acquisition and the Group’s share of the fair values of the net identifiable assets of the associate is accounted for in accordance with the accounting policy on “Consolidation”.

When financial statements of associates with different reporting dates are used (not more than three months apart), adjustments are made for the effects of any significant events or transactions between the investor and the associates that occur between the date of the associates’ financial statements and the end of reporting period. Where this occurs, the reporting date of the financial statements of the associate shall be disclosed, together with the reason for using a different reporting period.

Financial assets Financial assets, other than hedging instruments, can be divided into the following categories: financial assets at

fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the assets were acquired. The designation of financial assets is re-evaluated and classification may be changed at the reporting date with the exception that the designation of financial assets at fair value through profit or loss is not revocable.

All financial assets are recognised on their trade date - the date on which the Company and the Group commit to purchase or sell the asset. Financial assets are initially recognised at fair value, plus directly attributable transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value.

Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at the end of each reporting period whether or not there is objective evidence that a financial asset or a group of financial assets is impaired.

Non-compounding interest and other cash flows resulting from holding financial assets are recognised in income statement when received, regardless of how the related carrying amount of financial assets is measured.

Other than loan and receivables, the Group does not designate any financial assets at fair value through profit or loss, held-to-maturity investment or available-for-sales.




Financial assets (cont’d)

Loan and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in

an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivables. They are included in current assets, except for maturities greater than 12 months after the end of reporting period. These are classified as non-current assets.

Loans and receivables include trade and other receivables and deposits held in banks. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. If there is objective evidence that the asset has been impaired, the financial asset is measured at the present value of the estimated future cash flows discounted at the original effective interest rate. Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. The impairment or write-back is recognised in the profit or loss.

Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis,

and includes all costs in bringing the inventories to their present location and condition. In the case of manufactured products, cost includes all direct expenditure and production overheads based on the normal level of activity.

Provision is made for obsolete, slow-moving and defective inventories in arriving at the net realisable value.

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

Work-in-progress Work-in-progress represents uncompleted projects which include materials, direct labour, sub-contractors’ cost and

an appropriate proportion of overheads, if any.

Cash and cash equivalents Cash and cash equivalents comprise cash balance and bank deposits and highly liquid investments which are

readily convertible to cash and which are subject to an insignificant risk of changes in value.

For the purpose of the consolidated statement of cash flows, cash and cash equivalents are presented net of bank overdrafts which are repayable on demand and which form an integral part of cash management.

Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new shares are

deducted against the share capital account.

Dividends Final dividends proposed by the directors are not accounted for in shareholders’ equity as an appropriation of retained

profits, until they have been approved by the shareholders in a general meeting. When these dividends have been approved by the shareholders and declared, they are recognised as a liability.

Interim dividends are simultaneously proposed and declared, because the articles of association of the Company grant the directors the authority to declare interim dividends. Consequently, interim dividends are recognised directly as a liability when they are proposed and declared.




Financial liabilities The Group’s financial liabilities include borrowings, liability owing to holders of preference shares of a subsidiary,

finance lease obligations and trade and other payables.

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest-related charges are recognised as an expense in “finance costs” in the profit or loss. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.

Borrowings are recognised initially at fair value of proceeds received less attributable transaction costs, if any. Borrowings are subsequently stated at amortised cost which is the initial fair value less any principal repayments. Any difference between the proceeds (net of transaction costs) and the redemption value is taken to the profit or loss over the period of the borrowings using the effective interest method. The interest expense is chargeable on the amortised cost over the period of the borrowings using the effective interest method.

Gains and losses are recognised in the profit or loss when the liabilities are derecognised as well as through the amortisation process.

Borrowings which are due to be settled within twelve months after the end of reporting period are included in current liabilities in the statements of financial position even though the original terms was for a period longer than twelve months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the end of reporting period. Borrowings to be settled within the Group’s normal operating cycle are classified as current. Other borrowings due to be settled more than twelve months after the end of reporting period, if any, are included in non-current borrowings in the statements of financial position.

Finance lease liabilities are measured at initial value less the capital element of lease repayments (see policy on “Finance leases”).

Trade and other payables Trade and other payables are initially measured at fair value, and subsequently measured at amortised cost, using

the effective interest method.

Financial guarantees The Company has issued corporate guarantees to banks for bank borrowings of its subsidiaries. These guarantees

are financial guarantee contracts as they require the Company to reimburse the banks if the subsidiaries fail to make principal or interest payments when due in accordance with the terms of their borrowings.

Financial guarantee contracts are initially recognised at their fair value plus transaction costs in the statements of financial position.

Financial guarantee contracts are subsequently amortised to the profit or loss over the period of the subsidiaries’ borrowings, unless the Company has incurred an obligation to reimburse the bank for an amount higher than the unamortised amount. In this case, the financial guarantee contracts shall be carried at the expected amount payable to the bank.

Redeemable convertible preference shares Preference shares, which were redeemable on a specific date or at the option of the shareholders on which carry non-

discretionary dividend obligations, were classified as long term liabilities. The dividends on these preference shares were recognised in the profit or loss as finance expense.




Provisions Provisions are recognised when the Company and the Group has a present obligation (legal or constructive) as a

result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Present obligation arising from onerous contracts are recognised as provisions.

The management reviews the provisions annually and where in their opinion, the provision is inadequate or excessive, due adjustment is made.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance costs.

Leases Finance leases Where assets are financed by lease agreements that give rights approximating to ownership, the assets are capitalised

as if they had been purchased outright at values equivalent to the lower of the fair values of the leased assets and the present value of the total minimum lease payments during the periods of the leases. The corresponding lease commitments are included under liabilities. The excess of lease payments over the recorded lease obligations are treated as finance charges which are amortised over each lease to give a constant effective rate of charge on the remaining balance of the obligation.

The leased assets are depreciated on a straight-line basis over their estimated useful lives as detailed in the accounting policy on “Property, plant and equipment”.

Operating leases Rentals on operating leases are charged to profit or loss on a straight-line basis over the lease term. Lease incentives,

if any, are recognised as an integral part of the net consideration agreed for the use of the leased asset. Penalty payments on early termination, if any, are recognised in the profit or loss when incurred.

Contingent rents are mainly determined as a percentage of revenue in excess of a specified amount during the month. They are charged to the profit or loss when incurred.

Income taxes Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered

from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of reporting period.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting or taxable profit or loss at the time of the transaction.

A deferred tax liability is recognised on temporary differences arising on investments in subsidiaries and associates, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.




Income taxes (cont’d)

Deferred income tax is measured:(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred

income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of reporting period; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the date of the financial position, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in the profit or loss, except to the extent that the tax arises from a business combination or a transaction which is recognised either in other comprehensive income or directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Employee benefits Pension obligations The Company and the Group participate in the defined contribution national pension schemes as provided by the

laws of the countries in which it has operations. In particular, the Malaysia incorporated companies in the Group contribute to the State Pension Scheme, the Employees Provident Fund (“EPF”), a defined contribution plan regulated and managed by the Government of Malaysia, which applies to the majority of the employees. Contributions to EPF or other defined contribution plans are charged to the profit or loss in the period to which contributions relate.

Post-employment pension and other long-term employee benefits Subsidiaries which are located in Indonesia operate both defined benefit and defined contribution post-employment

benefit plans for its eligible employees.

Defined contribution benefit plans are post-employment pension benefit plans other than defined contribution plans. Defined benefit plans typically define the amount of benefit that an employee will receive on or after retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognised in the statements of financial position in respect of a defined benefit pension plan is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognised past-service costs. The defined benefit obligation is calculated annually by independent actuaries using the Projected Unit Credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using market yields of high quality corporate bonds (or government bonds if there is no deep market for such corporate bonds) that are denominated in the currency in which the benefits will be paid, and have tenures approximating to that of the related post-employment benefit obligations.

Actuarial gains and losses are recognised in consolidated income statement in the period when they arise.

Past service costs are recognised immediately in consolidated income statement, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period.

Employee leave entitlements Employee entitlements to annual leave are recognised when they accrue to employees. Accrual is made for the

unconsumed leave as a result of services rendered by employees up to the end of reporting period.

Key management personnel Key management personnel are those persons having the authority and responsibility for planning, directing and

controlling the activities of the entity. Directors and certain managerial personnel are considered key management personnel.




Impairment of non-financial assets The carrying amounts of the Company’s and the Group’s non-financial assets subject to impairment are reviewed at

the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of the cash-generating unit to which the asset belongs will be identified.

For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.

Individual assets or cash-generating units that include intangible assets, with an indefinite useful life or those not yet available for use are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell and value-in-use, based on an internal discounted cash flow evaluation. All assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.

Any impairment loss is charged to the profit or loss unless it reverses a previous revaluation in which case it is charged to equity.

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount or when there is an indication that the impairment loss recognised for the asset no longer exists or decreases.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognised.

A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading revaluation surplus. However, to the extent that an impairment loss on the sale revalued asset was previously recognised as an expense in the consolidated income statement, a reversal of that impairment loss is recognised as income in the consolidated income statement.

Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or

exercise significant influence over the other party in making financial and operational decisions. Parties are also considered related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.

Revenue recognition Revenue is recognised when the significant risks and rewards of ownership have been transferred or services

rendered to the buyer. Revenue excludes value-added taxes and is arrived at after deduction of trade discounts, if any. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.




Revenue recognition (cont’d)

Revenue from rendering of services for offshore engineering and mobile natural gas projects undertaken is recognised based on the percentage of completion method measured by reference to the extent of work performed and acceptance by customers.

Revenue from sale of natural gas is recognised upon transfer of significant risks and rewards of ownership to customers.

Processing fee which includes transportation fee is recognised when services are rendered.

Interest income is recognised on a time-apportioned basis using the effective interest method.

Dividend income from investments is recognised gross when the right to receive the dividend has been established.

Rental income from the rental of factory and office premises is recognised on a monthly basis upon acceptance of usage. Rental incentives, if any, are considered an integral part of total rental costs.

Functional currency Functional and presentation currency Items included in the consolidated financial statements of each entity in the Group are measured using the currency

of the primary economic environment in which the entity operates (“functional currency”). The financial statements of the Group and the Company are presented in Malaysia Ringgit, unless otherwise stated.

Conversion of foreign currencies Transactions and balances Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional

currency using the exchange rates at the dates of the transactions. Currency translation differences from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the end of reporting period are recognised in the consolidated income statement, unless they arise from borrowings in foreign currencies, other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations. Those currency translation differences are recognised in the currency translation reserve in the consolidated financial statements of the Group and transferred to the consolidated income statement as part of the gain or loss on disposal of the foreign operation.

Non-monetary items that are measured at fair values in foreign currencies are translated using the exchange rates at the dates when the fair values are determined.

Non-monetary items that are measured at historical cost in foreign currencies are translated using the exchange rates at the date of the transactions.

Group entities The results and financial positions of all entities within the Group that have a functional currency different from the

presentation currency are translated into the presentation currency as follows:(i) Assets and liabilities are translated at the closing exchange rates at the end of reporting period;

(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) All resulting currency translation differences are recognised in the currency translation reserve in equity.

Operating segments For management purposes, operating segments are organised based on their products and services which are

independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers are directly accountable to the chief executive officer who regularly reviews the segment results in order to allocate resources to the segments and to assess segment performance.



3 Revenue

Significant categories of revenue, excluding applicable value-added taxes, are as follows:


The Group RM RM

Offshore Engineering division 292,826,996 61,264,124

Mobile Natural Gas division 23,565,964 19,551,720

316,392,960 80,815,844

Offshore Engineering division comprise five Integrated Engineering Solutions (“IES”), namely Structural Integrity Solutions, Jacket and Pipeline Installation Solutions, Inspection, Repair and Maintenance Solutions, Life Extension Solutions and Decommissioning Solutions.

Mobile Natural Gas division is an energy provider to customers in Indonesia through development of mobile gas infrastructure which is mainly a commercial virtual pipeline to deliver natural gas to customers without pipeline access. Revenue comprises sales of Mobile Natural Gas and the processing fee as well.

4 Intangible assets

LicensesComputer

software Total

The Group RM RM RM

Cost

At 1 January 2011 1,928,547 15,772 1,944,319

Currency translation difference 134,258 2,629 136,887

At 31 December 2011 2,062,805 18,401 2,081,206

Additions 4,610,565 – 4,610,565

Currency translation difference (231,921) (2,103) (234,024)

At 31 December 2012 6,441,449 16,298 6,457,747



Computer

Licenses software Total

The Group RM RM RM

Accumulated amortisation

At 1 January 2011 800,744 12,945 813,689

Amortisation for the year 155,602 3,276 158,878

Currency translation difference 97,610 2,158 99,768

At 31 December 2011 1,053,956 18,379 1,072,335

Amortisation for the year 210,861 20 210,881

Currency translation difference (95,426) (2,101) (97,527)

At 31 December 2012 1,169,391 16,298 1,185,689

Net book value

At 31 December 2012 5,272,058 – 5,272,058

At 31 December 2011 1,008,849 22 1,008,871


The Group Note RM RM

Amortisation expense is charged to:

Cost of sales 51,971 55,121

Administrative expenses 21(b) 158,910 103,757

210,881 158,878

Intangible assets comprise licenses and software. The details to licenses are as follows:

License registered in the name of Description of licence Validity period Issuing authority/parties

IEV Group Sdn. Bhd. Exclusive distributorship rights to market and distribute the Enviropeel corrosion protection product

Valid for 20 years from 17 December 2004

Alocit Australasia Pty Ltd and Enviropeel International Ltd

4 Intangible assets (cont’d)


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49



5 Property, plant and equipment (cont’d)

(a) Depreciation expense is charged to:



Cost of sales 1,952,315 1,814,984

Administrative expenses 21(b) 832,209 702,111

2,784,524 2,517,095

(b) Assets acquired under finance leases of the Group are as follows:


The Group RM RM

At cost,

Motor vehicles 1,053,761 906,657

Computer equipment 267,577 267,577

1,321,338 1,174,234

At net book value,

Motor vehicles 868,914 750,322

Computer equipment 173,925 227,441

1,042,839 977,763

(c) The details of the leasehold factory building are as follows:

Location Land area (sqm) Ownership Tenure

Kampung Tegal Gede Desa Pasir Sari Kecamatan Cikarang Selanta, Kabupaten Bekasi 17550 Indonesia

6,000 PT. Prisma Agung Realty (Jakarta, Indonesia)

20 years lease commencing October

2007

(d) The construction in progress relates to the costs incurred for construction work for gas pipeline.



6 Associated companies


The Group RM RM

Equity investments, at cost 7,367,551 6,574,989

Share of post-acquisition reserves 10,933,362 10,297,797

18,300,913 16,872,786

Share of associated companies’ results, net of tax 5,342,124 7,047,352

The summarised information of associated companies, not adjusted for the percentage ownership held by the Group, is as follows:


The Group RM RM

- Assets 179,017,107 123,770,038

- Liabilities 112,860,995 59,299,263

- Revenue 382,461,320 119,856,502

- Net profit after taxation 23,405,931 34,719,250

Details of the associated companies are as follows:

Name

Country ofincorporation/principal place

of business

Effectivepercentage

of equity held Principal activities

2012%

2011%

^ CNG Vietnam Joint Stock Company (“CNG Vietnam”)

SocialistRepublic of

Vietnam

20.16 20.5 Producing, processing and charging CNG, LNG and LPG; providing services of converting, maintaining, repairing and installing conversion kits for facilities that use CNG, LNG and LPG; trading in serviceInvestment holding of transportation of CNG, LNG and LPG; provision of services of construction, installation, maintenance and repair of gas works

^^ IEV (Malaysia) Sdn. Bhd.

Malaysia 49 30 Provision of marine growth control,corrosion control, subsea engineering and oilfield equipment to the onshore, offshore and marine industries in Malaysia

^ Audited by Deloitte Vietnam Company Limited, Socialist Republic of Vietnam^^ Audited by SJ Grant Thornton, Malaysia



6 Associated companies (cont’d)

During the financial year ended 31 December 2012, under CNG Vietnam’s ESOS programme, CNG Vietnam issued 1,015,600 ordinary shares of VND10,000 each to its employees. In addition, there was a further increase of issued and paid up share capital of CNG Vietnam from VND203,125,000,000 to VND213,281,000,000.

The Group has also subscribed for 138,000 ordinary shares of VND10,000 each in CNG Vietnam for a consideration sum of VND3,882,374,948 (RM581,204).

Arising from the enlarged shares, the Group’s equity interest decreased to 20.16%.

The Group regarded IEV (Malaysia) Sdn. Bhd. as an associated company as the investment is held for strategic business purpose. During the financial year ended 31 December 2012, the Group increased its equity investment in IEV (Malaysia) Sdn Bhd from 30% to 49% by the acquisition of an additional 95,000 shares for a consideration sum of RM211,358.

7 Prepayments

The Company The Group

31 December 31 December 31 December 31 December

2012 2011 2012 2011

Prepayments - current 53,279 17,093 3,834,242 1,253,470

- non–current – – 907,687 –

The current prepayments relate to prepaid operating expense.

The non-current prepayment relates to premium sum incurred for guarantee bond for gas project in Indonesia.

8 Deferred tax assets



Balance at beginning of year 73,727 63,194

Credited to consolidated income statement 23 164,647 –

Currency translation difference (18,405) 10,533

Balance at end of year 219,969 73,727

The balance comprises tax on:

Provision 219,969 73,727

The deferred tax assets are to be recovered after one year.



9(a) Inventories


The Group RM RM

Raw materials, at net realisable value 1,182,538 817,759

Consumables - fuel and lubricant, at cost 25,175 93,937

Spare parts, at cost 70,716 –

1,278,429 911,696

Less:

Allowance for inventory obsolescence

Balance at beginning of year – (31,267)

Allowance made for raw materials – –

Allowance utilised during the year – 31,267

Balance at end of year – –

1,278,429 911,696

Cost of inventories included in cost of sales 2,371,911 3,331,529

Inventories write-off to consolidated income statement – 4,779

9(b) Work-in-progress

The Group

Work-in-progress represents unbilled services rendered and the amount to be collected from the customers for the project work performed to-date. There is no attributable profit recognised for this work-in-progress.

10 Trade and other receivables



2012 2011 2012 2011

RM RM RM RM

Trade receivables

- external parties – – 13,559,617 21,146,352

- associated companies – – 29,921,265 11,456,298

- accrued billing – – 22,868,779 –

– – 66,349,661 32,602,650





2012 2011 2012 2011

RM RM RM RM

Less:

Impairment loss on trade receivables

Balance at beginning of year – – (66,586) (208,405)

Allowance for the year – – (383,139) –

Allowance no longer required – – – 8,239

Allowance utilised during the year – – – 146,668

Currency translation difference – – 7,067 (13,088)

Balance at end of year – – (442,658) (66,586)

Net trade receivables – – 65,907,003 32,536,064

Deposits – – 2,910,496 286,997

Amount owing by associated companies

- advances – – 5,929,318 481,761

Amounts owing by directors

- Juzer Bin Nomanbhoy – – – 140,299

- Didik Achwan Widiyanto – – 61,166 63,600

– – 61,166 203,899

Advances to employees – – 265,023 442,710

Tax recoverables – – 4,470,727 413,795

Claims from customers – – 6,768,464 –

Others – – 1,432,597 1,471,781

– – 21,837,791 3,300,943

– – 87,744,794 35,837,007

10 Trade and other receivables (cont’d)




Trade and other receivables are denominated in the following currencies:



2012 2011 2012 2011

RM – – 24,649,873 20,079,647

USD – – 60,706,303 11,501,210

IDR – – 1,233,958 1,183,254

SGD – – 61,023 90,577

VND – – 997,926 2,964,773

AUD – – 93,782 –

THB – – – 15,503

HKD – – 1,929 2,043

– – 87,744,794 35,837,007

The Group

All trade and other receivables are subject to credit risk exposure where the credit terms are generally between 30 and 45 days. However, the Group does not identify specific concentrations of credit risk with regards to trade and other receivables, as the amounts recognised resemble a large number of receivables from various customers.

(i) Financial assets that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are substantially customers with a good collection track record with the Group.


The Group RM RM

Current 52,445,508 14,254,405

(ii) Financial assets that are past due but not impaired

The ageing analysis of trade receivables past due but not impaired is as follows:


The Group RM RM

Past due less than 31 days 3,615,230 8,179,611

Past due 31 to 60 days 1,136,773 3,041,787

Past due more than 61 days 8,709,492 7,060,261

13,461,495 18,281,659




Based on historical default rates, the Group believes that no impairment allowance is necessary in respect of trade receivables not past due or past due but not impaired. These receivables are mainly arising by customers that have a good credit record with the Group.

(iii) Financial assets that are past due and impaired

The ageing analysis of trade receivables past due and impaired is as follows:


The Group RM RM

Past due less than 31 days – –

Past due 31 to 60 days – –

Past due more than 61 days 442,658 66,586

442,658 66,586

Impairment on trade receivables is made when certain debtors are identified to be irrecoverable.

Deposits relate to rentals of office spaces, land usage and residential apartment.

The advances owing by associated companies are unsecured and interest-free. They have no repayment terms and are repayable only when the cashflows of the borrowers permit.

The amounts owing by directors of the Group are for business purpose.

The advances made to employees are for business purpose.

Tax recoverables relate to prepaid withholding tax for sales made to customers in Indonesia.

11 Fixed deposit

The Group

The fixed deposit matures on 2 July 2013 and is interest-free. It has been pledged to a financial institution for providing banker’s guarantee for a new project undertaken by a subsidiary.

The fixed deposit is denominated in Indonesia Rupiah.


12 Cash and cash equivalents



2012 2011 2012 2011

RM RM RM RM

Cash on hand – – 115,576 133,394

Bank balances 2,436,840 8,901,902 23,565,678 16,154,733

2,436,840 8,901,902 23,681,254 16,288,127

Fixed deposits – 10,982,284 8,049,330 13,453,465

2,436,840 19,884,186 31,730,584 29,741,592

Cash and cash equivalents are denominated in the following currencies:



2012 2011 2012 2011

RM RM RM RM

USD 427,912 – 12,457,261 5,748,338

VND – – 2,591,843 1,352,156

IDR – – 6,495,453 269,258

RM – – 6,264,022 1,598,141

GBP – – 16,536 16,826

AUD – – 892,825 870,229

SGD 2,008,928 19,884,186 2,996,939 19,886,644

HKD – – 15,425 –

AED – – 280 –

2,436,840 19,884,186 31,730,584 29,741,592

The Company

In 2011, the fixed deposit matured on 6 February 2012, carried interest rate of 0.1% - 0.28%.

The Group31 December

201231 December

2011

Interest rates (per annum)

- fixed deposits 0.2% - 9.0% 0.01% - 5.24%

The fixed deposits mature on:

Earliest date 2 January 2013 4 January 2012

Latest date 28 February 2013 30 March 2012



12 Cash and cash equivalents (cont’d)

(a) Included in fixed deposits is a sum of RM5,117,506 (2011 - RM1,584,125) which has been pledged to certain financial institutions for providing:

- a corporate credit card facility to a subsidiary; and - bankers’ guarantee facilities to subsidiaries.

(b) Included in bank balances is a sum of RM3,582,067 (2011 – Nil) which has been assigned to a financial institutions for providing:

- a term loan facility to a subsidiary [Note 15 (c)]; and - a revolving credit facility to a subsidiary [Note 15(e)].

13 Share capital

No. of ordinary shares Amount

The Company 31 December 31 December 31 December 31 December

2012 2011 2012 2011

RM RM

Issued and fully paid ordinary shares,with no par value

Balance at beginning of year 172,000,000 100 63,246,859 240

Transfer of RCPS – 22,706,000 – 13,000,000

Shares issued under share swap – 112,293,900 – 25,880,102

172,000,000 135,000,000 63,246,859 38,880,342

Shares issued for cash – 37,000,000 – 24,366,517

Balance at end of year 172,000,000 172,000,000 63,246,859 63,246,859

The Company was incorporated in Singapore on 26 July 2011 as an investment holding company of the Group with an initial paid-up capital of SGD100 comprising 100 ordinary shares issued and allotted to Christopher Do.

On 23 August 2007, AmPrivate Equity entered into an agreement to subscribe for 10,025,000 RCPS in the subsidiary, IEV Energy Sdn. Bhd. for an investment of approximately RM10,025,000. On 28 April 2011, AmPrivate Equity entered into a supplemental agreement (“Supplemental Agreement”) with IEV Group Sdn. Bhd. and IEV Energy Sdn. Bhd., pursuant to which AmPrivate Equity shall transfer the RCPS to IEV Group Sdn. Bhd. for a consideration equivalent to RM13,000,000. Pursuant to a letter dated 5 August 2011 (“Letter”) from AmPrivate Equity to IEV Group Sdn. Bhd. and a further supplemental agreement dated 10 October 2011 entered into between AmPrivate Equity, IEV Energy Sdn. Bhd. and IEV Group Sdn. Bhd. (“Further Supplemental Agreement”), it was agreed that the consideration of RM13,000,000 shall be satisfied by the issue of 22,706,000 Shares in the Company to AmPrivate Equity.

Pursuant to a share swap agreement dated 10 October 2011 (“Share Swap Agreement”) entered into between the Company (as the purchaser) and the Existing Shareholders, the Company acquired the entire issued and fully paid-up share capital of IEV Group Sdn. Bhd. for an aggregate purchase consideration of approximately RM25,880,102. The aggregate purchase consideration was satisfied by the allotment and issue of 112,293,900 Shares credited as fully paid, by the Company to the Existing Shareholders. The purchase consideration was arrived at based on the amount of issued and paid-up share capital of IEV Group Sdn. Bhd. as at 31 December 2010.

On 12 October 2011, the Company issued 37,000,000 New Shares at SGD0.30 each in the Initial Public Offering (“IPO”) exercise.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Group. All ordinary shares rank equally with regard to the residual assets of the Company.




14 Currency translation reserve

The Group

Currency translation reserve arises from the translation of the financial statements of foreign entities whose functional currencies are different from the functional currency of the Group and the Company.

15 Bank borrowings


The Group RM RM

Bank loan

- #1 (secured) 5,097,167 –

- #2 (secured)

- #3 (secured)

–4,500,000

4,378,860

–

9,597,167 4,378,860

Bank overdraft (secured)Revolving credit (secured)

2,706,8844,500,000

799,408–

16,804,051 5,178,268

Amount repayable:

Not later than one year 13,745,751 5,178,268

Later than one year and not later than five years 3,058,300 –

16,804,051 5,178,268

Bank borrowings are denominated in the following currencies:


The Group RM RM

USD 5,097,167 4,378,860

RM 11,706,884 799,408

16,804,051 5,178,268



15 Bank borrowings (cont’d)

(a) The bank loan facility #1 of USD2,000,000 (RM5,981,400) granted to a subsidiary by a bank is repayable over 12 quarterly repayments of USD166,667 (RM498,451) commencing 19 July 2012 with the final balance repayable on 18 April 2015.

Interest rates vary between 4.49% and 4.62% per annum.

The bank loan is secured by:

(i) a debenture comprising fixed and floating charge over all present and future assets of a subsidiary;(ii) a first charge over the Escrow Account to be opened with a financial institution acceptable to the bank and

which are to be operated solely by the bank;(iii) a charge over the assets of a subsidiary financed; (iv) a corporate guarantee provided by a subsidiary; and(v) a personal guarantee provided by a director, Christopher Nghia Do.

(b) The bank loan #2 was secured by:

(i) a debenture comprising fixed and floating charge over all present and future assets of a subsidiary;(ii) a first charge over the Escrow Account to be opened with a financial institution acceptable to the bank and

which are to be operated solely by the bank;(iii) a charge over the assets of a subsidiary financed; (iv) a corporate guarantee provided by a subsidiary; and(v) a personal guarantee provided by a director, Christopher Nghia Do.

The bank loan was fully repaid in FY 2012.

(c) The bank loan #3 granted to a subsidiary by a bank is repayable over 3 quarterly repayments of RM1.5 million commencing 31 December 2012 with the final balance repayable on 30 September 2013.

Interest rate is charged at 8.1% (2011 - Nil) per annum.


(i) a corporate guarantee provided by the Company;(ii) a corporate guarantee provided by a subsidiary;(iii) assignment over contract proceeds to the financial institution in relation to the project; and(iv) a floating charge over the project account. [Note 12 (b)]

(d) The bank overdraft is secured by a debenture by way of a fixed and floating charge over all present and future assets of a subsidiary.

Interest rate is charged at 8.1% (2011 - 8.3%) per annum.

(e) The revolving credit facility of RM6,000,000 granted to a subsidiary by a bank is repayable over 3 repayments instalment of RM1.5 million commencing 1 December 2012 with the final payment repayable on 1 May 2013.

Interest rate is charged at 5.25% per annum.


(i) a corporate guarantee provided by the Company;(ii) a corporate guarantee provided by a subsidiary;(iii) assignment over contract proceeds to the financial institution in relation to the project; and(iv) a floating charge over the project account. [Note 12 (b)]



15 Bank borrowings (cont’d)

The table below analyses the maturity profile of the Group’s borrowings based on contractual undiscounted cash flows:


The Group RM RM

Carrying amount

Less than one year 13,745,751 5,178,268

Between one to five years 3,058,300 –

More than five years – –

16,804,051 5,178,268

Contractual cash flows

Less than one year 13,965,761 5,320,667

Between one to five years 3,379,743 –

More than five years – –

17,345,504 5,320,667

As at the reporting date, the Group has unutilised bank facilities of approximately Nil (2011 - RM8,259,000).

The carrying amounts of the Group’s borrowings approximate their fair value.

16 Liability owing to holders of preference shares of a subsidiary


The Group RM RM

Balance at beginning of year – 13,360,621

Accrued interest [Note 21(c)] – 83,359

Interest write-back [Note 21(a)] – (443,980)

Redemption of redeemable convertible preference shares – (13,000,000)

Balance at end of year – –

No. of preference shares

Balance at beginning of year – 10,025,000

Redemption of redeemable convertible preference shares – (10,025,000)

Balance at end of year – -



16 Liability owing to holders of preference shares of a subsidiary (cont’d)

The redeemable convertible preference shares were denominated in Malaysia Ringgit and were fully redeemed as at 31 December 2011.

The liability owing to holders of preference shares of a subsidiary, IEV Energy Sdn. Bhd., was redeemable at the option of the holders at a fixed or determinable amount at a fixed or future date. The dividend on preference share to be issued by the subsidiary could be declared only if there was ordinary dividend being declared. The shares pay a compounded rate of return of 10% per annum which were charged to the consolidated income statement as finance costs.

As part of the restructuring exercise, the Company issued 22,706,000 ordinary shares at a consideration sum of RM13,000,000 to AmPrivate Equity Sdn. Bhd. to settle the redemption of preference shares which was agreed and accepted by AmPrivate Equity Sdn. Bhd. as a discharge of debt for the said preference shares.

Upon redemption of the preference shares, the Company became a creditor of IEV Energy Sdn. Bhd. regarding the settlement of this indebtedness.

According to the Supplemental Agreement dated 28 April 2011, the holder of preference shares, AmPrivate Equity Sdn. Bhd., agreed to take up the conversion which was to be settled by way of issuance of variable amount of ordinary shares in IEV Group Sdn. Bhd. calculated to equal a fixed amount in Malaysia Ringgit.

To the extent of this early redemption before maturity, the conversion rights remain unchanged. Accordingly, a sum of RM443,980 being the difference between the consideration sum and the carrying value of the preference shares was recognised in the consolidated income statement in the financial year ended 31 December 2011.

17 Finance lease obligations


The Group RM RM

Minimum lease payments payable:

Due not later than one year 194,285 364,644

Due later than one year and not later than five years 153,222 186,964

Due later than five years – –

347,507 551,608

Finance charges allocated to future periods (45,034) (84,656)

Present value of minimum lease payments 302,473 466,952

Present value of minimum lease payments:

Due not later than one year 167,441 304,971

Due later than one year and not later than five years 135,032 161,981

Due later than five years – –

302,473 466,952



17 Finance lease obligations (cont’d)

Finance lease obligations are denominated in the following currencies:


The Group RM RM

RM 136,021 221,929

IDR 166,452 245,023

302,473 466,952

The amount payable within one year is included under current liabilities whilst that payable after one year is included under non-current liabilities. The finance lease obligations are secured by the underlying assets (Note 5).

The carrying amounts of the Group’s finance lease obligations approximate their fair value.

18 Deferred tax liabilities

The Group

The balance on deferred tax liabilities comprises tax on excess of net book value over tax written down value of property, plant and equipment of a subsidiary.

The deferred tax liabilities are to be settled after one year.

19 Trade and other payables


31 December2012

31 December2011

31 December2012

31 December2011

RM RM RM RM

Trade payables

- third parties – – 47,611,266 13,357,675

- associated companies – – – 3,253,218

Accruals for project costs – – 33,752,225 4,894,413

Accruals for payroll costs – 495,869 836,617 2,861,531

– 495,869 82,200,108 24,366,837




31 December2012

31 December2011

31 December2012

31 December2011

RM RM RM RM

Non-trade

Amount owing to a subsidiary – 461,899 – –

Amount owing to an associated

company – – – 21,643

Amount owing to directors – – 35,990 2,819

Withholding tax – – 479,157 74,578

Sundry creditors 572,666 90 2,876,735 577,931

Value-added tax – – – 1,317,091

Others – – 460,140 1,078,630

Current portion 572,666 957,858 86,052,130 27,439,529

Provision for post-employment benefit

obligations [Note 19(e)] – – 843,852 592,909

Advances from a third party

[Note 19(f)] – – – 871,800

Non-current portion – – 843,852 1,464,709

572,666 957,858 86,895,982 28,904,238

Trade and other payables are denominated in the following currencies:


31 December2012

31 December2011

31 December2012

31 December2011

RM RM RM RM

RM 266,678 – 22,554,618 8,670,523

USD 305,850 – 60,619,566 14,215,125

IDR – – 3,239,630 3,108,824

GBP – – 42,179 120,866

Euro – – 2,916 16,857

THB – – – 7,219

HKD – – 5,404 –

SGD 138 957,858 233,194 1,776,814

AUD – – 24,565 20,330

VND – – 173,910 967,680

572,666 957,858 86,895,982 28,904,238

19 Trade and other payables (cont’d)




The Company

The non-trade amount owing to a subsidiary represents payments made on behalf which was unsecured, interest-free and repayable on demand.

The Group

The fair value of trade and other payables have not been disclosed as, due to their short duration, management considers the carrying amounts recognised in the statements of financial position to be reasonable approximation of their fair value.

(a) Accruals for project costs of the Group relate to the services rendered by service providers and goods received from suppliers where invoices have yet to be issued.

(b) Accruals for payroll costs of the Group relate mainly to provisions for salaries and related costs and unutilised leave.

(c) The non-trade amount owing to an associated company, represented advances which were unsecured and interest-free. They had no repayment terms and were repayable only when the cash flows of the Group permits.

(d) Amounts owing to directors of the Group relate to reimbursable disbursements incurred for business use and are repayable on demand.

(e) Provision for post-employment benefit obligations

The Group provides post-employment benefits for their eligible employees in accordance to Indonesia Labour Act No. 13 (2003).

The valuation of the post-employment benefit obligations is performed annually by an independent actuary, PT. Jasa Aktuaria Praptasentosa Gunajasa.



Obligations recognised in the statements of financial position for:

- post-employment and other long-term benefit (i) 843,852 592,909

Expenses charged to consolidated income statement:

- post-employment and other long-term benefits (ii) 366,458 312,519




(e) Provision for post-employment benefit obligations (cont’d)

(i) The amount recognised in the statements of financial position is determined as follows:


The Group RM RM

Present value of unfunded obligations 1,015,364 836,924

Unrecognised actuarial gain (182,577) (221,143)

Currency translation difference 11,065 (22,872)

Net liability recognised in the statements of financial position 843,852 592,909

(ii) The amounts recognised in consolidated income statement are as follows:


The Group RM RM

Current service cost 307,732 271,833

Interest cost 55,237 38,396

Net actuarial losses recognised in the year 3,489 2,290

Included in consolidated income statement 366,458 312,519

Movements in the defined benefit obligation are as follows:


The Group RM RM

Balance at beginning of year 592,909 252,777

Expense for the year 366,458 312,519

Benefits paid (27,198) (9,606)

Currency translation difference (88,317) 37,219

Balance at end of year 843,852 592,909




(e) Provision for post-employment benefit obligations (cont’d)

The principal actuarial assumptions used are as follows:


The Group RM RM

Reference to mortality rate * TMI 2011 CSO1980

Discount rate 6% 7%

Expected return on plan assets NA NA

Future salary increases 9% 9%

Normal pension years 55 years 55 years

* TMI 2011/ CSO1980 refers to a mortality table consisting of separate rates of mortality for male and female lives

The Group has no assets held by a long-term employee benefit fund (entity) nor has any qualifying insurance policies nor hold reimbursable right associate to any plan asset.

(f) The advance from a third party which was unsecured and interest rate was charged at 10% per annum was repaid in FY2012.

20 Progress billing

The Group

Progress billing relates mainly to billings accrued for services rendered.

21 (a) Other operating income




Interest income 222,638 194,527

Interest on liability owing to holders of preference shares of a subsidiary written back 16 – 443,980

Gain on disposal of property, plant and equipment 87,727 –

Rental income from sub-lease of factory and office space 93,305 86,398

Sundry income 400,984 372,780

804,654 1,097,685






Interest rates (per annum):

- bank deposits 0.1% - 3.6% 0.3% - 0.5%

- fixed deposits 0.2% - 9.0% 0.1% - 5.2%

21 (b) Administrative expenses




Employee benefit costs 21(d) 9,543,126 8,238,268

Amortisation of intangible assets 4 158,910 103,757

Consultancy fees 721,977 636,272

Depreciation of property, plant and equipment 5 832,209 702,111

Legal fees 408,345 124,514

Rental expenses 22 568,954 499,113

Travelling 608,896 477,054

Others 5,011,521 4,751,997

17,853,938 15,533,086

21 (c) Finance costs


31 December 2012

31 December 2011

The Group RM RM

Interests on:

- bank borrowings 666,711 327,391

- liability owing to holders of preference shares of a subsidiary – 83,359

- finance lease obligations 63,252 44,672

- advances from a third party 54,463 158,925

784,426 614,347

21 (a) Other operating income (cont’d)




31 December 2012

31 December 2011

The Group RM RM

Interest rates (per annum):

- bank borrowings 4.5% - 8.1% 4.2% - 7.8%

- liability owing to holders of preference shares of a subsidiary – 10.0%

- finance lease obligations 4.8% - 7.2% 4.8% - 13.1%

- advances from a third party 10.0% 10.0%

21 (d) Employee benefit costs



The Group RM RM

Directors’ remuneration

- salaries and related costs 1,931,720 2,337,588

- defined contributions 7,525 7,086

Key management personnel

- salaries and related costs 1,126,452 413,425


Other than directors and key management personnel

- salaries and related costs 10,539,601 7,430,415


- defined benefit plans 63,533 65,717

14,275,314 10,770,606

Employee benefit costs are charged to:




Cost of sales 4,732,188 2,532,338

Administrative expenses 21(b) 9,543,126 8,238,268

14,275,314 10,770,606

21 (c) Finance costs (cont’d)



22 (Loss)/profit before taxation




(Loss)/profit before taxation has been arrived at after charging/(crediting):

Amortisation of intangible assets 4 210,881 158,878

Depreciation of property, plant and equipment 5 2,784,524 2,517,095

Exchange loss 3,699,736 325,909

Rental - operating leases 21(b) 568,954 499,113

Professional fees and expenses in relation to IPO – 3,756,632

Directors’ fees 532,840 88,380

Audit fees of the Company 612,990 447,605

Non-audit fees of the Company’s auditor – 159,348

(Gain)/loss on disposal of property, plant and equipment (87,727) 9,501

Property, plant and equipment written off 151,078 133,464

23 Taxation




Current taxation 253,274 1,061,562

Deferred taxation charged to consolidated income statement 8 (164,647) –

88,627 1,061,562

Under/(over)provision of current taxation in respect of prior years 122,803 (8,794)

211,430 1,052,768



23 Taxation (cont’d)

The tax expense on the results of the financial year varies from the amount of income tax determined by applying the Malaysia statutory rate of income tax on the results of the respective companies in the Group of the following:


The Group RM RM

(Loss)/profit before taxation (3,044,618) 12,098,504

Tax at the domestic rates applicable to profits in the countries

concerned (1) (1,017,685) 3,024,626

Differences in foreign tax rates (210,533) (1,449,006)

Tax effect on non-deductible expenses 4,754,045 186,134

Tax effect on non-taxable income (3,729,078) (54,615)

Tax effect of deferred tax not recognised 1,289,094 256,047

Under/(overprovision) of current taxation in respect of prior years 122,803 (8,794)

Tax effect on offshore exemption for Hong Kong entity (997,216) (901,624)

211,430 1,052,768

(1) This is prepared by aggregating separate reconciliations for each national jurisdiction.

The Company has no taxable income to be subject to income tax in Singapore.

The Group has unabsorbed capital allowances and tax losses as follows:


The Group RM RM

Unutilised tax losses 16,359,000 8,185,000

Unabsorbed capital allowances 1,124,000 812,000

17,483,000 8,997,000

Unutilised tax benefits 4,371,000 2,249,000

These unutilised tax benefits are available for offset against future taxable profits provided that the provisions of relevant countries’ tax legislations in Malaysia and Indonesia are complied with. Unutilised tax benefits have not been recognised in the consolidated financial statements since there is no reasonable certainty of their realisation in future periods.

Pioneer Status (“Pioneer Status”) A subsidiary, IEV Manufacturing Sdn. Bhd., a company incorporated in Malaysia, was granted Pioneer Status by the

Ministry of International Trade and Industry Malaysia for pioneering the Marine Growth Preventer (“MGP”) activities for the period from 1 April 2006 to 31 March 2011; where 70% of its statutory income is exempted from tax.

As at financial year ended 31 December 2011, the Group had fully utilised its pre-pioneer unutilised tax losses and unabsorbed capital allowances.



23 Taxation (cont’d)

Operational Headquarters Status (“OHQ Status”) IEV Group Sdn. Bhd., a company incorporated in Malaysia, was accorded an approved OHQ status by the Malaysian

Industrial Development Authority for the period from 1 January 2004 to 31 December 2013; where the entity enjoys income tax exemption on its statutory income from all income from the provision of qualifying services and a part of the income from the provision of services in Malaysia (not exceeding 20%).

Full tax exemption on profits derived outside Hong Kong A subsidiary, IEV International Limited, a company incorporated in Hong Kong, enjoyed a full tax exemption since

year 2005 under Section 14 of the Hong Kong Inland Revenue Ordinance (“the Ordinance”) and the Departmental Interpretation Practice Note 21 on the basis that the mode of business operations are wholly and exclusively outside Hong Kong. This tax exemption status is applicable to onward years unless the mode of business operations changes to be in Hong Kong and that the provisions of the current Hong Kong Tax Practice and provisions of the Ordinance are complied with.

24 Earnings per share

Basic and diluted earnings per share

Basic and diluted earnings per share is calculated by dividing the net profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue of 172,000,000 (2011 – 144,250,000) shares during the financial year.


The Group RM RM

Net (loss)/profit attributable to equity holders of the Group (3,093,794) 11,151,071

Weighted average number of ordinary shares for purpose of calculating basic and diluted earnings per share 172,000,000 144,250,000

Basic earnings per share (Malaysian sen) (1.8) 7.7

Diluted earnings per share (Malaysian sen) (1.8) 7.7

As there are no dilutive potential ordinary shares that were outstanding during the year, the basic earnings per share is the same as the diluted earnings per share.



25 Subsidiaries


The Company RM RM

Unquoted equity investments, at cost (i) 32,357,388 25,880,102

Amounts owing by subsidiaries (non-trade)

- long-term loans 22,387,880 14,110,626

Less:

Impairment loss on receivables

Balance at beginning of year (13,274,920) –

Allowance during the year (1,217,900) (13,274,920)

Balance at end of year (14,492,820) (13,274,920)

(ii) 7,895,060 835,706

Total (i) + (ii) 40,252,448 26,715,808

The amounts owing by subsidiaries on long-term loans account are an extension of the Company’s net investment in the subsidiaries. These are unsecured, interest-free and are neither planned nor likely to be settled in the foreseeable future. Because they represent net investment, with indeterminable repayments, it is not practicable to determine the fair value of these amounts owing. As at the reporting date, there is an indication that the board of the directors of the Company may have intention to capitalise the indebtedness owings to some extent.



The details of the subsidiaries are as follows:

Name

Country ofincorporation/

principal place

of businessCost of

investments

Effectivepercentage


2012RM

2011RM

2012%

2011%

Held by the Company

## IEV Group Sdn. Bhd. Malaysia 25,880,102 25,880,102 100 100 Investment holding, provision of technical and management services to its subsidiaries, conducting product development for the Group’s product and services

IEV Energy Investment Pte. Limited

Singapore 6,477,286 – 100% – Investment in upstream, midstream and downstream activities of oil & gas projects

Subsidiaries held by IEV Group Sdn. Bhd.

^ IEV International Limited

Hong Kong + + 100 100 Provision of marine growth control, corrosion control, subsea engineering and oilfield equipment and services to the onshore, offshore and marine industries in global market

^^ PT IEV Indonesia Indonesia + + 95 95 Provision of marine growth control, corrosion control, subsea engineering and oilfield equipment to oil and gas and marine industries in Indonesia

Balance carried forward 32,357,388 25,880,102

25 Subsidiaries (cont’d)




Name


principal place

of businessCost of

investments

Effectivepercentage


2012RM

2011RM

2012%

2011%

Balance brought forward 32,357,388 25,880,102

Subsidiaries held by IEV Group Sdn. Bhd. (cont’d)

## IEV Manufacturing Sdn. Bhd.

Malaysia + + 100 100 Manufacturing, exporting, importing, supplying and wholesaling of marine growth products, corrosion controlproducts and other subsea engineering andoilfield equipment to the oil, gas and marine industries

# IEV Oil & Gas Technologies Co., Ltd.

Socialist Republic of

Vietnam

+ + 100 100 Providing services of maintenance and repair of subsea engineering (anti-corrosion, marine growth control), providing services on conversion of petrol into natural gas, providing sevices on natural gas use for technology, household and transportation, importing and retailing equipment relating to the survey, repair, installation and maintenance of industrial works (including subsea works), exploration boring and exploitation of petrol, decommissioning (oil and gas)



Name


principal place

of businessCost of

investments

Effectivepercentage


2012RM

2011RM

2012%

2011%

## IEV Energy Sdn. Bhd.

Malaysia + + 100 100 Provision of engineering solutions relating to mobile gas infrastructure development throughout Asia, from design, construction and operation of small to medium scale Liquefied Natural Gas (“LNG”) plants and Compressed Natural Gas (“CNG”) fixed/mobile stations, to their distribution to end users by mobile means

## IEV Engineering Sdn. Bhd.

Malaysia + + 100 100 Provision of marine growth control, corrosion control, subsea engineering and oilfield equipment and services to the oil and gas and marine industries in Malaysia





Name


principal place

of businessCost of

investments

Effectivepercentage


2012RM

2011RM

2012%

2011%

Balance brought forward 32,357,388 25,880,102

Subsidiary held by IEV International Limited

* IEV International Pty Limited Australia + + 100 100 Inactive

Subsidiary held by IEV Energy Sdn Bhd

^^ PT IEV Gas Indonesia + + 95 95 Undertakes commercial business of CNG and LNG, and provision of bottling services, charging and transportation of CNG and LNG

Subsidiary held by IEV Energy Investment Pte. Limited

PT IEV Pabuaran Indonesia + – 95 – Undertake business activities in relation to onshore oil and natural gas services and operating and maintenance of oil and natural gas facility services

32,357,388 25,880,102

^ Audited by Cheng & Cheng Limited, Hong Kong^^ Audited by Hendrawinata Gani & Hidayat Grant Thornton, Indonesia# Audited by Grant Thornton (Vietnam) Ltd, Socialist Republic of Vietnam## Audited by SJ Grant Thornton, Malaysia* Audited by Mitchell & Partners Chartered Accountants, Australia+ Interest held through subsidiaries

On 21 March 2012, the Group incorporated a subsidiary, IEV Energy Investment Pte Ltd, with an initial paid-up capital and registered capital of SGD2,600,000 respectively.

On 13 July 2012, the Group incorporated a subsidiary, PT IEV Pabuaran in Indonesia, with an initial paid-up capital and registered capital of IDR 12,000,000,000 (USD 1,320,000) respectively.

For the purpose of FRS reporting, Foo Kon Tan Grant Thornton LLP has re-performed the audit of all subsidiaries except for IEV Oil & Gas Technologies Co., Ltd and IEV International Pty Limited (an inactive company) which has a Net Tangible Assets (“NTA”) of RM1,098,701 and RM3,448,935 respectively as at 31 December 2012, which in total representing less than 6.7% of consolidated NTA.



26 Commitments

26.1 Operating lease commitments (non-cancellable)

(A) Where the Group is the lessee

As at the end of reporting period, the Group was committed to making the following lease rental payments in respect of non-cancellable operating leases for office premises, motor vehicles and factory equipment with an original term of more than one year:


The Group RM RM

Not later than one year 789,774 915,522

Later than one year and not later than five years 282,530 245,197

Later than five years – –

The leases on the Group’s motor vehicles on which rental is payable will expire on 23 October 2012, the earliest date and 13 December 2012, the latest date. The current rents payable are RM2,811 and RM1,386 per month.

The leases on the Group’s factory equipment on which rental is payable will expire on 14 October 2012, the earliest date and 16 October 2012, the latest date. The current rents payable are RM15,400 and RM15,708 per month.

The current rents payable on the leases on the office premises per annum are as follows:

Location Land area (sqm) Expiry date Rental per month (RM)

Malaysia

(i) Suite 2.01 2nd Floor Dataran Hamodal Block B Lot 4, Jalan 13/4 46200 Petaling Jaya Selangor Darul Ehsan, Malaysia

1,057 30 April 2013 28,163

(ii) 19-09 Mont Kiara bayu No 2 Jalan Kiara 2 Mont Kiara 50480 Kuala Lumpur

102 30 June 2013 2,800

Socialist Republic of Vietnam

(iii) Floor 7 Abacus Building 58 Nguyen Dinh Chieu Street Da Kao Ward, District 1 Ho Chi Minh City, Vietnam

80 31 March 2017 6,200



26 Commitments

26.1 Operating lease commitments (non-cancellable)

(A) Where the Group is the lessee (cont’d)

Rental per

Location Land area (sqm) Expiry date month (RM)

Indonesia

(iv) PT Kahatex, Senen Raya 135-137 Suite 12A-02, 12A-03 Jakarta, Indonesia

251 30 November 2013

2,928

(v) PT Kahatex, Senen Raya 135-137 Suite 12A-04, 12A-05 Jakarta, Indonesia

251 30 April 2014 2,928

(vi) Khanafi Komplek Cimareme Indah Blok A4 No 12, Desa Cimareme Jakarta, Indonesia

108 31 October 2013 594

(vii) Sri Suyati Taman Cibaduyut Indah Blok LA 24 RT 05 RW 05 Desa Cangkarang Wetan KEC Dayuehkolot Bandung, Indonesia

50 29 March 2013 181

(B) Where the Group is the lessor

As at the end of reporting period, the Group had the following lease rental income in respect of non-cancellable operating leases for factory premises with an original term of more than one year:

31 December 2012

31 December 2011

The Group RM RM

Not later than one year 64,599 68,508

Later than one year and not later than five years – 68,508

Later than five years – –

The leases on the Group’s factory premises on which rental is receivable will expire on 31 December 2013 with renewals at the then prevailing rates.



26 Commitments

26.2 Capital commitments

31 December 2012

31 December 2011

The Group RM RM

Capital expenditure contracted but not provided in the consolidated financial statements 9,854,514 295,059

27 Significant related party transactions

Other than the related party information disclosed elsewhere in the consolidated financial statements, the following are transactions at mutually agreed amounts entered into between the Group and associated companies at agreed rates:

31 December 2012

31 December 2011

The Group RM RM

Charged to associated companies

- project income - administrative fees - manpower services - operating expenses

244,434,65718,719

102,949–

5,107,91072,322

185,86585,700

Charged by an associated company

- purchases - operating expenses - commission

192,27940,331

2,000

325,1254,734

–

28 Contingent liabilities

As at the reporting date, entities of the Group has provided corporate guarantees to financial institutions for credit facilities granted to a subsidiary as follows:

31 December 2012

31 December 2011

Corporate guarantee provided by Provided to RM RM

The Company

IEV Holdings Limited IEV Engineering Sdn. Bhd. 9,000,000 –

The Group

IEV Group Sdn. Bhd. IEV Engineering Sdn. Bhd. 9,000,000 4,379,000

IEV Group Sdn. Bhd. IEV Energy Sdn. Bhd. 5,097,000 4,379,000

There is no impact on the financial guarantee as the bank borrowings of the subsidiary concerned are at prevailing

market rates.



29 Dividends


The Company and The Group RM RM

Ordinary dividends paid

- final tax-exempt (one-tier) dividend paid in respect of the previous financial year of 0.007 sen (2011 - Nil) per share 1,204,000 –

- Interim tax-exempt (one-tier) dividend paid in respect of the current financial year of 0.006 sen (2011- Nil) per share 1,135,200 –

2,339,200 –

The Directors do not recommend any final dividend in respect of the current financial year ended 31 December 2012.

30 Operating segments

For management purposes, the Group is organised into the following reportable operating segments as follows:

(1) Offshore Engineering division; and(2) Mobile Natural Gas division.

There are no other operating segments that have been aggregated to form the above reportable operating segments.

The management monitors the operating results of its operating segments for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as set out below, is measured differently from operating profit or loss in the consolidated financial statements.

(a) Business segments

Offshore Engineering Mobile Natural Gas Consolidated

2012 2011 2012 2011 2012 2011

The Group RM RM RM RM RM RM

REVENUE

Total sales 304,057,456 73,083,241 23,565,964 19,551,720 327,623,420 92,634,961

Inter-segment sales (11,230,460) (11,819,117) – – (11,230,460) (11,819,117)

External sales 292,826,996 61,264,124 23,565,964 19,551,720 316,392,960 80,815,844

RESULTS

Segment results (5,471,588) 5,281,580 (2,130,728) 383,919 (7,602,316) 5,665,499

Finance costs (179,052) (263,971) (605,374) (350,376) (784,426) (614,347)

(5,650,640) 5,017,609 (2,736,102) 33,543 (8,386,742) 5,051,152



30 Operating segments (cont’d)

(a) Business segments (cont’d)

Offshore Engineering Mobile Natural Gas Consolidated

2012 2011 2012 2011 2012 2011

The Group RM RM RM RM RM RM

Share of associated companies’ results,

net of tax 667,566 (210,163) 4,674,558 7,257,515 5,342,124 7,047,352

(4,983,074) 4,807,446 1,938,456 7,291,058 (3,044,618) 12,098,504

Taxation (211,430) (1,052,768)

Non-controlling interests 162,254 105,335

Net profit (3,093,794) 11,151,071

OTHER INFORMATION

Segment assets 103,046,873 67,009,188 46,465,067 25,280,749 149,511,940 92,289,937

Investment in associated

companies 1,142,801 263,876 17,158,112 16,608,910 18,300,913 16,872,786

Consolidated total assets (excluding taxation) 104,189,674 67,273,064 63,623,179 41,889,659 167,812,853 109,162,723

Segment liabilities

(excluding taxation and progress billing) 95,426,769 30,065,698 8,575,737 4,483,760 104,002,506 34,549,458

Capital expenditure

- intangible assets – – 4,610,565 – 4,610,565 –

- property, plant and

equipment 1,548,318 1,617,467 3,825,635 4,083,538 5,373,953 5,701,005

Amortisation of intangible assets 56,160 55,800 154,721 103,078 210,881 158,878

Depreciation of property,

plant and equipment 788,734 610,482 1,995,790 1,906,613 2,784,524 2,517,095




(b) Geographical segment

The following table shows the distribution of the Group’s consolidated sales based on geographical location of customers:

Sales Revenue by Geographical Market


The Group RM RM

Malaysia 263,150,567 20,144,297

Indonesia 27,646,485 25,745,063

Vietnam 3,927,101 9,138,692

Thailand 1,081,640 4,120,753

India 2,656,029 12,566,908

Singapore 3,872,574 –

China 4,469,799 5,598,476

South Korea 6,942,989 –

Middle East 2,058,730 –

Australia – 1,013,174

Myanmar – 1,902,137

Others 587,046 586,344

316,392,960 80,815,844

Information about major customers Revenue from two major customers amounted to RM244,434,657 and RM12,003,739 (2011 – RM5,107,910 and

RM11,593,044), arising from offshore engineering and mobile natural gas segments respectively.

(c) Additions to property, plant and equipment by geographical areas

The following table shows the carrying amount of additions to property, plant and equipment by geographical areas in which the assets are located:


The Group RM RM

Malaysia 440,733 534,310

Indonesia 3,838,831 4,131,749

Vietnam 226,415 9,213

Hong Kong 867,974 1,025,733

5,373,953 5,701,005




(d) Reconciliation of segments’ total assets and total liabilities


The Group RM RM

Reportable segments’ assets are reconciled to total assets:

Tax recoverable 4,470,727 413,795

Segment assets 149,511,940 92,289,937

Investment in associated companies 18,300,913 16,872,786

Deferred tax assets 219,969 73,727

Total assets 172,503,549 109,650,245

Reportable segments’ liabilities are reconciled to total liabilities:

Segment liabilities 104,002,506 34,549,458

Deferred tax liabilities 5,000 5,000

Progress billing 58,947 126,535

Current tax payable 501,273 790,509

Total liabilities 104,567,726 35,471,502

(e) Non-current assets information based on geographical location of assets are as follows:


The Group RM RM

Malaysia 2,785,110 1,761,549

Indonesia 25,818,559 21,328,884

Vietnam 17,468,721 16,739,432

Hong Kong 1,698,251 1,410,668

47,770,641 41,240,533

31 Disclosure of directors’ remuneration

As required by the Listing Manual of the Singapore Exchange, the remuneration of directors of the Company is disclosed in bands as follows:

Number of directors

2012 2011

Above SGD500,000 1 1

SGD250,000 to SGD499,999 – –

Below SGD250,000 5 5

Total 6 6


32 Financial risk management objectives and policies

The Group’s financial instruments carried on the statements of financial position include cash and cash equivalents, financial assets and financial liabilities.

The Group’s activities expose it to a variety of financial risks: currency risk, interest rate risk, liquidity risk, market price risk and credit risk. The Group’s overall risk management strategy seeks to minimise potential adverse effects from the unpredictability of financial markets on the Group’s financial performance through a system of internal controls set by the management.

The Group does not hold or issue derivative financial instruments for trading purposes or to hedge against fluctuations, if any, in interest rates and foreign exchange.

32.1 Foreign Currency risk Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.

Currency risk arises when transactions are denominated in foreign currencies.

The Group operates in Asia with dominant operations in Malaysia, Indonesia and Socialist Republic of Vietnam. Entities in the Group regularly transact in currencies other than their respective functional currencies (“foreign currencies”).

Currency risk arises within entities in the Group when transactions are denominated in foreign currencies such as the United States dollar (“USD”), Indonesia Rupiah (“IDR”), Australia dollar (“AUD”) and Vietnamese Dong (“VND”).

The Group is exposed to currency translation risk on the net assets in foreign operations. Currency exposure to the net assets of the Group’s foreign operations in Hong Kong, Indonesia, Socialist Republic of Vietnam and Australia are managed primarily through borrowings, denominated in the relevant foreign currencies to mitigate the risk of currency exposure.

However, the Group does not use any financial derivative such as foreign currency forward contracts, foreign currency options or swaps for hedging purposes. The Group will continue to monitor its foreign exchange exposure and may employ forward currency contracts to manage its foreign exchange exposure should the need arise.



32 Financial risk management objectives and policies

32.1 Currency risk (cont’d)

The exposure to major currencies of the Group is as follows:

At 31 December 2012

USD IDR AUD VND

Financial assets

Cash and cash equivalents 12,457,261 6,495,453 892,825 2,591,843

Trade and other receivables 60,706,303 1,233,958 93,782 997,926

73,163,564 7,729,411 986,607 3,589,769

Financial liabilities

Borrowings 5,097,167 – – –

Finance lease obligation – 166,452 – –

Trade and other payables 60,619,566 3,239,630 24,565 173,910

65,716,733 3,406,082 24,565 173,910

Currency exposure on financial assets and liabilities 7,446,831 4,323,329 962,042 3,415,859

At 31 December 2011

Financial assets

Cash and cash equivalents 5,748,338 269,258 870,229 1,352,156

Trade and other receivables 11,501,210 1,183,254 – 2,964,773

17,249,548 1,452,512 870,229 4,316,929

Financial liabilities

Borrowings 4,378,860 – – –

Finance lease obligation – 245,023 – –

Trade and other payables 14,215,125 3,108,824 20,330 967,680

18,593,985 3,353,847 20,330 967,680

Currency exposure on financial assets and liabilities (1,344,437) (1,901,335) 849,899 3,349,249



32 Financial risk management objectives and policies (cont’d)

Sensitivity analysis With all other variables being held constant, a 5% strengthening/weakening of the USD, IDR, AUD and VND against

RM at the reporting date would have either increased or decreased the Group’s net profit after tax and equity (nearest thousand) by the amounts shown below:

2012 2011

The Group RM RM

USD 279,000 (50,000)

IDR 162,000 (71,000)

AUD 36,000 32,000

VND 128,000 126,000

32.2 Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of

changes in market interest rates.

The Group’s exposure to interest rate risk arises primarily from borrowings, finance lease obligations and cash placed with financial institutions.

The interest rates are disclosed in Notes 12, 21(a) and 21(c) to the consolidated financial statements. The following tables set out the carrying amount, by maturity, of the Group’s and the Company’s financial instruments

that are exposed to interest rate risk:

The Group

Within1 year

RM

1 - 2years

RM

2 - 3years

RM

3 - 4years

RM

4 - 5 years

RM

More than5 years

RMTotal

RM

2012

Fixed rate

Fixed deposits > 3 months 47,049 – – – – – 47,049

Fixed deposits < 3 months 8,049,330 – – – – – 8,049,330

Obligations under finance lease (167,441) (102,694) (32,338) – – – (302,473)

Floating rate

Borrowings (13,745,751) (2,038,868) (1,019,432) – – – (16,804,051)

2011

Fixed rate

Fixed deposits > 3 months 60,560 – – – – – 60,560

Fixed deposits < 3 months 13,453,465 – – – – – 13,453,465

Obligations under finance lease (304,971) (104,644) (57,337) – – – (466,952)

Floating rate

Borrowings (5,178,268) – – – – – (5,178,268)




32.2 Interest rate risk (cont’d) Sensitivity analysis for interest rate risk At the end of reporting period, if interest rate increase/decrease by 1% per annum with all other variables held

constant, the Group’s profit net of tax and equity would have increased/decreased as follows:

Increase/(decrease)

The Group Profit net of tax

2012 2011

RM RM

Interest rate

- decreased by 1% per annum 128,000 49,000

- increased by 1% per annum (128,000) (49,000)

Equity

2012 2011

RM RM

Interest rate

- decreased by 1% per annum 128,000 49,000

- increased by 1% per annum (128,000) (49,000)

This arises mainly as a result of lower/higher interest expenses on bank borrowings, finance lease obligations and advances from a third party.

32.3 Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in raising funds to meet commitments associated with

financial instruments. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Company’s and the Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company’s and the Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

The Group ensures that there are adequate funds to meet all its obligations in a timely and cost-effective manner. The Group aims at maintaining flexibility in funding by keeping committed credit facilities available as disclosed in Note 15.




32.3 Liquidity risk (cont’d) The table below analyses the maturity profile of the Company’s and the Group’s financial liabilities based on contractual

undiscounted cashflows:

Less than Between 2

1 year and 5 years Total

The Group RM RM RM


Trade and other payables 86,052,130 1,015,364 87,067,494

Bank borrowings 13,965,761 3,379,743 17,345,504

Finance lease obligations 194,285 153,222 347,507

100,212,176 4,548,329 104,760,505


Trade and other payables 27,439,529 1,763,189 29,202,718

Bank borrowings 5,320,667 - 5,320,667

Finance lease obligations 364,644 186,964 551,608

33,124,840 1,950,153 35,074,993

32.4 Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the Group

to incur a financial loss.

The Company’s and the Group’s exposure to credit risk arises primarily from trade and other receivables, related parties’ balances and cash held with financial institutions. There are no significant concentrations of credit other than amount owing by related party and associates.

The Group typically grant credit terms of 30 to 45 days to customers and based on the Group’s experience, customers typically make payment within the credit period. However, the Group may be exposed to payment delays and/or defaults by customers. As the Group is in the projects-oriented business, there is no single customer considered significant.

At the end of reporting period, approximately 80% (2011 – 35%) of the Group’s trade receivables are due from an associate company in offshore engineering sector. The Group’s single customer reported 77% of the Group’s revenue.

The Group monitors its potential losses on credit extended. The amounts presented in the statements of financial position are net of allowances for doubtful receivables. An allowance for impairment on the receivables is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

Other than as disclosed, the Group does not hold any collateral, the maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented in the statements of financial position.



33 Capital management

The Group's objectives when managing capital are:

(a) To safeguard the Group's ability to continue as a going concern;

(b) To support the Group's stability and growth;

(c) To provide capital for the purpose of strengthening the Group's risk management capability; and

(d) To provide an adequate return to shareholders.

Having regards to its gearing exposure, the Group actively and regularly reviews and manages its capital structure to ensure optimal capital structure and shareholders’ returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. The Group currently does not adopt any formal dividend policy.

There were no changes in the Group’s approach to capital management during the financial year ended 31 December 2012. The Group is not subject to externally imposed capital requirements.

The Group manages its capital structure considering its gearing exposure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the financial year ended 31 December 2012.

Gearing has a significant influence on the Group’s capital structure and the Group monitors capital using a gearing ratio. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debts. The Group’s policy to keep the gearing ratio between 0.3 and 0.5. The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as bank borrowings plus trade and other payables plus finance lease obligations less cash and cash equivalents.

Total capital is calculated as equity plus net debt.

2012 2011

The Group RM RM

Borrowings (Note 15) 16,804,051 5,178,268

Obligations under finance lease (Note 17) 302,473 466,952

Trade and other payables (Note 19) 86,895,982 28,904,238

Less: Cash and cash equivalents (Note12) (31,730,584) (29,741,592)

Less: Fixed deposits (Note11) (47,049) (60,560)

Net debts 72,224,873 4,747,306

Total equity attributable to the equity holders of the Company 67,981,997 74,278,038

Equity and net debts 140,206,870 79,025,344

Gearing ratio 0.52 0.06

The Company has observed its covenant obligations, including maintaining capital ratios since the inception of the borrowings (Note 15).



34 Financial instruments

Fair values The carrying amount of the financial assets and financial liabilities with a maturity of less than one year is assumed to

approximate their fair values.

It is not practicable to estimate the fair value of unquoted equity investment classified as available-for-sale investment without incurring excessive cost.

The Group does not anticipate that the carrying amounts recorded at end of reporting period would be significantly different from the values that would eventually be received or settled.

NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2012


STATISTICS OF SHAREHOLDINGS

Issued and paid-up capital : SGD26,511,930.00Number of issued shares : 172,000,000 Number of Treasury Shares : Nil Voting rights : ON SHOW OF HANDS: 1 VOTE FOR EACH MEMBER

ON A POLL: 1 VOTE FOR EACH ORDINARY SHARE

DISTRIBUTION OF SHAREHOLDERS(As at 8 March 2013)

Size of Shareholding No. of Shareholders % of Shareholders No. of Shares % of Shareholding

1 - 999 2 0.22 1000 0.00

1,000 - 10,000 386 42.05 3,078,000 1.79

10,001 - 1,000,000 506 55.12 28,653,000 16.66

1,000,001 and above 24 2.61 140,268,000 81.55

TOTAL 918 100.00 172,000,000 100.00

TWENTY LARGEST SHAREHOLDERS(As at 8 March 2013)

No. Name No. of Shares %

1 CHRISTOPHER NGHIA DO 31,270,000 18.18

2 VIMALA J.GOVINDASAMY 31,071,000 18.06

3 AMFRASER SECURITIES PTE. LTD. 11,607,000 6.75

4 PERMBROOK PTY LIMITED 7,524,000 4.37

5 CROGAR PTY LIMITED 7,230,000 4.20

6 MUVUSI PTY LIMITED 7,230,000 4.20

7 MUWORI PTY LIMITED 7,230,000 4.20

8 OCBC SECURITIES PRIVATE LTD 5,064,000 2.94

9 KHIEM TRONG DO 4,691,000 2.73

10 JUZER BIN NOMANBHOY 4,147,000 2.41

11 ROZIA HANIS BINTI TUN HUSSEIN 3,133,000 1.82

12 PHILLIP SECURITIES PTE LTD 3,015,000 1.75

13 UOB KAY HIAN PTE LTD 2,502,000 1.45

14 JOANNE ROSE BRUCE 2,025,000 1.18

15 TRAN THI MAI THAO 1,736,000 1.01

16 POH CHENG SENG OR POH SENG KUI 1,500,000 0.87

17 LIM & TAN SECURITIES PTE LTD 1,262,000 0.73

18 MAYBANK KIM ENG SECURITIES PTE LTD 1,240,000 0.72

19 TJONG TJU PHIN 1,224,000 0.71

20 RAFFLES NOMINEES (PTE) LTD 1,207,000 0.70

TOTAL 135,908,000 78.98


STATISTICS OF SHAREHOLDINGS

SUBSTANTIAL SHAREHOLDERS(As recorded in the Register of Substantial Shareholders as at 8 March 2013)

No Name

Direct Interest Deemed Interest

No. of Shares %

No. of Shares %

1 TAN SRI DATO’ HARI N. GOVINDASAMY – – 32,471,000(1) 18.88

2. VIMALA J. GOVINDASAMY 31,071,000 18.06 1,400,000(2) 0.81

3. CHRISTOPHER NGHIA DO 31,270,000 18.18 1,736,000(3) 1.01

4. JANICE CRAWFORD – – 21,984,000(4) 12.78

5. CHRISTINE MUNRO – – 21,984,000(5) 12.78

6. AmPRIVATE EQUITY SDN. BHD. – – 11,353,000(6) 6.60

7. ANZ FUNDS PTY LTD – – 11,353,000(7) 6.60

8. AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

– – 11,353,000(7) 6.60

9. EMPLOYEES PROVIDENT FUND BOARD – – 11,353,000(7) 6.60

10. AMMB HOLDINGS BERHAD – – 11,353,000(7) 6.60

11. AmINVESTMENT GROUP BERHAD – – 11,353,000(7) 6.60

Notes:

(1) The deemed interest in 32,471,000 shares includes: i) 31,071,000 shares held by his spouse, Vimala J. Govindasamy;ii) 1,000,000 shares held through HSBC (Singapore) Nominees Pte. Ltd.; and iii) 400,000 shares held through HL Bank Nominees (Singapore) Pte. Ltd.

(2) Deemed to be interested in 1,400,000 shares held by her spouse, Tan Sri Dato’ Hari N. Govindasamy though HL Bank Nominees (Singapore) Pte. Ltd. and HSBC (Singapore) Nominees Pte. Ltd.

(3) Deemed to be interested in 1,736,000 shares held by his spouse, Tran Thi Mai Thao.

(4) The deemed interest in 21,984,000 shares includes:i) 7,524,000 shares held by Permbrook Pty Limited; ii) 7,230,000 shares held by Crogar Pty Limited; andiii) 7,230,000 shares held by Muvusi Pty Limited.

(5) The deemed interest in 21,984,000 shares includes:i) 7,524,000 shares held by Permbrook Pty Limited; ii) 7,230,000 shares held by Crogar Pty Limited; andiii) 7,230,000 shares held by Muwori Pty Limited.

(6) The 11,353,000 shares are held by AmPrivate Equity Sdn. Bhd. through AmFraser Securities Pte. Ltd.

(7) Deemed to be interested in 11,353,000 shares held by AmPrivate Equity Sdn. Bhd. through AmFraser Securities Pte. Ltd. by virtue of Section 7 of the Companies Act, Cap. 50.

SHARES HELD BY PUBLIC

Based on the information provided to the Company as at 8 March 2013, approximately 31.99% of the issued shares of the Company were held in the hands of the public as defined in the Listing Manual Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited (The “Rules of Catalist”). Accordingly, Rule 723 of the Rules of Catalist has been complied with.


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of IEV Holdings Limited (the “Company”) will be held at Paradiso Room, Level 3, Grand Copthorne Waterfront Hotel, 392 Havelock Road, Singapore 169663 on Monday, 22 April 2013 at 10.30 a.m. for the following business:

As Ordinary Business

1. To receive and adopt the Audited Financial Statements for the financial year ended 31 December 2012 and the Reports of the Directors and the Auditors thereon. (Resolution 1)

2. To re-elect Mr Christopher Nghia Do who is retiring pursuant to Article 98 of the Articles of Association of the Company. (Resolution 2)

3. To re-elect Mr Kesavan Nair who is retiring pursuant to Article 98 of the Articles of Association of the Company.

Mr Kesavan Nair will, upon re-election as a Director of the Company, remain as the Chairman of the Remuneration and Nominating Committees and a member of the Audit Committee. The Board considers him to be independent for the purpose of Rule 704(7) of the Listing Manual Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited. (Resolution 3)

4. To approve the payment of Directors’ fees amounting to SGD216,000 for the financial year ending 31 December 2013, to be paid quarterly in arrears. (Resolution 4)

5. To re-appoint Messrs Foo Kon Tan Grant Thornton LLP as Auditors of the Company and to authorise the Directors to fix their remuneration. (Resolution 5)

6. To transact any other ordinary business which may be properly transacted at an annual general meeting.

As Special Business

To consider and, if thought fit, to pass the following as Ordinary Resolutions, with or without modifications:

7. Authority to Allot and Issue Shares

THAT pursuant to Section 161 of the Companies Act, Chapter 50 (the “Act”) and Rule 806(2) of the Catalist Rules, the Directors of the Company be authorised and empowered to:

I (i) allot and issue shares in the capital of the Company (whether by way of rights, bonus or otherwise); and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that may or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures, convertible securities or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and



7. Authority to Allot and Issue Shares (cont’d)

II (notwithstanding that the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

provided always that:

(a) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments, made or granted pursuant to this Resolution), shall not exceed 100% of the total number of issued shares in the capital of the Company (excluding treasury shares) (as calculated in accordance with sub-paragraph (b) below), of which the aggregate number of shares to be issued other than on a pro rata basis to the shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) shall not exceed 50% of the total number of issued shares in the capital of the Company (excluding treasury shares) (as calculated in accordance with

sub-paragraph (b) below);

(b) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (a) above, the percentage of the total issued shares shall be based on the total number of issued shares in the capital of the Company (excluding treasury shares) at the time this Resolution is passed, after adjusting for:

(i) new shares arising from the conversion or exercise of any convertible securities outstanding at the time this authority is given;

(ii) (where applicable) new shares arising from the exercise of share options or vesting of share awards which are outstanding or subsisting at the time of the passing of this Resolution, provided the share options or share awards (as the case may be) were granted in compliance with Part VIII of Chapter 8 of the Catalist Rules; and

(iii) any subsequent bonus issue, consolidation or subdivision of shares;

(c) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Catalist Rules for the time being in force (unless such compliance has been waived by the SGX-ST), all applicable legal requirements under the Act and the Articles of Association for the time being of the Company;

(d) the authority conferred by this Resolution shall, unless revoked or varied by the Company in general meeting, continue to be in force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note 1] (Resolution 6)

8. Authority to allot and issue shares pursuant to the IEV Holdings Performance Share Plan (the “Plan”)

THAT pursuant to Section 161 of the Companies Act, Cap. 50 of Singapore, authority be and is hereby given to the Directors to offer and grant awards (“Awards”) in accordance with the provisions of the Plan and to allot and issue from time to time such number of ordinary shares in the capital of the Company (“Shares”) as may be required to be issued pursuant to the vesting of the Awards granted under the Plan, provided always that the aggregate number of Shares to be allotted and issued pursuant to the Plan, shall not exceed 15% of the total issued Shares of the Company (excluding treasury shares) on the date preceding the date of the relevant grant. Such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note 2] (Resolution 7)


By Order of the Board

Teo Meng Keong Company SecretarySingapore5 April 2013

Notes:

1. A member of the Company entitled to attend and vote at the Annual General Meeting of the Company is entitled to appoint not more than two proxies to attend in his stead. A proxy need not be a member of the Company.

2. Where a member appoints two proxies, he shall specify the proportion of his shareholding to be represented by each proxy in the instrument appointing the proxies.

3. If the member is a corporation, the instrument appointing the proxy must be under seal or the hand of an officer or attorney duly authorised.

4. The instrument appointing a proxy must be deposited at the office of the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623, not less than 48 hours before the time appointed for holding the Annual General Meeting.

Explanatory Notes:

(1) Resolution 6

This is to empower the Directors of the Company, effective until conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to allot and issue shares, make or grant instruments convertible into shares and to issue shares pursuant to such instruments, without seeking any further approval from shareholders in general meeting but within the limitation imposed by this Resolution, for such purposes as the Directors may consider would be in the best interests of the Company. The aggregate number of shares (including shares to be made in pursuance of Instruments made or granted pursuant to this Resolution) to be allotted and issued would not exceed 100% of the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of passing of this Resolution. For issue of shares (including shares to be made in pursuance of Instruments made or granted pursuant to this Resolution) other than on a pro-rata basis to all shareholders, the aggregate number of shares (including shares to be made in pursuance of Instruments made or granted pursuant to this Resolution) to be allotted and issued shall not exceed 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution.

(2) Resolution 7

This is to authorise the Directors of the Company, effective until conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to offer and grant awards in accordance with the provisions of the Plan and to allot and issue shares under the Plan up to an amount not exceeding 15% of the Company’s total number of issued shares (excluding treasury shares) in the capital of the Company on the date preceding the date of the relevant grant.


PROXY FORM

I/We, ___________________________________________________________ (name) of _________________________________________________________________________________________________________(address) being a member/members of IEV Holdings Limited (the “Company”), hereby appoint :

Name Address NRIC/Passport No.Proportion of

Shareholdings

No. of Shares %

and/or (delete as appropriate)

Name Address NRIC/Passport No.Proportion of

Shareholdings

No. of Shares %

or failing him/her, the Chairman of the Annual General Meeting, as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the Annual General Meeting of the Company to be held at Paradiso Room, Level 3, Grand Copthorne Waterfront Hotel, 392 Havelock Road, Singapore 169663 on Monday, 22 April 2013 at 10.30 a.m. and at any adjournment thereof.

(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.)

ORDINARY BUSINESS For Against

Resolution 1 To receive and adopt the Audited Financial Statements for the financial year ended 31 December 2012 and the Reports of the Directors and the Auditors thereon

Resolution 2 To re-elect Mr Christopher Nghia Do as a Director of the Company Resolution 3 To re-elect Mr Kesavan Nair as a Director of the CompanyResolution 4 To approve the payment of Directors’ Fees for the financial year ending 31 December

2013, to be paid quarterly in arrearsResolution 5 To re-appoint Messrs Foo Kon Tan Grant Thornton LLP as auditors and authorise the

Directors to fix their remuneration

SPECIAL BUSINESS For AgainstOrdinary Resolutions:

Resolution 6 To approve the authority to allot and issue shares Resolution 7 To approve the authority to allot and issue shares pursuant to the IEV Holdings

Performance Share Plan

Date this _________ day of _________________ 2013 Total Number of Shares held in : CDP RegisterRegister of Members

________________________________________Signature(s) of members(s) or Common Seal

IEV HOLDINGS LIMITED (Incorporated in the Republic of Singapore – Company Registration No. 201117734D)

Important :1 For investors who have used their CPF monies to buy IEV

HOLDINGS LIMITED shares, this Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely For Information Only.

2 This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

3 CPF investors who wish to vote should contact their CPF Approved Nominees.


NOTES:

IMPORTANT

1. Please insert the total number of Shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number of shares. If you have shares registered in your name in the Register of Members of the Company, you should insert that number of shares. If you have shares entered against your name in the Depository Register and shares registered in your name in the Register of Members, you should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by you.

2. A member of the Company entitled to attend and vote at the general meeting is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, the member must specify the proportion of shareholdings (expressed as a percentage of the whole) to be represented by each proxy. If no proportion of shareholdings is specified, the proxy whose name appears first shall be deemed to carry 100 per cent of the shareholdings of his/its appointor and the proxy whose name appears after shall be deemed to be appointed in the alternate.

4. The instrument appointing a proxy or proxies must be deposited at the office of the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623, not less than 48 hours before the time set for the general meeting.

5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised.

6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the power of attorney (or other authority) or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.

7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the general meeting, in accordance with Section 179 of the Companies Act, Cap. 50.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.

Annual Report

2012


This annual report has been prepared by the Company and its contents have been reviewed by the Company’s sponsor (“Sponsor”), Canaccord Genuity Singapore Pte. Ltd. for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (“SGX-ST”). Canaccord Genuity Singapore Pte. Ltd. has not independently verified the contents of this annual report. This annual report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this annual report, including the correctness of any of the statements or opinions made, or reports contained in this annual report.

The contact person for the Sponsor is Mr. Chia Beng Kwan, Director, Canaccord Genuity Singapore Pte. Ltd., at 77 Robinson Road #21-02 Singapore 068896, telephone (65) 6854-6160

IEV HOLDINGS LIMITED(Company Registration No.: 201117734D)

(Incorporated in the Republic of Singapore on 26 July 2011)

PRINCIPAL OFFICESuite 2.01, 2nd Floor

Dataran HamodalBlock B, Lot 4 Jalan 13/4

Petaling Jaya 46200Selangor Darul Ehsan, Malaysia

(with effect from 15 April 2013)Level 22 PJX-HM Shah Tower

No. 16A Persiaran Barat Petaling Jaya 46050

Selangor Darul Ehsan, Malaysia

Tel : +6 (03) 7960 9109 Fax : +6 (03) 7960 9108www.iev-group.com

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nnual Report 2012

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