annual report, accounts & sustainability developments

annual report, accounts

& sustainability developments

2009

www.kentz.com providing specialist services worldwide

For more information about Kentz, please refer to our website

www.kentz.com

Evolution Securities Ltd (NOMAD and Broker)

100 Wood Street, London EC2V 7AN

Tel: +44 (0)20 7071 4300

Rob Collins

Chris Sim

Kentz Investor Relations Team

Kentz Corporation Limited

Gurtnafleur, Clonmel, Co. Tipperary, Ireland

Tel: +353 52 6139806

Elizabeth Rous

Catríona Nugent

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Kentz Annual R

eport, A

ccounts & Sustainability

Developments

2009

2 Kentz Annual Report

3financial highlights

4corporate development andoperational highlights

6chairman’s statement

8chief executive officer’s report

12board of directors

14corporate governance

16key executives and organisation

20outlook, our markets and sector focus

36our HSE performance

42world reach 2009

44some of our 2009 and ongoing projects

48our people

52policies and systems

54corporate and social responsibility

59financial review 2009 andconsolidated financial statements

106shareholder information

107notice of annual general meeting

109glossary

110worldwide offices

Kentz Group is a specialist solutions provider operating principally

within the oil and gas services sectors with over 10,000 staff

worldwide. We deliver our solutions through a wide range of

engineering and construction services using our global network of

offices. We are currently delivering projects in 26 countries with a

strong presence throughout the Middle East and several other oil

and gas developing regions. At Kentz we bring a global reach to our

clients and partners worldwide with consistent performance in

safety, systems applications and fast-track project delivery.

who are we

over 10,000 employees

26 countries

total order backlog ofUS$1,497.4m

as of December 2009

3

* Excluding JV operations** Before flotation costs of $4.695m in 2008.

revenuein US$ millions

704.7 +9.5%Revenue in 2009increased by 9.5% toUS$704.7m (2008:US$643.4m) *

2008 2009

profit before tax marginsin percent

6.3 6.3 6.3%Profit before taxmargin wasmaintained at6.3%, in line with2008 **

2008 2009

gross cashin US$ millions

154.5

180.3 +16.7%Gross cash balance atthe end of 2009increased by 16.7% toUS$180.3m (2008:US$154.5m)

2008 2009

earnings per sharein US$ cents

25.0926.46 +5.5%

EPS (basic) 26.46US$ cents up 5.5%(2008: 25.09**US$cents). EPS (diluted) 26.35US$ cents up 5.0%(2008: n/a)

2008 2009

backlogin US$ millions

1,003.8

1,497.4 +49.2%Backlog at the end of2009 increased by49.2% toUS$1,497.4m (2008:US$1,003.8m)

2008 2009

profit before taxin US$ millions

40.744.5 +9.2%

Profit before tax in 2009increased by 9.2% toUS$44.5m (2008:US$40.7m) **

2008 2009

643.4

financial highlights


• Successfully completed re-organisation of the Group into three Global Business Units(“GBUs”); Specialist EPC, Construction and Technical Support Services

• Kentz’s Australian operations entered 2010 with a backlog of over US$376m, primarilylinked to a number of mega liquefied natural gas (“LNG”) projects going ahead

• Scope of work grown on both the Sakhalin 1 and 2 developments together with theCompany’s Russian joint venture partners. Kentz’s volume of total work is forecast toexceed US$150m, which includes services for the Sakhalin 1 third phase Arkun Dagi

• Further involvement in the main process and utility areas for the mega Shell Pearl gas toliquids (“GTL”) project in Qatar where Kentz’s volume of total work is forecast to exceedUS$400m

corporate development andoperational highlights

• Continued participation on the Medupi Project in South Africa, a 4,800MW powerstation for Eskom

• Successful completion of the Saudi Aramco Khurais Construction Project in SaudiArabia and the Rio Tinto Ilmenite Project in Madagascar, valued in excess of US$60mand approximately US$80m, respectively

• Continued participation on several Sipchem projects in Saudi Arabia includingcommencement of engineering and procurement services for the new Acetyls PolishingPlant with a total value of approximately US$150m

• Continued participation on the Gautrain Infrastructure Project in South Africa withcommissioning in time for the 2010 FIFA World Cup

Aerial view of Woodside’s Pluto LNG Project, Western Australia

corporate developments and operational highlights 5

Despite a reduction in worldwide energy demand in 2009, we are

convinced that in both the immediate and long-term future, the

energy demands, particularly of new emerging economies, will fuel

our industry and the continued growth of Kentz.


chairman’s statement 7

In 2009, the world economy came close to collapse, brought on by a global crisis in the international

financial markets. Whilst the current signs point to the beginnings of a global upturn, there remain a

number of hurdles to overcome before we can safely predict a full recovery.

The precipitous drop in energy prices at the end of 2008 continued into early 2009 and was followed

by a steady rise, sufficient enough to stimulate new growth in our clients’ investments. Within this

environment we are pleased to report that Kentz continued its growth in sales and earnings, marking

its performance as a stand-out in the international engineering and construction industry. As we

entered 2010, Kentz’s backlog stood at a record US$1,497.4m, a 49.2% increase over 2008.

The Board congratulates our Chief Executive, Hugh O’Donnell, and his management team in

navigating the Company through this difficult year whilst maintaining the steady and continuous

growth of Kentz. The core strategy of focusing on our blue-chip client base and providing consistent,

high-quality value-added services has served the Company very well, and continues to do so.

We have successfully utilised our strong balance sheet to invest in Kentz’s future, despite the past

year’s economic outlook. An example of this was the investment in personnel and management

made in the Australian market. Kentz has been operating in Australia for a number of years, but after

assessing the opportunities for new LNG projects, we were able to allocate additional human

resources to this market. This has resulted in large and diverse awards in our Construction and

Specialist EPC business units, and today we are a strong force in Australia ready to leverage our

presence to participate in the current and future commodity-based project investments by our

blue-chip clients.

Our largest and most important market continues to be the Middle East; and although we witnessed

some delay in the award of certain projects at the start of 2009, the second half was very buoyant.

New opportunities for our Specialist EPC business unit are emerging in Kuwait, Oman, and Syria. In

addition, the increased political stability in Iraq and the return of many of our core clients to the

country offers the potential for new opportunities and geographic expansion for Kentz in the Middle

East. Africa proved to be a strong market for Kentz in 2009 with all three GBUs exceeding their sales

targets. Although new investments in the oil and gas sector have been delayed, the growth in power

and metals and mining projects underpinned our 2009 sales performance. We foresee a return to

higher levels of energy investments in Africa, particularly in the coal to liquid and refining sectors of

the market.

Despite a reduction in worldwide energy demand in 2009, we are convinced that in both the

immediate and long-term future, the energy demands, particularly of new emerging economies, will

fuel our industry and the continued growth of Kentz. The International Energy Agency predicts that

by the year 2030 energy demand will have grown by 50%, with half of the total coming from fossil

fuel sources not yet developed. The Board continues to support our investment strategy of enlarging

Kentz’s presence in the upstream oil and gas services market in order to take full advantage of this

demand.

The Board is confident that the Company has the correct vision and strategy, coupled with an

outstanding management team, to enable us to bring value to our employees, to the communities in

which Kentz operates, and to our shareholders.

Tan Sri Mohd Razali Abdul Rahman

Chairman

chairman’s statement

The core strategy of

focusing on our

blue-chip client

base and providing

consistent, high-

quality, value-added

services has served

the Company very

well, and continues

to do so.

The management team believes the Company’s outlook is very positive. Oil prices have remained stable in the US$70-US$85/barrel range and many OECD and non-OECD countries arenow moving out of recession, providing a positive long-term viewfor oil and gas demand.


chief executive officer’s report 9

It has been another successful year for Kentz, with a strong performance across all business unitsand some significant new contract awards. Despite the ongoing challenges in the global economy,revenue increased 9.5% to US$704.7m, profit before tax increased 9.2% to US$44.5m and our profitbefore tax margin was maintained at 6.3%, in line with 2008.

Backlog has increased further to US$1,564.8m at the end of January 2010, up from US$1,003.8mat the end of December 2008 and US$1,100.9m at 30 June 2009. During 2009 the total order intaketo backlog was US$1,039.4m, with a strong performance in the second half as new orders andnatural growth from existing projects increased by 44.1% (H1 US$425.8m and H2 US$613.6m) overthe first half of 2009. The Group’s cash position remains very strong. Gross cash at the end of 2009was US$180.3m, up 16.7% from US$154.5m at the end of 2008. Net cash* at the end of December2009 was approximately US$168.3m, up from US$152.5m at December 2008. US$134.1m of thisis Kentz’s own cash, with the majority of the balance being customer prepayments on contracts.

The total dividend payment for 2009 will be 6.0 US$ cents per share. The final dividend payment of4.0 US$ cents per share represents two-thirds of the total payment for 2009 and is scheduled to bepaid in June 2010.

Kentz’s pipeline of prospects is currently in excess of US$2.95bn (December 2008: US$2.15bn) andcontinues to grow. In assessing prospects, in which bids have a period of up to six months beforebeing awarded, Kentz focuses on projects that have a high probability of proceeding and where ithas the greatest chance of success.

Kentz is currently involved in some of the largest and most prestigious projects in the world: theGorgon LNG Project in Australia; the Shell Pearl GTL in Qatar; the development of the Jubail IIinfrastructure in Saudi Arabia; the Sakhalin 1 and 2 developments in Far East Russia; and the4800MW Eskom Medupi Power Station in South Africa.

Projects in remote global locations are those where Kentz’s experience can add real value to clients.The re-organisation of the Group into three Global Business Units, completed during the second halfof 2009, has allowed us to leverage our well-established regional hubs to support work in remotelocations, with the potential for greater profitability.

Each of the GBUs – Specialist Engineering, Procurement and Construction; Construction; andTechnical Support Services – has benefited from increased exposure across the extended Kentzglobal network. The internal re-organisation has provided a number of additional strategic prospectsfor the Company and has helped unlock latent synergy that exists within Kentz’s business areas,which has been reflected in the growth of the backlog and prospects. The most significant growthin backlog was seen in the Specialist EPC business unit: from US$316m at December 2008 to overUS$837m at December 2009.

While the Middle East remains the most significant area of revenue generation for Kentz, accountingfor 63% of the overall revenue in 2009, we have seen significant growth in other regions. The globaloil and gas landscape for project development changed significantly during 2008 and 2009, andKentz is well positioned to service new opportunities as many of our core clients are involved indeveloping these major projects.

In particular, Australia has emerged as the world LNG liquefaction hub, following Qatar’s decision toput on hold further north field gas developments. Iraq is also set to become the largest developer ofupstream onshore oil and gas projects with several major IOCs signing up to new service contractswith the Iraq Oil Ministry. Brazil’s pre-salt reserve finds will set a new wave of FPSO projects in bothBrazil and in several fabrication centres around the world. Developments by US IOCs on large-scaleAlaskan gas projects to support domestic US energy demands look set to open up a new market ofprojects in this area, and Saudi Arabia is developing a number of downstream oil and gas projectsin joint venture with IOCs to service domestic, regional and Asian demands.

During 2009 the belief that the oil majors would continue to invest in oil and gas processing capacityfor future demand, in order to keep oil prices from “over-boiling”, has proven to be true. Capitalinvestments from the major IOCs continued at significant levels throughout 2009 and are likely to

chief executive officer’s report

Kentz is currently

involved in some of

the largest and

most prestigious

projects in the

world: in Australia,

Qatar, Saudi Arabia,

Far East Russia and

South Africa.

* Net cash represents gross cash less bank overdraft, bank borrowings and finance lease obligations.


remain buoyant for the foreseeable future. Economic growth, witnessed during the latter half of 2009 indeveloping economies, supports the current outlook that world demand for oil and gas will continue to grow.

The volatile global economic conditions during 2009 had some impact on our industry, but Kentz’s clientshave continued to finance a significant number of developments in the areas in which we operate. Therecent trend for IOCs to invest in locations where hydrocarbon extraction costs are marginally higher, butaccess and ownership risk are lower, has worked to Kentz’s advantage and many clients are taking astrategic long-term view of future developments in order to grow reserves, resulting in additional projectopportunities. Kentz continues to gain access to an expanded diversity of sectors, through a solid portfolioof projects and competencies across upstream oil and gas, downstream petrochemical, metals and mining,power and infrastructure. Kentz works with a well established base of blue-chip clients, consisting ofinternational oil, national oil and natural resource companies, along with leading engineering and projectmanagement companies.

Central to Kentz’s operations is the health and safety of our employees. During 2009 the workforceremained at an average of approximately 10,500 employees worldwide and we delivered over 34 millionman-hours of work on projects in 26 countries. The Total Recordable Incident Rate (TRIR) for the Groupwas 0.17. We maintain an appropriate mix of contract and permanent employees to provide a flexibleapproach to our fixed cost base.

Effective risk management remains a governing principle for the management executive. In the currentoperating environment, there are fluctuations in a number of the variables that make up our costs, and

chief executive officer’s report 11

ensuring these are addressed at bidding stage is of paramount importance. Kentz maintains its strict focuson risk management through regular bid proposal and ongoing project reviews.

The management team believes the Company’s outlook is very positive. Oil prices have remained stable inthe US$70-US$85/barrel range and many OECD and non-OECD countries are now moving out ofrecession, providing a positive long-term view for oil and gas demand.

We are confident that the expected long-term increase in demand for oil will drive the expansion of both theonshore and offshore oil and gas markets, and there are also several large downstream oil and gasdevelopments being planned. This view is further supported by the capital expenditure plans of many of ourcore clients, which remain intact.

Kentz is focused on identifying and assessing potential strategic investment opportunities in our sector,whether in the form of a joint venture, an investment or an acquisition. We maintain a prudent approach toany such transaction in order to ensure that any strategic investment will be value enhancing for ourshareholders.

Given the diversity of the sectors in which we are involved and our strong track record of operating acrossthe world, we feel well positioned to capitalise on the opportunities available to Kentz in the years ahead.

Hugh O’Donnell

Chief Executive Officer

Aerial view of LNG Berth 6 Project, Ras Laffan Industrial City, Qatar

Edward Anthony Power

Chief Financial Officer, aged 55

Ed Power, an Irish national, was appointed to theBoard on 31 January 2008, having previouslybeen appointed to the Board of Management asGroup Finance Director in 2002. Prior to that, heserved as Group Financial Controller of KentzGroup since 1995 and as Group FinancialAccountant since 1990. Before joining Kentz in1990 he worked with US-owned multinationalssuch as Measurex and Hasbro in Ireland, the US,Germany and Spain. Ed is a graduate ofWaterford Institute of Technology and is anassociate member of the Chartered Institute ofManagement Accountants.



Non-Executive Chairman, aged 62

A Malaysian, Tan Sri Razali was appointed to theBoard with effect from 6 May 1994. He holds aBachelor’s degree in Commerce from theUniversity of Newcastle, Australia and a Master’sdegree in Financial Management from theUniversity of Queensland, Australia, and is a fellowof the Australian Society of Certified PublicAccountants. Tan Sri Razali is currently theExecutive Chairman of Peremba (Malaysia) SdnBhd. He is also the Chairman of Saujana ResortSdn Bhd and Focal Aims Holdings Berhad; thelatter is a company listed on the Bursa Malaysia.

Hugh James John O’Donnell

Chief Executive Officer, aged 44

Hugh O’Donnell, an Irish national, joined Kentz in1991. He was appointed to the Board ofManagement of Kentz in August 1997 and to theBoard of Directors with effect from 1 January2001. He undertook a Bachelor of Engineering(Mechanical Engineering) degree at the Universityof Limerick, Ireland, from 1984 to 1987 and aMasters Course in Administration (Business) fromSurrey University in the UK from 1997 to 1999and a Doctorate in Management with theUniversity of Southern Cross, Australia, between1999 and 2002. Hugh is a Professional Engineerregistered with the Board of Engineers, SouthAfrica.

board of directors

board of directors 13

Hans Joachim Kraus*

Non-Executive Director, aged 72

An American, Hans acts as an advisor to Kentz managementin the area of safety, health and environment in addition to hisrole on the Board. He holds a Bachelor’s degree in MechanicalEngineering from the University of Wyoming. Hans has over 40years experience with Chevron Corporation, and has workedin various management positions in engineering, construction,operations, management and consulting and executivemanagement. Key executive positions during his tenure withChevron included Vice President of Projects, Project Directorsand General Manager/Co-ordinator of downstream projectsworldwide.

David Michael Beldotti*


An American, David Beldotti was appointed to the Board witheffect from 5 February 2003. David’s experience in the EPCprocess business spans over 40 years with direct involvementin over 100 projects ranging in size from small engineeringstudies to multi-billion US dollar projects. Over the years Davidhas worked in over 30 different countries in all continentsexcept Antarctica. The senior positions he has held during histenure in the industry include, President of BadgerEurope/Africa, CEO McConnell Dowell, and President ofLummus Americas/East Asia.

Hassan Abas


A Malaysian, Hassan Abas was appointed to the Board witheffect from 6 May 1994. He holds a Bachelor of Arts (Honours)from the University of Lancaster and is a member of theInstitute of Chartered Accountants, England & Wales. He isalso a member of the Malaysian Institute of Accountants.Hassan is currently the Deputy Chairman of Peremba(Malaysia) Sdn Bhd. He serves on the boards of the followingpublic companies – Jardine Cycle & Carriage Ltd (Singapore)and MCL Land Ltd (Singapore). He also sits on the board ofseveral private companies.

Brendan Lyons*


Brendan Lyons, an Irish national, holds a Bachelor ofEngineering (Chemical) from University College Dublin.Brendan also holds a Master’s degree in Public Administrationfrom the same university. Brendan was appointed to the Boardon 31 January 2008. Brendan has had a long career with theDepartment of Foreign Affairs of Ireland and is well placed toadvise the Company on numerous political and culturalmatters. Senior posts held with the Department of ForeignAffairs include Ambassador of Ireland in Riyadh, KualaLumpur, Singapore and Hanoi. He is currently President ofPenang Medical College in Malaysia.

* Independent Non-Executive Director

The holding company of the Kentz Group, Kentz Corporation Limited (the “Company”), is

incorporated in Jersey. Whilst there is no formal corporate governance code applicable in

Jersey, the Directors recognise the value of the principles of good governance and the

Company follows the recommendations on corporate governance for AIM companies

issued by the Quoted Companies Alliance (QCA).

The BoardThe Board of Directors of the Company is responsible to shareholders for the leadership

of all aspects of the business. The Board comprises seven members – three independent

Non-Executive Directors, each contributing individual experience from diverse

backgrounds. In addition there are two Non-Executive Directors who have served on the

Board since 1994. They provide focus and alignment and have many years of experience

on the boards of publicly-traded companies. Finally, the two Executive Directors are

responsible for the implementation of all Board decisions and oversee the management

of the Group on a day-to-day basis.

All members of the Board are required to stand for election by shareholders at the annual

general meeting following their appointment by the Board and thereafter for re-election on

a three-year rotational basis, which assists in ensuring planned and progressive refreshing

of the Board.

Role of the BoardThe Company has adopted a schedule of matters reserved for consideration by the whole

Board, including, for example: approval of the Group’s long-term objectives and

commercial strategy; approval of the annual operating and capital expenditure budgets of

the Group (and any material changes thereto); changes relating to the Group’s structure;

major changes to the Group’s corporate structure, approval of the Group’s annual report

and accounts; approval of the dividend policy; major capital projects; changes to the

structure, size and composition of the Board; determination of the remuneration for the

Directors, the Company Secretary and executive management; division of responsibilities

between the Chairman, the Chief Executive and other executives of the Board; and the

making of political donations or political expenditure.

The Board is also responsible for ensuring maintenance of sound systems of internal

control and risk management and the Directors confirm that they continually review the

effectiveness of the system of internal control, covering all material controls including

financial, operational and compliance controls and risk management. The Company has

established a Risk Review Committee, reporting to the Board and consisting of David

Beldotti as Chairman, Hugh O’Donnell, Ed Power and Adrian Griffin (the Company’s

Commercial, Contracts and Risk Officer). This Committee meets at least four times a year

to review the process for identifying the principal business risks facing the Group, the

methods of managing these risks, the controls that are in place to contain them and the

procedures to monitor them. The Committee also makes recommendations for

consideration by the Board of any actions it deems necessary to better protect the

interests of the Company.

Above: Salma Ghazali, MalaysianPA to Regional Business ManagerKentz employee for 15 yearsKentz world presence: Kuala Lumpur, Malaysia

corporate governance14 Kentz Annual Report

Sub-committeesIn early 2008, the Company established an Audit Committee, a Nomination

Committee and a Remuneration Committee, each with formally delegated duties and

responsibilities.

Audit CommitteeThe Company’s Audit Committee comprises David Beldotti as the Chairman, Hans

Kraus and Hassan Abas. The Audit Committee meets at least three times a year at

appropriate times in the reporting and audit cycle and otherwise as required. The

Chief Financial Officer and the Group Internal Auditor normally attend meetings of the

Committee and the Chief Executive Officer attends as necessary. The external

auditors are invited to attend meetings of the Audit Committee on a regular basis.

The terms of reference for the Audit Committee include the following responsibilities:

� Monitoring the integrity of the reported financial performance of the Group,

including its preliminary results announcement, annual report and interim report;

� Reviewing the effectiveness of the Group’s internal financial controls;

� Monitoring and reviewing the effectiveness of the Group’s internal auditor;

� Making recommendations to the Board on the appointment and removal of the

external auditors;

� Monitoring the objectivity and independence of the external auditors.

Nomination CommitteeThe Company’s Nomination Committee comprises Tan Sri Mohd Razali Abdul

Rahman as the Chairman, Brendan Lyons and David Beldotti. The Nomination

Committee meets at least twice a year and at such other times required by the

Chairman of the Committee. The Nomination Committee is responsible for identifying

and nominating, for the approval of the Board, candidates to fill Board vacancies. The

terms of reference for the Nomination Committee provide that it will give full

consideration to succession planning and regularly review the structure, size and

composition of the Board.

Remuneration CommitteeThe Company’s Remuneration Committee comprises Brendan Lyons as the

Chairman, Hans Kraus and David Beldotti. The Remuneration Committee meets at

least twice a year and at such other times required by the Chairman of the

Committee. The Remuneration Committee is responsible for monitoring the level and

structure of remuneration for senior management. The terms of reference for the

Remuneration Committee provide that it will determine and agree with the Board the

framework or broad policy for the remuneration of the Company’s executive

management and fix the remuneration for all Executive Directors, the Chairman and

the Company Secretary. The remuneration of Non-Executive Directors is a matter for

the executive members of the Board. No Director may be involved in any decisions

as to their own remuneration.

corporate governance 15

Aviva Stadium, Dublin, Ireland

Gautrain 1, Gautrain Rapid Rail Link TunnelVentilation Package, South Africa

132KV Switching Terminal prior to extensionsof bays, Karratha, Western Australia

key executives and organisation16 Kentz Annual Report

Above: Jemar Timajo, FilipinoProject Controls EngineerKentz employee for 8 yearsKentz world presence: Perth, Western Australia

In 2009, the re-organisation of the Group into three Global Business Units (GBUs) which

include Specialist EPC, Construction and Technical Support Services was successfully

rolled out across the Group. This new organisation has unlocked the latent synergy that

exists within Kentz’s business areas, and facilitates the sharing of business unit expertise

and resources across the world. Projects in remote global locations are where Kentz’s skill

set can add real value to clients. The re-organisation of the Company into three GBUs has

laid the foundation for continued growth, with each business unit increasing in geographic

reach, and sales increasing through new awards, during 2009.

The Management Executive Committee (MEC)

Hugh O’Donnell Chief Executive Officer

Hugh O’Donnel joined Kentz in 1991. He wasappointed to the Board of Management of Kentz inAugust 1997 and to the Board of Directors witheffect from 1 January 2001. He was appointed ChiefExecutive Officer in late 2000.

James MooreChief Operating Officer Specialist EPC Business Unit

James Moore joined the Kentz Group in November1993 upon returning to Europe from South Africawhere he had served as a Project Manager withSasol for thirteen years. Since joining Kentz he hasacted in several different senior management rolesacross the fields of engineering and projectmanagement and has served in Ireland, Britain,Thailand, Malaysia and Qatar.

Eoin HurleyChief Operating Officer Construction Business Unit

Eoin Hurley joined the Kentz Group in 1986. Eoin’scareer in engineering and construction spans 25years, having participated on a wide variety ofprojects in Europe, the Middle East andpredominately in Sub Saharan Africa across manysectors of the industry. He spent much of this timeon site and also in operational and generalmanagement roles, including most recently theManaging Director of the Southern African Region.

Mike MurphyChief Operating Officer Technical Support ServicesUnit

Mike Murphy joined the Kentz Group in 1987. Mikehas worked in project management anddevelopment capacities on major projects acrossthe Benelux, Southern Africa and Middle East andhas also served as Business Development Managerin both the South East Asian and the Caribbeanregions of the Group.

key executives and organisation 17

The Management Executive Committee (MEC) was formed in April 2008. The MEC meets

six times annually. Its main focus and responsibilities are:

� Overseeing the Safety Leadership Charter

� Carrying out risk reviews on all level 4 projects throughout the Group

� Reviewing Group financials, annual budgets and forecasts

� Ensuring appropriate guidance is given to analysts

� Planning news/project announcements

� Reviewing Group backlog position across the Group

The MEC provides strategic guidance and perspective over and above the day-to-day

operations of the business.

Ed PowerChief Financial Officer

Ed Power joined the Kentz Group in 1990. He wasappointed Chief Financial Officer in 2002. He hasserved as Group Financial Controller of Kentz Groupsince 1995 and as Group Financial Accountantsince 1990.

Rory O’DonnellGroup Development Officer

Rory O’Donnell joined Kentz in 1995. Rory startedhis career with Shannon Aerospace in Ireland wherehe worked closely with the Kentz Group toundertake one of the largest aircraft maintenancefacilities in Europe. He then relocated to SouthernAfrica with the Kentz Group. Since joining Kentz hehas served in several managerial roles in SouthAfrica and the Middle East.

Eamonn O’HanlonGroup Projects Services Officer

Eamonn O’Hanlon joined Kentz in September 1982.Eamonn has held a number of senior positions in theMiddle East (Iraq, UAE, Saudi Arabia) and wasappointed Chief Operating Officer in 2002. InJanuary 2007 he was appointed Middle EastRegional Director based in Bahrain. In July 2009, hewas appointed Group Projects Services Officer withresponsibility for Procurement, IT, Project Controls,HSE, Quality Assurance and HR.

Adrian GriffinGroup Commercial, Contract & Risk Officer

Adrian Griffin joined Kentz in 1991 and has servedthe Group in Ireland, the UK, Europe, SouthernAfrica, South East Asia and Australia. His experienceincludes commercial and contract managementroles on major projects in the oil & gas, mining &minerals, pulp & paper, power generation andinfrastructure sectors.


Above: Kuldip Singh, Canadian citizenCountry Finance ManagerKentz employee for 6 yearsKentz world presence: Calgary, Canada

In order to foster future growth and development of the Group and to take into account

the new GBU structure, a new Board of Management was formed in 2009. This consists

of new and fresh management talent from across various disciplines throughout the

Group. Each new member was chosen for their blend of experience, energy and drive in

their specialist area. The main objective of the Board of Management is to support the

Group’s objective of becoming “a specialist service provider of choice”. It meets four

times annually and reports directly to the MEC.

The primary objectives of the Board of Management are:

� To implement the Safety Leadership Charter

� To oversee the implementation of strategic projects

� To share business development networks and strategies

� To support the development of future leaders

� To review HR requirements across the Group

� To review overall business and operational performance

� To promote senior management communication

Board of ManagementNeil O’Mullane

Group Senior Projects Director and Chairman of the Board of Management

Chris Warlow

Business Unit Manager, Construction, Middle East Region

Michael Naughton

Group Financial Manager

Keith Barry

Regional Development/Country Director, Southern Africa

Bob Greaney

Senior Project Director

James Cassin

Head of Group QA/QC and HSE

James Clarke

Group Strategic Development Manager

Kevin Moroney

Technical Support Services Operations/Business Manager

KP Raman

Regional Finance Director, Middle East

Takis Karallis

Head of Group HR

Terry Henebrey

Technical Support Services Business Unit Manager, Africa

Sean Lucey

Corporate Finance Manager – Special Projects, joins the Board of Management with

effect from April 2010

Right: Kentz Shutdown Team with Petro SA Platform Personnel,Petro SA First Area Platform Shutdown, Mossel Bay,

South Africa

key executives and organisation 19


OutlookDespite the volatility in world markets during 2008 and 2009, Kentz has reported a solid

performance and remains well positioned to continue to deliver strong growth in the

coming year. Sales for 2009 have increased by 9.5% and we have achieved another

record backlog, up 49.2% year-on-year, providing a strong basis to continue to perform.

The re-organisation of the Company into three GBUs has also laid the foundation for

continued growth, with each business unit increasing in geographic reach and sales

through new awards, during the period.

At the end of January 2010 the backlog stood in excess of US$1,564.8m, the largest in

the Company’s history, and the pipeline of target prospects was in excess of US$2.95bn.

Our strategy of focusing on oil and gas, petrochemicals and energy projects in developing

regions has been highly successful, and we continue to build on the strong foundations

in our core markets. In addition, we have seen a significant increase in our metals and

mining business in Southern Africa and Australia, which we expect to continue in the long

term.

Kentz is encouraged by the fact that a large number of International Oil Companies

(“IOCs”) and National Oil Companies (“NOCs”) have maintained their exploration and

production capital spending during 2009. Whilst capital expenditure plans for these

companies vary considerably for 2010, we are seeing positive capital investment

sentiments for upstream exploration and production projects from important Kentz

clients, such as Shell, ExxonMobil, Chevron, Qatar Petroleum, Abu Dhabi National Oil

Company and Saudi Aramco.

Oil prices have remained reasonably stable over the past six months, between US$70 and

US$85 per barrel. This provided the catalyst for some delayed projects to gain

momentum and subsequently move into project execution. We remain comparatively

insulated against the fluctuation in oil prices as our key regional market for oil production

services, the Middle East, has production costs that are amongst the lowest in the world.

The development of the Pacific Rim as a major LNG liquefaction centre gained strength

during 2009. Kentz has been awarded significant LNG projects in this area and we expect

investment to continue. Kentz’s strength is in its ability to provide engineering,

procurement and construction services to remote and logistically challenging projects,

and is therefore well placed to service this demand. Our GBUs are enabling us to fully

service our clients’ needs in these areas, as seen by the recent award of contracts

for approximately US$107m on the Pluto LNG Project and US$251m on the

Gorgon LNG Project.

Power and infrastructure projects also gained momentum in 2009 and our work in this

sector, in Southern Africa and the Middle East, has been particularly successful. We

expect to increase revenues in this area during 2010 and beyond.

With the award of new specialist EPC contracts, we have continued to expand our

services in brown field projects, plant upgrades and expansion developments. The award

of the Storex Control System Upgrade Project consists of the replacement of existing

process control systems and associated electrical and instrumentation devices for Abu

Dhabi Gas Liquefaction Company Ltd (“ADGAS”), an Abu Dhabi National Oil Company

(“ADNOC”) Group company, on Das Island, United Arab Emirates.

Above: Vicky Cronjie, South AfricanExecutive Assistant/Travel Co-ordinatorKentz employee for 11 yearsKentz world presence: Durban, South Africa

outlook, our markets and sector focus

Sales for 2009 have

increased by 9.5% and

we have achieved

another record backlog,

up 49.2% year-on-year,

providing a strong basis

to continue to perform.

Kentz’s maintenance and shutdown services group has been successful across all

our regional operations. A good example of this is the recent award for the shutdown

services and operations support contract with Exxon Neftegas Ltd, within the

Sakhalin 1 Development Project. This contract includes all personnel, permits,

equipment, transportation and front-end execution planning, as well as the

management of contractor and subcontractor resources for the shutdown during

2010. A number of our clients have also indicated that they are assessing

opportunities for “de-bottlenecking” plants as well as increasing the product quality,

productivity and capacity on existing installations, which will create further

opportunities for Kentz.

The central oil processing facilities in Yemen is representative of Kentz’s strategy for

providing complete oil production facilities, both early and permanent, in marginal

field developments. This specialist EPC contract for the 30,000 barrels per day (bpd)

facility will hopefully be the first of many similar type projects for Kentz on a global

basis.

Economic drivers

• Oil prices have remained stable at US$70-US$85 per barrel. Many OECD and non-

OECD countries are now moving out of recession, providing a positive long-term

view for oil and gas demand. This view is further supported by the capital

expenditure plans of many of Kentz’s core clients, which remain intact.

• Global demand for oil is on track for year-on-year growth, the first time since the

second quarter of 2008. The International Energy Agency (IEA) stated in February

2010 that oil demand is expected to rise from 84.9 million barrels per day (mpbd)

in 2009 to 86.5mbpd in 2010, with growth entirely in non-OECD countries. By

2030 this is forecast to reach 105mbpd. Of this, non-OECD countries will account

for 93% of the increase in global demand between 2007 and 2030, driven largely

by China and India, with fossil fuels accounting for 77% of the increase in the world

primary energy demand.

• The IEA predicts that an energy supply infrastructure investment of US$26,000bn,

or over US$1,100bn per year by 2030, is needed. This figure includes

US$13,600bn in power projects, US$6,300bn in oil projects (80% of which will be

targeted at exploration and development), and US$5,500bn in gas orientated

projects (61% of which will be targeted at exploration and development). Over half

of this energy investment worldwide is needed in non-OECD countries, where

demand and production are projected to increase at the quickest rate. These are

all key industries for Kentz.

Regional factors

• The Middle East Economic Digest (MEED) noted in January 2010 that it expects

contract awards in the oil, gas and petrochemicals industry in the Middle East to

reach US$97.9bn in 2010 and US$212.6bn between 2010 and 2012. Revenues

from the Middle East region made up 63.2% of total Kentz revenues in 2009.

Middle East backlog as of the end of January 2010 was US$676.2m

• Kentz estimates that over US$170bn of capital expenditure on LNG type projects

could take place in Australasia following the LNG new project development shift

from the Middle East to Australasia and, with a current backlog of project orders in

Australia totalling US$368.5m, Kentz is already ideally positioned to benefit from

this. Kentz is also seeing a significant expansion in projects in Sub Saharan Africa

and at the end of January 2010 had a backlog of US$444.9m for projects in this

region.

outlook, our markets and sector focus 21

Qatargas II Management Camp, Qatar

View of two-reactor structure, MIBK Plant Sasol I,Sasolburg, South Africa

Petrotrin Alky Acid Project, Trinidad


OverviewKentz is a fully integrated services solution provider delivering specialist EPC solutions,

construction, and technical support services for projects involving oil and gas upstream

developments (both offshore and onshore), LNG, gas to liquid (GTL), refining,

petrochemicals, power, metals and mining and infrastructure. Our core clients include

international oil companies, national oil companies and leading engineering and project

management companies.

Our global workforce, which averaged approximately 10,500 during 2009, completed

over 34 million man-hours of work on projects with a Total Recordable Incident Rate

(TRIR) of 0.17.

Above: Mohammed Yousuf Noor, Indian Human Resources ManagerKentz employee for 26 yearsKentz world presence: Al-Khobar, Saudi Arabia

Our global workforce,

which averaged

approximately 10,500

during 2009, completed

over 34 million man-

hours of work on

projects with a Total

Recordable Incident

Rate (TRIR) of 0.17.

Aerial view of Spinfex Village on BHP Billiton’s Rapid Growth Project 5 (RGP5),

Yandi, Pilbara region of Western Australia


New InitiativesThe successful transition of the Group to Global Business Units during 2009 has

allowed Kentz to offer Specialist EPC, multi-discipline Construction Services and

Technical Support Services across all our regions using regional centres of excellence

to support new projects and clients.

Separately, the development resources of our teams in Canada, the USA, Caribbean

and South America have been pooled to improve efficiency and information-sharing

across projects and targets in the Americas.

We continue to target turnkey onshore oil and gas early and interim production

systems, providing cost effective solutions to oil and gas process plants as well as all

balance of plant services in the upstream oil and gas market. We are presently

providing a 30,000-bpd central process facility in Yemen and targeting additional

marginal field developments.


Global Business Units

In 2009, Specialist EPC revenue was US$166.0m (2008: US$184.5m), Construction

services was US$348.1m (2008: US$279.2m); and Technical Support Services was

US$190.5m (2008: US$179.7m). Recent project award values range from: US$50m to

US$210m for Specialist EPC; US$30m to US$260m for Construction; and US$3m to

US$50m for Technical Support Services projects.

Our main aim is to be recognised across the globe as the preferred specialist solutions

provider for all of our clients, and we have continued to see strong demand for Kentz’s

services across our GBUs.

As a general rule, our specialist EPC contracts are fixed price, lump sum and are often

competitively bid; construction contracts are based on a re-measurable work unit rate;

and our technical support services are usually on a fully reimbursable basis. Our lump sum

fixed price contracts are required to meet specified criteria and undergo risk assessment

by the Risk Review Committee prior to submission.

Above: Lucky Makofane, Northern SothoStoremanKentz employee for 20 yearsKentz world presence: Midrand, South Africa

*Engineering, Procurement and Construction ** Total Systems Integration *** Front-end Engineering and Design

Specialist EPC * Construction Technical SupportServices

Onshore Modular ProductionFacilities

Turnkey Temporary Facilities

Turnkey Utilities and Offsite Facilities

Turnkey Port Facilities

Small Capital Project Solutions

Controls & Automation (TSI**)

Telecommunications Systems

Power Projects & Services

Site-wide Construction Solutions

Structural, Mechanical & Piping

Electrical & Instrumentation

Pre-EPC award (FEED***)

Integrated Project Management

Commissioning

Maintenance & Turnaround

Offshore Services

Specialist EPC Construction Technical SupportServices Services

Project Management • •

Engineering •

Design •

Procurement •

Construction • •

Commissioning • • •

Gross Margin Range Medium Medium Higher

Recent Project ValueRanges US$m (approx.) 50 – 210 30 – 260 5 – 50

Lump Sum •

Unit Rate •

Reimbursable •

Specialist Engineering, Procurement and Construction(EPC)

The Group has seen considerable benefits from the newly formed global Specialist EPC

business unit, resulting in a record backlog for the business line of US$837.3m as of the

end of December 2009. Middle Eastern and African regions have continued to experience

sustained growth in backlog and this has been supported by two large EPC contract

awards in the Australasian region. There continues to be strong demand for onshore oil

and gas process facilities and infrastructure in these particular regions. EPC revenues in

2009 were US$166.0m, down from US$184.5m in 2008 due to some delays in the award

of new projects in the latter half of 2008. However, there have been a number of new large

EPC contracts awarded that have increased our EPC backlog by over 165% since that

time.

Kentz has continued to develop a strong presence in Australia, with a number of new

contract awards. Chevron Australia Pty Ltd awarded Kentz, in a joint venture with Decmil

and Thiess (TDKJV), an AUD$500m contract for the Gorgon LNG Project Construction

Village on Barrow Island. The accommodation facility is expected to accommodate 3,300

construction workers. All materials for the project will be shipped to the remote island via

landing craft transport from Dampier in the northwest of Australia. The Gorgon Project is

a joint venture between the Australian subsidiaries of Chevron (Operator), ExxonMobil and

Shell, to develop the Greater Gorgon gas fields, located 130-200km off the northwest

coast of Western Australia. The Greater Gorgon gas fields contain resources of about 40

trillion cubic feet of gas, and are Australia’s largest-known gas resource.


Gorgon LNG Project site, Barrow Island, Western Australia

SPECIALIST EPC

The Group has seen

considerable benefits from

the newly formed global

Specialist EPC business

unit, resulting in a record

backlog for the business

line of US$837.3m as of the

end of December 2009.


A second contract award by Chevron Australia Pty Ltd for the Gorgon Project is the EPC

telecommunications package, awarded to Kentz, through its Australian arm Kentz (Pty)

Ltd. Owing to the remoteness of the project site, the AUD$150m contract calls for the use

of state-of-the-art telecommunications technology, including converged IP networks for

multiple data streams, satellite data communications, navigational aids including radar

and vessel tracking, meteorological and oceanographic systems, site-wide WAN/LAN

with network management, central fire and security monitoring, and data transmission on

both fibre optics and microwave.

In Qatar, Kentz continues to be involved in the prestigious Shell Pearl GTL Project

including a number of Specialist EPC, Construction and Technical Support Service

packages in excess of US$400m. During 2010, the main focus will be on delivering the

commissioning support of utilities packages and enabling the commencement of critically

important process utilities, a precursor to plant-wide systems completion. During 2009

more than 2,800 specialist personnel were working on the project. Kentz also has a

general services contract to support project completion activities.

Engineering and procurement has commenced on the EPC US$85m Ras Laffan Refinery

Port Project for Qatar Gas. This contract will include full site development of the main fuel

truck distribution point for the Laffan Refinery Tank Farm, and the installation of the

interconnecting pipelines between the tank farm, loading facility and the Ras Laffan jetty.

Kentz has also recently been awarded an EPC contract to replace two existing glycol

regeneration trains at Qatar Petroleum’s Fahahil Stripping Plant in Dukhan, Qatar.

EPC activities continue on the Sidra Project, where Kentz is carrying out a US$208m

contract for the design, supply and delivery of the main electrical systems on the Qatar

Foundation and Qatar Petroleum-supported Sidra Medical and Research Centre.

Separately, work has commenced on the Qatargas Operating Company’s phase six LNG

storage and loading facility in Ras Laffan Industrial City, which is located on the northeast

coast of Qatar. Kentz is providing electrical, instrumentation and telecommunications

services.

In Abu Dhabi, engineering and procurement has commenced on the US$30m Storex

Control System Upgrade project for ADGAS on Das Island, which will run for three years.

The project consists of the replacement of the existing control system and associated

electrical and instrumentation devices. Process units include ADGAS LNG, LPG, Sulphur

Storage and Jetty Loading facilities, which will then be integrated into the existing systems

of the three LNG/LPG processing facilities.

Capital spending on some of the large oil and gas projects in Saudi Arabia was delayed

during late 2008 and early 2009. However, some of the delayed projects at export

refineries in Jubail and Yanbu are now proceeding, with a final investment decision for

Yanbu expected in 2010. Saudi Aramco also continues to move ahead in a joint venture

with Dow to upgrade and integrate the existing Rastanura refinery with a large-scale

petrochemical complex through a projected spend of US$26bn. In addition, Saudi

Aramco has a clean fuels programme to upgrade its existing refineries to meet US and

European emission standards in future years and Kentz is well positioned to participate in

these upcoming mega-projects. Our track record in Saudi Arabia over the last 33 years

coupled with Saudi Aramco’s stated intention to increase both onshore and offshore oil

and gas production suggests this is an area set for growth.

Above: Joel Peter D’sa, IndianAdministration ManagerKentz employee for 15 yearsKentz world presence: Doha, Qatar

In 2009, Specialist EPC

revenue was US$166.0m.

Recent project award

values range from:

US$50m to US$210m

for Specialist EPC.

Engineering and procurement has also commenced on the US$10m Isopentane unit

for Petrokemya.

We continue to remain focused on the development of important infrastructure with

the Royal Commission for Jubail and Yanbu, including the provision of engineering,

consultancy, procurement and on-site construction support services for the

development of approximately 2,000 hectares of land to the west of Jubail 2.

In 2009 Kentz was awarded an additional five year contract on Jubail 2. This

development of approximately 1,000 hectares of land will require 850,000 man-hours

of engineering and consultancy services. The scope of work will include engineering

studies and assessments for urban planning; the design site development for

Mutrafiah, Jalmudah, and Regga; and infrastructure projects, including landscaping,

schools, universities, sports facilities, community buildings, clinics and power

systems. When completed, Jubail Industrial City will be the largest of its kind in the

world. Future scopes of work under discussion with the Royal Commission include

security systems for the complete industrial area, and the development of a railway

system from the new industrial area to the port.

Kentz continues to provide EPC services to Sipchem, one of the largest, fully-

integrated, petrochemical companies in the Middle East, owned and operated by the

private sector. Kentz is executing EPC projects for the product pipelines, port

expansion and some buildings on the new major Acetyls complex. The Acetyls

complex consists of an Acetic Acid, Vinyl Acetate Monomer and a Carbon Monoxide

plant. Kentz is also contracted to provide EPC services on several smaller upgrade

projects in the region.

In Yemen, the award of the US$146m contract for Kentz’s EPC services on the

onshore 30,000-bpd oil production facility follows the formation of Kentz Global Oil

and Gas Process Systems Ltd., a joint venture with GPS Inc. This project is a

significant step forward in upstream onshore oil and gas production facilities business

for Kentz.

In South Africa, design work has continued on the Gautrain Tunnel Ventilation

systems and an additional EPC contract for the tunnel control systems.

Our newly-signed engineering and construction agreement with Sasol is also getting

off to a strong start with the award of a number of small EPC packages.

In Ireland, we continue to provide specialist EPC services to the healthcare sector as

well as the Aviva Sports Stadium, where we are providing construction management

and installation for the electrical systems and EPC services for the

telecommunications systems. This is expected to be completed during 2010.

In Canada, our work on the oil sands Kearl project has now grown to an expected

value of US$25m, and will include additional engineering and procurement services

for the plant-wide telecommunications activities.


Installation of process column on MIBK Project,Sasolburg, South Africa

Aerial view of Abu Dhabi National Gas Liquefaction Company(ADGAS) Project, Das Island, UAE

Construction Services Kentz manages and executes multi-discipline construction projects, including

construction and site management, field engineering and procurement, HSE and testing

for our clients. We also specialise in the provision of commissioning and start-up services

in conjunction with, or independent of, project construction activities. The Group’s

workforce has wide experience in the commissioning and start-up of large and often

complex plant facilities in remote locations.

The construction business unit performed particularly well during 2009 with 24.7%

growth in revenues to US$348.1m (2008: US$279.2m). Project activity across sectors

such as oil and gas, metals and mining and power sectors remains strong for Kentz,

evidenced by the volume in both natural growth and new awards during 2009. We have

also continued to supply significant construction services on industrial related projects to

Fluor, Technip and Linde in Qatar. The construction business unit had a backlog of

US$529.4m as of the end of December 2009

In Saudi Arabia, Kentz’s participation in the Aramco Khurais Project was primarily focused

on supporting the completion of the plant-wide electrical, controls and automation

systems to support start-up. This gas processing plant and water injection facility has a

capacity of 1.2mbpd of high-quality Arabian light crude for Saudi Arabia’s export facility.

The Khurais programme will also increase the capacity of the Qurayyah seawater injection

system by 4.5mbpd of treated water for injection at Khurais and South Ghawar fields.

In Qatar, construction has started on Qatar Gas’s new LNG Berth 6 loading facility where

Kentz is providing instrumentation, electrical and telecommunications services.


Above: Anastasia Gaus, RussianHR Logistic Co-ordinatorKentz employee for 2.5 yearsKentz world presence: Yuzhno-Sakhalinsk, Russia

CONSTRUCTIONSERVICES

The Construction business

unit performed

particularly well during

2009 with 24.7% growth in

revenues to US$348.1m

(2008: US$279.2m).

The Construction business

unit had a backlog of

US$529.4m as of the end

of December 2009.

Unit 6 ACC support steelwork,Medupi Project, South Africa


In the UAE, we continue to be involved with a number of major EPC contractors. We are

currently completing the construction and installation services for Bechtel on the GASCO

OGDIII gas development programme. This is designed to produce 125,000bpd of

condensate and 12,000 tonnes per day (tpd) of NLGs, including about 3,200tpd of

ethane. It will also recycle an equal volume of produced gas into a reservoir via a high

pressure gas injection system.

In Sub Saharan Africa, Kentz has started construction on the Moatize Coal Project in

Mozambique, worth approximately US$69m. The project is being developed by Vale.

Kentz will undertake the structural (steel), mechanical, electrical, instrumentation and

piping erection work for the coal processing plant. A number of additional coal projects

are being planned in the region. Kentz has been active in Mozambique for over 10 years,

and we are well placed to secure future contracts in this region.

Elsewhere in Sub Saharan Africa, Kentz is supporting the maintenance and operation

phase for the Kenmare Resources Moma Mineral Sands Project in Mozambique, a

700,000 tonnes titanium minerals facility. In Madagascar, we continue to provide

maintenance services on the Rio Tinto Mineral Sands QMM Ilmenite Titanium Dioxide

Project, which has initial production of 750,000 tonnes of IImenite per annum.

In South Africa alone there is estimated to be over US$98bn of infrastructure projects

taking place over the next three years that Kentz is ideally positioned to support. In 2008

Kentz was awarded the Medupi power contract worth in excess of US$250m. Medupi is

a greenfield 6 x 800MW coal fired power station that forms part of a US$12bn investment

programme by the South African Power Supply and Utility Group Eskom, which will span


over six years. Our contract is with GEA Energy, the German technology house, which

has responsibility for the turnkey delivery of the overall air cooled condensing system for

Medupi. Kentz’s scope of work includes the procurement, detailing, shop fabrication and

installation of approximately 36,000 tonnes of steel structure and plate work, 40,000

tonnes of mechanical equipment and 1,800 tonnes of piping over a four and half year

period.

In Australia, Kentz, together with its Australian joint venture partner Thiess Pty Ltd

(Thiess), has also been awarded an US$77m contract for electrical and instrumentation

installation services on Woodside’s Pluto LNG Project. Separately, Kentz has been

awarded the site wide specialist instrumentation contract bringing the combined value of

work secured to date on the project to in excess of US$107m.

From January 2010, following an agreement with Thiess, Kentz has now taken over

management control of the joint venture company, although its shareholding remains the

same. The joint venture company has changed its name to Kentz E&C Pty Ltd.

In the Caribbean, we are mobilised on three new construction projects for the Petrotrin

Refinery in Trinidad & Tobago. Kentz is providing construction services to the

Isomerisation Project, and two contracts on the Acid Alkylation Project – part of the

Gasoline Optimisation Programme. The isomerisation unit will produce isomerate, which

improves the octane rating of light gasoline, thus enabling Petrotrin to increase supplies

to premium markets.

Above: Joe Cassin, IrishGroup Projects Controls ManagerKentz employee for 25 yearsKentz world presence: Juffair, Bahrain

Qatalum Smelter, Mesaieed, Qatar


Technical Support ServicesThe Technical Support Services business unit performed well during 2009 with growth of

6.0% in revenues to US$190.5m (2008: US$179.7m). We have seen demand for

technical services at remote-based projects and continued growth on projects where

Kentz is also executing either specialist EPC or construction services. The Technical

Support Services business unit backlog was US$130.7m as of the end of December

2009.

Kentz works in the early stages of project development at the front-end engineering and

design phase (FEED) before EPC works commence. Kentz performs specific FEED study

programmes and has teams of specialist personnel engaged with the client delivering

validation and budgeting. Once the project receives approval, a team then typically works

as part of an integrated project management group, providing specialist services and

systems to support the management of the project.

Kentz also provides maintenance, shutdown and turnaround management services for

clients on an international basis, as well as commissioning services for the upstream

(offshore and onshore), refining, petrochemicals, metals and mining industries.

We have recently been awarded a number of Technical Support Service contracts with

core clients for commissioning services on re-gasification facilities and early production

systems. Many LNG developments are expected to come on stream during 2010,

including projects in Russia (Sakhalin), Qatar, Indonesia and Europe; all of which will

provide opportunities for Kentz to utilise our significant commissioning and start-up

expertise.

A significant award for Kentz in 2009 has been a five-year Global Framework Continuing

Engineering Service Agreement with ExxonMobil Global Services company. The

framework agreement covers the provision of engineering, design and technical support

services to ExxonMobil projects around the world.

In Sakhalin, both Sakhalin 1 and 2 developments are going through extended phases that

are being developed under their original license agreements. On Sakhalin 1, Kentz is

working on Exxon Neftegas’s second (Odoptu) and third (Arkutun-Dagi and Chayvo

expansion) phase developments. We have now started providing support and

construction services on the Chayvo Expansion Project following a recent award and

some preliminary engineering support services on Arkutun-Dagi. We are also providing

technical support and construction services, including commissioning and project

management personnel, to Sakhalin Energy (SEIC) on the Sakhalin 2 facilities.

Kentz was also awarded a US$25m shutdown services and operations support contract

with Exxon Neftegas Ltd, within the Sakhalin 1 Development Project, through its Russian

joint venture operating Company Kentz DEM LLC. The contract includes the provision of

all personnel, permits, equipment, transportation and front-end execution planning, as

well as the management of contractor and subcontractor resources. The shutdown is

scheduled to take place during the third quarter of this year.

In South Africa, we continue to provide construction and maintenance, shutdown and

turnaround services to Sasol facilities, including Natref, Engen, Hosef Fibres and Petro

SA. Kentz has been a constant presence on these projects since 2002. Several

shutdowns are in the planning phase for Engen and a number of Sasol plants.

In Indonesia, we are providing commissioning and start-up support personnel for the

20,000-bpd Cepu early production facility.

TECHNICAL SUPPORTSERVICES

The Technical Support

Services business unit

performed well during

2009 with growth of 6.0%

in revenues to US$190.5m

(2008: US$179.7m).

The Technical Support

Services business unit

backlog was US$130.7m

as of the end of December

2009.


In Kuwait, Kentz has a five-year PMC support services contract, which includes the

provision of engineering and consultancy resources and services to manage national oil

and gas projects.

Kentz is also providing completion and commissioning services for the Equate II

Petrochemicals Complex to support plant transition from construction through

completions and to start-up and production.

In Qatar, Kentz has been awarded a five-year contract to provide engineering support

services for Qatar Petroleum’s offshore operations for plant change requests and

engineering studies. The scope of the project includes all engineering disciplines inclusive

of process, mechanical, piping, structural, pipeline, electrical and instrumentation.

In Europe, Kentz provided commissioning support services for the LNG re-gasification

facilities at South Hook LNG in the UK and for Adriatic LNG, Italy. In Norway, during 2009,

we continued to support Aker Kvaerner offshore modular barge works for the Kashagan

Project in Kazakhstan.

Revenue by Business UnitBased on FY 2008 Based on FY 2009

US$643.4m US$704.7m

Geographical ReviewOver the past reporting period, we have increased our project execution capacity in our

core markets, especially in the Middle East, Australia and Southern Africa. In the Middle

East revenues have increased to US$445.6m (2008: US$406.0), making up 63.2% of

Group revenues. In Southern Africa, our revenues have increased to US$158.6m (2008:

US$131.1m) making up 22.5% of Group revenues. We have expanded our footprint and

we are in the process of delivering projects with core clients in three new countries – Italy,

Indonesia and Yemen.

Kentz is now established and operating in 26 countries worldwide, including the Middle

East, Southern Africa, Australia, Far East Russia, the Caribbean, South East Asia, the

USA, Canada and Europe.

The Middle East has been our strongest growth area and is still showing signs of

significant future expansion. New projects are being developed by both national and

international oil companies, especially in the UAE and Saudi Arabia for oil and gas

production and refining industries.

Above: Mary McGrath, IrishSenior Recruitment OfficerKentz employee for 31 yearsKentz world presence: Clonmel, Ireland

Over the past reportingperiod, we have increasedour project executioncapacity in our coremarkets, especially in theMiddle East, Australia andSouthern Africa. In theMiddle East revenueshave increased toUS$445.6m (2008:US$406.0), making up63.2% of Group revenues.

29% �Specialist EPC

�Construction

�Technical Support

Services

43%

28% 24%

49%

27%


Elsewhere, developments in the Caribbean remain small, but existing projects allow us to

maintain a presence there. Our activities in this region support the potential to develop in

new areas such as Brazil, where we have now mobilised a small office as we focus on oil

and gas production for both the onshore and offshore developments. Petrobras has

announced its 2009 to 2013 business investment plan of US$174.4bn, which includes

US$165.4bn for upstream development, refining, gas, energy and petrochemicals

projects.

Sector Review During 2009, 82.9% of our revenue was derived from oil, gas and petrochemicals projects

(2008: 82.7%), 6.5% from our power operations, (2008: 0.7%), 2.4% from our metals and

mining operations, (2008: 11.1%) and 8.2% from other businesses including

governmental, infrastructure and sporting arenas (2008: 5.5%). In addition, we have a

joint venture business with Thiess in Australia, Kentz E&C Pty Ltd, for which the majority

of the work is for mining, minerals and metals clients. Our share of revenue accounted for

an additional US$36.2m during the period.

Revenue by IndustryBased on FY 2008 Based on FY 2009

US$643.4m US$704.7m

During 2009, 82.9% of ourrevenue was derived fromoil, gas and petrochemicalsprojects (2008: 82.7%) 6.5%from our power operations,(2008: 0.7%), 2.4% from ourmetals and miningoperations (2008: 11.1%)and 8.2% from otherbusinesses includinggovernmental,infrastructure and sportingarenas (2008: 5.5%).

Revenue by Region and Business Unit

53%

30%

8%

7%

2%

51%11%

1%

32%

�Oil & Gas

�Petrochemical

�Mining & Metals

�Power

�Other

5%


Client ReviewKentz continues to maintain a good balance and mix of clients with 48.2% of revenues in

2009 coming from end-user international and national oil companies (2008: 48.0%).

These clients include Shell, Exxon Mobil, Chevron, Sasol, BP, Saudi Aramco, Kuwait Oil

Company, Sipchem, Qatar Petroleum, Gasco, Adnoc and KNPC. A further 45.1% of

revenues came from leading engineering and project management companies (2008:

52.0%), such as Fluor, Foster Wheeler, Linde, GEA, Snamprogetti, Udhe and Bechtel, and

the remaining 6.7% from other sources. Key clients in the mining and metals sector

include Mittal Steel, Rio Tinto, Kenmare Resources, Xstrata and Anglo Coal.

Backlog and Revenue VisibilityBacklog is defined as the future work load on our books for the EPC, Construction and

Technical Support Services GBUs, comprising current contracts not yet completed and

new orders received. Backlog is not an audited measure and other companies may

calculate the measure differently.

The Group’s backlog of work as of 31 December 2009 was US$1,497.4m, up 49.2%

from US$1,003.8m as of 31 December 2008. We anticipate approximately US$661m of

the backlog will fall into 2010, an increase of US$141m compared to the backlog at 31

December 2008 for execution in 2009. The remaining US$836m will fall into 2011 and

beyond, which is an increase of US$352m.

During 2009 our total order intake to backlog was US$1,039.4m. The second half of 2009

was highly successful, with new orders and natural growth from existing projects

increasing by 44% (H1 US$425.8m and H2 US$613.6m) over the first half of 2009. An

important part of Kentz’s success has been its ability not just to win new business, but to

achieve growth from its existing contracts. Approximately US$206.7m of new orders were

generated from current contracts during 2009, most of which converts to backlog for

2010. The EBIT and PBT margin expectations for 2009 from this backlog are expected

to be generally in line with the margins we delivered in 2009.

Above: Mark Preston, AustralianProject ManagerKentz employee for 4 yearsKentz world presence: Queensland, Australia

The Group’s backlog ofwork as of 31 December2009 was US$1,497.4m,up 49.2% fromUS$1,003.8m as of 31 December 2008.

As of 31 December 2009,Kentz’s pipeline for newwork is valued in excessof US$2.91bn.

Backlog and Prospects by Global Business Unitat 31 December 2009

46%28%

3%

23%

Backlog by Region

� Middle East

� Africa

� Arctic

� ACE

SBM Calm Buoy Project, Adgra Dos Reas, Brazil

Walkway in “Galleria” town centre, King Abdullah University ofScience and Technology, Thuwal, Saudi Arabia

Indeni Refinery after replacement,Ndola, South Africa


All business units have entered 2010 with significant backlog. Of the backlog at 31

December 2009, 55.9% came from EPC projects (31 December 2008: 31.5%),

35.4% came from Construction projects (31 December 2008: 51.5%) and 8.7%

came from Technical Support Services (31 December 2008: 17.0%).

However, it is important to note that our projection of future work stretches beyond

our backlog. At any given time we typically have a number of additional letters of

intent and new orders that are waiting to be converted to contracts. The combined

value of these currently sits in excess of US$43m.

Across all our regions we have a number of prospective projects that are under

development in bidding and proposals. As of December 2009, Kentz’s pipeline for

new work is valued in excess of US$2.91bn. 47.2% of these prospects are EPC

projects, 38.5% are Construction projects and 14.3% are Technical Support Services

projects. In addition to the above, we are also involved in a number of strategic

prospects that are being developed by our clients and are in pre-investment stage.

Overall our visibility of future work has several layers, and this gives us confidence for

the future.

Growth Strategy Including Acquisitions and BusinessOpportunitiesWe continually monitor trends within our industry and evaluate their potential impact

on our regions and sectors. Our understanding of the ever-changing industrial

environment means that we are able to enhance and improve the services that we

offer to our clients on an ongoing basis.

We are building on the success of our GBU roll-out to challenge the new

opportunities within the oil and gas production facilities; from marginal and captive

onshore and offshore field developments across Africa, through to extensive major

field developments such as those in Brazil and Iraq.

Our GBUs have also enhanced the continued expansion within our core regions

through the removal of regional operational bottlenecks. This will provide expansion

opportunities within many of our operation centres, including Saudi Arabia and

Canada.

Whilst the Americas have in the past been a minor revenue centre for the Group, we

will create a new regional development focus during 2010 to take maximum

advantage of our new global operations.

We still plan to complete an acquisition in the near term within the upstream oil and

gas industry. We are in discussions with potential targets, and our priority is finding

an entity that will provide a good strategic investment as well as creating value for our

shareholders.

We will continue to evaluate further joint venture and alliance opportunities with other

industry participants where we perceive such partnerships can reduce and diversify

risks, provide greater cost efficiency, increase the number of opportunities that can

be pursued, and capitalise on the client relationships of each party.


our HSE performance

Above: Arrol Millette, TrinidadianSupervisorKentz employee for 7 yearsKentz world presence: Trinidad, West Indies

95% of projects completed without LTI

79% of projects completed without

recordable incident

50%reduction in first aid cases

816average number of attendees at

HSE training programmes during

2009

66%increase in reporting of

near-misses

62%of management inspections

completed by members of the

Management Executive

Committee

Health and safety remains at the heart of everything we do at Kentz. We believe all

employees, whether on site in Far East Russia or in the planning office in Doha, should

have a safe and orderly working environment. The only way to achieve this is to instil the

highest held Group standards in every individual working for Kentz.

Kentz continues to designate time and resources to refining our values, disseminating

them across the Group, training personnel on the process and procedures, implementing

management checks and inspections, and making our safety statistics available for all to

review in order to empower people to take safety seriously in every area of their

working life.

During 2009, Kentz completed 34.8 million man-hours of work with a Total Recordable

Incident Rate (TRIR) of 0.17, a measure of the rate of recordable workplace injuries,

normalised per 100 workers per year. Our target is always to achieve an incident-free

working environment, but this remains an industry-leading TRIR, marginally up from 0.12

in 2008.

In 2009, Kentz worked on 121 projects without a recordable incident; defined as a fatality,

lost time accident, restricted injury duty and/or a medical case. This equates to 79% of

our projects being incident and injury free.

The measure of Lost Time Incidents (LTIs) does not include medical cases, of which there

were 18 at Kentz during 2009, the equivalent of 95% of our projects proceeding during

the period without a lost time incident.

In August 2009, the project team at the OGD III Project in the United Arab Emirates

completed over eight million man-hours over three years without a recordable incident, a

major achievement and a credit to their teamwork. The HSE leadership shown on this

project is characteristic of the leadership culture that has evolved within Kentz over the

past number of years. Elsewhere in Qatar we also completed over seven million man-

hours on the Pearl GTL E&I Services Project at Ras Laffan Industrial City without a lost

time accident.

During 2009 we completed the roll-out of Kentz’s Best Practices DVD. This DVD seeks to

outline the best practices that are being used on Kentz’s projects around the world and

link these back to our “9 habits of highly effective HSE leaders”. The DVD provides a

valuable tool to supervision and management teams on our projects to ensure an

incident- and injury-free site.

our HSE performance 37

Kentz 9 Habits of Highly Effective HSELeaders

Accept & Embrace Our HSE VisionEmbrace, believe, walk, talk and consistently demonstratecommitment to achieve our HSE vision.

Put Health & Safety First

Continuously reinforce the primary core value of Health &Safety so that this value takes priority in our businessobjectives.

Take Personal Responsibility and beAccountable

Ensure active participation throughout our organisation andthose of our partners and subcontractors at all levels, sothat personal responsibility and accountability for HSE isthe creed, and encourage all our people to “Be yourBrother’s Keeper”.

Express and Foster Genuine Care

Remember that everyone involved in our business is anindividual, with a name, a family and a future, and take careof them accordingly. Foster a culture of mutual carethroughout our organisation and those of our partners andsubcontractors.

Be CredibleBe honest, dependable and consistent, admitting mistakeswhen they occur and asking for ideas for improvement.Continuously demonstrate knowledge and awareness ofHSE standards.

Communicate Often and EffectivelyUnderstand, appreciate and continuously promote HSEleadership responsibilities, policies and procedures throughall means possible. Continuously ask others what they arethinking, and listen to and respect concerns raised byothers.

Give RecognitionVisibly acknowledge and express appreciation for goodHSE behaviour, and implement, fund and participate inrecognition programmes.

Provide Resources & TrainingRealise your training goals and needs, and strive to providethe best possible resources and facilities along withstructured craft & HSE training.

Adopt a Systematic ApproachEstablish a balanced score card of relevant andconstructive leading and trailing indicators to benchmark,measure and trend HSE performance. Constantlychallenge the effectiveness and relevance of the HSEsystems, procedures and programmes for continuousimprovement.

Senior Management InspectionsDuring the year, members of our Management

Executive Committee completed over 36 field

inspections on projects around the world. The field

inspections include an in-depth discussion with the

project managers about the HSE culture on the

project and aimed to consider the commitment and

credibility of the project management team, and the

rewards and recognition programmes being

implemented on site. In addition to these discussions,

there is a 77-point inspection guide for the site

walkabout.

The main objective of the inspections is to ensure

management continue to adopt the “9 habits of highly

effective HSE leaders” and implement these into their

everyday working practices.

The chart below displays the countries in which senior

management inspections have taken place (figure 1).

Figure 1: Countries of Inspections

Ireland

Saudi Arabia

Abu Dhabi

Qatar

South Africa

Russia

Italy

Thailand

Australia


Above: James Clarke, BritishGroup Strategic Development ManagerKentz employee for 18 yearsKentz world presence: Houston, Texas, USA

Back 2 Basics (B2B) ProgrammeIn 2009 we offered over 95 HSE training courses on our projects, covering topics such as

general inductions, site orientation, leadership behaviours, fire safety and working at

heights. The majority of these courses are provided in-house with our resident training

officers. However, at our Medupi Project in South Africa, for example, we employed

external training consultants to run our “working at heights” course due to the nature of

the risks involved.

Within the B2B programme there, we have 16 Life Critical Activities (LCA) training

programmes which, depending on the scope of the project, are mandatory on all projects.

During the year we trained over 3,000 employees in electrical safety and trained over 350

drivers in defensive driving techniques.

Our Children, Our FutureThis year’s theme for our annual HSE calendar competition was “Safety in the Home”.

The idea behind the theme is to encourage employees to transfer HSE practices from the

project to the home and pass them on to future generations The competition is open to

all employees, their children, nieces, nephews and grandchildren.

This year’s HSE Calendar cover winner was Neil Ivan M Mabansag from Qatar, shown here with Bill Nucom, HSE Country Manager, Qatar, and James Cassin, Group QA/HSE Manager

Some of the lucky winners’ submissions from the many Kentz offices around the world

Kentz Pearl GTL Team, Qatar


SOCKSOne of our initiatives for 2009 was the development and implementation of the Safety

Observation Card System of Kentz (SOCKS) programme. The SOCKS programme is a

behaviour-based safety programme, observing the behaviour of our workforce in relation

to use and maintenance of personal protective equipment (PPE), working postures, use

of tools, supervision interaction and competence to perform a task safely. Since the

programme started in February 2009 the percentage of our employees observed working

within these guidelines safely has improved from 96% in March to 99% in December.

Figure 2 depicts the percentages observed working safely on a monthly basis and figure

3 depicts the number observed working unsafely.

The results from the observations are reviewed monthly by the Management Executive

Committee. Any unsafe behaviour identified is followed by corrective action and

implemented through the toolbox talks and revised training programmes and rolled out to

all our projects.

The charts below highlight the use and condition of various types of personal protective

equipment (PPE). Figure 4 shows the overall percentage of people using their PPE

correctly and also maintaining the PPE properly. Other areas observed are the

supervision, work posture, training, tools and equipment.

Figure 3Figure 4: Personal Protective Equipment (PPE) – Safeand Unsafe percentages, month by month

Figure 5: Presence and Communication of Supervision– Safe and Unsafe percentages, month by month

Figure 6: Work Postures – Safe and Unsafepercentages, month by month

Figure 7: Training – Safe and Unsafe percentages,month by month

Figure 8: Tools/Equipment – Safe and Unsafepercentages, month by month

Figure 2


Above: Jacob Mogano, South African, ZuluBoiler Maker SupervisorKentz employee for 27 yearsKentz world presence: SAS Reactor Project, South Africa

Balanced Score CardIn 2009, the HSE department identified the critical success factors (CSFs) that contribute

to the overall goal and vision of the Company. The corporate Balanced Score Card (BSC)

was developed and has identified the following three CSFs; safe workplace, senior

management inspections and B2B training. In determining a safe workplace, we use the

following sub measures: performance HSE indice (PHSEI), near-miss reporting,

implementation of the SOCKS programme, regional and country manager bi-monthly

inspections, the monthly health campaign and head office environmental programmes.

We increased our overall reporting of near-miss incidents by 66% compared to 2008. The

increase in near-miss reporting allows us to further improve the working environment for

all our employees.

During the year each country developed and implemented a health campaign on a

monthly basis. The campaign focused on general health issues and also health issues

that may arise from construction work. As part of these monthly health campaigns, we

also rolled out our H1N1 virus awareness and isolation programme. The awareness

programme is based on the advice and guidance issued by the World Health Organisation

and local health ministries in Kentz’s countries of operation. Some of the other campaigns

focused on malaria control, the heart and food safety.

Every office and project within Kentz conducts an environmental impact assessment and

based on this, Group environmental objectives are established.

The results for our overall HSE BSC are shown below.

Some of the Kentz employees who worked on the OGD III Project, Abu Dhabi

A Year in NumbersThe number of man-hours worked by Kentz and our subcontractors was 34,879,673.

Kentz executed over 32 million of these man-hours using our own workforce.

The average score of our Performance HSE Indices for 2009 throughout all our projects

and offices was 96%.

Average number of attendees in HSE training course was 816.

Safety Leadership AwardThis year the CEO Safety Leadership Award was presented to Garry Ford, Project

Manager on the Pearl GTL (E&I Services) Project in Qatar. The project is currently still in

progress and at the end of 2009 had completed over seven million hours without a lost

time accident. Garry has worked for Kentz on projects in Trinidad, Russia-Sakhalinsk

and Qatar.

Notices & Breaches and Prosecutions Kentz received NO statutory notices and/or NO prosecutions related to HSE in 2009.


Moma Mineral Sands Project Team, Mozambique

Hugh O’Donnell presents Garry Ford with CEO SafetyLeadership Award

Rob Fietz, HSE Co-ordinator, pictured at SafetyCabinet, Thiess Kentz Office, Perth, Australia

Saudi Kayan Safety Team, Saudi Arabia


world reach 2009

Suncor Voyageur Oil SandsTechnical support services to client’s project team, Alberta, CanadaImperial Oil, Kearl Lake Oil SandsConstruction execution planning for utilities,Alberta, CanadaImperial Oil, Kearl Lake Oil SandsEngineering and procurement for site-widetelecommunication systems, Alberta, Canada

Aviva StadiumProvision of EPC services for stadium systems andelectrical services at new world-class 50,000-seatstadium, Dublin, IrelandWaterford Regional Hospital Design, procurement and construction of specialistelectrical and telecommunications systems, Waterford,IrelandFÁSMaintenance services, Waterford and Wexford, IrelandGalway Clinic Accommodation Wing and Day Care CentreElectrical and IT/communication scope for theaccommodation wing and day care extension at theGalway Clinic, Galway, IrelandEricsson - Comms 3 Optimisation ProjectCivil, mechanical and electrical works on data centreupgrade for Ericsson in Athlone, Ireland

Fluor Kuwait, PMCFive-year project management support services contract for Fluor Kuwait at the Kuwait Oil Company, KuwaitKuwait Paraxalene Production Company (KPPC)Supply of engineering support staff to KPPC on theAromatics Complex as part of the de-bottlenecking andproduction enhancement team at Shuaiba, KuwaitKuwait National Petroleum Co. (KNPC) Consultancy services to KNPC is in relation to performanceand the reliability study of medium voltage switchgear at theMina Al-Ahmadi Refinery, KuwaitSunkyong Engineering & Construction Company (SKEC)Supply of instrumentation testing and commissioning teamsto SKEC, for the completion, testing and commissioning ofthe New Gathering Centre 24 Project, at Kuwait OilCompany, Kuwait

Rio Tinto – (QIT) Mineral Sands Project General construction services, Madagascar

Kenmare Resources – Moma Sands Project General construction services, MozambiqueVale – Moatize Coal Preparation Plant (CPP) Project Steel erection, mechanical, electrical and instrumentationinstallation, including materials handling, piping supply andfabrication, Tete, Mozambique

Kashagan Project, Kazakhstan Specialist commissioning services to Aker Solutions, Egursund, Norway

Petro SA Fire damage restoration, Mossel Bay, South AfricaComplete E&C removal and reinstatement, with sub-contractor management andco-ordination (scaffolding, piping, structural steel, mechanical, painting, insulation,fire proofing, civils, grit blasting, HP cleaning etc.)Hulamin 210 ExpansionEPCM for the complete electrical & instrumentation excluding installation,Pietermaritzburg, South AfricaSasol Secunda, 4th Landlord ProjectFull structural steel, mechanical, electrical, instrumentation and piping for 4th trainlandlord at Sasol Secunda for Engineering House, Foster Wheeler, South AfricaRichards Bay Minerals Tails Treatment Plant Supply and installation of a belt conveyor system on the Richard’s Bay MineralsTailings Treatment plant, Richards Bay, South Africa Natref Refinery Mechanical & piping shutdown of hydro-cracker, hydrogen and sulphur units atinland crude refinery, Sasolburg, South AfricaSasol Various mechanical shutdowns completed in the refinery, cat-cracker and syntholunits of the western and eastern factories, Secunda, South Africa

Engen Refinery Multiple mechanical, electrical, instrumentation and piping shutdowns in the Merox,FCC, sulphur recovery and alkylation units of the crude refinery at Engen in Durban,South AfricaPetroSAMechanical, electrical, instrumentation and piping shutdowns with the refining,reforming and FA platform of the LNG facility located in Mossel Bay, South Africa.HosafMechanical, electrical, instrumentation and piping de-bottlenecking, expansionproject and shutdown at Hosaf chemical facility located in Durban, South AfricaGautrain Light Passenger Railway Complete EPC on the mechanical tunnel ventilation system and the STMS & SAMScontrol systems, Gauteng, South Africa. Medupi Power Station Supply, manufacture and construction of the six direct air-cooled condensers andassociated equipment on the new Medupi Power Station for GEA Lephalale, SouthAfrica Goedegevonden GGV Stackers for Xstrata CoalComplete EPC and start-up on a turnkey basis Ogies, South Africa

Atlantic LNG Co. of Trinidad and TobagoE&I construction and commissioning services, Point Fortin, Trinidad and TobagoPetroleum Company of Trinidad & Tobago Ltd (Petrotrin) Gasoline OptimisationProgramme, NHT/CCR ProjectE&I construction and pre-commissioning services, Point-a-Pierre Refinery, Trinidadand TobagoPetroleum Company of Trinidad & Tobago Ltd.(Petrotrin) Gasoline OptimisationProgramme, Offsite & Utilities, Water Treatment Facilities, ProjectE&I construction and pre-commissioning services, Point-a-Pierre Refinery, Trinidadand TobagoPetroleum Company of Trinidad & Tobago Ltd (Petrotrin) Gasoline OptimisationProgramme, Alky/Acid Plants, ProjectE&I construction and pre-commissioning services, Point-a-Pierre Refinery, Trinidadand TobagoEOG ResourcesE&I works on EOG offshore production platforms, Trinidad and TobagoPetroleum Company of Trinidad & Tobago Ltd (Petrotrin)Various E&I construction and commissioning services (new laboratory project,FCCU upgrade project, API separator, lighting upgrades, new warehouse facility)Trinidad and Tobago

Total Indeni Refinery Stack rehabilitation and maintenance contract, instrumentmaintenance contract on Indeni Refinery, Zambia

South Hook LNG Terminal Provision of technical commissioning and assettransfer support services to ExxonMobil on itsSouth Hook LNG Terminal, Great Britain – Wales

Adriatic LNG Offshore TerminalMulti-discipline completions and commissioningservices of offshore LNG terminal for Terminale GNLAdriatico S.r.l. – ExxonMobil (45%), Qatar TerminalsLtd (45%) and Edison SpA (10%), Adriatic Sea, Italy

Samir RefineryProject management and technical support forcommissioning of new diesel manufacturing plant, Morocco

BP/SangachalCommissioning services, Baku, Azerbaijan

world reach 2009 43

Thammama “C” Instrumentation and Control SystemUpgradeProvision of EPC services for control systems upgrade for GASCO, Abu Dhabi, United Arab Emirates OGD III ProjectE&I, telecommunications and SCADA installation works for Eastern Bechtel, Abu Dhabi, United Arab EmiratesADGAS Plant 42/43 Control System Upgrade EPC Services for Control Systems, Abu Dhabi, United Arab EmiratesReplacement of LV Distribution Boards, Zirku Island Provision of EPC services for ZADCO. Abu Dhabi, United Arab EmiratesGasco Compressor Upgrade – Ruwais EPC upgrade and relocation of turbine control systems forrefrigeration compressors for both Train 1 and Train 2 NGLfractionation plant, United Arab EmiratesADGAS Storex Control System UpgradeThe upgrade of the Storex control room systems andassociated electrical and field instrumentation devices onDas Island, Abu Dhabi, United Arab EmiratesZADCO Upper Zakum Field Wellhead Platform 15 – NewWater Injection PumpEPC scope for the installation of a new water injectionpump on Wellhead Platform15, Abu Dhabi, United ArabEmirates

Rapid Growth Project 5 – Yandi Overhead LinesSupply and installations of 33kV power line and fibreoptic cable, Western AustraliaRapid Growth Project 5 – Yandi North West VillageSupply and installation of the high and mediumvoltage and communications infrastructure for theYandi North West Village, Pilbara Region, WesternAustraliaPluto LNG Onshore Site AInstallation of underground cabling on Pluto site “A”Supply and installation of all duct banks and roadcrossing, testing of all cabling, pre-installation andpost-installation, Karratha, Western AustraliaPluto Site BElectrical and instrumentation works #1 Site B –process area Electrical and instrumentation, installation and testingwork associated with the LNG train, fractionation unit,power generation, nitrogen removal unit, heated waterand fuel gas units of the LNG plant, Karratha, WesternAustraliaGorgon Construction VillageDesign and construct contract for a state-of-the-art3,300-person construction village. Separate potablewater and fire systems will also be provided by thejoint venture, Barrow Island, Western Australia

Sakhalin 2 Project, Sakhalin Energy InvestmentCompany – Various FacilitiesConstruction and completions management servicesfor SEIC at Lunskoye OPFMulti-discipline management and execution supportservices for the mechanical completion andcommissioning of the Booster Station at Gastello Maintenance and shutdown services at the LNGTerminal at Prigoradnia, Sakhalin Island, RussiaSakhalin 1 ExxonMobil Neftegas OnshoreProcessing Facility (OPF)Civil, mechanical, structural, piping, electrical andinstrumentation works for the Odoptu first stageproduction facility, Odoptu, Sakhalin Island, RussiaSakhalin 1 ExxonMobil Neftegas OnshoreProcessing Facility (OPF)Commissioning management and execution servicesfor the Odoptu first stage production facility, Odoptu, Sakhalin Island RussiaSakhalin 1 ExxonMobil Neftegas Chayvo OPFShutdownShutdown management, planning and executionservices for mechanical vessel inspection shutdownas well as feed-off and start-up operational support,Chayvo, Sakhalin Island, RussiaSakhalin 1 Arkutun Dagi – FEED SupportProvision of multi-discipline engineering team tosupport Worley Parsons Houston office for FEEDstudy for Arkutun Dagi field, Sakhalin Island, Russia.Sakhalin 1 ExxonMobil Neftegas ChayvoOperations and MaintenanceMulti-discipline support services for operations,maintenance and modifications works on ChayvoOPF, Sakhalin Island, Russia

Banyu Urip Early Production Facility Contracted by Mobil Cepu Ltd (MCL)to provide technical support servicesto the main contractor (Exterran) forthe mechanical completion, pre-commissioning, commissioning,and start-up services at the BanyuUrip EPF, Cepu, Indonesia

Bintulu Offshore Receiving TerminalCompletions and commissioningservices consisting of mechanical,electrical and instrument supervisorsand technicians to assist constructioncompletion and carry outcommissioning activities for theBintulu Offshore Receiving Facility forphase 1 of the Sarawak GasDevelopment Project, Malaysia

Sipchem APU Engineering, procurement and constructionservices for the Sipchem APU, Jubail, SaudiArabiaPetrokemya Isopentane Project EPC services for piping, equipment, electrical (lowvoltage), and instrumentation, civil, structural, firefighting and deluge system, Jubail, Saudi ArabiaSipchem Jubail Acetyls Complex Pipeline, PortFacility and Export PipelinesEPC services for product pipeline, port facilitiesand ship loading at KFIP, Jubail II Industrial City,Saudi ArabiaSaudi Kayan – K020 – HV Electrical InstallationOffplot communication works, Jubail, Saudi Arabia Saudi Kayan – K034 – System Integrator and LoopCheckingSaudi Kayan – K070 – Electrical EquipmentInstallationSaudi Kayan – K088 – Install Backbone Cabling,Jubail, Saudi ArabiaNCP – Greenfield Project Electrical & instrumentation construction works forWorley Parsons, Jubail, Saudi ArabiaKayan KBR Olefins ProjectConstruction management and support services,Jubail, Saudi Arabia

Gorgon LNG Telecommunications PackageComplete EPC scope and five-year support andmaintenance of the telecommunications andelectronic systems for the Gorgon LNG Project in allproject locations in Western Australia including BarrowIsland, Dampier and Perth, Western AustraliaGorgon Temporary Construction Buildings – DecmilThe installation of high voltage cables for above andbelow ground works. It will also include the installationof substations, ring main units and distribution boards.Low voltage cables will also be installed as the mainelectrical power supply for all the temporary buildings,which will be occupied during the construction periodof 2010-2011, Barrow Island, Western AustraliaThiess Degremont Victorian Desalination Project Installation and testing of high voltage cabling,switchboards, transformers, UPS systems, instrumentcontrol system cabinets, motor control stations, fieldpanels, lighting and small power, trace heating,process instrumentation, fire and gas detection andprotection devices, above ground cabling, earthingand bonding, as well as the recovery and terminationof cables installed underground, Melbourne, Victoria

Kayan TR Phenolix Project Construction management and support services,Jubail, Saudi ArabiaKayan Sabic Olefins PMT ProjectConstruction management and support services,Jubail, Saudi ArabiaRoyal Commission – Jubail II InfrastructureDevelopment Engineering studies, FEED, preparation of designdrawings and specification and bid packages forinfrastructure development in Jubail II IndustrialCity, Saudi ArabiaSipchem General Engineering ServicesProvision of conceptual and detailed design andconstruction services for Sipchem, Jubail, SaudiArabiaSaudi Aramco Shell Refinery (SASREF) Design engineering and drafting services, Jubail,Saudi ArabiaS-Chem – Saudi Chevron Phillips CompanyDesign Engineering and Drafting ServicesNew styrene loading systemsDetail engineering for new styrene loading system Berth 41Jubail Export Refinery/TOTAL – ProjectManagement ConsultancyEngineering for TOTAL man camp and PMT Support, Jubail, Saudi Arabia

Sidra Medical and Research Centre Design and construction of the electrical systemson Sidra Medical & Research Centre (SMRC)situated in Qatar Foundation’s Education City, Qatar WOQOD (Qatar Fuel) Receiving & LoadingFacilities EPC of receiving and loading facilities for LaffanRefinery Ltd Company, QatarQatar Petroleum Dukhan Two GlycolRegeneration TrainsEngineering, procurement, installation andcommissioning for two new glycol regenerationtrains at Fahahil Stripping Plant in Dukhan, QatarQatar Petroleum Offshore Engineering andConsultancy Services for Plant ChangeRequests and Miscellaneous EngineeringSupport Services Three-year contract for engineering consultancyservices for plant change requests andmiscellaneous engineering support services, QatarShell Pearl GTL – Utilities and offsites Electrical and instrumentation construction and commissioning services for the EPCMcontractor JK JV (JGC and KBR), Ras Laffan Industrial City, Qatar

Shell Pearl GTL – Air Separation Units Electrical and instrumentation construction andcommissioning services for the EPC contractorLinde, Ras Laffan Industrial City, QatarRas Laffan Olefins Complex Electrical and instrumentation completions andcommissioning services for the EPC contractorTechnip France, Ras Laffan Industrial City, QatarQatargas Common Lean LNG Loading Facilities– Berth 6 Installation and commissioning electrical,instrumentation & telecommunications works for theQatargas CLLNG Loading Facilities for the EPCMFluor Mideast Ltd Qatar Fertiliser Company (QAFCO) V AmmoniaTanks Electrical and instrumentation installation andcommissioning works for the EPC contractor, CB&I Shell Pearl GTL – PI-077 Qatar General services work associated with Pearl GTL,Ras Laffan Industrial City, QatarShell Pearl GTL – Commissioning Support Support for Chiyoda/HHI on Package C4, feed gaspreparation, Ras Laffan, Industrial City, Qatar

Ras Gas Trains 6 and 7Commissioning support for the PMT, Ras LaffanIndustrial City, QatarQatarGas Common Sulfur Project CSP Commissioning services for Washington GroupInternational, Ras Laffan Industrial City, QatarCB&I – Pearl GTLCivil construction services, Ras Laffan Industrial City,QatarQatarGas II, III, IV Electrical and instrumentation commissioning supportfor QatarGas operating company expansion and start-up team, Ras Laffan Industrial City, QatarRasGas Common Offplots Projects (COP)Construction management support for the EPCMcontractor Fluor, Ras Laffan Industrial City, QatarQChem II – High Density Polyetheylene (HDPE) andNormal Alpha Olefins (NAO) Construction and commissioning support services forthe EPC contractor, Ras Laffan Industrial City, QatarQatalum Smelter Installation support for NKM Noell Installation support for Kempe Engineering Services

OMV Onshore Production FacilitiesEPC civil, structural, mechanical,piping, process, electrical controlsystems, telecommunications scopefor 30,000-bpd oil processing facility,Yemen


some of our 2009 and ongoing projectsSpecialist EPC

Gorgon LNG Project, Gorgon LNG Construction VillageWestern Australia.Design and construct contract for a state-of-the-art 3,300-person constructionvillage.

Engineering, design, procurement, project management and multi-disciplineconstruction services for the 3,300-person construction village to support the GorgonGas Field development.

Project Value: US$378m (Kentz 1/3 share)

Gorgon LNG Telecommunications PackageElectrical, instrumentation, telecommunications and IT scope.

Complete EPC scope and five-year support and maintenance of thetelecommunications and electronic systems for the Gorgon LNG Project in all projectlocations in Western Australia including Barrow Island, Dampier and Perth.

Project Value: US$125m

OMV Onshore Production Facilities, Yemen. EPC for a 30,000 – bpd oil central processing facility (CPF).

Engineering, procurement, construction and commissioning of the 30,000-bpd oil CPF for civil, structural, mechanical, process, piping, electrical, control andtelecommunications systems work scopes for OMV (Yemen Block S2) explorationGmbH at Al Uqlah, Yemen. The project comprises oil receiving, processing andstorage facilities for three x 10,000 bpd trains, including all associated utilities, inaddition to permanent operations and maintenance camp and office facilities for client.


Laffan Refinery, Qatar. EPC scope of work for multi-discipline project.

The project scope is to provide a main fuel truck gantry facility for WOQOD. Also thepipeline to WOQOD tanks at Ras Laffan jetty. Both lines will come from the LaffanRefinery tank farm. The engineering and procurement phase which will be executedentirely from Kentz office in Doha, Qatar.


Gautrain Tunnel Ventilation, STMS & SAMS Control Systems, South Africa. Contract A: Mechanical ventilation for tunnels.

Complete EPC and start-up on a turnkey basis.

Contract B: STMS & SAMS control systems.

Complete engineering, procurement, construction and start-up on a turnkey basis ofthe whole of the station and tunnel management system for the complete Gautrain.


some of our 2009 and ongoing projects 45

Construction

Shell Pearl GTL, Qatar. Electrical and instrumentation scope for utility and flare areas, materials managementand commissioning support.

Supervision, installation, testing, pre-commissioning and commissioning support forthe utilities electrical and instrumentation scope of work for Qatar Shell GTL PearlProject, Ras Laffan.


Eskom Medupi Power Station, Lephalale, South Africa. Steel, mechanical and piping scope.

Supervision, installation, pre-commissioning, commissioning and testing of the sixdirect air-cooled condensers and associated equipment on the power station. Shopdetailing design, supply and fabrication of 26,000 tonnes of structural steel work,11,000 tonnes of ducting, 1,800 tonnes of piping and 40,000 tonnes of mechanicalequipment.


Moatize Coal Project, Mozambique. Coal preparation plant and the materials handling system.

The scope of work includes the structural (steel), mechanical, electrical,instrumentation and piping erection work for the coal processing plant.


Pluto LNG Project, Pluto LNG Onshore E&I – Site B Process Contract, Western Australia. Underground cabling scope for a “greenfield” LNG liquefaction plant.

Installation and testing of high voltage cabling, switchboards, transformers, UPSsystems, instrument control system cabinets, motor control systems, field panels,lighting and small power, trace heating, process instrumentation, fire and gasdetection and protection devices, above-ground cabling, earthing and bonding, aswell as the recovery and termination of cables installed underground.

Pluto LNG – Onshore Site-Wide Specialist InstrumentationSupervision and execution of the onshore site-wide electrical and instrumentationtesting and commissioning scope.

Combined Project Value: US$107m

Saudi Kayan Petrochemical Contract, Saudi Arabia. Combined Saudi Kayan Petrochemical Plant at Jubail, Kingdom of Saudi Arabia.

Electrical and associated civil scope for 230KV and 34.5KV substations at Jubail.Systems integration and loop checking scope for Petrochemical Plant at Jubail.Electrical and associated civil scope for equipment installation and associated worksfor substations 70, 70A, 72, 72A and 83. Instrumentation, telecommunications andcivil scope for the backbone cable installation.


Chayvo OPF Shutdown, Sakhalin. Mechanical vessel inspection shutdown as well as production feed-off and start-upsupport operations.

Shutdown management, planning and execution services for mechanical vesselinspection shutdown including nitrogen purging and steaming, as well as other feed-off and start up operational support services. The Chayvo OPF is locatedapproximately 600km north of Yuzhno on Sakhalin Island, Russia and is the first everfull facility shutdown on Sakhalin.


PetroSA Shutdown, GTL Plant & FA Platform, South Africa. Complete scope of services for the October 2009 shutdown at the refinery andreformer units of the GTL plant and the FA platform offshore.

Scope development, prefabrication, preparation and planning for the October 2009shutdown at the GTL facility in Mossel Bay and the FA platform locatedapproximately 80km off the coast of Mossel Bay, South Africa. Scope of work includes mechanical maintenance including statutory and off-lineworks, electrical maintenance, instrumentation, piping repairs and vessel repairs.Work on over 172 pressure vessels, 140 heat-exchangers and fin-fans, 18 processcolumns and 1,072 valves.


Kuwait Oil Company (KOC) PMC, Kuwait. Provision of support services to Fluor Corporation.

Kentz is providing engineering and management services support to Fluor Corporationfor the co-ordination, planning, front-end design, engineering, tender evaluation,contracting, project controls, contract administration, construction management andtraining of KOC project staff.



Technical Support Services

Right: The prestigious Shell Pearl GTL Project in Qatar

our people48 Kentz Annual Report

Above: Rafiga Asgarova, AzerbaijaniPA & HR Co-ordinatorKentz employee for 1 yearKentz world presence: Baku City, Azerbaijan

During 2009 the global economic situation eased capacity constraint in the industry asthe availability of competent human resources generally continued to improve. Qualifiedand experienced people were more readily available across the discipline spectrum andeased the pressure to retain skills within the Group.

The Corporate-led HR Strategy embarked upon in 2007 has achieved its strategic aim of“the right person, in the right job at the right time”. The training and development initiativeshave started to achieve the end goal of providing future leaders for the Group andemployees that have been through the various training and development programmes arebeginning to take their places in management roles.

The recruitment process based on the Taleo System has allowed us to source topcandidates from across the globe. The strategy continues to be based on the imperativethat in order for the Group to grow and diversify, it has to continue to attract and retainthe right people with the right skills, experience and attitude to embrace our values andworld-class operational, health, safety and environmental standards. The Group retentionstrategy during 2009 continued to be successful, albeit with assistance from the globaleconomic situation, and can be gauged by the low turnover among the core managementgroup, which at just 5% was down from 6% in 2008 and continues to be well below theindustry average.

The average length of service of our top 100 core management as at the end of 2009 was16 years, slightly down on the 17 years of the previous year mainly due to the increasedrecruitment of highly skilled and experienced individuals into the Group. Of this coremanagement, 31% have 20 years or more service with the Group compared to 34% in2008, marginally down due to the retirement of long-serving employees. During 2009 wemaintained approximately 10,500 employees, on average, with more than 35 differentnationalities working in 26 different countries.

During 2009, 13 of the 54 engineering and quantity surveying graduates recruited in 2007and 2008 completed the Supervisory Management Development Programme (SMDP).This programme is intended for new graduates hired into the Group and is a 24-monthprogramme. During 2009 a further 24 graduates were recruited and placed on the SMDP.The Mentoring Programme continues to be the foundation on which the graduatedevelopment programmes are based and during 2009 a further six mentors were trainedin the Group.

For employees who have shown potential and ability to progress into middle and seniormanagement positions, the Executive Diploma in Leadership and Management (EDipLM)programme continues to be an invaluable learning experience. The programme aims todevelop management and leadership skills in employees who have been identified asfuture managers and leaders in the Group. At the end of 2009, 42 employees have

16 yearsthe average length of service for the

top 100core management

31%of top 100 core management have

20 years or more service with the Group

over35different nationalitieswithin our 10,500 employees

working in 26 different countries

84 people have been throughthe long-term in-house leadership development

training programmes

Executive Diploma and MBA graduates 2009

successfully completed the programme and in September 2009, 16 employeesembarked on the 2009/2010 programme. Of the 42 employees who have completed theprogramme to date, 62% have been promoted into more senior roles subsequent tocompleting the programme. During 2009 a review of the EDipLM was undertaken andcurrently a reaccreditation and academic validation exercise is being undertaken withNottingham Trent University in the UK, the outcome of which will be the introduction of aDiploma in Management and Leadership accredited by the university – this diploma willreplace the EDipLM. The first programme under Nottingham Trent University willcommence in the last quarter of 2010.

A number of employees are currently registered for external and internal MBAprogrammes. Four are registered with Manchester University and four are on the internalMBA accredited by the Business School Netherlands. During 2009 two employeesobtained their internal MBAs. As with the EDipLM, a review and academic validationexercise was undertaken during 2009 on the internal MBA with a view to reaccrediting thedegree through Nottingham Trent University. This accreditation and academic validation iswell advanced and by October 2010 a Master of Science in Management and Leadershipaccredited by Nottingham Trent University will replace the current internal MBA. TheMasters degree is intended as a follow-through on the Diploma in Management andLeadership and the first group will commence on the programme in 2011.

The Skills Enhancement Courses (SECs),which were developed in-house tosupplement the SMDP, EDipLM and MBAinitiatives, were utilised in the Middle East,South Africa and the Arctic region. A totalof 182 employees attended these coursesduring 2009. Business units and functionaldivisions within the Group continued tosend employees on various externaltechnical and functional trainingprogrammes.

our people 49

Thiess Decmil Kentz (TDK) JV Gorgon Team,Australia

Saudi Kayan Project Management Team, Saudi Arabia

Kentz Serba Bintulu Offshore ReceivingFacility Project Team, Malaysia


During 2009 the Group’s degree and apprenticeship support programme has continuedto grow. In Ireland 65 apprentices were contracted and eight were contracted in SouthAfrica as compared to a total of 46 apprentices contracted in the Group in 2008. In SouthAfrica a further 37 individuals were taken on and placed on accredited craft trainingprogrammes. Throughout the Group 20 external bursaries for university or college placeswere given in 2009 and nine employees were given assistance to complete degrees anddiplomas part-time.

The Taleo Recruitment System is being extensively used throughout the Group and hasstrengthened and made our recruitment process more efficient. At the end of 2009 therewere over 68,250 CVs on the data base, and 360 individuals in the supervisory, specialistand management categories were hired through the system by the Group in 2009.

Due to the global economic situation in 2009, the requirement for using recruitmentagencies has not been as critical as in previous years. Nevertheless we have maintainedour relationship with our recruitment agents in Ireland, the UK and Europe as well as thosein India, the Philippines and other South East Asian countries, which are the main sourcesof the majority of our labour. We continue to expand and consolidate our recruitmentfootprint globally by making extensive use of global recruitment websites and arecontinually exploring new non-traditional labour markets in which to source the skilled andexperienced people we require.

Kentz Pluto Team, Australia

Kearl Telecoms Project team members, Canada

Above: Zahid Ali Hasimi, IndianHelperKentz employee for 18 yearsKentz world presence: Safat, Kuwait

Closely aligned with our recruitment initiatives is our remuneration strategy to ensure that we attract andretain the best people in the industry. To this end and to keep aligned with market remunerations levels, in2009 we again undertook remuneration and benefit surveys in Ireland, the UK, South Africa, Australia andthe Middle East. The outcome indicates that the Groups remuneration and benefits packages are wellaligned with those in the relevant markets in which we operate.

During 2009 the Talent Management System was rolled out and the 2009 performance review for staff wasconducted via this system. The HR management information system was fully developed and tested andwill be implemented in the first quarter of 2010. This system will give management the ability to garnerinformation about our Human Resources at the touch of a button. This information is critical in managingour people globally and effectively.

2010 is a consolidation year in which the Group’s HR strategy will continue to focus on attracting andretaining talented and experienced people required to drive the Group’s growth whilst at the same timeaffording every employee the opportunity to develop to their full potential in a safe, stimulating and excitingenvironment.

In 2009, as in previous years, the Kentz annual CEO awards were presented to deserving employees. Theaward for Outstanding Safety Leadership went to Garry Ford, Project Manager on the Pearl GTL Project inQatar and the award for Outstanding Commitment and Dedication went to Donal Dempsey, Manager ofEngineering Services for Qatar, the United Arab Emirates and Kuwait, based in our Qatar Engineering office.In 2009 a new award was introduced by the CEO, the Emerging Employee of the Year award – this wasawarded to Michael Regan, Engineering Design Manager, based on the Gorgon Project in Australia.

our people 51

Laffan Refinery Project Team, Qatar

Thiess Decmil Kentz (TDK) JV Team, Thailand


Our Vision, Values and PurposeOur vision, values and purpose are the foundation of Kentz’s strategic direction and formthe basis for everyday operation of our business.

Balanced Score CardA new balanced scorecard (BSC) was developed during 2009 to ensure the criticalsuccess factors detailed in the score card effectively translate our mission and strategyinto a comprehensive set of performance measures.

These performance measures are taken from the four different perspectives of theorganisation:

1) Financial

2) Customer

3) Internal systems

4) People and culture

This BSC will be used as an ongoing management tool to mobilise and guide theorganisation in the correct strategic direction. Through regular reviews of the BSC, a focuson our strategic goals is being achieved.

policies and systems

Above: Paul Loughnane, IrishSenior EPC ManagerKentz employee for 19 yearsKentz world presence: Abu Dhabi, United Arab Emirates

Our Vision, Values and Purpose

Vision

PurposeValues

Safety

Reputation

Tenacity

Pride

Loyalty

Respect

Teamwork

“To be recognised globally as the specialist services provider of choice”

The safety and health of all ouremployees is the most importantvalue held by our Company. No onegets hurt and everyone goes homesafe and well

Our current and future successstands on our reputation

We are committed to our clients todelivering whatever it takes withoutcompromising our values

We take pride in everything we do

Our people’s loyalty to ourbusiness, our clients, our partnersis unquestionable

We respect all individuals, culturesand the environment within andconnected to our business

Working together to achieveorganisational goals

• To our Staff is to ensure

- Home safe

- Challenging projects

- Life career

- A sense of belonging

- A sense of adventure

• To our Customers is to focus on

- Building a safer workplace

together

- Adding to their reputation

- Adding to their competitiveness

• To our Communities to ensure

- Home safe

- Employability and sustainability

- Care for the environment

policies and procedures 53

Our PoliciesThe policy statements of Kentz relate to:

• Health & Safety • Environment • Human Resources • Quality • Community • Industrial Relations • Drugs & Alcohol • Equal Employment Opportunity • Rehabilitation • Ethical Behaviour • Security • Fitness for Duty

During 2009 we revised our Health and Safety, Environmental, Equal Opportunity, Rehabilitation and Ethical policystatements. The policy statements were revised to ensure their alignment to our business goals and objectives.

Kentz SystemsThe roll-out of our bespoke management tools commenced in late 2009 across the Group, with a number of ourrecently awarded projects implementing the systems. The suite of management tools collectively known as theKentz Project Systems (KPS) consists of our Project Cost Management System (PCMS), Kentz DocumentManagement System (KDMS), Construction and Completion Management System (CCMS) and the Procurementand Material Management System (PAMMS). These four systems communicate with each other, allowing forintegrated co-operation.

In addition to the above tools, a new Human Resources Management system was developed. The HR Profilerwas designed as an enhancement of our existing Human Resources Management Information System (HRMIS).

During 2009 we successfully completed the recertification to the following ISO and OHSAS Managementstandards; ISO 9001:2008 Quality Management System Requirements, ISO 14001:2004 EnvironmentalManagement System Requirements and OHSAS 18001:2007 Occupational Health and Safety ManagementRequirements. As a result of the recertification all four regions of Kentz are now certified to the three standards.The requirements of these three standards are the foundations of our Integrated Management System.

The alignment of our management system with the changeover to three Global Business Units was completedduring 2009. This has resulted in a new structure to Kentz’s management systems that will benefit not only thefunctional and operational units in Kentz but will also benefit our clients with seamless controls.

Kentz Project Systems Overview

PCMS

DMS

PAMMS CCMS

Project Cost Management System• Project Setup • Change Management System

Cost Recording Module• Cost Capture• Invoice Capture• Sales Capture

Cost Forecasting Module• Cost Basis• Cost Forecasting• Management Reports

Document Management System

• General Setup• Kentz Document Control• Client Document Control• Vendor Document Control• Third Party Document Control

• Communications Management • Workflow• Timesheets• Reports

PO/Currency Rates/ Vendors/MRR/OSD

References/Attachments/ Revisions Attachments Attachments

Construction and Completions Management System

Procurement and MaterialsManagement System

• Material Catalogue (MatCat)• Material Management System (MMS)• Procurement Management System (PMS)• Warehouse Management System (WMS)

• Cable & Drum Tracking• Other Tracking Modules:

- Civil/Structural- Control Systems- Electical- Instrumentation- Mechanical- Piping- Telecoms- Welding

• EILS & Logs• Manpower tracking• Commissioning• Daily Allocation

Sheets• S/E Tracking• Progress Payment

Tracking• Reporting


Kentz has a multicultural and diverse workforce, which includes more than 35 different

nationalities working in 26 different countries. We constantly strive to engage with local

communities, support development in countries in which we operate and also countries

of employee origin. It is the aim of all Kentz management to create a mutually beneficial

relationship between our project operations and local communities. Kentz also seeks to

form alliances with local companies, allowing us to gain a greater understanding of the

communities in which we operate, while at the same time benefitting local businesses and

economies through the success of our projects. Kentz is proud of its tradition of providing

sustainable initiatives through assistance and funding to various community projects,

charities, sporting organisations, and training and educational institutions.

Highlights of CommitmentFor six years Kentz has raised money through sponsorship and participation in the

Clonmel Rotary Golf Classic in Clonmel, Co. Tipperary, Ireland. Money raised at the event

is used for a variety of projects including the Society of St Vincent de Paul, a day

orphanage in Zambia, and disaster relief in the Solomon Islands. Additionally, many

organisations local to Clonmel and South Tipperary, Ireland, have been supported. In

recent years these have included the Wheelchair Association, the Cuan Saor Women’s

Refuge, the Samaritans, the Clonmel Red Cross, and various drug awareness projects.

Kentz in South Africa also entered a team in a golf day in early 2009, which was held in

aid of Kosmos Children’s Home in Kriel, near Secunda in South Africa. The aim of the

event was to raise funds for the home to assist with its running and upkeep. The home

has facilities for only 49 children but currently houses 72. The golf day was hosted by

MICA Secunda, Talisman Tool Hire and JAM Properties. The day was a great success,

raising much needed funds for the home.

In March 2009, Thiess Kentz supported the Victorian Bushfire Appeal in Australia by

raising funds and collecting much needed provisions for those affected by the devastating

and tragic bushfires which occurred earlier in the year. The fires ravaged many parts of

Victoria, killing over 200 people and countless wildlife.

The Company held various fundraising events for both office and site-based staff, and the

management team kindly committed to match all employee cash donations. The staff

members were also extremely generous in donating clothing, toys and blankets.

Above: Bob Elliot, British/AustralianArea Manager E&I Victoria Desalination PlantKentz employee for 4 yearsKentz world presence: Wonthaggi, Victoria, Australia

corporate and social responsibility

L-R: Brian Sheerin, Anna Brett, Group BD Executive andAngus Grant, the Rotary Club’s Golf Classic organiser

Children who benefited from Golf Day, South Africa

Staff of Thiess Kentz Perth office who held a coffee morning to raise funds

corporate and social responsibility 55

In April 2009, Kentz sponsored 11 students from Park

House School in Doha, Qatar, to complete a trekking

expedition in Nepal.

The group, accompanied by two teachers from the

school, trekked 100km in four days, during which the

students carried day packs, stayed in very basic

accommodation and sampled the local cuisine. Each of

the students managed to reach the staggering 3,210m

peak that they had set out to conquer.

Park House School is one of the leading educational

providers in Qatar. Expeditions of this sort allow students

to enjoy a range of experiences that will complement the

excellent academic instruction received at the school. Kentz is proud to be assisting Park

House School in giving their students a more holistic education, and congratulates the

students on their remarkable achievement.

As the season of goodwill approached in November and December 2009, Kentz

employees across the globe embraced the joy of giving by donating toys for children in

need.

The employees of Thiess Kentz in Australia sponsored Operation Christmas Child, a

unique project of Samaritan’s Purse that brings joy and hope to children in desperate

situations around the world. The previous year, over 300,000 gift-filled shoe boxes were

collected by teams in Australia and New Zealand and were delivered to South East Asia

and the South Pacific. Globally, Samaritan’s Purse distributed an estimated 7.6 million

shoe boxes to children in 105 countries.

Employees from the Kentz Clonmel office, the Aviva Stadium site and the Waterford

Regional Hospital site in Ireland continued their support of the Secret Santa Project in

association with the St Vincent de Paul Ozanam House Youth Group in Dublin. Each

employee chose a boy or girl from a list of children’s names and bought them a seasonal

gift.

Kentz in South Africa supported the annual Toy Run of the Centurion Motorcycle Club

which took place in late November 2009 in Vanderbijlpark, South Africa. The toy run was

in aid of underprivileged children who might not receive any toys were it not for the

generous donations of those who participated.

Thiess Kentz staff at the Perth office pictured with theirdonations

Park House Students overlooking the Himalayas

Toys loaded up and ready to go

Transforming Lives Through FootballIn June 2009, Kentz Global Oil & Gas Process Systems Limited donated generously to

support the African Medical and Research Foundation (AMREF) football tournament in the

rural district of Soroti, Uganda.

The Soroti region of Uganda has been hit by war, cattle raids and insurgency over the past

two decades. The people of Katine now have the worst health and living conditions in

rural Uganda, and most people live on less than 50p a day. In addition to uniting

communities and spreading vital health messages, the tournament also sought to instil a

sense of hope and pride amongst the villagers.

The tournament was organised by AMREF and its partners, including the Federation of

Uganda Football Association (FUFA). Forty-eight teams competed in front of thousands of

cheering spectators.

With a large audience attending the opening ceremony, AMREF had the opportunity to

communicate widely the vital messages linked to AMREF’s development aspirations. Two

drama groups from Katine performed plays and songs with messages encouraging

people to practise good hygiene and sanitation in their homes, and to make use of health

centres. Local leaders also spoke at the opening ceremony, and thanked Kentz Global Oil

& Gas Process Systems Limited for its generous donation, without which the tournament

would not have been possible.

The donation was also put towards ongoing efforts to empower children and communities

affected by conflict, funding social rehabilitation schemes and enabling reintegration

through football, health and social development.

As a result of the tournament, the Katine sub-county now boasts new sporting facilities

and, perhaps more importantly, a revitalised sporting spirit. With these foundations in

place, it is anticipated that similarly beneficial events will continue to take place in the area.

The tournament aims to support the objectives of AMREF through:

• Improved playing conditions for the children of Katine with the supply of uniforms, balls

and the creation of teams

• Providing organisational structures of football teams as a way of enhancing confidence

in young children

• Improved technical knowledge of football, by the provision of coaches, referees and

governing bodies

• Using the ability of players in Katine as a means of mobilising children around key health

issues, leadership skills, life skills, peace building and conflict resolution

• The active participation of girls in a culturally appropriate way, by fostering respect for

girls in sport, showcasing girls playing football

• Post-conflict reconciliation and healing through sport


Katine locals

Local football fans

corporate and social responsibility 57

Philippine PhilanthropyIn June 2009, Kentz provided sponsorship to Paula Quigley, a Final Year Construction

Management student at the Cork Institute of Technology, Ireland. This enabled her to

spend six weeks working with street children in the Philippines on educational and youth

empowerment projects.

Paula volunteered along with 13 others through SERVE, a development organisation that

is committed to tackling poverty in developing countries. It specialises in working with

marginalised and oppressed communities, and aims to empower them to tackle the root

causes of poverty and injustice. SERVE’s specific focus is on gender equality, children and

young people.

Paula was initially assigned to the Badjao Education Programme in Cebu City. The Badjao

people are commonly known as “Sea Gypsies” and the majority live in houseboats or on

bamboo stilts above the water. They are a peaceful, nomadic tribe but are highly

discriminated against by many Filipinos.

Paula worked at the Nano Nagle Childcare and Learning Centre, which was established

last year to help prepare the Badjao children to attend public schools. She assisted the

teachers with their daily classes and was particularly involved in helping the older children

with their writing and pronunciation. As part of the placement, Paula also spent four days

working on the nearby Gawad Kalinga Housing Construction Project.

Paula’s second assignment was with Akap Bata, an organisation that works with

disadvantaged children all over Manila. Speaking of her time there, Paula said: “I was

fortunate enough to witness the opening of two day care centres for children, and helped

to make and repair furniture. Akap Bata relies on co-sponsorships with non-government

organisations, churches and some government entities, and it does the most incredible

work. When you think that 64% of Filipino children do not attend pre-schools or day care

centres you realise just how invaluable the organisation is. They have so many dedicated

workers, and the whole experience was a real inspiration. I would like to thank Kentz for

its generous sponsorship of my trip. I will never forget my time in the Philippines and the

warmth and hospitality of the families that I was lucky enough to stay with.”

In the Philippines SERVE provides:

• Early education programmes for children in slums in Manila and amongst indigenous

tribes

• Skills training and empowerment opportunities for women from the Ates indigenous

tribe

• Advocacy work on child pornography with the objective of enacting quality legislation

against child pornography

• Education support to children and youth at the Badjao Centre, Cebu

• Skills training and livelihood support for street children in Manila

• Resources for cooking skills, development for young adults at Binalbagan College

• Technical and vocational education for female teenage victims of abuse, Cebu

Paula with Ates tribes-girls

SERVE volunteers pictured at a local day care centre

Paula and another volunteer help to feed children in aslum area

SERVE volunteers pictured at a local day care centre


Kentz Aiding the DisabledIn early 2009, Kentz in South Africa took action in supporting a number of organisations

involved with helping the disabled.

Firstly, Kentz contributed towards IT tuition for three disabled learners in association with

“Action”. Action is an institution which offers IT tuition, as well as Grade 12, to the blind

and disabled people through adult-based education and training. The training programme

consists of three days of IT skills tuition and two days of art and crafts skills tuition

(woodwork, pottery, stained glass and lamp shade manufacture).The duration of the IT

course is eighteen months. On completion, trainees qualify for a Microsoft Office

Specialist Certificate which is internationally recognised.

Kentz sponsorship funds went towards helping the following disabled learners:

• Bongani, aged 24

• Kagiso, aged 19

• Samson, aged 27

Kentz South Africa also became involved with the Support and Care Foundation, by

sponsoring three disabled pupils. The Support and Care Foundation raises funds to help

organisations that are in desperate need of assistance. They help people who are unable

to pay for medical treatment, operations and wheelchairs. The funds raised this year were

for children in desperate need of electrical wheelchairs, Shona buggies, back layers,

normal wheelchairs and prosthesis.

The following children were assisted by Kentz sponsorship:

• Tumi Innocentia Rapoo, aged 6

• Neo Rakuba, aged 5

• David McKlopper, aged 7

Finally, Kentz is also aligned with the Eduplex programme, which is a mainstream

pre and primary school established by the Foundation for Children with a Hearing Loss in

Pretoria, South Africa. The mainstream is specifically designed to integrate a few children

with hearing loss into the regular classes where they learn alongside their hearing peers

without using sign language. The total number of the children in each class is 25 and five

of these children are deaf. The programme commences at Grade 1 and is extended year

by year until the primary school stage is completed at Grade 7.

Kentz also contributed towards the monthly costs of education and audio logical

management for three deaf children.

• Andile Ndala, aged 3

• Zisanda Sithole, aged 6

• Winnie Rankapole, aged 6

Pat Cass of Kentz visited the school, met the headmaster and was impressed with the

facilities and how well the children adjusted to regular mainstream school.

Kagiso, Bongani and Samson

David and Neo

Phidelia with David, Neo and caregivers

Andile, Zisanda and Winnie

59

60chief financial officer’s report

64directors’ report

67independent auditors’ report

68consolidated income statement

69consolidated statement ofcomprehensive income

70consolidated statement of financial position

71consolidated statement ofcash flows

72notes to the consolidated financialstatements for the year ended 31 December 2009

financial review 2009 andconsolidated financial statements

chief financial officer’s report60 Kentz Annual Report

SUMMARY OF KEY FINANCIAL INDICATORS(values and percentage changes)

For the year ended 31 December: 2009 2008 %(US$m) (US$m) Change

Sales Revenue 704.7 643.4 +9.5%

EBITDA * 51.1 42.2 +21.3%

Profit before tax * 44.5 40.7 +9.2%

Profit after tax * 33.3 30.9 +7.9%

Profit after tax attributable to shareholders * 30.8 28.8 +6.9%

Cash generated from operations 67.7 21.9 +209.1%

Net cash from operating activity 56.1 11.0 +408.1%

Cash and equivalents at year end 179.8 154.4 +16.5%

Basic earnings per share (US cents) * 26.46 25.09 +5.5%

Backlog 1,497.4 1,003.8 +49.2%

GROUP INCOME STATEMENT Overview of trends (values and percentage of sales)

Continuing Operations For the year ended 31 December

(Values in US$m) 2009 2008 2007 2006

Sales Revenue 704.7 643.4 544.6 370.1

Gross Profit 94.8 87.6 68.2 56.0

% of sales 13.5% 13.6% 12.5% 15.1%

S.G. & A. expenses * 55.2 51.4 39.7 33.0

% of sales 7.8% 8.0% 7.3% 8.9%

EBITDA * 51.1 42.2 35.2 27.2

% of sales 7.3% 6.6% 6.5% 7.4%

Profit before tax * 44.5 40.7 34.3 25.1

% of sales 6.3% 6.3% 6.3% 6.8%

Profit for the year – continuing operations * 33.3 30.9 26.3 21.4

% of sales 4.7% 4.8% 4.8% 5.8%

ROCE * 25.7% 27.5% 41.4% 40.4%

* 2008 results are before non-recurring flotation costs of US$4.695m which were expensed during the period

The Group accounts are prepared in accordance with IFRS

chief financial officer’s report 61

SUMMARY OF GROUP INCOME STATEMENT HIGHLIGHTS

RevenueSales revenues increased by 9.5% in 2009 to US$704.7m (2008: US$643.4m) reflecting continued strong growth in our

main geographical business regions, particularly in Australasia, Europe and the Caribbean, Africa and the Middle East.

The breakdown of revenue by business unit shows a continuation in the pattern we saw in the first half of 2009, with the

Specialist EPC unit showing a reduction and the Construction and Technical Support Services units both showing

increased shares. Specialist EPC represented 24% of Group revenue (2008: 29%), Construction 49% (2008: 43%) and

Technical Support Services 27% (2008: 28%).

A review of the composition of our order backlog at December 2009 of US$1,497.4m shows that 55.9% of the total

consists of Specialist EPC (31 December 2008: 31.5%). Also, looking at the composition of the pipeline of the future

projects that we are pursuing, which are valued at in excess of US$2.91bn, we can see that 47.2% of that total consists

of Specialist EPC projects. This indicates that this sector should account for a larger portion in future years.

Sales to the oil and gas and petrochemicals market in 2009 totalled US$584.2m or 82.9% of Group revenues, up from

US$532.3m or 82.7% of Group revenues in 2008. Our remaining revenues have come from the power sector (6.5%),

mining and metals sector (2.4%) and from other sectors (8.2%).

Gross profitGross profits of US$94.8m or 13.5% of sales were recorded in 2009, an increase of US$7.2m or 8.2% on the 2008 figure

of US$87.6m.

Selling, general & administrative expenses (SG&A)SG&A expenses in 2009 increased by US$3.7m to US$55.2m in absolute terms (2008: US$51.4m). In relative terms, as

a percentage of sales the number is down by 0.2% to 7.8% (2008: 8.0%). This fall in percentage terms has been achieved

through prudent management of overheads during the year.

Other operating incomeOther operating income for the year was US$1.7m. This mainly consists of sale of scrap, discounts received and recovery

of bad debts previously provided for. This figure is up US$1.1m on the 2008 figure of US$0.6m.

Operating profit before finance costsOperating profit before finance costs for the year increased by US$4.5m to US$41.3m or 5.9% of sales, up from

US$36.8m or 5.7% in 2008.

Geographically, the main increase occurred in the Middle East (up US$8.1m to US$31.0m). This is mainly attributable to

strong performance in our Construction and Technical Support Services business units in Saudi Arabia and Qatar.

In the Arctic and New Areas region, profits are down US$3.0m to US$2.9m. Activity levels in the first half of the year were

substantially lower than anticipated. However, as indicated in the interim results, the position significantly improved in the

latter half of the year.

The operating profit in the Africa region is up US$2.5m to US$14.6m. This is attributable to strong performance in the

shutdown and construction sectors.

The Australasia, Europe and Caribbean region recorded an operating loss of US$8.6m, up US$2.7m on the 2008 loss of

US$5.9m. This is mainly due to costs associated with setting up new structures in Australia to support the Gorgon Projects

and the roll-out costs associated with the new Global Business Unit structure.

Net finance incomeNet finance income for the year was US$1.3m, down US$2.7m from the 2008 figure. This reduction is primarily due to

reduced deposit interest income during the year.


Share of joint ventures’ profit/(loss)Profit for the period from our joint venture operations was US$1.8m (2008: loss of US$0.1m). This income is attributable

to an increase in activity levels and improved margins and builds on the steady figures reported in the first half of the year.

Profit before taxProfit before tax for 2009 is US$44.5m or 6.3% of sales. This represents an increase of 9.2% on the 2008 figure of

US$40.7m, and maintains the net margin percentage at a level that is consistent with the previous two years.

TaxationThe tax charge for the year is US$11.2m, which is an effective tax rate of 25.1%. This compares with an effective rate

of 24.2% for 2008. The slightly higher percentage in 2009 reflects the fact that the Group has expanded its business into

new regions which have higher average tax rates.

Net profit for the yearProfit for the year from continuing operations was US$33.3m, up 7.9% on 2008. Net profit equates to 4.7% of revenue

which is broadly in line with the prior years.

Non-controlling interestNon-controlling interest for the year is US$2.514m or 0.36% of sales (2008: US$2.068m or 0.32%). The non-controlling

interest relates to our Black Economic Empowerment partner in Africa and the higher percentage is due to increased

profits in Africa during the year (profits in Africa increased by 20% from 2008).

Earnings per shareBasic earnings per share for the year were 26.46 US$ cents (2008: 25.09 US$ cents). This calculation is based on a

weighted average number of 116,371,470 shares in issue in 2009.

Diluted earnings per share for the year were 26.35 US$ cents (2008: 25.09 US$ cents). This calculation is based on a

weighted average number of 116,843,209 shares in issue in 2009.

DividendThe Group reports its financial results in US dollars and accordingly declares its dividends in US dollars. Dividends are

paid in sterling using an exchange rate calculated at the record date, and shareholders have the option of electing to have

their dividend paid in another currency. The interim dividend payment amounting to 2.0 US$ cents per share was made

in October 2009 and the Directors intend to propose a final dividend payment of 4.0 US$ cents per share which would

make a total dividend payment of 6.0 US$ cents per share for the year ended December 2009. The final dividend payment

will be made in June 2010 to shareholders on the register at the close of business on 21 May 2010.

SUMMARY OF GROUP BALANCE SHEET HIGHLIGHTS

Working capital

Working capital at year end was US$112.3m, up 9.6% on 2008 year end (US$102.5m).

Current assets at year end were US$378.7m, up US$97.5m or 34.7% on 2008 (US$281.2m). This growth is due to

increased contract receivables of US$66.3m and increased cash balance of US$25.8m, reflecting the strong trading

performance during the year.

Current liabilities at year end were US$266.4m, up US$87.7m or 49.1% on 2008. The increase is attributable to increased

trade and other accruals reflecting the strong trading performance during the year.

Equity Shareholders’ equity at year end was US$140.1m, up 22.8% on 2008 (US$114.1m). This reflects the strong growth in

retained earnings during the year.

Total assetsTotal assets at the end of the year were US$433.9m, up 39.0% or US$121.8m on 2008. The increase is due to a

combination of additional fixed asset purchases (mainly cranes in South Africa), growth in trade receivables and growth in

cash balances reflecting the strong trading performance of the Group during the year.

SUMMARY OF GROUP CASH FLOW HIGHLIGHTS

Cash flow from operationsCash generated from operations for the year was US$67.7m, up 209.1% or US$45.8m on 2008 levels. This is attributable

to a strong trading performance including a significant reduction in work-in-progress levels.

Cash flow used in investing activitiesNet cash used in investing activities was US$26.0m, up 53.6% on the 2008 year end level and primarily related to the

purchase of plant and equipment in South Africa.

Cash flow from financing activitiesNet cash generated from financing activities for the year was US$2.7m. This is the result of net finance lease proceeds of

US$10.0m less dividend payments of approximately US$7.0m.

Net cash and cash equivalentsNet cash and cash equivalents amounted to US$179.8m at year end, up US$25.4m or 16.5% on the 2008 figure of

US$154.4m.

chief financial officer’s report 63


directors’ report

The Directors submit their report together with the Consolidated Financial Statements of the Group for the year ended

31 December 2009.

Principal activities

The principal activities of the Group consist of the provision of mechanical, electrical, controls and instrumentation

engineering, construction and management services to the oil and gas, petrochemical, power, process, water and

environmental, communications and commercial and infrastructure services.

Board of Directors

The Directors who served the Company during the year ended 31 December 2009 were:


Hugh O’Donnell

Hassan Abas

David Beldotti

Ed Power

Hans Kraus

Brendan Lyons

Results and dividends

The Consolidated Income Statement and Consolidated Statement of Financial Position for the year ended 31 December

2009 are set out on pages 68 and 70. Profit before taxation for the year amounted to US$44.5m, an increase of 9.2%*

on the previous year. After providing for tax and non-controlling interest, the net profit attributable to shareholders was

US$30.8m (2008: US$28.8m*). Basic earnings per share amounted to US$26.46 cents compared with US$25.09* cents

in the previous year, an increase of 5.5%. Dividends proposed and paid during the year amounted to US$6.8m.

Business review and future developments

A review of the Group performance for the year is included in the Chief Executive Officer’s Report and in Outlook, Our

Markets and Sector Focus.

Admission to AIM

The ordinary shares of the Company were admitted to trading on the AIM Market of the London Stock Exchange on 5

February 2008. The listing raised Stg£66.7m (US$131.8m) before expenses, of which Stg£18.8m (US$37.1m) was raised

by the Company, before expenses, with the remainder going to the selling shareholders. The placing price was 115p per

share.

* 2008 results are before non-recurring flotation costs of US$4.7m which were expensed during the period.

directors’ report 65

Directors’ beneficial interests in ordinary sharesAt 31 December At 31 December

2008 2009Hassan Abas (i) 15,000,000 15,437,500

Tan Sri Mohd Razali Abdul Rahman (i) 15,000,000 15,437,500

Hugh O’Donnell 7,500,000 7,500,000

Ed Power (ii) 1,182,521 1,099,884

The Company operates a share option scheme for certain employees and in addition to the interests disclosed above

certain Directors have options to acquire shares in the Company. Full details are as follows:

Director Number Granted Exercised Number Exercise Date from Expiry dateand date at during during at 31 price whichof grant 1 January 2009 year year December 2009 Stg£ exercisable

Hugh O’Donnell

1 July 2009 - 127,000 - 127,000 1.545 1 July 2012 30 June 2019

Ed Power

1 July 2009 - 127,000 - 127,000 1.545 1 July 2012 30 June 2019

No options lapsed during the year. The market price of the shares at 31 December 2009 was Stg£1.99 and the price

during 2009 ranged from Stg£0.97 to Stg£2.17.

Significant shareholders

Interests in 3% or more of the issued share capital which have been notified to the Company in accordance with the

Articles of Association of the Company were:

At 31 December 2008 At 31 December 2009

No. of shares % No. of shares %Kerbet Limited 30,000,000 25.78 30,875,000 26.53Noel Kelly 7,500,000 6.44 7,500,000 6.44Hugh O’Donnell 7,500,000 6.44 7,500,000 6.44Danache Holdings Limited 13,339,213 11.46 11,660,570 10.02Blackrock Investment Management (UK) 7,807,121 6.71 9,212,957 7.92BAE Systems Pension Fund Investors 5,725,000 4.92 5,725,000 4.92Schroder Investment Management 6,950,000 5.97 4,675,000 4.02Standard Life Investments - - 3,576,309 3.07Henderson Global Investors 4,416,713 3.80 - -

(i) These shares are held indirectly by Hassan Abas and Tan Sri Mohd Razali Abdul Rahman respectively through Kerbet

Limited. 20% of the shares in Kerbet Limited are beneficially held by Covili Investment Limited and the remaining 80%

held by Gigondas Real Estate Inc. Each of Hassan Abas and Tan Sri Mohd Razali Abdul Rahman indirectly hold a

beneficial interest of 50% of the shares in both of Covili Investment Limited and Gigondas Real Estate Inc.

(ii) These shares are held indirectly by Ed Power through Danache Holdings Limited. Ed Power has a beneficial interest of

approximately 9.43% of Danache Holdings Limited. The shares in Danache Holdings Limited are held by Essex Trust

Limited in trust for certain managers of the Group, of which Ed Power is one.


Going concern

The Directors confirm that it is appropriate to apply the going concern concept in preparing the Financial Statements of

the Group. In forming this view, the Directors have reviewed the Group’s budgets and projections, and have satisfied

themselves that the Group is in a sound financial position.

Statement of Directors’ responsibilities

Jersey company law requires the Directors to prepare the Financial Statements for each financial year which give a true

and fair view of the state of affairs of the Group and of the Company and of the profit or loss of the Group for that year.

In preparing those Financial Statements, the Directors are required to:

• select suitable accounting policies and then apply them on a consistent basis;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable accounting standards have been followed, subject to any material differences disclosed and

explained in the Financial Statements; and

• prepare the Financial Statements on the going concern basis unless it is not appropriate to presume that the Group

will continue in business.

The Directors are responsible for keeping proper books of accounting records which disclose with reasonable accuracy

at any time the financial position of the Group and the Company and to ensure that the Financial Statements comply with

relevant legislation. They are also responsible for safeguarding the assets of the Group and for taking reasonable steps

for the prevention and detection of fraud and other irregularities.

Auditors

The auditors, BDO, Registered Auditors, have expressed their willingness to continue in office in accordance with Article

109(4) of Companies (Jersey) Law, 1991.

On behalf of the Board of Directors

Hugh O’Donnell Ed Power

Director Director

27 April 2010

67

independent auditors’ report

To the shareholders of Kentz Corporation Limited

We have audited the Group Financial Statements of Kentz Corporation Limited (“the Company”) and its subsidiaries

(together “the Group”) for the year ended 31 December 2009 which comprise the Consolidated Income Statement, the

Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated

Statement of Cash Flows and the related notes 1 to 34. These Group Financial Statements have been prepared under

the accounting policies set out therein.

This report is made solely to the Company’s members, as a body, in accordance with Article 110 of the Companies

(Jersey) Law 1991 and the terms of our letter of engagement. Our audit work has been undertaken so that we might

state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other

purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the

Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditors

The Directors are responsible for preparing the Annual Report and the Group Financial Statements in accordance with

applicable Jersey law as set out in the Statement of Directors’ Responsibilities and International Financial Reporting

Standards.

Our responsibility is to audit the Group Financial Statements in accordance with relevant legal and regulatory requirements

and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the Group Financial Statements give a true and fair view and whether the

Group Financial Statements have been properly prepared in accordance with the Companies (Jersey) Law 1991. We also

report to you whether, in our opinion, we have not received all the information and explanations we require for our audit.

We read other information contained in the Annual Report and consider whether it is consistent with the audited Group

Financial Statements. The other information comprises the Chairman’s Statement, Chief Executive Officer’s Report, the

Corporate Governance Report, Chief Financial Officer’s Report and the Directors’ Report. We consider the implications

for our report if we become aware of any apparent misstatements or material inconsistencies with the Group Financial

Statements. Our responsibilities do not extend to any other information.

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing

Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in

the Group Financial Statements. It also includes an assessment of the significant estimates and judgements made by the

Directors in the preparation of the Group Financial Statements, and of whether the accounting policies are appropriate to

the Group’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary

in order to provide us with sufficient evidence to give reasonable assurance that the Group Financial Statements are free

from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also

evaluated the overall adequacy of the presentation of information in the Group Financial Statements.

Opinion

In our opinion:

• The Group Financial Statements give a true and fair view, in accordance with the International Financial Reporting

Standards, of the state of the Group’s affairs as at 31 December 2009 and of its profit for the year then ended.

• The Group Financial Statements have been properly prepared in accordance with the Companies (Jersey) Law 1991.

BDO

Dublin

Registered Auditors

27 April 2010


consolidated income statement

Year Ended 31 December

2008

In thousands of USD Notes 2009 Before Flotation 2008flotation costs

Total costs (Note 4) Total

Revenue 3 704,662 643,414 - 643,414Cost of sales (609,849) (555,773) - (555,773)

Gross profit 94,813 87,641 - 87,641

Administration expenses (52,727) (48,848) - (48,848)Distribution & selling costs (2,430) (2,561) - (2,561)Other operating income/(cost) 1,654 609 (4,695) (4,086)

Operating profit/(loss) before finance costs 5 41,310 36,841 (4,695) 32,146

Net finance income 8 1,333 3,994 - 3,994

Share of joint ventures’ profit/(loss) 1,813 (118) - (118)

Profit/(loss) before tax 44,456 40,717 (4,695) 36,022

Tax expense 9 (11,150) (9,845) - (9,845)

Profit/(loss) for the year 33,306 30,872 (4,695) 26,177

Attributable to:Equity holders of the parent 30,792 28,804 (4,695) 24,109Non-controlling interest 20 2,514 2,068 - 2,068

Profit/(loss) for the year 33,306 30,872 (4,695) 26,177

Earnings per share (US$ cents) 11Basic 26.46 25.09 (4.09) 21.00Diluted 26.35 - - -

The attached notes 1 to 34 form part of these Consolidated Financial Statements.

On behalf of the Board


Director Director

69

consolidated statement of comprehensive income


In thousands of USD Notes 2009 2008

Profit for the year 33,306 26,177

Other comprehensive income

Exchange translation differences- on employee benefits (402) 802- on foreign currency net investments (522) 3,150

Actuarial gains/(losses) on defined benefits plans 26 2,156 (8,316)

Total other comprehensive income/(expense) 1,232 (4,364)

Total comprehensive income 34,538 21,813

Total comprehensive income attributable to:Equity holders of the parent 32,024 19,745 Non-controlling interest 20 2,514 2,068

Total recognised income and expenses for the year 34,538 21,813



consolidated statement of financial position



ASSETSNon-current assetsProperty, plant & equipment 12 47,447 25,345Goodwill 13 - 543Other investments 14 7,632 2,902Trade and other receivables 16 - 1,936Deferred tax asset 24 149 184

Total non-current assets 55,228 30,910

Current assetsInventories 15 25,150 39,157Trade and other receivables 16 161,359 84,078Amounts owed by related parties 31 11,868 3,412Cash and bank balances 17 180,284 154,504

Total current assets 378,661 281,151

Total assets 433,889 312,061

EQUITYShare capital 18 2,284 2,284Share premium 19 39,568 39,568Reserves 19 3,205 2,388Retained earnings 19 95,040 69,861

Total equity attributable to equity holders of the parent 19 140,097 114,101 Non-controlling interests 20 2,827 125

Total equity 142,924 114,226

LIABILITIES

Non-current liabilitiesInterest bearing loans and borrowings 22 - 30Obligations under finance leases – due after 1 year 25 8,202 -Employee benefit obligations 26 13,128 15,670Amounts owed to related parties 31 92 92Trade and other payables 2,805 3,278Deferred tax liabilities 24 374 81

Total non-current liabilities 24,601 19,151

Current liabilitiesTrade and other payables 21 254,546 170,464Corporation tax payable 4,545 4,317Interest bearing loans and borrowings 22 1,969 2,009Obligations under finance leases – due within 1 year 25 1,850 -Amounts owed to related parties 31 3,454 1,894

Total current liabilities 266,364 178,684

Total liabilities 290,965 197,835

Total equity and liabilities 433,889 312,061

The attached notes 1 to 34 form part of these Consolidated Financial Statements.The Financial Statements were approved and authorised for issue by the Board on 27 April 2010.

On behalf of the Board


Director Director

71

consolidated statement of cash flows



Cash flows from operating activitiesProfit before tax 30 44,456 36,022Adjustments for:

Depreciation 8,023 5,448Net finance income (1,333) (3,994)Loss on sale of property, plant & equipment 80 65Share of (profit)/loss from joint ventures (1,813) 118Impairment of goodwill 624 -Current service cost 495 519Share based payment expense 817 -(Increase)/decrease in trade and other receivables (83,111) 22,771Decrease/(increase) in inventories 14,007 (20,964)Increase/(decrease) in trade and other payables 85,477 (18,073)

Cash generated from operations 67,722 21,912

Interest paid (182) (202)Income taxes paid (11,407) (10,662)

Net cash from operating activities 56,133 11,048

Cash flows from investing activities(Investment in)/return from joint venture (1,825) 1,476Disposal of subsidiary (net of cash) - 1,000Purchase of property, plant and equipment (24,258) (22,112)Proceeds from sale of equipment 12 826Interest received 2,005 4,182Pension contribution (1,955) (2,311)

Net cash used in investing activities (26,021) (16,939)

Cash flows from financing activitiesProceeds of share issue - 37,114Expenses associated with new share issue - (3,071)Proceeds from finance lease liabilities 10,291 -Payments of finance lease liabilities (239) -Payments of long-term borrowings (30) (86)Payments of short-term borrowings (503) (168)Proceeds from short-term borrowings 139 1,388Dividends paid to non-controlling interest (150) -Dividends paid to equity holders of the Company (6,845) (2,004)

Net cash generated from financing activities 2,663 33,173

Net increase in cash and cash equivalents 32,775 27,282

Cash and cash equivalents at beginning of year 154,359 123,651Exchange difference (7,336) 3,426

Cash and cash equivalents at end of year 17 179,798 154,359



notes to the consolidated financial statementsfor the year ended 31 December 2009

1. Corporate Information

Kentz Corporation Limited (the “Company”) is a company incorporated in Jersey. The Consolidated Financial Statements

comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in jointly

controlled entities and jointly controlled operations.

The Group’s principal activity is the provision of engineering and construction services, principally in the oil services sector.

The Consolidated Financial Statements of Kentz Corporation Limited for the year ended 31 December 2009 were

authorised for issue in accordance with a resolution of the Directors on 27 April 2010.

2. Significant accounting policies

(a) Statement of compliance

The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting

Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB).

(b) Basis of preparation

The Financial Statements are presented in US$, rounded to the nearest thousand which represents the functional currency

of the Group, as it is the currency of the primary economic environment in which the Group operates. Foreign operations

are consolidated in accordance with the policies set out in note e(iii) below.

They are prepared on the historical cost basis except that financial instruments held for trading are recorded at their fair

value.

The preparation of Financial Statements in conformity with IFRS requires management to make judgements, estimates

and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and

expenses. The estimates and associated assumptions are based on historical experience and various other factors that

are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements

about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ

from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the

revision and future periods if the revision affects both current and future periods.

Judgements made by management in the application of IFRS that have significant effect on the Financial Statements and

estimates with a significant risk of material adjustment in the next year are discussed in note 33.

The accounting policies set out below have been applied consistently to all periods presented in these Consolidated

Financial Statements and in preparing an opening IFRS Statement of Financial Position at 1 January 2004 for the

purposes of the transition to IFRS.

The accounting policies have been applied consistently by Group entities.

(c) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or

indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing

control, potential voting rights that presently are exercisable or convertible are taken into account. The Financial

Statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences

until the date that control ceases. See note 32.

notes to the consolidated financial statements 73

2. Significant accounting policies (continued)

(ii) Joint ventures

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject

to joint control. Joint control is the contractually agreed sharing of control such that significant operating and financial

decisions require the consent of more than one venturer. The Group has two types of joint venturers:

- Jointly controlled entities and

- Jointly controlled operations

A jointly controlled entity is an entity over whose activities the Group has joint control, established by contractual

agreement. The results, assets and liabilities of a jointly controlled entity are incorporated in these Consolidated Financial

Statements using the equity method of accounting.

A jointly controlled operation involves the use of assets and other resources of the Group and other venturers rather than

the establishment of a corporation, partnership or other entity. The Group’s proportionate interest in the assets, liabilities,

revenues, expenses and cash flows of jointly controlled operations are incorporated into the Group’s Financial Statements

under the appropriate headings.

(iii) Non-controlling interest

Non-controlling interests in subsidiaries consolidated by the Group are disclosed separately from the Group’s equity and

Income Statement. Losses attributable to non-controlling interests in excess of the non-controlling interest in the net

assets of the subsidiary are adjusted against the interest of the Group unless there is a binding obligation on the part of

the non-controlling interest to contribute additional investment in the subsidiary.

(iv) Transactions eliminated on consolidation

Intra-Group balances and any unrealised gains and losses or income and expenses arising from intra-Group transactions

are eliminated in preparing the Consolidated Financial Statements. Unrealised gains arising from transactions with

associates and jointly controlled entities are eliminated to the extent of the Group’s interest in the entity. Unrealised losses

are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.



(d) International Financial Reporting Standards not yet effective

Set out below are new accounting standards and interpretations which will be applicable going forward. None are

expected to have a significant effect on the results of the operation.

Accounting Standard/Interpretation Type Effective Date

IAS 24 (Revised) – Related Party Disclosures Revised Statement Financial year

commencing on or

after 1 January 2011

IAS 27 (Revised) – Consolidated and separate Revised Statement Financial year

Financial Statements commencing on or

after 1 July 2009

IAS 32 (Amendment) – Financial Instruments: Amended Statement Financial year

Presentation – Classification of Rights Issues commencing on or

after 1 February 2010

IAS 39 – Eligible Hedge items Revised Statement Financial year

commencing on or

after 1 July 2009

IFRS 1 – First time Adoption of International Revised Statement Financial year

Financial Reporting Financial Standards: Improved commencing on or

structure but no technical changes after 1 July 2009

IFRS 2 – Share-based Payment: Group cash- Revised Statement Financial year

settled share-based payment transactions commencing on or


IFRS 3 (Revised) – Business Combinations Revised Statement Financial year

commencing on or

after 1 July 2009

IFRS 9 – Financial Instruments New Statement Financial year

commencing on or


IFRIC 14 (Amendment) – The Limit on a Defined Amended Interpretation Financial year

Benefit Asset, Minimum Funding Requirements commencing on or

and their Interaction – Prepayment of minimum after 1 January 2011

funding requirements.

IFRIC 17 – Distribution of Non-cash Assets New Interpretation Financial year

to owners commencing on or

after 1 July 2009

IFRIC 19 – Extinguishing Financial Liabilities New Interpretation Financial year

with Equity Instruments commencing on or

after 1 July 2010


(e) Foreign currency

(i) Functional and presentation currency

Items included in the Financial Statements of each of the Group’s entities are measured using the currency of the primary

economic environment in which the respective entity operates (“the functional currency”). The Consolidated Financial

Statements are presented in US Dollars, which is the Group’s presentation currency.

(ii) Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are re-translated to US$ at the foreign exchange rate

ruling at the Statement of Financial Position date. Foreign exchange differences arising on translation are recognised in

the Income Statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign

currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities

denominated in foreign currencies that are stated at fair value are translated to US$ at foreign exchange rates ruling at the

dates the fair value was determined.

(iii) Financial statements of foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are

translated to US$ at foreign exchange rates ruling at the Statement of Financial Position date. The results and cash flows

of foreign operations are translated to US$ at average exchange rates for the year. Foreign exchange differences arising

on re-translation are recognised directly in a separate component of equity.

(iv) Net investment in foreign operations

Adjustments arising on translation of the results of foreign operations at average rates, and on re-statement of the opening

net assets at closing rates, are dealt with in a separate translation reserve within equity. On disposal of a foreign operation,

accumulated currency translation differences are recognised in the Consolidated Income Statement as part of the overall

gain or loss on disposal; the cumulative currency translation differences arising prior to 1 January 2004 (the transition date

to IFRS) have been set to zero for ascertaining the gain or loss on disposal of a foreign operation subsequent to that date.

Translation differences arising after 1 January 2004 are presented as a separate component of equity in the foreign

currency translation reserve in the Consolidated Statement of Financial Position.

(f) Property, plant and equipment

(i) Owned assets

Items of property, plant and equipment are stated at cost, as deemed cost, less accumulated depreciation (see below)

and impairment losses (see accounting policy m).

Certain items of property, plant and equipment which had been re-valued to fair value on or prior to 1 January 2004, the

date of transition to IFRS, are measured on the basis of deemed cost, being the re-valued amount at the date of that

revaluation.

(ii) Leased assets

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance

leases. The Group has entered into various operating leases, the payments for which are recognised as an expense in the

Consolidated Income Statement on a straight-line basis over the lease terms. (see accounting policy t).

(iii) Depreciation

Depreciation is charged to the Income Statement on a straight-line basis over the estimated useful lives of each part of

an item of property, plant and equipment at the following rates:

• Buildings 10%

• Plant and fixtures 10% - 100%

• Motor vehicles 20% - 100%

The residual value, if not insignificant, is re-assessed annually.




(g) Goodwill and intangible assets

(i) Goodwill

Goodwill represents the excess of the cost of an acquisition of a subsidiary or joint venture, over the Group’s interest in

the fair value of the identifiable assets, liabilities and contingent liabilities recognised at the date of acquisition.

Goodwill on the acquisition of subsidiaries and joint ventures is included in intangible assets. Goodwill is tested annually

for impairment, or more frequently when there is an indication that the goodwill may be impaired and carried at cost less

accumulated impairment losses, if any. Impairment losses previously recognised cannot be reversed (see accounting

policy m).

(ii) Other intangible assets

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (see below) and

impairment losses (see accounting policy m).

Expenditure on internally generated goodwill and brands is recognised in the Income Statement as an expense as

incurred.

(iii) Amortisation

Goodwill and intangible assets with an indefinite useful life are not amortised. However they are systematically tested for

impairment at each Statement of Financial Position date.

(h) Trade and other receivables

Trade and other receivables are stated at their cost less impairment losses (see accounting policy m).

(i) Long-term contract work in progress

Amounts recoverable on construction contracts, which are included in trade and other receivables, are stated at the net

sales value of the work done less amounts received as progress payments on account. Cumulative costs incurred, net

of amounts transferred to cost of sales, after deducting foreseeable losses and progress payments on account not

matched with revenue, are included as construction contract balances within inventories. Where the progress billings

exceed the sum of costs incurred and recognised profit or recognised loss, the balance is shown under trade and other

payables as amounts due to customers on contracts.

(j) Financial assets

All financial assets are initially measured at fair value, including transaction costs, except for those financial assets

classified as at fair value through profit or loss which are initially measured at fair value, excluding transaction costs. Where

the effect on fair value at initial recognition of any extended payment terms is not material, no adjustments were made.

The fair value of a financial instrument on initial recognition is normally the transaction price, unless the fair value is evident

from observable market data.

Subsequent measurement for financial assets is set out below.

Loans and receivables

Trade and other receivables (excluding Value Added Taxation, pre-payments and operating lease receivables), loans and

cash and cash equivalents that have fixed or determinable payments that are not quoted in an active market are classified

as loans and receivables.

Loans and receivables are subsequently measured at amortised cost, using the effective interest rate method less any

impairment loss. Interest income is recognised in profit or loss by applying the effective interest rate, except for short-term

trade receivables where the recognition of interest would be immaterial. Trade receivables are carried at original invoice

amount less any impairment loss.

The accounting policy for bank and cash balances is dealt with under cash and cash equivalents set out below.


Trade receivables are carried at anticipated realisable value. An estimate is made for doubtful receivables based on a

review of all outstanding amounts at the year end. Bad debts are written off during the year in which they are identified.

De-recognition of financial assets

The Group de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire or it

transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

(k) Financial liabilities

All financial liabilities are initially measured at fair value, including transaction costs, except for those financial liabilities

classified as at fair value through profit or loss, which are initially measured at fair value, excluding transaction costs.

Subsequent measurement for financial liabilities is set out below.

Other financial liabilities not measured at fair value through profit or loss

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest

expense recognised on an effective yield basis, except for short-term trade payables where the recognition of interest

would be immaterial.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest

expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash

payments through the expected life of the financial liability or, where appropriate, a shorter period.

De-recognition of financial liabilities

The Group de-recognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or

expired. On de-recognition, the difference between the carrying amount of the financial liability, including related

unamortised costs, and settlement amounts paid are included in profit or loss.

(l) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and

form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the

purpose of the Statement of Cash Flows.

(m) Impairment

The carrying amounts of the Group’s assets, other than inventories and deferred tax assets (see accounting policy u(ii)),

are reviewed at each Statement of Financial Position date to determine whether there is any indication of impairment. If

any such indication exists, the asset’s recoverable amount is estimated.

For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the

recoverable amount is estimated at each Statement of Financial Position date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its

recoverable amount. Impairment losses are recognised in the Consolidated Income Statement.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any

goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets

in the unit (group of units) on a pro rata basis.

Goodwill and indefinite-lived intangible assets were tested for impairment at 1 January 2004, the date of transition to IFRS,

even though no indication of impairment existed.

When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is

objective evidence that the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised

in profit or loss even though the financial asset has not been de-recognised. The amount of the cumulative loss that is

recognised in profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss

on that financial asset previously recognised in profit or loss.




(n) Dividends

Dividends are recognised as a liability in the Group’s Financial Statements in the period in which they are declared by the

Company. In the case of final dividends, this is when approved by the shareholders at the AGM.

(o) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised as an expense in the Consolidated

Income Statement as incurred.

(ii) Defined benefit plans

The Group’s net obligation in respect of the defined benefit pension plan is calculated by estimating the amount of future

benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted

to determine its present value, and the fair value of any plan assets is deducted. The discount rate is the yield at the

Statement of Financial Position date on high quality corporate bonds that have maturity dates approximating to the terms

of the Group’s obligations. The calculation is performed by a qualified actuary using the projected unit credit method. The

excess of scheme liabilities over scheme assets is included in the Statement of Financial Position under non-current

liabilities. The increase in the present value of the liabilities of the scheme expected to arise from employee service (current

service cost) in the period is charged to operating profit. The expected return on the scheme’s assets and the increase

during the period of the scheme’s liabilities, arising from the passage of time, are included as other finance income/costs.

Actuarial gains and losses arising subsequent to the transition to IFRS are recognised in full in the Statement of

Comprehensive Income.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is

recognised as an expense in the Consolidated Income Statement on a straight-line basis over the average period until the

benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in the

Consolidated Income Statement.

Where the calculation results in a benefit to the Group, the recognised asset is limited to the net total of any unrecognised

and past service costs and the present value of any future refunds from the plan or reductions in future contributions to

the plan.

A full actuarial valuation is carried out every 3 years. The next actuarial valuation is due on 1 May 2010.

(iii) Share-based payments

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged

to the Consolidated Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are

taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that,

ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually

vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long

as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are

satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting

condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options,

measured immediately before and after the modification, is also charged to the Consolidated Statement of

Comprehensive Income over the remaining vesting period.


(p) Provisions

A provision is recognised in the Statement of Financial Position when the Group has a present legal or constructive

obligation as a result of a past event, and it is probable than an outflow of economic benefits will be required to settle the

obligation. If the effect is material, 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, where appropriate, the risks specific to the

liability.

(q) Trade and other payables

Trade and other payables are not interest-bearing and are stated at their settlement amount.

(r) Borrowings

Borrowings are recognised initially at proceeds received, net of transactions costs. Subsequent measurement is at

amortised cost. Finance charges including any premiums payable on settlement are recognised in the Consolidated

Income Statement over the period of the borrowings using the effective rate of interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability

for at least 12 months after the Statement of Financial Position date.

(s) Revenue recognition

Contract revenue is recognised under the percentage of completion method. When the outcome of the contract can be

reliably estimated, revenue is recognised by reference to the proportion that accumulated cost of sales up to the year end

bear to the estimated total costs of the contract. When the contract is at an early stage and its outcome cannot be reliably

estimated, revenue is recognised to the extent of costs incurred up to the year end which are considered recoverable.

Revenue related to variation orders is recognised when it is probable that the customer will approve the variation and the

amount of revenue arising from the variation can be reliably measured.

A claim is recognised as contract revenue when settled or when negotiations have reached an advanced stage such that

it is probable that the customer will accept the claim and the amount that it is probable will be accepted by the customer

can be measured reliably.

Losses on contracts are assessed on an individual contract basis and provision is made for the full amount of the

anticipated losses, including any losses relating to future work on a contract, in the period in which the loss is first

foreseen.

(t) Expenses

(i) Operating lease payments

Payments made under operating leases are recognised in the Consolidated Income Statement on a straight-line basis

over the term of the lease. Lease incentives received are recognised in the Consolidated Income Statement as an integral

part of the total lease expense.

(ii) Finance lease payments

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The

finance charge is 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.

(iii) Net financing costs

Net financing costs comprise interest payable on borrowings, calculated using the effective interest rate method, interest

receivable on funds invested, dividend income and gains and losses on hedging instruments that are recognised in the

Consolidated Income Statement.




Interest income is recognised in the Consolidated Income Statement as it accrues, using the effective interest method.

Dividend income is recognised in the Income Statement on the date the entity’s right to receive payments is established

which, in the case of quoted securities, is usually the ex-dividend date. The interest expense component of finance lease

payments is recognised in the Consolidated Income Statement using the effective interest rate method.

(u) Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the

Consolidated Income Statement except to the extent that it relates to items recognised directly in equity, in which case it

is recognised in equity.

(i) Current tax

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially

enacted at the Statement of Financial Position date, and any adjustment to tax payable in respect of previous years.

(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities for financial

reporting purposes and for the amounts used for taxation purposes. The following temporary differences are not provided

for: goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor

taxable profit, nor differences relating to investments in subsidiaries to the extent that they will probably not reverse in the

foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of

the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the Statement of Financial

Position date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against

which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related

tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay

the related dividend.

3. Segment reporting

Segment information is presented in respect of the Group’s geographical and business segments. The primary format,

geographical segments, is based on the Group’s management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be

allocated on a reasonable basis. Unallocated items comprise mainly income-earning assets and revenue, interest-bearing

loans, borrowings and expenses, and corporate assets and expenses.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to

be used for more than one period.

(i) Geographical segments

The Group manages its business on a worldwide basis by organising its activities into four distinct regions. The

geographical areas are:

• Middle East

• Africa

• Australasia, Europe and Caribbean

• Arctic and New Areas region.

Australasia, Europe and Caribbean includes all costs associated with the Group’s administrative function.

Arctic and New Areas region includes costs of investing in and developing the Group’s presence in New Areas during

2009.

3. Segment reporting (continued)

In presenting the information on the basis of geographical segments, segment revenue and segment assets are based on

the geographical location of assets.

(ii) Business segments

The Group’s activity comprises of the following main business segments:

• Specialist engineering, procurement, and construction (EPC)

• Construction

• Technical support services

Primary segment information by location of assets

Geographical segments

Year ended 31 December

In thousands of USD 2009 2008

Revenue by location of assetsMiddle East 445,629 405,951Africa 158,636 131,108Australasia, Europe and Caribbean 39,480 15,787Arctic and New Areas 60,917 90,568

Total revenue 704,662 643,414

Operating profit/(loss) before net finance cost by location of assetMiddle East 30,956 22,896Africa 14,635 12,173Australasia, Europe and Caribbean (8,608) (5,912)Arctic and New Areas 2,867 5,892

39,850 35,049

Unallocated Group income 1,460 1,792

Operating profit before finance costs 41,310 36,841

Flotation costs - (4,695)

Net finance income 1,333 3,994

Share of joint ventures’ profit/(loss) 1,813 (118)

Profit before tax 44,456 36,022

Income tax expense (11,150) (9,845)

Profit for the year 33,306 26,177




At 31 December


Segment assets (including tax) by location of assetsMiddle East 234,728 173,966Africa 82,090 50,830Australasia, Europe and Caribbean 80,787 51,149Arctic and New Areas 36,284 36,116

Total assets as reported in the Statement of Financial Position 433,889 312,061

Segment liabilities (including tax) by location of assetsMiddle East 169,205 114,516Africa 57,909 38,232Australasia, Europe and Caribbean 33,481 16,511Arctic and New Areas 17,242 12,906

Total segmental liabilities 277,837 182,165

Reconciliation of total liabilities as reported in the Statement of Financial Position

Employee benefits 13,128 15,670

Total liabilities as reported in Statement of Financial Position 290,965 197,835

Other segment informationCapital expenditureMiddle East 3,313 6,774Africa 20,291 13,491Australasia, Europe and Caribbean 401 1,672Arctic and New Areas 253 176

Group total 24,258 22,113

DepreciationMiddle East 3,578 2,788Africa 3,577 1,977Australasia, Europe and Caribbean 478 658Arctic and New Areas 390 25



Secondary segment information by business

Business segments



Revenue by businessSpecialist EPC 166,006 184,471Construction 348,148 279,204Technical support services 190,508 179,739

Total revenue 704,662 643,414

At 31 DecemberIn thousands of USD 2009 2008

Segment assets by businessSpecialist EPC 67,685 40,482Construction 123,815 97,480Technical support services 41,985 26,077

233,485 164,039

Unallocated assets 200,404 148,022

Total assets 433,889 312,061



Capital expenditure by businessSpecialist EPC 1,517 2,186Construction 21,659 16,945Technical support services 534 910Unallocated 548 2,072




4. AIM listing and flotation costs

The ordinary shares of the Company were admitted to trading on the AIM market of the London Stock Exchange on 5

February 2008. The Company raised US$37.1m before expenses from the listing. Total expenses associated with the

admission of Kentz Corporation Limited to the AIM are US$7.8m. These are reflected in the Consolidated Financial

Statements for the 12-month period ended 31 December 2008 with US$3.1m being offset against share premium raised

and US$4.7m being charged to the Consolidated Income Statement.

5. Operating profit before finance costs


In thousands of USD 2009 2008This is arrived at after chargingDepreciation 8,023 5,448Operating lease rentals - plant and machinery 9,621 7,174- other 8,429 7,999Audit fees for audit services 665 673Directors’ remuneration (note 7) 3,929 4,878Loss on sale of fixed assets 80 65

6. Staff cost


2009 2008In numberContinuing operationsContracts 10,027 10,092Administration 298 297Management 112 104


Staff costs for all employees, including Executive Directors, consist of:


In thousands of USD 2009 2008Continuing operations

Wages and salaries 264,497 266,155Share-based payment expense (note 27) 817 -Other pension costs 1,518 1,197

Group total 266,832 267,352

7. Directors’ remuneration

In thousands of USD

Year ended 31 December 2009Executive Directors Basic salary Performance Share based Other Total

and fees related bonus paymentHugh O’Donnell 436 1,800 18 207 2,461Ed Power 318 511 18 144 991

754 2,311 36 351 3,452

Non-Executive DirectorsTan Sri Mohd Razali Abdul Rahman 100 - - - 100Hassan Abas 68 - - - 68David Beldotti 92 - - 72 164Hans Kraus 72 - - - 72Brendan Lyons 73 - - - 73

405 - - 72 477

Total Directors’ Remuneration 1,159 2,311 36 423 3,929

Year ended 31 December 2008Executive Directors Basic salary Performance Share based Other Total

and fees related bonus paymentHugh O’Donnell 453 2,000 - 212 2,665Ed Power 301 802 - 123 1,226Noel Kelly(1) 191 292 - - 483

945 3,094 - 335 4,374

Non-Executive DirectorsTan Sri Mohd Razali Abdul Rahman 104 - - - 104Hassan Abas 58 - - - 58David Beldotti 96 - - 72 168Hans Kraus 80 - - 19 99Brendan Lyons 75 - - - 75

413 - - 91 504

Total Directors’ Remuneration 1,358 3,094 - 426 4,878

(1) Noel Kelly retired on 10 June 2008.



8. Net finance income/(cost)Year ended 31 December


Deposit interest receivable 2,187 4,184Interest payable on bank overdrafts and loans (182) (42)Pension finance charge (672) (148)

1,333 3,994

9. Tax expenseYear ended 31 December


Tax on foreign operations 11,129 9,584Deferred tax on foreign operations 21 261

11,150 9,845

Factors affecting tax charge Profit on ordinary activities before tax 44,456 40,717

Profit on ordinary activities before tax by standard rate of corporation tax of nil - -

Effects of:Higher tax rates on overseas earnings 11,129 9,584

11,129 9,584

10. DividendsYear ended 31 December


Dividends approved (note 19) 6,845 2,004

6,845 2,004

The interim dividend payment amounting to 2.0 US$ cents per share was made in October 2009 and, the Directors have

proposed a final dividend payment of 4.0 US$ cents per share which would make a total dividend payment of 6.0 US$

cents per share for the year ended 31 December 2009.

11. Earnings per share

The calculations of earnings per ordinary share are based on the following profits attributable to ordinary shareholders and

the weighted average number of shares in issue:


2008

In thousands of USD 2009 Before Flotation 2008flotation costs

Total costs (Note 4) Total

Profit/(loss) attributable to ordinary shareholders 30,792 28,804 (4,695) 24,109

No. ’000 No. ’000 No. ’000 No. ’000Weighted average number of shares of the Company used in basic EPS 116,371 114,802 114,802 114,802

Effects of:- Employee share options 472 n/a n/a n/a

Weighted average number of shares of the Company used in diluted EPS 116,843 n/a n/a n/a

Earnings per share (US$ cents) Basic 26.46 25.09 (4.09) 21.00

Diluted 26.35 n/a n/a n/a

12. Property, plant & equipment

Land and Plant and Motor In thousands of USD buildings fixtures vehicles Total

CostAs at 1 January 2009 383 31,931 10,133 42,447Additions 5,664 15,524 3,070 24,258Disposals - (430) (365) (795)Exchange adjustment 832 6,240 493 7,565

As at 31 December 2009 6,879 53,265 13,331 73,475

DepreciationAs at 1 January 2009 - 13,248 3,854 17,102Charge for the year 82 5,601 2,340 8,023Disposals - (388) (315) (703)Exchange adjustment 11 1,445 150 1,606

As at 31 December 2009 93 19,906 6,029 26,028

Net carrying amountsAs at 31 December 2008 383 18,683 6,279 25,345

As at 31 December 2009 6,786 33,359 7,302 47,447



12. Property, plant & equipment (continued)

The net book value of property, plant and equipment for the Group includes the following amounts in respect of assets

held under finance lease and hire purchase contracts.

Year ended 31 DecemberIn thousands of USD 2009 2008

Net book value of assets held under finance leases 14,644 -Depreciation on the assets held underfinance lease 286 -

13. GoodwillYear ended 31 December


Opening balance 543 760Impairment (624) -Exchange adjustments 81 (217)

Closing balance - 543

On 1 January 2007 Kentz (Proprietary) Limited, a Group company incorporated in South Africa acquired the 10% non-

controlling interest in Kentz Automation and Drives Projects (Proprietary) Limited, a company incorporated in South Africa.

This goodwill has been fully impaired in 2009 as Kentz Automation and Drives Projects (Proprietary) Limited is not

undertaking any new contracts.

14. Other investments Joint

In thousands of USD Venture Other Total

Balance at 1 January 2008 3,925 4 3,929Capital return (437) - (437)Exchange adjustments 567 - 567Share of joint venture profits (118) - (118)Loan repaid (1,039) - (1,039)

As at 31 December 2008 2,898 4 2,902

Balance at 1 January 2009 2,898 4 2,902Additional investment 1,810 15 1,825Exchange adjustments 1,092 - 1,092Share of joint venture profits 1,813 - 1,813

As at 31 December 2009 7,613 19 7,632

In 2006, Kentz Pty Limited, a company incorporated in Australia, which is a subsidiary of the Company, acquired a 50%

interest in an incorporated joint venture known as Thiess Kentz Pty Limited. On 17 December 2009, the name of the joint

venture entity was changed to Kentz E&C Pty Limited.

During 2008, Kentz Russia LLC, a subsidiary of the Company, acquired a 50% interest in two Russian joint ventures

known as Kentz-DEM LLC and Kentz-SMNM LLC.

In 2009, Kentz Pty Limited entered into a joint venture agreement in Australia with Thiess Pty Limited and Decmil Pty

Limited. Kentz Pty Limited has a 33.33% interest in this unincorporated joint venture, known as Thiess Decmil Kentz Joint

Venture.

14.1 Joint ventures

The Group’s interests in these joint ventures are accounted for using the equity method.


Total assets 16,961 5,931Total liabilities (9,348) (3,033)

Net investment in the joint ventures 7,613 2,898

15. InventoriesAt 31 December


For construction contracts in progress at the Statement of Financial Position date:Cumulative costs incurred net of amounts transferredto cost of sales under percentage of completion accounting 25,150 39,157

Total inventories 25,150 39,157

16. Trade and other receivablesAt 31 December


Contract trade receivables 125,844 71,569Retentions held by customers 17,259 5,207Prepayments and accrued income 5,043 4,133Other debtors 10,588 346VAT recoverable 1,942 2,646Corporation tax recoverable 683 177

Total trade and other receivables 161,359 84,078

Retentions due after one year - 1,936

Contract trade receivables that are more than 90 days past due are not considered impaired. At 31 December 2009, the

aging of the contract trade receivables was as follows:At 31 December


0 – 60 days 108,847 61,80460 – 90 days 6,774 4,237> 90 days 10,223 5,528

Total contract trade receivables 125,844 71,569



17. Cash and cash equivalentsAt 31 December


Cash and cash equivalents– continuing operations 180,284 154,504

180,284 154,504Bank overdrafts– continuing operations (486) (145)

Cash and cash equivalents in the Statement of Cash Flows 179,798 154,359


Cash at bank and in hand 79,688 85,665Short-term deposits 100,596 68,839

Total cash and bank balances 180,284 154,504

18. Share capital

The share capital of the Company as at 31 December was as follows:In thousands 2009 2008

Authorised share capital186,333,300 ordinary shares of Stg£0.01 each 1,863 1,863

Called up share capital116,371,470 ordinary shares of Stg£0.01 each 1,164 1,164

US Dollar equivalent 2,284 2,284

19. EquityShare Share Share Cumulativecapital premium Capital option Retained translation

In thousands of USD account account reserve reserve earnings reserves Total

At 1 January 2008 14 7,796 206 - 53,930 372 62,318Issue of shares 323 36,791 - - - - 37,114Expenses associated with share issue - (3,072) - - - - (3,072)Bonus issue 1,947 (1,947) - - - - -Total recognised income and expense - - - - 16,595 3,150 19,745Transfer to statutory reserve - - 2,182 - (2,182) - -Dividends (note 10) - - - - (2,004) - (2,004)

At 31 December 2008 2,284 39,568 2,388 - 66,339 3,522 114,101

At 1 January 2009 2,284 39,568 2,388 - 66,339 3,522 114,101Expenses associated with share-based payments - - - 817 - - 817Total recognised income and expense - - - - 32,546 (522) 32,024Dividends (note 10) - - - - (6,845) - (6,845)

At 31 December 2009 2,284 39,568 2,388 817 92,040 3,000 140,097

The capital reserve is a non-distributable reserve which relates to statutory requirements in certain countries in the Middle

East whereby a certain percentage of the profit for a period must be transferred to a statutory reserve which is not

available for distribution.

The cumulative translation reserve is used to record exchange differences arising from the translation of the Financial

Statements in foreign subsidiaries. It is also used to record exchange differences arising on monetary items that form part

of the Group’s net investment in subsidiaries.

20. Non-controlling interest At 31 December


Opening balance 125 339Share of profit 2,514 2,068Purchase of non-controlling interest - (2,277)Dividends paid to non-controlling interest (150) -Exchange difference 338 (5)

Closing balance 2,827 125

The non-controlling interest relates to the 25.002% non-controlling interest held by THEBE Investment in Kentz (Pty)

Limited and its subsidiaries as part of the Black Economic Empowerment initiative in South Africa.



21. Trade and other payablesAt 31 December


Trade creditors 68,064 39,520Other creditors 29,270 17,600Advances on contracts 34,231 36,956Accruals and deferred income 122,981 76,388

254,546 170,464

22. Interest-bearing loans and liabilities

This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings.

For more information about the Group’s exposure to interest rate and foreign currency risk, see note 23

At 31 DecemberIn thousands of USD 2009 2008Current liabilitiesBank overdraft 486 145Current portion of secured loans 1,483 1,864

1,969 2,009

- Bank overdraft 486 145

- Secured loans 1,483 1,864

1,969 2,009

Non-current liabilitiesSecured bank loans - 30

- 30

At 31 December

In thousands of USD Currency Interest rate at Term 2009 200831 December 2009 of loan

Short-term loan AED 4.50% 24 months 37 179Short-term loan EUR 2.75% 30 months 1,446 1,685Bank overdraft AED 6.75% On demand 486 145

1,969 2,009

Long-term loan AED n/a 24 months - 30

1,969 2,039

23. Financial instruments

The focus of the Group’s treasury policy is to ensure that there are sufficient funds to finance the business. Any surplus

funds are kept on interest-bearing deposits. Financial instruments held by the Group principally comprise borrowings,

cash and liquid resources and various items such as receivables and payables, all of which arise directly from its

operations. The main purpose of these financial instruments is to finance the operations of the Group.

The risks arising from these financial instruments are liquidity risk, interest rate risk and exchange rate risk. The Board

reviews and agrees policies for managing each of these risks and these are summarised below. These policies have

remained unchanged during the period under review.

(a) Liquidity risk

Cleared funds held at banks are monitored regularly by senior management and it is the Group’s policy to keep surplus

funds on interest-bearing deposits. At the Statement of Financial Position date there were no significant concentrations

of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset.

(b) Interest rate risk

The financial assets of the Group comprise trade and other receivables and cash and cash equivalents. The trade and

other receivables are non interest-bearing. The cash and cash equivalents earn interest at floating rates based on

individual bank base rates.

(c) Foreign currency risk

The Financial Statements are presented in US$, rounded to the nearest thousand which represents the functional currency

of the Group as it is the currency of the primary economic environment in which the Group operates. The Group is

exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency other than the

US$. The currencies giving rise to this risk are primarily Euro, South African Rand, United Arab Emirates Dirham, Saudi

Riyal, Qatari Riyal, Kuwaiti Dinar, Australian Dollar, Malaysian Ringgit, Thai Baht and Russian Rouble.

Exchange rate risk is managed at the subsidiary levels by ensuring that, as far as possible, income and expenses are

denominated in the appropriate functional currency. Certain subsidiaries enter into forward exchange contracts to hedge

the exchange risk. However, the Directors of the Group consider that those contracts outstanding at the relevant periods

are immaterial to the Group and therefore the Directors consider the carrying value to approximate the fair value.

(d) Fair values

The estimated fair values of financial instruments of the Group approximate to their book values as at the relevant period

ends. The following criteria have been used to assess the fair values of the Group’s financial instruments.

• Receivables, cash and cash equivalents and payables are based on their book values due to their short maturity period.

• Loans are based on their book values which represents the Directors’ opinion of their fair values.

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

As the Group’s bank borrowings bear interest at floating rates, which represent prevailing market rates, the Directors

consider the carrying amount of these borrowings approximates their fair value.

The Directors estimate the fair value of the amounts due to/from related companies approximates to the carrying value.



24. Deferred tax asset/liabilities

Deferred tax is calculated in full on temporary differences under the liability method using tax rates applicable in the various

jurisdictions in which the Group operates in. The movement on the deferred tax account is as shown below:


Opening balance (103) (986)Charge to the income statement 21 261Utilised during the year (404) 177Foreign exchange adjustment 711 445

Net deferred tax liability/(asset) at the end of the year 225 (103)

Deferred taxation is reflected in the Statement of Financial Position asDeferred tax asset (149) (184)Deferred tax liability 374 81

Net liability/(asset) 225 (103)

Deferred tax assets not provided


Deferred tax assets have not been recognised in respect of the following items:

Unutilised tax losses 8,129 7,880

Tax effect 1,016 985

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit

will be available in the subsidiaries where they arise against which the Group can utilise the benefits thereafter.

25. Obligations under finance leases

Amounts payable under finance leases Minimum lease Present value of payments minimum lease

payments2009 2008 2009 2008

Within one year 2,706 - 1,850 -In the second to fifth years inclusive 8,188 - 6,523 -After five years 2,099 - 1,679 -

12,993 - 10,052 -

Less: future finance charges (2,941) - - -

Present value of lease obligations 10,052 - 10,052 -

Less: Amount due for settlement within 12 months (1,850) -

Amounts due for settlement after 12 months 8,202 -

26. Employee benefits

The following pension schemes operate in the Group.

(a) Irish administered defined benefit scheme

The Group operates a contributory defined benefit pension plan for certain of its General and Professional Staff.

The pension plan is administered by independent trustees and is managed externally by independent investment

managers.

The pension charge in the Income Statement is calculated so as to spread the cost of the pensions over the employees’

expected working lives with the Group. The pension cost is determined in accordance with the advice of qualified

actuaries, using the Attained Aged method. An actuarial valuation was completed for the General and Professional Staff

Plan on 1 May 2007.

The assumptions which most significantly affect the incidence of pension costs are those relating to the rate of return on

the investments of the plan and the rate of increase in salaries and pensions. The financial assumptions inherent in the

actuarial basis underlying the plan assume that the long-term investment return exceeds the rate of increase in

pensionable earnings by 2% per annum.

At the date of the most recent actuarial valuation, the market value of the General and Professional Plan amounted to

€17,627,000 equivalent to US$25,770,000 and the actuarial value of the assets represented 76% of the liability for

benefits under the valuation method, for service to the valuation date, based on salaries projected to retirement or earlier

exit. The actuarial report is not available for public inspection.



26. Employee benefits (continued)

The disclosures required under IAS 19 “Employee Benefits” are as follows:



Valuation method Projected Projected unit method unit method

Inflation rate 2.00% 2.00%Salary increases 3.50% 3.50%Increase for pension in payments 3.00% 3.00%Discount rate 5.75% 5.80%Expected rate of return on plan assets 7.10% 7.00%

The major categories of scheme assets as a percentage of the total fair value of scheme assets are as follows:

Equities 76.45% 71.98%Bonds 20.12% 22.81%Property 3.42% 5.00%Cash 0.01% 0.21%

100% 100%

Expense recognised in the Income Statement



Current service cost 495 519Interest on obligation 1,993 1,931Expected return on plan assets (1,321) (1,784)

1,167 666

Analysis of the amount recognised in the Statement of Comprehensive Income



Actual return less expected return on pension scheme assets 2,289 (9,307)Experience gains/(losses) arising on the scheme liabilities 185 (1,544)Change in the assumptions underlying the present value of the scheme liabilities (318) 2,535

Actuarial gains/(losses) recognised in the statementof comprehensive income 2,156 (8,316)


The amount included in the Statement of Financial Position arising from the Group’s obligation in respect of its defined benefit scheme is as follows:



Present value of defined benefit obligations 37,011 33,555Fair value of plan assets 23,883 17,885

Recognised liability for defined benefit obligations 13,128 15,670

Movement in deficit during the period



Opening balance 15,670 9,801Current service cost 495 519Contributions paid (1,955) (2,312)Other finance cost 672 148Actuarial (gain)/loss (2,156) 8,316Foreign exchange loss/(gain) 402 (802)

Deficit at period end 13,128 15,670


In thousands of USD 2009 2008Change in benefit obligationBenefit obligation at beginning of the year 33,555 34,090Service cost 495 519Interest cost 1,993 1,931Plan members’ contributions 668 794Actuarial loss/(gain) 133 (990)Benefits paid (943) (819)Expenses paid (22) (75)Premiums paid - (180)Foreign exchange loss/(gain) 1,132 (1,715)

Benefit obligation at end of the year 37,011 33,555


In thousands of USD 2009 2008Change in plan assetsFair value of plan assets at beginning of the year 17,885 24,289Expected return on plan assets 1,321 1,784Actuarial gain/(loss) 2,289 (9,307)Employer contributions 1,955 2,312Member contributions 668 794Benefits paid from plan (943) (819)Expenses paid (22) (75)Premiums paid - (180)Foreign exchange gain/(loss) 730 (913)

Fair value of plan assets at end of the year 23,883 17,885




History of scheme assets, liabilities and actuarial gains and losses

2009 2008 2007 2006Amounts recognised in the Statement of Financial PositionPresent value of funded obligations (37,011) (33,555) (34,090) (30,541)Fair value of plan assets 23,883 17,885 24,289 21,953

Net deficit (13,128) (15,670) (9,801) (8,588)

Actual return less expected return on scheme assets 2,289 (9,307) (3,688) 695% of scheme assets 9.6% (52.04%) (15.20%) 3.20%

Experience gain/(loss) arising on scheme liabilities 185 (1,544) (2,791) 470% of scheme liabilities 0.5% (4.60%) (8.20%) 1.50%

(b) Irish administered defined contribution scheme

The Group also operates a defined contribution pension scheme in Ireland.

The pension charge in the Income Statement for the following periods are as follows.


Pension charge to the Income Statement 185 180

(c) South African administered scheme

A defined benefit pension plan also operated for the Group’s employees in South Africa. This scheme is in the process of

being converted to a defined contribution scheme. An actuarial valuation was completed for the plan as at 1 August 2003.

An actuarial review of the value of the fund was performed in July 2008.

The pension charge in the Income Statement for the following periods and any shortfall identified in the fund included in

trade and other payables are as follows.



Shortfall in the fund - 196

(d) Construction Industry Federation (CIF) scheme

Certain companies in the Group also participate in the CIF defined benefit plan.

The pension charge in the Income Statement for the following periods is as follows.



27. Share-based payment

The Company operates an equity-settled share based remuneration scheme for key management. All key management

are eligible to participate in the scheme, with the vesting conditions being that the individual remains an employee of the

Group over the savings period and subject to certain financial performance conditions being met. In addition, the options

will lapse if the individual leaves within 2 years of satisfying this criterion.

2009 2009 2008 2008Weighted Number Weighted Numberaverage averageexercise exerciseprice (p) price (p)

Outstanding at beginning of the year - - n/a n/aGranted during the year 154.5 5,712,000 n/a n/aForfeited during the year - - n/a n/aExercised during the year - - n/a n/aLapsed during the year 154.5 (54,000) n/a n/a

5,658,000

Of the total number of options outstanding at the end of the year, nil had vested and were exercisable at the end of the

year.

The following information is relevant in the determination of the fair value of options granted during the year under the

equity-settled share-based remuneration scheme operated by the Group.


Equity-settledOption pricing model used Black-Scholes n/aWeighted average share price at grant date (in Stg£ pence) 154.5 n/aExercise price (in Stg£ pence) 154.5 n/aExpected life of share award (in years) 5 n/a

Dividend growth rate relative to comparator index

Equity-settled Expected volatility 41.52 n/aExpected dividend growth rate 1.85 n/aRisk-free interest rate 3.06 n/a

The volatility assumption, measured at the standard deviation of expected share price returns, is based on a statistical

analysis of daily share prices over the last three years.

The share-based remuneration expense (note 6) comprises:


Equity-settled schemes 817 n/a

The Group did not enter into any share-based payment transactions with parties other than employees during the current

or previous period.



28. Contingent liabilities

(a) Certain banking facilities of the Group and its subsidiaries are secured by various securities, including the assignment

of contract receivables, the cession of book debtors and corporate guarantees from the Company. The Company

together with its subsidiary companies have given corporate guarantees as security for the banking facilities of certain

Group companies amounting to US$423.4m.

(b) The Group’s bankers and certain insurance companies provide guarantees to customers as security against the

possibility of the Group or certain companies related to the Group failing to satisfactorily complete contracts.

Guarantees issued with recourse against the Group amount to:


Guarantee bonds provided by banks 175,949 140,555Guarantee bonds provided by insurance companies 103,174 48,919

279,123 189,474

These guarantees are represented by the contractual amount. However, as management fully expects the guarantees to

expire at the end of these terms without being called upon, the contractual amount is not an estimate of future cash flows.

(c) The Company and its subsidiary Kentz International Limited have also provided guarantees for certain Group

companies in respect of performance of obligations under contract and tenders for contracts and a letter of financial

support for Kentz Management Limited.

(d) The Group has received advances on certain contracts as follows:


Advances received on contracts 34,231 36,956

29. Capital commitments

The following are the annual commitments under non-cancellable operating leases:


Within 1 year 11,846 11,873Between 2 and 5 years 5,539 5,803Greater than 5 years 670 1,250

18,055 18,926

30. Profit before tax reported in Statement of Cash FlowsYear ended 31 December


Profit before tax as reported in the Consolidated Income Statement 44,456 36,022

Profit before tax as reported in the Consolidated Statement of Cash Flows 44,456 36,022

31. Related parties and related party transactions

Identity of related parties

The Group has a related party relationship with its subsidiaries (see note 32), joint ventures (see note 14.1) and with its

Directors and Executive Officers.

Transactions with key management personnel

In addition to their salaries, the Group also provides non-cash benefits to Directors and Executive Officers, and contributes

to a post-employment defined benefit plan on their behalf. In accordance with the terms of the plan, Directors and

Executive Officers retire at age 60 and are entitled to receive annual payments equivalent to 1/60th of their final

pensionable salary for each year of pensionable service.

Pensionable service is the total number of complete and continuous years (with a maximum of 40) which the individual

has completed with the Group.

Final pensionable salary is the average of the individual’s pensionable salary on 1 May in each of three consecutive years,

the last of these years commencing on 1 May which immediately precedes the individual’s 59th birthday.

The key management personnel compensations are as follows:


Short-term Employee Benefits 6,751 6,241Post-employment benefits 554 462Share-based payments 224 -

7,529 6,703

Total remuneration is included in the Consolidated Income Statement (see note 6):Year ended 31 December


Directors 3,929 4,878Executive Officers 7,529 6,703

11,458 11,581

Management Incentivisation Arrangement

Pursuant to discussions in 2006 and 2007, Kerbet Limited formally signed share purchase agreements to dispose of 20%

of the issued share capital of the Company to Siemers Holdings Limited (4.25%) and Danache Holdings Limited (15.75%)

for an aggregate purchase price of US$18.8m. Siemers Holdings Limited and Danache Holdings Limited were

established for the purpose of this transaction and are each owned by a trustee, Essex Trust Limited, for and on behalf

of 83 members of the Group’s senior management. The Company is not a party to this arrangement, but has agreed to

meet certain costs relating to the arrangement.

Following admission to AIM, Siemers Holdings Limited sold all of its ordinary shares in the Company, and Danache

Holdings Limited sold 33.3% of its shareholding. Danache Holdings Limited now holds 11,660,570 shares in the

Company.

Description of the other related parties

Kerbet Limited

At 31 December 2009, the Company was 26.5% owned by Kerbet Limited, a company registered in Jersey. Kerbet

Limited is ultimately owned by Gigondas Real Estate Inc (80%) and Covili Investment Limited (20%). Both of these

companies are registered in the British Virgin Islands and are beneficially owned by two of the Company’s Directors, Tan

Sri Mohd Razali Abdul Rahman and Hassan Abas.



31. Related parties and related party transactions (continued)

Saffa Limited

Saffa Limited, a company incorporated in the Republic of Ireland, is beneficially owned by three of the Company’s

Directors. In 2005, a property owned by the Group was sold to Saffa Limited at open market value based on an

independent valuation for an amount of US$3,155,941. The property was subsequently leased to the Group by Saffa

Limited.

The Group pays rent to Saffa Limited and collects rental income on Saffa Limited’s behalf. Amounts due to/from the Group

to Saffa Limited are included in related parties.

Peremba Group companies

Tan Sri Mohd Razali Abdul Rahman and Hassan Abas, who are Directors of the Company, are also shareholders in the

Peremba Group companies incorporated in Malaysia.

Carmyle Limited

On 30 June 2007, Carmyle Limited entered into an agreement to purchase all of the shares held by the Kentz Group in

Likusasa Engineering & Contracting (Proprietary) Limited for US$1,000,000. Tan Sri Mohd Razali Abdul Rahman, Hassan

Abas and Hugh O’Donnell, who are Directors in the Company, are also shareholders in Carmyle Limited. At 31 December

2007, US$1,000,000 in respect of this purchase consideration together with US$10,543 of expenses incurred on Carmyle

Limited’s behalf is included in amounts due from related parties. On 30 January 2008, the purchase consideration of

US$1,000,000 was received. At 31 December 2008, an amount of US$20,982 was due in respect of expenses incurred

on Carmyle Limited’s behalf.

Transactions with joint ventures

Subsidiary companies incurred reimbursable costs on behalf of the joint ventures listed in note 32.

Amount due from related partiesAt 31 December


Joint ventures 11,418 3,011Kerbet Limited 61 53Carmyle Limited - 21Peremba Group companies 234 325Saffa Limited 155 2

11,868 3,412

Amount due to related partiesAt 31 December

In thousands of USD 2009 2008Current liabilities

Joint ventures 2,887 1,430Peremba Group companies 374 319Kerbet Limited 146 145Saffa Limited 47 -

3,454 1,894

At 31 DecemberIn thousands of USD 2009 2008Non-current liabilities

Kerbet Limited (Shareholders’ advance) 92 92

32. Subsidiaries, quasi-subsidiaries and joint ventures

The Company has dominant influence over the subsidiaries listed below. Accordingly, the Consolidated Financial

Statements incorporate 100% of the assets, liabilities, income and expenses (except where otherwise stated) in

accordance with the basis of consolidation accounting policy at 31 December 2009.

Country of

incorporation

Name and registration Nature of business

Kentz Ireland Limited Ireland Mechanical/electrical/

instrumentation

Clonmak Limited Ireland Non trading

Chandler Enterprises Limited Ireland Holding company

Cahirmee Holdings Limited * Ireland Dormant

Kentz Engineering International Limited Ireland Engineering services

Kentz Management Limited Ireland Engineering,

financial and human resources

Kentz Holdings (Europe) B.V. The Netherlands Holding company

Kentz lnternational Limited Channel Islands Holding company

Leonora Limited Channel Islands Holding company

Kentz Overseas Limited Channel Islands Engineering services

Bratoga Limited Channel Islands Engineering services

Kentz TSS Global Limited

(Formerly SA Kentz Proekty Limited) Channel Islands Holding company

Kentz Equatorial Guinea Limited Channel Islands Mechanical/electrical/

instrumentation

Kentz Caspian Limited Isle of Man Mechanical/electrical/

instrumentation

UTS Kent LLC United Arab Emirates Mechanical/electrical/

instrumentation

Saudi Arabian Kentz Company Limited Saudi Arabia Mechanical/electrical/

instrumentation

Radicon Gulf Consulting lndustrial Division Saudi Arabia Engineering services

Qatar Kentz W.L.L. Qatar Mechanical/electrical/

instrumentation

Kentz MiddIe East Holding Company W.L.L. Bahrain Holding company

Kentz Global Oil and Gas Process Systems Limited Bahrain Engineering services

(50% interest)

Kentz Africa Holdings Limited Isle of Man Holding company

Kentz Botswana (Proprietary) Limited Botswana In liquidation

Kentz Africa Proprietary Limited Botswana Dormant

Kentz Engineers and Constructors Botswana (Pty) Limited Botswana Engineering and construction (incorporated 31 March 2009) services

Kentz Mauritius Limited (incorporated 31 March 2009) Mauritius Holding company

Kentz Engineering and Constructors, Limitada Mozambique Engineering and construction (incorporated 31 March 2009 ) services

Kentz South Africa (Proprietary) Limited South Africa Holding company

Kentz (Proprietary) Limited (74.998% interest) South Africa Engineering and contracting

Kentz Management Services (Proprietary) Limited South Africa Dormant

Kentz Property Holdings Limited (56.2% interest) South Africa Property investment and

management company



32. Subsidiaries, quasi-subsidiaries and joint ventures (continued)

Country of

incorporation

Name and registration Nature of business

Kentz Training Solutions Limited (43.5% interest) South Africa Training services

Kentz Automation and Drives Projects (Proprietary) Limited South Africa Mechanical/electrical/

(74.998% interest) instrumentation engineering

Peremba Kentz (Thai) Limited Thailand Engineering services

Kentz MEPC (Malaysia) Sdn. Bhd Malaysia Mechanical/electrical/

instrumentation

Peremba Kentz MEC Sdn. Bhd Malaysia Mechanical/electrical/

instrumentation

Kentz Pty Limited (Australia) Australia Mechanical/electrical/

instrumentation

Kentz (Australia) Pty Limited Australia Mechanical/electrical/

instrumentation

Kentz E&C Pty Limited (50% Interest) Australia Mechanical/electrical/

(Formerly Thiess Kentz Pty Limited) instrumentation

Thiess Decmil Kentz JV (33.33% Interest) Australia Mechanical/electrical/

(Established 13 June 2009) instrumentation

Kentz USA Inc. USA Mechanical/electrical/

instrumentation

Kentz Caribbean LLC USA Mechanical/electrical/

instrumentation

Kentz OJ’s E&I Services JV (50% Interest) Trinidad & Tobago Mechanical/electrical/

instrumentation

Kentz OJ’s JV Barbados Limited (50% Interest) Caribbean Mechanical/electrical/

instrumentation

Kentz Caribbean (PR) Inc. Caribbean Mechanical/electrical/

instrumentation

Kentz Russia LLC Russia Mechanical/electrical/

instrumentation

Kentz-DEM LLC (50% Interest) Russia Mechanical/electrical/

instrumentation

Kentz-SMNM LLC (50% Interest) Russia Mechanical/electrical/

instrumentation

Kentz Canada Holdings Limited Canada Mechanical/electrical/

instrumentation

*This subsidiary was dissolved during the year.

33. Critical accounting estimates and judgements

Management makes estimates and judgements, including assumptions concerning the future. Estimates and judgements

are continually evaluated and are based on historical experience and other factors, including expectations of future events

that are believed to be reasonable in the circumstances.

The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and

assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities

within the next financial year are as follows:

Revenue recognition

The Group uses the percentage-of-completion method in accounting for its contract revenue. Use of the percentage-of-

completion method requires management to estimate the stage of completion of a contract to date as a proportion of the

total contract work to be performed in accordance with the accounting policy set out in note 2 (s). As a result, Kentz Group

management is required to estimate the total cost to completion of all outstanding jobs at each period end.

Income taxes

The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the

worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax

determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether

additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially

recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such

determination is made.

Pension benefits

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis

using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the

discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations. The Group

determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine

the present value of estimated future cash outflows expected to be required to settle the pension obligations. In

determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are

denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms

of the related pension liability. Other key assumptions for pension obligations are based in part on current market

conditions. Additional information is disclosed in note 26.

34. Events after the reporting period

(a) Final dividend

The Directors have proposed a final dividend of 4.0 US$ cents per share which would make a total dividend payment of

6.0 US$ cents per share for the year ended 31 December 2009. The final dividend payment will be made in June 2010

to shareholders on the register at the close of business on 21 May 2010.

(b) Management control of Australian Joint Venture

From 1 January 2010, following an agreement with Thiess Pty Limited, Kentz has now taken management control of

Thiess Kentz Pty Limited in Australia, although its shareholding remains the same. The joint venture company has changed

its name to Kentz E&C Pty Limited.



shareholder information

Secretary IFG Secretaries (C.I.) Limited

Registered office IFG House

15 Union Street

St Helier

JE1 1FG

Jersey

Channel Islands

Auditors BDO

Registered Auditors

Beaux Lane House

Mercer Street Lower

Dublin 2

Ireland

Solicitors Arthur Cox William Fry

Earlsfort Centre Fitzwilton House

Earlsfort Terrace Wilton Place

Dublin 2 Dublin 2

Ireland Ireland

Simmons & Simmons Ogier

One Ropemaker Street Whiteley Chambers

London EC2Y 9SS Don Street

United Kingdom St Helier

JE4 9WG

Jersey

Channel Islands

Nominated advisor and broker Evolution Securities

100 Wood Street

London EC2V 7AN

United Kingdom

Registrar Capita Registrars

The Registry

34 Beckenham Road

Beckenham

Kent BR3 4TU

United Kingdom

107

notice of annual general meeting

Notice is hereby given that the Annual General Meeting of Kentz Corporation Limited (the “Company”) will be held at The

Andaz Hotel, 40 Liverpool Street, London, EC2M 7QN, England on Friday, 11 June 2010 at 9.30am for the purpose of

conducting the following business:

Ordinary Business

1. To receive and approve the Company’s financial statements for the year ended 31 December 2009 and the reportsof the Directors and auditors thereon.

2. To re-elect as a Director of the Company Tan Sri Mohd Razali Abdul Rahman (who retires in accordance with Articles33 and 34 of the Articles of Association) and who, being eligible, offers himself for re-election.

3. To re-elect as a Director of the Company Brendan Lyons (who retires in accordance with Articles 33 and 34 of theArticles of Association) and who, being eligible, offers himself for re-election.

4. To re-elect as a Director of the Company Hans Joachim Kraus (who retires in accordance with Articles 33 and 34 ofthe Articles of Association) and who, being eligible, offers himself for re-election.

5. To re-appoint BDO as Auditors to hold office from the conclusion of the meeting to the conclusion of the next annualgeneral meeting of the Company.

6. To authorise, subject to the passing of item 5 referred to above, the Directors to determine the remuneration of BDOas Auditors of the Company for the current financial year.

7. To declare a final dividend of 4.0 US$ cents per ordinary share of the Company in respect of the year endedDecember 2009. This dividend will be paid in June 2010 to the holders of ordinary shares on the register at the closeof business on 21 May 2010.

Special Business

8. To renew by special resolution the Directors’ authority granted on 11 June 2009 pursuant to Article 2.16 of the Articlesof Association to allot up to a maximum of 5,818,573 ordinary shares in the Company which represents 5% of thetotal number of issued ordinary shares in the Company for cash consideration without first being required to offersuch shares to existing members in proportion to their existing holdings pursuant to Article 2.7 of the Articles ofAssociation, as the Directors in their absolute discretion see fit in any number of tranches, such authority to expire atthe next Annual General Meeting unless revoked, varied or extended prior to that meeting by ordinary resolution ofthe members of the Company. The Company does not hold any treasury shares. At present the Directors do notintend to exercise the authority to allot additional ordinary shares.

9. By special resolution pursuant to Article 57 of the Companies (Jersey) Law 1991, as amended, to authorise theCompany generally and unconditionally to purchase up to 10% of its issued share capital provided that:

(1) the maximum aggregate number of ordinary shares that may be purchased is 11,637,147 ordinary shares of£0.01 each;

(2) the minimum price (excluding expenses) which may be paid for each ordinary share is £0.01 each;

(3) the maximum price (excluding expenses) which may be paid for each ordinary share is the higher of:

(a) 105 per cent of the average market value of an ordinary share in the Company for the five business days priorto the day the purchase is made; and

(b) the value of an ordinary share calculated on the basis of the higher of the price quoted for: (i) the lastindependent trade of; and (ii) the highest current independent bid for, any number of the Company's ordinaryshares on the trading venue where the purchase is carried out.

The authority conferred by this resolution shall expire on 11 December 2011 or, if earlier, at the conclusion of theCompany’s next Annual General Meeting.

10. By ordinary resolution pursuant to Article 58A(1)(b) of the Companies (Jersey) Law 1991, as amended, to authorisethe Company to hold any of its limited shares that it has repurchased upon the authorisation under item 9 above, astreasury shares.

Dated: 5th day of May 2010 BY ORDER OF THE BOARD

Registered Office IFG Secretaries (C.I.) Limited

IFG House Company Secretary

15 Union Street

St Helier

JE1 1FG

Jersey


NOTES:

(i) Item 9 seeks authority for the Company to purchase a certain amount of its own ordinary shares and is proposed as a special resolution. If passed, theresolution gives authority for the Company to purchase up to 11,637,147 of its ordinary shares, representing up to 10% of the Company's issuedordinary share capital (it being noted that the Company does not have any treasury shares) as at 5 May 2010. The resolution specifies the minimum andmaximum prices which may be paid for any ordinary shares purchased under this authority. The authority will expire on the earlier of 11 December 2011and the Company’s 2011 Annual General Meeting.

The Directors do not currently have any intention of exercising the authority granted by this resolution. The Directors will only exercise the authority topurchase ordinary shares where they consider that such purchases will be in the best interests of shareholders generally and will result in an increase inearnings per ordinary share.

The Company may either cancel any shares it purchases under this authority or with ordinary resolution approval under item 10 above transfer suchrepurchased shares into treasury (and subsequently sell or transfer them out of treasury or cancel them).

(ii) Any member entitled to attend and vote at this meeting may appoint one or more proxies to attend and on a poll, to vote instead of him. To appointmultiple proxies this form may be photocopied. A proxy need not be a member of the Company. A form of proxy accompanies this notice of AnnualGeneral Meeting. Completion of the proxy does not preclude a member from subsequently attending and voting at the meeting in person if he or sheso wishes.

(iii) The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of suchpower or authority, shall be deposited with the UK Transfer Agent, Capita Registrars (Proxies Department), The Registry, 34 Beckenham Road,Beckenham, Kent, BR3 4TU, England, or the instrument of proxy issued by the Company at least 48 hours before the time appointed for holding themeeting or any adjournment thereof, at which the person named in the instrument proposes to vote or, in the case of a poll, before the time appointedfor taking the poll and, in default, the instrument of proxy shall not be treated as valid.

(iv) A vote given or a poll demanded by proxy or by a duly authorised representative of a body corporate shall be valid notwithstanding the previousdetermination of the authority of the person voting or demanding a poll unless notice of the determination was received by the UK Transfer Agent, CapitaRegistrars (Proxies Department), The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, England, before the commencement of the meetingor adjourned meeting at which the vote is given or the poll demanded or (in the case of a poll taken otherwise than on the same day as the meeting oradjourned meeting) the time appointed for taking the poll.

(vi) Any corporation which is a holder may, by resolution of its Directors or other governing body, authorise such person as it thinks fit to act as itsrepresentative at any general meeting or at any meeting of any class of holders, and the person so authorised shall be entitled to exercise the samepowers on behalf of the corporation which he represents as that corporation could exercise if it were a natural person who is a holder. A corporationpresent at any meeting by such representative shall be deemed for the purposes of these Articles to be present in person.

(vii) Pursuant to Regulation 40 of the Companies (Uncertified Securities) (Jersey) Order 1999, the time by which a person must be entered on the register ofmembers of the Company in order to have the right to attend and vote at the meeting is 6.00 pm on 9 June 2010. Changes to entries on the registerof members after the relevant time will be disregarded in determining the rights of any person to attend or vote at the meeting.

(viii) In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most seniorholder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members inrespect of the joint holding (the first-named being the more senior).

(ix) The issued share capital of the Company as at 5 May 2010 was 116,371,470 ordinary shares, carrying one vote each. The Company holds no treasuryshares and there are no share warrants in existence and therefore, the total number of voting rights in the Company on 5 May 2010 was 116,371,470.

(x) Biographical details of each Director can be found on pages 12 and 13 of the annual report.

109

glossary

AIM Alternative Investment Market

ASU Air Separation Units

Backlog Part of ongoing projects yet to be realised

B2B Back to Basics

BEEP Business Development, Exposure, Experience Programme

BRIC Brazil, Russia, India and China

CEO Chief Executive Officer

CFO Chief Financial Officer

COO Chief Operations Officer

DPC Design, Procurement, Construction

E&I Electrical and Instrumentation

E&P Engineering and Procurement

EBITDA Earnings before Interest, Tax, Depreciation and Amortisation

EDipLM Executive Diploma in Leadership and Management

EMSP Entry Management Supervisory Programme

EPC Engineering, Procurement and Construction

EPCC Engineering, Procurement, Construction and Commissioning

EPIC Engineering, Procurement, Installation and Commissioning

FEED Front-End Engineering and Design Phase

FEEP Financial, Exposure, Experience Programme

FPSO Floating, Production, Storage and Offloading. A converted or custom-built ship-shaped floater, employed to

process oil and gas for a temporary storage prior to transhipment.

FSU Former Soviet Union

GCC Gulf Co-operation Council

GTL Gas-to-Liquids. Transformation of natural gas into liquid fuel based on Fischer Tropsch technology

HR Human Resources

HSE Health, Safety and Environment

IMCA International Management Centres Association

IMF International Monetary Fund

IPO Initial Public Offering

LNG Liquefied Natural Gas

LTI Lost Time Incidents

LTIFR Lost Time Injury Frequency Rate

MBA Masters of Business Administration

MEED Middle East Economic Digest

MBPD Million Barrels Per Day

MTPA Metric Tonnes Per Annum

OSHA Occupational Safety and Health Administration

PBT Profits Before Tax

QCA Quoted Companies Alliance. A not-for-profit organisation dedicated solely to fighting for the interests of the

smaller quoted company (SQC) sector, defined as those quoted companies outside of the FTSE 350, including

those on AIM and PLUS

QEEP Quantity Surveying, Exposure, Experience Programme

REEP Rotation, Exposure, Experience Programme

ROCE Return On Capital Employed

SEC Skills Enhancement Courses

SMDP Supervisory, Management Development Programme

SMEIP Structural, Mechanical, Electrical, Instrumentation and Piping

TRIR Total Recordable Incident Rate

TSI Total Systems Integration

WWT Waste Water Treatment


worldwide offices

www.kentz.com

EuropeIrelandKentz GroupGurtnafleur, Clonmel Co. Tipperary, IrelandTel: Intl+353 52 6122811Fax: Intl+353 52 6126021Email: [email protected]

Kentz Ireland LimitedGurtnafleur, Clonmel Co. Tipperary, IrelandTel: Intl+353 52 6122811Fax: Intl+353 52 6126021Email: [email protected]

Kentz EngineeringInternational Limited (KEIL)Gurtnafleur, Clonmel Co. Tipperary, IrelandTel: Intl+353 52 6122811Fax: Intl+353 52 6126021Email: [email protected]

Middle EastBahrainKentz Middle East Holding (W.L.L.)Regional OfficeP.O. Box 75251, JuffairKingdom of BahrainTel: Intl+973 17 560360Fax: Intl+973 17 582132Email: [email protected]

Kentz Global Oil & Gas ProcessSystems LimitedP.O. Box 75251, JuffairKingdom of BahrainTel: Intl+973 17 560360Fax: Intl+973 17 582132Email: [email protected]

Saudi ArabiaSaudi Arabian Kentz Co. LtdP.O. Box 3462, Al-Khobar 31952Kingdom of Saudi ArabiaTel: Intl+966 3 859 1829Fax: Intl+966 3 859 1836Email: [email protected]

Kentz Engineering International Co. LtdForeign Company Branch OfficeP.O. Box 31412, Al-Khobar 31952Kingdom of Saudi ArabiaTel: Intl+966 3 859 1789Fax: Intl+966 3 859 1856Email: [email protected]

KuwaitKentz Overseas Limited(Kuwait operations)P.O. Box 28244, Safat 13143 KuwaitTel: Intl+965 2398 3020Fax: Intl+965 2398 3014Email: [email protected]

UAEUTS Kent LLC9th Floor, Tower 3, Al Mazyad MallMohammed Bin Zayed City MussafahP.O. Box 34826, Abu DhabiUnited Arab EmiratesTel: Intl+971 2 4013200Fax: Intl+971 2 5591202Email: [email protected]

QatarQatar Kentz (W.l.l.)P.O. Box 3865, Doha, QatarTel: Intl+974 4659435Fax: Intl+974 4552153

Intl+974 4552154Email: [email protected]

AfricaSouth AfricaKentz (Pty) Ltd89 14th Road, Erand Midrand, South AfricaTel: Intl+27 11 203 9600Fax: Intl+27 11 203 9700Email: [email protected]

Kentz (Pty) Ltd 3rd Floor, Hampden Court7 Hampden Road, MorningsideDurban 4001, South AfricaTel: Intl+27 31 312 6317Fax: Intl+27 31 312 6404Email: [email protected]

Kentz Integrated Solutions,a division of Kentz (Pty) LtdNo. 10 Hertz Boulevard Vanderbijlpark 1900, South AfricaTel: Intl+27 16 910 9300Fax: Intl+27 16 933 4543Email:[email protected]

Russia/CaspianRussiaKentz Russia LLC4th Floor, #24-B KommunisticheskiyAvenue, Yuzhno-SakhalinskRussia 693 000Tel: Intl+7 4242 46 49 74/5Fax: Intl+7 4242 46 49 76Email: [email protected]

AzerbaijanKentz Caspian Limited3rd Floor, Room No. 25Khagani Trade CenterKhagani Street, Baku CityAzerbaijanTel: Intl+994 12 598 0522Fax: Intl+994 12 598 0523Email: [email protected]

CaribbeanTrinidadKentz Caribbean LLC5300 Memorial DriveSuite 1060Houston, TX 77007, USATel: Intl+1 713 862 4066Fax: Intl+1 713 862 3342Email: [email protected]

Kentz-OJ’s E&I Services JV#65 New SettlementDow Village, CaliforniaTrinidad, West IndiesTel: Intl+1 868 636 1667Fax: Intl+1 868 679 6917Email: [email protected]

Puerto RicoKentz Caribbean PR Inc.P.O. Box 51432, Toa BajaPuerto Rico 00950-1432Tel: Intl+1 868 684 8649Tel: Intl+1 868 387 5599Email: [email protected]

North AmericaUSAKentz USA Inc.5300 Memorial Drive, Suite 1060Houston, TX 77007, USATel: Intl+1 713 862 4066Fax: Intl+1 713 862 3342Email: [email protected]

CanadaKentz Canada LimitedFirst Alberta PlaceSuite 1520, 777, 8th Avenue SWCalgary, Alberta T2P 3R5, CanadaTel: Intl+1 403 532 1119Fax: Intl+1 403 873 7293Email: [email protected]

AustralasiaMalaysiaKentz MEPC(Malaysia) Sdn. Bhd.Suite J-05-13 Solaris Mont’ KiaraNo. 2 Jalan Solaris, Mont’ Kiara 50480 Kuala LumpurMalaysiaTel: Intl+603 6203 7300Fax: Intl+603 6203 7311Email: [email protected]

AustraliaKentz E&C Pty Ltd6/305 Montague RoadWest End, BrisbaneQLD 4101, AustraliaTel: Intl+61 7 3370 8100Fax: Intl+61 7 3370 8101Email: contactaustralia.kentz.com

Kentz E&C Pty LtdKentz Pty LtdLevel 1, 191 St Georges Terrace Perth, WA 6000Western AustraliaTel: Intl+61 8 9442 2500Fax: Intl+61 8 9226 5435Email: contactaustralia.kentz.com

Kentz E&C Pty LtdLevel 9, 417 St Kilda RoadMelbourne, VIC 3004, AustraliaTel: Intl+61 3 9864 8888Fax: Intl+61 3 9864 8811Email: contactaustralia.kentz.com


3financial highlights

4corporate development andoperational highlights

6chairman’s statement

8chief executive officer’s report

12board of directors

14corporate governance

16key executives and organisation

20outlook, our markets and sector focus

36our HSE performance

42world reach 2009

44some of our 2009 and ongoing projects

48our people

52policies and systems

54corporate and social responsibility

59financial review 2009 andconsolidated financial statements

106shareholder information

107notice of annual general meeting

109glossary

110worldwide offices

Kentz Group is a specialist solutions provider operating principally

within the oil and gas services sectors with over 10,000 staff

worldwide. We deliver our solutions through a wide range of

engineering and construction services using our global network of

offices. We are currently delivering projects in 26 countries with a

strong presence throughout the Middle East and several other oil

and gas developing regions. At Kentz we bring a global reach to our

clients and partners worldwide with consistent performance in

safety, systems applications and fast-track project delivery.

who are we

over 10,000 employees

26 countries

total order backlog ofUS$1,497.4m

as of December 2009

annual report, accounts

& sustainability developments

2009

www.kentz.com providing specialist services worldwide

For more information about Kentz, please refer to our website

www.kentz.com

Evolution Securities Ltd (NOMAD and Broker)

100 Wood Street, London EC2V 7AN

Tel: +44 (0)20 7071 4300

Rob Collins

Chris Sim

Kentz Investor Relations Team

Kentz Corporation Limited

Gurtnafleur, Clonmel, Co. Tipperary, Ireland

Tel: +353 52 6139806

Elizabeth Rous

Catríona Nugent

innovat ion & excel lence

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Kentz Annual R

eport, A

ccounts & Sustainability

Developments

2009

annual report, accounts & sustainability developments

Documents

Transcript of annual report, accounts & sustainability developments