RISINg - Icon Offshore Berhad

Transcription

Rising
Above Challenges
Annual Report 2015
Rising Above Challenges
The cover depicts ICON’s continued excellence and resolution to rise above the current
turbulence and to continue sailing through the difficulties towards greater success as defined by
its long-term goal and aspirations.
While Icon Offshore Berhad (ICON/Company), like all Offshore Support Vessel (OSV) players in
Malaysia has encountered choppy waters, like a sound water-tight vessel, the Company remains
on course and undeterred – sailing onwards towards reaching its intended horizon. For ICON,
quality of services will overcome the temporary challenges and further strengthen the Company’s
fundamentals towards making it a world-class OSV operator.
VISION
To be the preferred global offshore marine service provider for
the oil and gas industry.
MISSION
We are committed to creating value for our customers, employees and
stakeholders by employing a fleet of modern vessels; upholding the highest
standard of Health, Safety and Environmental practices; as well as ensuring
the continuous development of our greatest asset – our PEOPLE.
VALUES
We hope to achieve our Vision and Mission by
upholding these tenets of our core values:
I
Integrity and
mutual respect
C
Committed to
creating value
O
Operate as one
- Teamwork
N
Navigate the
extra mile
CONTENTS
2 Corporate Information
46 Audit and Risk Management
4 Corporate Structure
6 Type of Vessels
50 Statement of Corporate Governance
8 Financial Highlight
61 Statement on Risk Management
9 Operational Highlight
12 Board of Directors
64 Statement of Directors’ Responsibility
14 Directors’ Profile
65 Financial Statements
19 Senior Management Team
143 Supplemental Information
22 Chairman’s Statement
1 46 List of Vessels
28 Managing Director’s Review
147 List of Property
40 Calendar of Significant Events
148 Analysis of Shareholdings
42 Health, Safety and Environment
151 Notice of Annual General Meeting
44 Corporate Social Responsibility
• Committee Report
and Internal Control
Proxy Form
CORPORATE INFORMATION
BOARD OF DIRECTORS
Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda
(Chairman and Non-Independent Non-Executive)
Datuk Wira Azhar bin Abdul Hamid
(Senior Independent Non-Executive Director)
Amir Hamzah bin Azizan*
(Managing Director and Non-Independent
Executive Director)
Edwanee Cheah bin Abdullah
(Independent Non-Executive Director)
Dato’ Abdul Rahman bin Ahmad **
(Non-Independent Non-Executive Director)
Syed Yasir Arafat bin Syed Abd Kadir
(Non-Independent Non-Executive Director)
Madeline Lee May Ming
Datuk Abdullah bin Ahmad
EXECUTIVE COMMITTEE
NOMINATION COMMITTEE
(Chairman)
(Chairman)
Amir Hamzah bin Azizan*
Dato’ Abdul Rahman bin Ahmad **
Captain Hassan bin Ali
Lim Fu Yen
COMPANY SECRETARY
Chin Mun Yee (MAICSA No. 7019243)
AUDIT AND RISK MANAGEMENT COMMITTEE
Chua Siew Chuan (MAICSA No. 0777689)
(Chairman)
REGISTERED OFFICE
REMUNERATION COMMITTEE
(Chairman)
Level 7,
Menara Milenium,
Jalan Damanlela,
Pusat Bandar Damansara,
Damansara Heights,
50490 Kuala Lumpur.
Tel. No. : +603 2084 9000/9182
Fax No. : +603 2094 9940
Note:
*
He assumed the position of Managing Director of the Company on 1 March 2016 and subsequently became a member of Executive Committee (EXCO)
**
Dato’ Abdul Rahman bin Ahmad ceased as a representative of Hallmark Odyssey Sdn. Bhd., (the major shareholder of ICON) pursuant to his
retirement as a Chief Executive Officer of Ekuiti Nasional Berhad (Ekuinas) on 29 February 2016. Please refer to page 57.
2
ICON OFFSHORE BERHAD
HEAD/MANAGEMENT OFFICE
PRINCIPAL BANKERS
Level 12A, East Wing
The Icon
No. 1, Jalan 1/68F
Off Jalan Tun Razak
55000 Kuala Lumpur, Malaysia
Tel. No. : +603 2180 6300
Fax No. : +603 2165 1086
Website : www.iconoffshore.com.my
Email :enquiry@iconoffshore.com.my
Affin Bank Berhad
KEMAMAN OFFICE
Lot 13837, Jalan Penghiburan, Bakau Tinggi
24000 Kemaman, Terengganu, Malaysia
Tel. No. : +609-8502 740
Fax No. : +609-8502 744
Email :kemaman@iconoffshore.com.my
Labuan OFFICE
Lot 6875, Bestari Warehouse,
Jalan Patau-Patau
87000 Labuan F.T., Malaysia
Tel. No. : +6087-410 387
Fax No. : +6087-410 424
Email
: labuan@iconoffshore.com.my
AUDITORS
PRICEWATERHOUSECOOPERS
Level 10, 1 Sentral,
Jalan Travers, Kuala Lumpur Sentral,
PO Box 10192, 50706
Kuala Lumpur Sentral
AmBank (M) Berhad
AmInvestment Bank Berhad
Bank Pembangunan Malaysia Berhad
Malayan Banking Berhad
OCBC Bank (Malaysia) Berhad
RHB Bank Berhad
Standard Chartered Saadiq Berhad
SHARE REGISTRAR
Symphony Share Registrars Sdn. Bhd.
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan, Malaysia
Tel. No.: +603 7849 0777
STOCK EXCHANGE LISTING
Bursa Malaysia Securities Berhad (Main Market)
Listed since: 25 June 2014
Sector: Trading/Services
Stock name: ICON
Stock code: 5255
LEGAL ADVISERS
Wong & Partners
Member firm of Baker & McKenzie International
Level 21, The Gardens South Tower
Mid Valley City, Lingkaran Syed Putra
Tel. No. : +603 2298 7888
SKRINE & Co
Unit No. 50-8-1, 8th floor,
Wisma UOA Damansara,
50, Jalan Dungun,
Damansara Heights,
Tel. No. : +603 2081 3999
2015 ANNUAL REPORT
3
CORPORATE STRUCTURE
Holding company
100%
100%
ICON OFFSHORE GROUP SDN. BHD.
Licence holder
ICON FLEET SDN. BHD.
Vessel holding company
100%
51%
Icon Bahtera (B) Sdn. Bhd.*
Icon Maritime Training
Centre Sdn. Bhd.
Icon Andra (L) Inc.
Icon Dawai (L) Inc.
Omni Marine Sdn. Bhd.
Icon Aliza (L) Inc.
Icon Explorer (L) Inc.
Omni Power Sdn. Bhd.
Icon Astrid (L) Inc.
Icon Gaya (L) Inc.
Omni Triton Sdn. Bhd.
Icon Azra (L) Inc.
Icon Huma (L) Inc.
Omni Ventures Sdn. Bhd.
Icon Biru 1 (L) Inc.
Icon Ikhlas (L) Inc.
Icon Biru 2 (L) Inc.
Icon Kayra (L) Inc.
Icon Corridor (L) Inc.
Icon Lotus (L) Inc.
Icon Dahan 1 (L) Inc.
Icon Ocean (L) Inc.
Icon Dahan 2 (L) Inc.
*
4
Ownership interest held by non-controlling interest is 49%
100%
ICON SHIP MANAGEMENT SDN. BHD.
Ship management company
51%
ICON-FOB Holdings (L) Inc.
Icon Piai 1 (L) Inc.
Icon Samudera (L) Inc.
Omni Emery (L) Inc.
Icon Piai 2 (L) Inc.
Icon Sari (L) Inc.
Omni Flotilla (L) Inc.
Icon Pinang 1 (L) Inc.
Icon Sophia (L) Inc.
Omni Marissa (L) Inc.
Icon Tigris (L) Inc.
Omni Offshore (L) Inc.
Icon Waja (L) Inc.
Omni Stella (L) Inc.
Icon Zara (L) Inc.
Omni Victory (L) Inc.
100%
ICON-FOB 1 (L) Inc.
Icon Pioneer (L) Inc.
Icon Puteri 1 (L) Inc.
Icon Puteri 2 (L) Inc.
2015 ANNUAL REPORT
5
Type OF VESSELs
AHTS
PSV
AWB
AHTSs are suited for “in-field support”
as the vessels have to leave space and
deadweight capacity for the carriage
of drilling mud, cement, base oil, drill
water, and other supplies. Our AHTSs
have a bollard pull that ranges from 40
tonnes to 100 tonnes and horsepower
engines ranging from 3,200 to 8,000
BHP. Some AHTSs are also equipped
for firefighting, rescue operations and
oil spill recovery. The stern of the vessel
is open to the sea, with a stern roller
fitted to enable the vessel to recover
and deploy anchors, while maintaining
a clear area for the vessel’s work wire.
From time to time, when not performing
anchor handling and towing services,
our AHTSs also function as SSVs and are
also able to serve as safety standby
rescue and fire-fighting vessels for oil
spill response and recovery efforts.
PSVs are capable of working in deep
water conditions and serve various
types of drilling rigs and platforms,
including drill ships, fixed platforms,
FPSOs and semi-submersible rigs. Our
PSV is equipped with a DP2 system,
enabling it to accurately manoeuvre
and operate in adverse weather
conditions. Our PSV is the first Malaysian
built diesel electric PSV and has a
750m 2 main deck cargo area. It can
accommodate up to 60 personnel,
including marine crew. PSVs are
designed to deliver large quantities of
cargo to offshore drilling and production
sites. They also provide logistical
support during offshore construction
work. PSVs are designed for optimum
capacity, and are distinguished by their
(i) deadweight; (ii) available deck area
for the transportation of cargo such as
pipes, equipment and spares; and (iii)
below-deck capacity for the storage of
drilling fluid, mud and cement used in
the drilling process and tank storage for
water and fuel oil.
Our AWBs are equipped with DP2
positioning system with four point
mooring capabilities. AWB vessels
usually have a large deck area,
used for the carriage of auxiliary
equipment, spools, containers, etc.
The main crane capacity ranges from
50 tonnes to 65 tonnes. Meanwhile, the
maximum accommodation capacity
is 200 people.
• ICON AZRA
• ICON IKHLAS
• ICON LOTUS
• ICON SAMUDERA
• ICON SOPHIA
• ICON ZARA
• OMNI GAGAH
• OMNI MARISSA
• OMNI PERKASA
• OMNI STELLA
• OMNI TIGRIS
• OMNI VICTORY
• TANJUNG BIRU 1
• TANJUNG BIRU 2
• TANJUNG DAHAN 1
• TANJUNG DAHAN 2
• TANJUNG DAWAI
• TANJUNG HUMA
• TANJUNG PUTERI 1
• TANJUNG PUTERI 2
• TANJUNG SARI
6
• TANJUNG PIAI 1
• TANJUNG PIAI 2
• ICON KAYRA
• ICON VALIANT
AHT
TUG
SSV
These vessels are used to support
offshore oil rigs, platforms and other
installations and to tow mobile structures
and position their mooring anchors
in order to ensure their anchors are
placed in a proper position. Our AHTs
have a bollard pull that ranges from 40
tonnes to 70 tonnes and horsepower
engines ranging from 3,200 to 5,152 BHP
which are suitable to operate in shallow
water fields.
Utility Vessels are much smaller versions
of SSVs but without cargo tanks for
drilling fluids or cement. UVs primarily
operate in shallow water and are
typically used to transport deck cargo,
fuel, fresh water, food provisions and
personnel.
SSVs primarily operate in shallow water.
Our SSVs are used for the transportation
of equipment, cargo pipe, drilling fluids,
cement, fuel and fresh water from
supply bases to offshore platforms and
facilities.
The defining characteristics of AHTs are
their engine power, measured in BHP
and the size of their winches in terms
of line pull and wire storage capacity.
AHTs also possess aft decks which are
utilised during anchor handling and
towing operations and for the carriage
of deck cargo. The stern of the vessel
is open to the sea, with a stern roller
fitted to enable the vessel to recover
and deploy anchors, while maintaining
a clear area for the vessel’s work wire.
• TANJUNG GAYA
• TANJUNG PINANG 1
AHTs are also capable of performing a
variety of functions in harsher weather
conditions compared to traditional
vessels. AHTs are capable of providing
long range towage services when
floating platforms need to be mobilised
to other fields, countries or repair yards.
Deep water AHTs also provide support
for construction work in transporting and
carrying out projects for mobilisation of
structures for floatovers, or launching or
installation, positioning, hook-up and
commissioning work.
• OMNI AKIRA
• OMNI ANTEIA
• OMNI EMERY 1
Note: Details on page 146.
2015 ANNUAL REPORT
7
FINANCIAL HIGHLIGHT
Revenue
Adjusted EBITDA*
Adjusted PAT*
RM (‘000)
RM (‘000)
RM (‘000)
0
‘13 ‘14 ‘15
RM (‘000)
900
1.80
800
400
0
600
300
‘13 ‘14 ‘15
0
718,828
2.40
1,080,606
1,200
379,364
1,600
1,520,760
3.00
1,781,693
1,500
1,575,717
2,000
1,200
90,747
Gearing Ratio
‘13 ‘14 ‘15
1.20
0.60
0
‘13
0.87
RM (‘000)
1.00
Equity Attributable
to Shareholders
0.55
Total Assets
‘13 ‘14 ‘15
0.62
0
20
2.91
‘13 ‘14 ‘15
89,574
40
40
0
26,023
80
70
60
128,088
140
120
80
2.78
266,566
210
160
184,801
318,877
280
100
190,868
200
334,863
350
‘14
‘15
Gearing ratio (Gross)
Gearing ratio (Net)
EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortisation
PAT – Profit After Taxation
* Adjusted EBITDA and Adjusted PAT excludes exceptional items mainly impairment of goodwill and vessels of RM180.6 million
and RM195.4 million respectively in FY2015. Details on page143.
8
Operational Highlight
10%
Fleet utilisation rate
Chartered/on-hired period
Available for charter/
Temporary shutdowns/lay-ups
Planned maintainence programme
and scheduled dry-docking
60%
30%
38%
FY2015
60%
Order Book
Total order book as at
31 December 2015
62%
686
RM
Firm period
Extension option period
Revenue by Geography
million
28%
Revenue 2015:
266.6
72%
RM
Overseas revenue
Malaysia revenue
million
13.0
million
Man hours without LTI
HSE Statistics
LTI : Lost Time Injury
2015 ANNUAL REPORT
9
RM686 million
ORDER BOOK
As at 31 December 2015
Binding Partnerships,
Harnessing
Synergy
ICON continues to leverage on its core competencies
while tapping the strong strategic partnerships it has
maintained to weather the current external challenges
and to maintain its position as a recognised leader in the
OSV market.
BOARD OF DIRECTORs
Datuk Wira Azhar
bin Abdul Hamid
12
Raja Tan Sri Dato’ Seri Arshad
bin Raja Tun Uda
Dato’ Abdul Rahman
bin Ahmad
Amir Hamzah
bin Azizan
Edwanee Cheah
bin Abdullah
Syed Yasir Arafat
bin Syed Abd Kadir
2015 ANNUAL REPORT
13
DIRECTORS’ PROFILE
bin Raja Tun Uda
Chairman
Non-Independant Non-Executive Director
Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda, Malaysian,
aged 69, is the Chairman and Non-Independent NonExecutive Director of our Company.Raja Arshad is also
the Chairman of Ekuiti Nasional Berhad (Ekuinas), Maxis
Berhad, Yayasan Raja Muda Selangor and Yayasan
Amir. He is presently a Director of Khazanah Nasional
Berhad (Khazanah), Yayasan DayaDiri and ACR
Retakaful Berhad. He is also the Chancellor of University
Selangor. He was formerly Executive Chairman of
PricewaterhouseCoopers (PwC), Malaysia, Chairman
of the Malaysian Accounting Standards Board and
Danamodal Nasional Berhad. His previous international
appointments include being a member of the PwC
Global IFRS Board and the Standards Advisory Council
of the International Accounting Standards Board.
His previous public appointments include being a
member of the Securities Commission, the Malaysian
Communications and Multimedia Commission, the
Investment Panel of the Employees Provident Fund and
the Board of Trustees of the National Art Gallery. He is
a Fellow of the Institute of Chartered Accountants in
England and Wales, and a member of the Malaysian
Institute of Accountants. He is also a member of the
Malaysian Institute of Certified Public Accountants and
served on its council for 24 years, including three years
as its president.
14
Amir Hamzah bin Azizan
Managing Director
Non-Independant Executive Director
Amir Hamzah Bin Azizan, aged 48, is the Managing
Director (MD) and Non-Independent Executive Director
of our Company.
He holds a Bachelor of Science Degree in Management
(majoring in Finance and Economics) from Syracuse
University, New York. He has also attended the Stanford
Executive Programme at Stanford University, United States of
America and the Corporate Finance Evening Programme
at the London Business School, United Kingdom.
He started his career within the Shell Group of
Companies for 10 years, serving in various capacities,
including as Head of Financial Services and Manager,
Planning & Support at Sarawak Shell Berhad, Corporate
Finance Executive at Shell Malaysia Limited, Marketing
Credit Accountant at Shell Singapore Pte. Ltd., Internal
Auditor at Shell Eastern Petroleum Pte. Ltd., and Senior
Treasury Advisory at Shell International Ltd., London.
In the year 2000, he joined MISC Berhad as the
Group’s General Manager, Corporate Planning
Services. Subsequently in 2004, he was the Regional
Business Director (Europe, Americas, Africa and FSU)
of MISC Berhad in London, United Kingdom before
being appointed President/Chief Executive Officer
(CEO), AET Tanker Holdings Sdn. Bhd. on 1 April 2005.
He was promoted to become the President/CEO of
MISC Berhad on 1 January 2009 and served until 14
June 2010. He was subsequently made the MD/CEO
of Petronas Dagangan Berhad from 15 June 2010 until
31 August 2012, when he became the Group MD/CEO
of Petronas Lubricants International. At the same time,
he was also the Vice President Downstream Marketing
from 1 March 2011 until 1 July 2013, when he became
the Vice President Lubricants for Petronas.
He became our MD on 1 March 2016.
2015 ANNUAL REPORT
15
DIRECTORS’ PROFILE (cont’d)
Dato’ Abdul Rahman bin Ahmad
Non-Independent Non-Executive Director
Senior Independent Non-Executive Director
Dato’ Abdul Rahman bin Ahmad, Malaysian, aged 46,
is a Non-Independent Non-Executive Director of our
Company.
Datuk Wira Azhar bin Abdul Hamid, Malaysian, aged
55, is a Senior Independent Non-Executive Director of
our Company. He is also the Chairman of Audit and Risk
Management Committee. He is a qualified Accountant
and is a Fellow of the Chartered Association of Certified
Accountant (UK). In addition to this, he is a member of
the Malaysian Institute of Accountants. He began his
career as a Financial Internal Audit Manager at British
Telecoms Plc. in London, UK and served from 1989 to
1991 where he was responsible for operational review
audits at British Telecoms District Offices in South East
England. He then joined the Malaysian Co-Operative
Insurance Society Ltd. as the Head of Finance from
1992 to 1994. Subsequently in 1994, he joined the Sime
Darby Group and held various financial and senior
management position in manufacturing, oil & gas,
industrial equipment and plantation businesses, before
leaving Sime Darby in 2010. Datuk Wira Azhar’s last
position in the Sime Darby Group was in its Plantation
Division as Executive Vice President. In January 2011, he
was appointed as Independent Director of Perbadanan
Kemajuan Negeri Perak and from September 2011 to
December 2014, he was the CEO of Mass Rapid Transit
Corporation Sdn. Bhd. He was appointed as a director
in Hong Leong Bank Berhad (Hong Leong Bank) on 15
May 2015 and a member of the audit committee of
Hong Leong Bank on 20 October 2015. He is now the
Group Managing Director of Tradewinds Corporation
Berhad and also holds several directorships in other
private limited companies.
He is currently the Non-Executive Chairman of ILMU
Education Group Sdn. Bhd., a leading integrated
Education group in Malaysia.
He was formerly the CEO of Ekuinas, a government
linked private equity firm with assets under management
of more than RM3.5 billion.
Prior to joining Ekuinas, Dato’ Abdul Rahman was the
Group Managing Director/CEO of Media Prima Berhad,
the leading integrated media investment group in
Malaysia. He also held the post of Group Managing
Director/CEO of Malaysian Resources Corporation
Berhad, a leading Malaysian conglomerate involved in
property, construction and infrastructure.
Dato’ Abdul Rahman began his career at Arthur
Andersen, London, and later served as Special Assistant
to the Executive Chairman of Trenergy (M) Berhad/
Turnaround Managers Inc Sdn. Bhd. He later served
Pengurusan Danaharta Nasional Berhad, the country’s
national asset management company and went on to
become Executive Director of SSR Associates Sdn. Bhd.,
a boutique corporate finance consulting firm.
Dato’ Abdul Rahman holds an MA in Economics
from Cambridge University, United Kingdom and is a
member of the Institute of Chartered Accountants in
England and Wales (ICAEW). He is currently also serving
as an Independent Director of Axiata Group Berhad
and M+S Pte Ltd, a joint venture property company of
Khazanah and Temasek Holdings (Private) Limited and
RHB Investment Bank Bhd.
16
Syed Yasir Arafat bin Syed
Abd Kadir
Independent Non-Executive Director
Syed Yasir Arafat bin Syed Abd Kadir, Malaysian, aged
44, graduated from University of Essex, UK in 1994
with a Bachelor of Arts (Hons) degree in Accounting
and Financial Management. He began his career
in 1994 as an Executive in the Project Development
Department of Aseambankers Malaysia Berhad (now
known as Maybank Investment Bank). In 1996, he
joined the Capital Markets Department of Commerce
International Merchant Bankers Berhad (now known
as CIMB Investment Bank Berhad) as an Executive until
1998. He subsequently joined Pengurusan Danaharta
Nasional Berhad as an Executive from 1998 to 1999.
He joined United Overseas Bank (Malaysia) Berhad
as a Deputy Manager in the Investment Banking
Division, Corporate Finance in 2000 and was involved in
corporate advisory work until he left in 2001. He joined
ING Corporate Advisory (Malaysia) Sdn. Bhd. in 2001
and served for nine years, starting as Vice President of
Corporate Finance, specialising in areas of mergers and
acquisitions, equity and equity-linked fund raising, debt
fund raising and financial advisory for some of Malaysia’s
leading companies in banking, plantations, automotive,
telecommunications and property, among others. His
last position was Country Manager of ING Wholesale
Banking, a position that he was promoted to in 2007,
overseeing both ING Corporate Advisory (Malaysia)
Sdn. Bhd. and ING Bank N.V. Labuan Branch operations
in Malaysia. He joined Ekuinas in 2009 as the Managing
Partner, Investment, where he oversees the Investment
Team and leads Ekuinas’ portfolio investments in the
oil and gas industry. He is a member of the Investment
Committee and the Management Committee of
Ekuinas. On 1 March 2016, he has assumed the role
of the Executive Director and CEO of Ekuinas leading
its management committee and is a member of its
Investment Committee after the retirement of Dato’
Abdul Rahman bin Ahmad.
Edwanee Cheah bin Abdullah, Malaysian, aged
65, is an Independent Non-Executive Director of our
Company. He is also the Chairman of Remuneration
Committee and Nomination Committee. He obtained
a Diploma in Mechanical Engineering from Singapore
Polytechnic in 1973. In 1999, he obtained a Masters in
Business and Administration (Technology) degree which
was jointly awarded by Deakin University, Melbourne,
Australia and the Association of Professional Engineers,
Scientists and Managers, Australia. He has over 40
years of international experience in the energy and oil
and gas industry. He began his career with Shell Brunei
LNG Sdn. Bhd. in 1973 as a trainee engineer and has
since served various companies within the Shell group
of companies (Shell Group) in Malaysia, Singapore,
Brunei, South Korea, Netherlands, UK and USA for 32
years. During his tenure with the Shell Group, he had
assumed various positions including Engineer, Site
Representative Manager, Division Head and Global
Consultant where he was responsible for, among others,
engineering related matters, project management and
internal consultancy. In 2006, he left Shell International
Exploration and Production B.V., Netherlands. In 2007,
he joined S 2 Click Sdn. Bhd., an oil and gas consultancy
firm, as Director and Principal Consultant, where he
provides consultancy services to various oil and gas
companies.
2015 ANNUAL REPORT
17
DIRECTORS’ PROFILE (cont’d)
18
Datuk Abdullah bin Ahmad, Malaysian, aged 68, is an
Independent Non-Executive Director of our Company.
He graduated from University Malaya in 1970 with
a Bachelor of Arts. He obtained his post-graduate
Diploma in Management Science from National Institute
of Public Administration (INTAN) in 1974 and Certificate
in Petroleum Management (Arthur D’Little) Boston, USA
in 1985. He was formerly an Administrative & Diplomatic
Service Officer. He started his career as a civil servant
assigned to various divisions within the purview of the
Ministry of Home Affairs. His last posting was in Public
Services Department. In 1979, he joined Petroleum
Nasional Berhad (PETRONAS) as the Head of Human
Resource Planning and Recruitment. Whilst serving
PETRONAS he was exposed to both upstream and
downstream at operating unit level including CarigaliBP(a joint venture company between PETRONAS
Carigali and British Petroleum Development Company,
UK) for exploration and production of oil, offshore Kudat,
followed by other postings to domestic marketing,
area office, regional office, petrochemical plant
and subsidiaries in various capacities including Board
Member of PETRONAS property related subsidiaries.
Madeline Lee May Ming, Malaysian, aged 47, is an
Independent Non-Executive Director of our Company.
In 1991, she obtained her Bachelor of Laws (Hons)
degree from Queens University Belfast, UK. She pursued
her postgraduate studies at the same university and
graduated with a Master of Laws in 1992. She became
a member of Grays Inn, UK in 1993 and was called to
the Bar of England and Wales in the same year. She was
subsequently called to the Singapore Bar in 1995 and
also to the Malaysian Bar in 2001. She has been in legal
practice for over 20 years. She embarked her career as
a pupil Barrister in the Chambers of 4 Brick Court, London
UK in 1993 until 1994. She continued her international
legal practice in Singapore until 1996 and in Vietnam
until 1999. She resumed her legal practice in Malaysia
in 2000 with Messrs Raslan Loong and thereafter, Messrs
Mazlan & Associates where she was made a Partner in
2006. In 2014, she left Mazlan and Associates and is now
with Ilham Lee, as a founding partner.
SENIOR MANAGEMENT TEAM
From left to right:
Captain Hassan
bin Ali
Chief Operating Officer
Amir Hamzah
bin Azizan
Managing Director
Zaleha binti
Abdul Hamid
Chief Financial Officer
2015 ANNUAL REPORT
19
Laying the Roadmap for Future
Success &
ICON’S
STRATEGIC ROADMAP
for the next 5 years is to weather
the storm and re-shape its future
Progress
Capitalising on the current scenario to improve internally, ICON embraces
the challenges as a means to deliver greater efficiency, productivity and
synergy that lays the roadmap for a better and more competitive ICON
going forward.
CHAIRMAN’S
STATEMENT
Dear Shareholders,
On behalf of the Board of Directors, I
present to you the annual report and audited
financial statements of Icon Offshore Berhad
(ICON/Group) for the financial year ended
31 December 2015 (FY2015).
The year in review marks our second year as a
public listed entity, and has been a challenging
period for the oil and gas industry as a whole. The
continued slump in crude oil prices coupled with
global economic weakness and the resulting
cutback in exploration and production activities
by oil and gas majors, has had a telling effect
on all OSV players, ICON included.
However, despite the difficulties faced, ICON has
shown exemplary resilience in the face of extreme
adversity. ICON’s robust and sustainable business
model, our strong business fundamentals and
continued professionalism have enabled the
Group to weather the storm and register a
measure of progress and achievement during
the year under review.
22
Raja Tan Sri
Dato’ Seri Arshad
bin Raja Tun Uda
Chairman
2015 ANNUAL REPORT
23
CHAIRMAN’S STATEMENT (cont’d)
ICON continued
to implement
the highest
standards and
best practices
for corporate
governance and
risk management
throughout the
organisation
FINANCIAL PERFORMANCE
UPHOLDING CORPORATE
GOVERNANCE
In FY2015, the Group’s revenue
decreased by RM52.3 million to
RM266.6 million. The Group reported
an Adjusted PAT of RM26.0 million.
However, given the need to make
provisions for exceptional items
which includes impairment for
vessels of RM195.4 million and
impairment for goodwill of RM180.6
million, the Group recorded a loss
after tax of RM363.3 million in FY2015.
This decrease in both revenue
and earnings was attributable to
reduced demand for OSVs from
oil and gas majors which in turn
contributed to reduced vessel
utilisation and charter rates.
In FY2015, ICON continued to
implement the highest standards
and best practices for corporate
governance and risk management
throughout the organisation. This is
achieved through the strengthening
of the Group’s internal policies as
well as operating procedures and
practices towards reducing risk
exposure and providing for better
operational and financial controls.
The Group subscribes to the
principles and recommendations
set out in the Malaysian Code
of Corporate Governance 2012.
Details of our 2015 corporate
governance
measures,
risk
management
practices
and
internal control policies can be
found in the relevant sections of this
Annual Report.
Group Financial Overview
Reconciliation of PAT to Adjusted PAT
RM million
100
0
(363)
(100)
181
3
1
9
26
Impairment
of goodwill
Amortisation
of intangible
assets
Change in
estimate for
vessels’
residual
value
Tax effect
adjustment
Adjusted
PAT
195
(200)
(300)
(400)
PAT
24
Impairment
of vessels
CORPORATE SOCIAL RESPONSIBILITY
Based on the core guiding principles
of people, planet and profit, ICON
is fully committed to realising its
role as a responsible corporate
citizen where our business goals
are balanced with social and
environmental considerations. Full
details of our various Corporate
Social Responsibility (CSR) initiatives
are given in the CSR section of this
annual report.
2015 ANNUAL REPORT
25
CHAIRMAN’S STATEMENT (cont’d)
DEVELOPING OUR GREATEST ASSET –
OUR PEOPLE
Without a doubt, ICON’s greatest asset is its diverse, multi-national workforce who has been a key pillar in the Group’s
growth and progress since its inception.
Cognisant of the important contribution that our workforce makes to our success, ICON has continued to develop
its talent pool through specific strategies for recruiting, retaining and developing staff. These included providing
competitive remuneration as benchmarked against industry standards, as well as providing ample training and skills
development opportunities.
In addition, ICON has also emphasised leadership development and succession planning to ensure the development
of capable leaders across all levels of the organisation and to ensure a strong leadership bench for the Group. 20 staff
have been selected and completed the leadership training programme last year. The leadership programme serves as
the Group’s talent development pipeline towards producing ICON’s future echelon of high-calibre leaders, capable
of serving across the Group and operating successfully within the demanding and complex OSV industry segment.
26
Outlook & Prospects
Appreciation
Given the tepid conditions of the
global economy, the languid
performance of the United States
and China as well as various
political uncertainties, we foresee
that FY2016 will follow a similar
trend to FY2015. Malaysia’s Gross
Domestic Product (GDP) growth for
2016 is forecasted to be weaker at
4.5-5%, indicating a slower domestic
economy impacted by reduced
private consumption and foreign
direct investment. We believe that
it is prudent therefore, to adopt a
more cautious outlook for FY2016.
On behalf of the Board, I wish to
convey our appreciation to the
Management
and
employees
of ICON for their exemplary
professionalism and contributions
during a most challenging year
under review.
Despite this however, FY2016 still
presents
opportunities.
Given
ICON’s inherent strengths and
capabilities, we remain confident
that the Group will successfully
weather the storm and maintain
its track record of profitability while
delivering value to our shareholders.
An industry veteran of 26 years, Encik
Amir brings a wealth of related oil
and gas experience to the Group,
both locally and internationally.
We are confident that he will be an
asset in ICON’s progress forward,
especially in the key area of value
creation through mergers and
international expansion. Encik Amir’s
appointment as Managing Director
commenced on 1 March, 2016.
ICON is the largest OSV provider in
Malaysia and one of the largest in
Southeast Asia in terms of number
of vessels. It is a noteworthy
achievement that was built over
many years and is testament of
our strong fundamentals and
competitive ability in the niche
segment of the oil and gas industry
that we operate in.
Despite the expected challenges,
we remain on track to achieve longterm, sustainable growth as outlined
in our overarching Group strategy.
I also wish to take this opportunity
to welcome Encik Amir Hamzah
Azizan (Encik Amir) as ICON’s
new Managing Director whose
vast experience and industry
knowledge will be a valuable
addition to the Group.
who served as an Independent
Non-Executive Director during the
year under review. The Board and
Management are grateful for their
contributions to ICON and wish
them every success in their future
endeavours.
I also wish to thank my fellow
members of the Board for their
counsel and support, as well as
express on their behalf, our gratitude
to all our shareholders, customers,
suppliers, business partners and
financiers for their continued
confidence
and
unwavering
support to ICON during the financial
year under review.
Raja Tan Sri Dato’ Seri Arshad bin
Raja Tun Uda
Chairman
4 April 2016
In the same vein, I wish to convey
the
Board’s
appreciation
to
former ICON Chief Executive
Officer, Dr Jamal Bin Yusof, who
was instrumental in the creation of
ICON through the merger of two
companies and who oversaw the
successful listing of ICON on Bursa
Malaysia in 2014. We also express
our thanks to James William Iler,
2015 ANNUAL REPORT
27
MANAGING
DIRECTOR’s
Review
Dear Shareholders,
The financial year ended 31st December 2015
(FY2015) was indeed a turbulent year for the
oil and gas industry
Global demand for crude oil reduced significantly on the back of
sluggish economic recoveries primarily in the United States and China.
Consecutively, crude oil prices reached a record 11-year low of USD37 per
barrel amidst global economic weakness, political turmoil in various parts
of the world and general volatility in the oil and gas industry as a whole.
Despite global demand being moderated considerably in FY2015, crude
oil production continued to outpace consumption largely due to sustained
output from OPEC member nations which remained high, in response to
various economic and political factors. The continued surplus in daily
production further exacerbated the slide in crude oil prices.
With crude oil prices having dipped considerably, oil and gas majors
consequently cut back on capital expenditure (capex) as well as
operating expenditure (opex). In Malaysia, PETRONAS and other oil and
gas majors temporarily suspended or renegotiated contracts on oil rigs
and significantly reduced spending on upstream operations.
The reduced demand from oil and gas majors for OSVs contributed to
lower vessel utilisation and marine charter rates both in Malaysia and
internationally. This had a ripple effect on the entire industry supply chain
including the OSV segment, in which ICON operates.
28
Managing Director
2015 ANNUAL REPORT
29
MANAGING DIRECTOR’s Review (cont’d)
Despite these challenges, ICON
has
continued
to
persevere
and to exemplify resilience in
the face of adversity. While the
Group’s short term business and
operational
performance
has
been impacted as per other OSV
players, we continued to make
steady progress in improving our
business fundamentals and internal
capabilities. Importantly, in FY2015,
the Group has delivered on its
contract commitments to oil and
gas majors and stayed on course
towards realising its long-term
business objectives.
Financial Performance
During FY2015, ICON’s revenue
decreased by 16.4% to RM266.6
million from RM318.9 million in
FY2014. The lower revenue was
mainly attributable to a lower fleet
utilisation rate of 60% as compared
to 78% in FY2014 due to reduced
activities and lower demand from
oil and gas majors during the
year, while sustaining our average
success rate for contract tenders.
Revenue
RM
266.6
million
30
Adjusted PAT (excluding exceptional
items) was recorded at RM26.0
million. However, with the inclusion
of exceptional items the Group
reported a loss after tax of RM363.3
million.
The
total
exceptional
items
recorded in FY2015 amounted to
RM389.3 million which were higher
than RM31.4 million in FY2014.
The significant exceptional items
included provision for vessels’
impairment of a certain age
group and with lower technical
specifications of RM195.4 million,
in line with the Group’s fleet
rejuvenation strategy. Under this
strategy, ICON continuously review
vessels for disposal and acquires
new vessels with higher technical
specifications. Impairment provision
was also made for goodwill arising
from the acquisition of Tanjung
Kapal Services Sdn. Bhd. and Omni
Petromaritime Sdn. Bhd. in 2012,
which amounted to RM180.6 million.
The Group’s net gearing ratio
increased to
0.87x for FY2015,
compared to 0.55x in the previous
year. During the year under review,
ICON procured a loan of BND37
million to finance the acquisition of
a new Accommodation Workboat
Vessel (AWB) to service a long-term
contract in Brunei.
Despite these challenges,
ICON has continued
to persevere and to
exemplify resilience in the
face of adversity
Addressing Challenges, Making
Steady Progress
ICON has continued to make
steady progress across its various
business operations.
In FY2015, we further expanded into
overseas waters through our joint
venture (JV) partnership in Brunei
with Zell Transportation Sdn. Bhd.
(Zell). Under the JV partnership,
ICON provides OSV to service
contracts and operations in Brunei
Darussalam. This was done in line
with establishing and expanding our
business presence in the regional
market space in view of tapping
opportunities within the OSV sector.
Our efforts have already begun
to yield results in FY2015 itself, with
notable contract wins in Brunei.
Elsewhere, we continued to bid
competitively for domestic and
regional contracts to ensure vessel
utilisation was maximised. The Group’s
order book remained strong at RM686
million for FY2015. Out of this total,
RM425.3 million is for firm periods and
RM260.7 million is for extension options
period. A significant portion of our
order book is long term (more than
one year) in nature which will provide
ICON with earnings visibility in FY2016
and beyond.
The Group also looked to optimise
operating costs and further improve
operational efficiency during the
year under review. Various measures
were undertaken in FY2015 which
included but were not limited to,
controlling fuel consumption as well
as managing the number of crew
onboard our vessels to optimise
operational gross profit margins
while taking into consideration
various safety and regulatory
requirements in the industry.
In addition, during periods of
low demand, ICON conducted
temporary shutdowns or lay-ups
on selected vessels, as well as
undertook repair and maintenance
work on these vessels as part of
our scheduled dry-docking and
planned maintenance program
to improve vessel readiness for hire
when demand eventually picks-up.
2015 ANNUAL REPORT
31
33
vessels
available for charter and
operating in waters off Malaysia,
Brunei and Thailand
32
ACTIVE FLEET MANAGEMENT &
REJUVENATION
maintain its undisputed position as
the largest OSV provider in Malaysia
and one of the largest in Southeast
Asia in terms of number of vessels.
As at 31 December 2015, the
Group has 33 vessels available for
charter and operating in waters off
Malaysia, Brunei and Thailand.
Our fleet consists of 21 anchor
handling tug and supply (AHTS)
vessels which make up 68% of our
total fleet; three smaller anchor
handling tug (AHT) vessels; four
straight supply vessels (SSV); two
platform supply (PSV) vessels; two
AWB vessels and one utility tug
vessel (UV).
ICON’s fleet is equipped with
technologically
advanced
equipment and machineries to
provide a wide range of logistical
support services throughout the
entire offshore oil and gas life
cycle. Our vessels can be used
for a wide range of services,
including seismic survey, drilling
operations support, towing, anchor
handling and mooring of barges,
repair and maintenance support,
accommodation
facilities
for
personnel and transportation of
personnel and supplies to platforms.
In addition, the Group also provides
ship management services to thirdparty vessel owners.
Despite the challenging external
circumstances, ICON continued
to
prioritise
its
active
fleet
rejuvenation strategy in tandem
with the requirements of the oil
and gas majors. We also remained
committed to implementing our
shipbuilding programme over the
ICON continued to
maintain its undisputed
position as the largest
OSV provider in Malaysia
and one of the largest in
Southeast Asia in terms
of number of vessels
long-term. Taking into account
current market conditions however,
the Group decided to adopt a more
prudent approach to conserve cash
expenditure by only taking delivery
of newly constructed vessels in
FY2017 or at the earliest suitable
date, when lucrative potential
contracts arise. These are shortterm decisions necessitated by the
current market scenario and do
not detract from the Group’s long
term plans to maintain a young,
competitive fleet and strengthen
ICON’s position as the largest OSV
provider in the country and one of
the largest in Southeast Asia.
Ultimately, our fleet rejuvenation
strategy will enable ICON to improve
its fleet utilisation rates, through fleet
diversification of selected vessel
asset classes and penetration
into regional operations. This will
strengthen our earnings and
provide for more efficient operating
performance going forward.
Fleet utilisation rate
FY2015
60%
10%
30%
Chartered/on-hired period
Available for charter/
Temporary shutdowns/lay-ups
Planned maintainence programme
and scheduled dry-docking
60%
2015 ANNUAL REPORT
33
CONTRACTS SECURED
In FY2015, ICON continued to secure
OSV contracts that have, and will
continue to contribute significantly
to earnings and net tangible assets.
In February 2015, the Group also
received another Letter of Award
(LOA) from PCSB for the provision
of spot charter marine vessels
under the Pan Malaysian Umbrella
Contract
(Umbrella
Contract).
ICON secured six (6) out of the eight
(8) packages offered under the
Umbrella Contract, mainly for AHTS
Vessel 60 MT, SSV, PSV, UV, Workboats
and Work Barges for a continuous
24-hour operation.
Under the Umbrella Contract,
ICON will provide the vessel, crew
and associated equipment for a
continuous 24-hour operation. The
Umbrella Contract will continue for a
primary period of two (2) years with
an extension option of one (1) year.
The contract is a significant
achievement for ICON, as it was
awarded to only 21 selected
players in the sector which make
up approximately 20% of the OSV
operators in the Malaysian industry.
This will ensure that for the next three
(3) years including the one year
option period, all spot contracts
from PCSB will only be awarded
to these 21 players. In addition,
our participation in the Umbrella
Contract will hold us in good stead
to win future jobs.
34
Outside Malaysia waters, in May
2015, we secured a second longterm contract via Zell with Brunei
Shell Petroleum Company Sdn. Bhd.
(BSP) for the provision of one (1) new
AWB delivered in the first half 2015 for
a firm period of two (2) years, and
with one (1) year extension option
period. The contract is valued at
approximately RM99 million, and
brings additional long term contract
in Brunei, further cementing our
business presence and position
in the market there. Progressively,
ICON has and continues to grow its
overseas operations, emerging as a
frontrunner in the region for OSVs.
In July FY2015, we secured two (2)
long-term contracts with Petronas
Carigali Sdn. Bhd. (PCSB) for the
provision of AHTS vessels valued at
approximately RM55 million. The
contract which came into effect in
July 2015 is for a firm period of two
(2) years with an option to extend
for an additional year.
I am also pleased to report that ICON
was awarded a charter in October
2015 by ExxonMobil Exploration &
Production Malaysia Inc. (EMEPMI)
for the provision of two (2) AHTS
vessels. The short-term contract is for
the provision of, among others, the
transportation of supplies from supply
bases to drilling rigs or platforms
and vice versa, and is valued at
approximately RM7.7 million.
In November 2015, we received
a letter of award from Borneo
Seaoffshore Sdn. Bhd. (Borneo
Seaoffshore) for the provision of
one (1) deepwater platform supply
vessel for Kebabangan Petroleum
Operating Company Sdn. Bhd.
(KPOC) with the total contract
valued at approximately RM51
million. The contract commenced in
November 2015 and shall continue
for a period of two (2) years with
an extension option of one (1) year.
This contract award is from a new
charterer in our portfolio so we draw
satisfaction from having successfully
made inroads into an oil and gas
major who could potentially offer
long-term business opportunities for
the Group.
Further, in December 2015, ICON
also received a Letter of Intent from
Carigali-PTTEPI Operating Company
Sdn. Bhd. (CPOC) for the provision of
one (1) unit of Utility Tug Vessel (UV)
commenced in October 2015, to
support production operations and
well services activities. The contract
which is valued at an estimated
RM22 million is for a period of three
(3) years with an option for an
extension of one (1) year plus one
(1) year thereafter.
The above contract was awarded
from an existing charterer in the
same operational location and is
a testament to their confidence
and trust in ICON’s service delivery,
having already established our
reliability and assurance in delivering
customer satisfaction.
Significant Contract awarded in FY2015
Feb 2015
Letter of Award (LOA) from PCSB for
the provision of spot charter marine
vessels under the Pan Malaysian
Umbrella
Contract
(Umbrella
Contract).
27 May 2015
2nd long-term contract through our
JV partner with BSP for the provision
of one (1) AWB for a period of 2+1
years.
lAOs
14 July 2015
Two (2) letters of award from PCSB
for the provision of two (2) AHTS for a
period of 2+1 years.
ThAIlAND
vIeTNAM
23 October 2015
CAMbODIA
PhIlIPPINes
Letter of award from EMEPMI for
the provision of two (2) AHTS. The
contract tenure is for a period of 6+1
months and 3 months respectively.
24 November 2015
MALAYSIA
Letter of award from Borneo
Seaoffshore for the provision of one
(1) deep water PSV to KPOC for a
period of 2+1 years.
11 December 2015
INDONesIA
Letter of award from CPOC for the
provision of one Utility vessel for a
period of 3+1+1 years.
2015 ANNUAL REPORT
35
CONTINUED IMPROVEMENT IN HSE
PEOPLE DEVELOPMENT INITIATIVES
improve on its HSE record, setting
new milestones and benchmarks of
excellence. HSE is a key focus area
for the Group and is effectively
our licence to operate. Hence, we
make no compromises in constantly
practising self-vigilance and selfregulation to ensure the highest
standards in day-to-day operations.
ICON views its talent as a key
competitive factor and as such,
continues to implement various
strategies and initiatives to develop
its workforce. The Group prioritises
the need to provide training and
development opportunities for staff
across the organisation in line with
empowering them to enhance their
competencies and professional
qualifications. Training is conducted
both on-site as well as off-site where
required and is based on the job
requirements and roles of staff, with
each individual possessing his/her
own career development pathway.
In FY2015, we are pleased to share
that ICON registered 13 million man
hours without a Lost Time Injury (LTI).
The year also saw several other
notable HSE milestones achieved
including awards by various oil
and gas majors. All of which are a
further testament to our exemplary
standards and uncompromising
commitment to HSE.
In addition to staff development, the
Group also emphasises succession
planning for key managerial
positions within the Company as
part of its business strategy to ensure
smooth transition of the leadership
bench in line with the theme of
sustainability within ICON.
HSE Statistics for fy2015
ICON
also
continues
to
commensurate its staff competitively
in line with industry standards to
ensure we are able to attract and
retain the best human capital for the
Group’s operational requirements.
0
Lost Time Injury (LTI)
Restricted Workday Case/
Medical Treatment Case
First Aid Case
3
1
6
Property Damage
10
Near Miss
14,169
Unsafe Act & Unsafe
Condition (UCUX)
13.0
million
Man hours without LTI
36
LOOKING FORWARD
Given the prevailing weak crude
oil prices, the languid global
economy as well as various political
developments including the lack
of global resolve to balance crude
oil production with reduced global
demand, we foresee that FY2016
will present a challenging scenario
similar to FY2015.
There may be further pressure on
charter rates as demand for OSVs
maintains a downward trend
against a backdrop of further
reductions in upstream activity by
the oil and gas majors. All oil and
gas players and ICON included,
will continue to bear the effects of
these sluggish conditions.
ICON has put in place various
measures to maintain a steady
course and to weather the storm
effectively. Since our listing last year,
we have been pursuing a clear
business strategy to not only expand
our operations, but also to maintain
profitable.
We will continue to implement key
short-term strategies to ride out
the current industry downturn. At
the same time, we will continue to
adopt a long term perspective by
remaining committed to our fleet
rejuvenation strategy as well as
continue investing in modern, bestin-class OSVs to meet future market
needs.
ICON will also continue to seek out
suitable merger and acquisition
opportunities
while
expanding
overseas into markets such as Brunei
and beyond. Boosted by our recent
award by Brunei Shell Petroleum,
we will continue to look at foreign
shores to boost our vessel utilisation
rate and to diversify our income
stream beyond Malaysia.
ICON will continue to competitively
bid for contracts to further improve
our tender success rate and
the overall fleet utilisation rate.
With regards to optimisation of
operational cost, the Group has put
in place various rationalisation and
cost control measures which will
carry through into FY2016.
We draw confidence from our
track record, our internal strengths
and firm fundamentals to see us
through the challenging conditions
ahead. Combined with our strong
fundamentals, we are optimistic of
consolidating our position as the
best-in-class OSV player in Malaysia.
Going forward, as the largest
OSV provider in Malaysia, ICON
will continue to implement sound
strategies to ensure the sustained
delivery of value to our stakeholders.
Managing Director
4 April 2016
2015 ANNUAL REPORT
37
Confident in the
Face of
13.0 million
man hours without LTI
Challenge
ICON maintains its resolve and conviction that tough times do not last but
tough companies do. Driven by the strength of its assets, expertise, track
record and most importantly, its people, ICON stands poised to continue
achieving new milestones of accomplishment.
Calendar of Significant Events
FEBRUARY
Delivery of Icon Valiant
ICON takes delivery of
Icon Valiant
The Langkawi International Maritime and Aerospace
Exhibition (LIMA) 2015
ICON inks two Memorandum of Understanding (MoU)
at the Shipbuilding, Ship Repair and Offshore Support
Vessel Pavillion during the LIMA 2015 event. A MoU with
Akademi Laut Malaysia (ALAM) is a collaboration to
develop a combined Standard of Training, Certification
and Watchkeeping (STCW) and Malaysian Certification of
Competency Level 3 OSV Operations training programme
for the maritime industry. Another MoU was with Generation
Six Sdn. Bhd. (G6) to develop computer based training for
the OSV industry under the BCiF Development Grant from
the Multimedia Development Corporation (MDeC).
JULY
Iftar Ramadhan During the holy month of
Ramadhan, the orphans
and underprivileged children
especially are remembered.
This year, ICON has identified
Pertubuhan Kebajikan Baitul
Kasih Wilayah Persekutuan
dan Selangor (PK BAITUL
KASIH)
to
join
ICON
employees to celebrate the
holy month with a breaking
of fast.
40
DECEMBER
Hari Raya Aidil Fitri Open
House
ICON feted its business
partners, corporate clients,
bankers, vendors and staff
during the Hari Raya Aidil Fitri
Open House which was held
at a hotel in Kuala Lumpur.
HSE Day 2015
ICON held its HSE Day themed,
‘HSE through Leadership and
Commitment’, attended by
Icon Offshore’s staff.
MARCH
Delivery of
Tanjung Piai 2
ICON takes delivery
of Tanjung Piai 2
MAY
JUNE
3rd Annual General Meeting
OGA 2015
ICON held its 3rd Annual
General Meeting at The
Royale Chulan Hotel, Kuala
Lumpur with attendees of
about 400 shareholders.
The 15th Asian Oil, Gas &
Petrochemical Engineering
Exhibition 2015 (OGA 2015)
is an event held every two
years with the participation
of the oil and gas players.
ICON participated in this
event which saw more than
23,000 visitors during the
three-day event which was
held at the Kuala Lumpur
Convention Centre.
LIST OF 2015 AWARDS
EORC Wells 1,000,000 ManHours LTI Free
ICON received an award
from SHELL – PETRONAS for
1,000,000 man-hours LTI Free
AwardVessel
From
Excellent OSVIS Status –
12 Months OSVIS Extension Period
Omni Marissa
Petronas Carigali Sdn. Bhd.
Active Contribution Towards Near Miss
Reporting FY 2015
Omni Perkasa
Petronas Carigali Sdn. Bhd.
2015 ANNUAL REPORT
41
HEALTH,
SAFETY AND
ENVIRONMENT
ICON’s PRIORITY TOWARDS HEALTH,
SAFETY AND THE ENVIRONMENT
As ICON continues to build up its
reputation in the oil and gas industry,
we take cognisance of the high
expectations of our partners, be it
our shareholders, clients, vendors
or the community in which we
operate in. We are ever vigilant to
ensure this strong partnership, one
which is based on respect, integrity
and professionalism, is upheld
by our employees at every level,
department and vessel throughout
our organisation. Our business
operating commitment is to surpass
what is required by regulations
and guidelines, and chart our own
pioneering, iconic standards.
ICON’s HSE COMMITMENT TO OUR
EMPLOYEES
It is acknowledged that policies
upholding stringent Health, Safety
and the Environment (HSE) standards
would position a Company better
in securing sustained commercial
prospects. At ICON, there is a far
more compelling reason to do
so – it is for the health and safety
42
of our workforce, essentially our
family at ICON. This provides the
fuel which drives us to ensure
stringent processes and protocols
do not remain merely as wording
in a document or hung in fanciful,
framed posters, but is inexorably
ingrained into the DNA that makes
for our way-of-life at ICON.
“ We do not inherit
the earth from our
fathers; we borrow it
from our children
”
Whilst the origins of the above quote
is unclear, what resonates clearly
to ICON is that our contribution
is
needed
to
preserve
the
environment, ensure efficient use of
limited resources through sustained
means and manage pollution to
our fullest ability, all supported
by technological advances in
processes and machinery.
CONTINUOUSLY IMPROVING OUR HSE
PERFORMANCE
ICON takes pride in the investment
of time and effort given to
understanding, maintaining and
enhancing our HSE standards.
Understanding the rationale of
why we have stringent processes
and procedures in place is the
first step toward a successful
HSE outcome. Maintaining such
measures is the second stage and
we manage this with continuous
education in emergency drills,
incident
investigations,
robust
safety inspections, knowledge of
health and safety controls, just to
name a few. Training sessions are
conducted for both employee and
management alike to reinforce the
key message that safety cuts across
all facets of the organisation and
does not discriminate designations.
A top-down approach is our hallmark
at ICON, demonstrated at senior
management
officials’
briefing
to employees on our strategic
direction and performance to-date.
Such engagement opportunities
further
reaffirm
the
collective
contribution needed from each
and every employee in order to
achieve our corporate objectives.
This transparency and culture of
openness ensures stronger buy-in and
a heightened sense of empowerment
from employees, resulting in improved
performance efficiency.
A number of initiatives were conducted over 2015 to ensure optimal
understanding on preventative measures and health aspects such as:
QuarterHSE Initiatives
1st Quarter
Fire Prevention Training
‘Spot the Hazard’ Campaign
Launching of UCUX card onshore and offshore
Defensive driving course for Company drivers
2nd Quarter Ship to Shore Drills
Fire Drill and First Aid Awareness at Labuan site office
3rd Quarter
Fire Prevention Awareness Talk by Fire Prevention Centre
Cancer Awareness Talk by Healthcare Professionals at Kuala Lumpur
4th Quarter
Cancer Awareness Talk at Labuan
HSE Day
HSE POLICIES ENABLE A CONDUCIVE WORKING ENVIRONMENT
Various policies governing employees have been adopted, some of which are
the Safety Management System Policy to maintain safe and reliable operations
of ships and environmental impact, a Stop Work Policy to pursue the goal of
“no harm” to people, property and environment, as well as a Drug and Alcohol
Policy to maintain a safe, healthy and conducive environment for all employees.
UPHOLDING THE HIGHEST HSE STANDARDS
Risks are an inherent factor in our industry and are almost tangible in our daily
operations. In recognition of this, we have instituted measures to identify and
mitigate such risks as best as possible. We look to various internal and external
safety audits as a means to validate our strict compliance with HSE protection
laws and regulations as well as affirm effective waste prevention and reduction
capabilities. Measures taken include the implementation of systems covering
formal safety management, comprehensive incident and near-miss reporting
as well as investigation and emergency response.
To further strengthen our internal systems, we conduct systematic health and safety
training for our employees. We actively safeguard against any hazardous materials
aboard our vessels and at shore-based locations. Such materials are maintained
in or transferred to confined areas to ensure its containment as a contingency.
OUR HSE EFFORTS RECOGNISED
Our due diligence and commitment toward HSE continue to secure due
recognition from our valued customers. In 2015, we successfully secured the
‘Active Contributing Towards Near Miss Reporting FY 2015’ which was awarded
to our vessel Omni Perkasa by PCSB.
ICON was also honoured to receive an award for outstanding HSE performance
and dedication from EORC Wells for achieving one million manhours without
any LTI.
2015 ANNUAL REPORT
43
Corporate Social Responsibility
Corporate Social Responsibility
(CSR) is widely acknowledged as a
company’s commitment to operate in
a sustainable and responsible manner
to serve the interest of its shareholders,
employees and its community
alike. ICON has embraced CSR as
the cornerstone of our Company’s
philosophy, with the aim to give back
to the community we work in.
Education, ICON’s Flagship
Initiative
Education has always been at
the heart of ICON’s CSR strategy,
programmes and initiatives. We
have formulated our CSR strategy
as a long-term journey, not as a
quick, one-off initiative. In this,
we strive to reach out to needy
and under-performing students in
schools and increase access to
educational opportunities for such
school children, irrespective of race,
religion or social background.
One such educational initiative
commenced in 2013 in which ICON
partnered the Dyslexia Association
of Malaysia (Persatuan Dyslexia
Malaysia or PDM) to train teachers
and psychologists to better assess
students with this learning disability.
Using a train-the-trainer approach,
workshops were organised for
international experts to train local
teachers and psychologists in the
various methods of conducting tests
to identify schoolchildren with this
44
learning impediment and impart
specially designed, internationally
accepted
practical
teaching
methods for such students.
and deepened their understanding
of various subjects taught, thereby
bringing a more positive perspective
of their schooling experience.
Equipped and keen to employ these
latest, cutting edge knowledge,
ICON partnered PDM in organising
similar workshops in Johor Baru
and Kedah in 2014, where a total
of 270 participants from diverse
backgrounds ranging from parents,
teachers, minders and healthcare
professionals involved themselves in
this series of workshops, facilitated
by an occupational therapist,
speech therapist and psychologist.
Mindful that wholistic education
transcends
the
confines
of
classrooms and lecture halls, ICON
further sponsored PDM’s Sport’s Day
with our employees volunteering
their own time at this inspiring event.
In that same year, we reached out
to the community in the area of
our operations and sponsored a
tuition programme at four schools
at Kemaman, Terengganu. This
spurred the school children’s interest
Following these earlier initiatives, we
realised that ICON could contribute
to further enhance the awareness of
dyslexia and thereby assist students
with their learning difficulty. We then
embarked on a pilot initiative in 2015
to further establish the incidence of
dyslexia amongst schoolchildren.
Working again in partnership with
PDM, two primary schools were
selected, namely SJK (Tamil) Ladang
Valambrosa at Kapar, Kelang and
SJK (Cina) Nan Yik (Lee Rubber),
Gombak, Kuala Lumpur. Led by the
PDM’s Honorary President, a team
of six trained assessors visited the
schools and conducted relevant
screening tests on a total of 172
schoolchildren. Their findings and
recommendation were submitted
to the respective schools for their
review and consideration, with
PDM’s assurance of further support
where needed.
Programmes in the Pipeline
The experience gained in this
and the preceding years’ activity
has redoubled our effort to map
out practical initiatives for 2016,
maintaining education as a primary
focus area. We aim to provide
tuition classes for students at two
secondary schools in Kemaman
to better prepare them for their
upcoming “Sijil Pelajaran Malaysia”
(SPM) examination.
We are in the midst of researching
various approaches to enhance
human capital development in
the oil and gas industry. One such
approach is to lay the foundation at
the early stages of tertiary education
by organising educational field
trips to our business operation sites
and also provide opportunities for
practical on-the-job training stints.
In this aspect, ICON as one of
Ekuinas’s
portfolio
companies
has participated in their Iltizam
Professional
Development
Programme (PDP) since 2013, a
structured program in developing
and nurturing local graduates to
enhance their employability through
placement at Ekuinas portfolio
companies. We took five graduate
trainees in 2015 to undergo on-thejob training at ICON. In addition, we
will absorbed them into our ICON
workforce when there is a match of
capability and job opportunity.
of employees in such initiatives. In
this, we are constantly engaging
our employees, to further motivate
and increase participation levels in
such activities.
We are keen to explore symbiotic
relationships with those interested,
with training exposure at the
Malaysian Maritime Agency Sdn.
Bhd. (ALAM), the only maritime
education and training institution
in Malaysia which offers the full
range of maritime shipping related
training. With such opportunities,
we could generate heightened
interest amongst students to pursue
an exciting career in the oil and gas
industry. By forming a potentially
suitable talent pool early enough,
we could devise appropriate
training to nurture their progress and
assist to realise their full potential.
We constantly remind ourselves
that the true measure of our
achievement lies in the many
lives ICON has touched and from
the positive outcomes delivered
for recipients. We have no doubt
that together with the relevant
partners and our enthusiastic and
committed employees, ICON looks
forward to instil a greater sense of
appreciation not just for education
but to prepare them to succeed
in life and broaden the range of
opportunity, particularly in the area
of oil and gas.
As with all CSR initiatives, we are
mindful that it is not just the financial
resources which determine its
success. A key contributory factor to
its sustainability is the participation
2015 ANNUAL REPORT
45
AUDIT AND RISK MANAGEMENT COMMITTEE REPORT
The Board of Directors (Board) of ICON is pleased to present the following report of the Audit and
Risk Management Committee (ARMC) for the financial year ended 31 December 2015.
MEMBERSHIP AND MEETING
The ARMC consists of all Non-Executive Directors with a majority of them being Independent Non-Executive Directors,
including the Chairman. The Chairman of the ARMC, namely, Datuk Wira Azhar bin Abdul Hamid, is a qualified
Chartered Accountant and a member of the Malaysian Institute of Accountants. Accordingly, the composition of the
ARMC complies with the Main Market Listing Requirements (Listing Requirements) of Bursa Malaysia Securities Berhad
(Bursa Malaysia).
The ARMC meetings are convened in orderly manner, structured through the use of an agenda. Minutes of the ARMC
meetings and ARMC papers are circulated to all members prior to the meeting for discussion. The reports presented
at the ARMC meetings are highlighted by the ARMC’s Chairman to the Board for further discussion, deliberation and
approval.
During the financial year ended 31 December 2015, a total of six ARMC meetings were held and the respective
member’s attendance is shown in the following table:
Name of ARMC Member
No. of Meetings
Attended/Held
Percentage of
Attendance(%)
(Chairman)
Senior Independent Non-Executive Director
6/6
100
(Member)
5/6
83
(Member)
6/6100
The CEO/MD, CFO and Head of Corporate Governance
and Risk Management (CGRM) are in attendance
at each of the ARMC meetings to brief the ARMC on
the reports and specific issues as and when required.
The representatives of the External Auditors and the
outsourced audit firm are also invited to attend the
ARMC meetings to present reports as and when required.
The ARMC has conducted a private discussion with
the External Auditors, Messrs PricewaterhouseCoopers
without the presence of the Management during its
meetings on 24 March 2015 and 24 November 2015.
AUTHORITY OF THE AUDIT AND RISK MANAGEMENT
COMMITTEE
In performance of its duty, the ARMC shall have the
following authority as empowered by the Board:
a) Have authority to investigate any activity within its
terms of reference;
b) Have access to resources required to perform its
duties;
c) Have full, free and unrestricted access to any
information, records, properties and personnel of
the Group and other subsidiaries (if any) or sisters
companies;
46
d) Have direct communication channels with External
Auditors, person(s) (in case of an in-house function) or
outsourced engagement firm carrying out the internal
audit function or activity for the Group (Internal
Auditors), and personnel of CGRM Department;
3)
Where the review of audit reports of subsidiaries
and any related corporations also falls under
the jurisdiction of the ARMC, all the abovementioned functions shall also be performed
by the ARMC in co-ordination with the board
of directors of the subsidiaries and related
corporation;
4)
To review arrangements established by
Management for compliance with any
regulatory
or other external reporting
requirements, by-laws and regulations related
to our Company’s operations; and
5)
To consider other areas as defined by the Board.
e) Have authority to engage independent professional
or other advice; and
f)
Able to convene meetings with the External Auditors,
the Internal Auditors or both, together with other
Independent Non-Executive members of the Board,
excluding the attendance of any Executive Directors,
at least twice a year in the case of External Auditors or
whenever deemed necessary.
B) DEALINGS WITH EXTERNAL AUDITORS
DUTIES AND RESPONSIBILITIES OF THE AUDIT AND RISK
MANAGEMENT COMMITTEE
The duties and responsibilities of the ARMC are as follows:
1) To recommend to the Board the appointment
of the External Auditors, the audit fee and any
issues relating to the resignation or dismissal of
the External Auditors;
A)BOARD OVERSIGHT
2)
To discuss with the External Auditors before
the audit commences, the nature and scope
of the audit, and ensure co-ordination where
more than one audit firm is involved;
3)
To discuss with the External Auditors, their audit
report and evaluation of the system of internal
controls and risk management;
1)To
obtain
satisfactory
response
from
Management on reports issued by the External
Auditors, Internal Auditors and the CGRM, and
report to the Board:
•
Significant findings identified and the
impact of audit findings on the operations;
•
Deliberations and decisions made at the
ARMC’s meetings with focus given to
significant issues and resolutions resolved
by the ARMC, on a regular basis; and
•
A summary of material concerns and
weaknesses in the control environment
noted during the financial year and the
corresponding measures taken to address
the issues.
2) To oversee the internal audit function and the
CGRM and report to the Board on significant
changes in the business and the external
environment, which affect key risks;
4) To discuss problems and reservations arising
from the external audits, and any matter the
External Auditors may wish to discuss;
5)
To review and assess the performance and
independence of the External Auditors; and
6)
To review the quarterly announcement
and year-end financial statements of our
Company, focusing particularly on:
•
Any changes in accounting policies;
•
Significant adjustments arising from the audit;
•
The going-concern assumption; and
•
Compliance with accounting standards and
other legal requirements.
2015 ANNUAL REPORT
47
AUDIT AND RISK MANAGEMENT COMMITTEE REPORT (cont’d)
C) OVERSIGHT OF INTERNAL AUDIT FUNCTION AND
CGRM
To oversee the internal audit function and the
CGRM by:
•
Reviewing and approving the annual internal
audit plan;
•
Reviewing the adequacy of the scope of
internal audit and governance review, internal
audit and governance review programmes,
functions and resources of the internal audit
function and the CGRM, and that they have
the necessary authority to carry out their work;
•
•
•
Reviewing the reports prepared by the Internal
Auditors and CGRM, discussing major findings
and Management’s response, and ensure
that appropriate action is taken in respect
of the recommendations made by the Internal
Auditors and CGRM;
Determining and recommending to the
Board the remit of the internal audit function
and the CGRM, and ensure that they are able
to undertake their activities independently
and objectively;
Approving any appointment or termination
of senior staff members of the internal audit
function (in the case of an in-house function),
and appointment or dismissal of outsourced
Internal Auditors;
•
Approving the fees to be paid to the
outsourced internal auditors;
•
Being informed of resignations of internal audit
staff members and providing the resigning staff
member with an opportunity to submit his/her
reasons for resigning (in case of an in-house
function);
•
Reviewing and assessing the effectiveness of
the internal audit function;
•
Ensuring on an on-going basis that the internal
audit function and the CGRM has adequate
and competent resources; and
•
Monitoring closely any significant disagreement
between the internal audit function and the
CGRM, and Management irrespective of
whether they have been resolved.
D) RELATED PARTY TRANSACTION
To consider any related party transactions that may
arise within the Group including any transaction,
procedure or course of conduct that raises questions of
the Management’s integrity.
SUMMARY OF ACTIVITIES OF THE AUDIT AND RISK
MANAGEMENT COMMITTEE DURING THE FINANCIAL
YEAR
During the financial year, the ARMC carried out its duties
as set out in the terms of reference, particularly on:
a) Review and approval of the audit plan of the
CGRM (interim), outsourced Internal Auditors and
External Auditors, including their scope of work for
the financial year;
b) Review and approval of the appointment and fees
of outsourced Internal Auditors;
c) Review of Risk Management Policy and Procedure,
Staffing Policy, Communication Policy, Property,
Plant and Equipment Policy, Remuneration Policy,
revised terms of reference of ARMC, and revised
terms of reference of Exco for adoption by
the Group, prior to submission to the Board for
consideration and approval;
d) Review and approval of the Internal Audit Charter
prepared by outsourced Internal Auditors;
e) Review of the quarterly business risk assessment and
risk management reports to identify and manage
key business risks, as well as to monitor the status of
the mitigating measures;
48
f)
Review and deliberate on the audit reports, issues
and recommendations from the outsourced
Internal Auditors and External Auditors in relation to
the audit conducted during the financial year;
g) Review of the quarterly unaudited financial
statements and its explanatory notes thereon, and
annual audited financial statements to ensure
compliance with the Malaysian Financial Reporting
Standards, International Financial Reporting
Standards and the requirements of the Companies
Act 1965 in Malaysia;
h) Review of the adequacy of the scope, functions
and resources of the internal audit function;
i)
Review of the Statement of Corporate Governance,
ARMC Report, Statement on Risk Management
and Internal Control, and Statement of Directors’
Responsibility for insertion into the annual report; and
j)
Review of the performance and independence of
the External Auditors and consider for change or
reappointment, and fees of the External Auditors
before recommending to the Board for approval.
INTERNAL AUDIT FUNCTION
The Group in-house internal audit function which was
previously under the purview of the CGRM is outsourced
to an audit firm, Deloitte Enterprise Risk Services Sdn. Bhd.
(Deloitte) effective May 2015. The internal audit function
reports directly to the ARMC and is guided by the
Internal Audit Charter. Its principal role is to undertake
independent, regular and systematic review and
appraisal of the Group’s risk management, control and
governance processes designed and represented by
the Management, so as to determine whether they are
adequate and functioning in an appropriate manner.
During its first year of engagement, Deloitte had
carried out two risk-based operational audit reviews
in accordance with the approved annual internal
audit plan, namely, Bidding and Customer Contract
Management, and Fleet Operations, Stock Management
and Shipbuilding Management. The significant audit
findings raised by Deloitte for the internal audit review
on Bidding and Customer Contract Management
include the absence of formalised contracts with
certain brokers, and non-vetting of the contract/charter
party agreement, whilst for Fleet Operations, Stock
Management and Shipbuilding Management include
the non-compliance and inadequate monitoring of the
budget for dry-docking cost, weaknesses in on-board
stock management, and inadequate tank sounding
practices and its discrepancies analysis in monthly
report. Certain audit findings arise due to arrangements
or practices prior to the initial public offering (IPO) in
June 2014. Subsequent to the IPO, the Management
has taken steps to enhance the internal controls and
strengthen the effectiveness of policies and procedures.
The corresponding reports of the internal audit reviews
were presented to the ARMC in November 2015 and
February 2016 respectively, and forwarded to the
Management for their attention and actions. The
Management is responsible for ensuring that the action
plans are performed within the required timeframe.
A follow-up review on previous internal audit was also
performed by Deloitte to monitor the progress made
towards the implementation of these actions. The
results of the follow-up audit for Bidding and Customer
Contract Management were presented to the ARMC
in February 2016. All audit findings in relation to this
audit review were closed within the target date of
implementation. The results of follow-up internal audit
review for Fleet Operations, Stock Management and
Shipbuilding Management will be presented to the
ARMC in May 2016.
On 4 April 2016, Deloitte presented to the ARMC the
annual internal audit plan 2016 outlining their scope of
work for operational audits for the financial year ending
31 December 2016, covering procurement, finance
management, crew management, human resources
management, and information technology functions.
The annual internal audit plan 2016 was approved for
execution with immediate effect.
For the financial year ended 31 December 2015, the
total cost incurred for the internal audit function based
on invoice received from Deloitte was RM28,371.
This report is made in accordance with a resolution of
the Board dated 4 April 2016.
2015 ANNUAL REPORT
49
Statement oF Corporate Governance
The Board of ICON recognises that the exercise of good governance in conducting the affairs of
the Group with integrity, transparency and professionalism are the key components for the Group’s
continuing progress and success as these would not only safeguard and enhance shareholders’
value but also provide assurance that the interests of the other stakeholders are preserved.
The Board of ICON is committed to comply with the
principles and recommendations embodied in the
Malaysian Code on Corporate Governance 2012 (the
Code) in order to meet the highest standard of corporate
governance. Our Company has commenced adopting
the Code since its listing on the Main Board of Bursa
Malaysia in June 2014 and is continuously striving to
pursue this objective.
The Board of ICON is pleased to present the following
reports on the application of the principles as set out
in the Code and the extent to which the Group has
complied with the best practices of the Code during
the financial year ended 31 December 2015.
DIRECTORS
A. THE BOARD
The Board is the ultimate body which takes full
responsibility for the overall performance and
governance of the Group. It resolves key business
matters and corporate policies except those
reserved for shareholders as provided in the Articles
of Association (the Articles) of our Company, the
Act and other regulatory requirements. The Board
establishes the vision and strategic objectives
of the Group, directing policies, strategic action
plans and stewardship of the Group’s resources
towards realising the Group’s mission.
The Board exercises due diligence and care in
discharging their duties and responsibilities to
ensure that high ethical standards are applied,
through compliance with the relevant rules
and regulations, directives, practice notes and
guidelines in addition to adopting the best
practices in the Code and acts in the best interest
of the Group and shareholders.
B.BOARD CHARTER
The Board has adopted a formal charter which
is available in our corporate website. The Board
Charter (the Charter) was established to assist
the Board to provide strategic guidance
to
our Company and effective oversight of its
50
Management, for the benefits of the shareholders
and other stakeholders. The Board is guided by
the Charter which provides reference for Directors
in relation to the Board’s roles, authorities, duties,
responsibilities and functions. It adopts the
principles of good governance and is designed to
maximise our Company’s compliance, adopting
best practice requirements. The Board will review
the Charter as and when necessary to ensure it
remains consistent with the Board’s objectives and
responsibilities, and all the relevant standards of
corporate governance.
C.BOARD COMPOSITION AND BALANCE
As at the date of this Statement, the Board of
ICON currently consists of eight members namely
a Managing Director, one Senior Independent
Non-Executive Director, three Non-Independent
Non-Executive Directors (including the Chairman)
and three Independent Non-Executive Directors.
The Board composition complies with the Listing
Requirements of Bursa Malaysia that requires at
least two or one-third of the Board, whichever is
the higher, to be independent directors. The Board
has maintained its mix of Directors from diverse
professional background with a wide range of
experience and expertise in the field of business,
oil and gas industry, information technology,
economics, legal, finance and accounting. In
view of the size of the Group and its business
complexity, the Board is of the opinion that its
current composition and size remains optimum
and conducive for effective deliberations at Board
meetings.
The Board of ICON is committed to comply with
the principles and recommendations embodied
in the Code in order to meet the highest standard
of corporate governance. We note that with the
resignation of James William Iler, our Independent
Non-Executive Director on 26 August 2015 and the
appointment of our new Managing Director on 1
March 2016, the Board is not comprised of a majority
of independent directors when the Chairman is not
an independent director as recommended by the
Code. The Company is now actively engaging
with potential candidates in pursuit of appointing
an additional Independent Non-Executive Director.
The MD, COO and CFO are the Senior Management
of our Company, responsible for the day-to-day
management of operational and financial matters
of the Group, implementation of the Group’s
policies and the Board’s decisions, development
and implementation of the business and corporate
strategies.
There is a clear segregation of roles and
responsibilities between the Chairman and the
MD. Their respective roles and responsibilities
are clearly defined in the Charter. The role of the
Chairman is held by a Non-Independent NonExecutive Director of our Company.
The Board had on 22 May 2014 designated Datuk
Wira Azhar bin Abdul Hamid as our Company’s
Senior Independent Non-Executive Director.
D.INDEPENDENCE
The Independent Non-Executive Directors are
independent of Management and free from
any business relationship which could materially
interfere with their independent and objective
judgement. Their presence ensures that issues of
strategies, performance and resources proposed
by the Management are objectively evaluated
and providing a capable check and balance for
the Management.
The Board has adopted a Policy and Procedure
on Independence of Independent Directors
that describes how the Board will assess the
independence of each Independent Director.
In determining the independence of individual
Independent Directors, the Board will consider all
relevant information, facts and circumstances
and the assessment of the independence of its
Independent Directors is undertaken annually. Each
Director is also required to immediately disclose to
the Board if they have an interest or relationship
which is likely to impact on their independence
or if an Independent Director believes he may no
longer be independent.
From the recent assessment of the independence
of the Independent Directors, the Board was
satisfied that Datuk Wira Azhar bin Abdul Hamid,
Edwanee Cheah bin Abdullah, Madeline Lee
May Ming, and Datuk Abdullah bin Ahmad are
suitable and qualified to act as an Independent
Non-Executive Directors of our Company. None
of the said Independent Non-Executive Directors
of our Company has exceeded the tenure of a
cumulative term of nine years in the Board.
E.
DIRECTOR’S CODE OF ETHICS
The Directors, in discharging its responsibilities,
continue to adhere to the adopted Director’s
Code of Ethics. The Director’s Code of Ethics is
based on principles in relation to sincerity, integrity,
responsibility and CSR, and is formulated to
enhance the standard of corporate governance
and corporate behaviour.
F.
DUTIES AND RESPONSIBILITIES OF THE BOARD
In carrying out their duties and responsibilities,
the Board exercises great care to ensure that
high ethical standards and corporate behaviour
are upheld. To enhance accountability and
transparency, the Board has specific functions
reserved for the Board and those delegated
to the Management. The Board members are
constantly mindful that the interests of the Group’s
stakeholders are always being protected.
In ensuring an effective discharge of its functions,
the Board adopts the Charter which sets out the
following key responsibilities:
a) To review, challenge and approve the annual
corporate plan, which includes the overall
corporate strategy, marketing plan, human
resources plan, information technology plan,
financial plan, budget, regulatory compliance
plan and risk management plan;
b) To oversee the conduct of the businesses and
to determine whether the businesses are being
properly managed;
c) To identify principal risks and ensure the
implementation of appropriate internal
controls and mitigation measures to effectively
monitor and manage these risks;
d) Succession planning, including appointing,
training, fixing the remuneration of, and where
appropriate, replacing the key management;
e)
To
oversee
the
development
and
implementation of an investor relations
programme or shareholders’ communications
policy for the Group; and
f)
To review the adequacy and integrity of the
internal controls and management information
systems, including systems for compliance
with applicable laws, regulations, rules,
directives and guidelines (including the Listing
Requirements of Bursa Malaysia, securities laws
and the Act).
2015 ANNUAL REPORT
51
Statement of Corporate Governance (cont’d)
The Board is cognisance of the importance of
business sustainability and, in conducting the Group’s
business, the impact on the environment, social and
governance will be taken into consideration.
During the financial year ended 31 December
2015, a total of nine Board meetings were held and
the respective Director’s attendance is shown in
the following table:
The Directors of our Company recognise the
importance to devote sufficient time and efforts
to carry out their duties and responsibilities and
has committed to this requirement at the time of
their appointment. The Director is at liberty to
accept other Board appointments so long as
the appointment is not in conflict with the business
of our Company and does not affect his
performance as a Director. None of the Directors of
our Company is holding more than five directorships
in public listed companies and it is the policy of our
Company for Directors to ensure that the number
of their directorships is in compliance with the
Listing Requirements of Bursa Malaysia before
accepting any new directorship.
Name
of Director
G. BOARD MEETINGS
The Board meets at least once every quarter and
additional meetings are convened as and when
necessary. Meetings are scheduled in advance
before the start of each financial year to enable
the Directors to plan their schedules accordingly.
Board meetings are conducted in an orderly
manner, structured through the use of an agenda.
Board members are provided with the structured
agenda together with the relevant documents and
information in advance of each Board meeting.
Minutes of the Board meeting are circulated to
Directors for their perusal prior to the confirmation
of the minutes at the following Board meeting.
The Directors may request for further clarification
or raise comments on the minutes prior to the
confirmation of the minutes as a correct record of
the proceedings at the Board meeting.
No. of
Meetings Percentage of
AttendedAttendance
/Held
(%)
bin Raja Tun Uda
Chairman
9/9
100
9/9
100
9/9
100
9/9
100
Dr. Jamal bin Yusof @
Gordon Duclos
1/6
17
7/9
78
9/9
100
7/8
88
James William Iler
4/6
67
N/A
N/A
(Granted leave of absence
as a CEO for a period of up to
six months beginning 27 April 2015
and ceased office as a director
on 27 May 2015)
(Appointed on 24 March 2015
and there was a Board meeting
held prior his appointment)
(Appointed on 24 March 2015
and there was a Board meeting
held prior his appointment,
and resigned on 26 August 2015)
(Appointed on 1 March 2016)
All the Directors have complied with the minimum of
50% attendance requirements in respect of Board
meetings as stipulated in the Listing Requirements
of Bursa Malaysia except for Dr. Jamal bin Yusof @
Gordon Duclos who was granted the said leave
of absence.
52
H.SUPPLY OF INFORMATION
for appointment to the Board, and recommends to
the Board on the appointment, re-appointment and
assessment of the Directors of the Group for approval.
Each Director is provided with the agenda and
a complete set of Board papers containing the
quantitative and qualitative information prior to
each Board meeting with the aim of enabling
the Directors to make an informed decisions
and seek clarifications that they may require from
the Management ahead of the meeting date.
The relevant member of the Management team
is invited to attend the Board meetings to advise
or report to the Board on the matters relating to
their areas of responsibility when necessary for an
effective deliberation and decision making.
The Board has established a clear and transparent
nomination process for the appointment of Director
of our Company. The nomination process involves
the following stages:
a) Identification of candidates;
b) Evaluation of the suitability of candidates
based on the criteria set;
c) Recommendation by NC to the Board; and
The Board has direct access to the Senior
Management on information relating to our
Company’s business and affairs in the discharge of
their duties. The Directors also have access to the
advices and services of our Company Secretary
and all information in relation to the Group whether
as a full Board or in their individual capacity to assist
them in furtherance of their duties. From time to
time, the Directors are regularly updated by our
Company Secretary on any latest development in
the statutory requirements relating to their duties
and responsibilities. Our Company Secretary
attends all the Board meetings and ensures all the
proceedings, deliberations and resolutions passed
are properly recorded and maintained.
The Directors may also seek the independent
advices from independent professional advisers at
our Company’s expense, if necessary.
I.
APPOINTMENT TO THE BOARD
The appointment of new Board members are
considered, evaluated and assessed by the
Nomination
Committee (NC) in accordance
with the criteria set up in the Charter prior to the
recommendation to the Board for approval. The
approving authority to nominate new appointments
lies within the Board’s responsibility upon considering
the recommendations from the NC. Our Company
Secretary will ensure that all the appointments are
properly made in accordance with the relevant
regulatory requirements.
The appointment, re-appointment and annual
assessment of the Directors are set up in the
Charter, the primary responsibility of which has been
delegated to the NC. The NC proposes nominees
d) Approval by the Board.
K.BOARD DIVERSITY
The Board considers that diversity includes
differences that relate to gender, age, ethnicity and
cultural background. It also includes differences in
background, experience, skills and competency,
education and functional expertise. As part of the
Board’s routine considerations regarding Board
renewal, it will continue its focus on diversity as
it has in recent years to ensure that there is an
appropriate mix of diversity, skills, experience and
expertise represented on the Board.
L.
RE-ELECTION OF DIRECTORS
The Articles of our Company provides that at every
Annual General Meeting of our Company, onethird of the Directors for the time being and those
appointed during the financial year shall retire
from office and shall be eligible for re-election.
The Articles further provides that all Directors shall
retire from office at least once every three years
but shall be eligible for re-election. The Articles
provides also that the Directors to retire in every
year shall be those who have been longest in office
since their last election but as between Directors of
equal seniority, the Directors to retire shall (unless
they otherwise agree among themselves) be
determined from among them.
The NC recommends who are the retiring Directors
based on the above and subsequently provides
recommendation to the Board for consideration
before tabling the same for shareholders’ approval.
2015 ANNUAL REPORT
53
M. DIRECTORS’ TRAINING
The Board acknowledges that continuous
education is vital for its Board members to gain
insight and maintain the Board members awareness
of the economy, technological advances, latest
regulatory developments and management
strategies. The NC assesses from time to time the
training needs of the Directors and ensures the
fulfilment of such training deemed appropriate.
The Board members are also encouraged to
attend training programmes and seminars to keep
abreast with developments in the industry as well as
to enhance their professionalism and knowledge.
Training programmes attended by the Directors for
the financial year ended 31 December 2015 include
Mandatory Accreditation Programme (MAP) for
Directors of Public Listed Companies (Pursuant
to Paragraph 15.09 of Bursa Securities Listing
Requirements), Briefing on Goods and Services Tax
(GST), 18th Asia Oil and Gas Conference – Realising
Opportunity
Amidst
Challenges,
Khazanah
Nasional – Overcoming Adversity, The Interplay
Between CG, NFI, and Investment Decision – What
Board of Listed Companies Need to Know and The
SEA Summit.
The Directors will continue to undergo other relevant
training, programmes and seminars as and when
necessary to ensure they remain well equipped
with the relevant and requisite knowledge to
discharge their duties effectively.
BOARD COMMITTEES
In enabling the Board to discharge their duties efficiently
and effectively, the Board has delegated certain
responsibilities to the Board Committees, all of which
operate within defined terms of reference that have
been approved by the Board to assist the Board in the
execution of its duties and responsibilities. The Board
Committees include the ARMC, NC and Remuneration
Committee (RC).
The respective Board Committees will report their
deliberations and recommendations to the Board and
all the deliberations and recommendations will then
be approved by the Board unless agreed otherwise by
the Board.
54
A. AUDIT AND RISK MANAGEMENT COMMITTEE
The summary terms of reference of the ARMC are
set out under the Audit and Risk Management
Committee Report. The terms of reference are in
line with the Listing Requirements of Bursa Malaysia
and the best practices as set out in the Code.
B.
NOMINATION COMMITTEE
The NC comprises exclusively of Non-Executive
Directors, a majority of whom are independent.
The Chairman of the NC is the Independent NonExecutive Director identified by the Board. The
members of the NC are as follows:
Name of the NC Member
Chairman
Independent
Non-Executive Director
Madeline Lee May Ming Member
Independent
Member
Non-Independent
The NC met three times during the financial year
ended 31 December 2015 and the meetings were
attended by all the members of the NC. The duties
and responsibilities of the NC amongst others are
as follows:
a) Board composition and succession planning
i)
To review the Board structure, size and
composition, and make recommendations
to
the Board with regard to any
adjustments that are deemed necessary
to ensure the appropriate Board balance
and giving full consideration to succession
planning for the Directors; and
ii)
To review annually the Board’s mix of
skills and experience and other qualities,
including core competencies which
Non-Executive Directors should bring to
the Board, independence and diversity
(including gender diversity) required to
meet the needs of our Company.
b) Appointments to the Board and the Board
Committees
i)
To be responsible, having evaluated the
balance of skills, experience and other
qualities on the Board, for identifying and
nominating for the approval of the Board,
candidates to fill Board vacancies as and
when they arise, giving full consideration
to succession planning;
ii)
To
consider,
in
making
its
recommendations, candidates
for
directorships proposed by the MD and
within the bounds or practicability, by
any other Senior Management or any
Director or shareholder;
iii) In identifying suitable candidates, the NC
shall consider candidates from a wide
range of backgrounds. The criteria used
in assessment of new candidates before
recommendation to the Board shall
include but not limited to the following:
•
Skills and competency;
•
Knowledge and expertise;
•
Regional and industry experience;
•
Academic
qualifications;
•
Background, race, gender, age and
nationality;
•
High personal and professional ethics,
integrity and values;
•
Ability to devote the required amount
of time to discharge the duties and
responsibilities of the Board;
•
Financial capability and business
stability to develop significant time,
energy and resources;
and
professional
•
Other directorships; and
•
In the case of candidates for the
position
of
Independent
NonExecutive Director, the NC should
also evaluate the candidates’ ability
to discharge responsibilities/functions
as expected from an Independent
Non-Executive Director.
iv) The determination as to who shall be
appointed to the Board shall be the
responsibility of the Board as a whole after
considering the recommendation from
the NC;
v)
To recommend to the Board to fill the
seats on Board Committees; and
vi) To recommend to the Board for any
matters relating to the continuation in
office of any Director at any time including
the suspension or termination of service of
a Managing Director as an employee of
our Company subject to the provisions of
the law and their service contract.
c) Assessment of performance
i)
To assess annually the performance and
effectiveness of the Board as a whole,
the Board Committees and the individual
Director;
ii)
To ensure that each Director, MD or CFO
has the character, experience, integrity,
competency and time to discharge his/
her role, as the case may be; and
iii) To assess annually the independence of
Directors to ensure that the Independent
Non-Executive Directors can continue
to bring independent and objective
judgement to Board deliberations.
d) Rotation and retirement of Directors
To recommend to the Board for re-election
by shareholders of any Director under the
retirement by rotation provisions in the Articles,
having due regard to their performance
and ability to continue to contribute to the
Board in the light of the skills, knowledge and
experience required.
e) Continuing education programme for Directors
i)
To orient and educate new Directors
as to the nature of the business, current
issues
within our Company and the
corporate strategies, the expectations of
our Company concerning input from the
Directors and the general responsibilities
of Directors;
2015 ANNUAL REPORT
55
To review and make recommendations
to the Board in relation to the training
and development programme for the
Directors; and
The RC met twice during the financial year ended
31 December 2015 and the meetings were
attended by all the members of the RC. The duties
and responsibilities of the RC are as follows:
iii)To ensure that the Directors have access
to appropriate training and development
opportunities that supports the work of the
Directors and the Board.
a) To study and propose to the Board the various
forms of remuneration and fees appropriate
for the Directors;
ii)
Upon the recent annual review and assessment, the
NC having considered the aspects of succession
planning and boardroom diversity, is satisfied
that the size of the Board and Board Committees
is optimum notwithstanding the Board is not
comprise of a majority of independent directors
when the Chairman is not an independent director
as recommended by the Code, and there is an
appropriate mix of skills, knowledge, experience
and competencies in the Board’s composition
which is corresponding to the Board’s duties and
responsibilities. The NC is satisfied that all Directors
are suitable and qualified to hold their positions in
view of their competency, qualifications, skills and
experiences.
From the assessment of the independence of the
Independent Directors, the NC is satisfied that all
Independent Directors of our Company have
fulfilled the established criteria set for Independent
Director.
All the deliberations, assessments and evaluations
including recommendations of the NC are properly
documented and minuted.
C. REMUNERATION COMMITTEE
The RC comprises exclusively of Non-Executive
Directors, a majority of whom are independent. The
members of the RC are as follows:
Name of the RC Member
Chairman
Independent
Madeline Lee May Ming Member
Independent
Member
Non-Independent
b) To determine and recommend to the
Board the framework or broad policy for the
remuneration package of the MD and such
other members of the management as it is
designated to consider;
c)To establish a formal and transparent
procedure for developing policy on the total
individual remuneration package of the
MD and other designated management
personnel including, where appropriate,
bonuses, incentives and share options;
d) To design the remuneration package for the MD
and other designated management personnel
with the aim of attracting and retaining highcalibre management personnel who will deliver
success for the shareholders and high standards
of services for stakeholders, while taking into
consideration the business environment in
which the Group operates. Once formulated,
to recommend to the Board for approval;
e) To review and recommend to the Board any
improvement on designated management
personnel’s remuneration policy and package
and any other issues relating to benefits for the
designated management personnel on an
annual basis;
f)
To consider and recommend to the Board the
various terms of engagement to be included
in any contract of service between our
Company and the MD and other designated
management personnel;
g) To review any major changes in employee
benefits structures throughout the Group, and
if deemed fit, to recommend to the Board for
adoption; and
h) To review and recommend to the Board for
adoption, the framework for the Group’s
annual incentive scheme. The framework for
the annual incentive scheme may include:
i)Merit increment;
ii)
Merit bonus; and
iii)Retention and reward incentives.
56
The RC’s aims, goals or objectives reflect our
Company’s overall philosophy that all employees
should be appropriately rewarded so as to attract
and retain high caliber persons who possess the
know-how knowledge to operate and manage our
Company successfully.
The levels of remuneration for Executive Director
are determined based on the corporate and
individual’s performance, whilst the level of
remuneration for Non-Executive Directors would
reflect the experience and level of responsibilities
undertaken by the particular Non-Executive
Director. Our Company aims to align the interests of
its Executive Director as closely as possible with the
interests of shareholders in promoting the Group’s
strategies. Total remuneration for Executive Director
comprises basic salary, performance related
bonus, benefit-in-kind and emoluments. The basic
salary and benefits are competitive and reviewed
annually. The basic salary is set by the Remuneration
Committee annually after consideration of our
Company’s performance and market conditions.
The procedures for approving the Executive
Director’s remuneration are as follows:
a) RC to determine the Key
Performance
Indicators (KPIs) for the Executive Director
based on the financial results, financial ratios
and human capital management;
b)RC to review and assess the performance
achieved by the Executive Director based on
the KPIs set; and
c)RC to make recommendation of the
remuneration package for the Executive
Director to the Board for approval.
D. DIRECTORS REMUNERATION
The RC reviews the remuneration package of the
Executive Director, who is also the MD, annually
to ensure that he is awarded appropriately for his
contributions to the Group’s growth and profitability.
The Non-Executive Directors’ fees are approved
by the Board and are subject to the shareholders’
approval at the general meeting. The review of the
Non-Executive Directors’ fees takes into account
the trends of similar positions in the market and any
additional responsibilities undertaken such as acting
as Chairman of the Board or Board Committees.
The details on the aggregate remuneration of the Directors for the financial year ended 31 December 2015 are as follows:
Fees and
Salaries and
Defined Emoluments
Bonuses
Contribution Plan
Benefits-in-kind
Total
(RM) (RM)
(RM)
(RM)(RM)
Executive Director*
-
683,813
129,926
7,200
820,939
Non-Executive Directors
672,500
-
-
-
672,500
*
Executive Director refers to the former CEO of ICON.
The number of Directors whose total remuneration falls within the respective bands is as follows:
No. of Directors
Range of RemunerationExecutive Director*
Less than RM 50,000
RM 50,001 to RM 150,000
RM 150,001 to RM 500,000
More than RM500,000
-
-
-
1
Non-Executive Directors
1
4
1
-
*
Executive Director refers to the former CEO of ICON.
Note:
Dato’ Abdul Rahman bin Ahmad and Syed Yasir Arafat bin Syed Abd Kadir being the nominees of the immediate holding company,
Hallmark Odyssey Sdn. Bhd. and indirect holding company, E-Cap (Internal) One Sdn. Bhd. respectively have waived their entitlement
for Director’s fee. Dato’ Abdul Rahman bin Ahmad ceased to be the representative of Hallmark Odyssey Sdn. Bhd., (the major
shareholder of ICON), which is wholly-owned indirectly by Ekuinas Capital Sdn. Bhd. , a fund company that holds the investable
capital managed by Ekuinas, with effect from 29 February 2016.
2015 ANNUAL REPORT
57
E.EXECUTIVE COMMITTEE
The EXCO generally:
The Executive Committee (EXCO) was constituted
by the Board as a sub-committee of the Board
and its general purpose is to provide an effective
oversight of the business of the Group and to ensure
that the Group’s operations are aligned with the
strategy approved by the Board and implemented
within the framework and agreed financial limits as
approved by the Board from time to time.
a) Reviews the strategy of the Group and make
recommendations to the Board, and monitor
the implementation of the Group’s strategy;
b) Reviews the business plan and budgets
and monitor progress and performance of
the business plan and budgets, including
performance
against
agreed
key
performance indicators in all aspects of the
Group’s operations;
The EXCO consists of up to three members of whom
nominated by Ekuinas and up to three members
of whom comprise of the key Management of
our Company. The Chairman of the EXCO is
appointed by the Board. The EXCO comprises the
following members:
c) Ensures that the Group maintains a sound
framework of reporting on internal control and
regulatory compliance;
d) Reviews and recommends to the RC and/or
the Board, the framework or broad policy for
the remuneration package, employee
benefits and annual incentive schemes of our
Company’s employees; and
Name of the EXCO Member
Chairman
Non-Independent
Dato’ Abdul Rahman bin Ahmad*
Member
Non-Independent
Dr. Jamal bin Yusof @ Gordon Duclos**
Member
Non-Independent
Executive Director/CEO
Amir Hamzah bin Azizan***
Member
MD
e) Assumes any other powers and responsibilities
that may from time to time be assigned or
delegated to the EXCO by the Board.
STAKEHOLDER
A. COMMUNICATION WITH SHAREHOLDERS AND
INVESTORS
Captain Hassan bin Ali^ Member
COO
Rahman bin Yusof****
Member
COO
Lim Fu Yen*****
Member
Note:
*
Please refer to page 57.
**
Dr. Jamal bin Yusof @ Gordon Duclos the then CEO of the
Group, was on leave of absence for a period of up to six
months beginning 27 April 2015 and ceased office due
to expiration of his tenure as the CEO of the Group on 15
November 2015.
*** Amir Hamzah bin Azizan was appointed the MD of the
Group on 1 March 2016.
**** Rahman bin Yusof the then COO of the Group, was on leave
of absence for a period of up to six months beginning 27 April
2015 and ceased office due to expiration of his appointment
as the COO of the Group on 15 November 2015.
***** Lim Fu Yen is the Director of Investment of Ekuinas.
^
Captain Hassan bin Ali was the Deputy CEO of the Company
and appointed as the Chief Operating Officer of the
Company effective 19 November 2015.
58
The
Board
recognises
the
importance
of
transparency
and
accountability
in
communication and dissemination of clear,
relevant and comprehensive information on
the Group’s business activities to shareholders,
investors and other stakeholders. To this effect,
the Board has maintained an effective Corporate
Disclosure Policy that enables both Management
and the Board to communicate effectively with
the shareholders and investors. In formulating the
Corporate Disclosure Policy, the Board is guided by
best practices and disclosure requirements as set
out in the Listing Requirements of Bursa Malaysia.
Our Company’s Annual Report remains a key
channel of communication with the Group’s
stakeholders. The Annual Report provides corporate
information, performance review of our financial
results, financial highlights and other activities in
order to facilitate shareholders’ easy access to
such key information.
In addition to that, our Company also makes
timely, complete and accurate disclosures and
announcements to Bursa Malaysia, including financial
results on a quarterly basis to provide the shareholders
and the investing public an updated overview of the
Group’s performance and operations.
The other modes of communication with
shareholders and investors include the Circular,
quarterly analysts briefing and ICON’s website at
www.iconoffshore.com.my.
ACCOUNTABILITY AND AUDIT
A. FINANCIAL REPORTING
The Board strives to ensure that our financial
reporting to its stakeholders, in particular, the
shareholders, investors and regulatory authorities by
means of the annual audited financial statements
and quarterly announcements, represents a clear,
balanced and comprehensive assessment of the
Group’s financial performance at the end of each
quarter and the financial year.
Any enquiries or information regarding the
Group may be conveyed through Corporate
Communications
Department
at
enquiry@
iconoffshore.com.my.
B.
THE ANNUAL GENERAL MEETING
The Annual General Meeting (AGM) is the principal
forum for the Board to meet with the shareholders.
At the AGM, a presentation on our operational
and financial performance will be presented to the
shareholders. The shareholders are encouraged to
attend the AGM and raise questions pertaining to
the business activities of the Group and the Board
will respond to shareholders’ questions during the
meeting. At the commencement of the general
meeting, the shareholders will be informed of their
right to demand a poll vote.
C.EMPLOYEES’ CODE OF ETHICS
Our Company’s Employees’ Code of Ethics
ensures that all employees observe and maintain
high ethical business standards of honesty and
integrity in all aspects of our operations. The
Employee’s Code of Ethics highlights key issues to
help employees perform their duties in line with
our Company’s standards such as ensuring a safe
working environment, effectively managing our
Company’s assets and property, safeguarding
confidential information as well as dealing with
external parties such as customers, vendors, media,
competitors and government agencies.
D.SERVICE PROVIDER CODE OF CONDUCT
The Group believes that relationships with service
providers should be based on the principles of
integrity, honesty, accountability and compliance
with laws and regulations. With this objective,
the Service Provider Code of Conduct (COC)
requires service providers, which include suppliers,
contractors, professional advisors, consultants and
other business associates, to adhere to this COC
when conducting business with the Group. The
Group may take the necessary action for breaches
of the COC which includes but not limited to
termination and preclusion from proposing any
work for the Group for a pre-determined period.
E.
The ARMC assists the Board in ensuring the
accuracy, adequacy and quality of the financial
reporting prior to recommendation to the Board for
approval and submission to Bursa Malaysia within
the prescribed period.
B.
DIRECTORS’ RESPONSIBILITY STATEMENT IN
PREPARING THE ANNUAL AUDITED FINANCIAL
STATEMENTS
The Board ensures that the financial statements
are drawn up in accordance with the Act and the
applicable approved financial reporting standards
in Malaysia so as to give a true and fair view of the
state of affairs of the Group and our Company as
at the end of the financial year and of the results
and cash fiows of the Group and our Company for
the financial year.
In preparing the financial statements, the Directors
have:
a) Applied relevant and appropriate accounting
policies consistently and in accordance with
applicable approved financial reporting
standards;
b) Made judgements and estimates that are
prudent and reasonable; and
c) Prepared the financial statements on a going
concern basis.
The Directors are responsible for ensuring that proper
accounting records are kept in accordance with
the Act. The Directors also have overall responsibility
in taking such steps as are reasonably open to
them to safeguard the assets of the Group, and to
prevent and detect fraud and other irregularities.
ANTI-FRAUD AND WHISTLEBLOWING POLICY
The Policy is built into the Group’s culture towards
elimination of fraud and corruption. It also promotes
a transparent and open environment for fraud
reporting within the Group.
2015 ANNUAL REPORT
59
C. RISK MANAGEMENT AND INTERNAL CONTROL
B.SHARE BUY-BACK
Our Company had duly obtained its shareholders’
approval at the Third AGM held on 27 May 2015 to
purchase its own shares up to ten percent (10%) of
its total issued and paid-up ordinary share capital.
The Board recognising the importance of risk
management and internal controls, and has
established a structured risk management
framework to identity, evaluate, control, monitor
and report the key business risks faced by the Group
on an on-going basis to safeguard shareholders’
investment and the Group’s assets.
The Board has also established internal control
policies and procedures and monitors to ensure that
such internal control system is implemented and
effectively carried out by the Management team.
The Statement on Risk Management and Internal
Control set out in this Annual Report provides an
overview of the state of risk management and
internal control within the Group.
D. RELATIONSHIP WITH AUDITORS
The Board has established a formal and
transparent working relationship with the Group’s
auditors, both internal and external that enables
the Board to seek their professional advice and
ensure compliance with accounting standards
and regulatory requirements. The ARMC met with
the external auditors regularly at its meeting to
review and discuss the scope and adequacy of our
Company’s audit plan, audit reports and annual
audited financial statements, in which effective
financial year 2015 two meetings have been held
without the Management presence.
The ARMC is tasked with authority from the Board to
review any matters concerning the appointment
and re-appointment, audit fee, resignation or
dismissal of external auditors, and to assess the
independence of the external auditors based on the
External Auditors Appointment and Independence
Policy and Procedure to ensure they have been
independent throughout the conduct of the audit
engagement with the Group.
However, for financial year ended 2015, our Company
did not exercise its power to purchase its own shares.
However, the Management is proposing to retain
the flexibility of exercising such power to purchase its
own shares and therefore, intend to renew the said
shareholders’ mandate at the Fourth AGM.
C. OPTION OR CONVERTIBLE SECURITIES
Our Company did not issue any options or
convertible securities in the financial year ended
31 December 2015.
D. DEPOSITORY RECEIPTS PROGRAMME
During the financial year under review, our Company
did not sponsor any depository receipt programme.
E.SANCTIONS AND/OR PENALTIES
There was no sanction and/or penalty imposed
on our Company and its subsidiaries, Directors or
Management by the relevant regulatory bodies
during the financial year.
F.
The amount of non-audit fees paid to the External
Auditors by our Company for the financial year
ended 31 December 2015 amounted to RM
215,161, constituting 25% of the total remuneration
of RM877,161 to the External Auditors, for the
services rendered on accounting advice on joint
venture and GST implementation assistance.
G.VARIATION IN RESULTS
There was no deviation between the unaudited
financial results announced and the audited
financial results of the Group for the financial year
ended 31 December 2015.
ADDITIONAL COMPLIANCE INFORMATION
A. UTILISATION OF PROCEEDS RAISED FROM
CORPORATE EXERCISE
Total proceeds of approximately RM410.2 million
were raised during our Company listing exercise on
the Main Market of Bursa Malaysia on 25 June 2014.
The proceeds were utilised for expansion of vessel
fieet, repayment of bank borrowings, repayment
of advances from immediate holding company,
Hallmark Odyssey Sdn. Bhd., working capital and
listing expenses purposes. As at 31 December 2015,
the proceed raised from the corporate exercise
were fully utilised.
60
NON-AUDIT FEES
The Group did not release any profit estimate,
forecast or projections during the financial year.
H. PROFIT GUARANTEE
During the financial year under review, there was
no profit guarantee given by the Group.
I.
MATERIAL CONTRACTS
There is no material contract, not entered into within
the ordinary course of business of our Company and
its subsidiaries, involving the interest of the Directors
and major shareholders of our Company, either still
subsisting at the end of the financial year or entered
into since the end of the previous financial year.
Statement on RISK MANAGEMENT
AND Internal Control
The Board is pleased to present this Statement on Risk Management and Internal Control (the
Statement) pursuant to paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia. To
prepare this Statement, the Board has been guided by the Statement on Risk Management and
Internal Control: Guidelines for Directors of Listed Issuers issued by The Institute of Internal Auditors
Malaysia with the endorsement of Bursa Malaysia.
BOARD RESPONSIBILITY
RISK MANAGEMENT
The Board acknowledges their responsibility for the
Group’s system of internal control, and for reviewing the
adequacy and integrity of this system. However, in view
of the limitations inherent in any system, it should be
noted that such system of internal control is designed
to manage, rather than to eliminate the risks of failure to
achieve the Group’s objectives. Accordingly, it can only
provide reasonable but not absolute assurance against
material misstatements, frauds, losses or breaches of
laws and regulations.
RISK MANAGEMENT FRAMEWORK
The Board has established an on-going process for
identifying, evaluating and managing the significant risks
faced by the Group. The Board shall continue to improve
the system of internal control and review the controls in
place, with the aim to ensure that the system is adequate
to mitigate the significant risks. The Management assists
the Board in the implementation of the Board’s policies
and procedures on risks and controls by identifying and
assessing the risks faced, and in the design, operation
and monitoring of suitable internal controls to mitigate
and control these risks. This process has been in place for
the financial year under review and up to the date of
approval of this Statement, and is regularly reviewed by
the Board through its ARMC which is supported by the
internal audit function and CGRM.
•
Strategic Risk;
•
Financial Risk;
•
Operational Risk; and
•
Other Risks.
A Risk Management Framework was developed to
ensure that risks are managed effectively, efficiently and
coherently across the Group. Key risk events were identified,
evaluated, discussed and with the approval of the Board,
appropriate measures were taken to control and mitigate
these risks. The key risks affecting the achievement of the
Group objectives identified by respective risk owners are
categorised into four types, namely:
These risks are evaluated to determine the appropriate
risk treatment and are managed through, among others:
•
On-going monitoring of key economic changes,
industry outlook and regulatory developments;
•
Putting in place policies and standard operating
procedures;
•
Documented limits of authority;
•
Setting and monitoring of KPIs; and
•
Periodic operational and financial reporting.
Reviewing of key risks are performed on a quarterly
basis, in which the Group risk profiles and rating,
newly registered risks, corresponding risk mitigating
actions identified and their progress are discussed and
presented to the Board through the ARMC.
2015 ANNUAL REPORT
61
Statement on RISK MANAGEMENT AND Internal Control (cont’d)
INTERNAL CONTROL
The Board recognises the importance of maintaining
a sound system of internal control to safeguard
shareholders’ investments and the Group’s assets. The
key elements of the Group’s system of internal control
are described as follows:
1) AUDIT AND RISK MANAGEMENT COMMITTEE
The ARMC is wholly comprised of Non-Executive
Board members and has full access to both internal
and external auditors, as well as the CGRM. It
shall meet with the external auditors without the
Management present at least twice a year or
when necessary. Deloitte, the audit firm engaged
to carry out the internal audit function for the
Group, and the CGRM report directly to the ARMC.
The activities performed by the ARMC during the
financial year under review are set out in the Audit
and Risk Management Committee Report.
2)BOARD COMMITTEE
Besides the ARMC, our Company also has NC and
RC. These Board Committees are established to
assist the Board in providing independent oversight
of the Group’s management with responsibilities
and authorities clearly specified in their respective
terms of reference.
3) OUTSOURCED INTERNAL AUDIT FUNCTION
The Group internal audit function which was
undertaken internally by the CGRM since its
establishment in mid-2013 is outsourced to
Deloitte in May 2015. Its primary role is to provide
independent assurance service to the Board,
ARMC and Management, focusing on reviewing
the effectiveness of the risk management, control
and governance processes that Management has
put into place.
62
4) CORPORATE GOVERNANCE AND RISK
MANAGEMENT
The role of CGRM is to assist the ARMC of our Company
in the effective discharge of their risk management
and
corporate
governance
responsibilities,
with emphasis given to assist the CEO/MD and
Management in the successful implementation
of Risk Management Framework, and Policy and
Standard Operating Procedure Framework across
the Group. CGRM activities updates are submitted
to the ARMC on a quarterly basis.
5) ORGANISATIONAL STRUCTURE WITH DEFINED
RESPONSIBILITY
Properly defined organisation structure with clear
reporting lines, formalised responsibilities and
delegation of authority has been established as
a control mechanism in terms of lines of reporting
and accountability.
6) DOCUMENTED LIMITS OF AUTHORITY
Approved limits of authority are imposed on the
Management team in respect of the day-to-day
operations as a control to minimise any risk of abuse
of authority.
7)BUDGETING PROCESS AND FINANCIAL REPORTING
Each department undertakes yearly comprehensive
budgeting and forecasting process. The Senior
Management conducts monthly reviews of the
financial performance of the Group against
financial budget, and subsequently presented to
the EXCO together with actions plan.
8) POLICY AND STANDARD OPERATING PROCEDURE
FRAMEWORK
A Policy and Standard Operating Procedure
Framework was developed to ensure key processes
within the Group are properly documented,
communicated and implemented by the
Management team. The objective of the written
policies and procedures is to ensure that internal
control principles and mechanisms are embedded
in the Group’s operations.
9) CODE OF ETHICS
The Board and Senior Management set the tone
at the top for corporate behaviour and corporate
governance. The Code of Ethics (COEs) has
been formalised and adopted for the Directors
and employees of the Group to encourage high
standards of conduct that are associated with
ethical business practices. It is a requirement
for all Directors and employees of the Group
to understand their respective COEs, and to
acknowledge and sign off on the declaration form.
10)SERVICE PROVIDER CODE OF CONDUCT
The Group believes that relationships with service
providers should be based on the principles of
integrity, honesty, accountability and compliance
with laws and regulations. With this objective,
the Service Provider Code of Conduct (COC)
requires service providers, which include suppliers,
contractors, professional advisors, consultants and
other business associates, to adhere to this COC
when conducting business with the Group. The
Group may take the necessary action for breaches
of the COC which includes but not limited to
termination and preclusion from proposing any
work for the Group for a pre-determined period.
11) ANTI-FRAUD AND WHISTLEBLOWING POLICY
The Policy is built into the Group’s culture towards
elimination of fraud and corruption. It also promotes
a transparent and open environment for fraud
reporting within the Group.
12) CORPORATE DISCLOSURE POLICY
The Corporate Disclosure Policy was developed
to ensure information directed to shareholders,
stakeholders and the general public fairly and
accurately represents the Group. Hence, investors
and potential investors can make properly informed
investment decisions, and others can have an
understanding of our Company and its objectives.
ADEQUACY OF RISK MANAGEMENT AND INTERNAL
CONTROL SYSTEM
The Board has satisfactorily received reasonable
assurance from the CEO/MD and the CFO that the
Group’s risk management and internal control system
is operating adequately, in all material aspects for
the financial year under review and up to the date of
approval of this Statement, and improvement in certain
areas are on-going.
CONCLUSION
The Board believes that the development of a sound
system of risk management and internal control is
an on-going process and hence, has taken steps to
progressively improve the system. During the financial
year under review, certain areas for improvement
in the system were identified. The Management has
been responsive to the issues raised and has taken the
necessary actions to address the areas for improvement
highlighted by the Auditors. The Board is of the view that
the system of risk management and internal control in
place is adequate for the financial year under review
and up to the date of approval of this Statement.
This Statement is made in accordance with a resolution
of the Board dated 4 April 2016.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
As required by Paragraph 15.23 of the Bursa Malaysia
Listing Requirements, the External Auditors have
reviewed this Statement. Their limited assurance review
was performed in accordance with Recommended
Practice Guide (RPG 5 (Revised)) issued by the Malaysian
Institute of Accountants. RPG 5 (Revised) does not
require the External Auditors to form an opinion on the
adequacy and effectiveness of the risk management
and internal control systems of the Group.
2015 ANNUAL REPORT
63
Statement oF Directors’ Responsibility
The Companies Act (Act) requires the Directors to lay before the Company at its Annual General Meeting, the
Audited Financial Statements, which includes the Consolidated Statement of Financial Position and the Consolidated
Statement of Comprehensive Income of the Company and its subsideries (Group) for each financial year, made out in
accordance with the applicable approved accounting standards and the provisions of the Act. This is also in line with
Paragraph 15.26 (a) of Bursa Malaysia Listing Requirements.
The Directors are required to take reasonable steps in ensuring that the Consolidated Financial Statements give a
true and fair view of the state of affairs of the Group and the Company as at the end of the financial year ended 31
December 2015.
The Financial Statements of the Group for the financial year in review are set out on pages 73 to 142 of this Annual Report.
In the preparation of the Financial Statements, the Directors are satisfied that the Group has used appropriate
accounting policies, consistently applied and supported by reasonable and prudent judgement and estimates. The
Directors also confirm that all accounting standards which they consider to be applicable have been complied with.
The Directors are required under the Act to ensure that the Group keep accounting records which disclose with
reasonable accuracy of the financial position of the Group, and to cause such records to be kept in such manner as
to enable them to be conveniently and properly audited.
64
FINANCIAL STATEMENTS
66 Directors’ Report
70 Statement By Directors
70 Statutory Declaration
71 Independent Auditors’ Report
73 Statements Of Comprehensive Income
74 Statements Of Financial Position
76 Statements Of Changes In Equity
80 Statements Of Cash Flows
83 Notes To The Financial Statements
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
The Directors submit their report together with the audited financial statements of the Group and the Company for the
financial year ended 31 December 2015.
PRINCIPAL ACTIVITIES
The Company is an investment holding company. The principal activities of the Group are vessel owning/leasing and
provision of vessel chartering and ship management services to oil and gas related industries. The principal activities of
the subsidiaries are disclosed in Note 16 to the financial statements. There were no significant changes in the nature of
these principal activities during the financial year.
FINANCIAL RESULTS
GroupCompany
RMRM
Loss for the financial year
- Equity holders of the Company
- Non-controlling interests
(364,086,731) (185,514,818)
798,315
–
(363,288,416) (185,514,818)
DIVIDEND
No dividend has been paid, declared or proposed since the end of the previous financial year. The Directors do not
recommend the payment of any final dividend for the financial year ended 31 December 2015.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in
the financial statements.
DIRECTORS
The Directors who have held office since the date of the last report are as follows:
Amir Hamzah bin Azizan (appointed with effect from 1 March 2016)
Dr. Jamal bin Yusof @ Gordon Duclos (resigned with effect from 27 May 2015)
James William Iler (resigned with effect from 26 August 2015)
66 ICON OFFSHORE BERHAD
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
DIRECTORS’ INTERESTS
According to the register of Directors’ shareholdings maintained by the Company in accordance with Section 134 of the
Companies Act, 1965, the interests and deemed interests in the shares of the Company and of its related corporations
(other than wholly-owned subsidiaries) of those who were Directors at the end of the financial year are as follows:
Number of ordinary shares of RM0.50 each
At
At
1.1.2015
Bought
Sold
31.12.2015
150,000
-
1,551,194
300,000
60,000
-
-
(1,651,194)
-
150,000
200,000
60,000
Other than the above, none of the Directors in office at the end of the financial year held any interest in shares,
warrants, share options and debentures in the Company or its related corporations during the financial year.
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being
arrangements with the object or objects of enabling the Directors of the Company to acquire benefits by means of
the acquisition of shares in, or debentures of, the Company or any other body corporate.
Since the end of the previous financial year, no Director of the Group and the Company has received or become
entitled to receive any benefit (other than Directors’ remuneration as disclosed in note 9 to the financial statements)
by reason of a contract made by the Group and the Company or a related corporation with any Director or with a
firm of which any Director is a member, or with a company in which any Director has a substantial financial interest
except that certain Directors of the Group and the Company received remuneration from related corporations in
their capacity as Directors or employees of that related corporations in accordance with the terms of their respective
service contracts.
2015 ANNUAL REPORT
67
DIRECTORS’ REPORT
ISSUE OF SHARES
There was no new share issuance during the financial year.
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
Before the statements of comprehensive income and statements of financial position of the Group and the Company
were made out, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
allowance for doubtful debts and satisfied themselves that all known bad debts have been written off and that
adequate allowance is made for doubtful debts; and
(b) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business,
their values as shown in the accounting records of the Group and the Company have been written down to an
amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in
the financial statements of the Group and the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and the
Company misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group
and the Company misleading or inappropriate.
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve
(12) months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the
ability of the Group and the Company to meet their obligations when they fall due.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and the Company which has arisen since the end of the financial year
which secures the liability of any other person; or
(b) any contingent liability of the Group and the Company which has arisen since the end of the financial year.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the
financial statements which would render any amount stated in the financial statements misleading.
In the opinion of the Directors:
(a) the results of the Group’s and the Company’s operations during the financial year were not substantially affected
by any item, transaction or event of a material and unusual nature other than the impairment loss on vessels
and goodwill as disclosed in the statement of comprehensive income of the Group and the impairment loss on
investment in subsidiaries disclosed in the statement of comprehensive income of the Company; and
(b) there has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely to affect substantially the results of the operations of
the Group and the Company for the financial year in which this report is made.
DIRECTORS’ REPORT
HOLDING COMPANY AND ULTIMATE HOLDING FOUNDATION
The Directors regard Hallmark Odyssey Sdn. Bhd., a company incorporated and domiciled in Malaysia, as the
Company’s immediate holding company, and Yayasan Ekuiti Nasional, a foundation incorporated in Malaysia, as the
Company’s ultimate holding foundation.
AUDITORS
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with their resolution dated 4 April 2016.
AMIR HAMZAH BIN AZIZAN
MANAGING DIRECTOR
RAJA TAN SRI DATO’ SERI ARSHAD BIN RAJA TUN UDA
CHAIRMAN
Kuala Lumpur
2015 ANNUAL REPORT
69
STATEMENT BY DIRECTORS
PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965
We, Amir Hamzah bin Azizan and Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda, being two of the Directors of Icon
Offshore Berhad, state that, in the opinion of the Directors, the financial statements set out on pages 73 to 141 have
been properly drawn up so as to give a true and fair view of the state of affairs of the Group and the Company as at 31
December 2015 and of the results and cash flows of the Group and the Company for the financial year ended on that
date in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards
and the provisions of the Companies Act, 1965 in Malaysia.
The supplementary information set out in Note 28 on Page 142 has been prepared in accordance with the Guidance
of Special Matter No.1, Determination of Realised and Unrealised Profit or Losses in the Context of Disclosure Pursuant
to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.
Signed on behalf of the Board of Directors in accordance with their resolution dated 4 April 2016.
AMIR HAMZAH BIN AZIZAN
MANAGING DIRECTOR
RAJA TAN SRI DATO’ SERI ARSHAD BIN RAJA TUN UDA
CHAIRMAN
Kuala Lumpur
STATUTORY DECLARATION
PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965
I, Zaleha binti Abdul Hamid, being the Officer primarily responsible for the financial management of Icon Offshore
Berhad, do solemnly and sincerely declare that the financial statements set out on pages 73 to 142 are, in my opinion,
correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions
of the Statutory Declarations Act, 1960.
ZALEHA BINTI ABDUL HAMID
CHIEF FINANCIAL OFFICER
Subscribed and solemnly declared by the above named Zaleha binti Abdul Hamid at Kuala Lumpur before me, on
4 April 2016.
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF ICON OFFSHORE BERHAD
(Company No: 984830-D)
(Incorporated in Malaysia)
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Icon Offshore Berhad on pages 73 to 141, which comprise the statements
of financial position as at 31 December 2015 of the Group and of the Company, and the statements of comprehensive
income, statements of changes in equity and statements of cash flows of the Group and of the Company for the
financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out
on Notes 1 to 27.
DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair
view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and
the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control
as the Directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
AUDITORS’ RESPONSIBILITY
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider
internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
2015 ANNUAL REPORT
71
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF ICON OFFSHORE BERHAD (CONTINUED)
(Company No: 984830-D)
REPORT ON THE FINANCIAL STATEMENTS (CONTINUED)
OPINION
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the
Company as of 31 December 2015 and of their financial performance and cash flows for the financial year then
ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and
the requirements of the Companies Act, 1965 in Malaysia.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company
and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions
of the Act.
(b) We have considered the financial statements and the auditor’s report of the subsidiary of which we have not
acted as auditors which is indicated in Note 16 in the financial statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s
financial statements are in form and content appropriate and proper for the purposes of the preparation of the
financial statements of the Group and we have received satisfactory information and explanations required by us
for those purposes.
(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse
comment made under Section 174(3) of the Act.
OTHER REPORTING RESPONSIBILITIES
The supplementary information set out in Note 28 on page 142 is disclosed to meet the requirement of Bursa Malaysia
Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the
supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and
Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements,
as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities
Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA
Guidance and the directive of Bursa Malaysia Securities Berhad.
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content
of this report.
PRICEWATERHOUSECOOPERS
(No. AF: 1146)
Chartered Accountants
Kuala Lumpur
4 April 2016
YEE WAI YIN
(No. 2081/08/16 (J))
Chartered Accountant
STATEMENTS OF COMPREHENSIVE INCOME
GroupCompany
Note2015201420152014
RMRMRMRM
266,565,638
318,877,129
--
Cost of sales
(170,775,490)
(159,283,404)
--
Gross profit
95,790,148
159,593,725
--
Other income
1,785,989
7,044,242
Administrative expenses
(45,056,435)
(48,377,021)
Revenue
5
201,525
(5,072,995)
3,504,546
(19,165,821)
Other expenses
- Impairment loss on vessels
13
(195,373,000)- -- Impairment loss on goodwill
14
(180,643,348)- -- Impairment loss on investment
in subsidiaries
16
--
(180,643,348)- Others
(3,132,000)
(11,758,667)
-(Loss)/profit from operations
Finance costs
6
Share of profit from a joint venture
(Loss)/profit before taxation
7
(326,628,646)
106,502,279
(36,996,193)
(50,137,941)
(185,514,818)
-
63,62936,119
(363,561,210)
56,400,457
(15,661,275)
(6,705,223)
--
(185,514,818)
(22,366,498)
Taxation10
272,794
2,953,682-(10,000)
(Loss)/profit for the financial year
Other comprehensive income/(loss):
Items that will be reclassified
subsequently to profit or loss:
Currency translation differences
(363,288,416)
59,354,139
(185,514,818)
1,361,302(194,338)
(22,376,498)
--
Total comprehensive
(loss)/income for the financial year
(361,927,114)
(Loss)/profit attributable to:
(364,086,731)
59,354,139
(185,514,818)
(22,376,498)
798,315---
59,159,801
(185,514,818)
(22,376,498)
(363,288,416)
59,354,139
(185,514,818)
(22,376,498)
Total comprehensive (loss)/income
attributable to:
(363,011,522)
59,159,801
(185,514,818)
(22,376,498)
1,084,408---
(361,927,114)
59,159,801
(185,514,818)
(22,376,498)
(Loss)/earnings per share for
(loss)/profit attributable to the
ordinary equity holders
of the Company:
11
Basic and diluted (loss)/earnings per share
(30.9)
7.4
The notes set out on pages 83 to 141 form an integral part of these financial statements.
2015 ANNUAL REPORT
73
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
Group
Company
Note2015201420152014
RMRMRMRM
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Investment in a joint venture
Investment in subsidiaries
Deferred tax assets
13 1,288,422,8741,378,168,441
-14
-
183,775,348
-15
4,232,4904,168,861
-16--
689,114,582
829,222,798
17
46,590,022
45,188,087
--
1,339,245,3861,611,300,737 689,114,582
829,222,798
CURRENT ASSETS
Inventories
1,605,697
1,543,732
-Trade and other receivables
18
81,088,346 92,075,917
420,389
342,025
Tax recoverable
3,466,298
1,954,830
9,163Cash and bank balances
20
95,354,013
74,818,205
25,908,452
34,193,057
181,514,354
170,392,684
26,338,004
34,535,082
CURRENT LIABILITIES
Trade and other payables
21
76,295,965 29,755,924
1,198,301
858,573
Amounts due to subsidiaries
19
--
41,255,022
4,382,726
Borrowings
22
181,144,834
129,477,599
-Taxation
753,452
1,244,006
-
2,500
258,194,251
160,477,529
42,453,323
NET CURRENT (LIABILITIES)/
ASSETS 74 ICON OFFSHORE BERHAD
(76,679,897)
9,915,155
(16,115,319)
5,243,799
29,291,283
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015 (CONTINUED)
Group
Company
Note2015201420152014
RMRMRMRM
NON-CURRENT LIABILITES
Borrowings
Deferred tax liabilities
22
17
541,872,317
1,864,713
---
539,005,775
1,603,759
543,737,030
540,609,534
-NET ASSETS
718,828,459
1,080,606,358
672,999,263
858,514,081
588,592,550
311,210,080
588,592,550
311,210,080
588,592,550
311,210,080
588,592,550
311,210,080
EQUITY ATTRIBUTABLE
TO EQUITY HOLDERS OF
THE COMPANY
Share capital
23
Share premium
23
Foreign currency translation
reserves
(Accumulated losses)/
retained earnings
Non-controlling interest
TOTAL EQUITY
880,871(194,338)
--
(183,088,665)180,998,066(226,803,367)
(41,288,549)
1,233,623--718,828,459
1,080,606,358
672,999,263
858,514,081
2015 ANNUAL REPORT
75
Issued and fully paid ordinary
shares of RM0.50 each
Non-distributable
Distributable
Attributable to equity holders of the Company
(194,338)180,998,066
-
1,080,606,358
--- -
(364,086,731)
798,315
(363,288,416)
1,177,185,100588,592,550311,210,080
1,177,185,100588,592,550311,210,080
880,871(183,088,665) 1,233,623 718,828,459
--- --
149,215
149,215
Total transactions with owners
recognised directly in equity
At 31 December 2015
--- --
149,215
149,215
---
1,075,209
(364,086,731)
1,084,408
(361,927,114)
Increase in non-controlling interest
arising from additional shares issued
Transactions with owners:
Total comprehensive (loss)/
income for the financial year
Currency translation differences,
representing total income and
expense recognised directly
in equity
---
1,075,209-
286,093
1,361,302
(Loss)/profit for the financial year
At 1 January 2015
Group
Currency Retained
Non
Number
Share
Share
translation earnings/
controlling
Total
of shares
capital
premium
reserve (Accumulated Interest
equity
losses)
RMRMRMRMRMRM
STATEMENTS OF CHANGES IN EQUITY
919,456,050
Total transactions with owners
recognised directly in equity
At 31 December 2014
1,177,185,100
440,000,000
Islamic Redeemable Convertible
Preference Shares (“RCPS-i”)
Conversion to ordinary shares
-
221,745,000
Proceeds from shares issued
Share issuance expenses
257,720,050
-
Ordinary Shares split to RM0.50 each
Transactions with owners:
Total comprehensive income/(loss) for the financial year
588,592,550
330,872,500
220,000,000
-
110,872,500
-
-
311,210,080
311,210,080
19,969,775
(8,115,445)
299,355,750
-
-
(194,338)
-
-
-
-
-
(194,338)
-
-
121,643,927
379,363,977
180,998,066
-
-
-
-
-
59,354,139
1,080,606,358
642,082,580
239,969,775
(8,115,445)
410,228,250
-
59,159,801
(194,338)
-
-
Currency translation differences
representing total income and
expense recognised directly
in equity
-
-
-
(194,338)
-
-
257,720,050
59,354,139
-
257,720,050
59,354,139
Profit for the financial year
At 1 January 2014
Group
Currency
NumberShareShare
translation Retained Total
of shares
capital
premium
reserve
earnings
equity
RMRMRMRMRM
Distributable
shares of RM0.50 eachNon-distributable
2015 ANNUAL REPORT
77
Distributable
At 31 December 2015
Total comprehensive loss for the
financial year
At 1 January 2015
Company
- (41,288,549)858,514,081
1,117,185,100 588,592,550 311,210,080
-(226,803,367)672,999,263
----
(185,514,818)
(185,514,818)
1,117,185,100588,592,550311,210,080
Currency
NumberShareShare
translation
Accumulated Total
of shares
capital
premium
reserve
losses
equity
RMRMRMRMRM
Distributable
221,745,000
Ordinary shares issued pursuant to IPO
At 31 December 2014
1,117,185,100
-
440,000,000
588,592,550
-
220,000,000
-
110,872,500
-
257,720,050
311,210,080
-
19,969,775
(8,115,445)
299,355,750
-
-
-
-
-
-
-
-
-
(41,288,549)
(22,376,498)
-
-
-
-
(18,912,051)
Total comprehensive loss for the
financial year
Islamic Redeemable Convertible
Preference Shares (“RCPS-i”)
conversion to ordinary shares -
257,720,050
Ordinary shares split to RM0.50 each
257,720,050
At 1 January 2014
Company
858,514,081
(22,376,498)
239,969,775
(8,115,445)
410,228,250
-
238,807,999
Currency
NumberShareShare
translation
Accumulated Total
of shares
capital
premium
reserve
losses
equity
RMRMRMRMRM
2015 ANNUAL REPORT
79
STATEMENTS OF CASH FLOWS
GroupCompany
Note2015201420152014
RMRMRMRM
CASH FLOWS FROM
OPERATING ACTIVITIES
Adjustments for:
Amortisation of intangible
assets
Depreciation of property,
plant and equipment
Gain on disposal of
property, plant and equipment
Impairment of receivables
Interest expense
Interest income
Impairment loss on goodwill
Impairment loss on vessels
Impairment loss on investment in subsidiaries
Unrealised loss on foreign
exchange Reversal of impairment
of receivables Share issuance expenses
Share of profit of joint venture
Operating profit/(loss) before
working capital changes
(363,561,210)
3,132,000
65,719,917
56,400,457(185,514,818) (22,366,498)
--
11,758,667
56,573,067--
-(4,688,734)
-1,003,530316,790
-36,996,193
50,137,941
-
6,705,223
(1,089,720)
(2,379,389)
(200,189)(3,064,788)
180,643,348--
195,373,000----
180,643,348
4,370,944
(74)-
516,455
(234,318)
(2,189,304)
-
14,655,481
(63,629)(36,119)
122,290,055
181,065,312
--
14,655,481
--
(5,071,733)
(4,070,582)
Changes in working capital:
Inventories
Receivables
Payables
(62,050)(167,704)
-13,075,377(3,761,096) (78,364)
(342,023)
13,615,968
(6,027,122)
339,728
332,194
Cash generated from/(used in)
operations
Tax paid
148,919,350171,109,390 (4,810,369)(4,080,411)
(2,870,207)
(5,017,436)
(11,663)
(7,500)
Net cash generated from/(used in)
operating activities
146,049,143
166,091,954
(4,822,032)(4,087,911)
GroupCompany
Note2015201420152014
RMRMRMRM
CASH FLOWS FROM
INVESTING ACTIVITIES
Investment in a joint venture
Purchase of property, plant
and equipment Proceeds from disposal of
property, plant and equipment
Interest received
Advances to subsidiaries
Net cash used in investing
activities
-
(139,329,831) --
(4,132,742)
-
(246,982,079) -
-
24,774,460
-1,089,720
2,379,389
200,189
1,781,237
--
(46,667,303)(319,098,761)
(138,240,111)
(223,960,972)
(46,467,114)
(317,317,524)
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from issuance of
ordinary shares
Issuance of shares to
non-controlling interest
Drawdown of borrowings
(net of transaction cost)
Repayment of finance lease
liabilities
Repayment of borrowings/advances
Repayment of amounts due
to intermediate holding
company
Net increase of amounts due from a
subsidiary company
Interest paid
(Increase)/decrease in fixed deposits
pledged
Net cash generated from
financing activities
-
-
410,228,250-
(22,770,926)
-
410,228,250
(22,770,926)
149,215--208,560,04879,776,873
(33,036)
(158,861,422)
-
-6,369,370
--(7,178,370)
(35,876)
(284,732,388)
-
(53,052,744)
--
43,004,467
(37,170,805)(44,487,374)
-
23,552,359
(1,549,449)
(52,650,100)
(5,961,565)907,919
6,682,435
86,236,378
--
43,004,467
355,598,490
2015 ANNUAL REPORT
81
GroupCompany
Note2015201420152014
RMRMRMRM
Exchange gains on cash and
bank balances
82,776
55,971
NET INCREASE/(DECREASE)
IN CASH AND CASH
EQUIVALENTS
14,574,243
28,423,331
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF THE
FINANCIAL YEAR
68,534,72740,111,39634,193,057
CASH AND CASH
EQUIVALENTS AT
THE END OF THE
FINANCIAL YEAR
83,108,970
20
68,534,727
74-
(8,284,605)
25,908,452
34,193,055
2
34,193,057
NOTES TO THE FINANCIAL STATEMENTS
1
GENERAL INFORMATION
The Company is a public company, incorporated and domiciled in Malaysia.
The Company is an investment holding company. The principal activities of the Group are vessel owning/leasing
and provision of vessel chartering and ship management services to oil and gas related industries. The principal
activities of the subsidiaries are disclosed in Note 16 to the financial statements. There were no significant changes
in the nature of these principal activities during the financial year.
The immediate holding company is Hallmark Odyssey Sdn. Bhd. The ultimate holding foundation is Yayasan
Ekuiti Nasional.
The address of the registered office of the Company is:
Level 7, Menara Milenium,
Jalan Damanlela, Pusat Bandar Damansara,
Damansara Heights,
50490 Kuala Lumpur
The address of the principal place of business of the Company is:
Level 12A, East Wing, The Icon
No. 1, Jalan 1/68F
Off Jalan Tun Razak
55000 Kuala Lumpur
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of financial statements are set out below. These
policies have been consistently applied to all the financial years presented, unless otherwise stated.
2.1 Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with
Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the
requirements of the Companies Act, 1965 in Malaysia.
The financial statements of the Group and the Company have been prepared under the historical cost
convention unless otherwise indicated in the accounting policies below and are presented in Ringgit
Malaysia (“RM”). The preparation of financial statements in conformity with MFRS requires the use of certain
critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reported financial year. It also requires the Directors to exercise
their judgement in the process of applying the Group and Company’s accounting policies. Although these
estimates and judgement are based on the Directors’ best knowledge of current events and actions, actual
results may differ. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements are disclosed in Note 3.
2015 ANNUAL REPORT
83
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.1 Basis of preparation (continued)
For the financial year ended 31 December 2015, the Group and the Company incurred a net loss after tax
of RM363,288,416 and RM185,514,818 (2014: net profit after tax of RM59,354,139 and net loss after tax of
RM22,376,498) respectively and, as at 31 December 2015, the Group and the Company’s current liabilities
exceeded their current assets by RM76,679,897 and RM16,115,319 (2014: Net current assets of RM9,915,155
and RM29,291,283) respectively.
The Group has taken steps to review the existing loan repayment schedule and the capital commitment for
vessels under construction. The Group will finalise the restructuring and rescheduling of the loan repayments with
the banks to allow the Group to defer certain amount of the current loan obligations. The Group has deferred
the delivery and finalising the deferment of payment for vessels under construction. In addition, the Group will
also be able to obtain the required financial support from its immediate holding company, if necessary.
With the steps taken above, the Directors are of the view that the Group will be able to generate sufficient
cash inflows from the charter hire contracts within the next twelve months from the reporting date to meet
working capital requirements and repayment of existing loan obligations, and to carry on their business
without significant curtailment of operations. The Directors believe that the Group and the Company are
able to realise their assets and discharge their liabilities in the normal course of business and that the financial
position will be improved through future operating profits and cash flows. Thus, the Directors believe no
material uncertainty exists that may cast significant doubt on the Group’s and the Company’s ability to
continue as going concerns.
As such, the Directors believe that it is appropriate to prepare the financial statements of the Group and the
Company on a going concern basis.
Standards, amendments to published standards and interpretations that are effective:
The Group has applied the following amendments for the first time for the financial year beginning on
1 January 2015:
•
•
•
Annual Improvements to MFRSs 2010 – 2012 Cycle (Amendments to MFRS 2 ‘Share Based Payment’, MFRS
3 ‘Business Combinations’, MFRS 8 ‘Operating Segments’, MFRS 13 ‘Fair Value Measurement’, MFRS 116
‘Property, Plant and Equipment’, MFRS 124 ‘Related Party Disclosures’ and MFRS 138 ‘Intangible Assets’)
Annual Improvements to MFRSs 2011 – 2013 Cycle (Amendments to MFRS 3 ‘Business Combination’, MFRS
13 ‘Fair Value Measurement’ and MFRS 140 ‘Investment Property’)
Amendments to MFRS 119 ‘Defined Benefits Plans: Employee Contributions’
The adoption of the Annual Improvements to MFRSs 2010 – 2012 Cycle has required additional disclosures
about the aggregation of segments. Other than that, the adoption of these amendments did not have any
impact on the current or any prior year and are not likely to affect future periods.
Standards, amendments to published standards and interpretations to existing standards that have been
issued but not yet effective:
A number of new standards and amendments to standards and interpretations are effective for financial year
beginning after 1 January 2015. None of these is expected to have a significant effect on the consolidated
financial statements of the Group, except as set out below:
•
Amendment to MFRS 11 ‘Joint arrangements’ (effective from 1 January 2016) requires an investor to
apply the principles of MFRS 3 ‘Business Combination’ when it acquires an interest in a joint operation
that constitutes a business. The amendments are applicable to both the acquisition of the initial interest
in a joint operation and the acquisition of additional interest in the same joint operation. However, a
previously held interest is not re-measured when the acquisition of an additional interest in the same joint
operation results in retaining joint control.
2
2.1 Basis of preparation (continued)
Standards, amendments to published standards and interpretations to existing standards that have been
issued but not yet effective: (continued)
•
Amendments to MFRS 116 ‘Property, plant and equipment’ and MFRS 138 ‘Intangible assets’ (effective
from 1 January 2016) clarify that the use of revenue-based methods to calculate the depreciation of
an item of property, plant and equipment is not appropriate. This is because revenue generated by an
activity that includes the use of an asset generally reflects factors other than the consumption of the
economic benefits embodied in the asset.
The amendments to MFRS 138 also clarify that revenue is generally presumed to be an inappropriate
basis for measuring the consumption of the economic benefits embodied in an intangible asset. This
presumption can be overcome only in the limited circumstances where the intangible asset is expressed
as a measure of revenue or where it can be demonstrated that revenue and the consumption of the
economic benefits of the intangible asset are highly correlated.
•
MFRS 9 ‘Financial Instruments’ (effective from 1 January 2018) will replace MFRS 139 “Financial Instruments:
Recognition and Measurement”.
MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary
measurement categories for financial assets: amortised cost, fair value through profit or loss and fair
value through other comprehensive income (“OCI”). The basis of classification depends on the entity’s
business model and the cash flow characteristics of the financial asset. Investments in equity instruments
are always measured at fair value through profit or loss with an irrevocable option at inception to
present changes in fair value in OCI (provided the instrument is not held for trading). A debt instrument is
measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash
flows represent principal and interest.
For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost
accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is
that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change
due to an entity’s own credit risk is recorded in other comprehensive income rather than profit or loss,
unless this creates an accounting mismatch.
MFRS 9 introduces an expected credit loss model on impairment that replaces the incurred loss impairment
model used in MFRS 139. The expected credit loss model is forward-looking and eliminates the need for
a trigger event to have occurred before credit losses are recognised.
•
MFRS 15 ‘Revenue from contracts with customers’ (effective from 1 January 2018) replaces MFRS 118
‘Revenue’ and MFRS 111 ‘Construction contracts’ and related interpretations. The standard deals
with revenue recognition and establishes principles for reporting useful information to users of financial
statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an
entity’s contracts with customers.
Revenue is recognised when a customer obtains control of a good or service and thus has the ability
to direct the use and obtain the benefits from the good or service. The core principle in MFRS 15 is that
an entity recognises revenue to depict the transfer of promised goods or services to the customer in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services.
Management is currently assessing the impact arising from the initial application of these standards on the
financial statements of the Group and Company. 2015 ANNUAL REPORT
85
2
2.2 Basis of consolidation
(a)Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the relevant activities of
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred
to the former owners of the acquiree and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement and fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. The Group recognises any non-controlling
interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling
interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree
and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of
the identifiable net assets acquired is recognised as goodwill. If the total of consideration transferred,
non-controlling interest recognised and previously held interest measured is less than the fair value of
the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised
directly in profit or loss (Note 2.8).
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the carrying value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date, any gains or losses
arising from such re-measurement are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an
asset or liability is recognised in accordance with MFRS 139 in profit or loss. Contingent consideration that
is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
Related company transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence
of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
2
2.2 Basis of consolidation (continued)
(a) Subsidiaries (continued)
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
income statement, statement of comprehensive income, statement of changes in equity and statement
of financial position respectively.
Profit or loss and each component of other comprehensive income of the subsidiaries are attributed
to the parent and the non-controlling interest, even if this results in the non-controlling interest having a
deficit balance.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the
fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If
this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference
is recognised in profit or loss. Refer to Note 2.8 on the accounting policy for goodwill.
(b) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as transactions
with equity owners of the Group. A change in ownership interest results in an adjustment between the
carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the
subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any
consideration paid or received is recognised in equity attributable to owners of the Group.
(c) Disposal of subsidiaries
When the Group ceases to consolidate because of a loss of control, any retained interest in the entity
is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair
value becomes the initial carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised
in other comprehensive income in respect of that entity are accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.
Gains or losses on the disposal of subsidiaries include the effect of de-recognising the carrying amount of
goodwill relating to the subsidiaries sold.
2015 ANNUAL REPORT
87
2
2.2 Basis of consolidation (continued)
(d) Joint arrangements
A joint arrangement is an arrangement of which there is contractually agreed sharing of control by
the Group with one or more parties, where decisions about the relevant activities relating to the joint
arrangement require unanimous consent of the parties sharing control. The classification of a joint
arrangement as a joint operation or a joint venture depends upon the rights and obligations of the
parties to the arrangement. A joint venture is a joint arrangement whereby the joint venturers have rights
to the net assets of the arrangement. A joint operation is a joint arrangement whereby the joint operators
have rights to the assets and obligations for the liabilities, relating to the arrangement.
Interests in joint ventures are accounted for using the equity method, after initially being recognised at
cost in the consolidated statement of financial position. Under the equity method, the investment in a
joint venture is initially recognised at cost, and adjusted thereafter to recognise the Group’s share of the
post-acquisition profits or losses of the joint venture in profit or loss, and the Group’s share of movements in
other comprehensive income of the joint venture in other comprehensive income. Dividends received or
receivable from a joint venture are recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in a joint venture equals or exceeds its interests in the joint venture,
including any long-term interests that, in substance, form part of the Group’s net investment in the joint
venture, the Group does not recognise further losses, unless it has incurred legal or constructive obligations
or made payments on behalf of the joint venture.
The Group determines at each reporting date whether there is any objective evidence that the investment
in the joint venture is impaired. An impairment loss is recognised for the amount by which the carrying
amount of the joint venture exceeds its recoverable amount. The Group presents the impairment loss
adjacent to ‘share of profit/(loss) of a joint venture’ in the income statement.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent
of the Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures
have been changed where necessary to ensure consistency with the policies adopted by the Group.
When the Group ceases to equity account its joint venture because of a loss of joint control, any retained
interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit
or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting
for the retained interest as an associate or financial asset. In addition, any amount previously recognised
in other comprehensive income in respect of the entity is accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.
If the ownership interest in a joint venture is reduced but joint control is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss
where appropriate.
2
2.3 Investments in subsidiaries, joint ventures and associates in separate financial statements
In the Company’s separate financial statements, investments in subsidiaries, joint ventures and associates are
carried at cost less accumulated impairment losses. On disposal of investments in subsidiaries, joint ventures
and associates, the difference between disposal proceeds and the carrying amounts of the investments are
recognised in profit or loss.
The amounts due from subsidiaries of which the Company does not expect repayment in the foreseeable
future are considered as part of the Company’s investments in the subsidiaries.
2.4 Property, plant and equipment
Property, plant and equipment are initially stated at cost. The cost of an item of property, plant and
equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing
the asset to the location and condition necessary for it to be capable of operating in the manner intended
by management. Cost of an item of property, plant and equipment is determined after deducting rebates,
discounts and the amount of goods and services tax (“GST”), except where the amount of GST incurred
is not recoverable from the government. When the amount of GST incurred is not recoverable from the
government, the GST is recognised as part of the cost of purchased property, plant and equipment. Cost
also include borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset (refer to accounting policy Note 2.22 on borrowing costs). All property, plant and equipment
are subsequently stated at historical cost less accumulated depreciation and impairment losses.
The cost of property, plant and equipment recognised as a result of a business combination is based on fair
value at acquisition date. The fair value of property is the estimated amount for which a property could be
exchanged between knowledgeable willing parties in an arm’s length transaction wherein the parties had
each acted knowledgeably and without compulsion. The fair value of other items of plant and equipment is
based on the quoted market prices of similar items when available and replacement cost where appropriate.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part
is derecognised. All other repairs and maintenance are recognised as expenses in profit or loss during the
financial year in which they are incurred. Cost also comprises the initial estimate of dismantling and removing
the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset
is acquired, if applicable.
Gains or losses on disposals are determined by comparing the net proceeds with the carrying amounts and
are included in other income/(expenses) in profit or loss.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost
of the asset and which has a different useful life, is depreciated separately.
2015 ANNUAL REPORT
89
2
2.4 Property, plant and equipment (continued)
Property, plant and equipment are depreciated on the straight-line basis to allocate the cost of each asset
to their residual values over their estimated useful lives, summarised as follows:
Vessels
Vessel parts
Drydocking expenditure
Building
Motor vehicles
Office equipment
Computers
Furniture and fittings
Renovation
25 years
10 - 14 years
5 years
50 years
4 - 5 years
5 -10 years
5 years
10 years
10 years
Depreciation on vessels under construction commences when the vessels are ready for their intended use.
Drydocking expenditure represents major inspection and overhaul costs and is depreciated to reflect the
consumption of benefits, which are to be replaced or restored by the subsequent drydocking generally every
five years. The Group has included these drydocking costs as a separate component of the vessels’ costs.
Residual values and useful lives of assets are reviewed, and adjusted if appropriate, at the end of each reporting
period. The Group revised the residual values of the vessels from 10% of cost to 5% of cost at the end of the
financial year arising from decline in ship demolition prices ie. scrap value. The revision was accounted for as
a change in accounting estimate and as a result, the depreciation charge increased by RM1,102,293 for the
At the end of the financial year, the Group assesses whether there is any indication of impairment. If such
indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable.
A write down is made if the carrying amount exceeds the recoverable amount. See accounting policy Note
2.5 on impairment of non-financial assets.
2
2.5 Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill or intangible assets not ready to use, are not
subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of
the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs of disposal (“FVLCOD”) and value in use (“VIU”). For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (“cash generating units”).
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the
impairment at each reporting date.
The impairment loss is charged to profit or loss unless it reverses a previous revaluation in which case it is
charged to the revaluation surplus reserve. Impairment losses on goodwill are not reversed. In respect of
other assets, any subsequent increase in recoverable amount is recognised in profit or loss unless it reverses
an impairment loss on a revalued asset in which case it is taken to revaluation surplus reserve.
2.6 Non-current assets (or disposal groups) held-for-sale
Non-current assets (or disposal groups) are classified as assets held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use and a sale is considered
highly probable. They are stated at the lower of carrying amount and fair value less costs to sell, except for
assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment
property that are carried at fair value and contractual rights under insurance contracts, which are specifically
exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to
fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of
an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A
gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is
recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while
they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group
classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are
presented separately from the other assets in the statement of financial position. The liabilities of a disposal group
classified as held for sale are presented separately from other liabilities in the statement of financial position.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale
and that represents a separate major line of business or geographical area of operations, is part of a single coordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively
with a view to resale. The results of discontinued operations are presented separately in profit or loss.
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2.7 Leases
A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments,
the right to use an asset for an agreed period of time.
(a) Finance leases
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement
at the lower of the fair value of the leased property and the present value of the minimum lease payments.
The corresponding rental obligations, net of finance charges, are included in other short-term and longterm payables.
Each lease payment is allocated between the liability and finance charges so as to achieve a constant
rate of interest on the remaining balance of the liability. The finance cost is charged to profit or loss
over the lease period so as to produce a constant periodic rate of interest on the remaining balance
of the liability for each period. The property, plant and equipment acquired under finance leases is
depreciated over the shorter of the useful life of the asset and the lease term if there is no reasonable
certainty that the Group will obtain ownership at the end of the lease term.
Initial direct costs incurred by the Group in negotiating and arranging finance leases are added to the
carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term
on the same basis as the lease expense.
(b) Operating leases
Leases of assets where a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to profit or loss on the straight-line basis over the lease period. Initial
direct costs incurred by the Group in negotiating and arranging operating leases are recognised in profit
or loss when incurred.
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2.8 Intangible assets
(a) Goodwill
Goodwill arises from a business combination and represents the excess of the aggregate of fair value of
consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value
of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired
and liabilities assumed on the acquisition date. If the fair value of consideration transferred, the amount
of non-controlling interest and the fair value of previously held interest in the acquiree are less than the
fair value of the net identifiable assets of the acquiree, the resulting gain is recognised in profit or loss.
Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes
in circumstances indicate that it might be impaired, and carried at cost less accumulated impairment
losses. For the purpose of impairment testing, goodwill acquired in a business combination is allocated
to each of the cash generating units (“CGUs”), or groups of CGUs, that is expected to benefit from the
synergies of the combination. Each unit or group of units to which the goodwill is allocated represents
the lowest level within the entity at which the goodwill is monitored for internal management purposes.
Goodwill is monitored at the operating segment level. The carrying value of goodwill is compared to
the recoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any
impairment is recognised immediately as an expense and is not subsequently reversed.
(b) Acquired charter contracts
Charter contracts acquired in a business combination are recognised at fair value at the acquisition date.
Charter contracts have a finite useful life and amortisation is calculated using the straight-line method to
allocate the fair value of the contract over their contract periods which range from 1 to 4 years.
2.9 Cash and cash equivalents
For the purpose of the statement of cash flows, cash equivalents are held for the purpose of meeting shortterm cash commitments rather than for investment or other purposes. Cash and cash equivalents comprise
cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with
original maturities of 3 months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank overdrafts.
In the statements of financial position, bank overdrafts are shown within borrowings in current liabilities.
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2.10Inventories
Inventories represent fuel on-board vessels which are stated at the lower of cost and net realisable value.
Cost is determined based on the first-in, first-out method for fuel. Costs of purchased inventory are determined
after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary
course of business, less the estimated costs necessary to make the sale.
Cost of purchased inventory is determined after deducting rebates, discounts and the amount of GST, except
where the amount of GST incurred is not recoverable from the government. When the amount of GST incurred
is not recoverable from the government, the GST is recognised as part of the cost of purchased inventory.
2.11Financial assets
(a) Classification
The Group and the Company classify their financial assets in the following categories: at fair value
through profit or loss, loans and receivables, available-for-sale and held to maturity. The classification
depends on the purpose for which the financial assets were acquired. Management determines the
classification at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates
this designation at the end of each reporting period. The Group’s and the Company’s financial assets
are loans and receivables.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. If collection of the amounts is expected in one year or less they
are classified as current assets. If not, they are presented as non-current assets. The Group’s and the
Company’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and bank balances’
in the statements of financial position (Notes 18 and 20).
(b) Recognition and initial measurement
Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the
Group commits to purchase or sell the asset.
Financial assets are initially recognised at fair value plus transaction costs that are directly attributable to
the acquisition of the financial asset for all financial assets not carried at fair value through profit or loss.
Financial assets at fair value through profit or loss are initially recognised at fair value, and transaction
costs are expensed in profit or loss.
(c) Subsequent measurement – gains and losses
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently
carried at fair value. Loans and receivables and held-to-maturity financial assets are subsequently carried
at amortised cost using the effective interest method.
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2.11Financial assets (continued)
(d) Subsequent measurement – impairment
Assets carried at amortised cost
The Group and the Company assess at the end of the financial year whether there is objective evidence
that a financial asset or group of financial assets is impaired. A financial asset or a group of financial
assets is impaired and impairment losses are incurred only if there is objective evidence of impairment
as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”)
and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or
group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the customers or a group of customers is
experiencing significant financial difficulty, the probability that they will enter bankruptcy or other
financial reorganisation, and where observable data indicate that there is a measurable decrease in
the estimated future cash flows, such as changes in economic conditions that correlate with defaults.
The amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset’s original effective interest rate. The carrying amount of the asset
is reduced and the amount of the loss is recognised in profit or loss. If loans and receivables have a
variable rate, the discount rate for measuring any impairment losses is the current effective interest rate
determined under the contract. As a practical expedient, the Group and the Company may measure
impairment on the basis of an instrument’s fair value using an observable market price.
If, in a subsequent financial year, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised (such as an improvement
in the customers’ credit rating), the reversal of the previously recognised impairment loss is recognised in
profit or loss.
When receivable is uncollectible, it is written off against the related impairment account. Such receivables
are written off after all the necessary procedures have been completed and the amount of the loss has
been determined.
(e)De-recognition
Financial assets are de-recognised when the rights to receive cash flows from the investments have
expired or have been transferred and the Group and the Company have transferred substantially all risks
and rewards of ownership.
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2.12Offsetting financial instruments
Financial assets and liabilities are offset and the net amount presented in the statements of financial position
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis, or realise the asset and settle the liability simultaneously. The legally enforceable right must not
be contingent on future events and must be enforceable in the normal course of business and in the event
of default, insolvency or bankruptcy.
2.13Current and deferred income tax
Tax expense for the financial year comprises current and deferred income tax. The income tax expense or
credit for the financial year is the tax payable on the current financial year’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses. Tax is recognised in profit or loss, except to the
extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the
tax is also recognised in other comprehensive income or directly in equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period in the countries where the Company, the Group’s subsidiaries and joint
ventures operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities. This liability is measured using the single best estimate of the most
likely outcome.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the
amounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financial
statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of
goodwill. Deferred tax is also not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting
nor taxable profit or loss. Deferred tax is determined using tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the financial year and are expected to apply when the related deferred
tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available
against which the deductible temporary differences, unused tax losses or unused tax credits can be utilised.
Deferred tax liability is recognised for all taxable temporary differences associated with investments in
subsidiaries and joint ventures, except where the timing of the reversal of the temporary difference is
controlled by the investor and joint venturer and it is probable that the temporary difference will not reverse
in the foreseeable future. Generally, the investor and joint venturer are unable to control the reversal of the
temporary difference for subsidiaries and joint ventures. Only where there is an agreement in place that gives
the parent and joint venturer the ability to control the reversal of the temporary difference, a deferred tax
liability is not recognised.
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2.13Current and deferred income tax (continued)
Deferred tax assets are recognised on deductible temporary differences arising from investments in subsidiaries
and joint ventures only to the extent that it is probable the temporary difference will reverse in the future and
there is sufficient taxable profit available against which the deductible temporary difference can be utilised.
Deferred and income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to taxes
levied by the same taxation authority on either the taxable entity or different taxable entities where there is
an intention to settle the balances on a net basis.
2.14Provisions
Provisions are recognised when the Group and the Company have a present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources will be required to settle the obligation
and a reliable estimate of the amount can be made.
Where the Group and the Company expect a provision to be reimbursed by another party, the reimbursement
is recognised as a separate asset but only when the reimbursement is virtually certain. Provisions are not
recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood
of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditures expected
to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the obligation. The increase in the provision due to the passage of
time is recognised as finance cost expense.
2.15Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
carried at amortised cost; any difference between initial recognised amount and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent
that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the
draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be
drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of
the facility to which it relates.
Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The
dividends on these preference shares are recognised as finance cost in profit or loss.
Borrowings are removed from the statement of financial position when the obligation specified in the contract
is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in profit or loss within other income or finance costs.
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 end of the financial year.
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2.16Employee benefits
(a) Short-term employee benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits that are expected
to be settled wholly within 12 months after the end of the financial year in which the employees render
the related service are recognised in respect of employees’ services up to the end of the financial year
and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as other payables in the statement of financial position.
(b) Defined contribution plans
The Group and the Company make contributions to the Employees Provident Fund (“EPF”) as required
by law in Malaysia, which are charged to profit or loss in the financial year to which they relate. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the future
payments is available.
(c) Termination benefits
Termination benefits are payable when employment is terminated by the Group and the Company
before the normal retirement date, or whenever an employee accepts voluntary redundancy in
exchange for these benefits. The Group and the Company recognise termination benefits at the earlier
of the following dates: (a) when the Group and the Company can no longer withdraw the offer of those
benefits; and (b) when the Group and the Company recognise costs for a restructuring that is within
the scope of MFRS 137 and involves the payment of termination benefits. In the case of an offer made
to encourage voluntary redundancy, the termination benefits are measured based on the number of
employees expected to accept the offer. Benefits falling due more than 12 months after the end of the
financial year are discounted to their present value.
(d) Profit-sharing and bonus plans
T he Group and the Company recognise a liability and an expense for bonuses and profit-sharing, based
on a formula that takes into consideration the profit attributable to the Group’s and the Company’s
shareholders after certain adjustments. The Group and the Company recognise a provision where
contractually obliged or where there is a past practice that has created a constructive obligation.
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2.17Share capital
(a) Classification
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares
issued, if any, are accounted for as share premium, if any. Both ordinary shares and share premiums are
classified as equity.
Preference share capital is classified as equity if they are non-redeemable, or redeemable but only at
the Company’s option, and any dividends are discretionary.
(b) Share issue costs
Incremental costs directly attributable to the issue of new shares or options are deducted from equity,
net of any related income tax benefit.
(c) Dividend distribution
A liability is recognised for the amount of any dividend declared, being appropriately authorised and no
longer at the discretion of the Group and the Company, on or before the end of the financial year but
not distributed at the end of the financial year.
Distributions to holders of an equity instrument is recognised directly in equity.
(d) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
the profit attributable to owners of the Company, excluding any costs of servicing equity other than
ordinary shares,
•
by the weighted average number of ordinary shares outstanding during the financial year, adjusted
for bonus elements in ordinary shares issued during the financial year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures in the determination of basic earnings per share to take into
account:
•
the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares, and
•
the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
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2.18Trade payables
Trade payables represent liabilities for goods or services provided to the Group prior to the end of financial
year which are unpaid. Trade payables are classified as current liabilities unless payment is not due within 12
months after the financial year. If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value, with the amount of GST included. The net amount of GST
payable to the government is presented as other payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows
which are recoverable from, or payable to, the government are classified as operating cash flows.
Trade payables are subsequently measured at amortised cost using the effective interest method.
2.19Foreign currencies
(a) 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 entity operates (the “functional currency”).
The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is the Group’s and
the Company’s functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at financial
year end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss. However, exchange differences are deferred in other comprehensive income
when they arose from qualifying cash flow or net investment hedges or are attributable to items that form
part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are
presented in profit or loss within finance income or cost. All other foreign exchange gains and losses are
presented in profit or loss on a net basis within administrative expenses.
Changes in the fair value of monetary securities denominated in foreign currency classified as available
for sale are analysed between translation differences resulting from changes in the amortised cost of
the security and other changes in the carrying amount of the security. Translation differences related
to changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are
recognised in other comprehensive income.
Non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined. Translation differences on assets and
liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences on
non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are
recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary
financial assets, such as equities classified as available for sale, are included in other comprehensive
income.
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2.19Foreign currencies (continued)
(c) Group companies
T he results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency
are translated into the presentation currency as follows:
•
assets and liabilities for each statement of financial position presented are translated at the closing
rate at the date of that statement of financial position;
•
income and expenses for each statement of comprehensive income presented are translated at
average exchange rates (unless this average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
•
all resulting exchange differences are recognised as a separate component of other comprehensive
income.
Goodwill and fair value adjustments arising on the acquisitions of a foreign entity are treated as assets
and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are
recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign
entities, and of borrowings and other financial instruments designated as hedges of such investments,
are recognised in other comprehensive income.
On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign
operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a
disposal involving loss of joint control over a joint venture that includes a foreign operation, or a disposal
involving loss of significant influence over an associate that includes a foreign operation), all of the
exchange differences relating to that foreign operation recognised in other comprehensive income
and accumulated in the separate component of equity are reclassified to profit or loss, as part of the
gain or loss on disposal. In the case of a partial disposal that does not result in the Group losing control
over a subsidiary that includes a foreign operation, the proportionate share of accumulated exchange
differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all
other partial disposals (that is, reductions in the Group’s ownership interest in associates or joint ventures
that do not result in the Group losing significant influence or joint control) the proportionate share of the
accumulated exchange difference is reclassified to profit or loss.
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2.20Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable for the sale of services in
the ordinary course of the Group’s activities. Revenue is shown net of goods and services tax, returns, rebates
and discounts and amounts collected on behalf of third parties and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that
future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s
activities as described below. The Group bases its estimates on historical results, taking into consideration
the type of customer, the type of transaction and the specifics of each arrangement. The following specific
recognition criteria must also be met before revenue is recognised:
Chartering and hiring of vessels
Charter hire income from vessels is recognised upon rendering of services to customers, over the term of
the charter hire contract. For income from the hire of forerunner vessels, it is assessed whether the Group is
acting as a principal or an agent. Where it has been assessed that the Group is acting as an agent, income
is recognised net of charter costs.
Other revenue
Other revenue is recognised when services are rendered.
2.21Interest income
The Group and the Company earn interest income from deposits placed with licensed banks. Interest income
is recognised on an accrual basis.
2.22Borrowing costs
General and specific borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready
for their intended use or sale, after which such expense is charged to profit or loss. Capitalisation of borrowing
cost is suspended during extended periods in which active development is interrupted.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the financial year in which they are incurred.
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2.23Prepayments
Prepayments are amounts paid in advance for services yet to be received. Prepayments are recognised as
an expense in profit or loss when the services are subsequently received.
2.24Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Group’s Executive Committee
that makes strategic decisions.
2.25Contingent liabilities and assets
The Group does not recognise contingent assets and liabilities other than those arising from business
combinations, but discloses its existence in the financial statements. A contingent liability is a possible obligation
that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one
or more uncertain future events beyond the control of the Group or a present obligation that is not recognised
because it is not probable that an outflow of resources will be required to settle the obligation. A contingent
liability also arises in the extremely rare case where there is a liability that cannot be recognised because it
cannot be measured reliably. However, contingent liabilities do not include financial guarantee contracts.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The
Group does not recognise contingent assets but discloses its existence where inflows of economic benefits
are probable, but not virtually certain.
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CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
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 under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
addressed below.
Key assumptions and sources estimation of uncertainty
The following are key assumptions concerning the future and other key sources estimation of uncertainty at the
end of the financial year that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
(i) Impairment of goodwill and investment in subsidiaries
The Group tests goodwill and investment in subsidiaries for impairment annually in accordance with its
accounting policy in Note 2.8 and 2.5 respectively.
For the purposes of assessing impairment, goodwill is allocated to cash-generating units that are expected to
benefit from the future earnings of the business activities in which the goodwill arose.
Significant judgement is required in the estimation of the present value of future cash flows generated by the
cash-generating units, which involve uncertainties and are significantly affected by assumptions used and
judgement made regarding estimates of future cash flows and discount rates.
Assessment of the investment in subsidiaries was conducted consistently with the assessment of the goodwill.
In line with the impairment in goodwill, as at 31 December 2015, the Group has evaluated the carrying
amounts of investment in subsidiaries against their recoverable amounts and recorded an impairment charge
to the carrying value of investment in subsidiaries of the same amount of RM180,643,348 for the financial year
ended 31 December 2015 as disclosed in Note 16.
As at 31 December 2015, the Group assessed the carrying value of the goodwill for impairment and has fully
written down the carrying value of goodwill of RM180,643,348. Changes in assumptions could significantly
affect the results of the Group’s impairment of goodwill. The key assumptions used are disclosed in Note 14.
(ii) Useful lives and residual values of property, plant and equipment
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives after
deducting their residual values. Management exercises their judgement in estimating the useful lives and the
residual value of the depreciable assets. The useful lives are estimated based on management’s knowledge
of the vessels owned by the Group and industry experience and are normally equal to the design life of the
vessel. Residual values of the vessels are estimated based on prevailing market conditions and expected
amount to be obtained for the vessels at the end of their useful lives in future, after deducting the estimated
costs of disposal. The Group assesses annually the useful lives and the residual value of the property, plant
and equipment and if the expectation differs from the original estimate, such difference will impact the
depreciation in the financial year in which such estimate has been charged.
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CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Key assumptions and sources estimation of uncertainty (continued)
(iii) Impairment of receivables
At each reporting date, the Group assesses whether there is objective evidence that receivables have been
impaired. Potential impairment loss is derived based on a review of the current status of existing receivables
and collection track record. Such provisions are adjusted periodically to reflect the actual and anticipated
impairment.
(iv) Impairment review of carrying value of vessels
The Group reviews periodically whether vessels have suffered any impairment in accordance with the
accounting policy stated in Note 2.4. The recoverable amounts of each vessel, being defined as a cash
generating unit, have been determined based on the higher of its FVLCOD and its VIU. For VIU calculations,
the future cash flows are based on contracted cash flows and estimates of uncontracted cash flows for the
useful lives of each vessel, including scrap values discounted by an appropriate discount rate.
In cases where FVLCOD is used to determine the recoverable amount of the vessel, valuation were performed
by an independent valuer using the market approach, including consideration of recent market transaction
of vessels of similar type and age. The valuation technique is therefore classified as level 2 measurement of
the fair value hierarchy.
The impairment testing for CGU requires estimates and judgement to determine the net present value of
future cash flows such as revenue growth, cost escalation and utilisation rates based on historical trends
amongst others. The discount rate used is based on industry average that varies over time.
As at 31 December 2015, the Group has evaluated the carrying amounts of vessels against their recoverable
amounts and recorded an impairment charge to the carrying value of vessels of RM195,373,000 for the
financial year ended 31 December 2015 as disclosed in Note 13.
(v) Deferred tax assets
Deferred tax assets are recognised for all unutilised tax losses and unutilised capital allowances to the extent
that it is probable that taxable profit will be available against which the losses and capital allowances can
be utilised. Significant management judgement is required to determine the amount of deferred tax assets
that can be recognised, based upon the likely timing and level of future taxable profits together with future
tax planning strategies.
Assumptions about generation of future taxable profits depend on management’s estimates of future
profitability. These depend on estimates of future revenue, operating costs, capital expenditure, and other
working capital transactions. Judgement is also required about application of income tax legislation. These
judgements and assumptions are subject to risks and uncertainty, hence there is a possibility that changes in
circumstances will alter expectations, which may impact the amount of deferred tax assets recognised in the
statements of financial position and the amount of unrecognised tax losses and capital allowances.
2015 ANNUAL REPORT
105
4
FINANCIAL RISK MANAGEMENT
The Group’s and the Company’s overall financial risk management focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the Group and the
Company. Financial risk management is carried out through risk reviews, internal control systems and adherence
to the Group’s and the Company’s financial risk management policies. The Directors of the Group and the
Company regularly review these risks and approve the policies, which cover the management of these risks.
The Group and the Company are exposed to credit and counterparty risk, liquidity risk, interest rate risk, foreign
currency exchange risk and capital risk management.
(i) Credit and counterparty risk
Credit risk arises when sales are made on credit terms. Customers are subject to credit checks and outstanding
accounts are followed up on a timely basis. Credit risk concentration is monitored by monitoring the performance
of our customers and actively engaging with customers to ensure payments are settled within the credit period.
The Group is exposed to the risk that the financial position of its customers may change during the contracted
period and that they will not be able to meet its obligations under the terms of the contract. Given the limited
number of major customers and the significant portion they represent of revenue, the inability by one or more of
the Group’s major customers to make full payment on any of its contracts may have a material adverse effect on
the financial position. To mitigate this risk, credit quality of potential customers is assessed by taking into account
their current financial position, past experience and other factors before entering into a contract. This evaluation
includes examination of the counterparty’s default rates as well as their credit quality. Outstanding receivables
are closely monitored in order to pursue full recovery.
The credit quality of financial assets that are not impaired can be assessed by reference to external credit ratings
(if available) or to historical information about counterparty default rates:
GroupCompany
2015201420152014
RMRMRMRM
Cash and bank balances
(excludes cash in hand)
Counterparties with external
credit rating (“RAM”)*
AAA
52,603,596
53,749,975
25,907,196
34,157,458
AA2
13,637,832
12,966,732
1,254
35,597
AA3
17,105,250
7,790,515
-Counterparties with external
credit rating (“MARC”)**
AA+
-
25,818
--
Counterparty with no credit
rating ***
--
11,889,322168,309
95,236,00074,701,34925,908,450
34,193,055
4
FINANCIAL RISK MANAGEMENT (CONTINUED)
(i) Credit and counterparty risk (continued)
The credit quality of financial assets that are not impaired can be assessed by reference to external credit
ratings (if available) or to historical information about counterparty default rates: (continued)
GroupCompany
2015201420152014
RMRMRMRM
Trade and other receivables
Counterparties without
external credit rating
Group 1
Group 2
1,989,619
73,540,460
1,768,625
87,016,936
-
-
-
The Group and the Company classify their receivables into the following groups:
Group 1 – new customers/related parties (less than six (6) months).
Group 2 –existing customers/related parties (more than six (6) months) with no defaults in the past.
Group 3 –existing customers/related parties (more than six (6) months) with some defaults in the past.
All defaults were fully recovered.
*RAM represents Rating Agency Malaysia.
**MARC represents Malaysian Rating Corporation Berhad.
***The cash and bank balance held in a financial institution outside Malaysia.
(ii) Liquidity risk
Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting financial obligations
due to shortage of funds. The Group and the Company carry out monthly rolling cash flows review for the
next twelve (12) months to ensure that the business operations have sufficient funds available to meet its
obligations as and when they fall due. Historically, treasury management has proven that the Group and the
Company have the ability to meet its obligations as and when they fall due and the Group and the Company
have not defaulted on any obligations due or payable to financial institutions or creditors.
The Group has taken steps to review the existing loan repayment schedule and the capital commitment for
vessels under construction. The Group will finalise the restructuring and rescheduling of the loan repayments with
the banks to allow the Group to defer certain amount of the current loan obligations. The Group has deferred
the delivery and finalising the deferment of payment for vessels under construction. In addition, the Group will
also be able to obtain the required financial support from its immediate holding company, if necessary.
2015 ANNUAL REPORT
107
4
(ii) Liquidity risk (continued)
The table below summarises the maturity profile of the Group’s and the Company’s liabilities (including interest
on borrowings) at the financial year end based on contractual undiscounted repayment obligations.
Within
Between 1
Between 2
Over
1 year
and 2 years
and 5 years
5 years
Total
RMRMRMRMRM
Group
At 31 December 2015
Borrowings
Finance lease
liabilities
Redeemable
preference shares
Trade and other
payables
207,004,528158,997,614321,026,463145,937,250832,965,855
80,19443,37812,206
-
135,778
9,209,512---
9,209,512
75,504,223---
75,504,223
291,798,457159,040,992321,038,669145,937,250917,815,368
At 31 December 2014
Borrowings
Finance lease
liabilities
Trade and other
payables
165,398,300
156,696,678
322,405,892
173,295,540
817,796,410
95,171
82,463
56,157
-
233,791
29,755,924
-
-
-
29,755,924
195,249,395
156,779,141
322,462,049
173,295,540
847,786,125
4
(ii) Liquidity risk (continued)
Within
Between 1
Between 2
Over
1 year
and 2 years
and 5 years
5 years
Total
RMRMRMRMRM
Company
At 31 December 2015
1,198,301---
1,198,301
Trade and other
payables
Amounts due to
subsidiaries
41,255,022---
41,255,022
42,453,323---
42,453,323
At 31 December 2014
Trade and other
payables
Amounts due to
subsidiaries
858,573
-
-
-
858,573
4,382,726
-
-
-
4,382,726
5,241,299
-
-
-
5,241,299
As at December 2015, the Company has provided corporate guarantees to financial institutions on behalf of
its subsidiaries, which are repayable on demand in the event of default, amounted to RM489,386,036 (2014 :
RM517,924,721).
(iii) Interest rate risk
Interest rate risk arises from fluctuations in interest rates. Bank borrowings consist of variable rate debt
obligations linked to applicable bank rates. Bank rates are typically reviewed and adjusted periodically
in accordance with prevailing interest rates. Increases in interest rates would increase interest expenses
relating to the Group’s outstanding floating rate borrowings and increase the cost of new debt. Interest rates
applicable to borrowings are regularly reviewed against the prevailing and anticipated market interest rates
in order to determine if refinancing or early repayment is warranted. The table below sets forth the carrying
amounts of borrowings, by floating interest rate terms.
Group
20152014
RMRM
Floating rate loans (unhedged)
430,377,516478,618,674
2015 ANNUAL REPORT
109
4
(iii) Interest rate risk (continued)
Group
20152014
RMRM
Impact on profit for the financial year and equity:
1.0% increase in interest rate
1.0% decrease in interest rate
(4,303,775)(4,786,187)
4,303,775
4,786,187
(iv) Foreign currency exchange risk
The Group’s foreign currency exchange risk arises primarily from the purchase of vessels, materials, spare
parts, other services relating to the maintenance of vessels, and borrowings as well as contracts for which
the charter rate is denominated in US dollars (“USD”) and Brunei Dollars (“BND”). The Group occasionally
enters into forward contracts for USD in order to manage their exposure to fluctuations in the exchange rate
between the RM and USD.
The Group has several USD denominated bank accounts, a USD denominated borrowings for a vessel and a
BND denominated borrowings for a vessel.
The impact on profit after taxation for the financial year is mainly as a result of translation of USD bank balances
and borrowings held by companies within the Group for which their functional currencies are not USD or BND.
Group
20152014
RMRM
Impact on profit for the financial year and equity:
10.0% increase in BND exchange rate 10.0% decrease in BND exchange rate 10.0% increase in USD exchange rate 10.0% decrease in USD exchange rate 110 ICON OFFSHORE BERHAD
(9,251,596) 9,251,596 (1,146,931) 1,146,931 330,659
(330,659)
(825,381)
825,381
4
(iv) Foreign currency exchange risk (continued)
Borrowings are denominated in the following currencies:
Group
20152014
RMRM
Ringgit Malaysia
Brunei Dollar
US Dollar
585,408,517
657,818,987
127,701,5309,907,10410,664,387
723,017,151668,483,374
Cash and bank balances are denominated in the following currencies:
Group
Company
2015201420152015
RMRMRMRM
Ringgit Malaysia
Brunei Dollar
US Dollar
71,472,387
72,024,256
25,907,931
34,193,057
10,339,622168,308
-13,542,007
2,625,641
521-
95,354,013
74,818,205
25,908,452
34,193,057
Trade and other payables are denominated in the following currencies:
Group
20152014
RMRM
Ringgit Malaysia Brunei Dollar US Dollar Thai Baht Others 44,657,846 8,611,811 17,954,906 4,436,736 634,666 21,920,715
1,026,650
4,303,376
2,319,626
185,557
76,295,965 29,755,924
Trade receivables are denominated in the following currencies:
Group
20152014
RMRM
Ringgit Malaysia
Brunei Dollar
US Dollar
34,601,79367,391,994
33,457,7634,164,931
2,850,695
4,088,315
70,910,251
75,645,240
2015 ANNUAL REPORT
111
4
(v) Capital risk management
The Group and the Company regard capital as share capital, borrowings and retained earnings as presented
in the statements of financial position. The Group’s and the Company’s objectives when managing capital
are to safeguard the Group’s and the Company’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group and the Company may return capital to
shareholders, issue new shares or sell assets to reduce debt. The Group and the Company monitor capital
on the basis of the gearing ratio. This ratio is calculated as net debt divided by total equity. Net debt is
calculated as total borrowings (including current and non-current borrowings as shown in the statements of
financial position) less cash and bank balances. Total equity is calculated as shareholders’ equity as shown in
the statements of financial position.
GroupCompany
2015201420152014
RMRMRMRM
Finance lease liabilities
110,619
143,655
Borrowings
722,906,532668,339,719
---
Debt
723,017,151668,483,374
-Less: Cash and bank
balances(95,354,013)
(74,818,205)
(25,908,452)
(34,193,057)
Net debt
627,663,138
593,665,169
(25,908,452)
(34,193,057)
Total equity
718,828,459
1,080,606,358
672,999,263
858,514,081
Net gearing ratio (times)
0.87
0.55
n/a
n/a
(vi) Fair values
The carrying value of the balances disclosed in the financial statements approximates its fair values except as
disclosed in the notes to the financial statements.
5REVENUE
GroupCompany
2015201420152014
RMRMRMRM
Charter hire of own vessels
Charter hire of forerunner vessels
Other revenue
252,789,646
291,081,276
1,987,4806,481,381
11,788,512
21,314,472
----
266,565,638
318,877,129
--
6
FINANCE COSTS
GroupCompany
2015201420152014
RMRMRMRM
Term loan interest/profit
Profit rate on Islamic Redeemable
Convertible Preference Shares
(“RCPS-i”)
Interest on amount due to
immediate holding company
Revolving credit
Finance lease interest
Bank overdrafts interest
Other finance charges
Transaction cost written-off
36,642,13841,991,790
Total finance costs
Less: Amount capitalised to
qualifying assets (Note 13)
37,922,200
Finance costs
36,996,193
-
979,538
-4,346,774
-4,346,774
-1,378,911
1,071,193
1,012,615
2,199
2,304
105,039
110,445
101,631
201,542
-
5,168,974
-1,378,911
------
(926,007)
54,213,355
-
(4,075,414)
--
50,137,941
-
6,705,223
6,705,223
2015 ANNUAL REPORT
113
7
(LOSS)/PROFIT BEFORE TAXATION
(Loss)/profit before taxation is stated after charging/(crediting):
GroupCompany
2015201420152014
RMRMRMRM
Amortisation of intangible assets
3,132,000
11,758,667
-Auditors’ remuneration
- audit
662,000
650,000
180,000180,000
- IPO
-
2,748,000
-
2,748,000
- other services
31,000
375,785
27,000
240,000
Consumable cost
7,010,817
9,195,109
-Depreciation of property, plant
and equipment
65,719,917
56,573,067
-Employee benefits expense (Note 8)
74,442,670
68,800,258
2,571,820
2,581,837
Gain on disposal of property,
plant and equipment
-(4,688,734)
-Impairment loss on goodwill
180,643,348--Impairment loss on vessels
195,373,000--Impairment loss on investment in subsidiaries
--
180,643,348Impairment of receivables
1,003,530316,790
-Insurance
5,532,954
4,892,138
-Interest income
(1,089,720)
(2,379,389)
(200,189)(3,064,788)
Interest expense
36,996,193
50,137,941
-
6,705,223
IPO-related expenses
-11,907,481
-11,907,481
Loan transaction cost written-off
-
5,168,974
-Professional fees
2,197,683
1,490,958
947,084
615,717
Rental of premises
2,071,147
1,481,024
-Realised loss/(gain) on foreign exchange
1,329,218
(458,562)
23,731Reversal of impairment of receivables
(234,318)
(2,189,304)
-Ship operation and charter hire costs
34,769,639
37,112,414-Unrealised loss on foreign exchange
4,370,944
516,455
(74)Write-down of inventories
556,354600,198
--
8
EMPLOYEE BENEFITS EXPENSE
GroupCompany
2015201420152014
RMRMRMRM
Wages, salaries and bonus
Social security costs
Defined contribution plan
68,226,025
352,217
5,864,428
62,536,393
352,112
5,911,753
2,155,447
2,165,908
1,653
1,859
414,720414,070
74,442,670
68,800,258
2,571,820
2,581,837
Included in employee benefits expense of the Group and the Company are the Executive Directors’ remuneration
amounting to RM2,767,676 (2014: RM2,782,220) and RM813,739 (2014: RM1,059,100) as further disclosed in Note 9.
9
DIRECTORS’ REMUNERATION
GroupCompany
2015201420152014
RMRMRMRM
Executive:
Salaries and bonuses
Defined contribution plan
2,325,769
441,907
2,338,000
444,220
683,813890,000
129,926169,100
2,767,676
2,782,220
813,739
Non-Executive:
Fees and emoluments
Total Directors’
remuneration
(excluding benefits-in-kind)
672,500
549,667
672,500
1,059,100
549,667
3,440,1763,331,8871,486,2391,608,767
Benefits-in-kind received by the Directors of the Group and the Company amounted to RM7,200 (2014: RM21,600)
and RM7,200 (2014: RM7,200) respectively. In addition to the above certain of the directors have received exgratia payment from a related company in the financial year ended 31 December 2014 as disclosed in note 25.
10TAXATION
GroupCompany
2015201420152014
RMRMRMRM
Current income tax:
- Current financial year
- Under/(over) provision of tax in prior
financial year
Deferred tax relating to the
origination and reversal of temporary
differences (Note 17)
(1,140,981)
Tax (credit)/charge for the
financial year
(272,794)
640,0001,944,039
-10,000
228,187
(355,599)
--
(4,542,122)
--
(2,953,682)-10,000
The Malaysian corporate statutory tax rate for the year of assessment 2015 is 25% (2014: 25%). Subsidiaries of the
Company being Malaysian tax residents incorporated in Labuan under the Labuan Companies Act, 1990 are
taxed at 3% of profit before taxation or RM20,000 in accordance with the Labuan Business Activity Tax Act, 1990.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
2015 ANNUAL REPORT
115
10 TAXATION (CONTINUED)
Reconciliations of income tax expense applicable to profit before taxation at the statutory income tax rate to
income tax expense at the effective income tax rate of the Group and the Company are as follows:
GroupCompany
2015201420152014
RMRMRMRM
Taxation at Malaysian statutory
tax rate at 25%
Deferred tax assets not recognised
during the financial year
Effect of change in tax rate on deferred tax
Effects of different tax rate in Labuan
Effects of different tax rate in Brunei
Tax effect of expenses that are not
deductible for tax purposes
Tax effect of income not subject to tax
Tax effect on transfer of vessels
between countries
Recognition of previously
unrecognised temporary
differences
Under / (over) provision of tax in prior
financial year
Tax (credit)/charge for the financial
year
(363,561,210)
(185,514,818)
(22,366,498)
(90,890,303)14,100,114(46,378,705)
(5,591,625)
56,400,457
316,456
5,137
-329,797--36,114,463
(19,842,423)
-(159,840)--59,630,014
7,685,261
46,413,362
5,601,625
(209,517)(143,996) (34,657)(5,632,051)- --
(4,402,176)
--
228,187
(355,599)
--
(2,953,682)
-10,000
(272,794)
11 (LOSS)/EARNINGS PER SHARE (“(LPS)/EPS”)
The basic (LPS)/EPS has been calculated based on the consolidated (loss)/profit attributable to equity holders of
the Company and divided by the weighted number of ordinary shares in issue.
Group
20152014
RMRM
(Loss)/profit attributable to equity holders (RM)
Weighted average number of ordinary shares in issue
Basic and diluted (LPS)/EPS (sen)
There are no dilutive ordinary shares outstanding during the financial year.
(364,086,731)
1,177,185,100
(30.9)
59,354,139
801,348,355
7.4
12 SEGMENT REPORTING
(i) Reportable segment
The Group is organised as a single integrated business operations comprising the vessel owning/leasing activities
and provision of vessel chartering and ship management services to oil and gas and related industries. These
integrated activities are known as the offshore support vessel operations. The Group as a whole is regarded
as an operating segment. In making decisions about resource allocation and performance assessment, the
key management regularly reviews the financial results of the Group as a whole. Hence, the information that
is regularly provided to the key management is consistent with that presented in the financial statements.
(ii) Geographical information
The Group’s operations are carried out predominantly in Malaysia. Revenue earned by the Group analysed
by the location of its external customers is as follows:
20152014
%RM %RM
Revenue
Malaysia
72192,584,621
Brunei
2565,364,029
Others
38,616,988
Total
100266,565,638
87
278,250,808
619,869,814
7
20,756,507
100
318,877,129
All vessels are Malaysian-flagged and operate primarily in Malaysia except one vessel with Brunei flag and
operates in Brunei.
(iii) Major customers
The Group has several single customers which generated revenue amounting to 10% or more of the Group’s
total revenue:
20152014
%RM %RM
Direct
Customer 1 Customer 2 Customer 3 40 25 8
107,028,195 65,364,029 20,016,270 35 11 10 113,063,417
35,012,691
32,549,715
Total 73 192,408,494 56 180,625,823
2015 ANNUAL REPORT
117
-
224,789,696--------
224,789,696
End of the financial year
Net book value 168,014,944
1,076,046,574
4,392,900
34,022,303740,087363,455410,915
2,624,045348,349
1,459,302
1,288,422,874
-
195,373,000--------
195,373,000
-
29,416,696--------
29,416,696
-
151,944,319
1,502,897
25,094,285 57,822398,776679,857
1,527,007228,657838,526
182,272,146
Beginning of the
financial year
Charge for the
financial year
Accumulated
impairment loss
Beginning of the
financial year
-
96,989,746877,353
16,590,460 41,420211,308318,646866,429144,567464,722
116,504,651
Charge for the
financial year
-
54,906,995625,544
8,503,825 16,402187,468361,211660,578 84,090373,804
65,719,917
Currency translation reserve
-
47,578--------
47,578
Accumulated
depreciation
End of the financial year 168,014,944
1,452,780,5895,895,79759,116,588 797,909 762,2311,090,7724,151,052 577,0062,297,828
1,695,484,716
Beginning of the
financial year 196,789,350
1,273,045,2505,846,89740,059,224 797,909 762,2311,036,6682,933,309 558,5822,260,368
1,524,089,788
Reclassification (133,599,291)
133,599,291--------Additions
104,824,885
46,225,71248,900
19,057,364
-
-54,104
1,217,74318,42437,460
171,484,592
Currency translation reserve
-
(89,664)--------
(89,664)
Cost
At 31 December 2015
Vessels under
Vessel Drydocking
Motor
Office
Furniture
construction
Vessels
parts expenditure
Building
vehicles equipment Computers and fittings Renovation
Total
RM RMRMRMRMRMRMRMRMRM RM
Group
13 PROPERTY, PLANT AND EQUIPMENT
-
877,353
512,129
-
(121,556)
16,590,460
8,287,258
-
(844,223)
9,147,425
40,059,224
33,027,269
8,652,909
(1,620,954)
-
41,420
17,139
-
-
24,281
797,909
797,909
-
-
-
211,308
148,374
-
-
62,934
762,231
352,341
409,890
-
-
318,646
135,293
(210,078)
-
393,431
1,036,668
937,242
99,426
-
-
866,429
471,626
210,078
(3,031)
187,756
2,933,309
1,883,820
1,054,924
(5,435)
-
144,567
61,388
-
-
83,179
558,582
493,177
65,405
-
-
56,573,067
(2,685,892)
62,617,476
464,722 116,504,651
184,022
-
-
280,700
2,260,368 1,524,089,788
1,662,915 1,304,711,821
597,453 251,232,889
- (31,854,922)
-
-
-
29,416,696
Net book value 196,789,350 1,146,638,808
4,969,544
-
23,468,764
-
756,489
-
550,923
-
718,022
-
2,066,880
-
414,015
-
29,416,696
1,795,646 1,378,168,441
-
Beginning of the
financial year
- 38,500,000
-
-
-
-
-
-
-
- 38,500,000
Charge for the
financial year
-
-
-
-
-
-
-
-
-
-
Disposals-
(9,083,304)--------
(9,083,304)
Accumulated
impairment loss
46,755,838
-
(1,717,082)
-
-
-
96,989,746
51,950,990
-
Beginning of the
financial year
Charge for the
financial year
Reclassifications
Disposals
486,780
5,846,897
End of the financial year 196,789,350 1,273,045,250
Accumulated
depreciation
3,947,597
2,486,824
(587,524)
-
Beginning of the
financial year 106,111,476 1,155,498,075
Additions 103,255,633 134,610,425
Disposals
- (29,641,009)
Reclassifications (12,577,759) 12,577,759
Cost
At 31 December 2014
Vessel Drydocking
Motor
Office
Furniture
construction
Vessels
parts expenditure
Building
vehicles equipment Computers and fittings Renovation
Total
RM RMRMRMRMRMRMRMRMRM RM
Vessels under
Group
13 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
2015 ANNUAL REPORT
119
13 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
(i)Included in the property, plant and equipment are motor vehicles and office equipment which were
acquired by means of finance lease arrangements with net carrying amounts of RM34,134 (2014: RM44,438).
(ii)Borrowing costs amounting to RM926,007 (2014: RM4,075,414) were capitalised as vessels under construction
during the financial year.
(iii) All the vessels have been charged to secure against the borrowings granted to the Group as disclosed in Note 22.
(iv)Drydocking expenditure accrued of RM8,357,451 (2014: RM4,254,937) was capitalised as at the financial
year ended 31 December 2015.
(v) As a result of the decline in vessel utilisation and charter rates, the Group recognised an impairment loss
of RM195,373,000 on certain vessels during the financial year based on the total recoverable amount of
RM712,226,790 determined based on the higher of fair value less costs of disposal (“FVLCOD”) or VIU. The
Group considered each vessel as a cash-generating unit. They are grouped together for disclosure purpose.
The fair values of the vessels have been assessed by independent professional valuers.The valuation of the
vessels was performed by an independent valuer using the market approach, including consideration of
the recent market transaction of vessels of similar type and age. Costs of disposal were determined at 1%
of total costs of vessels (2014: 1% of total costs of vessels) and reflect management’s expectations based on
past experience with disposal of assets and industry benchmarks.
The key assumptions used in the VIU calculations are as follows:
•
•
•
The cash flows projection is based on the remaining useful lives of the vessels;
Utilisation rates and charter rates are based on past performance, management’s expectation of market
development and weighted average growth rates that are consistent with forecasts included in industry
reports;
Discount rate of 12.0% (2014: 12.5%) is applied.
The discount rates used are pre-tax and reflect specific risks relating to the CGUs. The discount rates applied
to the cash flow projections are derived from the cost of capital plus a reasonable risk premium at the date
of assessment of the CGUs. The Group had taken into consideration the current depressed market conditions
in the oil and gas industry in the cash flow projections, which include lower forecasted vessel utilisation and
charter rates.
Sensitivity to changes in assumptions
Changing the assumptions selected by management could significantly affect the Group’s results. The Group’s
review includes the sensitivity of key assumptions to the cash flow projections. Fluctuation in utilisation rate and
charter rate by 5% will not have significant impact to the profit or loss.
14 INTANGIBLE ASSETS
Acquired
charter
Goodwillcontracts
Total
RMRMRM
Group
At 31 December 2015
Cost
Beginning/end of the financial year
180,643,348 44,880,000225,523,348
Accumulated amortisation
Beginning of the financial year
Amortisation charge during the financial year
- (41,748,000)(41,748,000)
- (3,132,000)(3,132,000)
- (44,880,000)(44,880,000)
Accumulated impairment loss
Impairment charge during the financial year
--(180,643,348)
-(180,643,348)
(180,643,348)
-(180,643,348)
Net book value
---
At 31 December 2014
Cost
Beginning/end of the financial year
180,643,348
44,880,000
225,523,348
Accumulated amortisation
Amortisation charge during the financial year
-
-
(29,989,333)
(11,758,667)
(29,989,333)
(11,758,667)
-
(41,748,000)
(41,748,000)
3,132,000
183,775,348
Net book value
180,643,348
2015 ANNUAL REPORT
121
14 INTANGIBLE ASSETS (CONTINUED)
Acquired charter contracts
Amortisation of acquired charter contracts is included in other expenses in the statements of comprehensive
income.
Goodwill
Goodwill represents the excess of cost of acquisition over the fair value of the net assets of acquisitions of its
subsidiaries during the financial year ended 31 December 2012.
The goodwill acquired is reviewed for impairment annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired. For impairment testing purposes, goodwill is monitored by
management based on a group of CGUs which represent the Group’s overall ship operation business.
The recoverable amount of the Group’s CGUs for assessment of goodwill impairment was determined based on
the higher of fair value less costs of disposal (“FVLCOD”) or VIU. The valuation of the vessels was performed by
an independent valuer using the market approach, including consideration of the recent market transaction of
vessels of similar type and age. The valuation technique is therefore classified as level 2 measurement of the fair
value hierarchy.
Costs of disposal were determined at 1% of total costs of vessels (2014: 1% of total costs of vessels) and reflect
management’s expectations based on past experience with disposal of assets and industry benchmarks.
•
development and weighted average growth rates that are consistent with forecasts included in industry reports;
Discount rate of 12.0% (2014: 12.5%) is applied; and
Terminal growth rate of 3.0% (2014: 3.0%) is applied.
•
•
The discount rates used are pre-tax and reflect specific risks relating to the CGUs. The discount rates applied
to the cash flow projections are derived from the cost of capital plus a reasonable risk premium at the date of
assessment of the CGUs. The Group had taken into consideration the current depressed market conditions in the
oil and gas industry in the cash flow projections, which include lower forecasted vessel utilisation and charter rates.
As of 31 December 2015, the Group had concluded that the entire carrying value of goodwill of RM180,643,348
was not recoverable, and correspondingly recorded an impairment charge of RM180,643,348 against the carrying
value of goodwill during the financial year.
15 INVESTMENT IN A JOINT VENTURE
Group
20152014
RMRM
Unquoted shares, at cost
Share of post-acquisition reserves
4,132,742
4,132,742
99,74836,119
4,232,4904,168,861
At 1 January
Share of profit
36,11963,62936,119
At 31 December
99,74836,119
The joint venture listed below has share capital consisting solely of ordinary shares, which is held indirectly by a
subsidiary of the Company.
Details of the jointly controlled entity are as follows:
Name of company
Principal activities
Group’s effective interest
Country of
31.12.201531.12.2014
incorporation
%%
Icon-FOB Holdings (L) Inc.*
Icon-FOB 1 (L) Inc.*
Leasing of vessels
Leasing of vessels
51
51
51
51
Malaysia
Malaysia
* Audited by PricewaterhouseCoopers (“PwC”), Malaysia.
Icon FOB Holdings (L) Inc is a private company, with financial year end of 31 December, and there is no quoted
market price available for its shares. There are no commitments and contingent liabilities relating to the Group’s
interest in the joint venture.
Summarised financial information for joint venture
Set out below are the summarised financial information for Icon-FOB Holdings (L) Inc. group which is accounted
for using the equity method:
Group
20152014
RMRM
Assets and liabilities
Current
Cash and cash equivalents
Other current assets
2,198
10,722,250
166,323
11,220
Total current assets
10,724,448
177,543
2015 ANNUAL REPORT
123
15 INVESTMENT IN A JOINT VENTURE (CONTINUED)
Group
20152014
RMRM
Assets and liabilities (continued)
Current (continued)
Current financial liabilities Other current liabilities
(2,425,449)(3,799,834)
-
(54,976)
Total current liabilities
(2,425,449)
(3,854,810)
Non-current
Assets-
11,851,504
Net assets
8,298,999
8,174,237
Summarised statement of comprehensive income
Group
20152014
RMRM
Profit from continuing operations
Income tax expense
144,762
110,821
(20,000)(40,000)
Profit/total comprehensive income for the financial year
124,762
70,821
Reconciliation of the summarised financial information presented to the carrying amount of its interest in the
joint venture.
Group
20152014
RMRM
Opening net assets/(liabilities) at 1 January
Issuance of ordinary shares
Profit for the financial year
8,174,237
-
124,762
(28,313)
8,131,729
70,821
Closing net asset
8,298,999
8,174,237
Post-acquisition interest in joint venture at 51%
4,232,4904,168,861
Carrying value
4,232,4904,168,861
16 INVESTMENT IN SUBSIDIARIES
Company
20152014
RMRM
Unquoted shares, at cost
Amounts due from subsidiaries
489,327,819
489,327,819
380,430,111339,894,979
869,757,930
829,222,798
Less: Impairment loss
(180,643,348)
689,114,582
829,222,798
The advances are unsecured and is non-interest bearing with no fixed terms of repayment. The Company does
not currently anticipate any repayment of the advances. These advances have been treated as extension of its
investment in subsidiaries.
Impairment assessment of investment in subsidiaries
During the financial year ended 31 December 2015, the Group had performed an impairment assessment of
the carrying value of the investment in subsidiaries. The recoverable amount of the Company’s subsidiaries for
assessment of impairment was determined based on the higher of fair value less costs of disposal (“FVLCOD”) or
VIU. The Company’s subsidiaries principal activities are vessels owning/leasing and provision of vessels chartering
and ship management services.
For the purpose of determining the fair value of the investment in subsidiaries, the valuation of the vessels was
performed by an independent valuer using the market approach, including consideration of the recent market
transaction of vessels of similar type and age. The valuation technique is therefore classified as level 2 measurement
of the fair value hierarchy.
Costs of disposal were determined at 1% of total costs of vessels (2014: 1% of total costs of vessels) and reflect
management’s expectations based on past experience with disposal of assets and industry benchmarks.
•
development and weighted average growth rates that are consistent with forecasts included in industry reports;
Discount rate of 12.0% (2014: 12.5%) is applied; and
Terminal growth rate of 3.0% (2014: 3.0%) is applied.
•
•
The discount rates used are pre-tax and reflect specific risks relating to the CGUs. The discount rates applied to the
cash flow projections are derived from the cost of capital plus a reasonable risk premium at the date of assessment
of the CGUs. The Group had taken into consideration the current depressed market conditions in the oil and gas
industry in the cash flow projections, which include lower forecasted vessel utilisation and charter rates.
As of 31 December 2015, the Group had concluded that the investment in subsidiaries is impaired by RM180,643,348,
and correspondingly recorded an impairment charge of RM180,643,348 against the carrying value of investment in
subsidiaries for the financial year ended 31 December 2015.
2015 ANNUAL REPORT
125
16 INVESTMENT IN SUBSIDIARIES (CONTINUED)
The details of the Company’s subsidiaries which are incorporated in Malaysia, are as follows:
Country of
The Company’s effective interest
Names of subsidiaries
incorporation Principal activities
2015
2014
%%
Direct subsidiaries
Icon Ship Management
Malaysia
Sdn. Bhd.
Ship management services to the oil and gas
and related industries
100
100
Icon Fleet Sdn. Bhd.
Malaysia
Investment holding
100
100
Icon Offshore Group
Malaysia
Sdn. Bhd.
Provision of services for
the oil and gas industry
100
100
Omni Marine Sdn. Bhd.
Malaysia
Vessel owner, operator and
provision of vessel services
for the oil and gas industry
100
100
Omni Triton Sdn. Bhd.
Malaysia
Dormant
100
100
Omni Power Sdn. Bhd.
Malaysia
Dormant
100
100
Omni Ventures Sdn. Bhd.
Malaysia
Dormant
100
100
Omni Offshore (L) Inc.#
Malaysia
Leasing of vessels
100
100
Omni Emery (L) Inc.#
Malaysia
Leasing of vessels
100
100
Omni Flotilla (L) Inc.#
Malaysia
Leasing of vessels
100
100
Omni Victory (L) Inc.#
Malaysia
Leasing of vessels
100
100
Omni Marissa (L) Inc.#
Malaysia
Leasing of vessels
100
100
Omni Stella (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Azra (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Samudera (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Ikhlas (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Zara (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Waja (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Corridor (L) Inc. #
Malaysia
Leasing of vessels
100
100
Icon Ocean (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Puteri 1 (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Puteri 2 (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Dawai (L) Inc.#
Malaysia
Leasing of vessels
100
100
Indirect subsidiaries
The details of the Company’s subsidiaries which are incorporated in Malaysia, are as follows: (continued)
Country of
The Company’s effective interest
Names of subsidiaries
incorporation Principal activities
2015
2014
%%
Indirect subsidiaries (continued)
Icon Huma (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Sari (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Biru 1 (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Biru 2 (L) Inc.#
Malaysia
Leasing of vessels 100
100
Icon Dahan 1 (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Dahan 2 (L) Inc.#
Malaysia
100
Icon Pinang 1 (L) Inc.#
Malaysia
Leasing of vessels
100
100
Malaysia
Leasing of vessels
100
100
Malaysia
Leasing of vessels
100
100
Malaysia
Leasing of vessels
100
100
Icon Piai 1 (L) Inc.#
Malaysia
100
Icon Piai 2 (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Gaya (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Tigris (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Lotus (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Sophia (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Kayra (L) Inc.#
Malaysia
Leasing of vessels
100
100
Icon Maritime Training Centre
Sdn. Bhd. Malaysia
Maritime training
100
100
ICON Bahtera (B) Sdn. Bhd.+$ Brunei
Leasing of vessels
51
100
Icon Aliza (L) Inc.#&
Malaysia
Leasing of vessels
100
100
ICON Pioneer (L) Inc. #&
Malaysia
Leasing of vessels
100
100
ICON Astrid (L) Inc. #&
Malaysia
Leasing of vessels
100
100
ICON Andra (L) Inc. #&
Malaysia
Leasing of vessels
100
100
ICON Explorer (L) Inc. #&
Malaysia
Dormant
100
100
#
&
+
$
Incorporated in the Federal Territory of Labuan, under the Labuan Companies Act, 1990.
These entities have yet to commence operations.
Audited by a firm other than PwC.
Ownership interest held by non-controlling interest is 49% (2014: nil).
2015 ANNUAL REPORT
127
Set out below is summarised financial information for Icon Bahtera (B) Sdn. Bhd. that has non-controlling interest that
is material to the group. The amounts disclosed are before inter-company eliminations.
Group
2015
RM
Summarised statement of financial position
Current assets
41,894,068
Current liabilities
(38,321,313)
Current net assets
3,572,755
Non-current assets
130,038,986
Non-current liabilities
(127,945,860)
Non-current net assets
2,093,126
Net assets
5,665,881
Accumulated non-controlling interest
1,233,623
Summarised statement of comprehensive income
Group
2015
RM
Revenue
65,364,029
Profit for the period
2,526,339
Other comprehensive income
1,361,302
Total comprehensive income for the financial year
3,887,641
Profit allocated to non-controlling interest
798,315
Summarised statement of cash flows
Group
2015
RM
Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Effect of exchange rate changes 9,156,938
(130,943,600)
131,607,426
350,549
Net increase in cash and bank balances 10,171,313
On 19 October 2015, pursuant to the completion of joint venture agreement between Icon Fleet Sdn. Bhd. (“Icon
Fleet”), a wholly-owned subsidiary of Icon Offshore Berhad and Zell Transportation Sdn. Bhd. (“ZT”) for Icon Bahtera
(B) Sdn. Bhd. (“Icon Bahtera”), the issued and paid up capital of Icon Bahtera was increased from RM258 to
RM306,224 by way of allotment and issuance of 99,000 new ordinary shares of BND 1.00 each at par value of
which 50,900 new ordinary shares were subscribed by Icon Fleet. As a result, Icon Fleet now holds 51% of ownership
interest in Icon Bahtera whilst ZT holds the remaining 49%. Icon Bahtera remains a subsidiary of the Company.
17 DEFERRED TAXATION
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when deferred taxes relate to the same tax authority. The following amounts,
determined after appropriate offsetting, are shown in the statements of financial position.
Group
Company
2015201420152014
RMRMRMRM
Deferred tax assets
- recoverable after more than 12 months - recoverable within 12 months
40,679,831 5,910,191
42,726,132
2,461,955
---
- to be settled after more than 12 months
- to be settled within 12 months
(1,748,794)
(115,919)
(1,076,959)
(526,800)
---
Deferred tax assets (net)
44,725,309
43,584,328
-
45,284,848
3,649,246
702,677
46,266,885-404,297
-1,075,809
--
-
Subject to income tax:
Deferred tax assets
- property, plant and equipment
- unused tax losses
- provisions
Offsetting
(3,046,749)
(2,558,904)
--
Deferred tax assets (after offsetting)
46,590,022
45,188,087
--
- property, plant and equipment
- intangible assets
(4,911,462)
-
(3,379,828)
(782,835)
---
Offsetting
3,046,749
2,558,904
Deferred tax liabilities (after offsetting)
(1,864,713)
(1,603,759)
---
2015 ANNUAL REPORT
129
17 DEFERRED TAXATION (CONTINUED)
The movements during the financial year relating to deferred taxation are as follows:
GroupCompany
2015201420152014
RMRMRMRM
Beginning of financial year
43,584,328
39,042,206
--
Credited to profit or loss (Note 10):
- property, plant and equipment (Malaysia)
- property, plant and equipment (Brunei)
- intangible assets
- unutilised tax losses
-
1,602,455
-5,373,677--782,835
2,939,667
-3,244,949---
Charged to profit or loss (Note 10):
- property, plant and equipment (Malaysia)
- provisions
(7,887,349)- -(373,131)- --
Deferred tax assets
(after offsetting)
44,725,309
43,584,328
--
The deferred tax assets recognised during the financial year ended 31 December 2015 include an amount of
RM5,400,000 (2014: Nil) which relates to carried forward tax losses of Icon Ship Management Sdn. Bhd. and Icon
Offshore Group Sdn. Bhd.. The subsidiaries have incurred the losses during the financial year following depressed
market conditions in the oil and gas industry. The Group had concluded that the deferred assets will be recoverable
using the estimated future taxable income based on the approved business plans and budgets for the subsidiaries.
The subsidiaries are expected to generate taxable income from 2016 onwards. The losses can be carried forward
indefinitely and have no expiry date.
The amount of unutilised capital allowances and unutilised tax losses (both of which have no expiry date) of the
Company’s subsidiaries, for which no deferred tax asset is recognised in the statements of financial position as it
is not probable that taxable profit will be available against which these temporary differences can be utilised are
as follows:
GroupCompany
2015201420152014
RMRMRMRM
Unutilised capital allowances
Unutilised tax losses
20,394,365
1,311,169
20,330,555
109,155
---
18 TRADE AND OTHER RECEIVABLES
GroupCompany
2015201420152014
RMRMRMRM
Trade receivables
68,927,417
74,588,472
Other receivables
6,680,21114,197,089
Prepayments
5,480,718
3,290,356
--420,389
342,025
81,088,346
92,075,917
420,389
342,025
Group
20152014
RMRM
Trade and other receivables
Trade receivables
70,910,251
75,645,240
Other receivables
6,680,21114,431,407
Less: Impairment of receivables
(1,982,834)
(1,291,086)
75,607,628
88,785,561
Trade receivables are denominated in Ringgit Malaysia, Brunei Dollar and US Dollars.
The credit term of trade receivables ranges from 30 to 60 days (2014: 30 to 60 days).
Ageing analysis of trade and other receivables
As at the end of the financial year, the trade and other receivables ageing is as follows:
Group
20152014
RMRM
47,741,439 18,282,393 4,235,300 5,348,496 46,345,300
15,423,807
25,009,694
2,006,760
75,607,628
Impaired
1,982,834
88,785,561
1,291,086
Neither past due nor impaired
One month past due but not impaired
Two to six months past due but not impaired
More than six months past due but not impaired
77,590,46290,076,647
2015 ANNUAL REPORT
131
18 TRADE AND OTHER RECEIVABLES (CONTINUED)
Trade and other receivables that are neither past due nor impaired
one of the Group’s trade receivables and other receivables that are neither past due nor impaired have been
N
renegotiated during the financial year.
Trade receivables that are past due but not impaired
ased on past experience and no adverse information to date, the Directors of the Group are of the opinion that
B
no impairment is necessary in respect of these balances as there has not been a significant change in the credit
quality and the balances are still considered fully recoverable.
Trade receivables that are impaired
Group
20152014
RMRM
Trade receivables - nominal amounts
Less: Impairment of receivables
1,982,834
(1,982,834)
1,291,086
(1,291,086)
-Movement in impairment of receivables:
Written off during the financial year
Charge during the financial year
Reversal during the financial year
1,291,086
4,563,922
(77,464)
(1,400,322)
1,003,530316,790
(234,318)
(2,189,304)
1,982,834
1,291,086
Impairment of trade receivable are individually determined by the Group and the Company. The individually
impaired trade receivables mainly relate to customers which are in difficult economic situations. These receivables
are not secured by collateral.
19 AMOUNTS DUE TO SUBSIDIARIES
Amounts due to subsidiaries are unsecured, interest-free and repayable on demand.
20 CASH AND BANK BALANCES
GroupCompany
2015201420152014
RMRMRMRM
Fixed deposits with licensed banks
Bank balances
Cash in hand
11,921,152
83,314,848
118,013
8,750,301
65,951,048
116,856
-
25,908,450
2
Less: Deposits pledged as security
95,354,013
(12,245,043)
74,818,205
(6,283,478)
25,908,452
34,193,057
--
Cash and cash equivalents
83,108,970
68,534,727
25,908,452
10,510,862
23,682,193
2
34,193,057
The interest rates of deposits of the Group at the reporting date range from 2.70% to 3.21% per annum (2014: 2.75%
to 3.60%).
21 TRADE AND OTHER PAYABLES
GroupCompany
2015201420152014
RMRMRMRM
Trade payables
9,385,336
12,403,199
Other payables
41,142,590
4,027,394
Accruals
25,768,039
13,325,331
-220,774
858,573
977,527-
76,295,965
29,755,924
1,198,301
858,573
T he total trade and other payables are mainly denominated in Ringgit Malaysia with credit terms of 30 days
(2014: 30 days).
2015 ANNUAL REPORT
133
22BORROWINGS
Group
20152014
RMRM
Current:
Bank borrowings
- term loans
- revolving credit (Commodity Murabahah Financing-i) Redeemable preference shares
141,853,623
129,400,093
30,014,5489,209,512
67,151
77,506
181,144,834
Non-current:
Bank borrowings - term loans
129,477,599
541,828,849
538,939,626
43,46866,149
541,872,317
539,005,775
Total borrowings
723,017,151668,483,374
22 BORROWINGS (CONTINUED)
T he table below shows the carrying amounts and fair value of the borrowings, by valuation method. The different
levels have been defined as follows:
Level 1:Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2:Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3:Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair value of the borrowings are estimated using the income approach, by discounting the cash flows based
on the market interest rates of a comparable instrument. This is a Level 2 fair value measurement.
Carrying amount
Fair value
2015201420152014
RMRMRMRM
Group
Fixed rate term loans
253,304,956
189,721,045
256,316,274
191,261,072
The range of interest/profit rates (per annum) are as follows:
Group
20152014
%
%
Term loans
4.09 - 6.59
Revolving credit
5.90 - 6.15
3.00 - 7.75
6.21
2015 ANNUAL REPORT
135
Floating rate varying based
on cost of funds
Fixed rates depending on
disbursement of tranches - term loans
668,339,719
478,618,674 189,721,045 129,400,093
82,907,460 46,492,633 127,099,944
84,688,194 42,411,750 274,766,389
201,777,490 72,988,899 137,073,293
109,245,530
27,827,763
Total carrying
Maturity profile
At 31 December 2014 Interest/profit rate terms
amount
< 1 year
1 - 2 years
2 - 5 years
> 5 years
RMRMRMRMRM
Secured:
722,906,532181,077,683130,582,038275,118,063136,128,748
30,014,548
30,014,548---
Revolving credit
9,209,512
9,209,512---
Redeemable
Preference Shares
Total carrying
Maturity profile
At 31 December 2015 Interest/profit rate terms
amount
< 1 year
1 - 2 years
2 - 5 years
> 5 years
RMRMRMRMRM
Secured:
- term loans
Fixed rates depending on
disbursement of tranches 253,304,95655,738,72544,669,494
111,216,76441,679,973
Floating rate varying based
on cost of Funds
430,377,516 86,114,89885,912,544
163,901,29994,448,775
Group
The term loans were secured as follows (either single security or combination of securities):
(i)
(ii)
(iii)
(iv)
(v)
Fixed charges over vessels.
Assignment of insurance policies for the vessels charged in (i) above.
Assignment of charter proceeds for the vessels charged in (i) above.
Assignment of ship building contracts for the vessels charged in (i) above.
Corporate guarantee by Icon Offshore Berhad and Icon Fleet Sdn. Bhd.
The term loans facilities were arranged to finance the construction and purchase of vessels for the Group.
s at 31 December 2015, the Group has provided bank guarantees, tender bonds and bid bonds amounting to
A
RM9,040,848 primarily due to the tendering of new contracts and as financial guarantee for the performance of
our charter contracts by our subsidiaries.
Group
2015
2014
RM
RM
Minimum lease payment:
- Not later than 1 year
- Later than 1 year and not later than 5 years
80,194
55,584 95,168
91,533
135,778186,701
Future finance charges
(25,159)(43,046)
Present value of finance lease liabilities
Principal portion payables:
- Not later than 1 year
- Later than 1 year and not later than 5 years
Present value of finance lease liabilities
110,619
143,655
67,151
77,506
43,468 66,149
110,619
143,655
2015 ANNUAL REPORT
137
23 SHARE CAPITAL AND SHARE PREMIUM
SHARE CAPITAL
Group/Company
20152014
RMRM
Authorised:
Ordinary shares of RM0.50 each:
Created during the financial year
1,497,000,000
597,000,000
-900,000,000
1,497,000,0001,497,000,000
RCPS-i of RM0.01 each:
Beginning/End of the financial year
3,000,0003,000,000
Issued and fully paid:
Ordinary shares of RM0.50 each:
Issued during the financial year at RM0.50 each
pursuant to:
IPO
RCPS- i conversion to ordinary shares
588,592,550
257,720,050
-
-
110,872,500
220,000,000
588,592,550
588,592,550
SHARE PREMIUM
Group/Company
20152014
RMRM
Share premium on ordinary shares pursuant to IPO
Listing expenses capitalised
Share premium upon RCPS- i conversion to ordinary shares
311,210,080-
299,355,750
-
(8,115,445)
-
19,969,775
311,210,080
311,210,080
The Company was listed on the Main Market of Bursa Malaysia Securities Berhad on 25 June 2014 after an Offer for
Sale of approximately 289.02 million Offer Shares and the IPO of approximately 221.75 million. Total gross proceeds
of approximately RM410.23 million were raised from the IPO.
24 CAPITAL COMMITMENTS
Group
20152014
RMRM
Approved and contracted for:
Property, plant and equipment
153,322,115
278,243,175
25 SIGNIFICANT RELATED PARTY TRANSACTIONS
Parties are considered related if the party has the ability to control the other party or exercise significant influence
over the other party in making financial or operational decisions.
The Group is controlled by Yayasan Ekuiti Nasional, a foundation incorporated in Malaysia formed by the Malaysian
Federal Government.
(i) The related parties and their relationships with the Company, are as follows:
Related parties
Relationship
Yayasan Ekuiti Nasional
Hallmark Odyssey Sdn. Bhd.
E-Cap (Internal) One Sdn. Bhd.
Icon Ship Management Sdn. Bhd.
Icon Fleet Sdn. Bhd.
Ultimate holding foundation
Immediate holding company
Intermediate holding company
Subsidiary
Subsidiary
Key management personnel
Key management personnel of the Group comprise members of the senior leadership team who are directly
responsible for the financial and operating policies and decisions of the Group and the Company. The
remuneration of key management personnel paid by the Group and the Company during the financial year
was as follows:
GroupCompany
2015201420152014
RMRMRMRM
2,325,769
441,907
2,716,550
516,148
2,767,676
3,541,694
2,767,676
3,232,698
Salaries and bonus
Defined benefit plan
2,325,769
441,907
2,985,146
556,548
In the financial year ended 31 December 2014, employees of the Group received payments of RM76.8 million
from the ultimate holding foundation pursuant to a cash bonus management incentive plan linked to the
achievement of set targets determined at the point of investment by the ultimate holding foundation in the
Company. Included in the amounts were RM68 million paid for key management personnel.
2015 ANNUAL REPORT
139
25 SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
(ii) Significant related party transactions
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are
other significant related party transactions. The related party transactions described below were carried out
on terms and conditions agreed with related parties.
Company
20152014
RMRM
Interest income from a subsidiary
-
1,283,550
Advances from Icon Offshore Group Sdn. Bhd.
(36,872,296)
Advances to Icon Fleet Group
20,049,447
Advances to Icon Ship Management Sdn. Bhd.
20,485,685160,049,716
(4,382,726)
139,650,360
(iii) Significant related party balances
Included in the Group’s and the Company’s statements of financial position are the following significant
related party balances arising from normal business transactions:
Company
20152014
RMRM
Amount due to subsidiaries
41,255,022
4,382,726
The transactions have been entered into in the normal course of business at terms mutually agreed between
the parties.
Apart from the transactions disclosed above, the Group has entered into transactions that are collectively, but
not individually significant with other government-related entities. These transactions include vessel chartering,
drydocking expenditure and repairs and maintenance. They are conducted in the ordinary course of the
Group’s business on terms consistently applied in accordance with the Group’s internal policies and processes.
26 FINANCIAL INSTRUMENTS BY CATERGORY
Analysis of the financial instruments for the Group and the Company are as follows:
GroupCompany
2015201420152014
RMRMRMRM
Financial assets - Loans and
receivables:
Trade receivables
Other receivables excluding
prepayments
68,927,417
74,588,472
--
6,602,662 14,197,089
-95,354,013 74,818,205
25,908,452
34,193,057
170,884,092 163,603,766
25,908,452
34,193,057
Financial liabilities at amortised
costs:
Trade payables
9,385,336
12,403,199
-Other payables and accruals
66,118,887
17,352,725
1,198,301
858,573
Borrowings
723,017,151668,483,374
-Finance lease liabilities
110,619
143,655
-Amount due to subsidiaries
--
41,255,022
4,382,726
798,631,993 698,382,953
42,453,323
5,241,299
27 APPROVAL OF FINANCIAL STATEMENTS
The financial statements have been authorised for issue in accordance with a resolution of the Board of Directors
dated 4 April 2016.
2015 ANNUAL REPORT
141
28 DISCLOSURE OF REALISED AND UNREALISED RETAINED PROFITS
The following analysis is prepared in accordance with Special Matter No. 1, Determination of Realised and
Unrealised Profits or Losses in the context of disclosure pursuant to Bursa Malaysia Securities Berhad Listing
Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa
Malaysia Securities Berhad.
The breakdown of retained profits of the Group as at the balance sheet date, into realised and unrealised profits,
pursuant to the directive, is as follows:
GroupCompany
2015201420152014
RMRMRMRM
Total retained profits/(accumulated losses)
- Realised
- Unrealised
74,859,050
398,947,127
(226,803,367)
(41,288,549)
42,283,43143,067,876
--
117,142,481
442,015,003
(226,803,367)
(41,288,549)
Total share of profit from a joint venture:
- Realised
63,62936,119
-
117,206,110
442,051,122
(226,803,367)
(41,288,549)
Less: Consolidation adjustments
(300,294,775) (261,053,056)
-Total retained profit/(accumulated
losses) as per financial statements
(183,088,665)180,998,066(226,803,367)
(41,288,549)
SUPPLEMENTAL INFORMATION
The Group presents selected adjusted financial information or components of the Group consolidated statements of
comprehensive income for the financial year ended 31 December 2015 and 31 December 2014, adjusting for certain
exceptional items.
This section is to provide a better and fairer understanding of our financial performance relating thereto.
(i) Adjustments relating to the acquisition of Icon Ship Management Sdn. Bhd. (“ICON Ship”) and acquisition of Icon
Fleet Sdn. Bhd. (“ICON Fleet”)
(a) Amortisation of intangible assets relating to acquired charter contracts
The Company is required to recognise all the identifiable assets and liabilities of ICON Fleet and ICON Ship,
based on a purchase price allocation exercise as at the acquisition date of the acquisition of ICON Ship and
acquisition of ICON Fleet. The purchase price allocation exercise includes measurement of the assets and
liabilities that were not previously recognised by ICON Ship and ICON Fleet such as intangible assets and also
to measure the identifiable assets and liabilities at their respective fair values.
Based on the purchase price allocation exercise for the acquisition of ICON Ship and acquisition of ICON
Fleet, the charter contracts of ICON Ship and ICON Fleet have been separately identified and measured at
fair value, and have also been recognised as intangible assets on the respective acquisition dates. The fair
value of the charter contracts is the present value of the net cash flows from the remaining contract period
of the respective charter contracts as at the acquisition date after deducting the corresponding estimated
operation costs. The acquired charter contracts have a finite useful life and the recognised fair value of these
contracts is required to be amortised using a straight-line method over the remaining contract periods which
range from one year to four years from acquisition date.
The Group do not expect to recognise additional intangible assets pursuant to these acquisitions. Also, given
that the acquired charter contracts have a finite useful life, the carrying amount of the intangible assets were
fully amortised by the end of fourth quarter of financial year ended 31 December 2015.
(b) RCPS-i profit rate
The RCPS-i were issued after the completion of the acquisition of ICON Ship and according to the terms of
the RCPS-i, the RCPS-i will only be redeemed at 110% of its issue price if our Listing does not happen within
two years from the date of issuance. In other words, the actual RCPS-i profit rate will only be payable in the
event the RCPS-i are redeemed. Since all the RCPS-i were mandatorily converted into our Shares on 23 May
2014 following the receipt of all relevant authorities’ approvals for our IPO, the profit rate on the RCPS-i was
not payable in cash.
The accrued amount of the RCPS-i profit rate recognised in our financial statements has been reversed and
reclassified to equity following the conversion of all the RCPS-i into Ordinary Shares on 23 May 2014.
2015 ANNUAL REPORT
143
(CONTINUED)
This section is to provide a better and fairer understanding of our financial performance relating thereto. (continued)
(ii) Adjustments relating to the strategic consolidation and subsequent review of the Group business plan.
In consequent of the strategic consolidation, the Group undertook an overall review of our fleet whereupon the
Group decided to focus on newer and higher technical specification OSV (being vessels with at least 5,000 BHP
and above, and/or equipped with at least a DP2 system) which led to the divestment of our non-OSV, lower
technical specification and older OSVs.
a. Disposal of OSV
The Group had disposed two (2) lower technical specification vessels which gave rise to a total gain on
disposal of RM4.7 million in the financial year ended 2014 and the tax impact on the proceed on disposal of
these vessels was RM3.1 million.
(iii) IPO related expenses
For the financial year ended 31 December 2014, the Group incurred IPO related expenses amounted to RM14.6
million and the Group utilised RM124.0 million of the IPO proceeds for repayment of bank borrowings where the
transaction cost of the respective borrowings were written off, in accordance with accounting standards, of
RM5,168,974.
(iv) Adjustments relating to the drastic change in economic condition within the oil and gas industry.
a. Impairment loss on vessels
Impairment loss on vessels were recognised for the financial year ended 31 December 2015 amounted to
RM195.4 million and the tax impact on the impairment on fair value of vessels on consolidation was RM9.8
million.
b. Impairment loss on goodwill
Impairment loss on goodwill were recognised for the financial year ended 31 December 2015 amounted to
RM180.6 million.
c.
Change in accounting estimate for residual value of vessels
Change in accounting estimate of vessels’ residual value from 10% of cost to 5% of cost resulted to RM1.1
million additional depreciation recognised for the financial year ended 31 December 2015.
(CONTINUED)
The table below sets out our Group’s (loss)/profit after taxation (“(LAT)/PAT”) after excluding the abovementioned adjustments:
Group
2015 2014 RMRM
(LAT)/PAT
Gain on disposal of OSV
(363,288,416)
-
59,354,139
(4,688,734)
Other expenses:
- Amortisation of intangible assets
3,132,000
11,758,667
195,373,000
- Impairment loss on goodwill
180,643,348
- IPO related expenses (including auditors’ remuneration)
-
14,655,481
- Transaction costs written off
-
5,168,974
Profit rate of RCPS-i
-
4,346,774
Change in accounting estimate for residual value of vessels
1,102,293
-
Tax effect relating to:
- Amortisation of intangible assets
- Disposal of OSV
- Impairment on fair value of vessels on consolidation
(783,000)
-
9,848,260
Adjusted PAT
26,027,485
(2,939,667)
3,091,390
90,747,024
The table below sets out a reconciliation of our Group’s (LAT)/PAT to Earnings before Interest, Tax, Depreciation and
Amortisation (“EBITDA”) and Adjusted EBITDA:
Group
2015 2014 RMRM
(LAT)/PAT
Taxation
(363,288,416)
(272,794)
59,354,139
(2,953,682)
Profit before taxation
Finance costs
Depreciation
Amortisation of intangibles assets
Share of profit from a joint venture
(363,561,210)
36,996,193
65,719,917
3,132,000
(63,629)
56,400,457
50,137,941
56,573,067
11,758,667
(36,119)
EBITDA
(257,776,729)
Gain on disposal of OSV
174,834,013
(4,688,734)
- IPO related expenses (including auditors’ remuneration)
Tax effect relating to:
- Impairment on fair value of vessels on consolidation
Other expenses:
- Impairment loss on goodwill Adjusted EBITDA
-
14,655,481
9,848,260
-
195,373,000
180,643,348
-
128,087,879
184,800,760
2015 ANNUAL REPORT
145
LIST OF VESSELs
BRAKE HORSE
NO.
VESSEL NAME
VESSEL TYPE
POWER (BHP)
1
TANJUNG DAHAN 1
AHTS
5,444
2
TANJUNG DAHAN 2
AHTS
5,444
3
TANJUNG PUTERI 1
AHTS
5,444
4
TANJUNG PUTERI 2
AHTS
5,444
5
TANJUNG BIRU 1
AHTS
5,220
6
TANJUNG BIRU 2
AHTS
5,220
7
TANJUNG DAWAI
AHTS
5,444
8
TANJUNG SARI
AHTS
5,444
9
TANJUNG HUMA
AHTS
5,428
10
OMNI VICTORY
AHTS
8,000
11
OMNI GAGAH
AHTS
5,500
12
OMNI PERKASA
AHTS
5,500
13
OMNI MARISSA
AHTS
5,220
14
OMNI STELLA
AHTS
5,220
15
OMNI TIGRIS
AHTS
5,220
16
ICON AZRA
AHTS
5,150
17
ICON SAMUDERA
AHTS
5,150
18
ICON IKHLAS
AHTS
5,150
19
ICON ZARA
AHTS
5,150
20
ICON LOTUS
AHTS
5,150
21
ICON SOPHIA
AHTS
5,150
22
OMNI ANTEIA
AHT/UTILITY
5,220
23
OMNI EMERY 1
AHT/UTILITY
4,200
24
OMNI AKIRA
AHT/UTILITY
3,200
25
TANJUNG PINANG 1
SSV
5,110
26
TANJUNG PINANG 2
SSV
5,110
27
TANJUNG PINANG 3
SSV
5,110
28
TANJUNG PINANG 4
SSV
5,110
29
TANJUNG GAYA
TUG/UTILITY
3,600
30
TANJUNG PIAI 1
PSV
6,970
31
TANJUNG PIAI 2
PSV
6,970
32
ICON VALIANT
AWB
5,200
33
ICON KAYRA
AWB
6,000
Vessels under construction
HULL NO.
VESSEL TYPE
34
35
36
37
SH120
ICON ATIQAH
ICON ALIZA
SH129
AHTS – Anchor Handling Tug & Supply
AHT – Anchor Handling & Tug
SSV – Straight Supply Vessel
AHTS
AHTS
AWB
PSV
BRAKE HORSE
POWER (BHP)
10,800
10,800
5,200
6,970
PSV – Platform Support Vessel
AWB – Accommodation Work Boat
YEAR OF
BUILT
2007
2007
2008
2008
2009
2009
2007
2009
2005
2009
2003
2003
2010
2010
2008
2012
2012
2012
2012
2012
2013
2008
2008
2006
2006
2006
2006
2006
2008
2011
2013
2013
2013
List of PropertY
ADDRESS
DESCRIPTION
STATUS
AGE OF PROPERTY
NBV
Lot 13837, Jalan Penghiburan,
Bakau Tinggi,
24000 Kemaman,
Trengganu Darul Iman.
Shop Office
Freehold
7
RM740,087
2015 ANNUAL REPORT
147
Analysis of Shareholdings
DIRECTORS’ DIRECT AND DEEMED INTEREST IN THE COMPANY
As at 31 March 2016, the direct shareholding of our Directors in our Company is shown below:
DIRECTORS
DIRECT INTEREST
INDIRECT INTEREST
1
—
150,000
2
Dato’ Abdul Rahman bin Ahmad —
—
3
4
—
—
Edwanee Cheah bin Abdullah 200,000
—
5
Datuk Abdullah bin Ahmad —
—
6
—
1,000,000
7
—
—
8
Madeline Lim May Ming 60,000
—
As at 31 March 2016, there is no deemed interest shareholding by our Directors.
SIZE OF HOLDINGS
No. of Shareholders
Malaysian
Foreign Less than hundred No. of Holdings
Malaysian
Foreign
%
Malaysian
Foreign
61 1
1,565 61
0.00
0.00
600 6
469,112 2,700 0.04 0.00
1,001 - 10,000 4,621 18 28,053,196 116,000 2.38 0.01
10,001 - 100,000 4,362 47 142,301,508 1,917,536 12.09 0.16
539 9
398,471,334
8,790,500 33.85
0.75
2
0
597,061,588 0
50.72 0.00
10,185 81 1,166,358,303 10,826,797 99.08 0.92
100 - 1,000 100,001 to less
than 5% of
issued shares
5% and above
of issued shares
TOTAL
GRAND TOTAL
10,2661,177,185,100 100.00
Analysis of Shareholdings (cont’d)
TOP 30 SHAREHOLDERS BASED ON RECORD OF DEPOSITORS AS AT 31 MARCH 2016
Name of Shareholders No. of Shares % of Shares
1
HALLMARK ODYSSEY SDN. BHD.
497,768,820 42.28
2
LEMBAGA TABUNG HAJI 99,292,768 8.43
3
JAMAL BIN YUSOF @ GORDON DUCLOS 40,870,212 3.47
4
CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
EMPLOYEES PROVIDENT FUND BOARD 38,163,300 3.24
5
LEMBAGA TABUNG ANGKATAN TENTERA
35,638,200 3.03
6
AMANAHRAYA TRUSTEES BERHAD
AMANAH SAHAM BUMIPUTERA
28,579,900 2.43
7
SEMPENA FOKUS SDN. BHD. 25,979,835 2.21
8
RAHMAN BIN YUSOF 11,166,204 0.95
9
CARTABAN NOMINEES (TEMPATAN) SDN. BHD.
TMF TRUSTEES MALAYSIA BERHAD FOR RHB PRIVATE FUND-SERIES 6 10,000,000 0.85
10 PERMODALAN NASIONAL BERHAD
6,855,100 0.58
11 TAN HAN CHUAN
5,000,000
0.42
12 MUHAMAD ALOYSIUS HENG
4,556,000
0.39
13 CIMSEC NOMINEES (TEMPATAN) SDN. BHD.
CIMB BANK FOR LIEW JUN KUAN (MY0750)
3,272,600
0.28
EXEMPT AN FOR CIMB COMMERCE TRUSTEE BERHAD
3,200,000
0.27
2,966,00
0.25
2,798,000 0.24
15 ER SOON PUAY
16 MAYBANK NOMINEES (TEMPATAN) SDN. BHD.
PLEDGED SECURITIES ACCOUNT FOR TEE TIAM HOCK
2015 ANNUAL REPORT
149
Analysis of Shareholdings (cont’d)
TOP 30 SHAREHOLDERS BASED ON RECORD OF DEPOSITORS AS AT 31 MARCH 2016 (CONTINUED)
Name of Shareholders No. of Shares % of Shares
PLEDGED SECURITIES ACCOUNT FOR HASSAN BIN ALI
2,770,300 0.24
CIMB BANK FOR LIEW JUN KUAN (MH6869)
2,741,700
0.23
PLEDGED SECURITIES ACCOUNT FOR ISY HOLDINGS SDN. BHD.
2,650,000 0.23
PLEDGED SECURITIES ACCOUNT FOR SEMPENA FOKUS SDN. BHD.
2,333,333 0.20
21 AMSEC NOMINEES (TEMPATAN) SDN. BHD.
AMTRUSTEE BERHAD FOR PACIFIC PEARL FUND (UT-PM-PPF)
2,238,000
0.19
22 MADON INVESTMENTS LTD 2,210,000 0.19
23 CITIGROUP NOMINEES (TEMPATAN) SDN. BHD.
PLEDGED SECURITIES ACCOUNT FOR SONG SOON HEE (470272)
2,100,000 0.18
24 MEPRO HOLDINGS BERHAD
2,100,000
0.18
25 SOH OON HAI
2,015,000
0.17
26 CHOO AH NGO
1,800,000
0.15
27 TAN SAW GNOH
1,753,800
0.15
28 MOHAMMED RASHDAN BIN MOHD YUSOF
1,749,400
0.15
29 PHILIP LAI
1,725,000
0.15
30 TE KIM LENG
1,700,000
0.14
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of the Company will be held
at Nexus Ballroom 1, Level 3A, Connexion@Nexus, No. 7 Jalan Kerinchi, Bangsar South City, 59200
Kuala Lumpur on Tuesday, 17 May 2016 at 10:00 a.m. for the following purposes:AGENDA
AS ORDINARY BUSINESS
1.
To receive the Audited Financial Statements for the financial year ended 31 December 2015 together with the
Reports of the Directors and the Auditors thereon.
(Please refer to Explanatory Note (i))
2.
To re-elect the following Directors who are retiring pursuant to Article 106 of the Company’s Articles of Association,
and being eligible, have offered themselves for re-election:-
(a) Datuk Wira Azhar Bin Abdul Hamid
Resolution 1
(b) Tuan Syed Yasir Arafat Bin Syed Abd Kadir
Resolution 2
3.
To re-elect Encik Amir Hamzah Bin Azizan who is retiring pursuant to Article 113 of the Company’s Articles of
Association, and being eligible, has offered himself for re-election.
Resolution 3
(Please refer to Explanatory Note (ii))
4. To approve the payment of the proposed revision of the Directors’ fees of RM584,000.00 for the financial year ended
31 December 2015.
Resolution 4
5.
To re-appoint Messrs. PricewaterhouseCoopers as Auditors of the Company until the conclusion of the next Annual
General Meeting of the Company and to authorise the Directors to fix their remuneration.
Resolution 5
AS SPECIAL BUSINESS
To consider and, if thought fit, with or without any modification, to pass the following ordinary and special resolutions:
6.
ORDINARY RESOLUTION NO. 1
-
AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965
“THAT subject to Section 132D of the Companies Act, 1965 and approvals of the relevant governmental/
regulatory authorities, the Directors be and are hereby empowered to issue and allot shares in the Company,
at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute
discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not
exceed ten per centum (10%) of the issued and paid-up share capital of the Company for the time being
and the Directors be and are also empowered to obtain approval for the listing of and quotation for the
additional shares so issued on Bursa Malaysia Securities Berhad;
AND THAT such authority shall commence immediately upon the passing of this resolution and continue to be
in force until the conclusion of the next Annual General Meeting of the Company.”
Resolution 6
2015 ANNUAL REPORT
151
NOTICE OF ANNUAL GENERAL MEETING (cont’d)
7.
ORDINARY RESOLUTION NO. 2
-
PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
“THAT, subject to the Companies Act, 1965 (“the Act”), rules, regulations and orders made pursuant to the Act,
provisions of the Company’s Memorandum and Articles of Association and the requirements of Bursa Malaysia
Securities Berhad (“Bursa Securities”) and any other relevant authorities, the Directors of the Company be
and are hereby authorised to make purchases of ordinary shares of RM0.50 each in the Company’s issued
and paid-up share capital through Bursa Securities subject further to the following:(i) the maximum number of ordinary shares of RM0.50 each in the Company (“Shares”) which may be
purchased and/or held by the Company shall be equivalent to ten per centum (10%) of the issued and
paid-up share capital for the time being of the Company;
(ii) the maximum fund to be allocated by the Company for the purpose of purchasing the Shares shall not
exceed the aggregate of the share premium of the Company based on the audited financial statements
for the financial year ended 31 December 2015 of RM311,210,080;
(iii) the authority conferred by this resolution will commence immediately upon passing of this ordinary
resolution and will continue to be in force until:(a) the conclusion of the next Annual General Meeting of the Company following the general meeting
at which such resolution was passed at which time it shall lapse unless by ordinary resolution passed
at that meeting, the authority is renewed, either unconditionally or subject to conditions;
(b) the expiration of the period within which the next Annual General Meeting after that date is
required by law to be held; or
(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in general meeting,
whichever occurs first, but not so as to prejudice the completion of purchase(s) by the Company before
the aforesaid expiry date and, in any event, in accordance with the provisions of the guidelines issued by
Bursa Securities and any prevailing laws, rules, regulations, orders, guidelines and requirements issued by any
relevant authorities; and
(iv) upon completion of the purchase(s) of the Shares by the Company, the Directors of the Company be
and are hereby authorised to deal with the Shares in the following manner:(a) cancel the Shares so purchased; or
(b) retain the Shares so purchased as treasury shares; or
(c) retain part of the Shares so purchased as treasury shares and cancel the remainder;
the treasury shares of which may be distributed as dividends to shareholders, and/or resold on Bursa
Securities, and/or subsequently cancelled;
and in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the
Act and the requirements of Bursa Securities and any other relevant authorities for the time being in force,
AND THAT the Directors of the Company be and are hereby authorised to take all such steps as are
necessary or expedient to implement or to effect the purchase(s) of the Shares.”
Resolution 7
8.
SPECIAL RESOLUTION
-
PROPOSED AMENDMENT TO THE ARTICLES OF ASSOCIATION OF THE COMPANY
“THAT the following proposed amendment to the Articles of Association of the Company be and is hereby
approved and adopted:Article No.
Existing Article
Proposed Article
165 (1)
The Directors shall from time to time in
accordance with Section 169 of the Act, cause
to be prepared and laid before the Company in
general meeting such profit and loss accounts,
balance sheets and reports as are referred to
in the section. The interval between the close of
a financial year of the Company and the issue
of the annual audited accounts, the Directors’
and auditors’ reports (the “Documents”) shall
not exceed four months. A copy of the Annual
Report including the Documents in printed form
or in CD-ROM form or in such other form or
electronic media or means or any combination
thereof shall not less than 21 days (or such
other shorter period as may be agreed by all
members entitled to attend and vote at the
meeting) before the date of the meeting,
provided always that it shall not exceed six
months from the close of a financial year of the
Company be sent to every member of, and to
every holder of debentures of the Company
under the provisions of the Act or of these
Articles. Any member to whom a copy of the
Documents has not been sent shall be entitled
to receive a copy free of charge on application
at the Office.
The Directors shall from time to time
in accordance with Section 169 of
the Act, cause to be prepared and
laid before the Company in general
meeting such profit and loss accounts,
balance sheets and reports as are
referred to in the section. A copy
of the Annual Report including the
annual audited accounts, and the
Directors’ and auditors’ reports (the
“Documents”) in printed form or in
electronic format shall not less than
21 days (or such other shorter period
as may be agreed by all members
entitled to attend and vote at the
meeting) before the date of the
meeting, provided always that it shall
not exceed four months from the close
of a financial year of the Company be
sent to every member of, and to every
holder of debentures of the Company
under the provisions of the Act or of
these Articles. Any member to whom
a copy of the Documents has not
been sent shall be entitled to receive
a copy free of charge on application
at the Office.
AND THAT the Directors and Secretaries of the Company be and are hereby authorised to take all steps as are
necessary and expedient in order to implement, finalise and give full effect to the Proposed Amendment to the
Articles of Association of the Company.”
Resolution 8
9. To transact any other ordinary business for which due notice shall have been given.
By Order of the Board
CHUA SIEW CHUAN (MAICSA 0777689)
CHIN MUN YEE (MAICSA 7019243)
Company Secretaries
Kuala Lumpur
25 April 2016
2015 ANNUAL REPORT
153
Explanatory Notes on Ordinary Business/Special Business:
(i) Item 1 of the Agenda
This Agenda item is meant for discussion only, as the provision of Section 169(1) of the Companies Act, 1965 does
not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item
is not put forward for voting.
(ii) Item 3 of the Agenda
Encik Amir Hamzah Bin Azizan was appointed as a Managing Director and Non-Independent Executive Director
of the Company on 1 March 2016 after due deliberation and discussion by the Nomination Committee and
the Board of Directors on various criteria including his experience, expertise, skill sets, competence and value
proposition which he could contribute during deliberation/discussion of Board of Directors’ meetings.
Please refer to page 15 of the Annual Report for further details of Encik Amir Hamzah Bin Azizan.
(iii) Item 6 of the Agenda
The proposed adoption of the Ordinary Resolution No. 1 is for the purpose of granting a renewed general mandate
(“General Mandate”) and empowering the Directors of the Company, pursuant to Section 132D of the Companies
Act, 1965, to issue and allot new shares in the Company from time to time provided that the aggregate number
of shares issued pursuant to the General Mandate does not exceed 10% of the issued and paid-up share capital
of the Company for the time being. The General Mandate, unless revoked or varied by the Company in general
meeting, will expire at the conclusion of the next Annual General Meeting of the Company.
The General Mandate will provide flexibility to the Company for allotment of shares for any possible fund raising
activities for the purpose of funding future investment project(s), working capital and/or acquisition(s).
As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the
Directors at the Third Annual General Meeting held on 27 May 2015 and of which the said mandate will lapse at
the conclusion of the Fourth Annual General Meeting.
(iv) Item 7 of the Agenda
The proposed adoption of the Ordinary Resolution No. 2 is to renew the authority granted by the shareholders of
the Company at the Third Annual General Meeting held on 27 May 2015. The proposed renewal of authority will
allow the Board of Directors to exercise the power of the Company to purchase not more than 10% of the issued
and paid-up share capital of the Company at any time within the time period stipulated in Main Market Listing
Requirements of Bursa Malaysia Securities Berhad.
Further information on the Proposed Renewal of Share Buy-Back Authority is set out in the Share Buy-Back Statement
to Shareholders which is dispatched together with the Company’s 2015 Annual Report.
(v) Item 8 of the Agenda
The proposed adoption of the Special Resolution is to streamline the Articles of Association of the Company with
the recent amendments to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
Notes:
1.
For the purposes of determining a member who shall be entitled to attend and vote at the forthcoming Fourth
Annual General Meeting of the Company, the Company shall be requesting the Record of Depositors as at 10
May 2016. Only a depositor whose name appears in the Record of Depositors as at 10 May 2016 shall be entitled
to attend and vote at the meeting as well as for appointment of proxy(ies) to attend and vote on his/her stead.
2.
The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor
or of his attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the
hand of an officer or attorney duly authorised. A proxy may but need not be a member of the Company and a
member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) of the
Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the
proxy.
3.
4.
5.
A member may appoint not more than two (2) proxies to attend the same meeting. Where a member of the
Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991
(“SICDA”), it may appoint one (1) proxy in respect of each Securities Account it holds with ordinary shares of the
Company standing to the credit of the said Securities Account.
Where a member or the authorised nominee appoints two (2) proxies, he shall specify the proportion of his
shareholdings to be represented by each proxy.
Where a member is an exempt authorised nominee which holds ordinary shares in the Company for the omnibus
account, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect
of each omnibus account it holds. Where an exempt authorised nominee appoints two (2) or more proxies to
attend and vote at the same meeting, the appointment shall be invalid unless he specifies the proportions of his
holdings to be represented by each proxy.
An exempt authorised nominee refers to an authorised nominee defined under the SICDA which is exempted from
compliance with the provisions of subsection 25A(1) of SICDA.
6. 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 that power or authority shall be deposited by hand at or by facsimile transmission to
the Company’s Share Registrar, Symphony Share Registrar Sdn. Bhd. not less than forty-eight (48) hours before the
time for holding the meeting or adjourned meeting at which the person named in the instrument proposed to vote
and in default the instrument of proxy shall not be treated as valid.
7. If this Proxy Form is signed under the hand of an officer duly authorised, it should be accompanied by a statement
reading “signed as authorised officer under Authorisation Document which is still in force, no notice of revocation
having been received”. If this Proxy Form is signed under the attorney duly appointed under a Power of Attorney, it
should be accompanied by a statement reading “signed under Power of Attorney which is still in force, no notice
of revocation having been received”. A copy of the Authorisation Document or the Power of Attorney, which
should be valid in accordance with the laws of the jurisdiction in which it was created and is exercised, should be
enclosed in this Proxy Form.
2015 ANNUAL REPORT
155
This page has been intentionally left blank
ICON OFFSHORE BERHAD (984830-D)
No. of Shares Held
CDS Account No.
FORM OF PROXY
I/We
NRIC No./Company No.
of
and telephone no.
being a member/members of ICON OFFSHORE BERHAD (“Company”), hereby
appoint
NRIC. No
of
or failing him/her, the Chairman of the Meeting as *my/our proxy to vote for *me/us and on
*my/our behalf at the Fourth Annual General Meeting of the Company to be held at Nexus Ballroom 1, Level 3A, Connexion@Nexus,
No. 7 Jalan Kerinchi, Bangsar South City, 59200 Kuala Lumpur on Tuesday, 17 May 2016 at 10:00 a.m. and at any adjournment thereof.
The proxy is to vote on the business before the Meeting as indicated below (if no indication is given, the proxy will vote as he/she
thinks fit or abstain from voting):Agenda
1
To receive the Audited Financial Statements for the financial year ended 31 December 2015 together with the Reports of the
Directors and the Auditors thereon.
Ordinary Business
2
3
4
Resolution
(a)To re-elect Datuk Wira Azhar Bin Abdul Hamid who is retiring pursuant to Article 106 of the
Company’s Articles of Association, and being eligible, has offered himself for re-election.
Resolution 1
(b) To re-elect Tuan Syed Yasir Arafat Bin Syed Abd Kadir who is retiring pursuant to Article
106 of the Company’s Articles of Association, and being eligible, has offered himself for
re-election.
Resolution 2
To re-elect Encik Amir Hamzah Bin Azizan who was appointed to the Board on 1st March
2016 and is retiring pursuant to Article 113 of the Company’s Articles of Association, and
being eligible, has offered himself for re-election.
Resolution 3
To approve the payment of the proposed revision of the Directors’ fees of RM584,000 for the
Resolution 4
5
To re-appoint Messrs. PricewaterhouseCoopers as Auditors of the Company until the
conclusion of the next Annual General Meeting of the Company and to authorise the
Directors to fix their remuneration.
Special Business
For
Against
Resolution 5
6
Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965
Resolution 6
7
Proposed Renewal of Share Buy-Back Authority
Resolution 7
8
Proposed Amendment to the Articles of Association of the Company
Resolution 8
9
To transact any other ordinary business for which due notice shall have been given
* Strike out whichever not applicable.
As witness my/our hand
this day of
2016.
For appointment of more than one (1)
proxy, percentage of shareholdings to
be represented by the proxies
No. of shares
Percentage
Proxy 1
Proxy 2
Signature of Member/Common Seal
Proxy 3
Total
100%
NOTES:
1.
For the purposes of determining a member who shall be entitled to attend and vote at the forthcoming Fourth Annual General Meeting of the Company, the
Company shall be requesting the Record of Depositors as at 10 May 2016. Only a depositor whose name appears in the Record of Depositors as at 10 May 2016
shall be entitled to attend and vote at the meeting as well as for appointment of proxy(ies) to attend and vote on his/her stead.
2.
The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his attorney duly authorised in writing
or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised. A proxy may but need not be a member of the
Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not
apply to the Company. There shall be no restriction as to the qualification of the proxy.
3.
A member may appoint not more than two (2) proxies to attend the same meeting. Where a member of the Company is an authorised nominee as defined under
the Securities Industry (Central Depositories) Act, 1991 (“SICDA”), it may appoint one (1) proxy in respect of each Securities Account it holds with ordinary shares of
the Company standing to the credit of the said Securities Account.
4.
Where a member or the authorised nominee appoints two (2) proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.
5.
Where a member is an exempt authorised nominee which holds ordinary shares in the Company for the omnibus account, there is no limit to the number of proxies
which the exempt authorised nominee may appoint in respect of each omnibus account it holds. Where an exempt authorised nominee appoints two (2) or more
proxies to attend and vote at the same meeting, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each
proxy.
An exempt authorised nominee refers to an authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection
25A(1) of SICDA.
6. 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 that power or
authority shall be deposited by hand at or by facsimile transmission to the Company’s Share Registrar, Symphony Share Registrar Sdn. Bhd. not less than fortyeight (48) hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposed to vote and in default the
instrument of proxy shall not be treated as valid.
7. If this Proxy Form is signed under the hand of an officer duly authorised, it should be accompanied by a statement reading “signed as authorised officer under
Authorisation Document which is still in force, no notice of revocation having been received”. If this Proxy Form is signed under the attorney duly appointed under
a Power of Attorney, it should be accompanied by a statement reading “signed under Power of Attorney which is still in force, no notice of revocation having
been received”. A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance with the laws of the jurisdiction in which it
was created and is exercised, should be enclosed in this Proxy Form.
Fold this flap for sealing
Then fold here
AFFIX
STAMP
SHARE REGISTRAR
Symphony Share Registrars Sdn Bhd
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan
Malaysia
1st fold here
w w w. i c o n o f f s h o r e . c o m . m y
(Company No.: 984830-D)
Incorporated in Malaysia under the Companies Act, 1965
Level 12A, East Wing, The Icon
No. 1, Jalan 1/68F
Off Jalan Tun Razak
T
F
: +603 2180 6300
: +603 2165 1086

RISINg - Icon Offshore Berhad

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