DESTINI AR 2017

During the year in review, the growth of the local economy came in tandem with the robust growth of emerging economies and a revival of commodity prices. Towards the end of the year, oil prices improved from a low of US$44 per barrel in June to just shy of US$70 per barrel in late December from the agreement of oil production cuts from the Organization of the Petroleum Exporting Countries (OPEC). The growth of the local economy was against the background of weaker US Dollar which augured well for the local currency. The Malaysian Ringgit was stronger against the greenback at USD/MYR of 4.02 in December from USD/MYR of 4.42 in March 2017, appreciating from the previous year. Corporate Developments In 2017, Destini was awarded three major contracts that were instrumental to the Group’s growth. In defence aviation, Destini continues to do well with an expansion of its capabilities into the supply and MRO of helicopters through a 70% acquisition of safety and security equipment company, Halaman Optima Sdn Bhd (Halaman Optima). The acquisition enabled the Group to secure the supply of six reconnaissance helicopters worth RM321.90 million for the Malaysian Army Airwing. In addition to that, the Group entered into a joint venture agreement (JVA) that saw the incorporation of Invation Aero Sdn Bhd (formerly known as Urban Fleet Sdn Bhd) (Invation Aero), a company that is in the business of supplying rotary wing and fixed wing aircraft as well as the supply and MRO of aircraft and helicopters. Invation Aero is also in the provision of aircraft wet and dry leasing. With this, it has enabled the Group to expand its scope of defence aviation services. With these two developments in defence aviation, will progress to see Halaman Optima as a unit of the company that will procure contracts while Invation Aero prepares a platform for the Group’s extended maintenance, repair and overhaul (MRO) capabilities. On its marine business, the Group entered into a JV with TH Heavy Engineering Berhad to tap into the market to fabricate bigger vessels for the maritime sector. The JV saw the Group securing its biggest contract worth RM738.90 million for the supply, delivery, testing and commissioning of three offshore patrol vessels (OPV) for the Malaysian Maritime Enforcement Agency (MMEA). In view of complimenting the Group’s current capabilities in the marine industry, Destini acquired 70% stake in a Singapore- based company, AMS Marine Pte Ltd (AMS), to expand its proficiencies in the fabrication of marine safety products. For its land systems business, the Group continues to do well with a contract to supply a dozen heavy vehicles for National Disaster Management Agency (NADMA). This adds on to the Group’s deliveries in past years that amounted to more than 300 defence and security vehicles for Government Agencies. 35 DESTINI BERHAD Annual Report 2017