SESB Annual Report 2020 - Part 2

Financial Statements
043 Directors’Report
Scomi Energy Services Bhd
(Registration No. 199601025627 (397979-A))
049 Statements of Financial Position
(Incorporated in Malaysia)
and or itsLoss
subsidiaries
051 Statements of Profit & Other Comprehensive Income
053 Financial
Consolidated statements
Statement forinthe
of Changes year
Equity
ended 30 June 2020
054 Statement of Changes in Equity
055 Statements of Cash Flows
060 Notes to the Financial Statements
159 Statement by Directors
160 Statutory Declaration
161 Independent Auditors’ Report
164 Appendix
Directors’
and its subsidiaries Report for the year ended 30 June 2020
Directors’ report for the year ended 30 June 2020
The Directors hereby submit their report and the audited financial statements of the Group
and of the Company for the financial year ended 30 June 2020.
Principal activities
The principal activities of the Company are investment holding and provision of management
services to its subsidiaries and an associate whilst the principal activities of the subsidiaries
are as stated in Note 7 to the financial statements. There has been no significant change in
the nature of these activities during the financial year.
Holding company
The Company was a subsidiary of Scomi Group Bhd, a public limited liability company
incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia
Securities Berhad, and regarded by the Directors as the Company’s holding company in the
previous financial period. On 26 February 2020, Scomi Group Bhd lost control of the
Company and the details are disclosed in Note 33(i) to the financial statements.
Subsidiaries
The details of the Company’s subsidiaries are disclosed in Note 7 to the financial statements.
Results
Group Company
RM’000 RM’000
Loss for the year attributable to:
Owners of the Company (187,503) (209,144)
Non-controlling interests 1,208 -
(186,295) (209,144)
Reserves and provisions

There were no material transfers to or from reserves and provisions during the financial year
under review except as disclosed in the financial statements.
Dividend
No dividend was paid during the financial year and the Directors do not recommend any
dividend to be paid for the financial year under review.
SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 43

Directors’ Report for the year ended 30 June 2020
Registration No. 199601025627 (397979-A)
2
Consolidation of subsidiaries with different financial year end

The following subsidiaries of the Company continue to have or to adopt a financial year which
does not coincide with the Company in relation to the financial year ended 30 June 2020,
subject to the following conditions:-
(i) approval by the Companies Commission of Malaysia pursuant to Section 247(7) of the
Companies Act 2016; and
(ii) the Company is to ensure compliance with Sections 252 and 253 of the Companies Act
2016 and the approved accounting standards pertaining to the preparation of
consolidated financial statements.
Subsidiaries of the Company affected by the above are as follows:
(a) Scomi Oiltools (RUS) LLC

(b) KMC Oiltools India Pvt. Ltd.
(c) Wasco Oil Service Company Nigeria Limited
(d) Rig Tenders Marine Pte. Ltd.
(e) CH Logistic Pte. Ltd.
(f) CH Ship Management Pte. Ltd.
(g) Rig Tenders Offshore Pte. Ltd.
Directors of the Company

Directors who served during the financial year until the date of this report are:
Dato’ Jamelah binti Jamaluddin

Ravinder Singh Grewal A/L Sarbjit S
Ruziah binti Mohd Amin
Stephen Fredrick Bracker
Wong Mun Keong (Appointed on 27 February 2020)
Amirul Azhar bin Baharom (Appointed on 18 May 2020)
Aminodin bin Ismail (Appointed on 15 July 2020)
Lee Chun Fai (Resigned on 4 March 2020)
Shah Hakim @ Shahzanim bin Zain (Resigned on 4 March 2020)
Sammy Tse Kwok Fai (Resigned on 4 March 2020)
Dr. Ir. Jeyanthi A/P Ramasamy (Resigned on 1 June 2020)
Dato’ Sri Meer Sadik bin Habib Mohamed (Resigned on 10 July 2020)
Dato’ Mohd Zakhir Siddiqy bin Sidek (Appointed on 27 February 2020 and resigned on 14
July 2020)
List of Directors of Subsidiaries

Pursuant to Section 253 of the Companies Act 2016 in Malaysia, the list of Directors of the
subsidiaries who served during the financial year until the date of this report is disclosed in
the Appendix to the financial statements.
44 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

Directors’ Report
for the year ended 30 June 20203
Directors’ interests in shares

The interests and deemed interests in the shares of the Company and of its related
corporations (other than wholly-owned subsidiaries) of those who were Directors at year end
(including the interests of the spouse or children of the Director who themselves are not
Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as
follows:
Number of ordinary shares

At At
1.7.2019 Bought Sold 30.6.2020
The Company ’000 ’000 ’000 ’000
Direct interests
Dato’ Sri Meer Sadik bin Habib
Mohamed 8,557 - - 8,557
Indirect interests
Dato’ Sri Meer Sadik bin Habib
Mohamed 109 (1) - - 109 (1)
Dato’ Mohd Zakhir Siddiqy bin Sidek - 84,793(2) - 84,793(2)
(1)
Deemed interested by virtue of Section 59(11)(c) of the Companies Act 2016 through
his spouse, Datin Zarida binti Noordin’s shareholding in the Company.
(2)
Deemed interested by virtue of Section 8(4) of the Companies Act 2016 through his
shareholding in United Flagship Sdn. Bhd., the holding company of Gelombang Global
Sdn. Bhd., which in turn is interested in the Company.
Save as disclosed above, none of the other Directors holding office at 30 June 2020 had any
interest in the shares of the Company and of its related corporations during the financial year.
Directors’ benefits
Since the end of the previous financial period, no Director of the Company has received nor
become entitled to receive any benefit (other than those fees and other benefits included in
the aggregate amount of remuneration received or due and receivable by Directors as shown
in the financial statements or the fixed salary of a full time employee of the Company or of
related corporations) by reason of a contract made by the Company or a related corporation
with the Director or with a firm of which the Director is a member, or with a company in which
the Director has a substantial financial interest other than those disclosed in Note 31 to the
financial statements.
There were no arrangements during and at the end of the financial year which had the object
of enabling Directors of the Company to acquire benefits by means of the acquisition of shares
in or debentures of the Company or any other body corporate.

4
Issue of shares and debentures

During the year, the Group and the Company undertook a share capital reduction exercise to
reduce its share capital from RM1,005,535,000 to RM445,535,000 which was completed on
14 February 2020. This was followed by the consolidation of the existing shares of
2,341,775,435 units into 468,355,087 units on the basis of 5 existing shares into 1 share
pursuant to Section 116 of the Companies Act 2016, which was completed on 28 February
2020 and the consolidated shares were listed on the Bursa Malaysia Securities Berhad on 2
March 2020. There were no debentures issued during the year. Details of issued and paid-
up capital are set out in Note 14 to the financial statements.
Treasury shares
Details of the treasury shares are as set out in Note 15 to the financial statements.
Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during
the financial year.
Significant events during the financial year

Details of the significant events during the financial year are disclosed in Note 33 to the
Subsequent events after the financial year end

Details of the subsequent events after the financial year end are disclosed in Note 34 to the
Indemnity and insurance costs

During the financial year, the total amount of insurance effected and insurance costs incurred
for Directors and officers of the Company on group basis are RM50 million and RM142,460,
respectively.

Directors’ Report
Other statutory information

Before the financial statements of the Group and of the Company were made out, the
Directors took reasonable steps to ascertain that:
i) all known bad debts have been written off and adequate provision made for doubtful
debts, and
ii) any current assets which were unlikely to be realised in the ordinary course of business
have been written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
i) that would render the amount written off for bad debts or the amount of the provision for
doubtful debts in the Group and in the Company inadequate to any substantial extent,
or
ii) that would render the value attributed to the current assets in the financial statements
of the Group and of the Company misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets
or liabilities of the Group and of the Company misleading or inappropriate, or
iv) not otherwise dealt with in this report or the financial statements, that would render any
amount stated in the financial statements of the Group and of the Company misleading.
At the date of this report, there does not exist:
i) any charge on the assets of the Group or of the Company that has arisen since the end
of the financial year and which secures the liabilities of any other person, or
ii) any contingent liability in respect of the Group or of the Company that has arisen since
the end of the financial year.
No contingent liability or other liability of any company in the Group has become enforceable,
or is likely to become enforceable within the year of twelve months after the end of the
financial year which, in the opinion of the Directors, will or may substantially affect the ability
of the Group and of the Company to meet their obligations as and when they fall due.
In the opinion of the Directors, except as disclosed in Notes 23, 33(iv) and 34 to the financial
statements, the financial performance of the Group and of the Company for the financial year
ended 30 June 2020 have not been substantially affected by any item, transaction or event
of a material and unusual nature nor has any such item, transaction or event occurred in the
interval between the end of that financial year and the date of this report.

6
Auditors
The auditors, KPMG PLT, have indicated their willingness to accept re-appointment.
The auditors’ remuneration is disclosed in Note 23 to the financial statements.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
…………………………………………………………
Amirul Azhar bin Baharom
Director
…………………………………………………………
Director
Petaling Jaya
Date: 30 October 2020

Statements of Financial Position as at 30 June 2020
and its subsidiaries
Statements of financial position as at 30 June 2020
Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Assets
Property, plant and equipment 3 258,778 298,990 6,380 -
Right-of-use assets 4 14,289 - - -
Intangible assets 5 - 103,531 - -
Investment properties 6 - - - 6,460
Investments in subsidiaries 7 - - 223,453 352,852
Investments in joint ventures 8 - 2,084 - -
Investments in associates 9 9,689 8,847 7,439 7,439
Deferred tax assets 10 1,199 529 - -
Trade and other receivables 11 14,759 14,333 - -
Total non-current assets 298,714 428,314 237,272 366,751

Trade and other receivables 11 129,480 267,439 21,531 96,937
Inventories 12 72,277 82,811 - -
Current tax assets 14,032 13,493 - -
Cash and cash equivalents 13 48,537 65,748 50 4,500
Total current assets 264,326 429,491 21,581 101,437
Total assets 563,040 857,805 258,853 468,188

8
Statements of Financial Position as at 30 June 2020
(continued)
Statements of financial position as at 30 June 2020
(continued)
Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Equity
Share capital 14 445,535 1,005,535 445,535 1,005,535
Treasury shares 15 (51) (51) (51) (51)
Reserves 16 (247,757) (600,709) (212,475) (563,331)
Equity attributable to owners
of the Company 197,727 404,775 233,009 442,153
Non-controlling interests 34,429 33,221 - -
Total equity 232,156 437,996 233,009 442,153

Liabilities
Loans and borrowings 17 - 49,800 - -
Lease liabilities 6,031 - - -
Provision for retirement benefits 18 7,011 8,401 - -
Trade and other payables 19 1,074 1,028 - -
Deferred tax liabilities 10 3,729 4,486 - -
Total non-current liabilities 17,845 63,715 - -

Loans and borrowings 17 124,644 136,006 - -
Lease liabilities 7,633 - - -
Trade and other payables 19 158,293 200,336 25,579 26,035
Current tax liabilities 22,469 19,752 265 -
Total current liabilities 313,039 356,094 25,844 26,035
Total liabilities 330,884 419,809 25,844 26,035
Total equity and liabilities 563,040 857,805 258,853 468,188

The notes on pages 18 to 116 are an integral part of these financial statements.

Statements of Profit or Loss and Other
Comprehensive Income
Statements of profit or loss for
and
the other comprehensive
year ended 30 June 2020
income for the year ended 30 June 2020
Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
Note 30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Revenue 20 423,320 643,494 - 3,855

Cost of sales/services (346,118) (519,993) - (3,754)
Gross profit 77,202 123,501 - 101
Selling and distribution
expenses (29,070) (56,212) - -
Administrative expenses (42,834) (83,800) (5,439) (5,099)
Net loss on impairment of
financial instruments (13,016) (34,506) (78,630) (7,952)
Other expenses (151,968) (6,020) (124,810) (11,992)
Results from operating
activities (159,686) (57,037) (208,879) (24,942)
Finance costs 21 (15,594) (23,139) - -
Finance income 660 3,762 - 2,583
Net finance (costs)/income (14,934) (19,377) - 2,583
Share of profit/(loss) of equity-

accounted associates,
net of tax 842 (2,299) - -
Share of loss of equity-
accounted joint ventures,
net of tax - (3,866) - -
Loss before tax 23 (173,778) (82,579) (208,879) (22,359)
Tax expense 24 (12,517) (20,883) (265) -
Loss for the year/period (186,295) (103,462) (209,144) (22,359)

10
Statements of Profit
Registration No. 199601025627 (397979-A) or Loss and Other
Comprehensive Income
Statements
for of profit
the year ended 30 Juneor loss
2020 and other comprehensive
(continued)
income for the year ended 30 June 2020 (continued)
Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
Note 30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Other comprehensive (loss)/
income, net of tax
Items that are or may be
reclassified subsequently
to profit or loss
Foreign currency translation
differences for foreign
operations (19,629) 16,066 - -
Retirement benefits 84 470 - -
Other comprehensive (loss)/
income for the year/period,
net of tax 25 (19,545) 16,536 - -
Total comprehensive loss
for the year/period (205,840) (86,926) (209,144) (22,359)
(Loss)/profit attributable to:

Owners of the Company (187,503) (95,690) (209,144) (22,359)
Non-controlling interests 1,208 (7,772) - -
Total comprehensive
(loss)/income attributable to:
Owners of the Company (207,048) (79,154) (209,144) (22,359)
Non-controlling interests 1,208 (7,772) - -
Total comprehensive loss
for the year/period (205,840) (86,926) (209,144) (22,359)
Basic loss per ordinary

share (sen) 26 (40.04) (4.09)

11
Consolidated
Notes Statement
to the Financial
of Changes in Equity
Statements
for the
and itsyear ended 30 June 2020
subsidiaries
Consolidated statement of changes in equity for the year ended 30 June 2020
/----------------------Attributable to owners of the Company--------------/
/---------Non-distributable--------/ Distributable
(Accumulated
losses)/ Non-
Share Treasury Other Retained controlling Total
Group capital shares reserves earnings Total interests equity
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 April 2018 1,005,535 (51) (542,246) 32,474 495,712 40,993 536,705

Adjustment on initial application of MFRS 9, net of tax - - (1,079) (10,704) (11,783) - (11,783)
At 1 April 2018, restated 1,005,535 (51) (543,325) 21,770 483,929 40,993 524,922
Foreign currency translation differences for foreign
operations - - 16,066 - 16,066 - 16,066
Retirement benefits - - - 470 470 - 470
Total other comprehensive income for the period 25 - - 16,066 470 16,536 - 16,536
Loss for the period - - - (95,690) (95,690) (7,772) (103,462)
Total comprehensive (loss)/income for the period - - 16,066 (95,220) (79,154) (7,772) (86,926)
At 30 June 2019/1 July 2019 1,005,535 (51) (527,259) (73,450) 404,775 33,221 437,996
Foreign currency translation differences for foreign
operations - - (19,629) - (19,629) - (19,629)
Retirement benefits - - - 84 84 - 84
Total other comprehensive (loss)/income for the year 25 - - (19,629) 84 (19,545) - (19,545)
(Loss)/profit for the year - - - (187,503) (187,503) 1,208 (186,295)
Total comprehensive (loss)/income for the year - - (19,629) (187,419) (207,048) 1,208 (205,840)
Contributions by and distributions to owners of
the Company:
Capital reduction 14 (560,000) - - 560,000 - - -
Total transactions with owners of the Company (560,000) - - 560,000 - - -
At 30 June 2020 445,535 (51) (546,888) 299,131 197,727 34,429 232,156
The
Thenotes
noteson
onpages
pages60
18to
to158
116are
arean
anintegral
integralpart
partof
ofthese
these financial statements.
financialstatements.

12
Statement of Changes in Equity
for the year ended
Statement 30 Junein2020
of changes equity for the year ended 30 June
2020
/---------Non-distributable----------/
Company Share Treasury Other Accumulated Total
Note capital shares reserves losses equity
RM’000 RM’000 RM’000 RM’000 RM’000
At 1 April 2018 1,005,535 (51) 26,881 (567,853) 464,512

Adjustment on initial
application of MFRS 9,
net of tax - - - - -
At 1 April 2018, restated 1,005,535 (51) 26,881 (567,853) 464,512
Loss and total
comprehensive loss for
the period - - - (22,359) (22,359)
At 30 June 2019/1 July 2019 1,005,535 (51) 26,881 (590,212) 442,153
Loss and total
comprehensive loss for
the year - - - (209,144) (209,144)
Contributions by and
distributions to owners of
the Company:
Capital reduction 14 (560,000) - - 560,000 -
Total transactions with
owners of the Company (560,000) - - 560,000 -
At 30 June 2020 445,535 (51) 26,881 (239,356) 233,009
The notes
The notes on
on pages
pages 18
60 to
to 116
158 are
are an
an integral
integral part
part of
of these
these financial
statements.

and its subsidiaries Statements of Cash Flows
Statements of cash flows for the year ended 30 June 2020
Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
Note 30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Cash flows from operating
activities
Loss before tax (173,778) (82,579) (208,879) (22,359)
Adjustments for:
Write-down of inventories 12 6,272 590 - -
Amortisation of intangible assets 5 219 812 - -
Depreciation of:
- Property, plant and equipment 3 51,554 76,880 80 11
- Investment properties 6 - 169 - 40
- Right-of-use assets 4 8,723 - - -
Gain on disposal of investment
properties - (3,643) - -
Loss on disposal of property,
plant and equipment 694 34,793 - -
Impairment loss on:
- Amount due from former
holding company 11.2 11,833 33,772 11,630 7,871
- Amount due from subsidiary - - 67,864 5,209
- Amount due from joint venture - 1,260 - 1,116
- Amount due from related
parties - - 311 -
- Amount due from associate 4,281 - 236 144
- Intangible assets 5 100,334 - - -
- Investments in associate 9 - 6,111 - -
- Investments in subsidiary 7 - - 127,320 14,088
- Investments in joint ventures 8 1,161 996 - -
- Property, plant and equipment 3 1,320 1,542 - -
- Receivables 10,001 4,522 - -
Bad debts written off - - - 88
Net unrealised gain on
foreign exchange (9,909) (18,091) (2,484) (6,531)
Property, plant and equipment
written off 3 - 994 - -
Reversal of impairment loss on:
- Amount due from subsidiary - - (1,064) -
- Amount due from joint venture - - (347) -
- Receivables (8,818) (5,048) - -
Reversal of write-down of
inventories 12 (164) (3,983) - -
Provision for retirement benefits 273 912 - -
Balance carried forward 3,996 50,009 (5,333) (323)

14
Statements of Cash Flows
for the year ended 30 June 2020 (continued)
Statements of cash flows for the year ended 30 June 2020
(continued)
Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
Note 30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Cash flows from operating
activities (continued)
Balance brought forward 3,996 50,009 (5,333) (323)
Share of (gain)/loss of equity-
accounted associates,
net of tax (842) 2,299 - -
Share of loss of equity-
accounted joint ventures,
net of tax - 3,866 - -
Gain on disposal of subsidiary
and branch 22 - (2,181) - -
Finance costs 21 15,594 23,139 - -
Finance income (660) (3,762) - (2,583)
Operating profit/(loss) before
changes in working capital 18,088 73,370 (5,333) (2,906)
Changes in working capital:
Inventories 13,347 25,351 - -
Trade and other receivables 60,841 (14,684) 345 3,496
Trade and other payables (43,666) (47,216) 301 (7,942)
Amount due from/(to):
- former holding company 13,463 932 - (4,771)
- subsidiaries - - (16,749) 5,979
- related parties (3,202) (674) 16,849 4,901
- joint ventures (1,207) 812 211 (1,315)
- associates 4,118 (3,964) (231) (282)
Cash generated from/
(used in) operations 61,782 33,927 (4,607) (2,840)
Tax paid (11,482) (23,440) - -
Retirement benefits paid (1,841) (1,154) - -
Interest received 660 3,762 - 2,583
Net cash from/(used in)
operating activities 49,119 13,095 (4,607) (257)
Cash flows from investing

activities
Investment in joint ventures 18 - - -
Acquisition of property, plant
and equipment 3 (8,607) (25,204) - -
Proceeds from disposal of
investment properties - 5,712 - -
property, plant and equipment 6,521 16,934 - -
subsidiary and branch 22 - 19,054 - -
Repayment from joint venture - 9,810 - -
Net cash (used in)/ from
investing activities (2,068) 26,306 - -

15

Statements of cash flows
for thefor
yearthe year
ended 30ended 30 June
June 2020 2020
(continued)
(continued)
Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
Note 30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Cash flows from financing
activities
Net repayment of bank
borrowings (52,300) (18,921) - -
Interest paid on bank borrowings (9,864) (19,705) - -
Decrease /(Increase) in short-
term deposits pledged 23,566 (6,213) - 3,251
Payment of lease liabilities (7,989) - - -
Net cash (used in)/from
financing activities (46,587) (44,839) - 3,251
Net increase/(decrease) in cash

and cash equivalents 464 (5,438) (4,607) 2,994
Effect of exchange rate
fluctuations on cash held 5,891 7,328 157 1,468
Cash and cash equivalents at
1 July/1 April 38,668 36,778 4,500 38
Cash and cash equivalents at
30 June (i) 45,023 38,668 50 4,500
Cash outflows for leases as a lessee

Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
Note 30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Included in net cash from
operating activities:
Payment relating to short-term
leases 23 1,809 - - -
Payment relating to leases of low-
value assets 23 4,921 - - -
Interest paid in relation to lease
liabilities 21 1,442 - - -
Included in net cash from

financing activities:
Payment of lease liabilities (9,431) - - -
Total cash outflows for leases (1,259) - - -

16

Statements
for of cash
the year ended flows
30 June for(continued)
2020 the year ended 30 June 2020
(continued)
Note to statements of cash flows
(i) Cash and cash equivalents
Cash and cash equivalents included in the statements of cash flows comprise the
following statements of financial position amounts:
Group Company
Note 2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
Cash and bank balances 13 45,023 40,842 50 4,500

Short-term deposits 13 3,514 24,906 - -
48,537 65,748 50 4,500
Less: Pledged deposits and
bank balances 13 (3,514) (27,080) - -
45,023 38,668 50 4,500

17
Statements
Notes to theof Cash Flows
for the year ended 30 June 2020 (continued)
Statements of cash flows for the year ended 30 June 2020 (continued)
Reconciliation of movements of liabilities to cash flows arising from financing activities
Net Net
changes Interest Effect Adjustment on changes Effect
from charge and movements initial from Acquisition movements
At financing amortisation in exchange At application of At financing of new in exchange Other At
Group 1.4.2018 cash flows cost rates 30.6.2019 MFRS 16 1.7.2019 Reclassification cash flows leases rates changes 30.6.2020
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Guaranteed Serial
Bonds 104,322 (11,428) 11,428 (405) 103,917 - 103,917 (103,917) - - - - -
Bank loans 58,462 (22,445) - 4,601 40,618 - 40,618 - (29,623) - (6,696) 3,150 7,449
Loan - - - - - - - 103,917 (30,384) - 3,329 849 77,711
Revolving credits 44,890 (4,728) - 1,109 41,271 - 41,271 - (2,157) - 370 - 39,484
Finance leases 22 (25) - 3 - - - - - - - - -
Lease liabilities - - - - - 15,962 15,962 - (7,989) 5,287 404 - 13,664
Bank overdrafts 10,030 (10,030) - - - - - - - - - - -
Total liabilities from
financing activities 217,726 (48,656) 11,428 5,308 185,806 15,962 201,768 - (70,153) 5,287 (2,593) 3,999 138,308
The notes on pages 18 158 are an integral part of these financial statements.
60 to 116

Notes to the Financial Statements
Notes to the financial statements
Scomi Energy Services Bhd is a public limited liability company, incorporated and domiciled
in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The
addresses of the principal place of business and registered office of the Company are as
follows:
Principal place of business

Level 15, Menara TSR
No. 12, Jalan PJU 7/3
Mutiara Damansara
47810 Petaling Jaya
Selangor Darul Ehsan
Registered office
No. 2-1, Jalan Sri Hartamas 8
Sri Hartamas
50480 Kuala Lumpur
Wilayah Persekutuan
Malaysia
The consolidated financial statements of the Company as at and for the financial year ended
30 June 2020 comprise the Company and its subsidiaries (together referred to as the “Group”
and individually referred to as “Group entities”) and the Group’s interests in associates and
joint ventures.
The principal activities of the Company are investment holding and provision of management
services to its subsidiaries and an associate whilst the principal activities of the subsidiaries
are as stated in Note 7 to the financial statements.
The Company was a subsidiary of Scomi Group Bhd, a public limited liability company
incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia
Securities Berhad, and regarded by the Directors as the Company’s holding company in the
previous financial period. On 26 February 2020, Scomi Group Bhd lost control of the
Company and the details are disclosed in Note 33(i) to the financial statements.
These financial statements were authorised for issue by the Board of Directors on 30 October
2020.
1. Basis of preparation
(a) Statement of compliance
The financial statements of the Group and the Company have been prepared in
accordance with Malaysian Financial Reporting Standards (“MFRSs”),
International Financial Reporting Standards and the requirements of the
Companies Act 2016 in Malaysia.

19
1. Basis of preparation (continued)

(a) Statement of compliance (continued)
The following are the accounting standards and amendments of the MFRSs that
have been issued by the Malaysian Accounting Standards Board (“MASB”) but
have not been adopted by the Group and the Company:
Amendments effective for annual periods beginning on or after 1 January

2020
• Amendments to MFRS 3, Business Combinations – Definition of a Business
• Amendments to MFRS 101, Presentation of Financial Statements and MFRS
108, Accounting Policies, Changes in Accounting Estimates and Errors –
Definition of Material
• Amendments to MFRS 9, Financial Instruments, MFRS 139, Financial
Instruments: Recognition and Measurement and MFRS 7, Financial
Instruments: Disclosures – Interest Rate Benchmark Reform
Amendment effective for annual periods beginning on or after 1 June 2020

• Amendments to MFRS 16, Leases – Covid-19-Related Rent Concessions

2021
• Amendments to MFRS 9, Financial Instruments, MFRS 139, Financial
Instruments: Recognition and Measurement, MFRS 7, Financial Instruments:
Disclosures, MFRS 4, Insurance Contracts and MFRS 16, Leases – Interest
Rate Benchmark Reform – Phase 2

2022
• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting
Standards (Annual Improvements to MFRS Standards 2018−2020)
• Amendments to MFRS 3, Business Combinations – Reference to the
Conceptual Framework
• Amendments to MFRS 9, Financial Instruments (Annual Improvements to
MFRS Standards 2018−2020)
• Amendments to Illustrative Examples accompanying MFRS 16, Leases
(Annual Improvements to MFRS Standards 2018−2020)
• Amendments to MFRS 116, Property, Plant and Equipment − Proceeds before
Intended Use
• Amendments to MFRS 137, Provisions, Contingent Liabilities and Contingent
Assets − Onerous Contracts − Cost of Fulfilling a Contract
• Amendments to MFRS 141, Agriculture (Annual Improvements to MFRS
Standards 2018−2020)
MFRS and amendment effective for annual periods beginning on or after 1

January 2023
• MFRS 17, Insurance Contracts
• Amendments to MFRS 101, Presentation of Financial Statements –
Classification of Liabilities as Current or Non-current
Amendments effective for annual periods beginning on or after a date yet to

be confirmed
• Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128,
Investments in Associates and Joint Ventures – Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
20
Notes to199601025627
Registration No. the Financial
(397979-A) Statements
(a) Statement of compliance (continued)
The Group and the Company plan to apply the abovementioned accounting
standards, interpretations and amendments:
• from the annual period beginning on 1 July 2020 for those amendments that
are effective for annual periods beginning on or after 1 January 2020 and 1
June 2020;
are effective for annual periods beginning on or after 1 January 2021, except
for amendments to MFRS 4, which is not applicable to the Group and the
Company;
are effective for annual periods beginning on or after 1 January 2022, except
for amendments to MFRS 141, which is not applicable to the Group and the
Company; and
• from the annual period beginning on 1 July 2023 for the amendments that are
effective for annual periods beginning on or after 1 January 2023, except for
amendments to MFRS 17, which is not applicable to the Group and the
Company.
The initial application of the abovementioned accounting standards, amendments

and interpretations are not expected to have any material financial impact to the
current period and prior period financial statements of the Group and the
Company.
(b) Basis of measurement
The financial statements of the Group and the Company have been prepared on
the historical cost basis other than as disclosed in Note 2 and on going concern
based on the assumptions that the debt restructuring and regularisation plan of
the Group will be successfully implemented as follows:
(i) The Group and the Company incurred net losses of RM186.3 million and
RM209.1 million, respectively for the financial year ended 30 June 2020 and
as at that date, the current liabilities of the Group and the Company exceeded
their current assets by RM48.7 million and RM4.3 million, respectively.
(ii) During the financial year, the Company announced that it had been classified
as an affected listed issuer pursuant to Paragraph 2.1 (e) of Practice Note 17
(“PN17”) under the Main Market Listing Requirements of Bursa Malaysia. The
PN17 criteria was triggered as a result of a material uncertainty related to
going concern that had been included in auditors’ report for the audit of the
Group financial statements for the financial period ended 30 June 2019 and
the shareholders’ equity of the Group as of 30 June 2019 on a consolidated
basis is 50% or less of share capital (excluding treasury shares) of the Group.

Notes to the
21

(b) Basis of measurement (continued)
(iii) On 13 December 2019, the Company announced that the Group will not be
able to redeem or repay the guaranteed serial bonds (“the bonds”) issued
amounting to RM55 million due on 14 December 2019.
The Group requested for a remedial period from the bondholders to extend
the redemption of the bond to 28 February 2020 which was approved by the
bondholders on 21 January 2020. On 10 February 2020, the Group requested
for another extension of time from the bondholders as the Group was not able
to get the financing required to redeem the bonds. However, the bondholders
rejected the Group’s request for a second extension.
On 12 March 2020, the Company announced that the facility agent under the
guaranteed serial bonds had declared an event of default on the total
outstanding bonds of RM80.4 million. The event of default also resulted in
cross defaults on the Group’s other credit facilities. The guarantor of the
guaranteed serial bonds and other secured lenders are entitled to the
enforcement of various securities granted by the Group in accordance with the
financial guarantee insurance agreement and the other credit facility
agreements.
On 2 April 2020, the Group applied for a Judicial Management Order (“JMO”)
pursuant to Sections 404, 405, 406 and 407 of the Companies Act 2016 (“CA
2016”) and Rule 8 of the Companies (Corporate Rescue Mechanism) Rules
2018 with the High Court of Malaya at Shah Alam (“the Court”) on the
Company and its subsidiaries such as Scomi Oiltools Sdn. Bhd. (“SOSB”),
Scomi KMC Sdn. Bhd. (“SKMC”) and KMCOB Capital Berhad (“KMCOB”)
(collectively, the “affected subsidiaries”) with the objective of restructuring their
debts and rehabilitating the Group’s business. The application for the JMO
immediately put into effect a moratorium for the period commencing with the
application of the JMO and ending with the grant or dismissal of the
application, during which no resolution shall be passed or order shall be made
for the winding-up of the Company and affected subsidiaries.
On 14 August 2020, the Court granted the JMO applications filed by the
affected subsidiaries. The Court also allowed the withdrawal of the Company’s
application for its JMO. The JM application was withdrawn by the Company as
it would accord greater flexibility to the Company to implement a group-wide
restructuring of the Group’s debts and rehabilitating the Group’s businesses
while continuing to access the capital markets.
Following the JMO approval by the Court for the affected subsidiaries, the
Judicial Manager was appointed to work on a debt restructuring plan. The
Judicial Manager is required to present a statement of proposal (hereinafter
referred to as “debt restructuring plan”) within 60 days or such longer period
as the Court may allow upon securing the JMO, to all creditors for the
respective affected subsidiaries.

22

(b) Basis of measurement (continued)
(iii) The debt restructuring plan will require the approval of at least 75% of the total
value for each class of creditors whose claims have been accepted by the
Judicial Manager and the debt restructuring plan may be approved with
modifications subject to the consent of the Judicial Manager. Once the debt
restructuring plan is approved by the creditors, the Judicial Manager shall
report the result of the meeting to the Court and execute the approved debt
restructuring plan accordingly.
Prior to the expiry of the initial deadline of 13 October 2020, the Judicial
Manager applied to the Court for the extension of another 60 days to finalise
the debt restructuring plan. On 8 October 2020, the Court approved the
application for the extension up to 13 December 2020.
(iv) On 5 October 2020, an independent financial advisor was appointed by the

Company to advise the Group on the group-wide restructuring to strengthen
the financial position of the Group. The Group together with the independent
financial advisor are in the midst of formulating a regularisation plan to address
the financial condition of the Group.
The circumstances highlighted above indicate material uncertainties that may

cast significant doubt over the abilities of the Group and of the Company to
continue as a going concern and therefore, the Group and the Company may
be unable to realise their assets and discharge their liabilities in the ordinary
course of business.
The Group believes that the debt restructuring and regularisation plan when
formulated and successfully implemented, will enable the Group and the
Company to generate sufficient cash flows to meet their financial obligations. The
Board of Directors are of the opinion that the Group and the Company will be able
to continue in operational existence for the foreseeable future and to realise their
assets and settle their liabilities in the ordinary course of business. Accordingly
the preparation of the financial statements on a going concern basis is highly
dependent on the approval and successful implementation of the debt
restructuring plan and the regularisation plan, and continuing support from the
lenders and the creditors of the Group and of the Company.

Notes to the
23

(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the
Company’s functional currency. All financial information is presented in RM and
has been rounded to the nearest thousand, unless otherwise stated.
(d) Critical accounting estimates and judgements
Estimates and judgements are continually evaluated by the Directors and are
based on historical experience, Directors’ best knowledge of current events and
actions, and other factors, including expectations of future events that are believed
to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual results.
The estimates and assumptions involving a higher degree of judgement or
complexity, or area where estimates and assumptions have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are addressed below.
(i) Impairment of goodwill
The Group assesses goodwill for impairment annually in accordance with its
accounting policy. More regular reviews are performed if events indicate that
this is necessary.
Determining whether goodwill is impaired requires an estimation of the

value-in-use of the cash-generating units (“CGUs”) to which goodwill has
been allocated. The value-in-use calculation requires the entity to estimate
the future cash flows expected to arise from the cash-generating unit and a
suitable discount rate in order to calculate present value. The recoverable
amount of goodwill has been determined based on value-in-use calculations.
The carrying amount of goodwill and key assumptions used in the value-in-
use calculation are disclosed in Note 5 to the financial statements.
(ii) Impairment of receivables
In respect of impairment of financial assets, MFRS 9 requires the Group and

the Company to make assumptions about changes in economic conditions
relatively far into the future for assets maturing in the medium term and
longer term. The Group and the Company have applied the expected credit
loss (“ECL”) model in accordance with the requirements of MFRS 9 in
assessing impairment of receivables.

Notes to the Financial Statements 24

(d) Critical accounting estimates and judgements (continued)
(iii) Impairment of property, plant and equipment - Marine vessels
The Group assesses the impairment of marine vessels when there is

indicator of impairment.
The Management is of the opinion that there are no reasonable possible

changes in any key assumptions that would cause the carrying amount of
the marine vessels to materially exceed the recoverable amount.
The carrying amount of marine vessels and key assumptions used in the
value-in-use calculation are disclosed in Note 3 to the financial statements.

(iv) Impairment of investments in subsidiaries, associates and joint
ventures
The Group and the Company assess the impairment of investments in

subsidiaries, associates and joint ventures when there is indicator of
impairment.
The recoverable amount of investment in subsidiaries was determined

based on the value-in-use and involves significant judgements and
assumptions. The carrying amounts of investments in subsidiaries,
associates and joint ventures are disclosed in Notes 7, 8 and 9 to the
(v) Adequacy of write-down of inventories to net realisable value
Write-down of inventories to net realisable value was mainly based on

management’s estimates, which had been derived from the assessment of
the adequacy of write-down for slow moving and obsolete inventories. The
Management focused on the risk that the carrying amount of inventories may
not be stated at the lower of cost and net realisable value, the determination
of which requires the Management to exercise significant judgement in
estimating the net realisable value of the inventories.
(vi) Income taxes
The Group is subject to income taxes in numerous jurisdictions. Significant

judgement is required in determining recoverability of withholding and
provision for income taxes worldwide, including determination of taxable
income, capital allowances and deductibility of certain expenses during the
estimation of the provision for income taxes. There are many transactions
and calculations for which the ultimate tax determination is uncertain during
the ordinary course of business.

Notes to the
25

(d) Critical accounting estimates and judgements (continued)
(vi) Income taxes (continued)
The Group recognises liabilities for anticipated tax audit issues based on
estimates of whether additional taxes will be due. The Group has made
assumptions and judgements in relation to provision for tax disputes based
on, among others, historical experience with local tax authorities in the
relevant countries and timing of the potential liabilities. These assumptions
and judgements are made in consultation with and according to the advice
from local independent tax professionals. Any changes to these
assumptions and judgements will impact the carrying amount of the potential
liabilities.
Where the final tax outcome of these matters is different from the amounts
that were initially recorded, such as if the actual future taxable profits, or if
the amounts of carry-forward tax losses, unutilised tax incentives and capital
allowances that are approved by the tax authorities differ from those
currently estimated by the Group, such differences will impact the income
tax and deferred income tax provisions in the year in which such
determination is made.
The deferred tax assets were recognised based on budgeted future taxable
profits as the Directors are of the opinion that it is probable that the future
taxable profits will be achieved.
(vii) Leases
In respect of leases, MFRS 16 replaces the guidance in MFRS 117, Leases,

IC Interpretation 4, Determining whether an Arrangement contains a Lease,
IC Interpretation 115, Operating Leases – Incentives and IC Interpretation
127, Evaluating the Substance of Transactions Involving the Legal Form of
a Lease.
Under MFRS 16, extension options and incremental borrowing rates in

relation to leases may differ from current assumptions. The key assumptions
used in relation to leases are disclosed in Note 4 to the financial statements.
(viii) Litigations
The Group operates across many countries and is required to comply with
all applicable laws and regulations of the countries in which the Group
operates. Significant judgement is required to determine the likelihood of the
obligation and the estimation of amounts to be recognised in respect of legal
matters, subject to uncertain future events. The legal cases may extend over
several years and the amount or timing may differ from current assumptions.

26
2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods
presented in these financial statements, unless otherwise stated.
Arising from the adoption of MFRS 16, Leases, there are changes to the accounting
policies applied to lease contracts entered into by the Group entities as compared to
those applied in previous financial statements. The impact arising from the changes are
disclosed in Note 35.
(a) Basis of consolidation
(i) S u b s id ia r ie s
Subsidiaries are entities, including structured entities, controlled by the

Company. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until
the date that control ceases.
The Group controls an entity when it is exposed, or has rights, to variable

returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Potential voting rights are
considered when assessing control only when such rights are substantive.
The Group also considers it has de facto power over an investee when,
despite not having the majority of voting rights, it has the current ability to
direct the activities of the investee that significantly affect the investee’s
return.
Investments in subsidiaries are measured in the Company’s statement of

financial position at cost less any impairment losses, unless the investment
is classified as held for sale or distribution. The cost of investments includes
transaction costs.
(ii) Business combinations
Business combinations are accounted for using the acquisition method from
the acquisition date, which is the date on which control is transferred to the
Group.
For new acquisitions, the Group measures the cost of goodwill at the
acquisition date as:
• the fair value of the consideration transferred; plus

• the recognised amount of any non-controlling interests in the acquiree;
plus
• if the business combination is achieved in stages, the fair value of the
existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets
acquired and liabilities assumed.

Notes to the
27
2. Significant accounting policies (continued)

(a) Basis of consolidation (continued)
(ii) Business combinations (continued)
When the excess is negative, a bargain purchase gain is recognised

immediately in profit or loss.
For each business combination, the Group elects whether it measures the
non-controlling interests in the acquiree either at fair value or at the
proportionate share of the acquiree’s identifiable net assets at the acquisition
date.
Transaction costs, other than those associated with the issue of debt or
equity securities, that the Group incurs in connection with a business
combination are expensed as incurred.
(iii) Acquisitions of non-controlling interests
The Group accounts for all changes in its ownership interest in a subsidiary
that do not result in a loss of control as equity transactions between the
Group and its non-controlling interest holders. Any difference between the
Group’s share of net assets before and after the change, and any
consideration received or paid, is adjusted to or against Group reserves.
(iv) Acquisitions from entities under common controls
Business combinations arising from transfers of interests in entities that are

under the control of the shareholder that controls the Group are accounted
for as if the acquisition had occurred at the beginning of the earliest
comparative year presented or, if later, at the date that common control was
established; for this purpose, comparatives are restated. The assets and
liabilities acquired are recognised at the carrying amounts recognised
previously in the Group controlling shareholder’s consolidated financial
statements. The components of equity of the acquired entities are added to
the same components within Group equity and any resulting gain or loss is
recognised directly in equity.
(v) Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets
and liabilities of the former subsidiary, any non-controlling interests and the
other components of equity related to the former subsidiary from the
consolidated statement of financial position. Any surplus or deficit arising on
the loss of control is recognised in profit or loss. If the Group retains any
interest in the former subsidiary, then such interest is measured at fair value
at the date that control is lost.

28

(vi) Associates
Associates are entities, including unincorporated entities, in which the Group

has significant influence, but not control, over the financial and operating
policies.
Investments in associates are accounted for in the consolidated financial

statements using the equity method less any impairment losses, unless it is
classified as held for sale or distribution. The cost of the investment includes
transaction costs. The consolidated financial statements include the Group’s
share of the profit or loss and other comprehensive income of the associates,
after adjustments if any, to align the accounting policies with those of the
Group, from the date that significant influence commences until the date that
significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the
carrying amount of that interest including any long-term investments is
reduced to zero, and the recognition of further losses is discontinued except
to the extent that the Group has an obligation or has made payments on
behalf of the associate.
When the Group ceases to have significant influence over an associate, any
retained interest in the former associate at the date when significant
influence is lost is measured at fair value and this amount is regarded as the
initial carrying amount of a financial asset. The difference between the fair
value of any retained interest plus proceeds from the interest disposed of
and the carrying amount of the investment at the date when equity method
is discontinued is recognised in the profit or loss.
When the Group’s interest in an associate decreases but does not result in
a loss of significant influence, any retained interest is not remeasured. Any
gain or loss arising from the decrease in interest is recognised in the profit
or loss. Any gains or losses previously recognised in other comprehensive
income are also reclassified proportionately to the profit or loss if that gain
or loss would be required to be reclassified to profit or loss on the disposal
of the related assets or liabilities.
Investments in associates are measured in the Company’s statement of

financial position at cost less any impairment losses, unless the investment
is classified as held for sale or distribution. The cost of investments includes
transaction costs.

Notes to the
29

(vii) Joint arrangements
Joint arrangements are arrangements of which the Group has joint control,
established by contracts requiring unanimous consent for decisions about
the activities that significantly affect the arrangements’ returns.
Joint arrangements are classified and accounted for as follows:
• A joint arrangement is classified as “joint operation” when the Group or

the Company has rights to the assets and obligations for the liabilities
relating to an arrangement. The Group and the Company account for
each of its share of the assets, liabilities and transactions, including its
share of those held or incurred jointly with the other investors, in relation
to the joint operation.
• A joint arrangement is classified as “joint venture” when the Group or the

Company has rights only to the net assets of the arrangements. The
Group accounts for its interest in the joint venture using the equity
method. Investments in joint venture are measured in the Company’s
statement of financial position less any impairment losses, unless the
investment is classified as held for sale or distribution. The cost of
investment includes transaction costs.
(viii) Non-controlling interests
Non-controlling interests at the end of the reporting year, being the equity in
a subsidiary not attributable directly or indirectly to the equity holders of the
Company, are presented in the consolidated statement of financial position
and statement of changes in equity within equity, separately from equity
attributable to the owners of the Company. Non-controlling interests in the
results of the Group is presented in the consolidated statement of profit or
loss and other comprehensive income as an allocation of the profit or loss
and the comprehensive income for the year between non-controlling
interests and owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are

allocated to the non-controlling interests even if doing so causes the non-
controlling interests to have a deficit balance.

30

(ix) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and

expenses arising from intra-group transactions, are eliminated in preparing
the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted associates

and joint ventures are eliminated against the investment to the extent of the
Group’s interest in the investees. Unrealised losses are eliminated in the
same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional

currencies of Group entities at exchange rates at the dates of the
transactions.
Monetary assets and liabilities denominated in foreign currencies at the end

of the reporting year are retranslated to the functional currency at the
exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are

not retranslated at the end of the reporting date, except for those that are
measured at fair value are retranslated to the functional currency at the
exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit

or loss, except for differences arising on the retranslation of equity
instruments where they are measured at fair value through other
comprehensive income or a financial instrument designated as a cash flow
hedge, which are recognised in other comprehensive income.
In the consolidated financial statements, when settlement of a monetary item

receivable from or payable to a foreign operation is neither planned nor likely
in the foreseeable future, foreign exchange gains and losses arising from
such a monetary item are considered to form part of a net investment in a
foreign operation and are recognised in other comprehensive income, and
are presented in the foreign currency translation reserve (“FCTR”) in equity.
(ii) Operations denominated in functional currencies other than Ringgit

Malaysia (“RM”)
The assets and liabilities of operations denominated in functional currencies

other than RM, including goodwill and fair value adjustments arising on
acquisition, are translated to RM at exchange rates at the end of the
reporting period.

Notes to the
31

(b) Foreign currency (continued)
(ii) Operations denominated in functional currencies other than Ringgit

Malaysia (“RM”) (continued)
Foreign currency differences are recognised in other comprehensive income

and accumulated in the FCTR in equity. However, if the operation is a non-
wholly-owned subsidiary, then the relevant proportionate share of the
translation difference is allocated to the non-controlling interests. When a
foreign operation is disposed of such that control, significant influence or joint
control is lost, the cumulative amount in the FCTR related to that foreign
operation is reclassified to profit or loss as part of the gain or loss on disposal.
When the Group disposes of only part of its interest in a subsidiary that
includes a foreign operation, the relevant proportion of the cumulative
amount is reattributed to non-controlling interests. When the Group disposes
of only part of its investment in an associate or joint venture that includes a
foreign operation while retaining significant influence or joint control, the
relevant proportion of the cumulative amount is reclassified to profit or loss.
(c) Financial instruments
(i) Recognition and initial measurement
A financial asset or a financial liability is recognised in the statement of

financial position when, and only when, the Group or the Company becomes
a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without significant financing

component) or a financial liability is initially measured at fair value plus or
minus, for an item not at fair value through profit or loss, transaction costs
that are directly attributable to its acquisition or issuance. A trade receivable
without a significant financing component is initially measured at the
transaction price.
An embedded derivative is recognised separately from the host contract

where the host contract is not a financial asset, and accounted for separately
if, and only if, the derivative is not closely related to the economic
characteristics and risks of the host contract and the host contract is not
measured at fair value through profit or loss. The host contract, in the event
an embedded derivative is recognised separately, is accounted for in
accordance with policy applicable to the nature of the host contract.
(ii) Financial instrument categories and subsequent measurement
Financial assets
Categories of financial assets are determined on initial recognition and are

not reclassified subsequent to their initial recognition unless the Group or
the Company changes its business model for managing financial assets in
which case all affected financial assets are reclassified on the first day of the
first reporting year following the change of the business model.

32

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

(continued)
Financial assets (continued)
Amortised cost
Amortised cost category comprises financial assets that are held within a
business model whose objective is to hold assets to collect contractual cash
flows and its contractual terms give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount
outstanding. The financial assets are not designated as fair value through
profit or loss. Subsequent to initial recognition, these financial assets are
measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses and impairment are recognised in profit or loss.
Any gain or loss on derecognition is recognised in profit or loss.
Interest income is recognised by applying effective interest rate to the gross

carrying amount except for credit impaired financial assets (see Note 2(j)(i))
where the effective interest rate is applied to the amortised cost.
All financial assets, except for those measured at fair value through profit or
loss, are subject to impairment assessment (see Note 2(j)(i)).
Financial liabilities
Amortised cost
Other financial liabilities not categorised as fair value through profit or loss
are subsequently measured at amortised cost using the effective interest
method.
Interest expense and foreign exchange gains and losses are recognised in
the profit or loss. Any gains or losses on derecognition are also recognised
in the profit or loss.
(iii) Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make

specified payments to reimburse the holder for a loss it incurs because a
specified debtor fails to make payment when due in accordance with the
original or modified terms of a debt instrument.

Notes to the
33

(c) Financial instruments (continued)
(iii) Financial guarantee contracts (continued)
Financial guarantees issued are initially measured at fair value.

Subsequently, they are measured at higher of:
• the amount of the loss allowance; and

• the amount initially recognised less, when appropriate, the cumulative
amount of income recognised in accordance to the principles of MFRS
15, Revenue from Contracts with Customers.
Liabilities arising from financial guarantees are presented together with other
provisions.
(iv) Derecognition
A financial asset or a part of it is derecognised when, and only when the

contractual rights to the cash flows from the financial asset expire or
transferred, or control of the asset is not retained or substantially all of the
risks and rewards of ownership of the financial asset are transferred to
another party. On derecognition of a financial asset, the difference between
the carrying amount of the financial asset and the sum of consideration
received (including any new asset obtained less any new liability assumed)
is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the

obligation specified in the contract is discharged, cancelled or expires. A
financial liability is also derecognised when its terms are modified and the
cash flows of the modified liability are substantially different, in which case,
a new financial liability based on modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying
amount of the financial liability extinguished or transferred to another party
and the consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss.
(v) Offsetting
Financial assets and financial liabilities are offset and the net amount
presented in the statement of financial position when, and only when, the
Group or the Company currently has a legally enforceable right to set off the
amounts and it intends either to settle them on a net basis or to realise the
asset and liability simultaneously.

34

(d) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less any
accumulated depreciation and any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of

the asset and any other costs directly attributable to bringing the asset to
working condition for its intended use, and the costs of dismantling and
removing the items and restoring the site on which they are located. The
cost of self-constructed assets also includes the cost of materials and direct
labour. Cost also may include transfers from equity of any gain or loss on
qualifying cash flow hedges of foreign currency purchases of property, plant
and equipment.
Purchased software that is integral to the functionality of the related

equipment is capitalised as part of that equipment.
When significant parts of an item of property, plant and equipment have

different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is

determined by comparing the proceeds from disposal with the carrying
amount of property, plant and equipment and is recognised net within “other
income” and “other expenses” respectively in profit or loss.
(ii) Subsequent costs
The cost of replacing a component of an item of property, plant and

equipment is recognised in the carrying amount of the item if it is probable
that the future economic benefits embodied within the component will flow
to the Group or the Company, and its cost can be measured reliably. The
carrying amount of the replaced component is derecognised to profit or loss.
The costs of the day-to-day servicing of property, plant and equipment are
recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value.

Significant components of individual assets are assessed, and if a
component has a useful life that is different from the remainder of that asset,
then that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the

estimated useful lives of each component of an item of property, plant and
equipment from the date that they are available for use. Freehold land is not
depreciated. Property, plant and equipment under construction are not
depreciated until the assets are ready for their intended use.

Notes to the
35

(d) Property, plant and equipment (continued)
(iii) Depreciation (continued)
The estimated useful lives for the current and comparative periods are as
follows:
• Freehold buildings 50 years

• Marine vessels 25 years
• Rental equipment 3 - 12 years
• Non-rental equipment 3 - 12 years
• Motor vehicles 3 - 7 years
• Renovation, fittings and office equipment 3 - 10 years
Depreciation methods, useful lives and residual values are reviewed at the
end of the reporting period, and adjusted as appropriate.
(e) Leases
The Group has applied MFRS 16 using the modified retrospective approach with
the initial application that the right-of-use assets are equivalent to the lease
liabilities as at 1 July 2019. Accordingly, the comparative information presented
for 2019 has not been restated – i.e. it is presented, as previously reported under
MFRS 117, Leases and related interpretations.
Current financial year
(i) Definition of a lease
A contract is, or contains, a lease if the contract conveys a right to control

the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the
use of an identified asset, the Group assesses whether:
• the contract involves the use of an identified asset - this may be

specified explicitly or implicitly, and should be physically distinct or
represent substantially all of the capacity of a physically distinct asset.
If the supplier has a substantive substitution right, then the asset is not
identified;
• the customer has the right to obtain substantially all of the economic
benefits from use of the asset throughout the period of use; and
• the customer has the right to direct the use of the asset. The customer
has this right when it has the decision-making rights that are most
relevant to changing how and for what purpose the asset is used. In
rare cases where the decision about how and for what purpose the
asset is used is predetermined, the customer has the right to direct the
use of the asset if either the customer has the right to operate the asset;
or the customer designed the asset in a way that predetermines how
and for what purpose it will be used.

36

(e) Leases (continued)
Current financial year (continued)
(i) Definition of a lease (continued)
At inception or on reassessment of a contract that contains a lease

component, the Group allocates the consideration in the contract to each
lease and non-lease component on the basis of their relative stand-alone
prices. However, for leases of properties in which the Group is a lessee, it
has elected not to separate non-lease components and will instead account
for the lease and non-lease components as a single lease component.
(ii) Recognition and initial measurement
(a) As a lessee
The Group recognises a right-of-use asset and a lease liability at the

lease commencement date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the underlying
asset or the site on which it is located, less any lease incentives
received.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the respective Group entities' incremental
borrowing rate. Generally, the Group entities use their incremental
borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability

comprise the following:
• fixed payments, including in-substance fixed payments less any

incentives receivable;
• variable lease payments that depend on an index or a rate, initially
measured using the index or rate as at the commencement date;
• amounts expected to be payable under a residual value guarantee;
• the exercise price under a purchase option that the Group is
reasonably certain to exercise; and
• penalties for early termination of a lease unless the Group is
reasonably certain not to terminate early.
The Group excludes variable lease payments that linked to future

performance or usage of the underlying asset from the lease liability.
Instead, these payments are recognised in profit or loss in the period in
which the performance or use occurs.

Notes to the
37

(ii) Recognition and initial measurement (continued)
(a) As a lessee (continued)
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases that have a lease term of 12 months or
less and leases of low-value assets. The Group recognises the lease
payments associated with these leases as an expense on a straight-
line basis over the lease term.
(b) As a lessor
When the Group acts as a lessor, it determines at lease inception

whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of

whether the lease transfers substantially all of the risks and rewards
incidental to ownership of the underlying asset. If this is the case, then
the lease is a finance lease; if not, then it is an operating lease.
If an arrangement contains lease and non-lease components, the

Group applies MFRS 15 to allocate the consideration in the contract
based on the stand-alone selling prices.
When the Group is an intermediate lessor, it accounts for its interests in

the head lease and the sublease separately. It assesses the lease
classification of a sublease with reference to the right-of-use asset
arising from the head lease, not with reference to the underlying asset.
If a head lease is a short-term lease to which the Group applies the
exemption described above, then it classifies the sublease as an
operating lease.
(iii) Subsequent measurement
(a) As a lessee
The right-of-use asset is subsequently depreciated using the straight-

line method from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are determined on the
same basis as those of property, plant and equipment. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability.


(iii) Subsequent measurement (continued)
(a) As a lessee (continued)
The lease liability is measured at amortised cost using the effective

interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a revision
of in-substance fixed lease payments, or if there is a change in the
Group's estimate of the amount expected to be payable under a residual
value guarantee, or if the Group changes its assessment of whether it
will exercise a purchase, extension or termination option.
When the lease liability is remeasured, a corresponding adjustment is

made to the carrying amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
(b) As a lessor
The Group recognises lease payments received under operating leases

as income on a straight-line basis over the lease term as part of
“revenue”.
The Group recognises finance income over the lease term, based on a
pattern reflecting a constant periodic rate of return on the Group’s net
investment in the lease. The Group aims to allocate finance income over
the lease term on a systematic and rational basis. The Group applies
the lease payments relating to the period against the gross investment
in the lease to reduce both the principal and the unearned finance
income. The net investment in the lease is subject to impairment
requirements in MFRS 9, Financial Instruments (see Note 2(j)(i)).
Previous financial year
As a lessee
(i) Finance lease
Leases in terms of which the Group or the Company assumed substantially

all the risks and rewards of ownership were classified as finance leases.
Upon initial recognition, the leased asset was measured at an amount equal
to the lower of its fair value and the present value of the minimum lease
payments. Subsequent to initial recognition, the asset was accounted for in
accordance with the accounting policy applicable to that asset.

39


Previous financial year (continued)
As a lessee (continued)
(i) Finance lease (continued)
Minimum lease payments made under finance leases were apportioned

between the finance expense and the reduction of the outstanding liability.
The finance expense was allocated to each period during the lease term so
as to produce a constant periodic rate of interest on the remaining balance
of the liability. Contingent lease payments were accounted for by revising the
minimum lease payments over the remaining term of the lease when the
lease adjustment was confirmed.
Leasehold land which in substance was a finance lease was classified as

property, plant and equipment, or as investment property if held to earn
rental income or for capital appreciation or for both.
(ii) Operating lease
Leases, where the Group or the Company did not assume substantially all
the risks and rewards of ownership were classified as operating leases and,
except for property interest held under operating lease, the leased assets
were not recognised on the statement of financial position. Property interest
held under an operating lease, which was held to earn rental income or for
capital appreciation or for both, was classified as investment property and
measured using fair value model.
Payments made under operating leases were recognised in profit or loss on

a straight-line basis over the term of the lease. Lease incentives received
were recognised in profit or loss as an integral part of the total lease expense,
over the term of the lease. Contingent rentals were charged to profit or loss
in the reporting period in which they were incurred.
Leasehold land which in substance was an operating lease was classified as

prepaid lease payments.
(f) Intangible assets
(i) Goodwill
Goodwill arising on business combinations is measured at cost less any

accumulated impairment losses. In respect of equity-accounted associates
and joint venture, the carrying amount of goodwill is included in the carrying
amount of the investment and an impairment loss on such an investment is
not allocated to any asset, including goodwill, that forms part of the carrying
amount of the equity-accounted associates and joint venture.

40


(f) Intangible assets (continued)
(ii) Research and development
Expenditure on research activities, undertaken with the prospect of gaining

new scientific or technical knowledge and understanding, is recognised in
profit or loss as incurred.
Expenditure on development activities, whereby the application of research

findings are applied to a plan or design for the production of new or
substantially improved products and processes, is capitalised only if
development costs can be measured reliably, the product or process is
technically and commercially feasible, future economic benefits are probable
and the Group intends to and has sufficient resources to complete
development and to use or sell the asset.
The expenditure capitalised includes the cost of materials, direct labour and
overheads costs that are directly attributable to preparing the asset for its
intended use. For qualifying assets, borrowing costs are capitalised in
accordance with the accounting policy on borrowing costs. Other
development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less any

accumulated amortisation and any accumulated impairment losses.
(iii) Other intangible assets
Intangible assets, other than goodwill, that are acquired by the Group, which
have finite useful lives, are measured at cost less any accumulated
amortisation and any accumulated impairment losses.
(iv) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future

economic benefits embodied in the specific asset to which it relates. All other
expenditure, including expenditure on internally generated goodwill and
brands, is recognised in profit or loss as incurred.
(v) Amortisation
Goodwill and intangible assets with indefinite useful lives are not amortised
but are tested for impairment annually and whenever there is an indication
that they may be impaired.
Other intangible assets are amortised from the date that they are available
for use. Amortisation is based on the cost of an asset less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the
estimated useful lives of intangible assets.
The estimated useful lives for the capitalised development costs for drilling
waste equipment for current year is 8 years (2019: 9 years).
Amortisation methods, useful lives and residual values are reviewed at the
end of each reporting period and adjusted, if appropriate.

Notes to the
41

(g) Investment properties
(i) Investment properties carried at cost
Investment properties are properties which are owned to earn rental income
or for capital appreciation or for both, but not for sale in the ordinary course
of business, use in the production or supply of goods or services or for
administrative purposes.
Investment properties are measured at cost less any accumulated

depreciation and any accumulated impairment losses, consistent with the
accounting policy for property, plant and equipment as stated in accounting
policy Note 2(d).
Depreciation is charged to the profit or loss on a straight-line basis over the

estimated useful lives of 20 to 50 years for buildings. Freehold land is not
depreciated.
An investment property is derecognised on its disposal, or when it is

permanently withdrawn from use and no future economic benefits are
expected from its disposal. The difference between the net disposal
proceeds and the carrying amount is recognised in profit or loss in the year
in which the item is derecognised.
(ii) Reclassification to/from investment property
When an item of property, plant and equipment is transferred to investment

property following a change in its use, any difference arising at the date of
transfer between the carrying amount of the item immediately prior to
transfer and its fair value is recognised directly in equity as a revaluation of
property, plant and equipment. However, if a fair value gain reverses a
previous impairment loss, the gain is recognised in profit or loss. Upon
disposal of an investment property, any surplus previously recorded in equity
is transferred to retained earnings; the transfer is not made through profit or
loss.
When the use of a property changes such that it is reclassified as property,

plant and equipment or inventories, its fair value at the date of
reclassification becomes its cost for subsequent accounting.
(h) Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is calculated using the weighted average method, and
includes expenditure incurred in acquiring the inventories and other costs incurred
in bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs necessary to make the sale.

42

(i) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits placed
with licensed banks which have an insignificant risk of changes in fair value with
original maturities of three months or less, and are used by the Group and the
Company in the management of their short-term commitments. For the purpose
of the statement of cash flows, cash and cash equivalents are presented net of
pledged deposits.
(j) Impairment
(i) Financial assets
The Group and the Company recognise loss allowances for expected credit
losses on financial assets measured at amortised cost. Expected credit
losses are a probability-weighted estimate of credit losses.
The Group and the Company measure loss allowances at an amount equal
to lifetime expected credit loss, except for debt securities that are determined
to have low credit risk at the reporting date, cash and bank balance and other
debt securities for which credit risk has not increased significantly since initial
recognition, which are measured at 12-month expected credit loss. Loss
allowances for trade receivables are always measured at an amount equal
to lifetime expected credit loss.
When determining whether the credit risk of a financial asset has increased
significantly since initial recognition and when estimating expected credit
loss, the Group and the Company consider reasonable and supportable
information that is relevant and available without undue cost or effort. This
includes both quantitative and qualitative information and analysis, based on
the Group’s historical experience and informed credit assessment and
including forward-looking information, where available.
Lifetime expected credit losses are the expected credit losses that result
from all possible default events over the expected life of the asset, while 12-
month expected credit losses are the portion of expected credit losses that
result from default events that are possible within the 12 months after the
reporting date. The maximum period considered when estimating expected
credit losses is the maximum contractual period over which the Group and
the Company are exposed to credit risk.
The Group and the Company estimate the expected credit losses on trade
receivables using a provision matrix with reference to historical credit loss
experience.
An impairment loss in respect of financial assets measured at amortised cost

is recognised in profit or loss and the carrying amount of the asset is reduced
through the use of an allowance account.
An impairment loss in respect of debt investments measured at fair value

through other comprehensive income is recognised in profit or loss and the
allowance account is recognised in other comprehensive income.

Notes to the
43

(j) Impairment (continued)
(i) Financial assets (continued)
At each reporting date, the Group and the Company assess whether
financial assets carried at amortised cost and debt securities at fair value
through other comprehensive income are credit-impaired. A financial asset
is credit impaired when one or more events that have a detrimental impact
on the estimated future cash flows of the financial asset have occurred.
The gross carrying amount of a financial asset is written off (either partially
or full) to the extent that there is no realistic prospect of recovery. This is
generally the case when the Group or the Company determines that the
debtor does not have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the write-off. However,
financial assets that are written off could still be subject to enforcement
activities in order to comply with the Group’s or the Company’s procedures
for recovery of amounts due.
(ii) Other assets
The carrying amounts of other assets (except for inventories, deferred tax
assets and investment properties) are reviewed at the end of each reporting
year to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated. For
goodwill that has indefinite useful life, the recoverable amount is estimated
each year at the same time.
For the purpose of impairment testing, assets are grouped together into the
smallest group of assets that generates cash inflows from continuing use
that are largely independent of the cash inflows of other assets or cash-
generating units. Subject to an operating segment ceiling test, for the
purpose of goodwill impairment testing, cash-generating units to which
goodwill has been allocated are aggregated so that the level at which
impairment testing is performed reflects the lowest level at which goodwill is
monitored for internal reporting purposes. The goodwill acquired in a
business combination, for the purpose of impairment testing, is allocated to
a cash-generating unit or a group of cash-generating units that are expected
to benefit from the synergies of the combination.
The recoverable amount of an asset or cash-generating unit is the greater

of its value in use and its fair value less costs of disposal. In assessing value
in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset or cash-generating
unit.
An impairment loss is recognised if the carrying amount of an asset or its

related cash-generating unit exceeds its estimated recoverable amount.

44

(j) Impairment (continued)
(ii) Other assets (continued)
Impairment losses are recognised in profit or loss. Impairment losses

recognised in respect of cash-generating units are allocated first to reduce
the carrying amount of any goodwill allocated to the cash-generating unit
(group of cash-generating units) and then to reduce the carrying amounts of
the other assets in the cash-generating unit (groups of cash-generating
units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other

assets, impairment losses recognised in prior periods are assessed at the
end of each reporting period for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has been a
change in the estimates used to determine the recoverable amount since
the last impairment loss was recognised. An impairment loss is reversed
only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised. Reversals of
impairment losses are credited to profit or loss in the financial year in which
the reversals are recognised.
(k) Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are
not remeasured subsequently.
(i) Issue expenses
Costs directly attributable to the issue of instruments classified as equity are

recognised as a deduction from equity.
(ii) Ordinary shares
Ordinary shares are classified as equity.
(iii) Repurchase, disposal and reissue of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the

consideration paid, including directly attributable costs, net of any tax effects,
is recognised as a deduction from equity. Repurchased shares that are not
subsequently cancelled are classified as treasury shares in the statement of
changes in equity.
Where treasury shares are sold or reissued subsequently, the difference

between the sales consideration net of directly attributable costs and the
carrying amount of the treasury shares is recognised in equity.

Notes to the
45

(l) Employee benefits
(i) Short-term employee benefits
Short-term employee benefit obligations in respect of salaries, annual

bonuses, paid annual leave and sick leave are measured on an
undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term

cash bonus or profit-sharing plans if the Group has a present legal or
constructive obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.
(ii) State plans
The Group’s contributions to statutory pension funds are charged to profit

or loss in the financial year to which they relate. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a reduction in
future payments is available.
(iii) Defined benefit plans
The Group’s net obligation in respect of defined benefit plans is calculated

separately for each plan by estimating the amount of future benefit that
employees have earned in the current and prior years, discounting that
amount and deducting the fair value of any plan assets.
The calculation of defined benefits obligations is performed annually by a

qualified actuary using the projected unit credit method. When the
calculation results in a potential asset to the Group, the recognised asset is
limited to the present value of economic benefits available in the form of any
future refunds from the plan or reductions in future contributions to the plan.
To calculate the present value of economic benefits, consideration is given
to any applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise

actuarial gains and losses, the return on plan assets (excluding interest) and
the effect of the asset ceiling (if any, excluding interest), are recognised
immediately in other comprehensive income. The Group determines the net
interest expense or income on the net defined liability or asset for the period
by applying the discount rate used to measure the defined benefit obligation
at the beginning of the annual period to the net defined benefit liability or
asset, taking into account any changes in the net defined benefit liability or
asset during the period as a result of contributions and benefit payments.
Net interest expense and other expenses relating to defined benefit plans
are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the
resulting change in benefit that relates to past service or the gain or loss on
curtailment is recognised immediately in profit or loss. The Group recognises
gains and losses on the settlement of a defined benefit plan when the
settlement occurs.
46

(l) Employee benefits (continued)
(iv) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no
longer withdraw the offer of those benefits and when the Group recognises
costs for a restructuring. If benefits are not expected to be settled wholly
within 12 months of the end of the reporting period, then they are discounted.
(m) Provisions
A provision is recognised if, as a result of a past event, the Group has a present
legal or constructive obligation that can be estimated reliably, and it is probable
that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-
tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. The unwinding of the discount is recognised as
finance cost.
(n) Revenue and other income
(i) Revenue
Revenue is measured based on the consideration specified in a contract with

a customer in exchange for transferring goods or services to a customer,
excluding amounts collected on behalf of third parties. The Group or the
Company recognises revenue when (or as) it transfers control over a product
or service to customer. An asset is transferred when (or as) the customer
obtains control of the asset.
The Group or the Company transfers control of a good or service at a point

in time unless one of the following overtime criteria is met:
(a) the customer simultaneously receives and consumes the benefits

provided as the Group or the Company performs;
(b) the Group’s or the Company’s performance creates or enhances an

asset that the customer controls as the asset is created or enhanced;
or
(c) the Group’s or the Company’s performance does not create an asset
with an alternative use and the Group or the Company has an
enforceable right to payment for performance completed to date.
(ii) Rental income
Rental income from investment property is recognised in profit or loss on a

straight-line basis over the term of the lease. Lease incentives granted are
recognised as an integral part of the total rental income, over the term of the
lease. Rental income from sub-leased property is recognised as “other
income”.

Notes to the
47

(n) Revenue and other income (continued)
(iii) Interest income
Interest income is recognised as it accrues using the effective interest

method in profit or loss except for interest income arising from temporary
investment of borrowings taken specifically for the purpose of obtaining a
qualifying asset which is accounted for in accordance with the accounting
policy on borrowing costs.
(o) Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or
production of a qualifying asset are recognised in profit or loss using the effective
interest method.
Borrowing costs directly attributable to the acquisition, construction or production

of qualifying assets, which are assets that necessarily take a substantial period of
time to get ready for their intended use or sale, are capitalised as part of the cost
of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset

commences when expenditure for the asset is being incurred, borrowing costs are
being incurred and activities that are necessary to prepare the asset for its
intended use or sale are in progress. Capitalisation of borrowing costs is
suspended or ceases when substantially all the activities necessary to prepare the
qualifying asset for its intended use or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings

pending their expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalisation.
(p) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred
tax are recognised in profit or loss except to the extent that it relates to a business
combination or items recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates enacted or substantively enacted by the end of
the reporting period, and any adjustment to tax payable in respect of previous
financial years.
Deferred tax is recognised using the liability method, providing for temporary
differences between the carrying amounts of assets and liabilities in the statement
of financial position and their tax bases. Deferred tax is not recognised for the
following temporary differences: the initial recognition of goodwill, the initial
recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss. Deferred
tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or
substantively enacted by the end of the reporting period.

48

(p) Income tax (continued)
Deferred tax assets and liabilities are offset if there is a legally enforceable right
to offset current tax liabilities and assets, and they relate to income taxes levied
by the same tax authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future
taxable profits will be available against which the temporary difference can be
utilised. Deferred tax assets are reviewed at the end of each reporting period and
are reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
(q) Earnings per ordinary share
The Group presents basic and diluted earnings per share data for its ordinary
shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary

shareholders of the Company by the weighted average number of ordinary shares
outstanding during the period, adjusted for own shares held.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary

shareholders and the weighted average number of ordinary shares outstanding,
adjusted for own shares held, for the effects of all dilutive potential ordinary
shares, which comprise convertible notes and share options granted to
employees, if any.
(r) Operating segments
An operating segment is a component of the Group that engages in business

activities from which it may earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any of the Group’s other
components. Operating segment results are reviewed regularly by the chief
operating decision maker, which in this case is the Chief Executive Officer of the
Group, to make decisions about resources to be allocated to the segment and to
assess its performance, and for which discrete financial information is available.
(s) Contingencies
(i) Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required,

or the amount cannot be estimated reliably, the obligation is not recognised
in the statements of financial position and is disclosed as a contingent
liability, unless the probability of outflow of economic benefits is remote.
Possible obligations, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future events, are also
disclosed as contingent liabilities unless the probability of outflow of
economic benefits is remote.

49

(s) Contingencies (continued)
(ii) Contingent assets
When an inflow of economic benefits of an asset is probable where it arises

from past events and where existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the entity, the asset is not recognised in the
statements of financial position but is being disclosed as a contingent asset.
When the inflow of economic benefit is virtually certain, then the related
assets are recognised.
(t) Fair value measurements
Fair value of an asset or a liability, except for lease transactions, is determined as

the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The
measurement assumes that the transaction to sell the asset or transfer the liability
takes place either in the principal market or in the absence of a principal market,
in the most advantageous market.
For non-financial asset, the fair value measurement takes into account a market
participant’s ability to generate economic benefits by using the asset in its highest
and best use or by selling it to another market participant that would use the asset
in its highest and best use.
When measuring the fair value of an asset or a liability, the Group uses observable
market data as far as possible. Fair value is categorised into different levels in a
fair value hierarchy based on the input used in the valuation technique as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or

liabilities that the Group can access at the measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3: unobservable inputs for the asset or liability.
The Group recognises transfers between levels of the fair value hierarchy as of
the date of the event or change in circumstances that caused the transfers.

50
3. Property, plant and equipment

Renovation,
fittings, Capital
Freehold Freehold Leasehold Marine Rental Non-rental Motor and office work-in-
Note land buildings buildings vessels equipment equipment vehicles equipment progress Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 April 2018 - 1,692 14,453 886,989 519,533 15,691 8,553 50,178 1,839 1,498,928
Additions 4,900 1,600 - 2,107 2,000 590 866 738 12,403 25,204
Disposals - - - (91,333) (73,620) (1,657) (1,115) (4,130) - (171,855)
Written off - - - - (1,196) - - (21) - (1,217)
Reclassification - - - 9,075 - - - - (9,075) -
Effect of movements in
exchange rates - 115 247 61,136 31,062 1,212 (112) 753 133 94,546
At 30 June 2019, as
previously reported 4,900 3,407 14,700 867,974 477,779 15,836 8,192 47,518 5,300 1,445,606
application of MFRS
16 - - (14,700) - - - - - - (14,700)
At 1 July 2019, as
restated 4,900 3,407 - 867,974 477,779 15,836 8,192 47,518 5,300 1,430,906
Additions - - - 1,930 1,497 614 122 404 4,040 8,607
Disposals - - - - (59,247) - (193) (219) - (59,659)
Reclassification - - - 5,760 - - - - (5,760) -
exchange rates - 65 - 31,686 15,146 1,514 (243) 887 162 49,217
At 30 June 2020 4,900 3,472 - 907,350 435,175 17,964 7,878 48,590 3,742 1,429,071

51
3. Property, plant and equipment (continued)

Renovation,
fittings, Capital
Depreciation and
impairment losses
At 1 April 2018
Accumulated
depreciation - 1,680 13,074 537,618 402,554 14,354 5,899 45,784 - 1,020,963
Accumulated
impairment losses - - 328 90,502 2,511 - - - - 93,341
- 1,680 13,402 628,120 405,065 14,354 5,899 45,784 - 1,114,304
Depreciation for the
period 23 - 44 235 42,923 31,947 587 305 839 - 76,880
Impairment losses 23 - - - 1,542 - - - - - 1,542
Disposals - - - (39,311) (67,168) (1,385) (1,113) (4,089) - (113,066)
Written off - - - - (202) - - (21) - (223)
exchange rates - 108 225 43,401 20,785 910 458 1,292 - 67,179
At 30 June 2019, as
previously reported
Accumulated
depreciation - 1,832 13,582 584,631 388,545 14,466 5,549 43,805 - 1,052,410
Accumulated
impairment losses - - 280 92,044 1,882 - - - - 94,206
- 1,832 13,862 676,675 390,427 14,466 5,549 43,805 - 1,146,616

52
Renovation,
fittings, Capital
Depreciation and
impairment losses
(continued)
At 1 July 2019, as
previously reported - 1,832 13,862 676,675 390,427 14,466 5,549 43,805 - 1,146,616
application of MFRS
16 - - (13,862) - - - - - - (13,862)
At 1 July 2019, as
restated - 1,832 - 676,675 390,427 14,466 5,549 43,805 - 1,132,754
Accumulated
depreciation - 1,832 - 584,631 388,545 14,466 5,549 43,805 - 1,038,828
Accumulated
impairment losses - - - 92,044 1,882 - - - - 93,926
- 1,832 - 676,675 390,427 14,466 5,549 43,805 - 1,132,754
Depreciation for the
year 23 - 80 - 29,804 19,622 595 698 755 - 51,554
Impairment losses 23 - - - - 1,320 - - - - 1,320
Disposals - - - - (52,159) - (193) (92) - (52,444)
exchange rates - 65 - 25,131 10,217 676 (86) 1,106 - 37,109
At 30 June 2020
Accumulated
depreciation - 1,977 - 639,566 366,225 15,737 5,968 45,574 - 1,075,047
Accumulated
impairment losses - - - 92,044 3,202 - - - - 95,246
- 1,977 - 731,610 369,427 15,737 5,968 45,574 - 1,170,293

53

Renovation,
fittings, Capital
Carrying amounts
At 1 April 2018 - 12 1,051 258,869 114,468 1,337 2,654 4,394 1,839 384,624
At 30 June 2019/
1 July 2019 4,900 1,575 838 191,299 87,352 1,370 2,643 3,713 5,300 298,990
At 30 June 2020 4,900 1,495 - 175,740 65,748 2,227 1,910 3,016 3,742 258,778

Renovation
Freehold Freehold and office Motor
Note land building equipment vehicles Total
Company RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 April 2018/30 June 2019/1 July 2019 - - 1,095 200 1,295
Transfer from investment property 6 4,900 1,600 - - 6,500
At 30 June 2020 4,900 1,600 1,095 200 7,795
Accumulated depreciation
At 1 April 2018 - - 1,084 200 1,284
Depreciation for the period - - 11 - 11
At 30 June 2019/1 July 2019 - - 1,095 200 1,295
Transfer from investment property 6 - 40 - - 40
Depreciation for the year 23 - 80 - - 80
At 30 June 2020 - 120 1,095 200 1,415
Carrying amounts
At 1 April 2018 - - 11 - 11
At 30 June 2019/1 July 2019 - - - - -
At 30 June 2020 4,900 1,480 - - 6,380

Notes to the
55

(a) Impairment loss - Marine vessels
The downturn in marine business operation has resulted in a decrease in charter

contract revenue for the Group’s vessels, which indirectly has an impact on the
recoverable amount of the vessels. Accordingly, the Group has reviewed the
recoverable amount of its vessels.
The recoverable amount of vessels of the Group were determined based on the
higher of fair value less costs of disposal and value-in-use calculation. In valuing
the vessels using fair value less costs of disposal, the valuer had taken into
consideration the prevailing market conditions and made adjustments for
differences such as age, size and specification where necessary before arriving
at the most appropriate fair value for the vessels. The fair value measurement of
the vessels was performed by an independent valuer not connected with the
Group, who has appropriate qualifications and recent experience in the fair value
measurement of the vessels in the relevant sector.
The value-in-use calculations use pre-tax cash flow projections based on financial
budgets approved by the Board covering remaining estimated useful lives of
vessels. The key assumptions used in the value-in-use calculation in the current
financial year are as follows:
2020 2019
% %
Discount rate 9.7 9.7
Revenue growth rate 0.0 0.0
The Directors are of the opinion that there are no reasonable possible changes in
the key assumption that would cause the carrying amount of the marine vessels
to materially exceed the recoverable amount.
Based on the impairment test, an impairment of RM Nil (2019: RM1,542,000) has

been recognised in profit or loss.
(b) Security
The carrying amount of property, plant and equipment of the Group charged as
security for banking facilities granted to the Group (Note 17) was as follows:
Group
2020 2019
RM’000 RM’000
Marine vessels - 140,359
The charges on property, plant and equipment of the Group were discharged as
the banking facilities were fully repaid during the financial year.

56
4. Right-of-use assets
Plant and
Group Land Buildings equipment Total
Note RM’000 RM’000 RM’000 RM’000
At 1 July 2019 371 14,329 1,621 16,321

Addition - 5,287 - 5,287
Transfer from property, plant
and equipment 3 - 838 - 838
Depreciation 23 (136) (7,918) (669) (8,723)
exchange rates 17 501 48 566
At 30 June 2020 252 13,037 1,000 14,289
The Group leases a number of warehouse and factory facilities that run between one year
and three years, with an option to renew the leases after that date.
4.1 Extension options
Some leases of the warehouse and factory facilities contain extension options
exercisable by the Group up to one year before the end of the non-cancellable
contract period. Where applicable, the Group seeks to include extension options in
new leases to provide operational flexibility. The extension options held are
exercisable only by the Group and not by the lessors. The Group assesses at lease
commencement whether it is reasonably certain to exercise the extension options.
The Group reassesses whether it is reasonably certain to exercise the options if
there is a significant event or significant change in circumstances within its control.
4.2 Significant judgements and assumptions in relation to leases
The Group assesses at lease commencement by applying significant judgement

whether it is reasonably certain to exercise the extension options. Group entities
consider all facts and circumstances including their past practice and any cost that
will be incurred to change the asset if an option to extend is not taken, to help them
determine the lease term.
The Group also applied judgement and assumptions in determining the incremental
borrowing rates of the respective leases. Group entities first determine the closest
available borrowing rates before using significant judgement to determine the
adjustments required to reflect the term, security, value or economic environment of
the respective leases.

57
5. Intangible assets
Capitalised Development
development cost work-
costs in-progress
Patents
and other Drilling EMS
intangible waste Engineering
Goodwill assets equipment Package Total
Group Note RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 April 2018 402,490 1,113 10,717 11,591 425,911
Disposal (2,824) - - - (2,824)
Written off - - - (11,591) (11,591)
exchange rates 198 70 1,541 - 1,809
At 30 June/1 July 2019 399,864 1,183 12,258 - 413,305
exchange rates 210 43 445 - 698
At 30 June 2020 400,074 1,226 12,703 - 414,003
Accumulated amortisation
and impairment losses
At 1 April 2018
Accumulated amortisation - 803 3,724 - 4,527
Accumulated impairment
losses 300,361 - 2,867 11,591 314,819
300,361 803 6,591 11,591 319,346
Amortisation for the period (a) - 330 482 - 812
Written off - - - (11,591) (11,591)
exchange rates - 50 1,157 - 1,207
At 30 June/1 July 2019
Accumulated amortisation - 1,183 5,363 - 6,546
losses 300,361 - 2,867 - 303,228
300,361 1,183 8,230 - 309,774
Amortisation for the year (a) - - 219 - 219
Impairment losses (b) 96,554 - 3,780 - 100,334
exchange rates 3,159 43 474 - 3,676
At 30 June 2020
Accumulated amortisation - 1,226 6,056 - 7,282
losses 400,074 - 6,647 - 406,721
400,074 1,226 12,703 - 414,003
Carrying amounts
At 1 April 2018 102,129 310 4,126 - 106,565
At 30 June/1 July 2019 99,503 - 4,028 - 103,531
At 30 June 2020 - - - - -

58
5. Intangible assets (continued)

(a) Amortisation
The amortisation of patents, other intangible assets and capitalised development

costs is allocated to the cost of inventory and is recognised in cost of sales as
inventory is sold.
(b) Impairment
(i) Impairment testing for cash-generating units containing goodwill
The carrying amount of goodwill allocated to the Group’s cash-generating

units (“CGU”) is as follows:
Group
2020 2019
RM’000 RM’000
Drilling Services - 99,503
Goodwill allocated to Drilling Services
During the year, the cash-generating units with the allocated goodwill was
reviewed for impairment using the value-in-use calculations. The value-in-use
calculations use pre-tax cash flow projections for each countries based on
financial budgets approved by the Board covering a five-year period. Based
on the impairment testing and management’s assessment, a full impairment
of RM96,554,000 has been recognised in the current financial year.
The key assumptions used in the value-in-use calculations in the current

financial year are as follows:
2020 2019
% %
Discount rates 10.0 - 22.0 9.0 - 21.0
Terminal growth rate 0.0 0.0
Revenue growth rates 0.0 0.0 - 24.0
The projections over these years were based on an approved business plan
and reflect the expectation of revenue, margin and operating costs based on
past experience and current assessment of market condition, expectations of
market and industry in the future. The discount rates used are pre-tax and
reflect specific risk relating to individual country in which the Group operates.
The terminal growth rate is based on long term growth rates relating to the
individual country.
(ii) Impairment losses on capitalised development costs
During the financial year ended 30 June 2020, the Group has reviewed the
carrying amount of the capitalised development costs due to the prolonged
low and volatile crude oil prices which indirectly has impacted on the carrying
amount of the capitalised development costs. Based on the management’s
assessment, the Group recognised an impairment loss of RM3,780,000
(2019: Nil) in the current financial year.

59
Notes to the
Registration No. 199601025627 (397979-A) Financial Statements
6. Investment properties
Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
Freehold land and buildings
At cost
At 1 July/1 April 2,890 4,860 6,500 -
Addition - - - 6,500
Disposals - (2,069) - -
Transfer to property, plant and
equipment - - (6,500) -
Effect of movements in exchange rates - 99 - -
At 30 June 2,890 2,890 - 6,500
Accumulated depreciation
At 1 July/1 April 2,435 2,265 40 -
Depreciation for the year/period - 169 - 40
Transfer to property, plant and
equipment - - (40) -
Effect of movements in exchange rates - 1 - -
At 30 June 2,435 2,435 - 40
Accumulated impairment losses

At 1 July/30 June/1 April 455 455 - -
Carrying amounts
At 1 July/1 April - 2,140 6,460 -
At 30 June - - - 6,460
During the financial year, a property has been transferred from investment properties to
property, plant and equipment as the property is no longer held for capital appreciation
or rental income.
The following is recognised in profit or loss in respect of investment properties:
Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Rental income - 190 - -
There were no direct operating expenses arising from investment property that
generated rental income in the previous financial period as all expenses were borne by
the tenants.

60
6. Investment properties (continued)

Fair value information
Fair value of investment properties at Level 2 are categorised as follows:
Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
Freehold land and buildings - - - 6,600
Level 2 fair value
Level 2 fair value of freehold land and buildings are determined by external,
independent property valuers. The fair values of freehold land and buildings have been
generally derived using the comparison method. In this approach, sales and listing of
comparable properties recorded within the same location are compiled. Sales price of
comparable properties in close proximity are adjusted for differences in attributes to
arrive at a comparison.
7. Investments in subsidiaries
Company
2020 2019
Note RM’000 RM’000
Unquoted shares, at cost 11,016 11,016

Deemed investment - capital contribution 1,454,883 1,456,962
1,465,899 1,467,978
Less: Accumulated impairment losses (a) (1,242,446) (1,115,126)
223,453 352,852
(a) Impairment losses of investments in subsidiaries
Due to the presence of impairment indicator during the financial year resulting
from downturn in operations of a subsidiary, the Company has undertaken an
impairment assessment on investments in subsidiaries.
The recoverable amount for the subsidiary was determined based on value-in-use
calculation. The value-in-use calculation uses pre-tax cash flow projections based
on financial budgets approved by the Board covering a five-year period. The
value-in-use was based on the key assumptions as disclosed in Note 5(b)(i).
Based on the management’s assessment, an impairment of RM127,320,000

(2019: RM14,088,000) has been recognised in the current financial year.

Notes to the
61
7. Investments in subsidiaries (continued)

(b) Details of the significant subsidiaries are as follows:
Principal Effective
place of ownership
business/ interest and
Country of voting interest
Name of entity incorporation Principal activities 2020 2019
% %
Significant
subsidiaries
Scomi Oilfield Limited Malaysia/ Investment holding 100 100

Bermuda
Scomi Marine Services Singapore Investment holding 100 100

Pte. Ltd.*
Scomi KMC Sdn. Bhd. Malaysia Provision of oilfield 52 52

(including 4% held equipment,
by Scomi Oiltools supplies and
Sdn. Bhd.) services
Significant
subsidiaries of
Scomi Oilfield
Limited
Scomi Oiltools Sdn. Malaysia Provision of oilfield 100 100

Bhd. equipment,
supplies and
services
Scomi Oiltools United Arab Provision of oilfield 100 100

(Cayman) Ltd.* Emirates & equipment,
Saudi Arabia/ supplies and
Cayman services
Islands

62

(b) Details of the significant subsidiaries are as follows (continued):
Principal Effective
place of ownership
% %
Significant
subsidiaries of
Scomi Oilfield
Limited (continued)
Scomi Oiltools (Africa) Congo & Investment holding 100 100

Limited Nigeria/ and provision of
Cayman oilfield equipment,
Islands supplies and
services
Scomi Oiltools Thailand Provision of oilfield 100 100

(Thailand) Ltd.# equipment,
supplies and
services
KMCOB Capital Berhad Malaysia Undertake the 100 100

issuance of private
debt securities in
such classes,
series, form or
denomination and
to secure the
redemption thereof
and the utilisation
of proceeds from
such issuance and
to undertake any
refinancing
exercise in respect
of such private debt
securities
Scomi Oiltools Oman Oman Provision of oilfield 51 51

LLC* equipment,
supplies and
services
Scomi Oiltools Pty. Ltd.# Australia Provision of oilfield 100 100

equipment,
supplies and
services

Notes to the
63

Principal Effective
place of ownership
% %
Significant
subsidiaries of
Scomi Oilfield
Limited (continued)
Scomi Oiltools Ltd. – Pakistan Provision of oilfield 100 100

Pakistan branch* equipment, supplies
and services
Scomi Oiltools (S) Pte. Singapore Investment holding 100 100

Ltd.
Significant subsidiary
of Scomi Marine
Services Pte. Ltd.
PT Rig Tenders Indonesia Ship owning and 80.54 80.54

Indonesia, Tbk*+ chartering
of Scomi Oiltools
(Africa) Limited
WASCO Oil Services Nigeria Provision of oilfield 100 100

Company Nigeria equipment, supplies
Limited and services
Significant
subsidiaries of
Scomi Oiltools (S)
Pte. Ltd.
KMC Oiltools India Pvt. India Provision of oilfield 100 100

Ltd.* equipment, supplies
and services
PT Scomi Oiltools* Indonesia Provision of oilfield 100 100

equipment, supplies
and services
Scomi Oiltools (RUS) Russia Provision of oilfield 100 100

LLC* equipment, supplies
and services

64

Principal Effective
place of ownership
% %
of PT Rig Tenders
Indonesia, Tbk
Grundtvig Marine Pte. Singapore Investment holding 80.54 80.54

Ltd.*
of Grundtvig Marine
Pte. Ltd.
PT Batuah Abadi Lines* Indonesia Ship owning and 76.51 76.51

chartering
* Audited by other member firms of KPMG International.

+ Listed on the Indonesian Stock Exchange.
# Not audited by member firms of KPMG International.
(c) Non-controlling interests in subsidiaries
The Group’s subsidiaries that have material non-controlling interests (“NCI”) are
Scomi Oiltools Oman LLC and PT Rig Tenders Indonesia, Tbk, and their
aggregated results with other subsidiaries with immaterial NCI are as follows:
Other
subsidiary
Subsidiaries with
with material immaterial
NCI NCI Total
RM’000 RM’000 RM’000
2020
Carrying amount of NCI 34,429 - 34,429
Profit/(Loss) allocated to NCI 2,998 (1,790) 1,208
2019
Carrying amount of NCI 31,431 1,790 33,221
Loss allocated to NCI (6,012) (1,760) (7,772)

Notes to the
65

(c) Non-controlling interests in subsidiaries (continued)
Summarised financial information of subsidiaries with material NCI before

intra-group elimination
2020 2019
RM’000 RM’000
As at 30 June
Non-current assets 184,746 201,990
Current assets 65,881 70,211
Non-current liabilities (3,099) (3,560)
Current liabilities (37,313) (74,238)
Net assets 210,215 194,403
Year/period ended 30 June

Revenue 120,579 168,479
Profit/(Loss) for the year/period 8,510 (33,484)
Total comprehensive income/(loss) 8,510 (33,014)
Cash flows from operating activities 37,103 37,327

Cash flows (used in)/from investing activities (8,244) 1,250
Cash flows used in financing activities (24,061) (37,460)
Net increase in cash and cash equivalents 4,798 1,117
Dividends paid to NCI - -
8. Investments in joint ventures

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost

- outside Malaysia 3,398 4,432 2,042 2,042
Deemed investment -
capital contribution (a) 34,920 51,241 15,053 15,053
Deemed investment -
financial guarantee liabilities 329 329 329 329
Share of post-acquisition
reserves (29,802) (46,234) - -
Accumulated impairment losses (b) (8,845) (7,684) (17,424) (17,424)
- 2,084 - -
(a) Deemed investment - capital contribution
The deemed investment - capital contribution relates to advances provided to

certain joint ventures that are contractually not receivable until the external
borrowings of the joint ventures have been repaid.

66
8. Investments in joint ventures (continued)

(b) Impairment review of investments in joint ventures
Due to presence of impairment indicator during the financial year resulting from
downturn in operations of a joint venture, the Group has recognised a full
impairment of RM1,161,000 (2019: RM996,000).
(c) Details of the joint ventures are as follows:
Principal Effective
place of ownership
Country of Nature of the voting interest
Name of entity incorporation relationship 2020 2019
% %
Held by the Company
MarineCo Limited*^ Malaysia Dormant - 51
Gemini Sprint Sdn. Bhd.*^ Malaysia Dormant - 51
Transenergy Shipping Malaysia Dormant 50 50

Pte. Ltd.
Transenergy Shipping Malaysia Dormant 50 50

Management Sdn. Bhd.
Held by PT Rig Tenders

Indonesia, Tbk
Rig Tenders Offshore Singapore Chartering of ships to 70 70

Pte. Ltd.* the Group
Held by Scomi Oilfield

Limited
Vibratherm Limited England and Dormant 50 50

Wales
Held by Scomi Oiltools

Sdn. Bhd.
Scomi Platinum Sdn. Bhd. Malaysia Dormant 50 50
Global Oilfield Products Malaysia Provide oilfield supplies 25 25

Sdn. Bhd. to the Group
Scomi Oiltools Gulf W.L.L. Dubai Provide oilfield 25 -

equipment, supplies and
services to the Group

Notes to the
67
8. Investments in joint ventures (continued)

(c) Details of the joint ventures are as follows (continued):
Principal Effective
place of ownership
% %
Held by Scomi D&P
Sdn. Bhd.
Ophir Production Sdn. Malaysia Dormant 30 30

Bhd.
* Companies with ownership of more than half of the equity shareholdings but
were treated as joint ventures pursuant to the contractual rights and
obligations of the respective joint venture party.
^ Under member's voluntarily liquidation.
Summarised financial information of joint ventures
1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019
RM’000 RM’000
Revenue 127 48,037
Loss for the year/period (1,516) (18,424)
Group’s share of results for the year/period - (3,866)
2020 2019
RM’000 RM’000
Total assets 10,352 15,403
Total liabilities (17,541) (6,598)
Net (liabilities)/assets (7,189) 8,805
Group’s share of net assets - 2,084
Unrecognised share of losses and net liabilities
The Group has not recognised losses and net liabilities related to the joint
ventures, totalling RM691,000 and RM4,904,000, respectively in the current
financial year since the Group has no obligation in respect of these losses and
liabilities.

68
9. Investments in associates
Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost
- outside Malaysia 26,675 26,675 16,857 16,857
Share of post-acquisition reserves (1,086) (1,928) - -
Less: Accumulated impairment
losses (a) (15,900) (15,900) (9,418) (9,418)
9,689 8,847 7,439 7,439
(a) Impairment review of investments in associates
There was an impairment indicator resulting from downturn in operations of an

associate in previous financial period ended 30 June 2019. Accordingly, the Group
had undertaken an impairment assessment on investment in the associate.
The recoverable amount for the associate was determined based on value-in-use
calculations. The value-in-use calculations use pre-tax cash flow projections
based on financial budgets approved by the Board covering a five-year period.
The value-in-use was based on the following key assumptions:
2019
%
Discount rate 20.0
Terminal growth rate 0.0
Based on the management’s assessment, the Group had impaired the carrying
amount of the associate of RM6,111,000 in the previous financial period after the
Group’s share of losses.

Notes to the
69
9. Investments in associates (continued)

(b) Details of the associates are as follows:
Principal Effective
place of ownership
% %
Held by the Company
Southern Petroleum Vietnam Provide oil tankers 13.84 13.84

Transportation Joint services to the
Stock Company* Group
Emerald Logistics Sdn. Malaysia Dormant 49 49

Bhd.
Held by the Scomi

Oilfield Limited
Midgard Oilfield Turkmenistan Provide oilfield 49 49

Services Ltd. /Cayman equipment,
Islands supplies and
services to the
Group
Held by Scomi Marine

Services Pte. Ltd.
King Bridge Enterprises British Investment holding 49 49

Ltd. Virgin
Islands
* Entity with ownership of less than 20% of the equity shareholding but treated as
associate as the Group is able to exercise significant influence over the entity.

70

(b) Details of the associates are as follows (continued):
Summarised financial information of associates
Southern
Petroleum
Transportation Other
Joint Stock immaterial
Group Company associates Total
2020 RM’000 RM’000 RM’000
Summarised financial information
As at 30 June 2020
Non-current assets 130,950
Current assets 25,715
Non-current liabilities (27,649)
Current liabilities (49,815)
Net assets 79,201
Financial year ended 30 June 2020
Profit from continuing operations 6,083
Other comprehensive income -
Total comprehensive income 6,083
Included in the total comprehensive
income is:
Revenue 156,475
Reconciliation of net assets to

carrying amount as at 30 June 2020
Group’s share of net assets 10,961 14,628 25,589
Accumulated impairment losses (1,272) (14,628) (15,900)
Carrying amount in the statement of
financial position 9,689 - 9,689
Group’s share of results for the

financial year ended 30 June 2020
Group’s share of profit or loss from
continuing operations 842 - 842
Group’s share of other comprehensive
income - - -
Group’s share of total comprehensive
income 842 - 842
Other information
Dividends received by the Group -

Notes to the
71

(b) Details of the associates are as follows (continued):
Summarised financial information of associates (continued)
Southern
Petroleum
Transportation Other
Joint Stock immaterial
Group Company associates Total
2019 RM’000 RM’000 RM’000
Summarised financial information
As at 30 June 2019
Non-current assets 128,007
Current assets 23,230
Non-current liabilities (35,257)
Current liabilities (42,862)
Net assets 73,118
Financial period ended 30 June 2019
Profit from continuing operations 10,172
Other comprehensive income -
Total comprehensive income 10,172
Included in the total comprehensive
income is:
Revenue 203,195
Reconciliation of net assets to

carrying amount as at 30 June 2019
Group’s share of net assets 10,119 14,628 24,747
Accumulated impairment losses (1,272) (14,628) (15,900)
Carrying amount in the statement of
financial position 8,847 - 8,847
Group’s share of results for the

financial period ended 30 June 2019
Group’s share of profit or loss from
continuing operations 1,408 (3,707) (2,299)
Group’s share of other comprehensive
income - - -
Group’s share of total comprehensive
income 1,408 (3,707) (2,299)
Other information
Dividends received by the Group -
Unrecognised share of losses
The Group has not recognised losses related to Midgard Oilfield Services Ltd.,
totalling RM4,879,000 in the current financial year since the Group has no
obligation in respect of these losses.

10. Deferred tax assets/(liabilities)

(a) Recognised deferred tax assets/(liabilities)
Assets Liabilities Net

2020 2019 2020 2019 2020 2019
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Property, plant and equipment - - (170) (694) (170) (694)

Deductible/(Taxable) temporary differences 1,199 529 (3,559) (3,792) (2,360) (3,263)
Tax assets/(liabilities) 1,199 529 (3,729) (4,486) (2,530) (3,957)
Set off of tax - - - - - -
Net tax assets/(liabilities) 1,199 529 (3,729) (4,486) (2,530) (3,957)
(b) Movement in temporary differences during the period/year
Recognised Effect of Recognised Effect of

in profit movements At in profit movements
At or loss in exchange 30.6.2019/ or loss in exchange At
1.4.2018 (Note 24) rates 1.7.2019 (Note 24) rates 30.6.2020
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Property, plant and equipment (1,700) 882 124 (694) 796 (272) (170)
(Taxable)/Deductible
temporary differences (185) (2,291) (787) (3,263) (1,939) 2,842 (2,360)
(1,885) (1,409) (663) (3,957) (1,143) 2,570 (2,530)

10. Deferred tax assets/(liabilities) (continued)

(a) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items
(stated at gross):
Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
Deductible temporary differences 62,834 60,393 90,528 14,353

Unabsorbed capital allowances 9,883 8,815 413 406
Unutilised tax losses 45,063 30,329 22,181 16,880
117,780 99,537 113,122 31,639
Deferred tax assets have not been recognised in respect of these items because it
is not probable that future taxable profit will be available against which certain
subsidiaries within the Group and the Company can utilise the benefits therefrom.
Pursuant to Finance Bill 2018, the unutilised tax losses of the Company and its
subsidiaries in Malaysia can be carried forward up to 7 consecutive years of
assessment.
The unutilised tax losses of the Group amounting to RM45,063,000 (2019:

RM30,329,000), and the Company amounting to RM22,181,000 (2019:
RM16,880,000) will expire in financial year 2026 - 2027 (2019: 2026).

74
11. Trade and other receivables

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Non-current
Other receivables 11.1 14,759 14,333 - -
Current
Trade receivables 136,980 181,826 - -
Less: Allowance for impairment
losses (37,256) (44,758) - -
11.3 99,724 137,068 - -
Other receivables 11.1 14,327 80,020 122 125

Deposits 8,132 3,920 - -
Prepayments 7,297 10,670 - 287
29,756 94,610 122 412
Amount due from:

- former holding company 11.2 - 30,186 - 30,133
- related parties 11.4 - 1,444 - 357
- subsidiaries 11.4 - - 21,409 65,982
- joint ventures 11.4 - 4,131 - -
- associates 11.4 - - - 53
- 35,761 21,409 96,525
129,480 267,439 21,531 96,937
144,239 281,772 21,531 96,937
11.1 Included in other receivables are Value-Added-Tax (“VAT”) recoverable

amounting to RM14,725,980 (2019: RM19,968,000).
11.2 Amount due from former holding company is non-trade in nature, unsecured and
repayable over the next twelve months. Interest at 7% per annum is charged on
the net amount due from former holding company after deducting amount due to
former holding company as disclosed in Note 19. An impairment of RM11,833,000
(2019: RM33,772,000) was recognised in the current financial year as disclosed
in Note 28(d).
11.3 Credit terms for trade receivables range from 30 to 90 days (2019: 30 to 90 days).
11.4 Amounts due from related parties, subsidiaries, joint ventures and associates are
unsecured, interest-free and repayable on demand. The Company has recognised
an impairment of RM68,411,000 (2019: RM6,469,000) in the current financial
year.

Notes to the
75
12. Inventories
Group
2020 2019
RM’000 RM’000
Raw materials 2,267 2,245

Finished goods 41,528 51,153
Consumables 28,482 29,413
72,277 82,811
Recognised in profit or loss:

Inventories recognised as cost of sales 69,724 179,482
Write-down of inventories 6,272 590
Reversal of write-down of inventories (164) (3,983)
The write-down and reversal of write-down of inventories are included in cost of sales.
13. Cash and cash equivalents

Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
Cash and bank balances 45,023 40,842 50 4,500

Short-term deposits 3,514 24,906 - -
Cash and cash equivalents in the
statements of financial position 48,537 65,748 50 4,500
Pledged deposits and bank balances (3,514) (27,080) - -
Cash and cash equivalents in the
statements of cash flows 45,023 38,668 50 4,500
The effective interest rates for short-term deposits of the Group at the end of the
reporting period range from 2.40% to 5.40% (2019: 0.18% to 6.50%) per annum.
In prior financial period, included in the Group’s cash and bank balances and short-term
deposits was RM27,080,000, pledged for repayment of Guaranteed Serial Bonds and
bank facilities granted to the Group as disclosed in Notes 17(b) and 17(c), respectively.

76
14. Share capital

Group and Company
2020 2019
Number Number
Amount of shares Amount of shares
RM’000 ’000 RM’000 ’000
Issued and fully paid shares with
no par value classified as equity
instruments:
Ordinary shares
At 1 July/1 April 1,005,535 2,341,775 1,005,535 2,341,775
Capital reduction (560,000) - - -
Share consolidation - (1,873,420) - -
At 30 June 445,535 468,355 1,005,535 2,341,775
a) 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 Company. In
respect of the Company’s treasury shares that are held by the Group (see Note 15),
all rights are suspended until those shares are reissued.
b) During the year, the Group and the Company undertook a share capital reduction
exercise to reduce its share capital from RM1,005,535,000 to RM445,535,000 which
was completed on 14 February 2020. The corresponding credit of RM560,000,000
arising from such capital reduction was utilised to set-off against the accumulated
losses of the Group and of the Company respectively.
Following that, the Group and the Company undertook a share consolidation
exercise by the consolidation of existing shares of 2,341,775,435 units into
468,355,087 units on the basis of 5 existing shares into 1 share pursuant to Section
116 of the Companies Act 2016 which was completed on 28 February 2020.
15. Treasury shares

Group and Company
2020 2019
Number Number
Amount of shares Amount of shares
RM’000 ’000 RM’000 ’000
At 1July/1 April/30 June 51 154 51 154

Share consolidation - (123) - -
At 30 June 51 31 51 154
None of the treasury shares repurchased has been sold as at 30 June 2020.
At the end of the financial year, 30,820 (2019: 154,100) ordinary shares are held as
treasury shares at a carrying amount of RM51,000 (2019: RM51,000) and the number
of outstanding shares in issue after setting off treasury shares is 468,324,267 shares
(2019: 2,341,621,335 shares).

Notes to the
77
16. Reserves
Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Translation reserve (a) (130,446) (110,817) - -

Merger reserve (b) (443,323) (443,323) - -
Capital reserve (c) 26,881 26,881 26,881 26,881
Retained earnings/
(Accumulated losses) 299,131 (73,450) (239,356) (590,212)
(247,757) (600,709) (212,475) (563,331)
(a) Translation reserve
The translation reserve comprises all foreign currency differences arising from the
translation of the financial statements of foreign operations.
(b) Merger reserve
The merger reserve arose from the acquisition of the entire shareholdings of the
former holding company in Scomi Oilfield Limited, Scomi Sosma Sdn. Bhd. and
Scomi KMC Sdn. Bhd. by the Company pursuant to the corporate exercise carried
out by the former holding company in 2013.
(c) Capital reserve
The capital reserve arose from the capital reduction exercise and repayment to
shareholders of the Company completed in 2012.
17. Loans and borrowings

Group
2020 2019
Non-current
Guaranteed Serial Bonds – secured (c) - 50,000
Less: Bond arrangement costs - (200)
- 49,800
Current
Guaranteed Serial Bonds – secured (c) - 55,000
Less: Bond arrangement costs - (883)
- 54,117
Bank loans – secured (b) 2,551 40,618
Loan – secured (a) 82,609 -
Revolving credits – secured (b) 39,484 41,271
124,644 136,006
124,644 185,806

78
17. Loans and borrowings (continued)

(a) Loan
During the financial year, the Group defaulted on the repayment of the bonds
which consequently triggered cross defaults on the other credit facilities. As a
result, the bonds and other credit facilities are immediately due and repayable.
Danajamin Nasional Berhad (“Danajamin”) as the guarantor of the bonds, was

responsible to repay the defaulted bonds’ pursuant to the claim made by the
bondholders. Consequently, the bonds have been converted into a loan from
Danajamin. Danajamin and the other secured lenders are entitled to the
enforcement of various securities granted by the Group in accordance with the
financial guarantee insurance agreement and other credit facility agreements. The
Group had then applied for Judicial Management Order with the High Court of
Malaya at Shah Alam on 2 April 2020 with the objective of restructuring its debts
and rehabilitating the Group’s business and the details are disclosed in Note 33(iv)
and Note 34(i), respectively to the financial statements.
The loan is supported and secured by:
(i) Corporate Guarantees from the Company and certain subsidiaries of the
Company;
(ii) Pledge of shares of certain subsidiaries of the Company;
(iii) Assignment of contract proceeds; and
(iv) Fixed and floating charge over all present and future assets of certain
subsidiaries of the Company.
(b) Bank loans and revolving credits
The bank loans and revolving credits are supported and secured by:
(i) Assignment and charge of relevant short-term deposits and bank balances
of the Group;
(ii) Assignment of contract proceeds;
(iii) Corporate Guarantees from certain subsidiaries of the Company; and

Notes to the
79
17. Loans and borrowings (continued)

(c) RM300 million Guaranteed Serial Bonds (“the Bonds”)
In the prior financial period, there was a breach in the bonds covenant where the
Group was unable to maintain the Group EBITDA to Group gross debt ratio of not
less than 0.30 times. However, the Group obtained a waiver from Danajamin for this
non-compliance.
Besides, there was an additional covenant which requires the Group to

progressively build up the principal redemption in debt payment account for
repayment of the bonds of RM55 million due on 14 December 2019. By 30 June
2019, the Group was required to have built up principal redemption in debt payment
account of RM51.5 million. However, at 30 June 2019, the total principal redemption
build up in the debt payment account was RM18.6 million and there was a shortfall
of RM32.9 million. The Group has obtained a waiver from the bond guarantor on 28
June 2019 to fulfill the redemption build up amount by 30 November 2019.
The bonds and financial guarantee insurance facility were supported and secured
by:
(i) Corporate Guarantees from the Company and certain subsidiaries of the
Company;
(ii) Pledge of shares of certain subsidiaries of the Company;
(iii) Assignment of contract proceeds; and
The Group defaulted on the repayment of the bonds during the year. As a result,
the entire bonds balance became due and repayable immediately.

80
18. Provision for retirement benefits

The Group operates an unfunded defined benefit plan for qualifying employees and
vessel crews of its subsidiaries in Indonesia. Under the plan, the employees and vessel
crews are entitled to retirement benefits as defined in Indonesian Labour Laws and
government regulations regarding maritime.
The amounts recognised in the statement of financial position are determined as

follows:
Group
2020 2019
RM’000 RM’000
Present value of unfunded obligations 7,011 8,401
Movement in net defined benefit liability
The following table shows a reconciliation from the opening balance to the closing
balance for net defined benefit liability and its components:
Group
2020 2019
RM’000 RM’000
Balance at 1 July/1 April 8,401 8,932

Included in profit or loss
Current service costs 761 788
Past service credit (765) -
Interest cost 277 124
Actuarial gains (84) -
Effect of movement of exchange rate 262 181
451 1,093
Included in other comprehensive income
- Financial assumption - -
- Experience adjustment - (470)
- (470)
Other
Benefits paid (1,841) (1,154)
Balance at 30 June 7,011 8,401
The principal actuarial assumptions used were as follows:
Group
2020 2019
Discount rates (per annum) (%) 8.0 8.0

Expected rates of salary increase (per annum) (%) 0.0 – 8.0 0.0 – 8.0
Normal retirement age (years) 56 55
The most recent actuarial valuation was carried out as at 5 August 2020 by independent
professional actuaries using the projected unit credit method.

Notes to the
81
19. Trade and other payables

Group Company
2020 2019 2020 2019
Note RM’000 RM’000 RM’000 RM’000
Non-current
Other payables 1,074 1,028 - -
Current
Trade payables 19.1 78,131 94,963 - 107
Other payables 12,297 8,447 1,691 931
Accruals 19.2 67,589 87,088 1,211 929
79,886 95,535 2,902 1,860
Amount due to:
- former holding company 11.2 - 4,890 - -
- related parties 19.3 - 4,948 - 1,136
- subsidiaries 19.3 - - 22,636 22,850
- joint ventures 19.3 41 - 41 82
- associate 19.3 235 - - -
276 9,838 22,677 24,068
158,293 200,336 25,579 26,035
159,367 201,364 25,579 26,035
19.1 Credit terms granted by suppliers to the Group range from cash terms to 90 days
(2019: cash terms to 90 days).
19.2 Included in accruals are Value-Added-Tax (“VAT”) payable amounting to

RM8,198,000 (2019: RM9,724,000) and unwinding cost arising from the close out
of the Cross Currency Interest Rate Swaps (“CCIRS”) contracts amounting to
RM10,072,000 (2019: RM10,680,000).
The unwinding cost is supported and secured as disclosed in Note 17(b) to the
19.3 The amounts due to former holding company, related parties, subsidiaries, joint
ventures and associate are unsecured, interest-free and repayable on demand.
20. Revenue
1.7.2019 to 1.4.2018 to
Group 30.6.2020 30.6.2019
RM’000 RM’000
Revenue from contracts with customers 320,742 520,768
Other revenue
Rental income 102,578 122,726
Total revenue 423,320 643,494
Company
Revenue from contracts with customers - 3,855

20. Revenue (continued)

20.1 Disaggregation of revenue
Development and
production asset and
Drilling services Marine services services Total
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
Group 30.6.2020 30.6.2019 30.6.2020 30.6.2019 30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Primary geographical markets
Malaysia 31,942 67,044 - 3,855 - 12 31,942 70,911
Russia 79,987 101,460 - - - - 79,987 101,460
West Africa 57,019 76,737 - - - - 57,019 76,737
Indonesia 29,409 29,716 96,333 142,625 - - 125,742 172,341
Middle East 65,722 70,725 - - - - 65,722 70,725
India 22,758 25,741 - - - - 22,758 25,741
Other countries 40,150 125,579 - - - - 40,150 125,579
326,987 497,002 96,333 146,480 - 12 423,320 643,494
Major products and services lines

Drilling fluids services 11,095 46,305 - - - - 11,095 46,305
Sales of drilling related chemicals
and supplies 85,916 124,284 - - - - 85,916 124,284
Drilling waste management services 51,564 99,386 - - - - 51,564 99,386
Sales of drilling waste equipment
related supplies and accessories 75,795 66,498 - - - - 75,795 66,498
Transportation of coal services - - 96,333 146,480 - - 96,333 146,480
Others 39 37,803 - - - 12 39 37,815
224,409 374,276 96,333 146,480 - 12 320,742 520,768


20.1 Disaggregation of revenue (continued)
Development and
production asset and
Drilling services Marine services services Total
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
Group 30.6.2020 30.6.2019 30.6.2020 30.6.2019 30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Timing and recognition
At a point in time 224,409 374,276 96,333 146,480 - 12 320,742 520,768
Revenue from contracts with

customers 224,409 374,276 96,333 146,480 - 12 320,742 520,768
Other revenue 102,578 122,726 - - - - 102,578 122,726
Total revenue 326,987 497,002 96,333 146,480 - 12 423,320 643,494
Significant judgements and assumptions arising from revenue recognition
There are no significant judgements and assumptions applied that significantly affect the determination of the amount and timing of
revenue recognised from contracts with customers.

84

20.1 Disaggregation of revenue (continued)
Marine services
1.7.2019 to 1.4.2018 to
Company 30.6.2020 30.6.2019
RM’000 RM’000
Primary geographical market
Malaysia - 3,855
Product and services line

Transportation of coal services - 3,855
Timing and recognition

At a point in time - 3,855
Revenue from contracts with customers - 3,855

85

20.2 Nature of goods and services
The following information reflects the typical transactions of the Group:
Variable Obligation for

Nature of goods or Timing of recognition or method Significant payment element in returns or
services used to recognised revenue terms consideration refunds Warranty
Drilling fluids Revenue is recognised when the Credit period of 30 Not applicable. Not applicable. Not applicable.
services services are performed and – 90 days from
accepted by the customers at invoice date.
their premises.
Sales of drilling Revenue is recognised when the Credit period of 30 Not applicable. Not applicable. Not applicable.
related goods are delivered and – 90 days from
chemicals and accepted by the customers at invoice date.
supplies their premises.
Drilling waste Revenue is recognised when the Credit period of 30 Not applicable. Not applicable. Not applicable.
management services are performed and – 90 days from
services accepted by the customers at invoice date.
their premises.
Sales of drilling Revenue is recognised when the Credit period of 30 Not applicable. Not applicable. Not applicable.
waste goods are delivered and – 90 days from
equipment accepted by the customers at invoice date.
related supplies their premises.
and accessories
Transportation of Revenue is recognised when the Credit period of 30 Not applicable. Not applicable. Not applicable.
coal services delivery reaches the – 90 days from
customers premises. invoice date.

86
21. Finance costs

Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Interest expense on:
- Guaranteed Serial Bonds - 6,873 - -
- Loan 2,024 - - -
- Bank loans and other 10,484 12,832 - -
- Lease liabilities 1,442 - - -
13,950 19,705 - -
Amortisation of bonds
arrangement costs 1,644 3,434 - -
15,594 23,139 - -
22. Disposal of subsidiary and branch

In the prior financial period, the Group sold its equity interest of 51 shares in Scomi
Oiltools Limited (Cayman Islands) – Turkmenistan branch (“SOLC”) representing 51%
of the total share capital of SOLC, for a total cash consideration
of USD1,500,000 (approximately RM5,166,000) on 9 October 2018.
On 31 January 2019, the Group sold its entire equity interest of 6,000 shares in Scomi
Anticor S.A. (“Anticor”) for a total cash consideration of USD3,700,000 (approximately
RM16,375,000).
Effect of disposals on the financial position of the Group
SOLC Anticor Total

RM’000 RM’000 RM’000
Property, plant and equipment 6,609 453 7,062

Inventories 11,165 - 11,165
Intangible asset - 2,724 2,724
Trade and other receivables 11,053 6,673 17,726
Trade and other payables (8,798) (3,192) (11,990)
Cash and bank balances - 2,487 2,487
Net assets 20,029 9,145 29,174
Less:
Equity interest retained as associate (9,814) - (9,814)
(Loss)/Gain on disposal of subsidiary
and branch (5,049) 7,230 2,181
Consideration received, satisfied in cash 5,166 16,375 21,541
Cash and bank balances disposed of - (2,487) (2,487)
Net cash inflow 5,166 13,888 19,054

Notes to the
87
23. Loss before tax

Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019 30.6.2020 30.6.2019
Note RM’000 RM’000 RM’000 RM’000
Loss before tax is stated after
charging/(crediting):
Auditors’ remuneration:
- Audit fees
KPMG PLT 1,580 2,122 120 130
Overseas affiliates of
KPMG PLT 1,546 1,725 - -
Other auditors 64 61 - -
- Non-audit fees
KPMG PLT 38 59 6 6
Material expenses/(income)
Amortisation of intangible assets 5 219 812 - -
Bad debts written off - - - 88
Depreciation:
- Property, plant and
equipment 3 51,554 76,880 80 11
- Right-of-use assets 4 8,723 - - -
- Investment properties 6 - 169 - 40
Gain from disposal of
investment property - (3,643) - -
Impairment loss on:
- Amount due from former
holding company 11.2 11,833 33,772 11,630 7,871
- Amount due from subsidiary - - 67,864 5,209
- Amount due from joint
venture - 1,260 - 1,116
- Amount due from related
parties - - 311 -
- Amount due from associate 4,281 - 236 144
- Receivables 10,001 4,522 - -
- Intangible assets 5 100,334 - - -
- Investments in associate 9 - 6,111 - -
- Investments in subsidiary 7 - - 127,320 14,088
- Investments in joint ventures 8 1,161 996 - -
- Property, plant and
equipment 3 1,320 1,542 - -
Reversal of impairment loss on:
- Amount due from subsidiary - - (1,064) -
- Amount due from joint
venture - - (347) -
Write-down of inventories 12 6,272 590 - -
Loss on disposal of property,
plant and equipment 694 34,793 - -

88
23. Loss before tax (continued)

Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019 30.6.2020 30.6.2019
Note RM’000 RM’000 RM’000 RM’000
Material expenses/(income)
(continued)
Net realised gain on foreign
exchange (8,770) (626) (109) (16)
Net unrealised gain on
foreign exchange (9,909) (18,091) (2,484) (6,531)
Personnel expenses (including
key management personnel):
- Expenses related to defined
benefit plans 273 912 - -
Wages, salaries and others 130,091 173,229 1,949 2,164
Termination benefits 534 239 - -
Contribution to state plans 4,934 7,051 265 302
Other employee benefits 5,867 14,060 251 199
written off - 994 - -
Rental of premises 3,242 15,624 11 33
Rental of equipment 11,989 16,982 - -
Interest income from deposit
placed with licensed banks (660) (1,252) - (73)
Interest income from former
holding company - (2,510) - (2,510)
Rental income from a related
party - (190) - -
Reversal of impairment loss of
receivables (8,818) (5,048) - -
Reversal of write-down of
inventories 12 (164) (3,983) - -
Expenses arising from leases

Expenses relating to short-term
leases 1,809 - - -
Expenses relating to leases of
low-value assets 4,921 - - -
Net loss on impairment of

financial instruments
Financial assets at
amortised cost (13,016) (34,506) (78,630) (7,952)

Notes to the
89
24. Tax expense

Recognised in profit or loss
Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Current tax expense
Malaysian income tax - - - -
Foreign income tax 12,768 16,041 - -
Under provision in prior period/year 892 6,251 265 -
Total current tax expense 13,660 22,292 265 -
Deferred tax expense

Origination and reversal
of temporary differences (1,135) (1,372) - -
Over provision in prior period/year (8) (37) - -
Total deferred tax recognised
in profit or loss (1,143) (1,409) - -
Total income tax expense 12,517 20,883 265 -
Reconciliation of tax expense

Total income tax expense 12,517 20,883 265 -
Loss before tax (173,778) (82,579) (208,879) (22,359)
Tax calculated at the Malaysian

tax rate of 24% (2019: 24%) (41,707) (19,819) (50,131) (5,366)
Tax effects of:
- different tax rates in other
countries 19,920 12,800 - -
- expenses not deductible for
tax purposes 38,984 15,600 30,575 3,404
- income not subject to tax (5,757) (2,138) - -
- tax assets not recognised 193 8,226 19,556 1,962
Deferred tax – over provision
in prior period/year (8) (37) - -
Current tax – under provision
in prior period/year 892 6,251 265 -
12,517 20,883 265 -

90
25. Other comprehensive (loss)/income

1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019
Group Tax Tax
Before (expense)/ Net Before (expense)/ Net
tax benefit of tax tax benefit of tax
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Items that are or may be
reclassified
subsequently
to profit or loss
Foreign currency
translation differences
for foreign operations (19,629) - (19,629) 16,066 - 16,066
Remeasurement of
defined benefit liability 84 - 84 470 - 470
(19,545) - (19,545) 16,536 - 16,536
26. Loss per ordinary share

Basic loss per ordinary share
The calculation of basic loss per ordinary share at 30 June 2020 was based on the loss
attributable to ordinary shareholders and a weighted average number of ordinary shares
outstanding, as follows:
Group
1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019
Loss attributable to owners of the Company
(RM’000) (187,503) (95,690)
Weighted average number of ordinary shares

outstanding (‘000) 468,324 2,341,621
Basic loss per ordinary share (sen) (40.04) (4.09)
Diluted loss per ordinary share is not presented as there were no dilutive potential
ordinary shares as at the end of the reporting period.

Notes to the
91
27. Operating segments

The Group has determined the operating segments based on reports reviewed by the
Chief Operating Decision Maker (“CODM”) i.e. the Group’s Chief Executive Officer
which are used for allocating resources and assessing performance of the operating
segments.
The Chief Operating Decision Maker considers the business from the industry
perspective and the services rendered. The following reportable segments have been
identified:
(i) Drilling Services - supply of drilling waste equipment, supply of a wide range
of specialised chemicals and provision of services.
(ii) Marine Services - provision of transportation of bulk aggregates for the coal
industry and other shipping related services.
(iii) Development and - provision of services in development and management of

Production marginal hydrocarbon assets; services encompasses
Asset and preparation and execution of Field Development Plan and
Services supplying and operations and maintenance of offshore oil
and gas facilities.
Performance is measured based on segment profit before tax, interest, depreciation

and amortisation, as included in the internal management reports that are reviewed by
the CODM. Segment profit is used to measure performance as management believes
that such information is the most relevant in evaluating the results of certain segments
relative to other entities that operate within these industries.
Unallocated costs represent corporate expenses. Segment assets consist of property,

plant and equipment, intangible assets, inventories, receivables and cash and bank
balances.
Capital expenditure comprises additions to property, plant and equipment and

intangible assets.
Segment assets
The total of segment asset is measured based on all assets (including goodwill) of a
segment, as included in the internal management reports that are reviewed by the
CODM. Segment total assets is used to measure the return of assets of each segment.
Segment liabilities
Segment liabilities information is neither included in the internal management reports

nor provided regularly to the CODM. Hence, no disclosure is made on segment
liabilities.

92
27. Operating segments (continued)

Development
and
Production
Drilling Marine Asset and
Group Services Services Services Total
2020 RM’000 RM’000 RM’000 RM’000
Segment revenue
External sales 326,987 96,333 - 423,320
Segment (loss)/profit (135,962) 37,614 - (98,348)

Included in the measure of the
segment (loss)/profit are:
Impairment of receivables (10,001) - - (10,001)
receivables 8,818 - - 8,818
Impairment of property, plant and
equipment (1,320) - - (1,320)
Impairment of intangible assets (100,334) - - (100,334)
(Loss)/Gain on disposal of property,
plant and equipment (719) 25 - (694)
Write-down of inventories (6,272) - - (6,272)
Share of gain of equity-accounted
joint venture, net of tax - - - -
Share of gain of equity-accounted
associates, net of tax - 842 - 842
Not included in the measure of

segment (loss)/profit but provided
to CODM
Depreciation and amortisation (30,423) (30,073) - (60,496)
Finance costs (14,358) (1,236) - (15,594)
Finance income 652 8 - 660
Tax expense (9,569) (2,948) - (12,517)
Segment assets 326,342 236,698 - 563,040

Included in the measure of segment
assets are:
Investments in associates - 9,689 - 9,689
Investments in joint ventures - - - -
Additions to non-current assets other
than financial instruments and
deferred tax assets 14,093 1,037 - 15,130

93

Development
and
Production
Drilling Marine Asset and
Group Services Services Services Total
2019 RM’000 RM’000 RM’000 RM’000
Segment revenue
External sales 497,002 146,480 12 643,494
Segment profit/(loss) 37,849 (17,633) (5,557) 14,659

Included in the measure of the
segment profit/(loss) are:
Impairment of receivables (3,384) (1,138) - (4,522)
receivables 5,048 - - 5,048
Impairment of property, plant and
equipment - (1,542) - (1,542)
Impairment of intangible assets - - - -
Gain/(Loss) on disposal of property,
plant and equipment 4,843 (39,636) - (34,793)
Write-down of inventories (590) - - (590)
Share of gain/(loss) of equity-
accounted joint venture, net of tax 392 - (4,258) (3,866)
Share of (loss)/gain of equity-
accounted associates, net of tax (3,707) 1,408 - (2,299)
Not included in the measure of

segment profit/(loss) but provided
to CODM
Depreciation and amortisation (34,867) (42,994) - (77,861)
Finance costs (16,138) (7,001) - (23,139)
Finance income 1,179 2,583 - 3,762
Tax expense (20,553) (330) - (20,883)
Segment assets 617,423 239,410 972 857,805

Included in the measure of segment
assets are:
Investments in associates - 8,847 - 8,847
Investments in joint ventures 1,148 - 936 2,084
Additions to non-current assets other
than financial instruments and
deferred tax assets - - - -

94

Reconciliations of reportable segment of profit or loss
Group
1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019
RM’000 RM’000
Profit or loss
Total profit or loss for reportable segments (98,348) 14,659
Depreciation and amortisation (60,496) (77,861)
Finance costs (15,594) (23,139)
Finance income 660 3,762
Consolidated loss before tax (173,778) (82,579)
Geographical segments
In presenting information on the basis of geographical segments, segment revenue is

based on geographical location of customers. Segments assets are based on the
geographical location of the assets. The amounts of non-current assets do not include
financial instruments (including investments in joint ventures and associates) and
deferred tax assets.
Total revenue Total non-current assets

1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Malaysia 31,942 70,911 14,338 11,464

Russia 79,987 101,460 8,852 6,377
West Africa 57,019 76,737 15,089 18,207
Middle East 65,722 70,725 26,753 1,545
Indonesia 125,742 172,341 187,725 204,924
India 22,758 25,741 2,140 1,838
Other countries 40,150 125,579 18,170 158,166
423,320 643,494 273,067 402,521
Revenue is disclosed based on the location of the drilling services, sales of drilling
related chemicals and supplies, drilling waste management services, sales of drilling
waste related supplies and accessories and transportation of coal services. Total non-
current assets are determined based on where the assets are located.

Notes to the
95

The following are the major customers with revenue equal or more than 10% of the
Group’s total revenue:
Revenue Segment
1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019
RM’000 RM’000
Customer A 53,559 74,165 Marine services

Customer B 63,200 82,491 Drilling services
116,759 156,656
Revenue for 2 (2019: 2) major customers constitutes 27.6% (2019: 24.3%) of total
consolidated revenue.
28. Financial instruments

(a) Categories of financial instruments
The table below provides an analysis of financial instruments categorised as

amortised cost (“AC”).
Carrying
Group amount AC
2020 RM’000 RM’000
Financial assets
Trade and other receivables* 122,216 122,216
Cash and bank balances 48,537 48,537
170,753 170,753
Loans and borrowings (124,644) (124,644)
Trade and other payables# (151,169) (151,169)
(275,813) (275,813)
Company
Financial assets
Cash and bank balances 50 50
21,581 21,581
* Excluding prepayments and GST/VAT receivables

# Excluding GST/VAT payables

96
28. Financial instruments (continued)

(a) Categories of financial instruments (continued)
The table below provides an analysis of financial instruments categorised as

amortised cost (“AC”) (continued).
Carrying
Group amount AC
2019 RM’000 RM’000
Financial assets
317,882 317,882
(377,446) (377,446)
Company
Financial assets
101,437 101,437
* Excluding prepayments and GST/VAT receivables

# Excluding GST/VAT payables

Notes to the
97

(b) Net losses and gains arising from financial instruments
Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Net gains/(losses) on:
Financial assets at
amortised cost 13,016 7,495 (78,630) 2,583
Financial liabilities at
amortised cost (15,594) (22,360) - -
(2,578) (14,865) (78,630) 2,583
(c) Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
• Credit risk
• Liquidity risk
• Market risk
(d) Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty
to a financial instrument fails to meet its contractual obligations. The Group’s
exposure to credit risk arises principally from its receivables from customers,
balances and short-term deposits and amounts due from the former holding
company and related parties.
The Company’s exposure to credit risk arises principally from advances to

subsidiaries and unsecured financial guarantees given to banks for credit facilities
granted to certain subsidiaries.
There are no significant changes as compared to prior periods.
Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is
monitored on an ongoing basis.
At each reporting date, the Group or the Company assesses whether any of the
trade receivables are credit impaired.
The gross carrying amounts of credit impaired trade receivables are written off
(either partially or in full) when there is no realistic prospect of recovery. This is
generally the case when the Group or the Company determines that the debtor
does not have assets or sources of income that could generate sufficient cash
flows to repay the amounts subject to the write-off. Nevertheless, trade
receivables that are written off could still be subject to enforcement activities.
There are no significant changes as compared to previous financial period.

98

(d) Credit risk (continued)
Receivables (continued)
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising
from receivables is represented by the carrying amounts in the statement of
financial position.
Management has taken reasonable steps to ensure that receivables that are
neither past due nor impaired are stated at their realisable values. A significant
portion of these receivables are regular customers that have been transacting with
the Group. The Group uses ageing analysis to monitor the credit quality of the
receivables. Any receivables having significant balances past due more than 90
days, which are deemed to have higher credit risk, are monitored individually.
Concentration of credit risk
The exposure of credit risk for trade receivables as at the end of the reporting
period by geographic region was:
Group
2020 2019
RM’000 RM’000
Malaysia 11,099 8,029
Asia 47,101 77,633
Middle East and Africa 41,469 51,199
Others 55 207
99,724 137,068
Recognition and measurement of impairment losses
In managing credit risk of trade receivables, the Group manages its debtors and
takes appropriate actions (including but not limited to legal actions) to recover long
overdue balances. Generally, trade receivables will pay within 90 to 120 days. The
Group’s debt recovery process is as follows:
a) Above 180 days past due after credit term, the Group will start to initiate a
structured debt recovery process which is monitored by the sales
management team; and
b) Above 365 days past due, the Group will evaluate options of commencing
legal proceeding against the customer.
The Group uses an allowance matrix to measure ECLs of trade receivables for all
segments. Consistent with the debt recovery process, invoices which are past due
90 days will be considered as credit impaired.

Notes to the
99

Recognition and measurement of impairment losses (continued)
Loss rates are calculated using a ‘roll rate’ method based on the probability of a
receivable progressing through successive stages of delinquency to 90 days past
due.
Loss rates are based on actual credit loss experience over the past 2 to 3 years.
The Group also considers differences between (a) economic conditions during the
period over which the historic data has been collected, (b) current conditions and
(c) the Group’s view of economic conditions over the expected lives of the
receivables. Nevertheless, the Group believes that these factors are immaterial
for the purpose of impairment calculation for the year.
The following table provides information about the exposure to credit risk and
ECLs for trade receivables which are grouped together as they are expected to
have similar risk nature.
Gross
carrying Loss Net
Group amount allowance balance
2020 RM’000 RM’000 RM’000
Current (not past due) 65,651 (2,707) 62,944
1 to 30 days past due 11,532 (432) 11,100
31 to 60 days past due 7,644 (828) 6,816
61 to 90 days past due 5,106 (1,360) 3,746
89,933 (5,327) 84,606
Credit impaired
More than 90 days past due 47,047 (31,929) 15,118
136,980 (37,256) 99,724
2019
Current (not past due) 79,150 (905) 78,245
1 to 30 days past due 14,925 (459) 14,466
31 to 60 days past due 17,339 (1,257) 16,082
61 to 90 days past due 9,040 (269) 8,771
120,454 (2,890) 117,564
Credit impaired
More than 90 days past due 61,372 (41,868) 19,504
181,826 (44,758) 137,068

100

The movements in the allowance for impairment losses of trade receivables during
the financial year are shown below:
Credit
Group impaired
RM’000
Balance at 1 April 2018 63,554
Amounts written off (20,431)
Net remeasurement of loss allowance (526)
Currency translation differences 2,161
Balance at 30 June 2019/1 July 2019 44,758
Amounts written off (6,992)
Net remeasurement of loss allowance (1,183)
Currency translation differences 673
Balance at 30 June 2020 37,256
Cash and bank balances
The cash and bank balances are held with licensed banks. As at the end of the
reporting period, the maximum exposure to credit risk is represented by their
carrying amounts in the statement of ﬁnancial position.
These licensed banks have low credit risks. In addition, some of the bank balances
are insured by government agencies. Consequently, the Group and the Company
are of the view that the loss allowance is not material and hence, it is not provided
for.
Financial guarantees
The Company provides financial guarantees to Danajamin, as guarantor of the

bonds, in respect of bonds issued by a subsidiary. The Company monitors on an
ongoing basis of the repayments made by the subsidiary. The subsidiary defaulted
on the repayment of the bonds during the year. Consequently, the bonds have
been converted into a loan from Danajamin.

Notes to the
101

Financial guarantees (continued)
The maximum exposure to credit risk amounts to RM82,609,000 (2019:

RM103,912,000) representing the outstanding loans/bonds as at the end of the
reporting period.
The details of the defaults on the loans and borrowings are disclosed in Note 17.
Inter-company advances
The Group and the Company provided unsecured advances to former holding
company, related parties and subsidiaries. The Group and the Company monitor
the ability of the former holding company, related parties and subsidiaries to repay
the advances on an individual basis.
As at the end of the reporting period, the maximum exposure to credit risk is
represented by their carrying amounts in the statement of financial position.
Advances provided are not secured by any collateral or supported by any other
credit enhancements.

102

Inter-company advances (continued)
Recognition and measurement of impairment losses
Generally, the Group and the Company consider advances to former holding
company, related parties and subsidiaries to have low credit risk. The Group and
the Company assume that there is a significant increase in credit risk when the
former holding company, related parties and subsidiaries’ financial positions
deteriorate significantly. As the Group and the Company are able to determine the
timing of payments of former holding company, related parties and subsidiaries’
advances when they are payable, the Group and the Company consider the
advances to be in default when the former holding company, related parties and
subsidiaries are not able to pay when demanded. The Group and the Company
consider the former holding company, related parties and subsidiaries’ advances
to be credit impaired when:
• The former holding company, related parties and subsidiaries are unlikely to
repay their advances to the Company in full; or
• The former holding company, related parties and subsidiaries are continuously
loss making and are having a deficit shareholders’ fund.
The Group and the Company determine the probability of default for these
advances individually using internal information available.
The following table provides information about the exposure to credit risk and
ECLs for the former holding company, related parties and subsidiaries’ advances
as at 30 June 2020.
Gross Impairment
carrying loss Net
Group amount allowance balance
RM’000 RM’000 RM’000
2020
Low credit risk - - -
Credit impaired 45,605 (45,605) -
45,605 (45,605) -
2019
Low credit risk 35,761 - 35,761
69,533 (33,772) 35,761

Notes to the
103

Inter-company advances (continued)
Gross Impairment
carrying loss Net
Company amount allowance balance
RM’000 RM’000 RM’000
2020
114,379 (92,970) 21,409
2019
110,865 (14,340) 96,525
The movements in the allowance for impairment in respect of the former holding
company, related parties and subsidiaries’ advances during the year are as
follows:
Credit impaired
Group Company
RM’000 RM’000
Balance at 1 April 2018 - -
Net remeasurement of loss allowance (33,772) (14,340)
Balance at 30 June 2019/1 July 2019 (33,772) (14,340)
Net remeasurement of loss allowance (11,833) (78,630)
Balance at 30 June 2020 (45,605) (92,970)
The significant increase in net measurement of loss allowance of the Company is

primarily due to the amounts due from former holding company, related parties
and subsidiaries’ which are not recoverable as the former holding company,
related parties and certain subsidiaries are continuously loss making and having a
deficit shareholders’ fund.
(e) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial
obligations as they fall due. The Group’s exposure to liquidity risk arises principally
from its various payables, loans and borrowings.
The Group maintains a level of cash and bank balances and bank facilities
deemed adequate by the management to ensure, as far as possible, that it will
have sufficient liquidity to meet its liabilities when fall due, other than as disclosed
in Note 1(b).


(e) Liquidity risk (continued)
Maturity analysis
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting
period based on undiscounted contractual payments.
Contractual
Carrying interest rate/ Contractual Under 1 1-2 2-5
Group amount coupon cash flows year years years
2020 RM’000 RM’000 RM’000 RM’000 RM’000
Non-derivative financial liabilities
Bank loans - secured 2,551 1.71% - 2.00% 2,551 2,551 - -
Loan - secured 82,609 4.90% - 9.00% 84,551 84,551 - -
Revolving credits - secured 39,484 1.80% - 2.75% 41,655 41,655 - -
Lease liabilities 13,664 3.25% - 14.92% 14,960 8,629 5,903 428
Trade and other payables 151,169 - 151,169 150,095 1,074 -
289,477 294,886 287,481 6,977 428
Company
Trade and other payables 25,579 - 25,579 25,579 - -
Financial guarantee - - 82,609 82,609 - -
25,579 108,188 108,188 - -

105

(e) Liquidity risk (continued)
Maturity analysis (continued)
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting
period based on undiscounted contractual payments (continued).
Contractual
Carrying interest rate/ Contractual Under 1 1-2 2-5
Group amount coupon cash flows year years years
2019 RM’000 RM’000 RM’000 RM’000 RM’000
Bank loans - secured 40,618 3.60% - 6.70% 42,139 42,139 - -
Revolving credits - secured 41,271 4.10% - 6.90% 43,541 43,541 - -
Guaranteed Serial Bonds 103,917 4.75% - 4.90% 108,617 57,442 51,175 -
377,446 385,937 334,762 51,175 -
Company
Financial guarantee - - 103,917 103,917 - -
26,035 129,952 129,952 - -

106

(f) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange
rates, interest rates and other prices that will affect the Group’s financial position
or cash flows. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters while optimising the return
on risk.
(i) Currency risk
The Group is exposed to foreign currency risk on sales, purchases and

borrowings that are denominated in a currency other than the respective
functional currencies of the Group entities. The currency giving rise to this
risk is primarily U.S. Dollar (“USD”).
Risk management objectives, policies and processes for managing the

risk
The Group does not have a fixed policy to hedge its sales, purchases and
borrowings via forward contracts. These exposures are managed primarily
by using natural hedges that arise from offsetting assets and liabilities that
are denominated in foreign currencies wherever possible and close
monitoring of the currency exposures by management.
Exposure to foreign currency risk
The Group’s exposure to foreign currency (a currency which is other than

the functional currencies of the Group entities) risk, based on carrying
amounts as at the end of the reporting period are as follows:
Denominated in
USD
2020 2019
Group RM’000 RM’000
Balances recognised in the statement of
financial position
Trade and other receivables 25,688 4,441
Trade and other payables (59,384) (28,341)
Net exposure (44,279) (39,740)
Currency risk sensitivity analysis
A 5% (2019: 5%) strengthening of the RM against the USD at the end of the
reporting period would have (decreased)/increased post-tax profit or loss by
the amounts shown below. This analysis is based on foreign currency
exchange rate variances that the Group considered to be reasonably possible
at the end of the reporting period. This analysis assumes that all other
variables, in particular interest rates, remained constant and ignores any
impact of forecasted sales and purchases.

107

(f) Market risk (continued)
(i) Currency risk (continued)
Currency risk sensitivity analysis (continued)
(Decrease)/Increase
Equity/Profit or loss
2020 2019
USD against RM
- strengthened (1,683) (1,510)
- weakened 1,683 1,510
A 5% (2019: 5%) weakening of the RM against the USD at the end of the
reporting period would have had equal but opposite effect on the above
currencies to the amounts shown above, on the basis that all other variables
remained constant.
(ii) Interest rate risk
The Group’s fixed rate borrowings are exposed to a risk of change in their
fair values due to changes in interest rates. The Group’s variable rate
borrowings are exposed to a risk of change in cash flows due to changes in
interest rates. Short-term receivables and payables are not significantly
exposed to interest rate risk.
Risk management objectives, policies and processes for managing the

risk
The Group manages its interest rate exposure by obtaining financing at

competitive rates, which is a mix of fixed and floating interest rates
instruments.
Exposure to interest rate risk
The interest rate profile of the Group’s significant interest-bearing financial

instruments, based on carrying amounts as at the end of the reporting period
are as follows:
Group
2020 2019
RM’000 RM’000
Fixed rate instruments
Financial assets 3,514 24,906
Financial liabilities (82,609) (103,917)
(79,095) (79,011)
Floating rate instruments

Financial liabilities (42,035) (81,889)

108

(f) Market risk (continued)
(ii) Interest rate risk (continued)
Interest rate risk sensitivity analysis
(a) Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and
liabilities at fair values through profit or loss, and the Group does not
designate derivatives as hedging instruments under a fair value hedge
accounting model. Therefore, a change in interest rates at the end of
the reporting period would not affect profit or loss.
(b) Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points (“bp”) in interest rates at the end of the
reporting period would have (decreased)/increased equity and post-tax
profit or loss by the amounts shown below. This analysis assumes that
all other variables, in particular foreign currency rates, remained
constant.
Profit or loss
100 bp 100 bp
Increase Decrease
2020
Floating rate instruments (319) 319
2019
Floating rate instruments (622) 622


(g) Fair value information
The carrying amounts of cash and bank balances, short-term receivables and payables and short-term borrowings approximate their
fair values due to the relatively short-term nature of these financial instruments.
It was not practicable to estimate the fair value of the Group’s investment in unquoted shares due to the lack of comparable quoted
prices in an active market and the fair value cannot be reliably measured.
The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed,
together with their fair values and carrying amounts shown in the statement of financial position.
Fair value of financial instruments Fair value of financial instruments Total fair Carrying
carried at fair value not carried at fair value value amount
Group Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
2019 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Guaranteed Serial
Bonds - - - - - 103,917 - 103,917 103,917 103,917
Level 2 fair value
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash
flows, discounted at the market rate of interest at the end of the reporting period.

110

(g) Fair value information (continued)
Transfers between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and Level 2 fair values during the
financial year (2019: no transfer in either directions).
29. Capital management

The Group’s objectives when managing capital is to maintain a strong capital base and
safeguard the Group’s ability to continue as a going concern, so as to maintain
investors, creditors and market confidence and to sustain future development of the
business. The Directors monitor and are determined to maintain an optimal debt-to-
equity ratio.
The debt-to-equity ratios at 30 June 2020 and 30 June 2019 were as follows:
Group
2020 2019
Loans and borrowings 17 124,644 185,806
Less: Cash and bank balances 13 (48,537) (65,748)
Net debt 76,107 120,058
Total equity 232,156 437,996

Debt-to-equity ratio 0.33 0.27
During the financial year, the Group defaulted on the repayment of the bonds which
consequently triggered cross defaults on the other bank loans and the details are
disclosed in Note 17(a). In the prior financial period, the Group has breached certain
covenants as disclosed in Note 17(c).
There was no change in the Group’s approach to capital management during the
financial year.
30. Capital and other commitments

Group
2020 2019
RM’000 RM’000
Capital expenditure commitments
Not contracted for 31,852 20,895

Notes to the
111
31. Related parties

Identity of related parties
For the purposes of these financial statements, parties are considered to be related to
the Group if the Group or the Company has the ability, directly or indirectly, to control
or jointly control the party or exercise significant influence over the party in making
financial and operating decisions, or vice versa, or where the Group or the Company
and the party are subject to common control. Related parties may be individuals or other
entities.
Related parties also include key management personnel defined as those persons
having authority and responsibility for planning, directing and controlling the activities of
the Group either directly or indirectly. The key management personnel includes certain
members of senior management of the Group.
The Group has related party relationship with its significant investor and its group of
companies, subsidiaries, associates, joint ventures and key management personnel.
Significant related party transactions
Related party transactions have been entered into the normal course of business under
negotiated terms. The significant related party transactions of the Group and the
Company are shown below. The balances related to the transactions below are shown
in Notes 11 and 19.
Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
A. Former holding company
Rental income/(expense)
for office 48 (116) 48 243
Support services recharge 835 2,190 835 207
Interest 2,051 2,510 2,051 2,510
Salary costs recharge - 2,847 - 2,563
Transfer of building - 6,500 - 6,500
B. Related parties
SAP maintenance fee - (187) - (187)
C. Associates
Recharge of expense paid on
behalf of 131 222 131 222

112
31. Related parties (continued)

Significant related party transactions (continued)
Group Company
2020 2019 2020 2019
RM’000 RM’000 RM’000 RM’000
D. Companies connected to a
former Director
Airline ticketing services -
Lintas - (38) - -
Rental income for office - Suria - 190 - -
E. Key management personnel

Salaries and short-term
employee benefits 2,836 5,365 630 829
Defined contribution plan 185 261 76 100
Termination benefits 107 - - -
3,128 5,626 706 929
Note: Lintas Travel & Tours Sdn. Bhd. (“Lintas”) and Suria Business Solutions Sdn.
Bhd. (“Suria”) were companies connected to a former Director.
Key management personnel comprise persons other than the Directors of Group
entities, having authority and responsibility for planning, directing and controlling the
activities of the Group entities either directly or indirectly.
32. Directors’ remuneration

The aggregate amount of emoluments received/receivable by Directors of the Company
during the financial year is as follows:
Group Company
1.7.2019 to 1.4.2018 to 1.7.2019 to 1.4.2018 to
30.6.2020 30.6.2019 30.6.2020 30.6.2019
RM’000 RM’000 RM’000 RM’000
Non-executive Directors
Fees 465(1) 364 428(1) 286
Allowances 166(2) 110 151(2) 84
631 474 579 370
Executive Director
Salaries and short-term
employee benefits 46 - - -
Defined contribution plan 5 - - -
51 - - -
682 474 579 370

Notes to the
113
32. Directors’ remuneration (continued)

(1)
The proposed annual Directors’ fees are subject to the shareholders’ approval at the
forthcoming Annual General Meeting (“AGM”) of the Company and of the respective
subsidiary.
(2)
Meeting allowance and transport allowance for the financial year from 1 July 2019
to 30 June 2020 is subject to the shareholders’ approval at the forthcoming AGM of
the Company and of the respective subsidiary.
There is no benefit-in-kind provided to the Directors of the Company as at the end of

the reporting date.
33. Significant events during the financial year

(i) On 17 July 2019, Tan Sri Nik Awang @ Wan Azmi bin Wan Hamzah (“TSWA”) and
Gelombang Global Sdn. Bhd. (“GGSB”) provided a loan to Scomi Group Bhd
(“SGB”) totalling RM42 million for working capital purposes. The loan was secured
by 870.5 million shares, representing 36% secured shares of the Company held by
SGB. On 26 February 2020, pursuant to the TSWA Stakeholder Agreement and
GGSB Stakeholder Agreement, SGB had failed to repay the loan within the
stipulated timeline and the 870.5 million shares were transferred to TSWA and
GGSB. Consequentially, SGB lost control of the Company upon the transfer of the
36% secured shares of the Company.
(ii) On 20 January 2020, the Company announced that it had been classified as an
affected listed issuer pursuant to Paragraph 2.1 (e) of Practice Note 17 (“PN17”)
under the Main Market Listing Requirements of Bursa Malaysia. The PN17 criteria
was triggered as a result of a material uncertainty related to going concern that had
been included in auditors’ report for the audit of Group financial statements for the
financial period ended 30 June 2019 and the shareholders’ equity of the Group as
of 30 June 2019 on a consolidated basis is 50% or less of share capital (excluding
treasury shares) of the Group.
(iii) During the year, the Group undertook a share capital reduction exercise to reduce
its share capital from RM1,005,535,000 to RM445,535,000 which was completed
on 14 February 2020. This was followed by the consolidation of the existing shares
of 2,341,775,435 shares into 468,355,087 shares on the basis of 5 existing shares
into 1 share which was completed on 28 February 2020. The share capital reduction
and share consolidation exercises were intended to rationalise the financial position
and share capital of the Group and of the Company by reducing its accumulated
losses and the number of shares in issue.

114
33. Significant events during the financial year (continued)

(iv) On 2 April 2020, the Company and its subsidiaries such as KMCOB Capital Berhad,
Scomi Oiltools Sdn. Bhd. and Scomi KMC Sdn. Bhd. (collectively, the “affected
subsidiaries”) have each applied for Judicial Management Order (“JMO”) with the
High Court of Malaya at Shah Alam (“the Court”). The application for the JMO
immediately puts into effect a moratorium for the period commencing with the
application of the JMO and ending with the grant or dismissal of the application,
during which no resolution shall be passed or order shall be made for the winding-
up of the Group.
The JMO application was a proactive measure by the Company to:

- allow some time to restructure their debts which are currently due and maximise
the return to lenders and creditors of the Company and the affected subsidiaries;
- allow the Company and the affected subsidiaries to continue to operate and
deliver its ongoing contracts and tenders across the world, thereby, preserving
the business and provide opportunity to generate returns and cashflows to meet
its loan and borrowings and trade payables obligations; and
- secure the expertise of an independent professional to assist the Company and
the affected subsidiaries with the rehabilitation of their debts and assist them to
better realise their assets.
34. Subsequent events after the financial year end

(i) On 14 August 2020, the Court granted the JMO applications filed by the affected
subsidiaries. The Court also allowed the application to withdraw the Company’s
application for JMO. The JMO application was withdrawn by the Company as it
would accord greater flexibility to the Company to implement a group-wide
restructuring of the Group’s debts and rehabilitating the Group’s businesses while
continuing to access the capital markets.
Following the JMO approved by the Court, the Judicial Manager commenced
working on a debt restructuring plan on 17 August 2020. The Judicial Manager is
required to present a statement of proposal (hereinafter referred to as “debt
restructuring plan”) within 60 days or such longer period as the Court may allow
upon securing the JMO, to all creditors for the respective affected subsidiaries.
The debt restructuring plan will require the approval of at least 75% of the total
value for each classes of creditors whose claims have been accepted by the
Judicial Manager and the debt restructuring plan may be approved with
modifications subject to the consent of the Judicial Manager. Once the debt
restructuring plan is approved by the creditors, the Judicial Manager shall report
the result of the meeting to the Court and execute the approved debt restructuring
plan accordingly.
Prior to the expiry of the initial deadline on 13 October 2020, the Judicial Manager
applied to the Court for the extension of another 60 days to finalise the debt
restructuring plan. On 8 October 2020, the Court approved the application for the
extension up to 13 December 2020.

Notes to the
115
34. Subsequent events after the financial year end (continued)

(ii) On 5 October 2020, an independent financial advisor was appointed by the
Company to advise the Group on the group-wide restructuring to strengthen the
financial position of the Group. The Group together with the independent financial
advisor are in the midst of formulating a regularisation plan to address the financial
condition of the Group.
35. Significant changes in accounting policies

During the year, the Group adopted MFRS 16.
Definition of a lease
On transition to MFRS 16, the Group elected to apply the practical expedient to
grandfather the assessment of which transactions are leases. It applied MFRS 16 only
to contracts that were previously identified as leases. Contracts that were not identified
as leases under MFRS 117 and IC Interpretation 4, Determining whether an
Arrangement contains a Lease were not reassessed. Therefore, the definition of a lease
under MFRS 16 has been applied only to contracts entered into or changed on or after
1 July 2019.
As a lessee
Where the Group is a lessee, the Group applied the requirements of MFRS 16
retrospectively with the cumulative effect of applying the standard recognised at the
date of initial application.
At 1 July 2019, for leases that were classified as operating leases under MFRS 117,
lease liabilities were measured at the present value of the remaining lease payments,
discounted at the Group entities’ incremental borrowing rates as at 1 July 2019. The
weighted-average rates applied are in between 3.25% to 14.92%. Right-of-use assets
are measured at an amount equal to the lease liabilities, adjusted by the amount of any
prepaid or accrued lease payments.

116
35. Significant changes in accounting policies (continued)

As a lessee (continued)
The Group used the following practical expedients when applying MFRS 16 to leases
previously classified as operating lease under MFRS 117:
- applied a single discount rate to a portfolio of leases with similar characteristics;

- applied the exemption not to recognise right-of-use assets and liabilities for leases
with less than 12 months of lease term as at 1 July 2019;
- excluded initial direct costs from measuring the right-of-use asset at the date of initial
application; and
- used hindsight when determining the lease term if the contract contains options to
extend or terminate the lease.
For leases that were classified as finance leases under MFRS 117, the carrying
amounts of the right-of-use assets and the lease liabilities at 1 July 2019 are determined
to be the same as the carrying amounts of the leased asset and lease liability under
MFRS 117 immediately before that date.
35.1 Impact on financial statements
Since the Group applied the requirements of MFRS 16 retrospectively with the
cumulative effect of initial application at 1 July 2019, there are no adjustments
made to the prior period presented.
The following table explains the difference between operating lease

commitments disclosed applying MFRS 117 at 30 June 2019, and lease
liabilities recognised in the statement of financial position at 1 July 2019.
Group RM’000
Operating lease commitments at 30 June 2019 as disclosed
in the Group’s consolidated financial statements 6,259
Less: Commitments related to short-term leases (6,163)
Less: Commitments related to low-value leases (31)
Operating lease commitments at 30 June 2019 65
Discounted using the incremental borrowing rate at 1 July 2019 64
Lease liabilities from contracts previously not classified as non-
cancellable operating leases at 30 June 2019 15,898
Lease liabilities recognised at 1 July 2019 15,962
36. Comparative figures

The comparatives for the statements of profit or loss and other comprehensive income,
changes in equity and cash flows as well as the comparatives in the notes to the
financial statements relating to the statements of profit or loss and other comprehensive
income for the year ended 30 June 2020 are not comparable to the results for the
financial period ended 30 June 2019 as the Group and the Company had changed their
financial year end from 31 March to 30 June in the prior financial period.

Statement by Directors
Statement by Directors
pursuant pursuant
to Section toof the Companies Act 2016
251(2)
Section 251(2) of the Companies Act 2016
In the opinion of the Directors, the financial statements set out on pages 49 to 158 are drawn
up in accordance with Malaysian Financial Reporting Standards, International Financial
Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to
give a true and fair view of the financial position of the Group and of the Company as of 30
June 2020 and of their financial performance and cash flows for the financial year then ended.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
…………………………………………………………
Director
…………………………………………………………
Director
Petaling Jaya

Statutory Declaration
Statutorytodeclaration
pursuant pursuant
Section 251(1)(b) of theto
Companies Act 2016
Section 251(1)(b) of the Companies Act 2016
I, Ramesh Veetikat Ramachandran, the officer primarily responsible for the financial
management of Scomi Energy Services Bhd, do solemnly and sincerely declare that the
financial statements set out on pages 49 to 158 are, to the best of my knowledge and belief,
correct and I make this solemn declaration conscientiously believing the declaration to be
true, and by virtue of the Statutory Declarations Act 1960.
Subscribed and solemnly declared by the abovenamed Ramesh Veetikat Ramachandran,
Passport No: Z3965153, at Petaling Jaya in the State of Selangor Darul Ehsan on 30 October
2020.
……………………………………………….
Ramesh Veetikat Ramachandran
Before me:

INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS Independent Auditors’
OF SCOMI ENERGY SERVICESReport
BHD
to the members of Scomi Energy Services Bhd
Report on the Audit of the Financial Statements
Disclaimer of Opinion
We were engaged to audit the financial statements of Scomi Energy Services Bhd, which comprise
the statements of financial position as at 30 June 2020 of the Group and of the Company, and the
statements of profit or loss and other comprehensive income, statements of changes in equity and
statements of cash flows of the Group and of the Company for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, as set out on pages 49
to 158.
We do not express an opinion on the accompanying financial statements of the Group and of the
Company. Because of the significance of the matters described in the Basis for Disclaimer of Opinion
section of our report and their possible cumulative effects on the financial statements, we have not
been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on
these financial statements.
Basis of Disclaimer of Opinion
In seeking to form an opinion on the financial statements of the Group and of the Company, we have
considered the implication of the following significant matters as disclosed in Note 1(b) to the
The Group has defaulted on the repayment of the guaranteed serial bonds of RM80.4 million on 12
March 2020. The event of default also resulted in cross defaults on the Group’s other credit facilities.
As a result, the guarantor of the guaranteed serial bonds and other secured lenders are entitled to
the enforcement of various securities granted by the Group and the Company in accordance with the
financial guarantee insurance agreement and the other credit facility agreements.
On 14 August 2020, the Group secured the Judicial Management Order (“JMO”) from the High Court
on its subsidiaries such as Scomi Oiltools Sdn. Bhd., Scomi KMC Sdn. Bhd. and KMCOB Capital
Berhad (collectively, the “affected subsidiaries”) with the objective of restructuring their debts and
rehabilitating the Group’s business while continuing to access the capital markets. The JMO also
immediately put into effect a moratorium period during which no resolution shall be passed, or order
shall be made for the winding-up of the affected subsidiaries.
Following the JMO approval by the Court, the Judicial Manager was appointed to work on a debt
restructuring plan which is required to be presented within 60 days or such longer period as the Court
may allow upon securing the JMO, to all creditors for the respective affected subsidiaries for their
approval.
Prior to the expiry of the initial deadline of 13 October 2020, the Judicial Manager applied to the
Court for the extension of another 60 days to finalise the debt restructuring plan. On 8 October 2020,
the Court approved the application for the extension up to 13 December 2020.
119

Independent Auditors’ Report for the
Independent Auditors’ Report Financial Year Ended 30 June 2020
Basis of Disclaimer of Opinion (continued)
Concurrently, an independent financial advisor was appointed by the Company to advise the Group
on the group-wide restructuring to strengthen the financial position of the Group. The Group together
with the independent financial advisor are in the midst of formulating a regularisation plan to address
the financial condition of the Group.
The financial statements have been prepared on the historical cost basis and on the assumption that
the Group and the Company will continue to be going concerns. However, the preparation of the
financial statements on a going concern basis is highly dependent on the approval and successful
implementation of the aforesaid debt restructuring plan and regularisation plan.
At the date of this report, the debt restructuring plan is still being formulated and the regularisation
plan is at a preliminary stage of formulation. There are material uncertainties as to whether these
plans would be approved and be successfully implemented. If these are not successfully
implemented, the Group and the Company may be unable to realise their assets and discharge their
liabilities in the ordinary course of business. Accordingly, the financial statements may require
adjustments relating to the recoverability and classification of recorded assets and to the
classification and additional amounts of liabilities as the Group and Company may be unable to
continue as going concerns.
Responsibilities of the Directors for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements of the
Group and of the Company that give a true and fair view in accordance with Malaysian Financial
Reporting Standards, International Financial Reporting Standards and the requirements of the
Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the
Directors determine is necessary to enable the preparation of financial statements of the Group and
of the Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the Directors are responsible
for assessing the ability of the Group and of the Company to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or the Company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our responsibility is to conduct an audit of the Group’s and of the Company’s financial statements in
accordance with approved standards on auditing in Malaysia and International Standards on
Auditing, and to issue an auditors’ report. However, because of the matters described in the Basis for
Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit
evidence to provide a basis for an audit opinion on these financial statements.
Independence and Other Ethical Responsibilities
We are independent of the Group and of the Company in accordance with the By-Laws (on
Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and
the International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance
with the By-Laws and the IESBA Code.
120

Independent Auditors’ Report Independent Auditors’ Report for the
Financial Year Ended 30 June 2020
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that in our
opinion:
(a) Except as disclosed in the Basis for Disclaimer of Opinion, in our opinion, the accounting and
other records and the registers required by the Act to be kept by the Company and its
subsidiaries have been properly kept in accordance with the provision of the Act.
(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated
with the Company’s financial statements are in form and content appropriate and proper for the
purposes of the preparation of the financial statements of the Group and we have received
satisfactory information and explanations required by us for those purposes.
(c) The subsidiaries of which we have not acted as auditors are disclosed in Note 7 to the financial
statements.
Other Matter
This report is made solely to the members of the Company, as a body, in accordance with Section
266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume
responsibility to any other person for the content of this report.
KPMG PLT Chan Chee Keong

(LLP0010081-LCA & AF 0758) Approval Number: 03175/04/2021 J
Chartered Accountants Chartered Accountant
Petaling Jaya
121

Draft - for discussion purposes only and subject to final amendments 122
Appendix
APPENDIX
DIRECTORS OF SUBSIDIARY COMPANIES OF THE COMPANY
The list of directors who served on the boards of the subsidiary companies of the Company
during the financial year until the date of the Directors’ Report is set out below.
Name of Subsidiary Company Name of Directors

Scomi Oilfield Limited Tatang Tabrani
Aminuddin Yusof Lana
Shah Hakim @ Shahzanim bin Zain
Benjamin Leong Wye Hoong
Scomi Oiltools Sdn. Bhd. Benjamin Leong Wye Hoong

Shyawalludien bin Mahmad
Scomi Oiltools Pty. Ltd. Ian Duncan Crabb

KMCOB Capital Berhad Shah Hakim @ Shahzanim bin Zain

Scomi Oiltools (Cayman) Ltd. Hilmy Zaini bin Zainal

Scomi KMC Sdn. Bhd. Shyawalludien bin Mahmad
Scomi Equipment Inc. (Texas, USA) Stephen Fredrick Bracker

Nicholas Harold Doust
Scomi Oiltools (Thailand) Ltd. Ramesh Veetikat Ramachandran

Hilmy Zaini bin Zainal
Montri Bunprasit
Scomi Oiltools Oman LLC Authorised Managers

Michael George Fielding
Norasazly bin Mohd Taha
Muhammad Farook
Khalid Muhammad Alzubair Alzubair
Rashad Muhammad Alzubair Alzubair

Appendix
APPENDIX
DIRECTORS OF SUBSIDIARY COMPANIES OF THE COMPANY (CONTINUED)
during the financial year until the date of the Directors’ Report is set out below (continued)

Scomi Oiltools Ltd. – Pakistan branch Ramesh Veetikat Ramachandran
Fransiscus Huberto Plaggenburg
Kevin Willem Pierre Plaggenburg
Pascal Guy Auguste Ibanez
PT Inti Jatam Pura Commissioner

Mastura binti Mansor
Director
Dick Sadikin Sapi’ie
PT Multi Jaya Persada Commissioner

Director
Dick Sadikin Sapi’ie
PT Scomi Oiltools Commissioner

Directors
Rizal Ichwansyah
Scomi Oiltools (S) Pte. Ltd. Benjamin Leong Wye Hoong

(Singapore) Tan Hoon Gee
Scomi Oiltools (Africa) Limited Ramesh Veetikat Ramachandran

KMC Oiltools India Pvt. Ltd. Pradip Kumar Sinha


Appendix
APPENDIX

Wasco Oil Service Company Chief Samuel Odu Ezediaro
Nigeria Limited Ramesh Veetikat Ramachandran
Scomi Oiltools (RUS) LLC Hilmy Zaini bin Zainal

Trans Advantage Sdn. Bhd. Benjamin Leong Wye Hoong
Scomi Sosma Sdn. Bhd. Amirul Azhar bin Baharom

Scomi Marine Services Pte. Ltd. Tan Hoon Gee

PT Rig Tenders Indonesia Tbk Commissioners

Harianto Taruna
Wong Mun Keong
Directors
Doddy Irawan
Rig Tenders Marine Pte. Ltd. Mukhnizam bin Mahmud

Tan Hoon Gee
Rig Tenders Offshore Pte. Ltd. Shah Hakim @ Shahzanim bin Zain
Sean Lee Yun Feng
CH Ship Management Pte. Ltd. Shah Hakim @ Shahzanim bin Zain

Mukhnizam bin Mahmud
Tan Hoon Gee
CH Logistics Pte. Ltd. Shah Hakim @ Shahzanim bin Zain

Mukhnizam bin Mahmud
Tan Hoon Gee

Appendix
APPENDIX

Grundtvig Marine Pte. Ltd. Mukhnizam bin Mahmud
Tan Hoon Gee
PT Batuah Abadi Lines Commissioner

Director
Abdul Hadi
Scomi D&P Sdn. Bhd. Amirul Azhar bin Baharom

Scomi Oiltools Egypt S.A.E Amira Saad Zaghloul

Muhammad Asri bin Omar
Nor Azly Taha
Scomi Argentina Sociedad Anonima Juan Aguero

(Argentina) Julio Cesar Pulisich
KMC Oiltools BV (Netherlands) Stephen Fredrick Bracker

Orangefield (Netherlands) B.V.

Analysis of Shareholdings as at 14 October 2020 Scomi Energy Services Bhd. 199601025627 (397979-A)
Annual Report 2020
Share Capital
Total Number of Issued Shares : 468,324,247 ordinary shares (excluding 30,840 ordinary shares
purchased by the Company under share buy-back scheme and
retained as treasury shares)
Class of Shares
: Ordinary shares
Voting Rights : One vote per ordinary share
No. of Shareholders : 5,509
Percentage of Shareholdings : The percentage of shareholdings are computed net of the

Company’s treasury shares
Distribution of Shareholdings
Size of Shareholdings Shareholders Shareholding

No. of holders % No. of shares held %
Less than 100 292 5.30 8,233 Negligible
100 to 1,000 1,907 34.62 1,086,169 0.23
1001 to 10,000 2,261 41.04 9,032,321 1.93
10,001 to 100,000 860 15.61 29,793,845 6.36
100,001 to less than 5% 185 3.36 125,494,799 26.80
of issued shares
5% and above of 4 0.07 302,908,880 64.68
issued shares
Total 5,509 100.00 468,324,247 100.00
Shareholdings of Substantial Shareholders
Name of substantial shareholders Direct shareholding Deemed interested

shareholding
No. of shares % No. of shares %
Tan Sri Nik Awang @ Wan Azmi bin 84,810,810 18.11 - -
Wan Hamzah
Gelombang Global Sdn. Bhd. 84,792,792 18.11 - -
Scomi Group Bhd. 137,794,958(1) 29.42 70,000(2) 0.01
United Flagship Sdn. Bhd. - - 84,792,792(3) 18.11
Dato’ Mohd Zakhir Siddqy bin Sidek - - 84,792,792(4) 18.11
Notes:
Notes:
(1) Includes 57,208,320 shares held through Maybank Nominees (Tempatan) Sdn Bhd and 4,489,660 shares
(1) Includes 57,208,320
held through shares
Malaysian held through
Trustees Berhad.Maybank Nominees (Tempatan) Sdn Bhd and 4,489,660 shares
held through Malaysian Trustees Berhad.
(2) Deemed interested by virtue of Section 8(4) of the Companies Act 2016 through its shareholding in Scomi
(2) Deemed interested
Energy Sdn. by virtue
Bhd., which of isSection
in turn 8(4) in
interested ofthe
theCompany.
Companies Act 2016 through its shareholding in Scomi
(3) Energy
Deemed interested
Sdn. by in
Bhd., which virtue ofinterested
turn is Section 8(4)
in theofCompany.
the Companies Act 2016 through its shareholding in
(3) Deemed
Gelombang Globalby
interested Sdn. Bhd.of Section 8(4) of the Companies Act 2016 through its shareholding in
virtue
(4) Deemed interested by virtue of Section 8(4) of the Companies Act 2016 through his shareholding in United
Gelombang
Flagship Sdn.Global Sdn.
Bhd., the Bhd. company of Gelombang Global Sdn. Bhd.
holding
Shareholdings of Directors
(As Per the Register of Directors’ Shareholdings)
Directors Direct Interest Indirect Interest
No. of shares % No. of shares %

Stephen Fredrick Bracker - - - -
Dato’ Jamelah binti Jamaluddin - - - -
Ravinder Singh Grewal a/l Sarbjit S - - - -
Ruziah binti Mohd Amin - - - -
Wong Mun Keong - - - -
Aminodin bin Ismail - - - -
Amirul Azhar bin Baharom - - - -

Analysis of Shareholdings as at 14 October 2020 Scomi Energy Services Bhd. 199601025627 (397979-A)
Annual Report 2020
List of Top Thirty (30) Largest Shareholders

(Without Aggregating The Securities From Different Securities Accounts Belonging To The Same Depositor)
No. Name of shareholders No. of shares Percentage %

1. Tan Sri Nik Awang @ Wan Azmi bin Wan Hamzah 84,810,810 18.11
Cimsec Nominees (Tempatan) Sdn. Bhd.
2. 84,792,792 18.11
CIMB for Gelombang Global Sdn. Bhd. (PB)
3. Scomi Group Bhd 79,096,958 16.25
Maybank Nominees (Tempatan) Sdn. Bhd.
4. 57,208,320 12.22
Pledged securities account for Scomi Group Bhd
UOBM Nominees (Asing) Sdn. Bhd.
5. 19,686,000 4.20
TAEL One Partners Ltd for Petroworld Investments Inc
6. Ramly bin Abdullah 12,914,400 2.76
7. Dato’ Sri Meer Sadik bin Habib Mohamed 8,556,799 1.83
UOB Kay Hian Nominees (Asing) Sdn. Bhd.

8. 5,429,200 1.16
Exempt An for UOB Kay Hian Pte Ltd (A/C Clients)
Malaysian Trustees Berhad
9. 4,489,660 0.96
Scomi Group Bhd
Ambank (M) Berhad
10. 3,500,000 0.75
Pledged securities account for Ali bin Abdul Kadir (Smart)
11. Guoline (Singapore) Pte Ltd 3,333,080 0.71
Alliancegroup Nominees (Tempatan) Sdn. Bhd.
12. 3,009,680 0.64
Pledged securities account for Tan Yap Yean (6000335)
13. Ch’ng Eng Seong 2,674,980 0.57
Alliancegroup Nominees (Tempatan) Sdn. Bhd.
14. 1,760,000 0.38
Pledged securities account for Tan Tze Aw (7000019)
CGS-CIMB Nominees (Tempatan) Sdn. Bhd.
15. 1,460,000 0.31
Pledged securities account for Hee Yuen Sang (MY2105)
RHB Nominees (Tempatan) Sdn. Bhd.
16. 1,332,000 0.28
Pledged securities account for Hee Yuen Sang
Amsec Nominees (Tempatan) Sdn. Bhd.
17. 1,315,600 0.28
Pledged securities account for Aasia-East Capital Sdn. Bhd.
18. Chee Suan Lye 1,304,000 0.28
19. Cartaban Nominees (Asing) Sdn. Bhd.
1,200,000 0.26
Exempt An for RBC Investor Services Trust (Clients Account)
20. Maybank Nominees (Tempatan) Sdn. Bhd.
1,125,500 0.24
Chua Eng Ho Wa’a @ Chua Eng Wah
21. Julian James Armstrong 1,120,020 0.24
22. Yee Kim Ee 1,002,000 0.21
HLIB Nominees (Tempatan) Sdn. Bhd.
23. Pledged securities account for Sharifah Hasnun Nita binti Syed 1,000,000 0.21
Kamaruddin (MG0239-006)
24. KL Alum Gypsum Board Trading Sdn. Bhd. 1,000,000 0.21
Citigroup Nominees (Asing) Sdn. Bhd.
25. 978,660 0.21
Exempt An for OCBC Securities Private Limited (Client A/C-NR)
SJ Sec Nominees (Tempatan) Sdn. Bhd.
26. 916,260 0.20
Pledged securities account for Francis Ho Ik Sing (SMT)
RHB Capital Nominees (Tempatan) Sdn. Bhd.
27. 900,000 0.19
Tan Tze Aw
UOB Kay Hian Nominees (Tempatan) Sdn. Bhd.
28. 819,200 0.17
Exempt An for UOB Kay Hian Pte Ltd (A/C Clients)
29. Hemant Hiralal Kothari 811,900 0.17
30. Hee Yuen Sang 800,000 0.17
Total 385,347,819 82.28

List of Properties
Tenure of land:
Freehold or Approximate
Description/ leasehold Audited NBV age of
Registered Location (years)/date Land/ as at 30.06.20 building
No Owner address Existing use of acquisition Built Up area (RM ‘000) (FY2020)

1 P.T. Rig Land Land for the Freehold Land area: 11.5 n/a
Tenders Jl Belitung Darat building as 09.01.2003 190 sq metres
Indonesia, No.88 mentioned Built-up area:
Tbk Banjarmasin in item 2 n/a
70116

2 P.T. Rig Office building Office Freehold Land area: - 25 years

Tenders Jl Belitung Darat building 06.05.1997 n/a
Indonesia, No.88 Built-up area:
Tbk Banjarmasin 972 sq metres
70116
3 Scomi Master: Land Five storey Freehold Built up area: - 23 years

Oiltools held under shop office 31.10.1999 11,755 sq ft
Sdn Bhd Geran 46494,
Lot 42410
Pekan Cempaka,
Daerah Petaling,
Negeri Selangor,
Malaysia
(formerly known
as PT 42410 H.S.(D)
135924 part of
Geran 35997
Lot 102
Geran 40176
Lot 15386 and
Geran 43061
Lot 15386, Mukim
of Sungai Buloh
Daerah Petaling,
Negeri Selangor,
Malaysia)
4 Scomi Land and buliding: Office and Freehold Land area: Land and 15 years
Energy Geran 58840 warehouse 23.12.2009 1,575m2 building:
Services Lot 64254 Building 6,460
Bhd Mukim of area:
Damansara 1,795m2
District of
Petaling
Selangor Darul
Ehsan

Corporate Directory
CORPORATE
Malaysia
Scomi Energy Services Bhd PT Scomi Oiltools Scomi Oiltools Sdn Bhd (Miri)
Level 15, Menara TSR Jl. Mulawarman No.155 Lot 2164, 1st Floor Saberkas
No. 12, Jalan PJU 7/3 Rt 05, Kelurahan Manggar Commercial Centre
Mutiara Damansara Balikpapan76116 Jalan Pujut-Lutong
47810 Petaling Jaya East Kalimantan 98000 Miri, Sarawak
Selangor Darul Ehsan Indonesia Malaysia
Malaysia
PT Rig Tenders Indonesia
Scomi Oiltools Sdn Bhd PT Batuah Abadi Lines Myanmar
Level 15, Menara TSR Jl. Belitung Darat No.88 Scomi Oiltools (Thailand) Ltd
No. 12, Jalan PJU 7/3 Rt 19, Banjarmasin c/o: Business Suite #4-11
Mutiara Damansara South Kalimantan Level 4, Sedona Hotel Yangon
47810 Petaling Jaya Indonesia No.1 Kaba Aye Pagoda Road
Selangor Darul Ehsan Yankin Township, Yangon
Malaysia PT Scomi Oiltools Myanmar
Jl. Raya Duri Dumai KM 131
Duri, Pekanbaru Nigeria
OPERATING LOCATIONS Sumatra 28884 Wasco Oil Service Company
Indonesia Nigeria Ltd
Australia No.9 Wharf Road, Before Onne
Scomi Oiltools Pty Ltd Kuwait Police Station
15 Boulder Road, Malaga Scomi Oiltools Gulf W.L.L Onne, Rivers State,
Perth, Western Australia 6090 5th Floor, The Green Tower Nigeria
Australia Al Dabous Street
Block 7, Fahaheel Oman
Kuwait Scomi Oiltools Oman LLC
Congo
Scomi Oiltools Africa Ltd P.0 Box 45673 Safat Building 272, Way No 44803
Zone Industrielle de la Foire Office No 1104 (2nd Floor)
Avenue Jean Marie Mavoungou Malaysia P.O. Box 302, Postal Code 130,
BP 685 Pointe Noire Global Research & Technology Azaiba
Republique du Congo Centre Oman
No. 9 Jalan Astaka U8/83
Egypt Seksyen U8, 40150 Shah Alam Pakistan
Scomi Oiltools Egypt SAE Selangor Darul Ehsan Scomi Oiltools Ltd
56 Farida Queen St from Ahmed Malaysia Plot No. 212, East Service Road
Badawy Industrial Area I-10/3
Merage - Maadi Scomi Oiltools Sdn Bhd (Kemaman) Islamabad
Cairo, Egypt Warehouse 24, Letterbox No.72 Pakistan
Kemaman Supply base
24007 Kemaman Scomi Oiltools Ltd
India
Terengganu Darul Iman Plot No. A-146
KMC Oiltools India Pvt. Ltd
Malaysia SITE, Superhighway
101, 1st Floor, Gundecha Solitaire
Karachi
Off Western Express Highway
Scomi Oiltools Sdn Bhd (Labuan) Pakistan
Borivali East, Mumbai 400 066
Labuan Integrated Base
Maharashtra, India
Lot 205331935, Jalan Kinabenua
Letter Box 82023
Indonesia 87030 Labuan Federal Territory
PT Rigtenders Indonesia TBK Labuan, Malaysia
Tetrapack Bld. 1st floor,
Jl. Buncit Raya Kav. 100
South of Jakarta
Indonesia

Corporate Directory
Russia
Scomi Oiltools (Rus) LLC Midgard Oilfield Services Ltd
Bld.1, 24/2 Sretenka Str. (Turkmenistan Branch)
107045 Moscow High Road 9 Kilometer
Russia 745030 Hazar
Turkmenistan
Scomi Oiltools (Rus) LLC
Western Siberia Office Midgard Oilfield Services Ltd
Bld.8, 5 Kuzovatkina Str. (Turkmenistan Branch)
628600 Nizhnevartovsk Petronas Base, Turkmenbashy City
Tyumen Region Balkan Region
Russia
UAE
Scomi Oiltools (Rus) LLC Scomi Oiltools (Cayman) Ltd
Western Siberia Office Mezzanine Floor M02, Liwa Tower
Quarter 04 Block 01 P.O Box 45333, Liwa Street,
Yugozapadnaya Industrial District Abu Dhabi
628305 Nefteyugansk Town United Arab Emirates
Tyumen Region
Russia Scomi Oiltools (Cayman) Ltd
Oilfield Supply Centre, Building B-40,
Saudi Arabia Jebel Ali Free Zone
Scomi Oiltools (Cayman) Ltd P.O. Box 1779
803, 8th Floor, Al Jarbou Tower Dubai
Custodian of the Two Holy Mosque Rd United Arab Emirates
Aqrabia P.O.Box 31151
Al Khobar 31952 USA
Saudi Arabia Scomi Equipment Inc
6607 Theall Road,
Thailand Houston, TX 77066,
Scomi Oiltools (Thailand) Ltd Texas
21 Floor CTI Tower, 191/45, USA
Ratchadapisek Road, Khet Klongtoey
Bangkok 10110 Vietnam
Thailand Scomi Oiltools Ltd
c/o: 9A, Pham Van Nghi
Scomi Oiltools (Thailand) Ltd Thang Nhat ward
163, Moo 6 Tumbol Lankrabue Vung Tau City
Amphur Lankrabue Vietnam
Kamphaengphet
62170 Thailand
Scomi Oiltools (Thailand) Ltd

424/9, Moo 6 Songkhla-Koh Yor Road
Amphur Muang, Songkhla
Kamphaengphet
90100 Thailand
Turkmenistan
Midgard Oilfield Services Ltd
Office L7, 12th Floor, Berkarar Business Center
82, Ataturk (1972) Street
744028 Ashgabat
Turkmenistan

SCOMI ENERGY SERVICES BHD.
Company No: 199601025627 (397979-A)
Notice of Annual General Meeting
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Twenty-Fourth Annual General Meeting (“24th AGM” or
“Meeting”) of SCOMI ENERGY SERVICES BHD. (“the Company”) will be held at Persatuan Alumni
Universiti Malaya, Lot 10476, Jalan Susur Damansara (Jalan Damansara Lama), Off Jalan Gegambir, 50480
Kuala Lumpur on Wednesday, 23 December 2020 at 2.00 p.m. to transact the following business:
AS ORDINARY BUSINESS:
1. To receive the Audited Financial Statements for the financial year ended (Please refer to Note 2)
30 June 2020 and the Reports of the Directors and Auditors thereon.
2. To re-elect Mr. Ravinder Singh Grewal a/l Sarbjit S as Director of the (Ordinary Resolution 1)
Company, who retires by rotation in accordance with Clause 96 of the
Company’s Constitution and who being eligible, has offered himself for
re-election.
3. To re-elect the following Directors who retire in accordance with Clause

103 of the Company’s Constitution and who being eligible, have offered
themselves for re-election:
(i) Mr. Wong Mun Keong; (Ordinary Resolution 2)

(ii) Encik Amirul Azhar bin Baharom; and (Ordinary Resolution 3)
(iii) Encik Aminodin bin Ismail (Ordinary Resolution 4)
(Please refer to Note 3)
4. To approve the payment of Directors’ fees amounting to RM427,754.10 (Ordinary Resolution 5)

for Non-Executive Directors in respect of the financial year ended 30 (Please refer to Note 4)
June 2020.
5. To approve the payment of Directors’ benefits to Non-Executive (Ordinary Resolution 6)

Directors up to an amount of RM200,000.00 from 24 December 2020 until (Please refer to Note 5)
the next Annual General Meeting of the Company.
6. To re-appoint Messrs KPMG PLT as Auditors of the Company for the (Ordinary Resolution 7)
financial year ending 30 June 2021 and to authorise the Directors to fix
their remuneration.
AS SPECIAL BUSINESS:
To consider and, if thought fit, pass with or without modifications, the

following Ordinary Resolution:
7. Authority to Allot and Issue Shares Pursuant to Sections 75 and 76 of (Ordinary Resolution 8)
the Companies Act 2016 (Please refer to Note 6)
“THAT subject always to the Companies Act 2016, the Constitution of

the Company, the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad and the approvals of the relevant governmental
and/or regulatory authorities, where such approval is required, the
Directors of the Company be and are hereby authorised and empowered
pursuant to Sections 75 and 76 of the Companies Act 2016 to allot and
issue shares in the Company, at any time and from time to time at such
price, upon such terms and conditions, for such purposes and to such
person or persons whomsoever as the Directors may, in their absolute
discretion deem fit, provided that the aggregate number of shares issued
pursuant to this Resolution does not exceed twenty per centum (20%) of
the total number of issued shares of the Company (excluding treasury
shares) for the time being and that the Directors be and are also
empowered to obtain approval from Bursa Malaysia Securities Berhad

for the listing of and quotation for the additional shares so issued AND
THAT such authority shall continue in force until the conclusion of the
next Annual General Meeting of the Company after the approval was
given or at the expiry of the period within which the next Annual
General Meeting is required to be held after the approval was given,
whichever is earlier unless revoked or varied by an ordinary resolution
of the Company at a general meeting.
8. To transact any other business of the Company of which due notice shall
have been given in accordance with the Companies Act 2016 and the
Company’s Constitution.
By Order of the Board
CHEN WEE SAM (SSM PC No. 202008002853) (LS 0009709)

THONG PUI YEE (SSM PC No. 202008000510) (MAICSA 7067416)
Joint Company Secretaries
Kuala Lumpur
Note 1: Appointment of Proxy
(i) A member of the Company entitled to attend and vote at a meeting of the Company, or at a meeting of any
class of members of the Company, shall be entitled to appoint not more than two (2) proxies to attend and
vote in his stead at the meeting.
(ii) A proxy may but need not be a member and there shall be no restriction as to the qualification of the proxy.
(iii) Where a member appoints more than one (1) proxy, he shall specify the proportion of his holdings to be
represented by each proxy, failing which the appointment shall be invalid.
(iv) Where a member is an exempt authorised nominee as defined under the Securities Industry (Central
Depositories) Act 1991, who holds ordinary shares in the Company for multiple beneficial owners in one
securities account (“Omnibus Account”), there is no limit to the number of proxies which the exempt
authorised nominee may appoint in respect of each Omnibus Account it holds.
(v) The instrument appointing a proxy, in the case of an individual shall be signed by the appointer or his/her
attorney duly authorised in writing and in the case of a corporation, either under seal or under the hand of an
officer or attorney duly authorised..
(vi) The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is
signed or a duly notarised certified copy of that power or authority, shall be deposited at the office of the
Share Registrar of the Company, Boardroom Share Registrars Sdn. Bhd. (formerly known as Symphony Share
Registrars Sdn. Bhd.) at 11th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200
Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than forty-eight (48) hours before the time for holding
the 24th AGM or adjourned meeting at which the person named in the instrument proposes to vote, or, in the
case of a poll, not less than twenty-four (24) hours before the time appointed for the taking of the poll, and in
default, the instrument of proxy shall not be treated as valid.
(vii) The lodging of a completed Form of Proxy to the Share Registrar of the Company will not preclude a member
from attending and voting in person at the meeting should the member subsequently wish to do so. If a
member subsequently decide to attend and vote in person at the meeting, the member is requested to rescind
his/her earlier appointment of proxy(ies), and notify the Share Registrar of the Company before the closing of
registration for the 24th AGM.
(viii) For the purpose of determining a member who shall be entitled to attend the 24th AGM, the Company shall be
requesting Bursa Malaysia Depository Sdn. Bhd. in accordance with Clause 68 of the Company’s Constitution
and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a General Meeting Record
of Depositors as at 16 December 2020. Only depositor whose name appears on the General Meeting Record of
Depositors as at 16 December 2020 shall be entitled to attend the said meeting or appoint proxies to attend
and/or vote on his/her behalf.
(ix) Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad (“Bursa Securities”), all resolutions set out in this Notice will be put to vote by way of poll.

Note 2: Audited Financial Statements for the financial year ended 30 June 2020 and the Reports of the Directors and
Auditors thereon
The audited financial statements are laid in accordance with Section 340(1)(a) of the Companies Act 2016 for
discussion only under Agenda 1. They do not require shareholders’ approval and hence, will not be put for voting.
Note 3: Abstention from Voting
(i) The interested Directors of the Company who are shareholders of the Company will abstain from voting on
the relevant resolutions in respect of their own respective re-election as the Director of the Company at the
24th AGM.
(ii) All the Non-Executive Directors of the Company who are shareholders of the Company will abstain from
voting on Ordinary Resolutions 5 and 6 concerning fees and benefits to Non-Executive Directors at the 24th
AGM.
Note 4: Explanatory Notes on Directors’ Fees
Ordinary Resolution 5
The fees for the Non-Executive Directors as set out below have been implemented since financial year 2009
and the Board had agreed that the Directors’ fees in respect of the financial year ended 30 June 2020 be
maintained as follows:
Annual Fee (RM)

a. Chairman of the Board of Directors 60,000.00
b. Chairman of the Audit & Risk Management Committee 60,000.00

(“ARMC”)
c. Non-Executive Director who is a member of the ARMC 58,000.00
d. Non-Executive Director who is not a member of the ARMC 48,000.00
The payment of the Directors’ Fees in respect of the financial year ended 30 June 2020 will only be made if the
proposed Ordinary Resolution 5 has been approved at the 24th AGM of the Company.
Note 5: Explanatory Notes on Directors’ Benefits
Pursuant to Section 230 of the Companies Act 2016, any fees and benefits payable to the directors of a listed
company and its subsidiaries shall be approved at a general meeting.
The Company is therefore seeking the shareholders’ approval for the payment of Directors’ benefits to its
Non-Executive Directors for the period commencing 24 December 2020 until the next Annual General
Meeting (“Relevant Period”) in accordance with the remuneration structure set out below, payable as and
when incurred:
1 Meeting Allowance Board of Directors RM1,000 per meeting
2 Meeting Allowance Board Committee RM1,000 per meeting
3 Transport allowance Non-Executive Director who is RM500 per trip

for attending Annual based in Malaysia but outside
General Meeting, of Wilayah Persekutuan Kuala
Board Meetings, Lumpur and Selangor
Board Committee
Meetings, Directors’
Training and the
Company’s events
In determining the estimated total Directors’ benefits for the Relevant Period, the size of the Board and Board
Committees and the number of meetings estimated to be held during the Relevant Period based on the above
remuneration structure were taken into consideration.
Note 6: Explanatory Notes on Special Business:
- Authority to Allot and Issue Shares Pursuant to Sections 75 and 76 of the Companies Act 2016
The Ordinary Resolution 8 is proposed pursuant to Sections 75 and 76 of the Companies Act 2016 for the
purpose of obtaining a renewed general mandate (“General Mandate”), which if passed, will empower the
Directors of the Company to allot and issue new ordinary shares in the Company at any time provided that
the aggregate number of shares issued pursuant to the General Mandate does not exceed 20% of the total
number of issued shares (excluding treasury shares) of the Company for the time being for such purposes as
the Directors deem fit and in the interest of the Company. This General Mandate, unless revoked or varied by
the Company in a general meeting, will expire at the conclusion of the next Annual General Meeting of the
Company after the approval was given, or at the expiry of the period within which the next Annual General
Meeting of the Company is required to be held after the approval was given, whichever is earlier.
As part of the initiative from Bursa Securities to aid and facilitate listed issuers in sustaining their business or
easing their compliance with the rules of Bursa Securities, amid the unprecedented uncertainty surrounding
the recovery of the COVID-19 outbreak and Movement Control Order imposed by the Government, Bursa
Securities had vide its letter dated 16 April 2020 allowed a listed issuer to seek a higher general mandate
under Paragraph 6.03 of the Main Market Listing Requirement of Bursa Securities of not more than 20% of the
total number of issued shares (excluding treasury shares) for issue of new securities.
The General Mandate, if granted, will provide flexibility to the Company for any possible fund raising
activities, including but not limited to further placing of shares, for the purpose of funding future investment
project(s), working capital and/or acquisitions, expeditiously and efficiently, during the challenging time.
The Board, having considered the current financial position, challenging economic outlook, strategic planning
and capacity of the Group, is of the opinion that the General Mandate is in the best interests of the Company
and its shareholders.
As at the date of this Notice, no new ordinary shares in the Company were issued pursuant to the general
mandate granted to the Directors at the last Annual General Meeting held on 28 November 2019 and it will
lapse at the conclusion of the 24th AGM of the Company.
Note 7: Personal data privacy:
By lodging of a completed Form of Proxy to the Share Registrar of the Company for appointing a proxy(ies) and/or
representative(s) to attend and vote in person at the 24th AGM and any adjournment thereof, a member of the
Company is hereby:
(i) consenting to the collection, use and disclosure of the member’s personal data by the Company (or its agents)
for the purpose of the processing and administration by the Company (or its agents) of proxies and
representatives appointed for the 24th AGM (including any adjournment thereof) and the preparation and
compilation of the attendance list, minutes and other documents relating to the 24th AGM (including any
adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws,
listing rules, regulations and/or guidelines (collectively, the “Purposes”);
(ii) warranting that where the member discloses the personal data of the member’s proxy(ies) and/or
representative(s) to the Company (or its agents), the member has obtained the prior consent of such
proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of
the personal data of such proxy(ies) and/or representative(s) for the Purposes (“Warranty”); and
(iii) agreeing that the member will indemnify the Company in respect of any penalties, liabilities, claims,
demands, losses and damages as a result of the member’s breach of the Warranty.
IMPORTANT NOTICE: In view of the outbreak of COVID-19 which is now a global pandemic, the Company
has in place rules and control for the 24th AGM in order to safeguard the health of attendees. Please follow
the standard operating procedures as advised by the Malaysian Government which will be practiced at the
venue.

Form of Proxy
SCOMI ENERGY SERVICES BHD. CDS Account No.
Company No. 199601025627 (397979-A)
(Incorporated in Malaysia) No. of Ordinary Shares Held
Registered Office: No. 2-1, Jalan Sri Hartamas 8
Sri Hartamas, 50480 Kuala Lumpur
Wilayah Persekutuan Kuala Lumpur
I/We* _________________________________________________________ NRIC/Passport No. ________________________________

(Full Name)
of _______________________________________________________________________________________________________________
(Full Address)
being a *member/members of Scomi Energy Services Bhd., hereby appoint:
Name of Proxy NRIC No./Passport No. % of Shareholdings to be Represented

(Full Name) (Refer to Note (iii))

Full Address:
and/or failing him/her

Name of Proxy NRIC No./Passport No. % of Shareholdings to be Represented
(Full Name) (Refer to Note (iii))
Full Address:
or failing *him/her, the Chairman of the Meeting as *my/our proxy/proxies to vote for *me/us on *my/our behalf at the
Twenty-Fourth Annual General Meeting (“24th AGM”) of the Company to be held at Persatuan Alumni Universiti Malaya,
Lot 10476, Jalan Susur Damansara (Jalan Damansara Lama), Off Jalan Gegambir, 50480 Kuala Lumpur on Wednesday,
23 December 2020 at 2.00 p.m. or any adjournment thereof.
Resolutions For Against
Ordinary Business
Ordinary To re-elect Mr. Ravinder Singh Grewal a/l Sarbjit S as Director of the Company,
Resolution 1 who retires by rotation in accordance with Clause 96 of the Company’s
Constitution and who being eligible, has offered himself for re-election.
Ordinary To re-elect Mr. Wong Mun Keong as Director of the Company, who retires in
Resolution 2 accordance with Clause 103 of the Company’s Constitution and who being
eligible, has offered himself for re-election.
Ordinary To re-elect Encik Amirul Azhar bin Baharom as Director of the Company, who
Resolution 3 retires in accordance with Clause 103 of the Company’s Constitution and who
being eligible, has offered himself for re-election.
Ordinary To re-elect Encik Aminodin bin Ismail as Director of the Company, who retires
Resolution 4 in accordance with Clause 103 of the Company’s Constitution and who being
eligible, has offered himself for re-election.
Ordinary To approve the payment of Directors’ fees amounting to RM427,754.10 for Non-
Resolution 5 Executive Directors in respect of the financial year ended 30 June 2020.
Ordinary To approve the payment of Directors’ benefits to Non-Executive Directors up
Resolution 6 to an amount of RM200,000.00 from 24 December 2020 until the next Annual
General Meeting of the Company.
Ordinary To re-appoint Messrs KPMG PLT as Auditors of the Company for the financial year
Resolution 7 ending 30 June 2021 and to authorise the Directors to fix their remuneration.
Special Business
Ordinary Authority to Allot and Issue Shares Pursuant to Sections 75 and 76 of the
Resolution 8 Companies Act, 2016.
Please indicate with an “X” in the appropriate space how you wish your vote to be cast. If you do not indicate how
you wish your proxy to vote on any resolution, the proxy shall vote as he/she thinks fit, or at his/her discretion, abstain
from voting.
*Delete if not applicable
Dated this __________ day of ______________________ 2020 Signature/Seal ___________________________________
Fold this flap for sealing
Notes:
(i) A member of the Company entitled to attend and vote at a meeting of the Company, or at a meeting of any class of members of the
Company, shall be entitled to appoint not more than two (2) proxies to attend and vote in his stead at the meeting.
(ii) A proxy may but need not be a member and there shall be no restriction as to the qualification of the proxy.
(iii) Where a member appoints more than one (1) proxy, he shall specify the proportion of his holdings to be represented by each proxy, failing
which the appointment shall be invalid.
(iv) Where a member is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, who holds
ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number
of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds.
(v) The instrument appointing a proxy, in the case of an individual shall be signed by the appointer or his/her attorney duly authorised in writing
and in the case of a corporation, either under seal or under the hand of an officer or attorney duly authorised.
(vi) The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a duly notarised
certified copy of that power or authority, shall be deposited at the office of the Share Registrar of the Company, Boardroom Share
Registrars Sdn Bhd (formerly known as Symphony Share Registrars Sdn Bhd) at 11th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim,
Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than forty-eight (48) hours before the time for holding the 24th AGM
or adjourned meeting at which the person named in the instrument proposes to vote, or, in the case of a poll, not less than twenty-four (24)
hours before the time appointed for the taking of the poll, and in default, the instrument of proxy shall not be treated as valid.
(vii) The lodging of a completed Form of Proxy to the Share Registrar of the Company will not preclude a member from attending and voting
in person at the meeting should the member subsequently wish to do so. If a member subsequently decide to attend and vote in person at
the meeting, the member is requested to rescind his/her earlier appointment of proxy(ies), and notify the Share Registrar of the Company
before the closing of registration for the 24th AGM.
(viii) For the purpose of determining a member who shall be entitled to attend the 24th AGM, the Company shall be requesting Bursa
Malaysia Depository Sdn Bhd in accordance with Clause 68 of the Company’s Constitution and Section 34(1) of the Securities Industry (Central
Depositories) Act, 1991 to issue a General Meeting Record of Depositors as at 16 December 2020. Only depositor whose name appears on
the General Meeting Record of Depositors as at 16 December 2020 shall be entitled to attend the said meeting or appoint proxies to attend
and/or vote on his/her behalf.
(ix) Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all resolutions set out in this
Notice will be put to vote by way of poll.
Personal Data Privacy:

By lodging of a completed Form of Proxy to the Share Registrar of the Company for appointing a proxy(ies) and/or representative(s) to attend and
vote in person at the 24th AGM and any adjournment thereof, the member accepts and agrees to the personal data privacy terms as set out in the
Notice of 24th AGM dated 30 October 2020.
Then fold here
Affix
Stamp
The Share Registrar of Scomi Energy Services Bhd.

Boardroom Share Registrars Sdn. Bhd.
(formerly known as Symphony Share Registrars Sdn. Bhd.)
11th Floor, Menara Symphony
No. 5, Jalan Prof Khoo Kay Kim
Seksyen 13, 46200 Petaling Jaya
Selangor Darul Ehsan, Malaysia
1st fold here

Scomi Energy Services Bhd 199601025627 (397979-A)
Level 15, Menara TSR, No. 12, Jalan PJU 7/3, Mutiara Damansara
47810 Petaling Jaya, Selangor Darul Ehsan, Malaysia
W www.scomienergy.com.my

SESB Annual Report 2020 - Part 2

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SESB Annual Report 2020 - Part 2

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Financial Statements

055 Statements of Cash Flows

060 Notes to the Financial Statements

159 Statement by Directors

160 Statutory Declaration

161 Independent Auditors’ Report

Reserves and provisions

SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 43

Consolidation of subsidiaries with different financial year end

Subsidiaries of the Company affected by the above are as follows:

(a) Scomi Oiltools (RUS) LLC

Directors of the Company

Dato’ Jamelah binti Jamaluddin

List of Directors of Subsidiaries

44 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

Directors’ interests in shares

Number of ordinary shares

SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 45

Issue of shares and debentures

Options granted over unissued shares

Significant events during the financial year

Subsequent events after the financial year end

Indemnity and insurance costs

46 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

Other statutory information

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

SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 47

The auditors’ remuneration is disclosed in Note 23 to the financial statements.

Date: 30 October 2020

48 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 49

50 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

Revenue 20 423,320 643,494 - 3,855

Share of profit/(loss) of equity-

SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 51

(Loss)/profit attributable to:

Basic loss per ordinary

52 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

At 1 April 2018 1,005,535 (51) (542,246) 32,474 495,712 40,993 536,705

SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 53

At 1 April 2018 1,005,535 (51) 26,881 (567,853) 464,512

At 30 June 2020 445,535 (51) 26,881 (239,356) 233,009

54 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 55

Cash flows from investing

56 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

Statements of Cash Flows

Net increase/(decrease) in cash

Cash outflows for leases as a lessee

Included in net cash from

SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 57

Statements of Cash Flows

(i) Cash and cash equivalents

Cash and bank balances 13 45,023 40,842 50 4,500

58 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

SCOMI ENERGY SERVICES BHD ANNUAL REPORT 2020 59

Principal place of business

60 ANNUAL REPORT 2020 SCOMI ENERGY SERVICES BHD

1. Basis of preparation (continued)