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DAYA MATERIALS BERHAD (DMB or the Company)

PROPOSED JOINT VENTURE BETWEEN DAYA PETROLEUM VENTURES SDN. BHD.


(DPV), A SUBSIDIARY OF DMB, PT. SINGGAR MULIA (SINGGAR MULIA) AND
GLOBALSTROY ENGINEERING INDIA PTY LTD (GLOBALSTROY), A WHOLLY-
OWNED AFFILIATE OF OPEN JOINT STOCK COMPANY, GLOBALSTROY
ENGINEERING SERVICES (PROPOSED JOINT VENTURE)

1. INTRODUCTION

The Board of Directors (Board) of DMB is pleased to announce that Daya Petroleum Ventures
Sdn. Bhd. (DPV), a subsidiary of DMB, had on 16 October 2013 entered into a Shareholders
and Joint Venture Agreement (SJVA) with PT. Singgar Mulia (SINGGAR MULIA) and
Globalstroy Engineering India Pty Ltd (GLOBALSTROY), a wholly-owned affiliate of Open
Joint Stock Company, Globalstroy Engineering Services to jointly venture into design
engineering services business opportunities (the Business).

The Business shall be undertaken by a single-purpose joint venture company (JV Company).

2. DETAILS OF THE PROPOSED JOINT VENTURE

2.1 Proposed Joint Venture

a) The shareholding of DPV, SINGGAR MULIA and GLOBALSTROY (hereinafter referred to


collectively as Parties and individually as Party) in the JV Company and the participation
of the Parties in the JV Company shall, at all times, be in the following proportions (Agreed
Proportions):

Party Legal title


DPV 40%
SINGGAR MULIA 30%
GLOBALSTROY 30%
Total 100%

b) DPV shall initially subscribe to 40,000 issued shares at a nominal value of RM1.00 per share.
This is 40% of the total issued shares of 100,000.

c) SINGGAR MULIA shall initially subscribe to 30,000 issued shares at a nominal value of
RM1.00 per share. This is 30% of the total issued shares of 100,000.

d) GLOBALSTROY shall initially subscribe to 30,000 issued shares at a nominal value of


RM1.00 per share. This is 30% of the total issued shares of 100,000.

e) The Parties agree that the Board of Directors of the JV Company shall determine and outline
the principles on how the interest of the Parties in relation to the assets, liabilities,
obligations, costs, expenses, profits, dividend and losses arising out of the execution and
completion of design engineering services projects in the Oil & Gas and other industries
under the joint venture shall be apportioned, taking into account the Agreed Proportions
stated under Section 2.1 (a) above.

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f) The Parties agree that the JV Company shall have its registered address and its business
address in Kuala Lumpur, Malaysia.

g) Within ninety (90) days of executing the SJVA, the Parties shall, so far as they are each able,
take or procure the following steps:-

(i) the Memorandum and Articles of Association of the JV Company is consistent


with the terms of SJVA;

(ii) the appointment of three (3) directors of the JV Company by DPV;

(iii) the appointment of two (2) directors of the JV Company by SINGGAR MULIA;

(iv) the appointment of two (2) directors of the JV Company by GLOBALSTROY;

(v) the appointment of the Company Secretary; and

(vi) the execution by the JV Company of any contract of employment in the agreed
terms (if any).

h) The JV Company shall be deemed to be part of the DMB group of companies (DMB
Group) and the Parties shall work closely together with DMB as well as other companies
within the DMB Group. In this regard, the Parties shall promote the business of the JV
Company and shall assist the JV Company in its activities with know-how, contacts and
advice. On its part, the JV Company shall do its utmost to expand its Business inter alia by
sourcing for new customers, both for its benefit and for the benefit of the DMB Group.

i) In order to ensure high professional standards in the services to be provided by the Parties,
the Parties agree to comply at all time with:

(i) All certified quality management standards, policies and requirements set out by
DMB, as notified to the JV Company from time to time;

(ii) All codes of professional conduct and, which DMB may issue from time to time;
and

(iii) DMBs principles, methods and philosophy with regards to good engineering, as
notified to the JV Company from time to time.

For the avoidance of doubt, DMB shall be entitled to update, supplement and amend all
documentation set out in Section 2.1 (i) at its absolute discretion and such
updated/amended/supplemented document shall come into effect and bind the JV Company
once DMB notifies the JV Company of such changes.

j) The Parties shall work exclusively together for the purposes of the design engineering
services projects for both the private and public sectors in Malaysia.

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3. INFORMATION ON DPV, SINGGAR MULIA AND GLOBALSTROY

3.1 DPV

DPV was incorporated in Malaysia under the Companies Act, 1965 on 6 June 2006 as a
private limited company under the name of Metriwell Sdn. Bhd. and assumed its current
name on 29 August 2012. DPVs present authorised share capital is RM500,000
comprising 500,000 ordinary shares of RM1.00 each of which RM350,000 comprising
350,000 ordinary shares of RM1.00 each have been issued and fully paid up. DPV is
principally involved in the exploration and production support services such as drilling
services, geological/geophysical/petroleum engineering services, engineering design
services, procurement/construction/commissioning services, subsea and deep-water
support services, and operations, inspection and maintenance services.

The existing shareholders of DPV and their respective shareholdings are as follows:-

Name Nationality/ No of shares held


Place of Direct % Indirect %
Incorporation
DMB Malaysia 178,500 51 - -
WIRAMAS Malaysia 101,500 29
Shahul Hamid bin Mohd Ismail Malaysian 70,000 20 - -
Total 350,000 100 - -

The Board of Directors of DPV and their interest in shares in its holding company, DMB
based on the Register of Directors Shareholdings as at 30 September 2013 are as
follows:-

Name Nationality No of shares held


Direct % Indirect %
Dato Mazlin Bin Md Junid Malaysian 129,359,386 10.35 20,000,720(1) 1.60(1)
Tham Jooi Loon Malaysian 69,708,198 5.58 4,709,998(2) 0.38(2)
Shahul Hamid bin Mohd Ismail Malaysian - - - -

(1) Deemed interest by virtue of the shareholdings of his son and daughter pursuant to Section 134
Companies Act 1965
(2) Deemed interest by virtue of the shareholdings of his spouse pursuant to Section 134 Companies
Act 1965

3.2 SINGGAR MULIA

SINGGAR MULIA is a private limited company incorporated in Indonesia on 29 June


1981 having its business address at Jl. Pakubuwono VI No.31 Kebayoran Baru, Jakarta
12120, Indonesia. SINGGAR MULIA is principally engaged in the provision of design
engineering services in the oil, gas and petrochemical industry.

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3.3 GLOBALSTROY

GLOBALSTROY is a private limited company incorporated on 3 December 2012 having


its business address at G-107, Himalaya House, 23 Kasturba Gandhi Marg, 110001 New
Delhi, India. GLOBALSTROY is principally engaged in the engineering, procurement
and construction services to the oil and gas industry.

4. RATIONALE FOR THE PROPOSED JOINT VENTURE

The Proposed Joint Venture is to invest and develop design engineering services business
opportunities. The completion of the Proposed Joint Venture will mark another milestone for the
DMB Group in providing full-fledged exploration and production (E&P) support services for
the oil & gas industry. The Proposed Joint Venture is expected to contribute positively to the
future profitability and cash flow of DMB as well as the stability of its future income stream.

5. RISK FACTORS

5.1 Business Risk

Like all business entities, risk factors affecting the Proposed Joint Venture include but not
limited to execution risks such as business expansion, prudent financial management,
changes in price materials, changes in political, economic and regulatory conditions. In
addition, there is also no assurance that the anticipated benefits from the Proposed Joint
Venture will be realised, and that the DMB Group will be able to generate sufficient
revenue from the Proposed Joint Venture to offset the associated cost.

Nevertheless, the Board of Directors of DMB has and will continue to exercise due care
in considering the risks and benefits associated with the Proposed Joint Venture and will
take appropriate measures in planning the successful integration of the Proposed Joint
Venture with its current business operations.

5.2 Political, economic and regulatory considerations

Like all business entities, changes in political, economic and regulatory conditions in
Malaysia could materially and adversely affect the financial and business prospects for
the DMB Group. Amongst the political, economic and regulatory uncertainties are the
changes in nullification of existing sales orders and contracts, changes in interest rates
and method of taxation and currency exchange rules and contracts.

The DMB Group may continue to take effective measures to mitigate such risks.
However, there is no assurance that adverse economic, political and regulatory conditions
will not materially affect the business activities of the DMB Group.

6. SOURCE OF FUNDS

DPV will fund the Proposed Joint Venture from its internally generated fund.

7. INVESTMENT

The estimated initial capital contribution by DPV for the Proposed Joint Venture is expected to be
RM40,000 only.

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8. FINANCIAL EFFECTS

The Proposed Joint Venture is not expected to have material impact to the share capital, gearing,
consolidated earnings, net assets and substantial shareholders shareholding of DMB for the
financial year ending 31 December 2013.

9. ESTIMATED TIME FRAME FOR THE PROPOSED JOINT VENTURE

The Proposed Joint Venture shall be completed within Ninety (90) days from the date of the
SJVA. Unless terminated in accordance with the provisions of the SJVA, this Proposed Joint
Venture shall remain valid.

10. HIGHEST PERCENTAGE RATIO APPLICABLE

The percentage ratio in relation to the Proposed Joint Venture is 0.02%.

11. APPROVALS REQUIRED

The Proposed Joint Venture is not subject to the approval of the shareholders of DMB or any
relevant government authorities.

12. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS

None of the directors, major shareholders or person connected with them have any interest, direct
or indirect, in the Proposed Joint Venture.

13. DIRECTORS' STATEMENT

The Board, after due consideration of all aspects of the proposal, is of the opinion that the
Proposed Joint Venture is in the best interest of DMB Group.

14. DEPARTURES FROM THE POLICIES AND GUIDELINES ON ISSUE/OFFER OF


SECURITIES ISSUED BY THE SECURITIES COMMISSION ("SC")

The Proposed Joint Venture has not departed from the SC's Policies and Guidelines on Issue /
Offer of Securities.

15. DOCUMENTS AVAILABLE FOR INSPECTION

The SJVA will be made available to shareholders for inspection at the registered office of DMB at
Level 8, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya,
Selangor during normal working hours from Mondays to Fridays (except public holidays) for a
period of one (1) month from the date of this announcement.

This announcement is dated 16 October 2013.

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