about us -...

NOTES TO THEFINANCIAL STATEMENTS(CONTINUED)

OUR VISIONMISSION

To be the preferred global offshoremarine service provider for the oil

and gas industry.

We are committed to creatingvalue for our customers,employees and stakeholdersby employing a fleet of modernvessels; upholding the higheststandard of Health, Safety andEnvironmental practices; as well as ensuring thecontinuous development of ourgreatest asset – our PEOPLE.

NOTES TO THEFINANCIAL STATEMENTS

(CONTINUED)ABOUT US


INTEGRITY ANDMUTUAL RESPECT

COMMITTED TOCREATING VALUE

OPERATE ASONE - TEAMWORK

NAVIGATE THEEXTRA MILE

ICON

VALUES

WE HOPE TO ACHIEVE OUR VISION ANDMISSION BY UPHOLDING THESE TENETS

OF OUR CORE VALUES:


(CONTINUED)

CONTENTSOUR BUSINESS

2 Corporate Information4 Corporate Structure6 Type of Vessels

OUR STRATEGY & PERFORMANCE REVIEW

10 Chairman’s Statement14 Management Discussion and Analysis21 Financial Highlight22 Operational Highlight23 Share Price Performance24 List of Awards25 Calendar of Significant Events

SUSTAINABILITY STATEMENT

HOW WE ARE GOVERNED

40 Directors’ Profile48 Senior Management Team51 Audit and Risk Management Committee Report55 Corporate Governance Overview Statement72 Statement on Risk Management and Internal Control76 Statement of Directors’ Responsibility

FINANCIAL STATEMENTS

OTHER INFORMATION

168 List of Vessels169 List of Property170 Analysis of Shareholdings174 Notice of Annual General Meeting Proxy Form

RATIONALE :

STRATEGIC RESILIENCE

We have risen to the occasion in order to triumph over ourchallenges. Our strategic planning and strong spirit haveensured our continued advancement.

Technical drawings of our key assets adorn the cover as atribute to our strength and status as an industry leader. Inthe background, the square grid symbolises ourprofessionalism and efficiency.

2PAGE ICON OFFSHORE BERHAD ( 984830-D )

CORPORATEINFORMATION

BOARD OF DIRECTORS

Raja Tan Sri Dato’ Seri Arshad binRaja Tun UdaChairman and Non-IndependentNon-Executive Director

Amir Hamzah bin Azizan*Managing Director andNon-Independent Executive Director

Syed Yasir Arafat bin Syed Abd KadirNon-IndependentNon-Executive Director

Datuk Wira Azhar bin Abdul HamidSenior IndependentNon-Executive Director

Edwanee Cheah bin AbdullahIndependent Non-Executive Director

Madeline Lee May MingIndependent Non-Executive Director

Datuk Abdullah bin AhmadIndependent Non-Executive Director

Farina binti Farikhullah KhanIndependent Non-Executive Director

Datuk Abdullah bin KarimIndependent Non-Executive Director

EXECUTIVE COMMITTEE

Syed Yasir Arafat bin Syed Abd KadirChairman

Amir Hamzah bin Azizan*

Captain Hassan bin Ali

Lim Fu Yen

AUDIT AND RISK MANAGEMENTCOMMITTEE

Datuk Wira Azhar bin Abdul HamidChairman

Syed Yasir Arafat bin Syed Abd Kadir

Farina binti Farikhullah Khan**

Datuk Abdullah bin Karim**

Edwanee Cheah bin Abdullah***

NOMINATION AND REMUNERATIONCOMMITTEE#

Edwanee Cheah bin AbdullahChairman

Madeline Lee May Ming


Datuk Abdullah bin Ahmad**

EMPLOYEES’ SHARE SCHEMECOMMITTEE

Edwanee Cheah bin AbdullahChairman

Madeline Lee May Ming


COMPANY SECRETARIES

Chua Siew Chuan(MAICSA No. 0777689)

Chin Mun Yee(MAICSA No. 7019243)

Note:

* Resigned with effect from 30 November 2017** Appointed with effect from 25 August 2017*** Ceased with effect from 25 August 2017# The Nomination Committee and Remuneration Committee was merged on 25 August 2017

3PAGEANNUAL REPORT 2017

CORPORATEINFORMATION

REGISTERED OFFICE

Level 7,Menara Milenium,Jalan Damanlela,Pusat Bandar Damansara,Damansara Heights,50490 Kuala Lumpur,Wilayah PersekutuanTel. No. : 603 2084 9000Fax No. : 603 2094 9940

HEAD/MANAGEMENT OFFICE

Level 12A, East Wing,The Icon,No. 1, Jalan 1/68F,Off Jalan Tun Razak,50400 Kuala Lumpur,Wilayah PersekutuanTel. No. : 603 2180 6300Fax No. : 603 2165 1086Email : [email protected]

KEMAMAN OFFICE

Lot 13837, Jalan Penghiburan,Bakau Tinggi,24000 Kemaman, Terengganu.Tel. No. : 609 8502 740Fax No. : 609 8502 744Email : [email protected]

LABUAN OFFICE

Lot 49, O&G Sec Lazenda Warehouse (Type B),Jalan Rancha-Rancha,87000 Labuan F.T.Tel. No. : 6087 410 387Fax No. : 6087 410 424Email : [email protected]

AUDITORS

PricewaterhouseCoopers PLT(LLP0014401-LCA & AF 1146)Level 10, 1 Sentral,Jalan Rakyat, Kuala Lumpur Sentral,50706, Kuala Lumpur, Wilayah PersekutuanTel. No. : 603 2173 1188 Fax No. : 603 2173 1288

PRINCIPAL BANKERS

Affin Bank BerhadAmBank (M) BerhadAmInvestment Bank BerhadBank Islam Brunei Darussalam BerhadBank Pembangunan Malaysia BerhadMalayan Banking BerhadOCBC Bank (Malaysia) BerhadRHB Bank BerhadStandard 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.Tel. No. : 603 7849 0777Fax No. : 603 7841 8151 / 8152

STOCK EXCHANGE LISTING

Bursa Malaysia Securities Berhad(Main Market)

Listed since: 25 June 2014Sector: Trading/ServicesStock name : ICONStock code : 5255

Icon Bahtera (B) Sdn. Bhd.*


CORPORATESTRUCTURE

100%ICON FLEET SDN. BHD.Vessel holding company

ICON OFFSHORE BERHAD(Holding Company)

100%ICON OFFSHORE GROUP SDN. BHD.Licence holder*#

Icon Maritime TrainingCentre Sdn. Bhd.

Omni Marine Sdn. Bhd.

Omni Power Sdn. Bhd.

Omni Triton Sdn. Bhd.

Omni Ventures Sdn.Bhd.

Icon Andra (L) Inc.

Icon Aliza (L) Inc.

Icon Astrid (L) Inc.

Icon Azra (L) Inc.

Icon Biru 1 (L) Inc.

Icon Biru 2 (L) Inc.

Icon Corridor (L) Inc.

Icon Dahan 1 (L) Inc.

Icon Dahan 2 (L) Inc.

51%ICON-FOB Holdings (L) Inc.

100%ICON-FOB 1 (L) Inc.


CORPORATESTRUCTURE

100%ICON SHIP MANAGEMENT SDN. BHD.Ship management company

* Icon Fleet Sdn. Bhd. holds 51,000 ordinary shares and 2,889,000 redeemable preference shares in IconBahtera (B) Sdn. Bhd. whilst Zell Transportation Sdn. Bhd. holds 49,000 ordinary shares and 3,011,000redeemable preference shares.

# Holder of the Petroliam Nasional Berhad Licence.

Icon Dawai (L) Inc.

Icon Explorer (L) Inc.

Icon Gaya (L) Inc.

Icon Huma (L) Inc.

Icon Ikhlas (L) Inc.

Icon Kayra (L) Inc.

Icon Lotus (L) Inc.

Icon Ocean (L) Inc.

Icon Piai 1 (L) Inc.

Icon Piai 2 (L) Inc.

Icon Pinang 1 (L) Inc.




Icon Pioneer (L) Inc.

Icon Puteri 1 (L) Inc.

Icon Puteri 2 (L) Inc.

Icon Samudera (L) Inc.

Icon Sari (L) Inc.

Icon Sophia (L) Inc.

Icon Tigris (L) Inc.

Icon Waja (L) Inc.

Icon Zara (L) Inc.

Omni Emery (L) Inc.

Omni Flotilla (L) Inc.

Omni Marissa (L) Inc.

Omni Offshore (L) Inc.

Omni Stella (L) Inc.

Omni Victory (L) Inc.

100%


TYPEOF VESSELS

Bollard Pull

50 tonnes

Engine

3,600 BHP

Clear Deck Space

230 m2

TANJUNG GAYA

Utility vessel is much smaller version of SSV butwithout cargo tanks for drilling fluids or cement. UVprimarily operate in shallow water and are typicallyused to transport deck cargo, fuel, fresh water, foodprovisions and personnel.

AHTAnchor Handling

Tug Vessel

Bollard Pull

40-70 tonnes

Engine

3,200-5,152 BHP

Clear Deck Space

150-240 m2

OMNI AKIRA OMNI EMERY 1

OMNI ANTEIA

These vessels are used to support offshore oil rigs,platforms and other installations and to tow mobilestructures and position their mooring anchors in orderto ensure their anchors are placed in a proper position.Our AHTs have a bollard pull that ranges from 40tonnes to 70 tonnes and horsepower engines rangingfrom 3,200 to 5,152 Brake Horse Power (“BHP”).

The defining characteristics of AHTs are their enginepower, measured in BHP and the size of their winchesin terms of line pull and wire storage capacity. AHTsalso possess aft decks which are utilised during anchorhandling and towing operations and for the carriage ofdeck cargo. The stern of the vessel is open to the sea,with a stern roller fitted to enable the vessel to recoverand deploy anchors, while maintaining a clear area forthe vessel’s work wire.

AHTs are also capable of performing a variety offunctions in harsher weather conditions compared totraditional vessels. AHTs are capable of providinglong range towage services when floating platformsneed to be mobilised to other fields, countries orrepair yards. Deep water AHTs also provide supportfor construction work in transporting and carrying outprojects for mobilisation of structures for floatovers,or launching or installation, positioning, hook-up andcommissioning work.

AHTSAnchor Handling

Tug & Supply Vessel

Bollard Pull

60-126 tonnes

Engine

5,150-10,800 BHP

Clear Deck Space

330-530 m2

ICON ATIQAH ICON AZRA

ICON IKHLAS ICON LOTUS

ICON SAMUDERA ICON SOPHIA

ICON MARISSA OMNI GAGAH*

OMNI ZARA 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

Our AHTSs are suited for “in-field support” as thevessels have space and deadweight capacity for thecarriage of drilling mud, cement, base oil, drill water,and other supplies. The stern of the vessel is fittedwith a stern roller to enable the vessel to recover anddeploy anchors, while maintaining a clear area forthe vessel’s work wire. From time to time, when notperforming anchor handling and towing services, ourAHTSs also function as SSVs and are also able toserve as safety standby rescue and fire-fightingvessels for oil spill response and recovery efforts.

* Disposed in January 2018

UVUtility Vessel


TYPEOF VESSELS

SSVStraight Supply

Vessel

Length

60 Meter

Engine

5,110 BHP

Clear Deck Space

403 m2

PSVPlatform Support

Vessel

Deadweight

3,500 tonnes

Engine (Diesel Electric)

6,970 BHP

Clear Deck Space

750 m2

TANJUNG PIAI 1 TANJUNG PIAI 2

Our PSVs are capable of working in deep waterconditions and serves various types of drilling rigsand platforms, including drill ships, fixed platforms,Floating Production Storage and Offloading (“FPSO”)and semi-submersible rigs. Our PSV is equippedwith a Dynamic Positioning (“DP”) Class 2 system,enabling it to accurately manoeuvre and operate inadverse weather conditions. Our PSV is the firstMalaysian built diesel electric PSV and has a 750m2main deck cargo area. It can accommodate up to 60personnel, including marine crew. PSVs aredesigned to deliver large quantities of cargo tooffshore drilling and production sites. They alsoprovide logistical support during offshoreconstruction work. PSVs are designed for optimumcapacity, and are distinguished by their (i)deadweight; (ii) available deck area for thetransportation of cargo such as pipes, equipmentand spares; and (iii) below-deck capacity for thestorage of drilling fluid, mud and cement used in thedrilling process and tank storage for water and fueloil.

AWBAccommodation

Workboat

Pedestal Crane

50-65 tonnes

Accommodation

200 men

Clear Deck Space

800 m2

ICON ALIZA ICON KAYRA

ICON VALIANT

Our AWBs are equipped with DP2 positioning systemwith four point mooring capabilities. These vesselshave a large deck area, used for the carriage ofauxiliary equipment, spools, containers, and othercargoes. The main crane capacity ranges from 50tonnes to 65 tonnes. Meanwhile, the maximumaccommodation capacity is 200 pax includingmarine crew.

TANJUNG PINANG 1 TANJUNG PINANG 2

TANJUNG PINANG 3 TANJUNG PINANG 4

Our SSVs primarily operate in shallow water, andused for the transportation of equipment, pipes,tubings, drilling fluids, cement, fuel and fresh waterfrom supply bases to offshore platforms and facilities.



(CONTINUED)


CHAIRMAN’S STATEMENT

DEAR SHAREHOLDERS,

On behalf of the Board of Directors (“Board”), I herebypresent the annual report and audited financialstatements of Icon Offshore Berhad (“ICON or “theGroup” or “the Company”) for the financial year ended31 December 2017 (“FYE2017”).

– RAJA TAN SRI DATO’ SERI ARSHAD BIN RAJA TUN UDA, Chairman –



In ICON’s Annual Report 2016, we hadreported on the ongoing discussions andpossible merger of ICON and UMW Oil &Gas Corporation (“UMWOG”). Themerger would have created one of thelargest integrated offshore serviceproviders in the upstream oil rig andoffshore support vessel market segment,locally and regionally. However, due to anumber of issues which parties wereunable to bridge, the exercise wasmutually and amicably aborted.

In November 2016, Organization ofPetroleum Exporting Countries (“OPEC”)and non-OPEC members agree to cutcrude oil production output by 1.8 millionbarrels per day to hasten the imbalanceexisting in the market and to bring pricestability to the market. The sustainedcompliance by OPEC and non-OPECmembers on the cut in crude oilproduction and the annual increase indemand for crude oil have had a positiveimpact on the price of crude oil whichrose to the USD50 per barrel range inearly 2017. Due to the positive effect onthe price of crude oil, OPEC furtherextended the accord throughout 2017and this has caused the price of crude oilto rise to above USD60 per barrel inOctober 2017 and in early 2018 the pricewas hovering in the mid USD60’s perbarrel.

With the increase in crude oil price,upstream activities have progressivelyincreased in the second half of the yearand this has had a cascading effectacross the industry value chain.

However, the longer term and full effectsof the recovery were largely unfelt due tooil and gas majors and national oilcompanies continuing to adopt acautious approach in awarding newcontracts. Furthermore, with the OSVsegment being at the lower end of theupstream value chain, the trickle-downeffect of uptake in drilling and explorationactivities took a while to set in. Thoughvessel utilisation rates had improved,charter rates continued to come underpressure as large number of bidders

competed for a limited number ofcontracts.

Against this backdrop, ICON remainsteadfast and committed to continueimplementing its strategic roadmap toweather the storm, which among othersincludes capital and cost restructuring,cash flow preservation and improve fleetutilisation through competitive bidding.These measures taken during thepreceding financial year have bolsteredthe fundamentals and sustainability of theGroup to operate within a low oil priceenvironment. With the recovery in crudeoil prices, the Group will be able tocapitalise on the scenario to turn aroundits business performance.

FINANCIAL PERFORMANCE

During the financial year, Group revenuedecreased to RM204.6 million fromRM226.9 million in the previous FYE2016.The decrease is largely due to lowercharter hire rate even though the fleetutilisation had increased from 52% inFYE2016 to 56% in FYE2017.

On the back of reduced revenue,adjusted EBITDA also declined toRM83.2 million compared to RM88.3million in FYE2016. However the Grouprecorded a lower Loss After Tax (“LAT”)of RM55.8 million compared to RM146.7million in FYE2016, mostly due to thereduced impairment.

Cost optimisation initiative undertaken byICON has translated to better results inits Cost of Sales and AdministrativeExpenses. Cost of Sales dropped fromRM163.5 million for FYE2016 to RM157.9million for FYE2017 and AdministrativeExpenses dropped from RM41.8 millionin FYE2016 to RM28.8 million inFYE2017.

Cost of Salesdropped fromRM163.5 millionfor FYE2016 toRM157.9 millionfor FYE2017 andAdministrativeExpenses droppedfrom RM41.8million in FYE2016to RM28.8 millionin FYE2017.

COST OF SALESRM157.9mil



OUTLOOK & PROSPECTS

Crude oil prices have touched theUSD70 per barrel mark before settling toa more modest but still encouraging mid-USD60’s per barrel as of March 2018. Asper PETRONAS Activity Outlook (“PAO”)2018-2020 which was released inDecember 2017, their activity outlook isbased on crude oil price hoveringbetween USD50-USD60 per barrel. Withthe current crude oil price hovering andsustaining at the mid-USD60’s per barrel,we hope it would spur PETRONAS andother Petroleum ArrangementContractors (“PACs”) to revive theirupstream investment and activities,leading to the increase in the number ofprojects and requirements for OSVs.

However, we remain cautious andprudent going forward. Geo-politicalevents, breaches and non-compliance ofthe agreed quota by OPEC and non-OPEC members on the oil production cutand resurgence in US shale oilproduction may impact the current oilprice recovery.

Domestically, the local oil and gas sectoris expected to continue to be challengingdue to the lack of long term contractsincluding the delay in the award for theIntegrated Logistics Control Tower(“ILCT”) tender by PETRONAS.

ICON will also continue to seekconsolidation opportunities to make itstronger and a sustainable entity moving forward. Consolidation will allow ICON toposition itself better in the oil and gasvalue chain.

Health, Safety and Environment (“HSE”),which has always been a proud hallmarkfor the Group will continue to bemonitored and emphasised as webelieve in protecting the well-being of ourassets, the environment and our people.

Going forward, aside from improving ourbusiness and financial operations, we willcontinue to emphasise on sustainability.Sustainability is key in ensuring the long-term prospects of ICON, which will makeus a better company with a more positiveEconomic, Environmental and Social(“EES”) footprint and also a company thatis attractive to investors, customers andalso to strengthen our brand amongstakeholders. Ultimately, sustainabilitycreates long-term value that will translateinto better business and operationalperformance.

In view of the changes to the MalaysianCode of Corporate Governance(“Principles”), the Board will continue tomake every effort to increase itscompliance with the Practices asstipulated in the Principles.

Sustainability is key in ensuring the long-term prospects of ICON, which will makeus a better company with a more positiveEconomic, Environmental and Social(“EES”) footprint

LOSS AFTER TAX (“LAT”)RM55.8mil

MARKET CAPITALISATIONRM270.8mil



ACKNOWLEDGEMENTS

On behalf of the Board, I wish to conveymy thanks to the former ManagingDirector, Amir Hamzah bin Azizan, whoresigned on 30 November 2017, for hiscontributions in managing the Groupduring this challenging period. For this,we express our appreciation to him.

We also take the opportunity to welcomeCaptain Hassan bin Ali as ICON’s actingChief Executive Officer, whose operationalknowledge and experience will continue tosteer the Group forward. Assisted by anexperienced management team, theBoard has full confidence in hisstewardship of the Group.

I wish to thank the Management andemployees of ICON for their contributionsin 2017. Without a doubt, theirdedication, patience and tireless effortsduring the difficult years including thefinancial year under review have beeninstrumental for the safe operations andsustainability of the Group.

We received notification from DatukAbdullah bin Ahmad of his intention notto seek re-election and will thereforeretire at the conclusion of the SixthAnnual General Meeting. On behalf of theBoard, I would like to express ourgratitude to him for his valuablecontribution to the Company during thethree years he served on the Board.

I have benefitted from the shared wisdomof my colleagues on the Board andwould like to thank them for their wisecounsel.

Finally, my sincere thank you to ourshareholders, customers, vendors andfinanciers, for their confidence in ICONduring the financial year.

Raja Tan Sri Dato’ Seri Arshad binRaja Tun UdaChairman12 April 2018


MANAGEMENT DISCUSSION& ANALYSIS

KNOWN TRENDS & EVENTS

The challenges faced by the oil and gas industry, including the OSV segment inFYE2016 continued into FYE2017. Depressed charter rates, oversupply of OSVsand lack of long term contracts persisted throughout the financial year.

However, the initiative taken by the OPEC and non-OPEC members in November2016 to cut crude oil production output by 1.8 million barrels per day has had apositive impact on the price of crude oil. The sustained compliance and commitmentto the production cut by OPEC and non-OPEC members coupled with the increasedglobal oil demand, led to a reduction in stockpile and inventories, ultimately pushingup the price of global crude oil. The price of crude oil rose to above USD50 perbarrel in early 2017 and in May 2017 OPEC further extended the accord. In October2017 the price of crude oil steadily rose to USD60 per barrel and as of March 2018the price was hovering around mid USD60’s per barrel. This was a welcomedimprovement compared to the 13-year record lows of USD28 per barrel in 2016.

Domestically, there was an increase inupstream activities and higher demandfor OSV from the second half of thefinancial year onwards. However theserequirements were mainly for spot andshort term charters. Charter rates alsoremained depressed due to anoversupply of OSV and with a largenumber of OSV owners bidding for alimited number of contracts, the charterrate are expected to remain depressedfor some time. As per PAO 2018-2020,PETRONAS will remain cautious onlonger term activities and investment untilthey are certain that the price of crude oilis sustainable for increased activities. Toexacerbate matters, being at the lowerend of the upstream value chain, thetrickle-down effect of uptake in drillingand exploration activities may take awhile before its impact is known.

For FYE2017, ICON remained steadfastand followed through on its FYE2016initiatives and short term strategies toride out the downturn. Strategiesincluded measures such as optimisingoperational cost, conserving cash flowand increasing the utilisation of its fleetthrough competitive bidding for

contracts. The amicably aborted mergerbetween ICON and UMW Oil & GasCorporation (“UMWOG”) did not dampenbut rather encouraged ICON to continueto seek other suitable consolidationopportunities.

The local oil and gas sector is expectedto continue to be challenging due to thedelayed award of the PETRONASIntegrated Logistic Control Tower(“ILCT”) contract for long term OSVrequirement. The ILCT is meant as areplacement to the PETRONAS 5-yearBase Fleet contract effective fromJanuary 2013 to December 2017.However this has somehow beenmitigated as the Base Fleet contractshave been extended further, in tandemwith the delay of the ILCT contract award.

ICON’s continuous efforts in FYE2017,which focused on optimising its assets -People, Process and Equipment (“PPE”),has improved ICON’s quality of service,reliability of its fleet and operationalexcellence in Health, Safety andEnvironment (“HSE”) performance. Themeasures implemented had enabledICON to weather the market downturn

and at the same time place ICON on abetter footing to capitalise on theimpending market recovery.

OVERVIEW OF GROUP BUSINESSAND OPERATIONS

ICON is one of the largest OSV providersin Malaysia and Southeast Asia in termsof number of vessels. As at 31 December2017, the Group has 35 vesselsconsisting of 25 AHTS and AHT vessels,four SSV vessels, two PSV vessels, threeAWB vessels and one UV vessel.

OSVs play a vital role in the growth anddevelopment of the oil and gas industry.Our fleet of vessels are suitably fitted withequipment and machinery to provide awide range of logistical support servicesacross the entire offshore oil and gas lifecycle. Each vessel type has its specificpurpose to support exploration,development, production anddecommissioning activities.



Identificationof Potential

• Geological & geophysical mapping & modeling via seismic surveys• Analysis & interpretation of geological data to identify the potential of hydrocarbon bearing formations

Exploration& Appraisal

• Wildcat wells drilling to assess potential of basin• Appraisal wells across the potential of any discovery made during the exploration phase• Flow rates assessment

FieldDevelopment

• Development scenario screening• Pre-FEED & FEED studies• Detailed engineering• Fabrication & procurement• Offshore construction, installation, hookup & commissioning

Operation &Maintenance

• Inspection, repair & maintenance• Enhanced oil recovery• Brownfield development & injection wells• Work over of existing wells

Abandonment

• The decommissioning of end-of-field infrastructure• Re-use / recycle / dispose

Type of OSVsdeployed

AHTAHTSAWBPSVSSV

AHTAHTSAWBPSVSSVTugs

AHTAHTSAWBPSVSSVTugs

AHTAHTSAWB

UPSTREAM OIL & GAS VALUE CHAIN

KEY OPERATIONAL HIGHLIGHTS

The Group is helmed by a highly qualified management team with vast experience in the marine and oil and gas sector.

GROUP OBJECTIVES & STRATEGIES

Given the present external environment, the Group’s primary strategies are:

• To reduce overall operational costs via short and long-term measures for efficiency.

• To continue focusing on cash management, asset / vessel optimisation and capital expenditure deferment.

• To leverage on the Group’s inherent competitive edge as one of the largest OSV providers to secure a better spread of short-term (quick win) and long-term contracts respectively towards boosting immediate revenue and the Group’s order bookpipeline.

• Given the opportunity, to pursue horizontal and vertical integration across the Group’s value chain towards enhancing itscapabilities and becoming a comprehensive solutions provider to the oil and gas majors.

• To expand and build up on the existing regional market presence, especially in Brunei.

Breakdown by Domestic and International Business

The Group has an established businesspresence in both local and overseasmarkets. For FYE2017, about 69% of theGroup’s business activities stemmedfrom local operations with the balance31% coming from overseas, i.e. Bruneiand Thailand.

The Group continues to actively seekexpansion opportunities for both localand overseas business segments.

FYE2017RM204.6mil

FYE2016RM226.9mil

Indicators 2017 2016 2015

Vessel Utilisation rates 56% 52% 60%Order book RM254.8 mil RM510.3 mil RM686.0 milNumber of employees 113 116 165Manhours without LTI (as at financial year-end) 4.1 mil 0.3 mil 13.0 mil


Overseas Revenue Malaysia Revenue

20162017

37%

31%

20162017

63%

69%


FINANCIAL RESULTS

Revenue & Earnings

For FYE2017, the Group’s revenue decreased by 9.8% to RM204.6 million despite improved vessel utilisation rates of 56%compared to 52% in FYE2016. The lower revenue was largely due to the depressed and lower charter hire rates.

With the revenue reduced, adjusted EBITDA declined to RM83.2 million compared to RM88.3 million in FYE2016. However the Grouprecorded a lower Loss After Tax (“LAT”) of RM55.8 million as compared to RM146.7 million, mostly due to the reduced impairment.

In FYE2017, Cost of Sales and Administrative Expenses registered a marked decline of 3%, and 31% respectively. Our efforts tooptimise costs, right sizing the Group to make it leaner and more competitive and agile to market demands are delivering tangibleresults and we will continue to pursue such activities going forward. These activities include better fuel consumption monitoring,the laying-up of under-utilised vessels, reduced payroll costs and various other measures.

Capital Structure & Capital Resources

In FYE2016, the Group had successfully deferred a large portion of capital expenditure (“Capex”) and this deferment alsoextended throughout FYE2017. This includes suspending the construction of two vessels with a final decision to be made goingforward into 2018, pending market conditions and contracts secured.

In this respect and to ensure the Company’s sustainability and ability to continue as a going concern, ICON had received approvalon 29 March 2018 from a regulatory agency under the purview of Bank Negara Malaysia for the Group’s application for assistanceto mediate and work out a feasible debt resolution with the relevant Malaysian banks under a prescribed arrangement. Thearrangement entails a structured mechanism for debt resolution to strengthen the balance sheet and ensure that the debts postrestructuring are at a sustainable level. The restructuring exercise, once completed, will put the Company in a much strongerfooting to move forward and compete in the market.


FINANCIAL INDICATORS 2017 2016 2015RM’000

Revenue 204,625 226,915 266,566

Loss before interest and tax (9,326) (109,624) (326,565)

Finance costs (42,476) (40,200) (36,996)

Loss after Tax (55,847) (146,699) (363,288)

Shareholders’ equity 517,457 572,259 718,828

Total assets 1,310,673 1,381,918 1,520,760

Borrowings 684,151 712,225 723,017

Net debt / equity ratio 1.23 1.14 0.87

Loss per share (sen) (5.28) (12.98) (30.93)

Net assets per share (RM) 0.44 0.49 0.61

Market capitalisation (as at financial year end) 270,753 429,673 506,190


2017 2016 RM’000 RM’000

Total Assets 1,310,673 1,381,918Total Equity 517,457 572,259Total Debt 684,151 712,225Cash and cash equivalents 22,338 39,495

2017 2016 Summary RM‘000 RM‘000

Net cash generated from operating activities 67,469 99,716Net cash used in investing activities (14,756) (86,257)Net cash used in financing activities (69,775) (57,235)Net decrease in cash balance (17,157) (43,614)Cash and bank balances 47,758 58,720Cash and cash equivalents at the beginning of the year 39,495 83,109Cash and cash equivalents at the end of the year 22,338 39,495

Internal Group Strategies in Responseto Market Environment

The Group responded pro-actively to drivevessel utilisation rates via competitivebidding. As at 31 December 2017, theGroup’s total value of contracts stood atRM254.8 million.

As before, the strategy was to seek ahealthy balance between “quick wins”with smaller margins but fasterturnaround periods; and that of longer-term contracts with larger earningpotential but longer gestation periods.

Internally, the Group continue to focus onoptimising the core assets of manpower,vessels, customer and vendor relationshipswhile strengthening its excellent HSE trackrecord. For FYE2017, the Group achieved4.1 million manhours without any Loss TimeIncident (“LTI”).

Contracts Secured & Order Book

The Group secured several contractsduring FYE2017 which contributedpositively to the earnings and net assetsof ICON group for the year under review.

These include the three-year umbrellacontract from Petronas Carigali Sdn Bhd(“PCSB”) for the provision of spot chartermarine vessels services. The contract isfor a period of five years, effective 15March 2017 with a two-year extensionoption period.

ICON was also awarded a RM8 millionPSV charter contract by HalliburtonEnergy Service (M) Sdn Bhd on April2017.

On 26 May 2017, The Group secured aRM5.4 million AHTS charter contract fora 10-month period jointly awarded bySarawak Shell Berhad and Sabah ShellPetroleum Company Limited.

In June 2017, ICON secured anadditional AHTS charter with PCPPOperating Company Sdn. Bhd. The 166-day charter that comes with a 30-dayextension option and is valued at RM3.4million is to support PCPP’s plug andabandonment programme at blockSK305 in Sarawak.

As for long-term contracts, the Groupsecured a three year AWB charter hirefrom Zell Transportation Sdn. Bhd. (whichwas awarded a long-term charter byBrunei based SPHI Marine Sdn. Bhd.).The contract has a value of RM72 millionwith a two-year extension option to benegotiated on a yearly basis.

With this, the Group’s order book nowstands at RM254.8 million as at 31December 2017, of which, about 49% orRM124.3 million is for a firm period. Thebulk of the order book consists of localcontracts. All contracts will contributepositively to the Group’s earnings andnet assets for the upcoming financialyear and beyond.


ORDER BOOK STATUS

Firm Option

49% 51%

Order book replenished to

RM254.8mil


Cash Management

The Group generated RM67.5 millioncash from operating activities and cashoutflow of RM14.8 million for investingactivities.

The Group net cash outflow for financingactivities was RM69.8 million as of 31December 2017. The Group cash andcash equivalents stood at RM22.3million.

VESSEL MANAGEMENT

Two vessels with low utilisation and duefor drydocking were laid-up to reducecost. In ensuring a high-level ofoperational readiness and vessel’availability, maintenance and repairworks were carried out during the year inaccordance to ICON’s plannedmaintenance system (“PMS”). Closemonitoring on compliance to the PMS byour Technical team ensured no vesselexceeded more than 5% of its plannedand scheduled jobs.

We continue to implement our fuelmonitoring and management system onvessels, which ensured vessels areoperated economically and inaccordance to the agreed optimum fuelconsumption for each vessel.

On a separate note, we also have anenbloc drydocking arrangement with amajor Malaysian shipyard. The Groupwas able to benefit from economies ofscale as well as to enable a better cashflow planning due to the favourablepayment scheme.

PEOPLE MANAGEMENT AND DEVELOPMENT INITIATIVES

Throughout the year, ICON continued tofocus on talent retention, developmentand succession planning as part of itsinternal strategy to ensure businesssustainability. Given the present acuteshortage of suitable talent across theoffshore marine industry, we havecontinued to emphasise talentmanagement as being pivotal to theGroup’s long-term success.

More details of our talent initiatives areprovided in the Sustainability Statementof this Annual Report.

We continue to maintain good workingrelationship with Akademi Laut Malaysia(“ALAM”) and other maritime andeducation training (“MET”) institutions

towards developing and ensuringavailability of an adequate pool ofseafarers to meet current and futureICON seafarers needs.

ANTICIPATED OR KNOWN RISKS

The Group remains cognisant of its riskfactors which include any potentialvolatility in crude oil prices, which mayimpact demand for OSVs and depressedvessel charter rates. Accordingly, theGroup continues to hedge itself betweenlong-term charter contracts with fixedrates and shorter ones that provide quickrevenue recognition and cash flow.

In the same vein, the Group will activelyseek opportunities to diversify across thesupply chain to provide related supportservices such as subsea, maintenanceand repair and offshore installation andconstruction. This would be achieved viajoint venture partnerships or outrightmergers or acquisitions via suitable parties.

We continue to invest in developing theGroup’s talent through variousprogrammes, fully aware that manpowerremains a critical risk area for all OSVoperators. There is a lack of qualifiedpersonnel in Malaysia for both onshoreand offshore personnel, with the latterfacing an acute shortage particularly forthe top four shipboard positions. Ourmajor shareholder, has been verysupportive of our talent trainingprogramme for FYE2017 and the samesupport and commitment has beenextended into FYE2018.

OUTLOOK FOR 2018

Global stockpiles continue to drop sincethe beginning of the year as demandsteadily outstrips supply. According to theInternational Energy Agency, demandgrowth for 2018 is expected to grow by1.4 mb/d with total demand projected toreach the 100 mb/d level in 4Q2018.Drilling activity has increased across keymarkets - locally and abroad.

Increased US shale gas production andgeo-political events in the Middle-East,East Asia and trade wars are fewexamples of events that may derail thecurrent rise of crude oil prices and affecton the supply and demand of globalcrude oil.

The continued quota discipline by OPECand non-OPEC countries also instilsconfidence that crude oil prices willremain stable, if not, increase in 2018.Certainly, the agreement by Saudi Arabiaand Russia to co-chair a monitoringcommittee to assess adherence toproduction targets as well as to continuelimiting output through the end of 2018further reinforces positive sentiment.

In Malaysia, the government hasmapped out various policies andincentives to spur the growth of the oiland gas sector, given its importance asa national key result area under theEconomic Transformation Programme(“ETP”). The sector is targeted to delivera 5% annual growth until 2020.


TOTAL ASSETRM1.3bil

ADJUSTED EBITDARM83.2mil


We are hopeful that the optimism, felt in themarket will see PETRONAS and other oiland gas players stepping up theirinvestment in the upstream sector whichwill translate into stronger demand forservices including the OSV sector.However, conditions will remainchallenging. Due to the long value chainof the industry, the multiplier effect will takea while to set in for OSV players. Oil andgas will continue to come under pressurefrom Renewable Energy (“RE”) with moreenergy companies looking into the latter.

The on-going rationalisation of the entiresupport services industry is another factorthat must be considered. In the long-term,consolidation is good for the localindustry. This is the inevitable reality withPETRONAS also indicating their supportfor consolidation to create a smaller, butmore competitive and efficient supportservices industry. However, this wouldmean that all players must be at theircompetitive best to ride out the toughoperating conditions ahead.

FORWARD LOOKING STATEMENT

In charting the best course forward,ICON held an Away Day in October2017. The purpose of this exercise wasfor the Board and Senior Management tooutline key strategic issues to chart thestrategic direction of the Company goingforward within a five year timeframe.

At this session, the participantsdeliberated on and challenged theGroup’s aspirations and goals.

These encompassed external andinternal business factors, material issues,the impact of rising technological trends,growing competition, socio-economicand political issues.

Essentially, the Group’s approach is tocontinue bidding competitively forcontracts both locally and abroad. Wewill continue to refine our business modelto derive further cost effectiveness andefficiency. The past few years presented



the Group with opportunities to pursueinternal improvements, to strengthen itsbusiness fundamentals and emerge as astronger and more resilient company.

We remain on the look-out for viableopportunities that will allow us to expandour footprint across the value chain,either vertically or horizontally. Beyondexpanding the Group’s revenue base,horizontal integration will strengthenICON’s capability to deliver acomprehensive solution and providesynergy to oil and gas players. This willenable ICON to bid more competitivelyfor contracts. Vertical integration willfurther entrench our presence locally andregionally, and will give us competitiveadvantages.

Management will continue to considerother corporate activities to increasestakeholder value, taking intoconsideration the size and strength ofICON’s balance sheet.

While we are supportive of initiativestaken by our national oil company, weremain hopeful that PETRONAS will playan active role in this process byprioritising local OSV players over foreigncompanies. This is essential given theimportance of the value chain towardssupporting national aspirations in makingMalaysia a regional oil and gas hub by2020.

DIVIDEND POLICY

The Group’s ability to pay out dividendsis based on its profitability and its long-term strategic plans for cashconservation as well as to drive futuregrowth plans. Given the Group’s financialperformance, no dividend was declaredby the Board for FYE2017.

REVENUE(RM MILLION)

ADJUSTED EBITDA*(RM MILLION)

ADJUSTED LAT/PAT*(RM MILLION)

NET GEARING RATIO(%)

TOTAL ASSETS(RM MILLION)

EQUITY ATTRIBUTABLE TO SHAREHOLDERS(RM MILLION)

’14’15

318.9

’16

226.9

266.6

’17

204.6

’14’15’16’17

128.1

184.8

88.3

83.2

’15 ’14

90.7

26.0

’16’17

(11.2)(21.4)

’17 ’16

1,781.7

’15

1,520.8

’14

1,381.91,310.7

’17 ’16

0.6

’15

0.9

’14

1.11.2

’17 ’16 ’15 ’14

1,080.6

718.8

572.3517.5


FINANCIALHIGHLIGHT

* LAT - Loss After Taxation* EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortisation* Adjusted EBITDA and Adjusted LAT/PAT excludes exceptional items mainly impairment of vessels of RM34.4 million (2016: RM135.5 million, 2015: RM195.4

million) and impairment of goodwill: NIL (2016: NIL, 2015: RM180.6 million)

HSE STATISTICS

4.1mil Manhours without LTI

FLEET UTILISATION RATE


OPERATIONALHIGHLIGHT

ORDER BOOK REVENUE

Chartered/on-hired period

56%

Planned maintainanceprogramme andscheduled drydocking

21%

Available for charter/Temporary shutdowns/lay-ups

23%

56%Fleet Utilisation Ratein FYE2017

Firm

Option

51%49%

RM254.8mil

Total order book as at31 December 2017

Overseas Revenue

Malaysia Revenue

RM204.6mil

FYE2017:

RM226.9mil

FYE2016:

37%31%

63%69%

2017 20162017 2016

Share Performance (RM) 2017 2016 2015

Year high 0.48 0.42 0.87 Year low 0.21 0.30 0.27

Year close 0.23 0.37 0.43

Market Capitalisation 270,752,573 429,672,562 506,189,593

* Based on daily last traded price


SHARE PRICEPERFORMANCE

Jan DecNovOctSeptAugJulJunMayAprMarFeb

3 JAN 2017 > 29 DEC 2017

0.00

0.10

0.20

0.30

0.60

0.50

0.40

LIST OF 2017 AWARDS

TechnipFMC & Baker Hughes from June2017 to July 2017 “Project execution wassuccessful and completed on schedulewithout any accidents”

Awarded to : Icon AlizaFrom : PETRONAS Carigali Sdn. Bhd. (“PCSB”)

HSE Award 2016 - SILVER AWARD(Category C: 20,000 - 100,000 workhours)

Awarded to : Icon Offshore BerhadFrom : Carigali-PTTEPI Operating Company Sdn. Bhd. (“CPOC”)

Best Performing Vessel - Q1/2017

Awarded to : Icon KayraFrom : Brunei Shell Petroleum Company Sendirian Berhad

In recognition of excellent performance withregards to the dedication and commitmentto excellent HSE achievement onboard forahead of schedule project

Awarded to : Icon AlizaFrom : Sapura Offshore Sdn. Bhd. (“SOSB”)

PCPP’s Achievement of 500k ManhoursWithout LTI for SK305 Abandonment Project”- and performing Good Efforts & commitmentsToward Zero LTI for the year 2017”

Awarded to : Icon Offshore Group Sdn. Bhd.From : PCPP Operating Company Sdn. Bhd.


LIST OFAWARDS

Best Performing Contractor 2017 Safe &Reliable Logistic Services Provided toBrunei Shell Petroleum Company Sdn. Bhd. Awarded to : Icon Ship Management Sdn. Bhd.From : Brunei Shell Petroleum Company Sendirian Berhad

In recognition of excellent performance andcommitment to excellent HSE achievementwithout LTI for completing the project aheadon schedule. PROVISION OF F12JT-APIPELINE PRE COMMISSIONING SERVICESFOR PCSB, F12 FIELD, BINTULU, SARAWAKfrom 8 May 2017 until 23 May 2017

Awarded to : Icon AlizaFrom : Sapura Offshore Sdn. Bhd. (“SOSB”)

In recognition of excellent performance andcontribution in the SK FIELD WIDESHUTDOWN from 6 September 2017 to 15September 2017.

Awarded to : Icon AlizaFrom : Murphy Sarawak Oil Co., LTD

Provision of Brownfield Major ModificationWork of Bardegg 2 and Baronia EORDevelopment Project with ExcellentLeadership & Teamwork

Awarded to : Icon AlizaFrom : Dayang Enterprise Sdn. Bhd.


CALENDAR OFSIGNIFICANT EVENTS

CSR with Mercy Malaysia

Handing over of donation to Mercy Malaysia for flood victims

JULY

Hari Raya Decoration Competition /Celebration

Staff from HQ, KL held their first Hari Rayacelebration internally to foster closerworking relationship and instill the spirit ofcamaderie

SEPTEMBER

Career Talk

ICON held two “Career Talks” in Kemaman (SMK Kijal and SMKAyer Puteh)

DECEMBEROCTOBER

BOD Away Day

The Board Members had their away day to discuss strategy onmoving forward

AUGUST

Career Talk

ICON visited three schools in Labuan (SMK Labuan, SMK TamanPerumahan Bedaun, Kolej Vokasional Labuan) to hold “CareerTalks” in the oil and gas industry

MAY

Annual General Meeting 2016

ICON held its 5th Annual General Meetingon 24 May 2017

JUNE

Majlis Berbuka Puasa

Orphans and underprivileged children fromPertubuhan Asnaf Al Barakh Malaysia(Ampang) broke fast with ICON staff.

ICON Kemaman Base held their “Majlisberbuka puasa” with clients



(CONTINUED)

Given our business exposure and operations which are primarily aligned to the oil and gas industry, theGroup has always maintained a heightened sense of vigilance, compliance and disclosure with regards tosustainability, particularly in the areas most material to ICON. These include but are not limited to HSE,talent management, staff welfare, vessel management, business and operational risks, as well as impacton the community. The Group remains focused and steadfast in ensuring a sustainable business operationthat creates long-term shared values for stakeholders.

With the regulator’s push for greater sustainability disclosure, the Group presents its inaugural SustainabilityStatement (“Statement”), which provides a narrative of its efforts in creating shared values in 2017.


SUSTAINABILITYSTATEMENT

Sustainability is an integral component insupporting ICON’s growth and progress. Since itsinception, sustainability has been championedfrom within as a conscious corporate decisionrather than a reactionary response to externaldevelopments.

STATEMENT SCOPE & BOUNDARY

ICON’s Statement provides disclosure on the Group’s most pertinent projects, initiatives and activities; and that of its subsidiariesand joint venture companies. Excluded is the Group’s value chain of third party contractors, suppliers and vendors.

Going forward, the Group believes that it is in a position to help cultivate greater sustainability consciousness among its businesspartners and with that, will explore the possibility to cascade its sustainability policies, culture and best practices to its valuechain partners.

REPORTING PERIOD 1 January 2017 to 31 December 2017

REPORTING CYCLE Annually

PRINCIPLE GUIDELINES Bursa Securities’ Main Market Listing Requirement Practice Note 9 Article 6.

GOVERNANCE

Sustainability is given due consideration across all levels of the Group’s hierarchy which includes the Board and SeniorManagement Level, and it is then cascaded across the organisation.

The Group’s governance is guided by the following internal policies. It is also guided by the mandated HSE and other industryrequirements of the oil and gas industry.

• Group Corporate Values• Board Charter• Code of Ethics,for which we have three:

i. Employee Code of Ethicsii. Directors Code of Ethicsiii. IT Code of Ethics

• Whistleblower Policy• Risk Management Policy• Corporate Disclosure Policies and Procedures• HSE Policy

In October 2017, ICON held a Board Away Day meeting that was attended by the Chairman, board of directors and seniormanagement of ICON. Aside from business issues, the meeting included discussion on sustainability related matters that wereof material importance to ICON.

Based on the internal insights derived from this exercise, Management was able to further refine their materiality identificationefforts across all EES pillars.

The Group also continued to engage with stakeholders as part of its overall sustainability strategy.

STAKEHOLDER ENGAGEMENT

During the financial year, ICON continued to engage with its various stakeholders through a wide range of communicationchannels and mediums. The engagements were either part of the natural obligatory communications with shareholders i.e.circulars announcing the annual general meeting, publication of quarterly financial results.; or as an additional effort by the Groupto solicit feedback from stakeholders to enrich its sustainability perspective.





Listed below is a comprehensive list of stakeholder engagement activities undertaken in 2017:

Stakeholder Group Engagement Approach Frequency

Customers Meetings Regular Email Regular Client/Commercial/Service Manager/Operation teams Regular

Employees Town Halls Regular Newsletters Regular Engagement Events Regular

Shareholders, Investors & Analysts Annual Report Annually Annual General Meeting Annually Financial Reports and Analyst Briefings Quarterly Media Releases Periodic Shareholder Updates Regular Investor Relations Page (Website) Regular

Government & Regulators Meetings & Visits Regular Reports Periodic Participation in Government & Regulatory events Ad-hoc Feedback on Consultation Papers Regular

Community & General Public CSR Activities/ Events Periodic

MATERIALITY MATRIX

Having engaged with multiple key stakeholders and drawing from our own internal insights and perspectives, the Group wasable to identify its materiality matters. The rest of this Statement provides an account of the Management’s approach in managingeach of these identified materiality matters and the progress achieved as well as the key learning points for the year.

MATERIALITY MATTERS

Crude Oil Prices

The Group is heavily dependent on upstream activity within the oil and gas sector, particularly the awarding of exploration andproduction (“E&P”) contracts. Demand for such projects is naturally influenced by the price of crude oil.

Given the recovery of crude oil prices in 2017; averaging around USD55 per barrel, the Group’s risk factor has been to a certainextent, mitigated. However, given that global or local macro-economic developments may lead to fluctuations in crude oil prices,the Group has restructured its business model to ensure sustainable operations amidst a “new norm” crude oil price environment.

The various efforts undertaken over the past three years have augured well, positioning the Group to sustain its operation withinthe current market environment. These efforts include continued reduction of capital and operational expenditures, enhancingoperational synergy between its subsidiaries, expanding strategic partnerships and seeking new opportunities to improve itscompetitiveness.



Vessels Fuel Management

The Group continues to practice prudence in managing its key operational costs that include vessels fuel management. In 2017,such efforts have resulted in savings for ICON.

Among the various improvement measures put in place were implementation of a remote fuel monitoring system for vesselactivities, weather and vessel movement. This is in addition to having a dedicated team monitoring and conducting a monthlyanalysis on the vessels fuel consumption and performance. These measures were supplemented by organising multiple trainingand engagement sessions with ship crew to promote greater awareness and action on fuel management.

Going forward, we will maintain the hard-earned fuel management efficiencies we have achieved. We will continue to implementall effective measures while ensuring more rigorous monitoring so that meaningful data is available to track our performanceaccordingly.

HSE Track Record

ICON continues to place emphasis on strengthening its HSE proven track record.

0

0 / 1

0

0 / 5 / 0

10 / 158

15 / 42 / 39 / 94 / 15,944ROVING / WALKABOUT INSPECTION / MANAGEMENT VISIT

/ UAUC (OFFICE) / UAUC (VESSEL)

NM (Near Miss) - VSL REPORT / FROM UAUC

FIRE / PROPERTYDAMAGED@LOSS / SPILL

FA (First Aid)

RWI / MTIRestricted Workday Injury/ Medical Treatment Injury

LTI

4.1millionManhours Without LTI

396Free LTI Days

HSE STATISTICS FOR 2017

2017 1Q 2Q 3Q 4Q YTD TARGET

REPORTED INJURIOUS INCIDENTS

LTI - - - - - 0

RWI - - - - - 0

MTI - - 1 - 1 0

FAC - - - - - 0

REPORTED NON-INJURIOUS INCIDENTS

FIRE - - - - - 0

PD / LOSS 3 1 - 1 5 0

HCR - - 1 - - 0

NM 1 3 2 4 10 -

OTHERS

UAUC (VESSEL) 2,633 3,091 5,344 4,876 15,944 1/DAY/ VSL

UAUC(OFFICE) 9 27 34 24 94

NEAR MISS FROM UCUA 86 28 31 13 158

ROVING 2 1 7 5 15

WB/I 9 6 10 17 42

MGMT VISIT 14 8 11 6 39 1/QTR

Manhours (Offshore & Shore) 956,880 979,568 927,304 886,344 3,750,096

LTIF 0.00 0.00 0.00 0.00 0.00 0.00

TRICF 0.00 0.00 0.34 0.26 0.26 <1.00

ICON received several letters of commendation as well as awards from oil and gas majors as follows: (Refer to page 24 for details)

Year Description Awarded to From

TechnipFMC & Baker Hughes. June-July 2017 “Project Icon Aliza PETRONAS Carigali execution was successful and completed on schedule without any Sdn. Bhd. (“PCSB”) accidents” HSE Award 2016 - SILVER AWARD Icon Offshore Carigali-PTTEPI (Category C: 20,000 - 100,000 workhours) Berhad Operating Company Sdn. Bhd. (“CPOC”) In recognition of excellent performance with regards to the dedication Icon Aliza Sapura Offshore and commitment to excellent HSE achievement on-board for ahead Sdn. Bhd. (“SOSB”) of schedule project

Best Performing Vessel - Q1/2017 Icon Kayra Brunei Shell Petroleum Company Sendirian Berhad

Best Performing Contractor 2017 Icon Ship Brunei Shell 2017 Safe & Reliable Logistic Services Provided to Brunei Shell Management Petroleum Company Petroleum Company Sdn. Bhd. Sdn. Bhd. Sendirian Berhad

“PCPP’s Achievement of 500k Manhours Without LTI for SK305 Icon Offshore PCPP Operating Abandonment Project” - and for performing Good Efforts & Group Sdn. Bhd. Company Sdn. Bhd. commitments Toward Zero LTI for the year 2017”

Provision of Brownfield Major Modification Work of Bardegg Icon Aliza Dayang Enterprise 2 and Baronia EOR Development Project with Excellent Leadership Sdn. Bhd. & Teamwork

In recognition of excellent performance and commitment to excellent Icon Aliza Sapura Offshore HSE achievement without LTI for completing the project ahead on Sdn. Bhd. (“SOSB”) schedule.

In recognition of excellent performance and contribution in the SK FIELD Icon Aliza Murphy Sarawak Oil WIDE SHUTDOWN from 6 September 2017 to 15 September 2017. Co., LTD

The marine sector of the oil and gas industry is a high risk sector and it is ICON’s goal that all staff, especially our marine crew,return home safely to their families after each tour of duty. However, safety is everyone’s responsibility and can only be achievedif all involved play their part.

We have enforced upon our crews the need to pay greater attention to both the Permit to Work system and Lock Out Tag Out(“LOTO”) system we have implemented onboard vessels. They must also strictly enforce with no exceptions, the rule for fasteningcargo securely prior to vessels departing from port or from an offshore location.

We have conducted Management Visits to the vessels throughout the year. We believe that HSE is an issue that is critical acrossour supply chain and all parties, including contractors, suppliers and vendors must share a similar mindset and commitment asICON towards HSE. Hence, we continue to reach out in conveying this commitment across our supply chain.

In addition to these, we have implemented more vigilant and continuous vessel roving by qualified shore-based personnel.

Remaining ever vigilant and continuing to be proactive, ICON continues to initiate various HSE programmes and initiatives. Amongthose held in 2017 were Unsafe Act and Unsafe Condition (“UAUC”), whereby all vessels were required to provide submissionswith effect to the aforementioned. Special focus was placed on improving cargo securing practices onboard fleet vessels, whichis a key HSE concern for ICON as well as for many OSV operators.





The Group also initiated quarterly HSE campaigns as follows:

Campaign Details

Q1 SMS Compliance Emphasising on the importance of Near Miss reporting by vessels. The objective is to learn from mistakes and share experiences and lessons learnt with others. This is supported via a simple Near Miss reporting procedure in poster form and a SOP-APP1-NM1-Near Miss report form.

Q2 Hygiene awareness & inspection Encouraging crew to maintain a clean vessel and workplace environment by adopting various onboard measures to ensure the vessel maintains a high level of cleanliness at all times. Cleanliness is also linked to improved efficiency and effectiveness within limited work space as well as a more hygienic and safer environment.

Q3 Health Campaign Emphasising on recognition of common cold symptoms, the spread of the illness and preventive measures.

Q4 Monsoon & Stop Work Emphasising on the do’s and don’ts given the annual North East monsoon season as well as the role of Masters’ overriding authority regarding Stop Work orders.

Also highlighted are the requirements for cargo securing prior to departure of vessels from port; and the need to implement clear deck practices and other precautions whenever vessel is moored at the anchorage.

Efforts were also aimed at the vessels’ masters on the importance of observing proper Stop Work implementation onboard,especially during adverse weather or when faced with potential unsafe situations onboard.

One key initiative was to organise engagement and debriefing sessions where crew members could share their lessons learntand insights with each other. One of these was the Officers Forum which saw 55 participants coming together to share theirknowledge and discuss their experiences towards improving safety aspects of operations as well as undertaking plannedmaintenance onboard.

One key initiative wasto organise engagementand debriefing sessionswhere crew memberscould share theirlessons learnt andinsights with each other

This method is different from the typical top-down push of HSE culture and practices and by getting peers to share; has led togreater buy-in. In 2017, sessions were held for Masters and Chief Engineers in particular.

During the year, 39 top management visits were held whereby senior level managers would physically board and inspect vesselsand meet with crews to get a first-hand experience of “on-ground” conditions. The scope of such visits is not confined solely toHSE factors but also on vessels’ cleanliness, hygiene, PPE facilities and general conditions. The visits also provide a platform formarine crew to interact with the senior management team from the office.

In 2017, the Group organised 39 such visits to vessels as listed below:

No Date of Vessel Location Visitor: Shore-base Inspection Manager

1 20/01/2017 Tanjung Pinang 3 Kemaman • Captain Syed Irfan • Captain Isham Ishak2 21/01/2017 Tanjung Pinang 1 Kemaman • Captain Syed Irfan • Captain Isham Ishak3 25/01/2017 Omni Akira Kemaman • Captain Syed Irfan4 26/01/2017 Tanjung Pinang 1 Kemaman • Captain Syed Irfan • Azman Abd Razak5 30/01/2017 Tanjung Gaya Tok Bali • Captain Syed Irfan6 08/02/2017 Omni Emery Kemaman • Captain Hasrul Nizam7 09/02/2017 Tanjung Pinang 3 Kemaman • Captain Hasrul Nizam8 14/02/2017 Tanjung Pinang 3 Kemaman • Azman Abd Razak9 28/02/2017 Omni Emery 1 Kemaman • Azman Abd Razak10 28/02/2017 Tanjung Piai 1 Kemaman • Azman Abd Razak11 01/03/2017 Tanjung Pinang 1 Kemaman • Azman Abd Razak12 08/03/2017 Tanjung Pinang 4 Labuan • Mohd Fazurin Abidin13 20/03/2017 Omni Victory Kemaman • Azman Abd Razak14 26/03/2017 Icon Samudera Kemaman • Azman Abd Razak15 04/04/2017 Omni Akira Kemaman • Azman Abd Razak16 05/04/2017 Tanjung Puteri 1 Kemaman • Azman Abd Razak17 06/04/2017 Omni Marissa Kemaman • Azman Abd Razak18 12/04/2017 Tanjung Biru 1 Labuan • Mohd Fazurin Abidin19 17/04/2017 Tanjung Pinang 1 Kemaman • Captain Hassan Ali20 27/04/2017 Tanjung Piai 2 Labuan • Mohd Fazurin Abidin21 28/04/2017 Tanjung Dahan 1 Port Kelang • Captain Syed Irfan22 08/06/2017 Omni Tigris Labuan • Mohd Fazurin Abidin23 04/07/2017 Tanjung Pinang 1 Kemaman • Azman Abd Razak • Captain Syed Irfan24 05/07/2017 Icon Sophia Kemaman • Azman Abd Razak25 05/07/2017 Omni Akira Kemaman • Azman Abd Razak26 12/07/2017 Tanjung Huma Labuan • Mohd Fazurin Abidin27 27/07/2017 Tanjung Piai 1 Kemaman • Azman Abd Razak28 27/07/2017 Tanjung Piai 2 Labuan • Mohd Fazurin Abidin29 28/07/2017 Omni Tigris Labuan • Mohd Fazurin Abidin30 30/07/2017 Tanjung Pinang 1 Kemaman • Captain Hassan Ali • Captain Zukernain31 12/09/2017 Tanjung Sari Bintulu • Mohd Fazurin Abidin32 13/09/2017 Icon Azra Labuan • Captain Zukernain33 28/09/2017 Omni Victory Kemaman • Rahman Jaya34 10/10/2017 Tanjung Pinang 2 Kemaman • Azman Abd Razak35 17/10/2017 Tanjung Pinang 1 Kemaman • Azman Abd Razak36 27/10/2017 Tanjung Gaya Tok Bali • Azman Abd Razak37 03/11/2017 Tanjung Piai 2 Kota Kinabalu • Mohd Fazurin Abidin38 25/11/2017 Tanjung Pinang 1 Kemaman • Azman Abd Razak39 30/12/2017 Tanjung Gaya Tok Bali • Captain Syed Irfan



Talent Management & Development

The industry continues to face an acuteshortage of talent and rely on the opentalent pool. ICON has put in placevarious programmes and is proud toshare that it has achieved anencouraging measure of success in thisarea. This is also in line with complyingto PETRONAS’ requirements for vesselsto be manned by 100% local crew.

The Group has increased its trainingbudget in 2017 by 13% to RM2.1 million(2016: 1.9 million). Despite thechallenging operating conditions, ICONcontinues to prioritise the development ofits people. As in previous years, emphasiswas placed on training and developmentactivities for marine crew that make upalmost 83% of our total workforce.

We also continue to maintain strongrelationship with various Maritime Educationand Training (“MET”) Institutions. Amongour initiatives in 2017 were:

• Providing On-Job-Training for 23cadets as part of a collaboration withMET institutions. Under thiscollaboration, ICON provided thecadets, aged 20-21, an opportunity togain first-hand practical skills and

training. The best performing cadetswill be offered employment with ICON.Six of the cadets are now serving asofficers onboard ICON’s vessels.

• Providing eight trainees with DPOperator training to produceadequate numbers of competentand qualified DP Operators to manICON DP equipped vessels. This isone of the key positions where talentis needed across the Malaysianmaritime industry. Currently, thereare five qualified DP trainees servingICON’s fleet.

• Once again collaborating with MET,ICON selected four candidates toundergo the APS. Upon completionof their combined courses,candidates shall serve as seniorofficers onboard ICON’s vessels.

In addition, ICON has organised trainingand professional developmentprogrammes, courses or events. One ofthese was the Emergency ManagementTraining (“EMT”) session conducted byexternal consultant using the principles ofthe Incident Command System for theICON Offshore Shore Based EmergencyResponse Team (“SERT”). The session washeld over the period of 16-17 May 2017.



23cadets undergone On-Job-Training

4trainees attendedAdvance Post SeaProgramme (“APS”)

8trainees attendedDynamic Positioning(“DP”) Operator training

TRAINING BUDGETIN 2017RM2.1mil

Other notable training initiatives were firstaid training conducted at ICON’sheadquarters in April 2017.

In 2017, the total number of trainingmanhours was approximately 2,200hours with an average of 40 hours foreach employee.

Minimising Carbon Footprint of Vessels

In 2017, all 35 ICON vessels compliedwith the latest MARPOL Regulation onSEEMP. The SEEMP is an operationalmeasure that establishes a mechanismto improve the energy efficiency of a shipin a cost-effective manner. The SEEMPalso provides an approach for shippingcompanies to manage ship and fleetefficiency performance over time using,for example, the Energy EfficiencyOperational Indicator (“EEOI”) as amonitoring tool.

The guidelines for the development of theSEEMP for new and existing shipsincorporates best practices for fuelefficient ship operation, as well asguidelines for voluntary use of the EEOI.

The EEOI enables operators to measurethe fuel efficiency of a ship in operationand to gauge the effect of any changes inoperation, e.g. improved voyageplanning, more frequent propeller

cleaning, or introduction of technicalmeasures such as waste heat recoverysystems or a new propeller. The SEEMPencourages the ship owner and operatorat each stage of the plan to consider newtechnologies and practices when seekingto optimise the performance of a ship.

Leadership Bench

The Group has a robust succession planin place, with many of its seniormanagement and management staffhaving risen through the ranks to assumeleadership positions in ICON.

The Group continues to prioritise internalhires in the nurturing of its next echelonof leaders. However, if required, ICON isnot averse to considering external hiresif there is no suitable internal candidateor talent.

Gender and Age Diversity

As an equal opportunity employer, ICONcontinues to seek ways to recruit morewomen into its organisation and this isreflected at the highest levels of theGroup. In 2017, the Board has twofemale directors, both sitting asIndependent, Non-Executive Directorsand will continue to improve its genderratio as and when necessary.

Similarly, we continue to create an equalopportunity environment whilst ensuringa healthy balance of young and seniorstaff to provide a strong blend of youthfulvigour and new ideas with proven,industry experience.



35ICON vessels compliedwith the latest MARPOLRegulation on ShipEnergy EfficiencyManagement Plan(“SEEMP”) to minimisecarbon footprint.

Community Relations

As an organisation that emphasisesCorporate Social Responsibility (“CSR”)with the goal of creating game-changing,positive impacts for stakeholders, CSR isa means to reflect our commitmenttowards building a better tomorrow forvarious segments of society.

Our approach to CSR consists ofcompany driven, strategic programmesto leave a lasting impact as well as one-off initiatives, which are mostlychampioned by employees. In 2017, theGroup contributed to Mercy Malaysia toalleviate the suffering of flood victims inKemaman, Terengganu as well as inPenang.

For this effort, cash collections from staffwere matched by the Company with thetotal proceeds then distributed to floodvictims. ICON has a physical presence inboth Kemaman and Labuan, henceManagement’s decision to focus itscommunity engagement efforts in theselocations.

PROMOTING MARITIME CAREERS ATGRASSROOTS LEVEL

ICON continues to be actively involvedwith Akademi Laut Malaysia (“ALAM”)and Politeknik Ungku Omar (“PUO”) inoffering a full range of maritime shippingrelated training to seafarers. Theseprogramme train those who will serveonboard domestic as well as foreigngoing vessels.

ALAM and PUO’s Marine EngineeringDepartment are ranked among the topinstitutions to offer maritime relatedtraining that adheres to world-classeducational and training standards.

While collaboration with ALAM and otherorganisations enhances the quality of thetalent pool, there is also a need to creategreater awareness and interest in careerwithin the maritime industry amongMalaysians.

Hence, we have continued to reach outto more schools in providing career talkstowards exposing students to theopportunities that are available in a sea-faring career. The talks are conducted byour own sea-faring staff using audiovisual aids to stimulate the interest ofstudents and to stir their minds towards

considering a career in the maritimeindustry. Each session was followed by aquestion and answer session so thatstudents could truly develop a betterunderstanding of being a mariner.

In 2017, we increased the number ofschools visited to five (2016: four).

MOVING FORWARD

We draw satisfaction and confidence in themany sustainability highlights achievedacross our operations in 2017. We are alsocognisant that the Group can improve itssustainability performance in several areasgoing forward. Certainly, the outlook ischallenging; given the present state ofevolution and flux in the oil and gas industryand that certain factors such as crude oilprices are beyond ICON’s control.

Nevertheless, we remain resolute andsteadfast in pursuing our sustainabilityagenda given its undeniable importancein today’s business environment.Sustainability is the means to chart abetter future - achieved via the creation ofa circular economy that provides sharedvalue for all stakeholders. We aspire toimprove our disclosure going forward.





(CONTINUED)

Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda, wasappointed to the Board on 26 February 2014 and he is theChairman and Non-Independent Non-Executive Director of theCompany.

He is a Fellow of the Institute of Chartered Accountants inEngland and Wales, and a member of the Malaysian Instituteof Accountants. He is also a member of the Malaysian Instituteof Certified Public Accountants and served on its council for 24years, including three years as its president.

He is also the Chairman of Ekuiti Nasional Berhad, MaxisBerhad, Yayasan Raja Muda Selangor and Yayasan Amir. He ispresently a Director of Khazanah Nasional Berhad and YayasanDayaDiri. He is also the Chancellor of University Selangor.

He was formerly the Executive Chairman ofPricewaterhouseCoopers (“PwC”) Malaysia, Chairman of theMalaysian Accounting Standards Board and DanamodalNasional Berhad. His previous international appointmentsinclude being a member of the PwC Global IFRS Board and theStandards Advisory Council of the International AccountingStandards Board. His previous public appointments includebeing a member of the Securities Commission Malaysia, theMalaysian Communications and Multimedia Commission, theInvestment Panel of the Employees Provident Fund and theBoard of Trustees of the National Art Gallery.

He is a nominee of Ekuinas Capital Sdn. Bhd., which indirectlyholds the entire equity interest in Hallmark Odyssey Sdn. Bhd.,a major shareholder of the Company, through E-Cap (Internal)Two Sdn. Bhd. and E-Cap (Internal) Three Sdn. Bhd.

He has attended all eight Board Meetings held in the financialyear ended 31 December 2017.


DIRECTORS’PROFILE

RAJA TAN SRIDATO’ SERI ARSHAD BIN RAJA TUN UDA71, Male, MalaysianChairmanNon-Independent Non-Executive Director

Datuk Wira Azhar bin Abdul Hamid, was appointed to theBoard on 26 February 2014. He is a qualified Accountant andis a Fellow of the Chartered Association of Certified Accountant(UK). He is also a member of the Malaysian Institute ofAccountants.

He is a Senior Independent Non-Executive Director and is alsothe Chairman of Audit and Risk Management Committee of theCompany.

He began his career as a Financial Internal Audit Manager atBritish Telecoms Plc. in London, United Kingdom and servedfrom 1989 to 1991 where he was responsible for operationalreview audits at British Telecoms District Offices in South EastEngland.

He then joined the Malaysian Co-Operative Insurance SocietyLtd. as the Head of Finance from 1992 to 1994. Subsequentlyin 1994, he joined the Sime Darby Berhad Group and heldvarious financial and senior management positions inmanufacturing, oil and gas, industrial equipment and plantationbusinesses, before leaving Sime Darby Berhad Group in 2010.His last position in the Sime Darby Berhad Group wasExecutive Vice President in Plantation Division.

In January 2011, he was appointed as an Independent Directorof Perbadanan Kemajuan Negeri Perak. In September 2011, hewas the Chief Executive Officer of Mass Rapid TransitCorporation Sdn. Bhd. until December 2014. Prior to hisappointment as the Chairman of Felda Global VenturesHoldings Berhad on 8 September 2017, he was the GroupManaging Director of Malakoff Corporation Berhad from 1 May2016 until 30 June 2017. He is also a Director in Hong LeongBank Berhad and Hume Industries Berhad.

He has attended seven out of eight Board Meetings held in thefinancial year ended 31 December 2017.


DIRECTORS’PROFILE

DATUK WIRAAZHAR BIN ABDUL HAMID56, Male, MalaysianSenior Independent Non-Executive Director

Syed Yasir Arafat bin Syed Abd Kadir, was appointed to the Boardon 14 November 2013. He graduated from University of Essex,United Kingdom in 1994 with a Bachelor of Arts (Hons) Degree inAccounting and Financial Management.

He is the Non-Independent Non-Executive Director of the Company.He is a member of the Audit and Risk Management Committee,Nomination and Remuneration Committee, Employees’ ShareScheme Committee and Executive Committee of the Company.

He began his career in 1994 as an Executive in the ProjectDevelopment Department of Aseambankers Malaysia Berhad (nowknown as Maybank Investment Bank Berhad). In 1996, he joined theCapital Markets Department of Commerce International MerchantBankers Berhad (now known as CIMB Investment Bank Berhad) asan Executive until 1998. He subsequently joined PengurusanDanaharta Nasional Berhad as an Executive from 1998 to 1999. Hejoined United Overseas Bank (Malaysia) Berhad as a DeputyManager in the Investment Banking Division, Corporate Finance in2000 and was involved in corporate advisory works until he left in2001.

He joined ING Corporate Advisory (Malaysia) Sdn. Bhd. in 2001 andserved for nine years, starting as Vice President of CorporateFinance, specialising in areas of mergers and acquisitions, equityand equity-linked fund raising, debt fund raising and financialadvisory for some of Malaysia’s leading companies in banking,plantations, automotive, telecommunications and property, amongothers. His last position was Country Manager of ING WholesaleBanking, a position that he was promoted to in 2007, overseeingboth ING Corporate Advisory (Malaysia) Sdn. Bhd. and ING BankN.V. Labuan Branch operations in Malaysia. He joined EkuitiNasional Berhad (“Ekuinas”) in 2009 as the Managing Partner,Investment, where he oversees the Investment Team and leadsEkuinas’s portfolio investments in the oil and gas industry. Currently,he is an Executive Director and Chief Executive Officer of Ekuinasand is a member of its Investment Committee.

He is a Director of Hallmark Odyssey Sdn. Bhd. (“HOSB”), a majorshareholder of the Company. HOSB’s shareholders are E-Cap(Internal) Two Sdn. Bhd. and E-Cap (Internal) Three Sdn. Bhd., whichin turn are wholly-owned subsidiaries of Ekuinas Capital Sdn. Bhd.

He has attended all eight Board Meetings held in the financial yearended 31 December 2017. He does not sit on the Board of otherpublic companies and public listed companies.


DIRECTORS’PROFILE

SYED YASIRARAFAT BIN SYED ABD KADIR46, Male, MalaysianNon-Independent Non-Executive Director

Edwanee Cheah bin Abdullah, was appointed to the Boardon 26 February 2014. He obtained a Diploma in MechanicalEngineering from Singapore Polytechnic in 1973. In 1999, heobtained a Master in Business and Administration (Technology)Degree which was jointly awarded by Deakin University inMelbourne, Australia and the Association of ProfessionalEngineers, Scientists and Managers in Australia.

He is an Independent Non-Executive Director of the Company.He is the Chairman of the Nomination and RemunerationCommittee and Employees’ Share Scheme Committee of theCompany. He ceased to be a member of the Audit and RiskManagement Committee with effect from 25 August 2017.

He has over 40 years of international experience in the energyand oil and gas industries. He began his career with ShellBrunei LNG Sdn. Bhd. in 1973 as a trainee engineer and hassince served various companies with the Shell Group ofCompanies (“Shell Group”) in Malaysia, Singapore, Brunei,South Korea, Netherlands, United Kingdom and United Statesof America for 32 years. During his tenure with the Shell Group,he had assumed various positions including Engineer, SiteRepresentative Manager, Division Head and Global Consultantwhere he was responsible for, among others, engineeringrelated matters, project management and internal consultancy.

In 2006, he left Shell International Exploration and ProductionB.V., Netherlands. In 2007, he joined S2 Click Sdn. Bhd., an oiland gas consultancy firm, as the Director and PrincipalConsultant, where he provided consultancy services to variousoil and gas companies.

He has attended seven out of the eight Board Meetings held inthe financial year ended 31 December 2017. He does not siton the Board of other public companies and public listedcompanies.


DIRECTORS’PROFILE

EDWANEECHEAH BIN ABDULLAH67, Male, MalaysianIndependent Non-Executive Director

Madeline Lee May Ming, was appointed to the Board on 26February 2014. She obtained her Bachelor of Laws (Hons)Degree from Queens University Belfast, United Kingdom in1991. She pursued her postgraduate studies at the sameuniversity and graduated with a Master of Laws in 1992. In1993, she became a member of Grays Inn, United Kingdomand was called to the Bar of England and Wales.

She was subsequently called to the Singapore Bar in 1995 andalso to the Malaysian Bar in 2001.

She is an Independent Non-Executive Director of the Company.She is a member of the Nomination and RemunerationCommittee and the Employees’ Share Scheme Committee ofthe Company.

She has been in legal practice for over 24 years. She embarkedher career as a pupil Barrister in the Chambers of 4 Brick Court,London, United Kingdom in 1993 until 1994. She continued herinternational legal practice in Singapore until 1996 and inVietnam until 1999.

She resumed her legal practice in Malaysia in 2000 withMessrs. Raslan Loong and thereafter, Messrs. Mazlan &Associates where she was a Partner in 2006. In 2014, she leftMessrs. Mazlan and Associates and is now with Messrs. IlhamLee, as a founding partner.

She has attended all eight Board Meetings held in the financialyear ended 31 December 2017. She does not sit on the Boardof other public companies and public listed companies.


MADELINELEE MAY MING49, Female, MalaysianIndependent Non-Executive Director

DIRECTORS’PROFILE

Datuk Abdullah bin Ahmad, was appointed to the Board on24 March 2015. He graduated from University Malaya in 1970with a Bachelor of Arts. He then obtained his post-graduateDiploma in Management Science from National Institute ofPublic Administration (INTAN) in 1974 and Certificate inPetroleum Management (Arthur D’Little) Boston, United Statesof America in 1985.

He is an Independent Non-Executive Director of the Company.He is a member of the Nomination and RemunerationCommittee with effect from 25 August 2017.

He was formerly an Administrative and Diplomatic ServiceOfficer. He started his career as a civil servant assigned tovarious divisions within the purview of the Ministry of HomeAffairs. His last position was in Public Services Department.

In 1979, he joined Petroliam Nasional Berhad (“PETRONAS”)as the Head of Human Resource Planning and Recruitment.Whilst serving PETRONAS, he was exposed to both upstreamand downstream at operating unit level, including Carigali-BP(a joint venture company between PETRONAS Carigali Sdn.Bhd. and British Petroleum Development Company, UnitedKingdom) for exploration and production of oil, offshore inKudat, followed by other postings to domestic marketing, areaoffice, regional office, petrochemical plant and subsidiaries invarious capacities, including Board member of PETRONASproperty related subsidiaries.

He has attended seven out of the eight Board Meetings held inthe financial year ended 31 December 2017.


DATUK ABDULLAHBIN AHMAD70, Male, MalaysianIndependent Non-Executive Director

DIRECTORS’PROFILE

Puan Farina binti Farikhullah Khan (“Pn Farina”), wasappointed to the Board on 18 May 2016 . Pn Farina graduatedfrom the University of New South Wales in Australia with aBachelor of Commerce in Accounting in 1993. She is a Fellow ofthe Institute of Chartered Accountants in Australia. She has alsocompleted the Advanced Management Program at HarvardBusiness School in the USA.

She is an Independent Non-Executive Director (“INED”) of theCompany. She is a member of the Audit Risk ManagementCommittee with effect from 25 August 2017.

Pn Farina has 23 years working experience, with 20 years in oiland gas industry and 10 years of which in the managementcapacity. She started out her career in 1994 with Coopers &Lybrand, Australia as a Senior Associate for the BusinessServices unit whereby she provided assistance and advisoryservices on accounting, audit, tax requirements and businessservices for three years.

In 1997, Pn Farina returned to Malaysia to join Petroliam NasionalBerhad (“PETRONAS”) in the Corporate Planning andDevelopment Division where she started as an executive and inthe ensuing years until 2005, she held various positions includingSenior Manager (Strategy and Portfolio) in Group StrategicPlanning of PETRONAS.

Pn Farina subsequently assumed the position of the ChiefFinancial Officer of PETRONAS Carigali Sdn. Bhd, one of thelargest subsidiaries of PETRONAS with operations in over 23countries, from 2006 to 2010. She then served as the ChiefFinancial Officer at PETRONAS Exploration and ProductionBusiness, the largest arm of PETRONAS Business, from mid-2010until 2013, where the business included both PETRONAS CarigaliGroup of Companies as well as the Petroleum Management Unitof PETRONAS.

Prior to leaving PETRONAS Group at the end of 2015 to pursueher other interests, Pn Farina was the Chief Financial Officer ofPETRONAS Chemical Group Berhad, the largest listed entity ofPETRONAS, for two years.

Pn Farina is also an INED of Ambank Islamic Berhad effective 14April 2017 and an INED of AMMB Holdings Berhad since 8August 2017. She had also previously served on the Board ofvarious PETRONAS entities such as Progress Energy Canada Ltdas well as a number of PETRONAS joint venture entities withforeign partners.

She has attended all eight Board Meetings held in the financialyear ended 31 December 2017.


PUAN FARINA BINTIFARIKHULLAH KHAN46, Female, MalaysianIndependent Non-Executive Director

DIRECTORS’PROFILE

Datuk Abdullah bin Karim, was appointed to the Board on 1October 2016. He graduated from University of Western Australiawith Bachelor of Sciences in Mechanical Engineering. He laterpursued Diploma in Gas Engineering from Illinois Institute ofTechnology in United States of America.

He is an Independent Non-Executive Director of the Company. Heis a member of the Audit and Risk Management Committee witheffect from 25 August 2017.

He joined Petroliam Nasional Berhad (“PETRONAS”) in 1977 andhas over 39 years of experience in the oil and gas industry. He servedas a Project Engineer (1981) and General Manager, EngineeringDivision (1991) in PETRONAS Carigali Sdn. Bhd. (“PETRONASCarigali”), responsible for petroleum engineering, drilling and facilitiesdevelopment in new oil and gas fields. He became the ExecutiveAssistant to the President of PETRONAS in 1994, after which he wasappointed as the Managing Director (“MD”)/Chief Executive Officer(“CEO”) of OGP Technical Services Sdn. Bhd., a projectmanagement consultancy company from 1995 to 1999.

In 1999, he assumed the position of MD/CEO of Malaysia LNG Groupof Companies, responsible for marketing of LNG and the operations ofthe PETRONAS LNG Complex in Bintulu. During his tenure, thecompany has successfully built an additional LNG plant in the Complex.

In 2004, he assumed the post of Vice President, Exploration andProduction Business, before being appointed in 2007 as thePresident/CEO of the subsidiary company, PETRONAS Carigali until2012.

From 2012 until his retirement from PETRONAS in July 2016, he wasthe Vice President/Venture Director, LNG Projects where he wastasked to oversee the design and construction of two offshoreFloating LNG Plants (“FLNG”), and an additional onshore LNG plant(Train-9) in Bintulu, Sarawak.

He is currently an independent Director in UZMA Berhad and RanhillHoldings Berhad.

He has attended all eight Board Meetings held in the financial yearended 31 December 2017.


DATUK ABDULLAHBIN KARIM65, Male, MalaysianIndependent Non-Executive Director

DIRECTORS’PROFILE

Save as disclosed above, none of the Directors has:-(i) any family relationship with any Directors and/or major shareholders of the

Company;(ii) any conflict of interests with the Company;(iii) any conviction for offences (other than traffic offences) within the past five

years, if any; and(iv) any public sanction or penalty imposed by the relevant regulatory bodies

during the financial year 2017.


CAPTAIN HASSAN ALI

Acting Chief Executive Officer

Capt. Hassan Ali (“Capt. Hassan”),Malaysian, male, aged 60, wasappointed as the Acting Chief ExecutiveOfficer (“Acting CEO”) effective 30November 2017 following the resignationof the Managing Director on 30November 2017.

Capt. Hassan has more than 40 years ofexperience in the marine industry spanningacross various companies including MISCBerhad, PETRONAS Carigali Sdn. Bhd.,Malaysian Maritime Academy, OrientOverseas Container Line (Malaysia) Sdn.Bhd. and Gugusan Maritime Sdn. Bhd. Hislast position was a Chief Executive Officerof Tanjung Kapal Services Sdn. Bhd.

In his former position as the ChiefOperating Officer of ICON, Capt. Hassanhas the overall accountability for theOperations and Technical functions ofthe Group’s fleet of vessels. Since theappointment as Acting CEO, he takes onfull responsibility to steer the Companyforward. He is accountable fordeveloping and implementing thecorporate and operational strategies ofthe Group.

Capt. Hassan obtained his MasterDegree in Science (“MSc.”) fromUniversity of Wales College of Cardiff. Healso holds a Master of Foreign GoingCertificate of Competency (Class 1).

SENIOR MANAGEMENT TEAM

IDHAM ADNAN JAMIL

Chief Financial Officer

Idham Adnan Jamil (“Idham”), Malaysian,male, aged 46, is the Chief FinancialOfficer of ICON effective 1 April 2017.

Idham has over 20 years of experience infinance functions in oil & gas industrylocally and internationally. He started hiscareer with Arab-Malaysian CorporationBhd in 1995.

After about three years, he left to joinPetroliam Nasional Berhad (“PETRONAS”).He held several positions in PETRONASGroup, both locally and abroad. His lastposting was as Chief Accountant,PETRONAS (Vietnam) Co., Ltd. He leftPETRONAS in 2010 to take up the

challenge in Qatar Petroleum as SeniorSpecialist, Joint Interest Group, Planningand Policy Directorate. After about fouryears in Qatar, he returned to Malaysia tojoin Shapadu Energy & Engineering asthe Group Chief Financial Officer untilJanuary 2017.

Idham is currently a Member of theInstitute of Chartered Accountants,Australia (“ICAA”) and Malaysian Instituteof Accountants (“MIA”). He obtained hisBachelor of Commerce (Accounting)Degree from University of New SouthWales, Australia.



Jamalludin Obeng, Malaysian, male, aged53, was appointed as the ChiefCommercial Officer of ICON effective 1March 2017.

He is responsible for the strategy anddevelopment of new business opportunitiesand growth, and at the same time providesleadership and direction for commercialand chartering.

Prior to joining ICON, he was the GroupBusiness Development Director for PetraEnergy Berhad, with concurrentresponsibilities as the Chief Executive Officerof Petra Fabricators Sdn. Bhd.

He has more than 27 years of workingexperience with 24 years in the oil and gasindustry, which included a 10 years stint inPetroliam Nasional Berhad (“PETRONAS”)and a nine years stint in the KencanaPetroleum Group which subsequentlybecame part of SapuraKencana PetroleumBerhad. During his tenure of service in

PETRONAS which started in 1990, his jobfunctions were mostly in project economics,business and project planning mainly inUpstream. After PETRONAS, he was withCahya Mata Sarawak Berhad, for a periodof three years as the BusinessDevelopment Manager starting in 2000 andlater as the Group Procurement Manager.

In SapuraKencana Group, he was the VicePresident (Fabrication), with concurrentresponsibilities as the Managing Director forits main subsidiary of construction andfabrication arm, Kencana HL Sdn. Bhd., aposition he held from 2008 to 2012, afterheading Business Development. He latermoved to MMHE Berhad, where he was theGeneral Manager of Business Developmentand Commercial from 2012 to 2014.

He holds a Master of Arts Degree inEducational Computing from University ofSan Francisco and a Bachelor of ArtsDegree in Economics from California StateUniversity, Fresno, USA.

MAIZATUL AZNIN MOHAMED

Senior General Manager, Legal & Secretarial

Maizatul Aznin Mohamed, Malaysian,female, aged 45, is the Senior GeneralManager of Legal & Secretarial of ICONeffective 9 February 2015.

She is responsible for overseeing andproviding legal advice and guidance onmajor company activities and businessissues including as a custodian ofCompany’s interest commercially andlegally. She is also responsible inmanaging all secretariat andmanagement/board relationships.

She has about 20 years of workingexperience. She has extensive experiencein stakeholder management collaborationwith local and international legal firms and

dealings with multinational companybusiness units. Prior to joining ICON, sheserved as the General Counsel of MalakoffCorporation Berhad(“Malakoff”) a leadingindependent power producer in Malaysia.During her stint at Malakoff she wasappointed as a director of Muscat CityDesalination Company S.A.O.C., a jointventure company with SumitomoCorporation and Cadagua S.A. Shestarted her career with Golden HopePlantations Berhad in 1998.

She holds a Bachelor of Laws Degree(Hons) from University of East Londonand also a member of MalaysianAssociation of Company Secretaries.

JAMALLUDIN OBENG

Chief Commercial Officer



Kamarunnihar Abdul Samad, Malaysian,female, aged 55, is the General Manager ofHuman Capital of ICON effective 1 August2016.

She brings with over 21 years of experiencein Human Resource Management. Shestarted her career with MARA in 1985 as aneducator. In 1992, she joined the corporateworld as a Training Executive with one of thesubsidiaries of Kumpulan Guthrie Berhad.

Since then she has been in the field of HumanResource Management and has served inseveral companies including Radicare (M)Sdn. Bhd., CIMB, MISC Berhad andPETRONAS Lubricants International. She hasalso accumulated a wealth of experience asa Human Resource Consultant with the

Performance and Rewards team of TowersPerrin (now known as Willis Towers Watson).

As the General Manager of Human Capitalshe has the strategic and functionalresponsibilities for all of the Human Resourcesdisciplines which include Compensation andBenefits, Training and Development,Employee Relations and Recruitment andSelection.

She holds a Master of Science Degree inCorporate Communication from UPM and aBachelor of Science Degree in Mathematicsfrom Western Illinois University, USA.

RONNIE KHOO BOO EAM

General Manager, Strategic Planning

Ronnie Khoo Boo Eam (“Ronnie”),Malaysian, male, aged 41, is the GeneralManager of Strategic Planning of ICONeffective 1 January 2017. Prior to that hewas General Manager of CoporateFinance & Strategy.

Ronnie is responsible for developing andexecuting the Company’s overall strategy,corporate growth and investor relations. Hegraduated with a Bachelor of CommerceDegree from Curtin University of Technology,Australia and is currently a member of CPA,Australia. He joined the Company inSeptember 2009.

He has 18 years of working experience instrategy, corporate finance/fund raising,

capital investments, mergers and acquisitionand audit. He started his career in 2000 withPricewaterhouseCoopers Malaysia in theAssurance and Business Advisory Servicesdepartment where he spent 6 years. In 2006,he joined Asian Finance Bank Berhad as apioneer member to set up the bank’s internalaudit function before its incorporation in2007. After three years, he left to join theCompany (formerly Omni PetromaritimeSdn. Bhd.) and held various position inCorporate Finance and Strategy andStrategic Planning. During his tenure in theCompany, he was actively involved in theCompany’s vessel fleet growth, debt andequity funding and joint ventures.

Save as disclosed above, none of the Senior Management has:-(i) any family relationship with any Directors and/or major shareholders of the Company;(ii) any conflict of interests with the Company;(iii) any conviction for offences (other than traffic offences) within the past five years, if any; and(iv) any public sanction or penalty imposed by the relevant regulatory bodies during the financial year 2017.

KAMARUNNIHAR ABD SAMAD

General Manager, Human Capital

The Board of ICON is pleased to present the following report of the Audit and Risk Management Committee (“ARMC”) for thefinancial year ended 31 December 2017 (“FYE2017”) (“ARMC Report or Report”).

MEMBERSHIP AND MEETING

The ARMC consists of all Non-Executive Directors with a majority of them being Independent Non-Executive Directors, includingthe Chairman. The Chairman of the ARMC, Datuk Wira Azhar bin Abdul Hamid, is a Chartered Accountant and a member of theMalaysian Institute of Accountants. Accordingly, the composition of the ARMC complies with the Main Market Listing Requirements(“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).

The ARMC Meetings are convened in an orderly manner; structured through the use of an agenda. Minutes of the previous ARMCMeetings and ARMC papers are circulated to all members at least three working days prior to the Meeting for discussion. TheARMC Chairman updates the Board on principal matters and key issues discussed at the ARMC Meetings for further discussion,deliberation and approval.

During the FYE2017, a total of six ARMC Meetings were held and the respective member’s attendance is shown in the followingtable:

No. of Meetings Percentage ofName of ARMC Member Attended/Held Attendance (%)

Datuk Wira Azhar bin Abdul Hamid(Chairman)Senior Independent Non-Executive Director 6/6 100

Edwanee Cheah bin Abdullah(Member)Independent Non-Executive Director(Ceased to be a member of the ARMC with effect from 25 August 2017) 4/5 80

Syed Yasir Arafat bin Syed Abd Kadir(Member)Non-Independent Non-Executive Director 6/6 100

Farina binti Farikhullah Khan(Member)Independent Non-Executive Director(Appointed as a member of the ARMC with effect from 25 August 2017) 1/1 100

Datuk Abdullah bin Karim(Member)Independent Non-Executive Director(Appointed as a member of the ARMC with effect from 25 August 2017) 1/1 100

The former Managing Director, Acting Chief Executive Officer and Chief Financial Officer are in attendance at each of the ARMCMeetings to brief the ARMC on the reports and specific issues. The representatives of the External Auditors and the InternalAuditors are also invited to attend the ARMC meetings to present reports as and when required.

The ARMC has conducted private discussions with the External Auditors, Messrs. PricewaterhouseCoopers PLT without thepresence of Management Executive Directors during its Meetings on 27 February 2017 and 24 November 2017. Moving forward,the ARMC shall also conduct private discussions with the Internal Auditors, Deloitte Enterprise Risk Services Sdn. Bhd. (“Deloitte”)at least once a year.


AUDIT AND RISKMANAGEMENT COMMITTEE REPORT

ROLES AND RESPONSIBILITIES OF THE ARMC

The ARMC is responsible for assisting the Board in fulfilling its statutory and fiduciary responsibilities which include, but are notlimited to the following:

a) To oversee the integrity of financial statements and quarterly announcements, significant financial reporting issues andjudgements, and accounting and financial reporting processes, policies and practices;

b) To oversee the corporate governance, risk management and internal control arrangements;c) To oversee the compliance with legal, regulatory and reporting requirements;d) To oversee the External Auditors;e) To oversee the internal audit function; and f) To review the related party transactions.

The roles and responsibilities of the ARMC are set out in written Terms of Reference. These are reviewed periodically by theARMC taking into consideration relevant legislation and recommended practices. The detailed Terms of Reference of the ARMCis available on the Company’s website at www.iconoffshore.com.my.

SUMMARY OF ACTIVITIES OF THE ARMC

During the FYE2017 and up to the date of approval of the Report, the ARMC had carried out the following works in dischargingits duties:

A. Financial Reporting

i) Reviewed the quarterly unaudited and annual audited financial statements, and its explanatory notes thereon to ensurecompliance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and therequirements of the Companies Act, 2016; and

ii) Reviewed the significant matters highlighted by the External Auditors and significant closing adjustments byManagement.

B. Corporate Governance, Internal Control Arrangements and Compliance

i) Reviewed the revised Terms of Reference of ARMC for adoption by the Group, prior to submission to the Board forconsideration and approval; and

ii) Reviewed the Corporate Governance Overview Statement, Corporate Governance Report, ARMC Report, Statement onRisk Management and Internal Control, and Statement of Directors’ Responsibility for insertion into the annual report.

C. Risk Management

i) Reviewed the quarterly business risk assessment and risk management reports. This is to identify and manage keybusiness risks, as well as to monitor the status of the mitigating measures: and

ii) Reviewed the revamp of Risk Management Framework.

D. External Auditors

i) Reviewed and approved of the audit plan of the External Auditors, including their scope of works for the financial year; andii) Reviewed of the performance and independence of the External Auditors and considered the change or re-appointment,

and fees of the External Auditors before recommending to the Board for approval.



E. Internal Auditors

i) Reviewed and approved of the audit plan of the Internal Auditors, including their scope of works for the financial year;ii) Assessed the effectiveness of the internal audit function; andiii) Reviewed and deliberated on the audit reports, issues and recommendations from the Internal Auditors in relation to the

audit conducted during the financial year and up to the date of approval of the Report.

F. Related Party Transaction

Reviewed the related party transactions to be entered into by the Company and the Group to ensure such transactions wereconducted in accordance with the Company’s policies and procedures on related party transactions, and proper disclosurewas made in accordance with the Listing Requirements of Bursa Securities.

INTERNAL AUDIT FUNCTION

The Group internal audit function is outsourced to an audit firm, Deloitte. The internal audit function reports directly to the ARMCand is guided by the Internal Audit Charter. Its principal role is to undertake independent, regular and systematic review andappraisal of the Group’s risk management, control and governance processes designed and represented by Management, soas to determine whether they are adequate, functioning in an appropriate manner and form a robust internal control.

During the financial year and up to the date of approval of the Report, Deloitte had carried out five risk-based operational auditreviews in accordance with the approved annual internal audit plan, namely:

• Human Resource and Information Technology Management;• Fleet Operations Management;• Bidding and Customer Contract Management;• Finance Management and Corporate Finance and Strategy; and • Procurement Process.

Deloitte has raised the following significant audit findings:

• Internal audit review on Human Resource and Information Technology Management includes weaknesses in human capitaldevelopment and training management, inadequate user access security in share drive server, and weaknesses in BASSnetcrew payroll module implementation management;

• Internal audit review on Fleet Operations Management includes weaknesses in life-saving equipment management of vessels,and weaknesses in Health, Safety and Environment management at Labuan Store and on-board vessel;

• Internal audit review on Finance Management and Corporate Finance and Strategy includes weaknesses in petty cashmanagement, and weaknesses in monthly financial statements close process; and

• Internal audit review on Procurement Process includes long outstanding payments to suppliers.

The corresponding reports of the internal audit reviews were presented to the ARMC in February, May and November 2017, andFebruary 2018 respectively, and forwarded to Management for their attention and actions. Management is responsible for ensuringthat the action plans are taken within the required timeframe.



Follow-up reviews on previous internal audits were also performed by Deloitte to monitor the progress made towards theimplementation of these actions. The results of the follow-up audit were presented to the ARMC in the subsequent quarterlyARMC Meetings until the audit findings were closed. All audit findings in relation to the above mentioned audit reviews wereclosed within the target date of implementation except for the followings:

• Weaknesses in human capital development and training, and absence of succession planning under Human Resource andInformation Technology Management; and

• Weaknesses in life-saving equipment management of vessels and weaknesses in Health, Safety and Environmentmanagement at Labuan Store and on-board vessel under Fleet Operations Management.

However, these audit findings were closed within the revised target date of implementation. The results of follow-up internal auditreview for Finance Management and Corporate Finance and Strategy, and Procurement Process will be presented to the ARMCin May 2018.

On 23 November 2016, Deloitte presented to the ARMC the revised three-year internal audit plan for the financial year ending2016, 2017 and 2018 (“Revised Internal Audit Plan”) outlining their scope of works for operational audits up to the financial yearending 31 December 2018, covering:

• Fleet operations, shipbuilding management and stock management;• Crew management;• Procurement; and• Legal and company secretarial.

The Revised Internal Audit Plan was approved for execution with immediate effect. Deloitte presented to the ARMC the statusupdates of the Revised Internal Audit Plan at its quarterly meetings.

For the FYE 31 December 2017, the total cost incurred for the internal audit function was RM110,397.

This report is made in accordance with a resolution of the Board dated 12 April 2018.



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 notonly safeguard and enhance shareholders’ value but also provide assurance that the interests of the other stakeholders arepreserved.

With the publication of the Malaysian Code on Corporate Governance (“the Code”) in April 2017 and in accordance with theguidance given by Bursa Malaysia Securities Berhad (“Bursa Securities”) through its circular titled “Amendments to BursaSecurities Main Market Listing Requirements (“Listing Requirements”)” dated 29 November 2017, the Board of ICON is pleasedto present the corporate governance overview statement and explain how ICON has applied the three 3 principles which are setout in the Code:

• Principle A: Board leadership and effectiveness;• Principle B: Effective audit and risk management; and• Principle C: Integrity in corporate reporting and meaningful relationship with stakeholders.

The Board considers that the Company has complied with the principles and practices embodied in the Code for the financialyear ended 31 December 2017 except for Practice 7.2 (Disclosure on the top five senior management’s remuneration on a namedbasis in the band of RM50,000.00).

A copy of the Corporate Governance Report which discloses the application of each practice set out in the Code and explainsthe departure from the above mentioned practices can be downloaded in the Company’s website at www.iconoffshore.com.my.This Corporate Governance Report has been approved by the Board of ICON on 12 April 2018.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

BOARD OF DIRECTORS

I. 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 Articlesof Association (“the Articles”) of Icon, the Companies Act, 2016 (“the Act”) and other regulatory requirements. The Boardestablishes the vision and strategic objectives of the Group, directing policies, and strategic action plans and stewardshipof 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 ethicalstandards are applied, through compliance with the relevant rules and regulations, directives, practice notes andguidelines in addition to applying the principles and practices of the Code and act in the best interest of the Group andshareholders.

II. BOARD CHARTER

The Board has adopted a formal charter which is available at the Company’s corporate website atwww.iconoffshore.com.my. The Board Charter (“the Charter”) was established to assist the Board to provide strategicguidance to the Group and effectively oversight of its Management, for the benefits of the shareholders and otherstakeholders. The Board is guided by the Charter which provides reference for the Directors in relation to the Board’sroles, authorities, duties, responsibilities and functions. It adopts the principles of good governance and is designed tomaximise the Company’s compliance, by adopting best practice requirements. The Board will review the Charter as andwhen necessary to ensure it remains consistent with the Board’s objectives and responsibilities, including the relevantstandards of corporate governance.


CORPORATE GOVERNANCEOVERVIEW STATEMENT

III. DUTIES AND RESPONSIBILITIES OF THE BOARD

In carrying out the Board’s duties and responsibilities, the Board exercises great care to ensure that high ethical standardsand corporate behaviour are upheld. In order to enhance accountability and transparency, the Board has specific functionsreserved for the Board and those delegated to Management. The Board members are constantly mindful that the interestsof 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 keyresponsibilities:

a) To review, challenge and approve the annual corporate plan, which includes the overall corporate strategy, marketingplan, human resources plan, information technology plan, financial plan, budget, regulatory compliance plan and riskmanagement 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

Directors and key Management;e) To oversee the development and implementation of an investor relations programme or shareholders communications

policy for the Group; andf) 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 ofBursa Securities, securities laws and the Act).

The Board is cognisance of the importance of business sustainability and, in conducting the Group’s business, the impacton the environment, social and governance are taken into consideration.

The Directors of the Company recognise the importance to devote sufficient time and efforts to carry out their duties andresponsibilities and have committed to this requirement at the time of their appointment. The Director is at liberty to acceptother Board appointments so long as the appointment is not in conflict with the business of the Group and does not affecthis performance as a Director.

None of the Directors of the Company is holding more than five directorships in public listed companies and it is the policyof the Group for Directors to ensure that the number of their directorships is in compliance with the Listing Requirements ofBursa Securities before accepting any new directorship.

IV. CODE OF CONDUCT, CODE OF ETHICS AND WHISTLEBLOWING

Directors’ Code of EthicsThe Directors, in discharging its responsibilities, continue to adhere to the adopted Directors’ Code of Ethics. The Directors’Code of Ethics is based on principles in relation to sincerity, integrity, responsibility and corporate social responsibility, andis formulated to enhance the standard of corporate governance and corporate behaviour.

Employees’ Code of EthicsThe Company’s Employees’ Code of Ethics ensures that all employees observe and maintain high ethical business standardsof honesty and integrity in all aspects of our operations. The Employees’ Code of Ethics highlights key issues to helpemployees perform their duties in line with the Company’s standards such as ensuring a safe working environment, effectivelymanaging the Company’s assets and properties, safeguarding confidential information as well as dealing with external partiessuch as customers, vendors, medias, competitors and government agencies.



Service Providers’ Code of Conduct (“COC”)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 COC requires service providers, whichinclude suppliers, contractors, professional advisors, consultants and other business associates, to adhere to this COC whenconducting business with the Group. The Group may take the necessary action for breaches of the COC which includes butnot limited to termination and preclusion from proposing any work for the Group for a pre-determined period.

Anti-Fraud and Whistleblowing PolicyThe Anti-Fraud and Whistleblowing Policy is built into the Group’s culture towards elimination of fraud and corruption. It alsopromotes a transparent and open environment for fraud reporting within the Group.

V. BOARD MEETINGS

The Board meets at least once every quarter and additional meetings are convened as and when necessary. Meetings arescheduled 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 providedwith the structured agenda together with the relevant documents and information in advance of each Board meeting.

Minutes of the Board meeting are circulated to the Directors for their perusal prior to the confirmation of the minutes at thesucceeding Board meeting. The Directors may request for further clarification or raise comments on the minutes prior to theconfirmation of the minutes as a correct record of the proceedings at the Board meeting.

During the financial year ended 31 December 2017, a total of eight Board meetings were held and the respective Director’sattendance is shown in the following table:

No. of Meetings Attended/ Percentage ofName of Director Held during the year Attendance (%)

Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda (Chairman) 8/8 100Datuk Wira Azhar bin Abdul Hamid 7/8 88Syed Yasir Arafat bin Syed Abd Kadir 8/8 100Edwanee Cheah bin Abdullah 7/8 88Madeline Lee May Ming 8/8 100Datuk Abdullah bin Ahmad 7/8 88Amir Hamzah bin Azizan (Resigned on 30 November 2017) 8/8 100Farina binti Farikhullah Khan 8/8 100Datuk Abdullah bin Karim 8/8 100

All the Directors have complied with the minimum of 50% attendance requirements in respect of Board meeting as stipulatedin the Listing Requirements of Bursa Securities.

VI. ACCESS TO INFORMATION AND COMPANY SECRETARIES

Each Director is provided with the agenda and a complete set of Board papers containing the quantitative and qualitativeinformation prior to each Board meeting with the aim of enabling the Directors to make informed decisions and seekclarifications that they may require from Management ahead of the meeting date. The relevant members of Managementteam are invited to attend the Board meetings to advise or report to the Board on the matters relating to their areas ofresponsibility when necessary for an effective deliberation and decision making.



The Board has direct access to the senior management on information relating to the Company’s businesses and affairs inthe discharge of their duties. The Directors have also access to the advices and services of our Company Secretaries andall information in relation to the Group whether as a full Board or in their individual capacity to assist them in furtherance oftheir duties. From time to time, the Directors are regularly updated by our Company Secretaries and/or Management on anylatest development in the statutory requirements relating to their duties and responsibilities. Our Company Secretaries attendall the Board meetings and ensures all the proceedings, deliberations and resolutions passed are properly recorded andmaintained.

The Directors will also seek the independent advices from independent professional advisers at the Company’s expense, ifnecessary.

VII. BOARD COMPOSITION AND BALANCE

As at the date of this Statement, the Board of ICON consists of eight members, comprising one Senior Independent Non-Executive Director, two Non-Independent Non-Executive Directors (one of them is the Chairman) and five Independent Non-Executive Directors. The Board composition complies with the Listing Requirements of Bursa Securities that requires at leasttwo or one-third of the Board, whichever is the higher, to be Independent Directors as well as Practice 4.1 of the Code whichrequires at least half of the Board comprises Independent Directors. The Board has maintained its mix of Directors fromdiverse 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 businesscomplexity, the Board is of the opinion that its current composition and size remains optimum and conducive for effectivedeliberations at Board meetings.

The former Managing Director (“MD”) or Acting Chief Executive Officer (“CEO”) has an overall responsibility for the day-to-day management of operational and financial matters of the Group, implementation of the Group’s policies and the Board’sdecisions, and development and implementation of the business and corporate strategies. The former MD or Acting CEO issupported by Management team.

There is a clear segregation of roles and responsibilities between the Chairman and the MD or Acting CEO to ensure abalance of power and authority, such that no one individual has unfettered powers of decision making. Their respective rolesand responsibilities are clearly defined in the Charter. The role of the Chairman is held by a Non-Independent Non-Executive Director.

VIII.BOARD DIVERSITY

The Board considers that diversity includes differences that relate to gender, age, ethnicity and cultural background. It alsoincludes differences in background, experience, skills and competency, education and functional expertise. As part of theBoard’s routine considerations regarding Board renewal, it will continue its focus on diversity as it has in recent years toensure that there is an appropriate mix of diversity, skills, experience and expertise represented on the Board.

IX. INDEPENDENCE

The Independent Non-Executive Directors are independent from Management and free from any business relationship whichcould materially interfere with their independent and objective judgement. Their presence ensures that issues of strategies,performance and resources proposed by Management are objectively evaluated and providing a capable check and balancefor Management.

The Board has adopted a Policy and Procedure on Independence of Independent Directors that describes how the Boardassesses the independence of each Independent Director. In determining the independence of each individual IndependentDirector, the Board considers all relevant information, facts and circumstances and the assessment of the independence ofits Independent Directors is undertaken annually. Each Director is also required to immediately disclose to the Board if hehas an interest or relationship which is likely to impact on his independence or if an Independent Director believes he mayno longer be independent.



From the recent assessment of the independence of the Independent Directors, the Board was satisfied that Datuk WiraAzhar bin Abdul Hamid, Edwanee Cheah bin Abdullah, Madeline Lee May Ming, Datuk Abdullah bin Ahmad, Farina bintiFarikhullah Khan and Datuk Abdullah bin Karim are suitable and qualified to act as Independent Non-Executive Directors ofthe Company. None of the said Independent Non-Executive Directors of the Company has exceeded the tenure of acumulative term of nine years in the Board.

X. APPOINTMENT TO THE BOARD

The appointments of new Board members are considered, evaluated and assessed by the Nomination and RemunerationCommittee (“NRC”) 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 therecommendations from the NRC. Our Company Secretaries will ensure that all the appointments are properly made inaccordance with the relevant regulatory requirements.

The appointment, re-election and annual assessment of the Directors are set up in the Charter and the primary responsibilityof which has been delegated to the NRC. The NRC proposes nominees for appointments to the Board, and recommends tothe Board on the appointment, re-election and assessment of the Directors of the Company for approval.

The Board has established a clear and transparent nomination process for the appointment of Director of the Company. Thenomination process involves the following stages:

a) Identification of candidates;b) Evaluation of the suitability of candidates based on the criteria set;c) Recommendation by NRC to the Board; andd) Approval by the Board.

XI. RE-ELECTION OF DIRECTORS

The Articles of the Company provides that one third of the Directors for the time being and those appointed during thefinancial year shall retire from office and shall be eligible for re-election at every Annual General Meeting (“AGM”). The Articlesfurther provides that all Directors shall retire from office at least once every three years but shall be eligible for re-election.The Articles also provides that the Directors to retire in every year shall be those who have been longest in office since theirlast election but as between Directors of equal seniority, the Directors to retire shall (unless they otherwise agree amongthemselves) be determined from among them.

The NRC recommends to the Board who are the retiring Directors based on the above for consideration before tabling thesame for shareholders’ approval at the AGM.

XII. DIRECTORS’ REMUNERATION

The NRC reviews the remuneration package of the former Executive Director, who is also the former MD, annually to ensurethat he is awarded appropriately for his contributions to the Group’s growth and profitability.

The Non-Executive Directors’ fees and benefits (i.e. meeting allowances) are approved by the Board and are subject to theshareholders’ approval at the AGM. The review of the Non-Executive Directors’ fees takes into account the trends of similar positionsin the market and any additional responsibilities undertaken such as acting as Chairman of the Board or Board Committees.



The details of the remuneration of the Directors of the Company comprising remuneration received/receivable from theCompany and its subsidiary companies during the financial year ended 31 December 2017 are as shown in the table below:

a) Company

Benefits- Emoluments in-kind TotalName of Directors RM RM RM

Executive DirectorAmir Hamzah bin Azizan* 2,535,372 72,640 2,608,012

Non-Executive DirectorsRaja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda 157,500 - 157,500Datuk Wira Azhar bin Abdul Hamid 126,000 - 126,000Syed Yasir Arafat bin Syed Abd Kadir** - - -Edwanee Cheah bin Abdullah 134,091 - 134,091Madeline Lee May Ming 123,097 - 123,097Datuk Abdullah bin Ahmad 109,403 - 109,403Farina binti Farikhullah Khan 113,305 - 113,305Datuk Abdullah bin Karim 113,305 - 113,305

Total 3,412,073 72,640 3,484,713

b) Group

Benefits- Emoluments in-kind TotalName of Directors RM RM RM

Executive DirectorAmir Hamzah bin Azizan* 2,535,372 72,640 2,608,012

Non-Executive DirectorsRaja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda 157,500 - 157,500Datuk Wira Azhar bin Abdul Hamid 126,000 - 126,000Syed Yasir Arafat bin Syed Abd Kadir** - - -Edwanee Cheah bin Abdullah 134,091 - 134,091Madeline Lee May Ming 123,097 - 123,097Datuk Abdullah bin Ahmad 109,403 - 109,403Farina binti Farikhullah Khan 113,305 - 113,305Datuk Abdullah bin Karim 113,305 - 113,305

Total 3,412,073 72,640 3,484,713

Note:* Amir Hamzah bin Azizan resigned as MD on 30 November 2017.** Syed Yasir Arafat bin Syed Abd Kadir, being the nominee of the holding company, Hallmark Odyssey Sdn. Bhd.

(“HOSB”) to the Board of ICON has waived his entitlement for the Director’s fee and benefit.



XIII. DIRECTORS’ TRAINING

The Board acknowledges that continuous education is vital for its Board members to gain insight and maintain the Boardmembers awareness of the economy, technological advances, latest regulatory developments and management strategies.The NRC assesses the training needs of the Directors from time to time and ensures the fulfilment of such training deemedappropriate. The Board members are also encouraged to attend training programmes and seminars to keep abreast withdevelopments 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 2017 are as follows:

Name of Director Seminar/Conference/Training Programme Attended

Raja Tan Sri Dato' Seri Arshad • International Investment Fund Forum 2017bin Raja Tun Uda • 21st Century Learning : Leading Learning and Building Sustainability • The Act and Corporate Governance 2017 • Update on Directors' Duties and new Code • Malaysia Invest 2017 - Malaysia at 60 : Maximising Potential • On Malaysian English • Khazanah Megatrends • Merger and Acquisition Conference • The Act • PricewaterhouseCoopers’ Global Entertainment and Media Outlook • Leadership Energy Summit Asia 2017 • Good Corporate Governance - Towards Integrity, Accountability and Trust

Datuk Wira Azhar bin Abdul Hamid • The Act and Corporate Governance 2017 • CITP Initiative on Safety (CIDB) at Diamond Room, CIDB, Sunway Putra Tower • New Programme: 2018 Budget: Implications to the Malaysian Economy and Capital Market, Conference Hall 1, Securities Commission, Bukit Kiara • CG Breakfast Series Entitled: Integrating an Innovation Mindset with Effective Governance, Conference Hall 1, Sasana Kijang, Jalan Dato' Onn, KL • Case Study Workshop for Independent Directors, Conference Room, Bursa Malaysia Berhad • PIPOC 2017, Kuala Lumpur Convention Centre, KL • MICG Half-Day Seminar On 'Governance Or Lack Of It', Kumala Room (Level 2), Istana Hotel, KL

Syed Yasir Arafat bin Syed Abd Kadir • The Act and Corporate Governance 2017 • AVCJ Private Equity and Venture Forum 2017 • The Financial Times Leadership Dialogues - The Future of Asian Business

Edwanee Cheah bin Abdullah • The Act and Corporate Governance 2017 • Driving Financial Integrity and Performance - Enhancing Financial Literacy

Madeline Lee May Ming • The Act and Corporate Governance 2017 • Seminar on updates to Companies Act 2016 • Tax seminar on Transactions involving Real Property Companies

Datuk Abdullah bin Ahmad • The Act and Corporate Governance 2017 • Remuneration Committee (“RC”): Attracting and Retaining the Best Talents



Name of Director Seminar/Conference/Training Programme Attended

Amir Hamzah bin Azizan • Bain & Co.: How Conglomerates in SEA can live Long and Prosper • Beyond Lean: Gaining Competitive Edge through Sustained Cost Transformation • Securities Commission Malaysia: Inauguration of Malaysian Code on Corporate Governance 2017 • 19th Asia Oil and Gas Conference 2017 • The Act and Corporate Governance 2017 • TN50 Workshop – Industry in 2050 • Khazanah: Trending Innovation, Disruption and Entrepreneurship (TIDE) Open Day • Khazanah Megatrends Forum 2017 • Trending, Innovations, Distribution & Entrepreneurship (TIDE) events

Farina binti Farikhullah Khan • Sustainability Forum for Directors/Chief Executive Officers: “The Velocity of Global Change and Sustainability - The New Business Model” • 19th Asia Oil and Gas Conference 2017 • The Act and Corporate Governance 2017 • Effective Internal Audit Function for Audit Committee Workshop

Datuk Abdullah bin Karim • The Act and Corporate Governance 2017 • Corporate Governance Breakfast Series - “Board Excellence : How to Engage and Enthuse Beyond Compliance with Sustainability” • Capital Market Conference 2017

The Directors will continue to undergo other relevant trainings, programmes and seminars as and when necessary to ensurethey remain well equipped with the relevant and requisite knowledge to discharge their duties effectively.

BOARD COMMITTEES

I. AUDIT AND RISK MANAGEMENT COMMITTEE

The Terms of Reference of the Audit and Risk Management Committee (“ARMC”) is available on the Company’s website atwww.iconoffshore.com.my and the activities performed during the financial year under review are set out under the ARMCReport. The said Terms of Reference is in line with the Listing Requirements of Bursa Securities and recommended practicesas set out in the Code.

II. NOMINATION COMMITTEE (“NC”), RC AND MERGED ENTITY OF NRC

NC

The NC comprises exclusively of Non-Executive Directors, a majority of whom are independent. The Chairman of the NC isthe Independent Non-Executive Director identified by the Board. The members of the NC are as follows:

Name of the NC Member Designation

Edwanee Cheah bin Abdullah Chairman Independent Non-Executive Director

Madeline Lee May Ming Member Independent Non-Executive Director

Syed Yasir Arafat bin Syed Abd Kadir Member Non-Independent Non-Executive Director



The NC met three times during the financial year ended 31 December 2017 and the meetings were attended by all themembers 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 anyadjustment that is deemed necessary to ensure the appropriate Board balance and giving full consideration tosuccession planning for the Directors; and

ii) To review annually the Board’s mix of skills and experience and other qualities, including core competencies whichNon-Executive Directors should bring to the Board, independence and diversity (including gender diversity) requiredto meet the needs of the 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 identifyingand nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise, giving fullconsideration to succession planning;

ii) To consider, in making its recommendations, candidates for directorships proposed by the MD and within the boundsor 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 criteriaused in assessment of new candidates before recommendation to the Board shall include but not limited to thefollowing:

• Skills and competency;• Knowledge and expertise;• Regional and industry experience;• Academic and professional 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;• Other directorships; and• In the case of candidate for the position of Independent Non-Executive Director, the NC should also evaluate

the candidate’s ability to discharge his 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 afterconsidering 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 matter relating to the continuation in office of any Director at any time includingthe suspension or termination of service of a MD as an employee of the Company subject to the provisions of thelaws and his service contract.



c) Assessment of performance

i) To assess annually the performance and effectiveness of the Board as a whole, the Board Committees, the individualDirector and the individual ARMC member;

ii) To ensure that each Director, MD or Chief Financial Officer has the character, experience, integrity, competencyand 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 cancontinue 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 provisionsin the Articles, having due regard to their performance and ability to continue to contribute to the Board in the light of theskills, knowledge and experience required.

e) Continuing education programme for Directors

i) To orient and educate new Directors as to the nature of the businesses, current issues within the Company and thecorporate strategies, the expectations of the Company concerning input from the Directors and the generalresponsibilities of Directors;

ii) To review and make recommendations to the Board in relation to the training and development programme for theDirectors; and

iii) To ensure that the Directors have access to appropriate training and development opportunities that supports thework of the Directors and the Board.

Following the duties and responsibilities of the NC, the NC had during the financial year under review undertaken the followingmain activities:-

a) Annual assessment of the Board’s effectiveness as a whole, the Board Committees and the contribution of each individualDirector;

b) Reviewed the size and composition of the Board;

c) Recommended the re-election of Directors;

d) Recommended the training programmes for Directors; and

e) Recommended the ARMC Members Self and Peers Evaluation Form in addition to the existing evaluation forms used toassess the Board, Board Committees and individual Director.

Upon the annual review and assessment, the NC having considered the aspects of succession planning and boardroomdiversity, was satisfied that the sizes of the Board and Board Committees are optimum and there are appropriate mix ofskills, knowledge, experience and competencies in the Board’s composition which is corresponding to the Board’s dutiesand responsibilities. The NC was satisfied that all Directors are suitable and qualified to hold their positions in view of theircompetency, qualifications, skills and experiences.



From the assessment of the independence of the Independent Directors, the NC was satisfied that all Independent Directorsof the Company have fulfilled the established criteria set for Independent Directors.

The annual assessments on the Board as a whole, ARMC and other Board Committees, as well as individual Director andmember of the ARMC, were conducted via self and peer review assessment.

All the deliberations, assessments and evaluations including recommendations of the NRC are properly documented and minuted.

RC

The RC comprises exclusively of Non-Executive Directors, a majority of whom are independent. The members of the RC areas follows:

Name of the RC Member Designation




The RC met four times during the financial year ended 31 December 2017 and the meetings were attended by all themembers of the RC. The duties and responsibilities of the RC are as follows:

a) To study and propose to the Board the various forms of remuneration and fees appropriate for the Directors;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 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 high calibre Management personnel who will deliver success for the shareholders and high standards ofservices for stakeholders, while taking into consideration the business environment in which the Group operates. Onceformulated, to recommend to the Board for approval;

e) To review and recommend to the Board any improvement on designated Management personnel’s remuneration policyand 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 servicebetween the Company and the MD and other designated Management personnel;

g) To review any major change in employee benefits structures throughout the Group, and if deem fit, to recommend to theBoard for adoption; and

h) To review and recommend to the Board for adoption, the framework for the Group’s annual incentive scheme. Theframework for the annual incentive scheme may include:i) Merit increment;ii) Merit bonus; andiii) Retention and reward incentives.

The RC’s aims, goals or objectives reflect the Company’s overall philosophy that all employees should be appropriatelyrewarded so as to attract and retain high calibre persons who possess the know-how knowledge to operate and manage theCompany successfully.



The levels of remuneration for Executive Director are determined based on the corporate and individual’s performance, whilst thelevel of remuneration for Non-Executive Directors would reflect the experience and level of responsibilities undertaken by theparticular Non-Executive Director. The Company aims to align the interests of its Executive Director as closely as possible with theinterests of shareholders in promoting the Group’s strategies. Total remuneration for Executive Director comprises basic salary,performance related bonus, benefits-in-kind and emoluments. The basic salary and benefits are competitive and reviewed annually.The basic salary is set by the RC annually after consideration of the 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; andc) RC to make recommendation of the remuneration package for the Executive Director to the Board for approval.

NRC

The Board has approved the merging of the Company’s NC and RC, which is now known as the NRC effective from 25August 2017. The members of the NRC are as follows:

Name of the NRC Member Designation




Datuk Abdullah bin Ahmad Member Independent Non-Executive Director

There was no meeting held by the NRC during the financial year ended 31 December 2017 since the merger of the Company’sNC and RC.

III. EMPLOYEES’ SHARE SCHEME COMMITTEE (“ESSC”)

The ESSC comprises exclusively of Non-Executive Directors, a majority of whom are independent. The members of the ESSCare as follows:

Name of the ESSC Member Designation




The ESSC met twice during the financial year ended 31 December 2017 and the meetings were attended by all the membersof the ESSC. The duties and responsibilities of the ESSC are to administer the Employees’ Share Scheme (“Scheme”) inaccordance with the By-Laws in such manner as the ESSC shall in its discretion deem fit with such powers as are conferredupon it by the Board.



The establishment of the Scheme among others serve to align the interest of eligible person of the Group with the corporategoals of the Group and to achieve the following positive outcome:

a) To further motivate the eligible person of the Group towards better performance through higher productivity and loyalty;b) To recognise the contributions and/or services of the eligible person who is considered vital to the operations and

continued growth of the Group, especially in view of the challenging market conditions faced by oil and gas companiesand service providers;

c) To stimulate a greater sense of belonging and dedication by providing the eligible person of the Group with an opportunityto further increase their participation in the equity of the Company via the Scheme; and

d) To reward the eligible person of the Group by allowing him to participate in the Company’s profitability and eventuallyrealise capital gains arising from any appreciation in the value of the Company’s ordinary shares.

IV. EXECUTIVE COMMITTEE (“EXCO”)

The EXCO was constituted by the Board as a sub-committee of the Board and its general purpose is to provide an effectiveoversight of the businesses of the Group and to ensure that the Group’s operations are aligned with the strategy approvedby the Board and implemented within the framework and agreed financial limits as approved by the Board from time to time.

The EXCO consists of up to three members of whom nominated by Ekuiti Nasional Berhad, the holding company of HOSBand up to three members of whom comprise the key Management of the Company. The Chairman of the EXCO is appointedby the Board. The EXCO comprises the following members:

Name of the EXCO Member Designation

Syed Yasir Arafat bin Syed Abd Kadir Chairman

Amir Hamzah bin Azizan* Member

Captain Hassan bin Ali Member

Lim Fu Yen** Member

Note:* Amir Hamzah bin Azizan ceased to be the EXCO member with effect from 30 November 2017.** Lim Fu Yen is the Senior Director of Investment of Ekuiti Nasional Berhad.

The EXCO generally: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 KPIs in all aspects of the Group’s operations;c) Ensures that the Group maintains a sound framework of reporting on internal control and regulatory compliance;d) Reviews and recommends to the NRC and/or the Board, the framework or broad policy for the remuneration package,

employee benefits and annual incentive schemes of the Company’s employees; ande) Assumes any other powers and responsibilities that may from time to time be assigned or delegated to the EXCO by the

Board.



PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

ACCOUNTABILITY AND AUDIT

I. FINANCIAL REPORTING

The Board strives to ensure that our financial reporting to its stakeholders, in particular, the shareholders, investors andregulatory authorities by means of the annual audited financial statements and quarterly announcements, represents aclear, balanced and comprehensive assessment of the Group’s financial performance, financial position and futureprospects of the Group at the end of each quarter and the financial year.

The ARMC assists the Board in ensuring the accuracy, adequacy and quality of the financial reporting prior torecommendation to the Board for approval and submission to Bursa Securities within the prescribed period.

II. 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 approvedfinancial reporting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and theCompany as at the end of the financial year and of the results and cash flows of the Group and the Company for thefinancial year.

In preparing the financial statements, the Directors have:

a) Applied relevant and appropriate accounting policies consistently and in accordance with applicable approvedfinancial reporting standards;

b) Made judgements and estimates that are prudent and reasonable; andc) 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. TheDirectors also have overall responsibility in taking such steps as are reasonably open to them to safeguard the assetsof the Group, and to prevent and detect fraud and other irregularities.

The Statement of Directors’ Responsibility in respect of the preparation of the annual audited financial statements of theGroup and the Company is presented on page 76 of this Annual Report.

III. RELATIONSHIP WITH EXTERNAL AUDITORS

The Board has established a formal and transparent working relationship with the Group’s External Auditors that enablesthe Board to seek their professional advice and ensure compliance with accounting standards and regulatoryrequirements. The ARMC met with the External Auditors regularly at its meetings to review and discuss the scope andadequacy of the Company’s audit plan, audit reports and annual audited financial statements, in which at least twomeetings shall be held without the Executive Director and Management presence in a year.

The ARMC is tasked with authority from the Board to review any matter concerning the appointment and re-appointment,audit fee, resignation or dismissal of External Auditors, and to assess the independence of the External Auditors basedon the External Auditors Appointment and Independence Policy and Procedure to ensure that they have beenindependent throughout the conduct of the audit engagement with the Group.

During the financial year under review, the Board, having considered the recommendation by the ARMC, was satisfiedwith the External Auditors’ performance and independence requirements, and agreed that the re-appointment of theExternal Auditors for the year 2017 be recommended to the shareholders for approval at the AGM held in 2017.

The services provided by the External Auditors include statutory audits and non-audit services. The details of audit and non-audit fees paid/payable in the financial year ended 31 December 2017 to the External Auditors are disclosed onpage 70 of this Annual Report.



RISK MANAGEMENT AND INTERNAL CONTROL

The Board recognises the importance of risk management and internal controls, and has established a structured riskmanagement framework to identity, evaluate, control, monitor and report the key business risks faced by the Group on anon-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 controlsystem is implemented and effectively carried out by Management team through periodic independent reviews by the InternalAuditors and External Auditors.

The Board has outsourced the internal audit function to an independent professional audit firm effective from May 2015. Theinternal audit function reports directly to the ARMC and conducts regular audits to review and provide assurance to theBoard on the adequacy and effectiveness of the Group’s risk management, control and governance processes.The Statement on Risk Management and Internal Control set out in this Annual Report provides an overview of the state ofrisk management and internal control within the Group. The External Auditors are appointed by the Board to review theStatement on Risk Management and Internal Control and to report thereon.

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

COMMUNICATION WITH SHAREHOLDERS AND INVESTORS

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 theBoard to communicate effectively with the shareholders and investors. In formulating the Corporate Disclosure Policy, theBoard is guided by best practices and disclosure requirements as set out in the Listing Requirements of Bursa Securities.

The Company’s Annual Report remains a key channel of communication with the Group’s stakeholders. The Annual Reportprovides corporate information, performance review of our financial results, financial highlights and other activities in orderto facilitate shareholders’ easy access to key information. The Company’s Annual Report is available in the Company’scorporate website at www.iconoffshore.com.my.

In addition to that, the Company also makes timely, complete and accurate disclosures and announcements to BursaSecurities, including financial results on a quarterly basis to provide the shareholders and the investing public an updatedoverview of the Group’s performance and operations.

The other modes of communication with shareholders and investors include the circulars, quarterly analysts briefing andICON’s website at www.iconoffshore.com.my.

Shareholders and investors are also encouraged to convey their enquiries and concerns regarding the Group throughCorporate Communications department via email at [email protected].



AGM

The AGM is the principal forum for the Board to meet with the shareholders. The Company holds its AGM at places that are easilyaccessible and at a time convenient to the shareholders to encourage them to attend the meeting. At the AGM, the formerMD/Acting CEO will give a presentation on our operational and financial performance during the financial year and his views andinsight on the future prospects of the Group’s businesses. The Board encourages and welcomes shareholders to raise questionspertaining to the business activities of the Group and on the resolutions being proposed at the meeting and the Board will respondto shareholders’ questions during the meeting. In compliance with the Listing Requirements of Bursa Securities, all resolutionsto be tabled at the general meetings would be voted by way of poll. The Company’s Fifth AGM on 24 May 2017 was the firstAGM that it entered into this new regime for poll voting.

This Corporate Governance Overview Statement has been approved by the Board of ICON on 12 April 2018.

ADDITIONAL COMPLIANCE INFORMATION

A. UTILISATION OF PROCEEDS RAISED FROM CORPORATE EXERCISE

There were no proceeds raised from corporate exercise during the financial year ended 31 December 2017.

B. AUDIT AND NON-AUDIT FEES

For the financial year ended 31 December 2017, Messrs. PricewaterhouseCoopers PLT, the External Auditors have renderedaudit and non-audit services to the Group. A breakdown of fees payable were listed as below for information:

Company Group (RM) (RM)

Audit services rendered 174,000 652,000 Non-audit services rendered - Tax Agent 5,700 65,000

Total 179,700 717,000

C. MATERIAL CONTRACTS

There is no material contract, not entered into within the ordinary course of business of the Company and its subsidiaries,involving the interest of the Directors, chief executive who is not a Director and major shareholders of the Company, eitherstill subsisting at the end of the financial year or entered into since the end of the previous financial year.

D. SCHEME

The establishment of the Scheme was approved by the Board on 3 March 2014. The Scheme consists namely, Employees’Share Option Scheme (“ESOS”) and Employees’ Share Grant Plan (“ESGP”).



The total number of options and shares granted, exercised/vested and outstanding under the Scheme since itscommencement up to financial year ended 31 December 2017 is set out below:

All Eligible Employees includingDescription Directors, MD and Acting CEO Directors, MD and Acting CEO

ESOS Options granted 5,470,000 1,000,000Options exercised - -Options forfeited 360,000 -Options outstanding 5,110,000 1,000,000

ESGP Shares granted 19,940,000 16,000,000Shares vested 1,333,000 1,333,000Shares forfeited 12,667,000 12,667,000Shares outstanding 5,940,000 2,000,000

In accordance with the Company’s By-Laws of the Scheme, not more than 75 per centum (75%) of the Company’s ordinaryshares available under the Scheme shall be allocated, in aggregate, to Directors and senior management of the Group.Percentage of options and shares granted to Directors and senior management under the Scheme is set out below:

Directors and Senior ManagementDescription During the financial year Since commencement up to 31 December 2017

ESOS - 9.30%ESGP 54% 67.60%

The information on the Scheme for the financial year is set out in Note 25 to the Financial Statements.

E. RECURRENT RELATED PARTY TRANSACTIONS

During the financial year under review, there was no recurrent related party transaction entered into by the Group.



The Board is pleased to present this statement on Risk Management and Internal Control (“the Statement”) pursuant to paragraph15.26(b) of the Listing Requirements of Bursa Securities. The Board has been guided by the Statement on Risk Managementand Internal Control: Guidelines for Directors of Listed Issuers issued by The Institute of Internal Auditors Malaysia with theendorsement of Bursa Securities when preparing the statement.

BOARD RESPONSIBILITY

The Board acknowledges their responsibility for the Group’s system of internal control, and for reviewing the adequacy andintegrity of this system. However, in view of the limitations inherent in any system, it should be noted that such system of internalcontrol is designed to manage, rather than to eliminate the risks of failure to achieve the Group’s objectives. Accordingly, it canonly provide reasonable but not absolute assurance against material misstatements, frauds, losses or breaches of laws andregulations.

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 thatthe system is adequate to mitigate the significant risks. Management assists the Board in the implementation of the Board’spolicies and procedures, and in the design, operation and monitoring of suitable internal controls to mitigate and control theserisks. This process has been in place for the financial year under review and up to the date of approval of this Statement, and isregularly reviewed by the Board through its ARMC which is supported by the internal audit function and Corporate Governanceand Risk Management (“CGRM”).

RISK MANAGEMENT

RISK MANAGEMENT FRAMEWORK

A Risk Management Framework was developed to ensure that risks are managed effectively, efficiently and coherently acrossthe Group. Key risk events were identified, evaluated, discussed and with the approval of the Board, appropriate measures weretaken to control and mitigate these risks. The key risks affecting the achievement of the Group objectives identified by respectiverisk owners are categorised into four types, namely:

• Strategic risk;• Market risk;• Financial risk; and• Operational risk.

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;• Detailed policies and standard operating procedures;• Established limits of authority;• Setting and monitoring of Key Performance Indicators (“KPI”); 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.

The Risk Management Framework was last reviewed and enhanced in February 2017.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTERNAL CONTROL

The Board recognises the importance of maintaining a sound system of internal control to safeguard shareholders’ investmentsand the Group’s assets. The key elements of the Group’s system of internal control are described as follows:

1) ARMC

The ARMC is comprised wholly of Non-Executive Board members and has full access to both Internal Auditors and ExternalAuditors. It shall meet with the Internal Auditors without the Management presence at least once a year and with the ExternalAuditors at least twice a year or when necessary. Deloitte, the audit firm engaged to carry out the internal audit function forthe Group reports directly to the ARMC. The activities performed by the ARMC during the financial year under review are setout in the ARMC Report.

2) BOARD COMMITTEE

Besides the ARMC, the Company also has a Nomination and Remuneration Committee, Employees’ Share SchemeCommittee and Executive Committee (“EXCO”). These Board Committees are established to assist the Board in providingindependent oversight of the Group’s management with responsibilities and authorities clearly specified in their respectiveterms of reference.

3) OUTSOURCED INTERNAL AUDIT FUNCTION

The Group internal audit function is outsourced to Deloitte. Its primary role is to provide independent assurance service tothe Board, ARMC and Management, focusing on reviewing the adequacy and effectiveness of the risk management, controland governance processes that Management has put into place.

4) CGRM

The role of CGRM is to assist the ARMC of the Company in the effective discharge of their risk management and corporategovernance responsibilities, with emphasis given to assist the Acting Chief Executive Officer (“CEO”) and Management inthe successful implementation of Corporate Governance Framework across the Group.

5) ORGANISATIONAL STRUCTURE WITH DEFINED RESPONSIBILITY

Properly defined organisation structure with clear reporting lines, formalised responsibilities and delegation of authority hasbeen established as a control mechanism in terms of lines of reporting and accountability.

6) SETTING AND MONITORING KPIs

The Group uses KPIs to measure the achievement of its strategic objectives. Corporate KPIs which are linked to the Group’sstrategic objectives are established at the beginning of the year, and cascaded down to individual employee. Monitoring ofthe performance of Corporate KPIs is carried out during meetings of Management and EXCO on a monthly basis, and theBoard on a quarterly basis. Individual KPIs are monitored through mid-year and year-end employee performance appraisal,and are linked to performance based rewards.

7) ESTABLISHED LIMITS OF AUTHORITY

Approved limits of authority are imposed on the Management team in respect of the day-to-day operations as a control tominimise any risk of abuse of authority, and to ensure segregation of duties.



8) BUDGETING PROCESS AND FINANCIAL REPORTING

Each department undertakes a comprehensive yearly budgeting and forecasting process. Management conducts monthlyreviews of the financial performance of the Group against financial budget which are subsequently presented to the EXCOtogether with action plans.

Management takes into consideration key economic changes, market and industry outlook and regulatory developments inthe preparation of budgeting and forecasting, and deliberates the same during reporting to the EXCO and the Board.

9) POLICY AND STANDARD OPERATING PROCEDURE FRAMEWORK

A Policy and Standard Operating Procedure Framework was developed to ensure key processes within the Group areproperly documented, communicated and implemented by Management as well as to ensure that internal control principlesand mechanisms are embedded in the Group’s operations.

10) CODE OF ETHICS

The Board and Senior Management set the tone at the top for corporate behaviour and corporate governance. The Code ofEthics (“COEs”) has been formalised and adopted for the Directors and employees of the Group to encourage high standardsof conduct that are associated with ethical business practices. It is a requirement for all Directors and employees of theGroup to understand the COEs, and to acknowledge and sign off on the declaration form.

11) 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 businessassociates, to adhere to this Service Provider COC when conducting business with the Group. The Group may take thenecessary action for breaches of the Service Provider COC which includes but is not limited to termination and preclusionfrom proposing any work for the Group for a pre-determined period.

12) ANTI-FRAUD AND WHISTLEBLOWING POLICY

The Anti-Fraud and Whistleblowing Policy is built into the Group’s culture towards elimination of fraud and corruption. It alsopromotes a transparent and open environment for fraud reporting within the Group.

13) CORPORATE DISCLOSURE POLICY

The Corporate Disclosure Policy was developed to ensure information directed to shareholders, stakeholders and the generalpublic fairly and accurately represents the Group. Hence, investors and potential investors can make properly informedinvestment decisions, and current stakeholders can be informed of the Company’s material information and its objectives.



ADEQUACY OF RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

The Board has satisfactorily received reasonable assurance from the Acting CEO and the Chief Financial Officer that the Group’srisk management and internal control system is operating adequately, in all material aspects for the financial year under reviewand up to the date of approval of the Statement, and improvement in certain areas is on-going.

CONCLUSION

The Board believes that the development of a sound system of risk management and internal control is an on-going process andhence, has taken steps to progressively improve the system. During the financial year under review, certain areas for improvementin the system were identified. Management has been responsive to the issues raised and has taken the necessary actions toaddress the areas for improvement highlighted by the External Auditors and Internal Auditors. The Board is of the view that thesystem of risk management and internal control in place is adequate for the financial year under review and up to the date ofapproval of the Statement.

The Statement is made in accordance with a resolution of the Board dated 12 April 2018.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

As required by Paragraph 15.23 of the Listing Requirements of Bursa Securities, the External Auditors have reviewed theStatement. Limited assurance review was performed by the External Auditors in accordance with Audit and Assurance PracticeGuide (“AAPG”) 3 issued by the Malaysian Institute of Accountants. AAPG 3 does not require the External Auditors to form anopinion on the adequacy and effectiveness of the risk management and internal control systems of the Group.



The Act requires the Directors to lay before the Company at its Annual General Meeting, the Audited Financial Statements, whichinclude the Consolidated Statement of Financial Position and the Consolidated Statement of Comprehensive Income of the Groupand the Company for each financial year, made out in accordance with the applicable approved accounting standards and theprovisions of the Act. This is also in line with Paragraph 15.26 (a) of the Listing Requirements of Bursa Securities.

The Directors are required to take reasonable steps in ensuring that the Consolidated Financial Statements give a true and fairview of the state of affairs of the Group and the Company as at the end of the financial year ended 31 December 2017.

The Financial Statements of the Group and the Company for the financial year under review are set out on pages 91 to 167 ofthis Annual Report.

In the preparation of the Financial Statements, the Directors are satisfied that the Group and the Company have used appropriateaccounting policies, consistently applied and supported by reasonable and prudent judgement and estimates. The Directorsalso 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 and the Company keep accounting records which disclosewith reasonable accuracy the financial position of the Group and the Company, and to cause such records to be kept in suchmanner as to enable them to be conveniently and properly audited.


STATEMENT OFDIRECTORS’ RESPONSIBILITY

78 Directors’ Report

83Statement by Directors

84Statutory Declaration

85Independent Auditors’ Report

91Statements of Comprehensive Income

92Statements of Financial Position

94Statements of Changes In Equity

98Statements of Cash Flows

101Notes to the Financial Statements

FINANCIALSTATEMENTS

The Directors submit their report together with the audited financial statements of the Group and the Company for the financialyear ended 31 December 2017.

PRINCIPAL ACTIVITIES

The Company is an investment holding company. The principal activities of the Group are vessel owning/leasing and provisionof vessel chartering and ship management services to oil and gas related industries. The principal activities of the subsidiariesare disclosed in Note 15 to the financial statements. There were no significant changes in the nature of these principal activitiesduring the financial year.

FINANCIAL RESULTS

Group Company RM RM

(Loss)/Profit for the financial year attributable to:- Equity holders of the Company (62,099,688) (50,831,166)- Non-controlling interests 6,252,404 -

Loss for the financial year (55,847,284) (50,831,166)

DIVIDEND

No dividend has been paid, declared or proposed since the end of the previous financial year. The Directors do not recommendthe payment of any final dividend for the financial year ended 31 December 2017.

RESERVES AND PROVISIONS

All material transfers to or from reserves and provisions during the financial year are shown in the financial statements.

DIRECTORS

The Directors who have held office during the financial year and during the period from the end of the financial year to date ofthe report are as follows:

Raja Tan Sri Dato’ Seri Arshad bin Raja Tun UdaDatuk Wira Azhar bin Abdul HamidSyed Yasir Arafat bin Syed Abd KadirEdwanee Cheah bin AbdullahMadeline Lee May MingDatuk Abdullah bin AhmadAmir Hamzah bin Azizan (resigned with effect from 30 November 2017)Farina binti Farikhullah Khan Datuk Abdullah bin Karim


DIRECTORS’REPORTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

LIST OF DIRECTORS OF SUBSIDIARIES

Pursuant to Section 253 of the Companies Act 2016, the list of Directors of the subsidiaries (excluding Directors who are alsoDirectors of the Company) in the office during the financial year and during the period from the end of the financial year to thedate of the Report are as follows:

Hassan bin AliSiti Nursalwana binti Haji AwangSiti Nurul Hameezah binti Haji AwangIdham Adnan Jamil (appointed with effect from 7 June 2017)*Jamalludin bin Obeng (appointed with effect from 7 June 2017)*Zaleha binti Abdul Hamid (resigned with effect from 30 August 2017)**

* The appointment date refers to the earliest appointment date among various subsidiaries within the Group. The actualappointment date is set out in the respective subsidiaries’ financial statements.

** The resignation date refers to the latest resignation date among various subsidiaries within the Group. The actual resignationdate is set out in the respective subsidiaries’ financial statements.

DIRECTORS’ INTERESTS

According to the register of Directors’ shareholdings maintained by the Company in accordance with Section 59 of the CompaniesAct 2016, the interests and deemed interests in the shares of the Company or its subsidiaries or its holding company orsubsidiaries of the holding company at the end of the financial year are as follows:

Number of ordinary shares At At 1.1.2017 Acquired Sold 31.12.2017

Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda 150,000 - - 150,000Edwanee Cheah bin Abdullah 200,000 - - 200,000Madeline Lee May Ming 60,000 - - 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, shareoptions 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 arrangementswith 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 toreceive any benefit (other than the benefits shown under Directors’ remuneration) by reason of a contract made by the Groupand the Company or a related corporation with any Director or with a firm of which any Director is a member, or with a companyin which any Director has a substantial financial interest.


DIRECTORS’REPORT

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTINUED)

DIRECTORS’ REMUNERATION

Details of Directors’ remuneration are set out in Note 9 to the financial statements.

INDEMNITY AND INSURANCE COSTS

The Company maintains a corporate liability insurance for the Directors and officers of the Company throughout the financialyear, which provides appropriate insurance cover for the Directors and officers of the Company. The amount of insurance premiumpaid by the Company for the financial year 2017 was RM108,301.

ISSUE OF SHARES

There was no new share issuance during the financial year.

EMPLOYEE SHARE SCHEME

The establishment of the Group’s Employees’ Share Scheme (“the Scheme”) is governed by the by-laws which was approved bythe Board of Directors on 3 March 2014 and administered by Employees’ Share Scheme (“ESS”) Committee .

The Scheme comprises the Employees’ Share Option Scheme and Employees’ Share Grant Plan. The Scheme is designed toprovide, among others, long-term incentives for the Group’s confirmed full-time employees (including an Executive Director) todeliver long-term shareholder returns.

(a) Employees’ Share Option Scheme (“ESOS”)

ESOS is the share option scheme of the Company’s ordinary shares offered for a subscription to the eligible person of the Group.

The salient features and other terms of the ESOS are disclosed in Note 25 (a) to the financial statements.

(b) Employees’ Share Grant Plan (“ESGP”)

The ESGP comprises of the Value Sharing Plan (“VSP”) and Loyalty Shares. Under VSP, ordinary shares of the Company arebeing granted to eligible senior management employee subject to achievement of the annual performance criteria asdetermined by the ESS Committee on an on-going basis. Under Loyalty Shares, ordinary shares of the Company are beinggranted to any senior management employee. The decision of the ESS Committee on the selection of eligible seniormanagement employees to participate in the ESGP shall be final and binding.

During the financial year ended 2017, the Company has granted 10,000,000 ordinary shares under the VSP and 4,000,000ordinary shares under the Loyalty Shares to the Executive Director. The details of the shares granted under the ESGP andits vesting conditions are disclosed in Note 25 (b) to the financial statements.

The salient features and other terms of the ESGP are disclosed in Note 25 (b) to the financial statements.


DIRECTORS’REPORTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTINUED)

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

Before the financial statements of the Group and the Company were prepared, 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 fordoubtful debts and satisfied themselves that all known bad debts have been written off and that adequate allowance ismade 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 includingthe values of current assets as shown in the accounting records of the Group and the Company have been written down toan amount which the current assets 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 financialstatements 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 Companymisleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and theCompany misleading or inappropriate.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve monthsafter the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group andthe 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 securesthe 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 financialstatements which would render any amount stated in the financial statements misleading.

In the opinion of the Directors:

(a) the results of the Group 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 as disclosed in the statementof comprehensive income of the Group and the impairment loss on investments in subsidiaries as disclosed in the statementof 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 orevent of a material and unusual nature likely to affect substantially the results of the operations of the Group and the Companyfor 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’simmediate holding company, and Yayasan Ekuiti Nasional, a foundation incorporated in Malaysia, as the Company’s ultimateholding foundation.

SUBSIDIARIES

Details of subsidiaries are set out in Note 15 to the financial statements.

AUDITORS’ REMUNERATION

Details of auditors’ remuneration are set out in Note 7 to the financial statements.

AUDITORS

The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed their willingness to accept re-appointment as auditors.

PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146) was registered on 2 January 2018 and with effect from that date,PricewaterhouseCoopers (AF 1146), a conventional partnership was converted to a limited liability partnership.

This report was approved by the Board of Directors on 12 April 2018. Signed on behalf of the Board of Directors:

SYED YASIR ARAFAT BIN SYED ABD KADIR RAJA TAN SRI DATO’ SERI ARSHAD BIN RAJA TUN UDADIRECTOR CHAIRMAN

Kuala Lumpur


DIRECTORS’REPORTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTINUED)

PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016

We, Syed Yasir Arafat bin Syed Abd Kadir and Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda, being two of the Directors ofIcon Offshore Berhad, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 91 to 167are drawn up so as to give a true and fair view of the financial position of the Group and the Company as at 31 December 2017and financial performance of the Group and of the Company for the financial year ended 31 December 2017 in accordance withthe Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the CompaniesAct 2016 in Malaysia.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors dated 12 April 2018.

SYED YASIR ARAFAT BIN SYED ABD KADIR RAJA TAN SRI DATO’ SERI ARSHAD BIN RAJA TUN UDADIRECTOR CHAIRMAN

Kuala Lumpur


STATEMENTBY DIRECTORS

PURSUANT TO SECTION 251(1) OF THE COMPANIES ACT 2016

I, Idham Adnan Jamil, being the Officer primarily responsible for the financial management of Icon Offshore Berhad, do solemnlyand sincerely declare that the financial statements set out on pages 91 to 167 are, to the best of my knowledge and belief, correctand I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the StatutoryDeclarations Act, 1960.

IDHAM ADNAN JAMILCHIEF FINANCIAL OFFICER

Subscribed and solemnly declared by the above named Idham Adnan Jamil at Kuala Lumpur before me, on 12 April 2018.

COMMISSIONER FOR OATHS


STATUTORYDECLARATION

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Our opinion

In our opinion, the financial statements of Icon Offshore Berhad (“the Company”) and its subsidiaries (“the Group”) give a trueand fair view of the financial position of the Group and of the Company as at 31 December 2017, and of their financial performanceand their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International FinancialReporting Standards and the requirements of the Companies Act 2016 in Malaysia.

What we have audited

We have audited the financial statements of the Group and of the Company, which comprise the statements of financial positionas at 31 December 2017 of the Group and of the Company, and the statements of comprehensive income, statements of changesin equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financialstatements, including a summary of significant accounting policies, as set out on pages 91 to 167.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing.Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the financialstatements” section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and other ethical responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct andPractice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordancewith the By-Laws and the IESBA Code.

Our audit approach

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financialstatements of Group and the Company. In particular, we considered where the Directors made subjective judgements; forexample, in respect of significant accounting estimates that involved making assumptions and considering future events that areinherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, includingamong other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement dueto fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statementsas a whole, taking into account the structure of the Group and of the Company, the accounting processes and controls, and theindustry in which the Group and the Company operate.


INDEPENDENTAUDITORS’ REPORT

TO THE MEMBERS OF ICON OFFSHORE BERHAD(Incorporated in Malaysia)(Company No. 984830 D)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financialstatements of the Group and of the Company for the current year. These matters were addressed in the context of our audit ofthe financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not providea separate opinion on these matters.


INDEPENDENTAUDITORS’ REPORTTO THE MEMBERS OF ICON OFFSHORE BERHAD (CONTINUED)(Incorporated in Malaysia)(Company No. 984830 D)

Key audit matters

Assessment of impairment and reversal of impairment ofthe vessels

As at 31 December 2017, the carrying value of the Group’svessels, vessels under construction, vessel parts anddrydocking expenditure capitalised was RM1.1 billion, aftertaking into account a net impairment charge for certainvessels during the current financial year of RM34.4 million.This carrying value represents 85% of the total assets on thestatements of financial position.

We focused on the management’s assessment of therecoverable amount of the vessels, being the higher of avessel’s fair value less cost of disposal (“FVLCOD”) and valuein use (“VIU”), which involved significant assumptions inrelation to the:• estimated fair value of the vessels, as provided by an

independent professional valuer; and• estimated utilisation rates and charter rates used in the

cash flow projections in determining VIU of the vessels.

Refer to Note 2.4 and 2.5 - Summary of significant accountingpolicies, Note 3(i) - Critical accounting estimates andjudgements and Note 13 - Property Plant and Equipment tothe consolidated financial statements where the impairmentof the vessels has been discussed.

How our audit addressed the key audit matter

We have performed the following audit procedures:• Where the recoverable amounts of the vessels are based

on FVLCOD, we evaluated the competencies andobjectivity of the independent professional valuer engagedby management and held discussions with the valuer tounderstand the assumptions and valuation techniquesused in deriving the fair values of the vessels.

• Where the recoverable amounts of the vessels are basedon VIU, we tested the discounted cash flow projections byperforming the following procedures:- for the period under contract, compared the vessel

utilisation and charter rates to locked-in contracts;- following the end of the contract period, compared the

assumption on subsequent utilisation of the vessels andcharter rates to their respective average historical rates;

- discussed with management on future industry outlookand long term growth rate and compared to marketdata on economic and industry forecasts; and

- checked the sensitivity of the key assumptions forrecoverable amounts of vessels by varying theutilisation rates, charter rates, and discount rate usedin the cash flow projections.

Based on the procedures carried out above, no materialexceptions were noted.


Key audit matters (continued)



TO THE MEMBERS OF ICON OFFSHORE BERHAD (CONTINUED)(Incorporated in Malaysia)(Company No. 984830 D)

Key audit matters

Ability of the Group to meet its loan obligation and otherliquidity requirements

As at 31 December 2017, the Group was in a net currentliabilities position of RM261.5 million.

On 29 March 2018, the Group has received approval from aregulatory agency (“the Agency”) to mediate and work out a debtresolution with the relevant Malaysian banks (“the Lenders”)under a prescribed arrangement (“the Arrangement”). As partof the Arrangement, loan servicing to the Lenders will be limitedto interest payments at an appropriate rate as determined by theGroup during the standstill period of up to twelve months fromthe date of the approval from the Agency or until such mutualagreements on the debt restructuring are reached with theLenders. Accordingly, management has prepared a cash flowsprojection for the twelve months from the date of approval of theArrangement on the basis that loan servicing to the Lenders islimited to the repayment of interest for the twelve month period.

The Directors are of the view that the Group will be able togenerate sufficient cash inflows from its operations within thenext twelve months from the date of approval of theArrangement to meet its working capital requirements, capitalexpenditure, interest repayments to the Lenders and otherloan repayments.

We focused on this area due to the significant judgementinvolved in determining the assumptions used by managementin arriving at the Group’s cash flows projection for the twelvemonths the date of approval of the Arrangement.

Refer to Note 2.1 - Basis of preparation, Note 4(ii) - LiquidityRisk and Note 23 - Borrowings to the consolidated financialstatements.

Recognition of deferred tax assets

As at 31 December 2017, the Group has recorded deferredtax assets of RM47.0 million which is largely due to unutilisedcapital allowances and unabsorbed tax losses of Icon ShipManagement Sdn. Bhd. (“ISM”). The ultimate recoverability ofthe deferred tax assets is dependent on the probability offuture taxable profits of ISM based on the budget approvedby the Board of Directors.

We focused on this area due to the judgement involved indetermining the probability that future taxable profits will beavailable against which the unutilised capital allowances andunabsorbed tax losses can be utilised.


In assessing the reasonableness of the cash flow projectionsprepared by the management for the next twelve month fromthe date of approval of the Arrangement we have performedthe following procedures:• Evaluated the reasonableness of estimated utilisation rates,

charter rates and drydocking expenditure used in the cashflows projection which were also tested by us as part of theimpairment assessment of the vessels;

• Evaluated the reasonableness of estimated timing of cashflows for operation, capital expenditure, taxation and otherloan repayments.

• Checked the computation of interests paid to the Lenders;• Read the Participants’ Code of Conduct of the Agency

(“the Code”) to have an understanding of procedures andmethodology of the Arrangement; and

• Obtained confirmation from the external financial advisorof the debt restructuring that the loan obligation during thestandstill period under the Arrangement is limited tointerest payments at an appropriate rate as determined bythe Group, and the standstill period is expected to be inplace for a period of twelve months from the date ofapproval of the Arrangement.

We also checked the adequacy of the disclosures in the notesto the financial statements.


We compared management’s assessment of the taxable profitprojections of ISM to the Board approved budget.

We checked that the key assumptions used in determining thetaxable profit projections, in particular the estimated utilisationrates and charter rates as well as the mark-up percentage to beretained by ISM for the provision of ship management andproject management services were reasonable. We alsochecked that the key assumptions used are consistent withthose used in the impairment assessment of vessels.


Key audit matters (continued)



Key audit matters

Recognition of deferred tax assets (continued)

Refer to Note 2.12 - Summary of significant accountingpolicies, Note 3(v) - Critical accounting estimates andjudgements and Note 16 - Deferred taxation to the financialstatements.

Impairment assessment of investments in subsidiaries(Company financial statements)

As at 31 December 2017, the carrying value of theinvestments in subsidiaries after impairment is RM684.3million. Impairment made during the financial year of RM35.8million relates to subsidiaries where the principal activities arevessel owning/leasing and provision of vessel chartering.

For the purpose of impairment testing, the subsidiaries areconsidered as a single CGU and the recoverable amount ofthe investments in subsidiaries was determined based on theVIU of the subsidiaries derived from the discounted cashflows projection prepared by the management, after adjustingfor the fair value of the outstanding debts and tax payment.

We focused on this area due to the significant judgementsand assumptions made by management in determining therecoverable amount of the investments.

Refer to Note 2.3 and Note 2.5 - Summary of significantaccounting policies, Note 3(ii) - Critical accounting estimatesand judgements and Note 15 - Investments in subsidiaries.




We performed the following procedures to assess thereasonableness of the recoverable amount of the investmentsin subsidiaries:

• We compared management’s assessment of the cash flowsprojection of the subsidiaries to the Board approved budget.

• We checked that the key assumptions used in determiningthe cash flows projection of the subsidiaries, in particularthe utilisation rates, charter rates and drydockingexpenditure of vessels were reasonable and consistentwith those used in the impairment assessment of vessels.

• In relation to the fair value of the subsidiaries’ outstandingdebts, we checked the reasonableness of the discount ratewith the assistance of our valuation experts bybenchmarking to industry and market data.


Information other than the financial statements and auditors’ report thereon

The Directors of the Company are responsible for the other information. The other information comprises Statement on RiskManagement and Internal Control and Directors’ Report, which we obtained prior to the date of this auditors’ report, and the othersections of the annual report, which is expected to be made available to us after that date. Other information does not includethe financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do notexpress any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the financial statements of theGroup and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditors’ report, weconclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing toreport in this regard.





Responsibilities of the Directors for the financial statements

The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Companythat give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial ReportingStandards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internalcontrol as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Companythat are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Groupand the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and usingthe going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to ceaseoperations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company asa whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance withapproved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, theycould reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, weexercise professional judgement and maintain professional scepticism throughout the audit. We also:

(a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whetherdue to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.

(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate inthe circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group and the Company’sinternal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by the Directors.

(d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt onthe Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, weare required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group andof the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or theCompany to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company,including the disclosures, and whether the financial statements of the Group and of the Company represent the underlyingtransactions and events in a manner that achieves fair presentation.



Auditors’ responsibilities for the audit of the financial statements (continued)

(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities withinthe Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervisionand performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significantaudit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence,and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,and where applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of thefinancial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describethese matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremelyrare circumstances, we determine that a matter should not be communicated in our report because the adverse consequencesof doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we havenot acted as auditors, are disclosed in Note 15 to the financial statements.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

PRICEWATERHOUSECOOPERS PLT YEE WAI YINLLP0014401-LCA & AF 1146 02081/08/2018 JChartered Accountants Chartered Accountant

Kuala Lumpur12 April 2018


INDEPENDENTAUDITORS’ REPORTTO THE MEMBERS OF ICON OFFSHORE BERHAD (CONTINUED)(Incorporated in Malaysia)(Company No. 984830 D)

Group Company 2017 2016 2017 2016 Note RM RM RM RM

Revenue 5 204,624,937 226,915,378 - -Cost of sales (157,872,465) (163,471,981) - -

Gross profit 46,752,472 63,443,397 - -Other income 7,120,173 4,224,248 610,000 81,006Administrative expenses (28,796,345) (41,814,553) (6,984,772) (6,182,627)Other expenses - Impairment loss on vessels 7, 13 (34,402,759) (135,476,980) - - - Impairment loss on investments in subsidiaries 15 - - (35,800,878) (113,132,646) Loss from operations (9,326,459) (109,623,888) (42,175,650) (119,234,267)Finance costs 6 (42,475,588) (40,199,975) (8,655,516) (2,031,694)Share of (loss)/profit from a joint venture - (1,124) - -

Loss before taxation 7 (51,802,047) (149,824,987) (50,831,166) (121,265,961)Taxation 10 (4,045,237) 3,126,033 - -

Loss for the financial year (55,847,284) (146,698,954) (50,831,166) (121,265,961)

Other comprehensive income:Items that will be reclassified subsequently to profit or loss: Currency translation differences 265,999 129,252 - -

Total comprehensive loss for the financial year (55,581,285) (146,569,702) (50,831,166) (121,265,961)

(Loss)/Income attributable to: - Equity holders of the Company (62,099,688) (152,746,880) (50,831,166) (121,265,961) - Non-controlling interests 6,252,404 6,047,926 - -

(55,847,284) (146,698,954) (50,831,166) (121,265,961)

Total comprehensive (loss)/income attributable to: - Equity holders of the Company (61,964,028) (152,680,962) (50,831,166) (121,265,961) - Non-controlling interests 6,382,743 6,111,260 - -

(55,581,285) (146,569,702) (50,831,166) (121,265,961)

Loss per share for loss attributable to the ordinary equity holders of the Company: 11 Basic/Diluted loss per share (sen) (5.28) (12.98)

The notes set out on pages 101 to 167 form an integral part of these financial statements.


STATEMENTS OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017


NON-CURRENT ASSETS

Property, plant and equipment 13 1,114,208,809 1,191,849,908 - -Investment in a joint venture 14 - 4,231,366 - -Investments in subsidiaries 15 - - 684,270,958 681,850,368Deferred tax assets 16 47,000,432 49,894,120 - -

1,161,209,241 1,245,975,394 684,270,958 681,850,368

CURRENT ASSETS

Inventories 3,169,256 3,033,184 - -Trade and other receivables 17 95,381,298 71,186,856 258,054 212,083Tax recoverable 1,885,394 3,002,936 18,500 10,000Cash and bank balances 18 47,757,744 58,720,087 11,643 47,751

148,193,692 135,943,063 288,197 269,834Non-current assets held for sale 19 1,269,600 - - -

149,463,292 135,943,063 288,197 269,834

CURRENT LIABILITIES

Trade and other payables 22 71,113,590 59,020,042 2,193,725 1,779,850Amount due to a subsidiary 20 - - 22,255,022 22,255,022Amount due to immediate holding company 21 2,000,342 - 2,000,342 -Borrowings 23 337,123,865 206,664,813 156,428,897 106,352,028Tax payable 738,374 102,943 - -

410,976,171 265,787,798 182,877,986 130,386,900

NET CURRENT LIABILITIES (261,512,879) (129,844,735) (182,589,789) (130,117,066)


STATEMENTS OFFINANCIAL POSITIONAS AT 31 DECEMBER 2017


NON-CURRENT LIABILITES

Trade and other payables 22 33,659,742 36,949,480 - -Borrowings 23 347,027,451 505,560,533 - -Deferred tax liabilities 16 1,552,664 1,361,889 - -

382,239,857 543,871,902 - -

NET ASSETS 517,456,505 572,258,757 501,681,169 551,733,302

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY

Share capital 24 899,802,630 588,592,550 899,802,630 588,592,550Share premium 24 - 311,210,080 - 311,210,080Currency translation reserve 1,082,449 946,789 - -Share based payment reserve 25 152,523 - 152,523 -Capital contribution reserve 25 626,510 - 626,510 -Accumulated losses (397,935,233) (335,835,545) (398,900,494) (348,069,328)Non-controlling interest 13,727,626 7,344,883 - -

TOTAL EQUITY 517,456,505 572,258,757 501,681,169 551,733,302



STATEMENTS OFFINANCIAL POSITION

AS AT 31 DECEMBER 2017 (CONTINUED)

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STATEMENTS OFCHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

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STATEMENTS OFCHANGES IN EQUITY


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CASH FLOWS FROM OPERATING ACTIVITIES

Loss before taxation (51,802,047) (149,824,987) (50,831,166) (121,265,961)

Adjustments for: Depreciation of property, plant and equipment 58,134,344 62,418,345 - - Interest expense 40,381,147 40,199,975 8,655,516 2,031,694 Interest income (644,506) (706,414) - (76,078) Impairment loss on vessels 42,657,991 135,476,980 - - Impairment loss on investments in subsidiaries - - 35,800,878 113,132,646Impairment of receivables (net) 612,350 - - -Reversal of impairment loss of vessels (8,255,232) - - -Accretion of discount on non-current payables 2,094,441 - - -Unrealised (gain)/loss on foreign exchange (5,019,098) 5,066,373 - 74Share-based payment expense 779,033 - 779,033 -Share of loss of joint venture - 1,124 - -

Operating profit/(loss) before working capital changes 78,938,423 92,631,396 (5,595,739) (6,177,625)

Changes in working capital: Inventories (114,169) (1,427,487) - - Receivables (25,877,243) 6,782,881 (45,972) 208,306 Payables 14,408,533 2,597,217 6,975,113 581,549

Cash generated from/(used in) operations 67,355,544 100,584,007 1,333,402 (5,387,770)Tax paid (853,584) (1,336,837) (8,500) (10,837)Tax refund 966,779 468,801 - 10,000

Net cash generated from/(used in) operating activities 67,468,739 99,715,971 1,324,902 (5,388,607)


STATEMENTS OFCASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017


CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (15,400,426) (87,226,765) - -Interest received 644,506 969,717 - 76,078Advances to subsidiaries - - (50,479,361) (105,868,432)Repayment of advances from subsidiaries - - 5,696,656 -

Net cash used in investing activities (14,755,920) (86,257,048) (44,782,705) (105,792,354)

CASH FLOWS FROM FINANCING ACTIVITIES

Advances from immediate holding company - 35,000,000 - 35,000,000Drawdown of borrowings (net of transaction cost) 23 51,251,200 118,000,000 50,000,000 105,000,000Repayment of finance lease liabilities 23 (4,875) (33,036) - -Repayment of advances from immediate holding company 23 - (35,000,000) - (35,000,000)Repayment of borrowings 23 (78,088,720) (131,473,562) - -Repayment of amount due to a subsidiary 23 - - - (19,000,000)Interest paid 23 (36,737,922) (36,748,312) (6,578,305) (679,666)Increase in deposits pledged as security 23 (6,194,217) (6,980,199) - -

Net cash (used in)/generated from financing activities (69,774,534) (57,235,109) 43,421,695 85,320,334


STATEMENTS OFCASH FLOWS



Exchange (loss)/gains on cash and bank balances (94,845) 162,061 - (74)

NET DECREASE IN CASH AND CASH EQUIVALENTS (17,156,560) (43,614,125) (36,108) (25,860,701)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 39,494,845 83,108,970 47,751 25,908,452

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 18 22,338,285 39,494,845 11,643 47,751

Cash and cash equivalents 22,338,285 39,494,845 11,643 47,751Deposits pledged as security 25,419,459 19,225,242 - -

Cash and bank balances 18 47,757,744 58,720,087 11,643 47,751



STATEMENTS OFCASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTINUED)

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 provisionof vessel chartering and ship management services to oil and gas related industries. The principal activities of the subsidiariesare disclosed in Note 15 to the financial statements. There were no significant changes in the nature of these principalactivities during the financial year.

The Directors regard Hallmark Odyssey Sdn. Bhd., a company incorporated and domiciled in Malaysia, as the Company’simmediate holding company, and Yayasan Ekuiti Nasional, a foundation incorporated in Malaysia, as the Company’s ultimateholding foundation.

The address of the registered office of the Company is:

Level 7, Menara MileniumJalan Damanlela, Pusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur

The address of the principal place of business of the Company is:

Level 12A, East Wing, The IconNo. 1, Jalan 1/68FOff Jalan Tun Razak55000 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 havebeen 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 FinancialReporting Standards (“MFRS”), International Financial Reporting Standards and the requirements of the Companies Act2016 in Malaysia.

The financial statements of the Group and the Company have been prepared under the historical cost convention unlessotherwise indicated in the accounting policies below and are presented in Ringgit Malaysia (“RM”). The preparation offinancial statements in conformity with MFRS requires the use of certain critical accounting estimates and assumptionsthat affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expenses during the reported financial year. It alsorequires the Directors to exercise their judgement in the process of applying the Group and Company’s accountingpolicies. Although these estimates and judgement are based on the Directors’ best knowledge of current events andactions, actual results may differ. The areas involving a higher degree of judgement or complexity, or areas whereassumptions and estimates are significant to the financial statements are disclosed in Note 3.

For the financial year ended 31 December 2017, the Group and the Company incurred a net loss after tax ofRM55,847,284 and RM50,831,166 respectively and, as at 31 December 2017, the Group and the Company's currentliabilities exceeded their current assets by RM261,512,879 and RM182,589,789 respectively.



FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.1 Basis of preparation (continued)

As set out in Note 4(ii) on liquidity risk, the Group will be carrying out a debt restructuring scheme with the relevantbankers with assistance from a regulatory agency under a prescribed arrangement. Based on the prescribedarrangement and its standstill period, the Group will be able to generate sufficient cash inflows from its operations tomeet its working capital requirements, capital expenditure, interest repayments to the relevant lenders in the prescribedarrangement and other loan repayments for the next twelve months from the date of approval of the Arrangement.

As such, the Directors believe that it is appropriate to prepare the financial statements of the Group and the Companyon a going concern basis.

Standards, amendments to published standards and interpretations that are effective:

The Group and the Company has applied the following amendments for the first time for the financial year beginning on1 January 2017:

• Amendments to MFRS 107 “Statement of Cash Flows – Disclosure Initiative”• Amendments to MFRS 112 “Income Taxes – Recognition of Deferred Tax Assets for Unrealised Losses”• Annual Improvements to MFRSs 2014 - 2016 Cycle: MFRS 12 “Disclosures of Interests in Other Entities”

The adoption of the Amendments to MFRS 107 has required additional disclosure of changes in liabilities arising fromfinancing activities. Other than that, the adoption of these amendments did not have any impact on the current periodor any prior period and is not likely to affect future periods.

Standards, amendments to published standards and interpretations to existing standards that have been issued but notyet effective:

A number of new standards and amendments to standards and interpretations are effective for financial year beginningafter 1 January 2017. None of these is expected to have a significant effect on the consolidated financial statements ofthe Group and the Company, except the following set out below:

• 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 primarymeasurement categories for financial assets: amortised cost, fair value through profit or loss and fair value throughother comprehensive income (“OCI”). The basis of classification depends on the entity's business model and thecash flow characteristics of the financial asset. Investments in equity instruments are always measured at fair valuethrough profit or loss with an irrevocable option at inception to present changes in fair value in OCI (provided theinstrument is not held for trading). A debt instrument is measured at amortised cost only if the entity is holding it tocollect 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 accountingfor most financial liabilities, with bifurcation of embedded derivatives. The main changes are:

• For financial liabilities classified as fair value through profit or loss, the fair value changes due to own credit riskshould be recognised directly to other comprehensive income. There is no subsequent recycling to profit or loss.

• When a financial liability measured at amortised cost is modified without this resulting in derecognition, a gainor loss, being the difference between the original contractual cash flows and the modified cash flows discountedat the original effective interest rate, should be recognised immediately in profit or loss.


NOTES TO THEFINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTINUED)



Standards, amendments to published standards and interpretations to existing standards that have been issued but notyet effective: (continued)

MFRS 9 introduces an expected credit loss (“ECL”) model on impairment that replaces the incurred loss impairmentmodel used in MFRS 139. The expected credit loss model is forward-looking and eliminates the need for a triggerevent to have occurred before credit losses are recognised.

Based on the assessments undertaken to date, the Group expects an increase in the Group’s allowance forimpairment by less than 2% of receivables reported for the current financial year, by the application of MFRS 9 onits effective date.

• 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 core principle in MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods orservices to the customer in an amount that reflects the consideration to which the entity expects to be entitled inexchange for those goods or services.

Revenue is recognised when a customer obtains control of goods or services, i.e. when the customer has the abilityto direct the use of and obtain the benefits from the goods or services.

A new five-step process is applied before revenue can be recognised:

• Identify contracts with customers;• Identify the separate performance obligations;• Determine the transaction price of the contract;• Allocate the transaction price to each of the separate performance obligations; and• Recognise the revenue as each performance obligation is satisfied.

Key provisions of the new standard are as follows:

• Any bundled goods or services that are distinct must be separately recognised, and any discounts or rebateson the contract price must generally be allocated to the separate elements.

• If the consideration varies (such as for incentives, rebates, performance fees, royalties, success of an outcomeetc), minimum amounts of revenue must be recognised if they are not at significant risk of reversal.

• The point at which revenue is able to be recognised may shift: some revenue which is currently recognised ata point in time at the end of a contract may have to be recognised over the contract term and vice versa.

• There are new specific rules on licenses, warranties, non-refundable upfront fees, and consignmentarrangements, to name a few.

• As with any new standard, there are also increased disclosures.

The Group has conducted the analysis on the different types of existing contracts with customers. The Group doesnot expect MFRS 15 to have a significant effect on the Group’s revenue based on current scope, and will have noimpact on the cash flows. However, the Group anticipates more extensive disclosures will be required from the yearof adoption in view of the requirements of MFRS 15 to provide information about the nature, amount, timing anduncertainty of revenue and cash flows arising from contracts with customers.

The Group will adopt the standard using the full retrospective approach from 1 January 2018, with the practicalexpedients permitted under the standard.







• Annual Improvements to MFRS 128 “Investments in Associates and Joint Ventures” (effective from 1 January 2018) allow:

• Venture capital organisations, mutual funds, unit trusts and similar entities to elect, on an individual basis,measuring their investments in associates and joint ventures at fair value through profit or loss.

• An entity that is not an investment entity to retain the fair value measurement applied by its associates or jointventures (that are investment entities) when applying equity method.

Based on the assessment undertaken to date, the Group does not expect MFRS 128 to have a significant effect onthe consolidated and separate financial statements of the Group and of the Company.

• Amendments to MFRS 2 “Share-based Payment” (effective from 1 January 2018) on classification and measurementof share-based payments address the following:

Measurement of cash-settled awards

• The amendment clarifies that the fair value of a cash-settled award is determined on a basis consistent with thatused for equity settled awards, where the impact of vesting and non-vesting conditions is considered.

Classification of share-based payment awards with net settlement feature for withholding tax obligations

• The Amendments introduce an exception to the principles of MFRS 2 when an employer is obliged under thetax law to withhold some of the shares to which an employee is entitled under a share-based payment awardand to remit the employee’s tax obligation to the tax authority on behalf of the employee.

Modification of cash-settled awards to equity-settled awards

• The amendments clarify that when an award is modified from cash-settled to equity-settled, the liability for theoriginal award is derecognised, and the modified equity-settled award is recognised in equity to the extent ofgoods or services received at the modification date.

• The modified award is measured by reference to the fair value of the equity instruments on the modificationdate. The resultant difference is recognised in profit or loss.

Based on the assessment undertaken to date, the Group does not expect MFRS 2 to have a significant effect on theconsolidated and separate financial statements of the Group and of the Company.

• IC Interpretation 22 “Foreign Currency Transactions and Advance Consideration” (effective from 1 January 2018).

IC Interpretation 22 applies when an entity recognises a non-monetary asset or non-monetary liability arising fromthe payment or receipt of advance consideration. MFRS 121 requires an entity to use the exchange rate at the ‘dateof the transaction’ to record foreign currency transactions.

IC Interpretation 22 provides guidance how to determine ‘the date of transaction’ when a single payment/receipt ismade, as well as for situations where multiple payments/receipts are made.






• IC Interpretation 22 “Foreign Currency Transactions and Advance Consideration” (effective from 1 January 2018).(continued)

The date of transaction is the date when the payment or receipt of advance consideration gives rise to the non-monetary asset or non-monetary liability when the entity is no longer exposed to foreign exchange risk.

If there are multiple payments or receipts in advance, the entity should determine the date of the transaction foreach payment or receipt.

An entity has the option to apply IC Interpretation 22 retrospectively or prospectively.

Based on the assessment undertaken to date, the Group does not expect IC Interpretation 22 to have a significanteffect on the consolidated and separate financial statements of the Group and of the Company.

• IC Interpretation 23 “Uncertainty over Income Tax Treatments” (effective 1 January 2019).

IC Interpretation 23 provides guidance on how to recognise and measure deferred and current income tax assetsand liabilities where there is uncertainty over a tax treatment.

If an entity concludes that it is not probable that the tax treatment will be accepted by the tax authority, the effect ofthe tax uncertainty should be included in the period when such determination is made. An entity shall measure theeffect of uncertainty using the method which best predicts the resolution of the uncertainty.

IC Interpretation 23 will be applied retrospectively.

• MFRS 16 “Leases” (effective from 1 January 2019) supersedes MFRS 117 ‘Leases’ and the related interpretations.

Under MFRS 16, a lease is a contract (or part of a contract) that conveys the right to control the use of an identifiedasset for a period of time in exchange for consideration.

MFRS 16 eliminates the classification of leases by the lessee as either finance leases (on balance sheet) or operatingleases (off balance sheet). MFRS 16 requires a lessee to recognise a “right-of-use” of the underlying asset and alease liability reflecting future lease payments for most leases.

The right-of-use asset is depreciated in accordance with the principle in MFRS 116 “Property, Plant and Equipment”and the lease liability is accreted over time with interest expense recognised in the income statement.

For lessors, MFRS 16 retains most of the requirements in MFRS 117. Lessors continue to classify all leases as eitheroperating leases or finance leases and account for them differently.

• Annual Improvements to MFRS 112 “Income Taxes” (effective from 1 January 2019).

MFRS 112 clarifies that where income tax consequences of dividends on financial instruments classified as equityis recognised (either in profit or loss, other comprehensive income or equity) depends on where the past transactionsthat generated distributable profits were recognised.

Accordingly, the tax consequences are recognised in profit or loss when an entity determines payments on suchinstruments are distribution of profits (that is, dividends). Tax on dividend should not be recognised in equity merelyon the basis that it is related to a distribution to owners.







• Annual Improvements to MFRS 123 “Borrowing Costs” (effective from 1 January 2019).

MFRS 123 clarifies that if a specific borrowing remains outstanding after the related qualifying asset is ready for itsintended use or sale, it becomes part of general borrowings.

Management is currently assessing the impact arising from the initial application of IC Interpretation 23, MFRS 16, MFRS112 and MFRS 123 on the consolidated and separate financial statements of the Group and of the Company.

2.2 Basis of consolidation

(a) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls anentity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and hasthe ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fullyconsolidated from the date on which control is transferred to the Group. They are deconsolidated from the date thatcontrol ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred forthe acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former ownersof the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value ofany asset or liability resulting from a contingent consideration arrangement and fair value of any pre-existing equityinterest in the subsidiary. Identifiable assets acquired and liabilities and contingent liabilities assumed in a businesscombination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Grouprecognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value orat 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 theacquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable netassets acquired is recognised as goodwill. If the total of consideration transferred, non-controlling interest recognisedand previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in thecase 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 interestin 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 isrecognised in accordance with MFRS 139 in profit or loss. Contingent consideration that is classified as equity isnot remeasured, and its subsequent settlement is accounted for within equity.

Related company transactions, balances and unrealised gains on transactions between Group companies areeliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of thetransferred asset.




2.2 Basis of consolidation (continued)

(a) Subsidiaries (continued)

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policiesadopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated incomestatement, statement of comprehensive income, statement of changes in equity and statement of financial positionrespectively.

Profit or loss and each component of other comprehensive income of the subsidiaries are attributed to the parentand the non-controlling interest, even if this results in the non-controlling interest having a deficit balance.

(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 withequity owners of the Group. A change in ownership interest results in an adjustment between the carrying amountsof the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any differencebetween the amount of the adjustment to non-controlling interests and any consideration paid or received isrecognised 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 remeasuredto its fair value with the change in carrying amount recognised in profit or loss. This fair value becomes the initialcarrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint ventureor financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of thatentity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean thatamounts 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 goodwillrelating to the subsidiaries sold.

(d) Joint arrangements

A joint arrangement is an arrangement of which there is contractually agreed sharing of control by the Group withone or more parties, where decisions about the relevant activities relating to the joint arrangement require unanimousconsent of the parties sharing control. The classification of a joint arrangement as a joint operation or a joint venturedepends upon the rights and obligations of the parties to the arrangement. A joint venture is a joint arrangementwhereby the joint venturers have rights to the net assets of the arrangement. A joint operation is a joint arrangementwhereby 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 theconsolidated statement of financial position. Under the equity method, the investment in a joint venture is initiallyrecognised at cost, and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or lossesof the joint venture in profit or loss, and the Group’s share of movements in other comprehensive income of the jointventure in other comprehensive income. Dividends received or receivable from a joint venture are recognised as areduction in the carrying amount of the investment. When the Group's share of losses in a joint venture equals orexceeds its interests in the joint venture, including any long-term interests that, in substance, form part of the Group’snet investment in the joint venture, the Group does not recognise further losses, unless it has incurred legal orconstructive obligations or made payments on behalf of the joint venture.





2.2 Basis of consolidation (continued)

(d) Joint arrangements (continued)

The Group determines at each reporting date whether there is any objective evidence that the investment in the jointventure is impaired. An impairment loss is recognised for the amount by which the carrying amount of the jointventure 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’sinterest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of animpairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessaryto 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 inthe entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fairvalue becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest asan associate or financial asset. In addition, any amount previously recognised in other comprehensive income inrespect of the entity is accounted for as if the Group had directly disposed of the related assets or liabilities. Thismay 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 theamounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

2.3 Investments in subsidiaries and joint ventures in separate financial statements

In the Company’s separate financial statements, investments in subsidiaries and joint ventures are carried at cost lessaccumulated impairment losses. On disposal of investments in subsidiaries and joint ventures, the difference betweendisposal 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 areconsidered 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 initiallyrecognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location andcondition 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 isnot recoverable from the government, the GST is recognised as part of the cost of purchased property, plant andequipment. Cost also include borrowing costs that are directly attributable to the acquisition, construction or productionof a qualifying asset (refer to accounting policy Note 2.22 on borrowing costs). All property, plant and equipment aresubsequently 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 atacquisition date. The fair value of property is the estimated amount for which a property could be exchanged betweenknowledgeable willing parties in an arm’s length transaction wherein the parties had each acted knowledgeably andwithout compulsion. The fair value of other items of plant and equipment is based on the quoted market prices of similaritems when available and replacement cost where appropriate.




2.4 Property, plant and equipment (continued)

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, onlywhen it is probable that future economic benefits associated with the item will flow to the Group and the cost of the itemcan be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenanceare recognised as expenses in profit or loss during the financial year in which they are incurred. Cost also comprisesthe initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Groupis 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 includedin 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 theasset and which has a different useful life, is depreciated separately.

Property, plant and equipment are depreciated on the straight-line basis to allocate the cost of each asset to their residualvalues over their estimated useful lives, summarised as follows:

Vessels 25 yearsVessel parts 10 yearsDrydocking expenditure 5 yearsBuilding 50 yearsMotor vehicles 4 - 5 yearsOffice equipment 5 -10 yearsComputers 5 yearsFurniture and fittings 10 yearsRenovation 5 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 consumptionof benefits, which are to be replaced or restored by the subsequent drydocking generally every five years. The Grouphas 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 residual values of the vessels is 5% based on ship demolition prices i.e. scrap value.

At the end of the financial year, the Group assesses whether there is any indication of impairment. If such indicationsexist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down ismade if the carrying amount exceeds the recoverable amount. See accounting policy Note 2.5 on impairment of non-financial assets.

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 toamortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairmentwhenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairmentloss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. Therecoverable amount is the higher of an asset’s fair value less costs of disposal (“FVLCOD”) and value in use (“VIU”). Forthe purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiablecash flows (“cash generating units”). Non-financial assets other than goodwill that suffered an impairment are reviewedfor possible reversal of the impairment at each reporting date.





2.5 Impairment of non-financial assets (continued)

The impairment loss is charged to profit or loss unless it reverses a previous revaluation in which case it is charged tothe revaluation surplus reserve. Impairment losses on goodwill are not reversed. In respect of other assets, anysubsequent increase in recoverable amount is recognised in profit or loss unless it reverses an impairment loss on arevalued 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 recoveredprincipally through a sale transaction rather than through continuing use and a sale is considered highly probable. Theyare 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 andcontractual 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 valueless costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposalgroup), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previouslyrecognised 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 areclassified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as heldfor 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 presentedseparately from the other assets in the statement of financial position. The liabilities of a disposal group classified asheld for sale are presented separately from other liabilities in the statement of financial position.

2.7 Leases

A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments, theright 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 ownershipare classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of thefair value of the leased property and the present value of the minimum lease payments. The corresponding rentalobligations, net of finance charges, are included in other short-term and long-term payables.

Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate of intereston the remaining balance of the liability. The finance cost is charged to profit or loss over the lease period so as toproduce 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 andthe 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 carryingamount of the leased assets and recognised as an expense in profit or loss over the lease term on the same basisas the lease expense.




2.7 Leases (continued)

(b) Operating leases

Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor areclassified as operating leases. Payments made under operating leases (net of any incentives received from thelessor) are charged to profit or loss on the straight-line basis over the lease period. Initial direct costs incurred bythe Group in negotiating and arranging operating leases are recognised in profit or loss when incurred.

2.8 Cash and cash equivalents

For the purpose of the statement of cash flows, cash equivalents are held for the purpose of meeting short-term cashcommitments rather than for investment or other purposes. Cash and cash equivalents comprise cash on hand, depositsheld at call with financial institutions, other short term, highly liquid investments with original maturities of 3 months orless that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes invalue.

Bank overdrafts which are repayable on demand and form an integral part of the Group’s cash management areincluded as a component of cash and cash equivalents in the statement of cash flows. In the statement of financialposition, banks overdrafts are shown within borrowings in current liabilities.

2.9 Inventories

Inventories represent fuel on-board vessels which are stated at the lower of cost and net realisable value. Cost isdetermined based on the first-in, first-out method for fuel. Costs of purchased inventory are determined after deductingrebates, discounts and the amount of goods and services tax (GST), except where the amount of GST incurred is notrecoverable from the government. When the amount of GST incurred is not recoverable from the government, the GSTis recognised as part of the cost of purchased inventory.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessaryto make the sale.

2.10 Financial assets

(a) Classification

The Group and the Company classify their financial assets as loans and receivables. The classification dependson the purpose for which the financial assets were acquired. Management determines the classification at initialrecognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at the end ofeach reporting period. The Group and the Company’s financial assets are loans and receivables.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted inan active market. If collection of the amounts is expected in one year or less they are classified as current assets. Ifnot, they are presented as non-current assets. The Group and the Company’s loans and receivables comprise ‘tradeand other receivables’ and ‘cash and bank balances’ in the statements of financial position (Notes 17 and 18).





2.10 Financial assets (continued)

(b) Recognition and initial measurement

Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Groupcommits to purchase or sell the asset.

Financial assets are initially recognised at fair value plus transaction costs that are directly attributable to theacquisition of the financial asset for all financial assets not carried at fair value through profit or loss. Financialassets at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensedin profit or loss.

(c) Subsequent measurement - Gains and losses

Loans and receivables are subsequently carried at amortised cost using the effective interest method.

(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 financialasset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired andimpairment losses are incurred only if there is objective evidence of impairment as a result of one or more events thatoccurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on theestimated 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 customers of debtors is experiencingsignificant financial difficulty, the probability that they will enter bankruptcy or other financial reorganisation, andwhere observable data indicate that there is a measurable decrease in the estimated future cash flows, such aschanges 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 valueof estimated future cash flows (excluding future credit losses that have not been incurred) discounted at thefinancial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of theloss is recognised in profit or loss. If loans and receivables have a variable rate, the discount rate for measuringany 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 observablemarket price.

If, in a subsequent financial year, the amount of the impairment loss decreases and the decrease can be relatedobjectively 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 a receivable is uncollectible, it is written off against the related impairment account. Such receivables are writtenoff 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 orhave been transferred and the Group and the Company have transferred substantially all risks and rewards ofownership.




2.11 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount presented in the statements of financial position whenthere 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 futureevents and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy.

2.12 Current and deferred income tax

Tax expense for the financial year comprises current and deferred income tax. The income tax expense or credit forthe financial year is the tax payable on the current financial year’s taxable income based on the applicable income taxrate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differencesand to unused tax losses. Tax is recognised in profit or loss, except to the extent that it relates to items recognised inother comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive incomeor directly in equity.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the endof the reporting period in the countries where the Company, the Group’s subsidiaries and joint ventures operate andgenerate taxable income.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable taxregulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected tobe 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 amountsattributed 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 notaccounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combinationthat at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined usingtax rates (and tax laws) that have been enacted or substantively enacted by the end of the financial year and areexpected 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 againstwhich 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 subsidiariesand joint ventures, except where the timing of the reversal of the temporary difference is controlled by the investor andjoint venturer and it is probable that the temporary difference will not reverse in the foreseeable future. Generally, theinvestor and joint venturer are unable to control the reversal of the temporary difference for subsidiaries and jointventures. Only where there is an agreement in place that gives the parent and joint venturer the ability to control thereversal of the temporary difference, a deferred tax liability is not recognised.

Deferred tax assets are recognised on deductible temporary differences arising from investments in subsidiaries andjoint ventures only to the extent that it is probable the temporary difference will reverse in the future and there is sufficienttaxable 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 taxassets against current tax liabilities and when the deferred tax assets and liabilities relate to taxes levied by the sametaxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balanceson a net basis.





2.13 Provisions

Provisions are recognised when the Group and the Company have a present legal or constructive obligation as a resultof past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimateof the amount can be made.

Where the Group and the Company expect a provision to be reimbursed by another party, the reimbursement isrecognised as a separate asset but only when the reimbursement is virtually certain. Provisions are not recognised forfuture operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determinedby considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow withrespect 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 berequired to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of moneyand the risks specific to the obligation. The increase in the provision due to the passage of time is recognised asfinance cost expense.

2.14 Financial guarantee contracts

Financial guarantee contracts are contracts that require the Group or Company to make specified payments toreimburse the holder for a loss it incurs because a specified debtor fails to make payments when due, in accordancewith the terms of a debt instrument.

Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability isinitially measured at fair value and subsequently at the higher of the amount determined in accordance with MFRS 137“Provisions, contingent liabilities and contingent assets” and the amount initially recognised less cumulativeamortisation, where appropriate.

The fair value of financial guarantees is determined as the present value of the difference in net cash flows betweenthe contractual payments under the debt instrument and the payments that would be required without the guarantee,or the estimated amount that would be payable to a third party for assuming the obligations.

Where financial guarantees in relation to loans or payables of subsidiaries are provided by the Company for nocompensation, the fair values are accounted for as contributions and recognised as part of the cost of investment insubsidiaries.

2.15 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carriedat amortised cost; any difference between initial recognised amount and the redemption amount is recognised in profitor 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 isprobable 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 iscapitalised 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 onthese preference shares are recognised as finance cost in profit or loss.




2.15 Borrowings (continued)

Borrowings are removed from the statement of financial position when the obligation specified in the contract isdischarged, cancelled or expired. The difference between the carrying amount of a financial liability that has beenextinguished or transferred to another party and the consideration paid, including any non-cash assets transferred orliabilities 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 theliability for at least 12 months after the end of the financial year.

2.16 Employee benefits

(a) Short-term employee benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits that are expected to besettled wholly within 12 months after the end of the financial year in which the employees render the related serviceare recognised in respect of employees’ services up to the end of the financial year and are measured at theamounts expected to be paid when the liabilities are settled. The liabilities are presented as other payables in thestatement of financial position.

(b) Defined contribution plan

The Group and the Company make contributions to the Employees Provident Fund (“EPF”) as required by law inMalaysia, which are charged to profit or loss in the financial year to which they relate. Prepaid contributions arerecognised 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 normalretirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. TheGroup and the Company recognise termination benefits at the earlier of the following dates: (a) when the Groupand the Company can no longer withdraw the offer of those benefits; and (b) when the Group and the Companyrecognise costs for a restructuring that is within the scope of MFRS 137 and involves the payment of terminationbenefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measuredbased on the number of employees expected to accept the offer. Benefits falling due more than 12 months afterthe end of the financial year are discounted to their present value.

(d) Bonus plans

The Group and the Company recognise a liability and an expense for bonuses, based on a formula that takes intoconsideration the profit attributable to the Group and the Company’s shareholders after certain adjustments. TheGroup and the Company recognise a provision where contractually obliged or where there is a past practice thathas created a constructive obligation.





2.17 Share capital

(a) Classification

Ordinary shares are classified as equity.

Preference share capital is classified as equity if they are non-redeemable, or redeemable but only at theCompany’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 anyrelated income tax benefit.

(c) Dividend distribution

A liability is recognised for the amount of any dividend declared, being appropriately authorised and no longer atthe discretion of the Group and the Company, on or before the end of the financial year but not distributed at theend 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 ordinaryshares, and

• the weighted average number of additional ordinary shares that would have been outstanding assuming theconversion of all dilutive potential ordinary shares.

2.18 Trade payables

Trade payables represent liabilities for goods or services provided to the Group and Company prior to the end offinancial year which are unpaid. Trade payables are classified as current liabilities unless payment is not due within 12months 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 payableto the government is presented as other payables in the statement of financial position.




2.18 Trade payables (continued)

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows which arerecoverable 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.

2.19 Foreign 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 theprimary economic environment in which the entity operates (the “functional currency”). The consolidated financialstatements are presented in Ringgit Malaysia (“RM”), which is the Group and the Company’s functional andpresentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing atthe dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resultingfrom the settlement of such transactions and from the translation at financial year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss. However, exchangedifferences are deferred in other comprehensive income when they are attributable to items that form part of thenet investment in a foreign operation.

Foreign exchange gains and losses that relate to borrowings are presented in profit or loss within finance incomeor cost. All other foreign exchange gains and losses are presented in profit or loss on a net basis withinadministrative expenses.

The results and financial position of one of the Company’s subsidiaries (none of which has the currency of ahyperinflationary economy) that has a functional currency different from the presentation currency are translatedinto the presentation currency as follows:

• assets and liabilities for each statement of financial position presented are translated at the closing rate at thedate of that statement of financial position;

• income and expenses for each statement of comprehensive income presented are translated at averageexchange rates (unless this average is not a reasonable approximation of the cumulative effect of the ratesprevailing on the transaction dates, in which case income and expenses are translated at the rate on the datesof 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 liabilitiesof the foreign entity and translated at the closing rate. Exchange differences arising are recognised in othercomprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, andof borrowings and other financial instruments designated as hedges of such investments, are recognised in othercomprehensive income.





2.19 Foreign currencies (continued)

(c) Group companies (continued)

On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation, or adisposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss ofjoint control over a joint venture that includes a foreign operation, or a disposal involving loss of significant influenceover an associate that includes a foreign operation), all of the exchange differences relating to that foreign operationrecognised in other comprehensive income and accumulated in the separate component of equity are reclassifiedto profit or loss, as part of the gain or loss on disposal. In the case of a partial disposal that does not result in theGroup losing control over a subsidiary that includes a foreign operation, the proportionate share of accumulatedexchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For allother partial disposals (that is, reductions in the Group’s ownership interest in associates or joint ventures that donot result in the Group losing significant influence or joint control) the proportionate share of the accumulatedexchange difference is reclassified to profit or loss.

2.20 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable for the sale of services in the ordinarycourse of the Group’s activities. Revenue is shown net of goods and services tax, returns, rebates and discounts andamounts 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 futureeconomic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities asdescribed 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 bemet 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 charterhire contract. For income from the hire of forerunner vessels, it is assessed whether the Group is acting as a principalor an agent. Where it has been assessed that the Group is acting as an agent, income is recognised net of chartercosts.

Backcharges to charterers and other revenue

Backcharges to charterers and other revenue is recognised when services are rendered.

2.21 Interest income

The Group and the Company earn interest income from deposits placed with licensed banks. Interest income isrecognised using the effective interest method.

2.22 Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifyingassets, 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 orsale, after which such expense is charged to profit or loss. Capitalisation of borrowing cost is suspended duringextended periods in which active development is interrupted.




2.22 Borrowing costs (continued)

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifyingassets 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.

2.23 Prepayments

Prepayments are amounts paid in advance for services yet to be received. Prepayments are recognised as an expensein profit or loss when the services are subsequently received.

2.24 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operatingdecision-maker. The chief operating decision makers, who are responsible for allocating resources and assessingperformance of the operating segments, has been identified as the Group’s Board of Directors and Managing Directorthat makes strategic decisions.

2.25 Contingent 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 frompast events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain futureevents beyond the control of the Group or a present obligation that is not recognised because it is not probable thatan outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rarecase where there is a liability that cannot be recognised because it cannot be measured reliably. However, contingentliabilities do not include financial guarantee contracts. A contingent asset is a possible asset that arises from pastevents whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future eventsbeyond the control of the Group. The Group does not recognise contingent assets but discloses its existence whereinflows of economic benefits are probable, but not virtually certain.

2.26 Share based payments

The Group operates a number of equity-settled, share-based compensation plans under which the entity receivesservices from employees as consideration for equity instruments (options) of the Company.

(a) Employees’ share options

The fair value of the options granted in exchange for the services of the employees are recognised as employeebenefit expense with a corresponding increase to share based payment reserve within equity. The total amount tobe expensed is determined by reference to the fair value of the options granted:

- including any market performance conditions (for example, an entity’s share price); - excluding the impact of any service and non-market performance vesting conditions (for example, profitability,

sales growth targets and remaining an employee of the entity over a specified time period); and - including the impact of any non-vesting conditions (for example, the requirement for employees to save or

holding of shares for a specific period of time).

Non-market vesting conditions and service conditions are included in assumptions about the number of optionsthat are expected to vest.





2.26 Share based payments (continued)

(a) Employees’ share options (continued)

The total expense is recognised over the vesting period, which is the period over which all of the specified vestingconditions are to be satisfied. At the end of the reporting period, the Company revises its estimates of the numberof options that are expected to vest based on the non-market vesting conditions and service conditions. Itrecognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustmentto share based payment reserve in equity.

In circumstances where employees provide services in advance of the grant date, the grant date fair value isestimated for the purposes of recognising the expense during the period between service commencement periodand grant date.

When the options are exercised, the Company issues new shares. The proceeds received net of any directlyattributable transaction costs are credited to share capital when the options are exercised. When options are notexercised and lapsed, the share based payment reserve is transferred to retained earnings.

In its separate financial statements of the Company, the grant by the Company of options over its equity instrumentsto the employees of a subsidiary in the Group is treated as a capital contribution to the subsidiary. The fair valueof options granted to employees of the subsidiary in exchange for the services of the employees to the subsidiaryare recognised as investments in subsidiaries, with a corresponding credit to equity of the Company.

(b) Employees’ share grants

The fair value of the employees’ share grants granted to employees for nil consideration under the short-termincentive scheme is recognised as an expense over the relevant service period, being the year to which the bonusrelates and the vesting period of the shares. The fair value is measured at the grant date of the shares and isrecognised in equity in the share-based payment reserve. The number of shares expected to vest is estimatedbased on the non-market vesting conditions. The estimates are revised at the end of each reporting period andadjustments are recognised in profit or loss and the share based payment reserve.

Where shares are forfeited due to a failure by the employee to satisfy the service conditions, any expensespreviously recognised in relation to such shares are reversed effective the date of the forfeiture.

The shares to be granted under the employees’ share grants are existing shares which were held by the Company’srelated company, Sempena Fokus Sdn. Bhd., and transferred to the Employee Share Trust at the grant date andare held by the trust until such time as they are vested.



3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, includingexpectations 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 materialadjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

Key assumptions and sources of estimation uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertainty at the end of thefinancial year that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilitieswithin the next financial year.

(i) Impairment and reversal of impairment of vessels

The Group reviews its vessels for impairment and possible reversal of impairment in accordance with its accountingpolicy in Note 2.5. The recoverable amounts of the vessels have been determined based on the higher of their FVLCODand their VIU.

In cases where FVLCOD is used to determine the recoverable amount of the CGUs, valuation were performed by anindependent valuer using the market approach, including consideration of recent market transaction of vessels of similartype and age. For VIU calculations, the future cash flows are based on contracted cash flows and estimates of uncontractedcash flows for the useful lives of each CGUs, including scrap values discounted by an appropriate discount rate.

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 maderegarding estimates of future cash flows and discount rates. The key assumptions used in the VIU calculations aredisclosed in Note 13.

(ii) Impairment of investments in subsidiaries

The Group tests investments in subsidiaries for impairment in accordance with its accounting policy in Note 2.5.

The subsidiaries are considered as a single CGU, as the principal activities of the subsidiaries, comprising vesselowning/leasing activities and the provision of vessel chartering and ship management services to oil and gas relatedindustries, are organised into a single integrated business. The recoverable amount of the subsidiaries has beendetermined based on the higher of their FVLCOD and their VIU.

In cases where FVLCOD is used to determine the recoverable amount of the investments, valuation of the vesselsperformed by an independent valuer using the market approach, including consideration of the recent market transactionof vessels of similar type and age. Thereafter, the valuation of the vessels were adjusted for outstanding loan and taxpayment to arrive at the recoverable amount. The key assumptions used are disclosed in Note 15.

In cases where VIU is used to determine the recoverable amount of the investments, the VIU was determined based onthe Company’s share of the present value of the subsidiaries’ estimated cash flows from the underlying assets, reducedby the fair value of outstanding debt and tax payment. Significant judgement is required in the estimation of the presentvalue of future cash flows generated by the cash-generating units, which involve uncertainties and are significantlyaffected by assumptions used and judgement made regarding estimates of future cash flows and discount rates. Thekey assumptions used in the VIU calculations are disclosed in Note 15.




3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

Key assumptions and sources of estimation uncertainty (continued)

(iii) 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 deductingtheir residual values. Management exercises their judgement in estimating the useful lives and the residual value of thedepreciable assets. The useful lives are estimated based on management’s knowledge of the vessels owned by theGroup and industry experience and are normally equal to the design life of the vessel. Residual values of the vesselsare estimated based on prevailing market conditions and expected amount to be obtained for the vessels at the end oftheir useful lives in future, after deducting the estimated costs of disposal. The Group assesses annually the useful livesand the residual value of the property, plant and equipment and if the expectation differs from the original estimate, suchdifference will impact the depreciation in the financial year in which such estimate has been changed.

(iv) 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 trackrecord. Such provisions are adjusted periodically to reflect the actual and anticipated impairment.

(v) Deferred tax assets

Deferred tax assets are recognised for all unutilised tax losses and unutilised capital allowances to the extent that it isprobable that taxable profit will be available against which the losses and capital allowances can be utilised. Significantmanagement judgement is required to determine the amount of deferred tax assets that can be recognised, based uponthe likely timing and level of future taxable profits together with future tax planning strategies as disclosed in Note 16.

Assumptions about generation of future taxable profits depend on management's estimates of future profitability. Thesedepend 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 subjectto risks and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which mayimpact the amount of deferred tax assets recognised in the statements of financial position and the amount ofunrecognised tax losses and capital allowances.



4 FINANCIAL RISK MANAGEMENT

The Group and the Company’s overall financial risk management focuses on the unpredictability of financial markets andseeks to minimise potential adverse effects on the financial performance of the Group and the Company. Financial riskmanagement is carried out through risk reviews, internal control systems and adherence to the Group and the Company’sfinancial risk management policies. The Directors of the Group and the Company regularly review these risks and approvethe 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 currencyexchange risk and capital risk.

(i) Credit and counterparty risk

Credit risk arises when sales are made on credit terms. Customers are subject to credit checks and outstanding accountsare followed up on a timely basis. Credit risk concentration is monitored by monitoring the performance of customersand 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 periodand that they will not be able to meet its obligations under the terms of the contract. Given the limited number of majorcustomers and the significant portion they represent of the Group’s revenue, the inability by one or more of the Group’smajor 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 thecounterparty’s default rates as well as their credit quality. Outstanding receivables are closely monitored in order topursue full recovery.

The credit quality of financial assets that are not impaired can be assessed by reference to external credit ratings (ifavailable) for cash and bank balances and to historical information about counterparty default rates for trade and otherreceivables:

Group Company 2017 2016 2017 2016 RM RM RM RM

Cash and bank balances (excludes cash in hand)

Counterparties with external credit rating (“RAM”)* AAA 26,804,911 13,989,101 11,641 46,619 AA2 8,974,256 11,514,239 - 1,130 AA3 10,247,458 9,144,802 - -

Counterparty with no credit rating ** 1,704,300 24,026,854 - -

47,730,925 58,674,996 11,641 47,749




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 (ifavailable) for cash and bank balances and to historical information about counterparty default rates for trade and otherreceivables: (continued)

Group 2017 2016 RM RM

Trade and other receivables

Counterparties without external credit rating Group 1 8,403,107 1,007,183 Group 2 83,571,135 67,886,035

The Group classifies receivables into the following groups:

Group 1 - new customers/related parties (less than six months).Group 2 - existing customers/related parties (more than six months) with no defaults in the past.Group 3 - existing customers/related parties (more than six months) with some defaults in the past. All defaults were fully recovered.

* RAM represents Rating Agency Malaysia.** The cash and bank balances are held in financial institutions outside Malaysia.

As at 31 December 2017, the Company has provided corporate guarantees to financial institutions on behalf of itssubsidiaries, which are repayable on demand in the event of default, amounted to RM479,517,991 (2016:RM554,203,611). The Company monitors on an ongoing basis the results of and repayment made by its subsidiaries.

(ii) Liquidity risk

Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting financial obligations due toshortage of funds. The Group and the Company carry out monthly rolling cash flows review for the next 12 months toensure 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 obligationsas and when they fall due and the Group and the Company have not defaulted on any obligations due or payable tofinancial institutions or creditors.

The Group received approval on 29 March 2018 from a regulatory agency (“the Agency”) under the purview of BankNegara Malaysia for the Group’s application for assistance to mediate and work out a feasible debt resolution with therelevant Malaysian banks (“the Lenders”) under a prescribed arrangement (“the Arrangement”). The Arrangement entailsa structured mechanism for debt resolution to strengthen the balance sheet and ensure that the debts post restructuringare at a sustainable level. It will also improve the speed and viability of the debt resolution. Under the approval, theAgency’s assistance to the Group is limited to twelve months or upon signing of a debt restructuring agreement,whichever is earlier.

A Standstill Letter was also issued by the Agency to the Lenders of the Group on 29 March 2018. Total borrowingsrepayable to the Lenders as at 31 December 2017 amounted to approximately RM593 million, of which approximatelyRM143 million of term loans are repayable within twelve months after the reporting period and RM170 million is in relationto the revolving credit facilities with rollover periods ranging from one to six months.




(ii) Liquidity risk (continued)

As part of the Arrangement, loan servicing to the Lenders will be limited to interest payments at an appropriate rate asdetermined by the Group during the standstill period of up to twelve months from the date of the approval from theAgency or until such mutual agreements on the debt restructuring are reached with the Lenders. Accordingly,management has prepared a cash flows projection for the twelve months from the date of approval of the Arrangementon the basis that loan servicing to the Lenders is limited to the repayment of interest for the twelve month period. TheDirectors are currently working on the Proposed Debt Restructuring Scheme. New terms with the Lenders will be workedout based on a realistic repayment capacity and sustainable level to achieve financial sustainability in the medium tolong term. Consequently, the Group will have an improved cash position.

In view of the above, the Directors are of the view that cash inflows generated from charter hire contracts within the nexttwelve months from the date of approval of the Arrangement are sufficient to meet the Group’s working capitalrequirements, capital expenditure, interest repayments to the Lenders and other loan repayments. The Directors believethat the Group and the Company are able to realise its assets, discharge its liabilities in the normal course of business.Accordingly, the Directors believe, no material uncertainty exists that may cast doubt on the Group’s and the Company’sability to continue as going concern.

The table below summarises the maturity profile of the Group and the Company’s liabilities (including interest onborrowings) 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 RM RM RM RM RM

Group

At 31 December 2017

Bank borrowings 352,811,182 87,645,395 201,503,191 98,298,478 740,258,246Finance lease liabilities 90,685 - - - 90,685Redeemable preference shares 9,086,295 - - - 9,086,295Amount due to immediate holding company 2,040,855 - - - 2,040,855Trade and other payables 66,643,216 36,024,750 - - 102,667,966

430,672,233 123,670,145 201,503,191 98,298,478 854,144,047

At 31 December 2016

Bank borrowings 227,964,458 145,843,504 266,715,365 160,742,835 801,266,162Finance lease liabilities 61,559 37,898 12,206 - 111,663Redeemable preference shares 9,209,512 - - - 9,209,512Trade and other payables 51,008,236 39,916,313 - - 90,924,549

288,243,765 185,797,715 266,727,571 160,742,835 901,511,886





(ii) Liquidity risk (continued)

The table below summarises the maturity profile of the Group and the Company’s liabilities (including interest onborrowings) at the financial year end based on contractual undiscounted repayment obligations. (continued)

Within Between 1 Between 2 Over 1 year and 2 years and 5 years 5 years Total RM RM RM RM RM

Company

At 31 December 2017

Bank borrowings 156,862,146 - - - 156,862,146Trade and other payables 1,817,200 - - - 1,817,200Amount due to a subsidiary 22,255,022 - - - 22,255,022Amount due to immediate holding company 2,040,855 - - - 2,040,855

182,975,223 - - - 182,975,223

At 31 December 2016

Bank borrowings 106,352,028 - - - 106,352,028Trade and other payables 1,779,850 - - - 1,779,850Amount due to a subsidiary 22,255,022 - - - 22,255,022

130,386,900 - - - 130,386,900

As at 31 December 2017, the Company has provided corporate guarantees to financial institutions on behalf of itssubsidiaries, which are repayable on demand in the event of default, amounting to RM479,517,991 (2016:RM554,203,611).

(iii) Interest rate risk

Interest rate risk arises from fluctuations in interest rates. Bank borrowings consist of variable rate debt obligations linkedto applicable bank rates. Bank rates are typically reviewed and adjusted periodically in accordance with prevailinginterest rates. Increases in interest rates would increase interest expenses relating to the Group’s outstanding floatingrate borrowings and increase the cost of new debt. Interest rates applicable to borrowings are regularly reviewed againstthe 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.


Floating rate loans (unhedged) 473,732,379 478,317,232 156,428,897 106,352,028

Impact on profit for the financial year and equity: 1.0% increase in interest rate (4,737,324) (4,783,172) (1,564,289) (1,063,520) 1.0% decrease in interest rate 4,737,324 4,783,172 1,564,289 1,063,520




(iv) Foreign currency exchange risk

The Group’s foreign currency exchange risk arises primarily from the purchase of vessels, materials, spare parts, otherservices relating to the maintenance of vessels and borrowings as well as contracts for which the charter rate isdenominated in US Dollar (“USD”) and Brunei Dollar (“BND”).

The Group has several USD denominated bank accounts, several BND denominated bank accounts, a USD denominatedborrowing for a vessel and a BND denominated borrowing for a vessel.

The currency exposure of financial assets and financial liabilities of the Group and of the Company that are notdenominated in the functional currency of the respective companies are set out below:

Borrowings are denominated in the following currencies:


Ringgit Malaysia 589,693,515 606,664,997 156,428,897 106,352,028Brunei Dollar 91,170,740 98,575,646 - -US Dollar 3,287,061 6,984,703 - -

684,151,316 712,225,346 156,428,897 106,352,028

Cash and bank balances are denominated in the following currencies:


Ringgit Malaysia 45,102,191 32,235,086 11,643 47,304Brunei Dollar 1,704,300 24,026,854 - -US Dollar 951,253 2,458,147 - 447

47,757,744 58,720,087 11,643 47,751





(iv) Foreign currency exchange risk (continued)

Trade and other payables (current and non-current) are denominated in the following currencies:


Current

Ringgit Malaysia 51,486,810 41,133,372Brunei Dollar 11,916,018 12,935,546US Dollar 5,319,103 2,026,466Singapore Dollar 935,742 1,098,956Euro 796,971 1,006,697Japanese Yen 434,444 767,338Others 224,502 51,667

71,113,590 59,020,042Non-current

US Dollar 33,659,742 36,949,480

104,773,332 95,969,522

Trade and other receivables (excluding prepayments) are denominated in the following currencies:


Ringgit Malaysia 46,848,185 34,808,647Brunei Dollar 41,870,625 30,731,301US Dollar 3,255,432 3,353,270

91,974,242 68,893,218 ══════════ ══════════

The impact on profit after taxation for the financial year is mainly as a result of translation of USD and BND bank balances,trade and other payables, trade and other receivables and borrowings held by companies within the Group for whichtheir functional currencies are not USD and BND.


Impact on profit for the financial year: 10.0% increase in USD exchange rate (3,805,922) (3,812,277) 10.0% decrease in USD exchange rate 3,805,922 3,812,277 10.0% increase in BND exchange rate (5,951,183) (5,675,304) 10.0% decrease in BND exchange rate 5,951,183 5,675,304




(v) Capital risk management

The Group and the Company define capital as total equity and borrowings as presented in the statements of financialposition. The Group and the Company’s objectives when managing capital are to safeguard the Group and theCompany’s ability to continue as a going concern in order to provide returns for shareholders and benefits for otherstakeholders 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, issuenew 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 currentand non-current borrowings as shown in the statements of financial position) less cash and bank balances. Total equityis calculated as shareholders’ equity as shown in the statements of financial position.


Finance lease liabilities 82,088 86,963 - -Borrowings 684,069,228 712,138,383 156,428,897 106,352,028

Debt 684,151,316 712,225,346 156,428,897 106,352,028Less: Cash and bank balances (47,757,744) (58,720,087) (11,643) (47,751)

Net debt 636,393,572 653,505,259 156,417,254 106,304,277

Total equity 517,456,505 572,258,757 501,681,169 551,733,302

Net gearing ratio (times) 1.23 1.14 0.31 0.19

(vi) Fair values

The carrying values of the balances disclosed in the financial statements approximates their fair values except asdisclosed in the notes to the financial statements. Fair values are categorised into different levels in a fair value hierarchybased on the inputs used in the valuation techniques.

The different levels of fair values 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).




5 REVENUE

Group Company 2017 2016 2017 2016

RM RM RM RM

Charter hire of own vessels 192,342,582 217,114,698 - -Charter hire of forerunner vessels 2,140,365 192,594 - -Backcharges to charterers 10,141,990 9,608,086 - -

204,624,937 226,915,378 - -

6 FINANCE COSTS

Group Company 2017 2016 2017 2016

RM RM RM RM

Term loan interest/profit 30,902,797 37,356,333 - -Interest on amount due to immediate holding company - 679,666 - 679,666Interest charged by immediate holding company on security of credit facility 3,331,164 - 3,331,164 -Revolving credit interest 6,141,305 2,091,204 5,324,352 1,352,028Finance lease interest 606 3,631 - -Bank overdrafts interest 5,275 53,939 - -Accretion of discount on non-current payables 2,094,441 - - -Other finance charges - 15,202 - - 42,475,588 40,199,975 8,655,516 2,031,694



7 LOSS BEFORE TAXATION

Loss before taxation is stated after charging/(crediting):

Group Company 2017 2016 2017 2016

RM RM RM RM

Auditors’ remuneration- Fees for statutory audit - PricewaterhouseCoopers PLT (“PwC”), Malaysia 652,000 652,000 174,000 174,000 - Other auditor 51,649 52,828 - -- Fees for other services - Member firms of PwC Malaysia 65,200 394,934 5,700 14,669 - Other auditor 10,049 9,323 - -Consumable cost 10,897,330 10,417,727 - -Depreciation of property, plant and equipment 58,134,344 62,418,345 - -Employee benefits expense 66,805,208 66,687,154 5,146,193 3,301,936Impairment loss on vessels 42,657,991 135,476,980 - -Impairment loss on investments in subsidiaries - - 35,800,878 113,132,646Reversal of impairment loss on vessels (8,255,232) - - -Impairment of receivables (net) 612,350 - - -Reversal of impairment of receivables (net) - (494,882) - -Insurance expense 4,751,084 4,794,667 10,355 7,549Insurance recovery* (5,526,897) (2,655,191) - -Interest income (644,506) (706,414) - (76,078)Professional fees 807,605 2,152,226 267,990 766,745Accrual for underassessment of crew income tax for prior years - 8,112,450 - -Rental of premises 2,237,176 2,583,791 - -Ship operation and charter hire costs 24,328,773 28,065,306 - -Victualling, joining and repatriation costs 11,664,416 10,098,525 - -Realised loss on foreign exchange 813,818 870,275 1,610 1,333Unrealised (gain)/loss on foreign exchange (5,019,098) 5,066,373 - 74

* During the financial year, the insurers of the Group’s vessels have approved claims made in relation to the repairs of

certain damaged vessels in accordance with the vessel insurance policies. Insurance recovery of RM5,526,897 (2016:RM2,655,191) is recognised as other income.




8 EMPLOYEE BENEFITS EXPENSE


Wages, salaries, allowances and bonuses 59,162,476 60,031,431 3,710,449 2,815,482Social security costs 408,249 312,117 3,245 2,122Termination benefit 174,051 1,004,689 - -Defined contribution plan 6,281,399 5,338,917 653,466 484,332Share based payments 779,033 - 779,033 -

66,805,208 66,687,154 5,146,193 3,301,936

Included in employee benefits expense of the Group and the Company are the Executive Directors’ remuneration amountingto RM2,535,372 (2016: RM1,683,298) as further disclosed in Note 9.

9 DIRECTORS’ REMUNERATION

Group and Company 2017 2016 RM RM

Executive:

Salaries, allowances and bonuses 1,612,576 1,414,000Defined contribution plan 295,526 268,660Social security costs 760 638Share based payments 626,510 -

2,535,372 1,683,298

Non-Executive:

Fees and emoluments 876,701 824,500

Total Directors’ remuneration (excluding benefits-in-kind) 3,412,073 2,507,798

Benefits-in-kind received by the Directors of the Group and the Company amounted to RM72,640 (2016: RM83,171).



10 TAXATION


Current income tax:Current financial year - Malaysian corporate income tax 1,106,079 595,228 - -Under provision of income tax in prior financial year - Malaysian corporate income tax (350,821) (255,027) - - - Brunei corporate income tax 205,515 340,688 - -

960,773 680,889 - -Deferred tax Deferred tax relating to the origination and reversal of temporary differences (Note 16) 3,084,464 (3,806,922) - -

Tax expense/ (credit) for the financial year 4,045,237 (3,126,033) - -

Subsequent to the announcement in the Malaysian Budget 2014 of a reduction in the corporate tax rate with effect from yearof assessment 2017, the income tax is calculated at the statutory tax rate at 24% (2016: 24%) on the estimated chargeableprofit for the financial year. Subsidiaries of the Company, being Malaysian tax residents incorporated in Labuan under theLabuan Companies Act, 1990, are taxed at 3% of profit before taxation or RM20,000 in accordance with the Labuan BusinessActivity Tax Act, 1990. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

Reconciliations of income tax expense applicable to profit before taxation at the statutory income tax rate to income taxexpense at the effective income tax rate of the Group and the Company are as follows:


Loss before taxation (51,802,047) (149,824,987) (50,831,166) (121,265,961)

Taxation at Malaysian statutory tax rate at 24% (2016: 24%) (12,432,491) (35,957,997) (12,199,480) (29,103,831)

Deferred tax assets not recognised during the financial year 2,079 34,663 - -Effect of change in tax rate on deferred tax - 687,109 - -Effects of different tax rate in Labuan 12,011,465 29,766,660 - -Effects of different tax rate in Brunei (676,934) (814,995) - -Tax effect of expenses that are not deductible for tax purposes 4,683,609 4,934,133 12,199,480 29,103,831Tax effect of income not subject to tax (84,358) (75,992) - -Tax effect on transfer of vessels between countries - - - -(Over)/under provision of tax in prior financial year 541,867 (1,699,614) - -

Tax expense/ (credit) for the financial year 4,045,237 (3,126,033) - -




11 LOSS PER SHARE (“LPS”)

The basic LPS has been calculated based on the consolidated loss attributable to equity holders of the Company and dividedby the weighted average number of ordinary shares in issue.


Loss attributable to equity holders of the Company (RM) (62,099,688) (152,746,880)Weighted average number of ordinary shares in issue 1,177,185,100 1,177,185,100

Basic/Diluted LPS (sen) (5.28) (12.98)

As at 31 December 2017, the Company has 5,110,000 (2016:5,470,000) potential ordinary shares outstanding pursuant tothe issuance of the Employees’ Share Option Scheme on 28 December 2016 as disclosed in Note 25. These potential ordinaryshares are anti-dilutive and are consequently excluded from the determination of diluted LPS.

12 SEGMENT REPORTING

(i) Reportable segment

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operatingdecision makers comprising the Board of Directors and the Managing Director or acting Chief Executive Officer. Thechief operating decision-makers are responsible for allocating resources, assessing performance of the operatingsegments and making strategic decisions.

The Group is organised as a single integrated business operation comprising vessel owning/leasing activities and theprovision of vessel chartering and ship management services to oil and gas related industries. These integrated activitiesare known as the offshore support vessel operations. The Group as a whole is regarded as an operating segment. Inmaking decisions about resource allocation and performance assessment, the key management regularly reviews thefinancial results of the Group as a whole. Hence, the information that is regularly provided to the key management isconsistent with that presented in the financial statements.



12 SEGMENT REPORTING (CONTINUED)

(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:

2017 2016 % RM % RM

Revenue

Malaysia 69 140,806,485 63 143,217,240Brunei 28 56,405,998 34 76,501,140Thailand 3 7,412,454 3 7,196,998

Total 100 204,624,937 100 226,915,378

Non-current assets of the Group based on where the assets are located as follows:

Non-Current Asset* 2017 2016 % RM % RM

Malaysia 92 1,021,377,394 92 1,093,371,437Brunei 8 92,831,415 8 98,478,471

Total 100 1,114,208,809 100 1,191,849,908

* Represents non-current assets other than financial instruments, tax recoverable and deferred tax assets.

(iii) Major customers

The Group has several single customers which generated revenue amounting to 10% or more of the Group’s totalrevenue:

2017 2016 % RM % RM

Direct

Customer 1 34 70,457,222 36 82,279,796Customer 2 28 56,405,998 34 76,501,140

Total 62 126,863,220 70 158,780,936




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pairm

ent l

oss

Beg

inni

ng o

f the

fin

anci

al y

ear

-

360,

266,

676

-

-

-

-

-

-

-

-

3

60,2

66,6

76C

harg

e fo

r the

fin

anci

al y

ear

-

42,

657,

991

-

-

-

-

-

-

-

-

42,

657,

991

Rev

ersa

l of i

mpa

irmen

t

loss

on

vess

el

-

(8,2

55,2

32)

-

-

-

-

-

-

-

-

(8,2

55,2

32)

Rec

lass

ifica

tions

to n

on-

cu

rren

t ass

ets

he

ld fo

r sal

e

-

(41,

452,

593)

-

-

-

-

-

-

-

-

(41,

452,

593)

End

of th

e fin

anci

al y

ear

-

35

3,21

6,84

2

-

-

-

-

-

-

-

-

35

3,21

6,84

2

Net

boo

k va

lue

17

0,35

5,32

8

89

7,14

7,70

7

4,7

51,9

97

3

8,78

6,27

5

708

,664

56,

323

13

7,32

8

1

,568

,656

1

44,2

22

552

,309

1,

114,

208,

809



13 P

RO

PE

RT

Y, P

LA

NT

AN

D E

QU

IPM

EN

T (

CO

NT

INU

ED

)

Gro

up

Vess

els

unde

r

Ve

ssel

D

rydo

ckin

g

Mot

or

O

ffic

e

F

urni

ture

co

nstr

uctio

n

V

esse

ls

pa

rts

e

xpen

ditu

re

Bui

ldin

g

veh

icle

s

equ

ipm

ent

C

ompu

ters

a

nd fi

ttin

gs

Ren

ovat

ion

Tota

l

R

M

RM

R

M

R

M

R

M

R

M

RM

RM

RM

RM

R

M

At 3

1 D

ecem

ber 2

016

Cos

t

Beg

inni

ng o

f the

fin

anci

al y

ear

168

,014

,944

1,

452,

780,

589

5

,895

,797

59,

116,

588

7

97,9

09

762

,231

1,09

0,77

2

4

,151

,052

5

77,0

06

2

,297

,828

1,

695,

484,

716

Rec

lass

ifica

tion

(8

1,81

2,71

4)

8

1,81

2,71

4

-

-

-

-

-

-

-

-

-

Add

ition

s

7

5,38

7,07

4

-

2

,000

,718

23,

633,

856

-

-

15,2

06

216

,503

32,0

24

-

10

1,28

5,38

1W

rite-

off

-

-

-

-

-

(

9,80

0)

(1

14,3

71)

(274

,234

)

-

-

(398

,405

)C

urre

ncy

trans

latio

n

rese

rve

-

91

,417

-

-

-

-

-

-

-

-

9

1,41

7

End

of th

e fin

anci

al y

ear

161,

589,

304

1,

534,

684,

720

7

,896

,515

82,

750,

444

7

97,9

09

752

,431

99

1,60

7

4

,093

,321

6

09,0

30

2

,297

,828

1,

796,

463,

109

Acc

umul

ated

de

prec

iatio

n

Beg

inni

ng o

f the

fin

anci

al y

ear

-

151,

944,

319

1,

502,

897

25,0

94,2

85

5

7,82

2

398,

776

679

,857

1,5

27,0

07

228

,657

8

38,5

26

18

2,27

2,14

6C

harg

e fo

r the

fin

anci

al y

ear

-

48,

543,

228

765,

007

11,3

16,8

59

1

7,14

0

187,

518

179

,113

7

74,4

16

129

,736

5

05,3

28

62,4

18,3

45W

rite-

off

-

-

-

-

-

(

9,79

8)

(1

12,9

42)

(269

,734

)

-

-

(39

2,47

4)C

urre

ncy

trans

latio

n

rese

rve

-

48

,508

-

-

-

-

-

-

-

-

4

8,50

8

End

of th

e fin

anci

al y

ear

-

200

,536

,055

2

,267

,904

36,

411,

144

74,9

62

576

,496

74

6,02

8

2,

031,

689

35

8,39

3

1,

343,

854

2

44,3

46,5

25

Acc

umul

ated

im

pairm

ent l

oss

Beg

inni

ng o

f the

fin

anci

al y

ear

-

224,

789,

696

-

-

-

-

-

-

-

-

224,

789,

696

Cha

rge

for t

he

finan

cial

yea

r

-

13

5,47

6,98

0

-

-

-

-

-

-

-

-

13

5,47

6,98

0

End

of th

e fin

anci

al y

ear

-

36

0,26

6,67

6

-

-

-

-

-

-

-

-

36

0,26

6,67

6

Net

boo

k va

lue

16

1,58

9,30

4

973

,881

,989

5

,628

,611

46,

339,

300

72

2,94

7

175,

935

245

,579

2,0

61,6

32

250

,637

9

53,9

74

1,19

1,84

9,90

8




13 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

(i) Included in the property, plant and equipment are motor vehicles and office equipment which were acquired by meansof finance lease arrangements with net carrying amounts of RM2,430 (2016: RM25,884).

(ii) Certain vessels of the Group with net book values amounting to RM777,012,877 (2016: RM989,942,661) andRM83,759,184 (2016: RM118,448,895) have been respectively charged to secure loan and bank guarantee facilitiesgranted to the Group as disclosed in Note 23.

(iii) Drydocking expenditure accrued of RM893,322 (2016: RM6,475,648) was capitalised as at the financial year ended 31December 2017.

Impairment assessment of vessels

The Group recognised an impairment loss of RM42,657,991 (2016: RM135,476,980) on certain vessels during the financialyear as a result of the continued difficult market conditions in the oil and gas industry, based on the total recoverable amountof RM281,773,001(2016: RM782,584,398) deriving from the Group’s vessels, vessels under construction, vessel parts anddrydocking expenditure capitalised, of which RM85,605,130 (2016: RM704,140,000) were determined based on fair valueless costs of disposal (“FVLCOD”) and RM196,167,871 (2016: RM78,444,398) were determined based on value in use method(“VIU”). The Group considered each vessel with vessel parts and drydocking expenditures capitalised as a cash-generatingunit (“CGU”). Vessels under construction are treated as separate CGU. They are grouped together for disclosure purpose.

The Group has also recognised reversal of impairment loss amounting to RM8,255,232 (2016:nil) for two vessels during thefinancial year, based on the total recoverable amount of RM65,235,377 (2016:nil) determined based on VIU. The reversalwas in relation to changes in management’s plan to prioritise utilisation of these two vessels in future, which was reflected inthe improvement in utilisation rate and cash flows generation by these vessels during the financial year.

FVLCOD

The fair values of the vessels have been assessed by an independent professional valuer. The sales comparison approachwas used as their valuation techniques which took into consideration the recent supply and demand for vessels of similartype and age in the vessels market. The valuation technique is therefore classified as level 3 measurement in the fair valuehierarchy. Costs of disposal were determined at 1% (2016: 1%) of total costs of vessels and reflect management’sexpectations based on past experience with disposal of assets and industry benchmarks.

VIU

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;• Drydocking expenditure are based on historical trends;• Inflationary rate of 5% is applied; and• Discount rate of 10.0% (2016: 11.0%) is applied.

The discount rates used are pre-tax and reflect specific risks relating to the CGUs. The discount rates applied to the cashflow 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 difficult market conditions in the oil and gas industry in the cash flowprojections, which include lower forecasted vessel utilisation and charter rates.



13 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Impairment assessment of vessels (continued)

VIU (continued)

The sensitivity of the carrying amount to the changes in key assumptions with all other variables being held constant are asfollows:


Utilisation rate increased by 10% 36,973,767 17,216,370 Utilisation rate decreased by 10% (36,973,767) (17,216,370) Charter rate increased by 5% 18,487,318 8,608,602 Charter rate decreased by 5% (18,487,318) (8,608,602) Discount rate increased by 1% (14,984,657) (3,996,339) Discount rate decreased by 1% 16,624,966 4,438,661

14 INVESTMENT IN A JOINT VENTURE


Unquoted shares, at cost - 4,132,742Share of post-acquisition results and reserves - 98,624

- 4,231,366

Share of post-acquisition results and reserves

At 1 January - 99,748Share of (loss)/profit - (1,124)

At 31 December - 98,624




14 INVESTMENT IN A JOINT VENTURE (CONTINUED)

The joint venture listed below has share capital consisting solely of ordinary shares, which is held indirectly through asubsidiary of the Company. The country of incorporation of the joint venture is the same as its principal place of business.

Details of the joint venture are as follows:

Group’s effective interestName of company Principal activity 2017 2016 Country of % % incorporation

Icon-FOB Holdings (L) Inc. Leasing of vessels - 51 MalaysiaIcon-FOB 1 (L) Inc. Leasing of vessels - 51 Malaysia

Icon-FOB Holdings (L) Inc. is a private company, with financial year end of 31 December, and there is no quoted marketprice available for its shares. There are no commitments and contingent liabilities relating to the Group’s interest in the jointventure.

Icon-FOB 1 (L) Inc. is a private company, wholly owned by Icon-FOB Holdings (L) Inc. (“Icon-FOB Group”), with financialyear end of 31 December.

Icon-FOB Holding (L) Inc and Icon-FOB 1 (L) Inc have been struck-off on 13 July 2017 and 18 July 2017 respectively. Thestrike-off resulted in a capital distribution of RM4,231,366 which settled the amount due to Icon-FOB Group.

Summarised financial information of joint venture

Set out below is the summarised financial information for Icon-FOB Group, which is accounted for using the equity method:

Icon-FOB Group 2017 2016 RM RM

Assets and liabilities

Current assets

Cash and cash equivalents - 2,295Other current assets - 10,742,250

Total current assets - 10,744,545



14 INVESTMENT IN A JOINT VENTURE (CONTINUED)

Summarised financial information of joint venture (continued)

Icon-FOB Group 2017 2016 RM RM

Assets and liabilities (continued)

Current liabilities

Current financial liabilities - (2,427,749)Other current liabilities - (20,000)

Total current liabilities - (2,447,749)

Net assets - 8,296,796

Summarised statement of comprehensive income

Loss from continuing operations - (2,203)Income tax expense - -

Loss after tax and total comprehensive loss for the financial year - (2,203)

Dividend received - -

Reconciliation of the summarised financial information presented to the carrying amount of its interest in the joint venture:


Opening net assets - 8,298,999Loss for the financial year - (2,203)

Closing net assets - 8,296,796

Post-acquisition interest in joint venture at 51% - 4,231,366

Carrying value - 4,231,366




15 INVESTMENTS IN SUBSIDIARIES

Note Company 2017 2016 RM RM

Unquoted shares, at cost 489,327,819 489,327,819Amounts due from subsidiaries (a), (b) 419,520,011 381,298,543Capital contribution to a subsidiary (c) 105,000,000 105,000,000

1,013,847,830 975,626,362Impairment loss (329,576,872) (293,775,994)

684,270,958 681,850,368

(a) The amounts due from subsidiaries arose from advances which are unsecured and non-interest bearing with no fixedterms of repayment. The Company does not currently anticipate any repayment of the advances in the foreseeablefuture. These advances have been treated as extensions of its investments in subsidiaries.

(b) During the financial year ended 2017, one of the subsidiaries of the Company, Icon Ship Management Sdn. Bhd. ("ISM")made certain payments on behalf of the Company which amounted to RM6,561,237 as disclosed in Note 27. Thesepayments on behalf made by ISM was offset against the amount due from ISM to the Company.

(c) Advances of RM105,000,000 owing by a subsidiary to the Company as at 31 December 2016 were reclassified fromamounts due from subsidiaries to investments in subsidiaries after having considered the working capital needs of thesubsidiary as approved by the Board of Directors of the Company. Subsequently, these advances are not repayable bythe subsidiary and are treated as an increase in the Company’s investment in the subsidiary.

Impairment assessment of investments in subsidiaries

During the financial year ended 31 December 2017, the Group performed an impairment assessment of the carrying valueof the investments in subsidiaries as a result of the continuous losses and deficit in shareholders’ funds. The recoverableamount of the Company’s subsidiaries for assessment of impairment was determined based on the higher of FVLCOD andVIU. The subsidiaries are considered as a single CGU, as the principal activities of the subsidiaries, comprising vesselowning/leasing activities and the provision of vessel chartering and ship management services to oil and gas relatedindustries, are organised into a single integrated business.

During the financial year ended 31 December 2017, the recoverable amount of the investments in subsidiaries ofRM684,196,336 was determined using VIU, which was higher than the FVLCOD. The VIU was based on the Company’sshare of the present value of the subsidiaries’ estimated cash flows from the underlying assets, reduced by the fair value ofoutstanding debt and tax payment.

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;• Drydocking expenditure are based on historical trends;• Inflationary rate of 5% is applied on the operating costs;• Discount rate of 14.1% (2016: 15.7%) is applied; and• Terminal growth rate of 1% (2016:3%) is applied.



15 INVESTMENTS IN SUBSIDIARIES (CONTINUED)

Impairment assessment of investments in subsidiaries (continued)

The sensitivity of the carrying amount to the changes in key assumptions with all other variables being held constant are asfollows:

Company 2017 RM

Utilisation rate increased by 10% 179,051,053Utilisation rate decreased by 10% (179,051,053)Charter rate increased by 5% 91,676,069Charter rate decreased by 5% (91,676,069)Discount rate increased by 1% (93,397,604)Discount rate decreased by 1% 118,610,949

During the financial year ended 31 December 2016, the recoverable amount of the investments in subsidiaries ofRM681,850,368 was determined using FVLCOD, which was higher than the VIU. The FVLCOD was based on the valuationof the vessels performed by an independent valuer using the market approach, including consideration of the recent markettransaction of vessels of similar type and age. Thereafter, the valuation of the vessels were adjusted for outstanding loanand working capital balances to arrive at the recoverable amount. The valuation technique is therefore classified as level 2measurement in the fair value hierarchy. Costs of disposal were determined at 1.0% of total costs of vessels and reflectmanagement’s expectations based on past experience with disposal of assets and industry benchmarks.

The details of the Company’s subsidiaries are as follows:

The Company’s effective interest Country of 2017 2016Names of subsidiaries incorporation Principal activities % %

Direct subsidiaries

Icon Ship Management Malaysia Ship management services 100 100 Sdn. Bhd. to the oil and gas related industries

Icon Fleet Sdn. Bhd. Malaysia Investment holding 100 100

Icon Offshore Group Malaysia Provision of vessel services 100 100 Sdn. Bhd. to the oil and gas related industries

Indirect subsidiaries

Omni Marine Sdn. Bhd. Malaysia Vessel owner, operator and 100 100 provision of vessel services to the oil and gas related industries

Omni Triton Sdn. Bhd. Malaysia Dormant 100 100

Omni Power Sdn. Bhd. Malaysia Dormant 100 100





The details of the Company’s subsidiaries are as follows: (continued)


Indirect subsidiaries (continued)

Omni Ventures Sdn. Bhd. Malaysia Dormant 100 100

Icon Maritime Training Centre Sdn. Bhd.& Malaysia Dormant 100 100

Icon Explorer (L) Inc.#& Malaysia Dormant 100 100

Icon Kayra (L) Inc.# Malaysia Dormant 100 100

Omni Emery (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

Omni Flotilla (L) Inc.# Malaysia Leasing of vessels 100 100

Omni Offshore (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

Icon Huma (L) Inc.# Malaysia Leasing of vessels 100 100

Icon Sari (L) Inc.# Malaysia Leasing of vessels 100 100




The details of the Company’s subsidiaries are as follows: (continued)


Indirect subsidiaries (continued)

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 Leasing of vessels 100 100

Icon Pinang 1 (L) Inc.# Malaysia Leasing of vessels 100 100




Icon Piai 1 (L) Inc.# Malaysia Leasing of vessels 100 100

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 Aliza (L) Inc.# Malaysia Leasing of vessels 100 100

Icon Bahtera (B) Sdn. Bhd.+$ Brunei Vessel owner, operator and 51 51 provision of vessel services to the oil and gas related industries

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

# 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 PricewaterhouseCoopers PLT, Malaysia.$ Ownership interest held by non-controlling interest is 49% (2016: 49%).





Capital and other commitments for the subsidiaries are disclosed in Note 26. There are no material contingent liabilitiesrelating to the subsidiaries.

Set out below is summarised financial information for Icon Bahtera (B) Sdn. Bhd. (“IBSB”) that has non-controlling interestthat is material to the Group. The amounts disclosed are before related company eliminations.

IBSB 2017 2016 RM RM

Current assets 55,566,380 52,905,436Current liabilities (77,289,330) (77,445,938)

Current net assets (21,722,950) (24,540,502)

Non-current assets 119,235,517 127,400,759Non-current liabilities (67,122,082) (84,418,945)

Non-current net assets 52,113,435 42,981,814

Net assets 30,390,485 18,441,312

Accumulated non-controlling interest 13,727,626 7,344,883

Summarised statement of comprehensive income

Revenue 51,690,916 76,501,139

Profit after tax for the financial year 12,760,009 12,342,706Other comprehensive income 265,999 129,252

Total comprehensive income for the financial year 13,026,008 12,471,958

Profit after tax allocated to non-controlling interest at 49% 6,252,404 6,047,926

Summarised statement of cash flows

Cash flows from operating activities (1,598,438) 32,812,398Cash flows from investing activities (517,666) (153,747)Cash flows from financing activities (20,273,019) (19,554,184)Effect of exchange rate changes 66,570 582,766

Net (decrease)/increase in cash and bank balances (22,322,553) 13,687,233



16 DEFERRED TAXATION

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets againstcurrent tax liabilities and when deferred taxes relate to the same tax authority. The following amounts, determined afterappropriate offsetting, are shown in the statements of financial position.


Deferred tax assets- recoverable after more than 12 months 41,507,747 42,061,161- recoverable within 12 months 5,492,685 7,832,959

47,000,432 49,894,120

Deferred tax liabilities- to be settled after more than 12 months (1,463,008) (1,222,220)- to be settled within 12 months (89,656) (139,669)

(1,552,664) (1,361,889)

Deferred tax assets (net) 45,447,768 48,532,231 ════════════════════

Subject to income tax:

Deferred tax assets- property, plant and equipment 53,621,754 48,901,093- unutilised tax losses 8,045,319 10,535,932- provisions 813,290 691,261

Offsetting (15,479,931) (10,234,166)

Deferred tax assets (after offsetting) 47,000,432 49,894,120 ════════════════════


Deferred tax liabilities- property, plant and equipment (16,431,407) (11,467,230)- others (601,188) (128,825)

Offsetting 15,479,931 10,234,166

Deferred tax liabilities (after offsetting) (1,552,664) (1,361,889)




16 DEFERRED TAXATION (CONTINUED)

The movements during the financial year relating to deferred taxation are as follows:


Beginning of financial year 48,532,231 44,725,309

Credited/(charged) to profit or loss (Note 10):- property, plant and equipment (Malaysia) 322,747 843,383- property, plant and equipment (Brunei) (3,288,024) (2,386,280)- unutilised tax losses (1,342,479) 5,535,915- provisions 937,002 (57,271)- others 286,291 (128,825)

Deferred tax assets (after offsetting) 45,447,768 48,532,231

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against whichthe temporary differences can be utilised. This involves judgment regarding the future financial performance of the subsidiaryin which the deferred tax asset has been recognised. As at 31 December 2017, the Group has deferred tax assets ofRM44,194,035 (2016: RM44,312,627) in respect of unused tax losses and unutilised capital allowances of a loss makingsubsidiary of the Group. The key assumptions used in taxable profit projections of the loss making subsidiary includeutilisation rates and charter rates which are based on past performance, management’s expectation of market development,a mark-up percentage within arm’s length range to be retained by the loss-making subsidiary for inter-company provision ofthe combined services of ship management and project management and weighted average growth rates that are consistentwith forecasts included in industry reports. .

In evaluating whether it is probable that future taxable profits will be available in future periods, all available evidence wasconsidered, including approved budgets, business plans, and analysis of historical operating results. These forecasts areconsistent with those prepared and used internally for business planning and impairment testing purposes.

The amount of unutilised capital allowances and unutilised tax losses (both of which have no expiry date) of the Company’ssubsidiaries, for which no deferred tax asset is recognised in the statements of financial position as it is not probable thattaxable profit will be available against which these temporary differences can be utilised are as follows:


Unutilised capital allowances 20,394,365 20,394,365Unutilised tax losses 2,126,380 2,151,689



17 TRADE AND OTHER RECEIVABLES


Trade receivables 81,262,844 62,743,107 - -Other receivables 5,444,839 4,539,772 - -Accrued income 6,732,725 3,098,291 - -Less: Impairment of trade receivables (1,466,166) (1,487,952) - -

91,974,242 68,893,218 - -Prepayments 3,407,056 2,293,638 258,054 212,083

95,381,298 71,186,856 258,054 212,083

Trade receivables are denominated in Ringgit Malaysia, Brunei Dollar and US Dollar.

The credit term of trade receivables ranges from 30 to 60 days (2016: 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 (excluding prepayments) is as follows:


Neither past due nor impaired 22,235,728 30,747,521One month past due but not impaired 11,756,279 17,818,610Two to six months past due but not impaired 33,506,882 13,021,868More than six months past due but not impaired 17,742,628 4,206,928

85,241,517 65,794,927Impaired 1,466,166 1,487,952

86,707,683 67,282,879Accrued income 6,732,725 3,098,291

93,440,408 70,381,170

Trade and other receivables that are neither past due nor impaired

None of the Group’s trade receivables and other receivables that are neither past due nor impaired have been renegotiatedduring the financial year.

Trade receivables that are past due but not impaired

Based on past experience and no adverse information to date, the Directors of the Group are of the opinion that no impairmentis necessary in respect of these balances as there has not been a significant change in the credit quality and the balancesare still considered fully recoverable.




17 TRADE AND OTHER RECEIVABLES (CONTINUED)

Trade and other receivables that are impaired


Movement in impairment of receivables: Beginning of the financial year 1,487,952 1,982,834 Written off during the financial year (634,136) - Charge during the financial year 1,360,110 106,987 Reversal during the financial year (747,760) (601,869)

End of the financial year 1,466,166 1,487,952

Impairment of trade and other receivables are individually determined by the Group. The individually impaired tradereceivables mainly relate to customers and counterparties which are in difficult financial situations. These receivables arenot secured by collateral.

18 CASH AND BANK BALANCES


Fixed deposits with licensed banks 6,871,244 8,339,360 - -Bank balances 40,859,681 50,335,636 11,641 47,749Cash in hand 26,819 45,091 2 2

Cash and bank balances 47,757,744 58,720,087 11,643 47,751Less: Deposits pledged as security (25,419,459) (19,225,242) - -

Cash and cash equivalents 22,338,285 39,494,845 11,643 47,751

Deposits of the Group were pledged to secure loan and bank guarantee facilities as disclosed in Note 23.

The interest rates of deposits of the Group at the reporting date range from 2.85% to 3.15% per annum (2016: 2.20% to 3.60%).

19 NON-CURRENT ASSETS HELD FOR SALE

During the financial year ended 2017, the Directors of the Group decided to disposed certain aged vessels, hence thevessels were reclassified from property, plant and equipment to non-current assets held for sale as disclosed in Note 13.

The Group already identified a buyer for the vessels and signed of Memorandum of Agreement with the buyer on 2 November2017. The sale of one of the vessels is completed on 17 January 2018 and the sale of the remaining vessel is expected tobe completed before the end of April 2018.



20 AMOUNT DUE TO A SUBSIDIARY

Amounts due to subsidiary are unsecured, interest-free and repayable on demand.

21 AMOUNT DUE TO IMMEDIATE HOLDING COMPANY

Amounts due to immediate holding company are subject to interest rate of 2.5%.

22 TRADE AND OTHER PAYABLES


Current

Financial liabilities

Trade payables 32,869,014 16,054,483 - -Payables in relation to vessels under construction 9,172,833 4,717,350 - -Payroll-related liabilities 5,090,100 1,985,077 145,263 -Other payables 3,424,204 10,632,028 282,718 201,111Accruals 16,087,065 15,729,408 1,389,219 1,448,698

66,643,216 49,118,346 1,817,200 1,649,809

Non-financial liabilities

Other payroll-related liabilities 3,212,242 9,452,909 376,525 130,041Other payables 1,258,132 448,787 - -

71,113,590 59,020,042 2,193,725 1,779,850

Non-current

Financial liabilities

Payables in relation to vessels under construction 33,659,742 36,949,480 - -

104,773,332 95,969,522 2,193,725 1,779,850

The total trade and other payables are mainly denominated in Ringgit Malaysia with credit terms of 30 days (2016: 30 days).

The carrying amounts of other payables approximate their fair values.




23 BORROWINGS


Current: Bank borrowings - term loans 157,658,585 78,054,323 - - - revolving credit 868,000 - - - revolving credit (Commodity Murabahah Financing-i) 13,000,000 13,000,000 - - - revolving credit (Short Term Revolving Credit-i) 156,428,897 106,352,028 156,428,897 106,352,028 Redeemable preference shares 9,086,295 9,209,512 - - Finance lease liabilities 82,088 48,950 - -

337,123,865 206,664,813 156,428,897 106,352,028

Non-current: Bank borrowings - term loans 347,027,451 505,522,520 - - Finance lease liabilities - 38,013 - -

347,027,451 505,560,533 - -

Total borrowings 684,151,316 712,225,346 156,428,897 106,352,028

As set out in Note 4 (ii) on liquidity risk, the Group will be carrying out a debt restructuring scheme with the relevant bankerswith assistance from a regulatory agency under a prescribed arrangement. Under this arrangement, total borrowingsrepayable to the relevant Lenders as at 31 December 2017 amounted to approximately RM593 million (excluding foreignterm loan, redeemable preference shares and finance lease liabilities), of which approximately RM143 million is repayableover the next twelve months for the term loan facilities and RM170 million is in relation to the revolving credit facilities withrollover periods ranging from one to six months.

For the majority of the borrowings, the fair values are not materially different to their carrying amounts, since the interestpayable on those borrowings is either close to current market rates or the borrowings are of a short-term nature. Materialdifferences are identified only for the following borrowings where the table below shows the carrying amounts and fair valuesof the borrowings, by valuation method.

The fair values of the borrowings are estimated using the present value techniques, by discounting the cash flows based onthe market interest rates of a comparable instrument. This is a Level 2 fair value in the fair value hierarchy (see Note 4(vi)).

Carrying amount Fair value 2017 2016 2017 2016 RM RM RM RM

Group

Fixed rate term loans 201,250,554 224,611,639 195,873,941 242,566,628

The range of interest/profit rates (per annum) are as follows:

Group Company 2017 2016 2017 2016 % % % %

Term loans 2.75 - 6.25 4.09 - 6.59 - -Revolving credit 4.06 - 6.25 4.20 - 6.15 4.06 - 4.43 4.20 - 4.37



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23 BORROWINGS (CONTINUED)

Term loans

The term loans were arranged to finance the construction and purchase of vessels for the Group and were secured as follows(either single security or combination of securities):

(i) Fixed charges over vessels (see Note 13(ii));(ii) Assignment of insurance policies for the vessels charged in (i) above;(iii) Assignment of charter proceeds for the vessels charged in (i) above;(iv) Assignment of ship building contracts for the vessels charged in (i) above;(v) Placement of deposits (see Note 18); and(vi) Corporate guarantees by the Company. For the loan under one of the subsidiaries of the Company, Icon Bahtera (B)

Sdn. Bhd. (“IBSB”), it is jointly guaranteed by the Company and non-controlling interest of the Company.

As at 31 December 2017, the Group has provided bank guarantees, tender bonds and bid bonds amounting to RM9,584,111(2016: RM9,549,533) primarily due to the tendering of new contracts and as guarantee for the performance of chartercontracts and use of port facilities by the Company’s subsidiaries.

The term loans of the Group are subject to certain financial covenants, limitation to certain asset sales or transfers and maintainingmajority ownership in certain subsidiaries by the Group. As at 31 December 2017, the Group has not met certain covenants forlong-term loans with one of the lenders, resulting in the long-term loans with carrying amount of RM35,978,243 being included incurrent liabilities. Subsequent to the financial year end, the lender has granted a waiver in respect of these covenants.

Revolving credit (Commodity Murabahah Financing-i) (“RC-CMFi”)

One of the subsidiaries, Icon Offshore Group Sdn. Bhd. has a RC-CMFi facility of RM13.0 million (2016: RM30.0 million) forworking capital purpose. RC-CMFi was secured as follows:

(i) A monthly sinking fund; (ii) Placement of deposit; and(iii) Corporate guarantee by the Company.

Revolving credit (Short Term Revolving Credit-i) (“STRC-i”)

The Company had obtained STRC-i facility of RM150.0 million for working capital purpose on 20 July 2016 with tenure of 5years. On 9 November 2017, the Company had obtained additional STRC-i facility of RM20.0 million with tenure of one year.The facilities tenure is subject to the bank’s review from time to time.

Redeemable preference shares (“RPS”)

One of the subsidiaries, Icon Bahtera (B) Sdn. Bhd. (“IBSB”) (hereafter “the issuer”) issued RPS on 19 October 2015, ofwhich 3,011,000 RPS were subscribed by IBSB’s non-controlling interest. The salient terms were as follows:

(a) The RPS is at an issue price of BND1.00 each and par value of BND0.01 each.

(b) The issuer shall have the discretion whether to declare any dividend as well as the quantum of such dividend subjectalways to:

i. No dividend is payable to RPS holders if no dividend is declared for the ordinary shareholders for the relevantfinancial year; and

ii. Any dividend, if declared, is a non-cumulative preferential dividend and is distributed on an equitable basis.





Redeemable preference shares (“RPS”) (continued)

(c) In the event of repayment of capital by the issuer, each RPS holder will be entitled to participate in such repayment andwill rank pari passu with the ordinary shareholders.

(d) The RPS shall carry no right to vote at any general meeting of the issuer except with regards to any proposal to reducethe capital of the issuer, to wind up the issuer, during the winding up of the issuer and on any proposal that affects therights attached to the RPS. In any such case, the RPS holders shall have one vote for each RPS held and may demanda poll at a general meeting of the issuer on any resolutions on which the holders may vote.

(e) An RPS holder may, at any time, by a written notice to the issuer, redeem all the RPS in issue.

Finance lease liabilities


Minimum lease payment:- Not later than 1 year 90,685 61,559- Later than 1 year and not later than 5 years - 50,104

90,685 111,663Future finance charges (8,597) (24,700)

Present value of finance lease liabilities 82,088 86,963

Principal portion payables:- Not later than 1 year 82,088 48,950- Later than 1 year and not later than 5 years - 38,013

Present value of finance lease liabilities 82,088 86,963

The carrying amounts of the finance lease liabilities approximate their fair values.



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Reconciliation of liabilities arising from financing activities (continued)

Company

Amount due Bank to immediate

borrowings holding (Revolving company credit) (note 27) Total RM RM RM

At 1 January 2017 106,352,028 - 106,352,028

Financing cash flows Drawdown of borrowings (net of transaction costs) 50,000,000 - 50,000,000 Interest paid (5,247,483) (1,330,822) (6,578,305)

Non-cash changesFinance costs for the year 5,324,352 3,331,164 8,655,516

At 31 December 2017 156,428,897 2,000,342 158,429,239

24 SHARE CAPITAL AND SHARE PREMIUM

SHARE CAPITAL


Authorised: Ordinary shares: At 1 January 1,497,000,000 1,497,000,000 Adjustment for the effects of Companies Act 2016 (1,497,000,000) -

At 31 December - 1,497,000,000

RCPS-i: At 1 January 3,000,000 3,000,000 Adjustment for the effects of Companies Act 2016 (3,000,000) -

At 31 December - 3,000,000



24 SHARE CAPITAL AND SHARE PREMIUM (CONTINUED)

SHARE CAPITAL (continued)


Issued and fully paid: Ordinary shares (1,177,185,100 shares) : At 1 January 588,592,550 588,592,550 Transition to no-par value regime on 31 January 2017 311,210,080 -

At 31 December 899,802,630 588,592,550

SHARE PREMIUM


At 1 January 311,210,080 311,210,080Transition to no-par value regime on 31 January 2017 (311,210,080) -

At 31 December - 311,210,080

The Companies Act 2016 (the “Act”), which came into effect from 31 January 2017, has repealed the Companies Act 1965.The Act has abolished the concept of authorised share capital and par value of share capital. Consequently, the amountsstanding to the credit of the share premium account become part of the Company’s share capital pursuant to transitionalprovisions set out in Section 618 (2) of the Act. Notwithstanding this provision, the Company may within 24 months from thecommencement of the Act, use the amount standing to the credit of its share premium account of RM311,210,080 forpurposes as set out in Section 618 (3) of the Act. The Board of Directors will make a decision thereon by 31 January 2019.

25 SHARE BASED PAYMENTS

Employees’ Share Scheme

The establishment of the Group’s Employees’ Share Scheme (“the Scheme”) was approved by the Board of Directors on 3March 2014. The Scheme comprises the Employees’ Share Option Scheme and Employees’ Share Grant Plan. The Schemeis designed to provide, among others, long-term incentives for the Group’s confirmed full-time employees (including anExecutive Director) to deliver long-term shareholder returns.

The salient terms of the Scheme are as follows:

Maximum number of ordinary shares available under the Scheme

Subject to the By-Laws governing the Scheme (“By-Laws of the Scheme”), the maximum number of shares which may bemade available under the Scheme shall not exceed 5% of the issued and paid-up ordinary share capital of the Companyfrom time to time or at any point of time during the duration of the Scheme.




25 SHARE BASED PAYMENTS (CONTINUED)

Basis of allocation and maximum allowable allotment

Subject to the By-Laws of the Scheme, the maximum aggregate number of scheme shares that may be allotted to an eligibleperson shall be determined at the discretion of the Employees’ Share Scheme Committee (“ESS Committee”) after takinginto consideration factors that the ESS Committee may deem relevant subject to the said By-Laws and any applicable law.

(a) Employees’ Share Option Scheme (“ESOS”)

Under the ESOS, an Eligible Employee as defined in the By-Laws of the scheme are offered options which vest on anannual pro-rata basis over a 4 year period to 1 March 2021.

Once vested, the options remain exercisable up to the expiry date of the ESOS on 28 December 2021.

Options are offered under the plan for a nominal consideration and carry no dividend or voting rights. When exercisable,each option is convertible into one ordinary share.

The exercise price of options is RM0.50 each.

The salient terms of the ESOS are as follows:

(i) Eligibility

Eligible employee who meets the following criteria as at an offer date shall be eligible to participate in the ESOS:

a. is a full time employee (including employment in the capacity of an Eligible Senior Management Employee asdefined in the By-Laws of the Scheme) whose employment with the Group has been confirmed in writing andhas not served a notice of resignation or received a notice of termination (including employees serving in aspecific designation under an employment contract for a fixed duration);

b. has been in employment with the Group for a minimum of 1 year, consecutively;c. has attained 18 years of age;d. if he is an Executive Director, the specific allocation of the ESOS options offered by the Company to him in his

capacity as an Executive Director under the ESOS has been approved by the shareholders of the Company ata general meeting

e. is not an undischarged bankrupt; andf. fulfills any other criteria and/or falls within such category as may be determined by the ESS Committee from

time to time.

No eligible employee or ESOS holder may participate at any time in another employees’ share option scheme orshare scheme of another corporation outside the Group without prior written consent of the ESS Committee.

(ii) Ranking of shares

The ESOS shares to be allotted and issued pursuant to the Scheme shall rank pari passu in all respects with thethen existing shares.

(iii) Alteration of share capital and adjustment

In the event of any alteration in the capital structure of the Company during the duration of the ESOS, the ESSCommittee may make such corresponding alterations to the ESOS:

a. the ESOS option price; and/orb. the number of ESOS shares comprised in an offer, ESOS option or any portion thereof that is unvested or

unexercised.




(a) Employees’ Share Option Scheme (“ESOS”) (continued)

Set out below are summaries of options granted under the ESOS:

Average exercise price per share Number option of options RM units

At 1 January 2016 - -Granted during the financial year 0.50 5,470,000

At 1 January 2017 0.50 5,470,000Forfeited during the financial year 0.50 (360,000)

At 31 December 2017 0.50 5,110,000

Fair value of Number share options of options RM units

Vested and exercisable as at 31 December 2016 - -

Vested and exercisable as at 31 December 2017 152,523 1,277,500

Share options outstanding at the end of the financial year have the following expiry date and exercise prices:

Share options Exercise price 2017 2016Grant date Expiry date RM Units Units

28 December 2016 28 December 2021 RM0.50 3,832,500 5,470,000

Weighted average remaining contractual life of options outstanding at the end of the financial year 4.0 years 5.0 years





(a) Employees’ Share Option Scheme (“ESOS”) (continued)

Fair value of options granted

The assessed fair value at grant date of options granted during the financial year ended 31 December 2016 was RM0.04per option. The fair value at grant date is independently determined using the Monte Carlo simulation model that takesinto account the exercise price, the term of the option, the impact of dilution (where material), the share price at grantdate and expected price volatility of the underlying share, the expected dividend yield, the risk free interest rate for theterm of the option and the correlations and volatilities of the Malaysian Oil & Gas Index.

The model inputs for options granted during the financial year ended 31 December 2016 included:

(i) options are granted for nominal consideration and vested based on a pro-rata basis over a four year period. Vested options are exercisable for up to the expiry date of the options;(ii) exercise price: RM0.50;(iii) grant date: 28 December 2016;(iv) expiry date: 28 December 2021;(v) share price at grant date: RM0.39;(vi) expected price volatility of the Company’s shares: 18.03%;(vii) expected dividend yield: nil; and(viii) risk-free interest rate: 3.75%.

The expected price volatility is based on the historic volatility of the Malaysian Oil & Gas Index (based on the remaininglife of the options), adjusted for any expected changes to future volatility due to publicly available information.

(b) Employees’ Share Grant Plan (“ESGP”)

ESGP is a grant of shares by the Company to the eligible senior management employee for no cash consideration.Eligible senior management employees who meet the eligibility requirements may elect not to participate in the ESGP.

The eligibility requirements for an employee to participate in the ESGP are as follows:

a. is a full time Senior Management Employee as defined in the By-Laws of the Scheme (as shall be determined by the ESS Committee) whose employment with the Group has been confirmed in writing and has not served a notice of resignation or received a notice of termination;b. has been in employment with the Group for a minimum of 1 year consecutively;c. has attained 18 years of age;d. if he is an Executive Director, the specific allocation of the New ESGP Shares, as defined in the By-Laws of the Scheme, offered or granted by the Company to him in his capacity as an Executive Director under the ESGP has been approved by the shareholders of the Company at a general meeting;e. is not an undischarged bankrupt; andf. fulfills any other criteria and/or falls within such category as may be determined by the ESS Committee from time to time.




(b) Employees’ Share Grant Plan (“ESGP”) (continued)

The ESGP shares are Sempena Fokus Sdn. Bhd. (“SFSB”)’s shares in the Company transferred to Maybank TrusteesBerhad.

The said ESGP shares are held in trust by Maybank Trustees Berhad, in accordance with the By-laws of the Schemeand its Trust Deed dated 31 December 2014 signed between Maybank Trustees Berhad, the Company, and SFSB.

The ESGP comprises the Value Sharing Plan (“VSP”) and Loyalty Shares.

(i) Value Sharing Plan (“VSP”)

Ordinary shares of the Company are being granted to eligible senior management employee subject to achievementof the annual performance criteria as determined by the ESS Committee on an on-going basis under VSP.

Under the VSP, up to 5,940,000 (2016: 5,940,000) fully paid ordinary shares in the Company may be vested toeligible senior management employee on an annual pro-rata basis over a 4 year (2016: 5 year) period to 1 March2022 for no cash consideration. The number of shares granted to participants in the ESGP is the offer amountmodified based on the achievement of the annual performance criteria as determined by the ESS Committee on anon-going basis. The performance measures and their weightings are determined by the ESS Committee based onthe priorities of the Group on an annual basis.

Offers under the ESGP are at the discretion of the ESS Committee, and no offer may be made unless the Group andthe respective eligible persons achieve the performance criteria. As at 31 December 2017, no employees have metthe performance criteria set by ESS Committee.

In all other respects the shares rank equally with other fully-paid ordinary shares on issue.

The number of shares granted under the ESGP to participating employees is as follows: Group and Company

2017 2016

At 1 January 5,940,000 -Granted during the year* 10,000,000 5,940,000Forfeited during the year* (10,000,000) -

At 31 December 5,940,000 5,940,000

* On 13 March 2017, 10 million units of the Company’s shares was granted under the VSP which may vested bythe Company to the Executive Director on an annual basis over a 3 year period to 1 March 2019 achievementof the annual performance criteria as determined by the ESS Committee on an on-going basis. However, 10million units of the Company’s shares granted under VSP were forfeited following the resignation of the ExecutiveDirector which took effect on 30 November 2017.





(b) Employees’ Share Grant Plan (“ESGP”) (continued)

(i) Value Sharing Plan (“VSP”) (continued)

The number of shares that are expected to vest has yet to be determined as the targets upon which the number ofshares granted will be based have not been approved by the Board of Directors to date.

(ii) Loyalty Shares

Loyalty shares being granted to the eligible person, under the ESGP on the terms to serve the Company for aspecified period of time.

On 13 March 2017, loyalty shares comprise of 4 million units of the Company’s shares was awarded to the ExecutiveDirector by SFSB in equal tranches over the next three years, with the first tranche to be awarded on 13 March 2017.1,333,000 units of the Company’s shares were transferred to the Executive Director on 13 March 2017 while thebalance of 2,667,000 units of the Company’s shares forfeited following the resignation of the Executive Directorwhich took effect on 30 November 2017. A charge of RM626,510 is recognised as part of the share-based paymentexpenses during the financial year ended 31 December 2017 for the first tranche of 1,333,000 units of shares at afair value at grant date of RM0.47 per share.

26 COMMITMENTS

(a) Capital expenditure

Authorised capital expenditure not provided for in the financial statements are as follows:

Group

2017 2016 RM RM

Approved and contracted for: Property, plant and equipment 76,788,000 96,723,000

(b) Non-cancellable operating lease commitments

The future minimum lease payments under non-cancellable operating leases are as follows:


- Not later than one year 1,470,122 1,971,078- Later than one year and not later than five years 387,083 1,526,277



27 SIGNIFICANT RELATED PARTY TRANSACTIONS

Parties are considered related if the party has the ability to control the other party or exercise significant influence over theother party in making financial or operational decisions.

The Group is controlled by Yayasan Ekuiti Nasional, a foundation incorporated in Malaysia formed by the Malaysian FederalGovernment.

(i) The related parties and their relationships with the Company are as follows:

Related parties Relationship

Yayasan Ekuiti Nasional Ultimate holding foundation Hallmark Odyssey Sdn. Bhd. Immediate holding company E-Cap (Internal) One Sdn. Bhd. Intermediate holding company Ekuiti Nasional Berhad Intermediate holding company Sempena Fokus Sdn. Bhd. Fellow subsidiary Icon Ship Management Sdn. Bhd. Subsidiary Icon Fleet Sdn. Bhd. Subsidiary Icon Offshore Group Sdn. Bhd. Subsidiary

Key management personnel

Key management personnel of the Group comprise members of the senior leadership team who are directly responsiblefor the financial and operating policies and decisions of the Group and the Company. The remuneration of keymanagement personnel paid by the Group and the Company during the financial year was as follows:


Salaries, allowances and bonuses 4,630,137 3,369,478 3,660,347 2,630,503Defined contribution plan 795,589 593,225 661,136 486,454Share based payments 626,510 - 626,510 -

6,052,236 3,962,703 4,947,993 3,116,957

During the financial year, certain members of the Group’s key management were granted options under the ESOS and/orparticipated in the ESGP as disclosed in Note 25.




27 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 significantrelated party transactions. The related party transactions described below were carried out on terms and conditionsagreed with related parties.


Advances from immediate holding company - 35,000,000 - 35,000,000

Repayment of advances from immediate holding company - (35,000,000) - (35,000,000)

Interest on advances from immediate holding company - 679,666 - 679,666

Interest charged by immediate holding company on security of credit facility 3,331,164 - 3,331,164 -

Repayment of advances from Icon Offshore Group Sdn. Bhd. - - - 19,000,000

Advances to Icon Fleet Group - - - 77,500

Advances to Icon Ship Management Sdn. Bhd. - - 50,479,361 105,790,932

Repayment of advances from Icon Ship Management Sdn. Bhd. - - 5,696,656 -

Payment on behalf of the Company made by Icon Ship Management Sdn. Bhd. (see Note 15(b)) - - 6,561,237 -

During the financial year ended 2016, the Group and the Company obtained a short term revolving credit facility, ShortTerm Revolving Credit-i (“STRC-i”) of RM150.0 million from a bank with tenure of 5 years. During the financial year ended2017, the Group and the Company has obtained additional STRC-i facility amounting to RM20.0 million with tenure ofone year. The Group’s immediate holding company has secured this credit facility with a pledged fixed deposit to thebank for an amount of not less than the outstanding facility amount disbursed by the bank to the Group. As at 31December 2017, RM155.0 million of the credit facility has been disbursed by the bank to the Group. Under thisarrangement, the Group and the Company shall pay an interest fee at the rate of 2.5% on the credit facility amount perannum to the immediate holding company.



27 SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)

(iii) Significant related party balances

Included in the Group’s and Company’s statement of financial position are the following significant related party balancesarising from normal business transactions:


Amount due to a subsidiary - - 22,255,022 22,255,022

Amount due to immediate holding company 2,002,342 - 2,002,342 -

Apart from the transactions disclosed above, the Group has entered into transactions that are collectively, but notindividually significant with other government-related entities. These transactions include vessel chartering, drydockingexpenditure and repairs and maintenance. They are conducted in the ordinary course of the Group’s business on termsconsistently applied in accordance with the Group’s internal policies and processes.

28 FINANCIAL INSTRUMENTS BY CATEGORY

Analysis of the financial instruments for the Group and the Company are as follows:

Group Company 2017 2016 2017 2016

RM RM RM RM

Financial assets - Loans and receivables:

Trade and other receivables (excluding prepayments) 91,974,242 68,893,218 - -Cash and bank balances 47,757,744 58,720,087 11,643 47,751

139,731,986 127,613,305 11,643 47,751

Financial liabilities at amortised costs:

Trade and other payables (excluding statutory liabilities) 100,302,958 86,067,826 1,817,200 1,649,809Borrowings 684,151,316 712,225,346 156,428,897 106,352,028Amount due to a subsidiary - - 22,255,022 22,255,022Amount due to immediate holding company 2,002,342 - 2,002,342 -

786,456,616 798,293,172 182,503,461 130,256,859

29 APPROVAL OF FINANCIAL STATEMENTS

The financial statements have been authorised for issue in accordance with a resolution of the Board of Directors dated 12April 2018.




NO. VESSEL VESSEL TYPE

1 ICON ALIZA AWB2 ICON KAYRA AWB3 ICON VALIANT AWB4 TANJUNG PIAI 1 PSV5 TANJUNG PIAI 2 PSV6 ICON ATIQAH AHTS7 ICON AZRA AHTS8 ICON IKHLAS AHTS9 ICON LOTUS AHTS10 ICON SAMUDERA AHTS11 ICON SOPHIA AHTS12 ICON ZARA AHTS13 OMNI GAGAH* AHTS14 OMNI MARISSA AHTS15 OMNI PERKASA AHTS16 OMNI STELLA AHTS17 OMNI TIGRIS AHTS18 OMNI VICTORY AHTS19 TANJUNG BIRU 1 AHTS20 TANJUNG BIRU 2 AHTS21 TANJUNG DAHAN 1 AHTS22 TANJUNG DAHAN 2 AHTS23 TANJUNG DAWAI AHTS24 TANJUNG HUMA AHTS25 TANJUNG PUTERI 1 AHTS26 TANJUNG PUTERI 2 AHTS27 TANJUNG SARI AHTS28 TANJUNG PINANG 1 SSV29 TANJUNG PINANG 2 SSV30 TANJUNG PINANG 3 SSV31 TANJUNG PINANG 4 SSV32 OMNI AKIRA AHT33 OMNI ANTEIA AHT34 OMNI EMERY 1 AHT35 TANJUNG GAYA AHT/UTIL/SB

* Disposed in January 2018


LIST OF VESSELS

ADDRESS DESCRIPTION STATUS AGE OF PROPERTY NBV

Lot 13837, Jalan Penghiburan, Shop Office Freehold 8 RM722,946Bakau Tinggi,24000 Kemaman,Terengganu Darul Iman


LIST OF PROPERTY

Total issued share capital : 1,177,185,100 ordinary shares Class of shares : Ordinary shares Number of shareholders : 8,705Voting rights : One vote per shareholder on a show of hands One vote per ordinary share on a poll

ANALYSIS OF SHAREHOLDINGS

Percentage Percentage No. of (%) of No. of (%) of Size of shareholdings shareholders shareholders shares held issued capital

1 - 99 87 1.00 2,386 0.00100 - 1,000 615 7.06 439,231 0.041,001 - 10,000 3,790 43.54 22,778,377 1.9310,001 -100,000 3,675 42.22 121,252,784 10.30100,001 to less than 5% of Issued Shares 536 6.16 435,650,734 37.015% and above of Issued Shares 2 0.02 597,061,588 50.72

Total 8,705 100.00 1,177,185,100 100.00

Remarks:

* Less than 5% of Issued Shares** 5% and above of Issued Shares

DIRECTORS’ SHAREHOLDINGS ACCORDING TO THE REGISTER OF DIRECTORS’ SHAREHOLDINGS

Direct Interest Indirect Interest No. of Percentage No. of Percentage Directors shares held (%) shares held (%)

Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda 150,000 0.01 0 0Syed Yasir Arafat bin Syed Abd Kadir 0 0 0 0Datuk Wira Azhar bin Abdul Hamid 0 0 0 0Edwanee Cheah bin Abdullah 200,000 0.02 0 0Madeline Lee May Ming 60,000 0.01 0 0Datuk Abdullah bin Ahmad 0 0 0 0Farina binti Farikhullah Khan 0 0 0 0Datuk Abdullah bin Karim 0 0 0 0


ANALYSIS OFSHAREHOLDINGSAS AT 30 MARCH 2018

SUBSTANTIAL SHAREHOLDERS ACCORDING TO THE REGISTER OF SUBSTANTIAL SHAREHOLDERS

No. of shares held Direct Percentage Indirect Percentage Substantial shareholders (%) (%)

Hallmark Odyssey Sdn. Bhd. 497,768,820 42.28 - -Lembaga Tabung Haji 103,611,268 8.80 - -E-Cap (Internal) Two Sdn. Bhd. - - 497,768,820(1) 42.28E-Cap (Internal) Three Sdn. Bhd. - - 497,768,820(1) 42.28Ekuinas Capital Sdn. Bhd. - - 501,081,988(2) 42.57Yayasan Ekuiti Nasional - - 501,081,988(3) 42.57

Notes:-

(1) Deemed interested through its shareholdings in Hallmark Odyssey Sdn. Bhd. (“HOSB”) pursuant to Section 8(4) of theCompanies Act, 2016.

(2) Deemed interested through its shareholdings in HOSB, Sempena Fokus Sdn. Bhd. (“SFSB”), E-Cap (Internal) Two Sdn. Bhd.(“E-Cap (Internal) Two”) and E-Cap (Internal) Three Sdn. Bhd. (“E-Cap (Internal) Three”) pursuant to Section 8(4) of theCompanies Act, 2016.

(3) Deemed interested through its shareholdings in HOSB, SFSB, E-Cap (Internal) Two, E-Cap (Internal) Three and EkuinasCapital Sdn. Bhd. pursuant to Section 8(4) of the Companies Act, 2016.


ANALYSIS OFSHAREHOLDINGS

AS AT 30 MARCH 2018

THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS

No. of Percentage No. Shareholders shares held (%) 1. HALLMARK ODYSSEY SDN. BHD. 497,768,820 42.28

2. LEMBAGA TABUNG HAJI 99,292,768 8.43

3. CIMB GROUP NOMINEES (TEMPATAN) SDN. BHD. 47,148,200 4.01 - YAYASAN HASANAH

4. CITIGROUP NOMINEES (TEMPATAN) SDN. BHD. - KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 29,046,700 2.47

5. AMANAHRAYA TRUSTEES BERHAD - AMANAH SAHAM BUMIPUTERA 28,579,900 2.43

6. CITIGROUP NOMINEES (TEMPATAN) SDN. BHD. - EMPLOYEES PROVIDENT FUND BOARD 28,427,000 2.41

7. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. - EXEMPT AN FOR MAYBANK TRUSTEES BHD (ICON ESGP) 23,667,000 2.01

8. JAMAL BIN YUSOF @ GORDON DUCLOS 15,410,112 1.31


10. PUI CHENG WUI 9,142,300 0.78

11. MUHAMAD ALOYSIUS HENG 7,492,400 0.64

12. CIMSEC NOMINEES (TEMPATAN) SDN. BHD. - CIMB FOR NG PAIK PHENG 7,415,100 0.63

13. CIMB GROUP NOMINEES (TEMPATAN) SDN. BHD. - CIMB ISLAMIC TRUSTEE BERHAD FOR PACIFIC DANA AMAN 7,080,000 0.60

14. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. - PLEDGED SECURITIES ACCOUNT FOR TEE TIAM HOCK 5,720,000 0.49

15. RAHMAN BIN YUSOF 5,116,204 0.43

16. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. - EXEMPT AN FOR MAYBANK ISLAMIC ASSET MANAGEMENT SDN. BHD. 4,318,500 0.37

17. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. - ETIQA LIFE INSURANCE BERHAD 4,000,100 0.34

18. CIMB GROUP NOMINEES (TEMPATAN) SDN. BHD. - EXEMPT AN FOR PETROLIAM NASIONAL BERHAD 4,000,000 0.34


ANALYSIS OFSHAREHOLDINGSAS AT 30 MARCH 2018

THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS (CONTINUED)

No. of PercentageNo. Shareholders shares held (%)


20. AMSEC NOMINEES (TEMPATAN) SDN. BHD. - MTRUSTEE BERHAD FOR PACIFIC PEARL FUND 3,468,800 0.29

21. LOONG DING TONG 3,200,000 0.27

22. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. - PLEDGED SECURITIES ACCOUNT FOR FONG YORK SIANG 3,000,000 0.25

23. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. - PLEDGED SECURITIES ACCOUNT FOR HASSAN BIN ALI 2,770,300 0.24

24. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. - PLEDGED SECURITIES ACCOUNT FOR ISY HOLDINGS SDN. BHD. 2,650,000 0.23

25. CIMB GROUP NOMINEES (TEMPATAN) SDN. BHD. - VCAP ASSET MANAGERS SDN. BHD. FOR TABUNG AMANAH BENCANA ALAM 2,610,000 0.22

26. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN. BHD. - PLEDGED SECURITIES ACCOUNT FOR MICHAEL HENG CHUN HONG 2,580,000 0.22

27. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. - PLEDGED SECURITIES ACCOUNT FOR SEMPENA FOKUS SDN. BHD. 2,333,333 0.20

28. SOH OON HAI 2,315,400 0.20

29. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. - PLEDGED SECURITIES ACCOUNT FOR MD ALI BIN MD DEWAL 2,210,000 0.19

30. PUBLIC INVEST NOMINEES (ASING) SDN. BHD. - PLEDGED SECURITIES ACCOUNT FOR MUHAMAD ALOYSIUS HENG 2,000,000 0.17

866,434,237 73.60


ANALYSIS OFSHAREHOLDINGS

AS AT 30 MARCH 2018

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 December 2017together with the Reports of the Directors and the Auditors thereon.

2. To re-elect the following Directors who are retiring pursuant to Article 106 of the Company’s Articlesof Association, and being eligible, have offered themselves for re-election:-

(a) Syed Yasir Arafat bin Syed Abd Kadir

(b) Madeline Lee May Ming

3. To approve the payment of the Directors’ fees of RM760,701 for the financial year ended 31December 2017.

4. To approve an amount of up to RM93,000 as benefits payable to the Non-Executive Directors from25 May 2018 to the next Annual General Meeting of the Company to be held in 2019.

5. To re-appoint Messrs. PricewaterhouseCoopers PLT as Auditors of the Company until theconclusion of the next Annual General Meeting of the Company and to authorise the Directors to fixtheir remuneration.

AS SPECIAL BUSINESS

To consider and, if thought fit, with or without any modification, to pass the following ordinary resolutions:-

6. ORDINARY RESOLUTION NO. 1- AUTHORITY TO ISSUE SHARES PURSUANT TO THE COMPANIES ACT, 2016

“THAT subject to the Companies Act, 2016 and approvals of the relevant governmental/regulatoryauthorities, the Directors be and are hereby empowered to issue and allot shares in the Company,at any time to such persons and upon such terms and conditions and for such purposes as theDirectors may, in their absolute discretion, deem fit, provided that the aggregate number of sharesissued pursuant to this resolution does not exceed ten per centum (10%) of the total number ofissued shares of the Company for the time being and the Directors be and are also empowered toobtain approval for the listing of and quotation for the additional shares so issued on Bursa MalaysiaSecurities Berhad;

AND THAT such authority shall commence immediately upon the passing of this resolution andcontinue to be in force until the conclusion of the next Annual General Meeting of the Company.”

7. To transact any other business for which due notice shall have been given.

NOTICE IS HEREBY GIVEN that the Sixth Annual General Meeting of the Company will be held at Ballroom 1, Level 1, Sime DarbyConvention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 24 May 2018 at 10:00 a.m. for the following purposes:-


NOTICE OFANNUAL GENERAL MEETING

[Please refer toExplanatory Note (i)]

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6



By Order of the Board

CHUA SIEW CHUAN (MAICSA 0777689)CHIN MUN YEE (MAICSA 7019243)Company Secretaries

Kuala Lumpur25 April 2018

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 340(1) of the Companies Act, 2016 does notrequire a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forwardfor voting.

(ii) Item 2 of the Agenda

Datuk Abdullah bin Ahmad who retires pursuant to Article 106 of the Company’s Articles of Association has indicated not toseek for re-election at the Sixth Annual General Meeting (“AGM”).

(iii) Item 4 of the Agenda

The proposed benefits payable to the Non-Executive Directors (save and except for Syed Yasir Arafat bin Syed Abd Kadirbeing the nominee of the holding company, Hallmark Odyssey Sdn. Bhd. to the Board of the Company, has waived hisentitlement for Director’s fees and benefits) comprises solely of meeting allowances.

The total estimated amount of benefits payable to the Non-Executive Directors is calculated based on number of scheduledor expected Board and Board Committees’ Meetings from 25 May 2018 until the next AGM in the year 2019.

(iv) Item 6 of the Agenda

The proposed adoption of the Ordinary Resolution No. 1 is for the purpose of granting a renewed general mandate (“GeneralMandate”) and empowering the Directors of the Company, pursuant to the Companies Act, 2016, to issue and allot newshares in the Company from time to time provided that the aggregate number of shares issued pursuant to the GeneralMandate does not exceed 10% of the total number of issued shares 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 AGM of the Company.

The General Mandate will provide flexibility to the Company for allotment of shares for any possible fund raising activities forthe 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 Directorsat the Fifth AGM held on 24 May 2017 and which will lapse at the conclusion of the forthcoming Sixth AGM.

Notes:

1. For the purposes of determining a member who shall be entitled to attend and vote at the forthcoming Sixth AGM of theCompany, the Company shall be requesting the Record of Depositors as at 17 May 2018. Only a depositor whose nameappears in the Record of Depositors as at 17 May 2018 shall be entitled to attend and vote at the Meeting as well as forappointment 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 orattorney duly authorised. A proxy may but need not be a member of the Company and a member may appoint any personto be his proxy without limitation. There shall be no restriction as to the qualification of the proxy.

3. A member may appoint not more than two proxies to attend at 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 oneproxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the saidsecurities account.

4. Where a member or the authorised nominee appoints two 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 itholds. Where an exempt authorised nominee appoints two or more proxies to attend and vote at the same Meeting, theappointment 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 compliancewith 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 ShareRegistrar, Symphony Share Registrar Sdn. Bhd. not less than forty-eight hours before the time for holding the Meeting oradjourned Meeting at which the person named in the instrument proposed to vote and in default the instrument of proxy shallnot be treated as valid.

7. If this Form of Proxy 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 beenreceived”. If this Form of Proxy is signed under the attorney duly appointed under a Power of Attorney, it should beaccompanied by a statement reading “signed under Power of Attorney which is still in force, no notice of revocation havingbeen received”. A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance withthe laws of the jurisdiction in which it was created and is exercised, should be enclosed in this Form of Proxy.



I/We ___________________________________________________ NRIC No./Passport No./Company No. __________________________________________ (Full Name in Block Capital)

of _________________________________________________________________________________________________________________________________ (Full Address)

being a *member/members of Icon Offshore Berhad (“Company”) hereby appoint ___________________________________________________________ (Full Name in Block Capital)

NRIC No./Passport No. ______________________________ of ______________________________________________________________________________ (Full Address)

_______________________________________________________________________________________________________________________ (Full Address)

or failing *him/her, ___________________________________ NRIC No./Passport No.___________________________ of ______________________________ (Full Name in Block Capital)

_______________________________________________________________________________________________________________________ (Full Address)

or failing *him/her, the Chairman of the Meeting as *my/our proxy to attend and vote for *me/us and on *my/our behalf at the Sixth Annual General Meeting of the Company to be held at Ballroom 1, Level 1, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 24 May 2018 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 orabstain from voting):-

Item Agenda

1.

Ordinary Business Resolution For Against

* Strike out whichever not applicable.

As witness *my/our hand ___________________ this day of _______________ , 2018.

_________________________________Signature of Member/Common Seal

PROXY FORM (Company No. 984830-D)(Incorporated in Malaysia)

CDS Account No.

Number of ordinary shares

2(a). To re-elect Syed Yasir Arafat bin Syed Abd Kadir who retires pursuant to Article 106 of the Company’s Articles of Association, and being eligible, has offered himself for re-election.

2(b). To re-elect Madeline Lee May Ming who retires pursuant to Article 106 of the Company’s Articles of Association, and being eligible, has offered herself for re-election.

3. To approve the payment of the Directors’ fees of RM760,701 for the financial year ended 31 December 2017.

4. To approve an amount of up to RM93,000 as benefits payable to the Non- Executive Directors from 25 May 2018 to the next Annual General Meeting of the Company to be held in 2019.

5. To re-appoint Messrs. PricewaterhouseCoopers PLT 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

6. Authority to Issue Shares Pursuant to the Companies Act, 2016. 7. To transact any other ordinary business for which due notice shall have been given.

To receive the Audited Financial Statements for the financial year ended 31 December 2017 together with the Reports of the Directors and the Auditors thereon.

1

2

3

4

5

6

For appointment of more than one proxy,percentage of shareholdings to berepresented by the proxies

No. of shares PercentageProxy 1 Proxy 2 Proxy 3 Total 100%

Notes:

1. For the purposes of determining a member who shall be entitled to attend and vote at the forthcoming Sixth Annual General Meeting of the Company, the Company shall be requestingthe Record of Depositors as at 17 May 2018. Only a depositor whose name appears in the Record of Depositors as at 17 May 2018 shall be entitled to attend and vote at the Meeting aswell 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 acorporation, 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 personto be his proxy without limitation. There shall be no restriction as to the qualification of the proxy.

3. A member may appoint not more than two proxies to attend at 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 proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the saidsecurities account.

4. Where a member or the authorised nominee appoints two 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 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 depositedby hand at or by facsimile transmission to the Company’s Share Registrar, Symphony Share Registrar Sdn. Bhd. not less than forty-eight hours before the time for holding the Meeting oradjourned 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 Form of Proxy is signed under the hand of an officer duly authorised, it should be accompanied by a statement reading “signed as authorised officer under Authorisation Documentwhich is still in force, no notice of revocation having been received”. If this Form of Proxy is signed under the attorney duly appointed under a Power of Attorney, it should be accompaniedby 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 ofAttorney, 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 Form of Proxy.

SHARE REGISTRARSymphony Share Registrars Sdn. Bhd.Level 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul EhsanMalaysia

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