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Pg 1 BUSINESS PROPOSAL OF GATECH ENGINEERING SDN. BHD. TO KEJORA ENGINEERING SDN. BHD. PRESENTATION

KESB-Gatech Business Proposal

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Page 1: KESB-Gatech Business Proposal

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BUSINESS PROPOSAL

OF

GATECH ENGINEERING SDN. BHD.

TO

KEJORA ENGINEERING SDN. BHD.

PRESENTATION

Page 2: KESB-Gatech Business Proposal

Table of Contents

1.0 Executive Summary 1.1 Objectives 1.2 Mission 1.3 Keys to Success 2.0 Company Summary 2.1 Company Ownership 2.2 Start-up Summary Table: Start-up Table: Management Monthly Commitments 3.0 Services 4.0 Market Analysis Summary 5.0 Strategy and Implementation Summary 6.0 Sales and Marketing Strategy 7.0 Management Summary 7.1 Personnel 8.0 Financial Plan 8.1 Break-even Analysis 8.2 Projected Profit and Loss

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1.0 Executive Summary

Introduction

Kejora Engineering Sdn. Bhd. (KESB) will be involved in providing innovative approaches to engineering, solutions and supply services throughout the oil and gas industry.

KESB will enter into this opportunity laden oil and gas industry where it can leverage its staffs' existing collective reputation and experience into long-term contracts centered on excellent service and cost effectiveness. We believe that we can service this market efficiently and profitably as we will be operating at a more reasonable cost than existing competitors of equal size.

The Company

KESB will be a private limited partnership incorporated in Malaysia. The company's main clients will be Petronas Malaysia and its respective multiple main contractors namely, PFCE-Hyundai, Kencana, Sapura Crest, Labuan Shipyard Corporation to name a few. By focusing on institutions such as these that have secured long term contracts with Petronas Malaysia, we believe we will be able to better serve our clients and produce a superior service that is more effective than other oil and gas engineering firms.

The Services

KESB offers comprehensive industry services to our multiple clients. Our services fall into three main categories of civil engineering and supply services, maintenance and development services and marine supply services.

Each project is customized to our clients and its scopes, specifications and costs are unique.

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The Market

There are plenty of opportunities within this market especially since Petronas Malaysia and other market leaders have been aggressively pursuing initiatives to fulfill their respective book orders.

The industry has been growing at a very fast rate for the past thirty years. According to the Journal of Petroleum & Geoengineering, the industry has averaged approximately 22% per year over the past five years. The oil and gas business consists of thousands of smaller consulting organizations and individual consultants for every one of the few dozen well-known companies. These companies range from major international name-brand firms to tens of thousands of individuals.

Financial Considerations

Start-up assets required are [see Start-up table]. This includes [see Start-up table] in expenses and the rest in cash needed to support operations until revenues reach an acceptable level. Most of the company's liabilities will come from outside private investors and management investment, however, we have obtained credit facilities from respective firms as per detailed in attached company profile.

The company expects to reach profitability in year one and does not anticipate any serious cash flow problems. We conservatively believe that during the first three years, average profitability per month per segment will be sufficiently comfortable and further expect that we will be able to reach a break-even point within the first 6 months.

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1.1 Objectives

The three year goals for Kejora Engineering Sdn. Bhd.(KESB) are the following:

• Achieve break-even within year one.• Establish long-term contracts with at least four clients.• Establish a minimum of a 95% customer satisfaction rate to establish long-term relationships with our clients and create word-of-mouth marketing.

1.2 Mission

It is the mission of KESB to provide innovative approaches and solutions throughout the oil and gas industry and to build effective long-term relations with our clients with excellent services delivered in a timely and cost-effective manner.

1.3 Keys to Success

KESB's keys to long-term survival and profitability are as follows:

• Create long-term contracts that demand constant monitoring or on-call services.

• Keeping close contact with clients and establishing a well functioning long-term relationship with them to generate repeat business and obtain a top-notch reputation.

• Establish a comprehensive service experience for our clients that includes consultation, field work and supply services and follow up monitoring and maintenance services.

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2.0 Company Summary

KESB will be a private limited partnership incorporated in Malaysia. The company's main clients will be Petronas Malaysia and its respective multiple main contractors namely, PFCE-Hyundai, Kencana, Sapura Crest, Labuan Shipyard Corporation to name a few. By focusing on institutions such as these that have secured long term contracts with Petronas Malaysia, we believe we will be able to better serve our clients and produce a superior service that is more effective than other oil and gas engineering firms.

2.1 Company Ownership

The company will have the participation of a private investor who will own 30% of the company's shares permanently. The rest will be owned by the senior management including Mr. Anwar Khan, (47%), Mr. Nizam Awang (20%) and Mr. Idris Komeng, (3%). All other financing will come from credit facilities.

2.2 Start-up Summary

Start-up assets required are shown below. This includes expenses and cash needed to support operations until revenues reach an acceptable level. Most of the company's liabilities will come from outside private investors and management investment, however, we have obtained credit facilities from respective firms as per detailed in attached company profile.

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Requirement:

Start up Expenses

A) Office Set- up before gain Project LOA Office Rental Kerteh (2 units) Deposit (2 + 1 + ½ Utilities) 28,000.00 Renovation 50,000.00 Furniture & Facilities 26,000.00

Total (RM) 104,000.00B) Operation Set up upon LOA Received (On Hold Mode) Non Executive & Executive of Board Director Accommodations 34,000.00 Administration Staff 17,500.00 KWSP & Socso 6,280.00 Others 10,000.00

Total (RM) 67,780.00

Table: Start-up Cost

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No. Description Qty Per Month (RM) Total (RM)

A) Remunerations 1. Executive Director 4 nos. 7,000.00 20,000.002. Non Executive Director 2 nos. 7,000.00 14,000.003. Administration Staff 5 nos. 3,500.00 17,500.004. Miscellaneous (Entertainment & Claim Budget) - 10,000.00 10,000.00

Total (RM) 61,500.00B) Office

1. Office Rental~ Kerteh Terengganu Office 2 lots. - 8,000.000

2. Utilities (Telephone, Electricity, Internet & Water) 2 lots. - 3,000.00

3. Logistic & Others L/S. - 5,000.00Total (RM) 27,000.00

C) KWSP (16%)1. Executive Director Appointed 4 nos. 640.00 2,560.002. Non Executive Director 2 nos. 640.00 1,280.003. Administration Staff 5 nos. 320.00 1,600.00

Total (RM) 5,440.00

D) Socso

1. Executive Director 4 nos. 70.00 280.002. Non Executive Director 6 nos. 70.00 280.003. Accounts Clerk 5 nos. 70.00 280.00

Total (RM) 840.00Grand Total (A+B+C+D) (RM) 94,780.00

Management Overhead

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3.0Services

KESB offers comprehensive industry services to our multiple clients. Our services fall into three main categories of civil engineering and supply services, maintenance and development services and marine supply services. Our services include:

• Shipping and gas vessel cleaning and maintenance services.• Piping, valve and parts supply, installation and commissioning services.• Maintenance services.• Development project services.• Manpower and equipments supply services.• Civil and structural, mechanical and electrical works services. Each project is customized to our respective clients and its scopes, specifications and costs are unique.

4.0 Market Analysis Summary

An analysis of the market using the five forces of profitability indicates that the greatest threat at the moment is in new entrants to the market who will want to capitalize on the current high growth in the industry. Currently rivalry among different oil and gas companies is relatively moderate as much of the potential rivalry is absorbed by this highgrowth rate. Many of the competitors are able to improve profitability simply by keeping up with industry expansion.

Our most serious competitors are Hamdan Eng Sdn Bhd, Material Resources Sdn Bhd & Local Eng Sdn Bhd just to name a few. These companies effect us most because of their higher capitalization and anchored reputation.

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Companies usually enter into contracts with oil and gas companies based on their reputation of professionalism and quality of services rendered in the past. This reputation is difficult to obtain by new firms unless its personnel bringit with them from previous companies, as we are. Price and scope are also important reasons for accepting contracts, especially if the company is small.

5.0 Strategy and Implementation Summary

KESB will enter into this opportunity laden oil and gas industry where it can leverage its staffs' existing collective reputation and experience into long-term contracts centered on excellent service and cost effectiveness. We believe that we can service this market efficiently and profitably as we will be operating at a more reasonable cost than existing competitors of equal size.

6.0 Sales and Marketing Strategy

KESB's management will be focusing on leveraging its extensive contacts in its various market segments to generate contracts. This strategy will generate both much needed revenue and generate the reputation KESB needs for securingfuture long term contracts.

7.0 Management Summary

The company will have four executive directors and four non-executive directors which will be involved in different aspects of the management and operations of the company.

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1) En. Anwar Khan (Chairman) (47%) – Responsible for overseeing financial accounting, Company Projection & operations.2) Participating Investor (ED) (30%) – Responsible for financing the initial startup capital and setup cost of the company.3) En. Mohd Nizam Awang (ED) (20%) – Responsible for overseeing financial accounting and business development.4) En. Idris Komeng (ED) (3%) – Consulting advisor.5) En. Mohd Nazri (NED) – Responsible for overseeing business development and operations (Technical).6) En. Ahmad Sayuti (NED) – Responsible for overseeing business development and administration.7) En. Mohd Asri (NED) – Responsible for overseeing operations (Technical).8) En. Syed Arafath (NED) – Responsible for overseeing administration and operations.

The company plans to hire additional consultants, support and administrative personnel as we begin to get large numbers of contracts.

7.1 Personnel

KESB's management brings to the company strong capabilities in creative flair, research, and a unique combination of skills drawn from other businesses.

8.0 Financial Plan

Our financial plan anticipates one year of positive profits and substantial increment as we gain contract volume. We have budgeted enough investment to cover our operations and have an additional credit line available if our targets do not match predictions.

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8.1 Break-even Analysis

Our Break-even Analysis is based on the assumptions that our gross margin is 100%. In other words, we will have insignificant direct cost of operations. Since each project will be of different scope, length, costs, and complexity, it is difficult to assign and average per contract revenue figure. However, it is conservatively believed that during the first six months we would be able to reach a break-even point, where average profitability per month/annum will be approximately RM100, 000 at the end of financial year. This is because we have currently a few contracts in hand that we have committed to which we would be able to commence immediately in January 2012 itself.

8.2 Projected Profit and Loss

Our profit projection is targeted at a stable 30% (MIN) based on the capital invested for operation for the 2nd quarter of 2012. The 3rd quarter of 2012 year will increase at least 30% based on the 2nd quarter turn over amount. Finally for the end of the 2012, the 4th quarter will increase 45% based on the 3rd quarter turn over of project.

Estimation turn over of the company for the year of 2012 is 4 Million (min).

Returning of the capital investment for operation from funder will be based on the net profit of the total project and the balance will be declare as a company operation cost for the incoming year 2013.

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Description

1st Quarter 2012

2nd Quarter 2012

3rd Quarter 2012

4th Quarter 2012

Total (RM)

Company Projection

Target

- RM 975,000.00 RM 1,267,500.00 RM 1,837,875.00 RM 4,080,375.00

Company Net profit Earning - RM 295,500.00 RM 380,250.00 RM 551,362.00 RM 1,227,112.00

Company Operation Invested

RM 800,000.00 RM 80,436.80 RM 80,436.80 RM 960,873.60

Schedule of Returning

fund- 40%

RM320,000.00

60 %

RM 480,000.00

ANNUAL PROJECTION DESCRIPTION

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GATECH ENGINEERING

SDN. BHD.

COMPANY PROFILE

PRESENTATION

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COMPANY REGISTRATION

CERTIFICATES

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THANK YOU